Memo: BigCommerce and Bolt Unite

There is a 1988 advertisement by Philip Morris that describes the enriched flavor of a brand of cigarettes. It called it a solution with Merit. It begins: “If you can’t join ’em, beat ’em.”

Bolt’s former CEO Ryan Breslow felt slighted by Shopify executives; he’s taken it personally. Now, what appeared to be just a fiery Twitter thread looks more like a strategy backed by Bolt’s board. If you can’t join Shopify in owning the market, beat them by joining its de facto rival. BigCommerce is a platform with distinct philosophical differences. For Bolt, an enemy of an enemy is a friend.

Days after we wrote about Bolt’s bold challenge to Shopify, the checkout company took a further step in taking on the eCommerce leader. Shopify rival BigCommerce and Bolt are partnering to bring Bolt’s one-click checkout to BigCommerce’s merchants.

The move contends with Shopify’s native approach to checkout options. With Shopify, platforms like Bolt and Fast have been excluded from checkout workflows. Shopify is on record as being opposed to alternative checkout options, making Shop Pay the ubiquitous checkout provider. Both BigCommerce and Shopify are approaching eCommerce in different ways: Shopify is a quasi-closed ecosystem and BigCommerce is open-source. Shopify allows non-merchants to use Shop Pay, spreading a core technology outside of its own walls. It’s a way to make Shopify more ubiquitous, even when it’s not the eCommerce provider. BigCommerce lets its merchants choose its own tech providers, meaning its platform employs APIs and external SaaS solutions in a way that Shopify doesn’t.

Bolt immediately jumping into a partnership with BigCommerce is part of its strategy to undermine Shopify, both institutionally and as a brand known for “arming the rebels.” Shopify’s villain is Amazon. With this move, BigCommerce and Bolt position Shopify in the same way. From Monday’s 2PM memo:

It may not work but it’s a gutsy strategy. Bolt is trying to out-rebel the armory of the rebels. The call to action is clear: “Switch to Bolt.” In another fiery thread by Bolt founder Ryan Breslow, he began: Shopify is eating their ecosystem.

Transitioning from a one-click checkout platform to a fully-fledged eCommerce solutions provider is not something that happens overnight; this is why the BigCommerce partnership is relevant. The two align in that they have a common competitor they want to overtake, but there’s also a potential future where Bolt acquires BigCommerce or vice versa. Currently, BigCommerce is worth one-ninth in the public market what Bolt is worth in the private market. See this insight from Business Insider’s report on Bolt and BigCommerce’s partnership:

BigCommerce, for its part, isn’t quite so overt about the competition, with [chief commercial officer Russel] Klein referring to Shopify as “the company whose name shall not be uttered” in an interview with Insider.

As we wrote on Monday, Bolt is rising up to fill the spot Shopify once held as the underdog, the challenger to Big Retail, the platform for the people. In the same way Shopify took on Amazon, one is not likely to actually defeat the other, but with enough differentiation, room will be made in the ecosystem for both. Then, another company will rise up to take on Bolt when its britches get too big for its market cap.

Where BigCommerce fits in is more interesting. Can Bolt arm the rebels in the same way Shopify did by aligning itself with a mainstream competitor? It’s an approach likely born of necessity. Bolt has a big valuation to meet. It doesn’t have time to slowly build a full response to Shopify. BigCommerce has growing revenue but widening losses. With Bolt as a marketing and sales partner, I can see how management at BigCommerce can envision the checkout solution as meaningful value-add beyond the OpenSaaS philosophy that both share. Bolt is excelling in sales and marketing in ways that BigCommerce has not.

The company posted revenue of $64.9 million in Q4 2021, beating analysts’ expectations of $62 million. For the year, the company reported a loss of $76.7 million. Revenue was reported as $219.9 million. And the bet is that together, Shop Pay will be overtaken as the premier checkout solution. This quote by Bolt’s Chief Business Officer was notable:

By having Bolt be that one agnostic player that’s creating this shopper network that works with all payment providers and all e-commerce platforms, it will grow bigger. It will eclipse Shop Pay.

Breslow sees Bolt as the third-generation of commerce enablers, a position shared by a number of headless competitors including its rival Fast. BigCommerce is in position to benefit from Bolt’s gutsy marketing strategy, that is unless Shopify finds a way to counter the partnership first. In the meantime, Bolt hopes to prove that it is the ultimate solution with merit.

