ACQUIRE - Target Invests $75 Million in Online Startup Casper

Target has become the latest large brick and mortar retailer to take major steps to strengthen their ecommerce profile and appeal to young consumers.

The company recently invested an estimated $75 million in online mattress startup Casper, whose “bed-in-a-box” strategy is tailored to millennials.

The deal will have Casper products exclusively in Target stores starting June 18th.

“At Target, we strive to bring guests amazing new products and exciting partnerships,” says Jill Sando, senior vice president, merchandising, home. “We love Casper’s brand and innovative products—and we really love the idea of giving our guests a simple way to get a better night’s sleep, with everything they need in one convenient place.”

A Recode report, citing unnamed sources, stated Target had initially attempted to purchase the company for $1 billion.

The Casper partnership follows deals Target brokered - with Bevel and Harry’s, two subscription-based online brands - that also resulted in exclusive deals to be the only mass retailer to carry their products.

“The cool factor Target had ten years ago is today captured by these niche brands, and Target is hoping to capture some of their luster with these investments and partnerships,” said eMarketer analyst Yory Wurmser.

These steps by Target are in concert with another large retailer, and one of their major competitors, Walmart.

Walmart recently acquired Jet.com followed by ShoeBuy and Moosejaw - all strong online retailers whose acquisitions have resulted in increased sales and revenue for the retail giant.

Brick and mortar retailers are faced with a rapidly growing global trend in mobile and ecommerce, along with a young customer base growing up in an environment dominated by the Internet of Things.

They are responding by purchasing or partnering with businesses that have a large online subscriber base, outstanding online customer service, and/or strong online retail sales, to help maintain a competitive edge.

BUSINESS - PetSmart Chewy Deal Causes Commotion in the Industry

The pet industry is abuzz about the recent announcement of PetSmart’s acquisition of Chewy.

How is this going to impact independent pet retailers?

Chewy has been a formidable opponent in online retail - often selling products at prices the big box stores are unable to come close to competing with.

Another major component of Chewy’s success is outstanding customer service.

Anywhere one looks, happy customers are sharing stories of how well the company treats them and how well the company knows them.

People are speculating on the purchase outside of the animal industry as well.

The $3.35 billion acquisition is being touted as the biggest e-commerce purchase in history by publishers like Tech Crunch.

Recode is pointing out the deal is larger than Walmart’s acquisition of Jet.com, which was done for many of the same reasons - expanding Walmart’s e-commerce abilities and positively impacting their customer service.

Even e-commerce focused eMarketer is writing about the deal.

This deal is a big deal!

A Pet Business article touches on independent retailers concerns regarding how this acquisition can impact their bottom line.

While some fear the deal can make PetSmart an even stronger competitor, others believe it can actually take away some of Chewy’s clout.

Why?

Some pet food brands have chosen to sell their products through Chewy rather than big box stores like PetSmart through loyalty to independent retailers and they may pull their products.

In fact, Tuffy has already announced they will stop selling through Chewy because of the acquisition.

Also, Chewy has been operating with a very low profit margin and therefore very little profit.

There is a belief that PetSmart will want to raise that margin and generate more profit and that can’t be done without increasing the prices of online products.

The impact on the independent retailer remains to be seen, but what is clear is many people are watching to see just what happens.

BUSINESS - Walmart Continues Bid to Become Ecommerce Heavyweight

Walmart has once again upped its game in the world of ecommerce.

Last year the retail giant took a major step to compete in the ecommerce market with the acquisition of Jet.com.

InfoStream predicted at the time the two companies had the potential to make a dent in sector-leading Amazon’s market share.

Their intention to do just that was illustrated by Walmart’s recent adoption of a free two-day shipping program.

To further bolster their ecommerce, Jet.com purchased ShoeBuy for approximately $70 million in January of this year.

Shoebuy is a leading online footwear, clothing and accessories retailer that carries over 800 brands and will continue to operate as a stand alone site.

