Daily Consumer #12 - TikTok and Google Make Their Claim for Advertising Dollars
Plus the rise of warehouse robotics aiming to automate ecommerce fulfillment.
My Work
No feature piece this week. I’m working on a writeup of Meesho, the fast-growing Indian social commerce platform.
Community
Please reach out if you have a request that the community can help with.
News
3D Websites. Etsy launches The Etsy House, a 3D environment that allows customers to “walk through” a digital home filled with curated Etsy items. See it here.
Advertising.
WSJ profiles Google’s efforts to win back advertiser mindshare and dollars from Amazon. “Google is almost like the living dead in ecommerce. No one goes there for shopping.”
TikTok launches new ad formats including “instant webpages”, “pop out showcases”, “super likes”, and gesture-based ads.
Liontree summarizes public company reactions to IDFA. A mixed bag with some citing significant impact and others claiming it is a ‘small issue’.
Square partners with TikTok to help Square Online sellers integrate their inventory and seamlessly run ads on TikTok.
Luxury brands are starting to advertise on LinkedIn, which passed $1B in ad revenue this year and boasts 774M users. “LinkedIn now derives up to 15% of its ad sales from the likes of Mercedes-Benz, Cartier, Louis Vuitton and other consumer brands. LinkedIn members are high-income earners, with the highest median household income of any platform’s user base.”
Analytics. Stripe launches Revenue Recognition, a way for users of its payments platform to set rules for accrual accounting instead of cash-based. Along with the recent cohorted data features Stripe has launched, users are now able to understand their businesses with much less effort now.
AR Commerce. Coty partners with Perfect Corp. to embed Perfect Corp.’s YouCam app technology into the sites and stores where Sally Hansen, Kylie Cosmetics and Covergirl products are sold. “We are working on two main pillars: The first one is innovation and tackling opportunities created by social commerce, live streaming and virtual try-on. The second topic is about advocacy. For years, everybody was looking only at the top influencers, but I would like to identify the best advocates of the brands, meaning the consumer.”
BNPL.
Walmart won’t offer layaway in the holiday season. Will push users to use BNPL instead, offered by Affirm.
Mastercard introduces Installments, a BNPL program available for both in-store and online purchases, in the US, Australia, and UK. Will partner with a number of banks for the service and allow BNPL to be provided without direct merchant integration.
Afterpay’s CEO Nick Molnar says that selling to Square is a “strategic play for the younger generation, which is moving away from credit to debit.”
Affirm is rolling out Adaptive Checkout. “Based on the transaction size, Adaptive Checkout will provide the option of selecting from 4 interest-free payments every 2 weeks to monthly payments spanning 3-36 months. This product is expected to bring incremental increases in sales volume and an average order value.”
Category Expansion.
Nordstrom is pushing into home goods.
Canada Goose expands into footwear starting with winter boots.
Creator Economy. Disney is launching a training program for its fans to learn how to become social media stars.
D2C Brands. Future Commerce ranks the best brands by topic including inclusivity and omni-channel.
Earnings.
Brands
Lego saw H1 2021 revenue grow 46% YoY to $36B. Said that ecommerce sales across its proprietary as well as partners' platforms grew 50% YoY. “We saw the benefits of multi-year investments in ecommerce, product innovation and a global supply chain network. Our strong financial performance now allows us to accelerate strategic investments in sustainability and digitalization.”
Ecommerce Software. A look into how Assembly, an acquirer of ecommerce software companies, makes decisions on what to buy amidst a gold rush in serving ecommerce merchants with software tools.
Gaming Commerce. Wunderman publishes a report about how the metaverse is taking shape and what behaviors, like buying virtual items, will emerge.
Gen Z. Vice profiles how Gen Z consumption behavior is changing. TLDR: sustainability, values, minimalism, connection, quality.
Grocery Delivery. Amazon is adding a $9.95 fee to grocery delivery orders from Whole Foods from Prime members. This is despite Prime members being trained on free delivery. Labor is hard to find and expensive right now and grocery delivery is labor intensive.
