May 19th, 2025: Amazon Announces New AI Tool to Enhance Product Listings, Venture Capital Dominated by AI Right Now, FedEx and Amazon Strike Up a Partnership, and Klaviyo Reports Q1 2025 Earnings
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It’s May 19, 2025 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Amazon Announces New AI Tool to Enhance Product Listings
Venture Capital Dominated by AI Right Now
FedEx and Amazon Strike Up a Partnership
Klaviyo Reports Q1 2025 Earnings
- 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….
Amazon Launches AI Tool to Enhance Product Listings
TechCrunch reported last week that Amazon has launched a new AI-oriented tool to enhance product listings. The tool suggests titles, descriptions, attributes and missing details.
For a reseller, these types of tools are always great because they can help you make your listings better. On a marketplace what these tend to do is level the playing field. In other words, if you were spending a lot of money on good data, and then giving that good data to Amazon… you have now just trained Amazon’s AI to help your competition.
For sellers who care enough to control their listings, now they have two jobs. One job they already had to update their own product data. And another job to monitor what Amazon is doing to ensure that they don’t introduce any inaccuracies.
For Amazon, I am sure they will be able to show this is a great idea as it likely improves conversion and findability across their long tail. For the individual brand that already pays attention, however?
It could just give them more work.
[References:]
Our Second Story
Venture Capital Dominated by AI Right Now
PitchBook and the National Venture Capital Association recently released their Q1 2025 report. I love tracking this kind of information because I tend to think it has implications for all founders out there. Here are a five takeaways that I thought were interesting from the report:
First, Venture investments have continued on the 2024 pace, so things are steady. What is not steady is AI which has consumed 71% of all capital investments in Q1.
Second, there have been a few companies who opted out of the Q1 chaos to delay their public listings. This caused public listings to be even less prevalent than last year. Notable companies in eCommerce include Klarna and ShipBob which both seemed to delay their planned IPOs. Speaking of exits, they hit their highest value since Q4 2021although 40% of that number was generated by a single IPO, CoreWeave. Not coincidentally, it’s an AI company.
Third, venture capital used to historically be a 5 to 7 year horizon for venture capitalists, with 10 years being the average lifetime of a fund.. Not anymore. The average timeline for a startup from first round of funding to exit is now stretched to 12 years or more in some cases. This means companies are staying private much longer.
Fourth, and speaking of companies staying private longer. How are investors and founders getting paid out without exits? That’s what are called secondaries. Secondaries are when a new investor comes in to put in money and cash out previous investors. One of the most famous examples of this has been Stripe recently which seems to never want to go public. Whereas late-stage growth rounds used to have a secondary component about 20-30% of the time just a few years ago, now that figure is over 50%. A huge shift in investor and founder behavior to unlock trapped liquidity.
Fifth, and finally, acquisitions have started to become slightly more concentrated in early-stage companies. Pre-seed and seed stage acquisitions used to represent about 30% of all acquisitions. Now these two categories represent over 45% of all acquisitions.
[References:]
Our Third Story
FedEx and Amazon Partner for Large Packages
Recent news shows that Amazon and FedEx have signed a multi-year partnership for large residential packages. Reuters reports that Amazon internal documents state the rates provided by FedEx are better for the same parcel that was previously provided by UPS. This doesn’t make me feel so good about the deal for FedEx, since 60% of the Amazon volume into UPS was not profitable.
Amazon has historically had a big and bulky facility in the center of the country. With the company’s new regionalized shipping network, likely the company needed more help in this area and found a partner who would take on this cost.
Finally, with increasing automation in Amazon’s network, it is also possible that Amazon was not able to easily automate the delivery of these parcels. Which means Amazon was more than happy to pawn this off on a partner.
All I can say is this: almost anyone who is on the other side of the table when Amazon does a transaction is a loser. I don’t care if it is someone like Toys R Us for famously putting their website on Amazon, Kohl’s for putting Amazon return counters in its stores, or now FedEx, I don’t think Amazon is on the wrong side of this deal.
