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

Join hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder & Executive Chairman at Channel Advisor, as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
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Now displaying: May, 2017
May 26, 2017

EP085 - FutureCommerce Joint Podcast Part 2

Brian Lange (@brianjlangeandPhillip Jackson (@philwinkle) are the hosts of futurecommerce podcast. 

In this first of it's kind, Co-Podcast Jason & Scot team up with Phil & Brian to record a two-part podcast.  Part 1 can be heard on futurecommerce.  This is part 2.

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

Episode 85 of the Jason & Scot show was recorded on Thursday May 11, 2017.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, 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.

New beta feature - Amazon Automated Transcription of the show:

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 85 being recorded on Thursday May 11th 2017.  I'm your host Jason retailgeek Goldberg and as usual I'm here with your Co Scot Wingo.

Scot, Brian, Philip:
[0:38] Hey Jason are welcome Jason Scott show listeners tonight we're doing something really Innovative in the world of podcasting I don't know if this phrases ever been used or not but if it has it,
its trademark Jason Scott it's a cross podcast that's right or maybe we'll go at the Omni podcast,
pull in the flavor of e-commerce this is part 2 of a cross podcast episode,
and we are Co casting with Brian and Philip over at futurecommerce so before we jump in you need to go to your favorite podcast app right now and add futurecommerce And subscribe and then go listen to the first part over there,
in the come back over here or if you're a fan of Back to the Future you can listen to this one first,
I did feel like you're doing time travel back into the past listened episode 1 real flexible here at the Jason Scott show so which ever one of those floats your boat we will courage to go do that,
will pause for a second while you figure it out okay welcome back Jason let's bring Brian and Philip in as we continue,
they're episode guys do you name your episodes what what was our episode going to be over on your side.
3433 I don't know somewhere in there.
436 that's the that's the name you have to get a team meeting with your audio Engineers over there to figure out,
how to how to do it to get a consensus built and then this is our episode 84 so welcome to the show guys.
Thank you thanks happy to be on this is quite an honor actually.

Jason:
[2:13] We we are happy to have you let's let our audience get to know you just a little bit so maybe Brian you want to start by giving us your background.

Scot, Brian, Philip:
[2:23] Usher Yeah so I'm born and raised in the Seattle area and I got into a little start-up out here that did,
basically Payment Processing both across physical and digital,
and so they actually processed like checks and so they also they also had it online payments to all and that sort of wet my appetite,
4 for Hardline Commerce in Hartford for Commerce I should say in general and and then made my way over to digital agency called classy llama,
and they're there a specifically Magento agency really long time ago until agency and got to help build up that agency and I've been in a couple different agencies right now I'm at an agency called,
something digital with Philip we're primarily a Magento Focus agency but when we're dead across the board,
and in parking with another platform as well and.

[3:28] We we are I've really enjoyed getting to know everything you know kind of,
the entire education of what it means to be in Commerce through this process.
Certainly there's a lot that I still don't know but really excited to to be talking about digital Commerce and I've been able to work with some really cool Brands to bring their digital Commerce experiences to to life.
And I.
Instagram started futurecommerce with Philip we were working at can basically competitors at the time in.
Kind of got to know each other through different conferences we live in the same world and.
There was this this one one late night we had we restarted really really kind of getting down deeper into the.
Into the details and and and,
I think was actually had irce in Chicago 3 years ago or something like that and we started a friendship and in really a series of conversations that,
led to and us being like man these aren't these are really interesting topics for talking about we should record this and so.
That's how I up in podcasting Phillips kind of got a little bit earlier story of getting into podcasting so let him get into that but yeah that's me.

[4:57] Your thoughts about your career and how you got into to be the podcast Ninja,
yeah thanks I so I actually I took a left turn at Albuquerque if you will I got.
I dropped out of Theological Seminary after two years and I joined a band.
And I did that for 7 years and you know we were like touring around it was super cool and you know you like recording and doing all these really cool really neat things and,
but it's interesting you know like the one thing that was sort of a Mainstay that held over from my high-school days was that you know it's really good with computers and.
In 03 so it's more of a long series of events you know you kind of look back on your life in your like one of these things is making me money in one's not and,
and so why don't we stop the one that doesn't make me any money in focus on the thing that does and found a lot of good fortune there and Ben been truly fortunate to,
to have the you know nearly at 18-year career now in in eCommerce digital Commerce and so you know it's great kind of growing up in the industry from the late 90s,
where people were in on the dock, just figure out how we were even supposed to do this stuff online and then sort of watching things mature and best,
actresses emerge and I yeah so kind of growing up and and working directly for a bunch of merchants and then you know doing a lot of.

[6:29] Direct Consulting and then you know finally finding my way into.
You know actually being a subject matter expert an e-commerce so then and now and heading up the digital Commerce team at something digital which is.
The best named digital agency ever and.

Jason:
[6:51] Although I do also like classy llama.

Scot, Brian, Philip:
[6:53] Classy llama yes.
Something to drill actually it contains its own origin story right in its name which is skids funny but you know just kind of getting to know,
Brian and the people in our industry and and you know having some success in podcasting you know I have another.
Podcast called Mage talk which is a magenta Focus podcast that.
Has about 70,000 listeners a month of this point and you know that's really taken us to a new place worldwide kind of talking about Magento talking about you know the future of that platform.
I really also wanting to tell other stories and so you know in the last year-and-a-half we launched two other,
properties futurecommerce to really talk about retail and general and talk about the the transformation that retail is undergoing right now and the challenges to you know not everything is so exciting in the future you know there's some there's probably some dark,
days ahead and there's there's definitely dark side and we touched on that someone the show so the show's been not quite a year yet and 35 or 34 episodes we're not really sure at this point we've lost count but you know we're we're trying to really,
you know do I think what a lot of people struggle with witches remain consistent.
We want to have consistent content and I think that's something you guys can appreciate so yeah so futurecommerce we also launched another podcast property this year.
I called Merchants to Merchants which is stories Merchants telling their own stories and it's for merchants.

[8:26] I specifically in stories of merchants talking about their own experience you know among themselves so we'll get a panel if you know 3 or 4.
Retailers together and ask them to improv them to talk about you know what's easy and what's hard.
And you wouldn't believe that the kind of feedback that comes out of that and it's real honest content where it's not just someone like me who thinks they know everything.
Just kind of telling you what to do which is usually what you get in these sort of mediums right you get a couple white guys that just pontificate on the podcast and that's not an uncommon thing in our space but to get people from diverse backgrounds in to get people that are,
that have very different two stories to you and have different aspirations and different struggles and get them to actually tell their story it's really thick.
Stories there so it's kind of cool I think we run this really interesting journey and for me it's it's really about storytelling and it's really about.

[9:28] You know shared experience so but yeah delighted to be here I'm a big fan of guy show so pardon me being a little Starstruck.
Thanks thanks it is awesome you're building a whole network we can Jason I struggle just to kind of get this puppy out once a week so I'm I'm amazed at folks that can to do that,
the key is to just neglect everything in your life and your job.
And then you can really be successful to let us know how that works out for you.

[10:03] Okay well listeners if you're listening to this two-parter in the chronological sequence when we last left you in this cross podcast episode we just finished talking about some future Trends and we thought we'd bring it back to the Here and Now,
now if you're listening to it out of sequence if you're one of those original trilogy people,
let me just say Darth Vader and Luke are not related at all there's nothing to see here these are not the droids you're looking for Jason you on that kick it out with us some some news.

Jason:
[10:31] I do but before we jump in the news I do want to take advantage of the fact that we have some Magento gurus in the house so for listeners on this podcast.
I have been slightly negative on Magento and I'm I'm prepared to be schooled but I want at least get my POV out there and and you guys can help me see the light we actually had Mark Lavelle and Peter Sheldon on episode 50,
and.

[11:03] Magento is is arguably the most important platform in the eCommerce Echo System I think there's probably more sites on that platform than anything else in my company we we do play a lot of that platform in Asia.
We don't personally do as much here in North America book what has been a concern for me is you know.

[11:26] Did that for a long time there's been this version 1 of magenta that had all these blood features that had had all these users.
And you don't have this rich rich community of developers and plugins and in all the all these sorts of things.

[11:41] And what you tended to run into is.

[11:45] You know these these kind of whether they're true or not like hey yeah and magenta was great for the long tail it doesn't really scale for the Enterprise clients and in full disclosure.

[11:56] Like Magento did struggle to.

[11:59] To sort of list a bunch of Enterprise clients like they would often list Enterprise clients and you'd go talk to those clients and they'd be like yeah we're using it for a small project in the corner it's not our.

[12:09] Armed army in platform and so you know that was kind of my first red flag at magenta was on magenta one while it was super popular.

[12:16] It didn't seem to catch the top of the echo system and then after years of waiting and promising and changing hands a couple times and I think they probably got screwed by by being acquired by eBay for a few years there they finally launched version 2.

[12:31] And what's scary to me and what what what you know sort of came to light in this conversation with Mark and episode 50 is.

[12:39] There are not a lot of sites that have migrated from version 1 to version 2.

[12:44] And so you know arguably there's there's some improvements and and fixes inversion to butt.

[12:50] No you can't you can no longer say Magento is the most popular platform in the world because there's you know a relatively small user base on the current version of Magento,
so it seems like the majority of those users got left behind and frankly some of the most beloved features like the the rich ecosystem of third party plugins.

[13:09] You know is is.

