Dive Brief:
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Shogun, an e-commerce software startup, has raised $10 million in Series A funding from Initialized Capital, VMG Partners and Y Combinator. Per the company's announcement, the funding will go toward growing its Page Builder platform and introduce a new product that the company anticipates being "the future of headless commerce."
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The startup's Page Builder tool integrates with Salesforce, Shopify, BigCommerce and Magento. Merchants used Shogun Pages to bring in more than $22 million in gross merchandise volume during the 2019 Black Friday and Cyber Monday period, the company noted in a blog post.
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Shogun stated that its software is meant to help direct-to-consumer brands better compete with retailers like Amazon.
Dive Insight:
It appears that Shogun is trying to even the playing field between sites like Amazon and up-and-coming retailers through its e-commerce software. That means, in part, increasing the speed of e-commerce purchases on mobile devices. In the past, retailers have not spent much on creating mobile apps, per The Manifests' 2018 survey. Depending on what the retailer's needs are, it's up for debate as to whether creating a mobile app will deliver a return on investment for emerging retailers.
"It not only democratizes [progressive web apps] by allowing emerging brands to now cost-effectively compete in mobile commerce, it also allows for easier and quicker site iterations and testing — which is increasingly important — by putting the control back into marketers' hands and removing the need for a massive team of developers," Carle Stenmark, partner at VMG, said in a statement regarding Shogun's technology.
Shogun's announcement makes reference to brands' need to maintain control over their digital presence and compete with Amazon. The need for brands and smaller retailers to have similar digital capabilities and control over their online image has come up repeatedly as merchants voice concerns with marketplaces facilitating counterfeit goods sales.
The inability to control the sale of goods in online marketplaces has negatively affected consumers and caused retailers to question their presence on such platforms. A report from Incopro found that more than a quarter of U.S. consumers have mistakenly purchased counterfeit goods online, and 52% of them said their trust in a brand diminished after buying knockoffs online. Late last year, Nike decided to pull its products from Amazon as part of its focus on "elevating consumer experiences."
In response to the counterfeit problem, marketplaces like Amazon and eBay have launched initiatives aimed at curbing knockoff sales. The Department of Homeland Security has also said it would step in to address the problem. But as Amazon continues to grow through its gadgets, physical stores and efficient shipping, it's not clear whether the e-commerce giant can compete based on quality.