We’ve got a US e-commerce news roundup with highlights including the potential impact of NAFTA on Amazon and other e-commerce companies, VCs betting on fashion e-commerce, a renewed boom in subscription services and new developments in mobile.
While Trump’s NAFTA goals sound somewhat like the recently abandoned Trans Pacific Partnership, some experts are saying Amazon, eBay and other e-commerce companies could benefit from a new deal. While VC deals on e-commerce dropped 24% in 2016, mobile fashion shopping app Dote raised $7.2 million in new capital. Subscription services seem to be back in style for retailers like Stitch Fix, Amazon Prime Wardrobe, Trunk Club and Rent the Runway.
If you’re a small business and not selling your products on Amazon, you may be wondering why not after reports that more than 40 million small business products were sold on Amazon Prime Day alone. When you walk into Sephora’s Manhattan flagship store, you might think you’ve mistakenly walked into the Apple Store. Dozens of iPads supported by artificial intelligence, mobile apps and a digital skincare studio, help consumers choose beauty products.
For Fall back-to-school sales, L.L. Bean will be supplementing its traditional print catalog with a brand new, e-commerce site and plans for an expanded digital footprint. The New York Post did a very negative and incomplete analysis of Amazon’s impact on the retail sector, highlighting jobs lost, store closures and falling retail share values. The analysis did not account for the growth and positive impact of e-commerce.
CNBC looked at Amazon’s new deal with Sears to sell Alexa-compatible digital appliances. NewStore, an enterprise platform for mobile commerce raised $50 million in new VC capital with plans to provide retailers with a full mobile commerce solution. Its first new big client is Adidas.
TechCrunch profiled Dote with its new $7.2 million in VC capital and aims to aggregate fashion retailers on its mobile platform to compete with Amazon. Walmart is going a second round with facial recognition to identify unhappy customers and perhaps enable payments by facial recognition in the future. Finally, even Campbell’s is going digital and hoping e-commerce will generate $300 million in online sales within five years. That’s a lot of bowls of Campbell’s tomato soup!
Trump’s NAFTA could be big win for Amazon, e-commerce
The Trump administration this week published a list of goals for the upcoming renegotiation of NAFTA, the free trade agreement between the United States, Canada and Mexico. There are no guarantees, but experts say Trump’s trade vision could boost e-commerce sites like Amazon (AMZN, Tech30) and eBay (EBAY) — helping create American jobs and closing the trade deficit with Mexico.
Those same experts, however, point out that Trump’s objectives on e-commerce look a lot like the ones included in the Obama administration’s Trans Pacific Partnership, a trade deal Trump not only withdrew from, but slammed as a terrible for American workers and businesses.
“Add that to your list of contradictions when it comes to the administration’s trade policy,” says Joshua Meltzer, a trade expert at the Brookings Institution. “It’s an incoherent approach to trade.” Via money.cnn.com
VCs betting on fashion startups in midst of e-commerce downturn
E-commerce company Dote has raised $7.2 million for its mobile shopping app, where it sells items from more than 100 retailers including Urban Outfitters and lululemon. The San Francisco-based startup and its backers, including Lightspeed Venture Partners, are betting the app will be able to succeed even with the continuing spread of e-commerce giants such as Amazon and Walmart.
With Amazon entering nearly every imaginable industry, including its recent foray into meal-kit delivery, many e-commerce companies are struggling to compete as venture funding dries up. VC activity in e-commerce has dropped since 2015—the industry experienced a 24% dip in deal count in 2016, and it’s on pace to drop again this year, per the PitchBook Platform.
But Dote could be onto something. Companies in the fashion space may have an advantage over other e-commerce startups: Many major clothing, accessory and makeup companies have resisted selling their wares on Amazon to preserve the integrity of their brands. Several of the labels in Dote’s “mobile mall,” like Forever 21, aren’t available on Amazon. And it’s possible that consumers, particularly young women, prefer a more personalized and entertaining experience than Amazon currently offers. Via pitchbook.com
Why retailers are going all in on subscription services
Stitch Fix, Amazon Prime Wardrobe, Trunk Club, Rent the Runway and a growing list of subscription services streamline shopping for busy customers, but not every brand has the right formula.
The words ‘subscribe’ and ‘save’ are so closely linked in the world of retail that it’s no wonder the subscription box industry is booming. In 2017, discounting and the sale price mentality have become such standards that The Business of Fashion and McKinsey & Company’s The State of Fashion 2017 report listed “discount culture” as one of its top consumer trends of the year.