[13:10] Dramatically different in a magenta to today so so my kind of talking point to people has been magenta to probably has a lot less momentum that then magenta one did and it's a day.
And I'm unprepared for you to tell me why I'm completely off base.

Scot, Brian, Philip:
[13:26] So you've caught up on 80 plus episodes of Fire,
inventory all that you had for the magenta platform and I actually applied that you were able to do that in two minutes that's kind of impressive skill.
You know I'll I'll start out here because I don't believe that Brian can be succinct I'll say.
If it's fair,
if if Mark and Peter who are the CEO and I think the VP of strategy at Magento respectively if they can't change your mind on,
and qual your fears on Magento then I don't know that I'm going to do any good but I will say this listen I can only speak from my own personal experience.
As somebody who is admittedly a fan boy and his hung a good portion of my there the latter part of this.
In a career that I have the last 8 years I'm Magento and I'm pretty well decorating the magenta space.

Jason:
[14:30] You have actual decorations by the way don't you are you like a black belt.

Scot, Brian, Philip:
[14:33] Yeah I might like,
I'm a two-time magenta Master which is a a sort of a notable Community Spotlight award that they give out so I'm one of like 7 people that have,
received it twice and I'm a four-time Magento certified developer and I've spent a lot of time in the trenches doing a lot of magenta work and specifically Yuna rescue for.
Rescue work for large builds which is you know something that no other platform can tell is the number of rescues that happened what I would like to say is that.

[15:04] I think with the with the I don't know with the ubiquity of the platform,
Imogen - once were the success of the platform magenta one I think,
any shift of years that represented a rer connector that that sort of leaves no quitiquit leaves people behind,
I is going to be a painful one I don't think there's any way,
just to get around that I think we've seen that in major in in any major software Rev,
you know Windows 10 most notably recently has had some major I had some major hiccups you know moving people across from platforms and sort of forcibly doing it at the end of the day and I think,
I think it's a it's not an easy thing in software. I think what's what's really complicated is e-commerce and digital Commerce in and of itself,
is a difficult problem space to solve and everybody wants.
You know everybody wants open architecture easy to build on an open ecosystem so some of the sort of.

[16:10] Little points that you mention are are things that I think are are being currently rectified I think the last check.
You know 70% of the people are 70% of all technology Partners had Magento 2,
compatible Integrations at the first of this year and it's growing,
you know we we do a tremendous amount of magenta work it's not all that we do we are we are also Shopify plus Partners but our deal pipeline is full.
We're we're seeing a tremendous demand for Magento so we going to speak for ourselves seeing a tremendous demand for magenta to and specifically magenta one clients looking to come over to Magento 2 now I do think that some of that could be under duress.

[16:58] So I wanted this count that but I do think that magenta has a lot of promise and if.
If you want to continue to sort of get the benefit of what a platform like Magento has to offer which is a freely available piece of software that is enterprise-grade.
Were you can you know download it and start your business and then grow into an Enterprise platform it's sort of.
Ready and the promise of Magento is that it grows with you right you have something it's available freely at the low tier and you can grow up into you know,
billion dollar business is running on Magento but I think,
there are challenges along the way and we have to be very honest about them and we can't glaze over them I think the the internet retailer 300 the B2B 300 which is a new segment for for the IRA Ting Magento owns the the btb 300,
I don't know that they're going to stay there forever and Magento sort of.
Found their way into it kind of like mr. Bean finds his way into good situations because because because Magento isn't a B2B platform it's not capable of doing B2B out of the box,
people adapt Magento,
to do it and I think that's what you're saying is that magenta is extremely adaptable and so the success of Magento has nothing to do with Magento I mean I think anybody will tell you that I think Mark Lavelle would tell you that the success of Magento is the community.
Is excessive Magento is the,
the sort of dedication of a lot of hard-working and brilliant people in the International Community especially,
that contribute to this platform to make it a better thing and you're not going to get that on hybris and you're not going to get that on demandware.

[18:34] Now I mean you might get scalability and speed that's another conversation but you're you're not going to you know you're also not going to get sort of that promise of what.

[18:44] Magento offers which is a you know this this Rich ecosystem of makers but I anyway now also not been to sync,
yeah I was going to bring that up Philip just to add on a little bit to what you're saying I think this is Ben actually,
how you mentioned pain but also opportunity because while the gento had a very broad ecosystem that you can system wasn't very difficult to navigate,
before and you know sort of modernizing the platform has now allowed Magento 2 in in bringing a new Marketplace into in the play has allowed Magento 2,
I do a much better job of curating their ecosystem,
which is been very good for it and yeah while it's taking a little bit of time for some of these module developers to 2 rerelease,
they're extensions for the platform.
I think the great thing is which it is rejected a whole bunch of them in for good reason sure and ends you know I think now we're getting you know I'm not going to say it's either the cream-of-the-crop but we're getting.
We're getting a much better picture of what actually works and doesn't work in so when it when whenever you tell her comes into the Magento world it's it's not quite as scary,
as it used to be it's not quite as wild west does it used to be it's a lot easier to to to be successful,
in the new paradigm and I think that's what scares you mentioned customers.

[20:20] I think that's what scared some of them away before cuz it just felt it felt it felt down market and you know it felt like there was a lot of weird stuff available to you and yang.
And so now now magenta is really tailoring itself to be Enterprise,
Enterprise reading and I know what they released their Commerce platform they're about to order their Cloud platform they're about to release a beating e-commerce Cloud this this summer the functionality this container that platform is is,
make the total cost.
Of of implementing Magento for me to be quite a bit lower and I don't think that anyone else is going to be able to touch that total cost of ownership from the BV perspective here coming out.
And soap,
there's a lot of things to really like about where Magento is headed was a lot of positive Memon in there also,
necessarily add a ton of features in Magento one on a regular basis and what we're seeing with Vicenta to is there were insane amount of.

[21:30] Product announcements that just happened here in Imagine,
are they added social that you know how speed to be you know they they had it as a CMS which magenta one was definitely lacking adjust a ton of tools a ton of innovation a ton of movement that's happening in,
directions to reinvigorated and you know I think.
Part of the other the other gripe with Magento at least you know at least one of those sort of inside baseball grapes for people like me is that yeah magenta was sort of slow and and and you know.
Adopting were worth keeping up with the times I think it started to show its age after some time and and they they say it in a nice way now it's like we have the youngest platform of anybody.
Which I think you know rightly so like it still has the name Magento on it and I would say you know it is Magento ask but it is a different platform.
It is not a simple upgrade to get from 1 to 2 I think that's a problem.
So yeah I think that there's I think there are there's still a lot of challenges ahead I think we're we're going to see.
We're going to see continued uptake through 2017 I'm interested to see what happens through the end of the year but you know Magento did just actually Place into the the leader.
A quadrant for me the new Gartner magic.
Quadrant survey so you know they are showing some promise there but a good portion of their ability to compete in the areas that matter is because the the platform is extendable.

[23:09] And I and N because there's Community enablement for those features magenta doesn't kill an improved and personalization.
In a magenta doesn't have native B2B right now it's coming but it's not there.
And so there are other platforms that I think are nice players that are better suited for different types of business I think you know but from a broad Market perspective Magento is.
Now I'm jective Lee owning it right now you know I think they have to continue to push hard to stay ahead.
They're not going to let you know they won somehow to this point but they're going to have to work harder to to keep that lead,
what do you think Scott and Jason does you guys seem to be real quiet over there.
I'm not as negative on Magento as Jason is but one thing I've noticed over kind of like the last five years is 5 years ago.
Every SMB I talk to you it was like I'm going Magento and then there were some I think you called and rescue Sanuk that was good I have some people calling refugees so I don't know the right one,
you know what would happen is these SMB is they got into these projects they didn't realize all right I got to go to developer designer and a host and that's like a.
That's pretty serious project for a 20-person company to handle that I can finally eCommerce business they can,
you can't just stop shipping product in the middle of all that either so a lot of them have abandoned it and gone to the either the Bigcommerce for the Shopify the SAS platforms at that SMB level.

[24:43] Nice I like magenta really miss an opportunity there they had that go thing but I think it was just so down size that it was kind of useless and I have to,
admit I haven't kept up with all the announcements but it sounds like you just talk about a cloud,
tussle bit more about that do you think they're kind of that parody with the Shopify Zappa Converses and I realize you guys talk about all the platforms so,
Brian I wouldn't put this in the same category it's not it's not what I would consider as you know software-as-a-service this is mine I know they're kind of migrate away from the terminology but it's more like platform-as-a-service so you actually still have,
it's more like a stack of of hosting and monitoring tools with support,
and you still have all the flexibility that you did with magenta before it's not like you don't have access to source code into the code and and the ability to make changes soap.
I wouldn't put it in the same category as big Commerce or Shopify I would still I would actually.
In the say that that their Crock Pot Farm is more competitive with like a demandware or or I should say Salesforce Commerce cloud or hybris then then with Shopify is not they're not they're not very similar at all.

[26:00] Do you think they need to do that.

[26:03] No I don't think they do I mean I think it would be a shift in direction for them right now honestly the the Magento brand I think it's built on you know sort of,
I don't know there's there's some complexity to Magento just inherently and and so you're never going to get the.
The fuggin playability that you would get from someone that you know has from other players that are.
You know specifically keeping you away from the internals and focusing you only on you know a a Walled Garden of of really good intuitive user experience you know for the merchant features to publish producten,
spell magenta also has a different strategy right so it's it's better probably fit for a retailer that sees there.
Their digital Commerce platform as one part of a larger piece of a young as part of their Ani channel strategy they see it as a property right this is an asset or this is an acid on their books as much as any,
in a brick-and-mortar store with with the frontage would would be considered a.
An asset and you know if you own that asset if it's a if it's an actual you know if it's ones and zeros that you've developed and you put.
Time in money into developing on and you own the platform and you on the hosting and noon you own all this relationship sandwich ento could go away tomorrow.

