Amazon has just unveiled its latest generative AI tool, Project Amelia, an innovation designed to transform how merchants operate within its ecosystem. The new AI assistant promises to streamline the daily operations of third-party sellers, offering personalized insights, inventory management tools, and creative assistance to boost sales. This move is part of Amazon’s broader strategy to strengthen its suite of AI-powered services, especially as it faces growing competition from rivals like Google and OpenAI.

A New Era for Amazon Merchants

Launched as part of Amazon’s continued expansion into artificial intelligence, Project Amelia is built using Amazon Bedrock, a generative AI platform designed to provide scalable access to cutting-edge foundation models. The AI assistant is positioned as a powerful business companion for Amazon’s vast network of third-party sellers, helping them optimize everything from product listings to sales strategy.

According to Matt Garman, CEO of Amazon Web Services (AWS), “Project Amelia is saving people time so they can focus on what matters most.” Garman emphasized that the AI tool is aimed at making the business of selling on Amazon more efficient, empowering sellers to analyze sales data, identify business opportunities, and provide strategic recommendations.

“Amelia is built to handle complex operational tasks,” Garman said. “Now a seller can rely on Amelia to gather and analyze sales data while offering valuable insights—all with just a few clicks.”

How Amelia Works

Project Amelia goes beyond basic data crunching; it brings a comprehensive, AI-powered approach to managing a seller’s business. Sellers can interact with the AI tool by asking a wide range of questions, from straightforward inventory updates to more strategic inquiries about market trends. For example, a seller might ask, “What are the top things I need to do to prepare for the holiday season?” Amelia will not only provide an answer but deliver personalized insights based on the seller’s business profile.

Swami Sivasubramanian, Amazon’s VP of AI and Data, highlighted Amelia’s ability to not just answer questions but to anticipate sellers’ needs. “Amelia is not just reactive; it’s proactive,” he explained. “It can provide real-time updates on metrics like sales and traffic, and it even compares current performance with historical data to offer valuable context.”

The assistant also taps into Amazon’s broader data ecosystem to generate creative content. From writing product listings to creating promotional videos, Amelia leverages generative AI to automate tasks that previously required significant manual effort.

Olivia Ma, Senior Manager of Product Management at Amazon, praised the potential of Amelia to transform how merchants approach their sales strategies. “The Amazon Seller mobile app, equipped with Amelia, is evolving into a more intelligent business companion,” she said. “We’ve listened to seller feedback, and this tool reflects their needs by integrating powerful, easy-to-use solutions that were previously labor-intensive.”

A Response to Competitive Pressures

The launch of Amelia comes at a time when Amazon faces increasing competition in the AI space. With companies like Google and OpenAI advancing their generative AI capabilities, Amazon has ramped up its AI efforts, introducing new tools like Rufus, an AI-powered shopping assistant, and Bedrock, a service for cloud customers. However, Amelia stands out for its laser focus on supporting Amazon’s merchant community.

Retail analyst James Callan noted that Amazon’s expansion into generative AI tools is not just about staying competitive but about enhancing the experience for both sellers and buyers. “Amazon has recognized that merchants, especially smaller ones, need more support to thrive in a highly competitive marketplace,” Callan said. “Tools like Amelia not only level the playing field but also create a more dynamic and efficient ecosystem for sellers.”

Reducing Complexity for Sellers

Running a business on Amazon involves managing numerous operational complexities—from ensuring proper inventory levels to optimizing marketing strategies and complying with regulations. Amelia simplifies these processes by offering personalized advice that reflects the unique needs of each seller.

According to Mary Beth Westmoreland, Amazon’s Vice President of Worldwide Selling Partner Experience, “Amelia acts as a personal AI assistant, always ready to help sellers manage their business more effectively and focus on growth.” She added that the assistant is capable of providing critical data updates and even resolving issues, like inventory discrepancies, in real-time.

For instance, if a seller notices a discrepancy in inventory data, they can ask, “I have 300 units on the way but don’t see them in the report. Can someone look into this?” Amelia can then not only investigate the issue but soon will offer to resolve it on the seller’s behalf.

What’s Next for Amelia?

Currently in beta, Amelia is only available to select U.S.-based sellers, but Amazon plans to expand access to more sellers globally in the coming months. This phased rollout will include additional language support and more advanced features.

“We’re just getting started,” Sivasubramanian said. “As sellers engage with Amelia, the AI will learn and evolve, becoming even more adept at meeting their needs.”

The potential of Amelia to revolutionize how sellers operate on Amazon has drawn praise from various industry insiders. Garman believes the tool will significantly reduce the time and effort merchants invest in daily operations, freeing them up to innovate and grow. “The goal is to make running a business on Amazon as seamless as possible, and Amelia is a huge step toward achieving that vision,” he said.

In the rapidly evolving world of e-commerce, where efficiency and personalization are paramount, Project Amelia could represent the next big leap for Amazon’s seller ecosystem, offering an invaluable assistant to help merchants succeed in a complex marketplace.

The Allure of AI: Transformative Promises

AI’s potential in retail is undeniable. From optimizing inventory management to personalizing customer experiences, AI is heralded as a tool that can revolutionize every aspect of retail operations. According to Dave Finnegan, a brand anthropologist and private equity board member, there’s a strong belief among top retailers that AI is headed for transformative impacts. “The consensus was all were very confident where AI is headed,” he notes after heading a think tank with leading retailers.

Retailers like Amazon and eBay are often cited as trailblazers in AI adoption. For instance, eBay’s ShopBot serves as a personal shopping assistant, helping customers navigate through listings using text, voice, or even photos. These examples illustrate the potential of AI to enhance customer experiences and streamline operations, making the promise of AI seem within reach.

