The headlines first:
But behind this gloom, there are stories of massive ambitions all pinned on the ability of the consumer to spend. While the macros play out as they will, let's look at some of the recent moves by these players and the non-obvious driving factors.
There are many motivations.
Prime users will soon be able to discover and buy from merchants that are not part of the Amazon marketplace. It's being touted as a reach for merchant access and data. But there is also short-term pain alleviation. Amazon doubled its fulfillment network capacity that it had built over 25 years in just 24 months, in response to the pandemic-driven consumer demand. That demand is waning for various reasons. 'Buy with Prime' is a short-term answer to the fulfillment supply glut that pulled Amazon's earnings down. This year's 'Prime Day' and 'Holiday season sales' will be featuring 'Buy with Prime' in the forefront because fulfillment cost management depends on them.
Bolt's trouble with Shopify is well-documented now. Shopify's clunky checkout experience is also well-known in developer circles. But it's not about the checkout experience per se. Owning checkout is the way Shopify gets hold of consumer information. This first-party data packaged as 'Audiences' is necessary to run 'look-alike' targeting on Facebook – a platform that every small eCommerce merchant depends on, to win customers profitably. Cut that oxygen, it threatens the survival of the merchants and the key feeder line for Shopify's revenue funnel. So checkout is as strategic for Shopify as it is for the checkout companies.
Even with the owing of checkout experience and launching 'Shopify Audiences', Shopify cannot hold the ground for long against 'Buy with Prime'. Merchants will need as many options to win customers as there are. Many of Shopify's merchants won't advertise. For them, 'Buy with Prime' presents a no-brainer channel (provided, that Amazon opens up the program without restrictions on merchant size).
Affirm is an embedded consumer financing product that happens to offer BNPL loans among other things. The ultimate game for Affirm is to replace card networks and offer a more granular embedded financing option down to underwriting specific SKU-level transactions for a uniquely identified shopper. By doing so, Affirm makes it a win for brands, merchants, and the shopper.
Ultimately, Affirm is a personalized product discovery marketplace – one that is aligned with shopper tastes and risk profiles. No financing product is able to do it at the depth and scale Affirm can. Affirm is a 'Shopper-Merchant-Brand' network that does not exist today.
What other non-obvious plays do you see and from whom?
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