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# Cooling E-Commerce, Nextdoor Trust Factor, Slammed by Rent
- URL: https://www.nearmedia.co/cooling-e-commerce-nextdoor-trust-smb-rents-up/
- Published: 2022-05-06T18:30:03.000Z
- Updated: 2022-05-06T18:31:58.000Z
- Author: Greg Sterling
- Tags: News

### E-Commerce Was Hot – Now Not

E-commerce saw triple-digit growth in 2020; however growth has dramatically slowed, as stores have rebounded. A slew of new earnings reports illustrate the recent weakness. Amazon [disappointed](https://www.cnbc.com/2022/04/29/amazon-shares-sink-11percent-on-disappointing-guidance.html?ref=nearmedia.co), Ebay and Etsy [posted weak guidance](https://www.cnbc.com/2022/05/04/ebay-etsy-earnings-q1-2022-reflect-e-commerce-crunch.html??ref=nearmedia.co) (Ebay's total [sales fell](https://www.digitalcommerce360.com/2022/05/04/ebays-sales/?ref=nearmedia.co) for the fourth consecutive quarter). Shopify [disappointed](https://finance.yahoo.com/video/shopify-stock-tanks-disappointing-earnings-200715491.html?ref=nearmedia.co); Wish, Wayfair, Overstock and others were also down. MasterCard [reported](https://www.businesswire.com/news/home/20220505005348/en/Mastercard-SpendingPulse-April-U.S.-Retail-Sales-Remain-Steady-Up-7.2%2A-Year-Over-Year?ref=nearmedia.co) that April in-store sales were up 10% and e-commerce was down \~2% (though up 92% vs. April 2019). Right now there's a [broad sell-off](https://www.cnbc.com/2022/05/05/e-commerce-stocks-plummet-as-consumers-pull-back-online-spending.html??ref=nearmedia.co) among e-commerce stocks, as investors lose confidence in future growth prospects. That could change if other companies post better earnings. DoorDash and Uber were outliers, reporting 35% and 136% year-over-year revenue growth respectively. While it was always strategically dumb, investor pressure on retailers to spin out their e-commerce businesses now seems especially short-sighted. 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2022/05/Screen-Shot-2022-05-06-at-10.00.40-AM.png)

Source: MasterCard SpendingPulse (April 2022)

**Our take:** 

- E-commerce [is 13%](https://www.census.gov/retail/mrts/www/data/pdf/ec%5Fcurrent.pdf?ref=nearmedia.co) of total US retail. However consumer behavior isn't entirely reverting to pre-pandemic norms.
- Digital presence and tools increasingly drive offline sales. you can't succeed offline anymore without a successful online presence.
- Very few SMBs or enterprises will be successful if they don't fully embrace digital-first behaviors. A [recent survey](https://www.nearmedia.co/searching-for-smbs-covid-tech-weaponizing-location/) found, 71% of "growing SMBs" survived COVID because of digital adoption.

### Nextdoor Secret Weapon: Trust

As a public company Nextdoor needs to generate user growth and revenue to satisfy investors. But the company's public-facing mission is more lofty: to build connections in the real world and "cultivate a kinder world where everyone has a neighborhood they can rely on." Accordingly, Nextdoor has been trying to change its "neighborhood watch" culture into something more positive. Nextdoor recently recently released a "constructive conversations reminder" [tool](https://www.cnet.com/news/social-media/nextdoors-new-reminder-aims-to-cool-down-heated-conversations/?ref=nearmedia.co) to generate more civil discussions on the site. Earlier this week the company released new research that argues it's a great place to showcase your business. [Survey data](https://about.nextdoor.com/press-releases/nextdoor-releases-new-insights-report-revealing-the-power-of-neighbor-recommendations/?ref=nearmedia.co) say 96% of users have seen business recommendations on the site, 89% value them and 72% had been influenced by them. This points to the company's secret weapon: trust. 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2022/05/Screen-Shot-2022-05-06-at-10.56.15-AM.png)

Source: Nextdoor Traffic via SimilarWeb

**Our take:** 

- Trust is in decline both [online](https://www.axios.com/2022/04/07/trust-tech-companies-new-low-americans?ref=nearmedia.co) and [offline](https://www.pewresearch.org/fact-tank/2019/07/22/key-findings-about-americans-declining-trust-in-government-and-each-other/?ref=nearmedia.co). Google, Facebook, Yelp and other places are less trusted than in the past. Fake reviews don't help.
- Nextdoor could become the most trusted source for local business referrals. It could be terrifically effective for SMBs (already is for some).
- To become a primary local search tool there need to be UI/UX changes. It also should be ranking for "best \[category + location\]" queries.