Enter subscription boxes. The implication in any box purchase is that consumers will save money, certainly, by signing up to receive a personalized selection of products designed especially for them. But also there’s the promise of saving time, which is almost as important. Consumers no longer need to waste valuable time selecting outfits, browsing through options or even visiting stores. All the work is done in advance, and customers get to enjoy the fun of opening packages at home — which also plays into the increased consumer desire for self-gifting. Via retaildive.com
Small Businesses Sold 40 Million Items on Amazon Prime Day — Twice Last Year’s Total
Are you selling your products on Amazon? If you are not, here’s a good reason to consider the platform. During the recently held third annual Prime Day event, customers ordered more than 40 million units from hundreds or thousands of small businesses. This was up from 20 million units sold last year.
Small businesses offered deals on everything from apparel to toys, household goods and handmade items. Many businesses, in fact, experienced their largest sales day ever. Small business owner, Lawrence Bibi, CEO of LightAccents, a seller of lights and decor, said, “LightAccents had a fantastic Prime Day. It was our best sales day in over two years.”
Ben Arneberg, co-founder of Willow & Everett, said, “Overall, for the Prime Day event (all 30 hours), we saw about 20 times more overall sales. This is a huge benefit to our business, as it gives us exposure to thousands of new customers, and helps us with cash flow as we ramp up on inventory for the Holiday Season.” Via smallbiztrends.com
Sephora Debuts New Digitally Infused Store Format
Inside the beauty oasis that is Sephora in Midtown Manhattan, there has been a lot of tapping going on lately. Not so much the kind of tapping one does with blush brushes or mascara wands, but tapping on high-definition screens.
That’s because when Sephora opened its largest store in North America in New York City this year, the beauty retailer christened a new format designed to appeal to today’s beauty shopper. At the new, larger version of Sephora — 12,000 square feet on 34th Street — the retailer installed dozens of sleek new iPads for shoppers to use. It put in a high-tech makeover station that complements Sephora’s mobile apps. And the retailer added a skin care studio with digital technology that measures moisture on skin.
The new store concept — called Beauty TIP, which stands for Teach, Inspire, Play — is designed to leverage technology to create an in-store beauty playground for shoppers that is un-matched by any other retailer. This culture of innovation is a big reason Sephora, which has 2,300 stores (and more than 600 stores in the U.S., including JCPenney outlets), is the No. 1 specialty beauty retailer in the world, according to Euromonitor International, which tracks beauty sales. Via risnews.com
L.L.Bean Rebrands to Be More Digital
L.L. Bean is stepping away from its traditional back-to-school catalog. Ad Age reports the Maine-based retailer is rolling out a new website with a digital push and three TV spots centered around its new “Be an Outsider” campaign. It’s all part of an effort from the traditional catalog business to become more digital-centric.
“The campaign is one piece of a bigger strategy to shift us from a heritage brand, in catalogs, to a product company,” said Brad Matson, senior vice president of creative for L.L.Bean. Later this year, L.L.Bean is planning on launching more robust digital marketing efforts, including in-store experiences and at least a dozen TV spots by the end of 2017.
Total Retail’s Take: Over the past few years, L.L.Bean has been fragmented in its marketing. The shift to a bigger focus on digital, without abandoning print, could help L.L.Bean not only gain new customers, but further enhance its reputation as an omnichannel retailer. While most companies are paring back TV spots in favor of more online promotions, L.L.Bean plans to use TV to reach a new audience on a national level, especially before the busy back-to-school holiday season. Via mytotalretail.com
Proof that Amazon has ravaged the retail industry
How much damage has Amazon done to the rest of the retailing industry? A lot — and I have the numbers to prove it.
I asked David Aurelio, senior research analyst for Thomson Reuters, to decide how much value the rest of the retailing industry has lost while Amazon’s shares have ascended. Today, for instance, a group of 35 retailers in the apparel business are worth $110.6 billion, according to Aurelio. That’s down from $135.9 billion a year ago.
Automotive retailers (19 of them) are now worth a cumulative $66.6 billion compared with $88.3 billion last year; seven department store companies are now worth $25.4 billion versus $31.4 billion; and 27 distributors are worth $29.6 billion compared with $32.7 billion.
