June 9th, 2025: Shopify MCP Server Raises More Questions Than Answers, Could the AI Race Become a Hardware Race, and Temu Half Off - Just In Time For Summer
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It’s June 9, 2025 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Shopify MCP Server Raises More Questions Than Answers
Could the AI Race Become a Hardware Race?
Temu Half Off - Just In Time For Summer
- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
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BUT FIRST in our shopping cart full of news….
Shopify MCP Server Raises More Questions Than It Answers
By releasing an MCP server quickly, Shopify seems to be trying to get ahead of providers that might try and create their own Shopify MCP servers and disintermediate Shopify's own control of various agents.
* Storefront allows searches, queries, and checkout against an individual store.
* Global Catalog allows searches across all merchants by trusted agents like Perplexity.
Storefront seems like it is designed for companies like Gorgias and others, etc., to build agents that look and act like Amazon Rufus. Given this is enabled store by store, it seems like the implications are less.
It's the Global Catalog which has wider implications.
In the tame version, this would just obviate the need for any Shopify merchant to use a third-party to provide a data feed and trusted order integration to the LLMs. Which, hey, one less app to buy.
All this is happening so quickly, even Shopify admitted at Editions that they are not sure where this is headed. So, there could be complications.
Having been at ChannelAdvisor for many years in my career, there are complex business rules that often determine what products you want to appear where, how data is displayed, which products to exclude, and how to calculate pricing.
In short, all the functions that channel management software already provide to Amazon today, you might also want for the LLM connection too.
Will this be possible?
Separately, will Shopify allow other MCP servers to automate Shopify also? Will there be a reason to? Or is this a Shopify exclusive function?
Will individual storefronts be able to override the "trusted integration"?
If there is a bug in the trusted integration providing incorrect information, will a merchant be able to disable themselves?
How will trust be incorporated? What will be the process for incorporating trust signals at a storefront, category, or SKU-level? How will that interact with data the LLMs might scrape directly?
How will agent-based price quotes work in scenarios where pricing is not so straightforward?
Will agents take into account promotions and loyalty programs, and how?
What if the Global Catalog data disagrees with other data the LLM scrapes? Who wins?
Many questions, few answers. It's still early but it feels like we are building a messy marketplace here in real-time with few guardrails for merchants.
In reality, a lot of this is on the LLM themselves.
Who will be the first LLM to release a Brand Registry MCP and A2A (naturally) for brands to police how they show up to agents?
Who will be the first LLM to release a data clean-room that brands can access which might contain product/customer data which is being presented to both users and agent interaction? Will "agentic funnel spying" be possible?
Some of these questions could be asked of normal marketplaces, and the line between a scaled global marketplace like Walmart and Amazon and like an OpenAI could blur.
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[References:]
Our Second Story
Could the AI Race Become a Hardware Race?
The fact that OpenAI acquired Jonny Ive's startup is really a warning shot across the bow of all the other AI companies out there.
If Jonny Ive is going to be creating a suite of hardware devices to harness global intelligence and make it relevant, Fidji Simo will be packaging the software and services that surround these devices.
We have Anthropic thinking about how chat interfaces with services with MCP. Google thinking about how agents communicate with each other in A2A. Yet no one is really going directly to the user to own the experience. The reality is, the past is trapped by Google (Android/Chrome) and Apple (iPhone).
OpenAI (and others) have no chance of owning the future without owning the next hardware stack. While it could be a total boondoggle, turn us all into Metaverse gargoyles like the novel Snowcrash, it is also simply the only way forward.
If we are going to do amazing things as a human race, there aren't enough smart humans. And we don't collaborate well enough. Hardware is needed to provide better context and turn ambient computing into ambient intelligence that we can all access.
Still, the line between the open protocols that are needed (like MCP, A2A -- think about what TCP/IP is for the Internet) and the closed knowledge bases that result from the fact that different models like Grok own different types of data sources than OpenAI, and you have the makings of a real battle happening.
How it will turn out is speculation at best - by anyone. Including those doing the inventing (and investing). What we do know is this:
* each generation of technology just makes communication more efficient. Figure out how, and you have figured out a lot. It's almost always the killer app.
* personalized intelligence may not bring us together, it's just as likely to separate us.
