The weekly Retail Tech Roundup compiles technology news across the supply chain, manufacturing, retail, e-commerce, logistics and fulfillment sectors.
Buy now, pay later
Two payments giants are becoming one as Square, Inc. acquired Afterpay for approximately $29 billion in an all-stock transaction. The acquisition aims to enable the companies to better deliver financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes.
Afterpay, a “buy now, pay later” (BNPL) platform, will help accelerate Square’s strategic priorities for its Seller and Cash App ecosystems, the companies said. Square plans to integrate Afterpay into each business unit, so that “even the smallest of merchants” could offer BNPL at checkout. Additionally, Afterpay consumers gain the ability to manage their installment payments directly in Cash App, and Cash App customers can discover merchants and BNPL offers directly within the app.
With 16 million consumers and 100,000 merchants on its platform, Afterpay offers a meaningful cross-selling opportunity for Square, according Joseph Vafi, an analyst at financial services firm Canaccord Genuity LLC.
“While we have always thought that Square’s dual ecosystem model could create a compelling payments circle over time, little did we foresee this evolution accelerating as fast as it has,” Vafi wrote in a research note. “Square will now have access to a new category of in-person merchants and provide a broader platform with more capabilities which should translate into meaningful growth opportunities in the long-term.”
Afterpay could benefit from Square’s growing customer base of more than 70 million annual transacting active Cash App customers and millions of sellers, which will expand Afterpay’s reach and growth both online and in-person. Afterpay consumers can now also access Cash App’s financial tools, including money transfer, stock and Bitcoin purchases.
Square believes Afterpay will be accretive to gross profit growth with a modest decrease in adjusted EBITDA margins expected in the first year after completion of the transaction. Square sees an opportunity to invest behind Afterpay’s unit economics as well as potential growth synergies, including the opportunity to introduce offerings and drive incremental growth for sellers and increased engagement for Cash App customers.
Holden Bale, group vice president and head of commerce at Huge, a digital agency, also said the acquisition helps Square move into e-commerce, a space it has previously tried to enter to compete with companies like Shopify, but to little success.
This acquisition is also a way for Square to solidify its position as a broader financial services company, as Afterpay has been expanding its offering beyond e-commerce with its recent Westfield partnership, he said.
“This will help traditional retailers and small businesses elevate their offline DTC experience to align with competitive online services that drive conversion,” Bale said. “Afterpay’s foray into money management and debit cards via their upcoming app continues the trend of B2B providers entering DTC territories.”
The acquisition also demonstrates Square’s intent to double down on driving millennial shopping in-store, he said.
Afterpay is currently available in Australia, United States, Canada, New Zealand, and in the United Kingdom, France, Italy and Spain, where it is known as Clearpay.
The deal is expected to close in Q1 2022.
Afterpay’s co-founders and co-CEOs will join Square upon completion of the transaction and help lead Afterpay’s respective merchant and consumer businesses, as part of Square’s Seller and Cash App ecosystems. Square will appoint one Afterpay director as a member of the Square board following closing.
Mark Rosales, vice president of payments at BigCommerce, said that the e-commerce platform provider chose Sezzle due to its dedication to financially empowering younger consumers through credit building and financial education. The payments provider was recently certified as a B Corp for its ethical business model.
“Sezzle’s commitment to giving consumers a responsible way to slowly build credit without taking on large amounts of debt was a key differentiator in deciding to make them our preferred BNPL partner,” Rosales said in a statement.
With Sezzle natively integrated as a payment gateway in the BigCommerce control panel, merchants can enable the BNPL option to display a Sezzle widget at checkout. Sezzle then collects 25 percent of the order price from the consumer at time of purchase, followed by three additional automated 25 percent installments over the course of six weeks.
Using the platform, BigCommerce merchants receive full payment upfront less a minimal fee, assuming no credit or fraud risk on purchases. With more than 45 million people ages 14 and older in the U.S. expecting use BNPL services this year, according to eMarketer said, merchants have an opportunity to appeal to a new generation of buyers seeking a new payment method to overcome limitations such as cash flow or credit.
Eon, a software company that enables brands to connect to their products through digital IDs and a Connected Product Cloud, has raised $2.1 million in funding, including participation from SML RFID.
With the partnership, Eon aims to unlock new insights into everyday interactions with products and bring transparency to the entire product lifecycle, from production through customer use, resale, reuse and regeneration.
Partners and clients including Yoox Net-a-Porter, H&M, PVH Corp and Target are already digitizing their products on the Eon Cloud, which provides technology to connect directly to customers through each product in their supply chain, and scale new applications, business models and services.
Eon’s platform functions as an “operating system” for physical products, connecting brands to their products, customers, and partners across the value chain so that they can have the transparent information necessary to buy, sell, own, use and engage with physical items. The company estimates that the rise of connected products is poised to unlock “trillions in additional revenue” via new business models, customer services, big data and sustainable and circular systems.
As part of its offering, Eon also has developed the CircularID Protocol, a standardized language for circular products.
In partnership with SML, which manages item-level product identification, tracking and labeling of retail and supply chain products, the companies aim to further accelerate the digitization of products on the Eon Cloud. Each product will be brought online with a digital passport, and connected through customer use, resale, reuse and recycling.
SMLs annually powers more than 25 billion item-level RFID transactions on its retail software solution across thousands of sites globally and delivering billions of digital carriers.
XPO Logistics/GXO Logistics
XPO Logistics has completed its spin-off of GXO Logistics, creating two independent public companies.
The provider of transportation and logistics solutions initially announced plans to spin off its logistics division in December, with the intention of creating two pure-play entities focused on contract logistics (GXO) and freight transportation (XPO).