[27:30] And and that thinking can continue to still run well then great like that's it that's a real asset and accountants sure kind of like that I supposed and that's one way to think about it,
you know I think there's a devaluation that's happening right now in in digital Commerce where we're just looking it's sort of like commoditized.
Web property,
enablement and so we're kind of buying into the shop of eyes of the world and we do Shopify some demeaning it by any means but you know you buy into these sort of all in ones where they they on the hosting they own the code,
they give you a very select few areas where you can make sort of customizations and also by the way they own payments to.
And and and while that gives for some really great you know they rolled Apple pay out to 250,000 Merchants like overnight that's cool,
but if Shopify goes away or Shopify changes something on you your your kind of going along for that ride it's not an asset that you own outright and you have no say in it.
And I think for some it's it's an ideology I think as a business that you just have to buy into that you're okay with that.
What we're saying on the rescue side of things not to continue to beat this but but what we're seeing is that.

[28:49] You know it's it's what I like into like you know once you have your first like.

[28:55] Can you come out of a break-up right you you have this great relationship with you know a significant other and then maybe you get hurt in that relationship and you break up and you realize you kind of look back and you do a post-mortem you're like there's a lot of things that I expected that were just unreasonable expectations.
Right this isn't her fault it's probably my fault too like it's both of our faults.
But it's not entirely just her right it's also meeting and I think what we're seeing is that there's a class of a merchant,
who is becoming more who's coming to the understanding that.
Maybe the problems with Magento also also have to do with their expectations of what digital Commerce should be and their expectations of what,
you know they're there unreasonable expectations of how something should work and behave and and and so does temperate those those are becoming tempered does expectations becoming tempered and there now better,
yeah they're going to go into the next relationship with with a little bit more open mind and and maybe a little more grace for when they you know get through the hard stuff I don't know it's a bad analogy but I think you understand,
I'll try to go.

Jason:
[30:01] Know for sure I'd get a and I should say you like my general POV is all of these platforms tank right like I.

[30:12] This is way harder than it should be and compared frankly to other platforms and other parts of the business like it's shocking how much work we have to do and how much risk and how many rescues there are because you know of all those issues and and I would certainly agree,
that those issues are on client side and the platform side and the integrator side.
I think I think my favorite client ever is a big retailer CEO he calls me and he's like hey you know we've hired three svp's of e-commerce here none of them did a good job we fired them all and they all went on to be wildly successful at their next companies.

[30:50] And he's like it's come to my attention that it might be us not them.

[30:55] Sci-fi like that that that level of self-realization is rare but it was enjoyable.
I feel like you guys made some great points like you have underscored what I think is still one of the the marketing challenges of the new Magento and that's like.

[31:12] They used to be good at certain things the new platform is much better at other things but.
Nobody seems to want to really like say hey.
This is our new Focus this is what we're really good at and you know they want to talk about how good they were at the old magenta one and at the same time talk about why that you know.
Hey that was the Wild West in the plugins were super dangerous now now I'm enchanted to in the plugins are much better vetted but we don't have as many.
So I wouldn't I chuckle the great irony here is that that Peter Shelton used to do the Forrester wave.
Son and his whole job was to say hey here all the platforms and here's the here's the use cases that each platform fits in the best right here's the box that you put a shoes Platforms in and it.
It's hard for purchasers because Magento is fighting so much to get put in a box like are you know are they in our right is their goal to being on from solution that just competes with with SI p and IBM is it to be,
a cloud offering like like Salesforce is it to be a long tail like.
Shopify like like they're absolutely is a strong place in the Echo System for them I have no doubt about that it's it's confusing because they won't help buyers by saying.
This is where we fit in and you underscored like one of the.

[32:33] That the great ones there they're really prevalent on the B2B top 300 West even though they don't have native B2B features.

[32:42] They're not prevalent on the IR 300 the top 300 retailers you know which is like the native feature said that they they more support and so it just it's it's hard to figure out exactly what they want to be when they grow up right now is kind of my.
Might my gripe.

Scot, Brian, Philip:
[32:58] Sure yeah yeah I do think that they sort of on the top 1000 to do so I do think I agree with you totally I think.
There's going to be a challenge with Magento philosophically going forward it's interesting to watch of how much of their.
How much of their Community are they going to start to usurp by putting by replacing their communities enable met with core features so that they can play in the larger spaces,
because nobody you know what you know I've seen deals actively lost.
Because Magento didn't have personalization out-of-the-box and you had to go to certona like that lost a deal you know and that's.
That's a silly thing to me to get upset over but at that level people don't want it have multiple.
You know relationships with multiple vendors they want one relationship with one vendor that does everything sort of poorly but they do everything,
but that's just my take to everything kind of suck,
but I don't think I want to mention about Magento and this is this is not something that's been talked about enough and it is I think it's really important point which into I think over a year ago now actually released.
And all of this and what are the things that I have.

Jason:
[34:21] First got that to order management system.

Scot, Brian, Philip:
[34:23] Yes.
Yeah nothing to call um I'm calm that's the that's the nickname and one thing I love about him, is that.
You're right now in the order management World in and it was talk about futurecommerce for a minute order management is is is probably yeah,
what are the most important plays going forward,
I think if you're going to if it going to look at what you know what technology holds the glass going forward order management is probably that technology,
the thing that I love about him, is that for again total cost of ownership perspective.
You know that the competition is is IBM and Manhattan.

[35:15] And those are very expensive Hot forms right now that I take a lot to implementing and yes they are very powerful they're great platforms.
But emcon is also really powerful and can be implemented for about a tenth of the cost.

[35:32] And so that is that.
All on its own I think it's going to start to shape how Magento enters the market,
it's going to take some time still going to be a year or two I think before it really starts to take hold but this is this is something where it's it's not sexy.
But it is the future it's the least sexy thing actually ever my my my take is is right you're right on,
I've been calling the death of the shopping cart for the last two years and I know I'm late to the game because a lot of really smart people have called that before but you know that the paradigm,
that we're currently operating underneath.
Is still a real world Paradigm being modeled in the digital space the idea that we go to a branded location to put.

[36:21] You know items in a basket and then push it to a check out and then give some payment information this is a dead.
Paradigm and it's it's one that's being challenged in that metaphor is being challenged on every single device that we interact with it's not a desktop computer today and so once,
we get more towards the one click sand and ambient Commerce with anticipated anticipated purchase,
behaviors and we sort of let more of our life go on autopilot and more things are on demand one click.
We don't need shopping carts anymore and Magento has no place anymore in fact most of us won't be interacting with Commerce in the same way 10 years from now that we are today.
And so what does a company like magenta do to future-proof itself it has to get into a different to a different every different area from area.

[37:12] I think we're management is the Crux of that and there are too many businesses today and don't realize it but they're building order management into Magento.
Yeah an order management is its own specific Challenge and nice and it says it is a very nice software market right now.

[37:30] And one that I think does need to struction.
But it's not one that's going to get a lot of people to temperature tension and I think magenta will be there to capture a lot of that business for the people that are trying to do the Alexa purchases that are also trying to do buy online pickup in-store they're also trying to do,
purchase is in,
yeah God forbid a rnvr purchases like whatever the heck that looks like so you know yeah it's an interesting thing that as business moves,
news away from Brandon portals,
Starman and branded direct consumer portals on the internet they were trying to drive people to I think instead of shopping being a destination shopping is now at our destination wherever we are and and that is the transformation,
so I think.
You're right Brian order Management's the Crux of that and so you know Magento digital Commerce as a shopping cart is probably a dead or dying platform in the next 10 years anyway,
how long for all the other ones along with everything else.

Jason:
[38:30] Except Blue Martini Blue Martini is going to survive.

Scot, Brian, Philip:
[38:33] The fabric.

Jason:
[38:37] So I totally get it and I do agree LMS is as.

[38:42] Definitely an opportunity to differentiate and most of the OMS Solutions out there right now or sort of design for how people fulfilled orders five years ago not orders are.

[38:52] Yo what we need today much as what we're likely to need in the next couple days couple years so that's going to be an interesting space totally disagree that OMS isn't sexy I would say cpq is way less sexy than illness.

[39:05] But I do want to change topics a good stuff on the platforms we did mention a couple times during the platform conversation the internet retailer B2B 300 list and.
The the the beat of C 500 or 1000 list in that reminded me of my pet peeve of the week.

[39:24] So those lips are super valuable to our industry there a list of the.

[39:28] The top companies in different sectors and how much revenue they do and what platforms they use in all these sorts of things so so when you're talking inside baseball you want to have that list so you know how many of the.

[39:40] Top 500 B2B companies are using Magento for example so they just released this year's list.

[39:48] For the the IR 500 which is the original list of retailers and they become the most annoying salesman in the planet like I get more spam.

[39:58] For this Westin anything.

[40:00] And I need that list so I click on all that spam and I go to the site to buy the list and it's impossible to buy they have like so many different plans.

[40:08] That you can't figure out like which is the plan you actually need and when you click on the price for any of those plans it takes you to a contact us form where.

