1 big thing: Bed Bath & Beyond misses bond payments

Sale signs in a Bed Bath and Beyond store

2. The BFD: Standard AI acquires Skip

Illustration of a shaking shopping cart icon with an X as if about to be deleted. 

3. Retail therapy

Illustration of a therapy sofa with five shopping bags positioned on the seats.

4. Retail transactions

5. It's Personnel

Welcome back, Retail readers. It's Thursday!

🤝 Situational awareness: French mass-market retailer Casino is in talks to merge its French retail operations with rival retailer Teract.

🌱 What we're planting: Kim's delighted to welcome two new additions to her plant collection: the philodendron white knight and the monstera standleyana albo variegata (try saying that 10x fast).

📢 Big shout out to newsletter editor Claire Rychlewski and copy editor Mickey Meece for today's edits.

Thank you for reading Retail Deals. Catch us again tomorrow for a catch-up on the week!

Retail Deals

1 big thing: The customer (experience) is not always right

Illustration of two chat bubbles, one with a question mark and one with ellipses.

2. The BFD: Fitch Ratings raises forecast for retail default rate

Illustration of two speech bubbles in the shape of shopping bags.

Happy Tuesday, Retail readers. Let's jump right in.

🛒 Situational awareness: Bed Bath & Beyond is preparing to seek bankruptcy protection as soon as this week, Reuters reports.

🍿 What we're watching: Kim saw "La La Land" director Damian Chazelle's latest flick, "Babylon," in theaters. She won't be as scathing as this NYTimes review, but she would warn: it's three hours long.

✏️ Many thanks to newsletter editor Claire Rychlewski and copy editor Nick Aspinwall for today's edits.

Thank you for reading Retail Deals. Catch you tomorrow!

1 big thing: Babylist focuses on content with Expectful deal

Illustration of a baby mobile made of money, coins and trending arrows. 

2. The BFD: Aesop auction draws LVMH, L'Oreal

3. Bed Bath & Beyond having difficulty finding a buyer

Store closing sign on a bed bath and beyond

🎉 What we're watching: Richard is reveling in the Kansas City Chiefs' latest AFC Championship (he's just old enough to remember the dreaded Todd Blackledge days).

Big thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece for today's edits.

Thank you for reading Retail Deals! We'll see you tomorrow.

1 big thing: Light at the end of the tunnel

2. The BFD: Craft's $32M boost

illustration of a computer pop up window made out of a shipping container

3. Subway's breadcrumbs spell sale

Illustration of a stock chart with the line made out of a hoagie.

🏈 Situational awareness: To mark the retirement of NFL star Tom Brady, fans can now buy clothing from his brand, Brady by Tom Brady, at Dick's Sporting Goods.

📺 What we're watching: For a little escape, Richard has been watching "The Bad Batch," a Star Wars spinoff on Disney+. Rhea Perlman even voices one of the key characters!

✏️ Many thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece for today's edits.

Thank you for reading Retail Deals. See you tomorrow!

1 big thing: Amazon CEO: We're working "really hard" to cut costs

Illustration of dozens of Amazon packages parachuting from the sky.

2. Ryan Cohen shopping at Nordstrom

3. Craft's $32M boost

4. Bed Bath & Beyond misses bond payments

Image of sale signs inside a Bed Bath and Beyond

5. Fitch Ratings raises forecast for retail default rate

6. Babylist focuses on content with Expectful deal

Happy Friday, Retail readers. Here's your digest of this week's news. 

We're kicking it off with a takeaway from Axios colleague Hope King on Amazon's earnings, and Richard has a look at Ryan Cohen's Nordstrom stake.

🚨 Situational awareness: 517,000 jobs were added to the U.S. economy in January. 

Thanks to copy editor Mickey Meece for today's edits.

Craft, a supply chain-focused enterprise data platform, raised a $32 million Series B to improve companies visibility into their supplier network, the company tells Axios exclusively. 

Why it matters: More money is expected to be poured into supply chain tech this year, especially in visibility, traceability, and areas that allow for greater control and adaptability.  

Details: The round was led by BAM Elevate, the venture capital arm of Balyasny Asset Management. 

Greycroft, Uncork Capital, High Alpha and ServiceNow Ventures participated.

The company declined to give an exact valuation, but CEO Ilya Levtov says the share price from its Series A valuation increased 3x and from its post-money Series A to its post-money Series B, its valuation increased 5x. 

