Digital and e-commerce news - May 2022
Here I summarize some news I read in May related to the digital and e-commerce world that I found most interesting and relevant. Let me know any suggestions to improve this monthly recurrence. I hope you will like it.
Amazon opened its first clothing store in California.
Credits: Amazon
The opening of physical retail spaces is nothing new for Amazon: in 2016, the queue-free, checkout-free Amazon Go store was born in Seattle, and later successfully expanded to the UK. In 2021 we also witnessed the opening of the first hair salon in London. However, the new opening in Los Angeles represents a real first for Amazon, as it is the first physical clothing store, called Amazon Style. The store will rely heavily on technology for its shopping experience. As an example, customers can use the Amazon Shopping app to send items they like to a fitting room and they can select a pattern, size, and color of a certain item by scanning a QR code. Read more here.
Jokr announces its Media platform and this could be its way for profitability.
Jokr, the US q-commerce player, announced the launch of Jokr Media. In the quest for profitability, the creation of a media platform is a big shift for the US rapid delivery specialist since it will represent an important source of income, depending on where brands (mainly CPG) will decide to focus their marketing spending.
Jokr’s platform will be self-service and will provide brands with the opportunity to bid for relevant marketing placements with the opportunity to analyze in-depth data and exploit additional touchpoints (on and off App). This announcement arrives just a few weeks after Jokr’s closure of European region that, according to its CEO, was representing only 1% of the business. Read more here.
Klarna letting 700 employees go while e-commerce payments decrease.
Credits: Klarna
The news of the buy-now-pay-later tech company laying off 10% of its workforce has bounced everywhere in the last few weeks. Indeed, Klarna revised its expected growth, considering the new economical and geopolitical situation, and communicated that around 700 employees would have been let go. It is clear that investors are concerned about future profits and with rising interest rates and declining market liquidity they are really careful when providing new funding. In addition to this, what has not been highlighted is that in the first months of 2022 e-commerce transactions decreased by 1.8% while ‘offline’ sales increased by 10% (source: Mastercard SpendingPulse). This shows that customers, amid strong economic uncertainty, are still eager to go out and shop more at brick-and-mortar stores and less online, forcing some tech founders to review their growth rates. News here.
Chip shortage could last till 2024 according to Intel CEO.
The pessimistic prediction made by Intel CEO Pat Gelsinger is that the chip shortage will last until 2024. The reason is simple: the semiconductor shortage is also predictably affecting the sophisticated machinery, which uses a lot of electronics, producing the same integrated circuits.
This bottleneck in manufacturing expansion is putting at risk an ever-rising demand given that areas such as the Internet of Things, fast data networks, robotics, automotive, and consumer electronics are continuously growing. Indeed, the Covid19 pandemic caused the disruption of a fragile equilibrium since chip production suffered a slowdown just as demand for electronic-computer apparatus was soaring (e.g. smart working). In addition to this, the situation got worse due to the fact that much of the world's chip production capacity is concentrated in Asia.
Finally, automotive is one of the industries that are suffering the most: its low (but growing) demand is giving car manufacturers low bargaining power so, as an example, BMW has revealed that some new models will be produced without Apple CarPlay or Android Auto options. Read more here for chip shortage and here for BMW and automotive slowdown.
Instagram testing NFTs in the US.
Credits: Instagram
Instagram started in the US a NFT test with selected creators. There is not any fee when posting or sharing a digital collectible so, beta testers, can show the NFTs they created or bought through Stories, Feed or messages. At launch, the supported blockchains for showcasing NFTs are Ethereum and Polygon. A. Mosseri, Head of Instagram, stated that they “can learn from the community. We want to make sure that we work out how to embrace those tenets of distributed trust and distributed power, despite the fact that we are, yes, a centralized platform”. Read more here.
Zara charging customers for online returns.
Starting from mid-May, every time you will shop on the Zara website in the UK you will think twice before hitting that ‘Buy’ button. Indeed, if you would like to do an online return you will be charged £ 1.95. However, if you want to return your item in a Zara store it will be for free. Smart move to bring customers back to stores or financial need to cover huge costs that fashion retailers bear for managing returns? Uniqlo and Next are already charging for returns so only time will tell if the decision will be accepted by Zara’s customers. What is clear is that this choice will not solve the big issue of the environmental impact that returns, and items that cannot be re-sold, have. Read the news here.
Exciting news from Google Marketing Live event.
The event was quite relevant for marketers since it was the first one after the announced privacy changes in online advertising. Google’s strategic priorities are quite clear: offer new tools and insights for advertising, increase integration between search and shopping, and battle with increasing competition. These are the key points:
Automation and insights: more automation and insights that leverage first-party data and marketing expertise in synergy with Google's machine learning. In addition, new reports inside the Insights page (e.g. Attribution, Budget, etc.);
Tools to simplify campaign management: more tools to experiment like A/B testing (Performance Max campaigns), to manage campaigns also through app, and additional merchant tools to improve conversion and sales;
Ads on YouTube Shorts: Video action and App Campaigns will go automatically also on Shorts that today count more than 30 billion daily views. By end of the year also product feeds will be connected to simplify the buying process;
Privacy updates: launch of My Ad Center, a new privacy tool that will allow users to select brands from which they agree to receive ads and opt-out of sensitive ad categories.
Read more here.
Celine (LVMH) and Armani Beauty expands in China by landing on JD.com with an official store
Expansion to China’s biggest online platform (JD.com) continues to be a priority for many brands in 2022. First, Celine (LVMH Group) opened its flagship store showcasing handbags, garments, and other accessories. Second, Armani Beauty also launched its official store at the end of May with more than 180 beauty products (in collaboration with L’Oreal). Read more here for Celine and here for Armani Beauty.
