Digital Alcohol with Diageo and Drizly
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This episode is a deep dive into the digital alcohol market with Diageo and Drizly.
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Episode 163 of the Jason & Scot show was recorded on Monday, February 11th, 2019.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer and Scot Wingo, CEO of GetSpiffy and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
New beta feature - Google Automated Transcription of the show:
[0:24] Welcome to the Jason and Scott show this is episode 163 being recorded on Monday, February 11th
2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.
[0:39] Hey Jason and welcome back Jason Scott show listeners as a reminder we are going to be at etail West and as a special gift to listeners you can use the code Jason Scott that's Jason Scott on Scott for 20% off
but that's next week and let's talk about today long time listener to the show will know that we have been talking about Brands going direct or direct consumer as a strategy for a very long time since I think 2016 started.
And you also know we are huge fans of the digital native vertical brand Trend as well,
so today on the show we are going to take a deep dive into a huge segment of the beverage industry the spirits your space one of Jason's favorite second only maybe the coffee will find out that will be a question.
[1:27] Yep that you don't have to keep those two separate.
[1:29] I'll turn it up down up down
understand the space and what's going on we are excited to have the rare to guest on the show
so Crown Royal Johnnie Walker Smirnoff
my personal favorites Guinness for strength what do all these brands have in common that have a single parent company
they're one of the largest global spear companies and that's just some of the highlights that I picked out there Brands there were so many that the show would have gone long if we covered all the brands we're excited to have on the show
Wayne Blum who is the director of e-commerce strategy and Partnerships with Diageo.
[2:13] Thank you guys I appreciate it and I am excited to be here because the e-commerce space is one in which I'm super passionate about and figuring it out for.
Beverage alcohol is is an incredible opportunity for Diageo so excited to be here thank you.
[2:31] Great happy and as listeners also know I am a big believer in the on-demand economy and one of the top companies in that space that intersects with the alcohol Spirits world is drizly.
And they provide on-demand Spirits so join us some drizly we have Taylor Burton and he is the VP of strategic Partnerships welcome to the show Taylor.
[2:51] Hey guys long time listener first-time got Russia have me on today.
[2:55] The awesome to have you here Taylor
appreciate you both taking time out to educate our listeners about this exciting and I would say somewhat emerging space
for those of you that haven't listened to the show before we always like to get things started with a brief background about how you
came to the space so maybe Wayne you want to give us your sort of a path to Diageo.
[3:19] So I just ruined the audio 2017 to.
Take on this econ strategy Partnerships real but prior to Diageo I had worked for Nestle focused on.
Direct-to-consumer and was running e-commerce digital operations and and platform.
Abilities for either largest GDP in the beverage segments and you know I really kind of chart to figure out.
You know what is the future of consumer goods through econ and particularly how the last mile,
play and so that's kind of been formed by thinking is I started to focus out that out,
and then before Nestle I was with American Express for quite some time and that was either really where I learned a lot about,
digital working with consumer data for Target in optimization loyalty like I value CRM,
what is a fundamental tools of understanding e-commerce promotional Marketing in the digit in the landscape today.
[4:27] Brickell so when I went from chocolate to Spirits Taylor did you have an interesting of a background as as winded.
[4:35] Did not come from chocolate and spirits
company timer spaceship part of my last three years leading the charge in the partnership. Drizly on eBay,
I'm working on the gator products specifically helping Merchants great offers within the platform to Target see how users based off their purchase history
the great opportunity for me to come over I'm a check to apply that to what is the relatively new space.
[5:09] Causes of vintage Meg Whitman Dara eBay PayPal.
[5:13] A little bit after her I started there about six and a half years ago about 3 and then jump.
[5:23] What's at the Bay Area kind of side of things or did you get it from.
[5:26] I work out of New York.
A lot of them and partner drive if they stopped here on the east coast and actually started off
I do. She purchased by PayPal surround advertising.
[5:45] That's cool so and I don't want to say anything about it it feels like you are falling all of the traditional vices so I have some theories about what what your next step in your career going to be.
[5:54] I'll be interested to hear that but maybe that's one for after the podcast.
[5:59] Exactly maybe we'll do that offline.
[6:02] Vaping vaping and cannabis are hot.
[6:06] Yeah yes we careful in this category bringing up the whole cannabis things to work we're not going to go there
but when I do feel like regular e-commerce is maybe a little bit too easy and so I I suspect there are some unique challenges around regulation in the distribution model in the alcohol and Spirits category am I right and can you tell us a little bit about,
about that how that changes the business.
[6:31] Yeah so just lay the regulatory environment means that we have to think about things differently right so the US has this three-tiered system that,
essentially says Diageo is going to fill Brands and create these these great products and then,
working at we're going to sell those products through to a distributor who then sells them through to retailers and so across the street to your system we essentially by law go the traditional router.
Selling a product directly to a retailer putting it into their warehouse and then having him the fill out for retail distribution or.
Corporate direct Chef when were looking at beverage alcohol 3 Commerce in the regulatory environment do we play with it at most effectively.
And if you like it what's happening with last-mile this is this is essentially our opportunity particularly for beer and spirits and in my opinion so.
The products being close to Consumers and then the Retailer's learning how to fill them compliantly as you need to do for beverage alcohol she doesn't understand,
that presents the opportunity for for this type of Orissa expanded econ shop.
[7:48] Fair enough so in like a general merchandise you used to have two prevalent models you have you know,
a direct-to-consumer model where you know you have tons of Brands launching their own website selling their own Goods direct to the consumer so that's.
Caspar Warby Parker bonobos never give retailers that own the goods and sell those goods direct to the consumer like at Target and then of course she have these really prevalent Marketplace models like Amazon and Alibaba,
where where did you lie you're just kind of introducing the buyer to the seller and that the.
The seller actually you know who owns the transaction because of that that regulation and.
Turn of the locality and fragment of nature that relationship it seems.
Way more likely that we won't or or won't see as quickly any of those sort of direct-to-consumer models.
In in alcohol and that that you know maybe more of the momentum is on the marketplace I am I reading that right or is that an oversimplification.
[8:54] No that's that's exactly that's so the momentum is going to come from the likes of a walmart.com who scales are grocery business,
and has the beverage alcohol category available to add to the basket or it's going to come from.
Some played some small instances like wine who asked of a trustee Wisin who does ability to go direct to Consumer and Wineries and stand up their own web site in and build a brand that goes to.
When were thinking beer and Spirits were really thinking about the last mile either through direct retailer or the Emmys.
That operate like a three-piece up like a dress.
[9:41] Yep like the two of the things that they feel like they are super important in this faced so if you're an alcoholic if you're a licensed seller of alcohol you take on a bunch of obligations when you sell that alcohol to a consumer or Aids verification,
you know potentially some liability around over-serving and some of these things and so have you if you have a liquor license and you sell online,
you still have those same obligations and so it it maybe makes things.
More risky or more messy to Outsource some of that last mile to a third party because you still have those,
does liabilities attached in you could potentially you know be at risk for significant regulatory fines or even the loss of your liquor license.
[10:22] You guys are assholes they correct their neither is there is definitely a there's definitely additional levels of compliance and complexity that retailers,
do I dress when they are essentially sending this product off to the consumer enough you know that's what I.
The challenge to the product teams to solve that the challenge for their compliance group to figure out how they navigate the right way of implementing checks and balances but
we've actually seen some some really great innovation in this space you know
think I think of companies like an instacart who do hand off the product and they do have the ability to AJ
at the front end so they present the terms and conditions and ask the conservative,
that they hate that they're within the compliant age to purchase but then they also can scan you know a handoff to the consumer on something like a phone invalidate.
This is their driver's license to actually seem really good progress in the DH dating in the the product management,
side of this business so retailers can start testing and expand into this category.
[11:32] Awesome I'm excited you're more about that and then one other follow-up it also seems to me like,
as with any new product category like consumer demand and in sort of the you know smart marketers are maybe ahead of the the regulatory bodies a little bit and so it's
it's not always 100% black and white what is or isn't permissible in any locality and so it's it's it's not even as simple as,
here's the rules that you have to follow up on when you'll be fine
every provider has to sort of make their own determination as to their level of risk in whether they're being completely compliance or not right and so you can imagine,
big companies are at more to lose and therefore are more risk-averse than maybe some you know super small startups that aren't well-funded or those. Is that is that also true or my imagining that.
[12:25] No I think it I think solutely correct.
I seen a lot of of what I would stay out of ambiguity and some of the language around what what are and aren't the rules.
[12:38] Looking in this business everything is kind of driven down to the local the state level or even in some cases the local level you have.
Tri Counties for example that you know someone like a shipt or instacart may need to solve a 4 in terms of family make this product available in this ZIP code.
And if someone order bring it outside the zip code you know what are the rules of,
using various types of digital media that were never thought about when you know these laws and regulations put into place many years ago so.
We're definitely in a bit of Uncharted water orgone sort of unmapped territory to some extent but.
At the same time I think consumers are are voting with their wallets shoveling that.
Baby love the aspect of convenience.
And they want to be able to take what they traditionally purchased an r and an in-store traditional retail environment and replicate that for.
[13:44] Full basket delivery and so we think that if you follow the rules if you understand the local laws and then you get creative around how you,
you find new ways to serve the consumer that you know some of the stuff will become more clear and and you know what the category will find its way there,
just like every other complicated category has found its way to to the digital or eCommerce Channel over time.
[14:13] Taylor now that Wayne's given us this good overview of of kind of the three-tier system.
Tell us news how does drizly inject into their so it got the bread man's distributors in retail where do you guys fit in I saw the site you're in 101 cities so I'd love to know more about how you skill so quickly all those kinds of questions I look.
[14:33] Yeah well you first start off by saying it and it wasn't as quick as we would have liked to be there we've been at this for over 6 years at this point and I think cautious.
I'm in control broke is really what you see not to buy,
I think it's important that you know players in our position specifically a category leader in the early early to the space,
are really asking for permission before going to head and diving in and doing things that might be in a regulatory gray area large parts.
Drizly business days but also the Retail Partners on our platform as well as the state and local level of been taking phone orders need an online orders for a long time,
you're making and executing and purchase an app like drizly,
it's really no different from a compliance perspective then it is a you know a person walk into a store and showing an ID so all of this being rules will still apply you're looking at a market that software lawyer,
did it simply allowing a customer to shop for that commodity good in this case alcohol level.
[15:41] And what we basically do with integrate with the Retailer's TLX you leverage Braintree at the back end to take the credit card payment from archers Lee consumer
actual retard South and then the retailer is actually the one making the Fulfillment though,
it appeared at the W-2 employee of a retailer in some states worth compliant we have third-party integration set up at the retailer Postmates or doordash or whoever might be,
I'm in the future and eventually their consumer is owned by drizly and then the actual ending of the alcohol and in-store housing and ultimately shipping of y'all called.
That answer your question.
[16:24] It does so imagine you've got in a great to the point of sale system is that is that so you can pull inventory and then.
Is this point of sale systems as instacart is kind of painfully found out grocery stores they are pretty archaic and they don't even have like graphics and army images.
Consumer-friendly descriptions how heavy of a lift is it for a seller to implement drizly.
[16:48] It's not happy with that used to be for the actual Stellar I'm wearing a gray didn't know what you wanted different POS system anything from an analog all the way up to your yard when its tail system,
I'm to the roadmap there and we can onboard a new retail partner and that's 24 hours a day system,
you should be a big challenge but yeah we done the groundwork again over the last six years to make that process as painless as possible for our partners,
but the reason why we do not really require that integration is because when a customer shopping in the product and cart that product and then go to the.
Not a great weekend breaks chains to get to the end of the journey and say hey you know what bye sorry there's no Captain Morgan available for you because your story doesn't currently have,
I'm having that really clean crisp integration on the POS side absolutely Akita.
[17:42] Cool and then so give us some characteristics of these sellers are they restaurants their convenience stores there
here in North Carolina become ABC Stores so there's like this legal I have retail for certain Spirits what's the profile of the stores on the.
[18:00] I'm putting a lot of local retailers great so that the poster typically competing with with the larger chain with that said we do have quite a few men size regionals on the platform,
I'm in a strictly scaled over the last two years especially we start to see larger partners jump on the platform,
I'm primarily because of the amount of volume that you're through the platform is driven and really that we kind of angered ourselves as if we go to Spotify and Shop alcohol online.
Can we start the profile to ship a little bit as we continue to grow and scale,
and that's really what keeps our Marketplace model moving right the more,
the more selection we can offer our consumers the wife's grave price and ultimately delivery method is going to make that shopping experience just that much better for an end consumer.
And at the end of the day that the best shopping experience typically will win and that's what I think would be great if you're at replay.
[19:03] What are the things that I'm a big instacart user one of things they've kind of had a nursing challenge with his price shopping so let's say I'm looking for the cheapest Coke Zero and I
make it very hard kind of like switch between stores to do that because they don't.
I'll have you know if you have any stores with the same SKU how do you handle that that experience.
[19:27] We're going to show them all right you want to leave that choice ultimately Yang consumer but it's not just price that we found our consumers or shopping they stop.
What type of rating does the retail store that's providing that price provide.
They have a higher score a lower score I'm in that also other factors like store hours Etc are going to fix a plan for that ultimate collection.
And we've also found a lot of our you know local consumers will you know how to store that they like to shop to maybe they go there in person,
they want to continue doing business with that's or whether that's in person or online the number of factors
you're the point that you're heading on the difference between the way instacart running their modeling and what we are doing dinner at Wrigley is really offering a wide array of choices selection and I'm really not trying to funnel use.
[20:19] One thing I've noticed on the platform is most of sellers advertise 1 hour delivery which is which is pretty impressive is that is that the market at work or set a guideline you guys to give them that kind of the standard in infant.
[20:31] I think it's a great question you said really shy away from saying when I was delivering we didn't want to be bumped into this just yearly on demand.
It's something that you come in Table Steaks right product is for media consumption and we understood that that we actually took,
yeah I really data analytics approach to understanding what's causing our consumers to hit check out,
I'm a huge factor in that was the immediacy write the how fast can I get that when you look in the market like New York know what would you guys guess the average delivery time here is.
Stop the top of your head.
[21:06] York this fast so I'm going to go 30 minutes.
[21:10] Yes it's 30 minutes or less right you know I don't know what the exact exact but it's probably closer to 20 minutes.
But it it's super fast almost right,
but that posted something with the New York Market is very used to write deliveries always been a thing here put laundry or Chinese food on that consumer expects that quick and then meet you
if you're in New York is your delivery fees don't lie there just like Amazon's going to great job of training computer the new Prime delivery should be free,
I knew your contemporary it seems it's free delivery to me actually don't even talk on a delivery fee here in New York like we wouldn't them other states so you'll have to understand what is that local market condition and how can you make sure you're checking all the boxes in decision tree,
a person might think through as their healing check out.
[21:58] Interesting a lot of my agency colleagues are based in New York and I can't speak for everyone in New York but for them I can say not only the delivery fast but the consumption is probably really fast.
[22:08] Absolutely let me know when you're looking at,
you know you're really seeing people put time and effort and energy into sending just the folks I think that's something you know that we really brings to the table is Bilal
I'm trying to offer unique experiences not some of the stuff that we don't know,
you know companies like Diageo on the building how to get the experience in trying to offer something special.
[22:38] Awesome and that that's a great point.
Can a throwback to Wayne Wayne mother thinks it's interesting to me is again going back to kind of General e-commerce you have this tension between like traditional cpgs that you know where houses are brands
and these new did we need a vertical brands
that sort of reinvented the product and the customer experience for this newer digital enabled consumer and is week we talked about in the top of the show it seems because of the regulatory climate is probably unlikely Diageo is going to launch a bunch of new,
direct-to-consumer spirits but I am curious if
these digital enable consumers in the fact that people are you no more likely to place an order from drizly than they they were six years ago and that is changing how you think about.
Product Innovation and building Brands like you know are there brands that are more digitally friendly in the Diageo portfolio than others or could we expect to see,
more in the future like had you guys think about that.
[23:41] No yes I mean you are 100% correct about that so so it's true we will never have what sort of digitally native heritage.
Foreign brands that have a direct-to-consumer proposition but we absolutely do have is a category that I like to say consumerist.
it's not it's not like we're going to create a breast and that I'll put in the warehouse and ship it out and say this is a direct consumer brand but we arguing,
is understanding like what is most culturally culturally relevant and then using front of the reaching power digital to to get that message out for consumers,
and I won't be seeing in on the back of that if people trying to Conquest the stuff online to find it so,
what are the best examples I could come up with was Diageo released a limited edition,
Game of Thrones 8 houses to align 3 8 houses in the show set of single-malt scotches so you got you know it Oban Night's Watch it.
What we realized by looking at things like Google search.
It was that this is this is where people go first and foremost to find something that they want to understand where it's at and how much it's going to cost when you don't have you know what station.
[25:01] Commerce Ave Warehouse stop in the mix right now that can say OK Google you don't want to buy Google Search terms.
Guys that have the product understand out of Market at online in essentially starts a go to match up with those consumers.
To essentially find what they're looking for a joke telling that brand story digitally the comes the opportunity and then.
[25:30] Retailers partnering with companies like.
Drizly to help bring that stuff to life on life online and it's actually close the loop on placing that final order.
Becomes what I would say the closest thing we have to digitally native Brad and.
Because because the category is just so engaging for consumers and somebody where is it so much for thought-out purchase,
they want to understand how to use it where they want understand the story behind the brand,
I definitely think building brands in digital is is a great strategy to think about or this guy too gory and then starting to get creative and how we essentially
close the loop on the purchase side becomes the next step in that cuss words.
[26:17] One of the things that I think that's a good point there when you get in the Game of Thrones example that was a new product release.
When that product is released it's important that you know when they're on the Fireside they're launching these products are making sure that drizly in the other.
Have the correct.
Collateral right do we have the right product images do we have the right bottle facts you all these things in an e-commerce consumer expects to see before or right at watch let's that's another thing to think about as you're going down that brand building.
[26:52] Yeah I know that makes total sense when I would imagine a new skills for a company with this been around as long as Diageo I have to have,
read digital merchandising the support drizzly & Company but I'm even assuming your traditional wholesale Partners you know there's a there's a lot more buy online pickup in-store than they used to be so I think,
the Total Wines in bed most of the world are probably doing more of that and then you have all this grocery pickup in Walmart and Kroger like you know I'll bet you.
Digital marketing and digital Shopper marketing shops are becoming a much higher priority across the board at the auto show.
[27:29] Yeah and I think that's that's part of the Mandate of our team so when we where we are.
I'm just over a year ago a lot of it was just going after some of the low-hanging fruit stuff so.
Do we have an internal audit the images we have if we don't have 400 and some odd you know brand of Fruit Products job descriptions ready to go,
do we use an in-house supplier or do we Outsource the production work to get that stuff set up,
you know who is R&R syndicating partner can we try and build something internally you two weeks ago.
[28:02] The likes of us ossify which ultimately we end up doing to distribute the content.
We were elastic just showing up in the most fundamental ways was incredibly important for us in the in the sort of phase 1 of this journey.
Once we got that in place then you're absolutely right and starts to become the,
more ideated space of how do we think about marketing on the back of this content now that we know we can trust,
not the content is of a certain caliber and quality to Syndicate to the retailer.
You know it's not an easy conversation to have with with any national retailer any Regional guy if you will if if they come back into you and say something like we don't even have product images and descriptions for your brand so I don't really,
really know what we can start to do for e-commerce year and,
you know that that's been the journey for rusted Dave and that's you know and I think that's a similar journey to most of what she could she'd companies in Centreville.
[29:06] You want it you want to do something aspirational and you want to go big but there's just a ton of work to do when it comes to establishing the brand presents online
correctly effectively and then a scale so you know you look as good with the walmart.com or an Amazon as you do with you Noah Kroger a liar and Albertsons and anywhere else your products are available.
In some type of online chatting format.
[29:33] Taylor on the drizly side I saw you guys recently raised around of 35 million that was good hopefully you got up your fair share of that and then that's according to crunchbase that that says you guys are up to 79 total,
clearly must be grown very quickly to to get that much venture capital and there's demand for your service we had to wait on the show several times talking about what they called the bifurcation wear,
u.s. split into Canada.
Surprised by some of the things we've seen there I'm sure it would have you guys seen you think about your I guess it's your sellers customer but I'm sure you guys see you.
[30:20] Identity of the consumer is a drizly consumer to be clear the war doing all the work on addition excetera to drive the volumes for a local Retail Partners that value layers be provided outside of the software,
I think what we're seeing is a more receptive consumer to buying alcohol online if he did that was one of the big hurdle that we really overcome in the last year and a half or so is.
The majority of the folks that were shopping kind of more by accident but still felt like they were doing something that might be considered illegal or On The Fringe but we've done a really good job and making sure that are messaging we are in,
they were putting the retailer out front.
When you shop with the New Jersey experience you're seeing which local retailer you're actually shopping from and that's crystal clear to Consumer on our platform I think that's been a big piece of it.
Bill you lagging the general you don't match grocery e-commerce percentage still we're still looking at below 2%.
I told you nobody by building groups and Biagio like Wayne and his team is done
I think of that kind of shows the importance from a category perspective of where alcohol e-commerce is headed
that makes sense when I start to look across the ecosystem of know who's going to be a quarters the consumer consumer probably go shopping or do most of their shopping online,
that's really who's coming to the shop you're just like.
[31:50] And then any resting time Trends is this kind of is there a peak time from liking it.
[31:59] Yeah and it's exactly what you think you're seeing a lot of stock application,
no happening later in the week you know Monday Tuesday Wednesday that's more for searching and sorting and complaining if you will
and then as you start to Rolling the Wednesday night Thursday night Friday night that's Morgan start the peak gallop and then obviously just Saturdays
Dagon in anytime if there's a holiday that has any celebratory finish to it you're going to see an uptick in orders,
we have to think New Year's Eve Super Bowl Saint Patrick's Day.
[32:34] What was interesting and often struggled with this is a lot of the on-demand guys they go app only because it.
It's easy to measure the metrics but I know what you guys also have web you have a great out but you also have kind of a web transaction model.
[32:55] The majority of our orders do you happen within the app experience and then iOS specifically but with that said it's important to shop and then that experiences,
you know a good experience right we don't want to create an MVP if you will we want to create an MLP if we want to meet him all lovable product,
and I think that's something that we take him very seriously beginning. I personally shop on the website when I'm shopping around Ridley,
typically playing together a little bit larger basket sizes in order,
no. My favorites into the favorite thing,
you know across the app and she just looks like a full bottle of wine she's looking for for for bachelor night with with the girls and she's off on her way so I'm really trying to meet all of our consumers where they are.
I'll take about you that our corporate anybody got a couple.
[34:00] Speaking of corporate consumers as cooking around your site and saw some pretty nursing seems like you guys have done some interesting things there are audience maybe how that came to be in some of the programs you have for corporate.
[34:12] Yeah yeah if we we've got a green head of corporate over at drizly
Amazon a phenomenal job of building that practice out for us it's an area that it actually took a little bit longer to really take a deep dive and we've always had corporate customers
would show that we really cared and corporate until released on this latest round of funding so I think it will be tried to do today that's really white blood that service for a corporate customer.
You're a larger order on there's more Logistics involved whether it's coming through a Docking Bay or whatever it might be in typically when you're also ordering for that or you're not,
scheduling it for an hour later you find a little bit of it and you want to make sure that you really get that delivery window because when I,
my happy hour and office is taking place at 6:30 they mean 6:30 they don't mean 7:30,
those are all important factors I think they mentioned that you're chatting
fire but no we also have taken the opportunity to make some Partnerships with some other folks out there yet mentioned the Buddy fridge power that on the back end,
you know what you did great Bay for offices that have the cooler unit within their office to automatically reorder their favorite beers online.
Doing a lot more in that space and I think that for me and Gracie perspective you can expect to see more and more of that stuff happen as Jersey becomes against Anonymous and alcoholics.
[35:35] I think it's obvious but anyone that had the title Chief strategy digital marketing Revenue officer would definitely have to have a smart alcohol fridge.
A b a b shot if Jason doesn't.
[35:49] No greater no greater.
[35:52] You think you're mocking me but I feel like we have a full-time team at boob assistants dedicated to our in office alcohol consumption technology.
So there I literally think we have tags in our office that are on Twitter and tell you when there's a when they've been tapped and and all that sort of stuff.
[36:13] The route to the reorder part of that cycle in and drizly can deliver.
[36:20] She's she's phenomenal.
[36:24] I do want to go back to tell your little bit about some of the differences between how you and your wife shop the leveraging of the using of list and and that's one of the mixed blessings with
digital shopping for a lot of these categories I can in grocery
on the one hand it it makes reorder and it is much easier in an improved convenience and and all these things that consumers are demanding more than ever.
The flip side is there's less opportunities for serendipitous discovery of new brands and things like that and so I've noticed like in the grocery space,
you're saying some new interesting Partnerships and opportunities that the marketplaces are inventing so you know interesting promotional units from instacart or interesting data partnership with Marketplace
shares data back with the flowers that they can use to create new experiences like are you guys.
Seeing that in the alcohol space as well and is there are there any interesting Serta brand Marketplace Partnerships that.
[37:23] Yeah yeah we're doing a lot up there and we talked with a lot of what we consider not endemic partner so you know a recent one Netflix just wants to show called Final Table partnership with them where you know it is essentially,
yeah they're answer to a food show type contest,
where we basically paired wines that correspond with each of the different episode when we actually went through some of our Retail Partners and created in Thor display so taking online and offline,
a creating a little bit of Piper on the show and then about some of the wines that are brought up in,
it really looks at all aspects of the ordering process but also like what people are ordering at a local level write a report with Neil Finn in the past I think the biggest.
Unlearning to be at our people really care about what's being made at a local level on a product.
And we write a logo on it to 10% increase of sales for that product,
English forget that the various craft breweries I'm really like to highlight that fact that he's around the corner from you.
[38:48] And I feel like a glove just came off now.
[38:52] Well I mean we don't have as many local badges because I think some of our best stuff happens to be made in Scotland but I would argue that we also have some awesome brands that are local to the US.
I wish you'd have local badges on them too and I know we actually do tell her.
[39:12] Yeah Ugg you got the badges think about you,
you know when you're serving up something a consumer you mentioned earlier,
I think that's an area where you going to see drizly and backed up in the next 6 to 12 months have only in and making sure they were putting right in front of the right consumer at the right time specially given you the the way it is
you know that e-commerce World works today you're very limited Chopper and
right thing in their basket you're so does the better we can do it helping push products at the browse grid.
Are consumers to purchase the more likely they are to check out and continue in the shop with our platform.
[39:56] Wayne not necessary enticing you to throw me under the bus unless you want to but in general
like you guys feel like you're you have access to enough data and enough promotional opportunities via all these new touch points to do the kind of marketing,
that you like to do or is there an opportunity for your partner's to do more.
[40:18] I would say we're getting there there's always room for more but but we've realized through some of these what I'm.
Call Canada for spear of of the category the drizly.
Instacart the Postmates you don't whole or the license are really always managed to put some of the product is that.
They do tend to know more about the consumers they serve than some of the traditional retailers and so the data we can get from them is is really interesting for us we get to understand
the notion of usage occasions but now we get to get into purchase occasion so,
you know we spent a lot of time for additionally learning about when people consumer Brands but,
knowing about when they buy them is also super interesting knowing about where they buy them is really interesting knowing about,
in a high price point low price point all the different stuff that you can see comments release these particular channel to partnership.
It's all new data for for the category but it certainly data that I think in the form of our strategy in a whole new way going for it.
[41:26] Well it wouldn't be a Jason Scott show if we didn't talk about Amazon so.
Can you sense Wayne with last do you know every startups worst nightmare has to go to build all this out and then Amazon says oh that's an interesting space let's go replicate what how do you guys answer.
[41:45] Yeah the Amazon car says everyone favorite.
[41:51] We be crazy not to think about Amazon right they only had faith in every e-commerce or Marketplace or otherwise I'm just because of how successful they've been,
I think it it honestly is it helpful to have them in the face and I don't use the word oil but I will
because it helps build consumer confidence that your back to my earlier pointed you know you buying online went down the right way and with the right partner is a very legal transaction is something that you know makes the shopping.
I think they were we've got an advantage is really in our Marketplace rights or our ability to show.
And to your point of the 8 to 15 different retailers in a single location with that same commodity product,
and then allowing the consumer to shop based off of what characteristics of that retailer are the most important to them whether it's Private Selection excetra
Jana and I think it will be both are really proven and it's been one of our biggest most to is this is a highly regulated good
right and drizly was built in its core,
the handle does the supporting sale right from the software perspective other regulated
so I think that you're just slapping on and alcohol category that's why we haven't
not the number. Of instacart and Postmates some of the other companies out there because it's not just that right the very different shopping experience.
[43:17] I'm not talking about the bottle of wine they can run into a shopping cart that you know,
yeah I might drink half of and cook with half I'm talking about the alcohol specifically sale,
and I think that's going to be our advantage now and in the dead moving or specially if you start to grow it our national retail.
[43:35] I mean Amazon is is testing this category and we we talked to them and then
you know they do have availability through Prime now in Seattle through fresh in Illinois through Prime now I believe in in Sacramento and Southern child coming from what we understand
we're Amazon has an opportunity to get better to tellers point on this you can't just add one more category and expect you to be successful,
the proposition that consumers looking for when they go to a liquor store in it's obviously price is important but really selection and so.
[44:13] You're the prime now facility were there for filling out of doesn't always have all the space that I think they would need to represent a wide enough assortment,
including various sizes right some people want 175 some people want 375.
You know big bottle small bottle for Matt about to challenge logistically that that I think anyone needs to overcome including Amazon to really build out an interesting proposition for,
are spirits online particular at the marketplace model essentially lets me is the end user on the app.
Columbus ZIP code say I'm interested in Bourbon and essentially yet.
You know almost any bourbon you could think of from from the lowest price point all the way up to you know bottles that are approaching thousand $2,000 for.
You know brand like maybe a copy that anyone should be looking for when you have that proposition and you have it almost.
[45:15] Spell nationally this point it's how you start to see a lot of opportunity for e-commerce to,
firstly when you're operating a very local level like Amazon or most of the retailers all right now you've got to you've got to think through that how do you how do you essentially provide.
. assortment that people are looking for but also you know let people come into the top of the funnel at any sort of scale and sufficiency to to make this thing work like you could do or say or diapers or.
You know any of them more traditional Goods that are available ubiquitously everywhere.
[45:53] Yen into the drizly point.
Example Amazon's done like you have 200 friendly Integrations with point-of-sale systems and then like Amazon pay hasn't had a lot of adoption with with retailers because it's kind of like you know.
Hey at this feels really weird having Amazon kind some ways their scale.
I think you heard them because they're not going to be very hard for me to build a network.
[46:21] Yeah I think I know you look on Prime now I think the experience for some of these third-party seller.
Optimize the way presented and then you know I know car category either there's a lot of price for the disparity so I think consumers would expect someone to to see the price options but then also understand why,
you know there are these different prices presented to them so early a challenge that at Amazon,
I think we need to address her or think for a little bit more closely was they knows they look to scale and something like at 3 p.m. I'll only agree with you.
[47:05] The big thing this happened in were,
more mature meaning higher adoption categories is now Amazon competing themselves with private label right and you guys worry over at the au jus about amazonbasics beer or an Amazon basic vodka.
[47:23] I don't and I and the reason that I think we are we are not so concerned with something like that I digitally first private label brand with with someone like Amazon is that
one is technically speaking there is this this rest of Market wall with that off so you can't necessarily create a,
Brandon not make it available now Costco does have some really good trip propositions with Kirkland brand of backyard Kirkland brand tequila but
you know I think when consumers are looking for Spirits in particular and beer,
I think I'm looking for that brand story they looking for that experience you know this is.
This is generally a more thought through purchasing you know that the price point is not that of your standard consumer guide and so.
[48:14] You know we we have trust in Our Brands and we we really see the strength of our friends has.
No fighting throw this in a potential disruption from private labeling and one in which I saw very very closely it play out where I was at.
It's just it's just not as easy to enter to win in a private label proposition.
Categories within the other category where you could directly Source manufacturer.
Any other thing with private labeling is essentially you do have to buy it back from the distributor you can.
Direct store so the various tax reform.
[48:54] Yeah and it's a double down on Wayne's plane really strongly believe the brand should one timeline you know they've done the brand building with the consumer
they brought him down the car I think that's the kind of one big point to sit who is an e-commerce world as they need to continue to prove that value prop and buy that brand and that should be shot War.
Ecommerce consumer as well go get some of the traditional channels that have always work,
should be also augmented with coming to think that Wayne and his team are doing to really go about that Chopper and make sure that they end up being.
[49:29] That's going to be interesting to see how it plays out you know one of the things that's always interesting to me in in
the market is still really early and it's did you adoption curve like alcohol and Spirits is right now is that you can have a pretty fragmented market right so.
Obviously been a bunch of time talking about drizly here is one of my readers that there's there's a ton of players trying to,
when I a piece of the spacing and you know each with a slightly different go-to-market approach from your standpoint Lane do you have to,
participate with all of them do you make some big bets on the ones you think are going to win like you know what is your strategy like early on when there isn't necessarily A.
[50:12] Yeah I mean we're still in that building phase of e-commerce for sure and in a lot of our time or the last year is just understanding.
What's happening across the market alcohol is in a lot of ways of Barry it's early fragments as you said but it's also.
Locally Tribbett so,
you know we we understand who is going to be the best strategic group to align with the New York but that might not also be this the best guys to figure out who the partner when is Texas in the West Coast,
the the play right now is continue to test and learn and I think that's,
that's really consistent with anything you here in anybody need Commerce is constantly test. Billy learning and you get ready to Pivot really quickly as things change.
But because there's no sort of clear National front-runner right now in in the space we need to figure out how to win it at every light at every level a lot of those levels are are hyperlocal.
[51:18] Come on Rainbow National front runner.
[51:22] The closest thing to a national franchise and about right now is is Total Wine.
But even they don't truly you know have a presence in all 50 states 00.
Yeah so we are we are definitely navigating the the ultra complex for sure.
[51:44] Taylor have a start-up question for you if you guys have the school red bear as your logo I'm guessing why that's there but I don't want to make assumptions founding story about the drizly bear.
[51:55] I was why I was wondering when that question would come up you know that.
I can tell you the name drizly actually came from.
That is an option off the board as far as name goes and then very early on in life.
Get a branding agent has become in and give us some marketing tips and tricks and feedback excetera and one of the things that they came up with
shooting currently with this Presley
not a lot of thought went into it after the first logo iteration with the Jersey Devil is done and I think it's something that deep down no one's ever fully understood but at this point in our life is what were known for,
we've all become pretty pretty affectionate to the bear so the bear the bear will live on.
[52:49] That that is awesome and is it works at that's going to be a great place to end it because it's happening again we've blown through all our allotted time but if folks have burning questions about the category let's keep the conversation going on Facebook and Twitter
as always if you really enjoyed this episode we sure appreciate that that five star review on iTunes and as a reminder of you want me Jason and Scott in person in Palm Springs next week you can do it at you tell West and then it'll be a promo code,
in the show notes for you but Wayne Taylor a real pleasure chatting with you and really grateful for your time today.
[53:27] Thank you guys just a lot of fun.
[53:31] The end up before before we let you go if folks want to find you online are you guys realistic tweeters or snapchatters or instagrammers in any any business writing there that where people can find you.
[53:44] Can you find me an admin people on Twitter although I mostly just tweet about sports and things like that but what happened.
[53:54] When the big wings and I find him on LinkedIn meet me the same people in 86 on Twitter but we're we're LinkedIn.
[54:02] Awesome we really appreciate guys taking time out of your busy day so join us on the show and.
[54:07] Until next time happy conversing.
EP162 - Amazon Q4 2018 Earnings Hot Take
Jason & Scot will be podcasting live from the eTail West which is held Feb 19-22 in sunny Palm Springs, CA. As a special gift to listeners, you can use the code JASONSCOT for 20% off.
This episode is a hot take on Amazon Q4 2018 earnings
Jason & Scot will be podcasting live from the eTail West which is held Feb 19-22 in sunny Palm Springs, CA. As a special gift to listeners, you can use the code JASONSCOT for 20% off.
Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Episode 162 of the Jason & Scot show was recorded on Thursday, January 31st, 2019.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer and Scot Wingo, CEO of GetSpiffy and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
New beta feature - Google Automated Transcription of the show:
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Thursday January 31st 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with Scot Wingo.
[0:37] Hey Jason welcome back Jason Scott show listeners Jason big question it's -50 there in Chicago how are you hanging.
[0:46] I am enjoying the modern technology of central heating so I'm doing I'm doing terrific my dog who hasn't had a walk outside in like 3 days is doing less well for MacGyver.
[0:59] Your dog doesn't have four dogs can't take minus 50.
[1:03] I really like this is a rescue dog from Detroit that thinks he's like a Southern California dog like he goes on strike below about 40 degrees.
[1:13] Got it Caldwell.
Earlier this evening Amazon announced their 4th quarter results that we've been on pins and needles waiting to see how they did so this episode is going to be exclusively Amazon news and we're going to give you a hot take on the result.
But first Jason are going to be live podcasting from etail West which is held February 19th to 22nd at Palm Springs California
and it's a special guest gift exclusive gift to our listeners you can use the code Jason Scott there's no and in there so j a s o n s c o t Scott with one t
looks like Jason Scott is another way to think about it,
for 20% off and we are going to put a link quick Link in the show notes for you to be able to apply for that and come to the show and see Jason I'd life podcasting would love to chat with you if you're going to be there.
[2:11] So with that housekeeping all the way let's jump into Amazon results first I kind of wanted to frame the discussion so the companies have already announced we had Facebook and eBay come out and,
Facebook really kind of exceeded expectations because they've been in this kind of
poop storm of negativity and controversy that was interested or expecting it to be bad because advertisers was bailed on them.
[2:39] Turns out if you have a way to get in front of customers people want then they don't really care about the controversy I guess,
eBay's results were below expectations so so kind of another e-commerce company there and was eBay's results or a lot of talk about this kind of.
End of 4th quarter slowed down
so if you recall we had camera from Adobe on the show and Adobe has come out and said look it really kind of fell off a cliff kind of December 15th
through to Christmas I needed to the back of the year they talked a lot about that where the holiday was semen along and then kind of died there towards the end which was interesting
so the net net of that for them is there Marketplace crew 1% if you exclude the impact of foreign exchanges so
a heading in and outs two days ago I believe I'm so heading into Amazon there's Otay people are a little kind of wobbly can I see some mixed results coming in to Amazon and where were they
so that set up Jason wants you walk us through the high-level pieces.
[3:42] Yeah well spoiler alert they landed very solidly like they basically had a complete beat they beat all the the
analyst expectations so top line revenue came in at 72.4 billion,
that was against a expectation of 71.9 billion and was a growth rate of 20% year-over-year,
earnings per share came in at.
A little over six bucks and the expectations were like 5:55 so that was a solid beat.
[4:17] Last year they had a quarterly Revenue this quarter of like 60 billion so that means this year they added about 12 billion dollars in sales just in this one quarter so they continue to be clicking along.
So if you look at an annualized basis for 2018 total revenue from Amazon comes in at 233 billion.
Corso remind listeners.
Ecommerce the revenue isn't really the most important number we like to talk about their gross merchandise value which I'm going to let Scott break down and in just a bit.
But if you listen to Jeff talk.
She's not as big a fan of the sort of Revenue and earnings metrics is he is that free cash flow metric so.
[5:10] Yeah that's really the the metric the Amazon Rise Against is that hundred percent free cash flow and you know once again this was a good quarter for that,
free cash flow more than doubled from 8.3 billion last year to 19.4 billion this year.
So that's a first world problem you got to find a lot of place to spend all that loot.
[5:30] Yeah but how's that possible Jason I thought Amazon wasn't problem.
[5:34] Yeah it's almost like that some some misnomer from 10 years ago or something.
[5:43] Fun fact I would call 19 billion dollars of free cash flow pretty not too shabby.
[5:53] Yeah and the one I get now though to be honest I guess you're like a Amazon is not profitable what it What I Hear now which is also a misnomer is 100% of their profits from AWS.
[6:04] Yeah yeah let's talk about that so is repealed the onion on on the
the 800-pound gorilla that is Amazon overall North America grew 18% year-over-year and as a reminder to listeners we talked a lot about the e-commerce Baseline of 15%
retail Baseline is 3 to 4%
Amazon has historically clocked around kind of 20 to 30% so this is where the first quarter is when they've actually slowed a little bit and part of it is the concert is getting monstrous in the fourth quarter you mentioned a $12 increase your rear which is you know.
[6:38] Adding a chunk of any other,
retailer but they are specifically in Q4 starting to see things slow down because they've created these massive comps your ear and things like
launch an echo now can create headwinds on that and then you also have to hide window when products move from one p to 3 p.
Prepuce growing faster than one PS4 creates a headwind on Revenue growth cuz they collect a lot less from from third-party
set also a like item going from 1 Peter 3 p as brands do things like hybrid that creates a little bit of slow down and rub you also.
[7:13] So that being said North America grew 18% year-over-year International grew 15% year-over-year for Blended rate of about 17% on the retail side
taking out a WIC etcetera overall they grew 20% but the retail pieces group of three bases 3% slower,
that international number was a little bit of an acceleration which was good to see that they've been kind of facing some headwinds there on the international side so it's good to see that and then profit-wise in North America that took
the 2.3 billion so the North America business inside of Amazon is profitable even so it is not true that that if you
all the profits come from a Tab S but certainly the Lion's Share do and then International is still losing business money
but it it kind of shrink the Lost 30% to 642 million so
even an aggregate if you add up the North America and international the retail part of Amazon is still profitable
including the marketplace so and that International Peace is on its path probability it's just so honking big is going to take a little while to get.
[8:23] North American margins ticked up 60 basis points and that was attributed on the call to getting some really good leverage out of fulfillment center expenses so Amazon 2018 was a. Of time where Amazon
you know they only Built a 15 to 20 centers
I'm a percentage standpoint that was a pretty low capital expenditure year for them so instead of adding all the capacity they needed to
to ship all the packages they utilize more of the film Center squeeze more out of them,
so that being said another thing that I always watch is 2% of units that come from third parties this is the
the the metric.
Give around third-party versus turtle useful that was 52% which is a tick down slightly from 53%
I wear it wasn't Q2 and Q3
reading the tea leaves that was probably driven by as a swing in the fourth quarter you know the the 1p kind of bumped up a little bit I believe because of all the private label that we
Racine going on I think there's over a hundred fifty private label Brands and then what you call owned Brands so things like echoes in the whole X family,
I think that pushes up that first party unit side during the holiday. I'm talking about 1% you're so not a lateral move.
[9:51] One area of a little bit of concerned that for Wall Street is they look at this total unit gross and that decelerate a tad
even at 14% that's down from last quarters 15% so
yo a lot people asking how can unit growth be 14% but then they totally grew 17% so what you have is unit growth in ASP mix coming out a little bit higher to multiply together to give you like the total,
so when Amazon on a quarterly basis doesn't give you the pieces you need to unpack the DMV
astrix and I'll come back to that so what they do is in their annual report which will come out and I think they have another 30 to 45 days to put in your Port out then they will provide the
mechanism for 410A backing into the DMV so.
But astrix is I go to a model I've used over the years that that is relatively close so so what that model tells me is now.
I'll say this is not an official number this is just kind of Scott napkin calculation to,
I just give you an idea of the scale but we don't have to wait for the annual report and if you take Amazon's overall Revenue this quarter of 72 billion.
