AI, AI, and more AI, plus FedEx’s new e-commerce platform

In this week's edition I cover: 

• AI, AI, and more AI! (no joke)

• Shopify and X teaming up for social commerce

• Microsoft's new AI-powered banner ad tool

• Walmart's partnership with Microsoft to build AI-powered shopping experiences

• Amazon's AI tools to help customers find clothes that fit

• Google Cloud's new AI tools for retailers

• FedEx's new e-commerce platform

• OpenAI debuting its new GPT Store

• Tech layoffs beginning in 2024

• BigCommerce + Marketplacer vs Shopify + Mirakl

• Apple's Emmy winning commercial

All this and more in this week's Edition of XWithMe. Thanks for subscribing and sharing!

Stat of the Week 📈

67% of enterprise retailers are considering changing their commerce platform in the next three years, but 61% said the cost of implementing new tech will be tough. 94% said a timely implementation is important. — According to Shopify

1. Shopify and X team up for e-commerce

X announced that it's entering into a partnership with Shopify, in a deal that would allow Shopify merchants to expand their reach through the X network.

X said in a post, “X 🤝 @Shopify. More to come on this new partnership, enabling all Shopify merchants to reach even more customers by leveraging the power of X!”

Not much is known about the details of the deal, except for what X executive Joe Benarroch posted about the partnership’s future goals:

• X wants to utilize Shopify’s sales channel to bring more engagement to the platform.

• Both companies also want to “make it seamless to upload product catalogs onto X.”

• As well as help merchants “optimize their ad dollars to maximize their outcomes on X.”

• And lastly “highlight the role X plays in a merchant’s marketing stack.”

Shopify President Harley Finkelstein added that the new partnership will give Shopify merchants more exposure:

“A determining factor in the success of your business is the ability to reach customers wherever they are. More platforms, more choice, more entrepreneurship. More details to come.”

It's about time that X (speaking historically about Twitter too) got serious about e-commerce.

What always drives me wild to think about is that Twitter was one of the earliest adopters of social commerce and quit too early.

Quick backstory…

In 2014, Twitter launched its first official Buy button in partnership with Stripe, Gumroad, Musictoday, and Fancy, before later expanding to a network of partners including Shopify, BigCommerce, Demandware, and Best Buy. However a few years later in 2017, the Buy button was officially phased out, which the company said was due to lack of traction.

Can you imagine where Twitter would be right now if they had continued down the path of e-commerce?

If instead of quitting early, they had allowed businesses and merchants to slowly catch up and integrate their commerce features into their ecosystems, as well as created additional tools for merchants that positioned Twitter as the center of conversation around product releases, reliable reviews, and social payments?

It was a hugely missed opportunity, and now X has to play catch-up in the world of social commerce thanks to Twitter's shortsightedness.

2. Microsoft launches new AI tools

Microsoft launched Retail Media Creative Studio, an AI-powered tool that can be used to create customized content for retailers, advertisers, and consumers.

In a nutshell, it's a tool that creates banner ads based on images and descriptions from your product page and resizes them to fit various placement types. The tool will automatically pull from your website's colors and fonts to match your brand's aesthetic. 

Here are examples of what it can do:

• Transform a product photo into a lifestyle image with prompts such as “put this sofa in a cozy living room.”

• Create headline options based on product titles or other descriptions.

• Crop and clean up unwanted background or words in an image.

• Allow for revisions of the images and headlines until you reach a desired output.

Once the banner ad campaign goes live, Microsoft Retail Media will leverage AI to choose and display the most effective creatives based on click-thru and conversion rates.

The tool will be available in preview in the Microsoft retail media platform this month. You can watch a short video of it on action on Microsoft's website.

Microsoft also introduced new AI capabilities for shoppers in collaboration with Walmart, which you can read more about in the next section.

3. Walmart unveils new AI capabilities

Walmart made an appearance at CES 2024 to announce that it teamed up with Microsoft to build AI-powered shopping experiences and AI-powered tools for Walmart associates. 

Here's what they've got going on: 

AI Search – a new search feature will give shoppers more options for interacting with inventory. For example, instead of searching for items like soda and chips, you can look for product recommendations for specific events like a birthday party or game day watch party.

AI Purchase Verification – employees at Sam's Club (which is owned by Walmart) will soon no longer need to check shopping receipts as people leave stores. Instead, it will deploy an AI tool that verifies customer purchases. (Wait, does that one help associates by giving them one less job to do?)

