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The Jason & Scot Show - E-Commerce And Retail News

Join hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Founder and Executive Chairman of Channel Advisor, as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
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Jan 23, 2020

EP205 - CES and NRF 2020 Recap

CES 2020 was in Las Vegas Jan 7th - Jan 10th.

NRF Big Show 2020 was in New York Jan 11-14th.

Scott Galloway (ProfG) hosting a 2020 Tech Prediction lecture the evening of Jan 14th.

PSFK Future of Retail 2020 event on January 15th.

We recap them all with a lens on what's relevant to retailers and digital shopper marketers.

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 205 of the Jason & Scot show was recorded on Wednesday, January 23nd, 2020.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Google Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scot show this is Episode 205 being recorded on Wednesday January 22nd 2020 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.

Scot:
[0:39] Hey Jason and welcome back Jason Scott show listeners well those of you that are regular listeners have probably realized we has been a little while since we put out a show
and the reason why is my colleague Jason here has been traveling like a crazy man.

Jason:
[0:55] This is true I have my annual fun start to the year with the whole CES in RF Marathon which I just got back from.

Scot:
[1:06] I thought this year you weren't doing CS what what what happened we had a client call and Russia.

Jason:
[1:11] Did end up yes having to go for a shorter than usual stay at CES but I did end up having to make an appearance.

Scot:
[1:18] What happens when you're the chief digital retail e-commerce strategist goes goes that way.

Jason:
[1:25] Yes when you yes it's true when you have that many words in your title like unplanned trips are part of the bargain.

Scot:
[1:33] Coco we thought would use most the show to kind of catch up on that and then try to work some news in there too let's start at CES in the first of all big question did you get any new gadgets.

Jason:
[1:45] You know a disappointing year for me personally and part of that may be because it was a shorter trip the,
the stuff like the stuff I tend to discover that like I personally want is maybe deeper in the CES catalog and I maybe didn't get to all of those booths this year I kind of had to hit the main.
Main Milestone booths so yeah nothing super excited I got I maybe have a little.
Personal problem hoarding Chargers and cables and so there are some nice new,
um third-party chargers for the Macbook so I did get a new anchor and the new hyper juice hundred watt charging systems.
Yeah no no super important purpose but yes I have some new Chargers that I have to hide from my wife I don't think she even cares about the spending I think she just cares about all the space that the unused.
Chargers take up in our life.

Scot:
[2:50] Yeah there's a drawer there where they all could live.

Jason:
[2:52] Yeah in my workshop it's more of a a system of drawers for.

Scot:
[3:01] They buy hcf like the 1985.

Jason:
[3:05] I mean people people laugh at me but then we need to find a 30 pin Mac charger for iPhone 3 I have one.

Scot:
[3:14] Boom I got it yeah.

Jason:
[3:18] Yeah so yeah got some new Chargers and I did this is kind of CES adjacent but I did get all new
networking hardware for my home office so I think you and I both did internet connection upgrades.
For the holidays and I added a fancy new firewall router access point and switch.

Scot:
[3:44] Furcal are you gigabit.

Jason:
[3:46] I am so so Comcast just add a gigabit in my neighborhood so we upgraded to gigabit and then I'm using,
this cool new device called the unify dream machine,
which is from I want to say it's a Ubiquiti networks and they do a lot of.
Commercial Wi-Fi equipment for like schools and institutions and things and so this is a a.
A Wi-Fi access point a firewall and and said a managed switches that are all controlled from their commercial software.
Way overkill for a home network but fun for tinkering.

Scot:
[4:35] Yeah I think I've seen one of those is it a it looks like a little cylinder.

Jason:
[4:39] It exactly so historically like they met they mostly make rack-mounted equipment and this is the first time they've,
they've made an all-in-one that that is supported by their sort of,
business level software and it looks like a cylinder and in fact it reminds people a lot of,
discontinued Apple Wi-Fi access point and so there's some people from that we're big fans of that,
that I forget what that was called like they are.

Scot:
[5:11] I had one I can't remember it's called him.

Jason:
[5:16] So yeah so people people think it's the spiritual successor to the Apple.

Scot:
[5:23] Cool what else any interesting Commerce news is he yes.

Jason:
[5:27] Yeah I actually thought it was a reasonably important year for Commerce,
like the Super Readers Digest version on this show it's the consumer electronic show I personally have been attending for 32 years it's the largest trade show in the u.s. like 200,000 people,
attend,
many years ago it was a buying show where people from retailers would go to figure out what they're going to carry for the year now it's mainly a PR show where they try to generate Buzz for new products to,
sell more new technologies but it's where a lot of consumer Technologies where watch for the first time so like the DVD player and the if you go back far enough the VHS.

[6:10] Tape system in the whole VHS beta War played out at CES,
and stuff like that in the Apple the Apple iPhone was famously launched during CES but not at CES as a Steve Jobs sort of did some clever counter-programming,
so people go,
both to like sort of do trend-spotting and see if there's any major new consumer electronics platforms that are coming down the path and from that standpoint I would like there's one big one that had the buzz I'll save for the end,
but there was a lot of smaller more tactical stuff that I think is going to have a meaningful impact on,
retail in particular digital merchandising it retailgeek.
So most of the listeners of this show are probably familiar with e-ink if you ever had a currently have a Kindle book reader it uses e-ink,
and it's a it's an important digital display technology because it's Dynamic you can change the image that's on it,
it's reflective so it works in super bright sunlight and it basically takes no power to display an image so you need electricity to change the image but once the image has changed.
It literally is moving ink around on the display and then you could turn off the power in the ink stays where.

[7:26] Where it was and so it's great for for not using a lot of power in an electronic book reader it,
great for having high visibility even in bright sunlight but a very common retail use case is it's the main display technology that used for all the digital fact tags that I talk about all the time.

[7:45] And one of the big drawbacks of e ink has historically been that it's only black and white or only black red and white or only black yellow and white so very limited,
color palette and so you couldn't do really pretty,
just blaze you couldn't use it for really pretty signs and this was the first year that they were showing full color E Ink that look very vibrant and High Fidelity and so.
You know we'll see you that.
You know maybe we'll have some color book readers in the near future and I suspect we'll see it trickled down to a new generation of electronic.
Price labels and fact tags for retail stores.
So that was an interesting technology and a way cooler display technology was released by Delta Airlines of all people.
And and so this is a new technology to sort of replace a.
Video monitor in a public area and it's called parallel reality and so Delta Airlines found this technology and invested in the company and they've announced that the first commercial deployment will be.
In the Delta lounges at the Detroit airport later this year.
And what this technology does is it lets a hundred people stand in front of a TV screen and have each of them get a different Custom Image that they see.

[9:13] So
so very precisely depending on where you stand you see a completely different image so the use case for Delta in this Lounge is all the customers stare at the flight status display and they all,
see a display that only has their flight information or prominently highlights their flight information.

Scot:
[9:32] Okay how does it know who's looking and we're there.

Jason:
[9:36] So first of all as soon as you describe this to someone they're like this sounds like it's going to be some kludgy gimmick and I was super skeptical so two halves of this problem the first half is,
can you really display an image that that is high fidelity and looks like discrete for each person,
and I went in with very low expectations and I was kind of Blown Away like it it totally works,
the the demo they had their like there's like the pixels weren't tiny so you could kind of see the pixels and,
the display is made up of a bunch of.
Of multiple smaller displays so you could kind of see the frame the internal frames so I'd say it wasn't,
but they were super open to saying yeah we know those are the visual flaws like we already have more advanced prototypes that solve those problems and what we deploy in Detroit later this year is going to.
Not have any of those those visual artifacts but basically what it's using is,
beamforming where they're essentially like each pixel is a projector and they can fire different color lights at different angles so by knowing exactly where your eyeballs are relative to the screen,
they can send you an image that's different from everyone else so that's the display technology as it's kind of like a projector inside of a television or.

[10:57] Thousands of projectors inside of a television and it works remarkably well and then you're very,
pertinent question how do they know who and where those eyeballs are to decide what to show each person and the answer to that is,
a combination of Wi-Fi RFID and your mobile phone so this is not,
this won't work for an anonymous use case in the Delta model the reason they're doing it in the lounge is everyone has to check into the lounge and show that they're a member so when you walk into the front desk,
you scan your mobile app they're using cameras similar to an Amazon go set up to track where you are in the lounge,
and they know who you are because you were holding a mobile phone with your unique ID on it to check in and then they're able to deliver your your unique flight information to you so it.
It's a kind of a combination of Amazon go for the identifying the person and their location and this new parallel reality display technology for,
for beaming the different messages and so it.

[12:07] It works better than I expected it seems pretty darn close to real we'll see if they're really able to get this in a while,
lateral out in an airport this year but like if it all works it's pretty easy to imagine a number of use cases for public displays and checkout systems and things like that and retailgeek,
what it would be really handy to be able to show different images to different customers on the same monitor.

Scot:
[12:30] Very cool was this the big one we're waiting for or know there's more to come.

Jason:
[12:36] No no more to come so the another interesting technology that like was kind of spooky as Samsung was showing this.
These avatars did they call neon life into these artificial humans,
and so you walk up to all these five or six foot tall monitors and if there's like a person in each Monitor and they can talk to you interact you with you and they look like.

[13:04] Completely real people like in so you would assume this was a video but these are computer generated people that are extremely lifelike,
and so the idea is that you could potentially walk into a retail store and you know there might be a artificial intelligence help agent.
That looks like a real sales associate that you're basically looking at through a glass window that can talk to you in,
and be more human that was the kind of use case that Samsung was pitching the the more interesting use case to me is like an you,
render different shapes and sizes of people and put apparel on them so you know could you could this be kind of like,
a digital mannequin scenario for retail stores and.
It was scary life like in the one thing I would say is they would call this an advanced science project so these avatars apparently took a super long time to build and they say that this technology is still three or four years away from being completely.

Scot:
[14:09] They have natural language parsing like kids or talk to them and.

Jason:
[14:12] They did but that wasn't part of the the magic so they were using that were using other Samsung artificial intelligence like in fact Bigsby is their artificial intelligent agent too
like decide what the Avatar was saying and to interpret what you were saying and so they weren't claiming any like.
You know new new Evolution there what was new about this neon life,
technology was how lifelike they could make the visual representation of a person and essentially you know it's,
it's like the next step to like not paying actors to be in the movie and instead having these these digital avatars that.
That will be acting in all the movies and stuff.
But I you know if it gets commercialized I can imagine a retail use case for that the next product that really caught my eye in this got a lot of Buzz at the show and I think this was a,
a darn impressive product came from L'Oreal and it's called perso,
Scot you may have followed this because I know you try to stay close to the beauty and cosmetics base.

Scot:
[15:24] I do.

Jason:
[15:25] But so the idea here is,
personalized beauty and cosmetic products that are formulated at home,
so so they initial concept has three different products there's a liquid lipstick product there's a,
liquid foundation product and there's a moisturizer so each of these is kind of a.
A metal cylinder like like one of those Yeti mug type things a metal cylinder and using an app you say I want this color lipstick,
and you know out of a set of holes in the top of this mug,
that exact shade of lipstick or several lipsticks come out that when you then blend them together with a in applicator or your finger like mixed to the particular color that you ordered.
And so the foundation comes out in a color custom color that you ordered the lipstick comes out in a custom color that you ordered and the moisturizer comes out in custom formulation that you ordered so it may be has.

[16:34] You know more moisturizing or sunscreen depending on the environment you're in or the the weather and a particular day and so the
to me the one that made the most sense in the kind of you know coolest use case is the lipstick they do things like you can point your camera at your outfit,
and it will recommend shades of lipstick that go well with your particular outfit and then it can produce,
that lipstick for you and so the reason I thought this was pretty impressive as it seemed to work really well people that tried it were seem to think it was,
not a gimmick that it was you know that they were quality products and they were totally legitimate and you know I've spoken to lots of women that think that the,
the custom shade of lipstick on demand would be,
total useful and I've smoked I've spoke to some women that think the custom foundations would be useful and I just think we're at this inflection point when more and more products are going to be customized for each individual user so whether that means
they're fabricated custom at a factory and quickly shipped to you or they have the ability to be customized in your own home this is essentially a
3D printer for Cosmetics or an inkjet printer for cosmetics and so I it to me it seemed like one of the first viable,
custom products in this category and one little Nuance that I thought was really clever about the whole thing.

[18:01] That the cylinder like could totally sit on your makeup counter at home and it seems like it would fit just fine but what happens when you want to take your lipstick with you and put it in your purse like that wouldn't work very well so it turns out the top of all of these cylinders,
is removable and it's magnetically attached to the cylinder so after you specify a color and it mixes some of that color up
you can just take the top of the cylinder off which is kind of the size of a makeup compact throw it in your purse and take your custom color with you so,
pretty clever and then you buy refill cartridges just like you'd buy refill ink for an inkjet printer.

Scot:
[18:39] That's where all the money is.

Jason:
[18:40] Yeah oh for sure but so I thought that was super interesting when you get into the Health Pavilion,
there were a number of players like one that caught my eyes was called DNA nudge and these guys are essentially doing a DNA test
and then they're helping you select,
Foods diet nutrition that match your unique DNA so again going back to this notion of customization that like,
you know the diet you select the foods you buy should all be predicated based on your your underlying DNA that they help you help you find.

Scot:
[19:20] Did you just come back and say error you are 99% an espresso beverage.

Jason:
[19:26] That is funny so I have.
Carefully avoided doing any of these DNA because I actually think there's some like significant privacy concerns and I like I don't know maybe I'm I'm.
Overly cautious but like I haven't wanted to just give my DNA to one of these for-profit companies with like dubious privacy policies.

Scot:
[19:53] Cool.

Jason:
[19:55] I don't know what about you Scott are you totally in on 23andMe do you do it like every month to see if your DNA is changing.

Scot:
[20:01] I've done both yeah it's pretty interesting.

Jason:
[20:03] Okay yeah I will be honest I would be totally.

Scot:
[20:06] Hi I don't have any murders out there I'm worried about.

Jason:
[20:09] Yeah well I read too much of a boring life to be very worried but I but here's the thing you could have an interesting relative that you're throwing under the bus by doing this.

Scot:
[20:18] Yeah they shouldn't do their crimes.

Jason:
[20:20] My fair enough,
yeah so again I can see it I might be being a little silly on that but I haven't wanted to do that so then you know it's the car thing is a big thing here they are,
like the car car tech now tends to get launched at CES not at the auto show.
So you know there's there's you know some interesting electronic prototype cars that may or may not ever see the light of day.
The huge thing I noticed this year in the car Pavilion is that every car seemed to have an Alexa integration like that seemed like that was.
Taking over as the like.
New cabin Tech that everybody was marketing and so I think Amazon announced that they're now over a hundred thousand consumer electronic devices that have Alexa embedded.
From more than 9,500 unique Brands and of course the new device with Alexa in it that I imagine you're going to need is the Lamborghini.

Scot:
[21:28] Yes absolutely.

Jason:
[21:29] I think that will round.

Scot:
[21:31] Finally took me over the edge.

Jason:
[21:33] Yeah that around out your stable just fine
they're like speaking of am Amazon Integrations I Amazon has a couple booths at the show they have a booth that's primarily focused on the Alexa and a lot of third party you know,
demos with that they have a booth in the home automation section dedicated to key and all the last mile Solutions and things but in the Amazon Booth one of the interesting ones was.
This this cpg company Reckitt beckon sir.
Commonly called RB they make a bunch of products like baby formula and finish is their big brand of dishwashing detergent.
And so they have upgraded all of their packaging to have Dash replenishment built in.
So when you get low on baby formula the box that you bought your baby formula in just recognizes that and automatically reorders more baby formula and when you get low on those.
Those PODS of finished dishwashing liquid the package automatically orders more for you.

Scot:
[22:47] The saw the Lamborghini thing in the it was funny there was like a poster which had like some amazingly handsome Brad Pitt of time looking dude and he said Alexa I'm hot,
and then she said she she knew to turn on the air conditioner.

Jason:
[23:05] Yeah yeah context.

Scot:
[23:07] So maybe wonder how often is Jason uttering Alexa I'm hot to his devices.

Jason:
[23:13] Yeah I feel like that's not even the most concerning thing you need to worry about me saying to Alexa.
I mentioned Samsung Bigsby earlier computer vision was a big thing I felt like half the booths were doing facial recognition for some nefarious purpose but Samsung built it in a refrigerators so,
in the past they've had these smart fridges that for example had a webcam in them so you could kind of like when you're in the grocery store and couldn't remember if you had eggs you could turn on a webcam and see the inside of your refrigerator.
Which I was like to point out probably wouldn't help you because your eggs are probably in a in an opaque car turn it Carton and you can't see how many are in there,
but that pesky detail aside they're now using Bigsby to do image recognition and take an inventory of your refrigerator so the smart refrigerator knows like,
that you have a quart of milk and how many times you've taken it out and likely how much milk is left in that core.

[24:16] So that was interesting there were a thousand Last Mile solutions that at CES so lots of people like with,
clever approaches and not clever approaches to porch piracy to delivering to your refrigerator to delivering to your garage to your car trunk drones and robots,
um
Kind of improved efficiency for for bow pass orders for store pick up orders and a lot of technology for like building mail rooms,
notify residents when they have packages all sorts of stuff like that so this is not really a retail show and so it's just interesting to me how,
booths were there like specifically solving a Commerce problem around the last mile.
Um so all those were interesting tactical things that I saw at CES that I think May,
may I make an appearance in the future of retail but by far the biggest platform that that you know was
the most strategically important that really had his coming out party at CES this year is the new wireless technology 5G.
So they've been talking about it CES for a number of years they've had prototype product but this is the first year that they have.

[25:38] Mass-produced products that meet all the certifications and work on networks that are deployed in the real world so this is kind of the
the first time that 5G was truly commercialized at CES and you know I I suspect in in the show's heart of hearts,
like if there's you know one news cycle that they want to win it's the you know the wave of coming 5G products and that everyone needs to throw out all their wireless devices and by shiny new,
new 5G devices and then it's going to magically change the world and there are crazy stats that they you know site about how much faster 5G is than 4G so,
you know hundreds to thousands of times faster bandwidth
way lower latency way more devices that can hang on the same networks and you listen all this and you go man 5 G's going to change the world it's the most important technology of all times and that's mostly.
The articles that are getting written about it but as I talked to more engineers and kind of you know.
Really started to understand what was going on I actually am now somewhat bearish on on 5G I think it's overhyped.

Scot:
[26:56] Yeah yeah they always the one I see that for his hearse like some remote surgery over 5G and you're like I don't think five G's going to solve the dead spots in fact up I have more dead spots because I won't be honest meat hours.

Jason:
[27:08] I'm not sure I'm going to be an early adopter of remote Robo surgery but if I am
I'm gonna insist that they have a wired connection to the robot and if for some reason they can't have a wired connection I would way rather have a Wi-Fi connection to the robot then a 5G connection to the robot.

Scot:
[27:25] Yeah we're going to belt and suspenders that puppy yeah if we're not yeah.

Jason:
[27:28] Yeah so it's going to be a long time before you ever going to do surgery on me with 5G but like here's here's the,
the huge Wrinkle In 5G that makes it kind of a mess technology for me is.
You know all these Wireless signals are over particular parts of the spectrum right and so like cellular signals and most of what we call LTE or 4G is,
in the 600 megahertz to 6 gigahertz range depending on which company and what what bandwidth they own and so 5G uses that same bandwidth,
and it uses some new band with that the government just sold the carriers that's at a much higher frequency and so it's what they're calling this millimeter wave frequencies and so this is,
20 gigahertz 295 gigahertz a way higher frequencies than the traditional Four G's and all of the,
dramatic improvements in bandwidth that they're talking about only happen on those new millimeter-wave frequencies.

[28:34] So the the 5G technology works on the 4G frequencies and it is faster but it's kind of incrementally faster in the same way that 4G was faster than 3G,
it's so call it
twenty to a hundred percent faster and then you get this you know hundreds to thousands of times faster when you get on millimeter wave and
so couple problems with millimeter wave number one it's mostly not built out and unavailable like there it's,
there are rumors that the the iPhone that comes out this year that will be the first 5G iPhone,
may or may not even support millimeter-wave but there's very limited coverage of millimeter wave in the United States like like when you don't company says they have coverage in a city that's probably one block that they cover
when this millimeter wave technology and then much bigger deal is that high frequency wave.
Is blocked by virtually any kind of structure so not only will it not go through walls it won't go through windows,
um so you won't ever get millimeter wave signal inside of a building for example.

Scot:
[29:45] Think you're gonna have to do your surgery in a tent.

Jason:
[29:48] Yeah exactly so a legitimate use case is
hey T-Mobile can compete with Comcast for internet bandwidth for Scott's home and if you buy it from T-Mobile what they're going to do is put a millimeter wave antenna on the roof of your building and run a cable inside of your house and convert it to a Wi-Fi signal inside of your house
and because the millimeter wave can be really fast to that antenna on your roof like they can legitimately compete with your,
your cable modem but you are not going to have a phone that you walk around in your office that's you know downloading movies in a second.

Scot:
[30:32] Nursing so a lot of infrastructure to be built to solve this millimeter wave from.

Jason:
[30:37] Yeah yeah and those those
like they need many more antennas and the antennas need much quote to be much closer together to really build out coverage for millimeter wave so it's a huge National infrastructure problem
and it doesn't seem like any of the carriers have really committed to like saturate their Market with millimeter wave yet so again you know most of what the carriers are talking about when they say 5G
is 5G over the existing 4G bands and,
it's a little better like I'm sure we'll all enjoy it but it it's by no means game-changing so that's that was kind of my,
my CES recap I think most people would say oh the big thing that's going to change the face of retails 5G I'm pretty convinced it's actually not but I do think a bunch of these display Technologies are,
potentially interesting and I really think that that this trend of more personalized products is super interesting for Commerce.

Scot:
[31:36] Cool so then you shot straight from Vegas Rider to New York and would a would you see it enough.

Jason:
[31:42] I did so yeah I got to do a prolonged my New York trip this year so I got there a little earlier,
as you know you and I were nominated for an award for best retail media and we were one of the finalists so I actually went to the awards ceremony on Friday night.
And I'm sorry to report that we did not win yeah so not a very credible award obviously I'm teasing.
Is actually the first year of this particular.
In our Enterprise and what they're trying to do is recognize suppliers for the retail Commerce industry because most of the awards are targeted at the retailer so that's kind of appreciate that and that's interesting and it was.
Very well-attended event for the first year but that sucked me into New York early so then I did the whole show I got to walk all the show floors,
and my limited time recap on all the show floors was,
that it was a very incremental year so rather than,
dramatically new stuff and new technology that you know didn't exist at the show asked year most of the booths in the main exhibit Halls were.
Here's our 10% better version of what we showed you last year.

[33:04] And a surprising amount of it was really oriented towards cost reduction and,
operations optimization so I would say like,
the it was rare to see customer-facing stories and improving customer experiences at retail it was mostly about taking costs out of supply chain and taking costs out of operations and Staffing and.
And increase Automation and that you know it things that are important to retail but frankly things I would argue like that's been a play in retail for the last five years and most of the good retailers today have.
Taking most of the COS out and you know so now I feel like to really move the needle you need to be thinking about your customer experience and improving,
that and I did not see a lot of great solutions for that on the inner F floor this year,
the one kind of new use case that showed up in a bunch of booths is what I'll call a smart shelf so this is like Amazon go like technology it's like a shelf that.

[34:12] Either using cameras or sensors or cameras and sensors,
knows what's on the shelf and it knows what you take off the shelf and it can probably recognize you and so sometimes this is used for self-checkout but way more often it was just used for inventory management,
for knowing when something was out of stock or helping navigate customers to the right product or or knowing when a products on the wrong shelf for all these kinds of use cases,
so I like frankly didn't think the juice was worth the squeeze walking the two main trade show floors at in RF,
the the floor I had the most fun on is this Innovation Pavilion that they've had for the last couple of years but it was much bigger this year
and to me like all the exciting interesting stuff was was definitely in this Innovation Pavilion and so this is smaller companies tend to be,
startup companies a bunch of companies,
from other countries like Israel was particularly well represented and you know here you are seeing a lot of Last Mile Solutions you are seeing a lot of.
Like using cameras to solve fitment and returns and things like that so I just I felt like there was a lot more interesting.
New approaches to customer experience in The Innovation Pavilion than on the main main interest rate show floors.

Scot:
[35:39] What was the strangest thing you saw.

Jason:
[35:42] Strangest thing I saw I probably should have come to rehearsal and gotten that question ahead of time so I could have thought about it.

[35:50] Yeah well I'll tell you an odd experience I had so you know I have this weird Affinity / fetish for these digital fact eggs.
And I keep predicting that they're going to be a big thing and they never are.
So of course I had to visit all of the exhibitors at this boot at the show and there's like six or seven.
Big manufacturers and then probably 20 little manufacturers of these things and then RF and so one of the companies I'm not even going to name them,
they're noted in my mind because they were the first tags that Amazon used in the four-star store in Amazon has changed vendors and they now use a different vendor but this first vendor
um had a lot of interesting tags and some new new technology in their booth in the way I remember what I what I see at the booth in order to kind of type up my show notes is I
take a picture of the booth and then I type my notes below the picture in Evernote so I tried to take a picture of this booth and they
tackled me and told me that no photos were allowed and I'm like,
okay do you have like a brochure something I could take no no we don't have a brochure.
So I'm like so wait you have a giant 30 by 30 booth at the show and you paid a bunch of money to come here and like.
You don't in any way want anyone to remember who the heck you are or be able to contact you after the show.

Scot:
[37:13] We were never here.

Jason:
[37:15] Yes I.

Scot:
[37:16] They make you delete the picture.

Jason:
[37:19] No and I mean I could have but I mean I just didn't even want to take a picture at that point I was I just thought that was so funny like
ten years ago that was about get super common thing and people are worried you're going to steal their intellectual property but I feel like if you have intellectual property that you don't want anyone to know about
don't buy a trade show booth.

Scot:
[37:38] Weird that is weird see I knew you had one in.

Jason:
[37:43] So that stuff was all interesting I went to most of the Keynotes and I feel like this is going to be a Captain Obvious comment to you but
I mostly went all the key notes which are all these big retail CEOs
and I've mostly decided that it's a complete waste of time going to any of these shows and sitting in on the on the CEO Keynotes.
Nobody ever said like they're all perfectly media prepped and they mostly Play commercials about their businesses and no you know nobody says anything very like informative or,
you know that isn't already on the public record at these things so I don't know why I always get excited to hear you know some retail CEO speak when.
Like in reality like it's not bad it's just it's just not valuable or super interesting.

Scot:
[38:32] Yeah yeah it's tough there at some point their public companies to so they're in their quiet period by the time this show comes out so they can't even really talked about you know anything that's.

Jason:
[38:43] Oh yeah no I don't even.

Scot:
[38:44] Air and yeah.

Jason:
[38:45] I don't even fault them but I just tough right and so you had like Kevin plank who's you know the founder of Under Armour and you know he recently stepped down as CEO but he's like.
Like Chief brand evangelists or something.
One that got like a little heat Michelle gas is the CEO of coals we'll talk about this later but like you know Cole's kind of underperformed a little bit for holiday and,
and so that's that's interesting but she also won the,
the internet Gala award as the person of the year and there are people that are pointing out like what's the state of our industry of like the.
Person of the year is like a CEO that's like let a company for five years that mostly has been in sales and market cap decline over that entire five-year period.