The Reality Check: Where AI Falls Short

However, despite the optimism, the reality of AI in retail is more complex. Many retailers are discovering that the road to successful AI implementation is fraught with challenges, particularly around data quality, privacy concerns, and the skills gap.

One of the biggest obstacles is the quality of data. As Rob Shaw, SVP and MD EMEA at Fluent Commerce, points out, “For most retailers, the reality is that they’re not yet in a position to benefit from AI technology due to a lack of data both in quantity and quality.” Predictive AI, which relies heavily on clean and comprehensive data, can be more harmful than helpful if the underlying data is flawed. This mismatch between AI’s potential and the data available to fuel it often leads to suboptimal outcomes, reinforcing the idea that AI is still more hype than reality for many retailers.

The Pressure to Innovate: A Double-Edged Sword

The pressure on retailers to innovate and stay ahead in a competitive market has led many to adopt AI tools prematurely. In some cases, this has resulted in the rebranding of existing technologies as AI-driven solutions without significant enhancements. Shaw notes that “many of the ‘new AI tools’ we see on the market today are not all that new. They’re existing technology, utilizing machine learning, that have now simply been rebranded as ‘AI Tools.’”

This rush to adopt AI can lead to significant issues. Even retail giants like Amazon have faced challenges, such as when their AI-based checkout-free technology, Just Walk Out, was revealed to be supported by human workers reviewing footage rather than fully autonomous AI. This highlights the gap between AI’s promise and its practical application in the real world.

Data Privacy and Trust: Navigating the Ethical Minefield

As retailers increasingly rely on AI, concerns around data privacy and trust are becoming more prominent. The collection and analysis of large amounts of customer data raise significant privacy issues. The National Retail Federation (NRF) has responded by releasing its Principles for the Use of Artificial Intelligence in the Retail Sector, emphasizing the need for transparency and ethical governance.

Retailers must ensure that AI technologies are implemented in a way that respects customer privacy and builds trust. “It’s important to be as transparent as possible with customers about how the business is using AI to improve the shopping experience, while also taking measures to protect customer privacy,” Shaw advises. Without this transparency, retailers risk eroding consumer trust, which is critical in an increasingly digital marketplace.

The Skills Gap: A Significant Barrier to AI Success

Another significant challenge for retailers is the skills gap. While AI has the potential to revolutionize operations, most businesses lack the expertise needed to effectively implement and manage these technologies. According to a report cited by Max Firsau, CEO of Accel Club, around 70% of workers are currently working on Generative AI at their workplace, yet half of them have no experience or training in this field.

This skills deficit is a major barrier to realizing AI’s full potential. “Investing in tools without having people who know how to use them is wasteful,” Firsau cautions. Retailers must prioritize training and upskilling their workforce to ensure they can leverage AI effectively. Without the necessary skills, AI initiatives are unlikely to succeed, regardless of the technology’s potential.

Setting Realistic Expectations: AI as a Tool, Not a Panacea

It’s crucial for retailers to approach AI with a realistic mindset. While AI can automate tasks, process vast amounts of data, and provide valuable insights, it is not a magic solution that can replace human creativity or critical thinking. “Let’s call out the elephant in the room. AI is not replacing human creativity or critical thinking any time soon,” Firsau asserts. “What it does is help automate tedious tasks, process huge amounts of data, and provide guidance for better decisions—not make the decision for you.”

Retailers must carefully evaluate how AI can fit into their operations, considering their specific needs and capabilities. AI should be seen as a tool that complements human judgment rather than replacing it. By setting realistic expectations, retailers can avoid the pitfalls of AI hype and focus on achieving meaningful, long-term results.

The Future of AI in Retail: Cautious Optimism

Despite the challenges, there is still significant optimism about the future of AI in retail. Retailers who invest in the right infrastructure, skills, and data quality can unlock substantial benefits from AI. For example, predictive models and expert systems can provide more accurate demand forecasting and customer behavior insights, leading to better decision-making and improved operational efficiency.

However, the road to successful AI adoption is not straightforward. Retailers must navigate the hype carefully, focusing on building a strong foundation before diving into AI-driven initiatives. As Shaw advises, “The first step is getting their data right based on the problem they’re trying to solve.” Only then can retailers begin to fully realize the potential of AI and move beyond the hype to achieve tangible business outcomes.

In conclusion, while AI holds tremendous promise for the retail sector, the journey from hype to reality requires careful planning, investment, and a clear understanding of the technology’s limitations. Retailers who approach AI with a strategic, measured approach will be better positioned to reap the benefits and stay ahead in a rapidly evolving industry.

Unveiling the Numbers

According to exclusive data obtained by Bloomberg, the lion’s share of this $8 billion figure was driven by iPhone sales, which accounted for nearly half of the revenue. This substantial growth trajectory highlights Apple’s success in penetrating a market traditionally dominated by cheaper, Android-powered devices. Annabelle Droulers, Bloomberg’s tech reporter, elaborated on these figures in a recent segment on Bloomberg Markets Asia, noting, “The numbers paint a clear picture of Apple’s growing focus on India as a pivotal market. Despite iPhones making up just 3.5% of total mobile device sales in the country, the revenue jump signifies a lucrative opportunity for expansion.”

Shifting Manufacturing Footprints

Apple’s commitment to India extends beyond sales, with significant investments in local manufacturing. In the past year, approximately 14% of Apple’s flagship iPhone 15 devices were produced in India, doubling the previous year’s figures. This shift is part of a broader strategy to diversify its manufacturing base and reduce dependency on China amidst geopolitical tensions and supply chain disruptions.

“CEO Tim Cook has been very clear about his vision for India,” Droulers stated. “He sees it not just as a consumer market but as a manufacturing hub. His visits to India, including the opening of two new Apple stores, signify a deepening engagement with the country.”