How it works: The San Francisco-based company aims to map and track every supplier in the supply chain, and provide reliable information on risks associated with cybersecurity, ESG, legal compliance and geopolitics.

The company has millions of supplier profiles, and that data can go down to the product SKU level, Levtov says.

Retailers in particular tend to use the tool to figure out which alternative suppliers to use if risk or issue arises in one area of their supply chain, Levtov says.

The company has about 60 customers, and it plans to grow that figure to 100 to 120 by the year's end. 

What they're saying: Craft says its platform lets customers tune into the specific dynamics around their global supply chain and its accompanying risks, he says. 

“I think most of our customers are being inundated with too much data,” says Dan Huber, vice president of global sales.

“There may be an outage in a particular plant, but if you're not getting items from that particular plant, but they are a supplier to you, is that important or not?” Huber says.

What’s next: Fresh funds will go toward R&D in data engineering and data science, as well as building further capacity to support large enterprises, Levtov says.

The company is growing its sales force and could expand into verticals like the public sector.

“As we continue to grow and expand the business, we'll grow with a more vertical approach,” Huber says.

The bottom line: Data visibility and advanced data analytics can apply beyond the supply chain: to financial risk management, competitive intelligence and M&A scouting, Levtov says.

Craft pursues supply chain visibility with $32M boost

Craft raised a $32 million Series B led by BAM Elevate.

Venture capital funding

Craft, a supply chain-focused enterprise data platform, raised a $32 million Series B to improve companies visibility into their supplier network, the company tells Axios exclusively. Why it matters: More money is expected to be <a class="gtmContentClick" data-vars-link-text="poured into supply chain tech" data-vars-click-url="https://www.axios.com/pro/retail-deals/2022/12/20/supply-chain-visibility-on-tap" data-vars-content-id="0321d3a4-a2d1-494e-b4d8-47ac95bd6a36" data-vars-headline="Craft pursues supply chain visibility with $32M boost" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/retail-deals/2022/12/20/supply-chain-visibility-on-tap" target="_self">poured into supply chain tech</a> this year, especially in visibility, traceability, and areas that allow for greater control and adaptability.

Walmart could spend more than $2.5 billion in India as it eyes the South Asian country’s e-commerce and payments markets’ growth prospects.

Why it matters: India is considered one of the world’s largest internet markets and it has become prime terrain for large retailers like Walmart and rival Amazon.

Driving the news: Bentonville, Arkansas-based Walmart, which already owns a majority stake in India’s e-commerce juggernaut Flipkart, may spend about $1.5 billion to buy Flipkart’s shares from private equity firms Accel and Tiger Global, according to the Economic Times.

The stake, which equates to around 5% collectively, would raise Walmart’s ownership in the company, the Economic Times reports, citing sources familiar.

Walmart could also invest around $200 million to $300 million in PhonePe’s current funding round, TechCrunch says, citing sources familiar.

Walmart, Tiger, Accel and PhonePe did not respond to Axios' request for comment.

Flashback: Walmart earlier this month paid the Indian government about $1 billion in taxes for PhonePe, a digital payments company that the company owns through Flipkart because PhonePe moved its headquarters to India from Singapore.

Last month, PhonePe and parent Flipkart said they had fully separated, though Walmart will remain a majority shareholder in both companies.

Of note: PhonePe announced a $350 million cash infusion from General Atlantic this month, giving PhonePe a pre-money valuation of $12 billion.

Walmart primes for $2.5 billion spending spree in India

India is considered one of the world’s largest internet markets and it has become prime terrain for large retailers.

Illustration of a dollar sign peeking out of a tractor trailer.

Photo Illustration: Lindsey Bailey/Axios. Photo: George Frey/Getty 

Walmart

Walmart could spend more than $2.5 billion in India as it eyes the South Asian country’s e-commerce and payments markets’ growth prospects.Why it matters: India is considered one of the world’s largest internet markets and it has become prime terrain for large retailers like Walmart and rival Amazon.

Standard AI, an autonomous checkout technology provider, has acquired Skip, a developer of self-checkout kiosks, CEO Jordan Fisher tells Axios exclusively.

Why it matters: As retailers face a labor crunch, they're increasingly turning to new technologies like computer vision and AI to help them bolster their frontline workforce.

What's happening: The acquisition will combine Skip's cloud-based point of sale system and back-office operations with Standard’s front-of-the-store computer vision system.