Scot:
[39:32] Emma close a bunch of stores they've closed Less stores than a lot of other retailers.

Jason:
[39:36] No I would say they have performed better than most of their peers and their Peril I think that's true and that's why it's kind of news that their their performances starting to,
to soften the the one thing that maybe was newsworthy about her Kina like obviously they get a bunch of Buzz for
being the first ones that were all in on like allowing Amazon returns and their store.
Um and I don't know why this gets so much coverage I mean it's an interesting tactic but to me it's not a game-changing thing.
But you know a big question has been like how valuable is that to Cole's like is it working and and she gave a full-throated defense of the tactic and said that it's working.
Quite well and that we're happy we're doing it and that we've expanded it to all stores but then she said like two sentences that didn't like,
and I'm like.

Scot:
[40:38] It was very vague yeah.

Jason:
[40:39] Yeah so so I don't know so that was a little interesting.

Scot:
[40:43] It was interesting there's a lot of pictures on social media accompanying that article and they showed Kohl's store and had a tiny little coal sign and it was just surrounded by Amazon promotional materials all throughout the front of the store and then inside the store.

Jason:
[40:56] Yeah and I think one of the things that's happening is you know Cole's is always been heavily promotional.
Like I think when you return something to Amazon you get like a fifty percent off of a Cole's item certificate that you know they're trying to juice you too.
To buy something presumably it's super little margins when you're on that visit,
so that stuff got a lot of Buzz as you know but listeners may not know a lot of my time as in RF gets booked up with,
these these various committee and Council meetings that are going on and so you know we're members of the digital Council which is a big group of.
Of people that are primarily focused on digital Shopper marketing.
And so you know they have a long meeting at the show and you know I'm still on the board of what used to be called shop dot-org now called the digital Advisory Board.
And we have a long meeting during the show and there's usually some interesting content at those meetings so I would say both of those meetings were good and I'm probably biased because I was the speaker the digital council meeting.
And I gave a presentation about like what western Brands can learn from China so sharing a bunch of,
interesting tactics that are going on in China that my hypothesis is you know that people ought to be trying in in the west and.

Scot:
[42:22] Is this the salty wait for you tried to get your your prediction of QR codes out there.

Jason:
[42:28] Potentially I'll do anything I can.

Scot:
[42:29] Talk about it the Ulta.

Jason:
[42:30] I'll do anything I can to win the forecasting battle against you just got so yeah.
No I did not I did not hit that hard but I got good feedback and I enjoyed doing it it's a scary audience because you know I talk to people all the time but this is like.
50 of my closest work friends that are all like smarter and more digitally savvy than me so like if you say something wrong.
They're pretty likely to call you out on it so which is not necessarily as true in my day job.

[43:04] So I was pleased that that went well and then in a rare treat for me I stayed for a couple days after an RF this year,
and there are a lot of events that other people program to take advantage of everyone being in town for an RF,
so PS FK is a research company that does a lot of great retail content they do a bunch of retail tours in New York the week of in our.
And they had kind of a direct-to-consumer day where they had a bunch of leaders from direct-to-consumer companies come in and talk and so,
I got to send it on that and that was kind of interesting content I think I inadvertently got some Buzz cuz,
unlike some of these really polish CEOs for the big retail companies like the CEOs for some of these startups probably share more information than they should and so one of the founders of neighborhood Goods was there there there.

[44:00] Kind of new retail concept there are like a retail Marketplace so vendors paid rent space in their store they open one store and,
Texas in Dallas there now they just opened a second store in Manhattan and they're about to open a third store in Austin and in our industry via all the Talking Heads I would say they get a ton of Buzz,
and,
you know the one thing they don't do is disclosed like any sales data so you know you never know how meaningful their sales are but the CEO at one point mentioned that their best-selling skew by volume,
by number of units and dollar volume is a t-shirt with their logo on it.

[44:42] And so I you know in my mind thinking like that probably says all you need to know about you know how much of the vendors products they're selling that are paying for space in those stores if they're evil logo t-shirts their best.

Scot:
[44:55] Ouch then he went Savage on social media.

Jason:
[44:58] I did not mean it to be super- but I just thought that was an interesting data point and then I went into the belly of the Beast,
our friend Scott Galloway who loves his predictions as you'll know.
He had an event he's a professor at NYU and he gave a lecture at NYU,
kind of a couple hours sharing his recap of his 2019 predictions and doing his 2020 predictions so I sat in on that and.
I don't think any of the predictions were very new to those of us that follow him regularly like you know he tends to be pretty repetitive and and so these were mostly repetitive,
predictions but there was a question and answer session afterwards and I thought the question-and-answer session was really interesting and people people asked him good questions and he had you know insightful answer so that would that part was fun.

Scot:
[45:56] Yeah he's a very anti Sheryl Sandberg Casper and then he's he's been antitussive for a long time and he's gotten his like face ripped off by Tesla this.

Jason:
[46:06] Yeah so it's funny.

Scot:
[46:08] Predicting it will go bankrupt and you know there's crazy and it's fraud and.

Jason:
[46:13] Yeah yeah he thinks it's way overvalued and he
it's kind of funny because he talks about he like he openly talks about this he's like people that agree with me tend to agree with me on most things I got like he's you know philosophically aligned on most things but he's like most of the people that follow me,
like Tesla way more than me
and they have way more digital privacy concerns than I have so he's like whenever I share my position on those two things I tend to get creamed and so like it almost became a joke like people standing up there were like challenging him on his,
Tesla predictions and like you know people came up and like made an argument for the Tesla evaluation and why it was reasonable and stuff and so there were some,
pretty funny back and forth on that stuff and he was making fun of the fact that like that's most likely what he'll get murdered for,
and then he did a podcast after this event where him and Kara Swisher who generally agree on most things on their podcast like got in a pretty heated argument,
on the whole should Apple unlock the terrorists phones and and Scott comes down heavily on absolutely Apple like should,
should immediately unlock the terrorists phones in the privacy concerns are kind of,
BS in Scott's mind and so and he recognizes that like,
that's the other thing he gets a lot of heat for is that most people that follow him don't agree with that position.

Scot:
[47:43] Wasn't swisher and RF like interviewing the politician or something.

Jason:
[47:46] She was I don't remember who she interviewed because that was during one of my meeting so I missed it.

Scot:
[47:53] I think it was Paul Ryan I didn't understand what the heck that had to do with retailgeek.

Jason:
[47:57] Yeah so there's kind of a tradition that interrupts like a big part of interests job is Lobby is federal lobbying and it that's particularly relevant right now because why.
These privacy laws that all the states pass are passing have.
Potential major intended and unintended ramifications on retailers like a lot of them like arguably make it illegal to run a loyalty program for example,
um so so the lobbying is a big deal in RF it's a lot of their energy as in lobbying and so if you look at the keynote speakers over the last several years in RF
they had Bill Clinton shortly after he went out of office they had George Bush Senior shortly after he went out of office and so they tend to have a
a big name politician and this year it was Paul Ryan but I didn't get to see it
I didn't hear any particularly newsworthy things come out of it but I can't speak to it firsthand.

Scot:
[48:53] Furcal anything else we need to know about NRF.

Jason:
[48:56] So that was my in a referee cap that kind of match up with what you followed on social media in the news or did I give you.

Scot:
[49:03] Was it seemed like kind of the the timing was interesting because you know at the same time you had the Casper S1 filing drop in this kind of,
pivoting to General news but kind of overlapped with an RF a fair amount then you had a fair amount of bad news from Q4
some of this it's hard to tell if it was just kind of there's a bunch of retailers that are kind of in that Molly gedan bucket that held on through Q4 is it's kind of crazy to once you make it to August you might as well not close any stores until
until January so it's hard to know how much is kind of an overhang kind of a holiday overhang and how much is kind of.
The holiday actually wasn't as good as we thought were those some of the topics that NRF.

Jason:
[49:47] Yeah so not in the formal presentations but in the sort of hallway conversations this this was a big point right and,
you know you and I have talked about on the show we were talking about it in December that I sort of felt like it was going to be a soft holiday that you know they were going to be
profitability challenges in talking to people at this show one of the interesting things that kind of reaffirms that it was a soft holiday is
there is apparently like a ton of excess product in the market which has not been the case the last several holidays and so retailers are getting asked to take a bunch of.
You know deeply discounted inventory from manufacturers and what we would call distressed inventory,
that there's a glut of that on the market this year and so that's a bad sign it means retailers didn't sell through all their inventory the manufacturer didn't move as many units as they expected and now they're going to liquidate all that inventory at low cost which.
You know means consumers closets are going to fill up with with cheap clothes and you know it's going to be longer before they can they can sell new stuff and you know a bunch of more of this like.
You know desirable Brands will show up in TJ Maxx and,
places like that so there's a bunch of negative ramifications and you know it's.

[51:06] The my theory is like it's for two reasons like,
that we just did have a soft holiday and people didn't sell as much as they wanted but the last several holidays I feel like retailers have been super careful about constraining their inventory and being really smart and using a lot of,
new modern tools to predict demand better and so they actually,
we're in really good inventory positions the last couple of years and what's different this year is potential fear of tariffs,
and so my my theory which I have no way to validate but my theory is that a lot of manufacturer is particular know they're getting their goods from China.
Made more stuff before tariffs kicked in as a hedge against potential tariffs and so they just ended up with higher inventory positions and they've been you know trying to sell that through to retailers,
and so as you know we have a glut of product and that that actually bodes,
poorly you know for the end of Q4 but also for q1 sales across much of a bunch of retail categories.

Scot:
[52:12] Yeah.

Jason:
[52:14] So I during the show or around the show you know there are bunt you know holiday earnings announcement started to come in.
Before this show MasterCard released there.
Sort of holiday recap and MasterCard has this product called spending pulse where they Aggregate and anonymize all the,
the spending behaviors of everyone that carries a MasterCard branded card.
And they said holiday retail sales were up 3.4 percent from November 1st to December 24th and the online sales were up almost nineteen percent and so those are decent numbers,
that would calm pretty you know favorably with last year I think those are very similar to last year's numbers.
And that would imply that everyone had a decent holiday but then the individual retailer started announcing their earnings and nobody has earnings.
That seems like they jive with that Master card number right so so not shocking the JCPenney was down but they were down you know lower than expectations so they were down seven and a half percent which is huge,
we alluded to this earlier but Cole's was down point two percent and they've been one of the,
the you know better performers in the apparel category for a while so the fact that they're down was was alarming and surprising.

[53:32] L Brands was down 3% Macy's was down,
point seven percent which they had been up the previous quarter so that was a big holiday Miss and then I think to me the one that was most surprising and alarming and kind of triggered some,
some stock alarm Bells was Target and their same-store sales were only up 1.4 percent versus,
5.7 percent last year so that was a big mix against their guidance and you know you,
you listen to that bloodbath of retailers like almost nobody you know performing above their comps and you try to reconcile that with the whole industry being up 3.4 percent and it just doesn't make sense to me I think,
I think that Master Gardener is just wrong or or like there there's something unique about MasterCard carrying people that you know is different than other spending.

Scot:
[54:27] Yeah yeah the.
Jury's out I think until we see how Amazon and they report on the 30th and will be here on the Jason Scott show recapping that for everybody that's going to be really really important and then the second most important going to be Walmart and I'm not sure,
you there in Feb 18 kids are in that off-cycle yeah.
So it's going to be awesome to see how that goes because if they both didn't do well then it really is a head-scratcher but even if they you know let's say Amazon grew like 25% or something.
It's kind of makes the,
you can get the e-commerce number to 19 percent but like what the heck happened to the rest of retail who actually grew everyone that we know that reporting didn't it would have to be Walmart or you know.
Someone else I don't know,
Costco yeah maybe it's the dollar stores there's there has been a bunch of strength and kind of like what we call the value plays the dollar stores the Wholesale Club's the T.J.Maxx has maybe those are the guys that kind of saved the day and there's haven't reported yet.

Jason:
[55:47] Yeah but I think no matter how you slice it like this is another version of bifurcation that like you know if holiday sales are robust like they were not,
robust for everyone that there were you know huge winners and losers and you know if that was the case which it certainly seems like it was
you know you're going to see that play out in you know future store closures and bankruptcies and all the other things that you know retailers have to do when they start to get into distressed.
Situations and you know along those lines I think we have already seen a bunch of announcements now that they've gone through holiday,
the upcoming store closures.

Scot:
[56:30] Any other news you want to cover.

Jason:
[56:33] I mean those are the big things like just to recap the store closures real quick like that was like expresses closing a hundred stores JCPenney's closing 6 more stores
Pier 1 is closing half their stores Bed Bath & Beyond closing 40 stores,
a slightly surprising one of me is bows which had a chain of company-owned stores.
Is closing all of their bricks and mortar they're going to be you know a pure brand and Direct online sales only so you know a significant amount of store closures to start the year,
so it's kind of falling into your whole you know Mama gettin story that you like to always talk about.
And then I guess just a couple of small little news items that are like you know pretty interesting in the Commerce base Google made an acquisition of this company called pointy.

[57:25] And I wouldn't expect people to necessarily recognize pointy but pointy is a,
a data company that makes it super easy for particularly small retailers to upload their store inventory to Google.
So that lets you do local inventory ads where we're like you know you do a search for a coat and Google says oh that coats in stock in this store that's a block from you.
And it also you know facilitates the sort of instant purchasing Google and a lot of other things and so it's it was interesting that Google's acquiring this capability to help retailers on board.
Their inventory to Google much easier that you know could be the first of a bunch of steps we see in Google trying to get more serious about Commerce,
and then you know the Gap had previously announced that they were going to split Old Navy off from the rest of the company,
and they kind of had assigned CEOs and then this month announced that they're actually not going to do that they fired that CEO in the,
the son of the founder I came back to run the company so so a lot of drama going on at the Gap right now.

[58:44] Yeah well I think they were another example like I,
I don't know I think it's a high level the story was a bunch of the Gap brands are underperforming the one Gap brand had been performing strongly was Old Navy and you know so there's an argument that like.
Old Navy wasn't getting full credit in the public markets because they're being dragged down by these other brands so you split up.
The strong brand Old Navy from the weaker brands,
and you know maybe you can carve out more value that of course ignores the fact that,
like all of these Brands share a shared infrastructure the same it stuff the same e-commerce stuff the same supply chain stuff when you split them up you got to spend a minimum shh money to rebuild that you know.
For both companies and and I think the thing that made this untenable was.
Old Navy didn't have a great holiday either and so you know they were left with the prospect of potentially splitting up and having two distressed Brands neither one performing very well and.
You know they just spent a bunch of money and and you know their employees Focus was all put on this this.
Split instead of focusing on on customers and in the right product in the right right brand positioning for that stuff so so I think it became scary and they pulled back.

Scot:
[1:00:08] Must be frustrating imagine if you were on that team and you probably had to separate all the point-of-sale systems and the customer databases and.

Jason:
[1:00:18] Yo and I'm.

Scot:
[1:00:18] Pretty far down the path.

Jason:
[1:00:19] Like I'll be honest I'm sure there were people that were far down that path and the whole time they were doing it we're saying this is stupid we shouldn't be doing this and now they're pissed that they wasted all that.
Because it's yeah it's not going to see the light of day but you know sometimes those are unavoidable things like you know there,
there are storied brand I hope they find their way through it.
But Scott that's probably going to play be a good place to wrap it up because we have hit our usual 1 hour mark so we've used up more than our allotted listener time,
as always if people have a comment or question feel free to drop us a note on Twitter or Facebook
and for sure we need to get those iTunes reviews going for the 2020 year fresh reviews are super important so if you haven't written a review for a podcast yet we'd love it if you jump over to iTunes and write us that review.

Scot:
[1:01:15] And make them five stars thanks everybody.

Jason:
[1:01:17] Yeah until next time happy commercing.

Jan 6, 2020

EP204 - 2020 Annual Predictions

2019 Recap - Predictions made on episode 159

Scot

  1. At least 5k more store closures in 2019. Yes.  9,300 US store closures per Coresight.
  2. Amazon – Prof Galloway is big on Amazon having to create a AWS spinoff and has moderated that to tracking stock. I’m going to predict Amazon doesn’t do either of those things. But this WILL be the year they break ads out. Yes. Galloway was wrong.
  3. eBay/Alibaba – I think this is the year when they both need to do something big and the stars are aligning for a combination there. Nope.
  4.  Shopify gets acquired by one of the big ad-based companies (facebook/google most likely) Nope.
  5. Walmart stumbles in e-commerce. Nope

Score 2/5

Jason

  1. Amazon store count exceeds 1000 stores Nope.  571 Amazon Stores
    • 22 Book
    • 15 4-Star
    • 8 Pop-ups
    • 25 Go
    • 2 liquor
    • 499 Whole Foods
  2. Walmart buys a last mile firm Nope
  3. Another big  bankruptcy (going to be a tougher than expected year, JCP, category killers Office, BBBY, Neiman). Yep (Payless ShoeSource, Destination Maternity Shopko,Forever 21, ShopKo, Gymboree, Things Remembered, Charlotte Russe, Diesel, Z Gallerie, Charming Charlie, Barneys, Sugarfina, etc ...)
  4. Mobile commerce revenue passes Desktop – Aided by PWA’s, and payment API’s we see mobile gap narrow. Nope.  60/35/5 Desktop/Mobile/Tablet Nov-Dec via Adobe.
  5. Fads (Voice Commerce, Customer facing AI, SocialCommerce, VR BlockChain). Yes

BONUS: Amazon breaks out prime revenue (No)

Score 2/5

An epic fail for Jason & Scot! It turns out the future is difficult to see (and our case the timing is also tough).

2020 Predictions

Scot

  1. Shopify wilts a bit - new competition comes out with different angles (marketcap stays static)
  2. Fedex does something drastic - buy eBay? Merge with Alibaba?
  3. The year of returns - “happy returns” - a startup raises $100M+ in space.
  4. Mallageddon continues At least another 8k stores
  5. Google gets aggressive in ecommerce
    • 10% traffic to ‘shopping actions’
    • buy ebay/fedex

Jason

  1. Walmart - growth slows due to completion of grocery build out. Marc Lore leaves Walmart.
  2. Amazon - Opens affordable grocery concept. Digital grocery wars heat up.
  3. Owned brands continue to grow. 5% of retail in 2019, could be 8-10% in 2020 (as measured by IRI, for CPG private label).
  4. Installment Payments heat up - At least one company is acquired (Affirm, Afterpay, Klarna, QuadPay, Sizzle)
  5. Digital in-store heats up, QR codes make a comeback

Bonus:  Cashier-less stores (Amazon Go), blockchain, 5G, big data, and personalization won’t have a significant impact on retail. No DNVB will break out. No major retail anti-trust actions in US. Brick & Mortar Marketplaces won’t take off (Showfields, Neighborhood Goods, B8ta). Shopify won’t compete with Amazon.  

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 204 of the Jason & Scot show was recorded on Thursday, January 2nd, 2020.

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

http://jasonandscot.com

Google Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode at 204 being recorded on Thursday January 2nd
2020 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo.

Scot:
[0:40] Hey Jason and welcome back Jason Scott show listeners will Jason happy New Year happy new decade hope you had a really good last decade and I hope you had a good holiday.

Jason:
[0:53] I did Happy New Year to you. I'm with you on that new decade but they're you know there's some controversy about whether it is a new decade or not.

Scot:
[1:01] Yeah I don't believe that it's a it's a 10 plus one problem we'll just to sweep sweep past.

Jason:
[1:07] Yeah it's the twenties as far as I'm concerned so.
Yes but it has already happened I nailed our intro despite the fact that we typed 2019 in the show notes.

Scot:
[1:22] Azle Easter I got them there for you you found it.

Jason:
[1:25] Yeah I was I felt I felt special about myself that I was able to fix that on the Fly.

Scot:
[1:32] Who said the most important question is have you been able to see the new Star Wars movie.

Jason:
[1:36] Oh my God Scott I've been thinking about you nonstop because yes I got to see the new Star Wars movie and obviously we'll will be spoiler-free but I I was totally happy with it and enjoyed it.

Scot:
[1:48] Yeah yeah me too weird thing happen to me where I've gotten to where I kind of like the Mandalorian almost better than the movies so I don't know.

Jason:
[1:57] So here's why I've been thinking about you nonstop my 4 year old is now both feet in on Star Wars everything.

Scot:
[2:06] Good quality parenting right there.

Jason:
[2:08] So we wouldn't want some of the movies there's a ton of like kid-friendly Star Wars content you probably knew all about this but there's like the Lego movies and cartoons and all this different stuff,
and like for Hanukkah he got a lightsaber which he has not been separated from since and.

Scot:
[2:27] Nice.

Jason:
[2:27] We got a bunch of Star Wars books including I got him,
like a graphic novel version of episodes for 5 and 6 and so now every night as part of our bedtime ritual he's his down with me and we we you know read us a segment from the book.

Scot:
[2:46] Give us your Darth Vader voice.

Jason:
[2:48] Yeah I'm not doing any voices on the podcast sorry.

Scot:
[2:53] Baby geek I am your father.

Jason:
[2:55] Exactly I have said that exact phrase tan.
The what's super funny is my wife and I like you have enjoyed Mandalorian and we were watching it one night and Stephen King in like you should have been asleep and it came in and saw I like.
30 seconds of Mandalorian which we have not let him watch Mandalorian but Steven is totally 100% fixated on Mandalorian.
So he's already convinced that mandalorians are way better than Jedis.
Like the only character he likes from all of the previous Star Wars work is now Boba Fett and he like he brings them up and every contact and we're like.
You seen 32nd.

Scot:
[3:44] Team Honda.

Jason:
[3:47] Anything he's like he's like four and he's asking like.
Like when he sees Yoda in like Clone Wars he's asking like how is he only a baby in Mandalorian.

Scot:
[3:59] You have time like it's really confusing.

Jason:
[4:05] Star Wars is super confusing to explain to a four year old white guy because you start with the premise that like the bad guys have red lightsabers in the good guys have other colors and then like,
it's only Don's I knew that all the bad guys used to be good guys and then become good guys again and so I.
It's super like that Santa can that it yeah yeah it's a very convoluted but suffice it to say there's a bunch of Mandalorian and baby Yoda posters up in his room and he's like we're leaving in a Mandalorian World which just makes me think of you.

Scot:
[4:37] Regal Walden toys are coming out so that it's going to be exciting in the next couple of weeks are all the they held them because they didn't want to spoil some of the plot elements of Mandalorian soon there's a big wave of toys coming so it's good time.

Jason:
[4:50] I know and in fact a bunch of entrepreneurial people because they did not release baby Yoda toys during the show because they were trying to prove your point keep him Secret.
So everybody and their brother started making baby Yoda toys and like there's been like you know a huge intellectual property Crackdown and there's like you know hundreds of people from Etsy that have been.
Don the cease-and-desist orders over that.

Scot:
[5:17] Speaking of toys I saw on Twitter that you were going to try to hit one of the new Toys R Us did you make it to him.

Jason:
[5:24] I did I am wearing a button right now that says I don't want to grow up I'm a Toys R Us kid.
Because I went to the Houston store a few days after it open so there's,
Tyreke and for our listeners like Toys R Us went bankrupt or done at super sad huge disruption in the toy industry,
a company bought the the intellectual property of Toys R Us and they did a partnership with beta who's been on the show a couple times,
the open initially to Toys R Us stores so there's one in New Jersey and there's one in Houston Texas.
So I got to go to the Houston Texas one and it was fun it was fun to see the brand,
back alive and reimagined then it was a you know it's very different than a Toys R Us a traditional Toys R Us store because these are.
Kind of 20,000 square foot Mall base toy stores versus.
80000 square foot big box toy stores but it was a fun immersive retail environment with a bunch of toys and,
this mall which is a a mall Scott like a week before Christmas felt like a ghost town to me like it was.
Tragically empty but I would argue the Toys R Us with the second busiest store in the in the whole mall and.

[6:49] Behind Apple you're exactly right side note people are only in the Apple store to get tech support but still.
But this one was really busy and people like had made a special trip just to go in like the brand is so strong so it looks like these first two stores are doing pretty well and I know there's a plan to open more so
kudos to them for saving the brand and beta for doing a pretty good toy execution.

Scot:
[7:16] Nice the so
thanks for the trip report this is our annual recap and he's always run long so I think we should just jump right on into it so being the first show of the decade and the year
it is our custom I guess we've done this for fact,
to do an annual prediction and then Square ourselves so way back in episode 159 we had our predictions,
or 2019 so I think what we'll do is score each other to start out with and then we'll put out our predictions so why don't you go to my last year predictions.

Jason:
[7:58] And before you jump and let me just say I despise this show I've had red
leading up to the show in the reason is is I've never done very well
that however will I have done I've gotten progressively worse every year and last year while I did quite poorly you did stupendous wave and so,
it's like I've dreaded even seen what my predictions were last year and hearing about them so I'm just going to rip the Band-Aid off and we'll get through the show
but your first prediction for for 2019 was that at least 5K more stores would close in 2019
and let's get this out of the way you blew away that prediction coresite which is the
company we most often use for kind of tracking Us store closures had like 9300 stores closing this year
IHL did a study in the world even more store closures than that in their in their study Dope by any measure way more than 5,000 stores closed and you know in hindsight I should have let you get away with that prediction because that's why,
it was too easy.

Scot:
[9:12] Well no I don't know if there's a lot of people saying but that was kind of going to be the worst.

Jason:
[9:19] That no so if you had said there is going to be worse than last year that would have been a slightly more predict like.
Tempstar 5000 was less than last year or this year but yeah I agree,
most people thought there be fewer closures this year than last year in that bike by depending on how you count did not prove to be the case that much more controversial thing on the whole store closures is it more
open and closed if you go by the course I track her a lot more closed than open but if you go by other studies,
that are the feel more comprehensive like they're actually were more swords that open then close so.

Scot:
[9:58] Yeah and I know the size Matters right to some of these are mattress stores which are pretty big.

Jason:
[10:04] And I whoop all a lot of the people that say way more stores open then close are also counting like restaurants and stores for example and the end restaurants have a lot of charm and so,
a lot of controversy but bottom line you started out of the gate strong you're one for one and.
Your second prediction,
you just you just jumped right into the gutter because your second prediction was that Professor Scott Galloway would basically be wrong.
Which I like as a general principle but more specifically what you're talking about is the,
an inner 9 people the climate a year ago he had just published a book about the the for one of which was Amazon so he was
he was publicly speaking about Amazon a ton and he you know was really beating a drum around having to split up Amazon and they're potentially Amazon would voluntarily spin off some of their businesses because they're so lucrative and so you know the talk to usually about 8 if you ask until your prediction was kind of
to go negative and say
you always wrong and Amazon isn't going to be split up and isn't going to voluntarily split up in any parts of their business and,
you were certainly correct none of those things happens.

Scot:
[11:28] What have I learned from this anti Galloway bet is that he throws out so many things he gets one right and then looks like a genius show his we work one with hit.
The bus was other ones didn't put the he's ridden the we work one for a good six months.

Jason:
[11:43] Yep yeah I feel like he the first one that hit for him that really like you know he made a lot of hay en was predicting Whole Foods would be acquired by Amazon and then yeah he was instrumental in that kind of picking the,
he was an early picker of the we were demise the pressure point
he also predicted Amazon would acquire a bunch of other people besides Whole Foods that they didn't in my favorite prediction is about 3 years ago he said that Amazon had peaked in that you should short the stock.

