Topics Covered:

  1. Apple’s privacy strategy (or why social commerce is coming in a bigger way)
  2. Walmart Instacart expand despite directly competing
  3. BNPL ad networks
  4. Buyk: Another entrant into NYC’s burgeoning instant grocery market
  5. Amazon reducing seller inventory again
  6. Amazon’s marketplace and stolen goods
  7. Instacart integrates with white-label offering
  8. Music album of the year? ?


Explainer on Apple's Privacy Strategy (or why social commerce is coming in a bigger way)

Eric Seufert has done the best job articulating why Apple has chosen to focus on “privacy” as a core brand value proposition.
In the latest piece, he articulates that ATT was done to elevate the app store for discovery right at the same time regulatory action may make alternative app stores possible and to develop an advertising business rivaling the size of Amazon’s. This all mostly comes at the expense of Facebook. 
The strategic move is structurally changing social media such that commerce will have to become a larger part of these businesses.  As marketers become more focused on measuring outcomes, the ability to connect an ad to a sale is absolutely necessary.  Today, Facebook and others struggle with that.  Hence, things like integrating with Shopify, enabling direct check out inside the app, offering tools like AR to help convert and so on are all happening this year.
Brands that can most quickly remove the silo between the groups managing digital commerce and digital advertising will have at least a temporary competitive advantage over peers that continue to keep both groups mostly separate. (link)


Walmart & Instacart Expand

Walmart and Instacart initially tested a partnership in four markets in Southern California and Tulsa. The two announced they are expanding the partnership in the New York City market.  Walmart cited the opportunity to reach incremental customers in markets where Walmart has less of a presence, while Instacart needs growth opportunities to drive its forthcoming IPO.
The expanding partnership demonstrates the strange bedfellows technology can create. Walmart just rolled out its GoLocal program to other merchants, which is essentially an Instacart-like delivery model leveraging Walmart’s Spark platform of delivery drivers. Meanwhile, Instacart is aggressively building an advertising business on top of its grocery partners, which will compete directly with Walmart’s advertising ambitions depending on how the partnership evolves outside of NYC. 

Direct competitors AND partners. It’s the golden age of online grocery as the industry sorts out the new economics of an evolving value chain. (link)


Buy Now Pay Later (BNPL) Ad Networks

BNPL offerings have become so popular amongst younger generations that even Amazon acknowledged their importance, signing a deal with Affirm last month. 
Interestingly, these BNPL services are building advertising businesses as they seek to (1) capitalize on the growing usage of their services and (2) improve their margins. 
From the linked article: “Through its network Klarna Media, Klarna has been testing paid placements in its app for over a year now, and Sandström said it has spanned from a mix of traditional display ads that brands purchase to giving brands paid placements on its in-app live shopping channels (or, if the brand creates its own channel, promoting that to consumers).” 
BNPL apps feel they can’t get more money from their retail partners, so they want to do ads. But that mostly means brands now sharing in the difficult economics.  Two questions are immediately apparent:

  1. What happens to digital margins as every aspect of the retail value chain features advertising options?
  2. How do brands evolve their programs with retailers to account for tech layers like BNPL apps or delivery intermediaries like Instacart? (link)


From Russia with Love

Buyk (pronounced “Bike”) launched its instant grocery operation in Manhattan.  The division is part of Russian instant grocer Samocat and features the familiar instant grocer model of pairing darkstore micro-fulfillment centers with bike couriers. The company is believed to have raised $46 million in seed funding to expand to the US.  NYC has become an increasingly crowded marketplace for these instant grocers with most likely failing, a few getting acquired, and maybe one breaking out as a durable, stand-alone company. (link



Amazon Further Restricting Restock Limits

Many FBA sellers felt the pinch last year when Amazon reduced restock limits during the pandemic driven online surge.  FBA sellers report these restock limits have gotten tighter over the last few months, with some attributing it to the upcoming Turkey 5 peak demand period.  However, our research suggests Amazon is having a difficult time finding enough brands to offer great Turkey 5 deals this year because of supply chain disruptions. (link)


For the Nerds

Amazon’s marketplace and stolen goods:  Omnichannel retailers like CVS, Home Depot and others indicate criminals are leveraging Amazon’s marketplace to sell stolen goods.  The stolen items often pass through one to two additional layers before reaching sellers on the marketplace that are doing, in some cases, millions of dollars in annual sales.  Reminiscent of the challenges social media faces with abhorrent content.  Essentially anyone can sell on Amazon’s marketplace much like anyone can create content on social media.  The ease of doing so and the historical hands-off approach has meant bad actors finding a way to make money.  (link)
Mercatus and Instacart integrate: White-label eCommerce solution provider Mercatus now offers the ability for grocers using its software to integrate with Instacart Connect. This provides grocers the ability to attract consumers to their own website, while leveraging the flexible Instacart fulfillment model of shoppers and delivery drivers. The integration is a noteworthy development for Instacart as many of its grocers have growing concerns over Instacart owning too much of the consumer relationship.  Of course, grocers that take this approach will have to focus on acquiring their own digital customers rather than benefit from the high awareness of the Instacart app…something that doesn’t come cheap. (link
“Let me put some clover in it!”:  Brands and retailers doing their own TV shows on social media or YouTube…got it. But an album? Spanning multiple genres?  With a singing leprechaun?  General Mills and its Lucky Charms brand launched a new album on Spotify. It's a case study in experimentation. Kudos on getting this one through the corporate approval gauntlet AND to anyone that listens to the whole album! (link)