[40:18] You know someone someone has to have to communicate with the salesperson that goes I don't know how much can you afford.

[40:25] I hate that whole experience I fought my way through all of it I got the list which is way more expensive this year than it's ever been before and.
Wouldn't you know it they've totally nerfed it like in the past they they gave you their estimate of actual revenue for every company on the list and now unless you pay literally tens of thousands of dollars for the list you get these like.
Really course estimates like they do over a billion dollars or they do.

[40:53] 500 million to a billion or they do 250 million to 500 million so I don't have any action here but I'm just saying I Feel Like These Guys Brewing that product like that it was the Super Value.

[41:06] For that the industry in the fact that they make it so hard to buy and then they're their diminishing.

[41:12] The the level of a product you get just seems like he's actually the wrong wrong Trend these days.

Scot, Brian, Philip:
[41:19] I'm just to get back at him you should just go ahead and torrent that that report it doesn't.

[41:26] Santa really show him.
That's the thing is that I know both of you sort of have a vested interest there again in those that comes that particular company my my my guess we'll be like can't anybody just sort of crazies lists and create their own,
could there be a competing product at some point is closed.

Jason:
[41:51] If only there was like some industry Trade Organization that Evan was members of and they they somehow like either gave it all that day.

Scot, Brian, Philip:
[41:57] Philip II nice.

Jason:
[42:00] We should find some board members are.

Scot, Brian, Philip:
[42:05] Will Jason it wouldn't be a Jason Scott show without some Amazon news so it's been a bit of pretty busy week on the Amazon front and futurecommerce guys would love to hear your your hot take on,
the latest entry to the echo family the Echo Show what do you guys think about it.

[42:24] I mean it's it's it's been a huge complaint that there's been no.
Screen for the Echo and so this isn't a very natural step in the progression of no voice first interactions.
And so I mean I applied at Amazon for releasing it obviously.
I'm I'm excited it's finally here I'm really excited to see how people start applying it I think there's a lot of application maybe even in a business level for the Echo Show,
I mean I think it's it's it's great I can't wait to start using it.
Next step for the product and probably an obvious next step for the product I'm more excited about the features not necessarily that the show.
Enables but the butt that the all of the echo devices have received which is calling and messaging.
I'll let you seem like a natural progression for the product so you don't need the show to do it it's landed on most Echo devices today already but you can you know call somebody and have a voice conversation with them,
if they happen to have a an echo in there in your customer in your inventory in your contact list or you can leave them a voicemail or are you can just,
play old text messages back and forth which I think is the natural progression and I do think that there's a place for it but.

[43:57] You know I was wrong about the original Echo so no longer allowed to be you no crusty about anything that Amazon does.
Yeah definitely big time and now I have like 4 of them in the house so it's you know.

Jason:
[44:15] And your podcast is available on it which I'm totally Joseph.

Scot, Brian, Philip:
[44:18] To be the first time.

[44:23] Actually I will I so I am way more excited about the echo look which is the camera device which I'm sure you guys were recovered but we.
You know we we covered it on episode 33 of Commerce we we like you know in general I think we're both high on the product I like the idea of.
Personalized recommendations that are for my body type where as you know I just have you know what's just say it I have a ghetto booty I have this I have a weird body shape.
And it's hard.
For me I have I have very wild range of sizes that fit across many Brands and I think if if Amazon can solve that for me I'm I'm definitely looking video I don't know if I need the fashion advice so much.
From a body data and a even mention Magento in the brain Amazon is a branded manufacturer actually making their own clothes and they can sell me clothes that fit I'm I'm kind of all in on that I like that idea.
Google what's a what's a ghetto booty.

[45:29] A light sides of the very large Terrier.

Jason:
[45:38] I have a booty design for podcast.

Scot, Brian, Philip:
[45:41] This is kind of a good Segway into the overall Amazon topic,
no you guys talked to a lot of retailers you know it's usually one of the first things that Jason I get what you guys,
you know when people ask you should we worry about Amazon how do we compete with them what's your general kind of framework you you work from do you think they're going to dominate the future or their kind of going to be 25%.
I feel like you you just set the tee up for me so I'll set it up and Brian you knock it down I don't think that Amazon is your competition I don't.
You may think Amazon is your competition and you may hear every podcast and every you know I think piece on medium that says Amazon is your competition but Amazon's out your competition it's,
your customers heightened expectations of you as determined by their great interactions with Amazon that is your new competition and so Amazon setting the new Norm,
but that doesn't mean that we can't compete with Amazon if it means that we have to give the customers a reason to come.
And I think Amazon has to be part of your strategy I think they are owning everything.
No I'm quite literally I mean I think I just got a recommendation for someone to come wash my windows from Amazon's Professional Services like thing which like they're doing Angie's List now I didn't even know that,
it's crazy they're doing everything but I do think that Amazon needs to be part of your strategy and I think.
You know there are any able to platforms field do that side because one part of the pie.

[47:14] And I'm setting it up so Brian you knock it down AKA Channel advisor.

[47:24] I think you know if you're if you're.
Certain retailers Amazon definitely competes with you.

[47:38] If if you're if you are a brand who makes shoes shirt Amazon isn't competing with you buying your own shoes from.
No I completely goes out until we start to get to the basics conversation,
but I guess that's not any different than you know selling at at Costco that has their Kirkland brand right or anyone else does generic Branch button rings to two larger retailers,
in general but obviously I think you know we're seeing the effects of that right now it's not just Amazon but.
You know we talked about Macy's briefly on part one of very briefly but you know I think they're definitely feeling the effects of competition with Amazon and so you know.
Yes I think if you're talking so Philip if you're talking about.
Sort of that that small the medium and even large sided large medium Brands and retailers out there that's.
Yep you're right they're not really competing but we start to talk,
you know a Tattler trying to press level I think there is some some competition and I think that's where you going to the question is is it is it going to be all Amazon in the future,
now if Mark Laura has anything to do with it I would say probably not definitely some.
Big opportunity Unison and I just love his mindset and strategy around what he's dealing right now with Walmart I think he's changing actually he's actually changing the Walmart brand right now.

[49:18] With his with his the moves that he's making in the stigma around Walmart is going to have to shift.
In order for them to remain competitive and in a certain sense they do have one competitive advantage and that is they've got.
A very large set of retail stores scattered throughout the country and so there's there's going to be there's going to be a fight it's not just it's not just going to be all lamps on all the time that's said.
I mean We've joked that our show is the Amazon show because it was on his doing so much cool stuff all the time and you know it's it's it's actually mind-boggling how much.

[50:05] Innovation is happening in an Amazon right now I may live in Seattle so I can be around at all the time.

[50:13] Like they're going and doing things that that everyone's been talking about doing or when like man you know futurecommerce you know a couple if we had started a couple years ago.
We would have been like oh yeah the whole walking to a store pick stuff up and walk out thing that's that's pretty find a future well Amazon just released a store that does exactly that,
you know they're taking risks and they're making moves that no one else's is making,
it's so yeah they're going to dominate in certain ways they're going to be in the Forefront and then they're going to their going to they're going to actually,
lead Arc are retail to its new future.

[50:58] I mean the concept is one thing right like I don't want to hijack your your your very.
A very poignant sort of soliloquy they're my my what I'm trying to but I was coming back to was.
What their Notions in the things that they're doing aren't necessarily.
Things that can't be replicated by other companies that already have.
Retail square footage to do it like if if if Walmart made a decision to do you know to do.

[51:32] Walk out of store you know they have they at least have the.
They actually have stores they don't have to go build them you know they actually have they have some of them got a leg up there and you know while the the notion is nice wasn't the the actual public.
Beta push back from Amazon already I think that you know it's not trying you know I'm just.
Thanks for sharing that the other news we definitely want to get to is,
you know today a lot of retailers release their same-store sales in and kind of a preview of earnings Macy's does both kind of together,
so Macy's has kicked the day off with a really sour note and the Saints were sales for the first quarter were down 5.2% year-over-year yeah I think Wall Street was looking at three down three so is almost,
twice as bad as folks. There's a number you'll see out there 4.6 and that's kind of this piece of Macy's that's called license to known I'm not an expert on that duh nursed and what's different but that was only down 4.6,
then you have Kohl's was down 2.7 Dillard's down for sacks down 4.8 and then Nordstrom's,
all in was down .8% but then you can actually Nordstrom's is to business there is the off-price and full price the full price was down 2.3%,
so you know.
I talked about in the show it's usually from the context of these malls closing but not all these guys are Mall retailers but it's pretty brutal out there you know it.

[53:06] It says it is a really rough time in in retail I've listened to you guys talked about it a little bit on your show,
any what what is your insight into that what's causing it without the what's causing it I think if you know.
If from a political perspective about the ability to you know create jobs and and and make an and keep the growth factor happening in our economy,
if you needed a distraction from retail crisis you know firing the head of the FBI was one way to do it.
Because nobody's talking about what you're talking about right now Macy's down 17% on the day after after that that report there after the that forecast come out today and I think we're.
This is what we all should be talking about ostensibly is that we're in a crisis and it's not just one that the Wall Street Journal had a heaven headline on but what's causing it I mean I think I think part you know.

