Canadian Ecommerce | Digital Commerce 360

3 ways AI transforms the ecommerce customs declaration process

Emily Newton — Mon, 12 Feb 2024 14:00:18 +0000

Emily Newton

A smooth customs process is essential for getting ecommerce goods to their destinations in the expected time frames. However, standard customs forms are extremely detailed, with dozens of fields to fill. People are increasingly interested in how artificial intelligence (AI) could streamline things.

1. Completing Customs Forms More Efficiently

Even conscientious people make errors when providing information on customs documents. That might mean they put details into the wrong fields, use the wrong tariff codes to classify ecommerce documents, or make other mistakes, ultimately extending the time frames for parcels reaching their destinations or resulting in the packages getting returned to the senders.

Many optical character recognition tools have AI features to improve their functionality. People can use these options to pull data from electronic paperwork automatically and use it for customs forms.

Phlo Systems is a digital forwarder based in the United Kingdom working on a chatbot to fill out customs forms. Training is underway and responses have about an 80% accuracy rate, showing the solution’s potential. As of November 2023, the company’s CEO and founder expected to complete customs forms with the tool in three to six months.

Although AI can shorten the time necessary to complete customs forms, humans should always supervise the process and double-check the results. Well-trained algorithms are not perfect, so computing power and human oversight are an excellent combination to assist those dealing with exported products.

2. Linking Customer Purchases to Customs Form Data

Businesses may also expand the functionality of existing ChatGPT tools that bring AI to ecommerce, making them improve customs documents, too. Technology ecommerce brand Newegg released a customer-facing ChatGPT tool in July 2023 that suggests products for people wanting to build computers based on details they input about budget, performance requirements and other specifics.

The tool compiles all the options into a list people can review before checking out at the site. It is easy to imagine an accompanying AI product Newegg team members could use to populate customs forms based on what a customer ultimately purchases from the suggested list. Then, the items are more likely to be classified and described correctly on the customs forms. Tariff classifications determine duty rates and taxes on imports, making their accuracy critical.

Ecommerce leaders could also use AI to track trends that enable more accurate customs data. Perhaps a large percentage of overseas shoppers purchase a specific in-demand item and nothing else. AI might accelerate the process by automatically populating the product-specific customs form fields in such cases. Then, there is less to do because people only need to check the information that varies with each customer.

3. Stopping False Declarations and Counterfeit Goods

Possibilities also exist for customs agents to use AI tools to highlight abnormalities associated with illegal goods or items declared incorrectly. Artificial intelligence excels at processing large quantities of information and catching things humans would miss. Many banks use it to monitor for fraudulent transactions because it can detect those instances more accurately than people

If people make false declarations on customs documents, they typically do that to reduce their import tax and duty-related obligations. Many border patrol agents use artificial intelligence to assess which shipping containers to open for further inspection.

Some ships reach ports bearing 24,000 containers, making it impossible to inspect them all. However, the customs officials working at a Belgian port rely on predictive AI models to flag which ones to check. The algorithms make decisions based on customs declarations and data from goods previously requiring inspections.

Even so, illegal goods can slip past border agents, which may result in counterfeit products reaching ecommerce sites. More companies are responding by using or offering AI tools to combat these emerging circumstances.

One enterprise specializing in the luxury goods and sneaker markets built an artificial intelligence-driven product to compare photographs of legitimate items with those sold online. The software compares approximately 2,000 to 4,000 characteristics so consumers or retailers can feel more confident about authenticity.

Some ecommerce marketplaces could use counterfeit protection as a selling point to attract new customers. Suppose first-time visitors to a shopping website sees a banner informing them that all products above a specific monetary value receive anti-counterfeit screenings before getting shipped to recipients. Such a claim gives consumers peace of mind, particularly before buying high-value, unique or collector’s items.

Will Artificial Intelligence Improve Customs Processes?

