Online retail app and site news

eBay collectibles account for more than $10 billion in GMV

Abbas Haleem — Thu, 09 Nov 2023 20:40:36 +0000

One category continues to draw consumers to eBay Inc.: collectibles, said CEO Jamie Iannone.

On an earnings call with investors, he announced eBay revenue and gross merchandise value (GMV) grew in the marketplace’s fiscal third quarter, ended Sept. 30. EBay GMV grew to nearly $18 billion in Q3, he said. And much of its GMV in the past year has come just from collectibles.

“We generated over $10 billion in GMV from collectibles over the last 12 months, and more than one in four eBay buyers purchased at least one collectibles item over the past year,” Iannone said. “These buyers carry some of the highest conversion, repurchase, and retention rates on eBay. And they are also among the heaviest cross-category shoppers on our platform, which supports our other categories.”

In the past 12 months, eBay GMV reached about $72.8 billion, according to financials listed in its most recent earnings release. Based on those figures and Iannone’s statement, Digital Commerce 360 estimates eBay collectibles accounted for about 13% of GMV in the past 12 months.

EBay ranks No. 6 in Digital Commerce 360’s Global Online Marketplaces database. The database ranks the 100 largest such marketplaces by 2023 third-party GMV. Digital Commerce 360’s 2023 Global Online Marketplaces Report includes key insights into the biggest players in the database.

eBay capitalizes on collectibles in Q3

Iannone said eBay’s goal is to remain “the world’s most loved destination for passionate collectibles enthusiasts.” Working toward that goal, he said, eBay launched direct submissions to its vault.

“This enables any U.S. resident to send in trading cards valued at $250 or higher from their personal collections to the vault, even if they were not purchased on eBay,” he said.

Additionally, in July, eBay announced what it calls Vault Enhanced Submission. It enables eBay “to gather large amounts” of valuable trading cards in person at events. In one weekend, eBay added “tens of millions of dollars of assets under management to the eBay vault,” Iannone added. That includes a signed Jackie Robinson card valued at about $1 million.

The marketplace describes eBay vault as “a secure, climate-controlled, physical storage facility for graded trading cards available to eBay customers. In addition to best-in-class storage, the eBay vault offers opportunities for seamless buying and hassle-free selling with the confidence that comes with Authenticity Guarantee.”

The eBay collectibles category includes sports trading cards, toys and figures, sports memorabilia, comic books and more. The category accounts for more than 10% of eBay GMV.

eBay revamps condition grading system for trading cards

Iannone said eBay “revamped” its condition grading system for trading cards. It improves transparency for collectibles in the subcategory, he said. New listings now carry more precise details, he added. That includes whether a card has been professionally graded and the numerical grade, or one of several predefined card conditions.

EBay will also migrate existing listings to the new standard “over the coming months,” Iannone said. “Sellers have been asking us for this feature for some time, and we believe it will drive improved trust for buyers, better and more consistent price realization for sellers, as well as more robust data and insights around individual card values for eBay.”

Making the shopping experience more interactive

Although still in beta, eBay launched eBay Live last year in response to its growing community of collectors and enthusiasts, Iannone said. The interactive live-shopping feature is available within the eBay app, and the marketplace continues to expand its availability to more sellers and categories, he said.

Using eBay Live, buyers can interact with sellers and checkout in real time without leaving the livestream, Iannone added.

“Q3 marked an inflection point as we hosted over 1,000 live events, saw our millionth buyer tune in, and grew GMV from eBay Live by 4x quarter-over-quarter,” Iannone said.

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How The Beer Bat knocked ecommerce out of the park

Peter Lucas — Wed, 08 Nov 2023 22:11:58 +0000

It’s not uncommon for small manufacturers with limited staff to turn to technology to address growing pains within the business. After developing and launching The Beer Bat, a 24-ounce plastic cup shaped like a bat that features a team’s logo, with a single minor league baseball team, creator Sam McGee and his staff soon found themselves with a major league hit on their hands and in need of an ecommerce platform that could scale to meet his company’s skyrocketing orders without the need to hire additional staff.

The Beer Bat’s business model is to operate with a lean staff and put its resources behind product development and quality control. As a result, the company has about a dozen employees, which limits their ability to answer sales calls and fill orders.

“What we wanted was a platform that takes the salesmanship out of sales and enables more of an Amazon-like model of point, click, buy, and deliver, as opposed to figuring pricing and placing the order with a sales representative over the phone,” says Sam McGee, president of The Beer Bat.

The Beer Bat needed a platform that could scale up

At the time, The Beer Bat was using the WooCommerce platform, which could not scale to handle the increase in order volume and required a software developer to write code for any of the changes the company wanted to make to the platform, as it does not employ a code writer in-house.

What The Beer Bat sought was a platform that could support B2B and B2C sales and had the features to support the company’s future growth. The Beer Bat settled on BigCommerce as its new platform provider not only for the platform’s scalability and features, but for the BigCommerce support team.

The latter was important to The Beer Bat as it wanted a platform provider experienced in working with small, but rapidly growing businesses.

“We wanted a platform provider that was personal, not transactional,” McGee says. “BigCommerce does not treat us like a transaction, and we are a small business that values the human side.”