Walmart InHome Replenishment – a tool that will use AI to predict what items in a shopper’s cart need to be replenished in a timely manner, offered as an extension to its ‘InHome’ program that became available to Walmart+ shoppers in 2019.

Augmented Reality – Walmart teased plans to weave AR into its shopping experience with a new ‘Shop with Friends’ social commerce offering that allows shoppers to share virtual outfits with friends for feedback while shopping.

These new algorithmic shopping initiatives will directly compete with similar products by Google and Amazon, which I've reported on in previous editions.

The AI shopping features will be available on iOS and Android devices as well as on Walmart's website.

In other Walmart news… the company is expanding its drone delivery in the Dallas-Fort Worth metro area. The expansion will serve 1.8M more households in Texas via its partnership with Wing and Zipline by the end of 2024.

Walmart says drone deliveries arrive in 30 minutes or less, with some reaching customers’ doorsteps in as fast as 10 minutes.

4. Amazon AI helps customers find clothes that fit

Not to be outdone by Walmart this week, Amazon also made some AI announcements. 

Amazon explained how it's now using large language models, generative AI, and machine learning to power four AI features that help customers find clothing that fits, including:

1. Fit Insights – this system works by combining the size relationship between a brand’s size systems, the product’s reviews, and the customer’s own fit preferences to make suggestions of the best-fitting size for that customer. Customers can create separate profiles for fit preferences for multiple membres of their family. 

2. Fit Review Highlights – an extension of the newly added AI-generated Customer Review Highlights introduced last August. This feature extracts information about the apparel's fit from the customer reviews including things like size accuracy, garment fit on specific body areas, and fabric stretch, and then summarizes the findings into an easy-to-ready highlight personalized for the customer.

3. Improved Size Charts – Amazon Fashion is using AI to extract and clean product size charts from multiple sources and then transforming the data into standardized sizes, removing duplicate information and correcting incorrect measurements to create more accurate charts.

4. Fit Insights Tool – a tool for sellers to get a better understanding of customers' fit needs so that they can improve how they communicate sizing to customers. For example, if the item is considered to be “true to size” or if it runs small.

Although these apparel sizing tools are a benefit to the customer, they're also designed to help Amazon streamline the incredible volume of apparel returns they deal with each year. By helping customers get the right size garment from the get-go, the AI technology can reduce Amazon's returns expense. 

AI, however, is also proving to be a pain point for Amazon.

It turns out that AI product title and description tools aren't perfect yet.

Shoppers have come across products with AI-generated names like:

• “I cannot fulfill this request as it goes against OpenAI use policy”

• “I apologize, but I cannot complete this task it requires using trademarked brand names which goes against OpenAI use policy.”

• “I'm Unable to Assist with This Request it goes Against OpenAI use Policy and Encourages Unethical Behavior.”

As well as AI descriptions like:

• “Our [product] can be used for a variety of tasks, such [task 1], [task 2], and [task 3], making it a versatile addition to your household.”

The product listings suggest that companies are using ChatGPT to whip up entire product descriptions, without doing any proofreading, which raises the question — is anyone at Amazon actually reviewing the products that appear on its site?

Amazon provided the following statement: 

“We work hard to provide a trustworthy shopping experience for customers, including requiring third-party sellers to provide accurate, informative product listings. We have removed the listings in question and are further enhancing our systems.”

5. Google Cloud also launches generative AI tools for retailers

Tired of reading about generative AI this week? Me too. However I've got one more story for you about it…

(If you're a new reader, please note that this newsletter is not typically so AI obsessed. However story trends like this are par for the course the week of CES and NRF.)

Google also launched several new tools for retailers that leverage generative AI to improve online shopping experiences and other retail operations, including: 

• Virtual Agents – that can talk to customers and offer product recommendations based on shoppers' preferences.

• Enhanced Product Search – a large language model feature that retailers can use to offer a Google-like search experience on their own websites.

• Customer Service Modernization – a tool that can hep retailers improve their self-service capabilities and increase customer engagement.

• Catalog & Content Enrichment – tools that will help retailers improve their product catalogs by creating and analyzing product images and descriptions, and then automatically generating new text for descriptions and product metadata. (Hopefully better than ChatGPT, LOL).

• Retail Software – a new fully managed hardware and software offering that will help retailers deliver modern customer experiences, even if they have no Internet connectivity.

Carrie Tharp, VP of strategic industries at Google Cloud, said generative AI has progressed from a barely recognized concept to one of the fastest-moving capabilities in the technology industry and a must-have for most retailers.

