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Zelle, the payments network run by banks-owned Early Warning Services, crossed $1 trillion in total volumes last year, which it said was the most ever for a peer-to-peer platform.
The firm said Wednesday that its user base jumped 12% to 151 million accounts in 2024, and that the total dollars sent on the platform jumped 27% from the year earlier.
Absolutely wild scale. Compare this to PayPal’s $400 billion in 2024.
A recent report from Authoritas points out how volatile a Google organic search ranking is vs AI Overview ranking is. The study show that over 70% of the AI rankings changed over 13 weeks which compares to organic Google search being 55%:
AI Overview ranking volatility score: 0.68 (8 weeks), 0.73 (13 weeks)
Google Search organic ranking volatility score: 0.49 (8 weeks), 0.55 (13 weeks)
Additionally, websites within the top 10 weren’t automatically given AI Overview privledges automatically:
60% of the time, pages ranking in the top 10 appear in AI Overviews.
40% of the time, AI Overviews rank a webpage that doesn’t appear in the top 10 of Google organic search.
Bottom line: SEO has two layers: Search and AI Overviews.
Amazon has been clearly pushing Buy With Prime. And they just clearly landed their largest fish…
With Buy with Prime, Prime members can shop directly from thousands of brands’ online stores using the shopping benefits they already know and love—including fast, free delivery, easy returns, and 24/7 shopper support.
How soon before every site has a Buy With Prime checkout button similar to Apple Pay? You will be surprised. The fulfillment network is just that compelling.
Here are some key trends we’ve been tracking over the past few weeks with accompanying charts below:
Temu & Shein Turbulence: Sales for Temu and Shein dropped between 16% and 41% over a five-day period starting February 5, following the removal of a duty exemption on their small parcel shipments by the U.S. government. While the ban was later reversed, the sheer volume of Section 321 shipments remains a major force in cross-border eCommerce.
Retail Sales Slowdown: January saw the steepest retail sales decline in two years, with a 0.9% dip (not adjusted for inflation). The likely culprit? Consumers maxing out credit cards in December after stronger-than-expected holiday spending. That said, auto sales, food & beverage/restaurants, and health & personal care stores were bright spots.
Walmart’s Momentum: Walmart continues to outperform and gaining share in higher-income households, with an 83% stock gain over the past year. Its success is largely driven by Walmart+, an expanding 3P marketplace, and an aggressive pricing strategy (-11% vs. competitors). The retailer has also perfected its Wall Street messaging, further solidifying its position.
“The three biggest retailers by revenue in the U.S.—Costco, Walmart, Amazon AMZN accounted for about 11% of total retail sales back in 2014, based on their reported figures measured against national retail sales data from the Commerce Department. Their share of the market has been growing since then. In their last three reported quarters, the behemoths selling everything from groceries to appliances made up about 17% of retail sales and roughly 57% of retail sales growth over that period.”
Grocery has been the hardest hit declining from 66% to 54% but add in the other major players in off-price such as TJ Maxx as specialty shrinks…it isn’t pretty. When noting likelihood of membership renewal, this trend is here to stay and arguably will further accelerate.
ChatGPT had the highest stickiness rating with greater than 70% keeping their paid subscription greater than 6 months. Claude and Gemini next closest and Perplexity was below 50%.
Menlo Ventures had a particularly interesting market share chart for 2023 vs 2024 for LLMs for enterprise showing OpenAI losing considerable share. Anthropic (Claude 3.5 Sonnet) gained considerable share along with Google.
On the consumer side, a16z reported the top 50 Gen AI web products by unique monthly visits. OpenAI’s ChatGPT remains at the top followed by Gemini. Google’s Pichai has stated an internal requirement for Google to ready the Gemini product for 500 million users in 2025.
The first mover and hype advantages don’t appear to be holding and Google clearly gaining traction in both the enterprise and consumer side of the business.
Total spending for the holiday period, from Nov. 1 through Dec. 24, rose 3.8 percent, according to data released on Thursday by Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment. That’s above Mastercard SpendingPulse’s estimate of 3.2 percent for this year and more than last year, when growth was 3.1 percent.
Online sales stood out, rising 6.7 percent compared with a gain of about 2.9 percent for in-store sales. The data is not adjusted for inflation.
Note the very key detail at the end. Data is not adjusted for inflation. Based on Mastercard data, spending for the holiday period was up marginally for second consecutive year. Let’s see how the numbers from Census, American Express (higher overall net worth customer) and others come in. I would guess that shopping for physical items was lite whilst travel, experiences and motor vehicles remained high. One bright spot is Department Stores have seen a bit of relief recently.