With the BigCommerce platform, The Beer Bat has implemented a customer portal for buyers to place an order, typically 10,000 to 15,000 units at a time, upload their artwork or logo to be printed on the Beer Bat, and automatically receive an invoice once the order is complete. Buyers can also see pricing specific to their account. On the B2B side, The Beer Bat sells to food and beverage retailers and distributors, and concessions operators.

“Manually processing orders of the size we typically get is a lot of work. Now, the ordering process is a lot more efficient,” McGee says.

Beer Bat’s origins

The idea for The Beer Bat grew out of McGee’s business philosophy that there is a product for every market and a market for every product. At the time, Green Egg Design LLC, a manufacturer of plastic bottles owned by McGee, was producing branded drinkware for the Hard Rock Café’s outdoor casino in Las Vegas. When the Hartford Yard Goats, a minor league baseball team, announced it would begin playing in Hartford, Connecticut, where Green Egg is headquartered, at the start of the 2017 baseball season, McGee saw an opportunity to develop a new drinkware product unique to the team.

“I did some research and I learned that the [Yard Goats] baseball park seats about 8,000 people, and everybody is drinking, 48% drink beer, and the other 42% are drinking non-alcoholic beverages,” McGee says.

The goal was to develop a product that not only fit the fan experience inside the park but enhanced it. McGee pitched several ideas to Yard Goat management, including The Beer Bat. In the end, The Beer Bat won out. The product debuted at the Yard Goats’ stadium in August 2018.

From minor leagues to major leagues

The company continued its focus on signing minor league teams for the next year until Major League Baseball’s Atlanta Braves franchise came calling.

“We initially focused on minor league teams as there were more than 300 of them in towns across the country at the time. That’s a good foundation when it comes to potential markets,” McGee recalls. “When the Braves saw our product in a promotional video that went viral, they called.”

The Braves debuted The Beer Bat when their new stadium opened in 2020. In 2021, MLB’s San Diego Padres signed as a client. The Beer Bat supplies its product to stadium concession operators for five MLB and 27 minor league teams. And the company has established online storefronts in several countries including Canada, Japan, Mexico, South Korea and Taiwan. The company also has licensing agreements with all 30 MLB teams, as well as the Negro League Baseball Museum to sell The Beer Bat featuring their respective logos.

“The multi-storefront functionality of BigCommerce allows us to go global locally with a single back end,” McGee says.

Business is growing fast

In 2023, The Beer Bat expects to deliver about 470,000 units, compared to 235,000 in 2022. Since installing the BigCommerce platform, The Beer Bat has increased orders by 71%, increased revenues by 115% and seen 98% increase in visitors to its B2B and B2C storefronts.

Always looking for the next great product idea, The Beer Bat plans to introduce a cup shaped like a hockey stick later this year. The cup will be based on the same business model as The Beer Bat.

“I think hockey has the potential to be bigger than our baseball business,” McGee says. “It could be our Mona Lisa.”

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Amazon’s software-as-a-service strategy set to drive new growth

Abbas Haleem — Mon, 06 Nov 2023 16:10:06 +0000

“This is the story arc of AWS’ success,” said Brendan Witcher, vice president and principal analyst at research firm Forrester. He was referring to Amazon Web Services and how it contributes to the merchant’s software-as-a-service (SaaS) strategy, which has led to new growth opportunities for the region’s top ecommerce retailer.

It’s No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party GMV.

“We already have made these investments, technologies,” Witcher said, speaking from Amazon’s perspective. “How do we create incremental revenue by applying those sunk costs to new opportunities for others to take advantage of those costs where we can benefit in a financial way? This has been part of Amazon’s strategy for quite a while.”

Andy Jassy, Amazon’s CEO, spoke about different SaaS initiatives on a recent earnings call with investors for its fiscal third quarter ended Sept. 30, 2023.

Amazon’s fastest-growing sectors are ads and seller services, said James Risley, research data manager and senior analyst at Digital Commerce 360.

It shows that “while Amazon’s online stores are still growing well, its third-party sellers are the real growth leaders for the company,” Risley said. “Online stores only grew 2.0% in the first half of the year, though, and grew 7.0% in Q3, so the momentum is strong for first-party sales as Amazon potentially shifts its focus ahead of government pressure and a more savvy consumer who prefers direct relationships with sellers.”

Supply Chain by Amazon changes the fulfillment game

Two key Amazon software-as-a-service programs Jassy addressed were Supply Chain by Amazon and a growing generative AI initiative. New Amazon generative AI technology gives merchants the ability to create web pages and product imagery “with nearly endless flexibility,” calling it, along with Supply Chain by Amazon and AWS “the democratization of technology.”

Jassy said the company has seen “very positive early response from sellers to Supply Chain by Amazon.”

Supply Chain by Amazon is a fully automated set of services in which the mass merchant handles:

Inventory pickup
Shipping
Customs clearance
Ground transportation
Inventory storage
Replenishment

Amazon has been making “huge investments” in supply chain for more than a decade, Witcher said. The idea was that Amazon would eventually reach scale and those investments would pay off, he added.

