In a tweet late Tuesday, President Trump criticized Apple for refusing “to unlock phones used by killers, drug dealers and other violent criminal elements.” Trump was specifically referring to a locked iPhone that belonged to a Saudi airman who killed three U.S sailors in an attack on a Florida base in December.
It’s only the latest example of the government trying to gain access to a terror suspect’s device it claims it can’t access because of the encryption that scrambles the device’s data without the owner’s passcode.
The government spent the past week bartering for Apple’s help. Apple said it had given to investigators “gigabytes of information,” including “iCloud backups, account information and transactional data for multiple accounts.” In every instance it received a legal demand, Apple said it “responded with all of the information” it had. But U.S. Attorney General William Barr accused Apple of not giving investigators “any substantive assistance” in unlocking the phone.
Following the big revamp of Google Shopping last fall, Google today is updating the shopping experience on Google Search, on mobile. Now, when you do a web search for clothing and accessories, you won’t just get a set of links to different products and stores. Instead, Google will present a new section where it features the most popular products from stores around the web, which you can filter and browse.
For example, you could search for things like “running shoes” or “women’s leather belt” or “wide-leg pants,” Google explains, then be presented with a selection of items in a new, visual guide. You can then further narrow down what you’re looking for by style, department or size type, and view images. Underneath each item, Google will also display how many stores carry that product and the lowest price. (e.g. “$199+”)
This change will help in particular when you’re trying to find all the stores that carry one particular item — something that hasn’t been easy to do in the past.
And as you view the item in question, you can scroll down to read aggregated customer reviews. When you’re ready to buy, you’ll just click on the link to the store you want to shop.
The feature is powered by Google’s search index, which has organized products from over a million online stores and is regularly refreshed. The new shopping feature isn’t a paid advertisement for retailers either, Google notes. Participating retailers can include their eligible products within this section for free.
The changes are part of a large focus on how the shopping experience can be improved for online retailers as Google revamps to become the go-to platform for finding everything that’s not on Amazon. On that front, Google this week acquired a startup, Pointy, for $163 million to help physical retailers track their in-store inventory.
The company also recently updated the Google Shopping homepage to become a personalized destination based on your habits and purchases, with additions like a price tracker and new ways to shop from both local and online retailers. But many online searchers’ first stop when looking for clothing and accessories isn’t the Google Shopping destination — it’s a simple Google Search. That’s where the new features come in.
Google says the updated experience will begin rolling out starting today and through this week, on mobile devices only.
In June, PayPal announced its Chief Operating Officer Bill Ready would be departing the company at the end of this year. Now we know where he’s ending up: Google. Ready will join Google in January as the company’s new commerce chief, reporting directly to Prabhakar Raghavan, SVP, Ads, Commerce and Payments.
Ready’s role at Google will not involve payments, which means he won’t be directly involved with PayPal’s competitor, Google Pay. Instead, as Google’s new president of Commerce, Ready will focus on leading Google’s vision, strategy and delivery of its commerce products. However, the role will see Ready working in close partnership with both the advertising and payments operations.
Google’s prior head of ads, commerce and payments, Sridhar Ramaswamy, left the company in 2018 after more than 15 years, which is when Raghavan stepped in. But Ready’s role is a new one, as it will focus on commerce specifically.
“Bill’s exceptional track record building great experiences for consumers and deeply strategic partnerships makes him a powerful addition to our team. I couldn’t be more excited for the future of commerce at Google,” said Raghavan, in a statement.
Added Ready, “I’ve long admired how Google has enabled access to the digital economy for everyone. Google has been making world-class commerce capabilities universally accessible to partners of all sizes, and I look forward to furthering that mission,” he said.
Ready joined PayPal in 2013 when it acquired his startup, the payments gateway Braintree, for $800 million (he became CEO of Braintree and Venmo). Today, Braintree powers payments for businesses like Uber, Airbnb, Facebook and Jet.com, while Venmo sees more than $25 billion in transaction volume on a quarterly basis.