That acquisition was followed by the purchase of outdoor retailer Moosejaw by Walmart just last week for $51 million.

While Moosejaw is a small retailer, they have experienced significant growth in contrast to other outdoor gear stores.

In case anyone had been in doubt, Walmart is showing they are serious about becoming a major ecommerce player.

Their strategy seems to be working for the company.

Walmart recently announced online sales gained 29% in the fourth quarter which ended January 31.

“We’re happy about how fast we’re moving, but still have a lot of work to do,” Marc Lore, President and CEO Walmart ecommerce US, said on a call with reporters.

Lore was up-front about the company’s interest in more acquisitions similar to Moosejaw.

It won’t be surprising to hear about additional ecommerce related purchases by Walmart in the near future.

BUSINESS - Walmart Escalates Ecommerce Battle with Free Two-Day Shipping

In an effort to challenge ecommerce giant Amazon, Walmart has introduced free two-day shipping for home delivery on orders of at least $35 in the US.
 

This initiative replaces their Shipping Pass, which offered free two-day shipping for an annual $49 fee, and all current subscribers will receive a refund.

“In today's world of ecommerce, two-day free shipping is table stakes. It no longer makes sense to charge for it,” Marc Lore, president and CEO of Walmart US ecommerce, said in a release.

The new shipping offer is a direct strike at and attempt to undercut Amazon who dominates the ecommerce market.

Amazon Prime is a $99-per-year service that bundles two-day shipping on purchases with unlimited streaming media and other perks and has strong customer loyalty.

Walmart’s acquisition of Jet.com in 2016 was a clear statement of their intention to become a serious competitor in the online sales market.

Their new shipping program is another.

It won’t be surprising to see Walmart offer better services and deeper discounts in the future, particularly as ecommerce and mobile commerce continue to increase in importance with consumers.

“Two-day free shipping is the first of many moves we will be making to enhance the customer experience and accelerate growth,” Lore said.

DIGITAL - Snapchat Offers New Advertising Features

In an effort to improve mobile commerce and lead generation marketing, Snapchat is testing deep-linking and auto-fill in their ads.

With deep-linking, consumers can swipe up and tap a link to be taken out of Snapchat and into a new app - to a playlist in a music app, or a product page in an ecommerce app.

Auto-fill allows viewers to fill out lead-generation forms with one tap on the screen after seeing an ad.

This time-saving feature addresses the challenge advertisers have getting consumers to take the time to fill out forms, particularly when they are using a smartphone with its small screen and keyboard.

"Snap's new features make its advertising platform more amenable to the type of direct response advertising that could make it a social commerce player," said eMarketer analyst Yory Wurmser. "Mobile retail above all is about relevant, compelling images and simplicity."

Other social networks already have these features so Snapchat is taking steps to catch up to them and stay on top of social commerce in general.

Some interesting statistics for businesses thinking about advertising on Snapchat:

• Over 100 million active daily users
• Snapchatters watch over 10 billion videos per day

• 58 percent of college students would be likely to purchase a brand’s product or service if they were sent a coupon on Snapchat.

BUSINESS - Ecommerce Players who Thrived in 2016

EMarketer recently featured seven ecommerce companies, big and small, that flourished in 2016.

Two of them were purchased by other corporations and featured in InfoStream articles.

What do they have in common?

It wasn’t necessarily corporate revenue that made Dollar Shave Club and Jet.com valuable commodities, it was a strong subscriber base and established online service delivery.

More and more corporate acquisitions are being based on a different value system.

The shift of consumers to mobile purchasing, growth of ecommerce and social innovation are having a profound affect on corporations.

It is predicted that in the next three to four years the scramble to acquire subscribers and services that add to the core values (purpose) of large brands will intensify.

Other companies highlighted by EMarketer include wholesale shopping club Boxed.

