Tag: e-commerce

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Amazon rolls out early Prime Day deals on devices including Fire TV Recast, services and more

In addition to expanding Prime Day to a two-day long sale event, taking place on July 15-16, Amazon today announced it’s kicking things off with early Prime Day sales across a range of devices and services. The pre-sale includes discounts on the Fire TV Recast, Ring Video Doorbell, and Echo Dot — the latter a perennial best seller during past Prime Day events and holiday sales. The retailer is also discounting services like Amazon Music, Prime Video, Kindle Unlimited, Audible and more.

The Fire TV Recast is the leading deal today. At $100 off, the now $129.99 Fire TV device is at its lowest price to date. The Recast offers everything you’d get with Fire TV plus the ability to hook up to an antenna to watch and record live TV. It’s a good deal for cord cutters who prefer to watch over-the-air TV for free, without paying for a TiVo subscription or a streaming TV service, like Hulu’s, YouTube TV, Sling TV or others.

In addition, Amazon says on July 8, the bundle with the Ring doorbell and Echo Dot will drop to $169.

Device deals often help to power Amazon Prime Day, as the retailer is known for slashing prices on its own hardware to cost or even lower. But already, Amazon’s top-seller the Echo Dot is listed at $24.99 — so how much lower can it go, unless Amazon just starts throwing a free Dot in with every Prime Day order?

Echo and Echo Plus are also already affordable at $69.99 and $149.99, respectively, as are the Fire TV Stick and Fire TV Stick 4K, at $39.99 and $49.99.

Meanwhile, the other early Prime Day deals those that seem designed to entice shoppers while they’re already on the site — but they’re not all necessarily outrageous enough to actually bring in traffic by themselves. And others were already underway ahead of today.

For example, Amazon in late June started giving away 4 months of Amazon Music Unlimited for $0.99, as well as 3 months of Kindle Unlimited for free, and a year of Audible for $119.50 (or $4.95/month for 3 months), with an Echo Dot thrown in.

These deals were again touted today, along with others.

The remaining deals include:

  • Prime Video: 50% off select movie rentals
  • Twitch Prime: an exclusive Legend and weapon skins for Apex Legends, and content from multiple EA Sports titles. (announced on Friday)
  • Amazon Fashion: save up to 30% on Tommy Hilfiger select clothing and shoes; up to 70% savings on Seafolly Australia Swimwear; up to 50% savings on athletic shoes from Reebok, Puma, and others; up to 30% savings on kid’s and baby styles from Gerber, The Children’s Place, and more
  • Amazon Brands: up to 50% off women’s activewear from Amazon Essentials, Core 10 and Starter, up to 40% on men’s shirts from Goodthreads, Buttoned Down and Amazon Essentials, up to 30% on women’s styles from Daily Ritual, up to 20% off furniture and décor from Rivet, Stone & Beam, and Ravenna Home, up to 20% off AmazonBasics, and up to 30% off everyday essentials from Solimo, Presto!, and Happy Belly, among others.
  • Prime Now: Save up to 40% on Amazon’s two-hour delivery service. Plus, new Prime Now customers can receive $15 off their order of $35 or more. (The same deal is available for AmazonFresh)
  • Prime Book Box: 30% off the first box ($13.99)
  • Amazon Prime Rewards Visa Signature Card: If approved, members receive an $80 gift card that is added directly to their Amazon.com Gift Card balance
  • Amazon Books and Amazon 4-star: $10 Amazon.com Gift Card on a purchase of $50 or more throughout the store (beginning July 6)
  • Amazon Pay: gift card with purchase (offers vary)
  • Amazon Handmade products: Save up to 30%
  • Whole Foods Market: From July 3 – July 16, get a $10 Prime Day credit when you spend at least $10 in store
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Twitch will join Amazon Prime Day with giveaways, events and live shows

Amazon -owned game streaming site Twitch will be participating in Amazon Prime Day this year, with giveaways of free content from Apex Legends and EA Sports games, live-streamed events, and apparently, even a live-streamed shopping show. The latter was reported this morning by AdWeek, which detailed the streaming site’s plans for a 2-day live shopping show on its Twitch Presents channel.

Update: Twitch says the article was taken down and news will be shared at 10 AM PT. We’ll update then.

In any event, it appears that the broad strokes of Twitch’s plan is to loop in some of the gaming site’s favorite streamers to Amazon’s big shopping holiday.