Customers can go up to a kiosk, scan a code, download an app and “skip even this step of scanning your items,” Fisher says.

It becomes “touch points for people to get upgraded to an even better experience,” Fisher adds.

Fisher declined to give financial details of the transaction.

What’s next: The San Francisco-based company hopes to bring its self checkout and autonomous retail platform to market later this year.

Standard AI will also aim to provide more services around the store, such as with over the counter purchases or food ordering, Fisher says.

How it works: Standard AI installs cameras overhead and uses computer vision to allow customers to pick something off the shelf and purchase the item without the need to check out.

Its cameras can also assist with out-of-stock alerts in real time, planogram compliance and insight and analytics around merchandising.

Its technology can be found in some Canadian convenience store chain Circle K locations, American Airlines Center, and the University of Houston, to name a few.

Standard AI plans to open 50 additional stores this year.

Zoom out: "There's been a lot of progress there to say, 'how do we really cut manual effort out of the process?'" says Hemal Nagarsheth, a partner at Kearney's financial institutions practice.

The more retailers add automation and other features like electronic receipts, the lesser the burden it will be on consumers and the more ready they will be to adopt new technologies.

"I think the innovation is really sort of driving choice," he says.

However, consumer education, tech savviness and potential for fraud are bottlenecks for merchant adoption, he says. 

Flashback: In February 2021, Standard AI raised $150 million in a Series C round led by SoftBank Vision Fund 2, valuing the company around $1 billion.

CRV, EQT Ventures, TI Platform Management and SK Networks participated.

The company has raised about $266 million as of November, per PitchBook.

State of play: Large players like Amazon are entering the fray, rolling out their own touch-free checkout technology. Amazon's Just Walk Out technology is projected to expand its reach in 2023. 

Meanwhile, Europe’s Trigo raised a $100 million equity financing round led by Temasek and 83North in October.

Berkeley, California-based Grabango snagged $39 million in its Series B led by Commerce Ventures in 2021.

Standard AI acquires Skip for touch-free checkout

Retailers are increasingly turning to new technologies to bolster their frontline workforce.

Mergers and acquisitions

Standard AI, an autonomous checkout technology provider, has acquired Skip, a developer of self-checkout kiosks, CEO Jordan Fisher tells Axios exclusively.Why it matters: As retailers face a labor crunch, they&#x27;re increasingly <a class="gtmContentClick" data-vars-link-text="turning to new technologies " data-vars-click-url="https://www.axios.com/pro/retail-deals/2023/01/03/checkout-tech-eases-retailer-burdens" data-vars-content-id="801148a5-2da5-46db-b41d-daeda198c8c0" data-vars-headline="Standard AI acquires Skip for touch-free checkout" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/retail-deals/2023/01/03/checkout-tech-eases-retailer-burdens" target="_self">turning to new technologies </a>like computer vision and AI to help them bolster their frontline workforce.

Shopify has positioned itself to become a one-stop shop for both small, independent merchants and established retailers, as it scouts additional M&A.

Why it matters: The acquisitive company has the "cash flow and the financial flexibility" to make more buys to boost its strategy, says D.A. Davidson analyst Gil Luria.

As of Sept. 30, 2022, Shopify had $4.9 billion in cash, cash equivalents and marketable securities.

What they’re saying: “The way that we think about M&A is very simple. It either has to accelerate our product roadmap, or it has to add key talent to the team,” Shopify president Harley Finkelstein told Axios at the NRF conference in New York.

Future acquisitions will supplement its current offering, he said, citing international markets and physical retail, and its enterprise retail stack Commerce Components as areas where Shopify could look to make buys.

"We don’t buy companies for revenue growth," Finkelstein says. “It's always been about product acceleration.”

Zoom in: When Shopify acquired fulfillment technology provider Deliverr for $2.1 billion last year, the thought was, “if we acquire them, we can just get there much, much faster with a much better team than building ourselves,” Finkelstein says.

Catch up fast: Shopify was founded in 2006 and expanded to become an online retail ecosystem thanks in part to about two dozen acquisitions it has made since its inception.

The company has made about the same number of investments into companies like Loop Returns, Klaviyo, Flexport and Crossing Minds. according to Pitchbook.

Between the lines: Shopify helps independent merchants that don't want to sell through Amazon or Walmart access the supply chain, Luria says.

He expects Shopify to “continue to try to create an end-to-end capability around logistics and fulfillment in order to help their customers,” he says.

