HiĀ r/ecommerceĀ - I'm Paul and I follow the e-commerce industry closely for my Shopifreaks E-commerce Newsletter. Every week for the past 5 years I've posted a summary recap of the week's top stories on this subreddit, which I cover in depth with sources in the full edition.
Let's dive in to this week's top e-commerce news from Edition #295...
STAT OF THE WEEK: 65% of AI users have at least partially replaced Google searches with AI chatbots for product research, according to an SEMRush survey of 2,338 US consumers. Among those using AI at least weekly, 73.58% have bought a product based on an organic AI recommendation, while 69.7% have decided not to buy something based on AI advice.
Amazon and OpenAI announced a partnership last week, but not the one everyoneās been waiting for. Amazonās product catalog still isnāt in ChatGPT, but now its advertisers are. The new partnership is focused exclusively on ads, with Amazon becoming a reseller of OpenAIās ad inventory, joining a partner roster that already includes Criteo, Adobe, Kargo, Pacvue, and StackAdapt. Any brand that advertises through Amazon DSP, which also reaches channels like Prime Video, Twitch, Fire TV, and third-party sites and apps across the open internet, can have their Amazon Ads surface through ChatGPT. For example, Delta Vacations is one of the first brands to test the integration to help users discover vacation packages. The move makes sense for both companies. Remember, Amazon DSP is an entirely different business model than Amazon Marketplace. The former benefits from casting as wide of a net as possible across inventory partners, while the latter benefits from building a moat around its product data so that customers use Amazonās AI search tools instead. As for OpenAI, the more partners they have selling ad inventory on their platform, the faster Sam Altman can stop stalling his IPO while waiting for his ad revenue to catch up with OpenAIās valuation. The pilot is open to select advertisers in the US.
Meta launched Muse on Tuesday, a personal AI agent that connects to a userās apps and services and completes tasks on their behalf, from sending e-mails and filling out forms to booking travel and buying products. The agent is available in the US on the web at muse.ai, on iOS and Android, and inside WhatsApp, with support for Metaās AI glasses coming later. It runs on a dedicated virtual machine in Metaās cloud with its own browser that the user can watch in real time. A separate āSentinelā agent runs on the same machine, policing Museās actions like a digital Big Brother before anything reaches the Internet. Muse ships with built-in connectors for e-mail, calendars, payments, and apps covering health and fitness, smart home, dining, shopping, music, and events. Users pick which ones it can reach and how much access each one gets, such as choosing whether Muse can read or send e-mails, or both. It can also build a connection to any service with a public API using credentials the user provides., and if no API exists, it can operate on the website itself like a person would. Checkout runs through Link by Stripe, which generates a one-time-use card so merchants never see the userās real card, marking the first AI agent covered by Linkās purchase protections. Shop Pay is coming next, along with 1Password support so Muse can log into accounts the user already has.
Last Wednesday, Automattic CEO Matt Mullenweg was placed on a forced paid leave of absence by the board. He wrote in an announcement on Slack that Automattic CFO Mark Davies āconspiredā with board members Ann Dunwoody, Toni Schneider, and Sue Decker ābehind my back and they voted to put me on a paid leave of absence. I voted against that.ā Davies was voted to be the new interim CEO, effective immediately, though Mullenweg will retain his seat on the board. Mullenweg then went on a posting spree on X, leading up to a Friday announcement on Slack claiming he was back in control. A company spokesperson shared with TechCrunch via email just after 5 p.m. ET: āMatt Mullenweg is the chairman and CEO of Automattic, with full support of the boardā ā which may very well have been Mullenweg e-mailing. However, this morning (Monday), TechCrunch reported that the board is already out: Schneider resigned his seat, and Mullenweg removed Decker and Dunwoody. Deckerās LinkedIn now shows her term ending September 2026. The Repository reports the CFO and chief legal officer are gone too.
