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Retail Tech: Klarna Cuts 10% of Workforce, Walmart Commits to RFID, GreyOrange Raises $110 Million

The weekly Retail Tech Roundup compiles technology news across the supply chain, manufacturing, retail, e-commerce, logistics and fulfillment sectors.

Buy now, pay later

Klarna

The market selloff over the last six months has hit high-growth tech companies hard, already cutting Instacart’s valuation by nearly 40 percent ahead of its confidential S-1 filing.

Now Klarna told staff that it would lay off 10 percent of the company’s approximately 7,000 employees.

Sebastian Siemiatkowski, Klarna’s CEO and co-founder, shared the message in a pre-recorded video with employees on Monday, before the company posted his memo online.

“When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today,” Siemiatkowski said. “Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession. All of which have marked the beginning of a very tumultuous year.”

Workers in Europe, where Klarna is based, will be offered a severance package. Outside of Europe, the process for affected employees will look different depending on their location.

Last week, The Wall Street Journal reported that Klarna is looking to raise a new round of funding that would value the company at $30 billion. Like Instacart, the BNPL player would be valued at significantly less than its prior estimated worth—Klarna said it had a $45.6 billion valuation after a $639 million funding round in June.

Financing platforms like Klarna and Afterpay may be under the spotlight for the wrong reasons—43 percent of Gen Z users have missed at least one payment on BNPL platforms, according to a survey by polling site Piplsay. Of Gen Z consumers who used a point-of-sale loan for something they needed, 30 percent missed at least two payments, according to a survey by Credit Karma.

In December, the U.S. Consumer Financial Protection Bureau announced it was opening an inquiry into buy now, pay later companies including Klarna, to investigate their impacts on consumer debt and compliance with consumer protection laws.

Affirm/WooCommerce

Also on the BNPL front, Affirm is now enabling merchants using the WooCommerce platform to offer consumers pay-over-time capabilities.

Eligible WooCommerce businesses will now be able to offer Affirm at checkout both in the U.S., and in Canada via PayBright, an Affirm subsidiary operating in the market. Approved customers will be presented with either the option to split their purchase into four interest-free biweekly payments, or be able to select from monthly payment terms with interest as low as 0 percent APR.

When paying with Affirm, consumers will be shown the total cost of their purchase up front and never pay more than what they agree to at checkout, the BNPL provider says. Offering Affirm at checkout can drive overall sales, increase average order value, and increase customer repurchase rates.

WooCommerce is an open-source e-commerce platform built on WordPress that supports 3.7 million online merchants, with the company citing BuiltWith data saying it powers 28 percent of the top 1 million online stores.

Scalapay

Scalapay, a Milan-based BNPL provider, has entered into a partnership with mobile banking application and Web3 green payment infrastructure Twig. This partnership is designed to allow customers to resell products they have purchased via Scalapay and get paid instantly by Twig.

The Scalapay BNPL offering includes three options for customers (Pay in 3, Pay in 4 and Pay Later) in which customers are not required to make any payments upfront, and can instead opt to pay in three installments, four installments, or entirely after 14 days.

Twig is built to empower the circular economy, with the London-based fintech firm offering Gen Z and younger millennial consumers an e-money account that can give them instant cashouts on fashion and electronics they want to sell so that they can focus on building a sustainable lifestyle.

Scalapay customers will be forwarded to Twig and can get an instant valuation on their apparel and electronics. From there, shoppers can sell these goods to Twig with immediate payment. Twig then sends them a prepaid parcel in the mail so the customer can ship the product.

This partnership enables Scalapay customers to live more sustainably by avoiding throwing away products and letting them still cash out through Twig. Selling a currently owned item to free up cash encourages consumers to buy more new products than they otherwise would if they had held onto the original item for longer. Essentially, they entered the partnership on the premise that circularity needs to work hand in hand with longevity to shrink consumption and reduce CO2 emissions.

According to a recent white paper published by Twig, almost 60 percent of Gen Z consumers consider the resale value already when purchasing new items and more than 30 percent fund the purchase of new lifestyle goods by reselling old ones.

Scalapay is also joining forces with For The Earth by Twig, a B2B impact initiative built to help businesses improve their sustainability practices. Tapping into Twig’s sustainability resources as a B Corp, focused on data, processes, and impact measurement, Scalapay is committed to bringing its workforce to net-zero carbon emissions.