Scot:
[12:14] I would not have been good.

Jason:
[12:16] Side note yeah that would turned out not to be good investment advice.
So yeah for your point like anyone in this predictions face like the whole key is to throw a bunch out and just remind people of the ones you got right and not bring up all the ones you got wrong.
But you're doing great you're two for two yeah so third prediction that.
Either or eBay and Alibaba would need to do something big in 2019,
and so you use you propose that potentially they might do some sort of joint venture or some sort of combination.
And I have to say he's got as far as I'm aware that did not happen.

Scot:
[13:03] Yeah but itself StubHub when you said that's pretty big.

Jason:
[13:09] No not relative to their socks.

Scot:
[13:11] It was Lucy 4 billion of 30 billion market cap that's more than materiality.

Jason:
[13:23] Again I'm dreading my own predictions so I'm grading you very very strictly enough so I'm going to say you're two for three right now.

Scot:
[13:35] Another thing just point out is the eBay CEO just got up and left one day if that was kind of surprised I don't know if we count that as something big happening or not there's this line with the Borden peace out.

Jason:
[13:49] Yeah need to do something big.

Scot:
[13:50] That's kind of a shot.

Jason:
[13:52] Sell the property will parts of your company and then watch the Executive Suite I don't think that was the spirit of I think you were more proposing they would do something that would help them reacquired growth.

Scot:
[14:05] Yeah but another thing I didn't anticipate us this anti-china thing that we have going on here right now so the tariffs were one thing but there's just.
A lot of anti-china going on right now that I think is going to make this murderer and possible I don't think the US government would let app.

Jason:
[14:24] Yeah I think there's there are some number of entanglements there that that would be challenges there aren't there were some little Partnerships there some interesting things we like,
well I guess it's more JD and the Walmart in the US but.
Back on track your two for three and your fourth prediction was that Shopify gets Acquired and you said potentially by one of the big add bass companies like Facebook or Google +,
once again to my knowledge that did not happen are you agree or do you have a argument there as well.

Scot:
[15:03] I agree and
you know what's really amazing is if you look at kind of your your Shopify when I made this production was their stock is like at 1:44 and they were attending. Nick on all the stuff like 3x so
weather like a 1012 blade on a company now they're $47 company
they're pretty much on acquirable I think at that price and then the valuation multiple is extremely lucky so if you look at all the different
soccer the service companies yet uses range of like 8 to 10 x there's something like 15 to 20 x is just crazy,
good as those guys they essentially don't they will be at choir and not not a choir.

Jason:
[15:53] Totally agree there they're killing it both in terms of their their financial success and valuations but also their they're just winning in the marketplace and they're like you have continuing to capture more Greyhound away from the Enterprise guys and they're doing a bunch of interesting things
so we'll talk more about them in the future I'm sure but yeah they're a bunch of people that would like to acquire them but for your point like
there is not that's not really economically viable at this point and then number 5,
Walmart stumbles in e-commerce and I took that to mean.
That they're the rate of e-commerce growth would slow over 2018 which was pretty solid gross at like 40%.
And they actually were exactly at 40% again in 2020 so there,
they're growing very quickly they're growing faster than Amazon certainly much faster than the,
the market overall and their growth rate in 2020 or 2019 was basically the same as 2018
so like by that measure I'm not giving them a stumble in 2019 but do you you agree or was you think it was some other dimension they stumbled in.

Scot:
[17:15] Agree I probably underestimated how long they had to kind of Wind by converting grocery over but I think this year probably will give you the.

Jason:
[17:29] I feel like that's a common theme in all of our predictions ynm that I've noticed both you and I are sort of afraid to double down and be like wrong one year and then say say it again the next year but many of our predictions come true a year after we predicted.

Scot:
[17:43] Lyrics the Alexa are pause airpods I did like 2 years and then it came up here I didn't God darn it.

Jason:
[17:49] Exactly which is frustrating yes so being super brutal you ended up 245 which is way off your your historic average.

Scot:
[18:02] Yeah I usually bat 500 but it wasn't wasn't there this year I mean on the stuff I feel like e-commerce slow down a little bit.

Jason:
[18:13] Oh no I for sure feel like it has and I do think.

Scot:
[18:16] But the pace of innovation is really slowing which is makes up makes it harder to throw out big predictions.

Jason:
[18:21] Yeah I also feel like
it is this point like it's the timing of many things is tougher to predict than the actual events themselves and the Horizon is now longer than a year for your point so that's
that's that another challenge with this whole predictions thing but I'm not remotely confident that I didn't any better so so
with no further Ado let's let's see how I did.

Scot:
[18:51] Yes yes so your prediction so let's jump into this the first one is you were very giddy you probably had just visited three or four of the Amazon stores and you said look
I am sure this can be over a thousand Amazon physical stores by the end of the year
so I think.
Whole Foods helps a lot here in this is there were there were a bunch of Articles out there that Amazon was going to because Wall Street Journal that they're going to have,
thousands of Stories the right now we're sitting in about five to six hundred so you got Whole Foods
500 Whole Foods there's some pop upstairs for Stars book stores throw all that together you get sky like 555 75
so that's a pretty big Miss 57% is f on any grading scale so sorry I did not get that.

Jason:
[19:53] Yeah no I'll be honest I thought,
perhaps Amazon go with scale and much more you were generous that they were actually a lot more pop-up stores the last year they closed most of the pop-up store so it's possible there's fewer Stars this year than they were last year of you
if you included those so yeah I wildly miss that in the only like slightly interesting thing in that in that whole thing is I feel like the one concept that has scales slightly More Than People realizes the 4-star store
so there now 15 for Star stores which is like coming up on on you know the number of bookstore so pretty soon we might have more,
more 4-star stores that we have book stores but nowhere close to a thousand I was wildly wrong.

Scot:
[20:38] What are the clothes the popups cuz I've kept an eye on them in our malls and they're pretty popular MMOs price at the.

Jason:
[20:46] Yeah yeah well you know for a while they had a ton of them in Whole Food stores,
and yeah I feel like they opened a lot of them in places where they could get real estate rather than in places where.
Where there was a like strategic audience need a few pop-up stores their main are some kind of interesting Concepts so that yeah I don't I don't know.

Scot:
[21:12] So that's 0 4 5 4
for those homegamers keeping track of the score then your second one and this was one where I think the timing probably is going to be what
this was on the heels of Target buying ships and here we are a year later that's gone really well you have Target,
Ecommerce accelerated they're constantly talking about how should you store is doing well and all those initiatives that if they can anchor on ship,
so your prediction was that in 2019 Walmart would buy a last-mile firm and that did not happen I think the big
idea and last-mile will there be a couple one was going to
just kind of Associates kind of on their way home free stuff and then the second one is this whole body camera thing where they're going to
pop Associates right in your house to deliver stuff I don't think that is really caught on either.

Jason:
[22:10] Yeah I know II do I agree I think they I made that prediction cuz I felt like,
that honey how stuff is really growing for them and they would need more Last Mile capacity and I still think that it is true,
I didn't foresee that last year but you know
like as whole food as a FedEx has kind of gone push the last run away from Amazon
that the company they're running to is Walmart and so we we've seen some like bigger strategic Partnerships between Walmart and FedEx and now that you know they're starting to be some some economic weakness at FedEx,
I do not want to talk about this year's predictions but that
you could almost imagine at one point that that could be an acquisition or some kind of deeper strategic partnership but nevertheless
did not happen last year.

Scot:
[23:03] So that says 045 stole your third one and I think you made a comment last year that you need to be less specific to this one's kind of interesting.
And they said there could be another big bankruptcy but then you said such as JCPenney
one of the office guys Bed Bath Beyond need and Marcus so you kind of had an ore in there or are you know we could have took her to this again.
Being generous since we're sitting here at over to there were a lot of bankruptcies so we had the seat jabri we had Forever 21.
What's rue21 was that a result 2018.

Jason:
[23:49] That might have been 18 or not sure.

Scot:
[23:51] One of the maternity stores Payless shoes and we'll see we had there was one of the mattress stores.
So there were there were some pretty high-profile bankruptcies.

Jason:
[24:07] I'm taking the win but in hindsight like that was a lame prediction like of course somebody's going to go bankrupt every year so if you're not specific at Tulane prediction and if you are specific the names I mentioned.
I still am taking the win and I would point out like the one that gets talked about the most which is actually one of the smaller ones is Barney's was like the,
start a story brand that went bankrupt and I know the one that almost doesn't get talked about but was most crushing and near and dear to your heart is sugarfina.

Scot:
[24:37] Yeah. Steer.
Okay so your fourth prediction.

Jason:
[24:44] Wait wait let's recap the score I'm now one of the three.
Infinitely improved over over the previous two.

Scot:
[24:50] Yeah yeah
you're all on at are two more to make up some some room here so your fourth prediction was that mobile Commerce Revenue would pass desktop and lessors of the show know you are a big fan of pwa
which is not a rap band it's some kind of a technology for mobile stuff and also the new payment apis and some of the other stuff you thought we're going to close the mobile,
I'll defer to you since you're the guru on this didn't did you.

Jason:
[25:21] Yeah did we mention that that e-commerce is slowing down a lot,
none of those things happened at near the scale that I thought they would end so for sure no
mobile Revenue did not pass desktop revenue and I I thought I could like save face and say well that didn't happen
it did happen on the big shopping days
bright like so you know you could kind of make try to make an argument that oh I totally happened on December Monday or things like that but the reality is even over the holiday. If you'll get November through December,
60% of all revenue happened on desktop 35% of Revenue on mobile and 5% on tablet so bottom line I wasn't even close.
Sad.

Scot:
[26:12] Yep sorry dude so let's see that gives us one out of four,
all right last chance on number 5 on this one,
Scot of one of your anti predictions you said following things are going to be fads and not take off voice Commerce AI That's customer-facing social commerce virtual reality and boxing.

Jason:
[26:38] Yeah and again not a very awesome prediction but I'm going to take the win on that and say that those things are all we're all basically feds at least in 2019,
the one that feels like it's trying to get some traction and some some aspects of social commerce but but I would still argue they weren't like.
Meaningful in 2019.

Scot:
[27:02] If I give you that one.

Jason:
[27:03] Yeah I'm desperate for I'm desperate for a win that would give me the 22052 at least IU.

Scot:
[27:08] Yeah yeah and then you threw out because you're you're Jason you just couldn't stop at 5
got a Bonus and you said Amazon is going to breakout Prime Revenue you're really specific I had to go back and listen.
Cuz I had a feeling you're kind of get a little slippery on it so Amazon has not broken out that's that's a no.

Jason:
[27:31] Yeah what really happened is I misspoke what I meant to say is that callonwood breakout primary.
For Amazon and I yeah I said it wrong.

Scot:
[27:43] Yeah but since I was a bonus will you know we won't
we won't count it so it's practically a tie this year so which is to me that's a loss cuz over the over the The Arc typically beat me by three or four answers.

Jason:
[27:59] And so it would be a win for me but since you basically came down to my level it doesn't I don't think it feels good for either of us but at least.

Scot:
[28:06] What are you get better.

Jason:
[28:07] At least we've established our credibility now so I'm sure it was on the edge of their seats to hear our wise predictions for next year now that we've shown how I'm nipotent we are.

Scot:
[28:17] We're going to rebound to I can feel it go do you want to join to do yours first.

Jason:
[28:22] No I want to hear you're so I can potentially use them.

Scot:
[28:27] Yep so here's my five predictions so I mentioned earlier that Shopify is kind of gone up 3x in a year that just feels you know,
very nose bleeding to me and there's a lot of new competition coming out so I think whenever you have a value creation event like that where they've essentially created 45 billion dollars out of town are there could be a lot of money chasing Shopify,
I don't know what their weaknesses but every company always has one so it's going to be interesting to see,
what comes after them what angles they come after and all that good stuff so that's that's my prediction is that they're going to wilt a bit and you know I'll put a.

[29:14] I need to put something more specific there I'll say they did kind of stay at this market cap or go down
10% somewhere between kind of here in temperature I don't think there's going to be another kind of like huge run up type your and it's going to be largely
your folks waking up to say wait there is competition out there for this business model.
But you don't think that doesn't get talked about this to turn just has to be like through the roof right so just on a unit turn to have to just be turning tons of customers and now in a cohort,
it probably is its revenue for the cohort pipe the GMB for the cohort crime makes up and then that's what drives the revenue,
overtime it just feels like there's going to be sup Rider light shown on part of their business model that isn't,
this kind of perfect kind of price for protection company.

Jason:
[30:09] No I would agree with that I do think that maybe the one thing that that mitigates that a little bit is they are starting to successfully go upmarket a bit and get like some slightly more.
Stables lower turn customers with higher gym be so so maybe that balance is out in the long run.

Scot:
[30:29] Yeah it's like a million at the base of the pyramid though and it takes a lot at the top of the pyramid.

Jason:
[30:35] It just takes one Kylie Jenner.

Scot:
[30:37] That last.
That's my first prediction my second one and another prediction we would kind of I can't remember which was did that for a long time is part of me just like the earpods I was saying,
Amazon will get into delivery that is,
that would be a double a man because it sucks such an obvious once and for the longest time FedEx UPS said no no no there are partner or not our competitor
the bloom is totally off that one right now where was like okay this is bad in fact you mentioned earlier FedEx is like getting hammered over this
and so did Amazon kind of dug the knife in further where they won't even let seller fulfilled Prime sellers use FedEx because they say the service level isn't good enough.

Jason:
[31:32] Yeah you talk about throwing some holiday shade.

Scot:
[31:34] Ouch ouch so as a result of FedEx is under a lot of pressure right now and I think it's going to cause some kind of interesting thing to happen
you know you got eBay out there kind of rudderless right now you could see FedEx eBay you could see you mention Walmart I think there's going to be some interesting,
kind of marriage that happens with FedEx in and it's can be driven from the world of e-commerce.

Jason:
[32:04] Get I like that one.

Scot:
[32:06] Predictions for 3 this is not my forte but there's just a lot of Buzz around returns so there's several startups you could probably write them better than I can save Mall.
BCS contact me about this which means it must be like just kind of,
yeah they're all trying to solve returns problems and there's all kinds of clever ways of doing this of no Consolidated return centers different ways of managing the supply chain that kind of thing so I'm going to say 2020 will be the year where
you know they're just probably be some kind of a winner that emerges from that and they'll be kind of like ShopRunner has try to do and not to successfully the offer a prime and
a network of retailers that form an alternative prime one of these startups will be successful and I guess I'll Define it as.
Raising over a hundred million something like that something that's like pretty pretty.
Obvious that their leader they'll be pretty successful in in kind of taking a run at offering an on Amazon,
multi retailer multi-brand approached returns.

Jason:
[33:25] So that's funny I wrote a similar prediction I didn't end up using it because I thought it was two wonky but I
totally agree with the sentiment it does like I think it's returns it become a huge acute problem and so you know we're seeing lots of new investments in the hole
reverse Logistics base to try to solve it so it that that seems reasonable although somebody raising a hundred million dollars is not peanuts so the so I like your.
You're taking a stance.

Scot:
[33:58] That's my third and fourth one is a keeping with my mall again which has been a winner for for two years in a row I'm going to say you know what you call 9000 store closures in 2019
it's a good start. So I think we're going to have many more store closures I'm going to say at least eight thousand so continuing to keep,
about the same as last year if not more I think we are going to see,
I just feels like we're still over stored in a lot of different categories like drug stores that kind of stuff so I put that one out there.

[34:34] And then this one this is one of these I've made a long time and I'm always wrong but I've some reason I'm back to it this year I just finally believe
Google has is waking up to the Amazon Fred and and starting ticket much more seriously now they're there,
terrible branding job at it but I think execution wise there is something there they have this Marketplace which is essentially called shopping Google shopping.
Actions and you know the sink,
they're getting pretty serious about it and I think this year they're going to get really really serious about it so what's that mean so I think I think.
Overall I think I could see them actually in the hunt to buy an eBay or FedEx or something like that that could be interesting
and then you know another one is the shopping actions is it's always just been this kind of on the edge like well a little Beyond 2% of
Android latest Android lollipop popsicle
Twix and yes it is a being like percent of a percent of a percent and not Material so so I'm thinking they get pretty serious about it meaning it's going to get a lot of exposure I'm on
not only just some fraction of Android but across all Google properties.

Jason:
[35:59] So I like it how like what were you cancel BC to know that that that happened like you expect them to be like I'd top 100 retailer like what would what's the.

Scot:
[36:11] I think yeah I think 10% of shopping traffic going through it would be material so I would come start there.

Jason:
[36:20] Oh wow yeah that's quite mature okay.

Scot:
[36:22] And I would look at like search marketing as someone like the referee on this search marketing.
Was that search engine land or one of those.

Jason:
[36:31] Ya SE land.com.
At least to get the ball rolling you know the last month they announced Bill ready who is that executive PayPal is the new,
like VP of Commerce a Google so they like they haven't a new person to sort of weed that initiative so that maybe bodes well for your prediction.

Scot:
[36:53] Yeah I worry about it because these payments guys want you when you've been in the payments world everything looks like a nail so so I worry we're going to get Google pay 8.0 embossing.

Jason:
[37:07] So yeah supposedly and I I don't know but I think he's got some non-competes and supposably like is being hired explicitly not to get involved in pain.

Scot:
[37:17] I did not know that.

Jason:
[37:19] So maybe that will benefit you.

Scot:
[37:23] Let's we can only hope.

Jason:
[37:24] Yes yes I like it though.

Scot:
[37:27] All right those are my five what are your five.

Jason:
[37:29] Awesome duck so my first one is I'm just going to take yours from last year and protect them for this year.
Thinking of you just missed the timing and given all the ones that that have happened the past that's my new strategy so last year you predicted it Walmart,
would would have a hiccup in 2019 so I'm going to say in 2020 is the year that the Walmart rate of growth slows down and I don't,
actually mean that that,
is a distressing anyway I just think sometime this year they're going to finish rolling out online grocery pick-up to all of their stores and they're going to have to comp against,
stores that were opened last year where has for the last few years they've had this benefit of opening a bunch of stores and going from zero to some,
some big number of digital grocery so I think it's going to be much tougher to maintain that 40% growth rate so I expect that growth rate to go down,
which is enough kind of natural and then I'll throw out a wacky one and say I also actually think that this might be the year that Mark Laurie exits from Walmart.

[38:43] Just think like,
that he's probably been there awhile like we weave you know started to see some of hit a lot of the jet people have,
kind of transitioned out now Andy Dunn has transitioned out that the guy has basically unlimited funds in the bank like I think he may just be like he's accomplished with what he can accomplish it at Walmart and we we might see a Changing of the Guard.

Scot:
[39:08] Did Nadal Ray say that he had like four years to make a trillion dollars but so it feels like they're being expensive choice.

Jason:
[39:18] Yeah I think it will be a I think he could afford an expensive choice I don't know how that would all work out like I could imagine him to go shooting some sort of payout,
it made sense for both parties will see.

Scot:
[39:35] Is that a nand or nor.

Jason:
[39:37] Yeah so I want my official prediction to be that the rate of growth slows but if Mark Lori does away this year I want permission to go. Galloway and just like launch a website that's called Jason predicted that Mark would we.

Scot:
[39:52] Got it so it's amore with the Galloway Asterix.

Jason:
[39:56] It's the color its color exactly.
So then my next permit prediction again following the trend that I like to always you always make some Amazon prediction so I'm going to steal that and.
How to be honest like part of me feels like this is too easy and not a very controversial prediction but so many things don't happen that that like I do think it's fair
I think this is the year that Amazon finally opens its own grocery concept bike separate from Whole Foods and I think it's going to be
targeted at a more affordable price points and I think it's going to dramatically heat up the sort of digital grocery Wars and most notably,
the Walmart Amazon Kroger battles.

Scot:
[40:44] Cool.

Jason:
[40:46] So number three is that I think we're going to see a lot more emphasis and talk about
owned Brands this year and that's going to significantly grow as a part of retail so last year about 5% of all retail goods were,
like private label type products and I think it could be dramatically bigger in 2020 I think it could be sort of in that 8 to 10% range.
Which would be a huge disruption in the retail Marketplace.

Scot:
[41:19] What's your data source.

Jason:
[41:21] The 5% is actually 4.6%
and I will have to I do have to get my intern to pull it out
but that's predominantly focused on like the cpg and grocery
space so it's one of those those Data Tracking companies but I'll find it for you.

Scot:
[41:47] So it's not Jason Goldberg go to himself.

Jason:
[41:49] No no no I we need a credible we need a credible external.

Scot:
[41:53] Is a data point out there were on the lam purses.

Jason:
[42:00] Yeah I like that one we just put it in the Echo chamber and and it'll become real.

Scot:
[42:06] That'll be interesting so that does that include digital native recall brands or this is more just like Target spending up.

Jason:
[42:17] Yeah,
so I'm primary thinking about omnichannel retailers like Shifting the focus to Brands they own rather than so like to be it's more of the the,
Captain Jack's of the world like I think Walmart's going to make a major effort to grow their own Brands Target you know me
is is putting a huge effort into their new grocery brand and I I just think,
the big macro Trend in in retailers we're going to see a couple retailers really try to can compete on,
sort of Assortment and being the everything store and then in North America to me that's Walmart and Amazon and every other retailers going to try to win by selling stuff that no one else has and so I just think that's going to result in a lot bigger,
Pechanga retail selling their own stuff instead of other people stuff.

[43:12] We shall see ya.
My fourth prediction is you know you you have on the area that there's a lot of momentum at the moment and returns and reverse Logistics another one for me is the installment payment space so I said installment payments are going to dramatically heat up
and I think that's going to result in at least one major acquisition in that space so I think like,
when I talk about installment payments I'm talking about a lot of these companies that are sort of alternative credit means a lot of them are kind of like,
Finance your purchase in for for monthly payments that kind of thing and cities are friends like affirm and afterpay and Karma and I I just think that
you know next year you see one of those acquired Maybe by a major credit card company or Bank
you know I think some of the big traditional Financial folks are going to want to own a piece of that hot space And so there's going to be some good acquisitions.

Scot:
[44:15] Who who do you think this is an addiction but I'm curious who you think the buyers are going to be like traditional like Financial folks like City or or is.

Jason:
[44:26] Yeah so I think I think the big the big Banks participating banks that have a retail credit Division if you are receiving retail credit services so you do private label credit cards for like Best Buy,
these guys are now taking a chunk of that space and and they've accomplished something that you've always wanted to do which is their built into the checkout flow
which is super valuable to these credit card issuers and so I could easily like imagine
one of those credit card firms wanting to acquire one of these guys I also think you could,
you know it could be a PayPal or,
square or you don't even like one of the big credit networks like Visa.

Scot:
[45:15] Singing payments do you have plans to move to Africa this year.

Jason:
[45:20] I was going to but I've been told that I only have one job and so I'm not qualified to to like move to Africa and remotely do my two CDL jobs.
Who would you be referring to buy a by chance.

Scot:
[45:36] So Jack Dorsey CEO of Twitter and and square
it's just kind of randomly said he's going to move to Africa for some. Of time if she can get Scott Galloway it really angered him he's very upset about.

Jason:
[45:52] Yeah but In fairness like I think of you a shit like Square in particular you're like,
why is my guys been in a lot of his time on this Twitter thing and then now he's going to do it from Africa like that that would seems like,
that would be a legitimate reason to have some concern.

Scot:
[46:12] Yeah yeah yeah.

Jason:
[46:14] Yep I would love to visit Africa but I think it would be on vacation and then my V prediction.
Is one that I feel like I used to do all the time and then you know I skipped a year,
so what will try it again I think this is going to be a year that digital in-store really heats up and the surprising piece of that is
this much-maligned a technology that people in our industry like to make jokes about the the ugly QR code I think is going to make a
a major comeback at retail and we'll see a bunch of of a Retailer's deployed QR codes for various forms of mobile wallets and particularly for like,
letting you scan products and read reviews and things like that ends in retail stores.
So those are my five and then.

Scot:
[47:08] DuckTales risky people hate QR you want a visceral hatred of York.

Jason:
[47:12] Yeah I feel like it's it's a bit of sneaky success I feel like there's a lot of people but they're pregnant primarily pendants that like have all this negativity around the QR code but didn't secretly you know.
There there's a bunch of of use cases where the QR codes have been like Paramount like it's,
it's you know a huge chunk of all payments at Starbucks and it's Walmart pay which is secretly been a success and it's you know it's it's Snapchat and if you go to China it's everywhere is WeChat so,
so hopefully we'll see you by usually I am dead wrong in these things so I am not overly confident about any of them but.
But I'm at least throwing it out there and again because the bonus is always treated me so well I thought I would throw a bonus in this year.

Scot:
[48:03] What do you have for this year.

Jason:
[48:06] So my bonus is I'm just going straight negative because I'll be honest when I first read these forecasts all five of my forecasts are things that we're not going to happen and then I realized
that I can't I can't be that guy right so so I tried to make more optimistic reasonable forecast but then I reserve the right to point out all of the Ebenezer Scrooge bah humbug,
moments so here's my long list of things that are not going to happen this year cashierless retail stores like Amazon go blockchain
5G big data and personalization none of those those Technologies are going to have a major impact on retail Talking Heads are going to go crazy about them and write stories about how you know if you don't do it immediately you're going to go out of business,
but I think they're going to be the examples of success are going to be few and far between I don't think,
everyone loves to talk about DJ need a vertical Brands but I don't think any of those are going to break out in a be particularly successful in 2020,
I for sure don't think we're going to see any major retail antitrust actions in the US.

[49:11] So that would be my negative Scott Galloway prediction I also don't think the the brick-and-mortar marketplace stores
so that's beta showfields neighborhood Goods I don't think they're going to have a huge success or break out in 2020 and Shop of eyes getting a lot of Buzz right now but the the,
thing I hear most about Shopify is that they're going to become a viable competitor for Amazon and I actually don't think they're going to compete with Amazon at all in 2020.

Scot:
[49:42] Yeah that the people that say they can compete feel like they think it Shopify would have some front door kind of marketplace Tech experience that kind of what you think people are looking.

Jason:
[49:54] There's people that talk about maybe they aggregate traffic and have some kind of marketplace experience where you could shop across multiple vendors you know they they bought a logistics company this year in the rapidly building out there with just aches and on paper that looks like,
fulfillment by Amazon and some people are like oh that's competing with a fulfillment by Amazon but as I as we said earlier in the show I admire Shopify think they're making a bunch of the right decisions and they're doing really well.
None of the services they provide to a client in my mind.
Replace or compete with any of the services Amazon provides in anyway and like,
I think they're for the most part synergistic in there they're going to have a lot of customer overlap but it's the end of the day
Amazon is in the business of generating a huge amount of traffic and monetizing that traffic and they sell that traffic to their customers
and that's exactly the opposite of what Shopify does Shopify does everything for you but get you any traffic whatsoever and you are totally responsible for bringing your own traffic and so I just think,
that's a that's a,
both sides of that strategy makes sense for both companies but I just I think all the pendants that are like oh you know the secret competitor for Amazon's going to turn out to be Shopify I just don't see it.

Scot:
[51:15] Any other bonuses you want though there.

Jason:
[51:21] No no no no I think I press my luck enough
hopefully that you know there's some nuggets in their our listeners will be able to use they shake their 2020 and that will be able to redeem ourselves when we unquestionably
I enter the new decade next January.