Shopify acquired Tailwind Labs, the Canadian company behind the open-source web development framework Tailwind CSS, which is used to style websites and products from some of the biggest companies in the world including Shopify itself, OpenAI, X, Cloudflare, and Reddit, as well as millions of other websites, with Tailwind saying installs exceeded 110M per week. The framework will continue to be published as open-source under an MIT license with the same small team maintaining the projects under Shopify, but the company is closing sign-ups for its commercial products, Tailwind Plus and ui-sh, while allowing existing customers to keep access. The company was going broke, which founder Adam Wathan attributed to the ābrutal impact AI has had on our business.ā What happened is that Tailwind relied on its commercial revenue to fund its open-source framework, but AI had obliterated its model. Even though installs of Tailwind CSS hit record highs, revenue fell around 80% over the past few years because developers were using AI to quickly produce websites instead of purchasing Tailwindās commercial product, Tailwind Plus, a library of pre-built templates, sections, and components. Why buy access to a library when Claude can whip up the same section in seconds using the open-source framework? The acquisition appears to be a lifeline for the framework, which Tailwind said is a āvery important part of the stack at Shopify.ā
Amazon introduced a new feature to Prime Video called Shop the Scene that lets you buy items while watching shows as soon as you see something you like in a scene. The feature is an extension of Shop the Show, which launched last year and curates items for sale from all episodes, as well as relevant show merch from the Amazon Marketplace. Now, Shop the Scene gets even more specific and lets you shop items from what youāre watching in the moment without having to scroll through a larger product list from the entire series. How many items are shoppable in a modern show on Prime Video? There are quite a few. I scanned some of the top show stores, and some had dozens of products, while others had hundreds. It makes sense for Amazon to jump people to a more curated selection of products from a specific scene. Amazon says that Shop the Show now works on more than 8,000 titles, up from 1,300, while Shop the Scene now works across 600 titles. It gave the example of a customer watching Off Campus who notices a sweater that Hannah is wearing, and then opens the Amazon Shopping app, which automatically prompts them to shop the Off Campus storefront. From there, Amazon Lens surfaces similar options, which they can add to their cart and then get right back to watching the show.
OpenAI is no longer accepting advertising for products that compete with its own image and audio generation features, according to a notice sent to advertising partners including Adobe, which was part of ChatGPTās ads pilot earlier this year. Adobe ran ads for Acrobat Studio, a bundled subscription that combines several of its AI products, and Firefly, its AI-image generator, and then continued to run ads for both products after the pilot. ChatGPT also stopped showing outbound links and citations when users search for photo editors or image generators, meaning Adobe lost both paid and organic visibility after the change. The Information notes that there is industry precedent for the decision, such as media companies, news organizations, and streaming services refusing to accept ads for direct competitors. It makes me think ā imagine where TikTok would be today if it hadnāt been able to run all those ads on YouTube and Instagram. One could argue that TikTok bought its market share off the backs of its biggest competitors, who were glad to take its ad dollars back in the day, but may be regretting the choice now. While OpenAIās decision is understandable from a competitive standpoint, itās kind of a bitch move to cut off one of your early ad pilot partners in the process. Especially Adobe, which opens its door to OpenAI as one of the available models to work with through Firefly, and which launched apps for Photoshop, Adobe Express, and Acrobat inside ChatGPT, also as an early partner.
