Mid-Year Report Card: Grading my 2021 Ecommerce Predictions

Will my grades make it to the fridge? Payments wars. Prime Day's new record amidst slower growth. It's hot freight summer. Gopuff continues their acquisition spree. And the Olympics do DTC.

Back in January, Nick Cotter asked me to give him my 2021 ecommerce predictions for his recently launched ecommerce software discovery platform: CommerceStacks.

I made a Cape Cod or Tom Brady joke, and he replied with a link to a Google Doc and said I had until EOD.

With July 1 arriving yesterday, let’s see how I stack up on my 2021 predictions at the mid-year mark. The grading criteria:

• Hit: 1

• TBD: 0

• Miss: -1

Please note: I’m providing a greatly abridged answer for the sake of brevity. Read the answers in full here.

In 2021, what ecommerce technology company do you have your eye on the most? Who will be the biggest disruptor?

Facebook.

Score: -1

They have expanded Shops, allow for 2-day delivery with select merchants, opened up Shops to WhatsApp, and are investing in AR and AI for Instagram, but they aren’t the biggest disruptor so far in 2021.

In 2021, what do you think will be the biggest disappointment in ecommerce technology?

Headless commerce.

Score: 0

Please note, I did write “I hope they prove me wrong,” but I had to give an answer. For now, I’ll say it’s TBD. Shogun just raised a large Series C valuing the headless solution at ~$600M and some people who I respect like Ben Kennedy are bullishly utilizing the software, but it’s not clear to me why ecommerce brands would revert to being more dependent on developers while adding an additional SaaS fee en masse. Also, Shopify just dropped Hydrogen.

What are you most excited about for the actual brands themselves?

Liquidity events.

Score: 1

I’m right here. And I’m not talking about funding announcements, but acquisitions and IPOs. In the last few months alone, Unilever acquired both Paula’s Choice for billions and Onnit, The Honest Company IPO’d, Barkbox IPO’d, Hims IPO’d, Oatly IPO’d, Figs IPO’d, Allbirds filed for an IPO, and Warby Parker filed for an IPO.

Also, the rollups like Thrasio, HeyDay, Pattern Brands, Win Brands Group, et al are buying like the well’s going to dry up yesterday.

What do you think will be the most competitive space?

Payments.

Score: 1

It’s not even close. I cover more news on payments in “The State of Ecommerce” below, but Stripe, Shopify, PayPal, Square, Facebook, Amazon, Google, Affirm, Klarna, Afterpay, Sezzle, and even Slice are aggressively battling and frenemy-ing.

What brand are you most bullish on in 2021?

Creators.

Score: 1

Maybe this is kind of cheating, but the creator economy movement has only accelerated. I mean, there’s a “bank for creators” that just raised $26M from top tier VCs. And with NIL (“name, image, and likeness”), college athletes are going to pour rocket fuel on this fire.

What ecommerce technology will get a lot of attention in 2021, but won’t see mass adoption until 2022?

Returns.

Score: -1

While PayPal acquiring Happy Returns and Affirm acquiring Returnly does not prove mass adoption at the merchant level, I have to give myself a “miss” here.

Total score: 1

Definitely not a good score with 3 Hits, 1 TBD, and 2 Misses. We’ll see how I finish up on January 1.

How did I grade myself? What’s your take or predictions? Feel free to comment or reply.

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We will be back with Insider Access next week featuring a very special guest.

The State of Ecommerce

What’s happening in the ecosystem? Who’s up? Who’s down? Who’s building the future?

• Death, taxes, and payments wars: PayPal increased their payments rates from 2.9% + $0.30 per transaction to 3.49% + $0.49. If you’re selling a $30 item, you now pay $1.54 (5.1%) compared to the old fee of $1.17 (3.9%). That’s a 31.6% jump overnight.

• Stripe taking on Square: They launched Stripe Terminal and make the public markets even thirstier.

• Taking a Slice out of Big Pizza: Speaking of POS, Slice launches their own as they look to create the “Dominos for independent pizzerias.”

• India is now coming easy to Amazon: Looking to penetrate India and their >1.3B population (with over 900M living in rural India), Amazon had to overcome a large segment of people who had never shopped online, a nightmare deliver situation, and building trust in a cost-conscious society. Read this quick case study behind the “Amazon Easy” model.

• Amazon Prime Day drives over $11B in 2 days: While setting a new record, the Prime Day sales were only up 6.1% YoY. I have never purchased anything on Prime Day. Not sure what that means.

• Amazon is eating Prime Day: In electronics, 45 of the top-50 best-selling products were Amazon brands. This number is usually closer to 20.

• Freight costs are skyrocketing: Freight costs on ocean containers from Asia to the US or Europe are up 3.5 to 7x YoY, while transit times are up 74%. From talking to Eytan Buchman at Freightos, “it’s going to get worse before it gets better.”

• Move over Shopify rollups, Rabois is here: After helping launch the real estate buying firm OpenDoor, which is now valued at $10B, Keith Rabois is looking to build an algorithm to buy Shopify stores with OpenStore.

• What about BigCommerce? As they continue to invest heavily in open SaaS, BigCommerce doubles down with open data to give their merchants even more control and visibility, as companies like Apple crack down on 3rd party data.

