November 10th, 2025: Implications of Amazon Working w/ OpenAI + ChatGPT, Shopify Reports Great Q3 Earnings, Some of Worst Mistakes I Made First Time as CEO, Klaviyo’s Earnings Answer Some Key Question
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It’s November 10, 2025 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Implications of Amazon Working with OpenAI and ChatGPT
Shopify Reports Great Q3 Earnings
Some of the Worst Mistakes I Made First TIme as CEO
Klaviyo’s Earnings Answer Some Key Questions
- 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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[PAUSE]
BUT FIRST in our shopping cart full of news…
Implications of Amazon Working With OpenAI and ChatGPT
Andy Jassy released a few important details in the last earnings call that I wanted to unpack further. Here are a few pillars:
- Amazon feels that on-site agents will continue to be super-important and it's growing fast for Amazon -- and the people using it are high-intent.
- Amazon feels that LLMs are currently best for research and narrowing down options.
- Amazon will eventually partner with the public agents.
Let's start simply:
- this is very similar language to what Shopify used when it said that "we are speaking with Amazon Buy With Prime" in checkout, and the world freaked out.
So, an agreement is coming soon. It's only a matter of when.
Regarding the role of agentic in commerce. Here's my take:
agentic research and finding is an acceleration of digital influence on purchases which can happen anywhere. Considering there hasn't been agentic "commerce" before 5 minutes ago, I expect this to be the bulk of things for quite a while, despite the growth of commerce.
Also, it's likely that research-oriented users are tilting towards ChatGPT now because it's one of the best research tools ever invented, already. Which, just because someone is doing research even with "commerce intent" has nothing to do with “am I ready to buy now”.
So people should tap the brakes on conversion conversations.
Finally, Amazon is in my opinion still positioning itself to "deliver for the world". In a world where OpenAI has the best index in the world, and Amazon has the best supply chain in the world, I'm not sure how OpenAI harms Amazon in any material way.
Do we think that OpenAI understands commerce more than Amazon?
No. Do I think OpenAI will focus more on commerce than Amazon? Also, no. Ditto Walmart.
So in commerce, I do not expect OpenAI will halt the rise of marketplaces. Ultimately, OpenAI could either:
- end up fueling more purchases on existing marketplaces, or
- ultimately end up becoming a marketplace (rather than just a front-end to a merchant's checkout), in which case marketplace dominance just continues unabated.
Also, I think the "retail media is dead and agentic killed it" conversation is a little overdone. Anywhere there is a surface which displays a SKU, there will be retail media. Period. The thing will morph, but death is not something I would predict.
"But what if OpenAI disintermediates Amazon? Wouldn't this hurt their ads business?": Ultimately I do not see their ad business shrinking.
For a long time, the number of digital channels which influence both physical and digital purchases has been increasing from few to 7-10 in the past several years (so many sources). Do we think this number will shrink to one or two?
I do not. First, Amazon could take share from other players. Second, Amazon could come up with a clever way to share ad profits with OpenAI.
>> closer
[References:]
Our Second Story
Shopify Q3 Earnings Plays Both the New Hits and the Old Standards
If there are faults in Shopify's plans and execution, it's hard to find them by looking at the scoreboard. Shopify continues to execute the best merchant acquisition engine in all of commerce, all without a CRO and a CMO.
This Rick Watson guy clearly is clueless about Shopify needing a CMO or that merchants are not replatforming and this bit about gnawing off arms. Unsubscribe and unfollow that mofo.
With that said, let's get to the deets.
On Agentic:
* AI-driven traffic to Shopify stores up 7x in 2025. Orders attributed to AI searches up 11x.
* Shopify survey: 64% of shoppers likely to use AI as part of their BFCM buying.
* Shopify wants its merchants to succeed no matter what agentic experience wins and what their model is.
* If AI is fueled by data, then Shopify has a clear advantage. We power millions of merchants and billions of transactions.
* Has an internal "voice of customer" tool called Scout. Any PM, designer, engineer or anyone can ask a question and get grounded answers in seconds.