“With the ability to accelerate growth, boost efficiency, fuel innovation, and reduce toil, generative AI solutions are ready to be deployed now, and Google Cloud’s recent innovations can help retailers recognize value in 2024.”

6. FedEx is building an e-commerce platform

FedEx is planning to launch an e-commerce platform called “fdx” later this year, which it describes as an end-to-end online shopping hub that aims to provide sellers with solutions for everything from reaching potential customers to order fulfillment and returns.

So far FedEx hasn't provided many details, other than to say that fdx is being built as a “data-driven” platform that will use the company's insights to optimize the buying and selling process. It also says:

• Sellers will have access to the existing network of customers on ShopRunner, which FedEx owns.

• Customers will be able to see delivery estimates on products as they browse and add things to their carts, even before checkout.

• Sellers will be provided with carbon emissions reports relating to their supply chain decisions, as well as optimal shipping routes and other data.

FedEx is calling fdx the “first data-driven commerce platform that connects the entire customer journey” — which is a bit of a stretch in my opinion, as a fairly large existing one that starts with an “A” and ends with a “mazon” comes to mind…

It's a lofty goal from a package delivery company, and the name sounds a little too close to “FTX”, the disgraced crypto platform, however I support competition in the space, so I wish them the best of luck. 

The official launch of the platform is planned for fall 2024, however the fdx platform is available in the meantime as a private preview upon request. If you're at NRF right now, you can also visit booth #3674 to see a preview.

7. OpenAI debuts its GPT Store

OpenAI officially launched its GPT Store, a marketplace for customers to access custom versions of ChatGPT created by other users. The store is initially only available to Plus, Team, and Enterprise users.

The custom GPTs are optimized for specific tasks that the standard version doesn’t necessarily support out of the box, and can interact with external applications and draw on proprietary datasets to generate answers.

GPT categories include DALL·E, writing, productivity, research, programming, education, and lifestyle.

A few examples of GPTs include: 

• Personalized trail recommendations from AllTrails

• Search and synthesize results from 200M academic papers with Consensus

• Expand your coding skills with Khan Academy’s Code Tutor

• Design presentations or social posts with Canva

• Find your next read with Books

• Learn math and science anytime, anywhere with the CK-12 Flexi AI tutor

To share a GPT via the new marketplace, users must make it publicly accessible and create a Builder Profile on the platform.

GPT Builders will be paid based on user engagement with their GPTs, which OpenAI says it will provide further details about payments as they get closer.

OpenAI also introduced a new paid tier called ChatGPT Team, which is geared towards organizations and will be available starting at $25/month per user. The tier is positioned as a more accessible alternative to its Enterprise plan which debuted last year.

I tried the Logo Creator by Chase Lean to make up for the terrible logo creation experience I had with ChatGPT last week (story #4). The custom GPT was equally as terrible at coming up with logos as the default ChatGPT.

8. The 2024 layoff season begins

Just when you thought the layoff frenzy was over at tech companies, a fresh wave is upon us for the new year. 

• Amazon's livestreaming site Twitch is cutting 35% of its staff, or about 500 workers.

• Amazon is laying off “several hundred” staffers from its Prime Video and MGM Studios division.

• Amazon's Audible division is laying off around 100 employees, or approximately 5% of its workforce.

• Google is laying off a few hundred AR Hardware engineers, members of the Google Assistant team, and core engineers, as well as Fitbit co-founders and other Fitbit leaders.

• Flipkart is set to let go of about 5-7% of its workforce, or around 1,500 employees, by April, initiating the layoffs via performance reviews.

• Instagram fired 60 employees, mostly technical program managers, signaling a phase-out of the role. Employees affected can choose to reapply and undergo a new interview process to secure positions product managers.

• Unity Software is laying off 1,800 employees, or about 25% of its workforce, as part of a corporate restructuring plan.

• Duolingo laid off around 10% of its contract workers, as the company moves to rely more heavily on AI.

Best of luck to all the folks impacted by these layoffs in the new year. 

9. Other e-commerce news of interest

Microsoft became the world's most valuable company on Friday, as its market cap ended a trading session higher than Apple's for the first time since 2021. Microsoft's market cap stood at around $2.887T, its highest ever, while Apple's was $2.875T. Most companies wouldn't mind just being worth the difference!

The eBay photo scam is back, this time with the special edition pink Stanley cups sold at Starbucks inside Target stores. Sellers listed photos of the cups, tricking buyers into thinking they were buying the product itself, when they were actually just buying a photo of the cup. So like an NFT?