It’s worth noting Amazon has tried to make QVC-style video shopping work several times in the past.

Years ago, it briefly ran a fashion-and-beauty focused show called “Style Code Live,” that was canceled in spring 2017. It also ran live video during past Prime Day events right on Amazon.com to show off some of its brand advertisers’ best deals.

And most recently, Amazon launched a dedicated section on its site, Amazon Live, which features a live-streamed video shows brands build using a new app, Amazon Live Creator.

Given its push for more live video, it only makes sense that Twitch would get involved with Prime Day in this way, too.

Beyond Twitch’s plans for live video, the streaming site is also offering a number of giveaways and hosting live events.

ea sports

Twitch Prime, which comes with an Amazon Prime subscription, will offer members an exclusive character and weapon skins for Apex Legends, along with free content in multiple EA Sports titles. Members will have to link their Twitch Prime account to their EA Account to gain access to the in-game offers, Twitch says.

In addition, Twitch will host two events ahead of Prime Day. On July 13, Las Vegas and London will host Twitch Prime Crown Cup tournaments, featuring Apex Legends and EA Sports games. In London, Olympic gold medalist runner Sir Mo Farah, footballer Thierry Henry, and five-time X Games gold medalist street skateboarder Leticia Bufoni compete against each other in an unnamed EA Sports game.

Meanwhile, the Vegas event will feature music producer Murda Beatz, global platinum-selling DJ Dillon Francis, and others, the company says.

The 8-hour event will be live-streamed on Twitch Prime’s channel starting at 10 AM PDT.

Twitch Prime is a gaming perk with Amazon’s $119/year Prime membership. This year, it’s given away more than $2,000 in free games and content, the company says, including two dozen free games.

Unrelated to Prime Day, Twitch also announced this week the launch of subscriber-only streams for its top creators, Twitch Partners and Twitch Affiliates.

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Amazon files suit against more counterfeiters

Amazon along with Boulder company Nite Ize, a maker of specialty lights and phone mounts under the STEELIE brand, filed suit on Wednesday in a Seattle federal court against a group of counterfeiters who have been ripping off Nite Ize products. The issue was brought to Amazon’s attention in October 2018, following a tip from the United States Customers and Border Protection agency, which had seized a shipment of 300 counterfeit STEELIE brand car mounts, Amazon lawsuit explains.

The agency alerted Nite Ize, which then, in turn, alerted Amazon.

“Defendants have deceived Amazon’s customers and Amazon, infringed and misused the IP rights of Nite Ize, and harmed the integrity of Amazon’s store, and tarnished Amazon’s and Nite Ize’s brands,” the lawsuit states.

The suit goes on to identify eleven individuals and businesses who operated third-party seller accounts on Amazon’s online store where they would advertise and sell counterfeit versions of Nite Ize products.

Nite Ize may not be a household name, but you may be familiar with some of its products.

The company began back in 1989 with the invention of a headband mini flashlight holder. It introduced its STEELIE line in 2014, which is a family of products designed to make phone mounting easier. Its patented magnetic mounting system is a two-part ball and socket system that’s particularly popular as a hands-free viewing platform in cars, home, and elsewhere.

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Above: STEELIE Original Dash Kit; credit: Nite Ize

That popularity, of course, attracted the knock-offs.

The defendants, Amazon and Nite Ize allege, marketed and sold items they claimed to be genuine STEELIE products in violation of Amazon’s Business Solutions Agreement. The suit names individuals living in Minnesota, Maryland, and Ontario as defendants, along with businesses based in China.

Nite Ize had been aware of the counterfeiting problems for some time.

It ordered test purchases from the defendants over the course of 2018, then reviewed the products they received and found them to be counterfeited, the suit explains.

Nite Ize and Amazon are now looking to recover actual and statutory damages as a result of the counterfeiters’ illegal business operations, along with other relief, including the ability to recover the defendants’ profits.

The lawsuit is the latest in a series of efforts by Amazon to crack down on the rampant counterfeit trade taking place online. While some brands have accused Amazon of turning a blind eye to issues with its third-party sellers, their illegal activity is ultimately damaging to Amazon’s brand, as well.

