Welcome to our new E-Commerce Insider newsletter, a morning email with the top news and analysis on the e-commerce industry, produced by BI Intelligence.
GOOGLE EXPANDS SAME-DAY DELIVERY: Google announced that its same-day delivery service, called Google Shopping Express, will soon be available in Los Angeles and Manhattan. Shoppers can go to google.com/express and order items from Google’s participating partners, which includes major retail brands such as Costco, Target, and Walgreens. “It’s a big team and a major multi-year commitment for Google,” Tom Fallows, head of Google Shopping Express, was quoted as saying in The New York Post. Fallows’ comment implies that Google will be rolling out the service to more cities.
The same-day delivery space is suddenly growing crowded. Google’s announcement comes just days after Amazon said that its same-day delivery service would be available in Los Angeles. Along with Amazon and Google, eBay, and Uber are all operating same-day delivery in several large cities in the U.S., and we don’t foresee a world where we need all those delivery services — not to mention those offered by pre-existing shipping giants such as FedEx. The economics of same-day delivery aren’t very forgiving. It’s expensive to cobble together courier services in metro areas, and difficult to eke out gains through fees and added volume. We expect a couple of these entrants to bow out if they fail to gain market share.
TARGET CEO STEPS DOWN: Target CEO Gregg Steinhafel has stepped down, the retailer announced today. Late last year, Target was the subject of a massive hack that saw 40 million customers’ credit card numbers exposed to data thieves. Steinhafel has been CEO for six years but has been with the company for 35 years. Target’s announcement made explicit mention of the data breach in the announcement: “[Steinhafel] held himself personally accountable and pledged that Target would emerge a better company.” Steinhafel will also step down from his roles as president and chairman. Target’s CFO John Mulligan will take over as interim CEO.
Steinhafel’s departure appears to be part of a well-orchestrated series of steps by Target to rehabilitate its security systems and its public image. In recent weeks it has also hired a new CTO, announced plans to migrate to payment terminals that accept the new more secure EMV credit cards containing a microchip, and announced its commitment to the more secure chip-and-PIN credit card security standard for EMV. Customers have to enter a PIN number to complete purchases rather than sign a receipt.
ONE KINGS LANE APPOINTS CEO: Online boutique One Kings Lane has named Dinesh Lathi as its new chief executive officer. Previously, Lathi was the company’s chief operating and financial officer. He has worked for One Kings Lane since 2011, and prior to that he spent seven years at eBay where he served at vice president of the company’s North America operations.
Former One Kings Lane CEO Doug Mack left after four years to head a sports website, which led some to speculate that the e-commerce retailer was facing some headwinds.
E-COMMERCE EXECUTIVES ON THE MOVE
Clothing retailer Lands’ End has hired Steven Rado as its new chief marketing officer. Previously, Rado was senior vice president of customer strategy for Office Depot. (Internet Retailer)
Appliance and electronics retailer HHGregg has hired Troy Risch as its new chief operating officer. Previously, Risch worked at RadioShack where he was executive vice president of store operations. (MarketWatch)
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AMAZON PROMOTES SHOPPING HASHTAG ON TWITTER: Amazon is asking its customers to use the hashtag #AmazonCart on Twitter so that products mentioned in tweets will be added to that person’s shopping cart, according to Pando. To participate, shoppers must first connect their Twitter account to Amazon. Then they can reply with #AmazonCart to tweets containing an Amazon product link. This seems like an awful lot of steps just to add an item to a shopping cart — and shoppers will still have to go to Amazon.com to make a purchase. Past efforts at a similar Tweet-to-purchase feature, like one by Amex, have not seen wide adoption. The one case where it might be helpful to use #AmazonCart is when a shopper sees a product mentioned on Twitter and wants to make a spontaneous purchase. But even then, most people will probably want to see photos of the product and do some research before making a purchase.
GOOGLE ACQUIRES RANGESPAN: Google has acquired retail analytics startup Rangespan, according to VentureBeat. Rangespan helps retailers predict which products and services shoppers might want in the future. Analytics that generate personalised future purchase recommendations to shoppers would be valuable both for Google search and for mobile payments schemes. For example, the Google Wallet app could generate recommendations after every completed purchase, or on an ongoing basis.
Canadian online marketplace Shop.ca has raised more than $US28 million in a new round of financing. The company says it will use some of the funds to recruit more merchants to sell on its platform. Currently, more than 2,000 merchants sell merchandise on Shop.ca, ranging across 28 different product categories. (Internet Retailer)
J. Crew is reportedly launching a budget-conscious chain called J.Crew Mercantile, according to The Wall Street Journal. Prices are expected to be similar to those found at an outlet store, but the line of clothing will be unique to the Mercantile brand. While Mercantile could help J. Crew reach different consumers, it could also backfire on the company and end up cannibalising the brand — pulling J. Crew’s own customers away to shop at a lower-cost store with a similar product line.
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