Influencer-Driven Commerce. Tom Brady is launching a fashion brand called Brady which he hopes will become the next Jordan brand. Is teaming up with Public School and former DKNY designer Dao-Yi Chow as well as Jens Grede, who helped Kim Kardashian-West build Skims.
International Commerce.
IPOs. Liontree summarizes IPO performance for retail companies that went public in 2021. A mixed bag so far with Figs up 75% since IPO and Poshmark down 43% and everyone else in between.
Lending. Trust, which advances capital for businesses up to 90 days to use for marketing, partners with Plastiq to allow businesses to use the Trust card for invoices where cards are not accepted.
Logistics.
40% of cargo ships in North America are currently waiting for access to a port. The global supply chain isn’t just backed up, it’s flooding with docked ships.
Amazon’s fulfillment infrastructure has double in size in the last 18 months. “We feel like we experienced probably 2 to 3 years of growth in 18 months. And so, I don’t, you couldn’t probably responsibly plan for, for a pandemic or the amount of capacity that’s needed. Just to give you an idea, Jon, we spent the first 24, 25 years of Amazon building a very broad fulfillment center network and over the last 18 to 18 months to 2 years, we’ve had to double that footprint.” - Amazon CEO Andy Jassy
What used to be manufacturing constraints have now become logistics constraints. “A year ago there was a shortage of merchandise, now they've got plenty of merchandise, but there's 2 to 3-week delays on getting it delivered because there's a limit on short-term changes to trucking and delivery needs of the supplier. So, it really is all over the board.” - Costco CFO Richard Galanti
Rohlik, a Europe-based grocery delivery service, is investing $463M in warehouse automation by 2025. Will robots improve the economics of grocery delivery?
Alibaba made its one millionth delivery with autonomous delivery vehicles in China just one year after their launch. Plans to expand their fleet to 10K robots in 3 years which will perform 1M deliveries per day.
NFTs.
Omni-Channel Commerce.
HomeGoods, a TJX company, launches HomeGoods.com. “Customers can purchase a variety of products that they would find in physical stores and executives plan to expand online offerings so customers can shop whenever they'd like.”
The Corners of Brookfield, a shopping center in Wisconsin, is launching a marketplace in partnership with Placewise. The goal is to make it a place where shoppers can browse products, place a buy online pickup in-store (BOPIS) order or make a return from every retailer at the mall.
Payments. The Reserve Bank of India’s is putting into effect on Friday a requirement that banks, financial institutions and payment gateways obtain additional approval for auto-renewable transactions worth over 5,000 Indian rupees ($67) from users. Amazon, Sony Playstation, and other merchants are struggling to react.
Private Label. Amazon is launching Halo Fitness (a Fitbit competitor), a smart thermostat similar to Nest, more home security devices, and an Alexa-enabled mobile robot that looks similar to Wall-E.
Resale.
Yoox Net-a-Porter partners with Reflaunt to launch resale on its online marketplace.
McKinsey publishes a piece on resale marketplaces. “An average of 30% of respondents say they were buying more secondhand fashion items online than before the pandemic. The main reason they cite was to save money. However, an average of 38% say it was because they were keen to create less waste.”
Commerce Ventures shares a thoughtful writeup about how resale is evolving. TLDR: “retailers and brands are embracing the resale category and are launching their own offerings directly.”
Restaurants. Denny’s launches a new consumer digital platform that encompasses on-demand ordering and loyalty. It’s becoming table stakes to have a direct customer relationship in restaurant industry as the ecommerce industry, and enabling platforms like Shopify, have demonstrated.
Returns. Happy Returns partners with Staples and will roll out their Returns Bar, which allows customers to process returns for supported online orders in 60 seconds, at 1K Staples stores. Happy Returns, which was acquired by PayPal, now has 3.8K locations and works with 250 merchants including Everlane, Rothy’s, Revolve, and others.
Same-Day Delivery.
Uber launches a Holiday Shop on Uber Eats. Will partner with Proper Companies to offer Halloween-themed items on the app in October.
Doordash partners with Dream Dinners to offer Dream Dinners meal kits on-demand.
Gorillas pauses its expansion into the US.
GoPuff is adding 40 or 50 micro-fulfillment centers every month and will open its first store in San Francisco.