The new hits:
* Shop Pay in Q3 processed $29 billion in GMV, up 67% year-on-year. It’s now processed over $280 billion.
* Shopify Payments penetration hit 65%.
* International GMV grew 41%; Europe’s revenue share reached 21% of our revenue in Q3.
* Estee Lauder signed. This is a big one they have been waiting on anxiously to come in.
* B2B: Following 2 years of consistent growth over 100%, we nearly doubled B2B GMV again in Q3, up 98% year-over-year.
* Offline GMV in Q3 was up 31%
* Shop Campaigns 8x bigger budget commitments y/y
The old standards:
* Q3 delivered 32% GMV growth, 32% revenue growth and an 18% free cash flow margin.
* Revenue increased 32%
* Merchant Solutions revenue rose 38% (GMV growth)
* Subscription Solutions revenue grew 15%. Q3 MRR increased 10%, with Plus plans representing 35% of MRR.
* Gross profit grew 24%, with gross margin at 48.9%
Tariffs:
* Not even a blip. Are there even still tariffs? The difference between a global logistics business like UPS and a payments-oriented business like Shopify in this climate is ridiculous.
Outlook:
* Q4 revenue growth to be in the mid to high 20s y/y
* FCF margin slightly above Q3
Concerns?
* I do not remember hearing before that Standard plans were flat to 4% growth only.
* Shop App not a mention. Harley talked a long time, maybe he ran out of things.
The Future:
* Harley teases more Ads product releases in the next Editions (usually January). Maybe the analysts will finally have their high-margin advertising wishes come true?
>> closer
[References:]
If you’re a regular listener of the Watson Weekly, you’ll love our free newsletter as well. Get insider access to events, reports, and other exclusive content by signing up for our e-mail newsletter at rmwcommerce.com/newsletter. A few clicks is all it takes.
Our Third Story
Some of the Worst Mistakes I Made First Time as CEO
The first time I was CEO of a company, it was right after my boss got fired. In fact, that boss took me to lunch right after it happened to congratulate me. Right after he got sacked at a venture capital Board meeting. The same Board meeting I got called into right after by the lead VC and asked if I had interest in running the business. This former engineer and product person with no real sales and marketing experience said:
“Sure what do I have to lose?”
My thinking was simple, surely the bar was low because they just fired the professional CEO and knew I had never been a CEO before.
Well, perhaps I should have been more worried. As a first time CEO, I made an incredible litany of mistakes. And of course this matters a lot when you are burning cash too fast, inbound sales are low, and you have a muddled product strategy. All the things that got my boss fired at the time.
Here are just a few of the things I didn't fully understand at the time, and didn't do well:
* Didn't move fast enough transforming the business
* Hired some of the wrong people
* Thought I had to hire "professional sales experience" when existing talent may have done a much better job
* Sometimes I fired some people I should not have
* Didn't pick a clear lane with the product
* Worried too much what the investors thought
* Didn't take good enough care of the existing top customers
* Didn't think marketing was my job.
* Didn't spend enough time on sales calls, even cold calls.
... I'm sure I could go on... All these mistakes are fuel and learning for the future. "Let my life be a warning to you."
From all this, I took a few critical lessons I take into my current company:
1 - Marketing is oxygen. If you're not marketing, you are not breathing. Get your brand out there. Create a positive impression. Add value. Repeat.
Investing in a brand takes years. Get yourself out there.
2 - Happiness is a full pipeline. Companies operate from a position of strength when their pipeline is full. There's another deal around the corner. You can worry about fun things like "fit."
If you spend your days worrying about where your next deal may come from, sure you are also buliding the business - but are likely making suboptimal decisions doing so. Chasing after bad deals you would never take on with a full pipeline.
[References:]
https://www.linkedin.com/posts/ecommercestrategyconsulting_some-of-the-worst-mistakes-i-made-my-first-activity-7392180216669868032-VA6z?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAABzTYBMEkpgbpDWbI9miv0bkNA3W2mE1I
[PAUSE]
And Our Last Story
Klaviyo’s Q3 Earnings Answer Some Key Questions
In a world where SaaS was expected to be made irrelevant by AI, Klaviyo is saying not so fast. AI may be the most powerful growth engine SaaS has ever known.