The Appeal of the Indian Market

India’s appeal to Apple is multifaceted. The country boasts a rapidly growing middle class, with increasing disposable incomes and a burgeoning appetite for premium products. While iPhones are still viewed as luxury items in India, this perception aligns perfectly with Apple’s brand positioning. Additionally, the vast market potential and relatively low current penetration rates provide ample room for growth.

Counterpoint Research data highlights that despite iPhones comprising a small fraction of the overall market, their popularity is rising steadily. The influx of high-quality Apple products has started to shift consumer preferences, with more Indians willing to invest in premium technology.

Strategic Advantages

Apple’s manufacturing ramp-up in India also offers significant strategic advantages. By producing more devices locally, Apple can mitigate some of the risks associated with global supply chains. Furthermore, local production can help Apple circumvent import tariffs and potentially lower the price point for Indian consumers, making its products more competitive against local and Chinese brands.

Tim Cook’s strategic vision aligns with these benefits. “India is a very exciting market for us, and we’re committed to growing here both in terms of our consumer base and our production capabilities,” Cook mentioned during a recent visit.

Competitive Landscape

The Indian smartphone market remains fiercely competitive, dominated by brands like Samsung, Xiaomi, and Vivo, which offer a range of budget-friendly options. However, Apple’s focus on quality and brand prestige provides a distinct competitive edge. The company’s ability to position its products as aspirational has been a key driver of its success in India.

Moreover, Apple’s expansion in India is not just about market share; it is about establishing a long-term presence. The company’s recent opening of new retail stores in Mumbai and Delhi is a testament to its commitment to providing a premium retail experience akin to its flagship stores in other parts of the world.

Future Prospects

Looking ahead, Apple’s growth in India is poised to accelerate. The company’s ongoing investments in local manufacturing are expected to increase, potentially producing a wider range of products beyond iPhones. This expansion could further strengthen Apple’s market position and drive down costs, making its products more accessible to a broader segment of the Indian population.

Industry analysts remain optimistic about Apple’s prospects in India. “The $8 billion in sales is just the beginning,” said Droulers. “With continued investment in both manufacturing and retail, and a growing middle class eager for premium products, Apple is well-positioned to significantly increase its market share in the coming years.”

In conclusion, Apple’s strategic shift toward India represents a pivotal moment in the company’s global strategy. As it continues to navigate the complexities of a dynamic global market, India offers a beacon of growth and opportunity. With robust sales, expanding manufacturing capabilities, and a keen understanding of the local market, Apple is poised to cement its position as a leading player in one of the world’s most promising markets.

Just Walk Out used a combination of sensors and cameras to track what items a customer selected and then bill them via their Amazon Prime account. The concept, while seemingly innovative and convenient, According to Gizmodo, the feature reportedly relied heavily on an army of personnel behind the cameras, labeling videos and making sure things were properly cataloged.

Amazon appears to be transitioning to Dash Carts, a smart shopping cart that has a screen and scanner included. The company confirmed to Gizmodo that it was replacing Just Walk Out with Dash Carts.

While Amazon has not gone into detail about the reason behind the switch, the change is likely at least partially motivated by privacy concerns. There are probably many customers that would not be comfortable with the knowledge that an army of people are watching them shop.

The reliance on back-end camera watchers also made Just Walk Out an unappealing option for Amazon to sell to other retailers, as there was no clear path toward cost-effective scalability.

Harley Finkelstein, COO of Shopify, discusses how COVID has dramatically sped up the timeline for commerce moving online and has also moved Shopify closer to its goal of becoming the world’s first retail operating system:

Shopify Evolving Into World’s First Retail Operating System

Most people assume that Shopify is an ecommerce provider. We have more than a million stores on Shopify. If you were to aggregate our stores in the US we’d be the second-largest online retailer in America. Of course, we’re not a retailer but we’re a platform. But we now have these great economies of scale that we’re using to level the playing field for entrepreneurs and small businesses. That being said, what really Shopify is evolving into is the world’s first retail operating system. 

What we’re trying to figure out is what do brands and entrepreneurs and retailers need, not just now but in the future? We think the future of retail is retail everywhere. A brand that’s going to be successful in 5, 10 or 15 years from now needs to sell across any platform and across any channel where they have customers. This idea of enabling Shopify merchants to very easily push their products to the Amazon Marketplace or the eBay marketplace or now the Walmart marketplace, that gives them access to a new set of consumers. The idea is that it all feeds back in one centralized back-office, the retail operating system, which is Shopify. 

Then we’ve gone ahead and asked what else can we do for these merchants? Can we do capital? We’ve now given out about a billion dollars worth of cash advances and loans to small businesses. We’re doing fulfillment and we’re doing shipping. We’re increasing the scope and the relationship that we have with the million stores on Shopify. This is allowing them to become category leaders.

COVID Speeds Up The Ecommerce Revolution

From our view, it seems like the commerce world that would have existed in the year 2030 has really been pulled into the year 2020 (as a result of the COVID crisis). We’ve seen ecommerce as a percent of total retail go from 15 percent to 25 percent in the last three months. That’s the same growth rate that we’ve seen over the last 10 years. What really has emerged here is sort of this tale of two retail worlds. On one side you have these resilient retailers that are doing great, they’re pivoting, and they’re expanding their businesses. On the other side, you have these resistant retailers who have not made it. In many ways, it’s probably the most exciting time for retail in a very long time. 

We talk a lot about these direct to consumer brands that are becoming category leaders. The Allbirds and the Gymsharks who started on Shopify when they were very small and have grown to become the incumbents in their industry. Every 25 seconds a brand new entrepreneur makes his or her (products) for sale on Shopify. We talk a lot about those new startups, those new DTC brands. But actually, what we’re also seeing on Shopify are companies like Lindt Chocolate or Heinz ketchup or Chipotle. They are signing up for Shopify and basically from like five days from contract to launch they are completely changing their businesses. 