Search-Based Commerce.
SMS Marketing. Klaviyo releases their SMS for Marketers report, a new study that delves into how consumers' relationships with their phones have changed during the pandemic. “More Americans (51%) say they have increased their use of texting in the past 12 months, compared with other popular forms of communication. 85% of Americans report having received texts from a brand; of those, 65% say they usually feel secure interacting with brands via SMS.”
Social Commerce.
TikTok hosted TikTok World, an ecommerce-focused event. Announced partnerships with Square, Ecwid, PrestaShop, Wix, Shopline, OpenCart and Base to bring more merchants seamlessly into the platform. Also announced a number of new ecommerce-focused ad formats. “The company said it’s able to work with online merchants in a couple of different ways. 1) Direct integration and full-service shopping solution where TikTok manages everything from shipping to fulfillment and point-of-purchase. 2) Working with third-party commerce partners, like Shopify, who can provide sellers with essential backend tools and support. 3) Later this year, via the TikTok Shopping API, which will allow businesses to integrate their product catalogs directly into TikTok, and eventually include those products in their organic content.”
VTEX, an ecommerce platform largely serving Latam-based merchants, announces a global integration with Facebook that will allow VTEX merchants to integrate their catalog of products into all of Facebook’s core apps and seamlessly set up Facebook Shops as well as ad campaigns.
Social Media.
TikTok reaches 1B monthly active users (MAU). Catching up to Facebook’s 2.9B.
Facebook brings Reels, its TikTok-like functionality, to the core Facebook app.
Facebook enables cross-app group chats on Messenger. You can now participate in group Instagram DMs from Messenger.
Pinterest may soon let you share your Idea Pins on Facebook and Instagram Stories.
TV Marketing.
Funding and Exits
Brands
Beauty.
Matter of Fact raises $10M from Horizons Ventures, Cowboy Ventures and First Round Capital for its serum and moisturizer products made from vitamin C formulations.
Live Tinted raises $3M from Montage Ventures for its inclusive beauty brand with its first product being Huestic, a 4-in-1 multi-stick to correct color by balancing discoloration and dark spots under makeup.
Cleaning. Cleancult raises $25M from Reynolds Channel and Anchor Capital for its plastic-free and plant-based cleaning products.
Construction Apparel. Brunt raises $8.4M from TF Cornerstone and Andrew Rosen, the cofounder of the fashion brand Theory, to try to become the Figs for construction. “Since launching in September 2020, the brand has consistently seen average MoM sales growth of 63%, as well as a 44% repeat customer rate.”
Fitness. Playpulse raises $2M from Courtside Ventures and Initial Capital for its gamified fitness bike,
Food and Beverage.
Vita Coco files to go public. Has a beverage portfolio while includes the namesake coconut water brand, a water brand, etc. Generated $334M revenue in the 12 months ending June 30, 2021 which was 17% YoY growth.
Perfect Day raises $350M from Temasek and CPP Investments for its animal-free milk products.
Good Meat raises $97M from UBS O’Connor for its lab grown meat products.
Ripple Foods raises $60M from Rage Capital, Ajax Strategies, and S2G Ventures for its pea milk brand and plans to expand into cheese and ice cream. “Ripple had seen sales grow 20% YoY in measured retail channels versus 6% growth for the overall plant-based milk category. Our sales on Amazon are also 10x what they were a year ago.”
Air Up raises $46M from Five Seasons Ventures for its integrated water products which combines a water bottle and fragrance-driven flavor cartridges. “Since first launching in the market in July 2019, the company has already reached in excess of $116M revenues and has served more than 1M customers across Europe.”
HumanCo raises $35M from 8VC, Jazz Venture Partners, and others for its portfolio of food brands including vegan ice cream. Will acquire Against the Grain, which makes gluten-free and grain-free food products.
New Age Meats raises $25M from Hanwha Solutions for its lab grown pork sausages.
Spudsy raises $3.3M from KarpReilly and Stage 1 Fund for its brand that upcycles imperfect sweet potatoes and turns them into plant-based snacks.
Underwear. Parade raises $20M from Stripes at a $140M valuation. Plans to open its first stores in NYC.
