Amazon has mastered the concept of subscriptions in e-commerce. Prime-based memberships, and the ability to set up recurring purchases for everyday items, have been central to how it drums up repeat business, tapping shoppers looking for discounts and more convenience. The concept has caught on fast with other retailers, and as one indication of that, Ordergroove — a startup that has built a “subscription as a service” platform for brands and retailers outside of Amazon to build similar experiences for their own sales — is announcing $100 million in funding, underscoring the opportunity ahead.

Subscriptions are the core of what Ordergroove does right now, so the plan is to build out more services that enhance that, said Greg Alvo, the company’s founder and CEO, in an interview. That will include bringing on more services to enhance “prepay” subscriptions (essentially offering discounts to pre-buy items or services that you will redeem at some point in the future, such as a regular morning coffee at a local cafe), and also more analytics to give more insights into buying patterns to Ordergroove’s customers. The focus is not subscriptions per se, he said, “It’s lifetime value.”

The funding is technically being described as “over” $100 million in equity, and it is being led by Primus Capital, with other investors in the round not being disclosed. Ordergroove has in total raised about $150 million, with other investors in past rounds including National Securities (now a part of B.Riley), Lerer Hippeau, OurCrowd, Western Technology, Level Equity and more.

Alvo confirmed the startup would not be disclosing its valuation, but as a measure of where it was before the round, last year, in the wake of a previous equity raise, PitchBook noted that it was $111 million.

Ordergroove’s raise is a timely reminder of where we are right now in the world of e-commerce. Put simply, it’s crunch time.

The arrival and two-year nadir of the Covid pandemic saw a boom in online spending as people stayed away from in-person commerce, leading to a lot of exuberant projections for how “we wouldn’t be going back” to the days of brick-and-mortar. But fast forward to today, and a lot of that activity has settled down.

Some retail has died for sure — looking at all the stores and brands that never reopened can feel downright depressing — but that hasn’t directly led to an extended boom online, either, and the ramifications of that “less than expected” activity have reached far. (Look at yesterday’s note from Meta CEO Mark Zuckerberg announcing layoffs as one example of that.)

This has led a lot of retailers and brands to look for stronger hooks with customers, and this is where subscriptions come into the frame.

Ordergroove currently has close to 500 customers, Alvo said, a list that includes some of the largest brands and retailers in the world — they include Walmart, Nestle, L’Oréal, Bonafide, The Honest Company, La Colombe, and PetSmart — as well as emerging names and smaller businesses.

Alvo won’t disclose revenue figures or whether the company is profitable, but notes that it had plenty of money in the bank when this fundraise came along. And perhaps more notably given the slowdown in e-commerce activity, he said that gross merchandise value on the platform is growing at a rate of 60% today, which was the same as during the pandemic.

“Customer growth rates are the same as they were 10-18 months ago,” he told me. “I wish I could say it we did this intentionally but we didn’t… Ordergroove is absolutely countercyclical to the economy right now.” Customer retention, he added, is close to 90% — subscriptions it turns out can be a hook in more ways than one.

The company is built around the tech stack to create, run and measure subscriptions — which includes integrations with the likes of Salesforce, Magento, Shopify, payments systems and whatever else that merchants and brands are using to build their own commerce technology stacks. That has been a focus that Ordergroove has evolved over the years: when I covered the startup back in 2017, Alvo talked a mean game around Dash buttons, building Prime Now competitors, and more. The fact that subs were and are still the core as Ordergroove has continued to grow has informed how that product roadmap has changed. Voice interfaces — something else that Alvo talked about in 2017 — are still part of the product vision, but they are now about creating easier ways to repeat purchase (as you do with subscriptions).

“How do we get people to buy products again? A simple “yes” or another short voice command — no clicks required,” he said. “It goes from what has been a nine-click process to five clicks to zero clicks to make an order. We think there will be more of these non-shopping cart based experiences in next five years.”

And he predicts will be anchored in subscription buying, which is expected to reach $1 trillion in sales by 2026, according to the company. If that’s accurate, it represents some pretty aggressive growth: researchers estimate subscription commerce to be worth around $120 billion this year, close to double its value a year ago.

In the meantime, there is also the opportunity of a different kind of liquidity event for the company: Alvo uneasily admitted that the startup has been tapped for potential acquisitions, but got very cagey when I asked him about what kinds of companies might be interested in owning it. You can tease these out for yourselves, though: payments providers, those providing commerce supply-chain management, and those building ‘headless’ systems for retailers and brands to build their own commerce experiences are all the kinds of platform players I imagine might want to own both the kind of technology that Ordergroove is building, and its substantial client list.

“Our goal at Primus is to seek out companies that are making an exceptional impact on a sector, which Ordergroove is doing with retail and eCommerce,” said Ron Hess, MD at Primus, in a statement. “The Ordergroove team has built an industry-leading platform to help brands build more sustainable revenue streams—and to scale in response to consumer demand. They also share our vision for what the future of the subscription market will look like. Ordergroove’s delivery of ‘Relationship Commerce’ has not only shown resilience but is truly beneficial for both buyers and sellers alike.”

Ordergroove picks up $100M to grow e-commerce subscriptions as a service by Ingrid Lunden originally published on TechCrunch

PayPal is taking a step away from the Honey brand, the $4 billion shopping rewards acquisition it made in 2019, with today’s launch of PayPal Rewards. The new program will replace “Honey Gold” — the rewards program for Honey browser extension users, which allows customers to redeem their points for cash, gift cards or PayPal shopping credits. With the new PayPal Rewards, consumers will be able to track and redeem their points directly inside the PayPal app, and will have new ways to earn, the company says.

The deal for Honey was intended to give PayPal a better position in the face of the increased competition in the payments space from larger rivals, including Apple, Google and even Facebook (now Meta). The battle for consumer adoption of online and mobile payments had shifted away from the checkout page itself, to compete against all the other places people go to discover, browse, get inspired and deal-hunt — including on retailers’ sites and on social platforms, like Instagram, Pinterest, and today, TikTok.