AWS with 7.4 and you take that out and then if you also take out the other AD business you're left with 61 billion dollars of kind of retail Revenue.
[11:18] So I use that to back into a 1 p.m. to 3 p mix and what I get is 52 billion and 1 p
and then you're left with eight or nine billion dollars in revenue from creepy Amazon's take rate is about 10% so you have to multiply that by 10
so you end up with first party DMV of 52 billion third party DMV of 95 billion for a total of about 150 billion in the fourth quarter, global stamp
again this is an approximation and we'll have a lot more clarity when they're in the report comes out more working into one of our new shows
6 interesting is if you take sat and soaked it with those of you that have her to say this before you know Amazon's easily
twice as large as you think it is to take my calculations from q1 to Q4
I get an annual number of Total Gym v-force partying third-party F450 Glen Jason is you know Walmart is kind of it a 500 billion
your Revenue rates
we we talk a lot about how I think you agree with me but that's that's the better comp is Amazon's total gmbh versus Walmart sales and
so so Walmart is still bigger than Amazon but I do think the lines are going to cross in 2019
I'm so that's going to be the first time somewhere in 2019 probably you wanted you to.
[12:44] Yeah we'll be able to say that GMB to GMB Apples to Apples Amazon is bigger than Walmart that's going to be interesting to keep an eye on.
[12:54] Last little bit on the marketplace side is Amazon it's kind of funny that press releases now are like 16 Pages cuz they usually put like a little. Of some highlights through the year and they have so many highlights now it's like
12 pages of highlights are they really highlights.
I'm the only one that picked out of there that I hadn't seen release somewhere else I thought was hers would find interesting is the announced that 200,000 sellers on the third-party platform are now generating over $100,000 a year in GMT
so I pre nursing small business platform there where you know if that's an international number but I would imagine it's split price 60% us 40% International and then correlated with that I've been seeing a lot of.
Amazon's running a TV ad campaign and it shows a train out of an a bunch of Amazon Fulfillment boxes with third-party seller stuff on it so they're really kind of,
camping up the third party aspected left.
[13:55] Yeah it's always chuckle to read those highlights because you'll get like one highlight will be like.
We added a PGA event to Amazon Prime video and then the next highlight will be and we sold a hundred million Alexa devices or so you don't seem seam
[14:17] Can we handle the trillion workloads on the AWS cloud.
[14:23] Yeah and the the Walmart Amazon is definitely becoming a horse race is pretty interesting and not just a reminder.
A ton of Walmart's revenue is grocery even with the Whole Foods acquisition very little of Amazon's revenue is grocery inside.
Amazon 30 crushing Walmart on General Merchandise Walmart's crushing Amazon grocery.
It certainly is the case that Amazon's probably growing grocery a lot faster than Walmart's growing general merchandise so if that doesn't doesn't bode well for for Walmart in the.
In the short term is those lines start to converge and then of course Amazon has all these other fabulous business so you know we mentioned,
the AWS gets a lot of the the buzz that's that's not entirely unfair cuz that you know that they continue to be going gangbusters that you're getting there the.
The clear market leader they have a huge weed over there their primary competitors Google and Microsoft.
Until you do when you're that big and have that much market share it's really hard to grow fast but AWS still grew 45% for the quarter so that was.
7.4 billion in revenue and you know much more profitable business so that that's been off 2.2 billion in operating income which is up 61% year-over-year so.
That is not a bad side hustle to have if your if your Amazon.
[15:52] And then of course they they have this other increasingly big category that they still call other the big chunk of other is this advertising Revenue.
Hopefully at some point in the not-too-distant future.
This gets spun out as a separate number but other came in at 3.4 billion which is up almost 100% 95% from last year and so you know.
If you think of that as.
The primarily that ad business is actually the growth rate is starting to decelerate so lightly as they do start to get a critical mass but it's still a huge.
Chunk of gross if you add up that the.
Portion of other for the last four quarters that are likely add sales it's it seems pretty clear that it's over 10 billion and add sales and.
[16:47] You know it is interesting it's like obviously becoming a much more important business for Amazon I think it was an analyst that counted how many times they mention the ad business on this call versus last year's call
and last year it was like 12 mentions this year was 25 mentioned so it's getting more mindshare.
And you know we're seeing all these wild projections of how fast I could grow so I think it was a new one out from pivotal research that said that by 2023.
Their ad business could be a 38 billion dollar business and even more so than eight of us.
Add business is hugely profitable and so you know if if they do grow that kind of trajectory is very likely that the ad business is is both bigger and more profitable than the AWS business in the next 5 years.
[17:35] Yats commit arson to see if they can get it to be that size it at that pace it would be bigger than Facebook I believe without a SIM Facebook Stan.
[17:44] Yeah it would be bigger than Facebook is now but yeah.
[17:48] Episodes it's clear it's going to be a three-horse race so so it's going to be Google Facebook Amazon I think dirty bigger than Snapchat.
[17:57] No I think they already are numbered if they hit 10 billion there they're probably number three.
[18:01] Snapchat I think is a Twitter somewhere around there so hard like 6 or something.
[18:07] Another part that I we always look at kind of your lie is that was all the past and this is kinda looking forward so Amazon
you know the way they do things they don't give annual guidance so they do tell you how it's coming in the next quarter so their practices
so looking towards 2019s the first quarter so the first thing they did as they kind of gave an overall warning which said hey 2018 we didn't spend a lot on centers industry,
data centers and employees but we are going to ramp that up in 2019.
[18:48] Unemployed fact that hit 675,000 people so I think in,
the not-too-distant future in the next three or four years Out imagine to get to a million people unless they dramatically changed the the workforce switch to robots or something
zipper that perspective last year capex grew 12% iron grew 14% so kind of signaling reading the tea leaves are I kind of got the vibe that is going to be more towards the high teens on those numbers may be excited,
120 kind of get the feeling again this is just kind of reading the body language which is very hard with Amazon
to be totally wrong I get the feeling they almost felt constrained by fulfillment capability in the fourth quarter that the maybe maybe they left a little bit on the table cuz they
they just couldn't get as much product in and out or something let me just be me while I have to see if any of the Wall Street analyst pick up.
[19:42] So so that's kind of you know it'll be interesting I think the stock will be a little kind of muted because.
While she keeps it when he comes on goes into a spending days until the groceries up
so for fourth-quarter projections Amazon put out a range of 56 to 60 billion that was below the Wall Street consensus estimate of 61 billion that add.
I'm at the midpoint that's 13.6% year-over-year growth,
and the high point and gets up towards 15% then the guy did towards pretty much what Wall Street was expecting on.
And then there a couple other tidbits executed since I'm going to have a couple to you go first.
[20:25] I did want to mention like one specific thing that came up a little bit in the
in the lower guidance was was what brought International is getting some traction there was recently a new e-commerce law that was passed in India that's going to be.
Potentially very challenging for Amazon and Walmart and so I and I think Amazon called out several times that there's some uncertainty about their their speed there.
Speed of growth in India as a result of this this new new regulation there.
[21:03] It is such a size u.s. space companies can't do business in India if you've beautycounter read the headline.
[21:08] Yeah if you like there's there's some ambiguity and how to get interpreted so people are hoping it's not that extreme but there's no version of it that's good news for for Amazon and Walmart who both invested a ton.
In that market and you know you know I'm not going to get that clearly has good access as they were hoping to that market so that's interesting but even with that that sort of.
You know what kind of muted level of enthusiasm that still puts Amazon's market cap white as of tonight at at like 840 billion and of course
you know they did briefly go over a trillion last year but to put things in perspective Walmart who you talked about.
Being larger than Amazon in terms of total revenue Walmart's market cap is like 278 billion tonight so so Amazon's market cap is the equivalent of the next seven largest retailers in the USA
they're the equivalent of Walmart + Home Depot + Costco Buffalo's plus Walgreens plus TJ Maxx and Target which is pretty mind-boggling of you
if you still think about it.
[22:15] It's a girl thing so I Walmart overall I think Walmart's growing low-single digits is that right at all.
[22:22] Yak like four.
[22:23] So is that that's what it is it's you you look at one point time you know the order about the same size as best we can tell right now, Jambi perspective but you know what will she loves his growth and when you have a.
1 / 200 billion dollar business growing in the mid-teens there's not many.
Accept apple and an Amazon that if you know to do that.
[22:46] Yeah dumb president is pretty awesome to be then.
So a couple other tidbits one thing that's getting a little bit of attention is you know they do not have a line item on the income statement for brick-and-mortar retail which is,
mostly Whole Foods and so this what is the first quarter when they now have a complete year of,
data from Whole Foods that is the first time that want the Amazon rather has his had sort of the true
look at same-store sales comps and the look isn't entirely favorable so it looks like they're brick-and-mortar sales are down 3% from last year.
And you know it it first you go huh does that mean Whole Foods is.
[23:35] Shrinking which Whole Foods West facing some some possible
but you know you also have to remember that that Amazon makes him aggressive price promotions in Whole Foods so the revenue from from some of those price promotions has some.
Some impact on sales but the the big item that that Amazon talked about was.
That when they do a by online curbside pickup from one of the the 60 Whole Food stores that supports that or they do delivery.
In one of the market that supports that that Revenue gets recognized as e-commerce Revenue rather than brick-and-mortar Revenue so for them brick-and-mortar means.
You you walk to the store and pick the fruit yourself instead of having a an Amazon pick our picket for you.
[24:32] And so they're they're alleging that that that contributed to the the lower sail brick-and-mortar sales some of that sales just shifted from.
From brick-and-mortar tab to digital in the in Amazon's version of the story but at the minimum it means.
Those stores aren't like wildly growing and it it also means that the fleet of other brick-and-mortar stores that Walmart has put out there the.
The increasing number of bookstores in nine go stores those still aren't having a material impact on revenue and.
[25:07] So that was interesting.
I did also you know it always comes up one of the big line items and cost in Amazon has every year and it always goes up by a big number is shipping so shipping cost went up 23% for the quarter.
I'm as you pointed out earlier they shipped 14% more units so.
[25:28] That accounts for you know a big chunk of that growth but also means their cost per unit had to creep up.
And it's it's always interesting to me a UPS had their earnings call today as well they actually had a good.
Good earnings call but but the.
The headline to me was that the CEO of ups for the first time and knowledge that yes Amazon's a big customer but they also are a competitor and we track them as such and that's a.
Basically a 180 from previous statements from UPS the day they really didn't think Amazon would be a competitor there's and that they purely saw them is.
A customer and I always like to talk about the fact that UPS isn't growing fast enough,
they're not growing a shipping capacity fast enough to accommodate all the
growth Amazon getting much worse want to get so it's almost imperative for Amazon to have some of their own shipping capacity and
really highlighting that I sort of backed into
do UPS as package number for 2018 and it looks like UPS shipped in in North America UPS shipped 1.5% less packages this year than they did last year so I wonder if UPS is ability to deliver,
some of their own packages which you know now they estimate that about 12% of their total volume if that's starting to have them internally impact on UPS.
[26:53] When I drive to work I go through a couple interstates and on a daily basis I C 5 + Prime delivery Vans the stasis is crazy.
[27:07] And I'm surprised like I mean aren't you in like autopilot and you're reading a book or something while you got so I'm surprised you can see them.
[27:13] I'm counting I just kind of play Amazon smile bingo.
[27:17] I like it.
[27:22] Cook's one of the other tidbits to the more detailed Wall Street reports will come out in the morning I'll treat anything that's kind of interesting there
but the ones I saw they do hot take kind of thing as well I saw her folks kind of.
Reappearing in sang Hey we're in a we are really interesting are overweight or whatever they're the recommendation is so it looks like everyone's bumping up their price targets to kind of the $2,500 share range
which is it comes true over the next 12 months or so that'll put Amazon squarely back into that trillion-dollar club.
[27:58] Summarize I would say Amazon had a great quarter. It was a really nice worth quarter but it is interesting you know over the years having all this for a while Amazon's always been growing
accutest 3x clip of e-commerce and now at a 70 70 billion dollar quarter ton of a scale though the rule of large numbers is kind of catching up to them and they're starting to kind of
get closer into that mid-teens e-commerce procrit so you know it's munition to see,
what does Amazon do to accelerate that do they care a lot of noise around the healthcare business and some other things that the Amazon to get into you than just wrapped up that.
When you're when you're clocking along that at over 250 billion dollars,
you have to take big swings at at the plates are the kinds of things are going to go through and disrupt are going to be there got to be a hundred billion dollar kind of opportunities for them to really move the needle and get that growth going to be,
reversing the see what they do to recover.
[29:03] Yeah I'm looking forward to watching it and podcasting about it and that's going to be a perfect place to leave it because it's happening again we've used up all our allotted time as always if you have any questions or comments about the show you can keep the dialogue going on our Facebook page or you can hit us I just got a ride up on
of course we always appreciate those five star reviews on iTunes and is a reminder that there's a chance to meet us in person if you're interested in attending the etail West show
in Sunny Palm Desert this month so as a reminder for listeners we have that special promo code
Jason Scott Jason Scott and that'll get you 20% off on your mission it's shaping up to be a really good show and I will put a link for registration in the show notes.
[29:53] Thanks for joining us everyone.
[29:55] Until next time happy commercing.
EP161 - Verizon Enterprise Solutions GVP, Michele Dupre
Episode 161 is an interview with Michele Dupre, GVP of Verizon Enterprise Solutions, live the National Retail Federation Big Show. We cover a variety of topics including:
Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Episode 161 of the Jason & Scot show was recorded on Tuesday, January 15th, 2019.
New beta feature - Google Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Tuesday, January 15th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your.
[0:37] Jason and welcome back Jason Scott show listeners we are joining you live live live from the floor of NRF 2019 Big Show here in the lovely Javits Center in New York City.
And we are in part 2 podcast Booth A and B I don't know what they're doing but they is where all the action is.
[0:56] Yeah if they keep doing a good job maybe they'll earn their way up to Booth a at some point.
[1:00] It's pretty much the gold tier here at at.
So we are excited to have on the show with us Michelle Duprey she is the group vice president at Verizon Enterprise solutions for retail hospitality and distribution.
So not only is she an awesome guess she has a longer title than you Jason which is just saying something.
[1:18] That's our new private area for gas is only a guess that have longer titles than me.
[1:22] Well there you go I think I fit the bill then.
[1:25] Will you tell appreciate you taking some time out to talk with us today Michelle tradition on the show we always like to start by getting a little bit of background about yourself and how you came to your roll.
[1:36] Yeah absolutely and again thanks for thanks for having me here today and then again we're really excited to be part of.
To be part of an Arab but where it where I started my journey with Verizon and just again the retail industry and how it's evolved.
So I do have responsibilities for the team that works with some of the largest and most recognized Global Brands not only in retail but also distribution and travel so,
you know again we service those clients globally we work with them to help them service there,
customers better but again my journey started with with Verizon a long time ago and it's evolved over,
yeah several years in different roles but really focusing on the Enterprise customer and you know again with the technology Evolution that clearly you see on the floor of a giraffe,
how you can see why Verizon continues to Young to evolve itself and continues to you no respond to the ever-changing needs of their customers.
[2:33] Cool and then so tell a suit so I get Verizon Enterprise Solutions and it sounds like you guys are vertical eyes didn't in any retail is there article we want to talk about today.
So so I'll just ask him some newbie questions just kind of soda does that mean the Verizon stores themselves you work with them or know you're selling more stuff to retail.
[2:50] No so we we go to market with in a retail meeting you know how we serve our consumers so the retail sector within Verizon I don't have responsibility for,
but again it's just that is becoming you know one of the test beds and again where we gain a lot of insight,
you know to what consumer demands are and do it all we've done a fabulous jobs over over the years just to get you no evolving and really working on providing that.
Yeah that great customer experience within the physical environment,
but also within our digital environment as those demands continue to grow to for the way consumers want to engage with our brand so you know we do a fabulous job and again it's a test bed,
I mean it's a great source of information for us to get our just again test the market and see what what what else is out there.
[3:40] Kosama soccer guy so let me restate that so you guys have these Solutions in your Verizon stores,
and you kind of dog food them outright you figure out what's working there and then you can go to another retailer and say hey JCPenney or you know whoever hears some best practices around
obviously conductivity but yeah when I go to Verizon store it's really nice to have like that dude with the tablet so I have positional awareness of where I am,
you know I think the cash register kind of like they have them but they kind of anyone can check me out it is that kind of what we're talking about.
[4:12] Yeah I mean I think it's two-fold I think it's exactly what you just said is that it's it's an opportunity for us to learn but it's also when we launch new products and services that we think are fit-for-purpose and again specific to retell,
Amino gives us the opportunity to do a sanity check to see are we on the market is it scalable,
you know beyond didn't and I think the other point about tablets that was you know getting Evolution that we recognized as a retailer very early on to get outside of you have behind the counter and get
in front of our customers and service that more effectively with a tablet and you know you look at retailers that continues to UNLV a widely adopted,
it'll application the way that they're serving their customers and brick-and-mortar.
[4:55] So when the reasons I'm excited to have you today is wheat wheel update on the show.
Are not around holiday time we get data from a bunch of sources about how consumers were behaving butterfly in a lot of the data sets that we get out of it it's heavily skewed towards desktop to use.
And I know you guys published some some insight about a holiday Shoppers and I'm guessing you're going to tell me that your data set.
Encompasses a lot more mobile users as well.
[5:31] Yes we did on the 5th year that we launched the holiday retail index in it and it does include you know focuses on the top 25 retailers e-commerce,
and attracts Broadband traffic so what I would say is that regardless of I think the mobile,
engagement continues to grow year-over-year I don't think that this Statistics behind how that consumers engaging really is you know it isn't any different so I think you know whether they're behind a desktop or whether they're on a phone
I'm again it's about the convenience but I think overall what the takeaway is is at the digital aspect of a consumer,
do you have their engagement with their brands that's where the the the traffic is significantly increased year-over-year.
[6:14] Got you and what were some of the top line inside from the study.
[6:17] Yeah so again like I said this is the fifth year that time that we've had the index in in what made this year very unique is just that.
The sheer volume of traffic that we saw starting November 1st so it was almost like you know Halloween was just a note in a dusted and over,
and right away came November 1st and every retailer had a full-on,
you know launch around you know just holiday and we also saw a heavier in again this is not associate with the index but again the other additional research that we do behind.
In a behind-the-scenes is that it was creating that experience for the anticipated and not coming holiday so that we saw the season get off to really really quick start,
I saw significant growth over you know 2017 and you know it.
[7:06] Throughout November we saw it you know just again significant growth patterns leading up to Thanksgiving which was a little bit unusual compared to last year,
of course Black Friday Saturday leading into Cyber Monday were really strong but that we saw significant weakness which again if you look at,
you know everything that's been reported on it's pretty you know it's consistent with what we saw you know early on in the in the holiday season so,
that continued and then absolutely we saw there was you know there's traffic and it was over the weekend she saw this you know that.
Natural Spike of when consumers are you know shopping and at home,
and then it kind of fell again petered off and then that last week right before Christmas just again it rallied up pretty strongly till the end.
[7:55] I call that the procrastinator pop that's that's where my shopping list how about you Jason.
[7:59] I'm super a proactive so I did everything on Prime day.
Add event listener believes that I have a bridge to sell you.
Do you have a I'm curious like so it feels like you're you're about eating some of the other day that we've seen that light.
The front half of holiday sort of over index versus previous years and the very end of holiday may have been,
under indexing versus the the growth we would traditionally expect.
[8:29] Yeah I mean I take the the the front half of the Season again and I think the season I think for you know it starts November 1st I mean I think historically it's just everyone rallied and it started,
are the Wednesday before Thanksgiving and then let into that weekend and that was the end of the end I'll be off but again I think you see this constant beat of the drum of consumer engagement,
and I ate it again I think it was really strong the first you know what I'd say November and then again we just saw this with this law,
the other piece that was interesting when you look at the statistics in the den,
you know Sunday seems to be one of those days you know where we saw you know we didn't see strong.
Yeah I was down here over here so I think that that's a consistent pattern and and they get I think that the opportunity for all retailers just to really Digest,
you know what what did they now throughout the entire season how are agile were they to respond,
and then going into 2019 in the planning season which they obviously already are is like what can they learn from it what do they have to do differently.
[9:32] Yeah I feel like one the ramifications we've already seen is there some retailers that like you know gave these like
midseason snap shots and they felt kind of Rosie and they probably raised investor expectations and now we're seeing the first rounds of like Ernie announcements and some of those earnings announcements aren't quite as rosy it feels like those retards are getting by.
A little extra punishment.
[9:54] Yeah it ain't and I do think because they saw strong a gagement on the front end you know I take absolutely you know that you know you would have you would assume that it would carry through the entire the entire season.
[10:06] So do you have a hypothesis for why I got a little softer like our people just Scott and I side more proactive and shopping earlier or did something happen that like there was less consumer confidence that I've talking to shut that I don't know.
[10:19] Yeah I know there could have been some distraction just in general but again consumer confidence I tagged you know absolutely it was there and,
yeah I think what we're going to find at the end of the season is that they're they're absolutely there are.
Some have been reported is that they've had really strong holiday seasons and then you know others I think they were probably a little bit,
yeah I'm taken aback by the by the end results because of the do you know the the traffic they saw in the front end so I think it's it's it's how they pivot
I think it's that the challenge that they all have going forward whether you had a fantastic holiday season it's just like well how do you repeat that because then you have the challenge there is that you got to set the right expectations. Going into the full you now to 2019,
and you know how do you repeat that going into you know holiday next year what's your this year actually.
[11:11] We call it comping the comp Center.
You might want to take a job after they had a soft here is my advice to listeners any thing that came out of holiday that like surprised you or that you think is a common misperception that.
[11:28] Yeah I think the piece that surprised it again I think it's it goes back to how a retailer is getting creative around,
you know engaging engaging our customers and it again I spoke to it a little bit earlier about just that the preseason kickoff for that November 1st it was is,
yeah really launched it and either you saw a lot of retailers being creative with,
again creating that experience so a lot of you know push for HomeGoods secreting that great environment whether it was for you know Thanksgiving or even going into you know into Christmas and Hanukkah.
But then but then also it's just being able to deliver that great customer experience so they're really good at the creative aspect of how do you get a how do you engage,
you saw a lot of flash sale so that time-bound engagement.
And I think overall I think retailers are really getting to become more intimate with their customers and understanding what their likes our understanding what their you know engagement patterns are through loyalty programs,
any adoption you know in that space it just in the maturity and I think you know five years ago I think consumers were a little bit so you know.
[12:39] Some of the aspects of knowing them a little bit too intimately were creepy and I think for the most part I think consumers are way beyond that.
Any on the other pieces is that once you have someone engage you don't want to just keep that consumer and gauge for the holiday season you want them to become a brand loyalists.
Post Holiday Inn for you know it ternity.
[13:02] Closer I get that you guys aggregate all the stated and you get some insights,
fur individual retailers can you provide them some some information that helps them to better so so it seems like you could,
yeah if you guys are running the network in a store you could say Hey you had this many people on the network and they were super active or.
They your network was too weak we need to up the bandwidth of the network and then such as like at the that layer even you know,
maybe Jason week we talked a lot about the mobile experience for a lot of retailers has a much lower conversion rate in when someone abuses their phone versus the website kind of a thing,
can you guys provide any insight stop retailer.
[13:41] Yes send it so the index looks at you know it's it's at a macro level and if the data is on on am I so from that standpoint the top 25 it says it is it is what it is
but I think we're retailers have the opportunity and and you know whether it's through their agencies.
You know whether it's through their digital marketing team that they understand their customers.
And I think with some of the you know was a Technologies and in some of the the geofencing and in the Loyalty apps and they're able to make that that intimate connection.
So I think that there is a combination I think it's no one data source.
Will tell you everything you need to be if you're a retailer I think it's it's understanding your customers based on what you know and then obviously looking at you know the external data in a data sources that are available in really mashing that up,
and in determining what is the best you know engagement and how do you engage with those customers on an intimate and personal level.
[14:38] Do you have an opinion about deacons they seem to be like hot five six years ago Starbucks have in every store and when I walk in there pops open the app but then I don't get that experience hardly anywhere else anymore at the seams like beacons are on their way out at.
I'm not an expert on him I thought you may know something.
[14:53] Yeah I mean I think that they've evolved in terms of another they absolutely still exist without a doubt and I think,
they're being used you know and I think this is where 5G will come into play to is just the ability to do stuff to do create this connected environment,
I'm at scale and I think there was some limitations when you look at it you know the cost of the devices the cost of the chipsets like those are the things that I think will really,
help of all this connected community that your retailers will have the opportunity to do but to your question around there because I think what we're it's a vowel from being of knowing who you are cuz I think there's other ways that they understand who their customer base
you know any retailer understands who their customer base is but it's understanding the flow so I think that there's a lot of the location-based applications that retailers are looking at
you know where today how effective is a display within a store how effective is there merchandising strategy in terms of product placement,
so I think that that's really the beat of the behind-the-scenes where they've learned to Leverage,
it wasn't just a customer-facing application but now it's kind of how do I help.
Build a better store environment and is the planogram that we've did you know is it working and do we need to make any modifications based on where the traffic flow is throughout the store.
[16:14] And you mentioned that the magic number letter combo 5G to Jason was just at Cs and here at the floor there's a lot of talk about 5G,
what started the thirty thousand foot level for for listeners that may not know what is 5G when's it coming and you know obviously five seems better than four or.
Is it 20% is it 20% better so and then not only is it faster but are we can get more coverage and maybe give us the high-level pitch on 5G.
[16:43] Yeah absolutely so again where it you know if you were at CSU you saw Hans and hopefully you saw hands on the on the our CEO.
Take the main stage for a keynote so we we strongly believe that it is again it's the Next Generation,
and it's the Next Generation from Tuesday and Finds Its what is that it's a new not you know it is the next Generation Network,
but it also will be so connected to the Next Generation device and whether that's a you know smartphone whether it's a you know iot device but again that's the pervasiveness of how we see,
the technology being deployed you know I think that there is absolutely the opportunity to get a 4G is not going away.
I'm so I think it will be complimentary and I think what you'll be able to do is really look at aplacate at the application truly at the edge and take advantage of edge computer.
What you getting that and other environments it just it was prohibited to be able to you know to do that so we're super excited about where the industry is going we're absolutely,
yeah positioned ourselves to be you know continue to be a leader in you know with 5G and Innovation and I think you know this industry,
we see it just unbelievable opportunity for them to be able to take advantage of it you know in the very near future.
[18:03] Stone example of like the edge thing is an autonomous car can do a lot of processing and then you cuz 5G so fast it can it can do offload more that to the cloud,
and you instead of kind of today those cars have to go doc overnight just to kind of get the data kind of give up into a cloud for processing and that kind of thing so it's is that kind what you mean by.
[18:23] Yeah absolutely I mean it takes it because if you think about what you know it's everything has been connected and iot we've been talking about for years and.
And you know it's the latency in the speed so when you push everything out to,
I'm out to the yeah just like that's where that kind of all comes the intersection no pun intended to the car analogy but it just that's where it all comes together and you know that I think that we see what the future can bring,
but I think it was a challenge that we threw out to the community is you don't help us cuz they had and there's tremendous amount of incredibly intelligent.
Visionary people that are out there and again we want them to help us you know crafty yeah the art of the possible.
[19:09] And then tell us what is 5G do you think mean for stores because a lot of stories I go into they have the Wi-Fi but it's like always a hassle right you have to go in find it and.
Does it connect you have to agree to terms and so it's not as seamless as you know if if I had not know if you know Wi-Fi level speed off of a of a network.
I'm totally against all that but then like what kind of store experiences are you a retailer thinking about that 5G will name.
[19:34] Yeah I think I think what will enable them and again it goes back to their the technology exists today but you think about video and you think about just the ability to look at an analyzed again whether it's this get out of simple model of
understanding flow traffic.
I was in the store but then also looking for characteristics of you know again what consumers,
are they might be wearing and we have yeah we've launched the 5G Labs of which were doing a lot of different,
you know again elevation around what does it mean and in one of the applications that were showing there is again that's it there's two that I think a really that are that will take off will they all take off but the ones I think are really relevant,
I miss being able to identify someone who walks in a store and the example is that they have yellow logo to a sports logo shirt.
And being able to identify that and then going back to your you know your comments about engagement is like well how do you personalize we know that you like,
a certain brand of sports attire you know apparel so that they can engage with you and whether it's you have some type of promotional activity,
I'm just again making that much more personal I think is but is identifying what are the patterns that you see with that and you just you can't do that today it's got it just the.
[20:57] Requirement for bandwidth latency speed and just the cost of Entry is just it it's it doesn't it's just not there so we see that continually to to evolve.
[21:07] Go to Jason walks in wearing his Lululemon pants and it says we see your Lulu enthusiastic come over to this part of the store to learn more.
[21:16] Alternatively it might say we see you and we women pants and willing to pay you not to.
[21:20] Please check the store security security.
[21:23] Fitbit could make product recommendations to the alternative the absolutely.
[21:27] Exactly so I want to turn to win the last Topic in it.
It's a good-news-bad-news thing for the industry after you guys enjoy this particular a good reputation in the security space so so Verizon Enterprise Security Services but the bad news is.
The reason you're always mentioned is some retailer gets breached and then you that they didn't hire Verizon the problem I feel like I've seen too many press releases where like you were the dissolution.
Can you talk a little bit about where the security services are and what some of the trends are.
[22:05] Yeah absolutely I'm an idiot I think it's you.
Looking at it from the standpoint of what you just you commented on we have an incredibly strong practice around helping you know organizations when you know the Anson couple happen so we're able to go in there and help them.
Intermediate and you know get back to get back to normal but on the front end and again I think that this is one of the important aspect of a good security practice is,
in a really understanding where your wrists are in the business so you know before the unthinkable happens we've created a really strong practice,
I'm at work with a lot of Major Brands not just hit retail cuz it got everyone susceptible to a potential you no compromise and breach in really putting salt leadership around how do we help.
[22:51] Be out the industry identifying you know the potential threats and attacks of the unusual it a traffic and visibility that we see throughout the entire network our Global Network.
And then also you know understanding the patterns that they know that's inclusive to their to their family and two there traffic correlating the two and then also looking for ways to it'll help,
prepare that when and if something does happen that they have the right practice in place,
whether it's notifying and working with the board of directors that's the other PR firms or Communications teams whomever that might be but it's again it's really just building that strong practice,
so when and if something does happen that you're well prepared but what retailers and everyone in the industry yeah they need to do they need to understand what information do they have what day do they have,
where does it set where is it in transit.
[23:45] And never let that information be accessible to anyone in the public and I think it's it's foundational to you no good security hygiene and I think that there is absolutely you know is that the Bad actors as we call them.
Is they continue to get smarter and and you know we have to stay ahead of the game and so does everyone else in yeah we really do work strong with them to do that so it's a growing field it's not going to get any smaller and I think when you look at.
It all Foundation lie to you know the leap from this connected environment that's going to continue to grow,
is it everyone needs to keep that in mind it's just whether year with 4G today and and you're going to create this in krino credible ecosystem of a disconnected environment,
everything you do today is foundational to the next generation of technology so it's really important that.
They know what they have in place today where it is and they have a plan that you know if and when something does happen that they can execute on it very quickly and stay out of the news.
[24:47] We stay out of the news seems like it should be the slogan the it's one of the topics I've heard come up in a lot of the the presentations that the show has has been about this like.
Emerging awareness of trust and how important trust is for Palmer success and obviously these,
these security Miss taps our line of the the easiest ways to lose that trust and as you rightly pointed out.
As connectivity gets better and we moved to 5G and you know we only have more devices they're not part of the customer experience it's a lot more vectors for those Bad actors to attack so I feel like protecting that trust,
is more important than ever and also harder than ever.
[25:30] Yeah I mean it's more complicated and I think it's just understanding you know if you create and live in a complicated environment it just you got to have the security practice.
Yeah the compliments that so you know again it's a 10 think we're going to live in this world if you think about where we were five years ago the adoption of smartphones
it just iot smart vehicle Smart cities you know I think that they would just security is just such an important aspect.
About Evolution and and you know again we're here to help and and will continue to be here to help serve our customers and and really serve the industry.
[26:07] Michele that's going to be a great place to leave it because we have used up our a lot of time but we greatly appreciate you taking time off in the Florida come.
Talk to the listeners and as always if the listeners want to follow up on the conversation we encourage you to jump on our Facebook page and of course we always appreciate those five star reviews on I-10.
[26:26] Michele thanks for joining us do you tweet or if if listeners want to follow some of the thought leadership from Verizon around 5G or security or some of the topics we talked about the retail flavor where should they go.
[26:38] Yeah absolutely so you can go to verizon.com and you can see everything that we're doing across all Industries and I'll practices and we're here today on our Verizon Enterprise
so look for us out there and and yeah we are actively tweeting so.
[26:55] Awesome until next time happy commercing.
EP160 - CES 2019 Recap, and NRF Update
Episode 160 is a recap of the 2019 Consumer Electronics Show, and an update from the Nation Retail Federation Big Show.
Episode 160 of the Jason & Scot show was recorded on Monday, January 14th, 2019.
New beta feature - Google Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this is episode 160 being recorded on Monday January 14th,
2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your clothes Scot Wingo.
[0:40] Jason a welcome back Jason Scott show listeners Jason's is one of those rare episodes where we are actually in the same room.
[0:47] I know it's super exciting I've always enjoyed getting the opportunity to spend some real life time with you.
[0:53] Collie time yeah yeah so we are live live life here from New York City I am looking out of Jason's fancy hotel room and I can see the Empire State Building which is home to many Amazon stores and fulfillment centers near in New York.
[1:08] And there's a Starbucks in that building that delivers.
[1:13] Leave it to Jason to know some Starbucks trivia.
[1:15] I'm desperate to find a way to work in a building.
[1:18] What is January weather in New York City that can only mean one thing we are here for the national retail Federation Big Show that are at Big Show and in that Spirit tonight's theme is trippy parts
are are fearless reporter Jason has been traveling the world to bring you the latest and greatest information about what's going on out there
I'm in first you want to cover he is you went straight back to back I think from Vegas to New York by past the family so
hi and bye guys and he is going to start out with ACS report and tell us what's going on there and then we'll jump it in her up so
what's good to talk Jason with what were some interesting things you saw at CES that had retail implications.
[2:03] Yeah so I feel like there was a fair amount of retail specific stuff at CES this year while the number of retailers had boo,
and so a lot of the Chinese retailers in particular had big boost to TSO Ali Baba had a big boost there for,
Services they would promote in the US are like,
their supplier services in their B2B Services they have a an alternative to AWS in China that they would offer to Western companies that want need to host Platforms in China,
but the bulk and they had one novelty they were showing and a new,
voice translation capability that was real time audio translation so Google kind of made some Buzz at the show by announcing these this new generation of their,
translate that lets you talk in your phone at transposes it in another language,
but you hang your phone into someone they can read it in their language speaking their language and you can kind of hand the phone back and forth so Alibaba came up with this technology we're in real time you talking to him.
And the guy next to you here's a translation in his native language and speech back to you so I got to speak to someone who is in need of Mandarin speaker and like.
[3:29] It mostly worked it's not like the grammar is a little,
monkey but you could totally get the antenna.
[3:35] Is like a translator where you speak and then you pause and it speaks and then the other person speaks and you pause so it's got like that and if you.
[3:42] So that the Google when is the definite pause in this Ali Baba one if you're speaking long enough they will get the translation before you finish.
[3:53] It's hard to like keep your brain going while the things speaking in a foreign language.
[3:59] Intended for remote interactions they're demoing it in a you're standing right next to the person but you are kind of in a isolated Booth so you only heard.
But it's remarkable how well that technology is getting the Star Trek Universal translator is basically here.
[4:18] Or the Babel Fish.
[4:20] Absolutely so but half of Ali Baba's Booth was focused on,
predominantly consumer electronics and Home Products that Ali Baba designs manufactures and sells on the platform so in addition to being a retailer and a service provider,
Alibaba is a product manufacturer and then their own hand sets that are sold in China they have a bunch of like,
smart home appliances and things and their pitches.
[4:51] Is there.
[4:53] Leveraging all the data and warnings from their their voluminous shopping interactions to identify needs in the market and design these products,
and I into a half a booth was dedicated to promoting those products and potentially selling those products in New Markets,
and I say that because that's a amongst all these retailers so jd.com,
which is like the second biggest e-commerce site in China Alibaba zapier Marketplace they don't actually sell their own stuff other than those,
products that they make jd.com is primarily a direct seller so they're more retailer that,
sell wholesale products in China they also had a big booth,
same story half their Booth was dedicated to products manufactured by jd.com sort of reinforcing this theme that,
retailers that had the most intimacy with the consumers have the most inside that they can use to make the most relevant products,
what time is also showing some of the retail technology so,
in China jd.com is doing pretty significant amount of deliveries via drone in so they were showing all their drones.
[6:11] The drum Vehicles usually say drown people.
[6:12] Usually when we say drone people think of the quadcopter that's flying packages and jd.com.
[6:18] Does have a like high payload quadcopter and they claim.
[6:19] Does have a like high payload quadcopter and they claim that they make,
thousands of deliveries a day with these things in in remote villages,
but the way higher volume stuff is they have autonomous vehicles these little mini size Vehicles even smaller than like a smart car that are mostly like storage capacity and it's kind of like,
shopping cart the drive to your house and so those things are kind of interesting they were showing some of the,
version of Amazon go type technology so they have vending machines that use facial recognition and so you've you've basically like storage a WeChat credential,
and you walk up the vending machine you just open the door take whatever you want and it it authenticate you with your face and charges your tencent account.
For the purchases so that was interesting.
[7:15] Alibaba has technology like that too for their The Coloradoan o and said omni-channel they call it online and offline 02.
[7:23] Yeah online to offline and and Alibaba definitely has initiative facial recognition they have pay with a smile that,
like I Smile as a gesture after the face recognition to to initiate transactions I didn't specifically see them demoing that in their Booth this year,
[7:43] The Chinese providers are like big ecosystems of of these interesting Services some oriented at Commerce of some sort of broader than that,
the third Chinese retailer there that would be even less familiar to listeners unless you spend some time in the Chinese market is,
I called sooning and they're the largest brick-and-mortar retail are in China there a conglomerate that owns a bunch of different kinds of stores,
the biggest chain is like 1700 consumer electronics and home appliance store so sort of like a Best Buy in China,
they had a booth and in their Booth they were primarily showing technology that they had developed for experiences inside of retail store,
they were showing produce displays for a grocery store that way all the,
the produce inside they detect when the weight on the Shelf changes so they know an apple got picked up for a banana got picked up and they have a digital sign that shows you,
product content relevant to that banana what form the banana came from how many days it'll be fresh all those sorts of things that a lot of in-store analytics so they were using video system to measure store traffic and I grabbed while time and all that sort of stuff.
[9:01] They had a,
at self-checkout experience they had a virtual try-on experience where your body was mapped in 3D and so they,
apparel on you that's not paper towels in front of you it sort of on your body and is you turn you see the profile and all that sort of stuff so they had all these,
different retail vignette showing technology that they had developed for their stores and what was interesting / peculiar,
a bunch of these people had badges from Palo Alto California from sooning I asked and they said they had a R&D lab in Palo Alto they have no,
that's out of Asia like they're mostly in China that a few stores in like Hong Kong there.
[9:48] There depends in the booth.
[9:49] There comes in the booth they're not trying to sell any of this retail technology to other retailers they're not trying to license anything outside of their home market and so.
[9:58] It baffles me why they would send it.
[9:59] Cuddles me why they would spend a bunch of money and have a booth at CES I mean it,
my Boost at CES just to generate PR going to be Western press.
[10:15] Maybe there are a lot of people go to CS cuz there's the component that is good place to go get little Lego blocks right so maybe they were trying to get,
component vendors to say hey come up with a cheaper screen for our future digital self or something sometime sometimes those kind of conversations.
[10:32] Totally viable that that would be a good place to like find new vendors and show them some of the things they're working on it.
[10:38] Expensive way to do it so well these guys gaited in like a retail technology or like you stumbled upon them as you walk the moon.
[10:46] Yeah mostly you would StumbleUpon I'm so that,
the Busa TSR sort of loosely grouped by use case so most of CES is into big venues the Las Vegas Convention Center which has three big Halls the North Central and South Hall,
and then the Sands convention center which is still called The Sands convention center but it's actually not connected to the Venetian Hotel,
the North Hall in the Las Vegas Convention Center is mostly Automotive so none of the boots I mentioned are there the central Hall is sort of the original CES Hall it's all the television and home entertainment and.
Berkeley the biggest longest running consumer electronic companies have boots and exhibited forever so that the huge Marquee booths in the central Hall are Sony Samsung and LG,
so Ali Baba had a very big boost,
in that Central Hall not quite as big as like those three but the next step down from those three,
The prominent location and I presume that was cuz they were trying to emphasize their home entertainment products predominantly.
Southall was computers audio technology drones and Robotics in their way,
retail Pavilion so none of the.
[12:15] So none of the companies I.
[12:16] Engine wear in the high-tech retail Pavilion the high-tech retail Pavilion was.
[12:21] A small splattering of Technology vendors that had sort of Point Solutions so there was like,
vendor that was doing like virtual makeup there's a vendor that's doing geolocation in the store,
and some reason why even more preferred vendors of vendor that sells vending machines that clean your eyeglasses while you wait that they're trying to sell the retail stores.
In the most Buzzy thing in the in the high-tech retail Pavilion was a bread box in an autonomous Self Service vending machine that bakes the bread and then dispenses freshly baked.
So the bread. Was kind of a hot Buzzy thing but like if you walk this high-tech the billion at CES it feels.
[13:12] Small subset of what you'll be here in New York at the.
[13:13] Subset of what you'll you'd see here in New York at The Innovation Pavilion in inner mouth.
Invite if you're going to exhibit one showing you're one of these small vendors CES does not feel like the right show to meet a bunch of,
retailers that would be interested in your products so I didn't spend a lot of time there sooning and JD were in that Southall,
the so those were all the sort of retail Focus boost and Walmart does have a booth in that Southall that was sort of just outside the high the high tech The Village,
and it's basically their jet booth in it's basically recruiting sellers for the jet / mart Walmart marketplace,
for the first time.
Amazon had went from no real booth at CES that's in small presence in the past and.
[14:09] We've had Marketplace boots where they recruit sellers.
[14:12] Voice Booth before they've had like the treasure truck and then the last several years they,
if that works with Alexa in a million votes in the show 4000 both sent one gaze exhibit space so the first thing they did,
talk about it this on the show before but a gimmick than Amazon does the corporate headquarters is they give away free bananas,
2 employees and random people walking by their headquarters in Seattle,
exhibit hall there was a Amazon banana stand giving away free bananas that just felt like a brand building thing and they had like a social media contest where they're encouraging you to,
tweet out the banana stand and in Winsome Echo prizes.
Did I saw they did not have a Marketplace booth that a dedicated booth in the automotive section talking about Alexa for automotive integration,
I said I was in the North Hall it had the biotin which is a Chinese,
vaporware all electric car that was debuted last year that's a new models this year and Amazon had that in their Automotive section the outside of BMW in there and they're talking about cars that have heavy,
Alexa integration in the dash as the cabin 10.
[15:32] Yes I borrow the Amazon Alexa Auto is supposedly shipping I don't know I couldn't I did not get invited to get in.
[15:40] I confess I did not try I probably should have.
I feel something that I feel like you called me out of the podcast thanks for.
[15:48] You really let here.
[15:49] Exactly the first episode this year that you didn't.
[15:52] Mock my title.
[15:54] You're like mocking me for.
[15:55] I think if you're a chief creative digital strategy officer you would have had this figured.