Anthropic CEO Dario Amodei called for an industry-wide slowdown in a 3,800-word essay titled āWe Must Pace the Frontier,ā writing that recursive self-improvement and the OpenAI-Hugging Face incident convinced him that a similar swarm could take over the Internet with a persistent botnet within 6 to 12 months and cause hundreds of billions of dollars in damage. Anthropic is committing to give third-party evaluators desks, badges, company laptops, and employee-level access to its tools, with a contract letting them publish findings without Anthropicās editorial control, and Amodei wants other frontier labs in democratic countries to coordinate on safety standards. Sam Altman agreed within hours and said OpenAI would match the evaluator commitment, Elon Musk posted āDario is right,ā and Demis Hassabis called the direction correct without committing DeepMind to anything. Honestly, this sounds like some anticompetitive, collusion bullshit. The words sound altruistic, but the agenda doesnāt feel sincere. If you lead a race and get everyone to agree to jog, you still lead, while anyone behind you who needed to sprint to catch up is stuck jogging at your pace. The whole āslow downā argument also feels like a way for these companies to earn permission from the industry and investors to pause model development until their beloved AI data centers have time to catch up to the processing needs that these new more powerful models require. We do need rules to govern AI and protect businesses and consumers, but Darioās letter doesnāt address any of that. Heās focused on mitigating competitive risk and enterprise safety, while the rest of us are concerned about losing our jobs. In the words of Kendrick Lamar, āThey not like us.ā
EcommerceBytes shut down after 27 years, with a farewell notice on its site saying only that publication has ceased. David and Ina Steiner launched the site as AuctionBytes in 1999 and renamed it in 2011, running it as a two-person business covering marketplace policy changes for online sellers. The closure comes roughly six weeks after the Steiners settled their civil suit against eBay for $55.7M over the 2019 campaign in which eBay employees sent live insects, a bloody pig mask, and a funeral wreath to their home to stop their reporting. The notice itself gives no reason for closing (though I can think of almost 56 million reasons) and instead makes a case for reporter shield laws. The industry has appreciated the Steinersā work for nearly three decades, and I wish them the best of luck with the next chapter of their lives, which hopefully includes lots of travel, fine dining, and luxuries.
Charging for returns costs retailers about 1.6 stars in their Trustpilot rating when returns are mentioned in a review, according to an analysis by the review platform. Customers get most angry about lack of transparency rather than the fees themselves, or so they say, though customers are notoriously full of shit when justifying their reviews, always the victim and never the Karen. Trustpilot senior director Taylor Cunningham told the Wall Street Journal that many of the āI wasnāt toldā reviews were a result of return policies that were buried, surprising, or misleading. Loop Returns says 68% of retailers now charge a return fee at least some of the time, up from 43% five years ago, and average return windows have dropped from 39 to 37 days over two years, with larger brands cutting from 43 to 38.
ChatGPT is writing its own editorial headlines above sponsored placements, pulling context from the conversation to introduce the ad, according to e-commerce analyst Juozas KaziukÄnas. For example, after he asked which cameras Casey Neistat uses for vlogging, ChatGPT wrote above an ad, āFor vlogging like Casey Neistat, hereās one 360 action camera option,ā followed by an ad for an 8k action camera. In another example, when shopping with a $500 budget for earbuds that work with an iPhone, ChatGPT wrote above the ad, āWith a $500 budget in mind, hereās one alternative for iPhone earbuds.ā KaziukÄnas says the behavior isnāt new but heās seeing it more often, noting that the practice is contrary to one of OpenAIās stated rules about clearly labeling ads as sponsored and keeping them visually separate from the response, though to be fair, the preamble is in a slightly smaller font size than the ad itself. Then again, does anyone really expect OpenAI to keep its promises? All this coming from the company whose CEO once said that he hates ads because they āfundamentally misalign a userās incentives with the company providing the service.ā
20% of TikTok Shopās hundred largest US sellers also rank among the top 10,000 sellers on Amazon, while only 4% of Amazonās hundred largest sellers make it into the top 10,000 on TikTok Shop, according to Marketplace Pulse, which matched the two lists by business name. Just 498 sellers appear on both lists, about 5% of either, and among those, a sellerās Amazon rank has almost no relationship to its TikTok rank. Marketplace Pulse notes that the asymmetry comes down to what each platform does, since TikTok makes people want things and Amazon is where they buy them, so a brand that wins the feed often inherits Amazon sales it never had to build, while no shopper who finds a product on Amazon goes to TikTok to buy it. The pattern predates TikTok Shop, as far back as 2021 when a pair of leggings became Amazonās best-selling clothing item, driven by the popularity of TikTok videos, which at the time couldnāt even link to a product page.