A rewards program, like the one offered by Honey, works to entice users by offering promo codes and coupons for favorite retailers, while redirecting them away from Amazon with better prices. Features like the price tracking “droplist” also help consumers find the best deals on items they’re considering. And, with last year’s revamp of the PayPal app, personalized deals and rewards became a larger part of the mobile experience as well.

This year, PayPal customers have saved nearly $200 million through the Honey cash back and discounts program, says PayPal.

With the launch of PayPal Rewards, the company is now combining the rewards being offered to PayPal customers across multiple PayPal products, including the Honey browser extension, the PayPal app, and, in the future, various card products. Rewards will also be given its own dedicated spot in a new part of the PayPal app, where shoppers can track and redeem their points as they earn. When customers want to redeem their points, there won’t be category restrictions or account minimums, the company notes, and the points can be converted to cashback at a rate of 100 points equaling $1 USD.

Once redeemed as cash, the funds can be transferred to a linked bank account, deposited into a PayPal Savings account, donated to a charity, or sent to someone else as a peer-to-peer (p2p) payment.

With the new in-app hub, customers will also be able to earn points through personalized engagement in the PayPal app, in addition to the browser extension, and will be able to be stacked with the rewards earned from their payment card programs.

This personalized engagement introduces a new way for a customer to earn PayPal Reward points by doing things like linking a debit card or bank account to their PayPal, for example. If the customer has already done so, they might be presented with a different action to take.

Image Credits: PayPal

The company is touting the move ahead of the 2022 holidays and traditionally, the biggest quarter for online shopping.

This year, however, the e-commerce landscape is looking a little different, with more spending expected to start earlier thanks in part to Amazon’s decision to host a second Prime Day event in October, leading other retailers to follow suit. Still, Adobe predicts consumer spending will still increase this year by 2.5% during the Nov. 1-Dec. 31 time frame, reaching $209.7 billion.

“With the financial challenges people face these days, brought on by rising prices and the need to tighten budgets, it can be frustrating to shop for everyday essentials or plan for the holidays,” said Greg Lisiewski, Vice President of Shopping and Global Pay Later, in a statement about the launch. “PayPal Rewards makes it easy to find sales, discounts, and great deals when making a purchase with PayPal – through cash back, discount codes, or other rewards,” he said.

Image Credits: PayPal

PayPal debuts a new rewards program that combines Honey’s discounts with other ways to earn by Sarah Perez originally published on TechCrunch

Online shopping and speedy delivery through services like Instacart and Amazon Prime are the height of modern conveniences, but for many consumers who care about sustainability and e-commerce’s impact on the environment, every box and plastic bag deposited on their doorstep is also accompanied by a feeling of guilt. If only there was a better way to shop, we collectively wonder as we click “Add to Cart” yet again. Well, maybe there is.

A startup called The Rounds believes it has landed on a solution to make online commerce more efficient, more eco-friendly, and — as its newly announced $38 million Series A implies — potentially profitable, too.

Investors Annie Kadavy at Redpoint Ventures and Andrew Chen at Andreessen Horowitz led the startup’s latest round, which included seed investors Construct Capital and First Round Capital. To date, The Rounds has raised $42 million.

The model employed by The Rounds involves what it calls reverse logistics — a system where online goods aren’t just delivered to the consumer, but their empty containers are also picked back up at the same time. Layered on top of this are regularly scheduled deliveries designed to restock basic household needs, from cleaning supplies to personal care items to shelf-stable foods and more.

Image Credits: The Rounds

The Rounds co-founder and CEO Alex Torrey came up with the idea as a means of solving his own personal pain point as a decade-long big city resident who lived in high-rise apartments, without a car. Like many city dwellers, he found himself either carrying big, bulky products back to his apartment after making a run to a local store or feeling wasteful as he restocked smaller household items via online orders as things ran out.

“I remember I ordered a hand soap…and I had to sort through thousands of options on Amazon,” Torrey recalls, speaking to the difficulties with using traditional e-commerce sites for everyday needs. Then, when his package arrived, Torrey realized how wasteful Amazon deliveries like this could be.

“I got a box within a box with a plastic bottle of hand soap — identical to the bottle that’s on my sink. Now I’m holding two identical plastic bottles, [but] one of them is empty. Plastic is designed to last hundreds of years — mine lasted not even 100 days,” he says.

Image Credits: The Rounds

This system just didn’t make sense, he says.

Combined with the fact that he lived in a building with 500 other apartment units where likely many other people were also ordering hand soap and other items on a regular basis, it also didn’t seem like the most efficient way to restock supplies, either. After all, a hotel of this size would just order in bulk, without the excess packaging designed for retail shelves. So why couldn’t consumers order this way, too?

As it turns out, they can.

Launched in 2019 in Philadelphia, and still flying a bit under the radar, The Rounds today works by allowing consumers to shop around 150 individual products (SKUs) across categories like household items, personal care, pantry staples, and dry goods, in addition to items from select local sellers like bakeries or coffee roasters, or others you might find at your local farmer’s market, depending on location.

Consumers sign up for the service, which has no annual fee, then create a restocking schedule for their weekly deliveries.

But unlike many subscription-based delivery services, The Rounds allows customers to adjust which items get delivered and when on an ongoing basis. Its system will text you before delivery to remind you to check your orders dashboard, where you can add or remove items. You can also just text back to make your changes, similar to texting your Instacart shopper.

This is a big improvement over more basic restocking systems like Amazon’s “Subscribe & Save,” which asks consumers to forecast their expected re-order cadence, leaving them to often become either overstocked or understocked, as a result.

And while it shares some similarities with something like sustainable product retailer Grove Co.’s monthly subscription-based deliveries, it delivers its goods weekly in reusable bags — and, most importantly, the company picks up your empty containers and bags to be used for future deliveries. (After cleaning, of course!)