Once at PayPal, Ready moved up the ranks to become EVP and COO in 2016. In this role, he was responsible for product, technology and engineering at PayPal, as well as the end-to-end customer experiences for PayPal’s consumer, merchant, Braintree, Venmo, Paydiant and Xoom businesses. He was also co-chair of PayPal’s Operating Group, which focuses on delivering on revenue and profit goals for the company.
At PayPal, Ready was behind a number of the company’s biggest moves, including the introduction of its most-rapidly adopted product ever, PayPal One Touch, as well as Pay with Venmo, the redesign of the PayPal mobile app, PayPal Commerce and the expansion of Braintree’s global reach.
PayPal announced Ready’s plans for departure this summer, saying he was planning to engage in other entrepreneurial interests outside the company.
Heading up commerce at Google will be a big task for Ready, given commerce’s close proximity to parent company Alphabet’s main source of revenue, which is advertising. In Q3 2019, Google’s ad revenue was $33.92 billion out of total revenue of $40.5 billion.
Today, many consumers visit Google first to shop for products, which allows it to charge top dollar for its ads. But over the years, Amazon has been steadily chipping away at Google’s lead as more consumers go directly to its site to hunt for products.
To address this challenge, Google has begun to transform its Shopping business.
At Google Marketing Live this year, Google unveiled a new look and feel for its shopping properties, which included rebranding its Google Express app as the new Google Shopping app. The goal with the changes is to better serve the way consumers now shop online. Today, people often start “shopping” by doing things like browsing Pinterest for inspiration or seeing what influencers are posting on Instagram, for example. Instagram capitalized on this trend with the launch of Instagram Shopping in March, which allows users to checkout right in its app.
PayPal is also now moving in this direction. The company recently made its largest-ever acquisition with a $4 billion deal for shopping and awards platform Honey. With Honey’s integrations, PayPal will be able to target shoppers with personalized promotions and offers earlier on in their shopping journey, then direct them to PayPal’s checkout as the final step.
Google’s commerce plans are similar in that regard.
It envisions a universal cart and new ways to shop across its platform of services, including Search, Shopping, Images, and even YouTube and Gmail. This will allow Google to also capture shoppers’ attention as they engage with Google properties — like browsing images for product ideas or watching YouTube videos, for example.
As a part of the Google Shopping revamp, the dedicated Shopping homepage was updated to allow consumers to filter products by brands they love, features they want, as well as read product reviews and videos. Shoppers could add items to a universal cart where purchases were backed by a Google guarantee, as well as receive customer service and make easy returns, as before with Google Express.
Google’s travel business also falls under commerce, and similarly received new attention this year with updates designed to simplify the experience of trip planning on google.com/travel, and more features around tracking flight price drops and predictions.
On the advertising side, Google’s highly visual Showcase Shopping ads were expanded outside of Google Shopping. And Shopping Actions — customers’ ability to shop directly from Google surfaces, like Google Assistant — are making their way to new services, like YouTube.
Google is also ramping up its ability to serve smaller and local businesses with features aimed at driving in-store pickup traffic to brick-and-mortar stores.
Critical to making Google’s new Shopping platform successful is being able to forge retail partnerships — as, unlike Amazon, Google itself is not really in the business of selling directly to consumers, outside of its own hardware devices.
Ready’s experience will prove valuable here, too. At PayPal, he was able to build strategic partnerships with a number of unlikely players — including Visa, Mastercard, Apple, Walmart, Samsung, and even Google.
What Ready’s strategy and vision will more precisely entail for Google will have to wait until after he’s on board, however.
“I’m thrilled to welcome Bill to Google as we continue our work to create more helpful commerce experiences and build a thriving ecosystem for partners of all sizes,” said Sundar Pichai, CEO of Google and Alphabet.
Image Credits: Getty Images — Bloomberg/Contributor; Ready: Google
Walmart this morning announced a new pilot program that will test autonomous grocery delivery in the Houston market starting next year. The retailer is partnering with autonomous vehicle company Nuro, a robotics company that uses driverless technology to deliver goods to customers. Nuro’s vehicles in this case will delivery Walmart online grocery orders to a select group of customers who opt into the service in Houston.
The autonomous delivery service will involve R2, Nuro’s custom-built delivery vehicle that carries products only with no onboard drivers or passengers, as well as autonomous Toyota Priuses that deliver groceries.