General merchandise stores (six of them) are down to just $67.5 billion in value compared with $94.8 billion in 2016, and 10 companies in food retailing — an area that Amazon just entered, amid antitrust concerns — are worth $41 billion compared with $55.6 billion last year. Via nypost.com
Amazon’s latest assault wipes out $12.5 billion off Home Depot, others
Shares of Home Depot and Lowe’s were slammed Thursday, along with Whirlpool, after Amazon threatened to take on the appliance market in a much bigger way in a deal with Sears Holdings.
The market cap loss in Home Depot, Lowe’s, Whirlpool and Best Buy was about $12.5 billion by the end of the day, after falling to more than $13 billion. Amazon stock was up slightly, and Sears closed up about 10 percent.
But the early read from some analysts was that the sell-off has created a buying opportunity for home improvement retailers Home Depot and Lowe’s, which have proven themselves to be somewhat “Amazon-proof” and among the best performers in the sector. Best Buy, already battling Amazon in electronics, ended the day about 4 percent lower.
Sears, which has lost share in appliance for years, saw its stock rally as much as 25 percent early Thursday, soon after it announced it would sell its Kenmore-branded appliances on Amazon.com. The products will be compatible with Amazon’s Alexa platform. Via cnbc.com
NewStore raises $50 million for mobile commerce
Demandware founder Stephen Schambach has moved on to his next startup and investors are betting $50 million. NewStore, an enterprise platform for mobile commerce, has raised a Series B from Activant Capital, General Catalyst and Schambach’s own money. The company previously raised $40 million since 2015, but just launched the business late last year.
While Magento, Shopify and others provide businesses with e-commerce solutions, NewStore is differentiating itself by being mobile-focused. It has already secured big clients including Adidas. The goal is to “develop a platform that provides an end-to-end solution for retailers that’s mobile first,” said Schambach. “We believe that e-commerce will be a smartphone-only player and we’re building for that,” he said, predicting the death of desktop shopping will happen within the next few years.
NewStore is specifically targeting businesses in the apparel, lifestyle and luxury categories because he believes these are the main spaces that can compete with Amazon. It helps brands build apps and mobile shopping experiences that result in more sales. Via techcrunch.com
Dote raises $7.2 million for its mobile shopping app
While consumers are increasingly turning to Amazon to buy everything from home goods to electronics, a newly launched app called Dote believes there’s an opportunity to compete with the e-commerce giant’s fashion business.
There are “brands that don’t want to put their stuff on Amazon because it degrades their brand,” claims founder and CEO Lauren Farleigh. Further, she adds, “We know that users don’t want to download 20 different apps” to access all their favorite fashion lines. Her solution is a mobile shopping app that curates from brands like Sephora, Victoria’s Secret and Gap in what the company calls a virtual mall.
Farleigh believes that this design will have appeal to young women, particularly between the ages of 15-35. Some notable investors are buying her vision, with Lightspeed Venture Partners leading a $7.2 million round in the company. Part of the money was secured on Apple’s “Planet of the Apps” startup show. Via techcrunch.com
Report: Walmart developing facial-recognition tech
Walmart is working on a facial recognition system for use in store checkout lines that would allow the retailer to use video cameras to detect dissatisfied shoppers, Business Insider reports. A patent filing regarding the system suggests that cameras would capture customers’ facial expressions and movements to gauge varying levels of dissatisfaction, the Business Insider report stated.
Walmart’s previous reported test of facial recognition technology seems to be one of the stranger episodes in the recent history of retail. The accuracy of the report and Walmart’s intentions for testing the technology, as well as its experience, were questioned in 2015 in the days following the Fortune report.
The fact that the retailer might again be developing an application around facial recognition technology is not exactly surprising. Companies like Mastercard are starting to move in the direction of using the technology for payments verification. Via retaildive.com
Campbell Soup forms new e-commerce unit
Campbell Soup Company is forming an e-commerce unit in North America and has hired retail veteran Shakeel Farooque to lead the unit, the company announced today.
Campbell aims to generate $300 million in e-commerce sales over the next five years. It plans to do that in part with partnerships, such as the recently announced $10 million investment and strategic partnership with online meal kit company Chef’d. The company is also creating a more flexible distribution system to serve e-commerce channels.
Farooque, whose title is vice president and head of digital and e-commerce, has experience building omni-channel capabilities for Kohl’s, eBay and Amazon, Campbell noted. Via zdnet.com