May 2023 E-commerce Insights: End-of-Month News Review

In this comprehensive coverage, we aim to equip you with actionable insights that could help shape your eCommerce strategies, stay competitive, and perhaps even anticipate what’s coming next in the ever-changing digital marketplace. From in-depth analysis to quick snapshots of significant events, we’ve got you covered!

#1 European Commission Targets Import Duty Exemptions to Strengthen EU Traders and Generate Revenue

The European Commission plans to impose import duties on goods valued up to €150, currently exempt from such fees, in a bid to strengthen the position of EU traders. This move follows a previous abolishment of VAT exemptions for products up to €22. The upcoming changes could affect online retailers outside the EU, especially those with a significant volume of sales up to €150. The customs reform is projected to generate €750 million annually in import duties for the EU. Concurrently, plans are underway to establish a new EU Customs Authority aimed at improving information flows and simplifying customs procedures within the next five years.

Read more here.

#2 Amazon Leverages AI and Robotics to Streamline Delivery Process and Expedite Customer Fulfillment

Amazon is leveraging artificial intelligence (AI) to streamline its delivery process by minimizing the distance between products and customers, according to Stefano Perego, the company’s vice president of customer fulfilment and global ops services for North America and Europe. The strategy, referred to as “regionalization,” involves using AI to predict which products will be in demand and where, so they can be stored in the nearest warehouses to customers.

AI also assists in mapping and planning routes for transportation, taking variables such as weather into account. With the aid of AI, Amazon aims to achieve same-day or next-day deliveries for its Prime subscription service. Perego reported that 76% of products ordered by US customers now come from regional fulfillment centers.

Additionally, Amazon is integrating robotics into its operations, with 75% of customer orders partly handled by robotic systems. These robots mainly perform repetitive tasks like lifting heavy packages. Perego emphasizes that this integration should be seen as a transformation rather than a replacement of jobs, as automation and AI will change the nature of jobs performed in fulfillment centers rather than eliminating them.

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#3 Finnish Delivery Company Wolt Expands to Austria and Iceland, Accelerating Its European Growth

Finnish food and retail delivery company, Wolt, continues to broaden its footprint in Europe with its recent launch in Vienna, Austria, and Reykjavik, Iceland. This expansion brings the company’s presence to 25 countries, mostly within Europe.

The recent move comes after a period of inactivity in terms of expansion. Notably, Wolt is yet to operate in certain major European markets, including France, the UK, Italy, Spain, and the Netherlands. Wolt, founded in Helsinki in 2014, was acquired by the American company DoorDash in late 2021.

While many flash delivery companies explored the model of delivering from their own dark stores, Wolt decided last summer to cease this approach. Instead, it chose to concentrate solely on delivering orders for restaurants and retailers, promising customers a broad selection, fast delivery, live customer support, and weekly offers.

Germany remains Wolt’s most crucial market, where it has secured partnerships with prominent brands, including Edeka, Tegut, McDonald’s, and Flink. The company has committed to a delivery time of within 35 minutes for its orders. This expansion occurs amid significant shifts in the European flash delivery market, with competitors such as Getir, Gorillas, Uber Eats, and Just Eat Takeaway exploring the delivery of groceries and other retail products.

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#4 Forever 21 CEO Winnie Park Leads Overhaul Aimed at Engaging Gen Z and Millennials

Forever 21, the American fashion retailer that once declared bankruptcy in 2019, is in the process of a significant overhaul under its current CEO, Winnie Park. The company aims to revitalize its appeal among its core audience: Gen Z and millennials. Park, the former CEO of Paper Source, with significant experience in the retail industry, has been leading this initiative since joining Forever 21 in January 2022.

A key component of the brand’s revitalization is aligning with the fashion preferences of Gen Z, who see clothing as an avenue for self-expression and are typically disinclined to adhere to a singular brand or group. As such, Forever 21 aims to provide a wide range of looks and trends catering to diverse moods and occasions.