Wine. Winc files to go public. Is a D2C winery that sold 430K cases in 2020 and has 120K members. Generated $71M revenue in the 12 months ending June 30, 2021.
Marketplaces
Affiliate. IAC is rumored to be acquiring Meredith, the publisher of print and online magazines like Allrecipes, Better Homes & Garden, People, etc.
B2B Commerce.
OfBusiness raises $207M from Tiger Global at a $3B valuation for its B2B marketplace that connect industrial suppliers with small businesses to finance raw material purchasing. “The startup’s revenue run rate is over $1B, and it’s profitable. By July this year, its loan book size had increased to $220M.”
Tundra raises $26M from Emergence for its B2B marketplace that allows retailers to buy inventory from a network of brands like Burt’s Bees, Mrs. Meyer’s, Aveeno, and Crayola that offer 2M+ products.
Bijnis raises $30M from Westbridge Capital for its India-based marketplace connecting factories directly with buyers with the value prop of cutting out agents and other intermediaries. “More than 5K factories operating in fashion, footwear and lifestyle categories are now using the Bijnis app to connect to 100K retailers.”
B2B Gifting. Reachdesk raises $43M from Highland Europe to scale its gifting marketplace for businesses with the core use case being sales and marketing.
Brand Rollups. Merama raises $225M from Advent and Softbank at an $850M valuation to acquire brands operating on Amazon and MercadoLibre. “Merama is profitable and it’s on track to reach $300M in revenue this year. The most popular product areas right now in Latin America are related to pets, exercise and consumer electronics.”
Collectibles. Fanatics Trading Cards raises $350M from Silver Lake, Endeavor Group, and Insight Partners at a $10.4B valuation for its new trading card business. Comes 1 month after capturing licensing rights for top sports leagues, including the MLB and NFL. Some insight as to what they’re building: “should collectors purchase a trading card, they’ll be able to insure the asset, grade, store and even put them on a marketplace to sell or trade all through Fanatics. The company would likely collect transaction fees.”
Custom Merchandise. Cobalt raises $2.8M from A&H Haiat and others for its marketplace allowing creators to build custom product lines. “Allows creators to connect with over 250 vetted experts in fields like design, sourcing, manufacturing, engineering and business. Creators pay an additional 10% platform fee on transactions, while experts pay a 5% service fee to use Cobalt.”
Logistics. Ninja Van raises $578M from Alibaba for its Southeast Asia-based parcel delivery network which delivers 2M packages per day and has served over 100M recipients.
Luxury Fashion. Luisa Via Roma raises $152M from Style Capital for its luxury fashion marketplace. Generated $211M in revenue in 2020, with more than 90% of sales occurring online.
NFTs.
Eternal raises $4.5M from NFX, Mark Cuban, Coinbase Ventures and others for its NFT marketplace focused on popular clips from game streamers.
Bubblehouse raises $4M from Third Kind VC for its NFT marketplace which abstracts away the complex mechanics of blockchain technology and crypto to the backend.
Futures Factory raises $2.5M from Seedcamp, Stride, and others for its marketplace for virtual sneakers, which users can collect and then use in augmented reality platforms such as video games.
Out-of-Home Marketing. Firefly raises $15M from Multiply Group for its advertising marketplace that operates digital billboards on rideshare vehicles and taxi cabs.
Same-Day Delivery.
Swiggy is rumored to be raising $500M at a $10B valuation for its Doordash-like food delivery service in India.
Avo raises $80M from Insight Partners for its vertically integrated residential and office delivery marketplace. Avo’s focus on buildings allows them to build demand density and not require a delivery fee.
Social Commerce. Meesho raises $570M from Fidelity and B Capital Group at a $4.9B valuation. Operates a three-sided marketplace that connects suppliers and resellers with customers on social media platforms such as WhatsApp, Facebook and Instagram. “As of April this year, 13M entrepreneurs and over 100K suppliers were using Meesho. Has grown 3x since the previous fundraise.”
Used Cars. Spinny is rumored to be raising $250M for its India-based used car marketplace which resembles Carvana in the US.