“Each day, millions of consumers use Amazon’s store to purchase a wide range of products across dozens of product categories from Amazon and third-party sellers,” the company said, in the filing. “Amazon recognizes that consumer trust is hard to win and easy to lose, so Amazon invests significant resources and effort into building and preserving its customers’ trust.”

The retailer also claimed that only a “small number of bad actors” seek to abuse that trust by selling counterfeit goods.

In more recent months, Amazon has become more active in its fight against counterfeiters.

Last year, for example, it filed three other lawsuits in partnership with fashion designer Vera Bradley and mobile accessories maker Otterbox over counterfeit goods.

And in February, Amazon launched a suite of new tools for brands and manufacturers that help them to proactively go after counterfeiters. As part of a program called “Project Zero,” brands can provide Amazon with logos, trademarks, and other key data. Amazon then scans its 5 billion product listings per day, looking for any suspicious items.

Another set of tools allows brands to work with Amazon to introduce product serialization capabilities. This puts a unique code on the manufactured units which Amazon scans at purchase to verify authentic sales.

But as this new lawsuit demonstrates, the counterfeiting business can be complex. With just this one company’s brand, there were people based across three countries involved with the illegal activity.

Amazon says in the filing it has more than 250 million active consumers and millions of third-party sellers. It’s a lot to police.

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250 retailers will compete against Amazon’s Prime Day, up from 194 last year

Amazon’s Prime Day event, now in its fifth year, is no longer just a big sales day for Amazon — it’s become the official kickoff to back-to-school shopping season and a new sales holiday that extends across the web among rival retailers. And those retailers’ competitive response to Prime Day is bigger than ever this year, according to a new report from RetailMeNot. In 2019, the firm estimates that 250 retailers will take part in Prime Day by offering deals of their own. That’s up from 194 last year, and up from just 7 retailers on Amazon’s first Prime Day in 2015.

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The increased participation may be related in part to the size of Amazon’s sale this year. Prime Day has been stretched out over the years. In 2018, for example, Prime Day became a 36-hour sale and, at the time, the biggest shopping event in Amazon’s history.

But more retailers today are aware that offering an alternative sale will bring in the shoppers, similar to how Black Friday and Cyber Monday sales also do.

Walmart, for example, is readying its answer to Prime Day by offering deals over a longer period of time than Amazon’s now 48-hour Prime Day 2019 event. Instead, of two days, the rival retailer is going for four. Walmart says it will offer “thousands” of special deals and Rollbacks starting on July 14 — the day before Prime Day starts. And these will continue until July 17, the day after Prime Day ends.

Walmart hasn’t announced what deals are in the works as of yet, beyond an HP 15.6″ HD Touch Display Laptop for $429 (currently $447), and the Dyson Multifloor Bagless Upright Vacuum for $154.00 (currently $175).

Target, meanwhile, is prepping its own answer to Prime Day with its biggest summer sale, Target Deal Days, which will take place concurrently with Prime Day (July 15-16). The retailer says it also will feature “thousands” of deals both online and in its app, with new deals each day. These deals haven’t yet been announced, either, but will expand across home, apparel, toys, and more, and will include both Target’s own brands and national brands.

While Prime Day brings the traffic and the sales, there’s some hint that the sale itself could be improved.

Based on RetailMeNot’s survey, 64% of shoppers are hoping that Amazon provides better deals on items this year, 58% want a greater selection, and 54% want more time to take advantage of deals. Nearly all also say they hope the overall Prime Day shopping experience this year is improved.

Back-to-school shoppers and parents will be dropping some cash on Prime Day, too, the report additionally found. 64% of parents say they’ll participate in Prime Day 2019 and will shop at 11 retailers, on average. Parents also plan to spend $162 on Prime Day and complete around 35% of their total back-to-school shopping during that time.

 

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Pinduoduo cements position as China’s second-largest ecommerce player

Alibaba and JD.com have been in a war over the Chinese e-commerce space for a decade or so, but a third player called Pinduoduo has managed to shake up the duopoly in recent times. The startup, which was founded in 2015 by an ex-Googler and went public on the Nasdaq last July, has further flexed muscles during the recent “6/18” shopping spree.

According to data provider QuestMobile, Pinduoduo’s daily active users have outnumbered JD’s for at least the past 12 months, and it came out of the mid-year sales festival — first popularized by JD as a counterpart to archrival Alibaba’s “11/11” shopping day — with 135 million DAUs.

