Today on our show:
- CMACH 3 event in New York City recap
- May retail sales data released
- Beyond loses a CEO
- Instacart expands retail media into Youtube
And finally, The Investor Minute, which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
https://www.rmwcommerce.com/ecommerce-podcast-watsonweekly
Today's episode of the Watson Weekly Podcast is sponsored by Commerce Tools. Make sure your brand and your business is ready for the trillion dollar e-commerce market. Commerce Tools, the global leader in commerce and creator of the powerfully composable mock architecture, can help you achieve bite-size wins or up-sized achievements faster than ever. Whether you are looking to reduce maintenance costs for legacy systems or put the power of AI to work for you quickly, Commerce Tools is your partner for commerce success. Go to commercetools.com to learn how to get started. It's June 24th, 2024. And this is the Watson Weekly, your essential e-commerce digest. Today on our show, Mach 3 event in New York City recap. May retail sales data released. Beyond loses a CEO. Instacart expands retail media into YouTube. And finally, the investor minute, which contains five items this week from the world of venture capital, acquisitions, and IPOs. But first in our shopping cart full of news. Mach 3 event in New York City recap. The recent alliance event offers community, new questions, and an elephant in the room. Last week I was at the Mach 3 event in New York City as chair of the Mach Impact Awards and I co-presented with Maya Nights to a packed room. There are many deserving winners and I thank all the entrants. It's great to see good friends like Garee Sakhar at the event, along with many others. Thanks to the organizers for having me. Here are some of the things that are on my mind. How to change and why change was on the mind of many attendees. Burning platforms were on display. Several presentations showed two to four year journeys with multi-billion dollar retailers. Range surgery is required. Overall, the level of technology discussion at the Mach Alliance event is second to none. You might expect that from this group and this is a boutique event. However, the difference from a standard shop talk or other event is really night and day. While there are many enterprises in the room, there are a lot of vendors in the room too, both agencies and ISVs. As the Mach Alliance itself grows, the organizers will definitely need to watch this ratio. The event continues to be a multi-platform affair and once I personally saw it, the event included commerce tools, big commerce, v-text, and commerce layer. I'm sure others were there as well and it's nice to see Tom Armstrong back in the platform gaming too at BigCommerce. The elephant in the room and a lot of discussions from vendors was, what about Shopify? I feel that several questions from some vendors and agencies who had traditionally focused more on market but now we're looking to understand how to penetrate the Shopify universe. At RMW Commerce, we travel into all the rooms and so it's interesting to see the shift. In the past, the feeling was always, if it's a Mach vendor and Shopify in the same room at the same time, one of us is in the wrong room and that time feels like a distant memory now. The feeling on the floor is that Shopify is being pushed from the boardroom, witnessed what just happened at Overstock, seriously, whatever the hell is going on there. There's another story about it, I have this week, I really can't figure it out. And IT teams understand the reality of a composable approach. In the new reality where it's the CFO's world and we're all just living in it, it seems to me that pre-composed solutions have the upper hand and custom-built anything feels like a distant memory, perhaps up to one billion in overall revenue at least. Over a billion, the technical complexity and legacy is often dizzying. This question remains in my mind. What does Shopify's role in an enterprise with a sea of vendors and Shopify is just one of the many solutions required to power e-commerce and not necessarily the central one? Just witness, no PIM, no OMS, no CMS to speak of, questions about payments and POS which is not let yet at the level for this segment. You can argue you ain't going to need it, but Shopify doesn't seem to be taking that approach. As a partner more and more, obviously they play no role in the mock alliance, but you will see some of these mock vendors playing in the Shopify world. Our second story. May retail sales data released. Every month the US Department of Commerce censuses bureau releases its first calculation of the previous month's retail sales. In retail dive reports is figured by grouping some of the segments in retail. Here are a few of the stats they report. Retail sales in May rose 4.5% year-of-a-year with commerce growing over 6%. However, if you remove autos, retail sales were essentially flat and expected to be slightly higher by analysts. Core retail sales which excludes restaurants, automobiles and gasoline increased 2.88%. In retail, electronics and apparel seem to have recovered with 3% and 5% growth respectively, but sporty goods and home goods are off 6% year-of-a-year. These in the home categories seem to be extremely worried about traffic at the moment for my own conversations. But let me tell you something. Traffic is down everywhere in this category, it may not be your marketing. Meanwhile, the Anoraph continues to put on a happy face saying April was down as an anomaly and May was slightly up. If that's the case, don't you have what's called a good comp? It's interesting that these numbers are softer than analysts expected because if there are revisions, I tend to find their revised down later and not up. Look, the data out there is not bleak by any stretch. There's a lot of growth from good companies, and the rebound of apparel is very positive. The reason that CEOs are holding on tight to their investment rates, however, is due to warnings about the future and wondering how long things can last. Interest rates declining will be good news and bad news for retailers at the same time. Great if you're in the home sector, but perhaps bad for other reasons. After all, the Fed doesn't raise rates until it feels the economy needs a boost for some reason to begin with. Has anyone else out there have little faith in the Fed's ability to time things perfectly? Haven't we all learned that timing the economy at all is a bad idea with regards to your personal investments? Why would it be any different for your business investments? There's always something to improve for your customers, focus on that and you'll be in a good place long term. Our third story, Beyond shakes up its C-suite in quest for profitability. At the home show recently, increasingly active board chair Marcus Glamonas while