Last month, Meta lost $232Bn in market value after releasing its first-quarter earnings report, which displayed a sharp decline in profits. It is the single biggest one-day decline for a stock in U.S. history. The reasons for this drop are manifold: the rise of TikTok, plummeting daily active users, and inflation are partly to blame. Yet Zuckerberg also cited Apple’s ad-tracking changes, introduced a year ago, as costing Meta upwards of $10Bn this year alone.
It’s a seemingly small change: in an effort to respect user privacy, Apple users are now encouraged to choose whether or not they’d like to be tracked by the apps on their phone. But it has a huge effect on how companies run targeted ad campaigns. Meta criticised the move, arguing that SMBs will be most hurt by these changes, but Apple’s decision is clearly wreaking havoc on their investor earnings report. $10Bn dollars worth of havoc.
When we discussed the report as a team, it struck us that another way to look at this number is that there is now an additional $10Bn on the table for early-stage founders in the e-commerce tooling space. This, combined with the pandemic-fuelled rise of e-commerce which is expected to grow 16% to $6Tn by 2025, creates game-changing opportunities for innovation.
At Seedcamp, we’ve partnered with several exceptional companies across the lifecycle of a merchant’s and customer’s e-commerce journey, from the pre-sale to sale and post-sale function. Within e-commerce enablement, we are particularly excited about three key trends: 1) building communities to own customer acquisition, 2) personalising customer journeys, and 3) bolstering the post-sale experience.
1. Building communities to own customer acquisition
Due to Apple’s increasing data privacy restrictions, and what that implies for customer acquisition costs ($10 on Facebook Ads just doesn’t do it anymore..), today’s e-commerce players are looking for alternative ways to acquire and strengthen their engagement with customers. One method is taking a DTC approach to go-to-market. Merchants are focusing their efforts on building communities and movements around their brands. Seedcamp portfolio company Early Majority, a technical outerwear company, is doing just that via an active newsletter, member-only items, and content around key trends in fashion and sustainability. By owning customer acquisition, Early Majority has full control over how customers understand and interact with the brand. There are a series of startups working on the tooling behind this massive trend: automating data-driven marketing playbooks, building out better referral programs, enabling brands to share in the success of a company via tokens, the list goes on…it’s an exciting ecosystem that we are watching closely.
2. Personalising customer journeys
In line with reducing CAC by owning more of the customer acquisition strategy, we are seeing a burst in innovation around the personalisation of e-commerce. Join, a Seedcamp portfolio company we backed at the end of 2021, is one such example. The CMS lets merchants create, distribute, and monetise web stories. Think IG stories but for the web. Join is already in the hands of Fortune 500 companies who are seeing uplifts in conversion, monetisation, and engagement due to stories. Join, and many other tooling companies like it, are helping merchants create more holistic and experiential customer touch-points, which in turn create a more loyal and active base of supporters.
3. Bolstering the post-sale experience
Merchants spend millions of dollars getting customers to the “browsing” stage of shopping. They optimise for ease of purchasing, not even requiring full payment of a product before the customer walks out the door. But what happens after a customer orders an item? Apart from getting email listservs that land in the “Promotions” section of one’s inbox, the post-sale experience is limited. Package tracking is table-stakes, rewards programs seem outdated, warranties are forgotten, and customer support frequently disappoints. A beautiful post-sale experience can make or break customer loyalty, and in an environment where acquiring customers is costly and more competitive than ever before, it’s essential to maintain this loyalty.
We’re excited for the next swath of companies building upon these, amongst other, trends with e-commerce enablement. If you’re an ambitious founder building something game-changing, tell us about it here or reach out to me directly at kate@seedcamp.com; we’re excited to chat with you 🙂
A snapshot of our e-commerce enablement portfolio to date:
- Antavo: Contest and loyalty software for e-commerce and retail brands
- Divido: Buy anything online in interest free instalments.
- Findify: The intelligent search solution for e-commerce using data science and machine learning to increase revenue.
- Fraugster: Using AI to eliminate e-commerce fraud and increase customers’ profits.
- Fullview: Customer experience control centre
- Grover: Reinventing consumption with a simple, on-demand subscription model for all the products you love.
- Join: Creating professional stories for brands
- Klasha: Simplifying borderless payments for commerce in Africa
- Klump: BNPL for Africa
- Medusa: API-first commerce engine built for fast-growing businesses
- Minubo: eCommerce Intelligence in the Cloud. Your online shop’s data hub with all key metrics
- Nuji (acq. by Klarna): Nuji is a platform to discover the world’s most trending fashion and lifestyle goods
- Pointy (acq. by Google): The simple way for local shops to get online and attract more customers through their door
- Poq: The App commerce platform
- Primer: Supercharging payments through a unified API
- Profitero: Global Insights for retailers and brands
- Surfboard: Data-powered tools to help orchestrate customer service teams
- TomatoPay: A simple, QR-code based payments and invoice app for businesses and sole traders
- Uncapped: Fast, flexible loans to help SaaS and e-commerce businesses grow
- Vidjet: Smart pop-up videos for the web
- Vyne: Open Banking-enabled payments for eCommerce
- Yavin: A one-stop-shop in-store payment solution for European merchants