The Webretailer News Digest May 2, 2022
Buy-now-pay-later gaining traction with online buyers and sellers
Not that buy-now-pay-later (BNPL) was going anywhere, but retailers are seeing the positive impacts of offering installment payment options. According to Worldpay’s Global Payments Report 2022, BNPL totaled 2.9% of global eCommerce transaction value last year, and they expect it to jump to 5.3% by 2025. That would equal $438 billion in value.
During the pandemic, the BNPL concept became wildly popular, as many consumers didn’t have the upfront funds to make larger purchases immediately. GenZ and Millennials are the two key groups that are leading the charge.
Many worries that fees from missed payments may cause the option to take a hit in the coming year. But others are quick to point out that the fees pale in comparison to interest charges from a traditional credit card. Regardless, it’s best for consumers to always read the fine print before partnering with a BNPL company for their purchases.
The concept of BNPL brings us back to the old ‘layaway’ concept, but not all providers are the same. Most offer interest-free payments on items over four installments, with a 25% down payment. But others are offering monthly payments with interest, much like a credit card.
Before you use a BNPL company, be sure to review the payment policy to avoid any potential interest or fees.
Etsy and eBay form coalition to simplify tax code
eBay and Etsy joined with a group of online marketplaces including Tradesy, Reverb, Poshmark, Mercari, and Offer Up to form the Coalition for 1099-k Fairness.
According to the group, they’re “committed to maintaining an accessible, fair, and safe resale market for used and pre-owned goods via online platforms, while empowering entrepreneurs and microbusinesses trying to get their business off the ground by selling online.”
However, their key focus point is on the American Rescue Plan Act of 2021. They say reporting thresholds within the bill would force online resellers to fill out confusing tax forms and potentially have to pay for tax professional services.
Together, the group aims to educate lawmakers on the important role of resellers in the economy and show how the bill will have a negative impact on their users.
Bed, Bath, & Beyond sees a drop in eCommerce sales
While many other stores are seeing booms in their eCommerce business, Bed, Bath, & Beyond took a hit in the previous quarter. The company reported an 18% drop in eCommerce sales coupled with an overall 22% drop in net sales.
The eCommerce drop is significant because the company only saw an 8% downturn in brick-and-mortar sales. And the eCommerce drop only reported a single-digit drop at the same time last year.
The company was quick to point to shipping costs as the key factor that caused the numbers to drop. Executive Vice President and Chief Financial Officer Gustavo Arnal stated, “Shipping cost increases were significantly higher than expected, as container rates and inbound freight rates moved unpredictably higher in late January and February.”
CEO Mark Tritton also cited stocking issues as another reason the company missed out on sales in the previous quarter. But like many retailers, they expect the supply chain issues affecting many US businesses to ease in the next year. They hope this will bring sales back to where they should be soon.
Female Founded eCommerce platform Beam raises more funds
eCommerce platform Beam raised $13.3 million in their Series A fundraising round this week. Venture capital firms HearstLab, Ulu Ventures, and Index Ventures all joined as initial investors.
If you’re not familiar, the Beam platform enables users to donate a portion of their online shopping cart total to any charity they choose. The company states that its platform creates brand loyalty by helping consumers partner with brands that align with their values. Charities partnered with the platform receive 100% of the donation, as Beam’s business model charges brands via a subscription.
With the funding, Beam will continue to expand their team, which has doubled since the funding round. And they also plan to add additional features to their platform to make it more attractive to potential brand partners.
Amazon making tremendous investments in robotics and logistics
Amazon is tackling the global supply chain issue by making a $1 billion investment in companies focused on supply chain management, safety, and logistics. The company intends to be at the forefront of technologies that can help with its core business operation — getting retail goods to consumers quickly, and with efficiency.
The Industrial Innovation Fund will invest in companies “of all stages” in a bid to improve warehouse working processes and speed up deliveries. However, the fund doesn’t list how many companies they intend to invest in, nor does it lay out a timeline.
Amazon has a history of putting big money into initiatives in the past, like the $2 billion Alexa Fund aimed at climate technologies. But only time will tell if the fund can be an effective asset for the company.
Freshworks launches eCommerce CRM
SaaS provider Freshworks recently launched a new CRM for eCommerce aimed at helping online retailers better engage with their users. The software aids online sellers in utilizing ‘modern messaging channels’ to allow sellers to get more personalized with their marketing and engagement.
The idea behind the program is to allow smaller sellers to have the same marketing advantages as large online retailers. They’ll be able to integrate multi-channel messaging within sales, marketing, and support to automate their messaging.
The company recently filed its IPO earlier this year and raised over $1 billion in capital. With big venture capital firms believing in the company, and its software, we can expect more eCommerce sellers to sign on soon.
BigCommerce acquires BundleB2B
Leading eCommerce SaaS provider BigCommerce recently acquired longtime partner BundleB2B. With the global B2B eCommerce market expanding at 18% annually, it makes sense that the company would want more tools in its toolbox to capitalize on the trend.
BigCommerce CEO Brent Bellm stated that “Consumer brands may have pioneered eCommerce, but B2B companies are quickly catching up.” BundleB2B offers tools focused on enterprise-level merchants and allows them to save time by shortening sales cycles and automating many manual processes.
With the launch of the BigCommerce B2B edition in June 2021, the two companies had been working together closely. So the acquisition does not surprise many in the eCommerce industry. We can expect a more integrated solution for B2B merchants on the BigCommerce platform soon.
Etsy makes net carbon emissions 2030 pledge
Etsy recently announced a pledge to reduce its environmental footprint. The company is committing to reach net-zero emissions by 2030 by following protocols from the Science-Based Targets Initiative.
Through the initiative, the company will reduce Scope 1 and 2 greenhouse gas emissions by 50% and Scope 3 emissions by 13.5%. The company states that it’s an ambitious goal, but they expect their global teams to jump on board and help with the global conscious effort.
Etsy also plans to shift towards working with more sustainable suppliers and vendors to help decarbonize their logistics. They’ll release environmental impact updates next to their financials to hold themselves accountable for the initiative.