JD, in comparison, ended with 88 million DAUs and Alibaba’s Taobao retained its top spot at 299 million. That result further solidified Pinduoduo’s position as China’s second-biggest ecommerce company by number of users.

The boom of Pinduoduo is in part attributable to ties with its investor Tencent — also a backer of JD — which enables it to sell via WeChat’s lite app and tap the giant’s vast social network. Alibaba, on the other hand, has for years been prevented from selling through WeChat.

In terms of sales, Pinduoduo still remains some miles behind JD, which focuses on large-ticket items like home appliances and targets China’s urban, deep-pocketed shoppers. Pinduoduo took a more rural tack and has built a reputation for hawking ultra-cheap goods at small-city consumers.

In 2018, Pinduoduo racked up 471.6 billion yuan ($68.6 billion) in gross merchandise volume, a somewhat problematic term for gauging sales as it totals the value of orders placed, regardless of whether they are actually sold, delivered or returned. (Alibaba stopped revealing GMV a few years ago.) JD’s GMV was almost four times that of Pinduoduo at 1.68 trillion yuan ($243.9 billion) last year.

One has to keep in mind that JD is a 21-year-old firm born out of the PC era, whereas Pinduoduo has been up and running on mobile for less than four years. The startup’s continued growth is undeniable. In a March report, investment bank UBS’s Evidence Lab predicted that Pinduoduo could overtake JD in GMV as early as 2021.

But Pinduoduo’s story is not all roses. Currently trading at $20.54, its stock has plunged about 35 percent since a March high. The online marketplace has also been chided for selling counterfeits and subpar goods, an endemic problem that’s long plagued Chinese e-commerce. This year Pinduoduo was put on the U.S. government’s “notorious” blacklist alongside rival Alibaba for selling fakes, while the company claims it’s actively working to root out problematic listings.

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Report: SoftBank-backed Brandless gets a new CEO amid turmoil at the company

Brandless, a direct-to-consumer purveyor of food, beauty, and personal care products, says that every item it makes is non-genetically modified, kosher, fair-trade, gluten-free, often organic and, in the case of cleaning supplies, EPA “Safer Choice” certified. Beginning with its 2012 launch, items were also priced at $3 across the board.

That changed in January, when the company added baby and pet products to its stable of offerings, some of them at a $9 price point. But according to a new report in The Information, that’s far from the only change afoot at the company. Instead, the outlet paints a picture of a company that sold 40 percent of its business to SoftBank for a stunning $240 million before it had found its footing,  and where things have been sliding downhill since.

Indeed, while cofounder and longtime CEO Tina Sharkey suggested to Bloomberg that SoftBank loved Brandless’s uniform price points, its messaging to customers, and that Brandless was focused on a “highly curated collection” in contrast to Amazon’s everything-store ethos, Brandless has steadily been losing customers since the round closed  — a lot of them, according to The Information.

Specifically, it says that analysis provided to it by Second Measure, a company that analyzes anonymized debit and credit card purchases, found that Brandless had 26.5% fewer customers last month than it did in May 2018.

We’ve reached out to both Brandless and SoftBank for more information. (Brandless’s earlier backers include Redpoint Ventures, New Enterprises Associates, GV, and Cowboy Ventures. It has raised $292 million altogether, shows Crunchbase.)

SoftBank declined to comment and we’ve yet to hear back from Brandless. In the meantime, The Information says it has talked with numerous former employees who cite quality control issues as one of the company’s biggest challenges over time — from silicone serving spoons that detached from their handles, to glass containers that arrived broken on customer’s doorsteps and, in some cases, sliced their fingers.

They also recount inventory challenges, including buying too much perishable inventory and not buying enough of popular items. And they note that some of the inventory for sale on Brandless in its early days came from  Beach House, a company that was founded by Ido Leffler, an Israeli entrepreneur who’d cofounded Brandless with Sharkey.

A bigger revelation by The Information is simply that Sharkey stepped down as CEO in March, which Sharkey had quietly revealed in a Medium post titled “More Goodness.” A source familiar with the situation says Sharkey made the decision, approaching the board about replacing herself and moving exclusively into a co-chairman role. The Information cites its own source, who seems to echo that Sharkey was not pushed out, but said her decision stemmed from tensions with SoftBank, which was pushing for Brandless to turn a profit.

