🪃 The Five-Year Boomerang

Happy Tuesday!

Ran into a merchant still waiting for the "post-COVID acceleration." Awkward.

From billion-dollar bets gone wrong to AI search tricks, fraud-fighting alliances, Alibaba's sourcing revolution, and the quiet wallet takeover, this week is packed with reality checks and future glimpses.

Let's dive in! 💸

ECOMMERCE NEWS

📊 E-Commerce Finally Returns to COVID Peak After 5 Years

U.S. e-commerce has reached a milestone: 16.3% of total retail sales, matching the exact peak it hit during lockdown in Q2 2020. The Census Bureau's latest quarterly report reveals how wrong industry giants were about digital commerce's trajectory.

The journey exposes costly miscalculations. Shopify doubled its workforce while Amazon added 427,300 employees in just 10 months, only to conduct massive layoffs later.

📈 Key Insights:

• E-commerce experienced 42% growth in 2020

• Growth crashed to just 6.5% in 2022

• Non-e-commerce surged 16.9% in 2021

• Total retail expanded to $7.38 trillion in 2024

The lesson is clear: COVID didn't accelerate e-commerce. It created a temporary disruption. What we're seeing now is genuine, sustainable adoption built on consumer choice rather than necessity, with both online and offline retail growing in a dramatically expanded market.

ECOMMERCE TOOLS

🤖 3 AI Search Optimization Tools for Smaller Merchants

As AI-powered search changes product discovery, smaller merchants face a challenge: how to appear in AI responses from platforms like ChatGPT and Google's AI Overviews. A new category of tools promises to help with "generative engine optimization" (GEO).

After evaluating over a dozen options, three stand out for small and mid-sized businesses: Writesonic for product page optimization, Peec AI for competitive benchmarking, and Profound for visibility measurement across AI platforms.

🔍 Top Tools:

• Writesonic for direct product page optimization

• Peec AI for SKU-level competitive analysis

• Profound for comprehensive visibility tracking

The good news? Merchants don't need expensive tools to start improving AI visibility. Begin by auditing your presence with free trials, identify high-intent prompts by asking AI platforms directly, and start tracking a small selection of products monthly before expanding your strategy.

ECOMMERCE TRENDS

🛡️ Firms Team Up to Tackle AI Shopping Risks

Riskified and HUMAN Security announce a new framework to help e-commerce merchants counter fraud risks from AI shopping agents. The partnership aims to protect businesses from revenue loss, inventory manipulation, and reputational damage while enabling safe AI commerce.

Traffic referred by large language models is significantly riskier, with one ticketing merchant seeing 2.3 times more risk compared to Google search traffic, and an electronics merchant showing 1.8 times more risk.

🚨 Key Threats:

• Adaptive probing to bypass security rules

• Automated reseller arbitrage stripping inventory

• False declines from inadequate fraud systems

The partnership comes as AI agents increasingly evade traditional rules-based fraud management by removing key behavioral signals. These systems can "write prompts to avoid typical patterns that would block them" from manipulating inventory or exploiting pricing strategies.

ECOMMERCE AI

🤖 Alibaba Unveils AI Agent for Global Trade Sourcing

Alibaba International launches Accio Agent, an AI-powered trade assistant built on its B2B search engine. The system promises to automate 70% of manual sourcing tasks, converting what traditionally takes days into minutes of work.

Trained on one billion product listings and 50 million supplier profiles, the agent streamlines everything from product planning to supplier selection.

📋 Key Features:

• Product development planning with market data

• Automated regulatory compliance checks

• Side-by-side supplier comparisons

Accio Agent operates like a team of dedicated professionals. Sourcing agents, product developers, engineers, and market researchers, all working together. The e-commerce AI market is projected to reach $37.69 billion by 2032, with a 25.5% annual growth rate.

DIGITAL PAYMENTS

💳 Digital Wallets Hit 16% of Online Purchases

PYMNTS Intelligence reports digital wallets now account for 16% of online retail purchases, double their usage in physical stores. The comprehensive study of 2,722 US consumers reveals shifting payment preferences across shopping channels.

While overall e-commerce adoption has stabilized across generations, payment methods vary significantly by context: 42% choose debit cards in physical stores, while 38% prefer credit cards online. This reversal suggests consumers perceive different security needs between channels.

📊 Key Findings:

• Digital wallet usage twice as high online

• Amazon dominates online card purchases

• Gen Z 72% more likely to order food online than boomers

The report also highlights interesting merchant patterns, with debit card users gravitating toward value-focused retailers like Walmart online and dollar stores in-person. Meanwhile, despite overall e-commerce parity across generations, younger shoppers still lead in specific categories like restaurant and grocery purchases.

NEWSLETTER TLDR;

WEEKLY ROUND UP

E-COMMERCE TRENDS: U.S. e-commerce finally returns to its pandemic peak of 16.3% of retail sales... five years later. Major players like Shopify and Amazon who doubled down on permanent acceleration had to backtrack. The lesson? What looked like a step-change was just a temporary disruption.*

GENERATIVE AI: New GEO tools help smaller merchants appear in AI search results. Three options worth exploring: Writesonic for product page optimization, Peec AI for competitive benchmarking, and Profound for visibility tracking. No need for expensive solutions, start with free trials and track a few products monthly.

SECURITY RISKS: AI shopping agents are creating new fraud risks. Traffic referred from large language models shows 1.8-2.3x higher risk rates compared to traditional search. Riskified and HUMAN Security have partnered to combat adaptive probing and automated reseller arbitrage that can strip inventory.

AUTOMATION: Alibaba's new AI agent promises to handle 70% of manual sourcing tasks for global trade. With 40% of SMBs now run by solo entrepreneurs, the system combines product planning, compliance checks, and supplier searches into minutes of automated work.

PAYMENT METHODS: Digital wallets now account for 16% of online purchases, twice their usage in physical stores. Interesting split: 42% prefer debit cards in-store vs. 38% choosing credit cards online. Amazon dominates online card transactions while Walmart leads physical retail.

Worth noting: The past five years show that genuine, sustainable adoption comes from consumer choice rather than necessity. Both online and offline retail are growing in absolute terms.

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Signing off,

The Merchant @CartHustle