AI for customs declarations and processing is still in the early stages, with decision-makers from many businesses still in the planning process. However, as more of them try real-world applications, artificial intelligence should make a bigger and lasting impact on paperwork and goods movement. The results could assist ecommerce companies with administrative tasks associated with import and export paperwork, plus support border patrol officials with spotting suspicious cargo or incorrectly declared products.

About the author:

Emily Newton reports on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

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Whole Foods will be available on Instacart in Canada

Brian Warmoth — Thu, 08 Feb 2024 17:28:59 +0000

After Amazon acquired Whole Foods, the grocer’s presence on Instacart became an early casualty. The companies worked together as far back as 2014, but Instacart eventually found itself competing with Amazon’s own grocery-delivery ambitions. In Canada, however, Whole Foods is back on Instacart, with its own storefront on Instacart.ca.

Amazon’s Whole Foods working with Instacart in Canada

Instacart announced the new addition to its app and website on Feb. 7, including delivery availability for 14 Whole Foods Market stores in the Vancouver, Victoria, Toronto and Ottawa metro areas.

Amazon ranks No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party gross merchandise value (GMV).

“Our mission at Instacart is to create a world where everyone has access to the food they love, and working with beloved retailers like Whole Foods Market helps us make that mission a reality,” said Chris Rogers, chief business officer at Instacart, in a released statement. “With this launch, we’re proud to welcome Whole Foods Market Canada to the Instacart marketplace, making same-day delivery in as fast as 30 minutes available to their loyal Canadian customers.”

Whole Foods on Instacart availability

Whole Foods, meanwhile embraced the delivery option, framing it as a win for customers.

“We strive to create the best shopping experience for our customers both in stores and online, including finding ways to provide convenience without sacrificing quality,” said Rick Bonin, senior vice president of operations at Whole Foods Market. “We’re excited to work with Instacart in Canada to provide our shoppers with a quick and easy way to get their favorite high-quality foods and products delivered directly to their doorstep.”

The chain will look to benefit from access to tens of thousands of Instacart users in Canada as the deliveries begin, according to Instacart’s press release.

“Both companies are incredibly passionate about providing an exceptional experience to customers, and we’re excited to help Whole Foods Market make its fresh produce, pantry staples, and so much more available to millions of Canadians through Instacart,” said Rogers.

Participating locations

Initially, 11 Whole Foods stores will participate, and three more will follow. Instacart promotes delivery in as little as 30 minutes in some circumstances. Delivery for Whole Foods orders over 35 Canadian dollars will be free for Instacart+ subscribers.

In addition, Instacart touted the use of its recently announced artificial intelligence-based features for order recommendations, recently announced at CES. The app serves orders for groceries, as well as alcohol and prescriptions.

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Earnings recap: What you missed from Joann, Designer Brands, and more

Mary Meisenzahl — Fri, 09 Jun 2023 16:23:26 +0000

Apparel, sports, and jewelry retailers in Digital Commerce 360’s Top 1000 list of ecommerce retailers in North America reported quarterly earnings this week. These are the highlights you need to know. Read more earnings coverage here.

Academy Sports and Outdoors (No. 136)

Net sales were down 7.3% year over year for the first quarter to $1.38 billion. The decline was due to fewer transactions and smaller ticket size, president Michael Mullican told investors. The retailer did not disclose sales data for ecommerce.

Academy Sports and Outdoors plans to open 120 to 140 stores in the next five years, with the goal of using them to grow omnichannel sales and use them as distribution centers, Mullican said.

Chico’s FAS Inc. (No. 108)

Ecommerce sales were “up low single digits and outpaced stores on very strong traffic,” at Chico’s for the first quarter, chief financial officer PJ Guido told investors.

Online sales made up just under half, 41% of revenue over the last 12 months, Guido said.

Designer Brands (No. 78)

Net sales for the shoe retailer declined 10.7% to $742.1 million. Designer Brands did not share specific information about ecommerce sales in the quarter. The retailer is on track for its goal of doubling owned brands between 2021 and 2026, with the recent addition of Keds.