[54:06] Part of it is you know changing and consumer expectations and demands and.
The the old end of the stalwarts can't keep up anymore and and so and especially because.
Malls of the destination I think is is an Antiquated idea.
So I mean I'm not going to say anything new about that subject that has already been said but I think the the idea that we're going to transform the retail experience into a different experience by layering digital on top of it.
Is is as is is the I don't know it's the retail equivalent of,
in a Weekend at Bernie's let's just prop up the Dead Guy and pretend like he's still alive for a little while,
yeah what one angle you guys may have on it that I wanted to ask about is when Shopify does their numbers they talk about a gmv number and,
it was a pretty robust I can't remember the exact number it was like north of 10% which which is kind of interesting so if your theory is Amazon's running away with it and taking share,
it seems like the SMB online would just be getting pummeled right but,
does she almost a bell curve where it's the omni-channel retail guys are getting pummeled they're not doing great online or offline Amazon's doing well and then there seems to be this kind of group of some bees that you know have,
you have to somehow figured it out what can you guys talk to all those folks would what is it they're doing that that's kind of causing him to Bakken and do you see that in your businesses.

[55:36] Good question I think that S&B is have done a good ass and bees have done is really do what we've already talked about a little bit which is there not competing with Amazon there there,
creating experiences for their customers that really cater their customers well and so they've gotten really specific and really honed and intuned into what their customers.
Are interested in in need and want and you know created product differentiation in and then you know and you know maybe they're selling through Amazon so you know Amazon,
Amazon's profiting from that but they're also profiting from that and so it's.

[56:16] It's you know I mean it Philip I'll let you speak to that to some degree as well but I think.

[56:24] The beautiful thing about being small is that you have the ability to to really focus,
and so do you start of mid-tier Amnesia and retailers I think that their strategy in terms of of early like that their Market was the same as Amazon's market and so they're getting killed because.
They're getting beat at their own game and so that's some BS that's not ever been their Market there their they're targeted.

[56:55] I have nothing more to add to that that's another thing is.
I will have a few points.
One thing is first of all you've got a generation that's now, sat coming into purchasing power and this generation has been through one of the worst recessions in history in American history.
Mom we're a lot more careful with our money and so and on top of that.
You've had insane amount of competition online and you've had sites come up like Retail Me Not in these passive Commerce sites like dealnews and Slickdeals and others ends.
They've created expectations about pricing and purchasing that that are more widespread than,
then what we used to think of us is crazy extreme couponers Extreme Couponing is not a thing that that a few people do now is something that everyone does.
And so were our expectations around what we pay for things.
Are are just completely different now and so even even Neiman Marcus is we talked about this on the show but they're saying price sensitivity is a big deal right now.
And so I think that's playing a big partner so not only are we are we coming out of the Great Recession never but now we have ways that we can save money and so I know I fall into an extreme category here but I would I would probably be.

[58:32] Categorized as an exploitive Shopper where I can I'm I'm buying things that I probably lower in lower than it took for a retailer to buy them,
because I know that I can wait I can wait around with my passive tools and way for price alerts and pick up that pair of Clark's 420 box.
And you know instead of the the retail price of of 120 or whatever it is.
I do have actually something to add which is I think that we're.
And III want myself into it even though I'm a gen-xer which by the way gen-xers have it worse than anyone because we're caught between two you know I'm jective Lee awful Generations,
my my take is that we are moving into a generation of people that are.

[59:22] That want to experience things for themselves and.
And so smbs who are offering lifestyle and who are offering you know a sort of way of life and connection with their brand and whether that's outdoor.
You know Outdoors or Source you know the Forever Summer sort of idea whatever that might be it's their goods and services that are around experience and I think that that sells pretty easily because it's the inexperienced as me being somewhere.
Living and maybe sharing it on Snapchat but I'm I'm going and I'm doing and I'm experiencing interesting things and these are the things that I bring with me.
Instead of you know the traditional you know hardgoods and soft goods that used to just outfit our homes,
you know where we spent most of our time and then take you no one vacation here I think we're we're kind of living life differently now and so maybe this is the new normal.
And we talked about this on futurecommerce we have it a retail analyst by the name of soccer pond at the Rodney and she shoots formerly of Andreessen Horowitz and done a lot of work in the VR space Butchy she has this theory that.

[1:00:35] You know you know maybe retail needs to rethink its model and operate more like Silicon Valley which have have a much longer investment curves and venture capital,
sort of 2 to back and have investment that gets you through they need to just generate profits and instead focus on the need to actually expand the,
the ubiquity of of you or your brand which I think is interesting take.

Jason:
[1:01:03] No it definitely is an that's actually going to be a great place to leave it for this week because it is happen again we have wasted a complete our of our listeners time so.

[1:01:14] Brian Philip we certainly appreciate you coming on the show and helping us to do so.

Scot, Brian, Philip:
[1:01:19] Yeah thanks guys we really enjoyed opportunity meet your audience and experiment with this whole cross podcast concept,
if you guys liked it be sure to let us know on Facebook or Twitter or wherever it is you like to leave feedback if you leave feedback in iTunes we always appreciate,
the five-star kind of feedback thanks guys thanks for having son straight.

Jason:
[1:01:43] Yep until next time happy commercing.

 

May 21, 2017

EP084 - Amazon News, Walmart Earnings, RumorsAmazon News

  • Prime day - 30 hours long, sometime the week of July 10t
  • Amazon market cap crossed 2X Walmart
  • 20yr anniversary of Amazon IPO - A $10K investment then would be worth $6,410,000 today
  • 1 click patent expiring
  • Amazon expanding into Pharmacy and Furniture
  • Amazon B2B impacts Grainger (Now predict that 80% of the sales by 2021 will be online)
  • Brands moving ad dollars from Google to Amazon

Walmart

  • Strong Q1 earnings- Ecommerce up 63% (40% organic), GMV up 69%
  • Same Store Sales up 1.4%
  • Went from 10m SKUs a year ago to 50m SKUs today (Amazon has 355m)
  • ThisIsStory opens Jet.com Fresh themed story
  • Walmart files IOT Patents

Other News

  • As earning season wraps up, discount retailers, dollar stores, and warehouses are up, while department stores are down.
  • Samsonite purchases Ebags  for $105m 
  • Google IO - Google is all in on artificial intelligence
  • Target tried to buy Caspar and settled for an investment
  • Target may be trying to buy Boxed

Scot will be hosting "Amazon & Me" an all day workshop on Tuesday June 6th at IRCE, he can be found in the Channel Advisor booth #607 for some of the show.

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

Episode 84 of the Jason & Scot show was recorded on on Friday May 19, 2017.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, 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.

New beta feature - Amazon Automated Transcription of the show:

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 84 being recorded on Friday May 19th 2017 I'm your host recent retailgeek Goldberg and as usual I'm Scot Wingo.

Scot:
[0:39] Hey Jason and welcome back Jason Scott show listeners Jason spend a little over maybe a week week and a half since we have chatted how have things been if you've been how many cities have you had since we last caught up.

Jason:
[0:55] This may be the first time I've been able to see this all year but I have hit zero City since we last chatted I meant home in Chicago for almost two straight weeks.

[1:07] She is she's at she has helpfully packed my suitcase and is eagerly awaiting my departure to the West Coast on Monday morning.

Scot:
[1:16] Put it right by the door there.

Jason:
[1:17] Exam.

Scot:
[1:19] Cool so I guess we can't talk about any trip reports any other things going on you want to highlight before we jump into it.

Jason:
[1:29] I do you know where you like to talk about the fan mail we get on the show but I got some angry fan mail this week.

[1:39] Well it's always the same angry fans Jason Delray of recode.

Scot:
[1:47] What did we do to engage mr. Del Rey.

Jason:
[1:52] Yes what's the argument sorry about don't get an argument with people that buy their ink by the Barrel in there.

Scot:
[1:59] DigiLink.

Jason:
[2:00] The digital anchor pixels by the barrel.
So if you recall last week we had a great conversation about Amazon with Andrea and the.
Topic came up of jets and I did mention that the Jason Del Rey.
I had written the article that sort of implied that that perhaps jet.
Close I'm sorry that the Amazon closed Quincy.
Out of spite for Mark Lori you know who's not competing with them at Walmart.
So we had a little conversation about that and Jason me actually very kind note to clarify that I had I had soda misrepresented his position and then.
He's really doesn't think that,
did Amazon close Quincy because of Mark Glory but he does think that some animosity for Mark Lori might have played into,
the communication around the closing of Quincy in the fact that they said like what we closed it because it was too difficult or not possible to make it profitable and so so Jason series more of that like the communication may have been a little more of,
negative as a result of the of the.
The Jeff Mark animosity then then the actual business case then I suspect that he's probably right like that certainly does make a lot more sense.

Scot:
[3:28] Yes it's almost like you know Amazon kind of crap that if you will.

Jason:
[3:35] Exact exactly that I quickly showed up on a crap report and they in the shutter shutter down.

Scot:
[3:43] Google that's said there's been a ton of news in industry and as I always like to say it wouldn't be a Jason and Scott show without some Amazon news.

Jason:
[4:07] Yeah Scot it feels like there's another interesting stuff going on and Amazon this week I think we finally got the announcement about,
Prime day for this year and I'm I'm struggling to even call it Prime day because I think it's now Prime days plural.

Scot:
[4:27] Prime day is prime day 30.
Yeah Dave it's weird because there's several news reports picked up and said they're hearing from Amazon that it's going to be the week of July 10th through 14th,
betting person was in 11th that's kind of where I'm going to put my money and then it's going this year it's going to be 30 hours were just kind of interesting which is like kind of random it's a,
day in 6 hours so I guess they're trying to pick up another nice 18 hour window and then.
The six-hour window when when most folks are asleep and then pick up a morning would be my guess.