That will be done by providing logistics through a software platform, which negates the need to make the same kind of large investment as the giants in space have.

Zoom out: Shopify isn't just focused on helping small merchants build their businesses, Finkelstein says.

“So what we’re trying to do is also not just help small businesses do that, but also help much larger companies also use our products and services," he says.

The pandemic made clear to legacy retailers that customers were agnostic to where they make purchases, he says.

Shopify is currently courting large retailers with online store experiences that need improvement.

The Ottawa, Canada-based company has ambitions to expand internationally as well.

The bottom line: When it comes to brick-and-mortar stores, “the future of retail is not one or the other,” Finkelstein says. “It's retail everywhere.”

Editor's note: This story has been corrected to omit insurance as an area where Shopify will look at M&A.

Shopify aims to be one-stop-shop retail ecosystem

The acquisitive company has the  "cash flow and the financial flexibility" for M&A, an analyst says

Photo illustration of Shopify president Harvey finkelstein with cursors and a shopping basket overlaid 

Photo illustration: Tiffany Herring/Axios; Photo: courtesy Shopify

Retail

Shopify has positioned itself to become a one-stop shop for both small, independent merchants and established retailers, as it scouts additional M&amp;A.Why it matters: The acquisitive company has the &quot;cash flow and the financial flexibility&quot; to make more buys to boost its strategy, says D.A. Davidson analyst Gil Luria.

Retailers' focus on investing in digital customer experience solutions to bolster sales has caught Zendesk's attention, CTO Adrian McDermott tells Axios.

Why it matters: With its private equity backing, Zendesk will opportunistically scan the market for R&D and intellectual property in the customer experience (CX) space.

State of play: Customer satisfaction has sharply declined since 2018, according to the American Customer Satisfaction Index.

As of the third quarter of 2022, the index fell to 73.2, down from 77 in the third quarter of 2018.

In the wake of the COVID pandemic, retailers are increasingly focusing on how to integrate their physical and digital storefronts.

"This idea of brick-and-mortar and digital, and the idea of being more consistent and immersive for the customer, is driving a lot of interest and investment" for retailers, McDermott told Axios on the side of NRF Retail’s Big Show this month.

San Francisco-based Zendesk is a software-as-a-service provider of customer support, sales and customer communications functions.

Zoom in: A major theme at NRF was investment in the frontline workforce.

Retailers are investing in tools to empower in-store personnel who can share their expertise and fix issues or help with orders online and off, McDermott says.

"We've seen a lot of people trying to leverage their CX interactions and turn them into these moments of actual brand-loyalty building," he says.

The intrigue: Investment in CX technologies — like conversational commerce and automation — helps personalize the shopper's experience.

Retailers are able to bring up their average order value because they're having their people have conversations with customers, McDermott says.

They’re better able to understand the customers' needs, provide them with a better product, and get them to buy more because they're building that trust, he says.

Zendesk itself is already investing heavily in conversational commerce and the AI that feeds into automation, he adds.

Context: Zendesk was taken private last year by buyout firms Hellman & Friedman and Permira in a $10.2 billion deal.

As part of the deal, the company received a $3.75 billion senior secured term loan facility and a $350 million revolving credit facility.

"We love to build, but buying’s awesome too," he says.

By the numbers: One in five customer experience programs are projected to "disappear" this year, according to a report by Forrester Research.

While many companies will have to prove the value out of their CX efforts, "the 20% of companies that embrace great CX as part of their brand identity will reward CX teams that can show positive ROI," the report finds.

The customer (experience) is not always right

Investment in CX technologies — like conversational commerce and automation — helps personalize the shopper's experience.

Animated illustration of two chat bubbles, one with a question mark and one with ellipses. 

Retailers&#x27; focus on investing in digital customer experience solutions to bolster sales has caught Zendesk&#x27;s attention, CTO Adrian McDermott tells Axios.Why it matters: With its private equity backing, Zendesk will opportunistically scan the market for R&amp;D and intellectual property in the customer experience (CX) space.

Kimberly Chin

Stories

Standard AI acquires Skip for touch-free checkout

Craft pursues supply chain visibility with $32M boost

The customer (experience) is not always right

Walmart primes for $2.5 billion spending spree in India

Shopify aims to be one-stop-shop retail ecosystem

Newsletter editions

Retail: 🗞️ Catch up quick

Retail: Standard AI buys Skip

Retail: Craft raise

Retail: Retail default rate 📈

Retail: Babylist's content play