Some interesting tidbits in different areas.
Product:
* Service product introduced, and adoption strong in first 6 weeks, faster than SMS out of the gate.
* now deploying product updates 270 times a day
* More than half of our ARR comes from multiproduct customers -- a strong indicator and one of the key questions from last year.
Growth:
* Revenue grew 32% year-over-year to $311 million
* NRR accelerated to 109%
* added 7,000 new customers, bringing us to more than 183,000 customers, up 17% year-over-year.
* Revenue outside the Americas grew 43% year-over-year (EMEA up 48%)
* EMEA and APAC now represent more than 35% of total revenue
* Now 3,563 customers with over $50,000 in ARR. Up 36% year-over-year.
Strategy:
* AI has really improved the intelligence layer of the platform - how?
-- can do work businesses don't have time for
-- quality of experiences for marketing and service is better
-- can also interact with klaviyo using natural language, either natively, or via MCP through an external agent/LLM
AI/agentic:
* over 50 AI models in production that are predicting customer behavior, surfacing insights and marketing analytics and helping personalize experiences across marketing and service.
* introduced marketing agent which is like adding a solid marketing intern to your team, working on leveling them up
* Klaviyo MCP is already being used by agencies to streamline workflows and help clients faster, analyze, recommend, improve and deploy campaigns
* maintaining direct relationships with customers even more important in agent era, klaviyo enables this
Wrapping up -- Klaviyo has not had a perfect stock market ride so far, but their pace of innovation has really been on a tear in the last 6 months. Introducing several new major product lines as well as updated agentic experiences within all their existing lines. Just late last year we were only speaking about "will people adopt SMS". Now we are talking about Service and Support, as well as the new agents doing work for users.
There are two questions that remain about Klaviyo's trajectory:
Is Klaviyo capturing -too- much value from customers? Shopify is able to maintain its growth because it has historically been focused on being a value platform. Klaviyo is known for a fairly high monetization curve that while might be good for them, is it the best for all businesses? (i.e. non seat-based pricing). This could hurt them long term up-market but I do understand many of those deals will likely be negotiated.
Second, in the past I've seen Klaviyo's dependency on Shopify is 77.5% (source: SeekingAlpha - is it right?). This will need to come down significantly over time to maximize the potential of the business. In the meantime, still nice work if you can get it.
[References:]
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Sycamore Partners and Walgreens Acquisition Close Amid Retailer Split
Sycamore Partners completed its $10 billion acquisition of Walgreens and plans to split the company into five standalone businesses. It is worth noting that Sycamore Partners has limited exposure to the healthcare sector.
Link: https://www.retaildive.com/news/sycamore-walgreens-acquisition-close-retailer-split/758929/
Second
Augment Raises $85M in Series A Funding
Augment, a freight operations automation platform, announced it has raised $85 million in Series A funding to support further product development and hiring.
Link: https://www.goaugment.com/blog/augment-85m-series-a
Third
DICK'S Sporting Goods Completes Acquisition of Foot Locker
DICK'S Sporting Goods announced that it has completed the $2.4 billion acquisition of Foot Locker. The combined company will operate in more than 3,200 stores, as well as e-commerce and digital businesses across 20 countries.
Fourth
Anaplan Acquires Syrup Tech
Anaplan, a scenario planning and analysis platform, announced it has acquired supply chain platform Syrup Tech for an undisclosed amount. Anaplan will integrate Syrup's technology to enable retailers to improve planning, forecasting, and decision-making.
AND FINALLY …
Klarna Prices IPO at $40 Above Online Lender's Expected Range
European headquartered Klarna, a fintech platform that enables buy-now-pay-later online and in-store, priced its initial public offering at $40 per share, valuing the company at $15.1 billion.
Link: https://www.cnbc.com/2025/09/09/klarna-prices-ipo-at-40-above-online-lenders-expected-range-.html
[PAUSE]
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.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