This resiliency isn’t simply in the hands of just the smallest of brands. Big companies are also beginning to think a lot more about how to stay resilient in this time. They’re moving well beyond ecommerce or thinking about offline commerce now. They’re thinking about how do they sell across social media? How do they sell across different marketplaces? So no, I don’t think it’s too late (to enter ecommerce) but I do think they have to rethink their strategies.

Farfetch plans to use their IPO windfall to dramatically improve their technology which they see as the best way to improve the consumer experience.

Farfetch Founder and CEO José Manuel Ferreira Neves recently discussed Farfetch and the online luxury brand industry on Bloomberg:

Online Luxury is Growing 25 Percent a Year

It’s a very unique opportunity. You have this amazing global industry. It’s $300 billion, the personal luxury goods industry and only 9 percent is online. There are two opportunities here really. One is the growth of online luxury which is going to grow to 25 percent a year for the next seven years. This is a $100 billion opportunity shift in online luxury.

The big question is how is technology going to help brands and retailers really improve the consumer experience in the physical store. This is something at Farfetch that we are very passionate about.

China is an Incredible Opportunity for Online Luxury

China is a very exciting opportunity. Chinese citizens are at the onset of the luxury industry, whether they shop at home or when they’re shopping abroad. Online penetration is very low in China so this means that there is an incredible growth runway for Farfetch in the territory.

That led to our partnership with JD.com where we have our own team. We have the Farfetch China app and website, we have local customer service, local payment systems, and local marketing. It’s a truly localized service. That is what’s driving incredible growth to the Farfetch brand in that region.

José Neves, founder and CEO of @farfetch, told us about the company’s grand ambitions for China at the WWD’s Men’s Wear Summit this week. https://t.co/MrMj7y5VCG

— Jing Daily | 精日传媒 (@JingDaily) March 29, 2018

WeChat is an amazing app with over 900 million users. It is the Instagram, plus WeChat, plus PayPal, etc. of China in one app. That is very powerful and very interesting. Now with our acquisition CuriosityChina we are powering the retail presence of 80 luxury brands. We think that is very interesting for the industry and we think that is probably something that we will see for the western world.

How Farfetch plans to capture the growth in online luxury e-commerce https://t.co/t9HI0igMFV pic.twitter.com/RjvAel79li

— Bloomberg TV (@BloombergTV) September 21, 2018

Brands Now Using Social and Digital Marketing Extensively

I think brands move cautiously and they choose their marketing channels very carefully. As these newer channels have developed the brands have adapted to them and their now using social media and digital media extensively to create desire, to drive discovery of new products obviously transactions as well.

It’s a gradual pace but it’s really exciting that were at that inflection point where the brands see this as a tremendous opportunity.

Instacart is preparing to go public, leading to a disclosure of the startup’s finances. The grocery delivery service is already setting itself apart from many startups seeking to go public by being a profitable company after reporting a $73 million loss the previous year.

Nonetheless, according to The New York Times, the company’s growth is slowing. Instacart benefited greatly from the pandemic, but as life has returned to normal, fewer people are relying on the startup’s service.

As a result, the company has diversified into other areas, most notably advertising. The advertising business now makes up almost 30% of its total revenue.

“They’re not facing a future of significant growth in their core business,” Brittain Ladd, a grocery industry consultant, told the Times.

Niren Chaudhary, CEO of Panera, discusses how the company has focused on ecommerce and the “off-premise channel” to drive dramatic growth:

Panera’s Ecommerce Pivot Sparks Dramatic Growth

Panera is actually emerging quite strongly through the pandemic because we’ve been completely focused on what we have control over. By focusing on servicing customers through our off-premise channels, leveraging e-commerce, and then rapidly innovating we’ve seen a very smart recovery on our brand and also a stronger business model emerging from the pandemic. What’s clearly playing out is the off-premise channel is seeing dramatic growth.

To give you a sense, our delivery is growing by over 100 percent, drive-throughs are growing by over 60-70 percent, and rapid pickup is seeing strong growth. The off-premise channels are growing very strongly and in some ways compensating for the decline in business on-premise. Pre-pandemic we were probably about 60-40 in terms of off-premise versus on-premise. Now it is predominantly off-premise convenience for our customers as we’re moving in that direction.

Close to 60 percent of our sales are coming from e-commerce. Brands that are able to leverage their e-commerce strength and pivot very sharply on providing convenience and off-premise are beginning to see a smart recovery.

It’s All About Convenience, Ecommerce, and Innovation

There are three levers that we’re working on to get our business back on track: convenience, e-commerce, and then meaningful innovation. Included in that are cool foods, a coffee subscription program, and most recently the flatbread pizza launch. We’re very excited about this because it’s the launch of a new food category at Panera, one that we haven’t had before. It’s a bullseye innovation in terms of what the customer is looking for at this time. Customers are looking for a warm shareable at-home meal solution for their families. The flatbread pizza fits perfectly for that.

We’re doing it in a uniquely Panera way as you would expect. We’re leveraging the credibility of our breads. We have unique ingredients that are all clean, they’re fresh, we have double blend cheese, bold flavors of our sauces, and it’s stone-baked. Think of this as a pizza that customers love but done in a very unique Panera way. That’s why we’re so excited.

AI is the new darling of the tech industry, with OpenAI, Microsoft, and Google leading the way. Walmart may not be the first company that springs to mind in the context of AI, but Bloomberg is reporting that the retailer is using it for vendor negotiations. The company has tapped Pactum AI, using its chatbot for the process.

“We set the requirements and then, at the end, it tells us the outcome,” says Darren Carithers, Walmart’s senior vice president for international operations.