“I think you’re starting to see that now, particularly because they’re starting to outsource delivery as a service,” Witcher said.

Amazon already has the infrastructure in place, so these are sunk costs, he said.

Amazon software as a service (SaaS) can change the game for third-party sellers

“Generative AI developments should be given more weight than Amazon let on,” Witcher said. “Using this innovative technology really gives Amazon the operational efficiencies in inventory planning and route planning that they need to realize the ROI of all these investments they made in supply chain.”

Witcher said AWS was the proof of concept that Amazon can create incremental revenue from its existing services and offerings. He said Fulfilled by Amazon (FBA) “clearly” works for a lot of sellers.

“Now, Amazon’s removing the pain points of being a small-business seller,” Witcher said. “Nobody gets into the retail business saying, ‘I can’t wait to build web pages’ or do photoshoots. That’s not why they get into selling products. They want to sell products. Amazon understands this, and so they’re using this in a way to make it easier for third-party sellers to have that Amazon relationship and make more reasons to say why they should have the Amazon relationship. I think that’s really what this comes right down to.”

Generative AI technology and the Amazon ecosystem

Witcher said Amazon understands that mom-and-pop shops and small companies don’t necessarily have the time or skill set to generate web pages and product imagery.

“The ability to use generative AI just helps those sellers,” Witcher said. “There’s a compounding effect to this, which is: The easier it is for me to build websites, the easier it is for me to upload product pages. Then, it’s easier for me to sell on Amazon. Well, if I’m already selling on Amazon, then it’s easier for me to give Amazon my supply chain, pay for them to do my supply chain, pay for them to have Amazon Pay on my website. It just bakes you deeper into the ecosystem of Amazon as you start to find value in the things Amazon offers.”

He added that this is “certainly a differentiator” for Amazon compared with other marketplaces. However, he said, he expects other retailers to follow suit.

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Shopify earnings increase in Q3; checkout page gets faster

Abbas Haleem — Fri, 03 Nov 2023 20:19:16 +0000

Shopify Inc. reported total revenue grew 25% to $1.7 billion in its fiscal third quarter ended Sept. 30.

Meanwhile, gross merchandise volume (GMV), the total value of merchants’ products across Shopify’s systems, increased 22% to $55 billion. Gross profit also grew, increasing 36% to $901 million.

45 retailers in the Top 1000 use Shopify. The Top 1000 is Digital Commerce 360’s database of leading ecommerce retailers in North America. The 45 using Shopify account for a combined $8.30 billion in web sales annually.

In the Next 1000, 74 merchants used Shopify in 2022 and accounted for $1.05 billion in web sales. The Next 1000 ranks the largest retailers after the Top 1000 (1,001 to 2,000) by web sales.

Shopify’s AI tools

Shopify president Harley Finkelstein said in an earnings call with investors that artificial intelligence is for everyone, and its capabilities should be embedded throughout a business.

“We’ve integrated Shopify Magic, our suite of free AI-enabled features across our products and workflows, and merchants are already finding success with unblocking productivity and creativity,” he said.

Shopify Magic enables personalized pages and content generation, he said. It can help craft an About Us page in a merchant’s brand voice or tone, he said.

Changing checkout benefits Shopify earnings

Finkelstein said in the Shopify earnings call that the company launched a new one-page checkout in September. In its first two months, Finkelstein said, it has sped up buyer completion time by an average of four seconds.

In the quarter, Shop Pay facilitated $12 billion in GMV, he said. That’s a 50% year-over-year increase. Since launching in 2017, it has facilitated a cumulative $110 billion in sales.

Finkelstein also said Shopify Checkout has helped its merchant base through Checkout Extensibility, which launched in 2022. Since launch, he said, Shopify has “exponentially expanded its suite of APIs, components and capabilities. It has also seen more than 400 checkout apps in the Shopify App Store that support Checkout Extensibility.

“It is more adaptable, loads faster and converts better, he said. “Designed to handle high volumes, it is ideal for the world’s largest flash sellers like the iconic brand Supreme.”

Shopify-Amazon deal

Shopify also announced a partnership with Amazon during the quarter, giving merchants the choice to offer Buy with Prime directly within their Shopify Checkout. Finkelstein said the app will release “in Shopify’s app ecosystem in the coming weeks.”

“This new app will give U.S. based merchants who use Amazon’s fulfillment network the option to add Buy with Prime into their Shopify Checkout, and all of it will be processed by Shopify Payments,” Finkelstein said.

James Risley, research data manager and senior analyst at Digital Commerce 360, said he doesn’t think the Shopify-Amazon partnership is making all the difference, but it “is a big deal.”

“Not only does it provide Shopify with a strong name to build on in its checkout flow, but it also allows retailers to not have to pick one vendor — Amazon or Shopify — to get the payment networks of each,” Risley said.

174 retailers in the Top 1000 offer Amazon Pay, whereas 130 offer Shop Pay.

Check back for more earnings reports.

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Three key reasons Netflix is going brick and mortar

Mark Brohan — Fri, 13 Oct 2023 20:25:04 +0000

In 2025, Netfilx is planning to open two concept stores the movie and TV streaming company is calling Netflix House.