Por Web Smith | Editado por Hilary Milnes com arte de Alex Remy

Update: This is something that I learned today. At the time of publishing this, BigCommerce employs over 100 in the Ukrainian city of Kyiv. Men between the age of 18 and 60 have been ordered to remain in the country. The banking system has been disrupted so funds have been difficult to ascertain for many of the employs. CEO Brent Bellm is in an unenviable position, Ukraine is an eCommerce-rich country with top engineers and nearly 10% of the company’s workforce is located within the wartorn country.

Resumo do membro: b8ta Testado

O encerramento das operações da b8ta foi uma perda para a comunidade de varejo, encerrando um esforço valente para mudar um setor de varejo que está evoluindo mais rápido do que nunca. De certa forma, a b8ta tentou recriar a sensação do Soho ou da área de South Congress de Austin em uma única loja. No Neighborhood of Goods de 2018, eu expliquei:

Mas quando você sai dos caminhos de tijolos das ruas do Soho, é improvável que encontre outro lugar igual. Não na recente colaboração da Macy's no Facebook, ou nas lojas b8ta, Four Post ou até mesmo na Neighborhood Goods. Há deficiências dignas de nota em cada uma delas: na maioria dos produtos encontrados na b8ta e na Neighborhood Goods, os consumidores não podem sair da loja com o produto que você comprou.

A b8ta é a mais recente vítima de um setor de varejo que está lidando com as consequências de uma pandemia. O CEO Vibhu Norby disse que a decisão de fechar sua empresa se deveu, em última análise, a negociações fracassadas com os proprietários. Mas não foi apenas a pandemia que forçou a b8ta a fechar suas portas nos EUA em 18 de fevereiro, o que foi anunciado hoje em seu site. Para as marcas digitalmente nativas, o setor de varejo físico evoluiu para além da competência principal do varejista. 

O varejista foi projetado para ser um destino para os consumidores que procuram experimentar marcas da nova era e digitalmente nativas que desejam exposição sem abrir experiências de compras próprias.

A b8ta foi lançada em 2015 como uma loja que servia principalmente para testar produtos de tecnologia de consumo, como alto-falantes e bicicletas ergométricas. Mas a visão da empresa era repensar a relação entre atacado e marca, agindo não apenas como uma loja, mas como um provedor de "varejo como serviço". Nesse sentido, ela fez uma promessa maior para as marcas que vendiam em suas lojas. As marcas pagavam uma taxa à b8ta para aparecer em suas prateleiras e também para ter acesso ao seu software, que fornecia insights sobre a análise do comportamento do cliente, como tráfego de pedestres e tempo gasto em demonstrações. Durante o auge do varejo experimental, que coincidiu com a mudança das marcas diretas ao consumidor para as lojas físicas, a b8ta se mostrou uma parceira promissora. Seu modelo era amigável para novas marcas sem grandes pegadas de loja que queriam testar a recepção do cliente pessoalmente. Ele também atendia aos clientes que gostavam de experimentar antes de comprar e queriam uma seleção selecionada de novos produtos em um só lugar.

Desde 2015, houve uma série de esforços semelhantes por parte de grupos proprietários de shopping centers: A Unibail-Rodamco-Westfield lançou pop-ups em vários shoppings da Westfield; a Macerich tinha projetos para operações semelhantes; a Brookfield também tinha o seu. A b8ta também foi um trunfo para shoppings e lojas de departamentos que buscavam maneiras de gerar novo tráfego de pessoas. A Macy's liderou um investimento na b8ta e usou sua tecnologia em seu conceito Market @ Macy's. À medida que muitas marcas começaram a investir em experiências omnicanal, o varejo experimental passou a ser terceirizado. Elas queriam sua própria presença nos shoppings, queriam ter estoque disponível e um local para processar devoluções.

No entanto, o software da empresa é exatamente o que muitos shoppings precisam para criar estratégias orientadas por dados. O tipo de software que a b8ta estava vendendo está de acordo com o que a Placer.ai diz que os shoppings precisam para se adaptar a uma nova geração. Em seu relatório "Mall Deep Dive" de 2021, a Placer.ai resumiu a necessidade do shopping de se adaptar à era digital da seguinte forma:

Os grandes shoppings não acomodam dezenas, mas centenas de locatários, portanto, conectar os bancos de dados de inventário de todos os diferentes varejistas exige recursos tecnológicos avançados. Medir o sucesso dessa plataforma é ainda mais desafiador e requer ferramentas que possam sincronizar dados on-line e off-line. Como resultado, embora já existam algumas exceções, a maioria dos shoppings atualmente ainda não possui esse tipo de aplicativo on-line ou canal de comércio eletrônico abrangente.