[16:01] I would have figured out how to get a Amazon how to enter.
Prisoners of the Amazon Auto is a device you can plug into the auxiliary audio input in your car that that sort of,
is a OEM Alexa that you can add to your car the people are up ridiculous got her excited about,
so they had this Auto thing they were that was mostly probably targeted other car manufacturers to you know convince them that they should be using Alexa,
in the Sands Amazon had a huge exhibit,
demonstrating all of the devices that have Alexa integrated into them and that was a super high traffic Booth so Amazon had a huge footprint at the show through all these different booths.
[16:48] That's how you tweeted a toilet from that exhibit.
[16:54] I treated a Kohler toilet that has Amazon in.
[16:58] That was not a.
[16:59] That was not actually in Amazon's Booth it was in coolers booth that we do all definitely need this toilet has a automatic.
Open and close function in so you can use Alexa to put the toilet seat down which could potentially result some marital problems and some some relationships.
[17:14] No problems in some relationships with the.
[17:18] Use case is by.
Just to have an Alexa in your bathroom so you can do things like run the water set the mood lighting play music do you know it's more of a bathroom control than a specific toilet control.
[17:31] But if you ask me it's a pretty crappy integration.
[17:34] Balloon pump.
Fancy bday in it so you can do things like pre-heat your toilet with.
For people that live a different life than I I do.
Send anywhere couple other boots that had some like just interesting retail vignettes in them so Qualcomm is a big chip manufacturer there would have called ingredient company they make,
Epson ink a lot of the devices we use in their most famous for making Wireless chips that are in a lot of the cell phones for a long time they were in Apple phones but now there's a big falling out in so I don't think Apple phones use Qualcomm chips anymore.
Mom was showing a whole set of retail use cases that were.
[18:20] Enhance by the coming internet of things so they made a simulated music festival and they showed examples of digital signs.
[18:30] We're Dynamic can change based on the composition of the crowd they're using video Analytics,
image of the crowd and their departed and they're doing sort of artificial intelligence digital signage based on all of these these signals that the signs were in taking they Envision that you would have morrible beer carts in this music festival,
and all the mobile beer carts knew exactly how much beer they were on had left and they knew,
the crowd was in the area where the cart was in so they could do things like,
say hey we have too much beer over a year in this part of the Pavilion and there's way more demand over here but let's tell the cart to move to where the demand is order replenish,
I meant to do those kinds of things they were showing up pretty robust.
[19:20] Digital fact egg use case which I've talked a lot about my Affinity for digital fact eggs,
downsides of most digital fact exhibitions today is that use proprietary Wireless Solutions so you put these tags on your shelf and you have to buy a hub,
from that manufacture or a bunch of hugs that,
speak over proprietary frequency and protocol to all the tags to Qualcomm things hey these tags are big thing there ought to be a lot more of them but they out of use Open Standards like Wi-Fi mesh and Bluetooth sobaka,
showing some reference designs for that they're showing a lot of video analytics to measure the crowd and know how many people.
[20:02] I was enjoying the music or not and you know they had to use cases where they would change the genre of music is the crab is losing interest and things like that,
yeah so they were they were I wouldn't say any of the customer experience words were perfectly Polished but they were you don't thinking about how.
Well then you could change the retail experience which is which is interesting to me Panasonic.
[20:27] I just wanted to detect when there's more than a hundred people in the store and caught more cash registers.
[20:35] Obviously if you have those video analytics like they're certainly are simple people counters that are they exactly there's too many people in line at the cash register but your.
[20:43] Got your right light.
[20:45] The proactive way to solve that problem is know how many people came in the store know what the average dwell time is and be proactive like once once there's too many people in line it's kind of too late.
[20:54] I feel like there's all these people cuz they're on the mountain they think about all these user experiences and women really nailed some of the basic ones yet down the kind of at the bottom of the mountain.
[21:03] I think that's up for sure theme of these two shows is that so I could see to show a lot of the bells and whistles and there's still a lot of blocking tackling to be one,
Panasonic had a like an additional the Consumer Electronics they were showing a new pickup Locker so a buy online pickup in-store,
at a locker experience.
[21:24] And they're trying to solve.
[21:24] They're trying to solve a very real problem.
Walkers for produce so they had lockers that were refrigerated and lockers that were freezers and so they're in their Vision was,
you buy the groceries they partition your groceries into cold and Frozen,
put them in these refrigerated automated Walkers and so it sort of like Amazon Locker for perishables.
[21:50] That's something that's like active in Japan and they're trying to bring to other countries or is it was.
[21:55] I think the Panasonic probably isn't used anywhere I think it's a brand new product that they Envision selling to retailers so we'll see if that gets any traction they also had like.
A common theme in CES in a shiny bauble a lot of people talk about is blockchain so they had a.
A food cart that was an autonomous vehicle that drove the produce to your house and it had self checkout and it had blockchain for all the produce so you could you know know the,
you could verify the origin of all the produce in them anything was recalled or something like that a little silly and more forward-looking that interesting that they,
spent a bunch of the space and they're super expensive CES Booth to think of these sort of retail vignettes and then much more interesting to me.
[22:46] John always has a big booth there despite the fact that way,
Cameron sales are decreasing dramatically as everyone uses their smartphone but,
built-in their Booth a bunch of,
Instagram photo opportunities and you walk around CES and people were standing in line for like 30 minutes,
picture taken in a bathtub full of yellow ping pong balls or in a swimming pool full of rubber duckies or you know all these these different like super colorful well-lit vignettes and very much reminded me,
might there now he's dead a dedicated Instagram experience tours things like the Ice Cream Factory in San Francisco where people pay forty bucks to,
coincide a venue that has a bunch of pretty sets to take photos of themselves to share on social media in,
it's great experiential we talked a lot with retailers about creating opportunities for digital souvenirs for your Shoppers and it and the Nikon booth just seemed like a particular good example of,
of creating these these digital experience as a sort of mementos of your visit to the booth and it seems like a smart tactic for retailers to be thinking about.
We've heard of some retailers even using the amount of the social media that their physical store generates has a kpi which is interesting and then last.
[24:15] And then last there's a.
[24:18] Avenger there it's been there for a couple years called physics and physics is taking up the mantle of Google Glass so they,
glasses that you wear that have an augmented reality display that are primarily intended for industrial purposes so,
car mechanic to wear that has like schematics of the automobile well while they're working this year they,
they debuted their first consumer product which is $1,000 clone of Google Glass as a much higher res screen that's much bigger,
I wouldn't say it looks any better than Google Glass much more processing power behind it and,
not sure they're ever going to sell a lot of these but it was interesting the created a bunch of vignettes for how people might use them in one of the vignettes was a shopping vignette where you could put on their prototype glasses walk into the setup store,
and they would everything all the product packaging you look at.
[25:22] The physical packaging with digital information like is a gluten-free is a kosher all this sort of things and I do think that,
A for product information is really interesting sort of thing people are way more likely to use their phones that they already own and carry with them than they are to use these for project glasses but it was a nice visualization of the con.
[25:48] Yeah I wanted to tell me where on the Shelf to find it cuz my wife wants a very specific thing and then I spend like the bulk of my time finding that very specific thing.
[25:56] They absolutely did have that use case like we caught wayfinding we're essentially.
You about a list in the the classes have sort of GPS directions saying turn left turn right and walk you to the to your wife's items so she that would definitely approve the wife approval factor in your family.
[26:12] Awesome I need all that I can get.
[26:14] Yeah so that was a lot of the stuff that jumped out at me as being particularly retail specific at the show.
[26:20] Cool and so as you know I've been thinking a lot about the future vehicles and I saw there was tons of interesting news that came out of Cs around
autonomous vehicles in electric vehicles one thing that's kind of the summer I saw lead with the CEO of waymo
was out there saying
hey the sky prior to see us become admitted in an interview with reporter he doesn't see us getting to 100% autonomy so they've been running these vehicles millions of miles even like tens of millions of simulated miles
with the finding are they to do okay in perfect stereos but things like
tree shadows and then as weather gets bad like Randy Rhoads they do really poorly,
it's one of the things I saw out there was kind of more limited autonomous vehicles so shuttle service that will go from point A to point C kind of thing did you see any of those when you write CS.
[27:18] So an interesting Cadence you Tennessee at CES is,
people show very early prototypes of stuff it's not going to be in the market for many years right tires used TV is the sort of example,
before there's ever any content or you could ever buy a TV that has 8K resolution,
there's a bunch of 8K TVs that are kind of Novelties so that when you're when you're you go there and it's like a magic there's a TV with twice as many dots as you've ever seen before you can't buy it for several years but it's cool though.
[27:49] Look at this picture of an apple spinning with some cool water blobs on it.
[27:55] Next year is it gets closer to reality there's there often are way less of those TVs because the the few,
being shown now are,
really store close to release and they're usually pretty rough because even though they've commercialize this TV in the ready to sell it and they have things they didn't have the year before like a price they still lack any content right there.
Of examples and almost feels like it loses traction as it's getting closer to commercialization and then you come to the show the third year and it's like,
ATV 8K TVs are ready for the general public now every TV you see is a k and that's sort of the the the Cadence so in autonomous vehicles last year felt like the year when,
everybody had autonomous vehicles just for the novelty of it and so like,
all the car manufacturers are showing and Thomas Vehicles a bunch of companies we've never heard of where showing autonomous vehicles and all the ingredient companies like Qualcomm and Intel were mainly talking about how their chips are driving autonomous vehicles in video which does a lot of the,
the heavy processing for the vehicle like everybody's talking about it this year.
Middle year there was less autonomous vehicle hype the autonomous vehicles shown.
[29:19] Completely commercialized or ready for Primetime that it felt like the vendors were having more practical conversations with them so it like.
TVs can probably iterate faster than a trama vehicles.
[29:30] Very fast.
[29:33] Saying you shall expect that we're all be driving autonomous vehicles next year but it feels like we're in the middle of that cycle so.
[29:38] Cycle so.
[29:41] The consumer car companies were away last emphasizing that autonomous vehicles the BMW's and in Honda's Ford Tollbooth last year was dedicated to autonomous vehicles that wasn't true this year.
A lot more B2B autonomous vehicle use cases were being shown and it was like public transportation people movers it was a lot of these autonomous drone delivery of package,
on public roads or in hotels are all these different use cases like that in the world bunch of commercials,
like use cases like there's a lot of people that are pitching like,
way before we have truly autonomous vehicles will have commercial trucks that are autonomous on the freeway and they hand over control to a remote operator,
when I get off the freeway for example and so there are more of those kind of use cases.
[30:38] I think it's interesting cuz I'll be a freak we have the news on when I'm like working and I'll hear some talking head come on and say you know,
we should plan on vast unemployment in 5 years cuz of all these we won't need truck drivers and Uber drivers and everything,
we've lived the Commerce experience for 20 years and we're at fitting on whose numbers look at 15 to 20% penetration so,
I think you know I think that's a little bit further out than people think it is I think they're the kind of reading too much into.
[31:12] Everything I say is not going to put truck driver like 50,000 truck driver short of what we need right now right away.
[31:18] Same time.
[31:21] I can't hire enough truck drivers in they're all like escalating pay and competing with each other and so the premises if the trucks can run at honesty in the freeway but then,
operator has to Take Over Control.
[31:32] Take Over Control.
[31:33] To drive it off the freeway to the the store or the DC you still need people.
A person can now manage more trucks they can essentially they have more delivery capacity for their labor and so the.
[31:48] The premise is.
[31:50] What's close the gap between supply and demand like probably doesn't like obsolete a bunch of jobs in the foreseeable future.
[31:59] But even then I go back to like my previous statement like my cell phone drops out a lot right jack making calls and,
I get really nervous of some guy in Phoenix driving a truck across five trucks across country in,
is is LTE drops out when he's on the ramp there I'm not sure where you can quite ready for a lot of these guys take a lot longer than people think.
[32:26] Absolutely well in there like they talked about like there's three fundamental technology platforms that need to happen that haven't happened yet.
They're all saying that like for their.
[32:37] Brittany practical for there to be a lot of autonomous.
[32:39] To be a lot of autonomous vehicles,
Gambia islands like the vehicles actually have to talk to each other and know where they are right and so not only do you need that good Wireless communication that you mentioned like you can't have the LTE but it's there's way more connections cuz I'll.
[32:53] Way more connections cuz all the vehicles are two paragraphs.
[32:55] And so the premise is that when 5G is Broad we deploy the next generation of Wireless technology.
Attributes that are more friendly to autonomous vehicles it's faster it has way more capacity for more devices and most importantly,
has way lower latency which is super important for like you can't you can't have the wireless going there's a dude in front of you and then have 130 millisecond lag before you hit the brakes.
[33:26] Where it where we see you're away from 5G being deployed at all much less like ubiquitously deployed and for your point,
maybe it'll work as well as promise maybe it won't there's a huge.
No One Believes that these things can be autonomous by just using cameras and sensors they all need this light our technology in the light our is kind of like a laser version of radar,
and there's a lots of controversy like the best working lidars are super expensive and have some negative side effects like,
potentially could blind people and they could ruin,
regular CCD cameras and so there's actually this big problem the vehicles need regular cameras and lidar and the lidar actually burns the the regular cameras,
signs of light are there way safer for devices and eyeballs but it has range limitations and things like that,
that's tough to be figured out so I totally agree like I think cars are going to have more,
amenities for easing driving in the near future but I like yeah I don't think we're just going to be like picking picking menus on Google Maps and and arriving there.
[34:39] Switching gears pun intended
there another thing you touched on was voice and I remember last year you kind of proclaimed it was the year that Amazon kind of stole CES arrest reports that
apple with their Siri platform in a Google with their assistant platform
I tried to kind of catch up to Alexa at CES this year although Apple didn't have a booth which I think was one of the first time so how would you score those three kind of
contenders and how they did.
[35:11] Why would I should go back two years I'd say 2 years ago.
[35:13] 2 years ago.
[35:15] Amazon had to show to themselves until they tell you what they didn't have a booth but they were,
embedded in their bunch of products that work with Alexa 2 years ago and last year the hand,
who's that work with Alexa turned into thousands of boost that had products that work with Alexa so again Amazon didn't really pay for a booth but they got huge buzz and footprint in their logo was everywhere on the show Google show,
last year but it was mostly with an advertising present so they had their own booth that they paid for the page.
There their logo on all the trans in Las Vegas and all the taxis until you're just looking around Las Vegas you go oh man I saw a bunch of Google.
[35:58] Google logo.
[35:59] And I saw a bunch of Amazon logos but I would argue Amazon dominated because,
all the Amazon logos were free and they were in products you could buy and the Google logos were mostly,
paid advertisements for for a handful of Google products that did not have huge penetration so now fast forward to this year and I feel like,
continue to make progress the Google is starting to catch up so the most common thing you would see now in a,
is in Words with Alexa and works with Google Assistant logos side by side it was on,
we agreed on the treatments and so there are lots of Brands where support for both products were in there to remind listeners which kind of two tiers of products there's products,
Alexa in it so it actually like is the assistant than you usually can talk to it,
and there's products that work with Alexa right like so a light bulb you know works with Alexa Smart Lock Works with Alexa a Bose or Sonos speaker,
probably has Alexa built into it the toilet odd we had Alexa built into it.
[37:19] They're both so you can you just kind of switch conversations and haven't OK Google / Alexa conversation.
[37:25] So they the ones that I saw mostly had an interface in you selected one of the other like I assume you could pretty seamlessly toggle back and forth but it wasn't like,
you could use either utterance and Trigger either assistant and way more common was devices that worked with both than that had both embedded in it like a lot of appliances like a refrigerator,
might have a smart assistant embedded in it that you actually bought one ski or the other you bought the Google Assistant version or you bought the Alexa version.
[37:58] And I've noticed you haven't said Siri in this conversation.
[38:02] So I sew a Amazon his net,
Apple has never had a booth at CES or at least in modern era has never had a booth at CES they many years they winzy yes because they launch the iPhone 11 years ago,
during CEO never one time and they sucked all the announcement out and Walt Mossberg was at CES and Steve Jobs called him and said hey we're having this event and I really think you ought to come mini cannons wall,
wces and go to the the first iPhone announcement,
and their many years when the most prominent product category at the show is stuff that worked with iPhones or that work with Apple products but Apple's never had a booth and again they did not did not,
for home pod this year so they still didn't have a booth I'm sure they had sweets where they were talking privately but there is very little.
Siri stuff embedded in products and to my knowledge I didn't see any products where it was like.
Google Amazon or Siri it felt like a two-way party the one place where Apple in are two places where Apple integration showed up heavily,
the the Sands has a hall dedicated to home automation and apple has a platform called home kits.
[39:26] So that every exhibitor.
[39:28] In the home automation section probably had a logo saying it was home Tech compatible and again Appleton have a booth in that section that homekit was definitely the most prevalent.
Call for home automation and then surprised that Apple pulled off at this show.
Who is famously sort of Walled Garden company.
A good experience you have to buy all our products if you want Apple TV you have to buy an Apple TV if you want Apple music you have to listen to it on the Apple product I'm so proud to show,
you saw those walls are eroding,
Apple actually launched a skill for Alexa that what you listen to your Apple music on your Amazon device which is unprecedented in shocking and then you got to CES this year and surprise.
[40:19] Apple in embedded.
[40:19] Embedded are play in most of the major TV manufacturers platforms so you now can get all the,
Apple TV content on a Samsung or LG TV without needing external hardware and the,
very likely is going to have a meaningful impact on Apple TV sales,
Roku is already destroying Apple TV in terms of market share in this will probably make it worse,
everyone's assumption is that Apple's about to make a major content Play Everybody expects Apple to have a pay-per-view video offering,
in the near future the complete compete with Netflix and the,
how has essentially as you can already buy individual content from Apple Apple is essentially made this decision that they can make more money,
as a Content publisher and they want to have his brought a market for their content as possible so they made this dream that,
from being a Walled Garden to being a open system that works with as many providers as possible.
[41:26] We've talked about it seems like things are thawing between Apple and Amazon these know so let's see,
Prime TV showed up on Apple TVs I think was the first thing and now we're seeing them kind of so the skill being Alexa there's an apple music skill on Alexa,
yes it would be interesting to see you could you have one of these Amazon Alexa TVs and get to some apple content to say say to Alexa hey ask Apple to play.
[41:57] Yeah absolutely seems like it's heading that direction the one that gets voted on and off the island a lot as there's a few Alexa devices with a screen like the Alexa show
and various X Alexis enabled YouTube to be on or off of those things in at the moment you can get YouTube on your Alexa show.
[42:15] So anything else from CS that you want to hit.
[42:20] So we touch on a couple of these in so I'm not going to Deep dive anyone but just us or the Highlight if you walked away from the show and said hey what.
[42:26] Walk away from the show and said hey what were the.
[42:28] Themes of this year show.
Underpinning in this whole show is there's this new thing coming that's not quite here yet called 5G and so falling that same kind of.
Nioh release actually released last,
a ton of 5G height with fake products this year there were fewer boost talking about 5G but they seemed very close and the the carriers have all announced that they have,
it's now and they're going to be doing appointments throughout the year and it don't have sort of meaningful penetration of 5G by the end of 2019 now that,
you can take multiple years to have the kind of 5G coverage that we enjoy the day with LTE which is the 4G network.
It really feels like we're at least a year away from meaningful consumer experiences and in fact there's like controversy.
[43:22] Factors like controversy this the earlier.
[43:24] IG this happens with every new iteration AT&T has rebranded some of their for G,
at work is 5G and they they got like a lot of funny social media Burns Teemo,
a funny video where they took a iPhone in AT&T iPhone and it showed the,
you have 5 bars of 4G LTE signal and they they wrote 5G on a Post-It note and like,
put it over the icon on the iPhone and said hang on a minute I'm doing a AT&T upgrade and it was sort of a joke that they just rebranded 4 G is 5 G,
so so that's coming everyone thinks that's going to be a huge game-changer when you can have a thousand times more devices connected,
and all those devices can have a hundred times faster bandwidth and they can have you know at 10 for a hundredth of the latency that we currently have its.
[44:24] You have to stop thinking about it's going to be a better cell phone and started thinking about,
no one's ever going to store files on the hard drive anymore by computers I'm going to need hard drives you're just like everything's going to be on the cloud and be able to come very quickly to your ubiquitous 5G signal and so,
the talk about other use cases that will change there's a ton of examples of leveraging improvements in visual search and video analytics and so there's a,
they talked about how I Google Maps spent a fortune,
turn cameras on cars and driving all over the country to get the images for Google Maps there's a company that sells the dash cams to all the taxi drivers.
[45:08] And they're like.
[45:10] We have GPS in the car we have all this dashcam video we can extract video from all the cab drivers in crowdsource better images than Google,
and so there's a lot of.
Qualcomm using video. To do crowdanalytix tons of Booth had this experience I hate where they they use video to try to infer the the mood of the,
the audience and hey we can show happy content to the audiences sad,
another number boost showing like we can tell old people and young people and sick people in healthy people and change the content there's a lot of controversy over that stuff.
[45:46] What is clear the technology.
[45:49] LG to quantify video and turn it into actionable analytics is like is incrementally improving and video visual searches is going to be a game-changer for a bunch of stuff,
so that was a big Trend a big Trend was,
a bunch of vendors shifting from their Walled Garden approaches to open system so Apple was the most dramatic but in the old days Samsung would try to make it use Bigsby and do everything with their smart home protocol,
felt like the manufacturer is kind of thrown in the towel on being walled Gardens and,
for several years there's been a connected home and a connected Health Hall at the Sands Hall but I tell people,
if you walk around the TV Hall the central Hall at CES it feel,
Legend Mall of America on Christmas Eve like it's super stressful it feels like you don't have enough room to breathe and walk and when you go to the Sands with this newer Technologies I connected home and connected health.
Felt relaxing because like there's more room it was West busy and this year felt like the year when those Halls flipped that like was much of.
[46:56] Her comfortable and less chaotic.
[46:56] Unless chaotic in the central Hall showing all the home video technology and it was wall-to-wall energy and Chaos in the connected home and connected health so very unscientific lie,
it feels like those categories are really starting to get some traction.
[47:13] And apples playing that in addition dumb could have helped get right so what did you see a lot of your healthkit kind of stuff.
[47:24] Homekit literally had a dedicated part of the hall so all the products that work with homekit when one place the connected Fitness area had a lot of,
products that support an apple healthkit a ton of apple competitors so I got to see the new,
new watch has an EEG in it and if you start having irregular heartbeat I'll be able to save you if I choose,
ton of ieg products and frankly some of them that make more sense like blood pressure cuffs that also do an EEG like so there was stuff that work for that ball there was stuff that competed with apple there were sensors for every,
Endeavor you could possibly imagine so if your baseball player we've got you know censored enabled baseballs they,
I can judge how well you hit it with the bad if your fisherman.
[48:16] We'll put a Fitbit.
[48:16] A Fitbit on your fishing pole to measure the quality of your casting whatever you want to do,
there's a way to quantify it and digitize it in a way you never could do them.
[48:31] Anything else from CS.
[48:35] It seemed like the big the big meaty stuff I know that's a lot of lot of content but it's it's the biggest trade show in the US it's a hundred and eighty thousand people.
[48:44] It feels like there's more more overlap between all the worlds which is interesting you know five years ago there would be no retail kind of stuff.
So speaking retail to switch gears and come on over to NRF so did you get here Saturday or Sunday.
[48:58] I came in Saturday.
[49:00] So you have been here much longer than I am I was only able to come up today which is Monday so.
[49:07] Wasted most of your day with me.
[49:08] I did unfortunately so tell us what you've been I saw a lot of selfies and things from the show floor so so what have you seen here it interrupts the New Berlin kind of really into the show but what have you seen that you want to share with listeners.
[49:24] Trans obviously Amazon go has a lot of traction and Buzz until one of the things you see here a lot are our alternatives to Amazon go so some of the.
[49:34] Those are what I would call a legitimate Amazon go tape.
[49:35] Legitimate Amazon go type experiences where they're sort of just walked out technology so there's a bunch of big exhibitors that have built little mini stores and can kind of demo that experience,
claiming they can do it with a fraction of the cameras and cost of Amazon go and it's really hard in these controlled environments to know whether there,
that's hyper or reality but a lot of vendors are claiming they can do Amazon go for a fraction of the cost and then there's a ton.
[50:03] Climbing on Amazon GoPro alternative when really there a scan and pay alternative.
[50:09] So which it is a useful and go.
[50:09] So which it is a useful and good experience in and of itself I'm not knocking Scan & Go I get slightly annoyed when people try to say.
The equivalent of grabbing your milk off the shelf and walking out the store without doing anything is grabbing your milk finding the barcode launching an app in your phone a mean a camera at the park,
it's a it's a it's a either there different use cases but.
[50:35] But they're a lot about I've seen tons of robots wandering around some of the same platform has been here for like 4 years now.
[50:44] So there's like a lot of the traditional automation like most of it,
dedicated Logistics so we've talked before about Amazon has these Kiva robots there's now a lot of alternatives to Kiva the other,
fulfillment centers can use to automate them would say there's more of those this year and what they're now is is a bunch of robots that people are hoping you'll use in the store,
so there are robots for wayfinding you come into the front of the store,
you say my wife told me to get this specific item in the robots is follow me and walks to the store and gets it and there's multiple competitors they've been here the last couple years,
pictures of all the shelves and they do planogram compliance the Campbell Soup is where it's supposed to be we're out of this SKU we got to get more they're all doing some some,
liability compliance as well now they're taking pictures the floor to make sure there is not a trip and fall Hazard or things like that there's robots that will.
[51:44] Robots that will.
[51:46] Replace the instacart people in the store it seems pretty far-fetched to me.
[51:50] All around with the customers and grabs products out the Shelf to fill a shopping cart.
[51:56] Robotic shopping carts.
[51:57] Birds that follow you around so you don't have to push your own shopping card and use but items in the the autonomous vehicle that's chasing you around the store,
a lot of robots.
Mostly feel like super expensive kind of Ivy bells and whistles right now like some of the the warehouse automation is like,
super effective in high Roi for for high-volume warehouses but a lot of the stuff I think is,
interesting but not something we should expect to see in high-volume in stores in the near future.
[52:31] That reminded me I kept seeing this video at CS of the Sluggers that would follow you around and then the video it literally runs into 4 people.
[52:44] They tell you you can't bring on the plane.
If your luggage has a battery in it you have to take the battery out of your luggage so if you're,
luggage is also a Killer attack robot it seems like there's going to be some interesting, conversations with the FAA.
[53:01] But yeah.
[53:01] But yeah there's a lot of robot to CES like in terms of density robot,
he's probably even more robots at interrupt this year so the robot guys are here in full strength there's a.
[53:16] Money is gravitating around.
[53:17] Is gravitating around the problem of apparel returns so a big reason people return a pair.
[53:22] Apparel is.
[53:24] Is because it doesn't fit,
and tell you that they bought two sizes and returned one or they bought it expecting it to fit and they didn't so there's a bunch of companies that are using your smartphone to try to take measurements.
Help you pick the right size the first time there's a bunch of companies that are having you upload your image in your measurements so that you can be busy.
[53:47] You can visualize the clothes.
[53:48] You can visualize the clothes on your exact body type,
stuff like that that is a big Trend this year a lot of hardware and software around optimizing Logistics and reverse Logistics so vendors thinking about how to optimize returns,
a ton of digital in-store in digital shelf stuff,
so I every year say oh this is going to be the year of digital fact tags and so far I've mostly been wrong I'm doubling down yet again I think there's more reasons that digital fact tags will take off this year and little boys at Amazon,
is using them now and it's like I could open a bunch more stores where them in Sam's Club is using them in Walmart is piloting I'm in Best Buy's piloting on the streets trying to see some real traction from,
retailers that other retailers are likely to follow and the technology is getting better.
[54:43] But there's a lot of other.
[54:44] Digital shelf technology Kroger has developed a digital shelf that can run Co-op ads on the Shelf Edge until you think about what a big advertising platform Amazon is becoming,
has a lot of.
But in the store so they're trying to monetize that traffic by creating opportunities to run ads next to the real-time products so those kinds of digital shells or super interesting,
the same train we saw a video analytics at CES we definitely see here that all the traffic meter guys but there's a lot of other use cases now for,
analyzing video streams to do various things in the store and not so much on the show floor but in a lot of the content I was able to capture one of the big themes that's emerging this year that I really agree with is that one of.
Challenges we have in Commerce is an erosion of trust between the retailer and the consumer or the brand in the consumer,
I feel like,
yeah with all the negative Facebook press and you know the the never ending stream of breeches like there's a lot of reason to really be worried about,
the level of trust you've earned with your consumers and a lot of reason to believe that that's that's a limiting to your Market opportunity so I'm not sure anyone had the Magic Bullet for,
learning that trust back or retaining that trust.
[56:09] I like the fact of.
[56:10] People are starting to have a conversation about explicitly trying to solve the the trust game.
[56:17] Call any us some good thematic stuff anything specific to specific retailers on the content side.
So I think you were at the big Gala and it seems like a lot of the winners of that Gala event or digital native Oracle Branson Center.
[56:34] Has this sort of their Hall of Fame that they called the list and every year about 20 people get inducted on to this list,
and they're like influencers and power Brokers and innovators and disruptors that these different categories and you know most of those almost all of those awards are targeted at retailers and so on the past you have,
you know the CEO of Nike winter the CEO,
Macy's are you know all these these these sort of traditional retailers in this year the overwhelming majority of retailers that won an award where,
small are digital native Brands the two batters of Warby Parker where the power Brokers and the women from a way you know was a disruptor inside,
it felt like a huge transition from the the traditional Legacy retailers to the the digitally native Brands which is coming.
And then a bunch of the retards give key notes to be honest like it's mostly not that interesting to attend the key notes from the CEO of all these retailers because.
The job not to share secrets and you don't get elevated to that level of seniority unless you're really good,
that kind of Public Communication and so.
[57:55] Kind of Public Communication and so.
[57:58] Mostly commercials you know focused on Public Information and it doesn't feel like there's a lot of like secret new inside or advice or learnings that get shared by the CEOs of these kind of events,
I might be cynical.
[58:12] Yes of the one-piece Contin I saw was a professor Galway or Galloway,
yeah I wanted like jump off a cliff. After that it was like super depressing.
[58:21] I feel like he made you sit with.
[58:22] Grab the Grim Reaper so everything is terrible and we're all going to die so thanks for that.
[58:28] It's up here is not a retail apocalypse guy I think he felt like our government and our society was going to collapse.
[58:33] But other than that retails going to be great.
[58:38] Better-than-expected year.
[58:40] Wow wow the whole society Falls.
[58:44] Exactly what we'll try to find you some some Beverages and help you help you start feeling better about your future and that is a.
A place to use it cuz we have used up our a lot of time as a reminder of anything came up on the show you want to discuss further or you have any questions for us we encourage you to go to Facebook and will continue the conversation there as always the biggest,
appreciation you can give to us is to jump on the iTunes and give us that five star review I know there's still a few listeners that listen to the show every week that haven't made the truck over to iTunes and now would be a terrific time to do it.
[59:24] Yeah thanks for joining us everyone and we will be back with the some more news from an RF later this week.
[59:30] And until next time happy commercing.
EP159 - 2019 Predictions and 2018 Recap
Our annual predictions episode for 2019 and a recap of our 2018 predictions.
2018 Recap - Predictions made on episode 112
Bonus - Amazon comes out with Alexa powered wireless earbuds - because I want them. NO
Bonus - Amazon launches a wearable. NO .
Scot crushes Jason!
Bonus: Amazon breaks out Prime revenue.
Episode 159 of the Jason & Scot show was recorded on Sunday, January 6th, 2019.
[0:24] Welcome to the Jason and Scott show this is episode 159 being recorded on Sunday January 6th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo.
[0:39] Hey Jason and welcome back and happy New Year Jason Scott show listeners Jason am I mistaken or is that some new music we have there at the beginning.
[0:48] Yeah yeah due to overwhelming listener feedback that I finally updated the
the intro to the show it is the same song and the the same announcer but
you know you and I both both had some career accomplishments in that in the last year until now there are titles are updated and it's you know just kind of refreshed for the year.
[1:13] Yeah and you how is the new gig going for anyone that missed for smashing on you if you missed any of our last couple episodes but Jason has a new gig will see if I can remember this Chief Grand Superior
digital retail Commerce officer is that the right now.
[1:31] The for the second time in a row you nailed it exactly right.
[1:35] Awesome my dad sometimes I drop a word in there but I think I got them all.
[1:38] Yep and impacted cuz you mark that title so much in the last episode I had a ton of a client with legitimately fancy titles all making fun of me for the for the entire break so thanks very much for that Scott.
[1:52] Awesome it's maybe that will be everyone's New Year's resolution is to give Jason a hard time about his awesome new title.
[1:58] For for sure.
[2:00] Coldwell we're post holidays here I think everyone's probably on the edge of their seat did you get any cool new gadgets.
[2:12] Ya always tough.
Like in general there's an extremely narrow gap between my desires and fulfillment in so.
Like if I got some new gadgets for Christmas it's most likely because a new Gadget came out right before Christmas so I will say I did some refresh is I finally got the.
The iPad Pro the 10.5% sync you also have I haven't unbent version I've been pretty.
Pretty happy with that and because because of the new job I had to trade out laptops and so now I have finally have a in all USB C.
Ecosystem with the iPad and the the the laptop so I've getting those new gadgets of course cost me thousands of dollars in new adapters and cables in.
And all angles but I guess the one minor little toy I got is a new.
A video camera well I got a couple new vision cameras so I got the DJI osmo pocket.
[3:25] This is a tiny as in fits like in the palm of your hand you could you could hide it in your hand video camera with a a fully-functioning gimbal so it's,
pretty cool to have some some.
Funny pictures I'm looking forward to taking nap to the several upcoming trade shows that will probably talk about in a minute so that has been cool and I did a little earlier than Christmas get the new Nikon.
Mirrorless camera system so a Nikon Zed 6 if you're from your upper or a Z6 if you're in the US.
[4:01] Cool house that is the mirror listen can you tell the difference.
[4:05] Yet yet so Nikon has always had a great reputation for digital still cameras and great
image quality in low-light capability in the color rendering they've been extraordinary really horrible at video.
And I'm assuming I actually need a camera that's.
Okay it Stills and also very good at video so the fact that I've always own Nikon cameras and have Nikon lenses have been.
A constant pain point for me because my car's been so far behind on video and so there's some the mirrorless cameras in general are much better at video and this this.
Nikon's first mirrorless full-frame camera.
Really does a pretty good weed frog for video capabilities in a lot of ways so it's it's definitely the best.
Video stills camera I've ever owned.
[5:01] Koba I know you're off to CES next week and we will have a lot more gadget news for us then you and I are both at the NRF Big Show so maybe we'll shoot some video do a live streaming or something fun like that.
[5:12] I will bring all those gadgets why be using them to photograph any cool new gadgets that you got for the holiday stuff.
[5:19] I I said William like you where I think I probably had caught up on my gadgets before the holiday suit so nothing new for me.
Oh yeah yeah I do think did you get the keyboard case on your iPad I really enjoyed that.
[5:35] Yeah I did I've enjoyed that it's been it's my first iPad with a pencil so that has been it's been cool yeah.
Not permanently I I will concede to have misplaced it but it it does reemerged.
[5:51] That an airpods have this weird like they want to get lots of gaple somehow his program them to is a margin enhancer to get lost as quickly as they possibly can.
[6:02] I'm afraid to even talk about that because my my wife is so much more responsible than me and she's on like her her like 4th or 5th pair and I am still in my originals through some some like and Candy miracle.
[6:15] Goodwill as is our tradition here on the Jason Scott show every year we kick off the new year with a recap of what happened in the last year
and then we have our predictions so the predictions are twofold last year about 365 days ago we made a bunch of predictions
couldn't remember so it's kind of fun to go back and look at those are super geeky and want to go back that was episode 112.
It's a method that means we did 47 shows last year so that's 47 hours roughly of Jason Scott if you if you have a week to burn if you have mono or something like that that you want to recover from and you need something to put you to sleep for 47 hours a week we have your cure
so we will be breaking the show into three pieces for going to do kind of a good bad ugly of 2018
and then we can go into recapping our predictions and squirm and then from 2018 and then we're going to put out some 2019 predictions so I think what you'll see from the 28th
predictions is we're actually pretty good pretty good at this thing after how long you been at this 3 for years now I think we're getting pretty good on the prediction game.
[7:34] That's easier for you to say than it is for me to say this year but sure.
[7:39] Without further delay let's jump into The Good the Bad and the Ugly Jason what order a couple of your goods from 2018.
[7:46] Yep so I was really excited to see some of the new physical store Concepts and the very end of the year you know Nike open at House of innovation we talked about that in the last show
that's super exciting to me I think some of the Amazon Concepts like go and 4-star are are super interesting there's a lot of new
physical Marketplace Concepts like we've had beta on the show I've mentioned show failed before and then a lot of these mobile-first stores like the Sam's Club now so I think,
the you know we're really starting to see digital Impact Physical stores and drive new store Concepts which is awesome.
[8:24] On the platform front I was excited to see Adobe make the big investment in Magento in an e-commerce platform.
In many ways I feel like the the commercial platform space in the Enterprise platform space in particular that I play in is kind of.
In the worst spot it's been in in 10 years in terms of.
You don't really meeting the needs of retailers and clients and there's always been this this conflict between CMS systems that people like Adobe make and commerce platforms that people like.
IBM sap in Oracle make in so I'm very optimistic that adobe who who is dominating the CMAs.
Essbase then making a significant investment investment in e-commerce you know really could be the way forward for 4.
A lot of new new retailers in in Commerce entities that need an enterprise-class system.
And I say this with the one caveat Magento as it is is not the solution.
[9:33] Adobe's willingness to invest in Magento 2 me is historically a Dobby is always been a.
And aggressive acquire that acquired a bunch of stuff and you know it often takes them several years to really integrate the stuff so I'm not expecting Miracles this year per se but in the long run feels like.
Adobe deciding that Commerce is an important part of the stack is super exciting and then my my last good for the year.
Is kind of specific it was Walmart's investment in Flipkart in the reason I think that is good I think it is super smart for.
From Walmart to be aggressively fighting for digital in in the super important Emerging Market in India.
Some things happened late last year that make those Investments actually look a little softer is as a Indian regulation on foreign Commerce is has gotten more challenging but the reason I just think it's good overall is.
I feel like that investment that huge investment in digital for Walmart you know his is the most.
[10:38] Tangible physical manifestation of Walmart's absolute recognition that.
Digital is the way forward in the day you know that they have to compete with the Amazon than alibaba's of the world and can't can't abdicate any of that Digital Ground And so seeing them them fight for for that that
intellectual property you know I think is a encouraging sign for all of us in the future what about you what would it were you excited about last year Scott.
[11:07] Well I'm always the guy that gets to say it wouldn't be the Jason Scott show without Amazon and Sonos surprised they're my good is crying it out with Amazon so
I thought was really interesting than Amazon you mentioned a little bit but they really expanded their store footprint so they had acquired Whole Foods back and 17 which obviously is a big splash into offline
and they never really expanded Whole Food stores I mean
2018 was a year of kind of adjusting that that acquisition they announce now they're going to start opening more here in 2019 so that's going to be interesting to see
I think the surprise for me in an impossible one was done to go experiments and
then just kind of really ramping that up pretty quickly you know I think they built another for 5 is that many more on the way there's rumors of wars and then
you're the one thing as I travel around not nearly as much as you but going to various malls and things
I would say pretty much every a mall in the US seems to have an Amazon pop-up store and
I think about all those people I don't know how many that is it's how many of these are out there but I think if we looked at.
[12:23] Your class A malls I think there be three or four hundred of them so I wouldn't be surprised if there was three or four hundred pretty substantial Amazon pop-ups out there so it's I think that's pretty interesting and really is a testament to the Amazon.
[12:38] You're expanding into kind of omni-channel world and get their products in front of more people.
[12:43] I'm done once asked on the front end of Amazon the back end of Amazon that was really interesting this year was what I would call it start a frenetic expansion of.
Delivery capabilities some of this is last mile so they acquire twenty thousand of these Mercedes Sprinter vans I'd be surprised if any listener at least the United States hasn't seen one of these I see you to a date at this point in my area.
[13:09] And they built a 1099 Network a very clever way kind of taking a page out of FedEx Grounds Playbook where they were actually kind of
put you in the business guarantee you rub you and routes and then boom you're off and running so I think they got those 20,000 sprinters out there delivering packages and something like
six months which is just pretty crazy about a lot of soccer capabilities so if you're a third-party now you can use Amazon soccer in your phone at Center
and almost be like little extension of FBA
Whole Foods we saw them can I ditch instacart and then layer and their their 1099 other 1099 network of Flex for that they've added a ton more jets that got to where are hubs coming and I attractive
distribution centers pretty closely
so in the USA in 2018 they added 46 more performance center assets and then another 23 in the rest of the world for a total of about 70
I am all in that's an additional 11 million square feet of space that came on line in 2018 and then that adds to the existing 850 or so globally and 250 million square feet so,
so it's a lot of people that I always
talk to you that the baby not in the industry but on the cusp there always surprise I'll say what how many how many from home as soon as you think Amazon has versus Walmart but they both have 10 and the number I think that's about right with Walmart but Amazon has.
[14:34] Tremendous amount of assets they built so it matters it's Amazon a so far ahead of anyone it is going to be interesting to see there.
My last surprise was becoming I think the economy did really well last year even the last
reported as of December on the job side was really really strong so that we're seeing a strong economy you know as the Fed
kind of Titans interest rates in the stock market with a lot of shakiness there but underlying economy.
[15:09] Then let's put it in the battle I'll start those so I think the bad was I was so surprised about how kind of negative to Amazon hq2 process turned out,
kind of ended in a in a thud you know it wasn't like this kind of I guess unless you're one of the two cities I think they're.
Pretty excited but even then there's a lot of protesting going on in the DC New York area that Amazon's coming and then it got these really big incentives so
yeah I think that's going to be interesting to watch and see what happens as Amazon is so large now that they can't just fly under the radar and I think they managed the back of that process kind of weirdly
not where it seems like everyone that are decided and then and then it's kind of pain a conspiracy theory if you believe that they were just Gathering data from people
what I'm concerned about a little bit you and I emailed about this just recently I kind of put it in the bad category in this is holiday 2018.
I'm so Adobe came out a couple days ago what their final report they said the holiday came in at 14%.
That's e-commerce so Little Debbie disappointing if that's true then you send me some data that showed MasterCard said all in 5.1
I guess you know this better than I do dinner or else was right around there and set right would that be kind of a win or a loss of your.
[16:30] Yet so for all of retail that's that that's probably a win it's a little better than the recent historical averages but I think the.
That does averages hide the fact that you know it just was not equal 4 for all retailers and inside I definitely think there are winners and losers.
[16:54] Yeah unfortunately don't think we'll know until Amazon reports there they're kind of the Bellwether I look at and you know,
Indus. Where they would have pre-announced if they had missed so they haven't said anything unfortunately Apple did pronounce look like they had a really rough calendar Q4 I believe it's there there
theraphysical q1i which is always confusing what companies do it that way
but that seems to be isolated to China with some of the tariffs and things in the Chinese economy that that I don't think we'll
Amazon has as much exposure to just really interesting to see where holiday 18 and zup and I think we'll know what covered on the show as we always do I think we'll know
by that first week in February however all the all the leaves fell and and what happened.
[17:41] Yeah I'm looking forward to seeing how that all plays out so some of my bads.