Carithers went on to tell Bloomberg that the AI has reduced negotiation times from weeks or months to mere days. What’s more, the bot has saved an average of 3% on contracts, with a 68% success rate in reaching deals.

Perhaps most surprisingly, three-quarters of the company’s suppliers prefer negotiating with the AI.

“Some really like it and are like, ‘This is the best way to do it,’” Carithers continued. “But I would relate that to people using self-checkout in stores. Some customers love it, but guess what: Some customers want to go to a manned checkout and see a person.”

The AI is currently only being used to negotiate contracts for equipment the company uses, such as shopping carts, and not goods being sold on shelves. Given the success Walmart is experiencing, however, it’s likely only a matter of time before AI negotiators are tasked with more responsibility.

Burt Flickinger, Managing Director of SRG, a consumer industry business consulting firm, discussed how Walmart is winning the retail wars in an interview on Fox Business:

Walmart is the Roman Empire of Retail

This earnings report just reinforces its winning. Amazon is going sideways. This is a reenactment of the Punic Wars, Rome versus Carthage. Walmart is the Roman empire of retail. Like Hannibal and the Carthaginians, Amazon is starting to go the wrong way. Big win for Walmart today and they will accelerate that in the next two to seven years.

What’s doubly impressive, we talk to a lot of vendors and shoppers around the world, what the vendors are saying is Walmart is reinvesting all the PPA (price and promotional allowances) in lower prices. Lower prices normally mean lower margins and lower revenue. But in this case, the shopper is shifting to Walmart.

Walmart strategically saw all the land-based businesses like Payless and all the retailers from toys to sporting goods going out of business. They had great sales on land and not so good online. Walmart is winning both ways. Amazon, with all the trouble they’re having with Whole Foods, can’t capitalize. Walmart is running the table.

This Says it All for US Retail

This says it all for US retail. The well capitalized highly capable retailers are winning and if it’s a one man show, like Bezos running the show, you could be Alexander the Great, you could be Hannibal out of Carthage, but one general isn’t going to win a war. Recent (lower) retail sales numbers were a combination of a couple things. One is Jerome Powell scared the market, especially high to mid-end, didn’t spend as much. Also, consumers were a little bit scared toward the end of the year. Walmart, off price, low price, did very well, but full price full service struggled and that’s why the numbers were bad.

Walmart comp sales increased 4.2 percent, just like Steve Jobs and Apple with their great campaign Think Different with Muhammad Ali, Walmart is thinking different with Doug McMillon. It’s evolved from a company of family management to professional management. Walmart had 40 percent growth online.

Walmart Ads Are Really Connecting

Before, Walmart looked at advertising as an expense. But as Jerry Della Femina said, most of the Super Bowl ads were pretty pathetic. Walmart was one that stood out because it advertised Walmart online and Walmart in-store. The Walmart ads are really connecting with consumers, a United Nations of consumers.

They’re reaching everybody around the world with better prices and better service. Doug McMillon has invested in inventory and has invested in store staffing, first to raise wages with some push from the UFCW. They are hitting on all cylinders. The biggest problem now is they can’t handle all of the volume they are seeing on the weekends.

Harley Finkelstein, COO of Shopify, discusses how COVID has dramatically sped up the timeline for commerce moving online and has also moved Shopify closer to its goal of becoming the world’s first retail operating system:

Shopify Evolving Into World’s First Retail Operating System

Most people assume that Shopify is an ecommerce provider. We have more than a million stores on Shopify. If you were to aggregate our stores in the US we’d be the second-largest online retailer in America. Of course, we’re not a retailer but we’re a platform. But we now have these great economies of scale that we’re using to level the playing field for entrepreneurs and small businesses. That being said, what really Shopify is evolving into is the world’s first retail operating system. 

What we’re trying to figure out is what do brands and entrepreneurs and retailers need, not just now but in the future? We think the future of retail is retail everywhere. A brand that’s going to be successful in 5, 10 or 15 years from now needs to sell across any platform and across any channel where they have customers. This idea of enabling Shopify merchants to very easily push their products to the Amazon Marketplace or the eBay marketplace or now the Walmart marketplace, that gives them access to a new set of consumers. The idea is that it all feeds back in one centralized back-office, the retail operating system, which is Shopify. 

Then we’ve gone ahead and asked what else can we do for these merchants? Can we do capital? We’ve now given out about a billion dollars worth of cash advances and loans to small businesses. We’re doing fulfillment and we’re doing shipping. We’re increasing the scope and the relationship that we have with the million stores on Shopify. This is allowing them to become category leaders.

COVID Speeds Up The Ecommerce Revolution

From our view, it seems like the commerce world that would have existed in the year 2030 has really been pulled into the year 2020 (as a result of the COVID crisis). We’ve seen ecommerce as a percent of total retail go from 15 percent to 25 percent in the last three months. That’s the same growth rate that we’ve seen over the last 10 years. What really has emerged here is sort of this tale of two retail worlds. On one side you have these resilient retailers that are doing great, they’re pivoting, and they’re expanding their businesses. On the other side, you have these resistant retailers who have not made it. In many ways, it’s probably the most exciting time for retail in a very long time. 

We talk a lot about these direct to consumer brands that are becoming category leaders. The Allbirds and the Gymsharks who started on Shopify when they were very small and have grown to become the incumbents in their industry. Every 25 seconds a brand new entrepreneur makes his or her (products) for sale on Shopify. We talk a lot about those new startups, those new DTC brands. But actually, what we’re also seeing on Shopify are companies like Lindt Chocolate or Heinz ketchup or Chipotle. They are signing up for Shopify and basically from like five days from contract to launch they are completely changing their businesses. 