Park shared her strategy with Retail Brew, explaining that Forever 21 is looking to engage with Gen Z by tuning into cultural moments. A notable example is the brand’s partnership with Rolling Loud, the world’s largest hip-hop festival, which resonates with the musical tastes of the target demographic.

In terms of reaching Gen Z, Forever 21 has embraced an omni-channel approach, providing a seamless experience from social media browsing to in-store purchasing. With Gen Z preferring TikTok to Instagram, the brand weaves stories that span across platforms, ensuring their presence both online and offline.

Additionally, Forever 21 is trying to re-attract its core millennial consumers by focusing on aspects beyond influencers. The brand is keen on engaging millennials with cultural moments they care about and inviting them to take a second look at the brand. This strategy involves showcasing the wide range of styles, the value in the product, and the brand’s democratic approach to fashion.

Read more here.

#5 Positive Customer Experience Key to Retail Success, Harris Poll/Retail Brew Survey Finds 

According to a Harris Poll/Retail Brew survey of 2,102 US adults, customer experience is a critical factor in retail business success, with 65% of Americans indicating they would likely cease shopping at a store following a negative experience. On the other hand, 82% of those surveyed are likely to return to stores where they had a positive experience.

A third of respondents (36%) claimed they were likely to discontinue shopping at stores where desired items were unavailable. Key elements contributing to a positive shopping experience included in-stock items (70%), ease and speed of checkout (64% and 61%, respectively), helpful employees (62%), variety of item options (49%), and store layout (48%).

Interestingly, the survey found that employees contribute significantly to the shopping experience, with 73% of respondents stating that retail workers helped enhance their shopping encounters.

In terms of loyalty programs, 82% of respondents reported belonging to at least one, with 56% enrolled in between one and four. Nevertheless, 25% of Gen Z respondents reported not participating in any loyalty programs, the highest among all age groups.

While technology plays a role in the shopping experience, only around a quarter of Americans reported frequently using chatbots when shopping online (27%), frictionless checkout technology (27%), or biometric payments (25%). However, these figures increase substantially for Gen Z (49%, 48%, and 41%, respectively) and millennials (46%, 45%, and 45%).

Read more here.

#6 Online Marketplaces eBay, Amazon, and Etsy Announce Contests in Support of Small Businesses 

May is a significant month for small businesses, with eBay, Amazon, and Etsy all announcing contests in support of these enterprises. The contests offer a range of prizes for small-business sellers.

eBay is offering a grant program called “eBay Up & Running grants”. Fifty businesses will receive grants of $10,000 and an additional $500 stipend to purchase refurbished equipment on the eBay marketplace. The grant program was announced on May 1st, and small businesses can apply until June 9, 2023.

Meanwhile, Amazon’s B2B platform is offering between $15,000 and $25,000 as part of its Amazon Business Small Business Grants program. In total, ten businesses will receive $15,000 grants; four finalists will receive $20,000; and one grand prize winner will get $25,000. Additional prizes include Eeors and Kindle Scribes. To enter, U.S. sellers must already have an Amazon Business account and be a brand owner of a small-sized business with an annual revenue of $1 million or less. Applications opened on May 1st and closed on May 21st, with voting by Amazon Business customers for their favorite entrepreneur commencing on June 15.

Finally, Etsy’s Design Awards (“The Etsies”) offer sellers of handmade and vintage goods the chance to win between $1,500 and $25,000. The program honors the work of sellers globally across multiple categories. Of 150 finalists, one seller will be crowned the Grand Prize Etsy Design Awards Winner, while 15 others will be named Etsy Design Awards Winners in each featured category. Submissions for Etsy’s contest opened on May 11th and will continue until May 26th.

In addition to these contests, eBay also held its annual DC Fly-in event, where a dozen eBay small-business sellers met with members of Congress in Washington, D.C., to share their stories and influence policies impacting small businesses.

Read more here.