Scot:
[51:43] Yeah you know what
maybe it would be fun as if listeners I'm just doing this off-the-cuff so what if listeners wanted to add some and we could kind of like aggregate
some of the better ones in and talk about them on the next show but then also when we do the recap see what had a third competitor which of these listeners and see how they do against you.

Jason:
[52:05] Yeah that's a great idea because I it's it's kind of boring coming in second so I feel like third would be that's why I've been to just.

Scot:
[52:14] Looks like it would feel better if it smells cancer.

Jason:
[52:17] Fair enough. So maybe I try to take only the worst products that be funny I try to cherry-pick the worst predictions and then it still be me
so yeah I'm totally in on that if listeners want to
jump on to Facebook and we leave any of their own predictions or hit us up on Twitter will be happy to aggregate them put them in the show notes and include them in our recap next year
and that's going to be a great final call to action because it's happen again we've used up our a lot of time so definitely love to hear all of our listeners predictions and also feel free if you just think,
Scott and I are crazy
and you want to refute any of our predictions we'd love to hear your thinking behind that and as always the beginning of the year before you get really busy at work is a perfect time to jump on iTunes and finally give us that five star review.

Scot:
[53:10] Things are running Jason congrats on salvaging a tie out this year.

Jason:
[53:15] Thanks very much it it it it feels good to be West behind than I usually am thanks everyone for listening and until next time happy commercing.

Dec 13, 2019

EP203 - Shopper insights from NPD Checkout

NPD Checkout is a product from NPD that scan physical and digital receipts from a panel of more than 100,000 users to get a unique look into consumer purchase patterns in a variety of product categories.

Jeremy Allen, Group President of Checkout, and Patty Altman, SVP Client and Business Development at Checkout join us to discuss what we can learn about the holiday from their dataset.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 203 of the Jason & Scot show was recorded on Tuesday November 16th, 2019.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episodes is in recorded on Tuesday November 26th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your squad window.

Scot:
[0:38] Hey Jason and welcome back Jason Scott show listeners well we're all here on pins and needles waiting for the first results of holiday 2019 so with that while we're doing that we would warm up your data analysis brain functionality
with some gas that are focused on retaildata we are really excited to Welcome to the Jason Scott show both of these folks come from NPD
we have Jeremy Allen he is the group president of checkout & Patty Altman choose the SVP client and Business Development check out what kind of showed us.

Jeremy & Patty:
[1:12] Thanks for having us it's an honor to be with you guys today thank you.

Jason:
[1:18] We are thrilled to have both of you and I started the tradition on the show we always like to take things off by having the guest share a little bit about their background so I'm Jeremy why don't why don't you get a stardust can you tell us how you came to MP3.

Jeremy & Patty:
[1:30] Absolutely so I've been with MPD for about the past 4 years my anniversary is coming up in December of this year that we don't check out business which will get into a lot more in this show but ended check out his MP start up business we use receipts to measure markets and how consumers shop
we're very very excited about this business it's been a great
investment and opportunity for us and for our clients prior to doing this and joining mpds spent about five years with Nielsen which is also in the measurement space
I led the marketing effect.
Is there helps clients improve their advertising reaching residents and before that I grew up in Consulting so I spent about fifteen long years at McKinsey & Company.

Jason:
[2:14] Route 15 years of Mackenzie is actually like 83 years in in people years.

Jeremy & Patty:
[2:19] Yeah and I have all the gray hairs to prove it.

Jason:
[2:21] Patty can you tell us how you got them pretty.

Jeremy & Patty:
[2:25] Yeah absolutely and thanks as well of her for having me on the show this morning I'm so I did attempt MPG for two years and I work on Jeremy's team I leave the commercial side of our business the mission of our team is to make sure that our clients use check out by rata latex in the most effective way and typically to drive big strategic
decisions and cover opportunities and all within the the omni-channel space.
Apart MPG I was at its cells for 7 years and I had a variety of leadership positions their everything from leading a Global Communication program,
how to custom Resurgens in Brandon Division and renovation.
Back to the keep probably 222 why I'm here at MPG now is my time that I spent at iri I was alright for 12 years and I was in the Consumer Panel division working with longitudinal panel very similar to what we do
and it was there that I learned the ins and outs of how to best leverage by Rihanna lyrics and really the power of that that information so that you know it's funny but it feels like coming to MPD is.
Because a lot of those studies that I did in the CPT space years ago things like Brands switching Milos retains you name it there the core of what we do at checkout and how we drive value at our clients.

Jason:
[3:38] That's awesome so is it fair to say that you guys basically took the best of Nielsen and ri-ri and brought it to make an even better offering a check out.

Jeremy & Patty:
[3:47] That's exactly right so what what's interesting is that panel analytics what that basically means is your tracking the same consumers spending over time it's been a Mainstay in the cpg space so
there's a product of meiosis and I are I collaborate on call the homescan panel and that's where many of those cpg brands
bread and butter analytics come out of that in our space we call a general merchandise in Food Service the industries and MPD tracks there hasn't been a longitudinal panel before check-out so we're bringing those exact same discipline as it existed for decades and cpg marketing to general merchandise and it's it's been a huge opportunity in our clients are thrilled
trouble that innovation.

Scot:
[4:27] Ricola just to make sure so Jason are pretty familiar but just make sure listeners are tracking us there's some kind of two companies in this space there's Nielsen and NPD Nielsen,
they do a lot of data around cpgs and then you guys do the Nazi party stuff with York on General Merchandise is that a is that a fair characterization.

Jeremy & Patty:
[4:46] That's exactly right so we track 24 Industries and it's basically I would check everything that you cannot eat or put on your body so you're getting personal products so it's closing its jewelry its beauty products it's Sporting Goods
it's we also do food service so restaurant operators all of those things that you find in a Target or Walmart that don't fall into the cpg category we track.

Scot:
[5:10] And then again for listeners that aren't familiar with how how this works at General at NPD and then you're working on a sub project within their called check out
in the overall in PD so you're at least 23 kind of non cpg categories,
I'll pick one of my favorites which is Automotive how does that work how are you tracking Automotive data.

Jeremy & Patty:
[5:32] Yeah so if I just back up for a second mpd's been in business for about 50 years and we track these twenty-four Industries and we do it in two primary ways so 1 is what we call a POS which stands for point of sale.
So similar to a Nielsen RI we,
data from retailers to all of their register receipt data we aggregate that data and we classified into a standard hierarchy that we then use the measure products sales
with that we can measure manufacturer brandshare we can measure retailer share and its really we called the data
record set the standard by which companies measure their performance and our Industries so that is what MPD has been doing for 50 years so it's retailer data aggregated organized and then given to the industry to measure performance that's one dataset that ipd uses the other one that would be used for a long time is consumer surveys
so a POS data that we get from retailers tells you what sold for how much it sold and how many units sold the consumer data we really go out and ask consumers,
what they bought and why they bought it right so it's that we called the why behind the buy checkout is a startup that gives us another way to measure what consumers do
the difference with check out that will get into his Patty mention it's a panel so historically with our consumer data we would ask trackers we would ask the same questions,
different people each month with a panel you're asking the same questions are getting the same information from the same people over time and that's where the Innovation comes in for us in these industries.

Jason:
[7:00] That that is awesome and I always like to talk about the soda panel data as observed Behavior what we actually see customers do versus the survey data is more stated.
Behavior is what customer said they do which may or may not perfectly accurately reflect but they actually did.

Jeremy & Patty:
[7:20] A hundred percent correct and that's why we love receipt so if I get in to check out for a minute what's what's interesting or different about checkout is exactly what you said we would ask consumers what they bought where they bought at why they bought it receipts we don't have to ask any questions and it's factual so
we'll check out those as we have an app called receipt palette available and I owe store on an Android.
Consumer download that app and we asked him to take pictures of all of their receipts for all of their purchases
we also ask them to give us access to the rear seats so the core of checkout is getting a consumer to give us information on everything they purchase
in the form of a receipt with an organized that data in the same way we do our point-of-sale data in the same taxonomy is the same hierarchies is class by the exact same way and with that we can measure what people are buying through their receipts.

Jason:
[8:08] Perfect and I don't want to belabor the methodologies so much but it it's super helpful because it lets us understand where there's any potential,
data biases in just like what the what the capabilities of the.
The dataset that's driving the insight into so you're you have a consumer at this enticing people to take pictures of receipts and.
To me part of the cool part is that you just implied as you're not just getting in-store Behavior or just online Behavior as,
as some other panels are doing you are actually seeing the same person across their their shopping habits on Amazon or walmart.com and in a Target store at Costco store.

Jeremy & Patty:
[8:50] That's exactly right and what's Patty use the term omnichannel that's exactly with me by omni-channel we're really interested in trying to understand everything I can supervise.
Where they buy it from a channel perspective and from a retail perspective and from a brand perspective and historically measurement has been Channel Centric right so you have an e-commerce measurement service which we used to provide within checkout
you have a brick-and-mortar measurement service but what was missing there was the interaction across channels and it's exactly what you just said we might getting purchases across all those different channels retailers and Brands we get a full picture of how a consumers making decisions about what the Spanish word I'll spend it.

Jason:
[9:26] Awesome and then you sell to other traditional data collection problems we have,
you don't care how many different devices be customer used to ShopRite because you're not using cookies you're you're getting the receipt so you see the same customer on their their laptop and iPad for example.
And a you don't care what the method of payment is right so they pay with cash or a credit card doesn't doesn't matter because it get a receipt in either case and you see that receipt.

Jeremy & Patty:
[9:54] That's exactly right in for some of the industries that we tried tried that we tried cash is extremely important so if you think about food service and people buying a meal at McDonald's cash is the dominant
method of purchase and if we didn't track the receipts we miss all those cash purchases that's one of the advantages over credit cards for example some sources to use credit card data track spending.

Jason:
[10:14] Perfect sedan is there some unintended bias in your in your pant like because you're its people that are willing to download and use this app.
It seems reasonable that they might skew more digital and therefore shop online more than then Middle America or anything like that at like you guys feel like there is some.
Some specific biases that you try to account for or or do I have that wrong.

Jeremy & Patty:
[10:40] Yeah there's always going to be a bias in any panel depending on the data collection depending on what to be an ass to but what we do with with checkout is we use both waiting and projections just to make sure that we are eliminating as much of that bias is possible.
So when we look at results from our panel it is indeed that's reflective of the average Shopper for that category for that brand for that retailer.

Jason:
[11:04] Perfect and then as I understand it there's about a hundred thousand people in the panel right now it sounds like a huge amount but there is like 240 million households in the US.
I'm guessing that you do some dancing math to somehow.
Make the the hundred thousand represent the all the household or all the consumers.

Jeremy & Patty:
[11:28] Yes fancy math is exactly what we applied the right now that we we have marketing research and Sciences here who are the best in the industry you know well known people who have been doing this for many years and we have,
but the waiting system to make sure who's in our panel is represented appropriately and then projection systems to make sure they could reject out what the total us.
Population would behave so we take that hundred thousand and make a represent the total US population.
If I can just add that hundred thousand by early next year will be a hundred and fifty thousand so we continue to invest
expand the panel because we believe we can accurately represent the population with a hundred thousand but in many of our Industries sample size is critical so the more panelist we have.
The more industry's categories Brands and products we can track US were always trying to invest and expand the panel for that reason.

Scot:
[12:18] Cool that's really helpful in thanks for going to the Jason Gatlin of data questions
I'm sure you guys get this from clients all the time so it's fine. Not foreign to
what time 21 I'm analyzing data I find the real value is in kind of surprises both both positive and negative if you will what are some of the most interesting surprises that you guys have seen from this project over.

Jeremy & Patty:
[12:43] So what was really interesting for me one of the very first things that we did when we got the first.
Long enough term data set to be able to observe consumer behaviors as we broke pick people up
based on how much they spent online so imagine a portion of the population that spends less than 25% of their spend online versus another portion of the population which are heavily engaged in e-commerce it's been more than 75% of their spend online and we really trying to find out it's do retail
preferences change and you would think they obviously would but do they change and how did they change based on how much of a spend
how much spend people do online and how engage they are the e-commerce what was interesting is people that are primarily brick-and-mortar the number one retailer as you might expect
Texas Walmart people that are primarily online Shoppers the number one retailer as you might expect was Amazon what was fascinating though was to look at how the other retail price is changed over time and what we're really trying to understand was where the,
brick-and-mortar retailers able through their.com offerings to maintain their fair share of the market as people moved online.
And for the most part they weren't right and a big question that we're working with our retail clients on its how do I present a multi-channel omni-channel offered it to Consumers so that whether they love coming into my store
or whether they really rather stay home and shop online they're choosing me as their retailer and an interesting example is.

[14:08] Has been a phenomenal job of using their store assets using a.com offering really making a friendly for consumers and actually do better with consumers as the as consumers shift from buying.

[14:21] Predominantly in stores to predominantly online bestbuy.com picks up more than their fair share of that heavy online consumer cohort.
That was fascinating and we use that as an example with our retail clients to say hey don't worry about.
Amazon as the p.m. if you can win you can create a compelling offer for consumers do what you do well use all of your assets.
And you can actually win with consumers as they make that shift online.
Dimension Automotive earlier that said it's a really good example for automotive clients where online penetration is still low.
What is your thinking about consumers moving more online for automotive purchases those retailers were really trying to figure out how did we win from the very beginning with an omni-channel multichannel offering for those consumers.

Scot:
[15:04] Recalls on any other insights from so it's this population that's like using less than 25% so I guess they're doing more Walmart any other interesting would like.
What is that type of a person is it the lower-income cohort or that certain parts of the country or how would you think about that person.

Jeremy & Patty:
[15:27] There's definitely excuse lower-income and more Middle America as you would.
So we're still saying is it in you guys know this way better than we do we still see that internet
Ecommerce shopping go SKU to where the population centers that skews toward the coast that's where you had the Leading Edge Shoppers that are much more comfortable with technology
you have a much higher presence of internet availability although it's becoming ubiquitous now so it's middle of the country and lower-income that desk you toward that lower online engagement cohort.

Jason:
[16:01] So you you mentioned something that was interesting.
You talk about a retailer like Best Buy sort of out I'll come out punching their weight in omni-channel which is fascinating to me I have a premise that.
In our industry a lot we we we work based on these
urban legends and you know we often don't have data and so like by where did math like omni-channel spend Shoppers tend to spend more than in-store Shoppers in that.
That sounded good when some CEO set it to the the shareholders and then it became.
Serve a defective fact in our industry and then the data sets like yours come up and we get to either confirm or debunk some of those urban legends so am I am specific I am curious I'm at specific example.
Is your data showing that omni-channel Spinners to Shoppers that use both online and in-store tend to be more valuable for retailers or or is that an urban legend.

Jeremy & Patty:
[17:03] I think it depends on the category so a lot of times what we do is we'll segments consumers based on spending into a heavy spending group and a category medium or light the heavy your suspenders,
you tend to be people that have,
uptmore multi-channel engagement so I would say in general and it sounds like you were hoping that I would debunk this one I would say in general or data would tend to agree with that premise but it really depends upon the category.

Jason:
[17:31] In fairness I'm probably out of business if you debunk that that so I'm fine.

Jeremy & Patty:
[17:34] Okay I thought you wanted me to be a contrarian and I can't be on that point.

Jason:
[17:40] Yeah yeah yeah if you jumped in and said any money you you spend on digital is a total waste of funds on.

Jeremy & Patty:
[17:46] Fair enough.

Jason:
[17:48] So thank God I dodged that bullet I don't put you on the spot but were there any other sort of.
Surprises to you in terms of omni-channel behavior or are there any retailers that you would have expected that are doing you know really well at capturing their share.
Any categories that tennis humoral new channel.

Jeremy & Patty:
[18:08] So in terms of categories it's cute. You know what I what I will point out is the automotive example that I pointed out earlier I would say there's a couple of categories like Automotive in Home Improvement.

[18:20] Where they've been able to to benefit from watching other categories and other retailers as consumers shifted online and those retailers didn't embrace it.
And really take advantage of all the assets that they had to make sure that they were getting their fair share
they're doing a better job out of the gate with an omni-channel offer so if you think about an advance for example to buy online pickup in-store which is a unique
capability that you have if you have a physical store location of your changing the muffler on your car it's pretty urgent for you to get it quickly right you may not be able to wait till the next day,
but to be able to do the shopping figure out what part you need to be able to look up a model number online.
Select exactly what you need and then go drive over and pick it up to be able to complete the repair or Auto retailers founded that was a very compelling value proposition so figuring out.
What you do well and where you can win,
and where your stores actually are a benefit to you is it something that I've really been impressed with with with some of the other retailers we've observed and Home Improvement similar as much earlier.
Many people thought you don't got you're never going to buy lumber online while you're right but there's a huge assortment of items that are in a Home Depot or Lowe's many of them are very friendly for e-commerce and being able had a
to figure out that buy online pickup in-store the multichannel offer they can really learn from your Best in Class retailers like Target that have done a really good job,
figuring out how to appeal to the consumer with all the different channels and features that they offer.

Jason:
[19:48] That's true that you and I did want to clarify one thing because you have different different companies use categories definition slightly differently when you say Automotive do you mean actual,
vehicle sales or do you mean like automotive aftermarket parts and accessories.

Jeremy & Patty:
[20:05] Thanks for clarifying only automotive aftermarket parts and accessories we do not track vehicle sales.

Jason:
[20:12] Perfect so then the target example which is particularly interesting to me,
because I feel like we've seen this really interesting Behavior we have the Walmarts of the world,
in my mind are really trying to go toe-to-toe with Amazon and and you know Amazon's got 800 million items online
Walmarts in a rapidly expanding their offering and you know trying to match same-day shipping and all of that I feel like when they zig zag Target actually zagged and said hey you know what we're not going to be the everything store.
We're going to carry a curated assortment in that a storm is going to live in our stores and we're going to use our stores,
much more centrally than Walmart does for example so you know their car chipped and they they ship a significant portion of all their e-commerce orders from the back of their stores and they do same-day delivery from the store inventory,
in my mind when I look at those two companies I go what you know Walmart's really playing for assortment price and convenience and Target is really.
Playing for curation and omni-channel does that show up in your data of it like you know.
The omni-channel is more relevant to Target than Walmart.

Jeremy & Patty:
[21:24] So I agree completely with the stories that you just laid out on those two companies and our data does support that at least as of right now.
At target.com is doing better than walmart.com in a fair share sense with people that are heavier online consumers.
That's the facts would support that Emmett and I you know I love about the shift example that you brought up as a very consistent with the Target brand right so
you know what I was growing up and I guess I'm old but people call Target Tarjay right but if you think about the shipt delivery service you have these part-time and in many cases working moms or
work-from-home moms that are coming into your home they're unpacking your groceries they feel like they're part of the family too very personalized,
brand experience of the way they've done it is very consistent with their brand Heritage in my opinion.

Scot:
[22:15] Wrinkle in Time it wouldn't be a Jason Scott show who didn't talk a little bit about Amazon you've already mentioned them a little bit there
what are things are ice and I'm curious about is when you get the macro numbers you see that the Amazons about half of online sales since my first question are related Amazon his
is that track what you guys are saying.

Jeremy & Patty:
[22:38] Yeah that's a really interesting and question I'm arguing shows that about 43% of total online sales moves or Amazon to Summit.
That's the way you just quoted but I think it would really have to know is that there's just a ton of variation across Industries so for example if you look at something like softline industry is like apparel about 20% moved through Amazon as opposed to Choice which,
approach 70% and think about the differences between those two industries toys is often for a specific occasion is often around a holiday it's often for gift giving purchase so that combination of what.
The product is 4 or the gifted of the occasion is for as much as the desire to have a specific online experience tends to drive the Reliance on Amazon vs.
The rest of the online space.

Scot:
[23:26] And you guys so if I kind of think of this giant pie of e-commerce you guys are seeing what what percent do you think you see of the whole pie if you're not doing cpg and apparel.

Jeremy & Patty:
[23:39] We do do apparel we don't do CBG and I I don't know what the shit I honestly don't know the answer to that.

Scot:
[23:46] I thought there's something like if you couldn't put on your body or something.

Jeremy & Patty:
[23:51] Oh yeah no personal products so that they probably the best bad example that I lay that.

Scot:
[23:57] I was thinking sweaters not Nada Massacre.

Jeremy & Patty:
[24:01] Will mascara retract it's more the lotions and deodorant tuxedo.

Scot:
[24:05] Okay why it's complicated.

Jeremy & Patty:
[24:07] It is complicated.

Scot:
[24:08] So so you know you when you read the headlines and and Jason I got there and talked to a lot of retailers and I've spoken it in PT shows about Amazon you do get this feeling that they're on this kind of like
unassailable on and unbeatable
does the data indicate any kind of tips that you would give to retailers are brands of of how to draw a quote-unquote beat Amazon or or two at least kind of slow down there their head weigh.

Jeremy & Patty:
[24:36] So I just got I think it's a lot of what we have been talking about I'd I think and then we have to be careful right because all these retailers are friends of ours and we want everyone to play nicely,
seed to having a physical store where you can engage with consumers on a different level and be there for them and build a relationship and greet them in person
inform an impression of a brand that's a connection with a person is a real Advantage being able to ship from your store being able to let somebody
things up the same day if it's available there's some advantages that a physical brick-and-mortar Network give you as a retailer.
But I think when unexploited right I look at headlines from and you'll remember these from 10 or 20 years ago that talked about the death of the store right and there was probably a credible point of view those before it at some point that people would never go into stores anymore.
There may stores made banners that are doing great because they realize that there are some things that consumers want from a store and we would just encourage all of our.
Retailers that have that physical presence to take advantage of that figure out what they can do uniquely to connect to a consumer when they come into the store to strengthen the connection to the brand,
and it's powerful.

[25:45] Yeah I just to add to a Jeremy was saying it's really only about the it's really all about the consumer not about the channel so the clients are either reach other manufacturers who are seeing really operating at at the highest capacity or those that always keep the consumer Central,
to the story so whether it's an experience of walking into a brick-and-mortar store physical location or if it's purchasing at their direct consumer or a.
A person in a curated site the message the field of communication is all holistic and fits together so it's a shopping at the consumer experience and not a channel experience.

Jason:
[26:18] Yeah that makes total sense I'm always like I'm less interested in which retailers are doing well against Amazon are there any of the categories that you track where.
Where do you feel like Amazon isn't as dominant so there's more online white space.

Jeremy & Patty:
[26:35] So Patty mention just a cystically apparel and it's offline categories especially when you get the fashion is one where
we see a lot of players other than Amazon do well right there a lot of. Com Pure Play e-commerce retailers that have brands that speak to something and see
to Consumers and stand for something and those who really well right I think that's a place where
we would all knowledge that there are a lot of other players in that space and it's not one that Amazon seems to be dominating or moving toward dominance.

Jason:
[27:08] Yeah I know that makes sense I it's funny I get asked all the time like like what categories can we get in.
Where Amazon is nrt winning and and I have to come up with a different answer every year because Amazon.
Conquesting more categories but like I used to say live plants and now they're shipping live Christmas trees.
I feel like I can't win on that.
I meant you regretting I didn't ask you a question earlier when I was in the data gauntlets Y100 the I know for a fact that both retailers and brands are customer of your data,
but I'm guessing how they use it is slightly different like can you share after the brief example of.
You know what the typical use cases for retail and what they might do differently as a result of your data and then what the typical use cases for a product manufacturer.

Jeremy & Patty:
[28:00] Yeah I know absolutely end and we work with a ton of different clients are really using checkout in a multitude of ways whether they're retailer or whether there are brand so you know
in MN across both quite honestly all of them are always interested in the basic or metrics of how consumer shop
we have a product you're called Essentials which in any other company would be things like a purchase summary of purchase Transit a shopping bath
and both from a retailer and a Matic manufacture perspective they need this information and they use this information to understand the core foundation of the health of their brand.
So things like penetration what percent of the population is is buying my product or buying right how much do they purchase over the course of the year do I have a a penetration strategy or do I have a virus strategy and how does it differ from my competition,
that's always critical one thing that I adore one study that we find it actually Bridges the gap between retailers
and manufacturers of something for the leakage tray and basically would have leakage tree does is it looks from a conservative from a retailer lens what trip.
A retailer is missing or or not converting for specific category and from there we can identify that opportunity and how much dollars are being missed because.
Is going to the competitor and who is that competitor in addition what we can do is the next.

[29:22] To help him activate or identify strategies you which to to convert.
Trinity why I say it's also a great manufacturer play as well as you know I mentioned earlier I've been in the cpg world many many years and category management functions or just the bread and butter of how manufacturers work with many retailers,
the Crux of that was always we could read.

[29:43] So that was pretty commonplace in the cpg world the reality is it's less common place here so we're finding manufacturers who are really successful with retailers are using strategies like leakage trees to help them understand how to improve their business,
and that in turn of course also helps create a better relationship and also opportunities for the manufacturer without retailer.

Jason:
[30:07] Awesome very cool Inn in general is check out a tool that like.
Is it a turn key tool that a client would use themselves or is it is it sort of a data set and what the client buys from from you is Insight from a person that's using that data.

Jeremy & Patty:
[30:23] Yeah that's a really great question and we really think that's the value proposition about checkout we right size the offer to wear or what stage a manufacturer and retailer my baby
so for example we have some really sophisticated clients who either came from the cpg world and they use a vuse us before they understand these metrics and and how to use them to a really affect
acid level are we having Seltzer platform for those clients where they can go in and pull those measures that I talked about earlier that really are the essentials of the core of the,
understanding business the other side of the equation where there are usually a pretty complex issues that need to be answered
big dollars are on the line we have a team of experts here who understand the categories that we deal with
from a retailer or manufacturer point of you understand the issues that they're being challenged with and how the best way we could line up what the client is looking to do
versus how checkout can assist
and can drive solutions the other thing that's really unique about us and MPG is because we have those POs and consumer asset
we can tell the complete picture so we can start from up from a step from a sell-side on the POS why cells might be up or down if that's the challenge of client is facing,
we could then look at the consumer data to understand some occasion base or some other information about how people
might have their attitudes towards towards a specific product brand or retailer and then we really bring it home with the check out their data and that check a data completely focused on helping to understand.

[31:53] What strategies you need to employ that are going to motivate be Shopper or the consumer that you want to attract
still get it can be self-serve or it can be a very curated experience where we are handed lock
step with you I'm from start to finish on the solution and what you can do with that solution.

Scot:
[32:09] Cool I like that this is the first time I've heard the term leakage tree.
Feel like I want to go cut down the forest of leakage trees.

Jeremy & Patty:
[32:18] Ocean of of leakage is really important going to be think about what the fundamentally what it means of the retailers been successful.
Bringing someone into their store and yet they're choosing to leave their store to buy somewhere else right so being able to figure out what was I missing from this category from a category perspective or a brand perspective or rice.
What didn't I have that made that consumer we're already did the hard work to get them into my store what am I missing so they had to go to one of my competitors to make that purchase that's powerful and we do that across all the categories to show retail is where they're leaking and why.

Scot:
[32:53] What were the topics on kind of fascinated with is what we call Molly getting right so we're definitely seeing problems at malls obviously this point Macy's just recently announced their reporting and they kind of blames their problems on the fact that a lot of the other anchor tenants at malls like like Sears are closing
the sum of the day that I've seen I can't remember where this comes from but it do showing
not only are Mal visits down but the intramall shock visits are down to so people are going to Great Reigns actually going to the mall and going to the Apple Store and getting some airpods and leaving the mall they're not they're not kind of.
Reading the restaurant six stores that they used to you guys have any kind of multi-level insights that you can talk about.