Image Credits: The Rounds

This is not an unfamiliar model — milk used to come in glass bottles, returned upon the next delivery, for instance. It just went out of fashion with the rise of supermarkets to serve those who relocated to the more spread-out, post-World War II suburbs. And now, everyday e-commerce is this model’s competitor. But traditional e-commerce has been particularly bad for the environment, despite improvements in last-mile logistics and recyclable cardboard. Items still come with excess packaging — plastic fillers and extra packaging — things that often just get thrown away, not recycled.

Plus, reminds Torrey, “it’s ‘reduce, re-use, recycle. Recycle is the worst option,” he says.

“With The Rounds, we’ve built a way that you can get [items] without any packaging waste. You can get it delivered with no cardboard, no single-use plastic. We’re building what we believe to be the future of last-mile logistics,” he says.

Image Credits: The Rounds

The startup’s e-commerce site also leverages technology to help consumers make better estimates about their restocking needs.

Using the online dashboard, shoppers move items in between columns labeled “now,” “soon,” and “later.” The “now” deliveries are the ones coming this week and these can be adjusted by the consumer or by the system’s own algorithms as it learns from your scheduled pickups. As your returned containers’ QR codes are scanned, The Rounds learns how often you really go through a given product.

Members pay $10 per month, but deliveries have no extra fees or tipping required. Individual item costs are comparable to Costco or other warehouse stores, the company claims, but divvied up into smaller sizes.

That could be an obstacle for some, however. Warehouse club shoppers would at least get a full box of a product, unlike on The Rounds where you might get, say, only half a box of cereal or pasta delivered in a refillable mason jar. That could be harder for larger households, where ordering the quantities needed to feed the parents and the kids alike could leave customers with a lot of empty jars by week’s end.

It may also not deliver the savings at that scale, either.

“It’s not the cheapest option,” Torrey admits. “We’re not out here saying that we are cheaper than anything else you can get. That’s not our value proposition.”

After launching in Philadelphia, The Rounds has expanded to D.C., Miami and Atlanta over the course of 2021 and 2022. It now counts over 10,000 active members and claims 10x growth. While Torrey won’t disclose The Rounds’ annual revenue, he notes it’s already profitable at the unit economics level on an individual delivery.

To help on this front, the company has a number of apartment building partners that allowed it to get density fast as it entered new markets.

“There’s no secret. It just comes from the fact that our model is much more efficient on the delivery side because we aggregate the demand,” explains Torrey. “We’re not sending out a DoorDash person with one delivery to your apartment building, and then they have to go to another restaurant and go deliver something else to another apartment building. That’s extremely costly. It’s very few deliveries per hour,” he says. “We’re sending out the ’rounder’ with a big trailer behind their e-bike full of deliveries.”

The ’rounder’ also can deliver directly to customers’ doorsteps in many buildings because of its partnerships.

Now, the company is also pilot testing deliveries with GM-owned electric van maker BrightDrop to see if it can become even more efficient by using vans designed for last-mile deliveries.

Image Credits: The Rounds

Torrey himself took an interesting path to entrepreneurship, having been recruited out of college to the CIA where he worked as an analyst and spent time in Afghanistan — an experience he credits with teaching him about what it’s like to have a sense of a mission and working with a small group of people. Later, he bootstrapped a consumer startup, Umano, all the way to Shark Tank, which he says was a learning experience where he got to make a lot of mistakes. He then entered the marketing agency world, leading brand strategy for big companies like McDonald’s, but couldn’t shake the entrepreneurship bug.

Thanks to a supportive partner, Torrey decided to take another stab at it and entered Wharton’s business school, where he met his co-founder Byungwoo Ko. Ko’s background is useful to The Rounds, as he previously worked at Uber and Uber Eats on the operations and strategy side.

The founders have now scaled The Rounds to four cities and 10,000 customers with just 100 full-time staff, which includes its delivery personnel (all of whom are W-2  employees, not gig workers, we’re told.)

With its new funding, The Rounds is now looking to grow its team, particularly on the technology side, as well as its market penetration, including by going deeper into its existing markets and expanding to new geographies. Longer-term, it aims to have a footprint in both major U.S. cities and more suburban markets, too.

Image Credits: The Rounds

While the startup’s mission is admirable, The Rounds will still have to contend with a tough economy where not being the cheapest option could hurt its ability to grow, and where much of its current customer base of urban city dwellers are already committed to the convenience of one-click orders with Amazon Prime. It could also face difficulties convincing families to join, given its current product sizing seems designed more for a 1 to 2-person household. And because it’s not a full-service grocery delivery service, people may prefer to just place one entire weekly order with a larger provider, like Shipt, Walmart, or Instacart, instead of having a separate service for household staples and packaged goods and another for fresh produce, dairy, meats and frozen.

The Rounds will additionally need to convince more than just the eco-minded of its value, which will come down to product quality and variety — something that could improve over time with more local business partnerships, including potentially, those with local produce providers at some point further down the road.

(Plus, consumers will have to trust the startup isn’t just running to Costco itself and then transferring products into mason jars for the upsell! The company says it works with U.S. distributors for inventory — it doesn’t shop from retailers on consumers’ behalf, like other grocery delivery services do.)

Torrey acknowledges the struggle ahead will involve convincing those customers of its value proposition while also reaching more people than it does today.

“That is our mission: make everyday sustainable choices effortless — that’s because we’re more convenient and the zero waste and the way we deliver and the no packaging. And for ‘everyone’ that not only means we need to physically be able to service you, but also the idea of keeping the value proposition really high,” he says. “This is not a premium service; this is just a very high-value service.”

Now it’s time to see if more consumers will agree.

The Rounds raises $38M Series A for its sustainable ‘household restocking’ service by Sarah Perez originally published on TechCrunch

A wave of Amazon-merchant aggregator startups, floating close to $15 billion in funding, have rushed in, rolled up, and rushed out of the e-commerce market in the last several years. Now, a new tide, and new take on the model, appears to be rising. Today, a Berlin startup called Everstores — which seeks out, buys and consolidates Shopify-based direct-to-consumer businesses, says that it has raised €18 million ($17.5 million at today’s rates) in funding, money that it will be using to continue investing in its data science and operational tools; and to buy up and consolidate D2C brands.