Netflix has yet to make a formal announcement and release many details, but vice president of consumer products Josh Simon says it will open physical stores with merchandise and activities inspired by its content.

Netflix House will debut in two undetermined cities in the U.S. before expanding globally, Simon told Bloomberg. Here are three key reasons Netflix is getting physical.

1. Keeping up with the competition

Entertainment consumers will pay for a digital and live event experience.
Netflix can sell merchandise and live events related to its content.
Netflix House will include a combination of merchandise sales such as clothing, food service and dining, and live events.
Netflix plans to build Netflix House into a global brand.

Key takeaway: Big streaming competitors such as Disney and Universal already have theme parks and theme-related live events.

2. Netflix needs new ways to generate revenue:

Revenue in the fiscal second quarter ended June 30 was flat at $8.187 billion compared with $8.161 billion in Q2 2022.
Net income was $1.487 billion compared with $1.305 billion in the previous year.
“While we’ve made steady progress this year, we have more work to do to reaccelerate our growth,” Netflix says.

Key takeaway: Netflix must diversify to grow revenue, and developing Netflix House is now a top strategic priority.

3. Netflix has a global base to make Netflix House a considerable success.

Netflix has 238 million paid memberships in over 190 countries.
There are 75.5 million paying members in North America and 79.9 million in Europe, the Middle East, and Africa.

Key takeaway: Give Netflix members what they want: more interaction.

“By opening physical stores, Netflix aims to create a more tangible connection with its fans,” Simon tells Bloomberg. “While streaming services have revolutionized the way we consume entertainment, the company recognizes the value of providing a physical space where fans can gather, interact and share their love for their favorite shows.”

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Can generative AI help online retailers design better products?

Abbas Haleem — Mon, 02 Oct 2023 13:00:25 +0000

With artificial intelligence learning how to do an endless variety of tasks, online jewelry manufacturer J’evar decided to develop its own generative AI application to design new products.

The tool allows J’evar’s jewelry designers to input information about the product’s materials and specifications, and the generative AI will produce an image of that product. The tool saves the brand weeks of manual design time on products, says Amish Shah, founder and CEO of the direct-to-consumer brand of jewelry featuring lab-grown diamonds.

J’evar began using its jewelry product AI generator last year in 2022. The retailer feeds metrics and images into a knowledge bank — or a database of text, images and metrics for materials that include the weight of gold and silver, among other key details — for the generator to refer to before it produces an image. Shah jokingly refers to it as “JevarGPT 1.0” and “AI for Jewelry 1.0,” the former a reference to OpenAI consortium’s ChatGPT.

For example, Shah says if he wanted to make a bangle, he could input a text prompt to the generative AI, specifying how much the weight of gold should be for that piece, how thin or wide it should be and what design style he would like. He can even ask it to produce 50 iterations from that single prompt. In return, the generative AI will output complete designs, some of which might be ready to turn into tangible products. Other product designs the AI outputs require J’evar designers to modify the design until it can be producible.

Shah says one key reason J’evar can’t produce all the designs is because of the inability to cut diamonds into the shape the AI generates. But even this ability is coming soon with new machinery, he says.

Exploring generative AI for design

“You’re looking at optimization, efficiency, speed — which is of course going to lead to cost reduction in the longer term,” Shah says about using generative AI. “But importantly, from an output perspective, we’re looking at precision and a higher level of creativity.”

In the past few years, developers have trained artificial intelligence to do more than analyze data and tell its users what to make of the data. They’ve trained AI to generate writing, images, videos and sounds. This is called generative AI, and online retailers have already begun to design new products and produce new variations of existing products — and do so quickly. With generative AI, retailers can create and test multiple product ideas in just minutes, much faster than the weeks or months it might take to design now. Online retailers, including J’evar and Auricle Technology, are learning how to use generative AI to assist their product designers, making the process more efficient. But because generative AI is still new, it has limitations on what it can do.

J’evar uses its own generative AI technology to help its human designers speed up the creative process.

Gen AI’s value outshines its current limitations

While generative AI is excellent for learning and processing massive amounts of data, it is not yet at a point that it can understand movement through space, says Brendan Witcher, vice president and principal analyst at research firm Forrester. It doesn’t think about engineering and structural elements or physical viability yet, he says. Although generative AI is not at that point yet, he says, that doesn’t mean it can’t be eventually.

“You want to design a shoe. Great,” Witcher says. “Well, a shoe’s a shoe until you put it on and have to run in it, then it falls apart on you because you didn’t think about the physics of how movement happens.

“The big question is when do we bridge the gap between the work that needs to be put into generative AI to understand the movement through physical space that objects need to go through often, and the commercial viability of doing that.”

Informed assessments

However, even with its current limitations, Witcher says generative AI’s value comes from the assessments it already has learned to make. He says people do their jobs based on the knowledge they receive in their training, and “AI kind of works like that too.” But generative AI “takes it to the next step” and looks at more data than humans can process, and then make assessments about what the best subsequent steps are. It can also come up with ideas humans couldn’t or wouldn’t think of because the human mind doesn’t process information the way artificial intelligence tools can, he says.