A própria queda da b8ta foi, em parte, devido à falta de vendas de comércio eletrônico. Quando a pandemia sufocou o tráfego de pedestres - um efeito sentido mesmo depois que as lojas reabriram após os lockdowns - algumas lojas tiveram uma queda de até 98% no tráfego de pedestres após a reabertura das lojas. Esse relatório da Retail Touchpoints mostra um quadro sombrio:

As lojas nunca mais foram as mesmas, mesmo depois de reabertas, de acordo com relatos da mídia; a unidade da b8ta em Houston tinha uma média de 1.000 compradores em um fim de semana típico antes da pandemia, mas caiu para 40 clientes durante o primeiro fim de semana de maio de 2020, de acordo com o Protocolo. A loja de Austin registrou uma queda semelhante de 98% no tráfego de pedestres.

Na maioria dos varejistas, suas lojas físicas podem impulsionar indiretamente as vendas de comércio eletrônico. Já na b8ta, as lojas são diretamente responsáveis pelas vendas de varejo on-line. Não havia nenhuma oportunidade de comércio eletrônico em primeiro lugar com a qual a b8ta pudesse contar, pois as lojas estavam fechadas durante os primeiros meses da pandemia. Além disso, o varejista provavelmente enfrentou inúmeros problemas na cadeia de suprimentos que afetaram a seleção e a disponibilidade de seus produtos. Em suma, as forças do mercado, as mudanças de comportamento do consumidor e as preferências da cadeia de suprimentos contribuíram para o fim operacional da empresa.

Mas como uma última tentativa de evitar o anúncio recente, a b8ta teve que tentar uma reviravolta: transformar as lojas em estúdios de vídeo para transmissão ao vivo. Há outra lição nisso. As tecnologias da era pandêmica que se materializaram no mainstream podem ser um ativo, mas não um bote salva-vidas. As vendas por streaming ao vivo não conseguiram preencher a lacuna enfrentada pela b8ta, que acabou se resumindo à decisão de um proprietário de não negociar seu contrato de aluguel, disse Norby à Modern Retail:

"Fomos bastante criativos em toda a Covid", disse Norby. Mas ele concluiu: "provavelmente o prego no caixão foi o tratamento dado pelos proprietários em geral, e se eles sentiam ou não que sua empresa era importante. Esgotamos todas as opções, e isso era o que tinha que acontecer".

O fechamento da b8ta não é uma simples falha de conceito, mas sim um resultado das forças do mercado que consumiram um futuro do varejo que ainda está se delineando. As futuras iterações devem ser sábias e observar: não coloque todas as ações em um único canal, mesmo aquele que você está reinventando. A empresa passou sete anos em fase beta e, nesse meio tempo, o setor passou por grandes mudanças.

Por Web Smith | Editado por Hilary Milnes com arte de Alex Remy e Christina Williams

 

Memo: Bolt’s Gutsy Strategy

It may not work but it’s a gutsy strategy. Bolt is trying to out-rebel the armory of the rebels. The call to action is clear: “Switch to Bolt.” In another fiery thread by Bolt founder Ryan Breslow, he began: Shopify is eating their ecosystem.

Ryan Breslow 🕺 on Twitter: “Shopify is Eating their Ecosystem (thread): / Twitter”

Shopify is Eating their Ecosystem (thread):

Just two days after, in a sponsored article published in Retail Dive on Monday, Bolt challenged Shopify directly. The headline “Has your online shop outgrown Shopify?” insinuates a new direction taken by Breslow and team. It’s now a rivalry stoked by a chairman of the checkout platform now valued at over $11 billion by investors. A click-through link titled “Tired of Shopify holding you back?” drove the message home.

  • top of funnel: viral thread
  • mid-funnel: topical sponsored article
  • bottom funnel: custom landing page to capture interest

Bolt wants to take on Shopify, transitioning from a one-click checkout tool to a full-fledged eCommerce platform. The landing page that Retail Dive sends readers to leaves no question unanswered:

Take back control of your store with Bolt CheckoutOS, the checkout partner that scales with you. Switch from Shopify for a flexible commerce solution and get up to $2M in incentives and marketing funds.

The thread, sponsored article, and the landing pages are all part of the new approach to growth that Bolt is relying on to reach its goals. The $11 billion valuation is hefty, especially given that Shopify competitor BigCommerce is trading at below a $2 billion market capitalization. According to filings, Bolt’s total revenue for 2021 was expected to be between $216.2 million and $216.6 million with a Non-GAAP operating loss of $19-20 million.

The thread headlines a repositioning strategy that may be designed to help Bolt stretch its total addressable market (TAM).