Apple is quietly building another stool with Apple Advertising. This is the latest quietly building multi billion dollar business. Remember when Apple Pay was just another small launch? It now has >92% sharew.ryanmcraver.com/blog/apple-pay-walmart-time-to-give-up.
Bloomberg posted a few noteworthy charts showcasing the catalyst that ChatGPT became 2 short years ago. Although AI was already in motion for many years, the race to spend clearly accelerated. Nvidia’s dominant rise with AMD growing and Intel continuing to lose share.
The could business across the three majors of Amazon AWS, Microsoft Intelligent Cloud and Google Cloud are well over $250 billion in annual revenues.
Consulting and professional services clearly has beneefited.
Data Center spend is projected to be above $350 billion in 2025.
And lastly, the server market growth.
The Children’s Place is now selling its apparel directly to users of the global on-demand fashion app Shein. The collaboration offers product assortments and limited-time promotions aimed at families with children.
Currently, The Children’s Place storefront is available to U.S. Shein customers and will soon be made available globally in a phased roll-out. The partnership is somewhat of a departure from normal business practices for Shein, which mostly offers Shein-branded, affordable apparel and accessories from a global network of vendors.
Children’s Place has always been an early adopter of marketplaces and was one of the first retailers to use Amazon Seller Central as a 3rd party seller. Excitement around Shein has been relatively tame but landing Children’s Place as a seller could be a major catalyst.
Back again for another quarter from the toll booth of eCommerce: Amazon. This quarter saw some tepid growth yet was incredibly profitable as online sales accelerated slightly from last quarter and AWS returned to nearly 20% quarterly growth year over year.
Total revenue growth of 11% growth in revenue which was slightly faster than Q2. While growth accelerated a bit in online store sales, advertising and revenue from 3rd party sellers slowed. Amazon Web Services remains the bread winner in terms of revenue growth and profitability.
2. Historically, Third-party Seller Services have accounted for 28-35% of the sales growth in prior quarters. This quarter slowed and only accounted for 22% of the sales growth. This is an indication of Amazon realizing marketplace fee increases to merchants selling on their site are nearly peaking. The focus by Amazon to earn more of the supply chain via their AWD program and lowering fees to compete against Temu and Shein is evidence of this belief.
3. Advertising continues to slow on the larger base. Whilst cost per click was considerably higher year over year, Amazon will keep focusing efforts to gain advertisers budget at the top of the funnel for awareness advertising. The major growth for bottom of funnel will continue to grow but at a much slower rate.
Bottom Line: Whilst there was some growth in online and brick and mortar for Amazon (Jassy statements from April), AWS has clearly returned as the focus area for growth. There is no slowing this beast with double digit growth held up by a robust ecosystem in AI and a dominant logistics infrastructure earning service fees from merchants, shippers and advertisers.
Other Points To Note:
Change in search is gradually, then suddenly. Perplexity is launching advertising, Reddit explodes, SearchGPT is publicly released and ChatGPT integration with Siri is here. What does all of this mean? Traditional search (mainly Google) is estimated to decline 25% by 2026 and 50% by 2028.
Brick and Mortar is back. General merch, clothing stores and even department stores are posting some of their best numbers in years.
Walmart is still the biggest Apple Pay holdout by a wide margin, and the company has shown no signs of changing its tune.
With Home Depot and Kroger on the bandwagon and Apple Pay now sitting with a 92% market share…I think Walmart might want to give up on forcing their digital wallet service.
I know there’s a lot to do on the internet, but you really should stop what you’re doing and watch this 19-minute talk about a bespoke mural that once lived inside a McDonald’s.
Couldn’t agree more. Wouldn’t typically find this interesting but truly enjoyed.
ChartSearch traffic, still dominated by Google search, has remained relatively steady during the period, Brad Streicher, sales director at Chartbeat, said in a panel at the Online News Association’s annual conference in Atlanta last week. Google Discover — the Google product offering personalized content recommendations via Google’s mobile apps — is increasingly becoming a top referrer, up 13% across Chartbeat clients since January 2023.
Google Discover remains a somewhat fuzzy product, panelists noted. It’s entirely mobile. Users find it primarily in the Google app or if they open a new tab in the Google Chrome app, but “Google seems to be experimenting with where to put it,” Streicher said.