“We can’t absorb that much data and extract from it an idea. It’s just impossible for us,” Witcher says. “It shouldn’t be lost that just developing an image of something that you wouldn’t be able to think of because you weren’t trained to think that way has huge possibilities.”

Witcher says generative AI’s value extends beyond production speed to unique creations.

“A lot of people talk about generating imagery with AI, but what to me is most important is the ability to do it over and over and over again until you get something you like,” Witcher says.

Will generative AI replace human designers?

Generative AI is not here to replace humans in the design phase, Shah says. Especially not in the jewelry industry.

“Human intelligence supersedes artificial intelligence, at least I can say that for jewelry,” Shah says.

Generative AI is more like an assistant to human designer, Shah says. It’s not the technology that’s telling designers when a piece has been finalized. It’s a human making that decision, Shah says. Just like Adobe and Corel are graphics software tools for designers, generative AI is a design tool, not a human replacement, he says.

“Once we get the initial output, it is then modified to be producible,” Shah says.

Forrester’s Witcher agrees that AI should be used as a tool and not a replacement for creative individuals.

“If all the people learn how to do things on generative AI, then no one learns how to do it beyond generative AI,” Witcher says. “Over time, you start weeding out the expertise from the low-level individuals and nobody becomes a high-level individual.”

Witcher adds that the majority of AI use isn’t leaving artificial intelligence “to its own devices.”

“It’s more assisted intelligence — the AI standing for assisted intelligence — where we’re using it to be more productive in our own jobs that we currently do today,” Witcher says.

J’evar uses generative AI to speed up the design process

Traditionally, Shah says, jewelry design is a long process that can take a few weeks or even more than a month. In the case of commissioned designs, J’evar designers would first have to understand what kind of product a customer wants before going into iterations. In the example of designing a bangle, the designers would have to first determine if a customer wanted a wide cuff or something they could stack, something lightweight or heavy, thick or thin, if they wanted diamonds or gemstones, and so on.

Then, the designers would do initial mockups to ensure they understood the customer’s request correctly. This process would typically be one to three weeks of showing designs to the customer and sketching accordingly, Shah says.

In one case, Shah says he and his team had gone through 55 variations before a customer said, “I love it.” After that, his team would then go to computer-aided design (CAD). From there, it would go to rendering.

“By using AI, we are able to take that process down to pretty much hours and in some cases, literally within minutes,” Shah says.

Moreover, when working manually, the designer has to move every single diamond into place, making sure they are in the correct position. AI speeds up that process, Shah says. In milliseconds, the generative AI processor can move diamonds and gemstones, raise or lower gold weight, or change the width or thickness.

“It’s almost like putting a thousand designers and the type of work they would have done into the knowledge bank and then letting the system do a combination from those thousand designs to give you back results,” he says.

J’evar fed years’ worth of jewelry data into its generative AI platform. The platform produces images that human designers then adjust in the design phase.

Developing a custom generative AI processor

Shah says his family’s 90-year history in the jewelry business gives him an advantage over others in developing custom generative AI technology for J’evar.

“It sounds complex, but you have to keep in mind: We’re in the business,” Shah says. “We’re in the jewelry business, so the core bank or the core information that’s required is sitting with us. It’s not something I have to go outside and source.”

J’evar feeds text and imagery into its generative AI to teach it what to output. When inputting prompts, J’evar designers primarily use text to generate an image.

“That knowledge bank is sitting there,” Shah says. “Now, it’s all about organizing it and feeding it into the system in a format that can then be analyzed and the GPUs can run and start combining things and getting them back to you.”

Iterations at scale

Sometimes, what generative AI produces needs less human modification than others. For example, Auricle Technology uses generative AI tools to swap out logos and colors on its different products.

Auricle Technology founder William Cooksey says he created his electronics accessory brand out of necessity. He uses Apple AirPods for long hours most days, and the hard plastic begins to hurt his ears after a while. That led him to create AirPod skins made from silicone that are softer and anchor better into his ears.

When his manufacturer sent back prototypes, it printed Auricle’s logo on them. That led Cooksey to realize the importance of branding and how he can “pivot and get into the licensing game.”

The direct-to-consumer brand launched in 2021 now creates customized merchandise including AirPod skins, AirPod charging case skins, phone cases, wireless chargers and mouse pads. And through licensing agreements, it prints these products with logos for more than 90 teams in Major League Baseball, the National Hockey League and Major League Soccer, as well as about 130 college teams.

Rather than have a designer manually change the colors and logos for each team, the brand has integrated generative AI into its design process, Cooksey says.

Unlike J’evar, however, Auricle does not have the budget nor the in-house capacity to develop an all-new generative AI engine. Its business model is also different, focusing on customization rather than new product development.

New technology, but make it affordable

Cooksey instead works with Goals Media Group to use generative AI into its product iterations. Goals uses technology Microsoft for Startups provides, says Goals founder and CEO Aubrey Flynn. This means it receives access to Microsoft’s resources, including technology and tech experts, among other benefits. Microsoft has announced it would invest $10 billion into OpenAI — the company behind text-based generative AI brand ChatGPT and image-based DALL-E.