Indeed, its new report reveals that Brandless recently appointed a new CEO to replace Sharkey: serial founder John Rittenhouse, whose LinkedIn profile says he began the job last month. Rittenhouse spent several years as a C-suite executive at Wal-Mart nearly 20 years ago. He has since cofounded two beverage industry companies, VinAsset and the business-to-business software firm Fortera.co. A source tells us he was introduced to the company through New Enterprise Associates.

The Information report offers other interesting details while leaving open the question of whether Brandless is going through the growing pains of a young company that raised too much capital too soon, or its problems run deeper. Either way, the bet is looking like a troubled one for SoftBank, and at a time when it reportedly has other, seeming major challenges with which to contend.

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TransferWise’s new debit card for the US fires the starting gun on a new war for travelers

International money transfer service TransferWise, has made a significant incursion into the US market today, launching a MasterCard debit card alongside a multicurrency account. Mirroring the card it has already launched in the UK and Europe last year, the card will work in over 40 currencies without balance limits, and conversion fees will be competitive with current exchange rates. A similar card aimed at businesses will follow the consumer launch.

Co-founder Taavet Hinrikus told me that the card effectively makes the average person able to act like a millionaire when they are traveling. “Alternative ‘travel’ cards are four times more expensive for every dollar spent and are only available to the top 10% of people who pass credit checks and also pay hundreds of dollars per year,” he said.

He believes this card will democratize the whole market. That means it’s likely that US tourists in Europe or elsewhere will be hugely attracted to this card because they will be charged as if they were a local person, in the local currencies, without all the normal fees.

Transferwise is also pushing an immigration angle to the launch featuring Tan France (pictured), star of “Queer Eye For The Straight Guy”.

Key features of the account and debit card include international bank details for the UK, the US, Europe, Australia, and New Zealand, meaning account and routing numbers that are unique to the account holder. Additionally, if a holder swipes a card in a currency they don’t have in their account, the card knows to choose the cheapest option from their available balances. The card is also free to get, with now no subscription, no sign-up fees, and no monthly maintenance fee. Holders can also freeze/unfreeze the card from the Transferwise app and receive push notifications every time they spend. It will also sync with Apple Pay, Google Pay, and Samsung Pay.

Hinrikus added: “Our goal is to offer bank details for every country in the world through one account — the world’s first global account — and we’re starting with five of the world’s top currencies. The 40-currency debit card completes the package, so we’re excited to be releasing the card in the US.

Earlier this year TransferWise said it was now valued at $3.5 billion after closing a $292 million secondary funding round. In November it reported an annual post-tax net profit of $8 million for the year ending March 2018. At the time it said it had five million users transacting $5 billion across its platform a month.

While Transferwise competes with the smaller Revolut and WorldRemit, as well as incumbents like Western Union and MoneyGram, with the launch of this new card it will also be breathing down the neck of Paypal.

Its investors include Old Mutual, Institutional Venture Partners, Andreessen Horowitz, Lead Edge Capital, Lone Pine Capital, Vitruvian Partners, BlackRock, Valar Ventures, Baillie Gifford, PayPal founder Max Levchin, and Virgin Group founder Richard Branson, among others.

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Walmart now accepts SNAP for online grocery orders at all 2,500+ pickup locations

Walmart has been working to address the needs of low-income shoppers for some time. More recently, it’s been introducing new ways to serve customers on public assistance. In fall 2017, the retailer began a small test allowing customers to pay for online grocery orders using their SNAP (Supplemental Nutrition Assistance Program) benefits — more casually known as food stamps. Today, Walmart says SNAP is now accepted for online grocery orders at all of the company’s 2,500-plus pickup locations.

For SNAP customers, the process of placing an online order is as simple as it is for those paying with debit or credit. They put in their zip code on the Walmart Grocery website to select their local store, then shop for groceries online by adding items to their cart. At checkout, they select a pickup time and choose “EBT card” as their payment option.

When they arrive at the store, they’ll park in the customer spaces marked for Grocery Pickup orders and give their EBT benefit card to the store associate who brings their order to the car.

As Walmart and other retailers have explained, online shopping should not be considered a luxury. Low-income shoppers can often save money by going online where there can be better deals available than at local stores. In Walmart’s case, however, online groceries are priced the same as they are in store.

In addition, be able to shop online can be a huge time saver for those working multiple jobs to make ends meet.

