The Current, delivered daily.
BigCommerce became the latest ecommerce platform to announce layoffs on Thursday.
The open SaaS ecommerce platform said it will reduce its workforce by 13% across employees and contractors by the end of the calendar year as part of a restructuring plan that is designed to speed up the path to profitability. As of Dec. 31, 2021, BigCommerce had 1,337 employees, according to an SEC filing reported by Marketwatch.
On its recent earnings call, company executives signaled that they will shift sales and marketing dollars to enterprise sales, where it said it sees “the strongest unit economics and the opportunity for long-term, profitable growth.” On Thursday, the company said the reduction of non-enterprise marketing expenses is part of the restructuring plan.
“This focusing of our spending and resources, which impacts all of our teammates, was an incredibly difficult decision to make,” said CEO Brent Bellm, in a statement. “We are implementing changes that will enhance the strength of our financial profile against the backdrop of a challenging economic environment. It will also drive focus on the areas we view as having the strongest product market advantage and best long-term financial performance,” said Brent Bellm, CEO of BigCommerce. “We are sadly parting ways with some incredibly talented people whom we have grown to cherish as friends and colleagues over the years. We will do our best to support them through the transition to find their next opportunities.”
The company said the cost associated with the layoffs will range from $4.2 million to $4.6 million.
BigCommerce cast the move as necessary to achieve profitability quicker, which follows a pattern of prioritizing sustainability over growth heading into 2023. The company said the restructuring shifts its adjusted EBITDA breakeven timeline from mid to late 2024 to the fourth quarter of 2023. It also reiterated guidance for the fourth quarter and full year.
BigCommerce follows Amazon, Shopify and Meta among the platforms that provide the infrastructure for ecommerce to make layoffs this year. In their announcements, those other companies said they had over-hired during a pandemic ecommerce boom that did not see growth pull forward as expected.
For its part, BigCommerce said the enterprise focus and profitability were the main forces behind the reduction.
The move toward running ecommerce for more established brands and retailers can require longer sales cycles and could mean choppier growth month-to-month, but it also holds out the potential of more sustained revenue, with frequent opportunities to add features. In Q3, BigCommerce said its enterprise accounts were up 16% year-over-year, while annual recurring revenue (ARR) for this segment was up 35% year-over-year. Clients who launched new stores using BigCommerce in the quarter included One Kings Lane, Hungry Harvest, Music Direct and Dippin’ Dots.
“We are actively shifting our demand generation budgets, both in people costs and variable spending towards the superior economics delivered by enterprise accounts,” Bellm told analysts on the recent earnings call. “We have tested this increased spending prioritization over the past two quarters, and we are moving full speed on this now across all teams and budgets.”
Coming out of the swings of the last two years, Shopify has also voiced a priority on signing more enterprise clients. With a more difficult environment for startup brands as a result of the tightening economy and more difficult performance marketing following Apple's privacy changes, don't be surprised to see more ecommerce SaaS companies focus on bigger stores in 2023.
Trending in Retail Channels
The partnership brings together subscriptions and shoppable content.
Roku and DoorDash are teaming up to connect TV and food delivery in one experience.
The news: Roku and DoorDash announced a new partnership that will allow people to order food delivery from a shoppable ad on their TV. Along with the capabilities being put in place by the tech platforms, Wendy’s is also adding shoppable content that will provide a discount on ordering at launch.
How does it work? For Roku account holders, there are three parts to the partnership:
DashPass: DoorDash is providing a complementary six-month DoorDash subscription. Called DashPass, this provides $0 delivery fees on orders from restaurants, grocery and retail stores on DoorDash’s marketplace.
Shoppable ads: Roku viewers will be able to click from their remote to order straight from ads on Roku via offers provided through DoorDash. For the first year, DoorDash will be the exclusive ad solution provider for restaurants on its marketplace to buy shoppable ads on Roku. With this, restaurant advertisers will also be able to work with DoorDash to attribute, target and measure TV streaming ads.
Wendy’s: The companies said Wendy’s also upped its digital capabilities as part of this partnership. The chain will make offers available through the shoppable ads. At launch, it will provide $5 off any Wendy’s purchase of $15 or more.
Key quote from Rob Edell, GM and head of consumer engagement at DoorDash: “While this offer unlocks DashPass benefits and perks for Roku users everywhere, it also provides our merchant partners with an opportunity to promote DoorDash offers through TV streaming. Consumers can conveniently and affordably get the best of their neighborhood delivered to their door, while brands can reach diners at the right time and drive instant conversion from the comfort of the living room.”
What it shows about commerce
The partnership is a sign that several different strategies being employed in digital media and commerce are converging:
Streaming and delivery: Watching TV and ordering food is a common behavior. In fact, Roku research indicates that one in three users order takeout or food delivery weekly. The partnership shows how there is room for the platforms that provide each of these distinct services to work together. It's a reminder not just to monitor how customers use your product, but what other products and services they use with it.
Shoppable ads and subscriptions: As digital commerce grows, there’s interest in reducing the steps between when a user thinks about making a purchase, and when they actually click “Buy.” This partnership does that in a couple of ways. With shoppable ads, Roku viewers can order directly from their TV, and even within the show they are watching. Switching devices may be a barrier, however small, to a sale. On DoorDash’s side, putting a subscription in place means users don’t have to think about logging in or consider delivery fees. This shows how introducing more interactive capabilities to streaming can open up new opportunities for commerce. Roku data shows that 36% of its users are interested in receiving interactive offers, such as a scannable QR code or text message. Such capabilities allow users to take action without switching screens.
Retail media and CTV: On the advertising side, the partnership is connecting DoorDash’s ad network with Roku’s content capabilities. DoorDash operates as a marketplace, while Roku serves ads during streaming content. Both have powerful customer data. DoorDash has purchase-level, or first-party, data. Roku has data on millions of customers, and the ability to reach them while they are doing the common activity of watching TV. The platforms also both have the ability to target users and measurement capabilities that can make this whole system even more powerful. While this partnership sets out one way the companies will work together immediately, it’s a safe bet that the partners will find other areas of mutual benefit to explore.
Further reading: It’s just the latest move by Roku to bring shoppable content to the platform. Last year, the streamer partnered with Walmart to pilot direct ordering straight from shoppable ads.
Is Amazon next? Break down the individual parts of this partnership: Subscription, delivery network, marketplace, streaming platform, advertising capabilities. Amazon owns each of these, and it even has a restaurant delivery partnership with Grubhub. Will it put these parts to work in a similar way? The better question may be, how long until it does so?