Cooksey says his lead designer and Flynn determined generative AI was the way to go from designing products with one team logo to hundreds “in a short period of time without breaking the bank.”

Auricle also uses Goals and its generative AI offerings to develop marketing materials like images for social media that highlight products from different teams at different stadiums. The generative AI creates an image complete with Auricle branding, the team’s branding, and any copy it needs.

“Being a small business, not having a lot of capital, it’s really exciting me that we can still come up with quality images without breaking our budget,” Cooksey says.

“When you deal with those leagues, they want you to be able to launch all the teams at the same time,” Cooksey says. “I just wouldn’t have been able to afford to do that.”

Generative AI’s impact on metrics

Goals has about 650 clients and nearly half are online retailers, Flynn says.

Flynn says that social media marketing creatives that generative AI produced can increase consumer interactions with the ad by more than 35% compared with that brand’s normal creative, according to data from its clients.

This includes creatives entirely generated through AI, visuals that already existed that AI has augmented, and copy that generative AI has helped develop for those types of visuals.

“I’ve seen AI-powered creative outperform to the extent where cost per click on a certain product may have been 30%-40% less expensive based on some of the guidance from AI on the copy and the imagery,” he says.

He adds that brands like Auricle — which lack access to capital, resources, infrastructure and more that large brands have — need to adopt technology like generative AI early on because it’s less expensive than some alternatives like hiring designers or manufacturers from the start.

Early results are insightful, but ‘is this just another buzzword?’

Shah, Cooksey, Witcher and Flynn all expressed the same idea: It may be early, but the application of generative AI in product development is promising.

While some may say generative AI is another buzzword, Witcher says what separates this technology from other tech fads is that companies are already allowing individuals in their organizations to play with, understand and experiment with generative AI.

“They’re almost crowd-sourcing proof of concept,” Witcher says. “It’s a unique characteristic to generative AI that it’s so easy to do and work with that almost anybody can do it.”

Although results are limited in some ways and sometimes imperfect, online retailers are using generative AI imaging to design new products essentially from scratch, customize existing products and develop marketing content. They can develop multiple iterations of these images at once or continue iterating on the same image multiple times until they’re satisfied with how the image looks. They can then take the design that generative AI produces and tweak it manually, saving them the time of doing each iteration manually — and saving them the creative energy it takes just to design a new product iteration.

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Costco ecommerce sales improve compared with previous quarters, but still down overall

Abbas Haleem — Wed, 27 Sep 2023 20:28:56 +0000

Costco Wholesale Corp. reported that its ecommerce sales dipped slightly but were essentially flat in its fiscal fourth quarter ended Sept. 3, 2023. The retailer’s total sales, however, grew 9.4% in the quarter.

Costco is No. 6 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers.

Costco ecommerce sales

Although Costco did not provide a dollar amount for its ecommerce sales, it said they decreased 0.8% year over year. Costco ecommerce sales for the fiscal year decreased 5.7% compared with 2022.

Food and sundries also led the retailer’s ecommerce sales, “with fresh foods right behind and some offsets on some of the non-foods categories,” said Richard Galanti, chief financial officer, in the retailer’s fourth-quarter earnings call. Sundries are small, miscellaneous items.

“Results showed good improvement this quarter versus our year-over-year results in Q2 and Q3,” he added.

Galanti also said some product category ecommerce sales decreased 15% to 20% year over year in Costco’s fiscal second and third quarters. Those included:

Home furnishings
Small electronics
Jewelry
Hardware

However, compared with Costco’s fiscal fourth quarter last year, these sales decreased just 5% this year. Those big-ticket departments comprised more than half of Costco ecommerce sales in the quarter, Galanti said. Online appliance sales grew 30% in the quarter as well.

He also said he has been getting calls about Costco selling one-ounce gold bars on its website.

“Yes, but when we load them on the site, they’re typically gone within a few hours and we limit two per member,” Galanti said.

Galanti said Instacart shoppers do not count toward Costco ecommerce sales because Instacart employees enter the retail stores to shop, purchase at the register, then take the order to their customers. Instacart sales do not count toward Costco mobile ecommerce sales either, he said.

Costco mobile ecommerce

“We’re always asked about this,” Galanti said.

Costco redesigned parts of its mobile ecommerce website, he said. It also redesigned its account page and the digital membership card, he said. And it also redesigned the header with a larger search bar and expanded selling space.

“We’ve added an app box for messages and advertisements right in the app,” Galanti said. A few months ago, Costco “opened an optical digital store where you can virtually try on glasses and then order them for pickup — prescription glasses.”

Costco app

The retailer has also worked to improve its in-warehouse shopping tools on its app, Galanti said. That includes:

Digital membership card
Managing shopping lists
Viewing warehouse savings
Seeing gas prices (if the location has a gas station)
Searching warehouse inventory
Scanning barcodes from the app

“With the improvements made thus far over the past year, our app store rating has gone from a dismal 2.3 stars to currently 4.7 stars,” Galanti said.

Unique visitors to the Costco ecommerce site increased 40% year over year in the fiscal fourth quarter, he said. Meanwhile, Costco app installs increased 46% year over year.

Costco Next

Galanti said the retailer is also working on growing Costco Next.