In stealth, it has picked up three businesses, and — according to co-CEO Kristoffer Herskind (who co-founded the business with two others, Carlos Lopez as co-CTO and CTO Kirill Martynov) — some 100 million data points from the further 500 Shopify-powered D2C brands that have signed up as potential acquisition candidates.

Now, armed with €8 million in equity and €10 million debt, the plan is to boost that number with a more public launch. Earlybird Venture Capital is leading the equity portion, while Viola Credit is leading the debit part, which we understand is structured as an ‘accordion’ that can expand up to €50 million. Pre-Seed investor Picus Capital, founder angels and KKR & Goldman Sachs also participated in the funding. The company has now raised €20 million in total, including an earlier pre-seed round.

If Everstores’ business model sounds a little familiar, that’s because it’s not only similar to the earlier aggregator model, but nearly identical to the newest variation on the idea, which is also being pursued by OpenStores, a U.S. startup that launched in 2021, which itself announced a hefty tranche of funding only last week that catapulted its valuation to nearly $1 billion.

OpenStore’s rapid growth speaks of competition, but also validation for others in the same field like Everstores. There are thousands of businesses building Shopify-based storefronts, in aggregate approaching $200 million in GMV annually (Shopify’s GMV last quarter was $46.9 million), and many of them have hit the wall when it comes to scaling.

The pitch here is that Everstores (or OpenStore, or others) can provide capital to the owners of those D2C brands, and apply economies of scale to all the different, and potentially costly, aspects of running an e-commerce business — supply chains and logistics; big data analytics; personalization and other technology — to do what the smaller, individual stores would have found challenging if not impossible to do on their own.

Herskind’s reference to how much data his company has already amassed is notable for a couple of reasons. First, it speaks to the company’s core thesis of why this business model is better than the aggregation play of yesterday typified by the likes of Thrasio, SellerX and others, which is based picking up Amazon-based businesses: the data that one can get from Shopify businesses is by its nature a lot more complete, and therefore, better.

“It’s all about the data,” he said in an interview. “On Shopify, merchants have insights to their customers because they own the customers. On Amazon, you have product and order data, but you don’t really know who your customers are. That is the fundamental distinction. And without knowing who they are, knowing the real cost of acquiring customers is hard. That also makes it hard to evaluate these businesses, and subsequently to scale them.”

And he believes there are other market-specific reasons for why independent online businesses are better candidates for aggregation and consolidation than Amazon-based merchants.

For one, Amazon is already doing a strong job in areas like supply chain management and logistics, which leaves little room for improvement. “It would be hard for us to do something to improve operationally,” he said.

On the other hand, taking a series of Shopify-based businesses, a lot of them are still using a mix of services to meet marketing, supply chain, inventory, and logistics needs. Horsing estimated that for B2C e-commerce businesses, between 20% and 30% of their costs are related to marketing in e-commerce and B2C, so there is an opportunity to create more efficiencies there.

The other interesting point to note about Everstores’ data is just how much of it it already has — 100 million data points currently — despite only having picked up three businesses so far.

Herskind said that since it opened up its platform as a private beta, some 500 businesses have logged on and registered their information to start providing data to Everstores to form part of the latter’s evaluation of the businesses. This speaks to the demand among them in looking for an exit, but surprisingly how open these companies seem to be to the idea of sharing data about how they are doing.

Herskind notes that even in the cases (most of them, as it happens) where Everstores is not interested enough to enter into an M&A process, it suggests keeping the data streams open so that it can continue to assess the situation.

This opens the door potentially too to the company building other products using that, which brings to mind companies like Xeneta, which has also turned third-party crowdsourced data into a thriving business in the world of shipping pricing.

It’s worth watching whether Shopify merchants are really all keen to sell up, though, or whether that’s just a hangover from the previous incarnation of roll-up plays. Herskind said that the market got so heated for FBA-based merchants that companies that might have initially been considered at 2-3 times earnings (Ebitda), heavy competition at the peak of the market drove those multiples to sales at 8-9 times earnings. Have aggregators learned their lesson from this, or will the same inflated pattern be repeated, is the question both for merchants and aggregators themselves.

“That [inflation] also made the business model break apart,” Herskind noted.

One thing very much in common between old and new incarnations of aggregators is their insistence that they are bringing a lot of technology to bear in their otherwise pretty obvious financial plays.

“We approached everything from first principles and with a fundamental belief that technology could drive better outcomes across the board. We’re excited about working at the frontier of this space, and we’re bringing together the smartest engineers and data scientists to crack these open-ended problems with us,” said Martynov in a statement.

“We believe D2C is a fundamentally attractive opportunity where structural issues in the space can be solved meaningfully through data and software. Everstores’ tech platform allows for both identification of the highest-potential brands and full value capture of this potential through their OS. We’re proud to support Everstores’ founders on their mission to unlock the D2C asset class at scale through their leading tech platform,” noted Tim Rehder, a partner at Earlybird, in a statement.

Everstores, an Open Store-style D2C Shopify aggregator out of Europe, emerges from stealth with €18 million by Ingrid Lunden originally published on TechCrunch

Una Brands, an e-commerce aggregator focused on brands in the Asia-Pacific region, announced the first close of its Series B round at $30 million today. The funding was led by White Star Capital and Alpha JWC Ventures.

Headquartered in Singapore, Una Brands has a presence in Southeast Asia, Australia, New Zealand, China and the United States, and over 200 employees. It launched in 2021 with $40 million in funding, and has now raised a total of about $100 million.

Over the last year, Una Brands has acquired more than 20 e-commerce brands in six countries, including ergonomic furniture vendors ErgoTune and EverDesk+. After taking over operations, Una Brands expanded those brands into Australia and grew revenue by over 40% in less than a year. In total, Una Brands says it now has annualized revenue of more than $50 million and is expected to achieve group profitability by the end of this year.

