🚨 DeepSeek AI.

Happy Tuesday!

A customer just asked if our chatbot was GDPR compliant. Told them it's still learning about privacy laws.

Speaking of digital growing pains, DeepSeek's getting kicked out of EU app stores, holiday prep season is sneaking up on us, a new AI wants to revolutionize shopping (again), attribution models are giving everyone headaches, and brands might be pushing AI faster than customers can handle.

Let's dive in! 🎯

ECOMMERCE NEWS

🚫 AI App Faces EU Ban Over Data Privacy

German regulators label DeepSeek AI chatbot as "illegal content" over unauthorized data transfers to China, giving Apple and Google an ultimatum to remove it from their app stores. The Berlin Data Commissioner cites serious GDPR violations in handling user data.

The app faces simultaneous challenges in the U.S., where the House Select Committee warns it could be a "weapon in the CCP's arsenal." The U.S. Department of Commerce has already banned its use on government equipment.

🔍 Key Issues:

• Collects chat histories and device data

• Transfers data to Chinese servers

• Violates EU data protection standards

• Failed to comply with regulatory requests

As AI apps proliferate, regulatory bodies are taking aggressive stance on data privacy, especially when sensitive information crosses borders to non-approved jurisdictions.

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ECOMMERCE TRENDS

📊 7 Ways to Save Your Holiday Season

Early data analysis reveals retailers who start Q4 prep in summer significantly outperform their competitors. The comprehensive guide outlines seven critical areas that directly impact holiday success, from sales patterns to shipping logistics.

Breaking down last year's performance shows smart retailers are already tracking channel effectiveness, product performance, and operational bottlenecks to optimize their holiday strategy.

🎯 Key Action Items:

• Review Q4 sales data by device and location

• Analyze ROAS across channels (TikTok vs YouTube)

• Identify high-converting SKUs with low returns

• Audit shipping performance and carrier reliability

• Review customer service pain points

• Optimize inventory for proven sellers

• Plan promotional calendar based on past wins

Summer planning isn't just about getting ahead, it's about using last year's data to prevent costly mistakes and maximize this year's holiday profits. The time to start is now.

ECOMMERCE AI

🛍️ Your Next Stylist is an AI

Daydream, a new AI-powered shopping platform from Stitch Fix veteran Julie Bornstein, launches with $50 million in funding. The platform combines expertise from tech giants like Google, Meta, and Amazon to revolutionize online fashion shopping.

Unlike generic AI, Daydream analyzes 2 million products across 8,000 brands, understanding nuances from fabric quality to brand positioning. The platform learns from user interactions to provide increasingly personalized recommendations.

👗 Key Features:

• Personalized styling via chat interface

• Brand-aware recommendations

• Visual search capabilities

• Size-specific curation across brands

As traditional search bars become obsolete, Daydream's sophisticated AI could mark the shift from keyword shopping to conversation-based commerce, potentially transforming how we discover and buy fashion online.

ECOMMERCE TRENDS

📊 Attribution Models: What Actually Works?

Google Analytics 4 has streamlined attribution modeling to two key methods, marking a significant shift in how we track customer journeys. The platform now focuses on Data-driven and Last-click models, each with distinct approaches to understanding conversion paths.

Research shows that while GA4's Data-driven model leverages machine learning for sophisticated analysis, it tends to favor Google-owned channels. The Last-click model offers simpler attribution but excludes direct traffic entirely.

🔍 Key Findings:

• Attribution windows span 30-90 days

• Technical errors affect pixel tracking

• Privacy regulations limit data collection

• Offline touchpoints remain invisible

While GA4 remains the most-used attribution tool, its limitations suggest merchants should consider multiple approaches, from platform-specific analytics to simplified comparative methods, for a complete understanding of their customer journey.

ECOMMERCE AI

🤖 Are Shoppers Ready for AI?

Brands rush to implement AI features, as customers prefer gradual improvements over radical changes to their shopping experience.

A consumer survey showed that, shoppers want AI to enhance rather than transform, with highest demand for improved product recommendations and faster discovery. However, trust remains a major hurdle, particularly with autonomous purchasing features.

🔍 Key Findings:

• Product discovery tops AI use cases

• Customer service needs human backup

• Trust builds through small wins

• Shopping enjoyment must be preserved

While AI in e-commerce is inevitable, success depends on gradual implementation that prioritizes customer experience over technological showmanship. Start small, build trust, and keep the human element alive.

NEWSLETTER TLDR;

WEEKLY ROUND UP

PRIVACY ALERTS: DeepSeek AI chatbot faces EU ban over data transfers to China. If you're using AI tools, double-check their data handling practices. German regulators aren't playing around with GDPR compliance.*

HOLIDAY PREP: Summer is prime time for Q4 planning. Early birds who analyze last year's data now see better holiday results. Seven key areas to focus on, from inventory to marketing campaigns.

AI SHOPPING: A new AI shopping assistant promises to make online browsing fun again. While impressive tech, remember that consumers prefer gradual improvements over complete transformations.

ATTRIBUTION: GA4's simplified attribution models are here. Data-driven or last-click? Choose wisely, but remember both have blind spots you'll need to work around.

AI ADOPTION: Omnisend's research shows customers want AI to enhance, not transform their shopping. Focus on practical improvements like better recommendations and faster product discovery before diving into autonomous features.

*Worth noting: The line between innovation and regulation is getting thinner. Smart merchants are balancing both.

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Signing off,

The Merchant @CartHustle