Five Below Inc. (No. 584)

Five Below grew sales 14% to $726 million in the first quarter, the retailer reported. The company didn’t share specific ecommerce sales, but Five Below’s social media presence is growing and driving traffic, CEO Joel Anderson told investors. Recent influencer campaigns also drove engagement, he said.

Joann Inc. (No. 307)

Ecommerce sales at Joann declined 1% year over year for the first fiscal quarter. Net sales and comparable sales both declined more quickly, down 4% over the previous year. Online sales made up 11.8% of revenue in the quarter. Sewing and craft online sales grew during the period, while craft technology sales declined, the retailer said.

App downloads have also grown to 15 million, the retailer said, and BOPIS has been especially popular with customers. Joann didn’t disclose what percentage of sales were made through the app.

Kirkland’s Inc. (No. 510)

Ecommerce sales represented 27% of total sales in Q1, down from 28% in Q1 of the previous year, Kirkland’s reported. Total sales across stores and online were down about 4%, driven by lower traffic in stores and online. Stores performed slightly better than online channels, Kirkland’s told investors.

Rent the Runway Inc. (No. 258)

Apparel rental company Rent the Runway reported Q1 revenue grew 10% year over year to $74.2 million. The retailer reached 145,220 active subscribers, a 15% increase over Q4.

Rent the Runway is also implementing new AI technology in search in 2023, the retailer announced.

Roots Canada LTD (No. 668)

Sales were $41.5 million in Q1, down from $43.1 million in Q1 2022. Net loss was also more than in 2022, at $8 million compared with $5.3 million last year. The first quarter typically represents just 15% of annual sales, the retailer said.

A few categories were bright spots for Roots in the quarter. Apparel categories were particularly strong, with dress and skirt sales up “five fold.” Activewear grew 50% year over year, and represented 10% of sales in the quarter.

Signet Jewelers Ltd. (No. 61)

Signet Jewelers reported ecommerce sales made up 23% of total sales in the first quarter. Ecommerce revenue is up 70% over 2020, the jewelry retailer said.

Total sales were down 9.3% year over year to $1.7 billion. Part of the declining sales are due to a drop in engagements from the COVID pandemic disrupting dating in 2020, CEO Gina Drosos told investors.

Torrid LLC (No. 224)

Online sales made up more than half of total revenue in Q1, Torrid said. Net sales decreased 11.8% year over year to $293.9. Traffic was “volatile and challenging,” both in stores and online, CEO Lisa Harper told investors.

“Once our customer finds us, she extends her shopping with us through our online capabilities, resulting in a strong omnichannel,” Harper said.

Vince LLC (No. 855)

Net sales decreased 18.3% year over year to $64.1 million in Q1, Vince reported. The decline was driven by a 6.3% decrease in Vince brand products, and a 99.2% decrease in Rebecca Taylor sales as Vince winds down the brand. The retailer didn’t share ecommerce sales figures, but CEO Jack Schwefel said stores outperformed ecommerce sales, in line with broader industry trends.

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Shopify slashes jobs again, sells most of logistics business to Flexport

Bloomberg News — Thu, 04 May 2023 15:42:55 +0000

Shopify Inc. will cut jobs for the second time in 10 months and has agreed to sell the majority of its logistics business to Flexport Inc. as it faces a challenging climb back from last year’s slump.

“I don’t want to bury the lede: after today, Shopify will be smaller by about 20% and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today,” CEO Tobi Lütke said in a memo to staff. “I recognize the crushing impact this decision has on some of you, and did not make this decision lightly.”

The company expects to incur severance charges of $140 million to $150 million.

“Our numbers were unhealthy, just like it is in much of the tech industry,” Lütke said. “With the right numbers, we’ll fully focus on outcomes and impact.”

Shopify earnings

The ecommerce platform provider also announced its fiscal first-quarter earnings on May 4. It said revenue increased 25% to $1.5 billion compared to the prior year.

