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  • Grubhub Rolls Out $30 Million Stimulus To Restaurants

    Grubhub Rolls Out $30 Million Stimulus To Restaurants

    “A $250 payment per restaurant (from Grubhub) doesn’t sound like a lot but it’s going to be a huge difference,” says Grubhub CEO Matt Maloney. “We’re looking at it as a stimulus almost because the way we’re rolling it out is a consumer gets $10 if they spend $30. So our $30 million dollars is going to transform into over $100 million dollars of food sales to restaurants across the country.”

    Matt Maloney, CEO of Grubhub, announces a $30 million stimulus to restaurants in a discussion on CNBC:

    Grubhub Rolls Out $30 Million Stimulus To Restaurants 

    A $250 payment per restaurant (from Grubhub) doesn’t sound like a lot but it’s going to be a huge difference. We’re looking at it as a stimulus almost because the way we’re rolling it out is a consumer gets $10 if they spend $30. So our $30 million dollars is going to transform into over $100 million dollars of food sales to restaurants across the country. That’s a big slug when everyone’s working really hard to try to put money in the hands of small businesses.

    It depends on the market (in terms of how many restaurants are still open). In early COVID West Coast markets, we saw a dramatic dip in restaurants that went off the platform. Now they’re starting to come back on. You have New York and Detroit that are in the throes of the crisis right now and so you’re they’re peaking with about 30 percent of the restaurants off. But remember, we’re having thousands and thousands of restaurants coming on the platform for the first time so we’re seeing about the same number in terms of net. It’s just a transition.

    Grubhub Triples Highest Restaurant Onboarding Month Ever

    Our teams are working around the clock. We tripled our most onboarding month ever of restaurants. We had 15,000 restaurants go live in March. We’re probably going to do more in April. It’s just an incredible intensity of need right now for restaurants. We’re doing everything we can to help them. With drivers, we launched contact-free pickup or drop-off. We also just launched, just last week, curbside pickup for the drivers to make sure there are two layers of protection.

    There’s plenty of work on Grub and I know there’s lots of work on other delivery platforms as well. We have our own stimulus for our drivers too. If they get impacted directly by COVID we’re paying them. I know other platforms are also. And, of course, the CARES Act just came through with a lot of relief for gig workers also. Everyone right now is all hands on deck trying to help the restaurants, the drivers, and everyone impacted through this economic and health care crisis. 

    Fundamental Economics Are Still Intact

    I am hoping for the best. I think that the fundamental economics of our society is still intact. There is a lot of demand right now for restaurants. If we can help restaurants get through the next few weeks or months, depending on how bad this is, they will come back, they will be there for our communities. If they can’t, then that’s going to be a real problem.

    What we’re seeing right now is as the crisis bottoms out in the market growth does start to come back in that local area. We’re seeing the crises (at different levels) around the country in different markets at different times so we’re trying to dynamically manage that situation on the ground.

    Grubhub Rolls Out $30 Million Stimulus To Restaurants, Says Grubhub CEO Matt Maloney

  • Google Donating $800 Million to Small Businesses Amid Crisis

    Google Donating $800 Million to Small Businesses Amid Crisis

    With the fate of many small businesses on the line, Google is donating some $800 million to assist small businesses during the economic crisis.

    As the global health crisis worsens, companies around the world are closing shop or drastically changing how they conduct business. Many are facing uncertain futures, leading governments and companies to take measures to assist. Google is one of the latest to step up, pledging some $800 million to the effort.

    In a blog post, CEO Sundar Pichai said the company will be donating “$250 million in ad grants to help the World Health Organization (WHO) and more than 100 government agencies globally provide critical information.” This should help combat the spread of misinformation that is plaguing social media.

    In addition, the company is also setting aside “a $200 million investment fund that will support NGOs and financial institutions around the world to help provide small businesses with access to capital. As one example, we’re working with the Opportunity Finance Network in the U.S. to help fill gaps in financing for people and communities underserved by mainstream financial institutions. This is in addition to the $15 million in cash grants Google.org is already providing to nonprofits to help bridge these gaps for SMBs.”

    Google is also providing “$340 million in Google Ads credits available to all SMBs with active accounts over the past year. Credit notifications will appear in their Google Ads accounts and can be used at any point until the end of 2020 across our advertising platforms.” The company is also providing $20 million in Google Cloud credits that researchers can use to access Google’s computing resources.

    Overall, this is a significant effort on the part of Google to stimulate small businesses and help them weather the storm. By making Google Ad credits available, it should provide a relatively risk-free way for small businesses to keep advertising, despite the economic challenges.

  • Americans Being Targeted by Coronavirus Digital Fraud

    Americans Being Targeted by Coronavirus Digital Fraud

    TransUnion research shows Americans are being targeted by coronavirus-related digital fraud in alarming numbers.

    As the coronavirus pandemic forces more Americans to stay at home, ecommerce has become a critical part of everyday life. Even basic necessities are being purchased online, rather than through physical stores. Bad actors are taking advantage of that trend, targeting Americans in an effort to defraud them.

    TransUnion surveyed 1068 adults, finding 1 in 5 (22%) had been targeted with coronavirus-related digital fraud. “In the report, TransUnion Global Fraud & Identity Solutions reported a 347% increase in account takeover and 391% rise in shipping fraud attempts globally against its online retail customers from 2018 to 2019.”

    Methods of taking over accounts included buying credentials on the dark web, social engineering, romance scams, phishing and more. Once an account is taken over, fraudsters can steal packages by intercepting them at the carrier and changing the shipping address, rather than attracting attention by doing it online.

    “With so many reported data breaches, it’s not just about if your account will be hijacked, it’s about when,” said Melissa Gaddis, senior director of customer success for TransUnion Fraud & Identity Solutions. “Once a fraudster breaks into an account, they have access to everything imaginable resulting in stolen credit card numbers and reward points, fraudulent purchases, and redirecting shipments to other addresses.”

    TransUnsion’s report is a good reminder that, even in a time of global crisis, individuals need to practice solid cybersecurity to keep their information, purchases and finances safe.