While many other e-commerce roll-up companies (like Thrasio) focus on brands that sell on Amazon, Una Brands covers multiple e-commerce platforms to reflect how fragmented the industry is in Asia. For example, it looks for brands on Shopify, Shopee, Lazada and Tokopedia, in addition to Amazon.

Una Brands will use its new funding on more acquisitions in categories like home and living, mother and baby, and beauty and personal care. The capital will also be used to further the development of its proprietary technology for expanding e-commerce brands across multiple channels. Its tech stack includes tools for brand management, marketing, supply chain and accounting, and process automation and advanced analytics.

E-commerce aggregator Una Brands gets $30M to acquire more APAC brands by Catherine Shu originally published on TechCrunch

At its Search On event this afternoon, Google announced a number of shopping-related changes and new features across areas that include visual shopping, personalization and buying with the help of trusted reviews. The additions aim to help the company better attract online consumers to shop on Google, instead of starting their searches directly on Amazon — as has become the norm for many online shoppers today.

Of significant concern, Amazon has been steadily eating into Google’s core search advertising business over the years and is projected to capture 14.6% of the U.S. digital ad revenue market share by 2023, data from Insider Intelligence indicates. Google’s share meanwhile, is expected to drop to 24.1% by that time, down from the 31.6% share it had in 2019, the report said.

To combat this threat, Google has been investing heavily into its Google Shopping services, including by making listings free for merchants then integrating those free listings into Google Search results. Now, the search and ads giant has grown its shopping graph to 35 billion product listings — a figure that’s increased by nearly 10 billion over the past year, the company notes.

One of the new ways Google hopes to better compete is to make shopping on Google feel more fun for consumers than if they simply ran a product search on Amazon’s site.

On this front, the company is launching a new feature called “Shop the Look” in the U.S. which will be discoverable as part of the now more visual shopping experience on Google. This feature will position a shoppable display of products alongside lifestyle imagery, guides, and other tools in your search results. It can also be triggered by typing the word “shop” ahead of your query, like “shop bomber jackets,” for instance.

Image Credits: Google

To “shop the look,” users will be able to view the product they had searched for — like a jacket — along with other items that complete the outfit, which can also be shopped from the same tool, similar to features previously launched with Google Lens.

They’ll also be able to see trending products that are popular right now within the same category of the item they searched for from across different brands and designers. (Google defines trending as those products that meet a certain threshold for an increase in searches and user interactions over the past week, it says). These features will arrive in the U.S. this fall.

To make shopping listings themselves more compelling, Google will soon begin to pilot test a 3D shopping feature for shoes, to follow up on its existing support for 3D home goods — a change that Google claims delivered increased engagement. Users interacted with 3D images almost 50% more than static images, the company said.

Initially, the 3D imagery will be tested with a handful of retail partners to start before scaling up. To support this, the company developed a way to automate 3D asset creation. Via machine learning improvements, Google can now use just a handful of product photos to build the 3D image. This new model relies on a neural radiance field technology, a type of neural network also known as NeRF, which can create novel views of 3D scenes using 2D images, Google explains.

Initially, the pilot will include a handful of merchants like Van’s and Skechers, but Google expects to add more over time, including smaller sellers.

“While some merchants have this kind of 3D imagery available, for many others — especially the smaller merchants — creating these types of 3D assets can be really expensive and time-consuming,” said Lilian Rincon, Senior Director of Product for Shopping at Google. “We really think has the potential to change the game for small merchants and we’re excited to get it out,” she added.

Image Credits: Google

Another new feature is designed to help people make more complex shopping decisions that typically require a lot of research.

Typically, consumers will read a variety of sources to make a decision about a more high-value product, including product reviews, news, online articles, recommendation sites, customer reviews, and more. To simplify this process, Google has introduced a new “Buying Guide” which will aggregate the most helpful resources from across a range of trusted sources, including Google user reviews, articles, product reviews and more. This feature has launched in the U.S. but will expand to include more insight categories soon.

Image Credits: Google

In addition, Google will add a new tool called “Page Insights” to the Google app in the U.S. in the months ahead. This will allow consumers to learn more about the products on a website, including their pros and cons and star rating. They can also opt-in to receive price drop updates on the items they’re tracking.

However, one of the biggest changes coming to Google Shopping is the addition of opt-in personalization, arriving in the U.S. later this year.

While companies like Meta and Snap have struggled with the impact of Apple’s privacy changes (App Tracking Transparency) that allowed users to opt-out of tracking, limiting sites’ ability to show them personalized ads, Google’s response to the privacy crackdown is to allow consumers to directly choose to personalize their shopping experience with intentional clicks.

To do so, consumers can tap buttons to direct Google to remember the types of categories they want to shop — like “Women’s Department” instead of the “Men’s Department,” for example — or even tap to choose favorite brands to ensure those are highlighted in their future Google Shopping search results. The company says the idea was prompted by its user research, as consumers told the company they were frustrated with seeing irrelevant search results.

Google says the user is in control of these settings and can turn them on or off at any time.

“We’ve taken a lot of time to do this very carefully because we absolutely want to make sure that people feel like they’re in control…if you, at any point, don’t want to share this information with Google — if you want to turn it off…you can do that,” says Rincon.

Image Credits: Google

Google is also adding new shopping filters that appear on pages as you search for various products, which will now adapt to search trends. That is, you might see “wide leg” or “bootcut” appear when shopping for jeans right now, because those styles are currently popular across Google.com searches. These “dynamic filters” are live now available in the U.S., Japan, and India, and will arrive in more regions over time.

Finally, the Google mobile app will highlight suggested styles based on your past shopping searches and what others have been shopping for on Google. You can tap on these suggestions and see where to buy the products via Google Lens.

Image Credits: Google

Combined, Google believes these changes will help to make shopping on its platform easier and, in some cases, more fun for consumers. But the larger reality here is that Google needs to find a way to keep users from diverting their searches to other sites, like Amazon, as doing so impacts its ability to sell ads and its bottom line.