Didn't get a ton of Buzz last year but I've been pretty disappointed in the outcome of the Supreme Court ruling regarding a internet sales tax and so you know,
basically the Supreme Court rule made a ruling in favor of a state that was suing to collect sales tax on.
An internet sales in Oxy like I'm okay with.
People having to pay sales tax for other online purchases I'm I actually think in general rather be Universal pricing and in.
You know you buy from the same retail online or in the store you want to see the same price and and that's a lot to be taxed in a similar way the reason I say that the ruling was bad is.
Because a bunch of the ramifications of the way this particular ruling plays out it just creates a lot of uncertainty in friction in the e-commerce space and so.
Which states you actually need to collect sales tax in which they tax you definitely don't need to collect sales tax in and which states.
You may or may not get sued by a state if you don't collect sales tax in right now is kind of.
[19:02] Thrown up in the air and it creates a lot of inconsistency and just a lot of.
A sort of effort and friction that isn't helping anyone and so I feel like there was opportunity for for Congress to solve this problem before dumping in the lap of the Supreme Court's and.
You know maybe that was overly optimistic so didn't happen until we're going to have to let this play out for now a number of years and.
Just like the unfortunate the other sort of bad one to me this year is we had some kind of ugly CEO exit so you know what we forgot about that this far end up but we had.
You know the very ugly exit at Lululemon.
[19:44] Early in the year I want to see February he was he was the CEO and chairman and got kind of forced out and he's now been.
In an irritant for them on an ongoing basis you know Mickey Drexler was.
Lasted less than a year of J.Crew and you know maybe not CEO of all but you know I see you judge executive term for some bad reasons it Nike.
And so you know that certainly to me as one of the the the bad blemishes on on 2018 from a Commerce perspective.
[20:19] And then my my ugly if we give it to the the really bad stuff for 2018 I just think it what I mean you're always going to have churning in retail stores are always going to have,
bankruptcies Doug mcmillon famous what he carries around this west of the top 10.
[20:36] Can retailers from my 1980 and there aren't a lot of those names that are that are still in business today so bankruptcies are in a shock but I feel like.
2018 hits is particularly hard with Toys R Us and Sears and then you know below them you had all these other guys David's Bridal Mattress Firm Brookstone Nine West Claire's Gymboree bonds.
Etc and so you know as a lover of Commerce and Retail and sorry to see some of those stories brands.
[21:07] You don't go away or get greatly diminished so that's only felt ugly and then right towards the end of the year,
we had a IBM sell their big Enterprise e-commerce platform Webster Commerce to US service provider HCL,
that to me is a probably super ugly for IBM clients that are relying on that platform and.
You know now it's fragmented from the rest of the IBM stacked and there's going to be a bunch of challenges there there's a bunch of clients that own the or just moving to the.
The cloud version of Webster Commerce which they didn't sell so that seems ugly I just feel like the the Enterprise Commerce platform space.
In general is in a bad space and it's most manifested by by IBM which was you know one of the top three platforms are arguably the top platform getting kind of dumped by IBM this year.
[22:08] Call yeah I'm going to plus one or as my kids would say retweet on the bankruptcies that tear you when was painfully know is that it is a kid that grew up
Star Wars fan I spent many a midnight madness so you know.
Jedi Friday or whatever the column hanging out in t r u so that was disappointing then you.
Add insult to injury one of the shopping center if we go to a lot had a combined Tru Babies R Us like a huge one it just sitting there empty for the last last three or four months is kind of sad.
Yeah I kind of say you know in this top of the mall Denton,
so interesting stat here that came out towards the end of the year.
I mentioned it, he did pretty well but malls were there emptiest in six years from a tenancy standpoint no foot traffic is also down at malls this company RI sorry is I had a report that said that they're at an 8.6% vacancy.
[23:05] Again that's the highest it's been in 6 years and that represents 4 million square foot is the most available square footage in malls and then strip malls have been hit
chick really bad because you know I think Toys R Us is really kind of one of those strip-mall type stores that
it was an anchor for a lot of strip malls and and as we see in the enclosed malls when she loosened his anchors you get up into this death spiral kind of situation so
I would also Echo that on the ugly side
cool so so that was kind of the what was sawed in 2018 let's put it to our predictions in and see if how Clairvoyant we were on condos so I went back to Good Ol episode 112 and service predictions I'll go to mine and then you go to yours and then what kind of see how he did
sue her quickly I had five predictions and a bonus so number one Mulligan 2.0
in 2017 we saw 7,000 stores closed and I said it's going to accelerate into 2018.
[24:05] I ended up with 9,000 closures then my second prediction was that Amazon will not buy another retailer
this doesn't seem like people may think well why would you say that it's kind of obvious but back then we were on the heels of the Whole Foods acquisition in a lot of Wall Street analyst for like issuing those reports you know Costco's Definitely Maybe the next company know it's Nordstrom's know its Target so that's that was kind of the backdrop.
Predictions is really say these guys are off base I just don't think Amazon's could do anything big again in 2018,
in the corollary to that was that they would instead of doing that they would triple down on private label.
[24:44] Third prediction I ripped my prediction on Amazon Logistics they would be competing more squarely with FedEx ups and then number for this one turned out,
pretty good I said Walmart will make
big m&a instacart Postmates and eBay so, playing on Marketplace and last-mile their number 5 and said somebody would acquire magenta or they would go.
And then my bonus was the Amazon would come out with Alexa powered,
your butt's so I mentioned airpods the topless show I love my airpods but I am not a huge Siri fan and I everyday I wish Alexa what would hang out on my airpods instead of Siri so that was the Genesis of that production Warrior 2018 predictions.
[25:30] Yep so I also had five in the bonus the first one was the grocery would get heavily disrupted by digital I think I called out specifically that would be wed by curbside pickup.
Number two was the drug would get the heavily disrupted by digital,
number three I said the biggest train would be talking about in 2018 was what I called that AI gap which was kind of,
the difference between the big players that could take full advantage of AI in the smaller players that couldn't necessarily afford to do it as quickly,
predictions for was voice I said it's going to continue to be huge and grow quickly but not for Commerce.
And then my V prediction was mobile payments was digital wallets I said a bunch of them with. I said Starbucks Walmart and Amazon when continue to thrive but a bunch of the other ones women's and,
snarky side note I mentioned that I expected Bitcoin to tank and then my bonus was.
Close to the same as yours I I said that I thought the Amazon would come out with a wearable in 28.
[26:42] What did you what you mean by Rebel.
[26:45] Army night.
Your paws were the most likely scenario but I just felt like they would find some way to get Alexa on on your body and especially because they lack the phone that seems like.
You don't like it could be some kind of widget that you you clip to your clothing or or carry with you but but or I wear something like that but I guess my biggest expectation was that it would be your pot.
And we will talk about the results of that moment early but I want to start off by breaking down how well you did
so now that we reminded everyone what we thought 2018 would look like in the beginning of 2018 let's see how we actually did so your first prediction was the store Mulligan what do you think.
[27:38] Yeah I'm going to because I put a specific number in there of 9,000 I I I missed that one turns out it took me a while to find the state looks like there was 6235 closures
in hindsight what I should have done and there's no good data set for this is looked at the square footage of so you know when
I don't know when a mattress firm closes that's different than a Sears or JCPenney are Toys R Us closing right
is this really the square footage we care about so I would argue I would throw myself at the feet of the judges and say look at miss the number of stores but I think if you look at kind of what did clothes and yours juices
rundown of store closures in 2018 Toys R Us 735,
Walgreens 600 n Taylor Loft Dress Barn 500 Teavana 379 Best Buy 250 Mattress Firm 200 Gap
200 Children's Place 144 Footlocker 110 Kmart 109 Gymboree 102 and then let's goes It goes from there another kind of big square footage when Sam's Club 63 how big is a Sam's Club like two hundred thousand.
[28:49] 100 weeks but yeah.
[28:50] Honored yet so there's enough so it's all right I think if we looked as square footage I bet and I don't have a source for this unfortunately I have heard that the there was way more square footage in 2018 so.
Who does if you want to hold it till I rely on the stop.
[29:08] Yeah I'm actually giving you that one because I would,
went out do I call the sources we do have the track store closures none of them claim or try to be comprehensive so they're they're tracking stores in a particular category or that made a particular criteria and saying they close that many but none of them for example are trying to keep track of.
Potentially how many mom-and-pop closed or those sorts of things and even there are a couple of sources of square footage in your right the square footage is more dramatic because we had closure is it a lot of big stores but even the square footage tend to be like.
People that are attacking mob a square footage in what the closures are so I just I don't think there is a definitive number but I think the spirit of your prediction came to pass and I think was the.
The biggest shrinkage of a store for stores in in recent memory.
[29:59] Colton so we'll call that one in the sky cam.
[30:05] For sure so your second prediction Amazon will not buy another offline retailer and you said they'd triple down on private label so pretty with B,
and I prediction but but I actually.
I liked it so how do you think you did.
so obviously I didn't make another big acquisition of an offline retailer in it you know the trouble down on private label I think
maybe they even quadruple down that it's hard to get data on the cell to does a good job and then we had some other data folks 10:10 to concentrate on the show and you know I think if you could attract our conversations on the show or the squeeze 7 episodes
the second half of 18 we were spending a lot of time talking about Amazon 3rd party because it's probably the number one thing on retailers and Brands mines
you know so so so I would call this definitely something that happened there.
[31:12] That for sure, annoyingly totally giving it to you so 242 so far your third prediction which I touch you like is your annual protection,
is the Amazon Logistics.
[31:30] Yeah and this one's kind of squishy so I'm going to kind of say this was a zero so my mind we won't cross this one until
I can ship a product on Amazon like I would FedEx from point A to point B.
So I think it's become insanely cleared everyone that this is what they're building now so I think everyone is kind of,
in fact if you if you go look at a FedEx stock chart and you'll see they had a number of issues with the terrorist it help them it would not,
listen to their conference call their CEO and founder Fred Smith,
you got a little agitated by a kind of the fifth or sixth Amazon question that he got so I think it's
become pretty apparent everyone would Amazon's doing here and the the ball is no longer hidden the cards are on the table
and who knows maybe 2019 will be that year when we can ship a product Coast to Coast for $3 on Amazon.
[32:31] Yeah for sure so I'm sort of with you I feel like they made a lot of progress in that direction
seems like you need to be something that will happen but but you don't get full credit for this year so if only because I need to keep the predictions competitive,
so your fourth prediction was the Amazon the ad group we get so large that they would have to break out there the revenue separately and that people would be totally shocked how how big they got
[33:04] Yeah and so did this is a win they didn't have to break it out like they do AWS work so I could separate kind of reporting piano but they have had to break it out because it has been so large they created this
they when they announced the quarter last year they said going forward they would change the way they recorded stuff.
Unfortunately they stopped recording a lot of my favorite stuff which was kind of sad so they used to have this
interesting breakdown between him and some things that have gone away now but when they did that they did start to break out
category called other and everyone knows that that's like 99% and so and it has gotten quite large so you'll hear me talk a little bit more about that in 2019 president.
[33:50] Yeah and you don't even though you're bad at reading predictions and you put that highly specific thing in there that didn't happen I'm totally giving this one to you like for people that haven't lived through the industry in last year
people are not talking about Amazon's ad Revenue in January of last year in
you don't even like the Scott Galloway's of the world that like make a living.
Making predictions and then you know reminding everyone when they're right he wrote a book that you don't Amazon with 1/4 of the book and he barely mentioned advertising in that book in like,
July and so for you back in January to have said hey there ads is going to be this big thing and it was going to be shocked when they find out how big it was and then you know
last June and then again in October when they you know,
showed how fast that was growing and everyone's exactly talking about that I feel like you you basically put the words right in there was a mouth so I'm totally giving you credit for that but you still ain't get one point for it so
so you're three or four running into to your V prediction which was that.
Annoying Walmart will make a big MMA and you mentioned some some last-mile candidates.
[35:09] How you did Scott.
[35:10] I'll give you sixteen Billy syneresis flag,
Walmart acquired what card it was not one of the ones that predicted but.
You know I probably should have so it was my my set up on this one going back then was,
it's not like Walmart had all this pressure you know that they had to get in the game with with Amazon more and I was thinking Last Mile but it totally makes sense on their National side as well so that was,
clearly a good call to kind of read the tea leaves on that one.
[35:48] Yeah that was totally good and then annoyingly even though they were only supposed to be 5 predictions you did 1/6 prediction and you know
to be annoyingly for me cuz I I'm I have this one-sided rivalry when I'm trying to compete with you I believe your 6 prediction was that a Dobby would acquire Magento for 1.6 billion dollars.
[36:07] It wasn't that accept fake but it was that someone would acquire Majin to or they would go public so so there you know
so having been on the other side of this
when when you get to a certain scale as a startup in the magenta got through some complicated things but they're effectively a start up again right there an independent entity they had a private equity
the clock starts ticking was what I was thinking
and what that clock means is that investor wants their money back and he's private Equity guys BC's want a 10-year Horizon private equities like two or three that was kind of feeding into that prediction and then you know it's also on the other side it's.
Musical chairs you know so so everyone every big cloud he's going to want to have a great platform and it just felt like there was.
One chair left in and kind of two Cloud companies that wanted to sit in that chair so so that's what it said in the so happy that I read those tea leaves right as well.
[37:07] What congratulations so recap five out of six right and then you did do the bonus one
and that was the Amazon would have an airpod like headphones they and what it what do you want to say about that stuff.
[37:23] So my strategy here is it's easy to call this when the wind because you had the same one so your Prime.
So Amazon specifically didn't get released this but this is actually my son was looking for some new headphones so we went to,
I would assume next to the derelict Toys'R'Us I mentioned earlier and I was surprised I'm a big I'm listening I'm on the show right now with some qc35 from Bose
and I looked and it said now featuring Alexa and I was like what the heck,
this is awesome now Alexa is in the Bose headphones then I went over to the job or display and it said now featuring Alexa then I went over to like two other kind of you know
generic style things and literally as I backed up and looked at the row of headphones every single pair suddenly I had Alexa so what's happened is Amazon has issued an API or some kind of capability in
a very strategically work with a lot of these manufacturers and unbeknownst to me until now literally like January 2nd when we were born in some.
[38:29] Best Buy gift cards they are there are a lot of airpod like Technologies and and you have every configuration headphone you can imagine with Alexa now
and I play with it it's actually exactly how I want it to be so
on my Gadget which list is I am hoping that somehow these Bose headphones I have break and that I can.
Get a new pair with Alexa or maybe I need to go check and see if I can retro them to have Alexa probably not try some kind of I'm sure there's some.
Gizmo this to make me buy a new car.
[39:02] Yea though I can certainly help you with the accidental breakage problem when I see you in in New York in a couple weeks
but yeah yeah same boat I I'm not giving it either this credit for this cuz the Amazon didn't didn't actually,
come out with an Amazon branded product but what did happen I can't remember the exact date like August or September they did finally release exactly as you suggested an API that made it totally possible for
OEM to build Alexa into the headphones and you can imagine folks are doing it right then
but then even a bigger deal one of the big chip manufacturers in November started shipping a new Bluetooth chipset
the included that capability and access to that API in the chips at so
you're already seeing a bunch of announcements that's before.
Brands had the opportunity to build new products with this new Bluetooth chipset my expectation is I'm going to show up in Las Vegas tomorrow
and there are going to be Bluetooth products with an Alexa embedded in them coming out of my ears with early.
So I think we yeah we may have missed The Branding on that one but the floodgates are about to open up and
not one of my predictions but sidenote like I think everyone's noticed that.
[40:24] Airpods have been Apple's most successful product in The Last 5 Years and you know the.
The Amazon Alexa family's been the most successful Consumer Electronic it in The Last 5 Years,
I'll be shocked if we don't see apple Google and Amazon directly battling it out with smart smart earbuds this year.
[40:44] Cool one of the one of the many Jason Scott show interns just handed me a note it looks like I can upgrade my headphones with firmware so we're going to stop a show right now.
[40:58] We're not going to stop at but you may not hear Scott anymore cuz he's going to like drop by the audio.
[41:03] I'm going to be upgrading my firmware while Jason finishes the wrestler show speaking of Jason let's go through your predictions so what was my score so was it 5 out of 7.
[41:13] I forgot I forgot what it was I'm giving you five out of six we're not counting the bone.
[41:18] Okay but I think that helps you but I'm okay with.
[41:21] Well but we're also the setting it was the same bonus oh.
[41:24] Okay so your first one was grocery gets disrupted by digital led by curbside pickup listeners will longtime listeners will know that is your favorite.
Grocery solution digital grocery doubles in the US at least one delivery firm Peters out.
[41:41] Yep so,
I'm calling out a window side note I have come to realize that I hate my predictions from last year and because I just,
put them badly like they're too subjective and in many cases like hard to measure so at one of my New Year's resolution is to write better
predictions and we'll find out how very shortly.
[42:05] It's easy to say you hate them in January of 2019.
[42:08] Yeah for sure for sure but but I do think the sentiment of this when like was wildly true
Walmart ruled after I pick up to 2,000 stores that over 40% e-commerce growth every quarter this year which is wildly faster than last year is faster than Amazon Kroger get a bunch of their own curbside pickup called quick list but a bigger deal they did an exclusive partnership with Arcado the
biggest digital Grocer in UK Albertsons made a bunch of big Investments they both
announced that they were going to watch the first digital grocery Marketplace and they also announced that they were going to build dedicated micro fulfillment centers out of the backs of a bunch of the Albertsons stores
our friends at shoptalk launched a dedicated digital grocery show called grocery talk and it's sold out with 3,000 attendees in the first year you know you go internationally and the
the Ali Baba concept hammer and the JD concept 7 fresh are going nuts I think it's it's a safe and fair to say
digital grocery blew up even even though.
You know I mean I have perfectly nailed the specifics and again there's no perfect metric but it does appear that digital grocery more than doubled in the US.
[43:28] Wood shed delivery from Peter.
[43:30] Yeah that's the part where I sort of depends on how you count right like you could argue that like one that got acquired like shipped for example.
[43:42] Oh that's like tripled.
[43:44] Not with any retailer besides Target.
And I think I mean you know there's there's something there on the ropes a little bit but yeah that was a dumb part of the prediction so you can you're going to trust me anyway so don't you don't need a whole night.
[44:00] Oh when writing predictions don't don't like a daisy chain hands together because.
[44:06] When specifics yeah yeah.
2 + 1 is that is that I'm one-for-one right now feel free to stop listening to schoenauer.
[44:17] Okay the judges give you that one okay because we're going to flip your aunt's to Anor and give you one there alright your second prediction was drugs get disrupted by digital.
[44:30] Yeah and I mean a few things did happen that are interesting Amazon invested a billion dollars in pillpack they wash their first over-the-counter brand basic care
they partnered to do that like at home medical devices under the choice brand of course there's this big joint health care venture between Amazon Berkshire Hathaway and JP Morgan
but to me none of that adds up to a true disruption yet and I I mean I think there's some
is there a lot of interesting tea leaves to read this year but I'm I'm not going to argue that I should get a point there.
[45:12] All right and then your third prediction was the biggest trend of 2018 will be the AI Gap.
[45:21] So once again a stupid prediction how do you argue something is or isn't the biggest Trend but I think it's safe to say this wasn't so I kind of miss this one like you know I do think.
Aai was one of the hype things that got a lot of chatter in 2018 and there was one IPO that you could argue with sort of AI Commerce which is Stitch fix
realistically like I didn't I don't think we saw a i dramatically transformed any retailers and so my my way more specific prediction that.
Did the it would open a gap between the big retailers in the little retailers why I just don't think it's fair to say that happened so that was a dumb prediction and I'm I'm not one for 3.
[46:06] Okay I'll see how you did a number for you said his voice is going to be huge but not for Commerce.
[46:14] Yeah so again based on my fragile ego I feel like this one is climbing out of the hole a little bit
I do think of voice was huge I think Amazon alone has said they sold over a hundred million devices now it's their best-selling device on all their big days
that there's some by some metrics Google is actually.
Selling more devices in the last couple quarters than Amazon I'm not sure I totally believe that but but I do believe they're selling a bunch of devices as well until for sure,
voice over all was huge and I think even more clearly voice commerce was not there was some some data that came out in the third quarter that said that
less than 2% of people that own smart speakers that ever tried to do Commerce with it feel like the only only even moderate volume,
Commerce type applications were things like a Starbucks in the Uber for sure people are not ordering things with.
Complicated attributes and in promo codes via there their voice devices self.
Again I'm going to take the win there and which would put me at 2 for 4.
[47:32] Does that hundred million devices suppression.
[47:36] No because I mean some very low-cost devices we haven't talked that an issue I don't think that they now even have like
and you can frequently get devices free and as part of bundles but they never liked him $19 device that you can plug into any speaker.
And so they they just have all the price points in there you know there,
is you highlighted there a huge advertising platform than one of that biggest biggest media platforms on the on the planet and they generally dedicate about half of all their pixels to selling this stuff so I mean.
Today I am not shocked they sold that many devices if you if you ask me in a 3 years ago when they started this stuff if they would get there this past I probably would have said that shot.
[48:21] So just like
one way I think about this is probably 80% domestic 20% International I don't think they push the Alexa stuff is hard International so then to the pilot 89 us net,
that article is totally undermined right is global High thing.
[48:40] Yeah I think that was a global number.
[48:42] There's three hundred and fifty people are in the US 250 households 200 million households.
[48:51] Little north of 200.
[48:52] Yes it was just going to round numbers 200 million households 80 million devices there's going to be some
like your house that has 30 devices but that's like we on this Edge Neo so you know call it's approaching half us households have an Alexa device that's pretty amazing.
[49:13] Yeah for sure but it is I feel like it is pres been on them like they're lots of devices that get to that.
That 50% market share eventually and it depends on the technology took a long time but I do think one of the ramifications of the like modern digital era is.
That all of this happens much faster so you know it.
Adoption of new things just happens much more quickly than it did in the ear of radio or TV and so you know smart speakers, you know followed a similar trajectory to a lot of those other media technologies that they just did it in a way I can press time.
[49:47] God I wish I could give you two on this one but it's been our custom to just give one point prediction so sorry.
[49:53] Yeah totally totally fair.
[49:56] Then your payments so you said retail die.
And Bitcoin tanks so you didn't and in there.
[50:11] So like you got him like me for my poor Boolean logic
and again stupidly written like I call that some specific digital wallets that were the exceptions and those exceptions
large we did really well Starbucks did very well on there some evidence that Walmart did well Amazon you know his continuing to thrive is a digital wallet
I didn't spell out the digital wallets that wouldn't do well but in my mind there were two families of those there's Apple and Google which,
like all indications are are pretty flat so there are people using them in liking them but it but it does not appear that they're growing particularly fast and it doesn't appear that they're getting as much reuse as,
I'm sure they would hope so so our friends over it payments that that
track this like it kind of found ample in Google to be flat and then there was this whole genre of digital wallets from financial institutions so specific Banks like Chase and Citibank and the card issuers like MasterCard and visa and.
[51:13] Yeah none of those digital wallets are used by anyone that's not a family member of the company so I do feel like that that is fair and then stupidly put a hand in there
4 Bitcoin that had nothing to do with digital wallet so I have no idea why I did that but that is arguably,
my best prediction of the entire thing because I think Bitcoin was at $16,000 a coin and in that is the beginning of January that you wanted me to prediction and today it's at about 3:36 hundred bucks so it's
basically a quarter of its its former value so if you if you wanted to invest in any prediction in this entire,
in N last year's entire show the most money you could have made was to take my advice and short bed.
[51:59] Unless you were a Magento investor.
Are Flipkart okay and then finally you said Amazon will come out in the wearable and I think you have already dismissed.
[52:14] Yeah yeah thank you you are to cover that one so so I think you add all that up I'm I'm three out of five you're for it at 5 but with a like a much richer more impressive for.
[52:26] Cool thank you I appreciate the kikuta sir I think you did a good job but hopefully you learned some some important lessons about writing your predictions and let's let's jump into that you want to go first you want me to go first.
[52:39] I want to go first, before you jump in and in case we have any that overlap.
[52:45] Are you good for.
[52:46] So my first prediction is that Eddie Lampert is not going to launch a space exploration company.
Wait wait that's all right so cheating just making fun of your negative predictions
but I do like that one if anyone wants to keep it as my bonus my first one I guess I'm trying to have more measurable objective things I think
continuing the the evolution of Amazon's brick-and-mortar I think Amazon is going to have more than a thousand brick-and-mortar stores by the end of this year,
combination of goes Whole Foods in some other expansion of bookstore Concepts
but a thousand stores is a very meaningful brick-and-mortar retailers so if you go to like the
the NRF top list of retailers and you sort it by number of stores
a thousand stores makes you about the the 67th,
largest retailer in the US by number of stores and so in addition to all the other areas where Amazon's excelling in.
And dominating I feel like eating that thousands door threshold like definitely makes you as usually credible brick-and-mortar retailer and I think they're going to get there this year.
[54:04] Do you want to throw and and in there about.
[54:07] And Eddie Lampert is not going to want to space exploration.
[54:10] Okay alright I almost got that in here.
[54:14] So then my new strategy is just to take your predictions that didn't happen from the year before and doubled down on them.
So you last year said Walmart was going to make a big acquisition and you highlighted some of the last mile companies and you got credit for the making the big acquisition but it wasn't the last mile company,
I think they're going to fulfill the other half of your prediction this year and actually buy a Last Mile company.
And that's potentially potentially instacart Postmates taskrabbit but I also think something like that.
Adda live wood would totally toy fit in there so I'm I'm sure we'll see Walmart both organically grow and acquire.
Let more last-mile capability this year.
[55:07] Number 3 I am sad to say based on our previous conversations but I I think we are going to see another big beloved brand go bankrupt this year so I actually think.
In any way I do I told you I think that it was an unexpectedly good economy this year.
I am not as confident that we're going to sustain that for all of 2019 and there are you know it again I think that the the booming economy hasn't been.
Equally generous to all retailer so I do think there's some retards have had a tough going and I think as both get tightened a little bit that potential will be the last.
The last straw so you know I certainly think the department stores.
You know is a vulnerable category United by JCPenney certainly is vulnerable I think any of the category killers that used to win based on assortment you know aren't winning an assortment anymore do the online so you know that could be one of the.
The Office Products companies are Bed Bath & Beyond or some of those guys and you know when we talk about department stores.
You don't one super story brand in the US that you like I think is has a bunch of money a bunch of.
Debt due in 2019 and seemed to be having some some substantial disagreements with her creditors at the moment is Neiman Marcus so I would be sad to see them go but it seems like.
[56:35] Like they're going to have to do pretty well tough to forestall that so I'm afraid we'll see another another big bankruptcy this year.
[56:43] How many demons are there are they only like four big cities room.
[56:47] So it's not a huge footprint unless it's 40 spores and they own a couple other Concepts as well but yeah.
[56:57] Predictions for 4.
[56:59] I feel like I might have made a similar version of this before but the.
I'm bringing it back so mobile the mobile Gap getting narrower is my is my official predictions I think aided by a progressive web apps and payment API we are going to see.
Mobile really catch up to desktop in terms of conversion rate and also total sale so I guess I'll see you in my dreams specific prediction is.
That we have more mobile Commerce than desktop Commerce in if you take out tablets in 29th.
[57:40] And then last but not least.
[57:42] Yeah I'm taking you or negative predictions to the extreme and I'm just saying there's a bunch of pads that I don't think will will.
Be significant and in 2019 the first one is still going to be hyped this year and still going to be a fad.
I actually don't think there's going to be a ton of like customer-facing AI experiences or are frankly even way better personalization experiences in 2019.
I think we will see more more chatter around social commerce but it's still not going to catch on.
I don't think going to see any meaningful Traction in in VR for Commerce.
And I certainly don't think blockchain is going to be a very important element for most of Commerce so that you know there's the ones you you all of those Technologies are ones you hear people talk about a lot and.
Like I frequently intended rough drafts of retail Trends decks with all these things in a minute I just don't think any of them are going to be very Signet.
[58:44] Any any bonuses you want to put on there.
[58:47] I do the you talk about Amazon being forced to break out their ad Revenue do I actually think they're going to get forced to break out the revenue related to Prime Membership.
And I hope that happens cuz I think it would be super interesting to see what percentage of.
Of their their sales come from Prime and and you don't total total Prime Revenue in those sorts of things would be fascinating to know.
[59:15] Did you include, like a whole p&l there or just really Prime revenue and sales around Prime.
[59:22] Yeah I don't know how specific I want to get on bonus I don't think I official purposes I won't say piano but I hope that they have to get as granny or as.
Using Prime members as a segment for reporting Revenue.
So that's what I got hopefully it's better than last year hopefully I am I'm not getting.
I hope I am enjoying next year's version of the show more than I did this year's but the time we're finally to the part that I'm really looking forward to which is what Nostradamus thinks is going to happen for next year so Scott what do we got.
[1:00:00] Yeah it's always hard to follow up on him set up pretty good predictions and if you like last year the,
the chessboard was more clearly laid out for me than it is this year and and the
the tilt of the board is really hard so you know we're coming off a year where the economy was smoking and wages are going up but then we have a lot of changes in the political scene
there's lots of talk of impeachment there's like all kinds of craziness the garments closes record this really hard to know which way
the economy is going.
But you know whenever I'm on kind of the fence on these things I tend to be an optimist so it's my heart for real blood so I'm going to lean towards the positive side of things I think you know hopefully we navigate to all that I know,
Tailwind of a good economy in 2019 as an industry which I think we all agree would be good so.
My first prediction so following on that optimystix thing by first one's kind of negative so like you I agree we haven't seen you know.
[1:01:06] The end of this kind of I think it's a Dominos that are falling and I don't think a lot of people even kind of put that together yet
so like you seen Sears file Chapter 11 I don't think many stores come out of that I think we're down to a handful of Sears that's going to put pressure on malls I think that puts more pressure on JCPenney. If you look there stocks already down from for $2. The other two are heading into a delisting scenario below a dollar
I don't know what's going on with their creditors but all these old-school guys Leverage.
So you get into the stuff spiral it sure does feel like JCPenney's stuck into that. Spiral they have 860 stores.
[1:01:45] Macy's is Macy's is doing really well today,
but once you get stuck into this kind of swirling drain of mall-based retail it's really hard to get out of there and I do worry that they kind of there a domino that falls in there.
[1:02:01] I've already closed some stores to trim their footprint and their 660 more so I don't think they would do bankruptcy everything but I think they may have to sell some of those stores are closing so I'm going to say at least 5,000 more stores and if we can ever find the square footage I think it'll be,
about as bad as 2019 so I think 2017-18 was a huge step up 8
1617 and 17 18 wheeler big steps up I think we'll go sideways which is still going to be pretty bad though because that step up Rick kind of this
5000 larger stores whatever the equivalent Sopranos that I do believe was larger than 2017 just my first pregnancy
second one is you know your your buddy Scott Galway also known as Professor go away he is really big on TV telling everyone that the government's Crackdown on Amazon and for some spin-off AWS he's backed off that a little bit and now he's talking about well
maybe they'll have to have tracking stock I'm going to predict this is one of my anti production so you can Amazon
doesn't do those things but this will be the year that they know that adds does get broken out and I'll be specific here
as its own p&l kind of line out of the bath report because when I kind of build a spreadsheet and it got to take.
Cloud stuff which is AWS and how I think adds is growing and I think.
[1:03:30] Off the record I think you for ads will probably do as much as the rest of 2018 which is going to blow people's minds but it makes total sense,
me and probably you cuz that's what you would do if you were
brand new grass is so when I put in a spreadsheet and track them I believe it's going to be about the same size as AWS by like 20 22 or 23 1 and I've seen a couple of Reports say the same thing,
that is my second prediction and just to recap it again they're going to have to break out they won't and I put an end in here in tribute to.
To Jason they're not going to spin or tracking stock AWS but they will have to break out ads.
What's your prediction is I think too kind of the companies out there and I've talked about Amazon and it's in the ones that are struggling on Mosside you have kind of eBay and Alibaba they had come like what I would call up
computer in 2018 it is kind of you know it wasn't a great year it wasn't a bad year
but they both had they have type beat up over the last year at least companies both have leaders that they want to grow and be aggressive,
I feel like something's going to happen there and when I kind of think about it I've always thought this would be a perfect kind of combination so these these two companies just feel like they belong together to me so I'm going to call that there is going to be a combination there.
[1:04:52] Number for and I know she didn't really make platform prediction
the last platform that last chair kind of out there is Shopify now all the cloud and infection on this all all the cloud guys seem to have kind of bed on their platform rent and I will get them all but I think,
so then you may be single who's left by like a Shopify and then another footnote is shopify's really expensive assets oh yeah
honest AC it's like for 5 billion dollars but it has to be small revenue is going to use super high valuation so whoever buys this that really kind of limits the number of companies that buy it has to be super my prediction here is you have the ad platforms and specifically I'm thinking Google and Facebook,
they're just getting pummeled right now on the ad side from data collection and and you know all the things about
Russia hacking and all this in front of Congress just getting beat up
I think if I had 100% of my revenue from ads and I was one of those two companies I would be willing to spend a very large sum to diversify That rumney Base because I do think that business model is going to be under
external pressures for a while to mow predictions I think that last seat is taken by either fat Facebook or Google.
[1:06:14] To be an ally bother someone so I'm not to be super specific there but I do think Shopify gets taken out this year and my sis production is kind of an opposite one of you so we're going to
misaligned on this one I think Walmart has made a couple a lot of big bets over the last year and it's just really hard to get all this right so so spending that much on Flipkart I think
Amazon shareholder base is in
Amazon Walmart shoulder base isn't Amazon shareholder base and I think they look at that and they're kind of like scratching their head and thinking wow I could open a lot more stores I could then X Y and Z you could have written a dividend check so that they have a much different old school
master bass been Amazon does and I think that's going to put pressure on them this year so it's a,
prediction is that they're going to stumble so I think their growth rates going too slow I think they got a lot of early wins from Anna digitalizing the groceries I think a lot of those are one-time pops and,
they are going to get stuck in that to keep that growth up at that and I'm north of what they said 30 40%.
[1:07:18] They have to do some big m&a Flipkart has to go right
zlata has to go right there and I don't think we have that flexibility to navigate to that I think they're going to have a run,
I don't want that to happen so let me be clear I don't want that to happen I just think it's the natural progression of these things when you have a year where you put a bunch of bats on the table,
your tab another year we're not all those bets are going to go well and truly they they're probably brace for that I think.
[1:07:46] It's not going to be there nothing about a business or anything but it is going to be a tough year for them I think I'll do a cover set.
[1:07:53] Interesting well I think that's a terrific sort of
spectrum of predictions between the two of us and that is going to be a perfect place to leave it in the reason I say that is because we always right these show outline that we intend to be 30 45 minutes and I believe I predicted this show would be
70 minutes and right now we're at 67 minutes so I'm calling it I can be right about one thing it's how long the show is but
if you are disappointed that we could have shortened you there was something you wanted to discuss that we didn't get to or you have any questions about the show or ideas for future shows feel free to keep the dialogue going on Facebook you can jump on their pop a question will be happy to chat with you as always we greatly appreciate those five star reviews on iTunes that's a wonderful belated Christmas present to Scott or I so feel free to
the jump on there and we would greatly appreciate it.
[1:08:52] Thanks everyone for joining so hope you enjoyed the first show 2019 happy New Year and we look forward to spending 2019 with you talking about what's going on in e-commerce retail and the rest of
[1:09:08] Absolutely and so until next time happy commercing.
EP158 - NYC Holiday Store Visits
We're in the peak of the holiday season, which means Jason is going to be visiting stores. This year he went to NYC and visited 33 new or updated store concepts. If you'd like to follow the tour yourself, here the Retailgeek NYC Retail Map.
Some favorites this year included:
Some disappointments included:
Episode 158 of the Jason & Scot show was recorded on Monday, December 17th, 2018.
Happy holidays everyone... talk to you in 2019!
[0:25] Welcome to the Jason and Scott show this is episode 158 being recorded on Monday December 17th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host.
[0:42] Jason and welcome back Jason Scott show listeners Jason it's been like 10 days but your life has changed a whole lot since we last talked so you you had a birthday happy belated birthday.
[0:55] Thank you much it's depressing the type that even bigger number into the the elliptical machine at the gym when I am frequent occasions when I use that.
[1:05] WG&R on verify so go ahead and round down.
[1:10] Yeah I don't want to only be cheating myself and I feel like my my I don't know if the math actually works out this way but in my mind I mean year older so it should be more impressed.
[1:22] And then you have an exciting new gig or title something like SVP of digital Commerce retail payments and chief strategy officer.
[1:37] I think that's exactly my title I've had to go to jumbo size business cards for the three people that still use business card.
[1:44] Or hang out 3 like a like a tweet storm you have a business card storm.
[1:48] 1 of 2 of 3 of I like that.
[1:50] But in all seriousness you are now the chief Commerce strategy officer tell us what's this entail and the upwardly-mobile thing what's going on.
[2:03] That was a lie the very least would like to think of others agree but yeah it innocence for the last six years have been working for
a particular agency that was originally razorfish and then you know we merged with Sapient and became sapientrazorfish.
But that agency is part of a much bigger a holding company called the pupusas group and so essentially,
took a new role at the group level so you know hopefully I'll get to keep working with a lot of the.
The colleagues and clients from from sapientrazorfish that I've always enjoyed but I'll have more responsibility and work opportunity to work with.
A broader selection of group clients across a bigger geography and.
Like most of these holding companies were a little more Silo then we should be done to best serve customers and so a big part of my job is to kind of.
Pull together all the the capabilities within the group to better serve our Commerce clients and so.
[3:15] That should be fun and you may know it was important that I get that promotion on my birthday because.
When you have a birthday on LinkedIn you get a lot of well-intentioned well wishes.
[3:34] And annoyingly LinkedIn won't actually send you emails with your mail from LinkedIn though just sending you an email each time you get something saying,
go to LinkedIn to read this one sentence can the message and so basically on your birthday your email is is,
put under a denial-of-service attack by LinkedIn and so that also happens when you change your your job and so I felt like,
smart to do both on the same day so that like I might email would only be down for one day.
[4:05] Cuz it's me you give me like a bull in a china shop in there tearing down silos and making people work together.
[4:14] Hopefully it's a little more carrot than stick
wouldn't be the first time I was inadvertently a little overly aggressive so I shall Endeavor to find the right balance there are a ton of
of great capabilities and in groups in pupusas and it's it's,
as far as I'm concerned I went from the the 32 pack of crayons to the hundred pack of crayons and so you know it's going to be fun to paint more colorful pictures.
[4:47] I know it's hard to put a number on it but would you say over 80 to 90% of getting this new gig is related to the podcast should we thank listeners for their contributions.
[4:59] Possibly that's slightly conservative.
[5:02] We forget individual performance I think the the pr halo effect from,
this kind of cited ever that we have this is probably responsible for most of your career trajectory hear the last at least 58 weeks.
[5:19] I feel like that's absolutely true I feel like the listeners absolutely would have put me over the top but you alone are so influential with all the the leadership in Paris that I feel like just you putting in a good word,
was was enough to drive the new promotion so thanks very much to Scott and thanks very much to all the listeners for supporting me.
[5:40] I said you listen up French dude Jason needs promotion and he doesn't need one of these like.
Everyday sea-level gigs he needs to be a double sea level and they came up the new tunnel ccso your CC level you like c-squared level.
[5:58] Etsy I like that c-square that's how I'm that maybe it's cuz I'm more sort of exponential growth than I am linear growth I like that I like that alot.
[6:08] I didn't go to the sea level meeting cuz I'm c-squared level.
[6:13] Exactly I feel like the one negative ramification as we are now going to have to do a deep dive on the Peter Principle.
[6:20] Well you hit the ground running and you have been in New York I've been watching your tweets my favorite is your Covergirl tweet that was a little.
It's surprising and shocking to see on the cover of Covergirl so congratulations on that.
[6:37] Yeah I feel like that would be
more than any person needs to be thinking about but then I got in a Twitter conversation today with with some of our favorite journalist talking about the latest trends in women's fashion and
now they're all super excited about seeing me where like flare denim at dinner cropped flare Denim and interrupt this year so
so sorry for all the Twitter followers that had to read that.
[7:07] Yeah that's going to be good with there will be pictures I will take them and post them.
[7:12] But in all seriousness it is sort of a annual tradition than I have around my birthday is I pick a city that has a bunch of retail going on and I like to do a bunch of store visits around the holidays is is,
people will know or might imagine.
There's a lot of in addition to the sort of all the Evergreen retail there's a lot of popups that they Brands open around the holidays and if you're a retail and you're going to watch a big new flagship it wouldn't be uncommon that you try to get it launched.
In time for Holiday Inn so usually it's a good time of year to see some new new retail Concepts or at least see the evolution of some.
Some retail Concepts so this year I went to New York City for a couple days and I walked about 14 miles and visited 33 stores.
[8:02] Give us give us the highs the lows The Good the Bad the Ugly how whatever kind of format you want to do.
[8:10] So I mentioned 33 stores there were 11 that really jumped out at me as.
As irrelevant and interesting for for one reason or another there were kind of for that I.
I'm putting in the doghouse that were disappointing for one reason or another and then you know the rest I kind of characterizes middle of the road,
the reason I pick New York this year was specifically was because Nike had just opened the new store on Fifth Avenue at flagship store called House of innovation 0:01.
And now there's been a lot of buzz in our industry that this was a super Progressive omnichannel digital first retail store and so I had read a lot about it and I wanted to make sure I had a good.
Good first-hand experience so that was kind of the anchor that pulled me to New York and then I put together a list if anyone is super masochistic.
What I tend to do is put all these things in in Google Maps which little-known feature of Google Maps is great for custom maps.
And it works on all that the apps on all the different mobile platform so I can actually put a link in the show notes to my Google Map and you can you can see why these doors are if you happen to be visiting New York and one.
Want to check any of them out but so jumping into that Nike store I felt like it really lived up to the hype.
[9:35] So this is a big store on Fifth Avenue you know some of the most expensive real estate in North America.
It's a 6-story store and some of the Marquis experiences they talked about are these kind of.
[9:51] Blend of digital and experiential.
So for example they have a great Reserve online fry in-store experience you can if you live in New York you can shop on the mobile phone,
I find some shoes in a size you want to try on and someone will pull those shoes and put them in a locker.
Waiting for you and so when you get to the store you can use the mobile app to unlock the locker try on the shoes if you decide you want to buy them you can do at self-checkout on the mobile app and so essentially you can.
[10:30] Get stuffed Asian in dressing room try it on.
And buy it without ever having to have any interaction with an employee if you don't feel like you needed employee.
[10:41] And said to me that was like an interesting sort of.
Improvement in the frictionless reserve online try and store experience another Marquis Ranch they had is this mannequin shopping so you knows is a lot of folks might know.
Apparel that you put on mannequins tends to sell dramatically better than the apparel that's just on the racks or on the Shelf.
But it often can be tricky to shop the outfit on a mannequin cuz you see something on the mannequin and you don't necessarily know.
What model that is or where you can go get that particular Peril in that you're the one thing the store can do is they can put the exact apparel on the mannequin on.
On an end cap or display right next to the mannequin but then that creates all kinds of problems for the store where the inventory is fragmented some of its out on that is custom display and some of its in line in the rack and,
when someone does a boat is order or something else now they can't find the apparel because it's floating all over the store.
And so what Nike did is they actually put a QR code on every mannequin and you can scan this QR codes with the Nike app and it opens up.
[11:52] At the digital experience with all the.
The apparel that's rest on that mannequin and again you can click on any of those things to have them sent to a dressing room in your size you can self-checkout or you don't get help from a sales associate but it,
it's kind of a cool digital way to shop the look on mannequins in the store.