  • Amazon Using AI to Understand Searches

    Amazon Using AI to Understand Searches

    Amazon is using artificial intelligence (AI) to better understand search queries and why a person may be looking for something.

    Understanding why a customer searches for a product is just as import as knowing what they searched for. Knowing the context can help a retailer make relevant recommendations for other products that not only compliment the item being searched for, but the activity or reason behind the search. Amazon is intent on cracking that piece of the puzzle, and is applying AI to the problem.

    “In a paper accepted to the ACM SIGIR Conference on Human Information Interaction and Retrieval, my colleagues and I present a new neural-network-based system for predicting context of use from customer queries,” writes Adrian Boteanu. “From the query ‘adidas mens pants’, for instance, the system predicts the activity ‘running.’

    “In tests, human reviewers agreed, on average, with 81% of the system’s predictions, indicating that the system was identifying patterns that could improve the quality of Amazon’s product discovery algorithms.”

    As Amazon continues to improve its algorithms, shoppers should see increasingly relevant shopping recommendations and the research could open a whole new arena for personalized digital shopping assistants.

  • There’s Been a Lot of Advances In Machine Learning, Says Etsy CEO

    There’s Been a Lot of Advances In Machine Learning, Says Etsy CEO

    “There’s been a lot of advances in machine learning that take things that would have been literally impossible ten years ago and made those things much more possible today,” says Etsy CEO Josh Silverman. “With 62 million products for sale, picking for any given buyer the 20 or 30 that should be on page one of search results is a pretty interesting and pretty challenging task. The key is understanding what an item is with relatively little data and then being able to determine for each individual person how to personalize search results.”

    Josh Silverman, CEO of Etsy, discusses how Etsy has increased growth by standing out in a world of sameness and by employing machine learning technology to personalize the Etsy experience for their customers. Silverman talks about his strategy for success in an interview with Fortune:

    We Started Doing Much Fewer Things Much Better

    Etsy has never been more relevant. In a world where so many of our products are being commoditized and we’re surrounded by a sea of sameness, Etsy stands for something really different. I think it’s really important that we stand out in the world and I’m proud of what the team has done to achieve that. The definition of success was really clear. I think from day one it’s about growing the size of the pie for everyone. The actual tactics that it was going to take to do that we’ve learned together as a team over time. 

    When I arrived, there were maybe eight or ten different metrics of success that we all held relatively equally. I said there’s one metric that matters much more than every other, which is what we call gross merchandise sales. In other words, the total sales of our sellers. When we stopped saying what’s a good idea, what moves any one of these 10 metrics and started saying, what are the fewest things we need to do to really accelerate gross merchandise sales, we came to a very different answer. We started doing much fewer things much better. That’s really been the key to our success.

    There’s Been a Lot of Advances In Machine Learning

    Change is hard. When running a marketplace we have access to a lot of data and insights that each individual seller won’t necessarily have. Our job is to really look after the good of the whole and be willing to make some decisions that sometimes, in the moment, may not feel obvious to every seller but really do lift all boats and make our sellers as a whole much better off. We’ve really focused at a high level on doing two things really well. One, make it much easier for people to find great products on Etsy. And two, once they’ve found those products to actually buy them. 

    With 62 million products for sale, picking for any given buyer the 20 or 30 that should be on page one of search results is a pretty interesting and pretty challenging task. There’s been a lot of advances in machine learning that take things that would have been literally impossible ten years ago and made those things much more possible today. The key is understanding what an item is with relatively little data and then being able to determine for each individual person how to personalize search results. We’ve made leaps and bounds in the science of search and machine learning. That’s more relevant at Etsy than almost anywhere else.

    The mission of Etsy is incredible. As the nature of work changes creativity can’t be automated. The role we play for creators and makers being able to harness their creative passions and power and turn that into a way to earn a living for their families is a mission that I think is ever more important in this fast-changing economy.

    There’s Been a Lot of Advances In Machine Learning, Says Etsy CEO Josh Silverman
  • Coronavirus: Amazon Hiring Additional 100,000 Warehouse Workers

    Coronavirus: Amazon Hiring Additional 100,000 Warehouse Workers

    With more Americans relying on online shopping during the coronavirus pandemic, Amazon is hiring an additional 100,000 warehouse workers.

    Dave Clark, Senior Vice President of Worldwide Operations said: “We are opening 100,000 new full and part-time positions across the U.S. in our fulfillment centers and delivery network to meet the surge in demand from people relying on Amazon’s service during this stressful time, particularly those most vulnerable to being out in public.”

    In addition to working to meet demand and help people who are relying on the ecommerce giant, Amazon is also taking measures to help employees cope with the added challenges by offering a $2 per hour raise.

    “In addition to the additional 100,000 new roles we’re creating, we want to recognize our employees who are playing an essential role for people at a time when many of the services that might normally be there to support them are closed,” Clark continued. “In the U.S., we will be adding an additional $2 USD per hour worked through April from our current rate of $15/hour or more, depending on the region, £2 per hour in the UK, and approximately €2 per hour in many EU countries. This commitment to increased pay through the end of April represents an investment of over $350 million in increased compensation for hourly employees across the U.S., Europe, and Canada.”

    Amazon’s announcement is welcome news for customers and warehouse employees alike, and will hopefully help ease the strain from the coronavirus pandemic.

  • Coronavirus: Shopify Giving Employees $1,000 to Help Work From Home

    Coronavirus: Shopify Giving Employees $1,000 to Help Work From Home

    It’s a good time to work for Shopify, as the company is giving employees $1,000 to help them make the transition to working from home.

    As the coronavirus pandemic spreads around the country and globe, Shopify has joined the ranks of tech companies instructing their employees to work from home. The company made the announcement in a tweet:

    As COVID-19 continues to impact people and countries around the world, Shopify will be going remote first starting March 16th. Working from home will help play a part in reducing the spread of the virus, and hopefully lessen its potentially huge burden on the healthcare system.

    — Shopify (@Shopify) 3/11/20

    According to Business Insider sources, the company is going a step further by giving all of its employees $1,000 to buy what they need to help furnish and set up their work-from-home space. It’s unclear how the company is doing this, whether in the form of a bonus or strictly by reimbursement. The company is also allowing employees to take home whatever office equipment they need to work from home.