Rated number one, Boxed (founded in 2013) expects revenues to surpass $100M for 2016, up from $8M just two years ago.

Mattress retailer Caspar, predicting to double their revenue to $200M this year, and MeUndies, on track to sell 5M pairs in 2017, were two other ecommerce power players featured by EMarketer.

Learn more about these top ecommerce companies - read the entire article.

BUSINESS - PetSmart's New Website Boosts E-Commerce

PetSmart Inc. has launched an improved, mobile friendly website with new features including same-day delivery and subscription services.

Many see these improvements in e-commerce as a direct step to compete with companies like Amazon, which has been dominating the US online pet food market.

Forrester Research has predicted the fastest online category growth will continue to come from the pet category, which prompts brick and mortar stores to step up their online retail game.

The new site includes features such as one-page checkout and new tailored delivery options like recurring subscription-based shipping, scheduled delivery and same-day delivery.

All the improvements are aimed at letting pet parents shop how, when and where they wish, which demonstrates a customer-centric approach that should benefit the company.

“Our omnichannel strategy is aimed at giving pet parents options tailored to their needs and desires. We look forward to seeing their response to the new site with its new user experience and commerce-meets-content approach,” Eran Cohen, chief customer experience officer, PetSmart said in a release.

The new shipping options are provided by last-mile logistics provider, Deliv, a company that powers same-day delivery for over 4,000 businesses.

By mid November, PetSmart customers located in 17 of Deliv's markets can shop on PetSmart.com and select scheduled delivery on the product page for anything from 50 pound bags of dog food to bulky containers of cat litter or a fun pet fashion accessory like a hoodie, collar or leash, as well as seasonal holiday items.

BUSINESS - Jet.com Adds an Edge to Walmart's Online Presence

Walmart’s purchase of one-year-old startup Jet.com is an important acquisition for the company, which has consistently underperformed in the ecommerce market.

The purchase, for over $3 billion USD, gives Walmart access to Jet’s intentional focus on customer experience and their commitment to keeping the customer experience “delightful.”

As Jet’s director of research, Ben Babcock, told Forbes in an interview prior to the acquisition, “The customer experience … must be seamless, consistent, and delightful from end to end.”

Jet has invested significant time and energy into user testing, and staying connected to their customers.

For consumers who may be avoiding Walmart’s current ecommerce offerings because of existing preconceptions about the brand, this refined focus on customer experience may be enough to sway them away from ecommerce giant Amazon and towards something new and exciting.

According to eMarketer, Walmart’s 2016 projected ecommerce growth was only 9.4%, significantly below the projected US retail ecommerce average growth of 16%.

Acquiring Jet gives Walmart access not only to Jet’s customer experience but also to their infrastructure – their warehouses, staff, and shipping operations – but also the brands that Jet has been able to attract and their more youthful, urban profile.

Bringing Walmart and Jet together has the potential to help both businesses.

They’ve each struggled to compete with Amazon, and both have an interest in tackling the online retailer’s market supremacy. Jet has focused on gamified pricing and a fun user experience in their competition with Amazon, while Walmart has relied on their significant brick-and-mortar presence.

By combining forces, it may be possible for the two companies to make a dent in Amazon’s market share.

Despite the hopes for their combined strengths, both brands will remain distinct. Jet’s CEO and co-founder, Marc Lore, will take over Walmart.com in the US and will also continue running Jet.com.

Keeping the brands distinct is one way that both companies can continue to leverage their unique brands while benefiting from each other’s strengths in quieter ways.

Expanding both brands individually and moving more slowly to an integrated public profile will give customers time to adjust, and hopefully provide Walmart with a larger online footprint in the next year.

By Tiffany Sostar

Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

ACQUIRE - Unilever Buys ECommerce Startup Dollar Shave Club

Dollar Shave Club's 3.2 million members generate US$1 Billion Cash (US$312/Member)

According to a twitter report by Forbes reporter Ryan Mac, Unilever, the $130 billion dollar multinational consumer goods company, is paying $1 billion cash, for the startup Dollar Shave Club. While the details are still emerging, this transaction is likely to be the third largest ever in e-commerce. The other higher dollar transactions are zulily and Wayfair.