Jeremy & Patty:
[33:38] It's a great question and probably something we should study but we haven't so I will put that on the list of things that we should look at.
But we would have a solution for it so it's a client did come to us and said they wanted to understand that we have something called the sequencing study which we can understand over a course of a day of someone,
shopping experience if they purchase at Macy's what they did.
My mother was brick-and-mortar or did they then go online and purchase something through them to be purchasing something during the course of the of the day we can help identify where they had to go out from that initial purchase to get other items that could be online it could be in store.

Scot:
[34:16] So kind of a little bit of a pivot here this is something that Jason I have been pondering for literally
I'm 5 years now so here on the show we talk a lot about the data out there at a macro level of Hephaestus e-commerce growing
I'm so generally you have comscore I think it's the Department of Commerce but it's do the Census Bureau they say that online sales are going to 15% and they kind of
put something like a new survey you look at 13 to 15% of sales are online but then you know on the show we always do his new shows and we have Amazon is over 25% Walmart's over 30% this just online sales Target at 50%,
Shopify even like eBay is kind of relatively flat so it feels like.
Either someone is losing tremendous share in there that that we don't see or the 15% number is wrong you guys have any
any insight into which of those things as possible or maybe there's something I haven't even imagined is going on here.

Jeremy & Patty:
[35:18] So I don't know what's driving it but I can say that you're the Department of Commerce number of 15% is consistent with our numbers we see growth from 13 to
1316 %
quarter-on-quarter that's something we publish instead of a new card retail Trends that's very consistent with the numbers that were seeing so when you see outline examples of people with double-digit growth 40 50% growth at you know I guess I would be with you that they must be taking share from somewhere but I also don't know where that is coming from.

Scot:
[35:49] Maybe maybe another way to ask for Smite my senses at Sonny's brick-and-mortar guys that
I just really not continuing to keep their share so I'll pick on like a JCPenney's cuz they've been in the news but not asking you specifically but I guess one counterexample is.
Are there examples of omni-channel going really poorly and is that more the norm than it going really well like like the best by example.

Jeremy & Patty:
[36:15] I think it is I think it is a bit by default right so if you don't pay attention to it and you don't build an omni-channel offering you don't have it. Com presents that appeals to your consumers and you don't invest in it,
you know kind of has to go poorly because you're up against people that are doing it really really well right they
know how to cure a disorder and online in a different way they know how to use the building have an endless shelf online they know how to do targeted marketing to bring people out of their sight so if you're not doing that your. Com presents can feel take off and I think you've raised a great example we probably do have many retail examples
it's not a place where they've invested maybe because they had to focus on other areas and it hasn't taken off and they probably are not capturing their fair share.

Jason:
[36:58] Which is of course always sad and it's I guess it's going to remain a mystery why we have this,
Spirit of numbers my own Theory,
we talked to the very beginning sort of surveys versus observed behavior that the US Department of Commerce data which which mini data providers in Dexter dated to.
Essentially is a survey they send a letter to a retailer and say,
what percentage of the sales were online in a mini cases they've been sending that letter to the same guy for 40 years and that's a store.
You know the answer to that survey doesn't necessarily like tie directly to the Erp system of every retail.
Be that as it may I'm I'm kind of curious you have all this like juicy real data from customers.
I have to imagine that there's.
Some kind of common mistakes that you you see repeated over and over again that you try to evangelize with customers like art are there any reoccurring themes that you tend to talk about that you can share with her audience.

Jeremy & Patty:
[38:03] Can it comes back I think too little bit of what we spoke about before really the The Shopper or the or the the
consumer has to be the center of every single
strategy so it's not enough to just say oh we need a direct-to-consumer we need brand. Com website to hell,
pimenta our sales it has to be something meaningful and fit,
what's a consumer expect for the Shopper expects but the experience what they know about the brand I'm so really has to all fit together what we know that some of our clients have moved away from having a Circle D, or separate digital teams we still see,
being a separate function when really it should be just one holistic approach I'm it should not be separated so where we see clients when he more often than not is where the consumer experience is address elastically and it's not Silo different channels where we don't see it happening is where it
it's either an afterthought or it's not a connected experience for the shopper.

Jason:
[39:02] Yeah we certainly will observe the same it's kind of sad that we're still having this conversation in.

Jeremy & Patty:
[39:07] Grid.

Jason:
[39:08] In 2019 but it do my experience recharge I've gotten a lot better at about talking about.
Having the customer at the center in in not having silos but that doesn't necessarily mean that the the organization in the metrics that they pay attention to behind behind the scenes are are perfectly in the.

Scot:
[39:29] What are so this is kind of so we've talked a lot about kind of what I called kind near window of what the date is telling you what was kind of project it forward and I'll kind of leave it to you guys too
to figure that out
the one one way we see a lot of people talk about this as though look at kind of the millennial and gen Z he's got to see that generation and then protect their behavior for work but what's the date of essentially telling you guys about the future.

Jeremy & Patty:
[39:57] That's a broad question future of retail.
And younger Generations are choosing to spend more on,
experiences and I'm sure you guys have done many podcasts on that growth experience spending but experience and services are getting an increasing share of spending our clients that sell Goods
are trying to figure out how to leverage and capitalize on that so it is similar experience brands,
where retailers or experiences that their consumers that have an affinity for their brand or also drawn to so could be Acquisitions it could be Co promotions it could be,
I tried to tie in and Merchandising their products where they wouldn't have before but that's an increasing concern for our clients,
a consumer's younger consumers especially are moving more and more away from buying stuff is the central feature of where they like to spend their money and and getting experiences and memories out of it.

[40:55] Related to that is is the notion of committee consumption which I think we may have coined that term but if you look at any any consumers discretionary spending.
They have an increasing share of that spending every month it's committed before their first paycheck comes in and things like streaming services things like your cable bill things like your cell phone bill.
Things like video game memberships you know they're all the different streaming services that have been the news lately that have launched consumers are spending more and more of their money
before even comes in in this this notion committee consumption so that's crowding-out discretionary spend on goods and that's a real challenge for clients as well so figuring out you know these subscription models are interesting
from any traditional e-commerce retailers are brick-and-mortar retailers and your subscription service is coming up there will my consumers be willing to
dedicate a portion of my spends or their spander of their income every month to me and there are several big retail Brands like Nordstrom.
But have a service where you can spend a certain amount a hundred bucks a month for four outfits they'll send it to your door you can return the ones you don't like but they're trying to figure out how they can get in on this
an ocean of a consumer saying okay every month you're going to get a portion of my spend and if you can't win with that you're going to lose cuz you'll get crowded out and I think that's been fascinating and we're trying to.
Work with our clients to see how they can work through that.

Jason:
[42:15] That that is super fascinating a trend we talked a lot about on the show we call Auto replenishment in so you you can imagine like if your.
You know a general Merchant with a hundred thousand views on the shelf and you're seeing that higher and higher percentage of consumption shift to this committed consumption like can you make.
Paper towels and toilet paper committed us consumption by you know providing some service where those things just show up in the customer doesn't have to shop for them again so.
Yeah it'll be interesting to see if what you said of fighting against that trended we if we seen more more retailers try to embrace that Trend you feel like that could be successful in.
In a broader range of categories in Weston today.

Jeremy & Patty:
[43:00] I think we're seeing a it expand and we're seeing trial I don't know that we've seen proof I mean that the again you guys are the experts in the e-commerce and Amazon space but the statistics that you see on what people are willing to spend.
Or how they're willing to engage when they have Prime memberships the amount of a purchasing that they do in the frequency of that purchasing on Amazon
what is Auto replenishment in the number of boxes that are showing up on their door crowding-out unit trips to,
two other retailers were they may have bought the paper towels or the cleaning products it's astonishing right
the purchase frequency on Amazon dwarfs and its factors 10 to 1 but it's a it's a it's a big multiple so I think Amazon certainly and in that case has gotten it right.
A black Porter other claims that are trying to figure out how they can win with that and some of the apparel manufacturers I think you're a really good examples there.

Jason:
[43:52] Yeah that's awesome along those lines Amazon made a pretty clever announcement this week day they launched a new product called the dash shelf have you guys seen this.

Jeremy & Patty:
[44:05] I have not.

Jason:
[44:06] It's so it's a a smart shelf that's design for their B2B customer so you'd put it in on your your Office Products shell for your pantry in your business and it.
It weighs the products that are on the shelf and automatically reorders when the the Shelf gets below a certain level of inventory so they're essentially.
Pushing automated Inventory management out to all these small businesses for you know ordering you know coffee and cleaning supplies for businesses which if I'm Office Depot or Staples or one of those companies.
I bet that would be pretty scary because they're you know again taking a bunch of that discretionary spending and shifting it to committed Amazon consumption.

Jeremy & Patty:
[44:52] I love that I had not heard of it so thank you for telling me about and I love that idea.

Scot:
[44:56] Ever you just kind of startup question the would look at your data can you tell if someone is a promise or not and can you do guys project and say hey we think there's this many prime users.

Jeremy & Patty:
[45:08] I don't have the projected answer but yes we can tell if someone is a prime user as I mentioned before we have access to e-commerce receipt so in those receipts pill identify
if your Prime member so we can see that was interesting and I mentioned before the purchase frequency that we see him on our users that are Prime members is about 35 purchases,
the average purchase that we see from other retailers is in the new 2 to 5 range so it's just massive the,
engagement and loyalty that Amazon has been able to create with that Prime Membership which by the way you know we've looked at all the things you get with prime that really is a good value for consumers and I think consumers recognize that so it's
I'm certainly not the first person to say it but it's a brilliant thing that they've done in it and we see it hard at in terms of Engagement that consumers cat.

Scot:
[45:55] And that that 35 is over the course of a week here.

Jeremy & Patty:
[46:00] Over the course of a year.

Scot:
[46:01] Yeah Jason does that in the day at Amazon.

Jeremy & Patty:
[46:03] It was really interesting to their spending typically is lower but with that many purchases over 35 different occasions and it's you know close to 2,000 on average per year.

Jason:
[46:17] That's that's crazy that's a huge like endemic advantage and I'm assuming it's a mean because if it was a medium Scott's you know that wasn't Star Wars purchases a year from Amazon would probably have a.
I'm more skewing effect on the data.

Jeremy & Patty:
[46:32] Yes they were that's an average.

Jason:
[46:33] But that's actually going to be a great place to end it because
it's happen again we've used up all our allotted time but if we've whet your appetite and you want to continue this conversation you're welcome to hit us up on Twitter or leave us a question on our Facebook page as always we
we really appreciate it if you jump on iTunes and give us that that five star review,
but Jeremy Patty is a real pleasure to talk to you today and thanks for sharing some of the insights from the checkout.

Jeremy & Patty:
[47:03] Thanks so much for having us thank you.

Jason:
[47:07] Until next time happy commercing.

Dec 6, 2019

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Adobe Recap

Taylor Schreiner is the Director of Adobe Digital Insights. He uses Adobe's data to give us a recap of the Cyber 5 (the five shopping days from Black Friday through Cyber Monday, this year Nov 29 - Dec 2).

Adobe Holiday Dashboard

  • Thanksgiving  11/28 - $4.2B (up 14.5% YoY) below forecast of $4.4B
  • Black Friday 11/29 - $7.4B (up 19.6% YoY) below forecast of $7.5B
  • Saturday - 11/30 - $3.6B (Up 18% YoY) at forecast
  • Sunday - 12/1 - $3.8B
  • Monday - 12/2 - $9.4B (up 19.7% YoY) at forecast

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 202 of the Jason & Scot show was recorded on Wednesday December 4th, 2019.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott Show. This is Episode 202 being recorded on December 4th 2019. I'm your host, Jason Retail G. Goldberg. And as usual, I'm here with your co host, Scott Wingo.

Scot:
[0:39] Hey, Jason! And welcome back, Jason Scott. Show listeners we are in the thick of holiday 2019 and are really excited tohave back on the show.
Adobe. And I think this is the fourth time. In fact, check me on that. Jason had one of the interns check.

Jason:
[0:54] I I actually had one of the interns in you. That number. So yes, it's right.

Scot:
[0:58] Good. All right. Pre pre fact checked. We're getting pretty. Ah, reliable here of Jason Scott Show.
Um, this year, representing Adobe, we have Taylor Shiner. He is the director of Adobe Digital Insight's Welcome Taylor.

Taylor:
[1:12] Thanks for having me. Guys. Appreciate it.

Jason:
[1:14] We are excited to be a tailor and a sort of tradition on the show. We always like to give listeners a little bit of background. So can you kind of share with us some highlights of your background? And what your role is it it'll be.

Taylor:
[1:25] Sure. So I was the 52nd best chess player in Utah in fifth grade.
Ah, And then from there I went into a career in retail. Uh, I went,
to work on Internet insights about 15 years ago with some of the major Internet players across the industry, and I've been doing that for a decade and 1/2.
And then about three years ago, I found my dream job here. A WNKW Adobe Digital Insight's.
We get to tell these amazing stories about how the digital world works, and we get to tell people about how tech and companies and events are changing their digital lives and companies about how those same trends are affecting how they need to run their businesses.
And we get to talk about retail. We get about time travel. We could talk about a whole host of different things.
It's been fantastic, and I get to work with some amazing data scientists, analysts to develop these insights, and it lets me have conversations like this one with you guys. So it's a perfect gig, and I love it.

Jason:
[2:24] Possum. So, to recap, this is sort of a career highlight for you right now.

Taylor:
[2:28] Yeah, I like to I like to go from Holly Tyler, but this one, I'm loving it.

Jason:
[2:31] Yeah. Yeah. Pinnacle, I like it and I'm.

Scot:
[2:34] Think Jason means being on our podcast. He wants an explicit answer on them.

Jason:
[2:38] All right.

Taylor:
[2:38] Oh, yes, I'll give you a quotable thing. Being on the Jason Scott Show is a career highlight to date.

Scot:
[2:45] Boom.

Jason:
[2:45] That boom. Yeah. You'll see that in the in the preview show. Pretty soon here, Uh, and I'm sure all this insight stuff is gonna be super fascinating. But I have to know first, if you've kept up your chest up chess, it all.

Taylor:
[2:57] Uh, only recently in my eight year old has started to learn to play chess, and he's creeping up on being able to beat me. And that is not acceptable. So.

Jason:
[3:05] Yeah, that's a losing battle. You could probably keep ahead of him for a little while, but I think, uh, there's, ah, natural progression there. That's working against you.

Taylor:
[3:13] I'm afraid so.

Jason:
[3:15] Awesome. Well, let's jump into the data. So we talk about your date a lot on the show.
We already did. Ah, an episode this week. In fact, what we talked about some of your data, and it always falls on me to describe your data set.
And I'm sure I'd butcher it. So, um, here's a chance toe kind of refresh our audience from the horse's mouth. Can you tell us a little bit about, um, what the data set is and how you use it.

Taylor:
[3:38] Sure. So we build a model of US online retail sales based on trillions of Web site visits based on,
tens and back to think over hundreds of millions of skews based on data from thousands of different companies all across the US across.
Ah, you know, a variety of device types.
OS is on other information, and we use that to to plan out, especially on a day by day and occasionally hour by hour basis.
Uh, how we think that that season's gonna go So he predicted all.
And then we go back and we track on a daily in again, sometimes hourly basis.
How US online retail sales go s Oh, it's a big data lift, and we spend all year getting to this point to be able to talk Ah, in almost real time about how how the sales were going.

Jason:
[4:33] I got it. And so just make sure my understands. Correct. So, um, there are a ton of major e commerce sites that use an analytics product called the Dhobi Analytics, which is, if you go back far enough, formally. Ahm nature.
And so it. The core of your data set is in aggregated view of all of those customers that are using that analytics tool for for their e commerce sites. Do I have that right?

Taylor:
[5:00] Yes, sir. The majority of the data that we've got and this is not including some data from the recent magenta acquisition so that there's a whole other set of data sources as well as some other things.
We talk about it on the periphery, but the core of the data that we work with our data from opted in. So companies that have chosen to share data with us, um, and for value that we give them.
And so that shared data Anonima ized before we even touch it and aggregated at a very high level so we can talk about these macro trends, but yes, that's where the data comes from and to be analytics.

Jason:
[5:34] Perfect. And then, um Ah, and that was you already answered.
My fob question in the court date is that you have not integrated any of the new data that you might have access to from Magenta. And if I have it right, you're also, at this point not really using data from the rest of the adobe marketing cloud.

Taylor:
[5:53] E. I wouldn't necessarily say that. So we do. Uh, we do a lot of so we haven't agreed.
A lot of the magenta data allowed us to look at things like shipping and returns that, uh, we're new renews angles for us, and it certainly gives us these amazing to you into that tail.
Set aside some of the bigger players in terms of e commerce, but we also you used the mark enter data for your candidate to look at so are marking channel Information Ad Cloud, which used to be two mogul, which I worked for.
Uh, we used them for some advertising data around Thanksgiving. So we bring it all the pieces.
Um, but, you know, not all of it necessary goes to the top line number. As you as you say.

Jason:
[6:33] Sure. And then, um, you kind of alluded to this, but you're not just trying to report on trends from adobe customers.
You're you're using some advanced math and you do the customers represent a big chunk of the market. But then you and interpret what the total market is based on the subset that you see. Do I have that? Correct.

Taylor:
[6:56] You do. I could spend a whole other podcast on how we do that, but it sze not do that. Yes, it's cool math. We do cool math.

Jason:
[6:59] Yeah, let's not do that. But just call it a cool math.
Yeah, And then the other thing that comes up a lot. And I think you guys are really good in this as well.
Like very often. We talk last year versus this year, and when a lot of vendors report their data, the customers they have this year are different than the customers they have last year.
So when they're when they're talking year over year growth and things like that, it's usually not perfect. Apples to apples.
Um, but because your your, um trying to normalize the data for the whole market before you do it. When?
When you say there is a 20% growth this year versus last year, that's a pretty accurate number. Drab.

Taylor:
[7:39] Uh, yeah, I think you should. It's yet. You said that. Really? Well, that's absolutely That's.

Jason:
[7:43] Perfect. You can use that in your highlights. Now we've reciprocated. Awesome.

Scot:
[7:49] Go. So, uh, now that Jason's extracted his pound of flesh, let's Ah, let's jump in at a high level. How? How would you view Holiday 2019 shaping up?

Taylor:
[7:52] Okay.

[7:59] I think it's been quite strong. And it has been strong all through today.
In fact, if you let me, I'll give you, uh, it as, ah, this morning.
So yesterday's numbers Through the third of December, we saw $84.7 billion in online retail sales, and that's up 14.8% on last year for the same period.
So that's a little faster than our aggregate prediction.
But the way that the bottle is trending that out puts us on target to be about 14.1% roughly on our predicted Taff for the season. So and the 14.1%.
I mean, some listeners and people who visit our website will see that last year was particularly strong of the 16% growth year.
But if you look back a few years just 2016 twice 17 this is sort of on par with those growth rates, but on a much larger base now, as we head into almost $150 billion in sales. So it's it's pretty huge.
Um, the the other tidbit of information I can give listeners about yesterday.
Giving Tuesday is that it was a $3.3 billion day, which is amazing research and account $3 billion days, the way that when I started in this gig, we counted $1 billion days.
So they're coming fast and furious. Now, that's only up about 11% on last year.

[9:23] So, uh, it leaves us open to the question of our consumers.
Have consumers, you know, taking all these early deals on and won't be spent later, or are they just taking a break on Tuesday and ready to get back out today?

Scot:
[9:38] Yeah, let's Ah, so it sounds like we're growing kind of 14% year over year.
Um, if you if you kind of look at the shape of the holiday so far, I know you can't predict. Well, you don't know what it's gonna happen here towards the end. It's kind of gotten this what I would call a U shape where it's being more front and loaded and back and loaded.
So the front end is people that have their act together and jump on the deals.
The back end is like Jason I where we're like, Holy cow. Uh, holiday is here. We should do some shopping on the 23rd.
Um, the, uh does that does that kind of what you've seen and is getting more pronounced. Can you tell if you've seen the front part of the curve?
I saw some data that said, like, Veterans Day was unusually large and like the early November days were larger. You guess? You know.

Taylor:
[10:24] Absolutely so we saw just points on these numbers from this conversation.
If you look from the beginning, what we call the beginning seasons of the person November roughly right to, um, Wednesday, that hole to the Wednesday before Thanksgiving, that whole period Groot. About 15%.
So that's what that was about a point 1/4 faster than we would have predicted.
So angry it. We saw a big lift we saw lift above.
We would have expected in that early season it that seems to be attributable to a bunch of, uh, earlier deals.
We had something similar happen last year, but it's even stronger now where discounts came earlier in electron ICS and computers and televisions.
We also saw that, you know, last year, Thanksgiving itself was a breakout day where you had, despite it can. Suddenly Thanksgiving was growing faster than any other day.
That spike seems to have moved back now to Wednesday, where the Wednesday before Thanksgiving was growing at about 22%.
And I think again, that's attributable to ah, lot of deals moving forward in time. So and to your point, that really changes the shape of the season.
You know, we used to basically tell a story of like, look, everything is sort of lifting around that Cyber Five said. The days of the 757 days is getting a disproportionate share.

[11:41] That's still true, but we're seeing sort of, ah, shift back to earlier sales this year, and that might have to do with the calendar.
But I think it is actually a broader trend of thinking about these pre holiday sales and reality promotions as being think that happened earlier, both for retailers and consumers.

Jason:
[12:02] Yeah, it's interesting to me. It's like, um, it feels like in the beginning of the season, you know, there's there's a lot of retailers under stress and have to have a good holiday. And there's this kind of winner take element mentality.
And so we both see Maura aggressive promotions and discounting at the beginning of the season. And I feel like we also see more digital marketing like more investment in ads and things like that, huh?
That really goosed the front half of that. You, um and then I have a hypothesis.
We'll see if it plays out. But, uh, you know, of course, Amazon has gone toe faster and faster shipping, right? And so that, you know, this would be the first big holiday with with sort of standard one day delivery in various forms.
Walmart, target and some extent, even best Buy have all been forced to sort of match that fast shipping.
So, you know, not that long ago we would have had this this very gentle ramp down of sales as we'd hit shipping cut offs and people would stop buying goods and then they'd just be doing oh, piss or gift cards.
Or things like that because they'd run out of time to get the gifts before the end of, you know, in time for holiday.
But now everyone can be a procrastinator like Scott and I, because so many of the vendors will ship so fast. So it feels like like all of those things conspire together to make the very beginning and the very in these these ah, anomalous bikes or that you shape.

Taylor:
[13:25] I think that's that's gonna be absolutely true. And this this year, in particular with this shift, two more by online pickup in store ah, or clicking collect behavior.
And to these accelerated shipping, it's gonna it's gonna make people think they can wait longer in the season where they can't really wait longer to your point.
You know, it's it's three weeks away before even those things are gonna be, uh, almost too close to Christmas to shop for Thio to purchase with.
And so you know, I think we'll see that ramp up at the end of people. Start to panic a little bit.
And that's also why, by the way, you see jewelry discounts be really strong on, like 20th.
Everybody who's panicked and realize they haven't gotten anything starts. Uh, just looking for something nice and blinking. Tow. Give us a gift.

Jason:
[14:09] Interesting. I was always assuming that people just misbehaved right before the holidays. And therefore it was a Yeah, I have no personal experience or data to support that.

Taylor:
[14:13] You may have a better high pop resistant I do on my own. I would draw my contention.

Jason:
[14:20] Just to be clear, honey, if you're listening, um uh, do you want to jump in to the cyber five, though?
Um, so we just got through those, Uh, can you kind of give us a recap for specifically? How have Thursday through Monday played out?

Taylor:
[14:37] Sure, So overall it's about $28 billion uh, online purchases over that same time frame, and that's 10 almost $11 billion of purchases through smartphones.
So overall it was quite strong. Almost 18% if you like those five days over last year, five days with peaks, you been on Black Friday and Cyber Monday, which always kind of blows my mind because I get the question every year.
Are these days too big to really grow outgrow the rest of the season?
And I convictable Maybe next year they will be.
And it's not not the case, people. Another not only are moving more online, but they're really focusing a lot of those purchases and increasing amounts on those big days.
S o. You know, several money, for instance, this year was $9.4 billion.
So we're almost gonna guarantee there is a $10 billion day, uh, barring anything serious happening next year on Cyber Monday, which is,
incredible, and over 1/3 of that, those purchases are really coming on phones.
Eso you're seeing people not only window shopping actually make purchases on those big days on their phones, especially that's what cyber Monday when people go sit in front of computers at work.
But you know, people under the table on Thanksgiving.
Uh, people on Black Friday we'll pretend to hang out with their family, but but by where? Two things. Anyway, Uh, that's really been a mobile story.

[16:06] And then the other story of the weekend, which I always, you know, you're talking about how, by a and pick up in store, uh is ah, you know, it is a capability that my drive people to wait a little longer for their purchases.
But nonetheless, we saw a big bump in bogus activity.
Even on that, that major weekend without 40% more purchases.
Then we had when we saw last year over the same timeframe, so outstripping overall gross and really pushing both share up.

Jason:
[16:38] Interesting. And so And if I think of it from a historical perspective, you know, 10 years ago a few people had reliable Internet and so, you know, cyber Monday or we'll call 20 years ago.
Several Monday became a big thing, like we'd all enjoy Thanksgiving. We'd go to work on Monday, steal our bosses Internet and go shopping.
And so that was like the one day spike.
And then, as as, uh, you know, we all became ubiquitously online.
The traditional big shopping day Black Friday also became a big online day.
And in fact, I feel like they're often are these forecasts that that Friday is eventually going to surpass Monday online, which seems like, hasn't happened yet. Read joy. I have that, right?

Taylor:
[17:23] But it hasn't quick hasn't gotten there yet. Uh oh, no. Didn't you thought?

Jason:
[17:25] Yep. And then I'll go ahead,
I was gonna say, And then increasingly, those other days in the weekend have grown to be extraordinarily meaningful.
So, you know, frankly, 10 years ago, we talk a lot about cyber Monday.
I actually don't care as much specifically about the results on Cyber Monday, because if it feels like the the aggregate results of the Cyber five is much more important and indicative of how holidays going than any one day in the,
in that block nowadays, is that a good way to look at it, or am I being shortsighted?

Taylor:
[17:59] No, I would agree with that. And I think what's always fascinating to me and is, uh, topic of a longer conversation. Is that to your point?
There's no need necessarily now for Cyber Monday. Everybody's not only got good Internet access at home, they've got good Internet Internet access in their hands.
But we have become so habituated to that day being a major sales day, and both on the consumer and the retailer side that it continues to grow on.
The psychology of this often drives a lot of the behavior even beyond the pricing or the deal's or anything that our model might pick up.
So to your point, you know, I think if you just looked at the data, you might think, Hey, look, this is all going to smooth out a little bit.
But people continue to think about those days as the big days to go shopping, Uh, online and offline.

Jason:
[18:47] Interesting. So you're saying people might be willing to go shopping even when it's slightly irrational? Interesting. No.
Thank God for that, by the way. Yeah, and along those lines, it feels like folks have been trying thio kind of make hay in some of those other days.

Taylor:
[18:54] It's a new fighting I came up with. Yeah.