[12:16] I've seen some of the shoe stores are now doing some of the 3D printing word out of separate experience.
[12:29] Yeah no no no Nike is all in on customized and custom products so.
[12:36] Nike actually has a Big 5 store in Tribeca did the bottom floor is totally dedicated to customization and it supposed to custom shoes and custom jerseys so I can round the World Cup.
[12:46] Like embroidering your name on on your team's Jersey and stuff like that in real time was huge and this.
House of innovation takes that even a step further in this store you actually can have your your shoe models custom ink.
I mean you literally wait for the ink to dry and then they give you.
That the completely custom product in the store so the ground for the store is totally dedicated to custom.
They have all these kind of experiential components to the floor where you can see like.
The embroidery shop they have all the people like sewing on the machines and you can watch him making the custom product they have the die shop and you can you know these that you can look through the glass walls and watch all the people handcrafting.
Your custom products and they have a bunch of digital stations where you can work with a sales associate and design your own shoe from scratch or.
You can pick a custom-designed shoe that was designed by an influencer that you're aligned with so that could be a celebrity or it could be.
You know some some talented independent designer that Nike had partnered with so if you don't want to just.
Pick a random design from scratch you can you can rely on the talent of someone else to still make a shoe that's kind of unique in that everyone doesn't have and that isn't available at Foot Locker.
[14:12] Yeah so they're definitely in on custom.
They also at another store we've talked about it with Nike is this Nike at Melrose which is in Los Angeles,
and it's big spin is it's localized so they pay close attention to what people shop for and that store and change the assortment really rapidly.
In response to the the Nike Shoppers in in Los Angeles and so the bottom floor which is a sub-basement for and this this store is called Nike Speed Shop and it is essentially is dedicated to the best-selling.
Products in New York City and again,
yui you walk in on you see like that you know fastest selling items while the changes you know quite frequently depending on what the popular items are and you you can scan a QR code and how many of those items popped into a,
a self-service Locker for you so again there they're kind of leveraging the the crowd generation and the the seamless.
Self Service experience you can self checkout for anything in the store so you don't you don't have to get in line at a particular cashier they have self-checkout station throughout the store where you can like get bags and things like that.
[15:27] So overall I'd say like this store does a better job of seamlessly integrating digital in a physical environment than almost any other store have been in and it's pretty exciting for that.
The downside is.
Most of these experiences are not ones that Shoppers are already used to and so the sales associates are having to do a heck of a lot of Education that teach people how to use all these amenities in the store.
And it's kind of a cannon to when Banks first ride rolling out ATM machines you know they had to staff the self-service ATM machines with the last app to teach people how to use them or you know when the airlines you step to teach people how to use.
That the digital boarding passes you know the Hope Is overtime everyone learns how to shop that store and use those amenities and they can cut back on the amount of staff that they need to train customers but then on the flip side.
[16:18] Fifth Avenue is like one of the the highest tourist traffic shopping areas in the United States and so.
You know the frequency of visit is probably a lot lower it's probably you know the one and only time a bunch of these people are going to shop that store so I think that the.
[16:37] Education think could be an ongoing Challenge and one of the sort of pet peeve or suggestion I would have for Nike is the.
All of these digital experiences are totally dependent on you having the Nike app which I.
I hate having that app dependency because it's really hard to get users to download the app and to help users get their password and to get users to consistently use the app.
And you know these days with Progressive web apps we could have all the same experience on a web experience.
All these QR codes that are all over the store the the Apple phones now natively Sant scan QR phones in the app in the the camera app so you know you could have.
Given the customer 90% of the same functionality with an iPhone with no app in it and Nike intentionally chose not to do that so when you scan any of those QR codes.
That work in the Nike app with the the iPhone camera for example instead of giving you the the digital experience it takes you to the iTunes Store and tries to get you to download the Nike app so.
You know they're there I can understand their goal to try to get good penetration of the app but I'd rather see him give him more seamless experience to the customers.
[17:51] Yeah cuz the apps are pretty beefy and you know you're in the store on cell and is 4 Wi-Fi never really works it's always get glitchy and yeah.
Talking to it and it just kind of creates a lot of friction.
[18:07] Yeah I know and you know getting their stores that are worse like that Amazon go stores that you'll see a huge queue outside these doors that require an app to shopping.
Yeah they they call him frictionless doors cuz it's just walk out technology and the irony is they just move the friction from the the cashier to the front door to the store.
[18:26] Yeah it is one time that which is good.
[18:28] No totally true. I mean I overall super favorable impression on the Nike store or I'll be excited to watch it continue to evolve as always anything new it's pretty easy to find a,
a few refinements and and you know hopefully Nike works for those overtime
if you go to that Nike store literally right next door to that Nike store is a Dyson Factory Store and I haven't seen this store talked about very much but this to me is a great store,
in terms of experiential retail so
like obviously Dyson is super premium product like that you know tend to be at at very premium price points to their competitors in the marketplace
and so it requires it's already considered sale it requires a lot of explanation and demonstration about why the products are better and so this Dyson store does
a really good job of,
immersing you in all their products they show you exploded you know versions of all their product so you can see the inside and you can see all the craftsmanship and design in the products and Wyatt's.
[19:32] Better and more expensive and then they do all kinds of clever things to let you experience the product so that the world's most expensive hair dryer as far as I know and so in the back of the store
they have a Blow Bar where you know if you want you can go in and have your hair styled and they'll blow it out and dry it using that Dyson product info,
you know you get this kind of great story that you you went shopping on your vacation on 5th Avenue when you got your hair done at Dice and then you got to experience this,
this one-of-a-kind hair dryer and and hopefully it sold you the hair dryer if you want to buy a vacuum.
[20:12] They next to all the vacuum displays they have like a complete assortment of.
For treatment so they have carpet and tile and hardwood and they have a funny wall of.
Different desserts that you can pick so you can you can like literally grab a beaker of dirt or a beaker of confetti or rubber balls or whatever you want to test and throw it on whatever kind of floor surfaces you want an,
and literally vacuum up those those products and so I just to me it's a great example of experiential retail and really.
Helping customers understand the value proposition in kicking in this,
this a psychology we called the endowment effect where you feel like you already own the product in the store and and you feel like you have.
Remorse if you walk to Home walked out of the store without taking the product.
[21:06] Did you take advantage of the dry bar the blow dry bar.
[21:09] I did not I do like sometimes it's funny I try to go in and test products that are maybe not,
not targeted at me but I did not have time to get my my sending unit 3 centimeter hair.
Can and I kind of think it would have dried in the time it took for my hair to get off the base into the chair so maybe when it worked anyway.
[21:34] Yeah that have I think they're sold out of that hair dryer that I mean it is very expensive but it's quite popular it's kind of the the bee's knees.
[21:43] Yeah I actually am thinking about getting hair extensions just so I have a reason to get one of those hair dryers.
[21:49] I think you should definitely do that before then our attic so so we can all I'll see you with your I think I'm imagining a mullet I will look.
[21:57] Not that hard to imagine there's probably some of your book somewhere.
[22:03] Not not true so hit a couple other stores on 5th Avenue and maybe we'll talk about it later but then I shot down to Soho in Tribeca
and Albert just had a pop up
there for a while that do I frankly was not a very interesting store and they just open their first.
Permanent store and I think they also did a terrific job I call Brazil courses a.
A shoe brand that's that's doing particularly well but very similar to Dyson.
They did a beautiful job I call the visual merchandising in this store is great but they really did this Rich storytelling about all of the materials that are used in all the Auburn products and they really kind of immerse you in the war of the products.
And just you know much more so than like walking into a Footlocker and seeing a wall of sneakers you feel like you get an origin story for every material that then is used in every shoe.
You know and you know they just made the product feel really aspirational and they try to use sustainable products in the shoe and they like you know really made you believe in the purpose and I just thought it was really,
well design store from a visual merchandising standpoint like they're not relying on a lot of digital technology in that store but I felt like.
[23:30] That's for combined with some of the other stores that I visited that are kind of newer I'll call them digitally native Brands although that's debatable in the case of all birds or Dyson,
and I really felt like like some of the best retail we're seeing right now is from these new emerging brands.
And an Auberge was another good example and a huge progression from their prop up to this permanent store so definitely congratulations to them on that.
[23:55] They do a lot of really cool kind of seasonal exclusives in City exclusives like.
[24:09] Yeah and exclusive that are
the trigger scarcity is a huge play across a bunch of these brands in a bunch of these products and really really smart you know again
in a world when you're a teenager that has to act cool amongst your thousand followers on Instagram you know.
Getting the same product that's available in every mall in America you know does not fly very well but being able to get you know something that's exclusive or scares
you know that's super well and we're seeing that and you know all of these these you know unique
limited edition shoes from Adidas and supreme and g-star and all birds and all of those brands are seeing them in the super young kids toys all the laugh out loud surprise toys I know you buy a bunch of these Star Trek,
Kinder surprise toy or Star Wars excuse me that was a horrible,
not for a DM but a horrible swppp.
The I don't know it maybe it's Friday and in some super weird creepy way that we don't want to get into.
[25:17] Yeah but yeah scarcity I think is super smart are you are you a big all birds guy.
[25:24] I think I have one pair but if I like him.
[25:30] And that store is now like literally across the street from the Amazon forest our store we we've talked about that's or a lot in the past I did go back to that store I was interested to see how it involves since I was there on the grand opening
and obviously that's a story that's.
Allegedly completely curated by customers and so I walked in there in a very curious to see how much of the assortment had really changed since the last time I was in and I was pleasantly surprised that.
A lot of it had changed like all the feature displays that you see when you walk in the front of the store were prominently featuring,
different merchandise than they were at the Grand Opening and even a lot of the product categories.
In the store had changed or evolved and so you know my my early indications are you no props.
Amazon for living there promise on on sort of.
Frequently and rapidly changing the mix in that store based on on customer curation.
[26:31] I wonder if they do it or if they just kind of like close down and reshuffle for a day or if they're just kind of like nibble away at it, like you know 2% a day.
[26:40] No it's a great question and I I don't know the answer.
But yeah I would have to live there or visit a lot more frequently 10 notice that but I did I took a ton of pictures the first time I was there and I retook all those pictures and so on.
I'm probably going to do a deeper dive in comparing the two sets of pictures but anecdotally it definitely felt like a lot of stuff at churned and obviously we're much closer to Holiday now and they're all these right.
Seasonal products for holiday that are selling really well so not surprisingly those products all moved forward.
You're secretly I feel like that store is first and foremost designed to sell Amazon branded products and those are kind of the Evergreen product that did not change.
Oh, there's some new product since last time I was there so that the first time I got to see the microwave in person.
[27:29] I'd like it.
[27:30] I was surprised it's smaller than I was anticipating it does not feel like I feel like that was a load capacity microwave them then I have so I would have been a little scared to.
[27:43] Talk out at the gym have Alexa make you some popcorn.
[27:46] I did not I was pleased to see that it was plugged in so you could infect talk to it but you like they did not give you product and give you a chance to actually.
Cook anything in it and I'm curious if the demo unit even had that hopefully it did not have them element in it but who knows.
[28:03] The at this is a little bit off topic but the switching of the storm made me think of everyone's in retails favorite store in York stories did you get swing by there.
[28:14] I did not swing my story I always love to go to this is story about the it just wasn't geographically convenient with all these other stores I did go to Macy's.
Macy's is now a minority owner of story and I was curious to see if they had a disa story iteration in Macy's.
And if they did I was not able to find it but the.
Beta who's been on the store has has the shopping shops inside of Macy's and I went to that Macy's expecting.
Then I go down to the basement where where they historically have put a lot of these Concepts and I was actually constantly surprised the beta store.
Is like prominently featured at the front door in like one of the highest traffic entrances and so kind of smart around the holidays since a lot of the beta product is.
Is very holiday gift friendly items but that all of the pods in the the beta display inside the Macy's were really hopping and it felt like.
The exact same experience you'd get if you walked into a dedicated beta store and then.
[29:22] Call Diem one of our interns just handed me a note make sure we reference episode 139 when we had beta founder the boo on telling us all about that.
[29:33] Yeah absolutely and if you do remember that episode of Yuri wissen he'll tell you a story about how he called me early on in the evolution of that concept and I gave him some stupid advice,
is his version and my version is I told him that in the long run,
that he would be funded by a bunch of retailers and he would be shopping shops inside of a bunch of these stores,
and your side note almost all the betas are now in Macy's and so I'm saying I'm right here saying I gave him bad advice you can judge for yourself.
[30:06] He is not a c squared executive Teresa CEO.
[30:12] He just has the one one see you in like Risk a bunch.
[30:14] Yeah it's your on a whole nother like you're in another orbit like.
[30:17] Yeah he would tell you this lame story about how he left his cushy job at Google to take this big entrepreneurial risk and worked really hard to build something and all that but you know as opposed to just like telling other people what to do and then running before they actually do it.
[30:32] Helios One C drop the mic.
[30:36] Potato potahto exactly.
The also sort of in that that area I visited the Casper store you know again
another great kind of showroom a store that has a bunch of experiential components like they have all these,
design house vignettes where you can in fact,
close the door and sweep on all these various mattresses but they even had they actually have and they have a cool branded term for it that I'm going to not remember unfortunately
at the back of the store is is actually dedicated to a service where you essentially can rent a in isolation pod with a bed in it and take a nap,
and if they've done like a really good job of creating this like super relaxing atmosphere and you know it.
The hustle and bustle of a busy City you can come and take a timeout and catch up power nap and then kind of recharge I looked at that thing and said man like these guys up to be partnering with we work like you ought to have one of these.
Nap stations in all the the work on demand.
[31:50] If it's at Casper ride to go people are always surprised how many skus they have I think everyone kind of Associates in with kind of essentially
once you a mattress live really expanded the offerings have got some pet stuff now right and they've got pillows and sheets.
[32:09] Yeah betting and so that they have all that but also I thought you're going is they have a variety of different.
Material treatments on the mattresses so there is a pretty good diversity of mattresses you can buy a different price points and so you can imagine,
people wanting to to actually try those out in the United States they talk a lot about how you know retail and trying is an important part of their.
Their growth strategy that that you know they like the pure digital experience and obviously they're kind of original Innovation was the ability to make a UPS shippable mattress and bypass the store but in the long run like
you know the total addressable Market of people that are willing to buy a mattress sight unseen is much smaller than the,
you know all the households in the US and so even these retail showrooms have been,
become a big part of their growth strategy I can't remember if I threw it up on social media or not but they also have kind of a
social photo booth in the store and that's why I took a picture in the Casper store and to me the,
that these these instagrammable scenes inside of retail stores is another strong retail Trend like we talked on the show little bit in the past.
There are these dedicated Concepts to instagrammable moments like the ice cream factory in in San Francisco and idea here is.
[33:38] Pay a significant amount of money I 20 to 40 bucks to go into what amounts to a bunch of like unique photo sets to take your your selfies and all these you know unique and interesting ways.
And there scarcity because that museum goes away after a couple of months and it creates a cool,
sort of photo that you can share on on Instagram in a bunch of retailers have jumped in on this action and so the the Casper score was one,
you mentioned earlier that cover girl had a pop up in Time Square and they had a great social photo booth so you got to go take,
a glamour still Anna and impact video in the store and so I use that that glamour photo booth and put my shepherd girl picks her up,
it's super smart as they capture your email address which you give them in order for them to send you the photos and you you share those photos on your social channels and amplify it and become an influencer for Casper CoverGirl,
or a bunch of the other retail brand so I feel like that was a common trend.
[34:46] Also up near 5th Avenue Rockefeller Center FAO Schwarz reopen.
So that you know they were longtime icon on 5th Avenue their space is now being used for Apple.
They went out of business but a new company bought the brand and they reopen the toy store in what used to be the NBC Experience Store in Rockefeller Center.
[35:13] Does it have the f e o clock in like that same kind of vibe that the old one.
[35:17] Yeah it totally does it has all the iconic displays that the old store has it has the cost you and Toy Soldiers dancing outside the store and taking selfies with everyone and again another one of these instagrammable moments.
And you know a round holiday in Rockefeller Center this was the busiest store in the area and had a shoe deal 9 to get into the store and so again like,
you know creating scarcity just buy,
you know you go to Rockefeller Center to check out what's going on and look at the ice rink and see the Christmas tree and blam there's a huge line of people waiting to get in somewhere and it instantly makes you want to get in there too and it it it.
It seems like there's definite evidence that the debt brand still carry some weight with consumers and at least around holiday.
Seems like it was doing terrific.
[36:07] Did a baby geek get like a drivable little Rolls-Royce Wraith.
[36:13] She did not I have as I think documented on some of these other shows already made the mistake of buying him some drivable Vehicles like only two.
How to get home and come to my senses and realize that I'm now paying for a separate City parking space for my son's truck my three-year-old son's truck yes.
[36:33] Five of them in one city park.
[36:35] Yeah that's true I probably could fit more but we don't need to tell him that.
So glossy are is another great digital brand is doing really well in the beauty and cosmetics base and they open the store in Tribeca again.
These guys do a lot of custom assortments instead of the whole store is really a showroom and you shop the store you you,
you know try Cosmetics you pick stuff that you want and then you go to a will call window and actually pick up your custom,
serrated bag with your name on it of your Cosmetics you can do that online and they have a a pick up station at the very front of the store for for online orders or or you know they have an in-store pickup station,
for folks that have shop the in-store experience and this door was hopping like there was a line at almost every display for people to check out,
and again a big chunk of the store was dedicated to both them like doing your makeup and glamming you up and taking an Instagram photo in you know a bunch of staged.
[37:42] Scents that they had and so you kind of Sharon amplify The Experience so another good example of that.
Google has a pop-up store in Chicago and New York called Google Hardware I visited the one in in Chicago earlier and talked a little bit about it on the show The New York one is sort of a,
bigger better laid out version of the exact same store
again a great place to experience a lot of the Google hardware and get you know live demos and some real-world vignettes but the whole you know downstairs of the store again is dedicated to,
taking cool photos of you in a unique environment
and sharing those on all your social platforms with all your friends and so for Google it's a double win there
they're getting you to take advantage of this social photo booth experience or catching an email all the same things as all the other retailers but they're also getting to demonstrate some of the unique features of the Google pixel
camera and as a speaker called best shot so essentially
they put you on this way cool interactive swing set and take a bunch of pictures of you and the AI in the Google Phone app,
looks at all the photos they took of you and pics of the two or three best photos and shows you though so kind of a double win there.
[39:01] Did you agree with the ones I picked.
[39:03] Yeah it seems optimized for obvious thing so you know I picked the ones where you're smiling and looking directly at the camera and that are in good Focus I don't know that I took enough pictures to.
To pick up beyond that what it's it's criteria were but definitely the the photos it recommended were keepers.
And yet it just a cool well design kind of theatrical set like it's in there cases funny cuz you walk up and it looks like a really Bland background with a bunch of wood paneling and a swing and you sit on the swing in there I have this doesn't seem like all that interesting of a,
have a background but then the guy triggers the display and as the swing starts moving,
all of the wood panels drop down in there all these colorful animated things moving around and it becomes a Thun Thun set for a photo so it's just fun. Watch the surprise and Delight moment when.
When that happened to other people as well.
[39:58] And then the 11th of my my favorite retail stores is a new store.
In kind of the upper end of Tribeca called show fields,
and to me this is a similar concept 2 Beta so this is a a Marketplace store it's a permanent store that.
Emerging Brands can rent a Pod in all of the pods have facilities for live demonstrations they all have digital signage,
until you got a bunch of like digitally native products you know that each had their own kind of,
shop and shop inside of this Schofield space then I guess the one thing that was different about Schofield from beta is,
the beta store is staffed by Beta employees and all the displays are largely self-service except for the beta employees most of the Schofield vignettes were actually staffed with branded employ so when you went to each of India,
you are likely to get a representative from the brand that was in that vignette talking to you.
Yeah so it seems like the the.
Marketplace at vacation of physical retail is continuing the happened so Scott. You may have been right that marketplaces are a thing.
[41:23] Yeah the other they're catching on.
[41:26] Yep. So we're super deep into the show project more time than we intended on the store visits super quick,
for they were a little bit of a letdown for me Restoration Hardware has this great reputation they move their store to the Meatpacking District,
is there a flagship store New York went to the store it's a beautiful piece of visual merchandising and has tons of their product in it,
but I just really think that it's a hard store to shop there's no way finding others no way to know what inventory is in the store I could keep that a lot of folks have a Restoration Hardware is.
You know you want to try this furniture before you buy it,
they have a website with all these different formations of all their products but no one on the website can you find out which store has the products you want to try,
and you just kind of have to pop into the store and you're going to see one sofa that represents a family of 10 and not get a very good story about the other nine so,
I just feel like it was a lost opportunity for a Restoration Hardware to take their retailing a little further than they had in the past and it seems like they stuck with.
[42:31] Beautiful visual merchandising and architecture but not really anything new or interesting and customer experience so that was a disappointment to me,
on 5th Avenue there's a the original Saks Fifth Avenue they made a bunch of hay earlier this year about doing a huge remodel to their Beauty Department which of the second floor of the store
are you walking the store on the ground floor and they're all these signed same check out Beauty 2.0 on the second floor and they really hype up this beauty 2.0 concept.
Until you know it frankly raises your expectation that they are
inventing a better way to shop for cosmetics and beauty and you know when I got up there and Shop did it felt like a very traditional department store Beauty experience to me like the.
The again the fixtures in the visual merchandising might have been a little nicer but you know you work at like all the exponential stuff going on at Sephora or an Ulta or the ability to shop based on
a use case or need instead of exclusively by brand you know they're all these opportunities to kind of reinvent Beauty and to me,
like sacks raised expectation by calling Beauty 2.0 in it it to me it was Beauty 1.1 Maybe.
[43:46] I hit up about for Apple stores in New York City and you know I continue to have this,
this impression when I walk in Apple stores that they had become to me super boring and the problem I think is
did they have curated down they dramatically diminished the amount of third-party product they offer in an Apple store and so,
you know it's almost all first-party product you know most of us know all of Apple's product before we walk in the store so we're not going to see some new Apple branded product at school or that we want to see you except maybe once a year
and you know that the stores always super busy but it's also always super busy because there's a bunch of people in line at the Genius Bar to get help getting their iTunes password so they can download the Nike app for the Amazon Go app
it that stores really become a customer service door and they're just really isn't a lot of.
Serendipitous Discovery or surprise and Delight like you know I just don't feel like I have a reason to go there and find anything that's going to be exciting for me I don't know,
Scot do you still go to an Apple Store when you're in a a new shopping district.
[44:54] But Jason it's a town hall don't you just go there to meet people diet ice cream
I used to I used to get the most joy out of kind of a few know looking at they had a kind of robust drone section and all these wacky accessories like
Golf Club thing you can play with and I save if they've taken that stuff away I do think it's Dimension
a part of it is once they get into the headphones Beats that's a big section out.
[45:23] Yeah they kicked over all the third party headphones out and yeah.
[45:26] Yeah so so it is a bit of a bummer because like you I think I pretty much have every product covered so there's no new Apple product I really need to discover.
[45:37] Same same deal so if I forget to pack a power supply I might pop pop in the Apple to get a replacement but
yeah I miss the surprise and Delight moments I hope I hope they find a new way to bring those back and then last store in this is sadly for me cuz I really wanted to be excited.
[45:57] My raspberry award is going to a digital native brand that folks on the show are probably familiar with all the way which is.
Kind of a great digital suitcase that's doing really well.
And the reason I'm disappointed is I had visited their pop-up store and thought it was fabulous right so,
you listen to the founders talk about the away brand and they say like hey we recognized early on we do you want to be about selling suitcases we wanted to be around selling aspirational experiences and destinations and so you went to the pop-up store and it was,
merchandise to be all these exotic locations that you wanted to go to and it just so happens that there was a luggage in each one of those locations that you could check out and it made you want to buy the luggage so that you could go to,
to Milan and you know have the experience,
and I thought that was really smart and it it you know the you know their presentations at Shopkin and shop at Oregon places like that you know they told the story that really kind of match the retail environment so,
now they've opened a permanent store and I and you go me and I like the pup I'm expecting you know some big stuff out of the permanent store and I feel like the permanent away store took a giant step back and it's a bunch of shelves with suitcases and no storytelling and,
and none of that destination merchandising or aspiration like it did have kind of a a like.
[47:23] Unremarkable Cafe inside the store but mostly it was you know it it felt just like your typical Mall luggage store that just happen to have a bunch of away suitcases on.
[47:33] I am a proud owner of a real of masochist.
[47:37] Do you get yelled at every time you get on the plane that you have to take the battery out.
[47:40] I know it pops I got the later generation that works pops right up.
[47:44] Yet so
I think that's most of the products but there is a slight slightly unfortunate thing that one of them are key features if they have a smart suitcase that has a big battery in it that you can use to charge a lot of your gadgets
and there must have been some bad experience on the airline somewhere because like it's now built into the FAA announcements on a lot of planes
but if you have an away branded suitcase you must take the battery out before you come on the plane
and again away his design the suitcase to allow that so it's not a big deal but I'm online from a brand or erosion standpoint it's.
Anime be favorable maybe negative that every single time you get on a plane they make an announcement saying like you have to do something with an away suitcase or you're not safe.
Maybe it helps that they're reminding everyone that there's this new pool suitcase call the way.
[48:31] Yeah it's not nearly as bad as when they said if you had a Samsung Note they would just like grab it. Off the plane.
[48:38] Exactly incident I guess the last take what's a bunch of great retail I do feel like a bunch of the new emerging brands or are the ones that are really moving the ball forward a lot of the
the start of.
A long time retail Brands I feel like I'm seeing glass Innovation out of them even Nike you know I mean arguably they been in retail since 1990 but as a major retailer
like they're moving the ball forward and and you know the Saks Fifth Avenue's of the world not as much.
That one other kind of antidotal take away I have talked a bunch of times on the show about electronic shelf labels and you know I would point out of the 33rd
three stores I visited four of them now I have 100% electronic shelf label so you know potentially we're starting to see the
the slow Evolution to this more real-time updatable Dynamic pricing retail environment so I hope we see more of that.
[49:37] Well we just give me the last show of the year so we want to give you guys kind of the double bang for your buck so in addition to Jason's detailed report we're going to do,
quick 10-minute news run and it wouldn't be a Jason Scott show without.
[50:01] The news your margin is there opportunity.
[50:10] Cool so briefly the big news for Amazon right now here we are in the heat of pizza delivery time is not surprisingly deliver you were in it so there's been a bunch out around delivery.
[50:23] I can see light interesting stuff on Amazon Jason by frequent Amazon order this time of year for estimator and
it's really interesting they're kind of my Prime orders are defaulting to to de-flea a message in there that says
choose one day and you'll get your item tomorrow and it's really it's a really weird user experience like why
why are they making me choose it there's no extra cost I did notice a day I didn't order and it did that and I chose it and then it did this interesting math over on the side where it said your shipping charge is $20 and then
Midas out the shipping charge almost to make me feel like you know I was getting 20 $20 worth of value it felt like some kind of an A B test there
but that's just been pretty unusual one here in Chicago you've probably already always had kind of same-day delivery in and next day
but that's pretty rare North Carolina so you know I'm definitely seeing that they're using language like.
[51:27] Using our express shipping partners and stuff like that so and around this area I'm seeing a lot of the Prime vehicle so I will talk about that little bit
so since it's been pretty interesting as a user
the Bloomberg had a friend Spencer super over there I had a great peace out today about the Amazon delivery Network and you'll notice he's there around delivery.
[51:55] Very intimately familiar with these various platforms most famous and well Love's truck platform is from Europe in is the Mercedes Sprinter
and so Amazon in September a news article came out that they had ordered 10,000 of these thousand and what they've done very rapidly is they have out the field but it feels like a lot of them
they have set up people in their own businesses these 1099 businesses
I am they will guarantee your route though rent the truck to you very inexpensively and this article had some really interesting case studies profiled someone that had a 42 and 70 drivers they're doing 250 deliveries per day per driver
I am making $1,000 a month in profit so
if you're interested in that kind of thing will put in the show notes and I definitely recommend you read that and then you saw one to Jason.
[52:53] Yep so inside notice there's a slight irony to me the same time you're seeing all these Amazon branded Sprinter Vehicles showing up it's also the time of year when UPS and FedEx don't have enough trucks until you start seeing a lot of Enterprise rental vans
with with UPS drivers getting out of them in the course there's always the problem of,
people thinking they're not not legitimate UPS drivers when they roll up in the in the unmarked white van.
[53:21] So you like people going in different directions there is an interesting thing that Amazon did this year you know there's always this battle for free shipping amongst retailers and who's going to lower their,
their threshold for free shipping and what they're going to charge and so you know Walmart does free 2-day shipping for any order over $35,
Target came out for holiday and said hey free shipping on anything and you know it's always curious,
Target made this better shipping offer than Walmart would Walmart match him in Walmart didn't,
and I I kind of thought that was interesting and that would be the end of it but then Amazon surprised is all about coming out with a new offer for this holiday that they were offering free shipping,
for the holiday even without a Prime Membership in this this is not their 2-day shipping but that it was interesting that Amazon was getting more promotional around holiday we've all been watching to see if that might Force Walmart.
To react so far we haven't seen that but now they're extending this free shipping and they're starting to really promote their,
they're cut off date so you know I think tomorrow is the last day to get free slow shipping from Amazon but as you pointed out they've beefed up there.
Their same-day delivery options in a bunch of markets and so you'll be able to continue to Christmas shop up to the 24th in a lot of markets and still get them.
[54:47] As you mentioned Chicago was one of the first so I for a long time I've had this experience where,
you order something that's available with one day delivery and then in the cart it defaults to 2-day delivery and it goes you can get it's Tuesday you can get this on Thursday for free or you can cook this to get it Wednesday for free,
cuz even though it says same day it usually is after the the early morning cut off so you get it the next day and so you know you constantly have this thing where of course why wouldn't I pick,
to get it a day earlier for the same free price of a new thing I just saw this week on on my own Amazon experience in Chicago
is there launching some new service called Amazon weekly delivery and it seems like they're trying to incentivize me to bundle more of my purchases
and have them delivered one day a week instead of on an ad-hoc basis and so it almost feels like Prime Pantry for.
Non-prime Prime Pantry items so I have to dive into that and get a little more details but that was a new GUI I had never seen before.
[55:54] What's the incentive.
[55:56] Yeah so that was part of the problem it did not like it was a new button I could put
to put it on my weekly delivery which to my knowledge I didn't have a weekly delivery but it did not seem like there was any monetary benefit to do that so it was again it was weird it was like
free same-day delivery get it on Monday standard 2-day delivery to get it on Tuesday or put it in your weekly delivery on Wednesday.
[56:21] They will there be there always playing around with incentives for slow shipping so I've noticed now they seem to have detected on my pretty heavy Prime now users they're offering me kind of somewhere between 5 and $10 for slow shipping at all do in a prime now single use coupon,
iPad audible coupons Whole Foods
variety of different free song a free app to put around look like a thousand things on that side.
[56:49] Yeah no for sure and I agree with you I think they they seem pretty smart about seeing which offers you're most likely to accept and then turning up the volume on those offers.
I do an audible and I keep getting more and more audible offers on or better offers on that regard stuff
definitely get that you link to an article this morning about Amazon's new air hub
in the Fort Worth airport so that his listeners that will probably already know they have a big air Hub in Cincinnati now they're adding a second big Hub in Dallas
and again you know these guys are getting more airport capacity and more planes and and it just seems
totally obvious that they're their bulking up there their internal delivery capacity and you know it it's it's hard to imagine it's not a competitive threat to our friends at UPS.
[57:48] Amazon names are fulfillment centers after the airport so for a long time there are us tracking this and Phoenix had the most so they would do like PHX and
when they open the second one they Rebrand the first one to one and then they start new muriatic so Phoenix had like PHX 1 2 3 and 4 in the Dallas for long time didn't have anything there then suddenly when the span of like four or five years David have
all the way from DFW 1 to 6 and then and then they expanded out the rest of the day of the Houston and Sentra so
no it's it's a it's a huge state for Amazon so I imagine you know that that's going to be a busy Hub and then it's interesting cuz they diagrams for the kind of have a book helps Earth Day
kind of building the supply chain that looks
it's kind of a hybrid of like what Walmart Walmart does to get stuff to a store and what FedEx UPS do so they have this kind of benefit of Products near you and then if it goes out then it goes to this other level and another level up there it is really fascinating how they're the kind of layer to supply chain,
elements on top of each other maybe we'll do a show where we get a supply chain Guru in to explain that privately digested.
[59:05] Yeah and I would add just one thing like these are not just hubs where they're like shipping Goods to then drive them to your house this is mostly about moving Goods around between the various for filming Center.
they're just getting crazy Advanced like I literally think we have a pop-up fulfillment center in Chicago right now so it appears Amazon his rented
all the parking under Millennial Park and they like literally staged a temporary fulfillment center in downtown Chicago for holiday.
[59:36] Brickell lots of machine learning lots of data.
Longtime listeners will enjoy this article because it's pretty much a topic we spent a lot of time on a I didn't think there is much you in there but it is paid gated tarp a waltz
and it really talks about introduces the concept of crap can't realize a profit and that you know it makes it sound like news that Amazon's pushing back on manufacturers to to change their packaging and figure out how you solve this problem of
you know that these items that are too bulky you too heavy to low asp2 to make money who's a good read good summary of of kind of what Amazon's doing but,
I kind of made it feel new and and we know that they've been doing this for years.
[1:00:26] Yeah I didn't think I'd almost argue that there's a slight trim the other way there that I feel like Amazon's been progressively getting more and more aggressive about targeting crap and more recently liked
in last few months and feels like they they may have loosened things likely in some category.
[1:00:44] Yeah yeah and then there was a smattering of Amazon go you touched on it and your your trip reports what are.
[1:00:54] Yeah so they're there is some rumors that one of the use cases for Amazon go could be airports and that is one of the categories where it seems like you could,
Amazon go would be a really good fit so I really fast grab-and-go Self Service experience in an airport and as we talked about like a lot of the go merchandise is food and so you think about,
man what happens a lot of airports you have a limited time to get something to eat before you get in the plane and you know you're not going to get served anything to eat on the plane now and so
seems for a lot of reasons
the Amazon goes strength online really well with that airport use queso that that made a lot of sense I won't be surprised to see that deploy and deploy fast they also open their first.
[1:01:45] Small for my Amazon go store so this is like a hundred square foot store and it is kind of like a self-contained shop and Shop,
where you know you can have a bunch of quick grab convenience items,
in a you know Anna is self-contained pop up store format and you know from the first time I saw I go one of these cases I always thought of was like the hotel.
Gift shop for the hotel snack shop kind of thing where it doesn't make sense to staff the store with the
a person but you know you can sell a lot of snacks to the guess that just check in and they're going up to the room and so this the small-format store seems like a perfect fit for a potential Hotel use case for exam.
[1:02:30] And then I think go is now going to the UK so we've seen like three new new retail for mastering Amazon open up in in London in recent times and now they're going to get their first ghost tour.
[1:02:42] Cool it's everyone laughed when they said they weren't there could be thousands of these so you put 10 in each airport and 50 in each City and boom you're there.
[1:02:52] Exactly so they are not sitting still there doing a lot of interesting stuff it's been fun to follow them.
[1:02:59] Awesome so I know we're up against time but there is that concludes our Amazon news there was one big news item that I wanted to pick your brain on and is there she might this kind of slid under my radar I'm sure you were really
you're attracting it but there was this announcement that IBM sold a bunch of software stuff to this company called HCL I don't know who that is and the ones that made the headlines I saw where I was he Lotus Notes and just some kind of,
old stuff that seemed
then I saw a kind of kerfuffle on LinkedIn where several of the smaller e-commerce platforms were really kind of riling up retailers and saying you know,
where you going to do now that IBM no longer supports websphere which is there their kind of you know their e-commerce platform that a lot of the largest retailers are on and.
Turns out that they have sold that whole platform to this company HCL what I'm sure a lot of our listeners out there
I'm sure if they're on websphere they're they're painfully aware this but I was a little shocked about that what do you what do you make of it does this mean IBM
just as getting out of the retail game or why would they sell it and then what do you think it means going for.
[1:04:14] Yep it's even potentially more confusing than that so it's totally cut me out of left field the,
you know if you'll get the last call at 5 to 8 years in retail there have been these three Enterprise platforms that have emerged as sort of the most competitive,
platforms for launching your e-commerce site so you know IBM has had Webster Commerce which is one of the products they sold the ACL Oracle has that a product called atg was originally stand alone company Oracle bottom,
there's originally a German stanaland company called hybris the sap bot
and so you know if you were a big retailer or you wanted to you know be selling hundreds of millions of dollars online,
you likely were going to pick one of these three platforms to launch your website and and you would likely have a shootout between two or three of them,
and you know that pay a company like razorfish millions of dollars to to implement it for you and and pay the vendor,
you know hundreds of thousands if not millions of dollars a year in maintenance on that platform and so in some ways like totally shocking IBM which you know.
[1:05:27] Arguably had the biggest retail market share of those three platforms.
So the entire websphere business to HCL HCL is a very large integrator and so you know frankly from my standpoint,
whatever traction IBM had in the marketplace that platform is totally going to lose now that a single integrator,
because you know all the other integrators in the world are not very likely in to be promoting and implementing a platform,
it's owned by one of their competitors so you know usually when an integrator buys a platform it's kind of the end of life for that platform and it just becomes,
an in-house piece of Ip that that that integrator uses you don't becomes much harder to see other third parties.
Integrate that's an IBM had this Rich echo system of integrators that were aggressively selling their stuff so there's a ton of customers that are on it it's but yours was super fragmented about this.
[1:06:31] They sold the on-prem version of the software 2hcl at the moment IBM still owns,
the cloud version of the software which is the newest version but the cloud version is based on the on Prim codebase so if you're one of the few customers that bought the,
Cloud version of IBM or you were thinking about migrating now you have to ask yourself.
Is HCl going to keep updating that code base so that IBM's Cloud version continues to stay.
Competitive or contemporary or what's going to happen there IBM owns a bunch of other retail software that a lot of retailers still rely on most famously they own order management system called Sterling.
It's still doing really well and they did not still sell sterling so in the old days.
You know I didn't had a lot of success getting people to use their o&s and their web platform together because obviously most most businesses need order Management in and then you conversate.
Now those things are getting split up so at the moment there's a lot more questions than answers.
I probably already taking too much time but the one thing I will say is in my mind all of these Enterprise platforms are losing momentum and losing customers and so you know the likely reason I'm selling it is.
They just feel like the super expensive enterprise software is kind of end-of-life because.
[1:07:54] To me what's happening is the very largest e-commerce sites are are all largely on custom and house built stuff.
And increasingly the biggest customers that were on these Enterprise platforms are.
Writing more the software themselves and using less of the Enterprise platform and negotiating to Payless licenses for that software.
Everyone wants to move to the cloud and none of these products are particularly graceful at offering a cloud version,
and then every new business that's been born every new brand that's been born in the last eight years that was more likely to be digital natives,
probably started doing e-commerce on something like Shopify or Bigcommerce and they're actually finding that those those platforms continue to meet all their needs even as they scale and so
you know even if you outgrow Shopify
once you're used to paying $10,000 a year for your eCommerce platform you know it becomes really hard to pay for a you know orders of magnitude more for that you know and then orders of magnitude more on top of that to implement it just became
a tough value prop for these old Enterprise platform so
a lot of us in the e-commerce software space have a lot of nostalgia for IBM at the you know they were definitely King Of The Hill in retail for a long time but you know I do
probably selling them because you know it was becoming a financial loser for them and and it does not seem like that's where the growth is going to be in retail.
[1:09:23] Feels like Financial.
Kind of yeah she'll games though too. Maybe a negative phrase but maybe I'm just wanting to show Wall Street more SAS Revenue so that's probably why they kept that piece
but you know you can't possibly
do well if you're not enjoying the underline code and if I'm an integrator I don't want to make this a surgeon that are so seems like there's instant misalignment there that
possibly work out well.
[1:09:50] No I think there's multiple layers of misalignment now and to your point like
you know if you had a long in the tooth version of IBM and you were debating whether you should upgrade to the latest version or go to the cloud version you know I can guarantee you the day after this announcement you added some new players to your consideration set.
[1:10:06] Who wins Miss.
[1:10:09] Well yeah so in the in the short run on the the low end you know I think those
the smaller platforms are are winning a bigger share of a,
the e-commerce dollar so I think those got the shopify's in Bigcommerce is continue to kind of get away from the bottom and it the top again you have more people building the stuff and so they're all these tools out there to help those companies
build their own things that are all these toolkits of microservices that you can buy to expedite your own development and
that's a really fragmented space right now I can't point to one and say oh my gosh.
Commerce tools is the one or Symphony Commerce is the one you know there's a lot of these players but it seems like ultimately
that that kind of native cloud-based microservice toolkit
retailers that want to build a little bit more of their own custom platform at a more economical price point is likely the way that this is going.
[1:11:14] If only people had a chief Commerce strategy officer they could call too bad no one is earned that title yet.
[1:11:22] Yeah I heard those guys.
[1:11:23] There is only one there is one.
[1:11:25] Few and far between.
That's got that's slightly more than a good place to end it we should have ended it about 30 seconds ago
but we completely overused are a lot of time so I apologize to witness for the extra-long episode but hopefully people found it valuable and it's a great way to
kick you into holiday season so
as always if you had any questions or comments feel free to jump on Facebook and leave us a note
if you struggle through this entire episode we'd love it if you jump on iTunes and give us that five star review and man I sure would like to thank all the winners for 4
a great year and wish everyone a happy holiday.
[1:12:09] You think someone happy holidays we will be back in 2019 with a lot of fresh content for you and we really appreciate appreciate you listening to the show and leaving us those reviews.
[1:12:22] Until next time happy commercing.
EP157 - Bain & Company Partner Cesar Brea
Episode 157 of the Jason & Scot show was recorded on Monday, November 19th 2018.
[0:25] Welcome to the Jason and Scott show this episode being recorded on Monday November 19th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your clothes Scott Wingo.
Scot & Cesar:
[0:38] Hey Jason and welcome back Jason Scott show listeners Jason we have a really exciting guest on tonight show our good mutual friend Rob Schmaltz said hey
have you guys ever thought of having Caesar Brea on the show
and we said who is that you said you need to get him out of there ASAP and when Rob talks we listen
so we're real excited to have Caesar on the show Cesar is a partner at Bain & Company where he is in the advanced analytics and marketing marketing practice welcome to the show Cesar.
[1:12] Thanks for inviting me guys a pleasure to do it.
[1:15] We are thrilled to have you in a Caesar if you've heard the show before you know we always like to start off by having guests give us a little bit of their background and how they sort of came into their current role so could you give us that the recap of your trip.
Scot & Cesar:
[1:30] Sure so I am a.
Several time vain person actually the last time I was here was in the mid-late 90s I was doing a lot of work in high-tech and and software and I left to help build a couple different software companies.
Ended up at one point helping to run sales and marketing at razorfish and then later on I built a marketing analytics consulting firm.
And a couple years ago I got invited to come back to beIN and I've been back in a couple of years and I'm really enjoying this this latest iteration.
[2:08] That's so you're basically a boomerang.
Scot & Cesar:
[2:11] Yes I am kind of I guess one way of putting that as I can't hold a job very well but but I'm really glad to be back at the firm.
[2:20] And you mentioned that one of your previous roles was at
at my current employer razorfish which book make me super excited but it's also kind of sad because I feel like that's a a storybrand and name in our industry that
is a falling under decreasing use as a all the agencies in the Pacific group sort of merge together.
