October 30th, 2023: HomeGoods shuts down their eCommerce platform, Overstock changes name to Beyond, can we tap brakes on TikTok Amazon comparisons? Update on retail inventory heading into holidays
Today’s episode of the Watson Weekly podcast is sponsored by Commercetools.
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It’s October 30, 2023 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
HomeGoods Shuts Down Their eCommerce Platform
Overstock Changes Its Name to Beyond
Can we Tap the Brakes On The TIkTok and Amazon Comparisons?
Update on Retail Inventory Heading into the Holidays
- 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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Just a reminder to stay tuned until the end for my Final Word for the week.
BUT FIRST in our shopping cart full of news….
HomeGoods Chooses Shutdown over Replatforming their Oracle ATG stack
You know that time growing up when you had that old dog and one day your parents said they were going to take it out to the country, and then they came back and you ask them where’s the dog?
“Well, Ricky, the dog is in a better place now.”
Well, wherever that better place is, that describes what HomeGoods just did when they put a bullet in their eCommerce website rather than choose to replatform.
HomeGoods, owned by TJMaxx was on Oracle ATG (from what I can tell) - with a hitlist of vendors such as Ensighten, one of the personalization vendors that Kibo sold off, Adobe Target and Analytics, and a long line of other expensive vendors that their off-price business model truly cannot support.
There are many Oracle ATG refugees even in this audience who are in the midst of figuring out what to do next. If you ask my opinion, and of course no one did, this is what happens to eCommerce platforms that try to expand too far.
In order to move up and to the right in some arbitrary quadrant, you have to either build a bunch of things you have no business building, or acquire a bunch of companies that you have no business acquiring. Pick one of these bad options.
There has to be a better way right?
My take on the whole replatform question is that any decision has to start from 3 fundamental questions that you ask yourself. These are:
First, what is our reason for existing?
Second, can an integrated digital experience enhance and support that vision from awareness through to loyalty?
Notice I said digital experience and not eCommerce. eCommerce is in service of the entire experience, and not everything is about a transaction.
Third, what constraints does our financial model demand, and how can new digital experiences enhance or improve our financial model over time?
My experience is if you start from these three simple questions, you can’t go too far wrong on your journey. If you’d like help with your replatform journey, don’t hesitate to reach out to me for help.
[References:]
Our Second Story
Ovesrtock Changes Its Name to Beyond
This last week, Overstock has released its plan to change its name …
Again.
The current name is Bed Bath and Beyond, which it recently purchased the rights to. Now the company would like to be referred to as Beyond.
Beyond what? That part is unclear. Beyond all recognition? Beyond all hope? Beyond the pale? Here are the details that will be effective as of November 6th:
* The Overstock stock market ticker symbol will change from OSTK to BYON on the New York Stock Exchange.
* That’s it, there’s no more details.
Apparently a name change is actually the entire strategy. Same discount overstocked merchandise, new name, now one that no one even recognizes.
I guess one question I have is why you pay $21 million dollars for a franchise which had stores all over America that consumers recognize, only to change the name 5 minutes after you acquire it?
I guess it’s true what Shakespeare said, What’s in a name? a rose by any other name would smell as sweet.
What would Shakespeare have said about renaming a poop emoji?
[References:]
Our Third Story
Can we Tap the Brakes On The TIkTok and Amazon Comparisons?
A recent article in the Wall Street Journal kinda set me off this week when it asked if Amazon has a new major competitor in TikTok. Seriously, can we look at this comparison again.
Amazon is a logistics monster, with the best distribution and delivery network in the world.
TikTok is a content-driven discovery engine.
The two companies are not even comparable.
The best TikTok can be is a place for influencers to help consumers discover and research either very high-margin (how much do you think a pop-dart costs to make) or luxury items (like a high-end stroller). It's due to the economics of the channel, and the inclination of influencers to gravitate to the biggest payouts on either the most considered or the biggest impulse purchases.
Are you going to stop going to malls with your friends because you are on Tiktok?
Nope. Something you saw on TikTok might drive you into the mall, however.
Are you going to stop shopping at WalMart because you are on TikTok?
Nope. A beauty technique you learned on TikTok might encourage you to try a new beauty product, however.
Are you going to stop the Subscribe and Save you have on Amazon because you are on TikTok?
Nope. Those paper towels are likely essentials and will never appear on TikTok.
In short, TikTok is about awareness and research/consideration. For purchases, except on cheap impulse items, consumers are still going to shop around.