Jason:
[5:09] Yeah you could you not yours you could imagine they're just creeping it ever every year and that eventually it will be like in always on promotion.

[5:22] Or cynical person might say that they're making sure that they dramatically beat last year sales numbers.

Scot:
[5:28] That is now it should by its nature since the six hours longer to see that's going to be one sick so the 18% more juice from hours assuming a linear distribution.

Jason:
[5:42] Thanks for doing public math on the show that's always impressive to me.

Scot:
[5:46] Yeah yeah this is why we have to delete the other two shows.

Jason:
[5:50] I was just going to point out no editing involve folks.

[5:54] I think also someone exciting we had talked about the the likelihood that this was going to happen but Amazon had a nice little uptick in their stock in their valuation is now officially twice that of Walmart.

Scot:
[6:12] Yeah yeah and I haven't seen anyone else who visited the word perilously close to that point that I've calculated again in real time on a show probably around midnight a caveat there,
that's a basis would be,
close to the number one richest person with over a thousand in the stock is kind of hovering around the 965 970 so we're not too far away from when I think that too so,
let's see I think I have some kind of a strong showing in Q2 or some kind of catalyst gets it over $1,000 I think we'll kind of see some articles about the.

Jason:
[6:50] Yeah that that is going to be fun to watch regardless that's a really high tax income tax neighborhood with with Jeff and a Bill Gates end up there.

[7:04] And I will one doesn't even that same neighborhood does I meant within a mile and a half you got two guys paying a lot of income tax.

Scot:
[7:11] I thought you meant the neighborhood of the top five on The Fortune 500 not the physical neighborhood.

Jason:
[7:14] No I'm just saying that that police force in Seattle is well-funded is what I'm.

Scot:
[7:21] Absolutely.

Jason:
[7:22] The PTA is is the coppers are overflowing.

Scot:
[7:27] Yet another nursing one is this week was the 20th year anniversary of Amazon's IPO and you know when that happens with these accessories is he always interesting data points and if you put a dollar in your every dollar you invested in the IPO 20 years ago it would,
each of those dollars would be worth a $641 today so if you done a thousand that would have been worth 641000 and if you done,
you can continue the math 10,000 will get you up to 6 million and that's why Jeff Bezos is at the heading towards the top of that list because he owns a lot of Amazon.

Jason:
[8:05] He invested about $2 in in that original IPO.
I think that's mostly true but when you say when you invested or you might get that I would point out that back then you probably get a paper stock certificate and I would have lost the certificate so I wouldn't of came the money but.

Scot:
[8:24] Even 20 years ago the paper was really just about sibo and you're registered and it's okay if you lose the pay.

Jason:
[8:30] Oh thank God I was losing a lot of sleep over that.

Scot:
[8:33] So you should actually check there's every state has a place to go look to see if there are someone looking for you to deliver that lost share of Amazon stock.

Jason:
[8:44] Luckily right after the Libyan Prince they're usually calling me so I don't I don't have to look it up.

[8:50] It's odd anniversary year for Amazon it is also the the.
Anniversary of the Amazon one-click patent and the reason that's interesting is it's the the final year of the Amazon one-click patent so that expires this year.

Scot:
[9:09] Who do you think will see a rush of people kind of coming out with one click now that they can't.

Jason:
[9:17] I suspect that we will like I feel like you'd only on Amazon like.

[9:24] Exercise the pageant really aggressively and I think that you know they got a licensing fee from eBay if I'm.
If I'm remembering right but I feel like people had been skirting the line on that patent more and more in recent years and so you know maybe it won't be a,
a watershed moment but I think it in certain sites it's certainly going to make sense and so I do think we'll see more of that.

Scot:
[9:47] Nothing eBay doesn't license that's why I have this weird kind of two-phase commit it's kind of like you know,
buy and then you can go to the PayPal flu and even unit they try to integrate those things are there still a two-faced but apple is one of the biggest licensees of one click.

Jason:
[10:05] Okay so I may have remembered it wrong I thought eBay was the company that the Apple actually prosecuted the pastor that Amazon prosecuted the Pats and again and there was some settlement or something but I'm a.

Scot:
[10:17] This will be a fun thing for Lester's to help us research Sean I definitely do Apple license is a very large licensee I don't know who Amazon tutor.

Jason:
[10:27] Answer those guys I'm certain are looking forward to that patent expiring if nothing else.

[10:33] And then there was also some news that it looks like Amazon is getting more serious about a couple new categories,
Furniture in potentially most interesting the the Pharma industry the Pharmaceuticals.

Scot:
[10:48] Yeah.
You know what's what's fasting about these rumors are Amazon announcements I think they a lot of them come out of job postings so the two I read kind of hit read between the lines of job posting this and then talk to me Amazon source,
but each of these days so CVS was down pretty materially the day the farm and news came out and then Wayfair and a couple other Furniture companies for down pretty substantially the days the furniture.
Sucking out so.
Yeah it's kinda it's really interesting your last 20 years to see this work like 20 years ago I run laughed at Amazon and if they announced we're going to come out for my run be like or if they even if they acquire drugstore.com NC,
I care too much about it oh no sorry the other guys did but they weren't investor drugstore.com and.
We're playing in that area and everyone scoffed and now when they're just so with that they're getting there they put a job putting out stocks go down to 20% so pretty amazing.
How much to move the needle here in the last 20 years.

Jason:
[11:48] That alone is a very powerful in both these categories are interesting cuz to your point.
Superficial like there'd be a reason that both of these categories are.
Difficult and obviously there's a reason that neither one was the first category that Amazon went after and there you know there's only going to be reasons that the Legacy in that the incumbents in those two segments,
are saying here's why we don't think Amazon will be as successful in our segment as they have been in all these other segments and and that of course,
you know I gets the hashtag Famous Last Words Furniture is interesting because it's not likely that the.
The enormous of fulfillment center infrastructure that Amazon has is very well suited to Furniture in so that you know there are some third parties that have built these these Furniture distribution Networks.
And they often require like white glove deliveries and you know very regular size stuff and even though.
Amazon has built a couple of distribution centers or Phillips centers for a regular sized items but the really design for things like big screen TV's not necessary sofas.
Inside of Amazon where to get really serious about furniture.
It would be interesting to see if they would build a new fulfillment center infrastructure or how they would it would handle that that whole part of the thing because it doesn't seem that could leverage all the existing FC's.

Scot:
[13:16] Yeah and that's that's one of the keys they report so some of the job postings are 444 falmont centers that are going to be designated specifically furniture and Appliance so so but they never been contact with that.
Name an end to point and never to my knowledge I know they got a pair of them at centers that have kind of steaming and ironing and kind of some very apparel they have a grocery footprint,
they have a small item that return footprint that have a large item that's largely is for large Electronics this is the first time I've kind of seen,
any Donuts Center tag with furniture and Appliance in and then certainly it sounds like they're building for sale that's.
Pretty interesting and going to be a whole new new them footprint to see what they're doing.

Jason:
[14:04] Yep and that that is a category that you look at and say has not been very digitally mature a lot of the the.
The traditional Furniture retailers would say like oh gosh people aren't going to be able to aren't going to buy furniture they can't come in and see it and so they hid them under invested in.
In digital in e-commerce there's certainly some exceptions out there so that's an interesting category and then potentially even more interesting is Pharmacy again bunch of unique challenges about.
The distribution Network for that and in that case particularly the delivery and dispensing has a lot of regulations attached to it.
But you talk about disruptions you know you have three very large chains in in the u.s. Walgreens Rite Aid CVS.
And the something like 60% of the revenue from all three of those chains is Pharmacy.
I said that literally is their reason for being that drives all the trips to the stores and then they hope to sell all that all that stuff on the Shelf as a,
serendipitous Discovery when you're coming in the store to fill your prescription so so it won't have Amazon was able to disrupt.
Pharmacy in and you know really really own direct-to-consumer.
Fulfillment for pharmacy that that would be those those chains could not survive without walk-in Pharmacy.

Scot:
[15:31] Yeah do you think the whole prescription thing in management of that is insurmountable or you think there's actually a better customer experience to be had in there.

Jason:
[15:40] Yeah I know I think it's exactly the opposite I think it's inevitable that the majority of prescriptions that people are going to want home delivery like it just is a better experience it's a chore to have to go.
Pick that stuff up like there's a subset of that industry that you need kind of on-demand fulfillment so you just had a medical procedure and you need to stop on your way home and.
And get some pain meds or something like that but the overwhelming majority of Pharmacy are these.
The stuff that the majority of Americans now take for for chronic conditions and so you're just.
Virginia if your whole life and it's a heck of a lot easier to have that stuff,
show up at your door there's some really Innovative companies that are tackling individual markets like I think of capsule and in New York for example and you know Amazon certainly has the resources to.
To go after that and saw that on the national basis and you know if and when they do that that's going to be a scary moment for other traditional drugstores.

Scot:
[16:44] Another category that's interesting we talked a lot about on the show and I know it's kind of a hobby for both of us to follow this one and it's kind of the B2B industrial category,
and I'm just kind of the brief history here on this a deep dive cuz this is definitely out,
that we should go deep run but that the Amazon piece of this is what she back in.
April I think it was April of 2015 Amazon launch time.

[17:14] Amazon business they used to have the thing that preceded it was Amazon Supply and it really signaled.