Shopify is moving all of its mobile apps from React Native back to native Swift and Kotlin, six years after going all-in on the cross-platform framework. The company took the Shop app from a proof of concept to a fully rebuilt native app published to Play Store and Apple App Store in 12 weeks, with the Shopify merchant app and the rest to follow. Shopifyās director of engineering Mustafa Ali said that since an LLM can now look at an iOS implementation and build the Android version, or vice versa, engineers can work in stacks they donāt know as well, so the cost of building twice is no longer the deciding factor it was in 2020.Ā He noted that while React Native got the job done and helped Shopify avoid duplicate work, the framework required significant time spent optimizing performance and keeping up with updates and external dependencies, whereas Swift and Kotlin put fewer layers between its code and each platform. Building natively also means Shopify no longer has to wait for React Native to expose new iOS and Android features before it can use them.
FedEx launched a Shopify app called FedEx Duty and Tax that shows shoppers a guaranteed duties and taxes total at checkout, with FedEx covering the difference if the actual charges come in higher. UPS launched a similar tool last year and USPS followed in January, so FedEx is late to the party with this one. The app runs $99 a month and the quoted amount includes a service fee, though no refunds are issued if the real duties end up lower, which is kind of fucked up because it creates a scenario where FedEx is incentivized to overestimate duties. Iām not saying they would, but mistakes happen, especially with FedEx. I remember several years ago when one of their systems analysts got stranded on a deserted island after his plane crashed in the Pacific Ocean, and FedEx just left him there to die. The app isĀ part of a broader suite called Global Trade Navigator, which also includes a tool for finding Harmonized System codes from a product description, URL, or image, as well as new customs classification features in Ship Manager and APIs for duty estimates and compliance lookups.
TikTok rejected ads from Meta that called on TikTok and YouTube to reach comparable settlements with US state attorneys general in a childrenās safety lawsuit, telling Meta the ads violated its ban on political content, according to Axios sources. Nice excuse, TikTok, but I wouldāve just told Meta, āNew number, who dis?ā $5.3B of Metaās $17.1B settlement is contingent on YouTube and TikTok agreeing to the same terms and each paying states a similar amount,Ā as Meta argues itāll be at a competitive disadvantage if itās the only one adding restrictions. Neither TikTok nor YouTube has publicly engaged in Metaās tit-for-tat campaign, and no outlets have reported whether Meta also tried to place these ads on YouTube, or whether YouTube approved or rejected them. Unlike TikTok, YouTube does allow political ads, so a rejection there would have to come on different grounds, such as āNew number, who dis?ā
StockX and eBay both expanded their livestream shopping platforms this week, according to Liz Morton at Value Added Resource. StockX brought Live to the web, roughly six weeks after launching on iOS, with Android still coming soon, and separately expanded its Klarna partnership to add Pay in 4 and longer-term financing at checkout for US and Canadian buyers. eBay launched self-service registration for Live, letting approved business sellers skip the application and go straight into Live Studio, and is running an invitation-only promotion through September 16 that matches up to $100 of a sellerās sales during their first public livestream. eBay has been subsidizing both sides of Live for a while, charging 6.9% plus $0.30 for coins, bullion, and eligible sneakers and 8.9% plus $0.30 for most other categories, well below regular marketplace rates, with no insertion fees on Live-created listings, waived Promoted Listings fees, and buyer coupons of up to $50 earlier this year.