    Numerous companies have already announced work-from-home plans, and in the wake of President Trump’s address Wednesday night, that number is likely to grow.

  • eBay Pursuing Sale Of Its Classified-Ads Business

    eBay Pursuing Sale Of Its Classified-Ads Business

    eBay has been considering selling its classified-ads business for some time, but it appears the company is finally taking steps in that direction.

    The company’s classifieds business is estimated to be worth some $10 billion and mainly operates internationally, similar to Craigslist in the U.S. Selling the classifieds division would leave eBay with its core marketplace business.

    According to The Wall Street Journal, “Private-equity firms including TPG and Blackstone Group Inc. and strategic bidders including Naspers Ltd. and German publishing company Axel Springer SE have recently expressed interest in the business.” eBay has also been approaching other companies to gauge interest.

    Both Naspers and Axel Springer have existing online classifieds businesses, and the addition of eBay’s business would no doubt significantly increase their reach. The WSJ reports that indications of interest are due in March.

    We will continue to monitor developments and report updates.

  • Morgan Stanley Set to Buy E-Trade

    Morgan Stanley Set to Buy E-Trade

    Morgan Stanley has entered into a definitive agreement to purchase E-Trade, the popular electronic trading platform.

    The deal is an all-stock transaction, valued at roughly $13 billion, making it the largest such deal since the 2008 financial crisis. The acquisition will help Morgan Stanley’s diversification efforts, bringing in 5.2 million customers and $360 billion in assets.

    ““E*TRADE represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy. The combination adds an iconic brand in the direct-to-consumer channel to our leading advisor-driven model, while also creating a premier Workplace Wealth provider for corporations and their employees. E*TRADE’s products, innovation in technology, and established brand will help position Morgan Stanley as a top player across all three channels: Financial Advisory, Self-Directed, and Workplace,” said James Gorman, Chairman and CEO of Morgan Stanley. “In addition, this continues the decade-long transition of our Firm to a more balance sheet light business mix, emphasizing more durable sources of revenue.”

    The deal is subject to regulatory approval and approval by E-Trade shareholders. Should everything go as planned, it is expected to close in the fourth quarter of 2020.

  • Grocery Foot Traffic is Walmart’s Secret, Says Analyst

    Grocery Foot Traffic is Walmart’s Secret, Says Analyst

    “Foot traffic has been the secret,” says Tim Lesko of Granite Investment Advisors. “Walmart a couple dozen years ago moved into grocery and that move, which was widely panned at the time, has really led foot traffic to stay steady. You’re still seeing same store sales growth in a retail industry that is really really under a lot of pressure. Stores that are able to maintain foot traffic, people that are going for grocery and then buying other goods, really creates a strong backdrop against other retailers.”

    Tim Lesko, partner at Granite Investment Advisors, discusses how foot traffic driven by their grocery business is key to Walmart’s continued growth in an otherwise difficult retail sector:

    Grocery Foot Traffic is Walmart’s Secret

    There are two things that are most important to us. One is that Walmart a couple dozen years ago moved into grocery and that move, which was widely panned at the time, has really led foot traffic to stay steady. You’re still seeing same store sales growth in a retail industry that is really really under a lot of pressure. So pretty happy to see that even though same store sales were a little light compared to street estimates, they were still positive. 

    Second is the online business. They continued to spend a lot of money and have done a really good job of growing that online business. People fail to recognize that they’re the second largest online retailer in the US. 

    Foot traffic has been the secret. Stores that are able to maintain foot traffic, whether they be stores that are people hunting for bargains in the TJ Max’s of the world or people that are going for grocery and then buying other goods really creates a strong backdrop against companies like Pier 1 which went bankrupt over the weekend. You’re seeing bankruptcies all over the landscape. You have to drive foot traffic. 

    Multiple Revenue Streams Makes Amazon a Difficult Competitor

    Multiple revenue streams is why Amazon is such a difficult competitor. They have businesses outside of their core retail business that really drive the profits and they continue to sell goods at a loss online. But interestingly, you have Amazon that’s moving from being a virtual merchant to now a bricks and mortar merchant, getting into grocery, getting into daily distribution of goods to people. 

    Walmart’s been doing that for years and has all of the goods in your geography. In the future world of same-day delivery and next day delivery, Walmart’s very well-positioned to provide that service. It’s almost like they’re both heading towards the same way but with Walmart at a much better valuation.

    Grocery Foot Traffic is Walmart’s Secret, Says Analyst
  • UPS Ups the Ante On Weekend Deliveries

    UPS Ups the Ante On Weekend Deliveries

    Just a week after FedEx Ground announced it would offer Sunday deliveries, UPS said it plans to more than double its weekend deliveries in 2020, according to Reuters.

    As Reuters points out, UPS “pioneered seven-day delivery in 2013, in partnership with the U.S. Postal Service (USPS), and is now spending billions of dollars to speed up its free shipping.” In recent years, however, it has faced increasing competition from FedEx, as well as from Amazon. Amazon has started using its own drivers for deliveries, and often reserves the most desirable, high-density delivery routes, leaving UPS to handle rural and low volume routes.

    One way to offset the challenges is by increasing the delivery volume, and is part of the motivation behind UPS’ announcement. Expanding weekend delivery also ensures UPS stays a viable option in the minds of customers who want items delivered as soon as possible.

    “E-commerce spikes on the weekends, and retailers want those orders delivered sooner,” said UPS Chief Marketing Officer Kevin Warren, according to Reuters.

    As the delivery market continues to heat up, it will be interesting to see if UPS and FedEx’s weekend options help them better compete with Amazon.

  • Amazon and Goldman Sachs May Soon Partner For Lending Services

    Amazon and Goldman Sachs May Soon Partner For Lending Services

    According to Quartz, and originally reported on by the Financial Times, Amazon and Goldman Sachs may soon team up “to offer small business loans in the U.S.”