Wedding Registry. Joy raises $20M from Valor Siren Ventures for its free wedding organization tools plus wedding registry. “The registry has seen more than 100% growth MoM since it was launched.”
Software
Channel Management. Marlin Equity Partners acquires a majority of Linnworks, a software platform that allows online merchants to connect their online selling channels, automate product listings, orders, and inventory management, and establish commerce control. “Bootstrapped since its founding, Linnworks has reached over $9B in GMV.”
Customer Engagement. Heyflow raises $6M from Project A Ventures for its no-code software that allows marketers to visually design interactive customer experience flows including forms.
Customer Support.
MaestroQA raises $25M from Base10 Partners for its ML-driven customer support quality assurance software that integrates with Zendesk and Salesforce. Is used by Stitch Fix, MeUndies, and others. “Uses machine learning to search for anomalies in customer interactions like a call running really long or a negative follow-up survey result. The software will then try to figure out the issue.”
Thankful raises $12M from Alpha Edison for its AI-powered customer support platform. Has tools to intelligently prioritize tickets and to fully automate ticket response as well. Is used by 50+ brands including Untuckit, FabFitFun, and MeUndies and grew revenue 400% YoY.
IP Protection. MarqVision raises $5M from Softbank Ventures for its AI-powered IP protection platform which allows brands and marketplaces to detect counterfeit products. “Has reached $1M in annual recurring revenue after nine months.”
Logistics.
Project44 acquires Convey, a last mile delivery software company, for $225M. Convey offers a predictive delivery platform that allows brands to properly send delivery updates. “The stakes are high for companies to not only fulfill and ship orders but to make the right promises about availability and delivery.”
AutoStore plans to take its warehouse robotics-as-a-service business public. Aims to generate $300M revenue in 2021 with 50% EBITDA margin. Is a pioneer of cube storage automation which allows warehouses to stack inventory very high vertically. Has deployed robots in 700 locations.
Marketing Automation. Optimove raises $75M from Summit Partners for its customer data platform. Employs AI models to organize customers into “micro-segments” and monitor their migration between micro-segments as their behaviors change. “Claims that its software is used by more than 2.2K marketers from over 500 brands in ecommerce, gaming, retail, etc.”
Social Commerce. Joyned raises $4M from Arthur Stark, the former president of Bed Bath & Beyond, for its ecommerce software that allows merchants to enable on-site social commerce experiences. “Put a “shop with me” button on the website where the shopper can invite friends to a shared shopping cart, mood board and speak with the merchants.”
Universal Cart. Carrot raises $5.5M from Kindred Ventures, M13, and others for its browser plugin that automatically captures what a user adds to a cart and allows users to organize all active carts they have across many stores. App also tracks price updates for those products.
Fintech
BNPL.
Capital Float raises $50M from Lightrock India for its India-focused BNPL service. Merchant partners include Amazon India, Unacademy, MakeMyTrip, and others. Has amassed 2.5M customers who make >2M purchase per month. “Our customer base has more than quadrupled in the last 12 months, and our collection efficiency was still more than 95% this period. Half of Capital Float’s user base today doesn’t have a credit card.”
QisstPay raises $15M from MSA Capital for its Pakistan-focused BNPL service that has partnered with 1K merchants and served 1M consumers.
Card Issuing. Highnote raises $54M from Oak HC/FT to enable brands to easily issue cards to their end customers. “Because ecommerce tech giants like Amazon, Shopify and Apple can outspend SMEs in the space, Highnote says its low-code API single platform and data feedback allows smaller players to compete on card issuance, customer loyalty and engagement.”
Insurance.
Cover Genius raises $73M from G Squared at a $729M valuation for its Australia-based insurance business that provides property, shipping and ecommerce warranties through its growing network of partners.
Buckle raises $60M from Volery Capital for its insurance product focused on gig economy workers in rideshare and food delivery.
Product of the Week
Cuts Clothing makes excellent staple shirts for men across three distinct shirt bottom cuts (regular, split-hem, and elongate) and three collar options (crew, v-neck, and henley). It’s also a remarkable story of a bootstrapped but thriving apparel brand. Check out their collections here.