The program’s goal is to learn more about how autonomous grocery delivery could work and how such a service can be improved to better serve Walmart’s shoppers.
Nuro’s focus to date has been developing a self-driving stack and combining it with a custom unmanned vehicle designed for last-mile delivery of local goods and services. The vehicle has two compartments that can fit up to six grocery bags each.
The company has raised more than $1 billion from partners, including SoftBank, Greylock Partners and Gaorong Capital. In March, the company announced it had raised $940 million in financing from Softbank Vision Fund.
Nuro is known for its pursuit of autonomous delivery. But it also licensed its self-driving vehicle technology to Ike, the autonomous trucking startup. Ike now has a copy of Nuro’s stack, which is worth billions, based on this latest round. Nuro also has a minority stake in Ike.
Nuro’s partnership with Walmart is hardly its first. The company partnered in 2018 with Kroger to pilot a delivery service in Arizona. The pilot, which initially used Toyota Prius vehicles, transitioned in December to the delivery bot. The autonomous vehicle called R1 is operating as a driverless service without a safety driver on board in the Phoenix suburb of Scottsdale.
The Nuro partnership isn’t Walmart’s first autonomous delivery pilot, either. The retailer earlier this year tapped the startup Udelv to test autonomous grocery deliveries in Arizona. This summer, it kicked off a test with Gatik A.I., an autonomous vehicle startup to test grocery delivery from Walmart’s main warehouse in Bentonville, Arkansas. Walmart also launched a pilot with self-driving company Waymo in 2018 to test rides to Walmart for grocery pickup, as well as a test with Ford and Postmates for autonomous grocery delivery.
“Our unparalleled size and scale has allowed us to steer grocery delivery to the front doors of millions of families – and design a roadmap for the future of the industry,” said Tom Ward, Walmart’s SVP of digital operations, in a statement. “Along the way, we’ve been test driving a number of different options for getting groceries from our stores to our customers’ front doors through self-driving technology. We believe this technology is a natural extension of our Grocery Pickup and Delivery service, and our goal of making every day a little easier for customers,” he aded.
Walmart’s Online Grocery business is booming, but today still relies on partnerships with third-party delivery services. Currently, Walmart partners with delivery providers across the U.S. to facilitate deliveries, including Point Pickup, Skipcart, AxleHire, Roadie, Postmates, and DoorDash. It has also tried, then ended, relationships with Deliv, Uber and Lyft in the past. By the end of 2019, Walmart Grocery will offer nearly 3,100 pickup locations and 1,600 stores that support grocery delivery.
The retailer’s investments in its online grocery business helped boost sales and benefitted consumers by offering an affordable competitor to Amazon, Target’s Shipt, Instacart, and others. In Q3, Walmart’s grocery business helped online sales grow 41%, ahead of the 35% gain expected, leading Walmart to another earnings beat and 21 quarters of growth in the U.S.
In the quarter, Walmart earnings rose to $1.16 a share on revenue of $127.99 billion. However, Walmart’s e-commerce business is losing money as it continues to invest in new technologies and acquisitions, which has led to internal tensions.
Walmart says its pilot program will Nuro will kick off in 2020.
PayPal announced today it has agreed to acquire Honey Science Corporation, the makers of a deal-finding browser add-on and mobile application, for $4 billion, mostly cash. The acquisition, which is PayPal’s largest to date, will give the payments giant a foothold earlier in the customer’s shopping journey. Instead of only competing on the checkout page against credit cards or Apple Pay, for example, PayPal will leap ahead to become a part of the deal discovery process, as well.
Currently, Honey’s 17 million monthly active users take advantage of its suite of money-saving tools to track prices, get alerts, make lists, browse offers and participate in an Ebates-like rewards program called Honey Gold. Its users tend to be younger, millennial shoppers, both male and female.
PayPal aims to add Honey’s technology to its own product line, expanding its reach to PayPal’s 300 million users.