    Goldman Sachs has already shown itself willing to work with big tech, as it partnered with Apple to launch the Apple Card. If the report is accurate, Goldman Sachs may be “developing technology to provide lending through Amazon’s lending platform, potentially reaching thousands of enterprises that sell through the e-commerce giant.”

    As Quartz highlights, Goldman Sachs has a lot to gain by working with big tech. A latecomer to the consumer banking industry, the company has no branch locations and is likely looking at big tech as a good way to gain market share. In fact, according to Quartz, “the Wall Street bank explicitly outlined partnerships (pdf) and co-branded relationships as part of its strategy for Marcus, its fledgling consumer brand.”

    Big tech companies have increasingly been looking to expand into the financial industry, seeing it as a way to keep customers involved in their ecosystems. At the same time, regulators are growing more concerned as tech companies expand beyond their traditional realm. If the report is true, a deal between Amazon and Goldman Sachs is likely to draw further scrutiny.

  • DTC Brands Doing Incredible Numbers on Shopify, Says COO

    DTC Brands Doing Incredible Numbers on Shopify, Says COO

    Direct to consumer brands are doing incredible numbers on Shopify, says Shopify COO Harley Finkelstein. He says that Kylie Jenner has generated almost a billion dollars in sales on the platform and many other influencers such as Kanye West, Drake, and most recently Tom Brady are also doing very well.

    “Even if you go beyond just Kylie, you look at companies like Bombas and Allbirds and Tommy John and Fashion Nova, these are brands that didn’t exist five or ten years ago and they’re absolutely doing incredible numbers on Shopify with no slowing down in mind,” says Finklestein. “Shopify was built to help anyone that has an idea start a great business and sell to a global audience.”

    Harley Finkelstein, COO of Shopify, talks about the incredible numbers DTC brands are doing on Shopify, the huge success of Shopify Capital, and their quick acceptance of cannabis stores in Canada and potentially the rest of the world, in an interview with Jim Cramer on CNBC:

    DTC Brands Doing Incredible Numbers on Shopify

    We’re really happy with how we ended the year and certainly, the quarter was great and we’re really excited about our future. We’ve been at this now for almost 14 years. We’ve grown to 820,000 merchants up from 600,000 merchants a year ago. We have a big top of funnel with brand new entrepreneurs getting started on Shopify for the very first time. We also have some very large brands like the big CPGs and some big direct to consumer (DTC) companies all using Shopify to scale their businesses. We’ve got a really great business model and we’re having a lot of fun.

    It’s amazing. I think the Kylie story ($1 billion in sales) was surprising to a lot of people, not for us because we see so many stories like that all the time. Whether it’s Kanye West launching his Yeezy store on Shopify or Drake’s store or Tom Brady’s new store, we see all of these major brands and huge influencers using Shopify to create authentic products and sell it to the audience. I always sort of think back to if DTC and direct-to-consumer were around when Michael Jordan was creating the Jordan brand with Nike I think Nike would be a supplier and Michael Jordan would be the brand. He would own the entirety of his business as opposed to getting a licensing fee.

    We’re really excited about this. But even if you go beyond just Kylie, you look at companies like Bombas and Allbirds and Tommy John and Fashion Nova, these are brands that didn’t exist five or ten years ago and they’re absolutely doing incredible numbers on Shopify with no slowing down in mind. Shopify was built to help anyone that has an idea start a great business and sell to a global audience. We really do bend the learning curve to make it really easy to get started.

    Shopify Helping Democratize the Entire Business Process

    The ones that succeed, not all of them do, but the ones that do succeed they grow really large with us and over time we want to provide them with more services and more solutions. For example, we launched Shopify Payments a couple of years ago. We went to the payments companies and negotiated rates on their behalf. We launched Shopify Shipping and went to the shipping company and negotiated shipping costs on their behalf. We always are trying to find economies of scale to help democratize the entire business process for these small businesses.

    More recently we realized that a lot of these small businesses also need capital. Because we have so much information on them we’re able to make really quick and very effective underwriting decisions so we were able to go and offer them capital cash advances. We’ve given out hundreds of millions of dollars of cash advances to a lot of these small businesses who if it wasn’t for Shopify would not be able to get this money on their own.

    Entrepreneurs Want to Own Their Audience

    Etsy fundamentally is a marketplace. Etsy is a place where someone who makes a product can go to find an audience. But our feeling is that you know for an entrepreneur they don’t always want to rent the audience. They want to own the audience. They want to have a direct relationship with their customers. They want to own the entire to profit margin. They want to be able to sell and have long-term relations with the people that are buying their products.

    So companies like Etsy do a really good job of curating a bunch of products and renting those customers to those makers. We think the marketplaces are really great but we think ultimately makers and entrepreneurs and merchants want to have a direct relationship with the people buying their products. One of the things that is not well known about Shopify but one way to think about what we do is really this retail operating system. Merchants can start a store with us very easily and they can build a beautiful online store but they can also cross-sell to different marketplaces like eBay or Amazon.

    The idea is that it feeds all feeds back in one centralized back office which is Shopify. That’s where they can run the entirety of their business. Really the idea is let’s become the most important piece of software they use on a daily basis. The first thing they open every morning, the last thing they close every night. So obviously marketplace will play a role there but ultimately merchants want to find customers wherever those customers exist and more and more they want to sell direct to those customers.

    Shopify Facilitating Cannabis Sales in Canada

    The reason we started with Canada was there was clarity in Canada. The Canadian government, the legislature, they were very clear with how they were going to roll out the commercialization and the legalization of cannabis sales on the consumer side. We felt it was really important for us to act quickly and effectively to not only win as much of the Canadian market as we possibly could but also to show the rest of the world as they begin to think about cannabis sales that we are the first phone call that they should be making.

    Whether it’s the province of Ontario or British Columbia or most of the largest licensed producers like Canopy in Canada, Shopify is what’s powering those retail sales. We think that we can do a great job helping other countries and other regions do the same thing.