Gross merchandise volume, the total value of merchant sales across Shopify’s platforms, was $49.6 billion. That’s above Wall Street projections of $47.68 billion, and some $6.4 billion higher than comparable quarter of 2022.

The Ottawa-based company also gave an outlook for the second quarter, saying it expects revenue to grow at a similar rate to the first quarter growth rate on a year-over-year basis. It also expects to achieve free cash flow profitability for each quarter of 2023.

Shopify bet early in the pandemic that a rapid rise in online shopping, fueled by customers staying home, would become permanent. As that wager soured, Lütke has attempted to turn the company around. It cut about 1,000 jobs last summer, raised prices and focused on building out client offerings and its in-house fulfillment network. Shopify had 11,600 employees at the end of 2022.

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Canadian fashion brand Aritzia grows ecommerce revenue by over 50% in Q4

Mary Meisenzahl — Wed, 03 May 2023 17:50:41 +0000

Aritzia Inc. reported ecommerce earnings increased more than 50% for the quarter ended Feb. 26, 2023.

The Canadian retailer reported net revenue grew 47%, and it reached $2 billion in sales for the first time in 2023.

Aritzia ranks No. 211 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Ecommerce boomed

Ecommerce sales were up 51% year over year for the fourth quarter, Aritzia said. Online sales accounted for about 43% of revenue in the quarter.

Traffic growth in both the U.S. and Canada fueled the sales record. Conversion also grew due to improvements in Aritzia’s website experience and search functionality, CEO Jennifer Wong said.

The clothing retailer is already gearing up for further online growth. Wong says Aritzia is now working toward better functionality to bring consumers “a captivating personalized experience.” Those improvements will allow Aritzia.com to make intelligent recommendations to shoppers based on style and preferences. Wong said Aritzia expects this plan to more than double ecommerce revenue by 2027. Tests of these tools show higher conversion rates and revenue per session, she said, without providing exact details.

Influencers and celebrities drive sales

Outlets including Bloomberg and Business of Fashion have praised Aritzia for winning over Gen Z consumers in a difficult retail environment. Much of that success is due to successful partnerships with celebrities and influencers on social media. Wong noted relationships with Martha Stewart, Lupita Nyong’o, and Tracey Ellis Ross as names strengthening the brand in the last quarter. Influencer Emma Chamberlain’s role as the face of the retailer’s spring campaign also had “strong” results, she said without revealing more.

US growth

Aritzia is based in Canada, but in 2023, the U.S. became the retailer’s largest market, generating more than half of total revenue. U.S. sales grew 56% year over year, compared with 32% growth in Canada. Aritzia still has a “long runway of growth” in the U.S., Wong told investors.

Aritzia opened seven new stores in the U.S. in its fiscal 2023. Physical stores remain the retailer’s top tool for acquiring new customers, who then go on to shop online.

For the fourth quarter ended Feb. 26, 2023, Aritzia reported:

Net revenue increased 43.5% year over year to $637.6 million.
U.S. net revenue increased 55.7% to $337.5 million, making up 52.9% of net revenue.
Ecommerce net revenue increased 50.8% from the year-ago period to $274.5 million, 43.1% of net revenue. Ecommerce made up 41% of revenue in the fourth quarter of 2022.
Net income increased 9.1% from the year-ago period to $37.3 million.