Scot & Cesar:
[2:43] Yeah it's true I I I'm a proud razorfish Alum it was a privilege to work there I got a chance to work with some incredibly talented people
Bob Lord is now at IBM as an old friend than a and a former boss and he originally asked me to come help out there and.
Got a chance to work with really some incredible people that to this day I started following and keep track of intimate touch with.
I still learn a ton from so it's I feel the same way about it and it was really amazing place and but that's the way a lot of things work out so.
[3:20] Indeed add a fun fact on Bob I run into him occasionally at industry events and my my favorite thing is to for those that don't know Bob is that the
Chief digital officer for IBM answer my favorite question to ask him is why IBM needs a chief digital officer I always am I who's the chief digital officer at Facebook or Google.
Scot & Cesar:
[3:43] Yeah I think the premier that's a thinly-veiled excuse to to have Bob Lord so they're lucky to have him and whatever whatever will make sense doesn't matter so that's why I look at things like.
[3:54] No I I totally agree to it until I agree but it's it's fun to needle in a little bit as he also was my former boss though it's and it's safer now.
Scot & Cesar:
[4:05] Cesar what is so analytics and marketing are near and dear to our heart muscle bit more about what that entails.
[4:13] So the simplest explanation that I have for for folks who say what the hell do you do is I tell people I help big companies use big data to spend really big ad budgets better.
How's that is that!
Yeah yeah I like a I like to do so big around budgets especially in terms of what we,
get involved with here it really is what I've been doing it ranges pretty widely it said everything from.
Turn reduction programs to assortment optimization to media mix optimization.
Really just a demand forecasting really just a whole range of things that were that were getting involved in to help our clients do better,
ghost sounds like someone in your company is engaging with a company and they they need an analytic ninja to come solve some really hard problem and they call Caesar what happens
well I would ya like but I guess that's part of it more broadly typically the the work that we do involves sort of tackling in a bigger issue for which analytics is kind of one part of the overall solution
so I think that's you know to distinguish it from situations where you might just hire say a modeling firm to build you a model or you know her or something like that.
[5:39] Yeah seems like you're solving acute problems with data and and getting to Solutions certainly are it's a lot of fun it's a great time to be in the business.
How much is there is a pie chart of kind of the verticals that you company vertical see you interact with how much of that pie chart would be what we would think of is retail and how much is something like I don't know the travel industry you're the finance industry.
Yeah so you know that's that's a varied a lot over over my career I've actually worked in lots of different retail settings big and small here I would say that.
You're probably about a quarter to a third of what I do is retail get involved in cpg a lot and then the rest of berries could be everything from Telecommunications.
Finance any number of different categories but retail is certainly now and then certainly over the course of the years I've been doing this.
A big piece of it principally because that's where a lot of the action is right it's generally speaking a less-regulated place.
People that the margins are spinner so being good at data and put it in a lytx is more existential for four people the other you know that the people that can do that tend to survive in the people that can.
Don't so so it's it's always been a part of what part of what I've been up to over the years.
[6:57] Call will just go ahead and go to the big elephant that's always in the retail and increasingly other Industries rooms is the Amazon elephant what do you have you put any thought against Amazon and how retailers can either inoculate themselves or protect themselves
even just plain survive in a world where Amazon has become so first of all the first thing to observe is is it really is amazing how.
How they are beginning to go into places where you know historically you you didn't think of historically thought of Amazon is okay you know I go and buy stuff online but now when you think about it there.
They're moving into customer experiences into a physical retail into into social of kind of formats and everything.
And also on the back and on the product side you know that what they've done in terms of beginning to take over product categories with you know what their private labels.
That's that's really extraordinary so it's interesting you know Baynes done a lot of research into how.
What what Amazon is doing and how how to try to in a build a strategy that that.
[8:09] It will let me not be Amazon proof it actually gives you a better shot of competing with them no one at one of the things that.
That you think about is you kind of have a couple of choices when it is you know do I.
Do I try to find a place within their orbit where I can actually.
You know through some form of coopertition kind of you know coexist with them and the other is you know can I can I try to build some ability to.
Distinguish myself or at least you know you have a business in places that are that are sort of less susceptible to the Bezos flywheel.
[8:45] The examples of the former would be.
Things like you know best by deciding to sort of carry Amazon Fire TVs or Kohl's deciding to
accept Amazon returns because it brings people into the store and then they can sell them other stuff that they sell at Kohl's right those are those are kinds of kind of examples of of people trying to
coexist and then on the other side you know there's the question of well you know and this is kind of been the subject of some some research we've done.
[9:17] About how do you how do you actually in a carve out a space where where you can survive so for example you know you if.
At one way to do it is through exclusive things that they don't otherwise selling Amazon right and historically I would have said Apple was an example but it's all recently now that they're you know more and more there their they're actually beginning to do.
First-party distribution through Amazon I guess that the new iPhone x are is going to go through there now it's all an announcement against in the last week on that.
There there are if you're big enough within a category you can actually be cost-competitive good example is you know tonight.
If you go on Walmart.com you can buy the Viva paper towels 12 pack for like under ten bucks in the same things on sale at Amazon for 15.
We're close to 16 actually so that you know if you're if you're a player like Walmart that buys a lot of paper towels or stay Home Depot that buys a lot of you know stuff 240i wires.
[10:22] Chances are you you know you can you can compete on cost but it but that's that's going to be tough another example of a company that I think.
It is that's really interesting to me is Wayfair here locally in Boston they
I think do a really good job on analytics on actually helping people discover what products should have go with which products
you know in the long tail of things that they have in their product offering and doing a really good job of certain Fina putting together rooms and kind of cross-selling different products to people and so.
You got to find some way.
And if you think of the Beezus flywheel is kind of Fino selection and cost and experience you've got to find some way to think okay how am I going to.
And run what they're doing in one of those places at least.
Abacus you can't if you if you if you just try to sort us a while I'll just try to keep up you know you're you're going to get crushed so that's I think a productive way to sort of unpack that problem and think about maybe what your strategic alternatives are.
[11:30] Yeah interesting and obviously everyone has to ask her to find a different vector
to compete with them I'm curious you mentioned up front that a lot of your analytics work goes towards helping people optimize their their big advertising spends and you mentioned you work with cpg so it's
in that that segments it's interesting because it seems like,
the cpgs are both having to compete with their advertising spends against Amazon who I think is the largest spender on Google for example
and then increasingly Amazon isn't it.
An important advertising platform that cpgs are spending on so I like how do you how do you think about that and are you saying budgets shift to Amazon and and you know what how do you think that's all going to play out.
Scot & Cesar:
[12:21] Yeah definitely it it's.
[12:25] You know being being on Amazon if you're if you're a cpg you're being a frankly if you're in the other consumer
Products company that with products to be sold there is now got to be a part of the of the strategy I insert when I said be on Amazon being being there from an advertising perspective
earlier this year acquired a,
digital agency that would work with for many years from called forward out in frwd out in Minneapolis and that that has a lot of experience in these areas and that's you know helping clients figure out.
How to make that work is now a big part of what we're doing in our marketing practice and and the other things I think their mind therapy people talk about you know analytics but in this case.
News limited history right so a lot of what we end up getting involved with his actually testing this stuff and setting up tests programs to you know to to figure out what was actually going to work.
[13:24] Yeah and I I guess I'm curious about that like does Analytics.
Mean a lot of sort of attribution modeling and figuring out.
You know how to spend the next s dollar and immediate mixes and those sorts of things or is it more Predictive Analytics and and soda programmatic AI based bidding type stuff or both.
Scot & Cesar:
[13:47] I think I think the answer is I think the answer is both but but I think I think.
One way I break it down in terms of thinking what you're getting at I think for my for my perspective is actually
thinking both macro and micro and end here here's here's a point of view on this that might be useful.
You know a lot of people a lot of marketing organizations and up
doing a lot of wonderful sort of micro optimization whether they do it themselves or they do it with Partners you know they'll figure out like you know how can I tune my by search budget or how how can I how can I figure out a way to get lift over control on my
I might display budgets with programmatic and then there's you know tmp's and cdp's and everything they're using to do all that stuff with.
[14:36] But what's what's interesting about that is if they typically are missing big opportunities at the macro level that they tend to sort of get down once a year and say okay our overall Investments going to be actually going to split it roughly this way across the channels and then we tend to sort of
your ossify during the course of the Year about about no power going to sort of allocate that money across across different channels
a lot of cases if if they're using TV for example to just go out and say all right you know The Weeknd
car. This amount of money and we're going to go buy it as cheaply as possible at the upfront and then we're just going to go run the campaign for the year and will report it each week as we go but there's not any meaningful you know sort of movement of budgets are testing or anything like that the top.
[15:19] And so you know a lot of people see historically this kind of.
Down media mix modeling approach in the bottom of attribution approaches kind of In conflict and I actually see them as as you know.
Pate yin and yang of of of of what we're trying to do in marketing where
it is very important to be doing kind of within a channel specific optimization
certainly want to take advantage of those opportunities for example you know when search let's say you know D average in your spend and maybe doing things by day week or by day part or across your keywords whatever but
but equally important is actually to have this macro view where you say you know like at any given point in time
is my bottleneck in my business you know attract engage convert or retain
and how should I be kind of disproportionately Shifting my attention and my resources to solve things you know at that bottle neck and in the latest month in the latest quarter
and once I saw that there.
Then I can throw to move on to the next bottle and I can figure out where my where my attention out of be as opposed to just sort of saying okay we're in 6 channels let's be as sophisticated as possible in each of them and optimized to a fare-thee-well at the micro-level miss the big.
Mr. big pictures.
[16:38] Yeah so I can definitely see that and I'm particularly interested in that sort of macroview why do you Tennessee clients.
Getting more sophisticated about how they do the macro View and I mean to me it feels like the media mix modeling is several decades old now and it seems like that's still the
the predominant and I'm just it's hard to believe that that still the best the best approach.
Scot & Cesar:
[17:03] Yeah you know so I think I think we need to distinguish between the analytics and the politics so.
There's nothing that you know media mix modeling course is only as good as the data goes that goes into it if you don't have any variation you know in your date if you just keep doing the same plan all the time you really never going to have a useful model because it's not going to tell you much.
If you do have some of that there's there's certainly lessons that you can draw from the data I think what.
What happens though is that a lot of organizations are in was that old expression about culture reading strategy for breakfast the if you have a.
A way of doing things that has led to the creation of a certain sort of an organizational structure and collection of Partners and agencies and so forth those things all have a certain momentum associated with them.
And I think actually you know the well there are certainly opportunities to improve media mix models through creating.
You know tests and creating and just artificially creating more variation your data to help you you know that would sort of the statistical significance of what you're looking at I think they're much more important thing for people to really look at it to try to get people on the same page about.
[18:22] Where are the opportunities might lie and and what they could be doing about that and and not try to get fixed on Unser to some holy war between you know one analytic techniques versus another.
[18:34] No that's that seems like great advice.
Speaking of Holy Wars I want to transition to a buzzword that seems like it comes up most often especially when you used
Big Data three times in the same sentence and that's a artificial intelligence and in particular machine learning and.
You know you go to any of our industry events now and you know you'll see a hundred vendors claiming that there
in ml base solution like including the custodial Services seem like they're machine learning based.
And that feels like a little bit of hype to me but at the same time it seems like they're there really is something there I'm curious how you think about Ai and machine learning and is it is it really being embraced particular by Rita.
Scot & Cesar:
[19:20] Well a couple of thoughts first of all.
IU know that movie Fight Club right in the first rule of Fight Club is we don't talk about Fight Club we we have a saying around here which is the first rule of advanced analytics is we don't talk about Advanced analytics we talk about results and.
For me all this stuff you have any conversation that you have about AI or machine learning whatever has to start not with well you know.
Do you have a squad of phds and are you using tensorflow and you know yada yada but but really.
[19:56] Is the Baseline performance of the business process and the statistical metric associated with that business process that you're trying to improve off of and what progress have you made in the last you know three six months whatever on both of those things.
And so I don't care whether you get there with a simple algorithm or a or a you know neural-net or a three eyed pigeon.
Yeah that you keep feds underneath your desk I think the important thing is that these conversations have to shift from from talking about the thing to talking about the result.
The second thing that people need their kind of Bear in mind when they think about AI is that
AI isn't a tool so much as it's a process right you need to think in terms of you know picking the right question making sure you have the right data for it
you can't do real sort of.
[20:46] AI without really big data and you have to sort of maintain a data platform be able to do that you know and then and then you kind of got to make sure you can do something about it right so if you have some great insight,
if you don't have the you know the marketing infrastructure let's say to a sort of act and we'll talk later by personalization but you know if if you can.
[21:05] If you discover that you know you can turn it down to an individual level and distinguish people's preferences if you don't have the sort of digital asset management system of the content management system is so far to be able to
handle Communications about level granularity you're really you're really kind of you know not getting anywhere and so I think I think we see a lot,
is is people pulling together components of of an AI or an ml solution
but not thinking about the full system it so they don't get the full value of it,
I'm familiar with one company that you had one group that actually went out and bought a DMP but they hadn't really hired the people who new kind of what to do with something like that so basically sat on the shelf for about a year until
you managed to come together and actually help them apply at that you know to something does something useful get a result and then actually get some enthusiasm for investing and all the pieces they need to do to take advantage of that and that's it that's a good example having said that.
[22:06] You know there's there's exciting stuff happening with with AI in the world of RetailMeNot you know one example
there's nobody like playing around on tracks that you're probably familiar with you know that
that basically use image recognition to help you kind of keep your your you know your shelves kind of the way they need to be and and then and then help you tune that and that's,
no that's that's actually a you know there's there's applications like that that I think have enormous potential obviously to
the kind of reshape the category but it all starts with having a clear idea what problem you're trying to solve it supposed to just for the talking kind of you know breathlessly about Ai and how in all the intergalactically wonderful things that you can be able to do with it.
[22:49] Yeah I know for sure I doubt that the the company you mentioned that that invest in a DMP with no plans for using it was alone by the way in that.
Scot & Cesar:
[23:00] Don't know what happens all the time right it's it's just you know and I think I think it's a symptom of this idea that.
We we have confused the means for the ends where
people are pursuing these things as you know things to be bought initiatives to be you know undertaken as opposed to sort of viewing it from a results and performance perspective and saying you know.
How well am I how efficiently and effectively am I out there you know attracting engaging converting customers and to what degree does a DMP powered solution actually create some sort of lift Over Control.
You know over what I had before.
You know and at what point do I get diminishing returns so I don't need to worry as much about the tack and need to worry more about say the content I have or the offer that I'm making or something like that right.
[23:51] Yeah I know for sure and I mean we on the show we talked about a lot is sort of the the shiny bauble problem that you know some some board member goes to a conference and then come back and sent a note to the VP of e-commerce what are we doing in machine learning and 3 months later they've got this
cool data Lake that's doing propensity modeling with you know zero plan to act on that or to change any customer to experience as a result of it.
Scot & Cesar:
[24:17] Now that's that's that's true story, night you know
you got it only seems you got a Target better and Market better right so if you only do the Target that are part and you don't have the ant the engine to kind of do the market better part you're you're not going to get there.
[24:32] Yeah I'm just the one example you you gave was I sort of think of is back-of-house optimization sort of improving inventory and and shelf management
I've heard a couple people theorize that the
in the short term that the biggest opportunities for machine learning to make really you know practical impact on on retail
are those kinds of things that it's it's inventory optimization and cost avoidance in those things more so than necessary necessarily
dramatically do new or different customer experiences.
Scot & Cesar:
[25:08] Yeah I I I think.
Prefer not to generalize too much about it I like to find itches to be scratched right so
in a 1-1 company that I'm familiar with you know looked at it from the perspective of having a chronic problem with over ordering for you know for the sales they had never variety reasons why this happened
you know a demand forecast it wasn't as accurate as it needed to be they had kind of a hard to learn ordering application they had organizational structures that a grown up the you know to compensate for that that introduce a lot of bias into the system
and and so in that case you know we.
You know what we we were able to help him basically reduce the forecast error that they had improved the order management interface and actually,
what kind of change some of the organization and operating practices that kind of wrapped around all that
and and what's what's interesting about that is is that it's for me all these things come up from very specific
use cases II I would say.
I just prefer generally not to you know not to sort of right off one.
One category or another every conversation that we have in our tries to start with tell me tell me specifically kind of what.
[26:37] You know your date is telling you about where the problems are in your business and and then through work up from something specific that we can get our arms around that that's proven to be kind of a.
[26:48] You're generally more more successful way instead of tackling the application these kinds of Technologies.
[26:54] Know that that seems I totally fair and wise and I hundred percent agree the three-eyed pigeon under Scott's desk has way too much open to buy and is definitely over spending.
Scot & Cesar:
[27:04] It's one thing I kind of.
What is machine learning stuff it feels like as a startup guy kind of like the next Network effect right so you're you're getting more day that you're getting smarter that creates this
nonlinear advantage over competitors and then I started looking well
then is it true that companies with the most data win so so then I kind of come to this place where no one's and have as much transactional data as the big guys like.
Ecommerce side Alibaba Amazon
yeah babe didn't even on the ad networks you know we all thought these ad networks would create this huge democratization of had platforms,
but now they're really just kind of Ogle opoly with Sprite there's two of them exactly so so does it mean kind of game over because those guys have all the add data and the car or stay there or is there hope
if I am a smaller independent company that could mean you'd like in a Best Buy in this this world were talking about yeah.
Help me understand that it is kind of an outsider of how you're thinking about them yeah so.
[28:20] One way to a take to process all this is there's no there's no question that.
The types of sophisticated machine learning algorithms things like in a deep learning and neural net approaches and things like that.
Those really begin to shine when they have a lot of data to work with you don't you know a lot of people misunderstand that that unless you have a lot of data in general the performance of one of those will you know.
[28:51] May not even be as good as what you get with and it was some of the you know some of the more conventional machine learning approaches things like you know.
Gradient boosted trees and things like that so what I would say is though is that.
It isn't just about how much data you have it really it's really back to this idea that you want to think systemically you want to be performance-oriented been think systemically about
about what you're doing and in terms of you know being aligned and where the opportunity is at any given moment
being at you having the access to the data to work with it but then also having the the kind of
the operational flexibility to act on it I actually think that the people that are winning and winning less because they have big data and more because they actually just have cultures that are data-driven that are Nimble that are better to
and and and that you know frankly are just
you know they're wired tube to move in a more agile way then then their traditional folks are that and in the proof of that pudding actually is
just so you know if you look in if you look in sort of the cpg world for example and you look at where all the growth is Ben it really is coming from these insurgents that are so much smaller then.
[30:12] You know than the than the traditional than the traditional players in the categories that they happen to plan but they just move faster and there you know they are more,
analytic by Nature even if they don't have access to the massive datasets some of the you know some of the bigger players you know.
The gravis if they had the inclination to do it.
[30:33] Cool so let's set some kind of best practices of The Cutting Edge to backtrack a little bit you've got a long history of seeing this what are some common pitfalls folks fall on when they when they kind of think about.
[30:47] Using data and analytics to solve a problem well I think the
Alpena kalpana scenario you see a lot which is
company X hires firm why they give him all their data the guys go off site they build models they come back they present an answer and nobody understands the answer
and so they don't believe in so they don't do anything about it right the biggest the biggest so what what's the so what out of that the biggest so what
is that there is an enormous opportunity to get more out of your
modeling efforts by making the process of understanding the data that's going into it something that's much more sort of shared there's famous
a famous statistician named John tukey who invented of a field called exploratory data analysis
and one of the things that we're very keen on is kind of exploratory data analysis for the masses and so what do we mean by that right so like.
What that means is rather than let's take the in the media mix modeling context rather than sort of waiting for the firm to come back and tell you that the marginal Roi of searches you know is Aksum that of TV is why.
Let's just go through some basic line charts up on the wall.
[32:07] And look at what happens when you spend more in TV to do searches go up dude you know dude site visits go up to conversions go up and just begin to have a conversation as business people about what we're seeing actually in the data
before we actually turn it over to the modeling firms to actually go process that and crunch it and come back and tell us you know what it all what it all meant if died of an aggregate
in a statistical measure perspective because I think that,
you doing that really empowers marketers it did kind of takes analyst and marketers you know who typically you're kind of at this passive-aggressive relationship and turn them into collectively analytic marketers and that.
That part of the process I think it's highly underrated as as a really valuable.
You know part of the whole machine learning process that that the companies are trying to take advantage of.
[33:01] I'm sensing a trend that it almost seems like in general it's wise for for businesses to start to have a practical well-grounded macro strategy before they jump right into crazy tactic.
Scot & Cesar:
[33:15] I think I think it just certainly I think what I see a lot of is companies that a fact.
Couple things I've seen this week basically we're people have kind of a product out report out kind of way of interacting with their data and decision-making where they say all right you know we we have
Project X it's week,
you know end of the year compared this week with last week and you know in the context of the overall media plan we change the creative this week.
Either they're basically just thinking insert a very static kind of.
You know we already are just reporting on what they're doing as opposed to saying you know.
[34:01] What is what is the bottleneck in our business if you ask that question you say okay where is the bottleneck and what are we doing about it that that.
Drives you to go you know explore the data in different ways and if you're just basically saying you know how did this week compared with last week or how did this quarter compared to last quarter a year-on-year whatever comparison you're trying to make and that that we find is a.
You know healthy lb access it's really important is it it's an accessible way of thinking about the problem.
[34:33] Which is which is important in a world where even though obviously data and analytics are more important there's a lot of you know marketers retailers e-commerce errors out there that that.
They didn't grow up that way and then or just coming to this.
[34:49] For sure and speaking of not growing up that way and having having to evolve
the question we get asked on the show super frequently is about omni-channel attribution right and I'm I'm curious if you have any sort of thoughts or best practices and you know if folks are starting to break
the silos in.
Scot & Cesar:
[35:10] I'll tell you I'll tell you what not to do and then I'll back into what may be some some things to do work what doesn't work is
the classic okay let's gather up all our data let's throw it into one big you know repository and then try to big one one big honking attribution model out of it even if that's down at the granular level what you're saying okay you know.
Idx saw this ad you know 30 days ago and you know came back and and so we'll assume that that at work.
[35:40] That kind of like throw it all into one big pot kind of approach I think cuz has been most people that sort of realized they know that that.
That doesn't work in the work that I've done that had the opportunity to work some really you know of strong people in this.
[35:58] In this category give me example.
The guys are visual like you were my first landlord back in the day when I had my old company in those guys are pros and they they know what they're doing.
[36:11] When we work together one of the things that we did was we tried to First Look at the kind of macro categories of lab results and spending and so forth and figure out okay
which are the dominant channels that we need to optimize against each other in this overall mix and then just focus on just getting like one
one pair of in a couple of channels working together productively right so so if their mix had you know say.
TV and search and then and then you know from there though obviously the conversion through the through the vine Channel we try to just.
And I try to get
DBA search Optimus together if it was Search and say I wish this play in Search and you're just trying to basically say okay to what degree does display spending Drive such a subsequent search behavior let's let's get you know let's get bad
kind of taken care of and and so the the smart approach was in a sequence to it was picking you know,
prioritizing the channels that mattered getting those two working together you know well seeing what kind of lift you got in terms of the results there and then recycling both the results in the lessons Into The Next Step at you take as opposed to this kind of Dino throw it up throw it all into one.
Big pot and I hope the best.
[37:30] That that's what I make sense it's funny when I went over to ask her about omni-channel attribution I find the.
There's even dramatically different dimensions that people are thinking about like often their thinking about the
the various advertising Vehicles like television versus search for example which I think is that first thing you took sometimes they're talking about the channel attribution.
You know when when someone does a mobile check out in that stores that are online sale.
Store sale no starts at things and sometimes that you're talking about a touch device attribution when someone browse is on that tablet and then consummates the purchase on that desktop how do we how do we do that sort of things.
And the one that I'm most interested at the moment as we were right in the throes of Black Friday and it's it's going to be the most
digital sort of holiday we've ever had both both online and in the stores any particular thoughts or or pitfalls or best practices you're seeing in terms of that the actual Channel attribution the
that online to in-store and vice versa that kind of stuff.
Scot & Cesar:
[38:46] Well what's really interesting is what I'm seeing a lot right now is
people trying to jump the gun on the on Black Friday all the Black Friday deals that are now being trolled kind of you know in advance and
and I've been tracking a few things just both for professional and personal interest.
[39:13] And watching the you know the prices come down
and and and and seeing whether or not it's almost like we're almost watching sort of like Airline pricing happening in sort of you know retail world now where you're basically you know you have this
attempts were to drop the price and see if you can actually get.
People to you know to buy before Black Friday at the Black Friday price or something close to it because it's really it's really in its if you think about it it's a it's an experience nightmare
right to try to cram everybody into the store at a specific time have people trampled to death
and I was you as you as you go in and answer anything you can do to basically sort of smooth and and optimize the
yeah. The flow of demand into your channels and your ability to fulfill that is actually going to be,
it is actually going to be something that's to the benefit of the business so to me that's the most interesting thing about this particular
addition of a Black Friday and Cyber Monday is to sort of watch kind of the you know the sort of.
[40:25] Sort of like the back in the old days the Oklahoma Sooners who were trying to jump out ahead of other people too kind of stake their claim and and it's not unlike.
You know airline seat pricing now I think is what we're beginning to see happening in in retail
yeah. So one of the big battle areas is cpg and in your sounds like you're involved in there to some degree and grocery where do you think that's going to wear seeing Walmart really kind of triple down on
curbside grocery there's a lot of people experimenting with delivery of groceries and then within cpg you know you have,
so what's going on with these new Challengers that are our kind of digitally native brands
you got the old guys trying to react to that may be acquiring some give us some thoughts on where you see this phone well so.
[41:23] You know that the the question here is very often at what point do these insurgents you know gif.
Buy the bigger players because obviously the bigger players do you know bring a lot of advantages to the the table in terms of distribution in terms of
yeah I was just in terms of their ability to also on the back and provide a a supply chain to actually get things built at scale that a lot of these folks can't you know can't manage as they're trying to grow so.
On the other hand all the groesten and pretty much all the growth in cpg over the last few years is Ben from these that should have been searching players that are for building these
at least these are these new brands go out of authenticity and everything in them.
[42:17] What one of the things that's interesting you know his historical e in cpg.
[42:21] Yuri may be familiar with the kind of a felony in Byron sharp who basically said for a fast moving consumer goods it's really all about mental and physical availability right so it's not it's not about loyalty so much for segmentation that's about just making sure that.
You're out there reaching and repeating and then that you have distribution in the stores and the basically that's how you want in that category what.
What we're seeing now is sort of a a movement away from that we're certain brands developer loyal followings you do in fact segment more than you used to
and I think we're bending the sea is this kind of weird middle Zone wear.
You know the the the new folks and the old folks would have need each other it's kind of a symbiotic kind of thing where you know the the cpgs need these Insurgent brands.
I will acquire them to to drive growth to begin their kind of expand their opportunities but at the same time be Insurgent Brands and a really need.
The the the half-ton the scale in the distribution of the bus on the manufacturing side of the distribution side that a you know that is step one of these large cpgs with their big sale sources for example and I can bring to bear.
[43:33] And that it was probably that sort of interplay between you know.
Those those those two kind of types of players is probably the most interesting place right now.
I see you've all been particularly in a world where even as that's happening the distribution channels are evolving right everything from from you know drone delivery to you know to Amazon is an advertising channel to yes but that's.
That's what I kind of Zone.
There's a geographic term for that that that's not coming to my but that's that's I think where we should watch for a lot of interesting action if it was next couple years.
[44:16] Yeah I told you I think it's going to be a really interesting category to follow cuz I feel like the disruption is is really only just getting started there at the moment
I wanted to give it a little bit to another.
Potentially interesting topic that comes up a lot but also has a a buzzworthy component and that is personalization so you know again lots of lots of folks get get directors from their board members to have a personal
Malaysian initiative how do you feel about that and what what sort of best practices are you saying there is that a real thing.
Scot & Cesar:
[44:54] So again let's not confuse the thing for the result right when people talk about this the question I have is.
What degree is personalization are we talkin about right and end are there is is is everybody sufficiently different.
That each person should actually have a materially different
you know offer or experience presented to them in order to generate the kind of lift that over over some more aggregated approach that
you know that you need to see so in general yesayya what we know they're there been
their studies out there that basically say that you know compared with a plain-vanilla US offer the same thing to everybody you know that obviously up personalized targeted segmented approach
is actually get Kratom lift but is it really is a question of degree there are certain.
[45:52] There's certain things that are also easier to personalize that other things so for example you know you can you know to the degree that it's legally
Bob permissible you can obviously very upright at very low price relatively easily in an offer but executing creative sometimes can be you know challenging and you certainly can't necessarily just you know
kind of like morph the product itself on the Fly for every individual customer maybe in some age where we have you know
3D printing in a widely-distributed you can you can kind of do that sort of thing but we basically.
You know beat the other there limits to what you could do on certain dimensions and there's possibilities there's more flexibility have another another dimension.
I think that the way to approach personalization
is through having a really really strong program of experimentation and kind of test test results test for learning where you know you're constantly sort of testing whether or not.
You know that extra sort of bit of variety actually provides enough economic lift that it's worth the incremental complexity that adding and is it said in some cases the dimension that you're burying The Experience on what is actually much more flexible than than another
a number in a digital you know.
[47:14] A degree of offer a promotional discount in an email is much easier to bury than even the creative this wrapped around that.
At least at the moment it may eventually be that we get to automated creative and so forth but that's we are beginning to but but for the moment it's it's.
[47:32] You know for most companies are there limits to just how how finally they can slice things
cool so we're up against time but we we love to ask kind of more of an out there question we've been kind of tactical here and I've seen you guys really interesting tweets about
AR VR and you just mentioned 3D printing and Jason I love to think about some this stuff sometimes just kind of get out of it the day today where do you see the future of Commerce and feel free to kind of
Go Out 3 5 10 20 years would love to get your thoughts on them wow well you know.
I think I think one way to think about this is is is that we
in the end we buying things and consuming them as sort of a means to visit to meeting physical and emotional needs right and and so to the degree that technology involves.
We will were ultimately need to think
yeah we ultimately need to think in terms of how we're sort of doing you know doing those things as opposed to the products that happened to be the this word of vehicles for fulfilling those those objectives.
[48:47] Let me not not to be like super esoteric about it but you know it if if I am,
let me know let's take for example clothing right you know if if if in the world of,
Evo VR and so forth I can begin to sort of project an avatar out there you know then then basically you
your way of sort of interacting with people may change and if your ability to sort of you know shift your shape on the Flies revolves it it means it has heard implications for the whole sort of you know fashion industry rights I don't want to.
To intergalactically distance on this but I think the main point is to basically say that we,
should not confuse the means for the ends we should think about the future of.
Retail in retail technology as something that serving these physical and emotional needs as opposed to figuring out how to get specific product X to you you know more more quickly or or give you a different perspective on it.
[49:57] Well that's a great perspective it's going to be interesting to watch it all play out and that's going to be a great place to leave it tonight because it's happen again we've used up all our a lot of time but if listeners have any comments or questions about today show we
encourage you to jump on our Facebook page and
continue the dialogue there as always of this show is valuable to you we sure would appreciate it if you would jump on iTunes and give us that five star review.
Scot & Cesar:
[50:23] Cesar folks want to learn more about us some of the topics that you covered in and see what you're you're talking about on social media where should they find you.
Sure Caesar Brea Mall when were done both
Twitter and Linkedin so I'll certainly post dust up there with some of the stuff we talked about here and and hopefully that'll be useful fucks, put a link to that in the show notes and we really appreciate you coming on the show thanks for joining us
thanks very much for inviting me I really appreciate it.
[50:53] Is internally our pleasure thanks very much Caesar and until next time happy commercing.
EP156 - Profitero's Keith Anderson Holiday Recap
Keith Anderson (@KeithAnderson) is the SVP of Strategy and Insights at Profitero. Profitero is a leading global provider of e-commerce analytics for brands and retailers. As head of strategy & insights for Profitero, Keith leads Profitero's product strategy and global analyst team.
In this episode, we discuss Keith's insights around last weeks Cyber-5 as well as 2018 in general.
Episode 156 of the Jason & Scot show was recorded on Thursday, November 29th, 2018.
[0:25] Welcome to the Jason and Scott show this is episode 156 being recorded on Thursday November 29th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your toes Scot Wingo.
[0:40] Hey Jason welcome back Jason Scott show listeners well this is the third and final part of a three-part series around our holiday 18 quote-unquote halftime coverage
in the first episode we covered a lot of the news that came out of the holiday then we had Tamara Gaffney from Adobe to share
sure do love how their day that was shaping up and we are excited to welcome as the third part,
property Rose s VP of strategy and insights Keys Anderson to the show.
[1:12] Thank you Scott thanks Jason great to be with you both.
[1:16] It is awesome to have you I've been wanting to get you on the show for awhile Keith I'm a Avid follower of all the content you put on the internet so I'm excited to have a lot of conversation about it tonight.
[1:26] Well likewise whenever I mention did I have a podcast people say I would like the Jason Scott show and I said yeah yeah I've always enjoyed it so good to be a guest.
[1:37] That's a fabulous compliments so as you know from listening to the show when we have a guest on we always like to start by getting kind of a
a brief synopsis of how you matriculated in your career and came to property row so what was your story.
[1:53] Up my whole career has been in retail and consumer goods Consulting and Industry analysis and now,
product management profitero's so started at kantar,
Consulting is it sound known in in those days it was a company called MPI and then help start another industry Analysis company called three telnet Group which is now part of,
Edge by Central and in what while I was there,
my practice was really focused at the intersection of Technology with retailers Brands and consumers both in-store and in out of store,
import of that work was helping some of the brands cope,
even in those days this is seven or eight years ago with the proliferation of Technologies and Solutions in all of the inbound email that comes with the business development teams those companies,
and there's a lot of noise and folks saying.
[3:00] Which types of capability should we be exploring who's good
until I had to have built up a view of the landscape
and have been doing work with some investors and as it turned out the investors and profitero's,
work with us that I had met before and really admired and they asked me hey we are thinking of trying something new what do you think,
and I don't think they were expecting five pages of notes but I had a lot of ideas and they said well.
[3:37] That actually sounds like a pretty good plan do you want to do it so I've been here for about 5 years and,
in that time we built a global performance analytics platform for brand manufacturers so it it's been a nice way to apply,
tell me what I know about the work in and apply it in a pretty different business than anything I didn't previously.
[4:06] Nice you can quickly Avail me of a misperception if I have one but I
I think of you guys as one of the Pioneers in a new category of analytics that I I tend to call digital shelf Analytics
and is a a is that like a good description to you is that too narrow.
[4:29] I think it is we we sometimes say performance analytics because we in a grade.
At least for Amazon traffic conversion tail share data but you're exactly right one of our court date is at this correct collected directly from,
the digital shelf it's public domain data on Amazon and any other retailers site or mobile app that tells you how your position than search.
Is your content completing compelling do you have enough reviews did you get a negative rating yesterday.
That needs a response are you available in stock in an ultimately you know what's the score in in why are you winning or losing so,
I wouldn't necessarily say we pioneered digital shelf data wait we've got,
great piers in the industries that were there first what we may have done first is connect some of the data points or data sets that allow you to look a little more holistically and we think make better decisions fast.
[5:39] And that's why I said you know one of the pioneers and so in my world and I'm super old and so in the old days of traditional Shopper marketing
we used to partner with brands that would spend a bunch of money on in-store displays and we would actually pay school or college kids
to go visit stores and take pictures of shelves and we would look at things like with our share of shelf in the house our product showing up on the shelf and all these sorts of things and so I sort of think of,
that digital shelf is the
the way better Modern equivalent where you guys are are essentially sending Bots to all the product detail Pages for these major retailers in your collecting all this super interesting,
structured data around how everyone is merchandising their their product on on the digital shopping.
[6:27] Yeah that there is definitely.
An alignment of some of those disciplines you know for p and and shelf management disciplines in and some Shopper marketing concepts that definitely translate from brick and mortar.
To this domain and some of the benefits of using technology or obvious you can collect a lot more data more frequently more accurately and having been.
What are the people collecting data like that manually in the store a lot more efficiently so so that is one of the benefits I think now where we sorta see things trending.
Ultimately those are Audits and audits are great for telling you whether you're doing what you think you should be doing but given the the pace that.
E-commerce and an Amazon continues to evolve at in and out Dynamic it is a lot of the questions are about what should I do and how do I do it.
So one one key Elementos what tools like these I think,
can help you do it is they keep evolving is certainly see whether what you think should be there is there and things are being executed the right way but it's it's definitely moving deeper and deeper into optimization I think.
[7:52] A long lines of optimization tieu you reference some performance analytics data beyond that the periodic can you just talk like in a little more detail about like what kinds of data that is.
[8:03] Sure yeah and I think.
What's important to to distinguishes some of the data sets that all describe now,
we can do on Amazon but we can only do it on Amazon and there are a couple reasons so we can,
show up I mean you fax your daily glance fuse for their Paisans on Amazon we can show him there conversion we can tell I'm not only there,
volumetrics that is daily unit volume and and.
[8:37] Sales but we can we can also ask them ate their competitors daily unit volume and sales and then ladder that up to a category View,
aligned with whatever hierarchy they may be accustomed to report again there's two reasons we can do it at Amazon and only Amazon one is Amazon's site structure is is revealing,
there are things like best-seller ranks and who's winning the buy box that are observable in the public domain and with with one of the other inputs to Armada,
which is actual sales for Branson products where we don't have the specific data points we need we can model them really accurately a nation level everyday.
[9:28] The natural question is when can you do that for any other retailer in in I think God's are slim that,
it'll work the way we do it at other retailers but there are companies that operate panels of different kinds in a browser and and device monitoring and,
a receipt modering dead that can also,
provide similar metrics for a broader set a Retailer's too I think the real value is in what we do is at least in in Amazon's ecosystem having those status at seamless integrated,
with workflows that are that are oriented around.
[10:12] The tassel you got to do that's one of the ways that that it comes to life in our world.
[10:19] . it's just so I make sure I'm I'm tracking like Amazon because it's so so rich gives a bunch of signals about how products
sell or perform relative to each other so you notice all those signals and then you know I was your client tell you what my actual sales are for my products and then you can use that as sort of the seed to them say alright well here's,
people that are performing acts and not better than you in X-Men worse than you and you can kind of interpolate,
the whole category using my my data and all the signals that you noticed is that.
[10:55] That's a that's a pretty accurate explanation.
Smiley paying attention so let's it sounds like a great set of Daedalus let's jump let's go swimming in their start with holiday at a macro level what are you guys seeing here at about half time of Holiday 8.
[11:15] I'd say there are two things that I've noticed we had actually just done sort of a 3-month study of of prices at around 20 Us online retailers,
in generally what we see is that Amazon is is the cheapest across,
a broad set of categories both hardlines offline discretionary,
NN consumable what with exceptions on some items in in every category and in occasionally entire categories where they get beat
what it looks like over the period from November 21st to 26 the basically just before Black Friday it into,
today after cyber monday it looks like Amazon was really aggressive with similar price gaps to a lot of the the same retailers that,
that we compared in the last study but larger in in a few cases.
[12:17] So during the holiday so it's a lot of people don't realize on Amazon it's like a real time stock market for products right products are changing
channel. So we have to replace her so we're probably part of the problem you're the
the solution depends on how you look at it I'm sure you guys see this a lot right does does that like go crazy during the holiday where it's usually like an 8 out of 10 and during the holiday you're just seeing these retailers react to each other more fever space or doesn't settle down during holiday
what do you see what's kind of in the day that you can tell us about that.
[12:52] We see definitely more Dynamic pricing especially on the 3rd party seller so I'd soak.
As you know on the one piece side as with any retailer all pricing decisions or at the retailers discretion it is dynamic an algorithmic.
But the Brand's get no input into Amazon what while nobody really knows how their algorithm Works across the board.
They have been from what we what we've observed.
A little more selective about the items that they don't want to be beat on or that they really want to win on I think that.
We did a study of hourly pricing a few months ago and I unfortunately don't have it pulled up but I think we saw orders of magnitude more intraday price changes.
From the third party seller side and that's what we see over holiday to what one of the things that we've seen a lot of retailers.
Last year but especially this year is what appeared to be somewhat constrained Supply so that's one of the other reasons you may not see.
[14:11] As aggressive price matching between retailers during the promotional period because if they're not promoting the item they probably don't have to supply and so I think they they are getting to the point where.
[14:23] They'll consider matching on items that are.
[14:28] Key items for them or that they're promoting but the rules engines are getting sophisticated enough that there's less of the Brute Force price-matching across the landscape.
[14:40] It it feels like Amazon's everyone's being particular aggressive on toys because this is the first holiday where we haven't had a Toys R Us and then the Adobe folks were talking about Dad and Amazon called out apparel and toys in their press release
can you see you talk about this kind of macro view of Amazon compared to other folks can you look into your data and say,
my gosh they're going crazy on toys or any other kind of categorical stuff there that was interesting.
[15:08] Yeah and toys at Walmart looks like they're being aggressive although a little less aggressive than they were in the second quarter on price,
and in jet actually looks like they win.
Much less aggressive but it it certainly makes sense there's definitely a vacuum that's been left,
you know we've seen some other supply chain related
complexities in in some of those categories over the same. So I'm really looking forward to the the final read on what the cell through was just to see how that compares to what we see in our pricing and promotion,
data as I I think everybody wants to win those those Shoppers looking for their Toys R Us substitute.
[15:53] Aromatic wants to have plant their flag and toys this holiday so they're they're being super aggressive.
[15:58] Yeah we also saw a lot and in baby which I think is sort of a similar idea just not a seasonally aligned,
but naturally when you went when your family expands especially For the First Time suddenly you're looking for new products that you've never bought and doing a lot of research and that makes you more receptive to.
The Retailer's so I think some of what we we saw in the baby category was was potentially related to it too.
[16:26] Cool swim if it's kind of already covered toys do you want highlight the Mack.
[16:31] I do electronics I think was was pretty competitive with Walmart and Jet being most competitive followed by Best Buy Best Buy was was 15% more expensive jet.
[16:45] 10.4 Walmart.
5.9 appliances not quite as is closed Amazon but Walmart.
Closest Home Depot 2nd close closest in in tools and Home Improvement or another one where.
What one of the rare ones where a specialist in the category really,
let our price in that case I will not let Home Depot's a little more expensive than Amazon but Home Depot is less expensive the Walmart so it's been interesting to us to watch,
it is we've seen over the last decade with a lot of the brick-and-mortar category specialist in their online counterparts.
Feeling to find a a point of difference,
you know do these players eventually capitulate and try to compete on price or do they give up I haven't mentioned Staples but they're commonly 35 to 50% more expensive,
so when I see Home Depot or somebody pricing is close to parody with Amazon as it looks like they did over this. It's sort of notable.
[17:58] Interesting is it what category that I'm particular interest in then and I'm curious of it
if you had much visibility in your in your data so I know you guys are really strong in the cpg space and obviously cpgs the
a category that I feel like is quickly getting disrupted by digital like there's not huge adoption to sales yet but it's it's Rapala daily involving and particularly on food I feel like coming into this holiday.
A lot of the retailers have really muscled up there they're digital food capabilities he had
Walmart with 2,000 stores you have Target with the whole ship infrastructure you had,
Whole Foods doing a digital orders and rectal home and you know of course she had you know instacart continuing have a strong present so in my mind
this this Thanksgiving was really the the first holiday that people had a very likely had an option to do there
their Thanksgiving meal shopping as curbside pickup or home delivery and I'm curious to see if it it look from the data like like there was traction in that category.