  • Amazon Is NOT Going To Put Everyone Out of Business

    Amazon Is NOT Going To Put Everyone Out of Business

    “Amazon is not going to put everyone out of business,” says retail guru Dan Hurwitz of Raider Hill Advisors. ”In fact, they’ve taught a lot of retailers how to distribute goods properly. They’re actually going to help a lot of retailers thrive at the end of the day. In our business, the best merchant wins, whether it’s Amazon, whether it’s Macy’s, whether it’s Target, or whether it’s Walmart. As a practical matter, if you can have a bricks-and-mortar presence and a digital presence at the same time you’re going to be a winner.”

    Dan Hurwitz, CEO of Raider Hill Advisors, discusses how Amazon’s retail success has driven other retailers to improve and some may have found ways to create a retail experience even better than Amazon.

    Amazon Is NOT Going To Put Everyone Out of Business

    Amazon is not going to put everyone out of business. In fact, they’ve taught a lot of retailers how to distribute goods properly. They’re actually going to help a lot of retailers thrive at the end of the day. In our business, the best merchant wins, whether it’s Amazon, whether it’s Macy’s, whether it’s Target, or whether it’s Walmart. We’ve all learned never to bet against Walmart. As a practical matter, if you can have a bricks-and-mortar presence and a digital presence at the same time you’re going to be a winner. Target is doing it right, Walmart’s doing it right, and Best Buy is doing it great. 

    What’s happening is 70 percent of those people that buy online pick up in-store are also buying something else in the store. The cohesion between bricks and mortar and digital is what’s making people successful. Those that aren’t doing it successfully will ultimately fail. There is (significant) up-sale when you buy online and you still pick up in-store. Don’t forget, people are going to be incentivized to pick up in the store because retailers lose money shipping goods for free. They’re going to have to figure out a better way to get you into the store. When they get you into the store there’s an up-sale and that up-sale is a highly profitable up-sale. We’re going to see more of that as this evolution continues. 

    The whole concept of an apocalypse of bricks and mortar was really overblown. Best Buy was the best example. People were talking about them disappearing. They’ve done a phenomenal job turning it around as has Target and as has Walmart. That will continue.

    Some Department Stores Will Struggle To Survive

    Some (department stores) will struggle to survive and some will get it done. I happen to be a fan of Macy’s. I like what Macy’s is doing. I think they have a very strong management team and they have great real estate. They have sophisticated buyers and they’re reinventing their inventory. They’re looking they’re sourcing the right goods just at the right price at the right time. They have to make the experience better obviously. People talk about experience, but the merchandise is the experience. You can have a great experience but if you have lousy merchandise it’s not going to work. Macy’s has a great buying group that I wouldn’t bet against.

    There would have been a number of great retailers for Amazon to own (via acquisition) nationally. The question is, if they really have a store, forget about Whole Foods for a minute, just an Amazon store, I’m not so sure what they put in it. They’re great distributors of goods but if you walk into their stores today I don’t know if you would argue that they run a great experience or store with terrific merchandise. I think they have to run a different kind of store. But I do think there’s an opportunity for them to expand their reach dramatically.

    Amazon Is NOT Going To Put Everyone Out of Business
  • Verishop CEO On Competing With Amazon: “It’s Not a Zero Sum Game”

    Verishop CEO On Competing With Amazon: “It’s Not a Zero Sum Game”

    “The market narrative is always it’s a zero-sum game,” says Imran Khan, co-founder and CEO of Verishop, a new Amazon competitor launching soon. “You are coming in and it’s Verishop versus Amazon or Snap versus Facebook. Those are great stories, but ultimately I fundamentally believe that all of us are on the right side of the history in a sense. Not one company will take everything. It’s just impossible for one company to solve every problem.”

    Imran Khan, co-founder and CEO of Verishop, discusses how the Verishop shopping platform can compete and win market share from Amazon and others in an interview on Bloomberg Technology:

    There’s a Lot of Opportunity to Innovate in Ecommerce

    Ecommerce is now only 9 percent of the overall retail market. I believe that over the next decade 30-40 percent of all retail will be online. There are actually not that many consumer choices when you look for buying branded products, having a better experience, or having a better way to discover products. We think there’s a lot of opportunity to innovate. In markets like China, for example, where 25 percent of the market is ecommerce there are many more players in China compared to the US. So I think that’s a better way to bring joy in the consumer mind when they’re trying to buy things.

    In my time at Snap I noticed that millennials like to do more research before they buy something. They also care about responsibility in terms of shopping. They care about economy and sustainability. If you as a consumer, for example, want to buy sustainable products where do you really go? So we have a lot of different ways of discovering products. On our platform, we’ll have around 200 different attributes that consumers can use to find products. I’m really excited to bring in a new way of shopping to consumers. The market is very large and I think it can accommodate a lot of players.

    As Ecommerce Grows Not One Company Can Solve Everything

    I really admire Amazon and I’m a shareholder of Amazon personally through my fund. However, I think as ecommerce goes from 10 percent to 40 percent, not one company can solve everything. Amazon is also a juggernaut. They do software, they do a lot of different things. Again, I really admire the company but there are a lot of parts of ecommerce that are not being addressed by existing players. I think we can bring that. For example, discovery, we know that because ecommerce is still very much intent based I think we can give consumers a lot of different ways to discover new products.

    The key thing to keep in mind is the time spent on mobile device is only going to grow. The market narrative is always it’s a zero-sum game. You are coming in and it’s Verishop versus Amazon or Snap versus Facebook. Those are great stories, but ultimately I fundamentally believe that all of us are on the right side of the history in a sense. People are spending more and more time digitally and as people spend more time digitally there will be a lot more new businesses. Not one company will take everything. It’s just impossible for one company to solve every problem. Facebook does a great job with Instagram and Snap has done a great job with camera. I think one will be bigger and the other smaller, but only time will tell. But I think both can co-exist very well.

    Verishop to Focus on Trust

    We are going to launch in late June or early July. You will see our commitment in four areas. Number one is trust. Most of the ecommerce players are marketplaces. When you’re in a marketplace where anybody can go list something or anybody can post something the platform is prone to counterfeit and fraud. We saw that with eBay we saw that with Facebook with the Russians and we saw that with Talbot in China. What we’re doing is we’re acquiring all the product directly from the brands by guaranteeing that everything you’re buying is real.