Costco Next is the retailer’s way of connecting members with its top suppliers through an ecommerce website. The suppliers drop-ship those orders.

“When you transfer to one of our suppliers’ sites, you will be able to purchase directly from that Costco supplier,” Costco says on its website. “For any items purchased on the supplier website, the supplier will ship, provide customer service and handle returns.”

Costco Next now has 62 suppliers on its site, Galanti said. He adds that the retailer is onboarding more in categories, including:

Apparel
Electronics and accessories
Home improvement
Pet
Sports
Toys

Costco earnings

For the fiscal fourth quarter ended Sept. 3, 2023, Costco reported:

Net sales increased to $77.43 billion. That’s up 9.4% from $70.76 billion in the prior fiscal year’s fourth quarter.
Net income was $2.16 billion, up from $1.87 billion in the year-ago period.
Costco ecommerce sales declined just 0.8% year over year.
$1.51 billion in membership fee income, up from $1.33 billion in the year-ago period.

For the 53-week period ended Sept. 23, 2023, Costco reported:

Net sales grew to $237.71 billion. That’s a 6.7% increase from $222.73 billion last year.
Net income increased to $6.29 billion from $5.84 billion the previous year.
Costco ecommerce sales decreased 5.7% compared with the previous year.
$4.58 billion in membership fee income, up from $4.22 billion in the previous year.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Costco report.

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Jewelry retailer J’evar strives for sustainability on different levels

Abbas Haleem — Tue, 26 Sep 2023 14:37:05 +0000

“You were born in jewelry, and you’re going to be a jeweler.” That’s what Amish Shah’s grandfather told him decades ago. Today, Shah is the founder and CEO of two sustainability-focused jewelry brands, J’evar and ALTR.

Shah launched J’evar, a direct-to-consumer brand, in February. Before that, he learned from years of experience through ALTR, which he founded in 2016 and sells through retailers like Borsheims and Michaels Jewelers. Shah and his team developed an in-house generative AI tool that mocks up designs for new pieces of jewelry. To teach the tool, his team used data from ALTR and 90 years’ worth of jewelry from his grandfather’s business.

J’evar uses diamonds ALTR grows. ALTR grows those diamonds with energy from a solar farm with a capacity of 10 megawatts. It generates 35 to 40 kilowatts of energy each day.

The megawatt is the standard term of measurement for bulk electricity, according to EcoWatch, an environmental news outlet.

“A megawatt measures power on a large scale,” according to EcoWatch. “So one megawatt can power a lot more than one household.”

“We grow our own diamonds, we cut and polish them, we design jewelry, we manufacture the jewelry, and we bring it to the consumer. We use recycled gold for making our jewelry — recycled metals, so gold and silver,” Shah said.

With generative AI-driven design, J’evar achieves a level of precision that Shah says dramatically reduces material waste and boosts the retailer’s sustainability goals. Shah said he expects a 10% to 20% reduction in energy consumption and wasted materials in the jewelry industry because of generative AI.

“Sustainability is actually core to us,” Shah said. “We’ve made sustainability as a part of our DNA rather than a marketing buzzword.”

It all starts on a (solar) farm

Shah’s brands run on electricity from a solar farm in Surat, a city in Gujarat, India. It currently generates 10 megawatts of solar energy, and Shah says he plans to scale that up to 17 megawatts. To put that into perspective, the Solar Energy Industries Association calculates that on average, 1 megawatt of solar power generates enough electricity to power 173 U.S. homes.

The energy is then transmitted through the power grid into J’evar diamond-growing facilities with help from the local government.

“In order to grow diamonds, the single largest raw material is energy,” Shah said. “They’re very high energy consumption. You are basically using solar energy to power the systems.”

And in terms of carbon neutrality for the diamond growth, Shah said, the facility is audited for climate neutrality based on the United Nations greenhouse gas protocol. The protocol holds corporations, organizations, cities and countries to different standards.

Shah said J’evar offices and facilities are both audited for all its energy consumption, from shipping packages to employees traveling and various other factors.

‘JevarGPT’ and generative AI for jewelry design

J’evar’s generative AI tool allows its human jewelry designers to input information about a product’s materials and specifications, and the generative AI will produce an image of that product. The generative AI tool saves J’evar weeks of manual design time on products, Shah said.

J’evar began using its jewelry product AI generator last year in 2022. The retailer feed metrics and images into a knowledge bank — or a database of text, images and metrics for materials that include the weight of gold and silver, among other key details — for the generator to refer to before it produces an image. Shah jokingly refers to it as “JevarGPT 1.0” and “AI for Jewelry 1.0.” The former is a reference to OpenAI consortium’s ChatGPT.

For example, Shah said if he wanted to make a bangle, he could input a text prompt to the generative AI, specifying how much the weight of gold should be for that piece, how thin or wide it should be and what design style he would like. He can even ask it to produce 50 iterations from that single prompt. In return, the generative AI will output complete designs, some of which might be ready to turn into tangible products. Other product designs the AI outputs require J’evar designers to modify the design until it can be producible.

J’evar fed years’ worth of jewelry data into its generative AI platform. The platform produces images that human designers then adjust in the design phase.