Google revamps shopping with 3D images, shoppable looks, buying guides, and more personalization by Sarah Perez originally published on TechCrunch

French startup Stockly is raising a $12 million Series A round (€12 million) from Eurazeo, Daphni and several business angels. The company pools together the inventory of several e-commerce websites. When a retailer is out-of-stock on a popular item, they can still accept the order and process the order through a different retailer’s inventory.

This startup is a network play. As Stockly grows, its product becomes more interesting because there are more partner retailers on the platform. Some of Stockly’s customers include Galeries Lafayette, Jonak, Go Sport and Decathlon.

If there are multiple suppliers that can fulfill an order, Stockly automatically picks a retailer based on several criteria, such as price, distance and a quality score. Stockly also tells its partners to use neutral packaging so that everything remains transparent for the end customer.

The main technical challenge is that Stockly has to synchronize millions of items at any point in time. It integrates with existing e-commerce product feeds and it has to reflect Stockly’s information in real time.

For instance, Stockly can’t say that it can find a specific product at a specific price if there’s some delay and no one actually has this product in its inventory anymore. But if it works as expected, it’s an easy sell as it improves user experience and everybody makes some revenue along the way — the e-commerce retailer, the product supplier and Stockly.

With today’s funding round, the company plans to reach 50 employees and sign more retailers. Eurazeo and Daphni had already invested in Stockly last year so they’re both doubling down on their investment.

Stockly raises another $12 million to sell out-of-stock items via other retailers by Romain Dillet originally published on TechCrunch

Meet Prediko, a new startup that sits at the intersection of e-commerce, fintech and software-as-a-service. If you’re manufacturing items or even just buying and reselling finished goods, chances are inventory management is one of the biggest pain points when it comes to running your business.

For instance, when you launch a new product, you don’t know if it’s going to be a popular item. You can either order too many goods or run out of stock too quickly. In the first scenario, it means that you are paying for goods that don’t generate revenue immediately, which will affect your cash balance for a while. You may also be spending money to store those items in a warehouse.

In the second scenario, you’re missing out on potential sales. It often takes quite a while to refill your inventory, so you want to forecast stock issues as early as possible.

Prediko has built an online dashboard that lets you review your inventory position as well as plan and order more products. Customers connect Prediko with their Shopify store directly — the startup is building integrations with other e-commerce platforms. After that, they can generate inventory reports to see fast-moving products, slow-selling items and the current retail value of the inventory.

The platform then helps you generate different growth scenarios depending on seasonality, ad campaigns and more. Over time, customers can compare actual sales with revenue targets. Like many SaaS products, Prediko competes with Excel spreadsheets and manual forecasting.

Image Credits: Prediko

Finally, Prediko helps you create purchase orders for your suppliers. You can track orders from Prediko directly using a kanban view.

And there’s a fintech angle with these capital-intensive e-commerce businesses. Prediko will also help you finance your stock so that your purchase orders don’t affect your bank account too much. This is a smart move as Prediko already has a ton of data about their customers’ revenue performance.

Prediko has raised a $5 million in a seed round led by Felix Capital. Other investors include Guillaume Pousaz’s Zinal Growth, HelloWorld, NomadCapital and the CEOs and/or founders of Klarna, Gorgias, Zencargo, Pigment, Ankorstore and Yoobic.

Image Credits: Prediko

With Prediko, online brands should never run out of stock by Romain Dillet originally published on TechCrunch

It’s become increasingly difficult to estimate how much money Apple’s App Store business makes, as it’s lumped in with other services on Apple’s balance sheet — and because Apple has adjusted its commission structure so it’s no longer a flat 30% across the board, making it difficult to work backward from the public figures Apple does provide to narrow down its numbers. But a new report indicates that overall, the prices consumers are paying to engage with apps listed on the App Store have grown considerably — a suggestion that Apple’s own cut has grown, as well.

And what’s more, this growth is not entirely organic, the report suggests. Rather, it’s more closely linked to Apple’s privacy changes — App Tracking Transparency, or ATT — instead of inflation or the broader macroeconomic factors that have impacted tech companies as of late.

Image Credits: Apptopia

This new data come from app intelligence firm Apptopia, which found that the average price of in-app purchases (IAP) on the App Store has climbed 40% since last year, while Google Play IAP prices only saw a 9% increase during that same time frame. The firm analyzed pricing across both app marketplaces between July 2021 to July 2022 to reach its conclusions.

Apptopia suspects ATT’s 2021 introduction is behind the rising prices for in-app purchases because the increases kick in before inflation began to hit the economy hard in 2022. In other words, it appears that app publishers were adjusting their rates in reaction to the increased effective cost per install (eCPI) that came about after Apple’s ATT made it more costly to acquire new users. To support this conclusion, the report cites data from measurement company Adjust which shows how the growth in eCPI directly correlates with the IAP price increases.

Image Credits: Apptopia & Adjust data

In addition, if the growing prices were more of a reaction to inflation than ATT, then it would go to reason that similar trends would be seen across Google Play — but that’s not the case. While it’s true that Google Play historically pulls in less overall revenue than the App Store through things like paid downloads, in-app purchases and subscriptions, it still hosts a number of apps reliant on in-app purchases to monetize. But Google Play’s average in-app purchase price increase was only in the single digits, compared with Apple’s 40%.

This news follows another recent report which found that ATT had helped boost Apple’s advertising business, as well, allowing it to earn a spot amid the Facebook-Google duopoly.

Apptopia’s new report also broke down how the different types of in-app purchases were impacted by the price changes.

It found that the average pricing of iOS single-purchase in-app purchases grew 36% year-over-year while other in-app purchases, including monthly and annual subscription options, grew only 19%.

Image Credits: Apptopia

The top iOS categories seeing the largest in-app purchase price increases were Navigation, Travel, Photo & Video, Sports, and Books. Food & Drink, Beauty and Events led the group on Google Play, though the overall average IAP price increases were much lower.

Apple’s in-app purchase prices jumped 40% year-over-year, likely tied to privacy changes by Sarah Perez originally published on TechCrunch

The wheels of global commerce continue to turn, through wars, pandemics and economic downturns; and today a startup taking a new tech approach to improve the workings of one of the more antiquated aspects of that industry — shipping — is announcing a big round of funding to double down on growth.