In the viral thread, Breslow says that Shopify copied Bolt when it launched Shop Pay. He also says that Shopify uses its positioning in the market and app store to bring in developers to build solutions for its clients, uses the app landscape as its own R&D and then manipulates app store restrictions to cut off the most popular apps at their knees and recreate the product themselves.

Breslow has become known for fiery tweet storms targeting powerful industry players. His last, which challenged YCombinator, came shortly before he stepped down as Bolt’s CEO (a choice he said was his own). In that thread, Breslow said his Twitter threads were not a marketing strategy. At least in the Shopify case, the tweets accompanied by the sponsored article seem coordinated. Bolt wants to become a Shopify competitor, and this narrative shift around Bolt’s own positioning (while pointing out the weaknesses of Shopify) were clearly planned.

This move to take on Shopify could boost Bolt’s business from one-trick tech company. Bolt’s current valuation underscores just how valuable checkout solutions have become. But to earn its valuation (and eventually grow beyond it) its next chapter has to be bigger. This is the impetus behind its growing value proposition. It now bills itself as a “CheckoutOS.” Bolt isn’t the only company that started in one corner of eCommerce tech and is looking at what other areas it can conquer in order to raise its own ceiling. But becoming the next Shopify is a tall order. Can Bolt achieve it without eventually using the same tactics as Shopify to grow users?

Right now, Bolt is suggesting it can be a home for both growing businesses as well as app developers who may have been burned by Shopify. The bottom line of Breslow’s argument is that eCommerce should be open-source. Bolt sees itself as a leading candidate in the version of eCommerce that is now inhabited by companies like BigCommerce, Magento, and Commerce Cloud – where commerce scale is decentralized because of open platform access. It wants to not only compete with Shopify, but replace it with a new model. However, Wall Street is still catching up to Shopify.

Shopify is down 57 percent over the trailing three months. Unlike Amazon, who found ways to calm the Street while reinvesting in future growth, Shopify has not been able to weave the same “we’re just beginning” narrative. Shopify needs quarterly growth to justify its market cap and to achieve that, it will have to own more and more of the ecosystem until the eCommerce industry matures beyond its currently nascent stage. Wall Street sees online retail as an industry in post-COVID retraction, further agitated by Apple’s privacy policies impacting the Facebook advertising that many retailers relied upon. Look at how reliant Shopify is on Facebook’s marketing prowess:

Speaking anonymously (with permission to share his thoughts), a Shopify executive contested my view that product decisions are made with the public market in mind. No one in Shopify’s leadership “optimizes for Wall Street,” he said. Rather, the Shopify executive explained that simplicity is prioritized. Products are concluded because they are not good for merchants, consumers, or the ecosystem as a whole.

A product manager also reached out to explain the unique role of checkout within the Shopify ecosystem. End to end control is critical, it’s “the most important piece of commerce.” And as Shopify continues to scale, the company wants control over the most critical point of the consumer workflow.

So while Shopify isn’t publicly weaving the narrative that its Amazonian rival did in its first 15 years, the management team is still playing by the same book: ruthlessly thinking for the long-term even throughout global and societal changes.

The ultimate irony of Bolt’s new strategy of antagonizing Shopify (like Shopify antagonizes Amazon) is simple. Shopify is slowly becoming more like Amazon to capture more share of eCommerce growth. If Bolt wants to compete against Shopify in other platforms, they will eventually adapt the same practices: picking and choosing between who gets to work within its ecosystem. When Bolt went after YCombinator, I wondered if the leadership team sanctioned the controversial statements made by Ryan Breslow. By taking aim at Shopify and backing it up with sponsored articles and thematic landing pages, it’s clear that the new marketing and public relations strategy has been sanctioned by the company. It has elevated Bolt in the eCommerce discussion. It’s set the stage for merchants and developers to see Bolt through the lens of larger aspirations.

Breslow sees Bolt as the third-generation of commerce enablers, a position shared by a number of headless competitors including its rival Fast.

But while the marketing strategy seems effective thus far, scale is a risky proposition. As Breslow correctly notes, there is a “success ceiling.” To break through the glass, you may end up making as many enemies as you do partners. If Bolt succeeds, it will have its own viral threads from younger, ambitious entrepreneurs to contend with. They’ll talk of the next generation and the right way to do things. And if they’re lucky, they’ll see the success ceiling too and adjust their strategies accordingly. It may lead to a bit of compromise. It may not work but it’s a gutsy strategy.

Por Web Smith | Editado por Hilary Milnes com arte de Alex Remy e Christina Williams