Venture capital providers Venrock, along with other other well known investors Andreessen Horowitz, Battery Ventures, and KPCB, have provided the capital for Dollar Shave Club’s growth. However, Battery Ventures and KPCB won’t benefit from the sale to Unilever since they exited earlier. The others are likely to see a true venture return of up to 10X investment.

Dollar Shave Club (DSC) has grown to become a dominant player in the male grooming business since its founding in 2012. Although best known for a shaving service, DSC also markets wash, skincare and styling products to its male club members. The company's revenue was $153 million in 2015 and there is an expectation it will top $200 million during this fiscal period. Other published information suggests this transaction will represent the largest multiple for a e-commerce startup in history.

DSC's 3.2 million members should be a valuable addition to Unilever, increasing the company’s exposure to a growing demographic as well as adding valuable client data. Unilever offers Dollar Shave Club the ability to plug into existing international marking and distribution channels.

Apparently, Unilever does not have plans to make any executive changes meaning DSC’s CEO, Michael Dubin will continue into the future.

BUSINESS - Watson-powered Mobile Shopping App Launching in April

The first mobile app to put Watson, the powerful artificial intelligence computer owned by IBM, to use in the retail environment will be launched by outdoor clothing and supply company The North Face.

Users can speak to the Watson-powered shopping assistant who will ask questions to determine what product meets the shopper’s needs.

Watson asks questions like where you will be using the product, what time of year (determines temperature/climate), what activities you will engage in and if you are male or female. The answers you supply will help the app narrow down items to the most appropriate for your personal needs.

Since North Face began testing in November, 50,000 have used the app. “Users who provided feedback rated the experience a 2.5 out of 3, and 75 percent said they’d use it again,” Cal Bouchard, senior director of e-commerce at The North Face, told VentureBeat. The technology generated a 60 percent click-through rate to try product recommendations.

The app still has some bugs, but artificial intelligence learns over time so it will only become more accurate.

While there are many online shopping sites, such as Amazon, this app will be the first to have a unique personal touch through innovative technology. No one else is using Watson with natural language question and answer.

“We think this is game-changing,” said Bouchard.

How can this technology expand into the pet industry? Imagine it helping consumers choose the right pet food, appropriate toys for individual dogs, or training tools.

Read more: The North Face to launch insanely smart Watson-powered mobile shopping app next month

PetSmart Acquires Pet360

PetSmart has acquired online pet products retailer and integrated media company Pet360 for $130 million to ramp up its e-Commerce business. The transaction is expected to close later this month. 

PetSmart President and CEO David Lenhardt believes the acquisition will help give PetSmart a leg up in the online market as its customers will be provided with seamless access to the Pet360 e-Commerce site, digital media programs and content sites. 

"We are delighted to announce our planned acquisition of Pet360, the most comprehensive online resource for pet parents," said Lenhardt. "Although online sales are still a relatively small part of the pet products industry, we expect them to become a more relevant source of revenue in the future. Combining PetSmart's unparalleled strengths in traditional outlets with Pet360's established digital footprint will perfectly position PetSmart to capitalize on this evolution and serve pet parent's across all distribution channels." 

READ MORE: PetSmart Acquires Pet360, Increases Net Income By 5.1%

Industry Canada Proposes Regulations for Electronic Commerce

NEW ANTI-SPAM RULES
Industry Canada has published proposed Electronic Commerce Protection Regulations under "An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act".

The Regulations are administrative in nature, and: provide definitions for "personal relationship", "family relationship", "membership", "club", "association" and "voluntary organization"; and set out conditions for obtaining consent on behalf of third parties.

Comments are due 60 days from publication in the Canada Gazette.

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