    Trust is going to become an important topic on the internet. Over the last 25 years, the internet was built on the premise of an open platform and we saw that when everything is open and there are no rules it brings chaos. We solve that at Verishop by sourcing all of the products that we are sourcing directly from the brands to ensure that they are real.

    The second key thing (that distinguishes) the Verishop platform is discovering new products. Again, ecommerce is very much intent-based, so we are giving consumers more choices to discover products through a lot of different ways that you will see. Our third focus is we’re going to continue to make a big commitment on convenience. I know Amazon and other companies do this it but we’re going to continue to do so by offering free shipping, free return, all those kind of things. We’re excited and it’s just the beginning. It takes a long time to build a business and hopefully we’ll continue to bring new products and new innovation to the platform.

    Verishop CEO Imran Khan On Competing With Amazon: “It’s Not a Zero Sum Game”
  • FedEx Delivery Robots Receive Chilly Response in New York City

    FedEx Delivery Robots Receive Chilly Response in New York City

    TechCrunch is reporting that New York City has made it abundantly clear autonomous delivery robots are not welcome.

    FedEx, like Amazon and Postmates, has been experimenting with autonomous delivery robots, some of which were in NYC over the weekend to be previewed at the company’s Small Business Saturday event. After some of the bots—called Roxo—were spotted, Mayor Bill de Blasio and transportation officials wasted no time making their position known—again, despite the fact the bots were only there for a presentation and not actually delivering anything.

    According to TechCrunch, “the mayor tweeted that FedEx didn’t receive permission to deploy the robots; he also criticized the company for using a bot to perform a task that a New Yorker could do. The New York Department of Transportation has sent FedEx a cease-and-desist order to stop operations the bots, which TechCrunch has viewed.

    “The letter informs FedEx that its bots violate several vehicle and traffic laws, including that motor vehicles are prohibited on sidewalks. Vehicles that receive approval to operate on sidewalks must receive a special exemption and be registered.”

    The bots use machine learning, in combination with an array of sensing technology and cameras to plot a safe route, while at the same time avoiding obstacles and obeying traffic or sidewalk rules.

    While FedEx has been testing “the bots in Memphis, Tennessee as well as Plano and Frisco, Texas and Manchester, New Hampshire,” it’s a safe bet NYC won’t be seeing them anytime soon.

  • Amazon VP Says 58% of Sales Come From Small Businesses

    Amazon VP Says 58% of Sales Come From Small Businesses

    “Over 50% of everything that gets sold on Amazon actually comes from small and medium-sized businesses.,” says Amazon’s VP of Small Business, Nick Denissen. “Their success is our success so we’re definitely focused on doubling down on that. We have over 1.9 million small and medium-sized businesses in the US who work together with Amazon to conduct their business. Those include our sellers, authors, and skilled developers. They’re just a very important part of the customer experience we serve up.”

    Nick Denissen, vice president of small business at Amazon, discusses the huge impact that small businesses have on Amazon sales in an interview on CNBC:

    Over 50% of Everything Sold On Amazon Is From Small Businesses

    Over 50% of everything that gets sold on Amazon actually comes from small and medium-sized businesses. Their success is our success so we’re definitely focused on doubling down on that. We have over 1.9 million small and medium-sized businesses in the US who work together with Amazon to conduct their business. Those include our sellers, authors, and skilled developers. They’re just a very important part of the customer experience we serve up. 

    The 58 percent I just culled out they are actually the part of the business that is growing faster than our first-party business. We definitely have our interests aligned with small businesses on all fronts. As I pointed out, 58 percent of everything that gets bought is from small and medium-sized businesses. Many customers don’t realize that. 

    Amazon Storefronts Shed a Little Bit More Light On Small Businesses

    Last year, we launched Amazon Storefronts to shed a little bit more of a light on small businesses. Amazon Storefronts is essentially a curated shopping experience where customers can dedicatedly shop from local small businesses. They’re all US-based small businesses. When we opened that Storefront last year a little bit over a year ago we had 20,000 sellers. To date, we’re excited to announce that we actually have 30,000 sellers. 

    We’ve also developed special technology for them to share more content. They can actually share their story. Those sellers have reached 70 million customers in the last year and sold over 250 million products. I think those numbers speak for themselves that we really are helping and that small businesses can get discovered on Amazon.

    Amazon Announces Small Business Spotlight Awards

    Today, we’re super excited to announce our Small Business Spotlight Awards. We’re continuing to shine a spotlight on many of these exciting small businesses where they can share their stories. We’re announcing 18 finalists across three categories. There’s Small Business Woman of the Year Award, Entrepreneur Under 30, and Small Business of the Year Award. When we asked our sellers to nominate themselves for this process we actually had over 1300 nominations. Since it’s the first time we did it we really didn’t know what to expect. 

    Starting today our customers can vote until November 8th for their favorite small business in this category. One thing that we’ve learned is that customers do like to learn more about these small businesses, about their stories, and also other small businesses get a lot of inspiration from small businesses. We’re pretty excited to have these sellers on this journey with us. 

    Small Business Winner Will Get $80,000

    We’re also conducting two live seller events in the US today where we’re enabling small businesses to meet customers and to actually conduct a sale. I just want to call out that one of the nominees, one of the finalists in the Small Business of the Year award, is  Damhorst Toys and Puzzles. They are a multi-generational company. They’ve been in business for 48 years. They hand manufacture their wooden toys in Missouri and now they found their way online with Amazon. They’re growing and it’s great to see those types of companies. 

    The winner will get an $80,000 award so we’re pretty excited to have them continue to grow and prosper on Amazon. One of the things we hear from small businesses is it’s not easy to find the skill sets to help them drive an online business, in particular businesses who have started offline. That’s one of the areas we’re also looking at. How can we help small businesses on that front?  So stay tuned on that.