Beyond Discover and Google Search, the other fascinating numbers come from Facebook being down considerably and Reddit up considerably. Granted that Reddit is small in comparison but Facebook becoming less and less relevant as traffic remains engaged on-site, in-app via offerings like Reels.
WSJ dropped a piece over the weekend that will surely gain steam over the next few weeks.
Google’s share of the U.S. search ad market is expected to drop below 50% next year for the first time in over a decade, according to the research firm eMarketer.
The article focuses on AI based searches via Perplexity and keyword searches via TikTok being the main culprit for Google’s loss of share. However, we know the main reason is Amazon’s growing share within retail media. Amazon is closest to end customer purchases and therefore the most justifiable and tangible payback for search dollars. Any major loss of share is due to Amazon at this point.
As of today (Sept. 24), the short-form video giant has rolled out its Search Ads Campaign tool, giving advertisers the ability to target ads based on what users are actively searching for. The goal is to turn those searches into ad dollars by matching ads with user intent, and cashing in on exactly what users want.
Long overdue. Can’t fathom why this wouldn’t have come sooner unless there was worry about impacting the search experience. Doubtful.
Perplexity has been under fire for scraping sites for content. And now some details have been leaked on how Perplexity will monetize traffic and search queries. Financial Times is reporting that Perplexity will allow brands to bid for “sponsored” questions that allow the brand to provide the AI-generated answer.
If the questions are sponsored and the answers are written by the brand, I struggle to understand where AI comes in. Regardless, there will be an audience and there will likely be a buyer as Nike and Marriott are rumored to be in talks with Perplexity.
Whilst Perplexity is growing quickly ($5mm in revenue in January to $35mm in August based on reports), the “search engine” is still only running 250 million queries per month. That compares to Google at 100 billion per month.
Google Evil has become the focus of media outlets yet I find that very few rational viewpoints on the position we are in with Google and how Google came to be in this position. Benedict Evans summarized it well:
However, there's another virtuous circle: everyone uses Google because it's the default, it's the default because it’s the best and because Google pays other tech companies billions of dollars a year in revenue shares as ‘traffic acquisition costs’ (TAC) to make it the default, and it’s the best and Google has those billions to pay because everyone uses it. In 2022, Google paid Apple about $20bn (about 17.5% of Apple’s operating income, and a 36% revenue share) and other companies $10bn to make it the default, which was close to 20% of Google’s search advertising revenue. And this was the center of the US competition case that was decided this week.
We all knew this in theory (after all, the TAC is right there in the accounts), but this week’s judgement made it a lot more tangible. 50% of search in the USA happens on channels where Google has a contract to make it the default: 28% on Apple devices, 19.4% on Android (the OEMs and telcos decide the default on Android, not Google) and 2.3% on other browsers (i.e. Mozilla) - and then another 20% happens in user-downloaded Chrome on PCs. (Amusingly, the contract means that Google pays Apple even for searches done in Chrome on Apple devices.)
While anecdotal, who do you know that changes the default search engine? It seems very few. Take a look at at the share of Edge and IE which are the few browsers that start without Google.
So what happens from here? I would guess the DoJ makes a similar move to the EU in providing users “choice windows” in which they can select other search engines at time of installation or check-in periods. I would also believe they minimize or shutdown TAC to some degree.
With all that said, is there a formidable competitor to Google that exists today to take everyone’s share? OpenAI is just getting started, Bing has been publicly dissed by Apple. That leaves options like Duckduck and Brave.
Even if given the choice, will users select an engine other than Google? Some yes. The majority? No.
Google continues to tweak their use of AI summaries:
“Now, according to research consultancy Authoritas which has analysed 6,599 keywords across a broad spectrum of categories, AI Overviews are being offered for 17% of queries in the UK and US.”
Publishers are still grappling with the overall impact but there clearly is an impact:
““It’s impossible to say for sure how this will impact publishers – if you are the first ranking site in the new AIO list on desktop then you’ll probably do quite well. One thing for sure though is your current top organic listings are going to get demoted down the page which is going to have a negative impact unless you have a prominent position in the AIO.””
“Press Gazette conducted research on Google AI Overviews durings its previous US rollout in May and found AI-written summaries were being offered for around 24% of the most important search quieries shared by a group of leading publishers. In cases where an AI overview was offered, the organic results (dominated by publisher articles for these queries) were pushed down by an average of 980 pixels (or one full page scroll).”
