Incumbents Versus Challengers: Ecommerce Platforms - Episode 211

DESCRIPTION

This week on the eCommerce Braintrust podcast, we’re talking about the incumbent and the challengers in ecommerce marketplaces and platforms. Kiri Masters gives a brief history of the changing relationships between Amazon, Walmart, Shopify and others, as well as their changing statuses in the marketplace. She tells the story of CartHook to illustrate her point about challengers, rebels, incumbents and disintermediation. Then, she gives advice on how to find your place in ecommerce and introduces the Bobsled research report entitled How Big Should Your Amazon Channel be?

Make sure you tune in to find out more!

“What about when the noble, good guy starts to gain so much power that they become the bully at the end of the day?”

— Kiri Masters

KEY TAKEAWAYS

Shopify has a brand that revolves around the concept of “arming the rebels,” claiming that there is a battle of good and evil raging in the world of retail. Who are the rebels fighting against? Amazon and Walmart, the incumbents, and also more broadly speaking, the status quo of doing things, of selling items online or in brick-and-mortar stores, of marketing, of ecommerce shopping engines.
In 2020, Shopify launched an app made out to be a bit more than upgrade to their parcel tracking system; pundits rushed to presume it would become a front-end marketplace of all the Shopify merchants, and take on Amazon.
The good guy gaining power and becoming a bully is a story unfolding with a podcast called Bootstrapped Web. One of the hosts is Jordan Gal, co-founder of an app called Rally and founder of a company called CartHook, a checkout app for Shopify’s platform.
Carthook was not initially allowed onto Shopify’s native platform for a long time after reversing their decision and allowing it. However, within a few months, Shopify stopped allowing CartHook to get new customers, essentially shutting them down.
Jordan Gal launched a new startup called Rally, which is part of a headless commerce ecosystem with a new message around disintermediation: merchants should adopt the headless commerce approach, where you can choose best-in-class tools that can be connected together instead of a single platform.
Once, Amazon was a challenger and Walmart was the incumbent. Amazon was small enough to be the web retail partner for Target, before they realized that Amazon was wolf in sheep’s clothing for them and started to build their own platform.
In recent years, merchants have been rooting for Walmart to disintermediate Amazon, to build a platform that would challenge FBA, wanting more balance in the competitive landscape.
In September 2021, Walmart started to reveal its platform merger, integrating Walmart.com with its in-store pickup program so that the online experience is seamless for a shopper.
There have been changes to Walmart.com that are moving it forward, including a DSP advertising platform which was launched earlier in the year.
The only certainty is that there will be a challenger to Amazon even if it is within Amazon itself.
Amazon is having regulatory issues, as well as questions regarding the quality of products, and has a difficult path to realizing what is junk and what is a legitimate challenger brand.
The external challengers could be Target, Walmart and Kroger that have been investing in ecommerce capabilities, Instacart and Gopuff that are growing fast, or Mirakl and Marketplacer as niche marketplaces coming to life.
What does this mean for my future? It’s important to keep your finger on the pulse as an early-warning system on the viability of different platforms. A good resource for that are episodes 155 and 207 of Ecommerce Braintrust.
How do you know if you’re investing the right amount in each channel and platform? Are you over indexing? Bobsled is doing research on this issue, including what factors drive maturity with an amazon channel. The hypothesis is that the more mature you get in strategy and execution, the closer you’ll be to the Amazon index number. The findings of that research should be coming out in the first week of December 2021.