    Amazon VP Nick Denissen Says 58% of Sales Come From Small Businesses
  • SurveyMonkey CEO: Selling To the Enterprise Has Been Wildly Successful

    SurveyMonkey CEO: Selling To the Enterprise Has Been Wildly Successful

    “We really took a strategic imperative about two and a half to three years ago to step up our enterprise game,” says SurveyMonkey CEO Zander Lurie. “This has been a company that has thrived in going direct to end-users. We’ve built up a user base, a paid customer base, today of almost 700,000 people. But over the last three years, we’ve elevated our game. Today, enterprise represents 20 percent of our business. It helped us deliver our best quarter in history. We’re now growing 20 percent year-over-year.”

    Zander Lurie, CEO of SurveyMonkey, discusses how the company is driving its massive growth by focusing on enterprise solutions that are sold by the seat, in an interview on CNBC:

    The Category For Experience Management Is Massive

    The category for experience management is massive. Companies today are differentiating their products and services by their ability to be customer-centric. Everybody has access to off-the-shelf software and you can buy keywords on Google and you can target folks on Facebook but the ability to really be sensitive to what your customers care about and want is critical. Usabilla is the solution that we acquired earlier this year. They have a customer in KLM Dutch Airlines who was able to improve their app experience by a 2.8 to a 4.2 rating using our product. It really is about, can your managers and can your marketers listen to that feedback, understand the bugs, and then deliver and take action. That’s what survey software can do.

    We don’t compete with Adobe and Salesforce at all. Frankly, there are hundreds of thousands of Salesforce customers who need to be buying enterprise survey software. We exist in the Salesforce ecosystem and really try and help Salesforce customers get better data and get sentiment data from what their customers really care about. Salesforce, Microsoft, Adobe, those are big systems of record. They provide you a lot of operational data. Where SurveyMonkey competes and thrives is delivering for customers that sentiment data. How am I really doing? What can we improve upon? That’s where we’re selling a solution into the Salesforce ecosystem and we partner with Salesforce in a really productive way. It’s part of the reason they bought into our IPO last year. 

    Selling To the Enterprise Has Been Wildly Successful

    We really took a strategic imperative about two and a half to three years ago to step up our enterprise game. This has been a company that has thrived in going direct to end-users. We’ve built up a user base, a paid customer base, today of almost 700,000 people. But over the last three years, we’ve elevated our game. Today, enterprise represents 20 percent of our business. It helped us deliver our best quarter in history. We’re now growing 20 percent year-over-year. 

    We set about on our IPO last year and told investors our plan to make this business a lot more valuable. The two key driving factors first is to elevate our sales motion to sell directly to the enterprise. That has been wildly successful. We doubled year-over-year a hundred percent growth in revenue in the sales channel. We now have almost 5,000 customers, up 60 percent year over year. We now compete in that ecosystem and we have a really disruptive product. Consumers love our product. We’re now selling into the organization with a really talented sales team. 

    There’s Been So Much Account Sharing On SurveyMonkey

    Our team’s product is the collaborative self-serve product. We have a unique opportunity here. There’s been so much account sharing on SurveyMonkey over the years and in the current security environment, we’re asking people to pay for their own seat. That has driven a really healthy paid user growth. We see continued growth in those two areas. As I said, growth for us we’ve accelerated growth now twenty percent year-over-year, but we do it a disciplined way. We’re still able to deliver over $13 million dollars of unleveraged free cash flow in the quarter. We’re just not a company that’s going to grow at all cost. We want to have both healthy growth and disciplined cash flow.

    We use politics in a fun way to help get a beat on what’s going on out in the world. Just like we ask questions about if you are potentially interested in buying an electric car or what do you think of Impossible Burger or Beyond Meat, we also ask questions of the two and a half to three million people on our platform every day of who might you vote for and what issues are important to you. That really does give us a particular read on what American consumers are thinking.

    Selling To the Enterprise Has Been Wildly Successful, Says SurveyMonkey CEO Zander Lurie
  • The Mall Is More or Less Dead, Says Legendary Retail Analyst Jan Kniffen

    The Mall Is More or Less Dead, Says Legendary Retail Analyst Jan Kniffen

    “The mall is more or less dead except in 279 great cases where we’ve got fabulous malls out there,” says legendary retail analyst Jan Kniffen. “But the 1,100 malls they’re struggling. It’s the levered retailers and the mall-based retailers that are struggling. We’re going to have 26 retail bankruptcies this year. But in a downturn, we could see 100 and we’re going to see 12,000 stores closed this year. It will be the highest number that’s ever closed in history. But we could see 50,000 close in a downturn. It’s because we don’t really need those retailers and we don’t need those stores because the business is moving online at a fierce pace.”

    Jan Kniffen, CEO of J Rogers Kniffen World Wide, says the mall is more or less dead as consumers move their shopping to online platforms at a fierce pace. Kniffen was interviewed on CNBC:

    The Mall Is More or Less Dead

    We’ve had really good retail reports. Think about it. Walmart was fabulous. Target was fabulous. Home Depot was good. Lowe’s was good. Just run down through the group that has already reported and, in general, if you weren’t mall-based full price you did great. Off-mall did great, online did great, and discount did great. The retail market and the consumer couldn’t be better. Levered mall-based retailers are dead. The mall is more or less dead except in 279 great cases where we’ve got fabulous malls out there. But the 1,100 malls they’re struggling. They’re running down comps. The mall is not the place to hang out anymore. Now you hang out in front of your computer and then you go with your friends to do something like go to restaurants and you don’t care about hanging in the mall. 

    But the people hanging in the mall were never the people that bought the stuff in them. All the people who bought the stuff in the mall were all the women in America who went to work for the first time in the 1980s and blasted them all to the ceiling. We pulled everything out of the mall except for women’s apparel for all practical purposes and that has now settled into this nice slow roll. People don’t dress for work anymore and the malls not any fun and there’s plenty of other alternatives. Just 20 years ago when the mall was really booming we didn’t have a strong T.J. Maxx and Ross stores and Burlington stores. The stuff across the street from the mall was very boring in those days. Those are really good retailers today. 

    Business Is Moving Online At a Fierce Pace

    The two best retailers in the world right now are Costco and Walmart. They are big, strong, have super supply chains, and can handle the tariffs no problem. They’ll gain market share under tariffs. They can even handle a downturn in the economy because they’re both super well-capitalized. Even people like Macy’s that have been struggling, they can handle a downturn in the economy because they’re not levered. They’ve got plenty of cash flow. They pay a 10 percent dividend and they buy back stock. 