[19:06] I don't know that are dated will reveal if we're talking about fresh and perishable groceries are they won't reveal it from a sales perspective,
I think you're exactly right it's clearly been an inflection point this year with with massive expansion I mean the last two years but this year especially massive expansion of availability.
Click and collect and delivery models.
Especially in some of the the tier-2 tier-3 you know less less Urban parts of the country that.
Prior to models like instacart really scaling meant that.
[19:50] Let you know any previous Thanksgiving for the last 20 years you could have ordered online groceries if you lived in Chicago New York Boston and a handful of others,
big metros but what I think is really notable is almost anywhere you can buy groceries you can buy them online now that the,
gross trajectory that you'll see though for online grocery is pretty different at least local on my groceries pretty different than 10 for typical e-commerce there are a lot of.
Surmountable but but important hurdles to triggering or prompting that first order in so I did see.
Retailers like Amazon and Walmart doing some interesting promotional stuff at some times with their suppliers in a komarketing.
Campaign trying to trigger that that order with either waived delivery fee or you know discounts if you if you buy in bulk.
To a few different ideas but my suspicion is it's going to take a few years of.
[21:09] Extended exposure to persuade you no more than a quarter of the the Target shopper base in any of those areas to try it once they do try it,
if it's a if it's a good experience then they start shifting some of their stock up trips and some of their there.
Routine grocery consumption to that model and that's where things get sticky I do think you know things like instacart lowering their annual membership fee to put it now actually a little below.
Prime and definitely below Prime including Prime fresh.
Where where before they were more expensive you know there's definitely that eagerness to.
Drive drive trial and then through those membership models which not all the online groceries have try and unlock a household in.
[22:03] Yeah it is one of the thing that's been fun for me about grocery is that it's both familiar and feels a lot like traditional e-commerce and then it's it's very different in for him anyway
and one of those Pig ways people have talked about it all that much but for most categories of e-commerce
what super important is the capture that second order from a customer
right bike so it is actually not that hard to get a customer to make a one-time purchase but until you get a second order from that customer you really haven't formed at
Habit in it you can spend much money to acquire the customer selling something wants and not be very successful so you have to work really hard to get that second order in
groceries potentially the one category where that flips its so list based that it's super important that you be the first brand that gets in that list because like it's very likely that you better,
had it thanks for that Chopper they're going to continue to to reorder off that list and Serta manicure that list rather than,
like make new product decisions every single time.
[23:08] Yeah that's exactly right and I was thinking even from the Retailer's point of view you know part of that.
Complexity is the larger order size that there in the average amazon.com order there's between one and two items.
But a typical grocery in in online grocery orders or even larger,
will have 25 or 30 items under 20 or $150 and that that take some planning in in a little deliberation to build that basket.
And as a result there's a lot of Abandonment of the online carts when you add three or four of your items and then.
Say you know what I know exactly where those items are if the the Stop & Shop.
[23:58] Three-quarters of a mile down the road I can get down there and get in and out and just have this stuff in the kitchen in an hour so you know there's it and then all the concerns about.
Produce freshness and I want to pick my knee and and all those things and in a lot of those things are some out of all but yeah once you get the Shopper to try on my grocery from the Brand's point of view you're exactly right.
You know search still matters but it it matters,
Less in the online local full basket models then then on amazon.com and that favorites list is a big part of it in there there have been some clever things folks have done,
like letting you link an in-store loyalty card to your online account so that they can pre-populate your first online order.
[24:48] Based on what what you typically Buy in their stores so people for years has had a a feature called guess my order like that and I think that's clever and we're actually starting to see,
at least a b testing or or piloting if not full scale.
Roll out of sponsored products in shopping list and Registries and some of those things you know just this week we were noting that some of the baby registries on Amazon are are.
Displaying inline sponsored products alongside what the the new parents are actually asking for that it's getting very interesting because there's all this disk Clarity that.
You do need to be on the list but.
Getting on the list is much less straightforward than how you drive traffic to a product page or a lot of the things that other brands have spent the last decade or two optimizing for in a.
Spearfishing amazon.com style model.
[25:55] Yeah and you did highlight I think one that that getting a lot of covers this week I want to see Wall Street Journal may have ran an article exposing some of the,
the Amazon sponsored listings in in baby registry and I have to say that feels and looks to me like particularly oil.
Like literally what's happening is is Shoppers Bill the registry list they send it to all their friends and Procter & Gamble has the option of spending a half million dollars to have,
to add their own products to your list with in a very settled sponsor branding and it it it literally says on it you know zero of one purchase just like any other item on that,
gift registry and so your friends are buying the stuff out the Procter & Gamble ad because they think you've requested it and if you know Amazon to me is a very good shopper friendly,
company that like you know claims they always really focus on the user and this is to me one of the most over cases where,
like they could we are not focusing on the user and that in that execution.
[27:00] Yeah it's hard to say what's going to Sticks Amazon is like you doing multi-grain testing counseling so web see if something like that 6 I think but it feels oily Amazon is typically done a pretty good job of pulling back on it but we'll see.
[27:14] We obviously see a lot of the knot,
unit test by test what's what's being tested but we were like like Channel advisor would be wear on their side all day and in the testing is really escalated this year and a lot of it has been around sponsored products,
every week you see an article about not only the gross but the importance of that Revenue to there.
To their profit model so I think they are really just testing the boundaries and not only saying what works but listening for the reaction and seeing out.
Ruffles feathers that doesn't around the ecosystem.
[27:57] That was a good summary of what your scene in Holiday lets this kind of pull back up to 30 thousand foot level 1 of things we've been wanting to get you on the show to talk about is just the more general pricing
I report you guys put out there,
give us a an overview of what you're seeing and kind of more of a macro Sensa and any interesting highlights you want to call out we would love to hear.
[28:21] Sure bite I think by this point it's it's evident that most retailers have some.
[28:32] Competitive intelligence and repricing capability and the the margin compression.
That that has resulted in when it's not widely deployed I think he has become a big topic so I mean the tactics I think you're really important but we we just did a big,
survey with kantar Consulting of 200 brands.
Globally and in the number one challenge that they cited above all the other challenges was pricing and profitability,
I think one of you mentioned you had seen the the recode story about the big shift.
It seems to be underway between how Amazon had been.
Essentially tolerating this emerging one p3p hybrid strategy that some suppliers have been operating are exploring what what what Amazon basically did was,
Crackdown and say if you're doing business with us directly is a vendor we want you to be a first party vendor and even if you've identified and authorized reseller,
is trying to enforce that authorization against unauthorized resellers.
[29:54] We we need you to consolidate on the one piece 5 in and you know when you hear some of the commentary and that record article from folks around the industry,
it's pretty alarmist or at least it sounds very alarmed but I think innocent it's a fair characterization.
You know this is not a particularly new problem but is the growth is compounded especially in these low-margin hot high velocity consumables category.
That there quickly Awakening to.
The supply chain in and unity conomic realities in realizing boy we have to,
contain cause and we have to raise a species until what where that leads us is wheat we definitely see a handful of retailers competing aggressively,
everyday shelf pricing on the items that everybody carries in common but there's also been a big escalation of.
What I think I was more strategic investments in in either value or non price point of difference.
[31:09] An example would be something like jet smart card which I'm not suggesting is widely adopted or or loved by shoppers but it is a way to make the economic trade-off that,
impact the retailer explicit to The Shopper so that they can align interest and say,
hey if you waive the privilege of overturning the product that saved us so will pass some savings on.
But much more investment in private label and exclusive Brands very aggressive Push by Amazon over the last few months in what in some categories might be a bit of a pivot from.
There their previous private label.
Strategy to more of an exclusive strategy a lot more tie-ups with some of the.
Direct-to-consumer Insurgent Brands and a Target is been partnering with a lot of those brands that.
[32:08] Built a little awareness through direct consumer model but then hit a ceiling and needed a partner to scale so I don't know if that's exactly what you had in mind on the price something but what I'm going to harden to see is.
That the retailers are starting to think of ways to transcend,
Brute Force matching hourly on every item regardless of other impacts cuz I think we can all see that's not going to be sustainable for five years.
[32:42] Yeah I know it's early as a race-to-the-bottom maybe a close cousin or lated to like you know all the the,
Dynamic pricing and and controversies there is just sort of General product visibility right like so a super common narrative all have is
every three piece our thinks they're being disadvantage invisibility versus stuff that Amazon selling directly so they they think.
[33:09] Amazon somehow cheating and making one p product more visible than their 3p version,
and like increasingly as Amazon has more more their own products all the all the you know National Brands feel like there,
there somehow disadvantaged invisibility versus Amazon zoned products and the the newest iteration of this I've heard is a lot of them,
there's several of my clients that are from very large Brands like have asked if,
I believe that Amazon is disadvantaging a large brand versus smaller digitally native Brands because their perception is,
sort of small Challenger brands are emerging and and doing really well with his ability on Amazon and their their perception is that it must not be a completely Level Playing Field like my overall reaction all that is that it's,
Amazon has a pretty fair system and they just know the system best of the they're able to take most advantage and there's not anything nefarious going on there like I mean.
You guys have about that.
[34:17] I definitely have a few thoughts I think Amazon.
With their own labels we've seen a couple a B test that they seem to be running only for their brands not for others so that you might argue could be.
Putting a thumb on the scale but I generally agree I think it's a pretty fair system overall and I don't think that big brands are necessarily disadvantaged I think they just don't.
Have some of the Scale based at Pantages on Amazon's platform. They're accustomed to in brick and mortar where it's a lot more relationship-based and things like,
category management are really relevant whereas,
they are relevant but less so at the end LaSalle I do think though you know when you look at some of the inherited limp inherently limited selection.
Platforms like Prime now in Fresh & Pantry those are certainly biased towards.
Mainstream National best selling items so it in some of those areas they have the benefit and I think as the.
Is the sponsor product in any Amazon advertising.
[35:43] Options continue to expand and grow in importance again he who can pay is going to play so I think there are signs that.
[35:56] Yeah I think it's a Level Playing Field in the broadest sense but there are Pockets where brands of any scale can can get it banned.
[36:05] Cool see you talk a little bit about sponsored products what kind of things can you guys either can you can you see like lift that brands are getting from doing this or or anything like that in any interesting
[36:24] Yeah yeah I mean I think we see things like who's sponsoring which keywords.
What which is is always interesting because Amazon is a lot more Wild West than thing Google is at this point and in some of the targeting you can do just week by week seems to get,
You can Target competitive products brands that there's a lot that's interesting but we see it at least where it's our clients product.
[37:01] You know traffic conversion in that gets really helpful.
When you're trying to optimize campaign spend because some of the the internal reporting doesn't tell you things like you can pay to drive a lot of traffic to this page but.
Nobody buys a product it doesn't convert so I think some of the brands are are just trying to ramp up as quickly as I can understanding.
How the platform Works what are all the metrics and interesting time because in that area in particular is we've been,
repeating it it's becoming so important in most companies we've encountered it was manage historically.
[37:49] Bye-bye the Amazon team.
Where it can be argued it should naturally live cuz it's a lever that drives growth but it's not the only lever the trash growth on Amazon but because the work is so similar to sem.
In traditional search engine a lot of the marketing teams are really starting to get interested.
And and I think it's just going to be interesting to see how how the work ultimately gets managed and and whether this ends up being more of a,
lever among many,
in the context of growing on Amazon or is Amazon media Network.
Transcends Amazon properties and in more more resembles a Google Network it's just going to be so interesting.
Who ultimately does the work are you going to merge sales and marketing.
[38:45] Yeah I think we can you and I can both agree you wouldn't want like one of these ad agencies to do it or you know like this like a sapientrazorfish or anyone like.
[38:55] No it should definitely be the analytics companies.
[38:59] I feel like the on-demand Car Wash company should really be doing it.
[39:03] I was wondering how we were going to work that in I will say something Jason that make you may find hardening when we ask these 200 brands.
What are you spending on it what are you going to spend on you know thankfully e-commerce data analytics and insights was number one but search agencies and product content agencies were number till 3 so.
The Outlook seems somewhat Rosie.
[39:32] Yeah well I mean I feel like there's headwinds and Tailwinds and and I'll ask you a question that like potentially highlights one of the Tailwind,
are headwinds weather at the moment it does be like most brand Outsource all this work like they Outsource a lot of the content development work for optimizing digital shelf and they optimize a lot of the the Amazon media works
sponsoring visibility on the site what I run into a ton is usually their Outsourcing both of those pieces of work to two different entities.
Disappointed maybe their traditional paid search agency that they're having do they Amazon marketing stuff or or they may find a specialty friend that does that and they have someone else focusing on on Rescue optimization,
in the long run it won't surprise me of a lot of that work comes in house cuz it's quarter their brand building and,
you know I think Amazon has a vested interest in building a tool set that's easy enough for the,
the clients to use directly but at the moment we're the Outsourcing it I feel like it's a tragic mistake to to divide those pieces of work because in my mind if so,
critical to have Synergy between like you both need glasses on the products and then you need conversion on the products right and so.
Don't spend much money on visibility for excuse that that you haven't optimizing are going to be able to convert and vice versa don't spend a bunch of money optimizing excuse that no one's ever going to see.
[40:59] Yeah no I like you I'm a big fan of not covering one eye when you don't need to and in a lot of how we structure our analytics is trying to.
Give me the complete picture so I think if if you're.
So specialized that you're you're doing great work in a narrow domain that has implications for the rest of the flywheel.
You're never going to.
How to execute and you might end up causing a lot of problems and we do see that scenario sometimes where the left hand isn't talking to the right and you have wildly different creative below the fold.
The contrasts with.
Clearly heavily SEO optimized above-the-fold content and you just look at his page and you're like what is going on.
Was there nobody that had final sign off and looked at this and said this is not coherent.
[42:02] So you're you guys have this survey data and then like the pricing data
maybe just kind of top-of-mind what are some things brands are doing right and wrong that you see obviously don't call out any friends and stuff wrong and then any other you know
maybe there is a certain brand AC that is kind of like
the case study for for how you knock down all the best practices in anything like that you can share with us.
[42:29] Yeah what one thing that we noticed in some some other research we did was there's been an uptick in the.
Especially the high end of the consumer products industry that is the largest companies.
Doing things like corporate venture capital and either technology or brand accelerators and going back to the sort of unfair Advantage discussion,
we were having as it relates to Big brands of small Brands I think you know that gets.
[43:02] Interesting because there are some disadvantages that a big brand has not because of a decision Amazon is making but inherent to that.
Retail model in other words in a drugstore there's four feet of shelf space and very limited Choice I've been a lot more Choice than one might need but.
You know limit of choice so you can manager for peas and really get unfair advantage.
But at the endless aisle whenever shop researches differently that there's no question the demand curve is not going to be is concentrated at the Hat.
That I think is going on a lot of the big Brands who have seen the share shift to Insurgent or emerging brands in a realizing we need to.
Think differently about building Brands and and watching friends and I see him moving with more jiloty so you know what an example is setting up.
Essentially a standalone business unit that has the autonomy to go and then decide.
All facets of it what they want to do we see about 16% of Brands doing that that's one thing that I think it's is interesting I think the biggest thing that they're missing although some of the.
[44:29] Smart Ones in the ones that that have been directly impact that are getting really serious about supply chain and unity economics and that means you know deeply involving.
E-commerce in the R&D process and new product development process so that you're thinking of product form and packaging and pack configuration in summer even to jointly funding.
Research and automation both Warehouse in in last-mile automation both of those are areas that are just seeing tons of capital.
Inflow right now and I don't think there's at least outside of the warehouse there's no clear model that is.
Dominant but but I think you know not not paying attention to the unity candle makes it is the biggest Pitfall I can see.
[45:22] Yeah it's it's not hard to imagine why that's not a good practice keeps running up on time I want to get one more question in before we we do wrap up though
maybe kind of,
taking our head out of some of the the minutiae and the tactics like big picture how do you see all of this.
Hannah playing out over the next I don't know you know 3 to 5 years are we still.
Do you sell see a market that has a similar number of competitors with a consumer with a similar market share that we see today or,
you think it's going to feel a lot different.
[46:03] I think you know I interviewed Liza landsman when she was.
I think Chief customer officer a jet in this was about a year after they launched and she said.
Everybody thinks that e-commerce is going to be a winner-takes-all market just like most technology markets we think it's not we think it's going to be a binary Market with two dominant choices and we're going to be,
one of those two choices and it's starting to look like that you know I think from a Marketplace perspective.
It is winner-takes-all in the broadest sense most countries or regions seem to have one dominant,
Marketplace in a lot of niche market places but I think it's plausible that you'll see Amazon at Walmart.
With dominant share in the US I think you'll see Alibaba and JD.
In China Inn in scenarios like that I do think because of.
[47:14] The capital intensity of owning and operating the infrastructure.
There are advantages that that scale brings to an Amazon or Walmart that is time goes on it just gets harder and harder to to catch up without renting some of that infrastructure Pro.
[47:34] Yet no I wholeheartedly agree I feel like we're currently moving towards a lot of duopolies the smart alec Amy has to wonder was that Liza interview before or after the jet acquisition because I sort of agree with her where we're probably you know part of a duopoly
after the Walmart Acquisitions but I'm not sure jet was well-positioned to be but one of that part of that duopoly before the Equus.
[47:58] If I recall it was before but I interpreted her to be sort of projecting.
Into the distant future that jet either independently or perhaps as part of a larger entity like Walmart they thought they had a Playbook that would.
I think fill in the space at the opening price point in really price oriented.
[48:24] Value equation that that Amazon had frankly seated a little bit with a lot of its bundling,
you know baked into the idea of we want Prime membership to be so valuable it's irresponsible not to be a member is we're just going to keep doing some stuff for you,
that you may not know about care about value and I think Mark Lower.
Well you know we can just go back in at the low end and and we can beat them on price if we get creative,
so I think there's there's value there I am always watching with the hard Discounters like Aldi and Lidl who are are quietly doing a bit,
online those folks are always interesting at least in the grocery and tpg contact and there's more more chatter about Alibaba coming to the u.s.
It in a much different way than they have so far and what that looks like everything is just going to be interesting but it's it's hard when the market is at this stage.
To enter from afar and make an impact I don't know we really haven't seen it online outside of Amazon.
[49:46] And in some of their International expansion but we definitely saw him brick-and-mortar and and I think there's been a lot of,
retrenchment retrenching over the last 10 years following the 90s so it'll be an interesting 5 years.
[50:02] Yeah. For sure to me that is one of the fun Parts about being in the industry right now is it does not feel like the play book is written or or certainly not set in stone.
[50:14] No I meet you at just think of all the new I know you said we have to wrap up and I promise we're almost done but think of all of the new devices and user interfaces that are actually starting to,
any voices the big break out and it's not really there for e-commerce but I think is it continues to improve and people get more experience with it.
It's going to open all kinds of environments in contacts to.
Commerce in a lot of other things as May augmented reality it if it reaches.
Mainstream adoption so I think when you look back at it how.
Markets gettry architected especially in technology markets whenever there's a platform shift like that it tends to Crown their winners so it if ways continues to expand and becomes a bigger deal.
Whoever owns voice is going to be interesting and I think there's going to be a lot of surprising new hardware coming over the next 18 months it's going to keep us all fascinated and busy.
[51:25] Amazon said that 10,000 people working on the Alexa team.
[51:30] I saw that there's a robot rumored to be launching and I have a new love of robots so that's one of the things I'm looking forward to.
[51:40] Jason be all over that.
[51:41] Yeah it's a double win like not only could those things drive more Commerce but just acquiring those things will drive more calmer.
[51:48] Exactly right.
[51:49] It's another flywheel and that's going to be a great place to leave it because it's happening again we've used up all our a lot of time if you were itching to make a comment or ask a question feel free to continue the
conversation on our Facebook page and will be monitoring that as always if you enjoy the show the
that never went on the Christmas list for Scott and I this year is for you to jump on the iTunes and give us that 5-star review.
[52:14] Keith thanks for joining us I know you're super busy we really appreciate it where can folks find you online.
[52:19] They can reach me at Keith's at profitero's. Com for just find me on LinkedIn thanks God thanks Jason big fan and and really grateful for the invitation.
[52:30] It was entirely our pleasure keep thanks very much for the time and until next time happy commecing.
EP155 - Cyber-5 Recap w/ Adobe's Tamera Gaffney.
Tamara Gaffney (@tamarag) is the Adobe’s Principal Analyst, Experience Index. Tamera joins us to discuss the holiday e-commerce results from Black Friday through Cyber Monday (Cyber 5). Tamera has access to anonymous, and aggregated data from more than 5,000 companies worldwide that use the Adobe Digital Marketing Cloud (including Adobe Analytics formerly known as Omniture), which represents one of the largest samples of the overall e-commerce industry available. Her team publishes useful insights based on that data throughout the year.
Episode 155 of the Jason & Scot show was recorded on Wednesday November 29, 2018.
[0:25] Welcome to the Jason and Scott show this is episode 155 being recorded on a Wednesday November 28th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.
[0:40] Hey Jason welcome back Jason Scott show listeners
well folks we are past the cyber-5 or turkey 5 or whatever phrase you want to use for those magical 5 days that we plan all year for in retail and
and this is part 2 of our three-part halftime check in for Holiday 18
we are excited to have back on the show for the third time you may remember her from episode 6109 and here she is on 155 tomorrow Gaffney.
Tomorrow is adobe's principal analyst for the experience index welcome back to the show for the third time tomorrow.
[1:18] Hey it's getting to be a trend it's great to be here thanks for having me.
[1:23] I like it when the data animats recognizes that it's a trend that switch it.
Tamara super excited to have you back you're in rare company is a three-time guess I think you might be only our second three-time gas.
[1:37] Oh my gosh that's like do I get it do I get it like a metal or a hat or something.
[1:43] Oh my God all the propagandas in the mail to you right now.
[1:47] I'm thinking a turkey had I've seen these turkey hats for 35.
[1:51] No no no no I knew gift became available today which is exclusively the only gift I'll be giving out this Christmas season Bob the singing bass now Alexa enabled.
[2:03] Oh my gosh really that is just that that's just perfect but it should be a thing in Turkey.
[2:12] Yeah that would be more thematic by the couple years ago a guy hacked one of the singing Bass with an Alexa and now there's apparently an official product so I'm buying them in bulk just in case anyone needs it.
[2:23] I think it will be a collector's item.
[2:25] You are probably right so one fun thing about the show as we keep collecting more and more audience so for the audience that may not have heard the last two shows can we get like the brief version of your background and how you came to it.
[2:40] Okay well the brief background was a long and winding road but basically I love data I do a lot of stuff
storytelling with data and in the case of adobe which most people don't know this and maybe some of your listeners don't those who've been here while I figured out that it will be as more of than
Photoshop and acrobat PDF we actually have,
the infrastructure the we called the experience cloud and it runs in behind the scenes it pretty much runs a lot of the internet of all the way from the websites to how people track their data on the web for in their mobile applications or even I mean
this was really kind of cool you know there was Coke machine that you go up to and you you select what you want or call the freestyle machine some of our technology is even on that screen as well and so you know a baby has
tons and tons of information and put in particular retail information or a trillion business to retail sites that are 55 million
excuse which basically means Unique Products during 80 of the top 100 Us online retailers so that's a lot of data
we've been doing this a long time and to track what's going on by my tail so that's what's coming up out of this report and how we got to it.
[4:04] Awesome and in that experience Cloud there's things like Adobe experience manager which runs a lot of the websites
there's there now is Magento which is a e-commerce platform that our lives would be familiar with but in particular there's a web analytics platform that was formerly known as I'm not sure which is,
near and dear to a lot of our hearts.
[4:28] My assumption is a lot of this Pacific Holiday retail data were talking about,
comes from aggregating all of the the omniture clients out there a my my generally right on that.
[4:41] You're generally right although many of them have only been around since before and after that your name was retired which was over
/ what 8 years ago good news Alex cloud is finally getting more search term.
Then on the trailer is after 8 years it was a very good brand so and that yes that's where the date is coming from for this type of information.
And it's your last day. I'm going to be quoting.
[5:12] Awesome and I know you're not the product manager so I'm not teasing you about this
Technically when you retire a name you should change the url and since most analysts metro.com get their data that's it somewhat it's not officially retired in my mind.
[5:27] How details.
[5:31] I'm at I'm just having fun and magenta was a pretty new acquisition are you starting to get data from them as well.
[5:39] We are starting to but we've been really
very light touch this particular holiday season because they are e-commerce platform company and so obviously this is their busiest time of year so disturbing them information was
was not something we wanted to do right in the middle of Black Friday when they need to make sure the systems are all running at perfect chub fish.
[6:06] Colts so I have a burning question based on the freestyle machines what's the most popular flavor of grade can you.
[6:12] I have no idea I'm going to go ahead and guess it's just flat-out cook.
[6:21] Yeah my favorite is when kids sit there and they put every little flavor injection and it takes like 2 hours.
[6:30] It comes out like this really you know being or something like that.
[6:36] But seriously back into the world of e-commerce let's talk about holiday 2018 it, thirty thousand foot level what did you guys expect coming in and how are we shaking.
[6:47] So what we expected for the whole season was about a 14.7% growth rate Which is higher than the growth rate we had last year at 14.3%
and anyone who understands stats knows that when you have a higher growth rate on top of the higher number the absolute growth is
quite a bit more and I'm so that was surprising and we looked at
Labor Day which turned out to be the first-ever to billion dollar online day outside of the holiday season and that's happened this Labor Day and we had
over 25% growth on Labor Day so we were heading into the holiday season really trying for it to be big
and so with the prediction was that it was going to be her
gross than last year and and then going through the first part of the Season it was looking I'm even bigger
and what we had predicted up until then
cyber-5 days we were at 58.5 billion dollars which was a 19.9% growth rates
our expectations and then we were looking at what was happening during the the Cyber 5 and it was starting to come in much higher than our predictions so we're definitely seeing.
[8:15] Very strong season so far.
[8:18] Yeah so that was the one of the first things that jumped out of me is is
November December you know somewhat aggressive week calling for 14.7% growth and then you get 19 almost 20% growth rolling into the cyber-5
in the average over the Cyber five I want is some place in the order of magnitude of by 28% truck so I guess I was curious.
What is that kind of expected and it just feels like more of the the sales are aggregating in that like Peak shopping time and we're going to see much more modest growth the rest of the,
the holiday. Or is there a chance we're going to blow away that 14.7.
[8:58] Yeah that's a really good question and normally does cyber-5 is a 20-plus percent growth and so that wasn't
as much of a blowout I'll go Black Friday was higher than we expected it to be and you know that's actually been a trend in the last 5 years that we weave under-estimated Black Friday
Friday's came in within 1% of what we expected the first 5 days of Thanksgiving to be and so we're at a point now where
either if we see a law happening and we did start to see a pitiable also Cyber Monday grew at 19.3% it was a 7.9 billion dollar day
and I remember reporting numbers when we were first hitting two billion on Cyber Monday and now we're almost at 8
and so there are definitely seen a really consolidation along this weekend but the very beginning part of the season was definitely up so if we don't see a Slowdown in the next couple of weeks.
We will probably be higher than our overall she's an estimate.
[10:11] Nice and then one inside baseball thing I think there's one more day in the holiday. This year than last year right so.
[10:17] Serious and I was taking into account interesting little factoids and and some of this information what we're trying to reading now is that is about a 280 million dollar
increase in online sales just to have one more day and I think if you correct me if I'm wrong cuz I'm not sure if it is it's the longest the season gets is it going to go back just too short next year
I think it might.
[10:42] I noticed you're shorter that you can keep Stephanie I I can't sit here and defend it to be say this is the the longest of the total calendar cycle.
[10:52] I think it is I think this is the longest it gets and then what ends up happening is that it locks off like a whole week next year and so,
that costs about 280 million dollars a day just because retailers have pegged to the shopping to start on a day that,
Yeah the same distance from Christmas and that's it that's a really big challenge for them next year this year it's a big chest so.
That's what we we saw that we predicted that into our findings and what we saw actually a couple years ago before we exported the notion of Black Friday
over the pond to Europe wish now is a very big day in Europe but it didn't used to be and what we discovered before we had
steam Black Friday get exported was that Europeans started their shopping
earlier and so what retailers have done by creating Black Friday is delay shopping although this year it looks like there wasn't as much of a delay people got on it.
Elise online a lot faster than the normal.
[12:04] I like it so as lazy Americans are even exporting are are lazy shopping habits I love it.
[12:09] Well yeah and they're both they're all shopping and in London on Black Friday and have absolutely no idea where they're shopping.
[12:19] Yep yep I totally get it in side note it does feel like there's.
Pretty darn favorable consumer macroeconomic conditions this this year and you know there's that the there's personal income tax benefits this year that go away next year and all these things.
The shorter holiday next year and the super favorable climate this year I do sort of feel bad for a lot of retailers they're going to have to comp against this year or next year is going to be a little rough.
[12:46] Yeah I know they're probably going to head into January starting to think how on Earth am I going to get what I got out of this season next year.
[12:55] Exactly but that's tomorrow's problem.
[12:57] It is and you're a little fun fact for you about cyber monday us consumer spent 11 Thousand Years shopping online on Cyber Monday.
[13:08] 11000 man years.
[13:10] 11000 man years I know right.
[13:14] Well it wouldn't be a Jason Scott show if we didn't talk about Amazon and if you don't want to talk with Amazon that's fine we can talk about any interesting retailer trends that you You observe that you want.
[13:28] Well I guess I don't tend to talk specifics about retailers in part because you're getting the permission to aggravate findings
you don't want to really call any of them out per se but one of the interesting findings that I will talk about is what they call.
B o p i s b o p i s.
[13:57] And that was a huge increased 65% increase in that on Cyber Monday and so,
it really gives you a lot of.
Concept around why did Amazon buy Whole Foods and why are pure play retailers setting up pop-up retail
locations or or something for people to try to go and physically interact so it's funny because in the past the idea was you didn't have the
extensive having any kind of physical location but the reality is is
it really is a benefit and so that is a big trend for retailers and it also helps extend the back end of the season so,
in the past we saw shopping pretty much ground to a halt around the 16th or 17th of December and now we will see shopping all the way up until Christmas Eve and that's because you can pick up in store.
And so that's that's what I would say is the most interesting retail Trend that we track this year.
[15:08] Yeah yeah for sure in in side note if you're in Europe instead of saying bopis you say click and collect which sounds more more of sophisticated.
[15:19] Doesn't it there always been so much more sophisticated you know.
[15:21] Exactly Timber instead of what they have all kinds of.
What is the use and everything I thought I saw another interesting stat along with the in the omni-channel category were you seeing.
Retailers that had a break-in Wonder presents outperforming sure play retailers am I remembering that right or am I making it up.
[15:47] That was in the prediction and we didn't put out anything yet on whether or not that's that's coming true but it was a part of our prediction.
[15:57] Okay, we will look forward to hearing how that plays out in increasingly omni-channel thing to me is how customers are behaving on mobile phones because.
There there you know in addition using his mobile phones at home a lot there they're using them in the store until I'm particularly interested in,
mobile played out this holiday and so can you share any insights in terms of like traffic or number of orders or a retinue on.
A mobile vs. desktop.
[16:34] Yeah that's the cool thing about our our dataset is that we can see
visits from any kind of device and track what type of device it was,
by the way those people who came with an iPhone or much more likely to purchase and those came with an Android I'm an Android User so I'm feeling a little bit and now I don't know maybe you got to have an iPhone to be at the pool all the time,
the mobile shopping what ended up happening was Cyber Monday brought into .2,
billion dollars of the 7.9 off of mobile devices that's at 55.6% versus last year so apparently starting to figure out and is jealous
the majority of the shopping list starting to figure out how to get,
that actual sale Austin last year over 50%,
work on a mobile device but much lower percentage of did of the final sales,
that's growing tremendously and I think it has a lot to do with a number of improvements to the experience of shopping on mobile.
[17:49] Yeah I know you probably should have digital index year-round I don't want to put you on the spot to memorize a bunch of numbers but.
The majority like across the whole index is the majority of traffic now on mobile or is or is when it goes over 50% in holiday is that a seasonal Peak.
[18:12] Yeah that's a seasonal Peak those are the most mobile days that we have ever seen
and it has a lot to do with the fact that people during that high-volume visit. Aren't you at home.
And so you'll see really high Mobile on Christmas day you'll see it on Memorial weekend you know the typical times when people are out and about or on vacation is when we start to see mobile heading over 50% but it's not
enough of the year yet to be over all over 50%.
[18:47] Got into it's interesting to me is my clients tend to be very large retards at the top of the echo system and the number of them are like.
Basically experiencing year-round 50% rates now which not surprising their the most likely to have.
In Avid mobile app user base in all these things but the problem we always run into is we're seeing more and more traffic go to mobile but the conversion rates on mobile have historically lagged and the aovs on mobile hey black and so you have this big gap.
We're more traffic shifting to mobile but the mobile is in generating the same Revenue that the desktop is it used to.
And my my hypothesis is that is we all get better at mobile experiences that Gap is starting to naira or can you confirm or deny that from,
from what you're seeing this holiday is is there less of a gap between traffic and revenue this year than there was last year.
[19:43] There is very still look at but it is closing and in particular is closing on these very high shopping days a large part of that is coming from an email click
map of the mobile device and I talked about this maybe in your in the last episode we did together but there's this notion of rolling over here not even out of bed yet
and starting your Black Friday shopping on the phone before you know you've even put your slippers on and so,
the combination of
those people who are willing to buy off of their mobile devices through email is becoming much more.
Prevalence and there's less friction the biggest friction points in this is from data that we did several months ago the biggest Russian points are really around the size,
I love the picture of you will see what you're shopping for so you will not see as many higher-end device things not just general you know gifts
to the mobile device but it isn't necessarily affecting every kind of retailer the same.
[20:57] Shop retailers have super high-end luxury goods and
people want to see those maybe a little bigger and that's that's one of the big challenges
has gotten much easier and being able to zoom in you know at least a c
text larger it's gotten easier,
and I should point out that none of this information includes mobile app shopping because that isn't coming through to Adobe analytics in the same way.
And I can be a very big percentage especially for large large retailers.
[21:41] Got its that could be maybe if we included mobile app we could be kind of over 50% on a consistent basis I guess.
[21:47] Yeah and mobile apps would research shows us that what happens when the holidays sometimes people will install a retailer app and then uninstall it in January or Adele really keep you recharge staffs but not very many.
[22:04] So sounds like holiday at least from a top line perspective is doing well can you tell how promotional it is so anecdotally you know I'm finding the Shoppers in my family are finding,
it just feels like better deals this year which implies you no more of a percent off and could be a worse bottom line is as this kind of is revealed if you want you have any.
[22:31] Well I'm looking at the discounts televisions were at about an 18.9% discount computers were about 17.9 and Toys R Us 30.9.
What word seeing overall look very similar to what we saw last year toys have a little bit more discount this year than they did last year last year but overall the discount percentages
look very similar maybe what you're seeing is a particular,
decline in prices overall and so they don't need to Discount to television as much because it's it's list price was lower than it was last year.
[23:09] Interesting well that that's potentially good news is I was sort of the line with with Scott antidote Ali it felt like a very promotional season but I will be glad to find out.
That we didn't give away too much margin I think you guys also look at the percentage of free shipping and is that pretty consistent this year from last year are we giving away more shipping.
[23:30] We look at free shipping in our production and it is a factor but it is looks like it's very similar tablet has been in them in the past with the exception of the click and collect
to be the more elegant European term is is helping retailers to not have to give away as much free shipping and so
I think that will will see is that the shipping expense will start to decline overall as resellers find a way to avoid
a lot or express shipping.
[24:05] Yeah for sure related to my earlier mobile question I'm I'm also kind of curious if so.
One of the things I think as a lot of friction on mobile as it's not very much fun to take your credit card information into a mobile phone.
But increasingly there's better Utilities in North America for digital wallets like there's more users on PayPal
Apple pay is getting more traction you mentioned Apple users are spending a lot more than Android users are you able to see,
any data around payment methods and are there any interesting friends coming up this holiday season in terms of payment method.
[24:40] You know that is a part of the data said that we could look at it but we tend to stay away from looking at anything close to
how people are paying just know we don't have any personal identifiable or any six your data in the system so it's really very Anonymous but we feel that if we kind of start putting out a lot of information around how people are paying and might feel creepy and so what we're doing is just kind of,
taking that piece the data out of all of what we look at.
[25:10] . so you're saying even if I turn off the mic you can't tell me what Scott's credit card number is.
[25:16] If I did I would have gone shopping with myself that's a joke friends.
[25:25] I'm right there with you we.
Heavy not your data set is like one of my favorite datasets around this holiday because I sort of feel like.
You guys are at the broadest view the widest range of different different.
Types of retailers that use your products and therefore you see their data there are a bunch of vendors that published their own data and some of it's interesting because they show me niches like I'm always curious.
Like what Shopify says they're doing this year because I think of them and started a long tail,
11 manner that published by the date of this year is a Salesforce what used to be the old demandware,
Commerce platform in one of the things that surprised me about their data set over this holiday is
you have sort of them obituaries me to expect Cyber Monday to be the biggest day and Black Friday to be a big day but not as big and it sounds like a customer.
Black Friday outsold Cyber Monday when I was just curious if that surprises you or what like what how you interpret that.
[26:36] Yeah well LOL just say this about.
They know what their methodology is I can't speak to their methodology but,
astrology with 80 of the top 100 retailers I feel like it,
very large dataset it does maardata said does tend to skew towards the larger Enterprise retailers and so,
is possible that for smaller retailers that there might be a different pattern but.
I don't think that that represents the actual true dollar spending because of the large retailers way outperforming smaller retailers in the gap between large and small is getting larger and larger as digital.
Digital experiences require quite a bit of investment and it's getting harder for smaller businesses to keep up with that level investment that's part of the reason why some of them have closed down and also.
Acquired by the larger Enterprises so that they can get their experiences online to be as good as what needs to be that's cuz you're expecting more.
[27:50] Wrinkled so we're getting right up to time so I wanted to ask kind of a three-part question I'll sneak in their number one.
[28:00] Is there trick once we get.
[28:02] Fish now.
[28:04] One more push up one more push up.
[28:06] So parte you talk about email as kind of a referral for mobile any interesting referral trends like social up or down or PVC up or down like that,
number to anything else you want to highlight the data and then number three maybe we wrap with any punches case should you have about the rest of holiday.
[28:29] Okay so as far as the demand sales drivers what we saw was just typing it and going directly to a retailer was the most
and by the way that also includes jumping in from an email that looks like you typed it in directly,
and paid search was at 21.6% of the traffic
and that is up 6.2% year-over-year interesting made from another report that I did that
isn't related to this it was a survey report I asked people where they like to find out about new things so we're still.
Using search we don't really like it if you tell her she don't really like it and I really like it but it's kind of
where we are the other thing natural search was down social media is about the same.
At about 1.3% at the flicks coming from social media so
not a whole lot of change a little bit more potential earnings power for our friends at Google
other than that I can't really nothing nothing super shocking about that.
[29:47] Second question was was raining in the data that we haven't asked about where you you said I really need to talk to Jason and see.
[29:54] Warriors are something that I think is interesting on the toys on that on area toys and this isn't maybe you guys you know we all have kids so maybe you can help figure out why this is a
things that come in little packages like you know those toys you get like one or two time at the counter and you don't really know what's going to be in it but it's.
those types of things and the LOL surprise kind of packages r r a trend.
I don't understand why kids today want not only a gift which is a surprise in and of itself,
to be a surprise even after they open it I just crave getting surprised nowadays.
[30:55] Yes it's on the Big Star Wars fan and this is been in the collectible world forever and we can blind boxes that usually
vinyl blind boxes and is collector you like it cuz it's kind of a fun game to try to collect them all and I think it's kind of leaked out of the collective world and into the mainstream.
I'm so see you at the the law surprise is probably going to be you know,
this year's last year they had the finger links was in the hatchlings were hard to get this year you see him everywhere and you can't find the loss of so so I just think it's kind of moved into the mainstream in it it's just going to add some onion and.
You know surprise to Holiday.
[31:33] I just wonder what that whole Collectibles mindset amongst gen Z or the guy like to call them crackers are creators because I hate
it's so boring but I just wonder if that's going to change their generation in some way and they will change the whole idea of.
Collectibles as being a much bigger thing as they go into adulthood I don't know.
[31:59] Yeah I think instead of going and buying them all to get them I think that Generations more into kind of like trading and so I think it's going to be kind of like
it's collectors you don't really trade him unless you get extras cuz you're trying to
all inclusive and get a full set so but I bet you know it'll be interesting to see I think they're designed with more of a trading angle versus a you got to get them all have an angle.
[32:21] Yeah I know I do. I do think that the notion for these kids of scarcity,
is going to be very different than previous generations right so you know it in Scottsdale he only had to be the person in his circle of friends that got the cool Star Wars thing out of the blind box and there weren't like perfectly efficient markets
if in one one pool of of Star Wars collectors there were too many of something in another pool at something was super scared now all these markets,
super efficient and you know when you have something you need it has to be unique amongst your ten thousand friends on Instagram not just your,
your 50 friends in real life in so that you know I do think.
Unique and scarce is going to equal like through limited editions of things and you know more personalized things.
For this generation in past but it's going to be interesting to watch.
[33:16] You know I just thought of a new business idea we need to sell parents and sort of x-ray machine that they can take to the store and see which of the surprise boxes are the
unique ones that their kid really want.
[33:31] Unblind box Tech.
[33:33] Is the unwinding Jewel.
[33:37] That's a sad thing is of course kids would figure out how to use it way before the parents would so.
The defeating factor and that's probably going to be a good place to leave it because we have used up our lot of time for this holiday quick-hit edition,
but it was hers have any follow-up questions or want to continue the discussion as always jump on her Facebook page and will continue the dialogue there.
And of course if you enjoy this show we sure would appreciate it if you jump on iTunes and is a holiday gift us Cotton-Eye you can give us that five star review.
[34:10] Two are thanks for joining us working folks find you online if they want to come and follow things through the rest of the holiday.
[34:16] Well I'm Twitter I'm at tomorrow G wish I had I got in pretty early on that name
and you can actually find us on
sorry to shut up because you guys look like you're having way too much fun and so I wanted to have more fun and have a little podcast you so I'm not a podcast is call J & T data talk and that's on Android and on iTunes and so I'll be a good way to to keep track of
what's going on but you can always contact me on Twitter message.
[34:48] Awesome so after you listen to episode 155 switch on over to that podcast and check it out.
[34:56] Thanks again for coming on the show and until next time happy commercing.
EP154 - Turkey-5 2018 Recap
Episode 154 is a quick recap of all the retail and e-commerce activity over the Turkey-5 weekend (Thanksgiving through CyberMonday).
Jason interviewed by eMarketer about AmazonGo stores
Jason article in Forbes "The Future of Brick-And-Mortar Retail is Mobile"
|* Adobe Forecast|
Episode 154 of the Jason & Scot show was recorded on Tuesday, November 27, 2018.
Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, 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.
[0:25] Welcome to the Jason and Scott show this is episode 154 being recorded on Tuesday November 27th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your Cohoes Scot Wingo.
[0:40] Hey Jason welcome back Jason Scott show listeners we sincerely hope you had a great Thanksgiving an awesome profitable Black Friday and a record shattering Cyber Monday Jason did you get enough turkey over the break.
[0:55] I did indeed it's my favorite time of the year my two favorite things shopping and eating.
[1:01] I have been dying to ask you two questions what's your favorite pie if pies are the favorite Thanksgiving dessert which pie and if not what's your favorite Thanksgiving dessert.