RFID 

Walmart/IDTechEx

Earlier this year, Walmart committed to expand RFID use from retail apparel to other retail departments, including home, entertainment and hardlines. The retail giant requested that its suppliers place Gen 2 UHF RFID tags, which have a frequency of 902-928 megahertz, on all items delivered to Walmart.

The departments include kitchen and dining; home décor; bath and shower; bedding; furniture and luggage, closet and organization; toys; electronics; wireless technologies; sporting goods; automotive tire; and batteries.

Walmart first adopted UHF RFID in its retail apparel sector in 2020, and inventory management has improved significantly since then, the company says. The improved in-store shopping experience for customers, additional online and in-store pickup opportunities, as well as improved sales potential, are all considered primary motivators for the retailer to expand RFID deployment to other categories.

Across retailer, more than 70 percent of UHF RFID tags were utilized in apparel and footwear in 2021 combined, according to IDTechEx, a market research firm that has been monitoring RFID for more than 20 years.

“UHF RFID business in retail apparel and footwear tagging is still by far the largest UHF RFID market by tag volume as well as market value, and it will remain so for the next 10 years since the payback is well-proven. We see retailers are rolling out in a cookie-cutter approach,” said IDTechEx CEO, Raghu Das. “As UHF RFID has shown to be very effective in the retail apparel and footwear tagging market, many leading players we spoke to are now looking at transferring this success to other business sectors.”

But the firm suggests Walmart’s announcement could potentially accelerate the UHF RFID adoption process in other retail segments, inevitably driving other retailers to follow suit.

The company says that one major RFID-related issue that must be addressed is that the UHF reader network is still mostly employed by businesses rather than consumers. UHF readers are becoming lower cost and ultimately may be integrated into consumer smartphones, as near field communication (NFC) technology often can be. UHF reader smartphones are available now but largely used exclusively within the industry, and they are not targeted at consumers.

IDTechEx believes that as reader infrastructure becomes more widely available, RFID adoption will further accelerate in both retail for apparel and footwear, as well as for other retail segments. This includes moving beyond inventory management offering benefits such as customer engagement and advertising, which can be realized to justify the additional cost of RFID added to products.

E-commerce

JD.com 

JD.com has kicked off its annual 618 Grand Promotion, which aligns with the largest mid-year shopping festival throughout China hosted by chief competitor Alibaba. Running from May 23-June 20, the promotion offers preferential benefits to U.S. merchants launched through the company’s partnership with Shopify.

In addition to waiving deposit and platform fees, JD.com will provide supporting resources for key account merchants including exclusive traffic, special promotional activities and participation in JD Worldwide’s “Overseas Direct Purchase” campaign.

Items identified as potential bestsellers will be listed in the cross-border marketplace’s “selected product pool” for additional exposure. JD.com will also provide special coupons and a variety of newcomer rights to first-time shoppers buying from Shopify merchants.

“We are delighted to kick off this year’s 618 Grand Promotion along with providing preferential benefits for brands and merchants on Shopify,” said Zachary Gidwitz, head of the JD and Shopify partnership. “This partnership provides an exclusive and trusted gateway for U.S. merchants and independent brands who want to unlock the multi-trillion dollar e-commerce market in China. The largest mid-year shopping festival in China, 618, will be a crucial opportunity for their first showing.”

“618 is one of the biggest shopping festivals of the year, and presents the ideal stage for our merchants to showcase high-quality products to JD’s 580 million customers in China as part of our strategic partnership,” said George Xue, country head and director, Shopify Greater China.” With global cross-border commerce and China’s e-commerce market – the world’s largest – continuing to expand, we look forward to creating more opportunities for US and China merchants to reach new audiences and thrive.”

In January, JD.com and Shopify announced the collaboration to give independent brands in the U.S. another access point to consumers in China. With this collaboration, JD.com has opened an accelerated channel for brands on Shopify to list products through JD Worldwide, the company’s cross-border e-commerce marketplace. JD.com’s supply chain network also provides end-to-end fulfillment service from the U.S. to China, leveraging JD.com’s U.S.-China cargo flights, U.S. warehouses and more than 1,400 warehouses and 200,000 delivery personnel in China.

PLM

Aptean/RLM Apparel

Enterprise software solutions provider Aptean has acquired RLM Apparel Software Systems (RLM), a cloud-based business software solution provider designed specifically for fashion and apparel companies, for an undisclosed sum.