### Rents Increase, SMBs Struggle 

Commercial landlords continue to raise rents, putting the squeeze on many small business owners across the US. During the height of the pandemic some long-established and beloved local businesses closed because they were unable to make rent payments. According to an April [survey](https://www.alignable.com/forum/rent-delinquencies-decline-significantly-for-minority-owned-businesses?ref=nearmedia.co) of roughly 25K SMBs by Alignable, "46% of renters polled said their rent was higher now than it was six months ago," with another 7% saying they anticipated increases soon. Ability to pay varies by industry but overall delinquency rates have increased recently. Manufacturing had the lowest delinquency rate (10%), while live events (50%) and arts-related businesses (59%) had the highest (see below). 

![](https://storage.ghost.io/c/03/80/0380d96d-ef7e-450e-96b3-2963e18aaab5/content/images/2022/05/Screen-Shot-2022-05-06-at-9.28.16-AM.png)

Source: Alignable (April, 2022)

**Our take:** 

- SMBs are facing labor shortages, higher costs and supply chain issues.
- In many categories consumers have continued to spend despite inflation. But that could change if inflation persists and confidence declines.
- Most SMBs survived the COVID crisis; however macroeconomic pressures now are an even greater threat in some respects.

## Recent Analysis

- **The Hidden Side of CX: Mining Unstructured Data**, [by Adam Dorfman](https://www.nearmedia.co/the-hidden-side-of-cx-mining-unstructured-data/)

## Short Takes

- **Shopify buys Deliverr** for $2.1B [to boost logistics](https://news.shopify.com/oh-ship-shopify-to-acquire-deliverr-for-21b-building-the-future-of-global-logistics-for-independent-brands?ref=nearmedia.co)/fulfillment.
- Bogus[DMCA takedown request](https://twitter.com/CyrusShepard/status/1521940398620303360?ref=nearmedia.co) removes **Moz** from Google SERP.
- **Yelp** turnaround: Company [reports](https://www.yelp-ir.com/news-releases/news-release-details/2022/Yelps-Strategic-Initiatives-Drove-Strong-First-Quarter-2022-Results/?ref=nearmedia.co) strong quarter, third in a row.
- **Google** [buys Raxium](https://blog.google/inside-google/company-announcements/google-acquires-raxium/?ref=nearmedia.co), MicroLED display tech maker, for AR/VR.
- **Apple, Google and Microsoft** support [passwordless sign-in standard](https://fidoalliance.org/apple-google-and-microsoft-commit-to-expanded-support-for-fido-standard-to-accelerate-availability-of-passwordless-sign-ins/?ref=nearmedia.co).
- Advertiser [interest](https://www.mediapost.com/publications/article/373623/tiktok-outperforms-facebook-twitter-in-advertiser.html?ref=nearmedia.co) in **TikTok** growing, declining for Facebook, Twitter.
- Co-founder of **WhatsApp** [now regrets selling to Facebook](https://thenextweb.com/news/neeraj-arora-whatsapp-sale-facebook-regret-analysis?ref=nearmedia.co).
- Advertisers: If **Twitter** relaxes content moderation we'll bail ([NYT](https://www.nytimes.com/2022/05/05/business/media/elon-musk-twitter-ads.html?ref=nearmedia.co)).
- Musk acquisition of **Twitter** [faces FTC antitrust review](https://www.bloomberg.com/news/articles/2022-05-05/musk-faces-ftc-antitrust-review-on-twitter-alongside-stock-probe??ref=nearmedia.co).
- TurboTax owner **Intuit** [agrees to pay](https://www.cnbc.com/2022/05/04/turbotax-owner-intuit-to-pay-141-million-to-customers.html?ref=nearmedia.co) $141M for deceiving tax filers.
- Behind search: [Profile](https://finance.yahoo.com/news/google-raters-paid-to-teach-algorithm-204308901.html?ref=nearmedia.co) of $10 hourly **search-quality rater's** world.
- **Google** [removed](https://blog.google/products/ads-commerce/ads-safety-report-2021/?ref=nearmedia.co) 3.4B ads, suspended 5.6M advertiser accounts in 2021\.
- **Amazon,** Peacock [inserting product placement](https://www.thedrum.com/news/2022/05/03/peacock-and-amazon-prime-video-reveal-virtual-product-placement-ads?ref=nearmedia.co) digitally after the fact.
- **Abortion's end** could have unintended consequences for biz ([WaPo](https://www.washingtonpost.com/business/2022/05/04/companies-abortion-decision/?ref=nearmedia.co)).

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