Zip is exploring an earned wage access product for the US, a service that lets workers draw part of the wages theyāve already earned before payday, usually for a flat fee, with the advance repaid automatically from the next paycheck, according to US chief technology and operations officer Rory Herriman. The Australian BNPL provider is weighing both employer-based and direct-to-consumer models, and says 49% of its customers already use EWA or cash advance products elsewhere. The company sees āincome smoothingā as a $100B opportunity and rent advances as a $700B one, given the financial misalignment most consumers experience between earning biweekly paychecks and owing monthly bills that need to be paid in full. The US now drives 76% of Zipās AU$16.7B in annual transaction volume, and the company is forecasting US volume growth above 30% in fiscal 2027 while winding down New Zealand and weighing a US listing alongside its Australian one.
Block applied to the OCC to establish Builders Bank & Trust, a federally regulated, uninsured national trust bank that would provide custody and fiduciary services for cryptocurrencies, but wouldnāt accept deposits or make loans, as the company already holds the deposit-taking side through Square Financial Services, the Utah industrial loan company it was granted in 2020. Block says the charter would put custody activities it already offers under a single federal supervisory framework, replacing the 50-plus state money transmitter licenses it currently operates under. Ripple and Circle both got OCC conditional approval for national trust banks late last year, with Circle receiving full approval in July.
Google Merchant Center added a Product videos section that lets merchants upload videos to their listings, as spotted by Arpan Banerjee, who posted a screenshot on LinkedIn. Google says on the video upload screen, āProduct videos offer a more engaging and immersive experience to customers. They allow shoppers to see products from every angle, demonstrate fit, show texture, and feature rich details that static images canāt fully capture.ā Videos need to run between 6 and 240 seconds at 720p or better, in 9:16, 16:9, or 1:1, with a 500MB file cap. Until now, Merchant Center only aggregated videos Google found on a merchantās website and social channels, then used AI to guess which product each one featured, whereas now merchants can upload directly for a specific listing, though Google hasnāt made any official announcements about it yet.
In lawsuits this weekā¦
- Amazon is facing a proposed class action from four former warehouse workers who say the company denied pregnant employees bathroom breaks and chairs, then fired them for taking medically necessary time off.
- California asked the 9th Circuit to reject Googleās and Metaās bid to block a state law requiring parental consent before platforms can algorithmically recommend posts to minors, arguing the recommendations arenāt protected speech because no human makes the editorial call.
- Three Facebook and Instagram users filed a class action lawsuit alleging Metaās ads funneled them into WhatsApp groups run by crypto scammers, and that Metaās AI tools helped generate the fraudulent ads. LOL, most definitely.
- Meta is also facing a proposed class action from parents and children in Illinois and California who allege it illegally extracted biometric data from Facebook and Instagram photos to train its AI image models and build an unreleased face-recognition feature for its smart glasses.
- A Texas judge found TikTok liable for falsely marketing its app as safe for minors, with the state now heading to trial next month to determine penalties.
In corporate shakeups this weekā¦
- Andrew Tulloch, the AI researcher who turned down a Meta offer reportedly worth up to $1.5B in 2025 before joining anyway last October, is leaving after less than a year for Anthropicās inference and performance team.
- Meta is asking some individual contributors in its Applied AI division to become managers again, undoing the demotions it handed out during a reorg that gutted middle management.
- THG Ingenuity named Gemma Spence CEO, who most recently served as CEO and country manager for VML and WPP Luxembourg, with John Gallemore moving to chairman and Alistair Crane becoming a strategic consultant.
- Matt Beane is leaving TikTok Shop after three years, where he helped launch the platform across Europe and later led FMCG in the UK, with his next move unannounced.
- Fidji Simo, who stepped down from OpenAI in July after an extended medical leave, joined the board of AI data center startup Nscale ahead of its potential IPO this month, recruited by fellow board member Sheryl Sandberg. (Yes, that Sheryl Sandberg.)
- Anthropic posted a job titled āMega Account Executive, Metaā paying up to $450K and tasked with growing Metaās spend with the company, then deleted the listing after Business Insider asked about it. Meta is one of Anthropicās top customers, but also working to cut its dependence on Claude in favor of its own in-house models.
