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#13 - Amazon Lawsuit, Faire's new Boost, No more free-returns, European Ecommerce & Harley Finkelstein Interview
FTC is suing Amazon. Shopify invests in wholesale platform Faire. H&M cancels free returns. Ecommerce in Europe keeps growing (kinda). Harley Finkelstein on the List of People Shaping Retail’s Future.
It’s kind of unbelievable how the world keeps on going. No breaks. Every week when I send this message, I believe I cover the most interesting topics in Ecommerce. And the next week eventually comes by, with many more news and events to cover. At this point I think I could write a newsletter like this every single, without ever running out of material. Don’t worry - I won’t spam your inboxes that much 😅
Let’s get to it!
5 - FTC is suing Amazon
Lina Khan, head of the Federal Trade Commission (FTC), filed a major lawsuit against Amazon, arguing the company has too much power. Khan believes that the US needs new rules for big tech companies. Amazon has faced previous FTC actions, including allegations of unauthorized Amazon Prime sign-ups and privacy violations related to Alexa. Amazon denies these claims. The lawsuit aims to challenge Amazon's dominance, but it's uncertain what the outcome will be. Some argue that Amazon provides benefits to consumers, and breaking it up or regulating it might not be straightforward. Additionally, the lawsuit doesn't address the power law distribution issue in the tech industry, where a few winners dominate while others struggle. Overall, the outcome of the lawsuit and its impact on Amazon and the tech industry remain uncertain.
4 - Shopify invests in wholesale platform Faire
Shopify is investing in Faire, a platform that connects brands and independent retailers for wholesale transactions. Faire will become the recommended wholesale marketplace for Shopify merchants. This partnership allows Shopify merchants to easily find wholesale buyers and gives retailers access to Faire's brand network. Faire is especially popular in the United States, but it’s growing rapidly in Europe too. Shopify's investment in Faire is part of its strategy to expand its services and help retailers grow their businesses. The exact financial details of the deal have not been disclosed, but it surely deepens the collaboration between the two companies.
3 - H&M cancels free returns
H&M is now charging customers £1.99 to return items they bought online, either in-store or through the internet. The cost will be deducted from their refund. This change doesn't apply to H&M members, who can still return items for free. Other retailers like Zara, Boohoo, Uniqlo, and Next already charge for online returns. The move is aimed at discouraging customers from making bulk online purchases and returning most of them, which has been very costly. While it might not sit well with some shoppers, this is a sensible decision to manage return costs. It's also a way for retailers to retain customers through loyalty programs like H&M's free returns for members. It surely seems that the era of free returns has come to an end.
2 - Ecommerce in Europe keeps growing (kinda)
Most Europeans shop online, and e-commerce is still growing, albeit slower than before. In 2022, online sales in Europe reached €899 billion, with a 6% increase, down from the 12% growth in 2021. Western Europe dominates with 67% of online sales, while Eastern Europe contributes just 2%, but this is where most of the recent growth is happening. The slowdown in growth is primarily due to inflation, which has driven up prices and, in turn, sales volumes. However, the services sector in several countries didn't perform as well.
Experts anticipate a 2% growth rebound this year as inflation subsides. Looking ahead to 2030, e-commerce is projected to make up 30% of total retail sales, thanks to new technologies like AI. AI is currently used to create smart algorithms that predict customer demand, optimizing stock levels and reducing waste. Additionally, the rise of second-hand sales is further fuelling e-commerce's growth.
1 - Harley Finkelstein on the List of People Shaping Retail’s Future 2024
During the interview, Harley Finkelstein, President of Shopify, underscores entrepreneurship as a potent tool for self-improvement and democratizing access to success. He advises individuals to focus on their core strengths and strive to become masters in their chosen domain, advocating for specialization rather than attempting to be well-rounded. Finkelstein shares his personal career risk of leaving a stable law job to join Shopify, highlighting the importance of taking calculated risks, especially early in one's career. He envisions the future of retail as "retail everywhere," emphasizing the need for businesses to be accessible through various channels and surfaces, with direct-to-consumer models gaining prominence. Additionally, he acknowledges the NRF Foundation's pivotal role in connecting people to opportunities within the retail industry, ultimately enabling them to build better lives and careers.
App of the week: Shopify/background-replacement
Meet the Shopify Image Background Replacement Tool: using Stable Diffusion XL, this tool lets you turn your pics into something entirely new. Just upload your photo, describe your ideal background (or what you don't want), and you're good to go!
The Latest Releases and Features by Shopify
We’ve just finished our planned live stream about the latest Shopify Summer Editions 2023. Take a look to see the opinions and analysis of 3 Shopify Experts. Hope you enjoy it 💚
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