“What’s exciting is that we can take the functionality Honey now offers — which is product discovery, price tracking, offers and loyalty — and build that into the PayPal and Venmo experiences,” explains PayPal SVP of Global Consumer Products and Technology, and former Xoom CEO, John Kunze. “When Honey says they’re putting money in the pockets of their customers — that’s perfectly in line with what we want to do. We want to make digital commerce and financial services more affordable, easier to use, more fun and more accessible to people around the world,” he says.
In addition, PayPal’s network of 24 million merchant partners will gain the ability to offer targeted and more personalized promotions to consumers as a means of acquiring new business and driving increased sales. PayPal Credit may also be integrated into Honey to help finance larger purchases.
Honey has flown under the radar to some extent since its founding in 2012.
Originally only a web browser extension, Honey tracks sales and retailers’ promo codes, as a rival to RetailMeNot and others. What makes the extension so useful is that it automatically tries all the eligible promo codes for you during checkout then selects the one that provided the most savings and applies it on your behalf. This helps shoppers feel more comfortable with their purchases and reduces shopping cart abandonment.
The company also rolled out features to inform shoppers of an item’s price history, including the historical pricing of any product on Amazon’s marketplace. In 2017, Honey launched DropList, which would track and alert users to lower prices, as well as tools for finding travel deals.
As more consumers shifted their shopping to e-commerce merchants, Honey’s user base also rapidly grew.
Its browser extension now works across approximately 30,000 merchant websites, including fashion, technology, travel and even pizza delivery. Last year, Honey publicly shared that its 10 million members had saved over $800 million using its tools. As of today, Honey’s 17 million members have saved more than $2 billion to date.
“Honey is amongst the most transformative acquisitions in PayPal’s history. It provides a broad portfolio of services to simplify the consumer shopping experience, while at the same time making it more affordable and rewarding,” said Dan Schulman, president and CEO of PayPal, in a statement.
“The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers. As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales. The combination of Honey and PayPal adds another significant and meaningful dimension to our two-sided platform,” Schulman added.
The acquisition also gives PayPal a way to fight back against the increased competition from Apple, Google, Facebook and other tech companies that have entered the payments market in recent years. On Apple’s Q4 2019 earnings call, for example, CEO Tim Cook noted that Apple Pay has now exceeded PayPal transaction volume with 3 billion transactions in the quarter. Meanwhile, analysts are predicting Facebook Pay has the potential to unseat both Apple Pay and PayPal alike.
Then there are PayPal’s original rivals — the world’s biggest card networks like Visa, Mastercard, American Express and Discover. These companies are also fighting to remain relevant online, with a new PayPal competitor of their own to simplify online checkout.
With Honey, PayPal immediately shifts the battle away from the checkout page itself to instead compete against all the places people go to discover, browse, get inspired and deal-hunt — whether that’s directly on retailers’ sites or through newer platforms, like Pinterest or Instagram Shopping.
As a result of the acquisition, Honey co-founders George Ruan and Ryan Hudson will join PayPal where they’ll work on product integrations and scaling the technology to a much larger user base. Also joining is Honey’s predominantly L.A.-based team of 350 employees.
The Honey team and headquarters will remain in L.A., where they’ve just signed a lease on a new office space with expansion goals in mind.
“Combining PayPal’s assets and reach with our technology, we can build powerful new online shopping experiences for consumers and merchants,” said Hudson. “We’ll have the ability to help millions of retailers efficiently reach consumers with offers that deliver more and more value to Honey members.”
To date, Honey had raised $49 million from investors, including Ludlow Ventures, Zuma Partners, Mucker Capital, SXE Ventures, BAM Ventures, Plug and Play, Wonder Ventures, Cendana Capital, Anthos Capital and others, according to Crunchbase.
Honey was already profitable on a net income basis in 2018, PayPal notes. The acquisition is expected to close in the first quarter of 2020, subject to regulatory approval. It’s expected to be accretive to PayPal’s non-GAAP earnings per share in 2021.
PayPal will hold a conference call at 2 PM PST today to discuss the transaction further.
Same-day delivery is coming to Target’s app. The retailer announced this morning that its same-day shopping service Shipt, which Target acquired two years ago for $550 million, will now be integrated directly into the Target mobile application. Though Shipt is widely known as an online grocery service that competes with Instacart and others, Target is putting the service to work to do more than deliver food and various household items.