Put another way, if TikTok becomes primarily an eCommerce engine, it will lose what makes it TikTok - I go there to be entertained and unwind. If every 10th video tries to entertain and sell me something, sure I can tolerate that.
More than that? Sorry, I'll pass.
If I'm considering a product, TikTok can help me research something I might be considering, but a lot of essential purchases don’t fall into that bucket. Which actually means that most of retail, including the heart of Amazon and Walmart's business, is off-limits to it.
It still doesn't mean that there aren't interesting reasons to be on TikTok. But a brand’s success will ultimately depend on category, use case and economics.
[References:]
https://www.wsj.com/tech/amazon-tiktok-online-shopping-rivals-5bf902c2
https://www.linkedin.com/feed/update/urn:li:activity:7122923830150352905
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And Our Last Story
Update on Retail Inventory Heading into the Holidays
RetailDive recently reported on some data from Matthew Shay, the Head of the National Retail Federation has given his update on retailer health as we prepare for this holiday season.
Inventory levels have returned to prepandemic levels overall. Many major retailers have seen their inventory levels fall throughout the year.
On the consumer front, September retail sales have flashed a few warning lights. Sales came in up 3.4% year over year in September which may indicate a softer than expected holiday season.
Some of the declining categories included electronics at 2.5% down year over year and furniture and home improvement sales down 6.5%. A lot of the spend seems to keep moving to travel and experiences.
What seems to be happening in the market is that higher income shoppers are driving all the results. Below that level, consumers still seem to be on the lookout for deep discounts to justify any big purchases, at least according to a recent BankRate consumer survey.
The bottom line for retailers could be that in a race between sales growth and inflation, inflation is likely to win this year across the board and that is not a great result for the industry, despite the fact that I’m sure there will be some bright spots.
[References:]
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Hey, Watsonians, did you know that Goop Has Launched a new Mass Beauty Brand? If you were in our online community, you would! To stay on top of what’s going on in eCommerce and join the conversation, visit community.rmwcommerce.com today.
Now a word from our sponsor Commercetools:
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It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Ergo Raises $1.5M Pre-Seed Funding
Ergo, a pricing startup that enables customers to negotiate personalized pricing, has raised a $1.5M pre-seed round. Is this a commerce or finance business - asking for a friend?
Link: https://techcrunch.com/2023/10/12/ergo-shopify-app-e-commerce-pricing/
Second
Pair Eyewear Announces $75M Series C Funding Round
Pair Eyewear has raised $75M in Series C funding to invest in its lens factory automation technology and expand its product line.
Third
JOOR Raises $25M
B2B wholesale platform JOOR has raised $25m, which will be used to invest in its platform for brands and retailers, enter new categories, and invest in its embedded checkout solution, JOOR Pay. Is this another platform going down the payments route? Sure sounds like it. While the press release is bright and cheery, the debt raised indicates it’s primary purpose is to be lending money not investing in the future.
Fourth
Ryder Acquires Impact Fulfillment Services
Ryder acquired Impact Fulfillment Services (IFS) for undisclosed terms, and it will place IFS co-packaging and co-manufacturing services into Ryder's CPG vertical. Ryder expects to add $250M in annual revenue as it will add complimentary services to its current offering.
Link: https://www.freightwaves.com/news/ryder-acquires-ifs-to-boost-supply-chain-business
AND FINALLY …
Steve Madden Acquires Almost Famous
Steve Madden acquired privately-held apparel brand Almost Famous for $52M in cash. Almost Famous adds women's and junior apparel and strength in value-priced channels to Steve Madden's apparel business.
Link: https://www.fashiondive.com/news/steve-madden-acquires-almost-famous/697500/
Today’s final word for the week of October 30th is “Weekend”
As in the Watson Weekend. If you haven’t heard, we are starting a new venture here in the world of Watsonians, and it’s called the Watson Weekend.
The Watson Weekend is the bookend show to the Wildly successful “The Watson Weekly”, hosted by Rick. We wanted to create a space to have engaging and irreverent discussion about our industry in general. We will have a set of topics to discuss on the show, but this is also designed to be a space where great personalities shine. We won’t always agree on everything but we will have have good opinions, thoughts and idea sharing. Check out our first Watson Weekend show at 12:00 Noon Eastern on November 3rd on my LinkedIn or Youtube.
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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 CitizenRacecar. The show is produced by Jose Baez; Production Manager, Gabriela Montequin.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