For the fiscal year ended Feb. 26, 2023, Aritzia reported:

Net revenue increased 46.9% to $2.2 billion in 2023 from $1.5 billion in 2022.
U.S. net revenue increased 65.8% to $1.1 billion from $676.1 million.
Ecommerce net revenue grew 36.4% to $769.9 million from $564.3 million.
Net income grew 19.5% to $187.6 million.
Aritzia opened eight locations and relocated five others.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

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In focus: Walmart Marketplace’s push to grow third-party seller base [Member-exclusive content]

Jessica Young — Tue, 13 Sep 2022 17:41:53 +0000

The news: In late August, Walmart Inc. launched another campaign to broaden a growing pool of third-party sellers listing on its U.S. online marketplace, this time extending the invite to Canadian retailers. The move is a continuation of the merchant’s more recent plans for international expansion for that business arm. The context: Walmart Marketplace continues […]

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Shopify cuts 10% of workforce

Bloomberg News — Tue, 26 Jul 2022 20:44:07 +0000

Canadian ecommerce firm Shopify Inc. is cutting about 10% of its workforce. The Shopify cuts come with acknowledgment from CEO Tobi Lutke that the company’s decision to expand rapidly coming out of the COVID-19 pandemic didn’t pay off.

The Shopify cuts will eliminate about 1,000 jobs out of 10,000 or so total employees at Shopify. Most of the affected roles are in recruiting, support and sales, Lutke said in a memo posted on the company’s website. The layoffs are immediate. The Wall Street Journal reported the job cuts earlier Tuesday.

“We bet that the channel mix — the share of dollars that travel through ecommerce rather than physical retail — would permanently leap ahead by five or even 10 years” because of the pandemic, Lutke wrote.

“It’s now clear that bet didn’t pay off,” he wrote. “What we see now is the mix reverting to roughly where pre-COVID data would have suggested it should be at this point.”

Shopify was among the hottest pandemic stocks in 2020 and 2021 as online shopping boomed. It came crashing down this year, hampered by an economic cool-down and an easing of COVID-19 restrictions. Shopify shares have fallen 73% this year as of Monday’s close.

The Ottawa-based company reported a huge profit miss in the first quarter, and analysts have cut their expectations for second-quarter results, which are scheduled for Wednesday.

The move boosts the likelihood that Shopify will lower its full-year outlook, according to RBC Capital Markets analyst Paul Treiber. During first-quarter results in May, the company said it had expected merchants to join its platform at the same rate as in 2021.

“Since Shopify reinvests all the gross profit that it generates back into the business, the reduction of headcount increases the likelihood that the company reduces its FY22 outlook,” Treiber said in a note to clients.

Analysts expect $1.33 billion in revenue for the period ended June 30, up just 11% from the first quarter.

For those losing jobs this week, Shopify will pay at least 16 weeks of severance and extend additional benefits. Those include an allowance to buy laptops and temporary coverage of home internet costs, a spokeswoman for the company said.

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Shopify and Twitter in deal to expand merchants reach on social media

Bloomberg News — Wed, 22 Jun 2022 15:13:47 +0000

Shopify and Twitter announced a deal to let Shopify merchants sell on the social-media platform. It’s the latest in Shopify Inc.’s initiatives to expand its social media partners as it aims to help businesses reach buyers across a range of online platforms.

As of today, Shopify’s U.S. merchants will be able to open a virtual storefront on Twitter’s online shopping platform. The news follows other Shopify Inc. collaborations with Alphabet Inc.’s Google and Meta Platforms Inc.’s Facebook.

“Retail does not happen across one channel, it happens across every channel,” Shopify President Harley Finkelstein said in an interview with Bloomberg News. Now that the pandemic is easing, merchants “want to sell across every single surface area.”

The Ottawa-based company’s shares have fallen 76% this year. The ecommerce company faces headwinds from the post-pandemic return to in-person shopping.

Shopify retailers will be able to sell their goods on Twitter two ways:

Displaying as many as five products on their Twitter profile.
Using Twitter Shops, a pilot feature that lets vendors advertise as many as 50 products in a tab linked to their profile.

Shopify and Twitter details

Shopify declined to provide an estimate of how much the Twitter deal will increase sales for its customers. But it said orders placed with Shopify merchants through other online partnerships quadrupled in the first quarter of 2022, compared to the same period a year earlier. It also said shopping-related tweets hit roughly 40 billion views last year.

The Twitter launch is slightly different from some other partnerships in that it doesn’t include Shop Pay, Shopify’s online payment tool.