Jason:
[19:04] Like for a while now, that that Saturday has been small business Saturday.

Taylor:
[19:09] You okay?

Jason:
[19:10] Andi, I think there's a couple of people trying to grab Sunday now, too, right? It is. I'm trying to, uh.

Taylor:
[19:15] Yeah. Super Sunday has a bunch of different cuts at it.
Exactly. And there are big days. Now we're talking about, uh, you know, there, there.
Three and 1/2. Almost $4 billion each.
This is It's massive any other day of the year and we would be having a conversation about a particular $3 billion day.
But they just come fast and furious between November and Christmas.

Scot:
[19:42] Do you do? You have? Ah, At the end of the season, everyone has a different word. Just be like free shipping day. And then I think it's called Green Dares. But you guys, what is what is last year like? Was there a bump? And is it? How does that compare to, like, Cyber Monday?

Taylor:
[19:51] And.

[19:58] So we said we would see ramps toward the end of last year, and I don't have the last little couple days to hand. But they were more closer to sort of Super Saturday and or even smaller than that in the $2 billion range.
Um, as you had in there. They're not the ones bigger ripped last year, but two earlier point.
I'm really curious to see if we don't see a big bump. Uh, come to the 20th 19.

Scot:
[20:24] Yeah. Hey, this is just kind of came to me. So it's if you don't have an answer. I understand. So last year we grew 16%. This year we're growing 14.
Where do you think that 2% Delta is coming from? Is it just kind of across the board, or is it a certain category underperforming? You have any Any thoughts on the.

Taylor:
[20:44] I have some thoughts, and I think it'll be really interesting conversation to have in a few weeks.
But the the, um, the couple things, first of all the models telling us 14 ish, Um, my gut says there might be more upside risk there than downside.
So somebody get my clothes.
What seems to be the case so far in the data is that there wasn't proportionately even bigger push into the early season.
Um, because of, uh, a CZ people moved into Thanksgiving on on that Wednesday, some of his deals move forward.
But honestly, if you just if you just look at the math, which is, uh, what we particularly good at,
the just pushing the season shorter between Thanksgiving and Christmas is about a $1,000,000,000 which is, you know, 50 bases, 50 of those basis points, uh, arm or sorry on its own.
So between a little bit of merging of error and that some of those basis points and ah, uh, and not the shock of all these earlier deals that got everybody accelerated between those three things you kind of get to, uh, the delta.

Scot:
[21:53] So the jury's still out. Kind of depends on how the models perform and how people react to those missing days.

Taylor:
[21:59] Yeah, exactly. If we get a big surge and everybody. Service comes off of the off several Monday and thinks, Gosh, I got a sprint toward, uh, toward River Last shipping days game. I'll be very different than everybody feel like.
Gosh, I blew my budget on all those early deals.

Scot:
[22:16] Yeah, cool. It wouldn't be a Jason and Scott show if we didn't talk a little bit about Amazon.
And I understand if you can't talk specifically about anyone, retailer or whatnot.
But any insights into how Amazons holidays going big, they put out their annual release that said something like Vague like We sold hundreds of millions of dollars.
You know, third parties did great. So so it always befuddles Wall Street when they kind of without these puzzle boxes for them to figure, figure out.

Taylor:
[22:45] Yeah. J. J. Abrams doing the press releases? No, I, uh you said you wouldn't be your podcast if you didn't ask about Amazon.
It wouldn't be a doubIe response. I didn't say we don't talk about particular retailers, but what I can say eyes we do track the biggest and the smallest against each other Really looking at.
Especially as you see two big trends that big.
A lot of discussion about big, big retailers pushing, couldn't collect, pushing one day shipping, having great deals.
Ah, and a lot of democratization of, uh, e commerce. As you know, a lot of art form.
We have five farm, those others that makes that much easier for people to bring businesses to the market.
So those two forces air going on, um, in the on the average, uh, you see big companies outperforming smaller ones in terms of growth.
So if you compare November an average day in November to an average day in October for the big companies they're up about, these are $1,000,000,000 plus companies.

[23:42] They're up about 87% in sales, whereas the smaller companies in the 50 million lower range.
So these are the small ones are up only about 43% and some of it is.
It's coming from the East from the data, at least, is coming from two things. One is the larger companies are much better at mobile conversions, that 80% better at taking a customer and bringing them to purchase on a phone than the smaller companies.
And consequently, they get about 10% more of their share.
Their revenue from those phones and the way that I reviewed the data is that if you're a consumer and you are going to a big retailer, that big retailer has a number of advantages, including a wide set of products wide set of,
promotions generally really good, aye, aye at connecting you with those promotions,
and a really the slick, speedy checkout process that they worked on really hard.
And for the smaller companies, they obviously have quite a selection.
Some of them haven't figured out how to turn customers, uh, into buyers swiftly.
But the last thing I would say this is the most important part about this is I am talking about the averages.
So, you know, in the smaller companies, there's a lot of entry, a lot of people trying things out on a lot of exit, and there are within that average a huge number of small companies who are just blowing the doors off.
It's just that on average, they're not doing as well as the very big ones.

Jason:
[25:09] Sure that makes sense. Um, you talked a little bit about Omni Channel. I wanted to jump into that for just a second.
That seems like an area where, in particular, a lot of the big companies have made major visible investments in their infrastructure.
So of course you know, Target, but shipped. And then now that's heavily integrated. And they have rich like same day delivery and curbside pickup options available across all their mobile platforms.
Wal Mart, you know, has has done a bunch for general merchandise Omni Channel. But even more for grocery, um, and curbside pick up and and all of those things even, um ah, the Amazon.
You know, although much more footprints are starting to get a little better at Omni Channel with their with their small footprint of retail stores, um is any indication of that's paying off?
Like Are you guys ableto to see an Omni Channel transaction versus a pure digital transaction? And is there any like is the rate of growth of those Omni Channel transactions faster than overall?

Taylor:
[26:15] Oh, yeah. So we're we're seeing a Z, said rumor, roughly in the 14 to 16% range growth for the overall market place, but for by online picker in starker POTUS.
Another word that's up but, like 40% for the season. So it's way outstripping overall sales.
And what's also really interesting is we see that this has a little bit to do with larger, so small.
But we see that companies that offer, uh oh, this, uh, 20% better at converting, then companies that don't offer both us.
So people are coming there specifically for that capability, or at least finding that capability incredibly valuable to them.
At my my thought on this is Look, we got a phone in her hand that has moved the display window experience into your hand. It's moved the checkout experience into your hands, and everybody just wants to move that fulfillment.
That one thing in between the human experience, closer and closer and you know, one day shipping is great, but, uh, sometimes it's just easier if you drive down in about 10 minutes and go pick up the thing you just saw and knew you wanted.

[27:25] And plus these guys are. You know what we see in the survey data to is it?
This is good for the brick and mortar stores that not only are they know is you guys know that not only are they making people making purchases online and sitting in the car and getting that that pickup, they're also going to the store and buying another thing, could they thought of it.
I'm driving that That makes it different. Step for brick and mortar stores as well.

Scot:
[27:47] Wrinkle. Um, you've hit on this a little bit, but let's talk about mobile. So, um, do you guys, when I talk about mobile, I tend to take tablet out, and it seems like you do to you. You seem to be explicitly calling out smartphone.
Um, so you mentioned. I think I can't remember. Was it black Friday? You said it was. 1/3 of the sales came from a bull. Ah, talk us through any other kind of insights on the mobile side.

Taylor:
[28:12] Sure s o your point. We tried. We tried crier years to be really disciplined about mobile version smartphone.
We've been a little acts this year because tablets are decreasing share. So smartphone really had started crossed That that 1/3 threshold on major days in terms of dollars spent, it was always has been for the past several years.
The majority visits were coming from phone, so people were doing initiating their shopping.
We had this challenge empire years and still have some do now that they weren't closing the deal.
Uh, from that we'll visit either not at all or going to the desktop to purchase.
That gap continues to close. In fact, on Christmas this year, we expect to have the first day in us where the majority of online purchases actually come through a phone.
As people aren't going to their computers and their families are around, they're actually using boats.
That purchase and the things that are driving this, at least in the data that we see are two really interesting and related points.
One is that time per visit is going down rapidly.
So, consumer, they're coming. They're not messing around.

[29:20] They're looking for and expecting the product that they that they came for at least a product to buy.
And some of that is going to be in part because your connection speed have gotten faster. Screens gotten bigger processes were faster, but also retailers have gotten much better at streamlining that process.
I'm the mobile phone, and consequently, the amount of money that people are spending per minute per second on a mobile phone continues to skyrocket month after month, year after year.
As people just get faster making those purchases, especially with a lot of them. You check out options that make make it easier than, say, trying to type in the numbers on your credit card.

Jason:
[30:03] Fascinating. The, um that would be cool if, uh, Christmas did end up being the first, like, majority mobile day.
Um, I was also truce. You mentioned something earlier.
Um, that sounds like that. I call it a mobile gap when traffic side, but conversions lower.
And it sounds like that mobile gap is getting lower for big companies. And you said it a couple reasons why that might be, um, in general. Do you feel like that?
Like, Is that mobile gap? Um, getting narrower across the border. Is it only for large companies that they're they're being successful closing that gap?

Taylor:
[30:39] Well, I think large companies again, it has to do it so that the broad, um uh, you know, there's a much broader array of outcomes and smaller companies than larger ones, so it's harder to paint them with the same brush.
The large companies obviously have focused on this. Figure it out.
They can track per second per user per region per item, how much time consumers are willing to tolerate and they can achieve those things down.
If nothing else, would I just bring more machines online?
Smaller businesses don't always have that ability, but the platforms,
one of which Toby has but the Platform three Commerce are making that whole process from visit to fulfillment and even marking channel much, much more streamlined, especially for small businesses.
Who, uh, we think about that a little bit and focus on what their consumers experience needs to be.

Jason:
[31:34] Got it. So one A transition briefly to profitability. So last year I feel like the narrative would have been, ah, you know, a big growth year, a jump from the previous year.
But a lot of people felt like it was Ah, that was partly attributed thio heavier than usual promotions, which meant it actually ended up being, you know, not a phenomenal profitability year.
Um, and so this year, we're seeing the rate of growth slow a little bit from last year.
Is there any reason to believe that people are being more conservative on promotions or are you have any insights about how we're gonna come out from promotions and profitability perspective?

Taylor:
[32:18] So, you know, I'll be honest with you were really good about figure out the revenue. We're really good about throwing out prices. We are generally missing that third piece of costs that allows you to talk about profitability.
But I'll tell you what. I was thinking about this this morning and last night and looking at, but began for a bunch of different angles in our data and frankly, that the short answer is the results are mixed.
So we did. If you asked me a week or so ago, uh or even to I would have said, Look, the discount seem to be moving forward, especially in electronics.
Um, and so, you know, maybe the maybe the profit margins are slimming, but then we started. Look at toys and toys. Bottom out, quickly.
Um, uh, you know, maybe once the Toys R Us process was was through the toy discounts didn't go is deep.
This year's they did last year, and we're seeing something we saw. For instance, we elected appliances, appliances discounts for a little later last year.
So exactly how the profit margins are gonna go. Hard to say.
But the, um, you're in the revenue looks really strong.
So, you know, I think the jury is ah, bit out where possibilities go in.
But I don't for consumers see, a year where we're like have massively deeper discounts than the last year. We just have them earlier and on particular product.

Jason:
[33:38] Got that? Uh, that makes sense, and I agree. It's It's really hard to get a clear picture until well after the fact on the promotions, because there's like there's promotions and pricing effects and all these other things.
But one thing that seems like it might be coming to play a little bit more on profitability this year is profitability like there's a couple Evers one.
Is that pricing a promotion? Another is the cost of acquisition.
Um, and I do feel like folks. There's a lot of folks that used the Adobe marketing cloud, um, for further cost of acquisition.
Like, Are you guys seeing any trends around higher advertising rates or spend rates than previous years, or is that not something you guys are looking at you?

Taylor:
[34:18] So we don't. We have looked at overall investment in advertising.
That could be a fairly complicated thing to grab to look into. But we have looked at performance and individual, Um, your ad level pricing and what's interesting is we definitely see if you're if you're advertising, especially in video, but also on display or search.
You're gonna see costs go up, um, a bit as everybody sort of pores online and wants to wants to acquire customers in the video room. That's about 23% higher CBN's.
But when we look at performance, metrics does go up by an even greater amount.
So, uh, you know, again in video that we're pressed about 20% performance in terms of, uh, viewable completions of videos are going up 30%.
Or we see, for instance, your email efficacy goes up quite a bit over that that same time frame.
So we should We haven't reached a point of diminishing return earns uh, in those areas yet where prices start outstripped performance growth, and I think there's a lot of opportunity for customer acquisition there on dhe.
Advertisers and marketers have figured that out and are pouring the money, and now when it's, uh, it's most productive.

Jason:
[35:32] That that makes sense, and that's gonna be a great place to leave it, because we have, ah, slightly exceeded are a lot of time for this show.
But as always, if we didn't get to something that folks want to talk about, your welcome and I hit us up on Twitter or leaves the question on our Facebook page, as always, have you enjoyed the show?
We'd really appreciate it if you, um, jump on Thio iTunes and give us that five star review were also nominated for this vendor of the year award in our category, So I'll put a link in the show notes.
If you could take a couple minutes and vote for us, we'd really appreciate that. But Taylor really appreciate you being on the show and sharing the data. I know it's a busy week for you.

Taylor:
[36:10] Thank you guys so much. Really appreciate the opportunity.

Scot:
[36:13] Thanks, Taylor.

Jason:
[36:13] Until next time. Happy commercing.

Dec 4, 2019

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Adobe Recap

Taylor Schreiner is the Director of Adobe Digital Insights. He uses Adobe's data to give us a recap of the Cyber 5 (the five shopping days from Black Friday through Cyber Monday, this year Nov 29 - Dec 2).

Adobe Holiday Dashboard

  • Thanksgiving  11/28 - $4.2B (up 14.5% YoY) below forecast of $4.4B
  • Black Friday 11/29 - $7.4B (up 19.6% YoY) below forecast of $7.5B
  • Saturday - 11/30 - $3.6B (Up 18% YoY) at forecast
  • Sunday - 12/1 - $3.8B
  • Monday - 12/2 - $9.4B (up 19.7% YoY) at forecast

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Episode 202 of the Jason & Scot show was recorded on Wednesday December 4th, 2019.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott Show. This is Episode 202 being recorded on December 4th 2019. I'm your host, Jason Retail G. Goldberg. And as usual, I'm here with your co host, Scott Wingo.

Scot:
[0:39] Hey, Jason! And welcome back, Jason Scott. Show listeners we are in the thick of holiday 2019 and are really excited tohave back on the show.
Adobe. And I think this is the fourth time. In fact, check me on that. Jason had one of the interns check.

Jason:
[0:54] I I actually had one of the interns in you. That number. So yes, it's right.

Scot:
[0:58] Good. All right. Pre pre fact checked. We're getting pretty. Ah, reliable here of Jason Scott Show.
Um, this year, representing Adobe, we have Taylor Shiner. He is the director of Adobe Digital Insight's Welcome Taylor.

Taylor:
[1:12] Thanks for having me. Guys. Appreciate it.

Jason:
[1:14] We are excited to be a tailor and a sort of tradition on the show. We always like to give listeners a little bit of background. So can you kind of share with us some highlights of your background? And what your role is it it'll be.

Taylor:
[1:25] Sure. So I was the 52nd best chess player in Utah in fifth grade.
Ah, And then from there I went into a career in retail. Uh, I went,
to work on Internet insights about 15 years ago with some of the major Internet players across the industry, and I've been doing that for a decade and 1/2.
And then about three years ago, I found my dream job here. A WNKW Adobe Digital Insight's.
We get to tell these amazing stories about how the digital world works, and we get to tell people about how tech and companies and events are changing their digital lives and companies about how those same trends are affecting how they need to run their businesses.
And we get to talk about retail. We get about time travel. We could talk about a whole host of different things.
It's been fantastic, and I get to work with some amazing data scientists, analysts to develop these insights, and it lets me have conversations like this one with you guys. So it's a perfect gig, and I love it.

Jason:
[2:24] Possum. So, to recap, this is sort of a career highlight for you right now.

Taylor:
[2:28] Yeah, I like to I like to go from Holly Tyler, but this one, I'm loving it.

Jason:
[2:31] Yeah. Yeah. Pinnacle, I like it and I'm.

Scot:
[2:34] Think Jason means being on our podcast. He wants an explicit answer on them.

Jason:
[2:38] All right.

Taylor:
[2:38] Oh, yes, I'll give you a quotable thing. Being on the Jason Scott Show is a career highlight to date.

Scot:
[2:45] Boom.

Jason:
[2:45] That boom. Yeah. You'll see that in the in the preview show. Pretty soon here, Uh, and I'm sure all this insight stuff is gonna be super fascinating. But I have to know first, if you've kept up your chest up chess, it all.

Taylor:
[2:57] Uh, only recently in my eight year old has started to learn to play chess, and he's creeping up on being able to beat me. And that is not acceptable. So.

Jason:
[3:05] Yeah, that's a losing battle. You could probably keep ahead of him for a little while, but I think, uh, there's, ah, natural progression there. That's working against you.

Taylor:
[3:13] I'm afraid so.

Jason:
[3:15] Awesome. Well, let's jump into the data. So we talk about your date a lot on the show.
We already did. Ah, an episode this week. In fact, what we talked about some of your data, and it always falls on me to describe your data set.
And I'm sure I'd butcher it. So, um, here's a chance toe kind of refresh our audience from the horse's mouth. Can you tell us a little bit about, um, what the data set is and how you use it.

Taylor:
[3:38] Sure. So we build a model of US online retail sales based on trillions of Web site visits based on,
tens and back to think over hundreds of millions of skews based on data from thousands of different companies all across the US across.
Ah, you know, a variety of device types.
OS is on other information, and we use that to to plan out, especially on a day by day and occasionally hour by hour basis.
Uh, how we think that that season's gonna go So he predicted all.
And then we go back and we track on a daily in again, sometimes hourly basis.
How US online retail sales go s Oh, it's a big data lift, and we spend all year getting to this point to be able to talk Ah, in almost real time about how how the sales were going.

Jason:
[4:33] I got it. And so just make sure my understands. Correct. So, um, there are a ton of major e commerce sites that use an analytics product called the Dhobi Analytics, which is, if you go back far enough, formally. Ahm nature.
And so it. The core of your data set is in aggregated view of all of those customers that are using that analytics tool for for their e commerce sites. Do I have that right?

Taylor:
[5:00] Yes, sir. The majority of the data that we've got and this is not including some data from the recent magenta acquisition so that there's a whole other set of data sources as well as some other things.
We talk about it on the periphery, but the core of the data that we work with our data from opted in. So companies that have chosen to share data with us, um, and for value that we give them.
And so that shared data Anonima ized before we even touch it and aggregated at a very high level so we can talk about these macro trends, but yes, that's where the data comes from and to be analytics.

Jason:
[5:34] Perfect. And then, um Ah, and that was you already answered.
My fob question in the court date is that you have not integrated any of the new data that you might have access to from Magenta. And if I have it right, you're also, at this point not really using data from the rest of the adobe marketing cloud.

Taylor:
[5:53] E. I wouldn't necessarily say that. So we do. Uh, we do a lot of so we haven't agreed.
A lot of the magenta data allowed us to look at things like shipping and returns that, uh, we're new renews angles for us, and it certainly gives us these amazing to you into that tail.
Set aside some of the bigger players in terms of e commerce, but we also you used the mark enter data for your candidate to look at so are marking channel Information Ad Cloud, which used to be two mogul, which I worked for.
Uh, we used them for some advertising data around Thanksgiving. So we bring it all the pieces.
Um, but, you know, not all of it necessary goes to the top line number. As you as you say.

Jason:
[6:33] Sure. And then, um, you kind of alluded to this, but you're not just trying to report on trends from adobe customers.
You're you're using some advanced math and you do the customers represent a big chunk of the market. But then you and interpret what the total market is based on the subset that you see. Do I have that? Correct.

Taylor:
[6:56] You do. I could spend a whole other podcast on how we do that, but it sze not do that. Yes, it's cool math. We do cool math.

Jason:
[6:59] Yeah, let's not do that. But just call it a cool math.
Yeah, And then the other thing that comes up a lot. And I think you guys are really good in this as well.
Like very often. We talk last year versus this year, and when a lot of vendors report their data, the customers they have this year are different than the customers they have last year.
So when they're when they're talking year over year growth and things like that, it's usually not perfect. Apples to apples.
Um, but because your your, um trying to normalize the data for the whole market before you do it. When?
When you say there is a 20% growth this year versus last year, that's a pretty accurate number. Drab.

Taylor:
[7:39] Uh, yeah, I think you should. It's yet. You said that. Really? Well, that's absolutely That's.

Jason:
[7:43] Perfect. You can use that in your highlights. Now we've reciprocated. Awesome.

Scot:
[7:49] Go. So, uh, now that Jason's extracted his pound of flesh, let's Ah, let's jump in at a high level. How? How would you view Holiday 2019 shaping up?

Taylor:
[7:52] Okay.

[7:59] I think it's been quite strong. And it has been strong all through today.
In fact, if you let me, I'll give you, uh, it as, ah, this morning.
So yesterday's numbers Through the third of December, we saw $84.7 billion in online retail sales, and that's up 14.8% on last year for the same period.
So that's a little faster than our aggregate prediction.
But the way that the bottle is trending that out puts us on target to be about 14.1% roughly on our predicted Taff for the season. So and the 14.1%.
I mean, some listeners and people who visit our website will see that last year was particularly strong of the 16% growth year.
But if you look back a few years just 2016 twice 17 this is sort of on par with those growth rates, but on a much larger base now, as we head into almost $150 billion in sales. So it's it's pretty huge.
Um, the the other tidbit of information I can give listeners about yesterday.
Giving Tuesday is that it was a $3.3 billion day, which is amazing research and account $3 billion days, the way that when I started in this gig, we counted $1 billion days.
So they're coming fast and furious. Now, that's only up about 11% on last year.

[9:23] So, uh, it leaves us open to the question of our consumers.
Have consumers, you know, taking all these early deals on and won't be spent later, or are they just taking a break on Tuesday and ready to get back out today?

Scot:
[9:38] Yeah, let's Ah, so it sounds like we're growing kind of 14% year over year.
Um, if you if you kind of look at the shape of the holiday so far, I know you can't predict. Well, you don't know what it's gonna happen here towards the end. It's kind of gotten this what I would call a U shape where it's being more front and loaded and back and loaded.
So the front end is people that have their act together and jump on the deals.
The back end is like Jason I where we're like, Holy cow. Uh, holiday is here. We should do some shopping on the 23rd.
Um, the, uh does that does that kind of what you've seen and is getting more pronounced. Can you tell if you've seen the front part of the curve?
I saw some data that said, like, Veterans Day was unusually large and like the early November days were larger. You guess? You know.

Taylor:
[10:24] Absolutely so we saw just points on these numbers from this conversation.
If you look from the beginning, what we call the beginning seasons of the person November roughly right to, um, Wednesday, that hole to the Wednesday before Thanksgiving, that whole period Groot. About 15%.
So that's what that was about a point 1/4 faster than we would have predicted.
So angry it. We saw a big lift we saw lift above.
We would have expected in that early season it that seems to be attributable to a bunch of, uh, earlier deals.
We had something similar happen last year, but it's even stronger now where discounts came earlier in electron ICS and computers and televisions.
We also saw that, you know, last year, Thanksgiving itself was a breakout day where you had, despite it can. Suddenly Thanksgiving was growing faster than any other day.
That spike seems to have moved back now to Wednesday, where the Wednesday before Thanksgiving was growing at about 22%.
And I think again, that's attributable to ah, lot of deals moving forward in time. So and to your point, that really changes the shape of the season.
You know, we used to basically tell a story of like, look, everything is sort of lifting around that Cyber Five said. The days of the 757 days is getting a disproportionate share.

[11:41] That's still true, but we're seeing sort of, ah, shift back to earlier sales this year, and that might have to do with the calendar.
But I think it is actually a broader trend of thinking about these pre holiday sales and reality promotions as being think that happened earlier, both for retailers and consumers.

Jason:
[12:02] Yeah, it's interesting to me. It's like, um, it feels like in the beginning of the season, you know, there's there's a lot of retailers under stress and have to have a good holiday. And there's this kind of winner take element mentality.
And so we both see Maura aggressive promotions and discounting at the beginning of the season. And I feel like we also see more digital marketing like more investment in ads and things like that, huh?
That really goosed the front half of that. You, um and then I have a hypothesis.
We'll see if it plays out. But, uh, you know, of course, Amazon has gone toe faster and faster shipping, right? And so that, you know, this would be the first big holiday with with sort of standard one day delivery in various forms.
Walmart, target and some extent, even best Buy have all been forced to sort of match that fast shipping.
So, you know, not that long ago we would have had this this very gentle ramp down of sales as we'd hit shipping cut offs and people would stop buying goods and then they'd just be doing oh, piss or gift cards.
Or things like that because they'd run out of time to get the gifts before the end of, you know, in time for holiday.
But now everyone can be a procrastinator like Scott and I, because so many of the vendors will ship so fast. So it feels like like all of those things conspire together to make the very beginning and the very in these these ah, anomalous bikes or that you shape.

Taylor:
[13:25] I think that's that's gonna be absolutely true. And this this year, in particular with this shift, two more by online pickup in store ah, or clicking collect behavior.
And to these accelerated shipping, it's gonna it's gonna make people think they can wait longer in the season where they can't really wait longer to your point.
You know, it's it's three weeks away before even those things are gonna be, uh, almost too close to Christmas to shop for Thio to purchase with.
And so you know, I think we'll see that ramp up at the end of people. Start to panic a little bit.
And that's also why, by the way, you see jewelry discounts be really strong on, like 20th.
Everybody who's panicked and realize they haven't gotten anything starts. Uh, just looking for something nice and blinking. Tow. Give us a gift.

Jason:
[14:09] Interesting. I was always assuming that people just misbehaved right before the holidays. And therefore it was a Yeah, I have no personal experience or data to support that.

Taylor:
[14:13] You may have a better high pop resistant I do on my own. I would draw my contention.

Jason:
[14:20] Just to be clear, honey, if you're listening, um uh, do you want to jump in to the cyber five, though?
Um, so we just got through those, Uh, can you kind of give us a recap for specifically? How have Thursday through Monday played out?

Taylor:
[14:37] Sure, So overall it's about $28 billion uh, online purchases over that same time frame, and that's 10 almost $11 billion of purchases through smartphones.
So overall it was quite strong. Almost 18% if you like those five days over last year, five days with peaks, you been on Black Friday and Cyber Monday, which always kind of blows my mind because I get the question every year.
Are these days too big to really grow outgrow the rest of the season?
And I convictable Maybe next year they will be.
And it's not not the case, people. Another not only are moving more online, but they're really focusing a lot of those purchases and increasing amounts on those big days.
S o. You know, several money, for instance, this year was $9.4 billion.
So we're almost gonna guarantee there is a $10 billion day, uh, barring anything serious happening next year on Cyber Monday, which is,
incredible, and over 1/3 of that, those purchases are really coming on phones.
Eso you're seeing people not only window shopping actually make purchases on those big days on their phones, especially that's what cyber Monday when people go sit in front of computers at work.
But you know, people under the table on Thanksgiving.
Uh, people on Black Friday we'll pretend to hang out with their family, but but by where? Two things. Anyway, Uh, that's really been a mobile story.