Technological advances

Shah said J’evar can’t produce all its AI’s designs yet. A key reason is because of the inability to cut diamonds into the shape the AI generates. But even this ability is coming soon with new machinery, he said.

“You’re looking at optimization, efficiency, speed — which is of course going to lead to cost reduction in the longer term — but importantly, from an output perspective, we’re looking at precision and a higher level of creativity,” Shah said about using generative AI.

J’evar marries generative AI and sustainability

In the case of J’evar, generative AI can determine exact material amounts before creating an item, helping with sustainability by limiting waste.

“If we are able to predict the exact amount of gold we’re going to need, what the design is going to be, how much cubic millimeters of gold, the wastage will go down dramatically because you know exactly what you’re looking to produce. More importantly, the level of precision from a point of engineering will go much higher,” Shah said. “The amount of gold that is used will be very precise. How and what is printed in terms of the level of resolution will go higher, ultimately lowering the amount of wastage.

“Gold wastage will go low, but yes, that means the speed will go up, which means the energy requirements will go down. The material wastage from wax to silicon to machine usage, everything will go down. From a sustainability perspective, AI is going to have a direct impact on sustainability or improving the reduction of wastage.”

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BigCommerce upgrades online B2B ordering and invoicing

Paul Demery — Tue, 26 Sep 2023 13:00:33 +0000

Serving the thoroughbred horse industry from Lexington, Kentucky, Doc Lane’s Veterinary Pharmacy is using ecommerce to grow its business of providing medications to veterinarians and their racehorse-owning clients.

Since deploying a new ecommerce platform nearly a year ago, the company has increased total sales by 30%. The percentage of orders placed online has grown from zero to about 40%, says Ryan Nesbitt, co-founder and chief financial officer.

Doc Lane’s new ecommerce site runs on the BigCommerce B2B Edition ecommerce platform and features an upgraded buyer’s portal. It has made it easier for the pharmacy supplier to showcase its full range of products while also making it easier for buyers to find what they need, place orders and pay online, he says.

“Customers didn’t really know the full extent of Doc Lane’s capabilities,” Nesbitt says. “And that’s where digital commerce comes in.”

Doc Lane’s builds its brand and grows commerce online

On the ecommerce site, DocLanes.com/equine, customers can learn that the company provides both branded and “compounded medications.” The latter is a form of made-to-order medications that vets may not easily find elsewhere.

The site also provides a better overall customer experience. Nesbitt says it includes the ability to:

More easily set up customer accounts
Find and order specific products
Place reorders
View order history

Now, Doc Lane’s is also expecting a continued increase in the percentage of customer accounts paying their invoices online through the newly released BigCommerce B2B Edition Invoice Portal. The invoice portal is designed to let customers view their invoices online and click them to process payments. It also reconciles payments with enterprise resource planning systems (ERPs) and lets customers pay invoices for orders placed either online or offline.

In addition to simplifying the invoice-paying process for customers, Doc Lane’s also expects the invoice portal to improve its cash flow.

“Over 60% of Doc Lane’s Veterinary Pharmacy customers pay orders on terms,” Nesbitt says. “Many of our customers wait to send us a paper check after they receive their billing statement at the end of each month, which is like adding an additional 1-2 weeks to their 30-day terms.”

Lance Owide, B2B general manager at BigCommerce, describes the invoice portal’s abilities as “transforming a traditionally disconnected process into a seamless centralized hub where buyers can manage offline and online transactions from one ecommerce backend.”

Other companies using the BigCommerce B2B Edition include B2B brands The Beer Bat, Tectran, USCutter and United Aqua Group.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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With 14 million ecommerce sites, the US is atop the online world

Mark Brohan — Tue, 19 Sep 2023 18:55:01 +0000

The world wide web for ecommerce is truly global. But one nation accounts for more than one half of all ecommerce sites across the world: the United States.

There are currently over 26.5 million ecommerce sites operating worldwide. Between 2019 and 2023, the number of ecommerce sites worldwide grew from 9.2 million to 26.5 million, says research from Markinblog.com, a digital marketing and sales services provider.

With nearly 14 million ecommerce sites, the U.S. now accounts for about 53% of all websites, far more than any other country. In comparison, the number two and three countries, the United Kingdom and Brazil, have 1.24 million and 730,000 ecommerce sites, respectively.

“The significant rise in ecommerce can largely be attributed to the COVID 19 pandemic, which led to a 204% year-on-year growth in ecommerce sites in 2021 alone, taking the number from 9.7 million to an impressive 19.8 million,” says Markinblog.com. “The United States is the leading country in ecommerce, with 13,982,500 sites, significantly outpacing the other countries. This indicates the highly digitalized nature of its economy and the significant role of online shopping in consumer behavior.”

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Costco ecommerce sales improve compared with previous quarters, but still down overall

Costco ecommerce sales

Costco operates ecommerce sites in:

Costco mobile ecommerce

Costco app

Costco Next

Costco earnings

For the fiscal fourth quarter ended Sept. 3, 2023, Costco reported:

For the 53-week period ended Sept. 23, 2023, Costco reported:

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With 14 million ecommerce sites, the US is atop the online world

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