Walmart says it’s planning to accept the SNAP payment option at over 3,100 Walmart stores by the end of the year.

The SNAP at Pickup program isn’t the only way Walmart is serving low-income customers.

The retailer also announced in April its participation in a USDA pilot program designed to test the acceptance of SNAP payments directly on retailers’ websites for both grocery pickup and delivery. Walmart is one of several retailers who agreed to participate in the pilot, along with Amazon, Dash’s Market, FreshDirect, Hy-Vee, Safeway, and Wright’s Markets.

Another pilot we recently spotted is focused on bringing down the cost of grocery delivery by offering customers the option to pay an annual subscription fee of $98, instead of per-delivery charges which can add up over time. Though not aimed at the low-income shopper, it is a viable alternative to rival grocery delivery programs from Target (Shipt), Amazon, and Instacart.

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The next service marketplace wave: Vertical market-networks

Ivan Smolnikov Contributor
Ivan Smolnikov is the CEO and founder of Smartcat, the market network platform for the translation industry.

The last few decades have produced many successful marketplaces. We went from goods marketplace pioneers such as eBay and Amazon to simple service marketplaces such as Uber, Lyft, Doordash, Upwork, Thumbtack, TaskRabbit, and Fiverr. But why haven’t we seen many successful B2B service marketplaces?

Table of Contents

Why Many B2B Service Marketplaces Failed

Some would argue that companies such as Upwork, Thumbtack, Fiverr, or TaskRabbit are horizontal B2B marketplaces in the sense that they provide access to suppliers of different services. But while businesses do indeed transact with freelancers on such “horizontal” marketplaces, for most service verticals these are limited-value, one-off transactions. They fail to enable long-term business collaborations.

So, such marketplaces haven’t delivered more valuable services nor introduced a new paradigm for how businesses buy specific services at scale and on an on-going basis. Why is that?

Horizontal marketplaces are stuck at the discovery process

Horizontal services marketplaces don’t provide much value beyond matching clients with quality service providers. In other words, they don’t facilitate collaboration between buyers and suppliers, never mind provide ways for the two parties to collaborate more efficiently over time as they engage in follow-on projects.

In essence, the model these marketplaces were built around is not much different from the likes of Craigslist, which put a convenient UX on traditional classified advertisements.

Complex B2B services require workflow and collaboration tools

In their article “What’s Next for Marketplace Startups?,” Andrew Chen and Li Jin found that there aren’t many successful service marketplaces because those offerings are complex, diverse, and difficult to evaluate. It’s challenging to define a successful transaction in a service marketplace because it’s harder to quantify success.

One reason is that several service providers must often work together to complete a single job for a buyer, requiring a complex workflow from end to end. As a result, it’s difficult for marketplaces to not only mediate service delivery but also make it significantly more efficient for buyers and suppliers. If both the buyer and suppliers don’t see a significant efficiency gain other than being initially matched, why would they continue using the marketplace?

(Image via Getty Images / Lidiia Moor)

The $50 billion translation industry is a prime example of complex B2B services marketplaces. On the supply side are roughly 50,000 small agencies around the globe responsible for more than 85% of this $50 billion industry. (Note we are referring to agencies here as suppliers, though they play on both sides.)

On the demand side are businesses that need to translate text from one language into another. Plus about 1,500,000 freelance linguists work in this industry, many of whom are more specialized than professionals in other industries.

Anyone can find and hire a translator on Fiverr or Upwork. Both provide a vast selection of language translators. However, the quality and cost of the translation depends on the translation tools available to the translator as well as their subject expertise.

Neither Fiverr nor Upwork provide computer-aided translation (CAT) and collaborative workflow solutions for users of their platforms. Additionally, neither provides an effective way for all parties to collaborate and continuously improve the efficiency and quality.

But the problem with traditional marketplaces goes even further: Multiple translators and reviewers are usually needed to complete a single job for a customer. Multi-language translation projects are even more complicated. Such projects require multiple service providers and cost estimates, in addition to project management tools.

This is why building a B2B service marketplace is difficult. Service marketplaces must not only connect buyers and suppliers, but also provide tools to enable an efficient and collaborative workflow that reduces wasted time and effort.

Horizontal marketplaces suffer high attrition

In addition to the problems already outlined, traditional marketplaces experience another issue that prevents them from growing and retaining market participants: Buyer and supplier attrition.