[16:06] And then the other story of the weekend, which I always, you know, you're talking about how, by a and pick up in store, uh is ah, you know, it is a capability that my drive people to wait a little longer for their purchases.
But nonetheless, we saw a big bump in bogus activity.
Even on that, that major weekend without 40% more purchases.
Then we had when we saw last year over the same timeframe, so outstripping overall gross and really pushing both share up.

Jason:
[16:38] Interesting. And so And if I think of it from a historical perspective, you know, 10 years ago a few people had reliable Internet and so, you know, cyber Monday or we'll call 20 years ago.
Several Monday became a big thing, like we'd all enjoy Thanksgiving. We'd go to work on Monday, steal our bosses Internet and go shopping.
And so that was like the one day spike.
And then, as as, uh, you know, we all became ubiquitously online.
The traditional big shopping day Black Friday also became a big online day.
And in fact, I feel like they're often are these forecasts that that Friday is eventually going to surpass Monday online, which seems like, hasn't happened yet. Read joy. I have that, right?

Taylor:
[17:23] But it hasn't quick hasn't gotten there yet. Uh oh, no. Didn't you thought?

Jason:
[17:25] Yep. And then I'll go ahead,
I was gonna say, And then increasingly, those other days in the weekend have grown to be extraordinarily meaningful.
So, you know, frankly, 10 years ago, we talk a lot about cyber Monday.
I actually don't care as much specifically about the results on Cyber Monday, because if it feels like the the aggregate results of the Cyber five is much more important and indicative of how holidays going than any one day in the,
in that block nowadays, is that a good way to look at it, or am I being shortsighted?

Taylor:
[17:59] No, I would agree with that. And I think what's always fascinating to me and is, uh, topic of a longer conversation. Is that to your point?
There's no need necessarily now for Cyber Monday. Everybody's not only got good Internet access at home, they've got good Internet Internet access in their hands.
But we have become so habituated to that day being a major sales day, and both on the consumer and the retailer side that it continues to grow on.
The psychology of this often drives a lot of the behavior even beyond the pricing or the deal's or anything that our model might pick up.
So to your point, you know, I think if you just looked at the data, you might think, Hey, look, this is all going to smooth out a little bit.
But people continue to think about those days as the big days to go shopping, Uh, online and offline.

Jason:
[18:47] Interesting. So you're saying people might be willing to go shopping even when it's slightly irrational? Interesting. No.
Thank God for that, by the way. Yeah, and along those lines, it feels like folks have been trying thio kind of make hay in some of those other days.

Taylor:
[18:54] It's a new fighting I came up with. Yeah.

Jason:
[19:04] Like for a while now, that that Saturday has been small business Saturday.

Taylor:
[19:09] You okay?

Jason:
[19:10] Andi, I think there's a couple of people trying to grab Sunday now, too, right? It is. I'm trying to, uh.

Taylor:
[19:15] Yeah. Super Sunday has a bunch of different cuts at it.
Exactly. And there are big days. Now we're talking about, uh, you know, there, there.
Three and 1/2. Almost $4 billion each.
This is It's massive any other day of the year and we would be having a conversation about a particular $3 billion day.
But they just come fast and furious between November and Christmas.

Scot:
[19:42] Do you do? You have? Ah, At the end of the season, everyone has a different word. Just be like free shipping day. And then I think it's called Green Dares. But you guys, what is what is last year like? Was there a bump? And is it? How does that compare to, like, Cyber Monday?

Taylor:
[19:51] And.

[19:58] So we said we would see ramps toward the end of last year, and I don't have the last little couple days to hand. But they were more closer to sort of Super Saturday and or even smaller than that in the $2 billion range.
Um, as you had in there. They're not the ones bigger ripped last year, but two earlier point.
I'm really curious to see if we don't see a big bump. Uh, come to the 20th 19.

Scot:
[20:24] Yeah. Hey, this is just kind of came to me. So it's if you don't have an answer. I understand. So last year we grew 16%. This year we're growing 14.
Where do you think that 2% Delta is coming from? Is it just kind of across the board, or is it a certain category underperforming? You have any Any thoughts on the.

Taylor:
[20:44] I have some thoughts, and I think it'll be really interesting conversation to have in a few weeks.
But the the, um, the couple things, first of all the models telling us 14 ish, Um, my gut says there might be more upside risk there than downside.
So somebody get my clothes.
What seems to be the case so far in the data is that there wasn't proportionately even bigger push into the early season.
Um, because of, uh, a CZ people moved into Thanksgiving on on that Wednesday, some of his deals move forward.
But honestly, if you just if you just look at the math, which is, uh, what we particularly good at,
the just pushing the season shorter between Thanksgiving and Christmas is about a $1,000,000,000 which is, you know, 50 bases, 50 of those basis points, uh, arm or sorry on its own.
So between a little bit of merging of error and that some of those basis points and ah, uh, and not the shock of all these earlier deals that got everybody accelerated between those three things you kind of get to, uh, the delta.

Scot:
[21:53] So the jury's still out. Kind of depends on how the models perform and how people react to those missing days.

Taylor:
[21:59] Yeah, exactly. If we get a big surge and everybody. Service comes off of the off several Monday and thinks, Gosh, I got a sprint toward, uh, toward River Last shipping days game. I'll be very different than everybody feel like.
Gosh, I blew my budget on all those early deals.

Scot:
[22:16] Yeah, cool. It wouldn't be a Jason and Scott show if we didn't talk a little bit about Amazon.
And I understand if you can't talk specifically about anyone, retailer or whatnot.
But any insights into how Amazons holidays going big, they put out their annual release that said something like Vague like We sold hundreds of millions of dollars.
You know, third parties did great. So so it always befuddles Wall Street when they kind of without these puzzle boxes for them to figure, figure out.

Taylor:
[22:45] Yeah. J. J. Abrams doing the press releases? No, I, uh you said you wouldn't be your podcast if you didn't ask about Amazon.
It wouldn't be a doubIe response. I didn't say we don't talk about particular retailers, but what I can say eyes we do track the biggest and the smallest against each other Really looking at.
Especially as you see two big trends that big.
A lot of discussion about big, big retailers pushing, couldn't collect, pushing one day shipping, having great deals.
Ah, and a lot of democratization of, uh, e commerce. As you know, a lot of art form.
We have five farm, those others that makes that much easier for people to bring businesses to the market.
So those two forces air going on, um, in the on the average, uh, you see big companies outperforming smaller ones in terms of growth.
So if you compare November an average day in November to an average day in October for the big companies they're up about, these are $1,000,000,000 plus companies.

[23:42] They're up about 87% in sales, whereas the smaller companies in the 50 million lower range.
So these are the small ones are up only about 43% and some of it is.
It's coming from the East from the data, at least, is coming from two things. One is the larger companies are much better at mobile conversions, that 80% better at taking a customer and bringing them to purchase on a phone than the smaller companies.
And consequently, they get about 10% more of their share.
Their revenue from those phones and the way that I reviewed the data is that if you're a consumer and you are going to a big retailer, that big retailer has a number of advantages, including a wide set of products wide set of,
promotions generally really good, aye, aye at connecting you with those promotions,
and a really the slick, speedy checkout process that they worked on really hard.
And for the smaller companies, they obviously have quite a selection.
Some of them haven't figured out how to turn customers, uh, into buyers swiftly.
But the last thing I would say this is the most important part about this is I am talking about the averages.
So, you know, in the smaller companies, there's a lot of entry, a lot of people trying things out on a lot of exit, and there are within that average a huge number of small companies who are just blowing the doors off.
It's just that on average, they're not doing as well as the very big ones.

Jason:
[25:09] Sure that makes sense. Um, you talked a little bit about Omni Channel. I wanted to jump into that for just a second.
That seems like an area where, in particular, a lot of the big companies have made major visible investments in their infrastructure.
So of course you know, Target, but shipped. And then now that's heavily integrated. And they have rich like same day delivery and curbside pickup options available across all their mobile platforms.
Wal Mart, you know, has has done a bunch for general merchandise Omni Channel. But even more for grocery, um, and curbside pick up and and all of those things even, um ah, the Amazon.
You know, although much more footprints are starting to get a little better at Omni Channel with their with their small footprint of retail stores, um is any indication of that's paying off?
Like Are you guys ableto to see an Omni Channel transaction versus a pure digital transaction? And is there any like is the rate of growth of those Omni Channel transactions faster than overall?

Taylor:
[26:15] Oh, yeah. So we're we're seeing a Z, said rumor, roughly in the 14 to 16% range growth for the overall market place, but for by online picker in starker POTUS.
Another word that's up but, like 40% for the season. So it's way outstripping overall sales.
And what's also really interesting is we see that this has a little bit to do with larger, so small.
But we see that companies that offer, uh oh, this, uh, 20% better at converting, then companies that don't offer both us.
So people are coming there specifically for that capability, or at least finding that capability incredibly valuable to them.
At my my thought on this is Look, we got a phone in her hand that has moved the display window experience into your hand. It's moved the checkout experience into your hands, and everybody just wants to move that fulfillment.
That one thing in between the human experience, closer and closer and you know, one day shipping is great, but, uh, sometimes it's just easier if you drive down in about 10 minutes and go pick up the thing you just saw and knew you wanted.

[27:25] And plus these guys are. You know what we see in the survey data to is it?
This is good for the brick and mortar stores that not only are they know is you guys know that not only are they making people making purchases online and sitting in the car and getting that that pickup, they're also going to the store and buying another thing, could they thought of it.
I'm driving that That makes it different. Step for brick and mortar stores as well.

Scot:
[27:47] Wrinkle. Um, you've hit on this a little bit, but let's talk about mobile. So, um, do you guys, when I talk about mobile, I tend to take tablet out, and it seems like you do to you. You seem to be explicitly calling out smartphone.
Um, so you mentioned. I think I can't remember. Was it black Friday? You said it was. 1/3 of the sales came from a bull. Ah, talk us through any other kind of insights on the mobile side.

Taylor:
[28:12] Sure s o your point. We tried. We tried crier years to be really disciplined about mobile version smartphone.
We've been a little acts this year because tablets are decreasing share. So smartphone really had started crossed That that 1/3 threshold on major days in terms of dollars spent, it was always has been for the past several years.
The majority visits were coming from phone, so people were doing initiating their shopping.
We had this challenge empire years and still have some do now that they weren't closing the deal.
Uh, from that we'll visit either not at all or going to the desktop to purchase.
That gap continues to close. In fact, on Christmas this year, we expect to have the first day in us where the majority of online purchases actually come through a phone.
As people aren't going to their computers and their families are around, they're actually using boats.
That purchase and the things that are driving this, at least in the data that we see are two really interesting and related points.
One is that time per visit is going down rapidly.
So, consumer, they're coming. They're not messing around.

[29:20] They're looking for and expecting the product that they that they came for at least a product to buy.
And some of that is going to be in part because your connection speed have gotten faster. Screens gotten bigger processes were faster, but also retailers have gotten much better at streamlining that process.
I'm the mobile phone, and consequently, the amount of money that people are spending per minute per second on a mobile phone continues to skyrocket month after month, year after year.
As people just get faster making those purchases, especially with a lot of them. You check out options that make make it easier than, say, trying to type in the numbers on your credit card.

Jason:
[30:03] Fascinating. The, um that would be cool if, uh, Christmas did end up being the first, like, majority mobile day.
Um, I was also truce. You mentioned something earlier.
Um, that sounds like that. I call it a mobile gap when traffic side, but conversions lower.
And it sounds like that mobile gap is getting lower for big companies. And you said it a couple reasons why that might be, um, in general. Do you feel like that?
Like, Is that mobile gap? Um, getting narrower across the border. Is it only for large companies that they're they're being successful closing that gap?

Taylor:
[30:39] Well, I think large companies again, it has to do it so that the broad, um uh, you know, there's a much broader array of outcomes and smaller companies than larger ones, so it's harder to paint them with the same brush.
The large companies obviously have focused on this. Figure it out.
They can track per second per user per region per item, how much time consumers are willing to tolerate and they can achieve those things down.
If nothing else, would I just bring more machines online?
Smaller businesses don't always have that ability, but the platforms,
one of which Toby has but the Platform three Commerce are making that whole process from visit to fulfillment and even marking channel much, much more streamlined, especially for small businesses.
Who, uh, we think about that a little bit and focus on what their consumers experience needs to be.

Jason:
[31:34] Got it. So one A transition briefly to profitability. So last year I feel like the narrative would have been, ah, you know, a big growth year, a jump from the previous year.
But a lot of people felt like it was Ah, that was partly attributed thio heavier than usual promotions, which meant it actually ended up being, you know, not a phenomenal profitability year.
Um, and so this year, we're seeing the rate of growth slow a little bit from last year.
Is there any reason to believe that people are being more conservative on promotions or are you have any insights about how we're gonna come out from promotions and profitability perspective?

Taylor:
[32:18] So, you know, I'll be honest with you were really good about figure out the revenue. We're really good about throwing out prices. We are generally missing that third piece of costs that allows you to talk about profitability.
But I'll tell you what. I was thinking about this this morning and last night and looking at, but began for a bunch of different angles in our data and frankly, that the short answer is the results are mixed.
So we did. If you asked me a week or so ago, uh or even to I would have said, Look, the discount seem to be moving forward, especially in electronics.
Um, and so, you know, maybe the maybe the profit margins are slimming, but then we started. Look at toys and toys. Bottom out, quickly.
Um, uh, you know, maybe once the Toys R Us process was was through the toy discounts didn't go is deep.
This year's they did last year, and we're seeing something we saw. For instance, we elected appliances, appliances discounts for a little later last year.
So exactly how the profit margins are gonna go. Hard to say.
But the, um, you're in the revenue looks really strong.
So, you know, I think the jury is ah, bit out where possibilities go in.
But I don't for consumers see, a year where we're like have massively deeper discounts than the last year. We just have them earlier and on particular product.

Jason:
[33:38] Got that? Uh, that makes sense, and I agree. It's It's really hard to get a clear picture until well after the fact on the promotions, because there's like there's promotions and pricing effects and all these other things.
But one thing that seems like it might be coming to play a little bit more on profitability this year is profitability like there's a couple Evers one.
Is that pricing a promotion? Another is the cost of acquisition.
Um, and I do feel like folks. There's a lot of folks that used the Adobe marketing cloud, um, for further cost of acquisition.
Like, Are you guys seeing any trends around higher advertising rates or spend rates than previous years, or is that not something you guys are looking at you?

Taylor:
[34:18] So we don't. We have looked at overall investment in advertising.
That could be a fairly complicated thing to grab to look into. But we have looked at performance and individual, Um, your ad level pricing and what's interesting is we definitely see if you're if you're advertising, especially in video, but also on display or search.
You're gonna see costs go up, um, a bit as everybody sort of pores online and wants to wants to acquire customers in the video room. That's about 23% higher CBN's.
But when we look at performance, metrics does go up by an even greater amount.
So, uh, you know, again in video that we're pressed about 20% performance in terms of, uh, viewable completions of videos are going up 30%.
Or we see, for instance, your email efficacy goes up quite a bit over that that same time frame.
So we should We haven't reached a point of diminishing return earns uh, in those areas yet where prices start outstripped performance growth, and I think there's a lot of opportunity for customer acquisition there on dhe.
Advertisers and marketers have figured that out and are pouring the money, and now when it's, uh, it's most productive.

Jason:
[35:32] That that makes sense, and that's gonna be a great place to leave it, because we have, ah, slightly exceeded are a lot of time for this show.
But as always, if we didn't get to something that folks want to talk about, your welcome and I hit us up on Twitter or leaves the question on our Facebook page, as always, have you enjoyed the show?
We'd really appreciate it if you, um, jump on Thio iTunes and give us that five star review were also nominated for this vendor of the year award in our category, So I'll put a link in the show notes.
If you could take a couple minutes and vote for us, we'd really appreciate that. But Taylor really appreciate you being on the show and sharing the data. I know it's a busy week for you.

Taylor:
[36:10] Thank you guys so much. Really appreciate the opportunity.

Scot:
[36:13] Thanks, Taylor.

Jason:
[36:13] Until next time. Happy commercing.

Dec 3, 2019

EP201 - Cyber5 2019 Hot Take

Cyber 5 is the five shopping days from Black Friday through Cyber Monday (this year Nov 29 - Dec 2).  

Adobe Recap

Adobe Holiday Dashboard
(note: numbers updated after show was recorded)

  • Thanksgiving  11/28 - $4.2B (up 14.5% YoY) below forecast of $4.4B
  • Black Friday 11/29 - $7.4B (up 19.6% YoY) below forecast of $7.5B
  • Saturday - 11/30 - $3.6B (Up 18% YoY) at forecast
  • Sunday - 12/1 - Not reported
  • Monday - 12/2 - $9.4B (up 19.7% YoY) at forecast

We'll have an Adobe analyst on next week to break down results.

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 201 of the Jason & Scot show was recorded on Monday December 2nd, 2019.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show
this is episode 201 being recorded on Cyber Monday December 2nd 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your Scot Wingo.

Scot:
[0:41] Jason and welcome back Jason Scott show listeners hope everyone is having a successful sales and up time Cyber Monday Jason how's your cyber monday going.

Jason:
[0:52] Mine is awesome I've been up all all day I haven't had any outages.

Scot:
[0:56] Very good nice to know I have you what's been hot on your must-buy list.

Jason:
[1:01] You know I'm falling the consumer Trends so I'm buying a lot of Frozen and PAW Patrol toys.

Scot:
[1:10] Very nice.

Jason:
[1:11] Yeah those are big sellers this year and my son is in one both.

Scot:
[1:16] Rachel have you seen Frozen to you.

Jason:
[1:19] We did we took baby geek to his very first movie was frozen to eat totally mean you did great and enjoyed it.

Scot:
[1:26] Awesome we did adults attitude is good.

Jason:
[1:31] There's a few good movies out right now and of course December going to be a big month for you and me.

Scot:
[1:38] It is so this is our Star Wars side Sidekicks the first.
Star Wars fan I strongly recommend a really good Star Wars content and then yeah December 20th.
We'll see it's kind of a Bittersweet classic but have to report on spoiler-free report on the shows that we do after that.

Jason:
[2:04] I will mark my calendar to listen to that one.

Scot:
[2:07] Well folks we are in the meat holiday 19 as mentioned coming to you live on Cyber Monday and wanted to give you a cyber five holiday 2019.
As we mentioned on the show there 60 or days between Thanksgiving and Christmas this year so in a way everyone these days is really Amplified and much more important than usual
so first want to set the table we did a new show that I'm sure you all listen to but just to refresh your memory
when you kind of boiled all the different forecast online offline what not.
The one I cared most about showed e-commerce coming out in the mid-teens for Holiday 19th that was kind of the pontification around the Halloween time frame for 4 we're going to see the shirt,
we have been busy here at Jason Scott podcast headquarters Gathering all the data and are going to summarize it in this hot take,
Jason you've been studying the Adobe data and we are going to have Adobe on the show later to go into this more detail but they walk us through what they reported so far.

Jason:
[3:13] Yep. So I would say it's but good news bad news from the Adobe data all the days are up pretty significantly but they're all
down slightly from adobe's forecast so there it is supreme their forecast was slightly over Rosie and the the rate of growth is probably swelling so for Thanksgiving but that man was sales were up 22% which came in at 4.2 billion up sales in the US
against the forecast at 4.4 billion so off the forecast a little bit but up a healthy number of Pap you know more than the
traditional amount of e-commerce growth and of course Thanksgiving has been a particularly rapidly growing.
Day in the old days people didn't shop on Thanksgiving Salina shop online on Thanksgiving and increasingly as shopping is gone the mobile
you know where we're all shopping on the dinner table and Thanksgiving so that that day is growing faster is now pretty big black Friday.

[4:18] You know it continues to be the biggest day for offline shopping online growth according to Dobie was only 14.5% so.
You know not not.
Super impressive growth I mean, in line with the the typical average growth we see for the whole year and again slightly under adobe's forecast of 7.4 billion and sales on Black Friday against a 7.5 billion forecast.
The year we are seeing a significant shift to mobile.
And that the rate of mobile growth is much bigger so I cracked Black Friday 4.
Adobe I mean there's going to be some other data that can put you this a little bit later but Prado be on Black Friday 39% of all sales 61% of all traffic.
I was on mobile and I would say those numbers are in line with the individual data I've seen from clients the majority of traffic is on mobile but.
But still mobile underperforms as a conversion in the aov form factor.
And then Saturday was up 19.6% Sunday was up 18% and we don't have the final numbers from Monday because it's still going on in a lot of us every Monday shopping happens.

[5:41] At night as we're recording this but they're you know what the forecast is for 9.4 billion and it sounds like people you know still think it's going to be in that.
9.2 to 9.4 billion which is a pretty healthy bump over last year which was actually 7.8 billion so where.
We are simply not going until we're jumping over a billion dollars in sales just on on Cyber Monday so for Adobe that's going to put you just under Thirty billion dollars for the cyber5 29 billion for the.
For the whole deal.
And that was pretty much how Adobe saw anything you saw in the Adobe data Scott.

Scot:
[6:26] Yeah. I saw a lot of wall streeters kind of summarize the data and I saw some people kind of.
I would call a sounding alarm Bells but they're starting to say there's some concern that it was a little squishy I would say so especially this slowing so last year.

[6:44] Thanksgiving and Black Friday rough by 29% year-over-year and to kind of go to almost half of that at 14 and a half people felt like
you got it feels like we're really slow down your ear specialist pure days now the Counterpoint to that is baby people did start shopping earlier and Sibley was the first things that I want to talk to the folks about cuz I think they also reported Veterans Day was up something like 40% so
and that goes what is that that's double singles Day this year right Stars 11:11 so you know
so one scenario is it song these days are so important that you know that the problem is that the shape of the holiday just refused to change it
go forward more and more I have anecdotally see more people talking about I should cut my holiday shopping done it's only the 2nd of December lot of that going on.
These guys have started rolling out their head like a November month of black Friday's or something like that it's everyone's definitely
going earlier so I got to get this kind of changing the shape of the holiday but we'll have to see what the data bears.

[8:00] The,
the taking it to the brick-and-mortar world there's a couple folks that track traffic Jason I know you feel strongly about this exceeded these things maybe not being,
the best fits it is kind of
probably directional I would say and so shoppertrak is one of those and they said by their calculations store foot traffic was down 3%.
Over the whole holiday. So far that's kind of the Thanksgiving through Cyber Monday but on Thanksgiving it was up 2.3% so this kind of Mia Black Friday movie did Thanksgiving Trend continues
I did notice that this was the first time Best Buy has been open for.

[8:44] Thanksgiving so they kind of jumped into The Fray but then Black Friday ring shoppertrak the foot traffic was down 6.3%,
that sounds most cataclysmic to me as a.
Oh my guy because I count on that foot traffic for Black Friday so it's kind of,
the piece that together with Adobe data it starts to feel like maybe the physical stores are not really going to come out of this very well lefse
one more data point is from retail next and they had Black Friday Also down there wasn't theirs wasn't as severe
they said the traffic was down 2.1% people bought a little bit more of the sales were only down 1.6%
banana same time they said the transaction value was down 6.7% that didn't make any sense I had to read it like six times I don't know how the
Ultra Works in that particular statement but I'll let our listeners try to pursue that if they can they can make more sense than I could.

Jason:
[9:42] Yeah I think what it amounts to is sales as in sales conversion you bought or didn't buy and Transit.

Scot:
[9:49] Okay so it's like unit unit sales.

Jason:
[9:50] The dollar value yeah yes I think it is conversion in aov.
Yeah I think those are both totally valid data sources those are both companies that sell Hardware that measure traffic in stores and so that the only grain of salt to take with their data is it skewed towards the particular,
set of retailers that each of them has sold two and you know they disproportionately he happened to both sell two big boxes and Mall retailers right and so,
you know it's,
that that's a a significant portion of of the retail space but obviously you know we know we know malls are down in general and
you know as I think it was traded in both their datasets more stores are open on Thanksgiving so there was more overall traffic on Thanksgiving and that took a bite out of Black Friday but I do agree with you.
Like the bigger Trend that's more concerning as overall for the for the turkey 5,
days you know trap traffic's down in that that is a big concern for ticket when there's a bunch of retailers that are already in a distress situation.

Scot:
[11:01] Yeah nfm United State assets bisacky
the neuro datapoint can really screw things like an online a lot of them don't have Amazon data and that's like half right so that's going to be don't have that day to 30% that's going to cost you everything
south of where I came in so I'm left thinking you know between these these guys
when I go to the mall the store that's the busiest Apple Store I doubt apples using these things maybe they are I don't know
he didn't have Apple Store that seems to be like the number one destination in every Mall I've been in the last 2 years so I'll meet you at you'll get this really die of you the world that may not be true.

Jason:
[11:45] Yep yeah in retail that you know that the mall winds tend to be more specialty apparel and anchor store in so you know we know those are.
Two unhealthy parts of the the return echo system.

[11:58] But I did also see that the sales force has a bunch of their data out.
In that that also was interesting.

[12:11] The date their numbers did not completely jive with the Adobe numbers you want again same same conversation we just had.
Salesforce data comes from all the people using Salesforce Commerce Cloud which was formerly demandware demandware was originally really targeted and apparel retailers so it's it's Broad and since then but you know I think if we look at the bulk of their.
Their user base it's going to be I'll call him upper mid-tier retailers so it's not going to be the very biggest retailers cuz it's a.
Clouds a solution with a rev-share component.
I'm sold your shoes you probably wouldn't use them but they tend to be kind of enterprise-class customers and they tend to skewed towards retail and so that
apparel so you know that's going to buy stared at a little bit but they had Black Friday up 13% which again is another bad number and kind of matches the.
The Adobe one in general they had that was 7.2 billion I think which is up 14%,
a interesting thing that they only gave us by Friday data but they also had some interesting discounting data and they said that they saw their customers.

[13:30] On average of sales were discounted 28% this year versus 27% last year last year we talked about it being a pretty heavy promotional year and it actually,
had a pretty significant negative impact on margins and you don't gets feeling like that.
True again this year what jumped out at me though is they also said that 56% of all the sales on Black Friday were happened on mobile phones which is.
Considerably higher percentage than what a w said and.
You know I'd be surprised if overall for all of retail that the numbers really that high but but interesting to see that that's that's what's happening in their segment.
What did you think about that Scott.

Scot:
[14:18] Yeah it feels like mobile the mobile results are kind of all over the place so so,
that point was from the shop Friday then we can have a discussion about it
Absol Shopify is done something fun to have a visualization like this and then it didn't seem to be that cool.
What's the horoscope I don't have a handy or I will put it in the show notes but you know it's just a spinning globe you can see line shooting all over and then occasionally it'll say
a customer just bought an order you know that's going to go 50 miles or something like that and then it says.
Check out or something like that just feels like.
Just not enough information to really be useful but then so that that was kind of a little bit of a disappointment but they did announce that for Holiday they're seeing sales up 40% year-over-year,
cross 6.1 million Shoppers and then they said Black Friday was up 49% year-over-year.
Whether they said 69% of their sales were mobile that felt like super high because for the longest time you know traffic has been north of 50 for a while but sales ad in south of 50 on mobile but we're saying mobile.