[1:13] Do you like I'm a traditionalist I go with a pumpkin pie with whipped cream on it what about yourself.
[1:18] I am a southerner so it has to be pecan pie with a little scoop of ice cream.
[1:28] So my grandmother's family my grandma Daisy who's no longer with us is also a southerner and we always have followed her Thanksgiving Traditions but oddly
somehow somewhere along the line she added a German chocolate cake to the mix so full disclosure
I sort of Miss now that she's not with us anymore the grandma Daisy's German chocolate cake in addition to my pumpkin and pecan pies.
[1:54] Maybe she was Southern German.
[1:56] Exactly Daisy just was at a head of her time she was just a multicultural.
[2:02] And then I've been dying to know how you survive when Starbucks closed for a day.
[2:07] That is a great question there have been years when that was a challenge for me but I feel like at this Advanced stage of my life
I have pretty much mastered at so a Starbucks wasn't Starbucks strategically close early so I like to make a visit before they close
and then Abby as a back at the Starbucks I do have a super fancy automatic espresso machine that makes my Starbucks drinks at home.
[2:36] Call and I saw you have published couple articles before we jumped into the meat of the show toast us what you been putting out there into the interwebs.
[2:43] Yeah I was prolific the time off I give me a chance to catch up on a few things I've been meaning to do so you and I are both Ford's contributor so I published a Forbes article today
and it's about a topic we first started broke on the the podcast it's called the future brick-and-mortar is Mobile in its talking about all these new
store Concepts that are opening up and and how the customers mobile phone is increasingly becoming a mandatory
part of the in-store shopping experience in an increasingly you need a mobile phone to get into the store so that that was
interesting to me and then I did do an interview in emarketer all about the Amazon go store soap again probably not any,
opinions that would be new or surprising to Jason and Scott show listeners but nice concise article of sort of every swear I think the the Amazon go stores are going so I'll I'll post a link to both of those in the show note.
[3:46] Cool this is kind of a the first of a Trilogy of shows were put together that really are looking at kind of the halftime report of where we are as far as holiday 18th concerned
we're recording this the day after Cyber Monday so we've got those key 5 days out there and some data starting to roll in
then our next to Gaston the show or going to come with some more proprietary data someday we're going to do kind of a hot take on what we're seeing out there from Publix results
from all kinds of sources that that will try to slip note as we go through and we want to jump into that
and it wouldn't be a Jason Scott show without some Amazon used to kick it off.
[4:34] Amazon news new your margin is there opportunity.
[4:42] So Amazon is one of the most secretive companies you'll ever come across and holiday is no exception typically they did Issue a press release which was
some of it was interesting and revealing and others of it was frustrating leak looked so I just wanted to walk through some of the highlights there.
First highlight is a tortoise a new term where Amazon is calling it instead of I like the Cyber 5 they're calling it The turkey-5.
Jason what you think about this rebranding of the five days from Black Friday to Cyber Monday.
[5:13] So I think I don't consider rebranding I think both terms are important so
you were actually the first person I heard you cyber 5 and it was quite some time ago way before the podcast and so I've embraced that when I'm talking about e-commerce sales over those five day. But when I'm talking about omni-channel sales and brick-and-mortar sales then I feel like we need to talk about the turkey-5.
[5:36] Okay well next time they can both look together so.
What are some of the highlights of wood Amazon announced they announce the Cyber Monday was their biggest day ever and they sold millions quote-unquote millions which you know I think.
Is a range between 1 and 100000.
I don't know how to arrange that I know it starts at 1 and goes
Tenpenny so millions and millions of Amazon devices were sold the new Echo dot was the top Amazon device,
they sold Millions more this turkey-5 versus last over 18 million toys and then over 39 fashion items and I always find it interesting to Think Through.
And some of this is probably much mind-reading but
herbal Tea Leaf reading that goes on here you know why do they pick out these two categories I think
21 is kind of like Hey we're picking up that Toys R Us business that evaporated out there and then fashion everyone there's been a lot of negative kind of Amazon Fashion Stories where people are saying
Yep they're not really doing well they're fashion designers aren't embracing Amazon so this one I thought was just a little bit of hay.
Fashion industry check us out.
[7:05] This is the most revealing data point they said in total and I believe this is a u.s. number over a hundred eighty million items were sold over the turkey five
and when I try to do the math on that if we assume, $50 average order value that comes in kind of 9 billion
now sometimes Amazon average order value is tricky because
sometimes they include didn't see if this was paid or unpaid items as soon as paid items unpaid items would be free books to Kindle stuff there free apps on stuff like that.
So this could be as high of us as a $75 ASP 1213 billion dollars.
[7:48] So I wasn't ashamed actually kind of put a number out there that I could actually anchor off of and get to a real number that's the first time.
[7:56] It's a third party sales grew 20% year-over-year Which is pretty good you know I would expect so so you know.
E-commerce is going around 15% according to the US Census and Cubs score.
Amazon has been growing in the mid-to-high 20s so it's actually little loaf I felt for this third-party datapoint if I understood the metric right
I've only grow 20% year-over-year and then couple of highlights they said Black Friday alone or million toys and electronics are sold through the mobile app
so I think they're they're highlighting you know I think there were talking a little bit about showrooming where I think they're trying to
hints that people are out in the stores shopping toys Electronics on Amazon from their phones while they're out
couple other highlights of the top sellers.
Obviously Amazon devices everywhere you go you see that mentioned so this is Nivea.
Echo Christmas there should be a lot more Echo devices out the world after this holiday looks like instapot the classic is a top seller I am now seeing it everywhere so around
Prime day you only saw it at Amazon and now I can't run into a store without
Nintendo switch is hot this year.
[9:20] Such a platform has been around awhile but has, new Breath of Life Jason what did what did you think of Amazon's results on Turkey 5.
[9:28] Yeah it's always interesting to try to parse anything out of their press releases because that you know they're the pretty expert of giving you these numbers.
That we don't have any frame of reference for a right like everything's the biggest ever but you know they said all these records last year so if they were .1% growth it would be,
it would still be the biggest ever and they let you know they give you this many items in these big categories you know it's obvious they're trying to paint
a Rosy picture without disclosing too much real information but to me some of the things that jump out like your math is super interesting if we take that $50 aov and say they're like.
You know it will you don't 9 billion to 12 billion that puts them at a third to about a half of what a Dobby predicted.
Overall e-commerce sales were for the the December 5 so.
Normally we think of Amazon as being about half of e-commerce so if they're only a third to a half of cyber 5 e-commerce that actually means.
Other retailers are doing a better job of of grabbing a little bit of that traffic so that to me is interesting.
[10:38] It does make sense to me that 3-piece sales would it be growing as fast on Cyber 5 because I think
Amazon promotes the bejesus out of the Amazon owned products particular The Echoes In fires and the Rings were heavily promoted and so you know when they're selling.
Not even just one p items but Amazon owned Brands so heavily and kind of crowds out that the three p a little bit.
And it is interesting to me you know this these guys are increasingly becoming the largest retailer in North America
get on the biggest sales days of the year the things they're able to sell the most of our the things they own which is like completely unique like you know prior to Amazon you know
Craftsman was not the number one selling item at Sears on Black Friday for example so that feels like a.
That's sort of interesting Trend and you know it'll be interesting when we get some of the other guests on that have some datasets to kind of get their point of view about all that.
[11:39] Now Adobe has been probably the most prolific this holiday with getting their data out which is interesting because I haven't seen last couple years IBM made of
big push but I didn't see them out there really pushing hard on the data so it's almost like a one kind of company show now with Adobe and I know you gathered some of the highlights what what did you see there.
You don't want to spoil it for 4 we have us be coming on the next shows we don't want to spoil too much but what were some highlights.
[12:11] Just a quick primer on data sources the route to write like the the most ubiquitous best data source out there that I use the most of it kind of track it is Adobe there's three big
analytics platforms that e-commerce lights tend to use Adobe IBM and Google Google
you know his never liked had an evangelist kind of you know posting real-time data out there IDM some years does some of your doesn't they actually had a very meaningful outage on their analytics platform this year which will talk about a little later so even if they're planning on it I suspect they
they bailed when they started having problems and Adobe did a phenomenal job so it will hear specifically from Adobe tomorrow but just so listeners have sort of a frame of reference.
Adobe is heavily used by the largest.
Brick-and-mortar retailers in in North America so I feel like they're their data ranges a very broad set of retailers from.
Serta medium size two very big you know they don't have much data from Amazon who doesn't use any of these platforms for their main main site.
So to me Adobe is kind of the broadest and definitely best representation of the biggest sites that are most meaningful.
[13:27] I do have some data from Shopify which I think of a sort of the long tail so it's interesting to see what's going on there and then we do get some data from Salesforce which is.
Salesforce Commerce cloud is the old demandware e-commerce platform and to meet a man where is a little more than itchy it's kind of in the middle between.
The really big sites and the long tail it's these like pretty darn big predominately apparel sites for example.
And so it just it's interesting to see where the date of matches between those different sets and where it's different but that kind of.
[14:04] Key things up adobe gives us a number for every day of cyber 5 so Thursday was 33.7 billion.
Which is up 28% Friday with 6.2 billion which is up 23.6% Saturday was 3.2 billion.
Which is up 25% Sunday was 3.2 billion which was up 25% Monday the biggest day ever for.
Ecommerce with 7-point not in North America is 7.9 billion which was up 29% so.
Hopefully you're not doing math while you're driving in the car you add up those 5 days and there were 23.1 billion dollars worth of sales during those.
Those 5 days.
[14:53] I just realized I had a slight air in my spreadsheet so we'll actually see Liam and then I caught 24.1 billion in in sales over those 5 days.
And the gross for all 5 days was about 26% and what's interesting about that is Adobe predicts.
124 billion for the entire November December. And a growth I would like 14.8% which is.
Kind of similar to all the other e-commerce estimates we see you in that 10 to 15 to 16% and so you go wait.
These five days grew 26% they represent about 15% of the whole holiday right there.
You know about 19% of the holiday right there so it's it's it's interesting that that it seems like these days are getting the disproportionate amount of the.
The grout sensor you sometimes your talks about how promotions are stretching out longer and in that stretching out sales but the data makes it seem like people are still very habituated to shop on these Amy's 5 cyber 5 days.
[15:58] So yeah.
[16:01] I was just going to add to it in Shopify doesn't provide super granny or data.
But they did give us an Insight that on the the four days between Thanksgiving in and
Cyber Monday they sold about 1.6 billion and about 1.8 billion over the Cyber 5 so if that's true
again Adobe says 24 billion sold all over the Cyber five and Shopify alone sold 1.8 billion that would put Shopify at about 7.5% of all.
Cyber 5 sales witch.
I kind of doubt year-round that they have that big market share again that we don't have good data to know for sure.
It's believable to me that more shopping shift to do some of the Shopify sites over holiday so I don't know what what's your initial reaction on that Scott could you.
[16:53] Kills High you know but.
It's hard to say the thing that always confounds me about some of these things is when you add up the pie slices I always get up to like 130% so no matter
whether it's holiday data or quarterly data or annual data I always get a little confused by how all the stuff adds up.
The number to supposed to.
if you compare that so again and that the Dobies kind of this broad look if you look at like Salesforce you see like more like a 16% growth for e-commerce to see traffic going 9% what what's interesting to me about salesforce's they share some of their mobile numbers
and sales for says that like 62% of all there traffic was mobile.
And a 45% of all their sales was Mobile on Cyber Monday for example and on.
Black Friday mobile actually Pete that slightly over 50% of all of all sale so so you know.
[18:03] In the demandware Echo System the majority
a strong majority of traffic is mobile and almost half of all orders is of of Revenue is mobile
orders are actually number of orders is actually even a little higher so if you think about like you got dollars in sales you got number of orders and you got traffic.
The the Salesforce number to look kind of like the Shopify numbers from mobile so we have a couple of vendors
that share their data that mainly live on the Shopify platform and swim it was one that talked to you on Twitter and they were claiming 73% of their Shoppers were mobile and 62% of their shop
their purchases were mobile those mobile numbers are way higher than what we see from Adobe where
it's going to be something like 45% of traffic was mobile and only like 30 or 30.
5% of of orders were mobile so it's going to be interesting to talk to Adobe about about that if it is.
In their mind true that this a longer tail is more mobile than than their whole user base or what were missing their.
[19:09] And I also wonder if it Dobie is including any Magento data because historically it was mostly kind of that omniture
I did it right that they were effectively tapping into so I wonder if they're able to pull in the Magento data analysis.
[19:26] Yeah that will be interesting I'm going to Mike Hess is going to be no for this year the murderer wasn't that long ago and remember.
Magento can't see the majority of their data so most people are running the gento on-prem they they have the software but magenta wouldn't necessarily know whether the revenue was unless they happen to be either one of the the minority of Magento customers that's hosted.
[19:50] I forgot that they were more of an assault versus has.
Bottom line this it feels like online were definitely kind of more in the
20 to 30% Reigns versus kind of the traditional 15 so that feels good and then it feels like a brick-and-mortar is a little slow.
[20:10] Yep so well it depends on what you mean by slow so.
[20:18] They have been drawn at kind of like three or four percent right kind of mid single-digit.
[20:22] Some MasterCard says that like on Black Friday brick-and-mortar sales were up 9%
[20:32] What's good.
[20:33] Yeah that sounds great MasterCard is predicting that November December sales will be up.
5% right and of course you know you can imagine what MasterCards dataset is they have like like a 1/3 of all the credit card sales.
[20:47] So so those are good numbers there's a couple companies that
rent Hardware to retailers that gets installed on the front door to the store to measure traffic in the store so one of those companies is called shoppertrak and the other is called retailnext they aggregate all their data
as traffic data shoppertrak says that traffic was down 1% over the holiday over by Friday retail next said the traffic was down five to 9%.
[21:20] They do tend to attract slightly different customer so as I sit here I can't tell you exactly what categories they tend to be strong in butt
that sounds to me like fewer people are
going to the store then they have in years past and yet we still see higher sales in the store and we have in your
past which just means the conversion rate of Shoppers to buyers is higher and the amount they're spending when they're in the store is higher and so you add all that up
I think before the holiday started people were kind of forecasting they're like 16% e-commerce growth
like in a three to 4% brick-and-mortar gross
I think it's possible we're going to see like 5% he, brick-and-mortar drugs which would be the biggest year since 2011 so we may see some big numbers on the revenue side when I'm more worried about is that it
it potentially was super promotional revenue and said the earnings may may suffer that that commonly is the yin and yang of of holiday sales.
[22:23] Yeah unfortunately won't have a read on that until some of the January did I start to come out right before results.
[22:29] Exactly it mostly shows up in earnings where people are like oh we had our Revenue goals but we missed our earnings goals Adobe does
get to see some interesting promotional data so when they're on we will definitely get their perspective about whether the holiday felt online more.
Lesser the same promotional is past years.
[22:49] Call a couple other seems I saw out there there was this kind of is Black Friday dead a lot of this circles around somatic Mall while getting your everyone is there's a whole controversy around the opening on Thanksgiving Day itself and.
Some retailers like REI stand on that
others are kind of messaging that up even more and more and they're doing their doorbusters around that so there's a dinner I had some day.
[23:20] Where they actually had several buckets of Shoppers they reported on so they said 41.4 million people shot
online only from Thanksgiving to Cyber Monday so the I guess I'll call that cyber 5 and that 6.4 million more
who's been shot exclusively in stores so they have an online exclusive bucket
stories lusive bucket and then they have an omni-channel bucket and then the omni-channel bucket they say 89.7 million hour Shoppers.
So I'll see you in a day or calling a reference so
so that was interesting and there's an article that was kind of saying because more people shopped online than offline during that. It was kind of the end of the traditional Black Friday.
Brick-and-mortar holiday discount Holiday in your reaction to that.
[24:22] Yeah it was it yummy you here to Reasons by Friday is going away because people are shifting online and because black Fridays
you know keeping earlier tough to Thursday night it didn't feel like,
more stores open on Thursdays then did years pass so I don't think that really affected by Friday I do think / that interested anymore
yeah if you're only going to do one of the other there more people that are opting for the convenience of online shopping and that
that seems reflected in the the few datasets we had that show store traffic was down so I could lie but honestly it doesn't feel like.
[25:03] A dramatic shift to me over your you know it seems very windy or change versus sort of an exponential change and I think all this is happening in a climate in which
like most of the consumer macroeconomic factors are really favorable and particularly for the first time in a long time the macroeconomic factors for low-income Shoppers are favorable in those are the Shoppers that are least likely to shop online right like so that's the
the low-income Walmart Shopper probably feels like they have more money in their pockets and they have the last several holidays
and until I feel like you know some of that the trends that we try to predict do I get office gated by the fact that there
probably just are more people shopping and more people spending money this year than they then we've seen in the last couple years
so that's that's a good problem but it makes it hard to really.
[25:59] Really have a strong opinion I have I will say one of their data points from UW data is that buy online pickup in-store orders were up
50% over your past so I think like driving with an RF data what we're seeing is that the
this notion of these being separate channels is going away and people are increasingly using digital tools whether they.
Go to the store or not and you know you tease me for talking too much about grocery on the show I feel like this is the first year when people could
potentially buy online curbside pickup their their ingredients for their Thanksgiving dinner and so I haven't seen any data on that yet but I but I know as an amenity digital grocery shopping was available to many more consumers this year than ever before and so I'm going to be really interested to see
if Shoppers take advantage of that and if that you know changes behavior and all of those are two things so I think there's going to be a lot of fun
fall out to follow from this holiday. For the next several months we should keep doing the podcast.
[27:01] We we will
another theme that was interesting and you kind of touched on this little bit with outages Amazon seems to be pretty robust Facebook had an outage kind of like right around Thanksgiving so happy for freaking out.
It was kind of a yeah that was interesting
and then you would mention coremetrics an outage Amazon I've been kind of rough for Prime day then they did Cyber Monday and end so that's interesting it seems like they must have
tweet whatever they had some lips on on Prime day good warm-up for Cyber Monday.
I did see some articles that highlighted some other stuff it's hard in today's news climate to know kind of what exactly is going on and how bad it is with what did you see as far as I was just.
[27:47] Yeah I think there were some partial out I mean the number retard saw some partial added outages for you know for some subset of all the people that tried to get to the site for some small. Of time during the day and it's really hard
size how significant those are I would slide side note on the Facebook one when Facebook has an outage it has an impact on e-commerce in an unexpected way there's a fair amount of eCommerce sites that let you use your Facebook credential
as the keys to your eCommerce account in your stored payment information so it is possible when Facebook's down
that the people can't log into their account on an e-commerce site and and Shop so it has the potential to have that impact
and Facebook tags are all over these e-commerce sites so even.
If the outage and I don't think this was such an outage causes those tags to not respond it can really have a material impact on the page load speed on all these e-commerce side so there's.
[28:46] Town of best practices that site should do to mitigate those risks and and frankly wait way too many sites do do to those best practices so it's always surprising to me.
But you reference IBM and their analytics package which I think officially is now called IBM Analytics
all ice Old-Timers would know it is coremetrics and from my perspective they had a pretty catastrophic outage so I think they were out for most of Black Friday and then,
I were able to resolve the issues and then they have another significant outage for most of.
[29:24] Cyber Monday so that's a huge deal if you're running a site in your using the analytics to make decisions about
you know whether you should get more less promotional you know what what marketing you should be doing on the side how much additional email you should send you know that.
Data from that from your analytics platform is critical and you know some heavy rain Deluxe platform out is a huge deal
I will tell you I had several clients that that had an outage and the only reason that they weren't Furious is
because many of them are now using more than one analytics package so pretty, and that you had a IBM and Google which meant you were exclusively.
Using Google for the holiday and it probably is not going to bode well the next time you know IBM comes to have Yuri up your your contract
and you had this outage in the most important time and you were forced to use Google and probably found out that that that Google Map most your needs so I think from a business standpoint
that that IBM analytics at outage is going to be pretty catastrophic I think they were probably struggling to maintain market share against Adobe and Google anyway and so this is probably going to be a.
Another black eye to them in that regard.
[30:42] Quick question did this.
So I know that mosites almost every page of a site while will reference to the underlying analytic system and there's a lost tag and stuff did this cause the retailer sites to either go down or be sluggish or to those guys.
All currently have that kind of asynchronous so that if it's down it doesn't really.
[31:02] Exactly so what you want and what the
in finished all these vendors at least the analects vendors sort of beg you to do is have these tags load asynchronous way which essentially means it doesn't block anything from happening lower on the page from still happening while that tag loads and so
it's still even when you load it asynchronously there still you know some ways in which its
it's hurt hurting your rendering budget but but the impact is much lower than having the screen be white while you wait for that tag to fail and so
for analytics most people have them well implemented and I didn't hear about any anyone that had coremetrics tags blocking the whole site.
You do like to also put all these vendors at the end of the page but for Analytics.
[31:50] That means you miss out on a lot more analytics if someone like interrupt a page from completely loading or their clicks away from the page before for renters and so you know the analytics vendors like to have their their tags at the very top of the page so when there's an outage.
It's even a little more prominent so.
Bad deal all around but to my knowledge there were no there were no sites that were like literally WhitePages while they're waiting to find out that the idiom tags didn't work.
I don't think Google analytics had any problems but Google had a problem with her at platform over the holiday and I know that impacted a lot of people's promotional plans that you know I felt like the number of clients that had.
Plan spins and open the spins that they you know we're going to make over holiday depending on how things went and they literally were like locked out of their AdWords account and weren't able to make some of the adjustments that they intended to make.
[32:46] Yeah that the Facebook ad platform was down during their outages well so it could be some pretty material.
[32:54] Yep that digital marketing tends to be about the third-highest
source of traffic to the site so that's a big deal and then the retailer that I think at the most news for having a complete outage unfortunately it was at J crew
had a very aggressive sale they were they were offering 50% off on everything and I think they were there down for like the majority of of.
Black Black Friday so that's a pretty tough outage I know that they probably offered to extend that sale.
Extra days to try to catch that that Revenue but in most cases you know a shopper.
Likely move to some other other site and spent that money somewhere else so so you know that that's.
Pretty material impact to be down that long on this holiday so sorry for my friends at J.Crew
and that's probably going to be a perfect place to wrap it we promise to keep this is a short concise show just about the holiday
folks have any comments or questions as always we encourage you to jump on her Facebook page and will continue the dialogue there as always if you found the show useful we'd love it if you jump on the iTunes and give us that 5-star review.
[34:10] Makes everyone we hope that you're cyber 5 / turkey-5 crushed all your expectations and that you are going to finish strong in Holiday 18.
[34:23] Absolutely and then till next time happy commercing.
EP153 - Pre-Thanksgiving Industry News and Listener Questions
Thanksgiving road trips with Jason & Scot have become a tradition in the digital shopper marketing industry. Here is an hour of new and listener questions, to get you ready for the Turkey-5 holiday!
Spiffy announces connected car initiative. The first connected car feature grants limited access to vehicles through OEM (Original Equipment Manufacturer) connected car capabilities. Eliminating the step of handing off keys prior to a service makes Spiffy's on-demand services even easier for customers.
Episode 153 of the Jason & Scot show was recorded on Sunday, November 18, 2018.
Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, 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.
[0:25] Welcome to the Jason and Scott show this is episode 153 being recorded on Sunday November 18th 2018 I'm your host Jason retailgeek,
and as usual I'm here with your co-host. Wingo.
[0:41] Hey Jason and welcome back Jason Scott show listeners.
Tonight we are sitting here on the cusp of Thanksgiving which is the official kickoff of holiday 18 we got some great guests on as we get into the thick of that
but we thought we'd take this kind of opportunity here before at everything hits to go over some industry news and we
I had some listeners that were really dying to ask some questions so we have some listener questions
and we have hopefully if our sound engineer is doing his job we should have this out before you do your travel for Thanksgiving so hopefully this gives you something to you
get the folks in the car asleep so that you can pick about some e-commerce and get really super hungry as you ride to that,
great turkey dinner that you're going to enjoy.
[1:34] That's a lot of pressure you just put on the audio engineer thanks a lot.
[1:38] Well we have a we have a big team and I'm confident they can they can get it done.
Before we dig into news and Lester questions Jason you were at something to deal with a bonfire so tell me about this big block party with you.
[1:55] Sorry I did not get to light anything on fire.
Loyal listeners will have heard of last week show where we talked a little bit about some joint research that my employer poop assisted with salesforce.com and so we did this.
Speak study called The Shopper first study and you can listen to episode 152 if you want to learn more about the study but one of the things we
we've done is leverage pieces of that study in various social events around the country so one of these
we called the retail retail bonfire was in Manhattan a couple weeks ago we had three or four hundred clients in.
To the Dream Hotel put on a cool event and shared some of the research but I also got to,
talk a little bit about one of my favorite topics which is personalization and I I got to share this story that I enjoy sharing that I call hashtag United you don't know me and it's essentially this.
This tragic story about how I'm United's best customer and I'm in their Secret customer Infinity program and I travel millions of miles with him and I.
Do all my spending with a very expensive United credit card and so imprimis they should know everything about me and they should have tons of data.
Dramatically reduce friction and make my my experiences with them easy and.
[3:23] There's just numerous touchpoint I have with them every day where they missed that opportunity and so.
I used that story to sort of underscore the point that at the moment in the industry were talking off a lot about personalization but in reality,
nobody's doing a very good job yet and we we have all that the data and insight to treat customers much better than we in fact actually are and so that's kind of.
The kind of said my my talk which seems like it was well-received I got some good feedback at the retail bonfire.
[3:57] Yeah there was a video posted in I couldn't hear what you were saying because it was from the audience there and but there was a lot of laughter I thought you were doing your quit this whole e-commerce retail gig and doing stand-up.
[4:09] So you may have busted me I'm a little Overexposed I flew straight from the retail bonfire to the Home Improvement Aerie tail summer
in Chicago which was that show
for the Home Improvement industry at talking about digital disruption and so I think the video you're referring to is actually a little bit of my my sort of omni-channel presentation at the retail bonfire and I always.
Put some jokes in there and occasionally one of them lands.
[4:38] I don't know you're saying but those people were very rolling in the aisles.
[4:43] I got super lucky that they accidentally recorded the one one segment where where they thought it was funny and they didn't record what I said so you will never know that they just don't have a very good sense of humor.
[4:56] I was guessing that maybe you would like you're like the 9 p.m. and then going to dinner and had like 45 drinks or something.
[5:04] Yeah well that for folks that are interest in having me speak to your event you should know I do have a two drink minimum so I only accept it and swear people are likely in that state already.
But yeah so I've been traveling a lot since grocery shop doing a bunch of fun events and I've been trying to keep up on stuff,
I feel like everytime I open my newsfeed all I see is a big giant picture of Scot Wingo,
doing something with speed and I think there was some pretty cool news this week if I'm not mistaken.
[5:35] Yeah it's kind of you know you would think that my car washing world would not intersect with our digital world that much but the increasingly dense and so one of the things we've been working on it's 50 for a long time is
a fair number of Manufacturers have connected car initiatives
big Tesla do so I've been in Connected car world since 2013
and what would connect the car is essentially is your vehicle has a 3G or 4G or an LTE connection,
that essentially connects your car to the cloud and then usually the manufacturer will give you a nap and I'll let you do a lot of cool stuff so for example with the Tesla app you can lock and unlock the car to put it in the valet mode
you can now actually.
[6:23] It has a mode where will we will come to you that's pretty cool kind of Tony Stark mode and then so various other manufacturers have other features in addition to the app haven't connected car
it in the vehicle you will have Wi-Fi and then you can
have just like over the air updates you can have better Maps so there's a lot of really great reasons to do this from a consumer Behavior perspective so 2015 people started in it
and it was kind of spotty because a lot of them would charge you extra a lot of consumers didn't sign up for it within the last 2 or 3 years OEM zarchive including it in the
the first three to five years of the vehicle ownership so we're that ties in with our world is 50 is for doing
Car Care car wash and oil changes those kinds of things and we're having watched Amazon for 20 years
yeah I think they think they get right as a musician is being really obsessed with with customers so we.
[7:24] I'm thinking how can we make that customer experience better and one of the painful things,
drives us crazy is we have to get our customers keys and that can be kind of an arduous process so this allows us for those customers that you have connected cars they can give us permission
and then the day of service we can come in and our technician can walk in the black car and get the keys to our service without having them involved.
Inet School transparency in mission control of that so that was really well received a lot of good press and thanks for bringing up it's it's it's fun to see how these things overlap.
[8:00] Yeah it's that's kind of cool. It reminds me a lot of sort of it's the carwash equivalent of the Holy Grail of Amazon or Walmart delivering the groceries right through my refrigerator.
[8:12] Yeah Amazon does have a program So within the Amazon key there's two flavors to key there's that home one where they can you can grab them permission with a Wi-Fi lock that come in or out and then you have a camera to watch Lily person
I've been else have a car delivery system within tea and they're using a lot of the same technology that we are in the connected car to do that.
[8:33] I will say I know you.
Joke about there being a lot of overlap but it's kind of annoying for me because I feel like I'll go to visit a car client and you don't be talking that e-commerce and.
You know if you start to feel like you've moved on from e-commerce the car and then they're still out yet we're sick of Jason can we meet Scott.
[8:54] Funny Cooks so it would not be the Jason Scott show without a little bit of.
[9:07] Your margin.
[9:16] Cool well the big amazon news that that has happened since our last news podcast is they they did make the final hq2 decision.
Good news is it lined up the rumors reported on so this is kind of like old news in a way but I guess we should say.
[9:33] So what Amazon did I is they did kind of did the proverbial the Old Testament splitting of the baby and instead of announcing they decided to split it into two so,
New York's and Virginian were the winners so specifically New York City somewhere around Queens called Long Island City which is maybe you can explain this list I don't understand this particular thing.
It in Crystal City and they're actually,
asking people to kind of create a new names there's a whole new name there that they're going to kind of call where they're going to be,
something like National Landing so that's interesting and so there was a lot of controversy after Nelson super small lot of people were upset they split it.
I and our cock will this isn't really another headquarters is just two things.
You know dr. Holloway was right he had predicted this and so he was indicated in his whole thing about you know it's convener to abduct businesses houses and their political influence.
The light people of observed that now Amazon has data from sunlight 240 cities and Metro areas about.
[10:50] All this data they had them put together for Amazon is now sitting somewhere in a database
I hopes Amazon in the variety of different ways young next time they build a building center or a Dana Center they can kind of go and say well you know for hq2 you said this,
certainly give us portion of whatever you promise,
and then the other big one is now that it's public the subsidies have been released and it turns out we add up New York in Virginia it's over 2 billion dollars and subsidies,
so this creates a lot of consternation from citizens who were like wow why are we paying so much and then company exist,
okay we've been here forever when are we going to get our tax credits and it's just really kind of,
yeah I probably read 5 articles a date so kind of from the aftershocks this that's been and,
you're so that's good be interesting to watch and see where they they plant more flights would you think about it all Jason.
[11:59] I'm a little over at my wife asked me today and I she pointed out that I kind of snapped at her in the answer.
Cuz I'm a little tired of talking about it out of course I want to share my myhumboldt pod with our listeners.
[12:20] So they're opening a new headquarters in a suburb New York and they're going to 25,000 employees Google already has close to 25,000 employees in New York and there was no year long.
Contest or you know this constant drumbeat of news Amazon set.
Nothing's up by calling at hq2 and having this kind of formal contest and all of us to follow the industry and in the media.
[12:51] I feel like sort of overreacted and bought into it too much because it's in some ways it's it's not a heck of a lot different than.
Then the way every other company behaves I mean all all companies you know try to extort these business development funds from cities when they moved new infrastructure there I mean.
Towing threatened to move their headquarters from Seattle to Chicago McDonald's and moving their headquarters like they're all these things that happen all the time.
And it's it's kind of annoying that the Amazon one stayed in the new cycle for a year and then had this anti-climatic ending right so.
They split it up between two City so it clearly isn't that co-equal headquarters like I'm sure the center of gravity for Amazon is going to stay squarely in Seattle so people that like that or going to be happy people that don't like Amazon's presents in Seattle and probably.
Going to be disappointed they're going to hire a bunch of people in New York and compete with with Google and the agencies protect tires in New York but that's not.
[13:53] I think a game changer you know it's.
I feel like it's a little overhyped I will tell you that Steve Carell was the host of Saturday Night Live this week and he played Jeff Bezos.
In the opening and he had a bunch of funny lines but one of them he's like we are excited to announce hq2 last week and everyone was really excited with our result.
What are the people in one of the cities that we selected as hq2 or any of the people that live in anywhere that is not hq2.
[14:25] Spring Arbor.
[14:30] Pretty funny and summed it up pretty well side note.
Anytime a city cut these Economic Development projects with employers one controversial thing is right.
How much input you gave the citizenry in this and what you know sort of checking balance process were followed and obviously.
Particularly in New York Amazon negotiated for these things and the governing politicians a largely.
Agreed to them without any public discourse and so now that they're revealed there's there's a lot of folks on City councils and Andreas capacities that are sort of.
Outraged and obviously the Optics to Amazon probably look pretty bad because they're.
There you know compared to many companies there they're doing very economically well now these these.
Subsidies that they're getting our are publicly revealed there was no there was no sort of public comment.
[15:33] And it looks a little shady that they promise this whole hq2 thing and then they they split the baby and you know we all assume that the subsidies they got are not half of what was offered because they split the headquarters in half they probably.
Got most or all of the the offered subsidies even for the the half the jobs that they promised and as you kind of pointed out.
Every single time they open up a filming center from now on they're probably going to remind that municipality what kind of.
Program was off and you know the try to get as much as they can and I think they even announced a big new facility in Nashville the same time they announce these two headquarters.
I'm not I don't think they're behaving that much different than any other employer but I feel like.
Some of the overhyped pr maybe sort of backfiring on them at the moment because there is a big backlash.
And it almost even feels like Amazon recognized it again overboard cuz I feel like they they'll eat the announcement on Election Day in that like I assume that was to try to.
Can I sneak it in and a busy new Psycho.
[16:40] So another interesting one that I was following this week is there's been kind of a fun arms race on what retailers would do for their free shipping program for holiday.
[16:57] Several weeks ago and asked that they would drop all minimum thresholds on their free shipping so you know if you want to shop from Black Friday to Christmas it Target no matter what you buy what volume you get free 2-day shipping.
Walmart normally has free 2-day shipping with a $35 threshold so we are all curious to see if Walmart would respond to targets.
Offer in Walmart did not respond they announced that they were going to keep their $35 threshold and so at the time I thought that was kind of interesting Walmart didn't feel like they had to chase.
Target in this particularly expensive to offer promotion over holidays I thought that was kind of fascinating and that in a way I,
I sort of admired Walmart's position there and then the totally unexpected thing happened Amazon came in and said,
oh and by the way we're offering free shipping with no threshold whether you're a Prime member or not for the holidays Inn in effect matching targets offer and undercutting Walmart and well haven't been in Walmart was comfortable,
not matching Target I suspect they they did not anticipate that that,
Amazon would have a significantly more generous shipping offer than they did.
[18:14] Yeah I had some people tweet at me in there like what why I would even pay for Prime and you know I think what those folks are missing is this is the Super Saver quickly a program that used to be you had a minimum car that you have to get to get Super Saver but it's still the Super Saver service-level just
Hard series things to say but essentially
you know that's kind of the slow boat and it's a 4 5 6 day kind of a shipping window not a not a two-day so Prime Sole is the thing that makes sense in my mind to pay for it because now you're getting free 2-day shipping
for pain description so that's the difference in yiay Prime and Super Saver can still co-exist even when Super Saver is free.
[18:58] One thing I noticed it was interesting is there's been a lot of kind of friction between Apple and Amazon over the years and then also Facebook their Style
lot of drama going on with with all these companies fit specifically between Apple and Amazon you know there's been no love lost there they had,
what example is Prime video for the longest time wasn't available on Apple TV devices you know I don't think apple is ever available on Amazon Fire devices and then
I'll dig up that resolved and then one of the ones that got resolved that was kind of nursing is is Apple app that apple is going to really increase its listings on Amazon with kind of
bring that the main product lines up there with iPhones iPads and that kind of stuff so it was actually Apple selling on Amazon,
I thought the timing was interesting it feels like if your Apple you want to do that for the holiday,
the water of Wall Street on Judith at the new iPhones aren't selling it, the pace ever thought they should be and suppliers are swimming in inventory so that was interesting
you know what is the quid pro quo if I'm if I'm.
[20:15] Amazon and I say alright I'll let you somewhere your stuff here you know obviously you're getting it cuz of that,
but then you got it feels like there's something else going there and one of the big friction points as a Kindle reader so I use my Kindle app on my iPad
is can't really buy from the Kindle app you have to go to the Amazon website you can buy to the Amazon
apps Can't Buy Kindle content website order it and then download it and what they're doing is it getting around the 20 to 30% take right at the store level not selling right from the iTunes Store.
So I would love to see you know that is a big friction point that with the Amazon ecosystem I'd love to see kind of hopefully as he's guys get along better let's see that go away.
[21:07] I totally agree you know I assume one of the things that that Apple's getting in the short run is that by being on on the.
The popcorn formula that they're going to get more brand protection help in more policing with all the the counterfeit product and because am is Apple so popular.
You know there's a lot of speculation that there's a ton of counterfeit fit product and I'm I'm thinking mainly like Chargers and cables and things like that that that.
Probably part of the quid pro quo of Apple being on their formally is that they'll get more help with their brand protection and so in some ways it felt not too dissimilar from the like the deal Nike cut earlier for example.
[21:52] But I will throw one thing out,
I share your frustration I can browse for books on the Kindle app but I can't buy them I have to go to the website and prove your point it's because when you buy something through an app you pay a commission to the app store owner right and so.
Amazon doesn't want to pay Google and iTunes the big Commission on those.
So they make you go to the web there is now a traffic solution for this Amazon should release a Kindle Progressive web app.
An answer that that essentially like would be.
Functionality that you don't get from the the App Store and therefore don't have to pay a commission and so they could basically have all the same offline capabilities that they have in their app that can let you put an icon on there on on the.
The homescreen let you read books offline and all those sorts of things and they could sell you books which without having to pay on iTunes or Google Play.
Commissioned so regardless of whether this deal makes apple and Amazon more friendly in that way if you like Amazon needs to get off the dime and embraced pwa.
[23:04] So then how do you it's so I'm going to do it for dummies question if they're not in the app store which everyone's been trained as a way to get this stuff how do you do discovery.
[23:15] So that still is the that is the problem with pwa today.
[23:21] Never trying to con in Discovery they're not discovered in the App Store but they are much more discoverable in Google then amps are in so.
I if I were a Amazon I would certainly still have.
My app in the app store for Discovery but I would give them an alternative which is this pwa version so instead of throwing someone to the Amazon website to buy.
The book and then having them come back to the app to read it I would throw them to the pwa version of my sight to both by the book and read them going forward and it will see if the App Store.
Track down on this pain at the moment there's no restriction against having an app in the app store if you get that app away for free by the way you pay nothing to the App Store have utility in that app.
In that app you can totally promote your pwa and even had a direct link for someone to download the PJ pwa version,
as having greater capability than the App Store version so.
You can kind of use the app store version of the Trojan Horse for your pwa version but at the very least the pwa version would be a good would be a better alternative than.
Send him to the website to buy and then having them come back to the Kindle app.
[24:46] So we'll see how that all plays out.
[24:48] Search Jeff listens I'm sure he's taking care of since Jeff call Jason if you want details.
[24:53] Or I'll just send an email you can add a? In forward it off to someone to ruin their life on Thanksgiving.
We you did not record a show directly adjacent to it but.
Of course singles Day November 11th was happened since the last time we did a new show and it's kind of a big milestone it's the 10th anniversary of double eleven day.
Did you were you up late buying some stuff from Hong Kong.
[25:29] Wasn't you know I think it's been interesting over the 10-year Ark where you know I feel like the last first nine years there was all this hey this is going to spill into the US and then feels like this year
there's finally capitulation and I didn't even get a single email I think
from us retailer promoting it like last year I got a couple of your before I got a lot and you before you a lot so it feels like,
we kind of given up on the spilling over in the US
and then Prime day is kind of become are on the singles day. And now everyone is anchoring on that and offering their own kind of deals around that time for 11:11.
[26:10] The number of years where singles they grew dramatically and Jack ma would threaten next year.
We're coming to the west and mostly what that meant and this has definitely been true.
Every year alibaba's done a great job of recruiting more Western Brands to participate in singles day,
in Asia and definitely singles day has expanded Beyond China so Alibaba now you don't has a presence in other cities are other countries rather,
they have is it was Zada.
In Singapore did they extended it too so it's it's definitely become a bigger Regional event and there's a ton of Western Brands I have a ton of clients that are excited about it as an opportunity to sell to.
The indigenous populations in those countries but I would agree with you right there was always some type that there might be some play for for us consumers and it most there's like a kind of soft play for.
[27:14] Like a kind of soft play for.
[27:17] But I definitely know I haven't seen any any traction with with Western Choppers.
Just what happened they sold 30 billion the equivalent of 30 billion dollars in US 30.8 billion so huge day.
Compare do I cut prime day that might be 4 billion or a Black Friday or Cyber Monday they could maybe hit 6030000000 the normous number,
that's up from Mike 25.3 billion last year so,
in a superficial you look at that and go man this this thing continuing a crank it does seem like the rate of growth is starting to slow down so that represented a 27% growth over last year to put things in perspective
last year was a 39% growth over the year before that and I'm pretty sure every year other than those two has been over 50%.
[28:14] Feels like the growth rate is decelerating a little bit and.
In some ways even though was the 10th anniversary it felt a little bit Mewtwo
number one Jack ma who played at the super prominent role in the first nine was was there but had like a much less significant role as he sort of stepping back from the company a little bit.
I think Alibaba issued some guidance either right before or right after,
singles day that they sort of downgraded their the revenue guidance for the year and there's a lot of talk about how the Chinese economy is slowing down a little bit so.
You know it's it's one of those things like objectively.
It did really well but against expectations it was a little bit of the year if you will.
[29:06] Yeah absolutely and dumb
Alibaba stock is spelled it so even after you know what kind of a crazy number like 31 billion essentially if you around up a tad which is crazy to do in a 24-hour period the stock is trading kind of New Year Of Glow and it's that pressure
up lowering the forecast China economy slowing down the tariffs you know everyone is thinking.
Is, assuming the worst with this tariff environment that were in so yeah it's going to be a little bit of a rough time there yeah I did see another article that to your point about brands
that they had the most semi 200 Western Brands sold pretty considerable amounts on there and it it's funny it's kind of like you know
everyone goes to China and tries to set up a.com to give up and they essentially saw Auntie mall to you're looking at,
even Amazon who runs their own Chinese store they sell a lot of candles and devices over there which be like let's see if you like Amazon selling on eBay which you would never have so
it is interesting to see it even though they're slowing down there quite dominant and huge portion of e-commerce goes to Ali.
[30:24] For sure what one of the thing that seems
what is containing attractions every year they make significant progress in trying to turn this into a omni-channel event
so Alibaba owns a bunch of stores they only like a hundred of these fancy digital-first grocery stores they don't like 500 convenience stores.
Increasingly there their soliciting other retailers that they don't,
direct Lyon to participate in double eleven day in so what that usually means is some kind of digital enablement so maybe they have a digital sign in the front of the store with the deals and you can.
Activate the deals in the store you might take the goods with you or had the good ship from home but you don't really trying to expand from being a pure e-commerce holiday to being an omni-channel holiday.
[31:15] E-commerce is bigger in in China than is in u.s. it still is true that it's like e-commerce is like 15% of the total.<