Operator: Our next question comes from Koji Ikeda with Bank of America. Please proceed with your question.
Koji Ikeda: Hi Amir, Nir and Ofer. Thanks for taking the questions. I wanted to dig in on the fulfillment take rate and how to think about this metric going forward. In the quarter, take rate was about 8.5%. And I realize you did call out the kind of multi-local and standard shipping. So I really appreciate the color there. But also thinking about — I do recall in prior quarters, sometimes smaller box, high-value products can drive the fulfillment take rate lower. And then layering on the ramp of Market Pro on top of that. The question here is how should we be thinking about the long-term fulfillment take rate for the business and maybe some of the dynamics that could affect that?
Amir Schlachet: Yes. So thank you for that, Koji. I’ll start from luxury, as we mentioned, it wasn’t a great quarter for luxury. So that didn’t have any negative impact on fulfillment take rates. Going forward, and as we mentioned, the main drivers were multi-local and also some shift from Express shipping to standard shipping. Going forward, we do expect stabilization and maybe a slight improvement going into next year, into the first quarter. But all in all, if we look to 2024, and again, we are working on the budget currently, but we do expect take rates to stay relatively stable throughout ’24 with some volatility between the quarters.
Operator: Our next question comes from Maddie Schrage with KeyBanc Capital Markets. Please proceed with your question.
Madison Schrage: Hi guys. Just wanted to maybe keep on the fulfillment take rate subject. I wanted to know if any of the consumer weakness kind of also resonates with shipping speeds and shipping take rates. Just wondering if we would maybe express — or expect less express shipping in the holiday season this year maybe compared to last year? Thanks.
Nir Debbi: I think you’re perfectly right that there was some effect related to consumer sentiment and the higher growth of standard shipping versus Express, we’ve seen in Q3 as we’ve seen shoppers mainly in Europe, trending more towards the standard with increased standard share in the mix. However, when we go into Q4, especially for peak period and into Christmas sales as consumers are much more concerned with the time it will take for the package to arrive. A lot of it is gifting, especially if we speak about the Christmas shopping, we don’t expect to see this trend continue as we do give some warnings in the checkout prior to Christmas to alert about higher transit time in standard. Usually, we see a shift towards — back towards Express. So, we don’t expect this to continue.
Madison Schrage: Okay. Great. And I think we’ve heard from some other e-commerce players that they’re kind of expecting bigger discount this holiday season from the retailers. So just wondering what your guys’ expectations are in terms of maybe discounts from retailers and maybe lower cart sizes than typical? Thanks.
Nir Debbi: So within September, October, we did witness some lower AOV on average. It was driven by, I would say, a reduction in luxury that also with smaller baskets in Europe, the combination of both yielded on company-wide, a bit of a reduction, or average order value. And we do expect, some of it to translate into lower baskets within peak. We did and we do discuss especially with some of our larger brands, or plans into peak. And some of it is based on heavier discounting than last year. All in all, we don’t think it would be a major effect. And the early signings of peaks that we see in the last few days look very positive in terms of uplift in sales without a major impact on the average basket versus last year.
Operator: Our next question comes from Pat Walravens with JMP Securities. Please proceed with your question.
Pat Walravens: Great. Thank you. I mean, so Amir, putting it all together, what are the top one or two things that you feel as CEO, you need to get done for 2024? And as part of that, does the Shopify agreement still expire in April 2024 with the automatic renewal? Is that still how that works?
Amir Schlachet: Thanks, Pat. I’ll start with the second one. It’s easier as we mentioned, the agreement was extended for another year. The original agreement as was the three year initial term, which indeed ends in April of next year, but it also had an auto renewal mechanism that kicked in. So it was renewed, and it’s now until April 2025. So that’s regarding the Shopify agreement. In terms of priorities for next year, I think it’s pretty clear for us. We have our core set. We believe very firmly in our ability to continue executing on all our strategic vectors. So it will it will be making sure that we continue the strong push of our funnel into actual deals. And getting the many merchants that we have signed and in integration, getting them live as planned.
And in parallel, growing Shopify Markets Pro together with Shopify, and extending our reach to additional markets into additional verticals as we stated. On top of that, we have quite a few strategic initiatives. We talked a lot about the demand generation also in previous quarters, and we have a few value-added services that are longer term in terms of their impact on the actual financials, but we believe they are important stones in the building that we are building, and we will continue to invest in these as future growth engines for the business.