This resiliency isn’t simply in the hands of just the smallest of brands. Big companies are also beginning to think a lot more about how to stay resilient in this time. They’re moving well beyond ecommerce or thinking about offline commerce now. They’re thinking about how do they sell across social media? How do they sell across different marketplaces? So no, I don’t think it’s too late (to enter ecommerce) but I do think they have to rethink their strategies.

Brand growth expert Austin Brawner of Ecommerce Influence interviewed Justuno CEO Erik Christiansen about conversion optimization:

Retailers Should Focus On The Last Mile

Conversion optimization is the same as it’s been for a while. People still don’t want to focus on the last mile. Finally, in 2020, we saw that shift when advertising got so expensive. Everyone is like, okay, we have minimal budgets, how do we stretch them? Finally, with all the competition from COVID where everyone’s shifting online everyone, they are saying that we can’t keep just throwing money at this. We’ve got to come up with the real problem.

When we first launched we had to pivot immediately because when we mentioned the word coupon or the word pop-up people just ran the other way. It’s been ten years of education and we’ve kept to the same message of investing in your current website visitors. Our main job still is to educate the online retailer about the basics. We ask most businesses, as you know with email, are you doing a 30, 60, 90 day, the basics? Are you doing a cart abandonment email? You cover the basics and you get so much further ahead.

There’s always low-hanging fruit

Everyone thinks businesses are run perfectly but most businesses are just a mess. What I’ve been trying to do is challenge my team to look at the basics. There’s always low-hanging fruit to improve your business. When it comes to retail, where’s the low-hanging fruit? Let’s break out your business to the basics like new visitors versus repeat. With the new ones, how many are there? What percentage of emails are we capturing? Are we sending those emails to your ESP? Are we putting in the basic workflows? There’s so much low-hanging fruit.

Then, you’re sending these emails, are you reinforcing those campaigns on-site? You spend so much time designing the email, sending it. Then it comes to that shopping cart abandonment. Do you even know how many people come to your cart each day? Do you know how many carts get abandoned and the dollar value? What can we do? The basics are still very much there in terms of opportunity to help people increase their sales lead capture and sales. How do you take one marketing dollar and stretch it as far as you possibly can? How do you also get creative? It’s all about creativity. That’s what marketing is and that’s what retail is. Retail is retailing and getting your hands dirty.

Burt Flickinger, Managing Director of SRG, a consumer industry business consulting firm, discussed how Walmart is winning the retail wars in an interview on Fox Business:

Walmart is the Roman Empire of Retail

This earnings report just reinforces its winning. Amazon is going sideways. This is a reenactment of the Punic Wars, Rome versus Carthage. Walmart is the Roman empire of retail. Like Hannibal and the Carthaginians, Amazon is starting to go the wrong way. Big win for Walmart today and they will accelerate that in the next two to seven years.

What’s doubly impressive, we talk to a lot of vendors and shoppers around the world, what the vendors are saying is Walmart is reinvesting all the PPA (price and promotional allowances) in lower prices. Lower prices normally mean lower margins and lower revenue. But in this case, the shopper is shifting to Walmart.

Walmart strategically saw all the land-based businesses like Payless and all the retailers from toys to sporting goods going out of business. They had great sales on land and not so good online. Walmart is winning both ways. Amazon, with all the trouble they’re having with Whole Foods, can’t capitalize. Walmart is running the table.

This Says it All for US Retail

This says it all for US retail. The well capitalized highly capable retailers are winning and if it’s a one man show, like Bezos running the show, you could be Alexander the Great, you could be Hannibal out of Carthage, but one general isn’t going to win a war. Recent (lower) retail sales numbers were a combination of a couple things. One is Jerome Powell scared the market, especially high to mid-end, didn’t spend as much. Also, consumers were a little bit scared toward the end of the year. Walmart, off price, low price, did very well, but full price full service struggled and that’s why the numbers were bad.

Walmart comp sales increased 4.2 percent, just like Steve Jobs and Apple with their great campaign Think Different with Muhammad Ali, Walmart is thinking different with Doug McMillon. It’s evolved from a company of family management to professional management. Walmart had 40 percent growth online.

Walmart Ads Are Really Connecting

Before, Walmart looked at advertising as an expense. But as Jerry Della Femina said, most of the Super Bowl ads were pretty pathetic. Walmart was one that stood out because it advertised Walmart online and Walmart in-store. The Walmart ads are really connecting with consumers, a United Nations of consumers.

They’re reaching everybody around the world with better prices and better service. Doug McMillon has invested in inventory and has invested in store staffing, first to raise wages with some push from the UFCW. They are hitting on all cylinders. The biggest problem now is they can’t handle all of the volume they are seeing on the weekends.

Matthew Shay, President and CEO of the National Retail Federation, says that the pandemic has made this a great time for innovation by retailers:

This Is A Great Time For Innovation.

Just look back a decade ago and the companies that were created in the midst of the great recession in 2008, 2009, and 2010. We saw a lot of new IPOs. This is a great time for innovation. Some of the predictions this year, for example, about the number of stores that would close or bankruptcies that we would see just haven’t materialized. Part of that is because consumers have been relatively healthy and part of that is because on a net basis we’ve seen new businesses opening to offset the closing. There’s an enormous amount of innovation taking place.

On the issue of returns, there’s a big company located right here in Washington, D.C., Optoro, a big partner for many retailers helping them process returns efficiently. I’ve talked to senior executives at UPS today about shipping issues and there is a lot of innovation taking place. They are working very diligently and have a great delivery record so far. We are looking forward to getting all those gifts to American families. The biggest gift of all, of course, will be some additional pandemic relief.

A Lot Of This Is Going To Be A Permanent Change

The issue is how much of this consumer behavior has changed permanently and fundamentally? How much of us as Americans go back to our old behaviors? That’s going to play itself out. Certainly, a lot of this is going to be a permanent change. People will do more as we saw across all demographic groups, regardless of age, this entire year doing much more online. Some of that will remain sticky.