    It’s the levered retailers and the mall-based retailers that are struggling. I keep saying we’re going to have 26 retail bankruptcies this year. We just got two more to talk about. But in a downturn, we could see a hundred and we’re going to see 12,000 stores closed this year. It will be the highest number that’s ever closed in history. But we could see 50,000 close in a downturn. It’s because we don’t really need those retailers and we don’t need those stores because the business is moving online at a fierce pace.

    We Know That Everybody’s Getting Out of China

    We know that everybody’s getting out of China. They were getting out of China before the tariffs started. Now they’re just getting out of China faster. Yeah, the shoe guys are still getting 60 percent of their stuff out of China but it used to be 90 percent. The apparel guys are still getting 15 percent of their stuff out of China but it used to be 50 percent. So that’s already happening.

    The tariffs have not been that big a deal. Tier four, the new tariffs that are about to kick in, if they kick in, would be a big deal for my world. But maybe they’re not going to kick in, which is the other thing that’s going on. We’re not really sure it’s going to happen but it’s still causing everybody to move faster out of China. So Trump has accomplished what he wanted to accomplish. He’s getting American business out of China.

    The Mall Is More or Less Dead, Says Legendary Retail Analyst Jan Kniffen
  • Walmart Now Delivering Groceries Directly Into The Fridge

    Walmart Now Delivering Groceries Directly Into The Fridge

    “We’ve got 4,700 stores within ten miles of 90 percent of the US population,” says Walmart Ecommerce CEO Marc Lore. “In those locations, we’ve got about 100,000 products including fresh and frozen. We’ve started doing pickup a couple of years back and now same-day delivery to the door. We decided to take it a step further and actually deliver it directly into customers fridges and so far so good.”

    Marc Lore, CEO of Walmart Ecommerce U.S., discusses In-Home Delivery and Next Day Delivery in an interview on Bloomberg Technology:

    Walmart Now Delivering Groceries Directly Into The Fridge

    This (delivery to a customer’s fridge) is a great opportunity for Walmart to leverage this unique asset to do things that only Walmart can do. We’ve got 4,700 stores within ten miles of 90 percent of the US population. In those locations, we’ve got about 100,000 products including fresh and frozen. We’ve started doing pickup a couple of years back and now same-day delivery to the door. We decided to take it a step further and actually deliver it directly into customers fridges and so far so good.

    I do think this is a great step change in the value proposition. Imagine going to work and coming home and having all the groceries stocked in your fridge. We just saw (in a previous trial using a third party) a really big opportunity to use our own Walmart associates to do the delivery. Their W-2 employees. They’ve been with Walmart for at least a year. We feel like that’s a big advantage.

    Can Deliver All Purchases Into Your Home Without Packaging

    We don’t actually need to have cameras in the home. The actual associate will have a camera on their vest. You could actually as a customer track on your app the associate going into your home, putting groceries into the fridge, and then leaving. You can look at it in real time or you can go back and look at it anytime you want. It’s very safe for customers as well.

    There are lots of possibilities (that will stem from in-home deliver). For example, being able to do a return. Imagine just leaving something on your kitchen table. That’s it, going to work and coming home and we’ll just take it away from you. Also, being able to deliver general merchandise into your home without any packaging. I think there’re lots of opportunities for services and health and wellness and all sorts of opportunities. We’re thinking them through now. We have some ideas.

    One Day Delivery Actually Costs Us Less Than Two Day

    Next Day Delivery has been great so far. It’s down in the LA region right now. By the end of the year, we’ll have about 75 percent of the population will have access to Next Day Delivery. Typically, the cutoff time is around 3 p.m. If you order by 3 p.m. you will get it the next day in a single box. That’s the other great thing too. A lot of times now you might receive it in multiple packages. It’ll be overnight in one box. We are really excited about that.

    It actually costs us less than Two Day Delivery. The big reason is that we’re able to get it in a single box. All this inventory is now mirrored or replicated close to the customer. If it’s close to the customer and it costs us less to ship it. If it’s one box it costs us less to ship as well. So yes It’s actually cheaper. We’re just being very measured in how we roll it out. By the end of the year, three-quarters of the country will have it. It’s gonna be moving pretty fast. About 40 of the top 50 metro areas will have access to it. So it’s about four or five areas a month that we’re adding.

    Dramatically Improved Contributed Profit Margins

    Right now, we’re in a really good position (regarding online profitability). Over the last year, we’ve dramatically improved our contributed profit margins. We’re starting to drive more mix into the higher margin categories like fashion and home. So feeling really good about the momentum we have. We have some dates in mind that we’re not obviously sharing. But we feel good about where we are right now. We feel really good about where we are and where we’re going.

    Walmart Now Delivering Groceries Directly Into The Fridge – Walmart Ecommerce CEO Marc Lore
  • FedEx Ground Now Offering Sunday Shipping

    FedEx Ground Now Offering Sunday Shipping

    FedEx has announced “that FedEx Ground has officially started delivering FedEx Home Delivery packages on Sunday for the majority of the U.S. population.”

    The moves comes as FedEx strives to “better serve the fast-growing e-commerce market.” Over the holiday season, Amazon banned its third-party sellers form using FedEx Ground over concerns the service was too slow and that packages would not arrive in time for Christmas. The news should go a long way toward dispelling those concerns moving forward.

    “Now that FedEx Ground delivers FedEx Home Delivery packages on Sundays to most U.S. residences, we have increased our speed advantage significantly to kick off the new year,” said Raj Subramaniam, president and chief operating officer of FedEx. Corp. “This provides added value to e-commerce shippers throughout the U.S. and the 188 million online shoppers in 7,700 cities and towns where FedEx Home Delivery packages are delivered on Sundays. As more customers expect weekend delivery, this enhancement to our network means that every day is now a delivery day at FedEx.”

    The change is another example of the increasing importance of e-commerce to the U.S. economy and the changes companies are willing to make to keep pace with it.