Elon Musk, who is leading a proposed $44 billion takeover of Twitter, has said he plans to turn Twitter into a “super app.” He said he wants to combine social media, online shopping, and payments. Twitter shares have fallen 10% this year.

Shopify is a cloud-based, multichannel commerce platform designed for small and medium-sized businesses. Merchants use the application to design, set up and manage their stores across multiple sales channels. Those channels include web, mobile, social media, marketplaces, bricks-and-mortar locations, and pop-up shops. The platform also provides merchants with a comprehensive back-office and single view of their business.

The deal with Twitter comes just two months after Amazon.com Inc. said it would let merchants sell products they list with the ecommerce giant directly from their own websites. The move is seen as part of an effort to blunt the momentum of Shopify. Amazon ranks No. 1 in the 2022 Digital Commerce 360 Top 1000.

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Shopify falls short of earnings expectations, confirms acquisition of Deliverr

Bloomberg News — Fri, 06 May 2022 16:03:47 +0000

Shopify Inc. said sales and profit in the first quarter fell far short of analyst expectations. The Canadian ecommerce company also lowered guidance for the rest of the year, as the platform provider struggles to add new merchants.

Shopify is contending with consumers returning to physical stores and rising inflation, as well as labor shortages, Chief Financial Officer Amy Shapero said in a call with analysts.

“We saw lower merchant adds than last year and we largely attribute that to a very tight and transitional labor market,” Shapero told analysts. “We expect that the labor market will start to ease.”

At least seven analysts ratcheted down their share price targets on Shopify yesterday, adding to a series of cuts in the weeks before the earnings release. Shares in the company have fallen roughly 70% in the past year. They’re now 2% below where it closed the day the World Health Organization called COVID-19 a global pandemic in March 2020.

Ecommerce stocks have been pummeled this earnings season on concerns that online shopping is slowing as the COVID-19 pandemic fades. Amazon.com Inc. suffered its biggest one-day drop since July 2006 after it reported a weaker-than-expected revenue forecast.

Shopify sales

Shopify’s sales in Q1 rose 22% to $1.2 billion from a year earlier. But they couldn’t match analyst expectations of $1.25 billion, according to data Bloomberg compiled.

Gross merchandise volume (GMV) grew 16% in the first quarter from a year earlier to $43.2 billion. GMV is the value of merchant sales flowing through the platform. Analysts, on average, expected $46.5 billion in GMV.

Ottawa-based Shopify earned $25.1 million on an adjusted basis in the first quarter, or 20 cents a share. That’s far short of the 64 cents a share analyst expected. It’s also well below the $254.1 million in earnings in Q1 last year. The company gave a weaker outlook for adding new business customers in 2022. It said growth in merchants on its platform would be “comparable” to 2021.

Deliverr deal confirmed

Shopify also announced the largest acquisition in its history, a $2.1 billion deal for delivery startup Deliverr Inc., confirming an April 20 report. But it gave few financial specifics about the year ahead.

It purchased Deliverr — which provides two-day delivery services — more than doubling the size of Shopify’s fulfillment team. The transaction will be financed using 80% cash and 20% Shopify Class A shares.

The deal marks the beginning of one of Shopify’s most important long-term initiatives, according to KeyBanc Capital Markets analyst Josh Beck. To build its own fulfillment network, Shopify needs an experienced team with established technology, which it gains with Deliverr. But the process is expensive and takes up time and resources, he added.

In January, Shopify canceled several fulfillment and warehouse contracts intended to create its own distribution network.

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Online’s share of total retail sales by North American country

Wed, 20 Oct 2021 16:22:56 +0000

The retailers in the 2021 Digital Commerce 360 Top 1000 benefited from the big shift to online shopping during the pandemic as many stores closed and millions of consumers turned to the web rather than risk entering stores that remained open. In percentage terms, ecommerce growth was even faster in Canada and Mexico than in the […]

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