RLM offers integrated enterprise resource planning (ERP), product lifecycle management (PLM), supply chain management (SCM) and other apparel management applications to over 100 fashion brands and manufacturers. RLM’s platform also includes more than 40 modules designed to allow brands to manage the entire fashion product life cycle and collaborate with global teams and suppliers.

The acquisition broadens Aptean’s range of cloud-based software products. In particular, RLM can benefit from Aptean’s global scale, considerable resources and technological expertise as it seeks to further drive innovation for customers in the fashion and apparel industry.

The deal comes a year after Aptean acquired another business, apparel and softgoods supply chain software provider Exenta. The Exenta acquisition brought in a suite of ERP, PLM, Innovation Lifecycle Management and Shop Floor Control (SFC) solutions under the Aptean umbrella.

Over its 40-year history, RLM has sought to accelerate performance for apparel, footwear, accessories brands by increasing efficiency, reducing costs and streamlining business processes across the entire concept-to-consumer product life cycle.

RLM’s category-spanning enterprise software solutions also include warehouse management systems (WMS), sales force automation (SFA) and e-commerce systems (both in B2B andB2C). RLM solutions are available in either a traditional on-premise deployment or as a hosted cloud subscription model.

American Textile Company/Centric Software

American Textile Company, the owner of bedding brands including AllerEase and Tranquility, has selected Centric Software’s PLM solution to help the firm better plan, design, develop, source and sell products and achieve strategic and operational digital transformation goals.

Within the past month, apparel and footwear companies including Allbirds, Lands’ End and Frankies Bikinis have also announced partnerships with Centric PLM.

The Pittsburgh-based bedding firm provides performance sleep solutions to retail, e-commerce and hospitality customers throughout North America and globally, and is a strategic supplier of store brand and OEM bedding products. The company also licenses name brands including Sealy and Tempur-Pedic.

“We need to streamline our product development lifecycle and improve visibility across departments especially for remote collaboration and execution. Getting the data centralized, automating workflows and enhancing collaborative capabilities through Centric will help us improve productivity,” said Karl Herleman, senior vice president of information technology, American Textile Company. “We’re expecting better efficiency; higher levels of productivity and time-to-market improvements using Centric’s advanced technology. We were impressed with the energy that the Centric team brings. We’re all pretty excited here and we found a partner that matched our level of excitement.”

Digital transformation

Backcountry/Infosys

Backcountry, an online retailer of outdoor gear and apparel, has selected digital services and consulting firm Infosys to help deliver a more secure digital experience.

The retailer also currently uses Google Cloud to fuel its data-driven transformation and help optimize business outcomes with analytics and real-time insights. As the spring and summer seasons ramp up and more consumers embrace outdoor activities, Backcountry wants to be prepared for a surge of activity with its agile, cloud-driven business model and ability to identify security risks proactively, thus preventing any potential disruption to operations and strengthening protection of customer data.

Leveraging both Infosys Cobalt and the Google Cloud Platform, Backcountry has embarked on a cloud-driven transformation journey in an effort to enhance the customer experience and improve its security posture in an increasingly turbulent cyber landscape.

“As we enter the spring season and our customers embark on more outdoor adventures, we anticipate heightened demand for our products, which is why we’re opening new brick-and-mortar stores to meet their needs in any format,” said Vismay Thakkar, vice president of technology, Backcountry. “Infosys offers the necessary skills and resources to deliver a secure and seamless customer experience, virtually or in-person, which is why our collaboration is proving to be so powerful.”

Infosys’ Cyber Next platform offers Backcountry real-time visibility into security and ransomware risks, enabling the company to proactively mitigate threats and minimize exposure. Infosys has also provided security threat monitoring with its platforms including Cyber Watch, a security detection and response platform, and Cyber Scan, a vulnerability risk management platform—both of which Backcountry says fortified its business operations. Given the volume of e-commerce transactions Backcountry handles every day, the retailer says these measures are critical to optimizing security and creating a safe digital shopping environment.

Infosys Cobalt solutions accelerated Backcountry’s transformation with Google Cloud and introduced new security and resilience features for e-commerce and backend systems, helping Backcountry to not only secure day-to-day customer transactions, but also their larger business platform.

Backcountry’s initial shift to the cloud started by selecting Google Cloud as its platform for digital transformation. The company moved its marketing, product, sales, order processing, inventory and supply chain data into Google BigQuery, giving Backcountry the ability to apply predictive analytics capabilities to its data in one location.