* Lastly, regardless of how many things agents help us buy, Amazon trucks will likely deliver it to us ;-). Amazon Logistics is likely to say to the agent world: "that's a nice front end you got there, it's a shame you only have one system to deliver it."
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[References:]
And Our Last Story
Temu Half Off - Just in Time For Summer: Deminimus Maximus
“Since the tariff changes, the situation seems to be getting a little dire at Temu. The intelligence firm Sensor Tower reported that daily users dropped 58% in May.
Yowza.
We've always known that deminimis was a de-maximus part of Temu's business, but now we know just how much. But as much as deminimus is a part, what really is tipping things over here is something else entirely:
Temu slashing ad budgets.
You see, Temu was/is extremely reliant on performance marketing and ad budgets seemed to have been slashed significantly. This is what happens when your business model changes overnight, your selection is cut significantly, conversion rate is severely impacted, and now there is nothing leftover to fund acquisition.
I've spoken here in the past about the disruptive nature of the Temu model. I think there are a lot of folks out there that are hoping that Temu is down and stays down.
Death spiral - activated.
To draw some parallels. If you have ever competed on Amazon, you know all about these kinds of competitors. Bid themselves up only to reveal they either don't have inventory depth or profit margin to sustain the level of share they are gaining. In the event of competitors buying the market in your category, sometimes the best course of action is to wait it out.
In other words, while it pays to monitor the competition, it does not always make sense to compete with all potential competition out there.
Overall, I am not seeing a good path for Temu recovery here.
>> closer
[References:]
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Stord Acquires Ware2Go and Announces UPS Partnership
Logistics startup Stord has acquired UPS subsidiary Ware2Go, significantly expanding its fulfillment network. This acquisition adds 21 new centers and strengthens its partnership with UPS. The expanded network aims to meet increased e-commerce demand, positioning Stord as one of the largest fulfillment networks based on volume and reach.
Link: https://www.cnbc.com/2025/05/19/e-commerce-logistics-stord.html
Second
Levi’s to sell Dockers to Authentic Brands Group for $311M
Levi Strauss & Company will sell its Dockers brand to Authentic Brands Group for $311 million, with potential for an additional $80 million earnout. This divestiture enables Levi's to focus on its core business. Dockers, under Authentic Brands Group, is expected to see continued growth, particularly internationally, leveraging ABG's global licensing network.
Link: https://www.retaildive.com/news/levi-strauss-sells-dockers-authentic-brands-group/748572/
Third
Retail Merchandising Platform Flagship Raises $3.75M in Seed Funding
Australian retail visual merchandising platform Flagship secured $3.75 million in seed funding for US expansion. The company provides retailers with digital analytics to measure merchandising and performance in physical stores. Flagship enables retailers to optimize product placement and enhance the in-store experience.
Link: https://www.smartcompany.com.au/startupsmart/flagship-raises-6-million-become-canva-of-retail/
Fourth
OpenAI Buys Jony Ive's Design Startup for $6.5b
OpenAI has announced plans to acquire Jony Ive's startup, io, for $6.5 billion in a reported all-equity deal. Ive's design studio, LoveFrom, will operate independently from OpenAI but will have design and creative responsibilities across the merged company. The acquisition highlights OpenAI's end-to-end intent to create hardware products that showcase its AI software. Acquihire anyone?
Link: https://www.engadget.com/ai/openai-buys-jony-ives-design-startup-for-65-billion-173356962.html
AND FINALLY …
Australia's WiseTech Agrees to Buy E2open For $2.1b
Australian software company WiseTech Global will acquire cloud supply chain software platform E2open for $2.1 billion, fully funded by debt. The deal offers E2open shareholders $3.30 per share and expands WiseTech's capabilities in supply chain planning, procurement, trade compliance, and channel management.
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Did you know that RMW Commerce has another podcast? Check out The Watson Weekend for an unfiltered and lively eCommerce chat each week with me, Rick Watson, my co-host Jess Lesesky, and an array of interesting guests and topics. All focused on eCommerce. You can find the Watson Weekend by searching for it on iTunes, Spotify, or Youtube.
That’s all for this week! Till next time Watsonians.....
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Hi, I’m Rick Watson, CEO and Founder of RMW Commerce Consulting and host of the Watson Weekly podcast - your essential eCommerce Digest.
Our production partner for the series is Podcast on the Fly. This podcast is produced by RMW Commerce.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