• And what about SAP? With the longstanding enterprise success of SAP Hybris, they recently launched a multi-tenant SaaS option called Upscale Commerce. Are they way too late to the party? Or will their brand recognition at the enterprise level allow them to take market share?

• What’s an appearance on Shark Tank worth? From talking to the founders of R. Riveter earlier this week, it changed their life. Not just partnering with a Shark, but the preparation for the show. Btw, Rabois should start a DTC Shark Tank. He was born for it. There’s his content play. He can thank me later.

• The Olympics are finally here: And in a power move, ecommerce company Coupang pays $44M for exclusive streaming rights in South Korea for the Tokyo Olympics.

• Kim Kardashian’s underwear is at the Olympics: The Kardashian shapewear brand Skims is the official underwear of the US Olympic Team and will also be providing loungewear and sleepwear for Team USA.

• Nike, it’s not you, it’s me: As Nike stock surges, the most decorated female track and field Olympian and USC Trojans icon, Allyson Felix, launches her own shoe company two years after breaking up with Nike.

• Recommerce…repeated: Another newsletter, more news in recommerce with ThredUp’s 2021 Resale Report.

• Facebook adds Shops to WhatsApp: With more than 2B global users, WhatsApp will expand their ecommerce capabilities with Shop.

• a16z on supply chain: What is really going on with the supply chain?

Acquisitions & IPOs

Liquidity events fuel the market, drive new innovation, and create new founders with deep experience and even deeper pockets. Who’s getting acquired? And who’s going public?

• Elo7: Taking a step into MercardoLibre’s biggest market, Etsy acquired the Brazilian marketplace for handmade items for $217M.

• rideOS: For $115M, Gopuff acquired the fleet management platform. I was in Chicago this past week and didn’t get in until 10pm. By the time I was at my AirBnb, it was 11pm and nothing was open to buy groceries for the week. I fired up Gopuff for the first time and had water, coffee, and breakfast foods delivered 20 minutes later.

• Liquor Barn: Gopuff strikes again…and acquires Liquor Barn to add 23 store fronts in Kentucky. This comes a year after they bought BevMo for $350M.

• Primer: With minimal press and Twitter talk, Shopify acquired the augmented reality app that allows users test the effects of a home improvement project before getting their hands dirty.

• Plus: Amazon has placed an order for 1,000 autonomous driving systems from Plus and acquired the option to buy a stake of as much as 20%.

• Warby Parker: As a “founding father of DTC,” Warby Parker files to go public. They were recently valued at $3B.

• Yummy Bear: Valued at $50M (yes, an M not a B), Yummy Bear is going public.

Following the Money

Who are VCs betting on to lead the future of ecommerce?

• ShipBob: I was in Chicago this week as we announced our $200M Series E led by Bain Capital Ventures with participation from SoftBank, Menlo Ventures, and Hyde Park Venture Partners. With 24 fulfillment centers across 5 countries, our 5,000 customers ship millions of items every month.
  
  “While other players saw the problem as a thin layer of digitization on top of traditional warehouse networks, ShipBob built from-scratch software for every key component in a cloud fulfillment service: warehouse management, fulfillment execution, inventory management, replenishment, network optimization, and shipping integrations.” - Ajay Agarwal, Partner at Bain Capital Ventures
  

• Mollie: The “European Stripe” based in Amsterdam raised $800M in equity funding at a $6.5B valuation led by Blackstone Growth. They are on track to process nearly $24B in transactions, which is up 100% YoY.

• GOAT: As the sneakerhead zeitgeist grows, the Los Angeles-based sneaker marketplace raised a $195M Series F at a $3.7B valuation. They tout nearly 30M members and 600,000 sellers across their platform.

• Snackpass: The social food ordering platform raised a $70M Series B at a $400M valuation. They claim 500,000 users across 13 college towns and grew 7x YoY.

• CommerceIQ: The ecommerce merchandising platform raised a $60M Series C led by Insight Partners. They are looking to expand their branch in India, where its platform technology was developed.

• Tapcart: The “Shopify for mobile apps” platform raised a $50M Series B led by Left Lane Capital. Over the last 12 months, more than $1.2B of GMV has flowed through their platform. Keep an eye on them!

• 10club: With the rollup market not stopping, the six-month-old “Thrasio for India” raised $40M led by Fireside Ventures. In an interesting twist, Heyday participated in the round.

• Via: The San Francisco-based conversation commerce startup raised a $15M Series A led by Footwork.

• Taptap Send: The London-based cross-border payments startup raised $13.4M for a no-fee money transfer service aimed at price-conscious emerging market users.

• SoleSavy: The sneakerhead community raised a $12.5M Series A.

• Renewal Workshop: To grow apparel resale, the recommerce platform that repairs, refurbishes, and cleans used or damaged garments raised $6M.

• Co-op: The ecommerce customer acquisition platform raised $5.8M led by Sugar Capital.

In Closing

Thanks for all the kind words this week around our big announcement at ShipBob. That day, we were recruiting international executive talent, preparing to launch two of our most requested integrations, and restructuring our 2-day shipping capabilities for better pricing and performance.

People are trying to cancel hard work, but it’s time to build.

Best,

Casey