XPO Logistics now has businesses in truck brokerage and less-than-truckload shipping, which generally serves industrial customers and covers shorter distances than trucks traveling down interstate highways.
GXO Logistics will manage warehouses and logistics operations for its customers, and is now expected to take advantage of emerging opportunities such as e-commerce expansion, logistics automation and supply chain outsourcing as a standalone company. The spinoff will allow management to implement an optimal capital structure, establish an investment identity and allocation strategy and pursue opportunities for long-term growth and profitability, the company has said.
XPO shares will continue to trade on the New York Stock Exchange under the symbol XPO, while GXO is now trading on the exchange under the symbol GXO.
GXO launches with approximately 94,000 team members worldwide and more than 208 million square feet of warehouse space in 869 locations across 27 countries. XPO has a global warehouse network of 744 locations and approximately 40,000 employees, providing truck capacity at scale to 50,000 shippers.
Ambi Robotics, a developer of what it calls “simulation-to-reality” AI for highly dexterous robots, has introduced AmbiKit, a multi-robot kitting system that leverages AI data collection to expedite e-commerce kitting operations. Kitting is the process of taking multiple SKUs and bundling them together in one package before a shipment.
AmbiKit is designed to automate product bundling for faster delivery to increase order accuracy and reduce operating costs. The new kitting system includes a five-robot picking line, currently deployed to augment the pick and place tasks associated with one of today’s fastest growing e-commerce opportunities: online subscription boxes.
AmbiKit picks and packs unique products into specific bags or boxes for shipping to online customers. Leveraging the combination of AI and robotics, Ambi says it has more than 99 percent order accuracy and can operate around the clock with zero downtime for product changeover.
While legacy systems can often take hours, or days, to adapt to new products introduced into a subscription box, AmbiKit is geared to personalize customer orders at scale to increase throughput.
AmbiKit is successfully sorting up to 60 items per minute in a commercial production environment, Ambi said. The kitting system alleviates existing manual warehouse processes for kitting operations that can cost retailers millions of dollars annually due to human error, high employee turnover and employee injury.
Ambi Robotics wants to capitalize on the subscription e-commerce market, which is expected to exceed $478 billion by 2025, according to data from Univdatos Market Insights. As consumers are demanding more product choices and shaping new trends like personalization and select-item bundling from individual SKU’s, the company aims to empower brands to improve on-time deliveries, order customization and maintain competitive pricing with reduced operating costs.
On-floor associates work alongside the AmbiKit system to induct totes with product and pack complete kits to be shipped to the end customer. The AI-powered robotic system guides associates while sorting products to complete external actions through intuitive interfaces and dashboards.
The SM Store/Aptos
The SM Store, a Philippines-based retailer with more than 60 stores selling apparel, accessories, housewares, general merchandise and lifestyle products, has deployed Aptos’ Merchandise Financial Planning solution to support its omnichannel sales planning activities.
As part of a commitment to provide customers with the best possible products and services, The SM Store sought an “omnichannel-ready” merchandise financial planning tool that would allow the retailer to standardize planning procedures across businesses and product categories.
Aptos’ Merchandise Financial Planning is designed to provide The SM Store with end-to-end support of merchandise planning activities, from strategic planning to planning by channel. The SM Store hopes to optimize inventory levels and sales plan allocation across its vast network with the support of detailed planning at the product and location level.
As seasons progress, the solution is geared to help simulate and allow planners to make course corrections to keep a firm handle on sales and inventory investment targets.
Designed to help NetVirta’s partnering brands maximize the value of customer body data captured by the Verifyt’s app, the BI Portal enables users to aggregate customer body data, visualize 3D body models and measurements, and gain insights from body analytics.
Together, the Verifyt app, BI Portal, and Web Widget offer brands a 3D body scanning solution designed to support size recommendations and custom-fit product creation. The solution has been made available for brands of all sizes. The Starter, Premium, and Enterprise Verifyt plans that NetVirta offers are devised to support brands just trying out the solution, SMBs with additional needs, as well as larger brands or those with custom requirements.
Within the BI Portal, brands can filter customers’ body data based on demographic information including age, gender and geographic location. Apparel brands can leverage this data to improve tech pack dimensions or create custom-fit clothing by exporting 3D body models into 3D fashion design software. Footwear brands on the other hand can leverage aggregated foot data to confirm or correct the shape of their lasts, which their shoes fit is predicated upon. Accumulated body data can also enable fashion retail aspirations including on-demand manufacturing and AR virtual try-on experiences.
Retail task management
Yoobic, a digital workplace for frontline teams, closed a $50 million Series C funding round led by Highland Europe, a growth-stage investment firm that backs software and consumer technology companies.
The Yoobic app is designed to give retail associates, restaurant staff, fieldworkers, and all types of frontline employees a single centralized mobile hub to support their daily task management, deliver digital training and enable communication with peers, supervisors, and headquarters.
The company is already working with more than 300 top brands across 80 countries and over 335,000 locations spanning retail, hospitality, distribution, manufacturing and more. Operations, human resources and leadership and development leaders at companies including Puma, Vans, VF Corp, Carrefour and Boots all leverage Yoobic to drive operational efficiency, achieve network-wide performance consistency, and upskill their frontline workforce.
Yoobic closed out the first quarter of 2021 by signing new high-profile clients including Untuckit, Roots, Canada Goose, Zadig & Voltaire, and Athletico—a sign of the growing need for frontline worker enablement. Overall, the platform has seen a 200 percent increase in activities conducted natively in the app in the last 12 months, everything from chats and videos to digital task completion and virtual training lessons. In March 2021, Yoobic reached the milestone of 1 million activities per month on the platform.
Existing investors Felix Capital, Insight Partners, and a single family office advised by BNF Capital Limited also participated in the round.