[17:21] That Amazon is getting pretty serious about B2B and you know it's funny a lot of the B2B players really kind of laughed and said you know we have this network of.
A thousand stores we have same day delivery there's no way you'll be able to counteract that and I would maybe think of this is Granger I was just one of the big players in this kind of B2B category and Industrial.
Lovegood's has had a really rough first quarter so it started out they they.
The mr. numbers worse than they ever have and then it took awhile for them to kind of come out and explain what was going on and they really just a simply said they've seen a seismic shift over Ecommerce and dinner.
They called out specifically but reading between the lines it sounds like Amazon strategy is really taken root and it is causing them a world of hurt,
one of the things I thought was interesting is when they came out and said kind of readjusted expectations they said they now predict that.
Over 80% of sales by 2021 will be online and that cause analyst to take because they're so.
Built out in the stores and all their margin is kind of.
The accounts on people coming in the store analyst came out and cut their whole long-term margin Outlook by more than half.

[18:36] So there's definitely see changes going on in that part of the market we haven't had a ton of time to talk about it and I think it warrants a deep dive.

Jason:
[18:45] That we should talk I've been to that one either,
Factor there that seems really scary for Granger a lot of these B2B companies have contract pricing or negotiated pricing with each individual customer so there's,
their tents and not be a public price and,
you know they rely on price application you not knowing how much anyone else is paying for the goods and so Granger's had an e-commerce site for a while,
but they they charge like the highest possible price on that e-commerce site so today,
you know that the customers are buying online we're paying the highest price and one of the other things that they announces that they've had to dramatically.
At as all shoppers are shifting the purchasing online they're their price sensitive online and so you know how to say Amazon,
has the exact opposite pricing philosophy so they had to dramatically lower their prices and so it's a double whammy you say like wait a minute all your stores are so your sales are shifting online away from this huge investment in brick-and-mortar that you have,
and you're having good to dramatically reduce the margins you get for online sales you know that doesn't give us a lot of confidence in your future.

Scot:
[19:53] Yep that's when I want to talk about it really news but it's kind of trend I just wanted to bounce off you and see if you're seeing the same thing so so it's my talk to.
Brands all the time.
And yeah I don't really causality but because I think we talked a lot about Amazon comes up for really interesting conversations over the years used to be.

[20:19] What should I trade you be in that kind of thing,
now what I'm finding is in Pride like the last 10 to 15 conversations I've had with Brands there they're really getting very serious about advertising on Amazon and I don't really see this out in the press three much but no.
I now hear that stat come a come back to me that that I use all the time and that you no more searches are done on Amazon then for products than other sites like Google and it for she was the first service this like for five years ago and now there's several sources for the data,
so
Answer the conversation goes you know what we're doing is restarting it's been a lot more on Amazon ad Platforms Night if I have to that AMS Nama and we can go into that on.
If I do Deep dive on this too and certainly you know it had gas like Andrea and most break talk about it on the periphery.
What you interesting is what I'm seeing is this very quick lifecycle where brands are starting to the test and then it is a brand that you know.
There their name brand so they have a lot of marketing dollars already in all kinds of different buckets,
and at least we're starting to see them slash those at dollars it towards Amazon rapidly,
also some folks have moved north of 30-40 50% of their previously mostly Google ad dollars over to Amazon and it's because of that so they can measure very.

[21:50] Easily how it is moving the needle on Amazon itself but they're also seeing a very powerful spillover effect off Amazon.

[22:00] It's hard to quantify that and I've talked to some of the other doing and its proprietary nothing.
I don't want to go into it now cuz though I think it would reveal who they are but it's really fascinating to see this and I would not have guessed this would happen this quickly and I just kind of wondering are you are using the same thing in the hearing the same discussions.

Jason:
[22:19] Yeah absolutely.
In it it it feels like for a couple reasons like certainly one is there is this like shift 2 more miserable,
forms of media and more more sort of green eyeshade evaluations of marketing spend and your point when you advertise on Amazon you can it's Noah believe that that had resulted in the cell whereas a lot of other advertising Vehicles it's not been so the KP eyes have to be more,
more wishy-washy and frankly like there's a lot of ugliness in the whole digital advertising space about like when you measure things like impressions.
How accurate those measurements even are and is it about that sing that are person as that below the,
the the full the never invisible to the human eye on all these sorts of things come into play into the the ads on the Retailer's site,
you know certainly have an advantage and measurability but I actually think it's it's two other factors that are really driving it like that.
The top on when you mention like hey if Google is been a traditionally effective way for me to advertise in particular. I've been really effective and then you start to hear that weight 55% of all.
Search traffic starts on Amazon not Google you say man my portfolio of of pieles should.
In 55% of those dollars should be going to Amazon not to Google in so you're starting to see Brands want to make that shift.

[23:51] And then you have this third problem for the account teams that are particularly responsible for selling their own products on Amazon.
There's a Amazon has this great virtuous cycle for Amazon which is when you launch a new product on Amazon the only way to find it is inserts right like unlike a lot of other e-commerce sites where.
We're about 90% of the users are using the nav and maybe 10% are using search Amazon is almost exclusively a search based.
Experience and the only way to show up in search is to have a high velocity of quick through on your product.
And when you're a new product you don't have a high velocity of quick through so.
You literally have to see the system by buying ads to improve your visibility so people could through to your product detail page so that you can get some volume so that you can start organically showing up in search.

[24:44] So it almost necessitates that you make that that investment and what's what's been interesting to me is.

[24:52] You know a brand of spending money on marketing like these tennis spend money out of a couple budgets and so usually.
The first thing you see is that there's a sales team at you know Procter & Gamble or if you know you pick any brand.
And they're responsible for selling the family care products through Amazon and they have a sales budget to invest in promotions on amateur Amazon that help himself just like that.
Promotion budget to invest in in-store Shopper marketing at Walmart tell them so.
And into those are the guys that originally are investing in these these AMS services to have their products show up so that they can start getting that search visibility.
But there's a much bigger marketing budget that's owned by the CMO and that's the sort of brand building General awareness budget,
I'm in that usually the budget that's invested digitally and things like like Google and so the interesting trim we're seeing is a lot of brands have always had a presence on AMS,
MN other retailers advertising platforms.
From those account teams but now it's becoming much more common that you're seeing the CMO allocate part of the brand building budget to showing up on these retail or sites and well.
Amazon's the by far the largest Network in the US the Walmart advertising that work W an ex is very big target has a meeting full of network,
Best Buy has a meaningful Network like almost every big sight there there's a separate team that's called the site monetization team and they're focused on on selling these marketing products brands that that died.

[26:31] You don't want visibility on the sites.

Scot:
[26:33] Young I'm kind of curious if this going to start to show up in a lot of the ad tectonic companies.
Results on specially Google because it does seem to be this,
the kind of destroyed the Google milkshake so it'll be interesting to see if if we start to see him it back or maybe you could just big and diversified enough it doesn't it's not Material or something that we should if you're interested in this maybe,
Too Deep dive ideas maybe we could get some Worcester feedback on you know which one of these is most interesting so we've got a Amazon marketing platforms and entrance and then we've got the B2B DS2 topics there.

Jason:
[27:15] Yeah good stuff and I guess one of the thing I would say there,
one thing holding Amazon back a little bit at the moment is there ad platforms are not nearly as advertiser-friendly as,
since somebody that their Core Business Like Google right so there's lots of friendly api's that all the Aztec guys can build products that talk to on things like like Google and the.
Technology you can use to interface and execute your ads on on Amazon and and you don't even greater or stand on all the other retailers sites his is.
Relative William in church so that feels like with the one area that needs to change for it really to catch fire.

Scot:
[27:53] Yeah and we've had several guests on the show say that they're pretty big kind of aspirations there so I think they'll get there.

Jason:
[28:00] There's their zero doubt that they could solve that problem and likely will.

Scot:
[28:04] Cool exit on Amazon you think anyone's going to slow those guys down.

Jason:
[28:13] Well I guess it depends on what you mean by slow them down III I certainly think that they're going to continue to grow and capture more market share in so if you're if you're picking a winner it's it's clearly got to be there,
but I don't think it is a one-horse race and so I do think there's some other retailers that you know of,
in a position to carve a pretty big pies for themselves and the one you think of the most in the one that you know frankly at the moment has a much bigger than Amazon is our friends at Walmart.

Scot:
[28:46] Yes yes oh Walmart had their first quarter earnings out and I think.
Most of the reaction I've seen has been really positive some some folks are saying you're out of the woods and others are calling and green shoot so kind of,
yeah different levels enthusiasm but mostly enthusiasm the one metric everyone's really excited about and I thought was.
Pretty awesome is Ecommerce was up 63% year-over-year to you as a reminder e-commerce cornichons going about 15% maybe at 2 gets 14 desktop in two or three said that night maybe.
Natural north of that but called 15 to surrounding and,
Amazon consistently as a company grows in the mid-twenties and then if you take out a bunch of pieces the egm part of Amazon instead of the marketplace are growing,
to clear around 30% so twice the rate of e-commerce so here you have something growing for X rated eCommerce witches witches great now Walmart hasn't been consistently doing that they've been all over the map here,
so you're one skeptic one skeptical think people could say as well.
The last year they didn't have a jet so is this all inorganic growth into the Wall Street analysts have taken some of Walmart's comments but I gave him enough data to back into it and,
no the ones I've said have estimated that the organic growth was 40% your beer so still a really good showing ahead of Amazon's growth rate and then when you later in the jet would she have the Dell 23% or you get took up.