Speaking of creating marketplaces, Shopify and Mirakl teamed up to allow merchants to launch and grow marketplace sales using Mirakl’s suite of AI-powered platform solutions. Through the new partnership, Shopify merchants can add marketplace sellers into their operations using the Mirakl Platform, as well as sell through other Mirakl-powered marketplace platforms.

So now it's BigCommerce + Marketplacer vs Shopify + Mirakl!

One more Shopify partnership to report on this week… Shopify and Manhattan Associates partnered up to help retailers build unified omnichannel shopping experiences. The partnership will see Shopify's platform combined with Manhattan's omnichannel order management solution, including their post-purchase customer service tools and digital self-service solutions. Nautica will be the first joint customer. 

Afterpay launched a new tennis-inspired campaign to build awareness of the truly “unbelievable head-turning ways” people can use Afterpay to buy now and pay later. The creative can be seen on Channel Nine during the live broadcast of The Australian Open, as well as BVOD, social and other online channels.

Amazon announced a Buy with Prime integration with Salesforce Commerce Cloud, offering shoppers the ability to search and filter for Amazon Prime-eligible items. Shoppers will also be able to add both Prime-eligible and other items to their carts and purchase all items in a single checkout.

Wix introduced a new revenue-sharing initiative for Partners engaged in Wix Studio. Agencies and freelancers can apply through the Wix Studio Workspace and earn a 20% revenue share on new sites created in 2024, as well as a 50% share of revenue from client sales on sites using Wix Payments. Wow that's pretty generous! I'd love to earn 50% revenue on Shopify Payments revenue from all the stores I've opened through their Partner program.

Shopify revealed custom software it built to run its business more efficiently, including Shopify OS, a system that helps leaders make decisions about the business like head count and title recommendations. It also revealed GSD, or “get shit done”, an internal system used for tracking progress on tasks, which gives visibility into work happenings across the company by designating it into various projects, which roll into missions and then themes. So Shopify turned productivity into a video game?

Google is shutting down its free website offering for Google Business Profiles in March, and from then on will redirect customers from those sites to the company's Google Business Profile. Honestly they weren't even really necessary, as all the sites did were regurgitate information from the company's Business Profile. There are plenty of other better free website tools out there that company's can transition into.

Victoria's Secret is tapping into Google Cloud's Vertex AI to enhance its online search capabilities and personalize product recommendations. The company is deploying a generative AI virtual assistant and using AI to optimize inventory forecasting and allow customers to upload and search images, allowing Victoria's Secret to provide custom recommendations for individual customers (or their wives).

Amazon, Microsoft, and Google are opening headquarters in Saudi Arabia amid pressure from the government, which said it will stop giving contracts to companies without regional headquarters in the country. The three firms have all received licenses to establish regional HQs in Riyadh, just ahead of the deadline set by the government.

Instacart is now letting advertisers use its shopper data to target ads on Google Shopping campaigns, as part of its strategy to let brands target ads off-platform. Last year the company announced partnerships with Roku and The Trade Desk.

Instacart is also piloting ads on its AI-powered smart carts in Southern California. CEO Fidji Simo said, “You can imagine an experience where you are going through the aisles of the store, you drop a box of cookies in your cart and we immediately suggest Dreyer’s ice cream to make ice cream sandwiches with your cookies and we even tell you which aisle you can find this product in.”

10. Seed rounds, IPOs, & acquisitions

Finn, a Munich-based startup that operates a platform for new car subscriptions, raised €100M in a Series C round led by HV Capital, Korelya Capital, and others, bringing its total amount raised to $250M in equity and $1B in debt. The company will use the funds to expand its tech and reach, with a move into more electric vehicles and cloud-based tools to manage its services. 

Pier, a SaaS platform that offers developer-friendly API tools to help companies with their own credit products, raised $2.4M in a round that included Y Combinator, Liquid 2 Ventures, and others. The company will use the funds to develop its technology that helps businesses launch credit products in weeks, rather than months.

Rokt, a global e-commerce platform that focuses on enhancing the purchase experience for its clients, agreed to acquire AfterSell, a Shopify partner that helps retailers create customizable checkout and post-purchase experiences, for an undisclosed amount. Through the acquisition, Rokt will gain access to AfterSell's client base, which include Good American, KitchenAid and Bloom Nutrition, and the ability to expand its offerings to small and medium sized businesses. 

Bank of America has given Jio Platforms, an Indian telecom and digital conglomerate, a $107B valuation, as the company is about to undertake an IPO. This valuation is 64.6% higher than the $65B valuation it was given when Meta, Google, and other giants participated in a multi-billion dollar investment round in 2020.

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