[15:44] Tablet covers around the desktop category or even separate or is it really just one product detail page
we've ever been on Facebook and seen an ad where you can kind of see an ugly sweater that's interesting to you or a cat.
Bug or something like that.
A lot of those are just Shopify one product page stores I could lyrics you mind into a check out so I could see that mobile number being there saying that I thought was true about their data,
having a. Of 10 years reproduce this kind of data at child eyes or nose bleed kind of stop doing that but you have to be careful because you can give this.

[16:33] You have this discussion of not clean view of the data because they don't report same-store sales that's really important because he's growing.
Merchants so they say they're hot is up 40% over this really closely and I think I'm saying their entire holiday is up 40% with that doesn't really tell you is what are the Saints for sale
so they added 50% more Merchants then actually there's things for sale would have to be down because they're adding always merchants and yet
your bratty more Merchants than their stomachs true that it's kind of not very helpful to have that number without the seeds for sale on it so hopefully this is our first year doing this will put them through some of this give us a little bit more data that this kind of
meteor.

Jason:
[17:20] Yeah I had the same impression and I equally I was excited when they announced this holiday Port the real-time holiday dashboard
and yeah it ended up just being an order for me a minute speedometer really which isn't isn't that interesting a bunch of these companies in the past have had these really interesting real-time dashboards but
for the most part Benders and moved away from those so
I'd say we have fewer datasets and for sure of the days since we have one that gets quoted the most is Adobe and that's probably with good reason not only do they have a a good chunk of e-commerce
but they also do the rigorous math to state same-store sales so the one downside of that is
you actually can't come when they talk about this year vs last year if you actually go to last year and see what their last year was it's not the same as what they're talking about.
Now because they're comparing their current customer sales this year vs last year not their customers last year at that.
Could be more confusing to make any more sense but they they do the math right to make sure it's true apples-to-apples.
Set of retailers with their data this year in their data last year.

Scot:
[18:35] How about did you see in any interesting out of this.

Jason:
[18:39] Yep so this is always the sad part to report but usually there are some stumbles over this holiday as you know these sites get hit with.
You know dramatically higher traffic than they're used to and that tends to.
Put some stress on things and we usually have one or two notable outages and unfortunately this year was no exception the one that I saw to get the most buzzed was Costco.
So they even really had them put a lot of focus on digital until very recently the kind of almost.
Begrudgingly did digital and you know they're their Executives used to talk about why would we ever encourage people not to come to the store and stuff like that so they they really only have done serious about digital last year so like you don't frankly
they're less digital immature or then some other retailers and not shocking that an outage I haven't seen any.
Any sort of recap as to why they had the outage sometimes we get it sometimes we don't Nordstrom Rack also has an outage which,
tell me a little more surprising cuz this has been a big day for Nordstrom for a long time
and I did see something funny that I just had to add add to the list brick-and-mortar retailers are not immune to outages either so one of the very biggest shopping malls on the west coast is South Coast Plaza in Orange County and they actually had a power outage at 2 p.m. and all the stores have to close for several hours
cuz they they couldn't use their point of sale systems.

Scot:
[20:05] Does that do to those rolling around house to have enough there cuz it's kind of random.

Jason:
[20:10] Yeah I don't I kind of doubt it so if they are having rolling power outages but if they did that to her to like this huge shopping mall on Cyber on Black Friday that would probably be.
Some,
Sirius Revolt so I suspect this was an unplanned thing and it sounds like it was just localized to South Coast Plaza so so probably some some issue with their infrastructure I was actually
at the on Thanksgiving day I was at the Lions Bears football game in Detroit and we had a power outage during the halftime show so the the music got interrupted.
Yes it happens Super Bowl went black one year.
Yeah so what is that investors think of all this.

Scot:
[20:57] Yes it was a Wall Street is largely kind of going through a lot of the day that we have one of the more interesting reports is out of Goldman Sachs or they have a retail analyst
and what they do is they come up with the basket of holiday items and they do it in two categories take the track consumer electronics and toys
and then they did really come up with this round Halloween the track it through Tyler holiday and it was interesting there is on the electronic side
they also look at selection and
Amazon is kind of dominated there where they have the most of this basket of goods that are in stock I'm so a lot of people sell out very quickly and see see this with the.
Targets in the Walmart especially and I think that maybe cuz he's in that store kind of inventory as a backstop more than the hook on it.

[21:44] But you know what else I noticed is Amazon's prices crept up and
the Amazon was the cheapest at
so the index is at 1 so it's so if you add up this basket of goods that's one on average below the average about that
you're working so Amazon was a full 1% lower than everyone else in Best Buy was the most expensive then the week that kind of ended with Cyber Monday Amazon was up 1.6% so.

[22:24] Walmart with the most expensive at 2% off the decks at Best Buy a discounted about 3% that's kind of simple average but then when you wait it by
the more expensive items having more weight in the whole thing kind of price-weighted approached Amazon was the most expensive are around Cyber Monday at 3.1%
that's on consumer electronics and then if you go and look at toys then,
your Amazon was by far the most toys by a factor of about 3%
so you're kind of the read that I got from this pricing data was that the Amazon was really,
Cushing to win the Toy War this year in a consumer electronics maybe they're right kind of margin preservation that was my take on some of that interesting
ice basket of goods kind of price now it's.

Jason:
[23:21] Yep and that is going to be interesting because it is that's the price that all the stuff gets sold at is in many ways more important than the,
total revenue number in the in the final analysis and how successful holiday was so that's going to be an important thing to track it is tricky because there's so many.
Different different ways to sort of track pricing data and it's just not possible to to perfectly know what every retailers doing on price.

Scot:
[23:50] That's better so you know just kind of land the plane in c e that's a 5% Delta Amazon margin was effectively 5% higher the Best Buy's which is really material into termite.

Jason:
[24:03] Another interesting data set is this company called
Edison Edison Trends is the name of the company and they are another one of these companies that get a large panel of consumers to give them access to their emails and then they scan for
e-receipts and they report you know various e-commerce Trends based on the e-receipts that they see in so they
actually publishing data specifically for Thursday and Friday that showed up from there their View,
have individual retailers did and so they had like the big Winners that grew a lot as Nordstrom Walmart and Amazon they showed Nordstrom is the.
Fastest griller with 60% higher sales and last year Walmart at 53% irr in Amazon at 49% higher and they show Target JCPenney and eBay is the big losers with
Target down 12% JCPenney down 14% in eBay down 17%.

[25:17] So that it that's an interesting data set I hate to say it but like you need to take all these receipt data sets with a slight grain of salt number one the big,
retailers are constantly trying to obfuscate the receipt so that these companies can't scan their sales so it's a constant arms race and
you know I do Tennessee some like crazy anomalies in this data and Yuna frankly
it just can't be true that Walmart and Amazon are both up over 50% and the.
Average for the day is only up up 17% like that would have sent you mean every other retailer on the planet is way down because Amazon and Walmart are such a big.

[26:02] Chunk of all all e-commerce sales
but directionally if those are the retailers that are winning and there's a retailers that are losing that is believable
and particularly of you if you look at it through the lens of discounting you know you think about a retailer like Nordstrom traditionally they didn't like to Discount a lot and they had one big sale a year
then maybe you know did a little activity around Cyber Monday but it wasn't a huge promotional holiday
and this year Nordstrom is super promotional that a lot of deals on merchandise and then there
they're literally giving you money to shop so you can spend $400 on discounted merchandise on Nordstrom and I'll give you $100 back so.
So they're really aggressively trying to buy customers per your day that we saw that Walmart and Amazon a really aggressive on price.
And like it so I haven't seen a conclusive data but to me it's at least viable,
the target is intentionally being less promotional than some of those other retailers this year in particular you think.

[27:02] A pretty big chunk of Target sales are exclusive merchandise.
There there's less reason to be promotional on that so you might see you know Target for going a little bit of.
Top line revenue by not being so promotional but maybe they'll end up being a little more profitable than some of these other retailer.
So you don't I'm going to tell him that but but as I sit here on Cyber Monday I'd say rate of growth slowing.
Aggressive discounting continuing there's going to be a lot of stress on profitability and.
And that you know the big strong retailers are disproportionately winning which means the distress retailers.
You know are going to be really distressed coming out of this holiday. Which is you know none for an unfortunate reality.

Scot:
[27:51] Seems like the other big trend is mobile heading to 60% of sales not to strap.

Jason:
[27:56] Yeah yeah and I do I mean I think the mobile Gap we talked about a lot it's still a real thing but I do I do believe it's narrowing and it Narrows more on these big event holidays than a minute it's likely to for the.
Traditional shopping throughout the year as well so not shocking to see mobile index higher on these big sale days then then it would ordinarily.
So that is pretty much are.
Quick take recap as we're still waiting for final data to come in on Cyber Monday but we hope you enjoy this sort of real-time look,
I am you do have any questions or comments we would certainly enjoy hearing about them on our Twitter feed or on our Facebook page
and of course if this hot takes been valuable to you we sure would appreciate it if you'd go to iTunes and give us that five star review.

Scot:
[28:49] Big Sur when we hope your holiday sales are up over 100%.

Jason:
[28:54] And until next time happy commercing.

Nov 26, 2019

EP200 - Walmart Chief Customer Officer Janey Whiteside 

Episode 200 is our 4 year anniversary, featuring an interview with Janey Whiteside, EVP and Chief Customer Officer at Walmart.

Anniversary Recap

Janey Whiteside Interview 
(Timecode 6:34)

In this wide-ranging interview, we cover many topics, including:

  • Janey's background at Amex
  • The role of Chief Customer Officer at Walmart
  • Doing things at Walmart Scale
  • What does digital mean at Walmart
  • Private Label
  • Amazon
  • Challenges and opportunities of value focus
  • Innovation
  • The future of retail

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 200 of the Jason & Scot show was recorded on Wednesday October 9th, 2019.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 200 being recorded on Wednesday October 9th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo.

Scot:
[0:38] Jason and welcome back Jason Scott show listeners.
You guys can't see us right now but Jason and I are wearing our Tuxedos and that's because we are celebrating our 200th episode and 4 years of podcasting together.
Jason I don't think we've told her origin story so this is probably a good time is any he has been for years so here's my recollection was here.
This lines up with your memory.

Jason:
[1:03] Yeah and then I'll correct it.

Scot:
[1:05] It would be a Jason Scott show without a lot of Jason cracking Scott so my memory is we were having some adult beverages after a board meeting that was part of the shop. Org.
Oregon digital Summit held in Philadelphia and this back in 2015 and we were about an hour into a payments discussion and
I decided was just starting to do some podcast listening a little late to the party there but better late than never.
And then you know what you started talking I was like you know every time I'm hanging out with Jason I
I learned a lot about payments and Retail and all that offline stuff that I don't spend a lot of time thinking about
hopefully you learn a lot about e-commerce Marketplace for me and I said you know we should do a podcast where are you talk about your payments and offline stuff next.
Then we pretty quickly moved on to probably personalization or or one of your other favorite topics.
In a week later you called and said hey you know you talked about podcasting I have all the equipment and I'm ready to go and I figured this all out.
What's your first show for singles day and we were Off to the Races so I learned an important life lessons from all this and that is with great power comes great responsibility.

Jason:
[2:28] Scot I think that might have been Spider-Man's life lesson.

Scot:
[2:31] Oh yeah you're right sorry I get my my marble and podcasting mixed up the real life lesson was if you're going to pitch Jason on an idea you have to be 100% ready to run with it and be committed for at least 4 years.

Jason:
[2:45] Yeah yeah you pay a horrible price by pitching a if you're not ready I think the secondary lesson here is if you want to pitch Jason and I have it work pitching something that allows them to buy new electronic Gadget.

Scot:
[2:58] Absolutely.

Jason:
[3:00] Yeah so I think when we started this I did a little research into podcasting and it was like the majority of podcast fail in the first Eight Episodes so
my my goal when we started was where we're going to stick with this and and not bail during the first date episodes and I thought you know,
maybe the the 12 members of the shop. Overboard and our friends and family would with them and it's been wildly more successful than that.

Scot:
[3:25] We 50 x 28 250 external no 25 x.

Jason:
[3:34] Yeah it's amazing and I I was looking at some of our podcast stats last night and we have now crossed over 176 hours,
of content so if you are so inclined you could listen to us talk for seven straight days without taking a break 24 hours a day.

Scot:
[3:53] Awesome that's a few hardcore streamers out there.

Jason:
[3:57] Yeah and if anyone chooses to do that will let us know.
Chicks I'm getting out of this early shows I'm going to stand up and then a couple months and we started adding guest so our first guest was Peter table and that was episode 15,
I also chuckled
several episodes were like 30 minutes and we slowly have prep up to the 60-minute mark and I think our 200th anniversary shows likely to go even maybe a little longer than that.
I was looking at some of the the podcast ads on our most popular guest was Ken worzel who is in the president of digital at Nordstrom he now is still the president of digital but also the CEO of,
I most popular new show was the show we did about Amazon acquiring Whole Foods.
The Deep Dives have been especially popular and surprisingly are most popular Deep dive was on artificial intelligence which is not necessarily what I would have guessed.

[4:49] A man of the guess I sort of to Hall of Fame guess we have a Samir bhavani and who is then with 1010 data that has been really interesting data on.
I know how how people a babe on Amazon and Tamara Gaffney who was with Adobe and had all the data from Adobe analytics on on House customer shocktober holiday
open those guess where I'm free shows and I'm I have to throw in an honorable mention
or Melissa Burdick and the genie dually they both been on two shows and a show fun fact they actually recorded a third show together,
and it never aired because we had some problems with permissions from one of their employees.

Scot:
[5:32] Those are some awesome facts Jason it's been a great four years and in all seriousness we couldn't have done this and we would have done it without you listeners we really
shit you guys listening to our thoughts around retail and e-commerce each week and we got just amazing feedback questions
guess I would have never imagined we would get on a podcast we really appreciate it and realize we are busy like you are and have a million things you should be doing and you really humbled and honored that you take time to listen to our thoughts.

Jason:
[6:03] Yeah I want to Echo your sentiments exactly. I'm super grateful particular for those listeners that have stuck with it for a long time like it's now become one of my funnest things to do is go to some industry of van
and you know just random people in line waiting to register or get Starbucks or whatever will occasionally recognize my voice and it's triggered all kinds of fun.
Fun conversations
you know in a few rare occasions people even recognize my voice at airport so that's super fun and I'm really grateful for all the listeners that have made this a great show.

Scot:
[6:34] Well since this is our 200th episode and 4 year anniversary celebration we wanted to do something really really special I like to say it took us two hundred tries and I think we've actually going to deliver on something really exciting.

Jason:
[6:47] That's a lot of pressure.
That's right Scott I am here with Janey Whiteside Walmart's Executive Vice President and first Chief customer officer which working want to hear more about Jenny welcome to the show.

Janey:
[7:00] Thank you excited to be here.

Jason:
[7:01] We are thrilled to have you a tradition we might have on the show with gas is to get a little bit of their background prior to their current role so can you tell us a little bit about what you did before Walmart.

Janey:
[7:12] Yes so I'm going to age myself hip but before Walmart I spent 20 years at American Express so I started it have a job before that so I was at HSBC
before that 73 companies that you're my twin tiers American Express I in,
when I first started I was I was in finance what if I start my career.
I'm in from banking to planning and finance and was starting to figure out that may be fine arts was wasn't my passion where I want you to go moved over to American Express and I was doing.
Pricing work and realized pretty quickly that there was a lot of people of the other side of the floor the mox's will something the other side of the floor and they seem type of way more fun,
I didn't know we were having I am brushing away and I spread sheets and so you know was given the chance the opportunity to
move over to the new product development team that was really had to spend the night in the next 20 years and a whole variety of various disciplines across marketing.

[8:23] Business Development sales roles in a I feel very passionately that it's really hard to sell on behalf of a company if you don't really understand that.
The customer the brand you know how products are being built and sold and so but a lot of time bringing Business Development sales teams together
did your client management roles and when I left I was actually running the global.
Premium products benefits and services if you think about green go apartment since you're in the cards that the AmEx cards and then,
all of the services that support them somewhat that CM Punk people familiar with the airport lounges.

Jason:
[9:12] Very cool and.
Obviously American Express his famously quantitative has a ton of data so when you talk about getting to know the customer it feels like you are in a unique position for really know your customers well.
Tell me if I have this right I want to say one of the cool promotions during your tenure at American Express was the beginning of small business Saturday.

Janey:
[9:37] Yeah so you know I'd like to say it was my idea it wasn't as many people so I did and.
I think what's most interesting honestly about small business sign today at the time of the continuation was.
It was an opportunity.
Afro-American expressed to really do something to celebrate to promote uplift small businesses around the country and it's 9 in in a time of turmoil probably the first time.
I've ever worked on in the strip that was so genuinely in favor of the customer that,
American it wasn't it wasn't a favorite American Express our entire ethos was go find a small business
go go go test it go see it go see what makes them different and I hope he spend some money and if you spend that on National Visa or Mastercard and we don't care I just want you to go and learn what is really different about small businesses and.
From a purpose perspective what was really interesting was everybody wants you to work on it
are you could handpick the talent across the company because everybody felt like you were serving at you know how a purpose and it was just a real passion and dedication of the teams that the continued the
that's where all the way all the way through when I left at least.

Jason:
[11:01] Yeah and that is very cool because obviously that the whole Purpose Driven campaigns.
Very in Vogue right now like Somers wildly successful some like you don't have dubious authenticity but it it's totally cool to see those those campaigns that were so successful before it was the trend is yours.
Until after doing your bit to help small businesses in America you you change rolls to the diametric opposite of small businesses.

Janey:
[11:33] Yes I was just as I was talking about small business Saturday I'm going to Parlay this is how do you go from that to.

Jason:
[11:39] Oh I can transition any.

Janey:
[11:40] Obviously yes so I am Walmart first ever Chief customer officer.
On paper although you knows you go back through one of things I like to do when I go into any role any job any brand has to go by.
To look for what I like to go back to the archives I like to take a look at where are we today and where we come from.
If you go back and you take a look at the some old made in America bulk or in any of the things that you can see online.
What's super interesting to me is he in his office he was incredibly small and a consummate retard.
Actually a marketing genius way before his time and he start when you start to think about and I will talk in a bit about things like.
Innate segmentation and design targeting and really talkative product positioning and how you do that way ahead of his time and so he really was right he was the first Chief customer officer,
because he was so highly thoughtful about.
A the mission and be the deployment of Batman and how you grow your business and obviously grew it from from it from a small business to the to the world's the world's largest company.

[12:55] I ate a what constitutes a chief customer officer today I like to say it's everything set up at the beginning of the funnel at the end of The Funnel and then and supporting underneath so.
Supa tactically it means.
Unique source of a voice of the customer so and insights days Trends all of the how do we have it how we actually have a single voice of the customer and how do we ensure that that is used,
objectively across the company we will know their fax this yo fake facts this is fake news top news,
we need to make sure that we have the capacity to have a source of data that is used consistently and objectively.

[13:32] How do I identify the right customer Journeys we want to self how do you prioritize those how do you deploy the resources cross-functionally have against those I have a sort of Innovations like new product development.
Group so you may have seen.
Accidentally about will be cool in home which is really actually deliver groceries into the fridge I'm so taking that service expanding that continuing to test and then see if wet weather we take that in there a whole series of other Renovations with with the balcony.
And something about that the sum right at the front of the phone all this as we think but early stage Innovation Chief product officer runs all about you not digital product and then how do you deploy that didn't know many fashion I have a team that runs.
I Services Knotts everything from
gold Financial Services we offer in the store to a credit card to any of the services in and around the store so I think about the build a better the FedEx of the nail salon on the Chick-fil-A that is in a in a in and around the store and drives and drives that as well as I Omni.
Services so if you think about something like cake decorating I you order the cake you order decorating online how do you integrate that even into that Walmart pay all those sorts of things.

[14:48] Interesting enough we run returns and to answer returns really in a custom problems with a huge issue for a second on Maclay and then.
At Walmart that the Walmart Media Group is it as the selling or so as the selling entity against their organization,
CMO. Samo and then I said that is supported by the customer care organizations what happens.
As you transact with us and and how do we support the customer service at the front entrance with folding the organization of the back in times of creating demand for the front and then supporting Anthony.

Jason:
[15:25] So that's an incredibly broad scope which I imagined doesn't leave a ton of time for side hustles.
And what do you think I predict admire about that structure is you you mention the polls to ask you most like it would early does sit
above marketing so like you know where everybody talks about sort of putting the customer at the center but you guys from literally an org chart standpoint are really putting sort of this customer ownership
like at the center of all of these different disciplines at Walmart which is to my knowledge.
A newer structure that we haven't seen a lot of retail in the past.

Janey:
[16:03] Yeah I think you're right and you know we have a lot of debate in one of the comments Frankie that I've heard is all well Jamie should see much of the glorified say it
how many different constructs we're saying Mo's Purity demand gen or another company so they have a lot and I like it and take her surgery you didn't hate me to talk about public affairs and Communications rights out Francis I don't have that cuz that's it that's it
different skill but to me there is a difference between
understanding and helping your organization really truly build for the customer and pull that through in an organization that has been built up on it
Orion's Belt tremendous scale 3 absolutely Flawless operation execution and its capacity to,
build create Source amazing products at great price please.
Those we need to continue to do and will continue to do but we need to make sure that we are mindful of the customer
that would that would join if that is really different from how do you create them and what do you do and how do you run a fully optimized Media budget which is in the end.
Billions.

Scot:
[17:16] It's amazing the the Spectrum you work with must make your head spin it must be hard to prioritize everything you have on on your plate.
I was going to shout out to listener is one of my favorite books I'm kind of a nerd on amarillo biographies when my favorites around the early 90s was Sam Walton.

Janey:
[17:36] So I was looking it up this morning actually cuz I was recommending it to somebody it's super easy read
sounds like it would be 90 but actually it's not and I will tell you that more often than not I go back I just didn't know we goes past I don't go back to take a little reader of a section office it's important to me as you think about the ethos of Wilmot weather is so much
goodness in that in times at the thought process Anthony the.
The unwavering dedication to building a business building at the right way and the the notion that.
You can democratize resale,
and just because you have less financial means I know you you live in a you don't live in a city does not mean you shouldn't have access to great quality items at really affordable prices.

Scot:
[18:27] Yeah it's like urban legend but isn't his office preserved in Bentonville and you can can I go see it and is that true.

Janey:
[18:34] Yep but yet yes I know yes it's God's office
so done right so I'm so dog sits in it now it's the desk we just did a sort of mild refurb of that space in invented also yet it's that and all its Glory
and you know I haven't asked.
But now I'm going to his eyes when we moved to a new head off his way. So we have met making a new home office I'm assuming somehow it will be lifted and shifted and actually we are we building a replica in the museum,
downtown Fayetteville to so that way you know we have it preserved at 2.

Jason:
[19:09] Yeah I've got a Funny Story I Heard tell once is that he's like.
Mildly a pain working in a historic office because he's like you know he's like when I first started I like asked if I could get a whiteboard over here and there and they're like they're basically like no you can't.

Janey:
[19:27] Images like what is wood panels and uses of walk in and appreciate that duck like rearranges the books or something like that to change things that you can change it but I.
It does give you a sense that she will walking in there and thinking about.
Show me like literally Disney ultimate entrepreneurial story.

Jason:
[19:52] And of course if you do read the biography I would argue his actual office is probably that truck.
Because per your sort of Chief customer officer comment he spent an awful lot of time in the field visiting stores and talking to customers and I I think in the early days it was driving to them in the truck and then and later days it was in the airplane.

Janey:
[20:13] Yeah I mean Sarah.
There are so many people still around a colleagues of mine who have in them so many missed Asylum stories but
you are absolutely right I mean it so he literally was flying over geography is,
and from the air and it's like the plane would figure out full that in a full that town where was the corner of Main and Central
Wright and salmon in and figure that out and then figure out that that's what you need to do a graph you put your store if that's not micro-targeting you know.

Scot:
[20:53] I want to start off the questions by kind of starting at the super high level so you guys see so many customers get so much data how do you use all those insights that are gathered to deliver better experiences for Shoppers.

Janey:
[21:08] It's a great question 160 and 160 million people shopping Walmart everyday
so we are trying to slice and dice and make sure that we
information is usable to do the sorts of things that we want to take from an experiential perspectives if you think about Walmart stata
it's primarily SKU driven right side it's really interesting to me because I was told it's Q level so I would say it's kind of at the base level
what we're trying to do is figure out how you Advocate that.
SKU level Day to you after Butte it to the right kind of customer right what does that cross across payment and is excetera think about is the diametric opposite of America special and you everything about the customer and I couldn't get down to skew
are we going to ever get down to what are they actually dying here I know how many bottles of ketchup we leave so the question is how many did JT die,
when did she use cash when did she use a credit card when you buy them online and when did she go to the store so we lie during a top
just in terms of what people actually do the other piece that we are double triple quadruple clicking on is.

[22:25] How are people actually behaving in the stores and what what are the what are they saying how are they shopping different man how do you use that to make sure that we are old mention that experience and Laura's
seek to rationalize things in the stores for operational efficiency with doing it in a way that makes sense.
Podcast medicine so that's a whole other realm where we have some of the day to we haven't spent a lot of time you know in.

[22:53] Some of the Behavioral Science components an ethnography and actually you know
space space evaluation as well as we think about bringing all of that together so you can come by and all of that day to what is it Louis to do it allows us to really think about who I desire until I get off,
what they really want with some degree of precision because by its very nature you know we serve all of America.

[23:16] Design for everybody because I thought that I bought it as you are busy designing for nobody at that point so how do we design those right experiences how do we prioritize while we go to sign those great experiences and I think probably most importantly.

[23:31] The way I like to say it is you think about going back to my sis I'm what made those first stools so great was he figured out where to put them
you have the right the right product in that was relevant at the right price point
I have really great people in the store who knew who you are and were able to welcome you in and you know it was a Gemini and mouth and Tums a fast frictionless fun,
personal experience I'm not worth trying to recreate that experience at scale with digital tools and so it's really how much can we,
understand about a customer based on what we know where do we need to open that right we don't know how do we old men that such that we can really create the sort of experience is that that most YouTube customers want
across channels and so you know I hate the word Albany but you know but still how do you let people
flow in and out of of online online offline various tools without making the experience really hot and ready Conkey
I'm really on a mission to try to make it fun fun to shop at Walmart physically fun shop at Walmart digitally so I'd like to bring some of that in them too.

Scot:
[24:48] Yeah a lot of the knowing I will talk about Amazon but you know I never said wow that Amazon experience was fun it was just kind of a transactional
I'm a I'm a four-time entrepreneur and I've done three B2B companies in my latest companies consumer and I found when I was B2B was always easy to say
customer first but it's actually been surprisingly hard because I found its constantly at odds with what the rest of business.
I've been dying to get someone of your tenure on a on a podcast like this and asked you that question.
How do you navigate that and cuz there's times when it's not right to do what the customer wants to know.
Retail returners or getaways price things that the company doesn't make money in surviving the customer still happy how do you think about that and then how do you articulate it into the organization so.
All the way down to that store associate a kind of understand calculus.

Janey:
[25:45] That's what the key to the code right.

Scot:
[25:51] You figured it out so I.

Janey:
[25:52] So I wish I wish I wish I could say to I wish I could say it you know the keys Dakota 62 or so I think,
can you questions go to I'll give you I'll give you a Walmart example if this