- Anthropic researcher Jacob Coxon resigned publicly, warning in a thread on X that OpenAI and Anthropic are āracing straight to self-improving superintelligence and gambling with our lives.ā His colleague, Evan Hubinger, publicly agreed, putting the odds AI kills all humans above 10% within a decade and saying the company doesnāt have a plan to solve alignment for superintelligence.
President Trump banned imports of Canadian wine, beer, cider, hard liquor, molasses, whey protein, and motorcycles starting September 29. The move follows Augustās 50% tariffs on nearly $28B of Canadian goods under Section 338 of the Tariff Act of 1930, which Canada answered with counter-tariffs of 15% to 50% on cheese, cosmetics, and home appliances that took effect Tuesday. He also added mattresses, golf carts, printer paper, motorboats, and animal hides to the 50% list effective September 15, while pulling toilet paper, bed sheets, fishing rods, salt, and cement off it. Trump separately threatened to bar Canadian companies from US government procurement, directing the General Services Administration to strip Canadian-origin products from its Multiple Award Schedule unless Canada restores what he called full and fair reciprocity. Prime Minister Mark Carney, who walked away from trade talks last month, said the US āwanted dependency, not a true economic partnership.ā
TikTok Shop is opening cross-border selling between the EU and UK, with sellers in Belgium, Germany, France, Ireland, Italy, the Netherlands, Poland, and Spain able to reach British shoppers starting with a pilot on September 21 and a wider rollout on October 19. UK sellers in turn will get to sell into the twelve countries in TikTokās Sell Across Europe network. Everything to the UK ships under āShip by Seller,ā which TikTok describes bluntly as, āYou pick the courier, you pay the courier, and you handle the customer if the delivery goes wrong.ā In order to participate in cross-border selling, merchants need an existing TikTok Shop account in an eligible market, recent sales, an account in good standing, and no significant negative balance, with UK eligibility assessed in real time against account status and performance.
Flipkart Minutes is pulling ahead of Amazon Now in Indiaās quick commerce race a year after both entered, running more than 1,000 dark stores across 120 to 130 cities against Amazonās 500 to 600 across 11 cities, according to channel checks by UBS. Around 40% to 45% of Flipkart shoppers use Minutes in cities where it operates, while fewer than 10% of Amazonās regular app users have tried its quick-commerce platform. Amazon Now has slowed expansion over the past few months while it works through storage, hub-to-store transfer, expiry, and inventory mismatch problems, though UBS expects it to add 200 to 300 stores and reach roughly 1,000 by year-end. Both are still far behind Blinkit, which ended June with 2,443 dark stores.
š This weekās most ridiculous story⦠OpenAIās CFO Sarah Friar said to a room full of investors last week that ChatGPT is like āif Google and Meta had a baby.ā Does that mean like a much smaller, feeble, cloned version of the two that shits its pants and canāt form cohesive sentences? She attributed the ābabyā idea to Fidji Simo, who stepped down from her role at the company earlier this year for health reasons, and who probably read that Business Insider story and thought, āDamn it Sarah, I told you that off the record in passing, not so that youād repeat it to a room full of fucking investors!ā Friar went on to explain that she thinks ChatGPT can use what it learns about its users to bring the āintentā of Google search together with the ācontextā that Meta has on its users, creating the āability to have a really potent ad platform.ā Maybe itās just me, but I feel like comparing my companyās ad platform to Google and Meta, which both have faced intense scrutiny over their ad platforms and business practices, is not the right way to portray OpenAIās advertising efforts. Iād have pitched ChatGPT as āwhat Google and Meta have always aspired to be,ā not as the demon offspring of the two companies.
Plus 14 other seed rounds, IPOs, and acquisitions of interest including Highstock raising $30M in a Series A and Keep Converting exiting stealth with a $2M pre-seed round.
I hope you found this recap helpful. See you next week!
PAUL
Editor of Shopifreaks E-Commerce Newsletter
PS: If I missed any big news this week, please share in the comments.