Many business services are based on regularly recurring engagements. In some cases, a buyer and a service provider interact daily, requiring a different workflow than gig-marketplaces are built around.

Buyers and suppliers have little motivation to continue interacting on a platform with no workflow automation solutions. They lack a way to improve service efficiency and quality, automate collaboration, payment, paperwork, and other basic processes required for a business.

This is why many traditional marketplaces suffer from slow network effects and high attrition. (A network effect is what happens when a platform, product, or service delivers more value the more it is used.

Think Facebook, eBay, WhatsApp.) Why wouldn’t companies work directly with service providers outside of a marketplace after they were introduced? What incentives keep the service transaction on the marketplace? These are critical questions to answer when building a marketplace.

Traditional marketplaces target broad services, making it nearly impossible to provide workflow solutions for buyers and suppliers. Going forward, successful service marketplaces will be developed relying on an industry-specific SaaS workflow. This will focus buyers and suppliers on longer-term projects and interactions that serve the unique needs of collaborations and transactions in a specific vertical.

Image via Getty Images / OstapenkoOlena

What makes a successful service marketplace?

In “The next 10 Years Will Be About Market Networks,” James Currier, Managing Partner at NFX Ventures, defines a new era of service marketplaces, which he calls market networks.

A market network is a platform that combines elements of an n-sided marketplace, a network, and workflow solutions. An n-sided marketplace is one that requires coordination of multiple supply-side parties to provide a complex service for a single buyer.

Market networks enable multiple buyers and suppliers to interact, collaborate, and transact on the same platform. They provide users with industry-specific workflow solutions that enable efficient, ongoing collaboration on long-term projects. This reduces costs and leads to a higher quality of services and increased overall value for all users.

But how do you actually build a successful market-network platform? While the answer to that varies from company to company, here is our approach. We were able to build a market network for the translation industry that combines the components: network, marketplace, and workflow solution.

STEP 1: SaaS workflow platform unlocks high-value collaboration

The first step to building an effective complex market network is to develop a workflow that is easy for users to embrace. It might not seem like much, but this increases productivity by enabling teams to perform tasks that were previously impossible.

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Sam’s Club launches alcohol delivery through Instacart

Walmart -owned Sam’s Club is expanding into same-day alcohol delivery, the retailer announced this morning. The delivery service is being powered by Sam’s Club partner Instacart and is currently live in 215 stores across 12 U.S. states, with plans to reach other cities and markets in the months ahead.

At launch, the list of states supporting alcohol delivery includes Florida, California, Missouri, Hawaii, Idaho, Illinois, Ohio, Wyoming, Connecticut, Texas, Kentucky, and Minnesota. Not all clubs in those states will offer the service — only select markets.

Where available, Sam’s Club members will be able to order both from the in-house “Member’s Mark” brand — like Member’s Mark Sangria, Member’s Mark Prosecco and Member’s Mark Moscato D’Asti, for example — as well as from other popular brands, like Kendall Jackson Chardonnay, Modelo Especial, and Tito’s Handmade Vodka, among others. The deliveries can arrive as fast as one hour.

The move pits Sam’s Club as a rival to other same-day alcohol delivery services, including Target’s Shipt, which delivers alcohol in a number of cities from various retailers (including Target), Amazon’s Prime Now, Drizly, Postmates, plus other Instacart partner retailers which vary by market and regional chains.

Sam’s Club parent Walmart also delivers alcohol in select markets through Walmart Grocery.

To order alcohol, Sam’s Club members will need to order through the Instacart app or website. They’ll also obviously need to be 21 years of age and will need to present their government ID at the time of delivery.

“Sam’s Club is focused on offering quality products, unexpected finds and better customer experiences,” said Racquel Harris, Vice President, Adult Beverage, in a statement. “Now you can select the perfect bottle of wine to complement your dinner or stock up on your favorite beer or spirits for the big game with the convenience of delivery.”

“Instacart is proud to collaborate with Sam’s Club to provide wine, beer, and spirits delivery for their valued members. By extending our marketplace categories, we’re making it even easier for customers to shop from Sam’s Club for all their needs – from groceries and household essentials to alcohol,” said Andrew Nodes, Vice President of Retail at Instacart. “We’re proud to have grown our relationship with Sam’s Club to include its clubs across the U.S., helping members across the country get the groceries they need in as fast as an hour.”