In addition, using BigQuery has given Backcountry the ability to quickly identify and respond to changing customer demand while keeping costs low and optimizing operations at scale. Backcountry also implemented Looker to help fuel the real-time data analytics needed for financial success—all while operating on Google Cloud’s global cloud infrastructure.

Payments/robotics

Radial/Adyen/Locus Robotics

Radial, an omnichannel e-commerce technology and operations provider, has selected Adyen for Platforms to streamline and consolidate payment offerings for its roster of clients in the U.S. and Canada.

Adyen for Platforms is built to offer a global and agile payment solution that can enable brands to integrate more payment types into their offering without the added operational complexity or resource constraints. Platforms can leverage Adyen’s unified commerce solution to expand, manage risk, track results and gather customer insights across all touch points, from one integration.

The collaboration builds on Radial’s fulfillment expertise, which includes a network of more than 30 fulfillment centers worldwide, flexible transportation services and advanced omnichannel technologies. With the added payments capabilities on top, Adyen aims to further help clients meet increasing consumer expectations and maintain market competitiveness.

Alongside the Adyen partnership, Radial is expanding its existing partnership with Locus Robotics in deploying the company’s autonomous mobile robots (AMRs) at its fulfillment center in Romeoville, Ill.

The AMR technology will support high-volume order fulfillment for underwear, loungewear and shapewear brand Skims.

Radial’s implementation of Locus AMRs is designed to ensure that fulfillment center operations can meet rapidly increasing volumes and seasonal peaks, while also helping to control labor costs. The robotics company’s “LocusBots” are build to optimize worker productivity in the order fulfillment process by decreasing unproductive walking time and improving worker ergonomics and workplace quality.

Locus says the AMRs can improve piece-handling productivity in the range of 2X to 3X. Locus’ back-end solution works with Radial’s existing picking technologies and infrastructure, and can be deployed at any existing fulfillment center. With Locus, Radial says it is able to improve and scale on-demand and without disruption or downtime.

Locus’s AMRs also help expedite the onboarding of new Radial employees and seasonal workers in an effort to enhance their productivity. The Locus solution includes integrated multi-language capabilities and an intuitive interface, without needing long training times or added training and development resources, the company says.

Robotics

GreyOrange, a provider of automated robotic fulfillment and inventory optimization software, announced $110 million in comprehensive growth financing, a majority of which came from Mithril Capital Management and a group of current and new investors, along with separate financing provided by funds and accounts under management by BlackRock.

The robotics technology and inventory optimization software can reduce operating costs and expedites delivery for retail and logistics businesses like Walmart, H&M, Cos, Coupang and GXO Logistics. GreyOrange says it grew across new customers, applications and geographies while achieving more than 170 percent gross retention in contracted revenue from existing customers in 2021.

The GreyOrange fulfillment platform, which integrates across every node in a retailer’s fulfillment network, is designed to provide adaptive learning and continuous process automation with high resiliency as well as an ecosystem for third-party software, robotics and hardware application development.

The company’s GreyMatter software uses machine learning insights to orchestrate fulfillment operations for efficient movement of inventory in a fully integrated, end-to-end solution. GreyOrange solutions can be installed in as little as 12 weeks to rapidly transform fulfillment with minimal disruption to operations.

GreyOrange will deploy the growth capital to accelerate the company’s technology leadership, continue its global expansion and further support the adoption of its fulfillment platform in warehouses, distribution centers and retail stores.

Furthering the future of omnichannel fulfillment, gStore from GreyOrange is a mobile-first SaaS app that can turns stores into tech-enabled, personalized experience hubs for customers as well as dynamic fulfillment centers for e-commerce using real-time digital management of in-store inventory. The gStore software solution can deploy either in stores as a standalone solution, or as part of GreyOrange’s ecosystem-wide fulfillment platform.

GreyOrange says its fulfillment platform equips retailers to fulfill high volume e-commerce orders seven times faster and with 50 percent less physical effort.

Walmart recently announced a new high-tech sortable fulfillment center in Rocky View County, Alberta, Canada that will be powered by GreyOrange robotic technology. This platform is designed to speed up order fulfillment by using an advanced operating system that will help associates store, pick and sort items by using smart and flexible storage abilities to manage a large and wide variety of inventory.

GreyOrange will also use a portion of the debt financing provided by funds and accounts under management by BlackRock to invest in scaling its headcount in key areas, creating 300 jobs across the customer success, sales, marketing, product and engineering teams, with a focus on roles that deliver exceptional customer experiences.

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