There’s been a great increase in efficiency in the supply chain. Those gains are not going to be given back. Customers are going to continue to expect certain kinds of delivery and fulfillment opportunities that have been rolled out by retailers this year. They won’t give that up. They are going to want the convenience and they are going to expect to be able to maintain that in the future.

With those kinds of innovations and that kind of resilience in the system against the backdrop of a year next year that could be extremely bullish if we get the vaccine rolled out, as we all believe it will be. I talked to a senior executive of one of the major pharmaceutical companies last week and they said early April or the end of May everyone that wants it will get it. We could be set up for a really big comeback for consumers next year.

Government and business leaders the world over are worried about the state of the economy. Rising inflation, supply chain issues, unfilled jobs, the war in Ukraine, and other factors threaten an economic downturn. JPMorgan CEO Jamie Dimon likened it to a hurricane, although it’s still unclear how bad a hurricane it will be. Despite the cause for trepidation, Narayen believes the e-commerce sector has some reason to be optimistic.

“When you look at the total expense, in addition to the macroeconomic, where there may be a little bit more concern, what’s happening is actually you’re seeing some price decreases in elements like electronics or things that are happening with games,” Narayen said in an interview on Mad Money.

As a result of the decreased prices, especially in categories that have previously been hit hard by supply chain issues, Narayen believes digital shopping will continue at a healthy pace.

“Nothing’s going to change as it relates to people saying, ‘I want to do digital engagement, I want to perhaps buy digitally, pick up physically and you know, the multi-channel thing,” he added.

Narayen’s comments are some of the few elements of good news amid the economic uncertainty.

Matt Maloney, CEO of Grubhub, discusses with Jim Cramer on CNBC how Grubhub is in the business of driving growth for restaurants and is not just a logistics company:

The American Public Has Just Adopted Digital Ordering

This is our fifth anniversary of our IPO. The market now is ten times what I thought it was five years ago. It’s because the American public has just adopted digital ordering as their preferred way to engage with their local restaurants. We are not just marketing to Millennials. We are marketing on national television across all channels, all time zones, and hitting all segments. We just see that people realize that digitally ordering on their app or on their desktop is just easier.

Of course, our ad campaign is working. I wouldn’t have it on TV if it wasn’t working. You think about it this way. You know your LTV, your lifetime value of your customer, once they start ordering we know that they’re lifers. They’re on forever. We can make that revenue model and then we know how much it cost to put the ad on there. So yes, over time, as people see the ad, more and more it becomes less and less effective. But we’re nowhere near our LTV.

I have always been willing to be extremely aggressive investing in the future. Historically, I was bound by the amount of money I could invest. The reception of these communications just weren’t hitting the public and they weren’t working as well. Then around the third quarter of last year, we saw that we could spend way more than we had historically. I’m just talking about effectiveness. Spending it effectively. We came to the street on our third quarter earnings call and said we see opportunity and we are going long in the fourth quarter.

Yum Made $200 million Investment – They Believe in Our Story

People are going to say where’s the beef, the old Wendy’s commercial. They’re like show me the money. (We don’t have Wendy’s) but everyone talks to everyone in this industry. I think over time exclusivity is just not going to happen. (We have Yum) and Yum is the biggest restaurateur in the world. YUM is an incredible brand which includes Taco Bell, KFC, and Pizza Hut. They are very forward-thinking. They invest in technology a lot and they wanted to make a fundamental partnership and we wanted to understand what the brands needed from a partner.

Yum made a $200 million investment because they believe in our story. We didn’t need the investment because we have a very healthy balance sheet. What it did it was really bringing the support of the young brand and the franchisees into Grub. As a tight partnership, we’re able to execute on technology and growth for them in a way that nobody else in the industry is doing right now. I totally disagree (that we aren’t making money from this partnership).

We Are a Marketplace That Sells Demand Generation

We are a marketplace that sells demand generation. We sell growth. That’s what our primary product is. We’re not a logistics company. We do logistics because we know that’s an end to get to restaurant growth and make money off our logistics. The gross margins on the logistics are not fabulous. The gross margins on the demand generation are fabulous which is why I differentiate between a logistics company and demand gen company.

If you’re selling consumers, you’re selling growth and you can charge a lot for that. That’s the profitable side. Everyone else in my industry is a logistics company which has razor thin margins. One of my competitors said they’re the next FedEx. Do you really want to be the next FedEx? There’s the multiple that we can get as marketplaces and there’s the multiple that logistics companies can get.

Everyone Would Prefer to Order Digitally

I think that everyone in the country would prefer to order digitally than order on the phone. That’s why we acquired Tapingo. It’s an incredible acquisition because it gives us further scale on campuses. Tapingo is a pickup focused product. So here’s what you need to think about. We sell growth, we sell orders. I don’t care if that’s a pickup order, a delivery order, a self-delivery order, or a catering order.

Everyone else in my industry only does delivery facilitated by that platform. Because we partner with the restaurants (which means) the restaurants are subsidizing part of our transaction fee, we are always cheaper. That’s what people don’t understand. There’s a lot of bait and switch pricing going on (from competitors).

The global pandemic has upended the retail market, with consumers relying on home deliveries more than ever. The increased number of deliveries has put a strain on multi-unit properties, requiring staff to manage the influx of packages and work to get them to the right residents.

Position Imaging has developed a solution: the Smart Package Room. The solution is a computer-vision-driven system designed to allow package delivery services to drop packages off, and residents to pick them up at their convenience — 24/7 access combined with theft mitigation features.

Position Imaging is making its solution available to its partners via a reseller and referral program.

