Target to close nine stores / Amazon confirms Panos Panay hire / Subscriber growth of top music streamers

Plus, Costco beats earnings expectations, upgrades app

Inside Ecommerce For September 28, 2023

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Hi Insiders! In today's issue, we cover, Target's plan to shutter stores in major U.S. cities Amazon's confirmation of its plan to hire Panos Panay The subscriber growth of music streaming platforms And much more! If you find this newsletter helpful, please share it with your friends and colleagues. Thank you! Gregory p/Gregory_Bridgman

1 Target will shutter nine stores in major U.S. cities. The retailer cited the problem of retail theft in its announcement. More: Target will close: Three stores in San Francisco and Oakland, California. Three stores in The Portland, Oregon, area. Two stores in the Seattle area and one in New York City. The company cited threats to employee and customer safety at the listed locations. CEO Brian Cornell said that Target saw a major uptick in theft during the first five months of 2023. Target saw a 120% increase in theft involving violence or violent threats over that period. Target announced in February that it plans to spend $100M on its online fulfillment infrastructure by 2026. Could persistent retail theft accelerate the U.S. retail sector's shift toward e-commerce? Join the conversation here.

2 Amazon confirmed its plans to hire Panos Panay. Panay will replace Dave Limp as head of the e-commerce giant's devices and services.  More: Limp announced his departure plans in August after working at Amazon for 13 years. Limp is leaving Amazon to become CEO of Blue Origin. Amazon confirmed on Wednesday that it will hire Panay. Limp will assist Panay with the transition after he joins Amazon in late October. Panay previously led Microsoft's Surface device family and oversaw the launch of its Windows 11 operating system.

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3 What the numbers say: Spotify remains the leading streaming platform, with its subscriber count rising from 36 million in 2016 to 188 million in 2022. Apple Music's subscriber count rose from 20 million to 88 million over the same period. Amazon rolled out Amazon Music worldwide in 2017, and its subscriber base stood at 74 million by 2022. Relevance: Music subscription services have expanded rapidly since 2016, with Spotify leading the sector. However, music subscriptions are just one branch of the wider digital services economy. Digital services are becoming an increasingly important revenue stream for U.S. tech firms. Amazon's revenue from subscription services rose from $6.3B in 2016 to $35.2B in 2022. Apple's services segment increased its share of the company's overall revenue from 14.11% of Apple's overall revenue in Q3 2016 to 25.93% in Q3 2023. What's next: The e-commerce subscription market is expected to be worth $687B by 2025, up from 225B in 2020.

4 Costco is improving its digital retail capabilities. CFO Richard Galanti described the company's "digital mobile transformation efforts" at its Q4 earnings call on Tuesday. More: Costco reported quarterly revenue of $78.9B, beating analyst expectations of $77.9B. Earnings stood at $4.86 per share, surpassing expectations of $4.79. Galanti said that Costco is continuing to improve its app-based shopping tools and recently changed its website layout. The company also added messaging capabilities and advertisement space for its app.

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5 Amazon will expand a program that helps third-party sellers ship products without added packaging. All third-party sellers using Fulfillment by Amazon (FBA) will be able to participate in the program in 2024. More: Amazon's Ships in Product Packaging program delivers online orders without added packaging. The program helps sellers redesign product packaging so that items can be delivered in their original branded containers. Amazon informs customers at checkout when ordered items will not ship in Amazon boxes. Customers are able to opt out of the program at no additional cost. Products that are certified for the program this year are eligible for FBA discounts when shipped into North America and the EU.

6 Walmart launched a new virtual world on Roblox. The retailer removed its previous virtual worlds after coming under fire from consumer advocacy groups. More: In 2022, Walmart released two virtual worlds on game creation platform Roblox. The worlds were called "Walmart Land" and "Universe of Play." Walmart's branded worlds allowed players to play games, gather virtual merchandise, attend live concerts, and more. Walmart shut down its virtual worlds following allegations of non-compliance with the U.S. children's online privacy law, COPPA. Walmart launched a new world called "Walmart Discovered" on Tuesday. Some parts of the world allow players to shop for virtual merchandise, while others provide gamified experiences.

7 QUICK HITS No-code development is here to stay, according to industry experts. Gartner predicts 80% of technology products will be built by those who are not IT professionals by 2024.* Shopify entered a partnership with Faire and named the B2B platform its "recommended wholesale marketplace." Inspire Brands restaurants will unify "in-store, in-app, and online commerce" as part of an expanded partnership with Fiserv.  LTK added an in-app cart and checkout experience for its Creator Commerce platform that provides creator-guided shopping experiences. Panera Bread is allowing business customers to order its products through its partnership with B2B corporate food platform eZCater. NEXT WEEK in LA, redefine development at DockerCon! Use DCHALF for 50% off in-person registration, or participate online for free. Come learn with us.* *This is a sponsored post.

Knowledge Hub Term of the Day Backorders: Backorders refer to orders placed for products that are currently out of stock. Read More Question of the Week Do you share details about your salary with your coworkers? Join the conversation

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Gregory Bridgman Writer / Editor Gregory Bridgman is an e-commerce researcher with a PhD. from the University of Cambridge. He also holds a Master of Science from University College London and a Bachelor's degree from the University of Cape Town.  Please follow me on Twitter or email me at gregory@inside.com. This newsletter was edited by Aaron Crutchfield

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