Instead, Shipt is turning into Target’s own version of Amazon’s Prime Now. Currently, Target shoppers can order 65,000 items from the app for same-day delivery, including not just groceries and essentials, but also toys, baby-care products, kitchenware and more. For comparison’s sake, Amazon says Prime Now offers “tens of thousands” of products for one or two-hour delivery. Shipt may not have quite as tight windows, however — just “same-day.”
While Amazon doesn’t disclose how many products are available via Prime Now, as it varies by location, a 2018 study indicated that Amazon’s biggest markets offered around 55,000 Prime Now products per city, while many other cities offered 34,000-41,000 SKUs.
Unlike Prime Now, Shipt doesn’t require a membership, though one is available. Instead, shoppers can opt to pay a $9.99 delivery fee per same-day order. This is similar to how Walmart Grocery operates, though it’s now rolling out a subscription option for its more regular customers.
Shipt’s integration with the Target app doesn’t mean the dedicated Shipt app is going away — that’s still a more convenient experience for shopping groceries at this time. However, it is a way for Target to offer Shipt delivery to a wider customer base of mobile consumers.
The mobile integration follows the launch of a dedicated shopping site for same-day delivery on Target.com earlier this year, which had a similar goal.
Target has been steadily modernizing its business to better compete with Amazon and help customers shop however they want — in-store, online or some hybrid of the two, as with Drive Up orders. In less than two years’ time, Drive Up became a top-rated service and it more than doubled the number of 2018 orders by fulfilling more than 5 million orders in the first part of the year, for example. Meanwhile, Target recently said that one in five customers were placing same-day orders with Target for the first time in Q2, indicating the potential for growth in same-day.
The same-day Shipt integration is rolling out today in the Target app, which also includes a new “My Store” tab where shoppers can convert lists to a shopping cart with a “Delivery” button. A “Discover” button also helps them to navigate and find other features, like deals and seasonal content.
Target tells us same-day delivery is now available in nearly 250 markets across 48 states.
Home furnishing retailer Wayfair was among the first to adopt AR technology as a means of helping people better visual furniture and accessories in their own home, ahead of purchase. Today, the company is expanding its feature set to allow for more visualization capabilities — even when you’re shopping out in the real world and aren’t able to take a photo of your room to use AR.
Instead, shoppers will be able to leverage a new feature called “Interactive Photo,” which lets shoppers take a photo of their room then visualize multiple products within it, even when they’re not home in their own space. The feature itself uses technology to understand the spatial information of the room in the image to give you an AR-like experience using your photo.
Alongside this addition, Wayfair has updated its app to put its camera tools more at the forefront of the app experience. Similar to how you can click a camera icon next to the Amazon app’s search bar, you can now do the same in Wayfair. You can also then toggle between the various camera-based features with swipe gestures, in order to move between Wayfair’s visual search and its “View in Room” AR feature, which is also where you’ll find the new “Interactive Photo.”
The retailer has also launched its room design tool, Room Planner 3D, on the mobile shopping app. This allows shoppers to create an interactive room 3D room that they can view from any angle, while testing out different layouts, styles, room dimensions and more.
The update follows Amazon’s launch earlier this year of its own visual shopping experience called Showroom, which let online and mobile shoppers try out furniture and other décor in a customizable virtual room where they pick the wall color, flooring, carpet and more.
“With the latest updates to the Wayfair app, we continue to push the limits of what’s possible by iterating on advanced AR and machine learning capabilities, and introducing new and innovative spatial awareness techniques to an e-commerce experience, bridging the gap between imagination and reality,” said Matt Zisow, Vice President of Product Management, Experience Design and Analytics at Wayfair, in a statement.
The new feature set comes shortly after Wayfair’s third-quarter earnings, where the company reported a wider-than-expected loss of $2.33 per share, adjusted, versus the expected $2.10 per share. Revenue was up 35% year-over-year to $2.3 billion, above the anticipated $2.27 billion, however. The company attributed the miss to “short-term headwinds from tariffs.”
However, as the holiday shopping season heats up, Wayfair still needs to unveil enticing features that will encourage consumers to redownload its app and shop — especially given that smartphones alone drove $2.1 billion in U.S. online sales last Black Friday.