Xeneta — a startup out of Oslo, Norway, that applies innovations in crowdsourcing to the fragmented and often murky world of shipping to build transparent data and analytics for the industry — has raised $80 million, money that it will be using to build out its datasets and customers across more global routes.

Xeneta has already amassed 300 million data points from “several hundred” of the world’s biggest shipping companies, which contribute and subsequently source source data from the Xeneta platform to figure out if they are paying market prices for their shipping on particular routes. And more than $40 billion in procurement sitting on the platform to date. This is all just the tip of the iceberg, however: Patrik Berglund, Xeneta’s CEO and co-founder, said in an interview with TechCrunch that combined procurement across air and sea (the two channels Xeneta covers today) totals between $600 million and $900 million depending on the season; and there are thousands more shipping companies and other shipping players out there.

“We believe we will have 1,000 of them on Xeneta in the near future,” he said. It has aimed for the biggest first: current customers include Electrolux, Unilever, Nestle, Zebra Technologies, Thyssenkrupp, Volvo, General Mills, Procter & Gamble, and John Deere.

The funding values Xeneta at $265 million, the company has confirmed.

Apax Digital, the growth equity arm of PE firm Apax, is leading the round, with Lugard Road Capital also participating. Lugard is an affiliate of a previous backer of the company, Luxor, and other existing investors include Creandum, Point Nine and Smedvig. Prior to this round, the company had raised around $55 million over a series of rounds starting in 2013.

Innovations in e-commerce and fintech have sped up how the world finds and pays for goods and services, but when it comes to getting items from A to B to turn the wheels of that ecosystem, the journey is a little less zippy: shipping remains a fragmented and — subject to economic, climate and social changes — often unpredictable ecosystem. 

There have been a number of tech startups emerging over the last several years targeting opportunities to bring more modern approaches to the antiquated and un-streamlined world of shipping. PayCargo is building new payment products; companies like sennder, Zencargo and Flexport have zeroed in on freight forwarding; Flock Freight is applying a carpooling ethos to trucking; Convoy is also applying a new touch to logistics; Fleetzero believes there’s mileage in electric freight ships; and so on.

Xeneta is in yet another distinct category of freight and shipping services: business intelligence for the companies working within the industry.

As Berglund explained it, it’s a somewhat ranging and unstructured market: for starters, you have thousands of small and big shipping companies and the partners they use to carry out their work, as well as hundreds of thousands of businesses using those services. Added to that, those interactions are often analogue and impacted by a multitude of factors that can affect pricing and overall operations. Those who are looking to book a shipping job might not know what the going price might be for a particular route, or whether it can be approached in a different way more cheaply. Those with space on freighters don’t know the best prices to offer potential customers. 

Xeneta’s breakthrough was to build a platform where all of those players could essentially share what prices they are paying at any given moment for a particular route. Its system then orders that data and applies analytics around it to model how pricing is moving, and what it might mean for related routes elsewhere.

As with other crowdsourced logistics platforms (Waze is an apt example here), the more data that is fed into the system, the more powerful it becomes. Today, Xeneta has most definitely crossed over into the self-feeding category in that regard, although earlier years when the company was just starting out were definitely more challenging.

Initially, the company covered just one route — from a port in Norway to a port China. But getting its first customers to make the leap to provide data for that one passage to prove Xeneta’s value turned out to be a winner: Berglund said that things quickly picked up as those customers input more data, and others started to as well, in order to get better insights into how much they were paying, what routes they were using and so on. The data now is based on a 70/30 split between sea and air shipping (it doesn’t cover ground routes at this point) and the data feed is active enough that when you visit Xeneta’s site, you see it passing ticker-style as it gets updated, more like a stock exchange. Interestingly, it seems that those who are submitting data are less concerned about the competitive aspect of divulging their own data to would-be rivals: the value gained from knowing the bigger picture seems to outweigh this fact.

The company, interestingly, isn’t in the business of booking shipping routes, nor does it want to be, Berglund said.

“My background is in freight forwarding,” he said, and so he knows the benefit of being someone that can provide that group with more data to do the job better. “Whether its a new digital freight forwarder, or a legacy player, they are all in need of better data to run their businesses more efficiently.” He added that 95% of the market still mainly uses Excel spreadsheets to parse historical and current data.

“I’m just flabbergasted that they still use that, and fax machines.”

And just to be clear, it’s not the only one that has realized the potential of offering more intelligence tools to this eventually modernizing industry. Others like Freightview are also building tools to make it easier for those booking shipping to get a sense of market pricing.

“Buyers and sellers of freight have been flying blind in a complex and opaque market. Xeneta’s world-leading dataset and cutting-edge platform provide unique access to granular real-time information and insight, enabling data-driven freight sales and purchases,” said Mark Beith, a partner at Apax Digital, in a statement. “This delivers compelling value for their blue-chip customer base – not just in sales or procurement, but also in budgeting and reporting, and increasingly in ESG monitoring. We’re thrilled to partner with Patrik and the Xeneta team and help deliver their vision.” Beith is joining Xeneta’s board with this round.

Xeneta makes a splash with $80M on a $265M valuation to scale its crowdsourced sea and air freight analytics by Ingrid Lunden originally published on TechCrunch

A series of commitments offered by Amazon in the EU, where regulators are investigating competition concerns linked to its use of third party data, has been dubbed “weak, vague and full of loopholes” in a critical submission signed by a dozen civil society and digital rights groups, non-governmental organizations and trade unions.

The submission, which was made public today, goes on to urge the bloc’s regulators to reject Amazon’s proposals and press on with a full antitrust investigation of the two-sided marketplace. “We urge the European Commission to reject Amazon’s commitments outright and in full, and instead continue vigorously to pursue its antitrust cases against Amazon, imposing remedies and penalties (on the Commission’s own terms) as necessary,” the 12 signatories write.