[References:]
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And Our Last Story
Klaviyo Reports Q1 2025 Earnings
My summary of earnings is simple: Klaviyo continues to grow quickly - faster than Shopify - and is currently trading efficiency for higher growth rates. Here are a few takeaways from the call:
* First quarter revenue grew 33% year over year. Even higher than this are growth rates of customers over $50k Annual Recurring Revenue of 40%, and EMEA growth rates of 47%.
* Unfortunately to generate this revenue, Klaviyo had to spend a lot of money. Year over year sales and marketing costs were up 34%, while R&D costs were up 23%. This pushed the company’s net losses 9% worse.
I’ll end on this note, Klaviyo now has over 169,000 customers total, representing a 16% year over year growth. And of those, about 1,000 customers are now paying it over $100k a year in ARR. This is a significant milestone for them, so congrats on the growth!
I’m still bullish on Klaviyo as a product line and expect the company to continue winning business across a variety of eCommerce scenarios.
[References:]
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
DHL Supply Chain Acquires IDS Fulfillment, Eyeing Smaller E-Commerce Customers
DHL Supply Chain has announced that it has acquired Indiana-based IDS Fulfillment for an undisclosed amount. The company will gain access to small and mid-sized e-commerce businesses that sell apparel and shoewear, health and beauty products, toys, and other goods. The deal was in place before the tariff announcements and is part of DHL Supply Chain's strategy of acquiring capabilities it does not offer currently. This is DHL Supply Chain's second acquisition of 2025 after it acquired North-Carolina-based returns-service provider Inmar Supply Chain Solutions in January.
Second
Skechers To Go Private in $9.4B 3G Capital Deal
Skechers has announced that consumer-goods private equity investor 3G Capital will acquire it at $63 per share in cash. The acquisition price implies an enterprise value of about $9.4 billion. Upon completing the transaction, Skechers will cease trading on the New York Stock Exchange. This is a leveraged buyout for a business that generates $9 billion in annual revenue, has 5300 global stores, and a loyal customer base. 3G Capital is betting that Skechers will operate profitably in the long term despite tariffs. Longtime CEO Robert Greenberg stands to collect a $1 billion payout and will remain with the company alongside other executives to run it and retain a stake in it.
Link: https://www.fashiondive.com/news/skechers-acquired-3g-capital-go-private-deal/747138/
Third
DoorDash Buys UK Rival Deliveroo for $3.86B
DoorDash will acquire UK rival Deliveroo for about £2.9 billion ($3.85 billion) or 180 pence (around $2.40) in cash per Deliveroo Share. The acquisition enables DoorDash to access nine new markets, including the UK and Deliveroo's home market. After the acquisition, DoorDash will operate in 40 markets and service 50 million monthly active users. The acquisition also enables DoorDash to better compete against rivals such as Just Eat Takeaway and Uber Eats due to its larger scale and global footprint. It is unclear whether Deliveroo will remain independent or be absorbed into DoorDash's existing platform.
Link: https://www.wsj.com/business/deals/doordash-buys-deliveroo-for-3-86-billion-35072945
Fourth
Rite Aid Files for Bankruptcy 8 Months After Exiting Chapter 11
Rite Aid, a drugstore retailer, has voluntarily filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court for the District of New Jersey. The company is in active discussions with potential acquirers and is using the Chapter 11 process to pursue a sale of its prescriptions, pharmacy, and front-end inventory, and other assets. It has secured commitments from certain existing lenders to access $1.94 billion in new financing. Per court documents, an auction is set for May 14 for the pharmacy assets and June 20 for other assets. Who is buying Rite Aid? Walgreens cannot, and CVS is downsizing.
AND FINALLY …
Instacart Acquires Wynshop to Expand The Adoption of Its Enterprise Technology Solutions
Instacart has announced that it has acquired Wynshop, a cloud-based e-commerce platform for grocers, for an undisclosed price. The acquisition will strengthen Instacart's enterprise solutions and enable retailers to enhance their online experiences. Wynshop will initially operate as a wholly owned subsidiary of Instacart, and over time, Instacart expects to expand more of its enterprise technology solutions to Wynshop’s customers.
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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.