The new Wayfair app is out now on iOS and Android, but the new features — Interactive Photo, Integrated Camera and Room Planner 3D — are only on iOS.
Pan-African e-commerce startup Jumia released its third-quarter financial results today.
The numbers and presentation reflected some of the same past trends, with a dash of new, and nary a mention of a declining share price.
Jumia — with online goods and service verticals in 14 countries — posted third-quarter revenue growth of 19% (€40 million) and increased its active customer base 56% to 5.5 million from 3.5 million over the same period a year ago.
Jumia’s Gross Merchandise Value (GMV) — the total amount of goods sold over the period — grew by 39% to €275 million. The online retailer nearly doubled its orders from 3.6 million in Q3 2018 to 7 million in Q3 2019.
Jumia also saw growth in its JumiaPay digital finance product, with total payment volume growing 95% to €32 million in Q3 2019 from €16.4 million in Q3 2018.
This is significant, as the company has committed to generate more revenues from digital payment products and offer JumiaPay as a standalone service across Africa.
The overall pattern of growing revenues and customers YoY has been consistent for Jumia.
Jumia pegged a large part of the spike in losses to an increase in fulfillment expenses due to more cross-border goods transactions (with higher shipping costs) on its platform in 3Q 2019.
Jumia introduced some new methodologies and measures for its results. “We believe the most relevant monetization metrics for us are market-based revenue and gross profit,” Jumia Group CFO Antoine Maillet-Mezeray explained on the call.
“We don’t see revenue as a meaningful metric to assess the monetization of our business as it is impacted by shifts in the revenue mix between first party and marketplace,” he said.
If and when Jumia does get into the black, I suspect revenue will shift back as key.
On its path to profitability, Jumia CEO Sacha Poignonnec reaffirmed the company’s commitment to generate more revenue from higher margin (straight through) products, such as JumiaPay and Jumia’s classified business, over cost-intensive (and logistically complicated) online goods sales.
“We are focused on driving the adoption and penetration of Jumia pay within our own ecosystem,” he said — meaning across Jumia’s existing buyer-seller universe.
Since its founding in 2012, the company has been forced to adapt to slower digital payments integration in its core Nigeria and allow cash-on-delivery payments, which are costly and more problematic than digital processing.
Poignonnec highlighted Jumia’s commitment to build a financial services marketplace (and revenues) from consumers and partners using JumiaPay and JumiaLending for products such as loans, third-party credit-scoring and insurance, he explained. This has led to Jumia moving into working-capital services for vendors on its platform.
On the movement of online goods, Jumia highlighted the expansion of its JumiaMall service, which offers brands — such as L’Oreal, Samsung and Unliver — more tailored selling options on its website around shipping, product positioning and consumer data analytics.
Jumia also shared info on product mix and diversification, which showed strong upward trends in digital services, the sale of consumer electronics and beauty products.
Surprisingly absent from Jumia’s earnings call and the subsequent Q&A was any discussion of the company’s share price.
Today’s reporting was slightly more anticipated, given Jumia has faced a short-seller assault, sales scandal and significant market-cap drop since its April IPO on the NYSE.
The online retailer gained investor confidence out of the gate, more than doubling its $14.50 opening share price after the IPO.
That lasted until May, when Jumia’s stock came under attack from short-seller Andrew Left, whose firm Citron Research issued a report accusing the company of fraud. That prompted several securities-related lawsuits against Jumia.
The company’s share price plummeted 43% — from $49 to $26 — the week Left released his short-sell claims.
Then on its second-quarter earnings call in August, Jumia offered greater detail on the fraud perpetrated by some employees and agents of its JForce sales program.
The company declared the matter closed, but Jumia’s stock price plummeted more after the August earnings call (and sales-fraud disclosure), and has lingered in the $6 range for weeks.
That’s 50% below the company’s IPO opening in April and 80% below its high.
Jumia can offer new metrics to evaluate its performance, but the simplest measure — the ability to generate revenues in excess of costs to turn a profit — will still apply.
The sooner Jumia can go in that direction the faster it can revive its share price and investor confidence.