The full list of signatories are as follows: Austrian Federal Chamber of Labour (AK Europa); Balanced Economy Project; Digitale Gesellschaft e.V.; European Public Services Union (EPSU); Foxglove; Goliathwatch; FairVote UK; LobbyControl; Simply Secure; Centre for Research on Multinational Corporations (SOMO); UNI Europa; and WEED (Weltwirtschaft, Ökologie & Entwicklung e.V.).

Their submission argues that much of what Amazon has proposed to try to settle the EU’s investigation into its handling of merchant data will be required under an incoming pan-EU law anyway — called the Digital Markets Act (DMA) — that’s expected to start applying from spring 2023, bringing in major penalties for non-compliance.

The incoming regulation reforms the bloc’s approach to competition enforcement around Big Tech — introducing up-front requirements for so-called “gatekeepers”, whose core platform services fall in-scope, in oft-complained-about areas like self-preferencing and data use.

But the signatories warn there’s a risk of a confusing “dual-track” of regulatory requirements opening up around the ecommerce giant if the Commission decides to accept Amazon’s commitments as it could soon be subject to the DMA. They also point out that “most” of what Amazon is offering will be required under the DMA anyway (such as a ban on self-preferencing; or restrictions on not using non-public data generated by business users) — asserting that Amazon is offering less extensive obligations, hence there’s a risk of one undermining the other.

“[T]he DMA’s obligations are more extensive than those offered by Amazon, and will be enforced by the Commission rather than by the company itself. From the point of view of both efficacy and rule of law, it is not appropriate for a private company to make voluntary commitments parallel to those that will imminently be imposed on it by European law,” the signatories argue, implying that, if accepted as is, the commitments could become a vehicle for Amazon to evade the full force of beefed up EU antitrust law (and the full sweep of associated obligations on its business).

The EU’s probe of Amazon’s use of third party data has been public since 2019. The Commission published a first set of antitrust charges back in November 2020 — saying at the time that its preliminary conclusion was the ecommerce behemoth had abused its market position in France and Germany, its biggest markets in the EU, via its use of big data to “illegally distort” competition into online retail markets.

Last fall, news reports suggested Amazon was seeking to settle the EU investigation by offering concessions on how it operates. Then, earlier this summer, details of Amazon’s proposal were confirmed by the EU which published a summary — saying the company was offering concessions attached to how it uses third party seller data; around its programming of the influential Buy Box; and for Prime, its membership program (which links to Amazon’s own logistics business such as via preferential delivery options). 

Specifically, on marketplace seller data, Amazon offered to refrain from using non-public data relating to, or derived from, the activities of independent sellers on its marketplace, for its retail business that competes with those sellers. Re: the Buy Box, it proposed applying equal treatment to all sellers when ranking offers to make the selection for the Buy Box, as well as offering to display a second competing option to the winner in certain circumstances.

While, on Prime — which emerged as a second strand of the EU’s probe — Amazon offered to set non-discriminatory conditions and criteria for the qualification of marketplace sellers and offers to Prime; to let Prime sellers freely choose any carrier for logistics and delivery services (and negotiate terms directly); as well as offering not to use any information obtained through Prime about the terms and performance of third-party carriers, for its own (competing) logistics services.

However the 12 groups critical of Amazon’s proposals in the aforementioned submission argue that what it’s offered both does “not materially improve” the position of third-party sellers vis-à-vis the ecommerce giant and risks muddying the water around the application of the DMA.

Asked for a view on whether the Commission will be minded to accept Amazon’s commitments, a policy advisor who has been working with the NGOs for this submission flagged the public consultation process as a sign that EU lawmakers are looking at what Amazon has suggested seriously. Although he also argued they will likely be applying a sceptical eye — not least given some of the issues being raised in submissions such as this one but also as he suggested the Commission will be wary about preempting Amazon’s obligations under the DMA (which he said “touch on similar practices but are more comprehensive and now have a foundation in EU law”).

“If I had to make an educated guess, I think the Commission will eventually accept a set of commitments from Amazon but only after significant revisions based on DG COMP’s feedback,” Global Counsel’s Max von Thun added. “I would also expect them to make it explicit that Amazon — if designated as a gatekeeper [under the DMA] — will still have to demonstrate separately how they are complying with the DMA’s obligations, and perhaps even specify that the commitments will be superseded by the DMA obligations once they take effect in early 2024.”

EU urged to reject ‘weak’ Amazon offer to end antitrust probe by Natasha Lomas originally published on TechCrunch

Russian search giant Yandex has confirmed the completion of the sale of two of its flagship media properties, News and Zen, to local social media giant, VK, following regulatory approvals.

As we reported back in March, Yandex began looking for ways to offload its news aggregator and blogging recommender platform in the wake of Russia’s invasion of Ukraine as the Kremlin has cranked up control of the media and freedom of expression — seeking to shape the narrative around what it only ever refers to as a “special military operation”. The Russian state has also sought to clamp down on anti-war sentiment, raising risks for media owners. And we understand Yandex insiders had come to refer to News and Zen as “toxic assets”.

In a statement today, the Dutch registered company announced its Russian operating subsidiary had completed the sale of the news aggregation platform and Zen “infotainment” service to VK — confirming too the acquisition of 100% of the food delivery service, Delivery Club, which had been owned by VK.

The transaction received approval from the Federal Antimonopoly Service, Yandex added.

Following closure, Delivery Club becomes part of Yandex’s ‘E-commerce, Mobility and Delivery’ segment. And Yandex’s statement notes that, as of today, the brand be consolidated in the group’s financial results — with these changes due to be reflected in its third quarter financial results.

As we reported last month, the sale includes the Yandex.ru homepage which will pass to VK — with visitors to that site being redirected to a renamed version of the page, dzen.ru, which is controlled and developed by VK.

The redirect is expected to begin happening later today.

We understand that the deal to sell News and Zen to VK was a pure asset swap — with no financial component to the transaction.

Yandex’s sale of News and Zen to VK completes by Natasha Lomas originally published on TechCrunch