introducing Chandra Holt, the new Bed-Bass CEO said all the idiots are out of the room and the company was on a stable platform going forward. Apparently, all the idiots, but maybe not all the costs. CEO Chandra Holt has been ejected from this mess after only five months on the job. It increasingly looks like to me, the strategy for Beyond has just become the old overstocks since Dave Nielsen, the longtime veteran of the company, is now taking over overstock, Bed Bath and Beyond and Zulily. Chandra Holt joined just in February and is already out. Zulily was acquired in March this year and the site is still shuttered not yet live. From technology to acquisitions to leadership, overstock and Beyond have had a very strange recent history and there are more questions and answers. Will the technology stack be consolidated across the firms? Is there any brand equity left in Zulily? What's left to turn back on? When will these new promised brands launch? Is this more than just a dumpster diving strategy? When will all these home loan and other new grifty services launch? Apparently, all the idiots in even more costs is out of the room now and to me that means there are still several shoes more to drop and the firm has not yet hit rock bottom and Marcus Glamonas' attempt to reboot the firm. Perhaps he'll have his own episode of The Prophet focused on himself. At our last story, Instacart extends retail media data to YouTube. A new article from payments talks about how a new partnership between Instacart and YouTube for shoppable ads. Here's how it works. Shopable ads be credited on YouTube to allow brands to use those ads to drive same day purchases, of course, powered by Instacart. The key behind the whole thing is leverage a segmented set of Instacart's customer data in order to drive the proper audience for the ads. There are two initial partners in the program, Clorox and Publicis. Overall, the use is for retailers who have valuable shop or data are endless and these types of partnerships are becoming more common. Amazon has prime video and other assets and it's increasingly building a targeting engine to work with other media partners as well. The fact that these ads not only drive brand impressions but also direct purchases is very ROI friendly for CFOs as well. The retail media train has left the station a long time ago and there are many channels but it seems to me that the big players will still get bigger and there needs to be some kind of consolidated first party data network for the lower tier vendors to survive by sharing data. A data network which pooled the lower tier retail media network's data could increase the value of their data assets and give retail another viable option when partnering with these distribution channels like YouTube. Now a word from our sponsor, Commerce Tools. When a multi-billion dollar beauty brands e-commerce platform near the end of its life, the entire business was at risk, including the ability to serve customers. By switching to commerce tools and embracing a more flexible mock architecture, the retailers vision for connecting in-store and personalized shopping experiences became a reality. The brand can now roll out new features within days, securing its position as a modern brand which uses technology to its advantage. After being held hostage by your technology platform and your developers who are storing up their hands, tell them to start a free trial at commercetools.com today. It's not time friends for our investor a minute. We have five items on the menu today. First, retailer accounting platform Final Loop raises $35 million Series A. Final Loop, a real time accounting software platform for retailers, has raised $35 million in Series A funding. The money will be invested in software platform and its partnership network. Second, express bonobos are brought out of bankruptcy. Phoenix Retail, a joint venture between WHP Global and mall owner Simon Brookfield and Centennial, have required express for $174 million and bonobos for $75 million. Will 2024 be the year we see more brand acquisitions after bankruptcy? This venture seems focused on spreading the risk between the parties involved. Third, Descartes requires box top technologies for $13 million. Descartes, a global supply chain SaaS platform has acquired box top, a shipment management solution for small to medium sized logistics service providers for $13 million in cash. Descartes loves making these small talking acquisitions which fits certain capability needs on their platform. Fourth, international shipping platform ship Angel raises $5 million. An Angel, a rate management platform for beneficial cargo owners, has raised $5 million to optimize supply chain performance, save time and costs, and improve data accuracy. It sure does feel like there are a lot of rate management platforms out there and I expect consolidation as the industry matures. And finally, B2B Inventory Optimization Platform Revive raises $3.5 million seed round. B2B Inventory Optimization Platform Revise has raised $3.5 million in seed funding to help turn deadstock into revenue. Businesses like this were focused on apparel have formed continuously. Mostly they succeed on the back of marketplaces and are a tough business to run. This one seems focused on AI to remove the labor component which is always tricky. And today's final word of the week for June 24th is "guarantee". I was speaking with a friend in e-commerce last week and it seems like not only have we moved into the area of the CFO, we have moved into the area of the guarantee. Brands are so sensitive to failure and risk-averse that they have started to ask for service guarantees. If you are a service provider in this kind of environment, I feel for you. And the move here is simple. Don't take the cheese. Be patient, communicate your value and references and wait them out. Even if another provider is willing to lower prices enough or make outrageous guarantees to the brand, they're not going to be a good customer for your provider anyway. Why? Making promises you can't keep is no way to start any business relationship. Did you know that RMW Commerce is a brand new podcast? Check out the Watson Weekend for an unfiltered and lively e-commerce chat each week with me, Rick Watson, my co-host, Jess Lasseski, an array of interesting guests and topics all focused on e-commerce. You can find the Watson Weekend by searching for it on iTunes, Spotify, or YouTube. That's all for this week. Until next time, Watsonians! Hi, I'm Rick Watson, CEO and founder of RMW Commerce Consulting and host of the Watson Weekly Podcast, your essential e-commerce digest. Our production partner for the series is Citizen Race Car. The show is produced by Jose Baez, production manager Gabrielle Montakeen. To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts. You