“The partnership program at Position Imaging gives our partners selling into the same space the ability to broaden the portfolio of products they offer their clients with the most advanced solutions on the market. We’re looking to work closely with our partners to create mutually beneficial relationships that grow together through innovation and delivering greater value together,” said Jacqueline Cournoyer, Director of Dealer Relations, Position Imaging.

Companies interested in learning more or signing up can do so here.

Charlie Youakim, CEO and co-founder of Sezzle, discusses the massive growth of the Buy Now, Pay Later industry and how that is reshaping ecommerce and retail in general:

Focused Uniquely On Credit Building

Sezzle is generally focused on the ecomm space, that’s where we do most of our work. We are present on over 44,000 merchant websites. The Buy Now, Pay Later industry, in general, is typically focused on ecommerce. So as that push back into ecomm occurs (potentially due to increases in COVID causing more people to shop from home) we generally benefit from that.

We compete in this space by really focusing on our stakeholders, focusing on the merchants, focusing on the consumers, and doing the right thing by both of them. We really stand on the high road for the consumer. We are the only player in the space that focuses on credit building which is totally unique. We love it, our consumers love it and our merchant partners love it. By focusing on their needs, these consumers’ needs, and doing right by them and right by the merchants, you have a chance to do a really strong job within the sector.

Sezzle Pushing Into the Enterprise

With SMB’s we’ve been growing like wildfire. It just continues for us. That’s how we have that big count of merchants and we expect that to continue. We’re doing a great job there and the merchants love us. It’s viral in that space. For us now the push is into enterprise and in Target, Bass Pro Shops, those are two great examples of that for us. The reason we’re doing that is that our consumer wants to shop with us everywhere so we have to be everywhere. That means we have to be with SMB, we’ve got to be with mid-market, and we’ve got to be with enterprise.

That will be the push for Sezzle to continue to push in those spaces. If you look at the enterprise players in those spaces, what they want is they want a brand that they can believe in. That’s where you have Sezzle and our halo around doing right by the consumer helping them build their credit score up and being a partnerships player. That’s what really sets us apart.

Sezzle: The Creditization Of a Debit Card

The average order value per customer has been relatively stable. We’re around $100 per order. The only reason it’s been tracking a bit up for us is we’ve been expanding our services. We started with a pure ‘pay in four’ for over six weeks interest-free and so that’s where we tracked right around $100. But as we add long-term into the mix we’ve been starting to track upwards. The order values on a 12-month order or 12-month installment plan, tend to track towards $1,000. We feel it’s probably going to stay stable, it’s just going to be a mixed shift that creates any change for Sezzle.

We see from our consumers that they love our product because it represents purchasing power but also budgeting for them. They feel safe with it just like they do with the debit card. We’re driving a new wedge into payments between credit and debit. I call it the creditization of a debit card. I think it’s here to say because of that safety element that we give to the consumer.

John Copeland of Adobe, predicts that ecommerce spending could be $930 billion, or just under $1 trillion, in 2021:

COVID was a catalyst to the ecommerce channel last year. What we saw when you look at the full calendar year of 2020 was $813 billion dollars in ecommerce spending, 42 percent growth over 2019. That’s like combining two years’ worth of growth into a single year. Consumers have really embraced the online channel to meet their needs during these challenging times.

We’re all kind of wondering what (the vaccine rollout) is going to do in terms of ecommerce. We’re forecasting this year somewhere between $850 billion, only a 5 percent over last year, and up to $930 billion, which would be a 14 percent increase over last year. The 5 percent increase would be if everybody gets vaccinated and rushes out and we see kind of a slowdown. The $930 billion, 14 percent increase, would be more typical of what we see year over year in the ecommerce channel.

Buy Now Pay Later Up 215 Percent Over Last Year

Buy Now Pay Later is very much good for retailers. In fact, what we’ve seen in February this year relative to February 2020, which is kind of on the cusp of the pandemic, is a 215 percent increase year over year in buy now pay later orders. In terms of retailers, it comes along with larger average order values. What we’re seeing is 18 percent larger orders when customers are using that service. Unlike layaway, with buy now pay later you actually get the goods upfront, you don’t have to wait until the payment’s done.

Another trend is Buy Online, Pick Up In-Store, also known as BOPUS. In February of this year, we’re already seeing it growing 67 percent year on year. It’s always been huge and growing during the holiday season but now people are clearly working it in as part of their fulfillment options. Picking up in the store gives consumers the ability to schedule it according to their availability and knowing that stock will be there for them when they want to pick it up.

The partnership between the two companies will see the integration of Salesforce Commerce Cloud and Salesforce Order Management with features from FedEx and its e-commerce subsidiary, ShopRunner. The combination of platforms and services should help e-commerce shops manage the entire process, from promotion to purchase to shipping.

“Brands and merchants have to move quicker than ever to meet their customers’ expectations,” said Claude Russ, COO of FedEx Dataworks and CEO of ShopRunner. “With the combined power of Salesforce and FedEx, we will provide them the speed, control and economics they need to help them exceed those expectations. From optimizing their inventory management and fulfillment operations, to faster delivery and attracting new buyers, together we’re helping change the game so brands and merchants can have greater control over the links of their supply chain and increase their competitiveness.”

“We are in a world of commerce anytime and anywhere,” said Lidiane Jones, EVP & GM, Salesforce Commerce Cloud. “Commerce Cloud and Order Management let companies sell wherever their customers shop and fulfill on any channel. Pairing that with FedEx’s logistics capabilities lets us deliver an even faster, easier, and cost-efficient experience for our customers. Now, retailers can better meet shoppers’ two-day shipping expectations without accumulating extensive costs, or sacrificing their time or brand.”

The partnership is a multi-year agreement, with US customers set to see the first results of the partnership in Spring 2022.