Wednesday Aug.25, 2021

🛍 TikTok Shopping has landed

_"Hold on, let me shop this Tok" [Nick David/Stone via GettyImages]_
_"Hold on, let me shop this Tok" [Nick David/Stone via GettyImages]_

Hey Snackers,

Remember when the public was asked to help name a new research ship, and the internet chose "Boaty McBoatface"? The meme lives on: Boaty McBoatface is now an NFT.

The tech-heavy Nasdaq index crossed 15K for the first time yesterday, as investors reacted to strong corporate earnings.

TikShop

Tap-to-buy mania: TikTok launches Shopping, and Insta drops Shop ads

Bought it on Insta... The ads know you so well. Two big developments dropped this week in the world of "social commerce" — aka: shopping through social media. TikTok is testing "TikTok Shopping" tabs in North America and the UK through an expanded partnership with ecomm platform Shopify. Meanwhile, Instagram is launching advertising on its Shop feature globally.

  • Instagram Shop, which launched last year, lets businesses set up digital storefronts on their pages. In some cases, you can pay directly through Insta with Facebook Pay. FB gets a small fee per purchase.
  • TikTok Shopping: Should've been TikShop (TokShop?). Shopify merchants with a "TikTok For Business" account can add a “Shopping” tab to their profiles and create mini-storefronts. Kylie Cosmetics will be an early adopter. But shopping takes place in the merchant's Shopify-powered site.

"Link in bio"... So 2020. US social commerce sales are expected to exceed $35B this year, up 36% from 2020. New shopping features from TikTok and Insta are fuel for the creator economy, which relies on affiliate sponsorships. TikTok Shopping will give Shopify merchants — and their influencer partners — the ability to tag products in their videos. Instead of just posing next to a bottle of protein powder, you can also link it.

Social commerce = the friction-killer... from discovery to checkout. Our purchasing decisions are often influenced by social media — remove the friction, and ads become even more effective. You spot pleather boots in a post and buy them directly through Insta, instead of entering a Google rabbit hole. That seamlessness is extra-valuable for advertisers, which means social giants can charge even more for ads. That's why Twitter, Pinterest, and Snap are also doubling down on shopping features – think: branded makeup filters on Snap.

Un-brand

Walmart opens its delivery network to mom-and-pop shops — because un-branding can be big business

Hold on to your cupcakes and car mufflers… There’s a new last-mile delivery service in town. Walmart is opening up its delivery network to outside retailers with a new program called GoLocal. The deets:

  • Retailers won’t need to sell in Walmart’s marketplace to use GoLocal, so even small shops can deliver products from store to customer. And don't expect those giant Walmart trucks: GoLocal is un-branded.
  • Only Walmart workers will fulfill GoLocal deliveries — unlike existing Walmart delivery, which also uses third-parties like FedEx, Doordash, and Uber.

Racing for the last mile... The same-day delivery market is expected to triple between 2020 and 2026. Amazon set the standard: Prime same- and one-day shipping was available for 72% of Americans in 2019. But Walmart has invested heavily in its same-day Express Delivery in the past three years. It now covers 70% of the US population. Here’s how the mega retailers compare:

  • Similar most of the way: Walmart and Amazon both operate massive ecommerce sites and shipping networks, and Amazon’s slowly expanding into IRL stores, where Walmart has long thrived.
  • Different for the last mile: Walmart’s doubling down on last-mile delivery. But Amazon’s going the opposite direction — it shut down its delivery platform for retailers in 2020 and prioritized warehousing instead.

“Un-branding” can be big business... Corporate giants can use their massive footprints to help other businesses scale — and profit in the process. With its white-labeled delivery service, Walmart — the second biggest US ecomm retailer — will have a new revenue stream. Other big businesses also sell unbranded services B2B: Target sells delivery tools to 120 retailers, Zoom sells its video-conferencing tech to other apps, and DoorDash sells its backend platform to stores that want delivery services.

What else we’re Snackin’

  • Trillions: House Dems passed a $3.5T budget resolution and advanced the $1T bipartisan infrastructure bill after breaking a stalemate.
  • Export: Delta variant outbreaks in Vietnam and other Asian countries with low vaccination rates are causing production shutdowns that affect global trade.
  • Home: Airbnb plans to temporarily house 20K Afghan refugees in properties listed on its platform, as the Taliban's fast takeover wreaks havoc.
  • Stacks: Samsung plans to spend a whopping $205B on chip manufacturing and Covid vaccine production over the next three years.
  • Racks: Urban Outfitters posted record second-quarter earnings as shoppers return to racks. Nordstrom beat estimates, but was still below 2019 levels.

Wednesday

  • Earnings expected from Salesforce, Royal Bank of Canada, Autodesk, Ulta Beauty, Dick’s Sporting Goods, and Zuora

Authors of this Snacks own shares of: Shopify, Walmart, Amazon, Uber, Snap, and Twitter

ID: 1807724

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Meta, of course, isn’t the only company that’s tight-lipped about where its AI data is coming from. In a now infamous interview with WSJ’s Johanna Stern, OpenAI’s chief technology officer Mira Murati was unable to answer questions about what Sora, OpenAI’s video generating app, was trained on. YouTube? Facebook? Instagram — she said she wasn’t sure.

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Some companies check out rivals’ websites, stores and public filings to stay abreast of the competition. Amazon made its own fake shell company and brands, transacted hundreds of thousands of dollars per year undercover on competitors’ platforms, and kept its intel operation a secret for nearly a decade even from others at Amazon, according to a fascinating investigation by the Wall Street Journal.

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Exclusive | Inside Amazon’s Secret Operation to Gather Intel on Rivals

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In meetings where they’d use this clandestine information to inform Amazon’s own business practices, the group resorted to literal paper. “[T]he team avoided distributing presentations electronically to Amazon executives. Instead, they printed the presentations and numbered the documents. Executives could look at the reports and take notes, but at the end of the meeting, team members collected the papers to ensure that they had all copies."

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