[30:21] Pretty significant growth number so you have it too early to call that the strategy is working but there is definitely this is better than - 5%.

Jason:
[30:30] Absolutely and you know it,
a huge warning sign for everyone else in the industry Let's Pretend analysts are for sure right in his 40% organic growth so the whole e-commerce Industries growing at 15%.
By far the largest player in the Commerce industry that alone is is like 30 or 40% of the industry,
is growing at 30%,
and this and like most likely the second largest player in the Commerce industry is growing right now at 40% so that actually does not leave a heck of a lot of growth,
for everyone else to get to that 15%.

Scot:
[31:10] Yeah there's there's two kind of outcomes if if the industry keeps going at 15 then.
Online people to share will what I actually thinks going to happen if I grinning kind of a golden HD Connor Square I think if you don't just ties into the mall again theme I think we're going to actually see the,
Tire e-commerce sea rise and we're ghosts are too.
Bump up from that 15% we've had for years and start to get up towards the 20% that that's kind of yeah I think that's what's going to happen because and then the,
and what that'll do is the percentage of sales that are online is going to start accelerating it's been kind of if you look at the comscore data in the Census Bureau data,
it's in the sky like straight line for a while and it.
I feels like the elbow the curve so I think this between q1 and Q4 I think it be a attic will start to see the really interesting inflection point there.

Jason:
[32:01] I think that's totally possible I like to think of it is,
the really isn't an e-commerce industry like they're a bunch of product categories that are each a different places in there,
certain maturity or adoption curve in in general across all the segments we see you once they get about 20% of their their Sales Online like it becomes a major disruption for the the incumbent model in so I think they're just,
a heck of a lot more retail segments that are that are rapidly approaching that that 20% threshold in so like I do think that you can,
that you could imagine a bunch of those crossing over that threshold then driving up the overall industry average.

Scot:
[32:46] Coupler just two bits of so if the first time they just close the DMV number in that was up 69% so when,
when Revenue grows slower than gmv that mean to take rate is going down at I don't think that's enough of a Delta to be concerned it usually that can be explained and mix so all these marketplaces have.
No a different mix a different take rate for electronics let's say is usually some 10% and then some of that jewelry is north of 15%,
what is a nursing kind of trend watch over time which could indicate that there's some price pressure there or something like that,
I'm Sims 4 sales improved 1.4% in the physical stores so that's good and.

Jason:
[33:29] And that beat analyst estimates.

Scot:
[33:32] Yes that was an improvement and you know it.

[33:37] Walmart's been on about a year Journey may be teaching months where they've been investing in stores in hiring people and raising their,
wages and cleaning up the stores really focusing on you have the day today blocking and tackling at the store level and that's an indication that that seems to be working and as we know later than other same-store sales numbers out there and 1.4% is,
printable right now it's going to got a plus sign in front of it which I think many retailers would,
really like to have on their teams for sales the quality of earnings growth improves which is good and then what the guys always measure on the sun and this is I've been being this drum for.
Pearl every 15 years is at this point in time Amazon has you know,
over 3 and 55 million skews so when it comes to selection no one comes close to Amazon it's that marriage of the one p and 3p model that does it Walmart seems I've got religion around this and it's widely reported,
that they went from 10 million skis a year ago to now that 50 months can still drop in the bucket kind of 1/7 of Amazon but you have to go up 5x in a years is pretty impressive when for you know.
What was yes 15 years and be a Walmart has been kind of in single-digit millions in here the last couple years they've they've really started to get very serious about adding selection.

Jason:
[34:59] Yeah absolutely in it it seems to me I mean when Amazon or when Walmart first wants to Marketplace like you know they didn't get immediate Traction in there you know they were kind of,
judicious about who they let on to the marketplace and I know the sellers like really complained about.
The platform in the the the tools and how many schools you can on more than all these sorts of things when you see that jump from 10 million to 50 million my section is that they fix the bunch of those problems in the third,
they're much more seller friendly than they then they were originally.

[35:39] Couple other little things in the Walmart world there's a great store concept that I can't remember we never talked about on the show,
call the story or or formal name this is story which is a retail space in New York City and it's kind of an interesting concept they they.
Are a great mix of Commerce and content,
they come up with a theme every month or two and they redesigned the retail space.
Based on that thing so the theme could be.
A category product like health or you know measured self or innovation or something like that,
and you know they design a complete retail space around that theme in so,
when you go there from month to month you you wouldn't expect to find the same product you'd expect a completely different sort of Rich immersive experience,
from the original concept they have been able to sponsor a number these stories so they had Brands come in and say hey we want you to develop a whole store concept around,
are our particular brand and this month's story debuted a new A New Concept in the space and it's it's jet.com fresh.

Scot:
[36:58] You and I have been to several shopping at work meetings at at that store it's really cool it's kind of.
Antiques curation to the the Instagram think because the store is the simply just wipe and replace every wish you do every 2 or 3 months is it courtly.
Every month with what's that site.

Jason:
[37:17] I think it tends to be about every 2 months but I don't think it did so I got to fix schedule.

Scot:
[37:20] Come on Sia yeah yeah so are you going to go I think you're going to be in York City going to go stop by.

Jason:
[37:28] Yeah I haven't been to this concept yet it just open I think my next trip to New York is maybe end of next week or two weeks from now and so I will,
definitely look forward to checking it out and hopefully we'll be able to tell our non New York westerners about it after that.

[37:45] And then no one other piece of interesting new Walmart news this week is that Walmart's I filed for a number of Internet of Things past tense,
in the, space so like everyone's really familiar with Dash buttons and dash Auto replenishment Walmart has patented and number of sensors.
Detect when a consumer is likely in need of replenishment so it sort of,
implicit is a replenishment instead of explicit so you don't maybe it's a toothpaste holder that can tell you when you're out of toothpaste,
but other interesting play with some of these sensors are designed to tell you when the product you bought the perishable product you bought is about to expire so I could warn you that your.
Your milk is expired or your cheese or something like that I don't know she's never expires now that I think about it but you get the.

Scot:
[38:44] Cheese expire this green stuff on it.

Jason:
[38:48] That green stuff in cheese I'm just getting I think it's penicillin no that would be bred never mind.
But in any case interesting that the Walmart is investing in that in that ipspace we talked about.
The internet of things and Auto replenishment on the show a couple times and it is very likely that five or ten years down the road sort of 40% of the goods that you.
You buy in the grocery store today are likely items that magically show up at your door because your house knows you needed him so,
I think that the retailers that are investing in returns and brands that are investing in that technology now are are wise to do so.

Scot:
[39:32] Yeah yeah one news item to kind of break out of the Walmart side that we were remiss and covering and so we had this flurry of activity there were Walmart bottom of Oaks in between shows of one of our gas company was acquired so Samsonite acquire D-backs was cofounders Peter Cobb is good on your end we've also had John Norma,
two of the three or four Sounders on on the show.

Jason:
[39:59] Acquire.

Scot:
[40:01] Yeah yeah I'd say so.
I don't think it's a huge stretch to say that we basically put this deal together but anyway so it was acquired 405 million,
that's great outcome for everyone in and you know this trend of,
brands of accelerating their digital footprint by buying e-commerce players is as fascinating in its.
A shout-out to our friends at ebags and congratulations on that one.

Jason:
[40:27] Yeah absolutely it's going to be interesting to see I got his bags has a lot of that digital expertise Samsonite now also owns to me so it'll be interesting to see how they're able to leverage all those those new digital chops,
across like you know both of the stores brands.

Scot:
[40:47] And then I'm also in news so we're,
Walmart usually one of the last folks reports or kind of heading towards the end of the q1 reporting cycle and I saw a really cool chart where well one of our joint Twitter friends Ryan Craver has been tracking the sand,
what is he shows kind of graphically same-store sales Trends and you know this was fast about this chart is.
Yeah he has what he has kind of groups without call value-oriented retailers or their counterparts so things like Burlington Coat Factory which is a discount on Nordstrom Rack.
The Nordstrom Rack piece of Nordstrom Rack shoes TJ Maxx,
Dollar Generals in the dollar stores then there's a grouping for department stores and there's a grouping for wholesale clubs and it is a tale of three cities so wholesale clubs in generally the discount guys are doing well with positive same-store sales results and.
Department stores are doing really really poorly with with severely negative same-store sales.
So we'll put this in the show notes or check either my handle or Jason's on Twitter and by the way both retweeted this so you can see it there but it's really,
interesting graphical display out of this where consumers are spending their money is actually an end the feast and famine that's going on and offline retail right now.

Jason:
[42:15] For sure I mean it plays perfectly into the,
the retail Armageddon that we talked about that but you know protect those department stores are super distressed as consumers are making different decisions about where to shop been increasingly it's at those those more value-oriented retailers.

Scot:
[42:33] Yeah and one of the young,
no one of the folks that did not make it out here in the last week or so as a retailer or rented towards team some all based retailer oriented towards teams called rue21 the file for bankruptcy so remains to be seen if they'll be closing all their stores or what's going to happen to the bankruptcy but usually it does mean store closures.

Jason:
[42:57] Yeah in it.
I mean then we talked about the number the earlier bankruptcies a doing some interesting buzz on Twitter one of the bankruptcies was Gander Mountain and what kind of interesting,
that Gaynor was bought out of bankruptcy by Camping World in the reason Camping World might be interesting to some listeners is the CEO of camping world is the star of retail Park a profit show on CNBC if you ever watch this.

Scot:
[43:30] Leon's Marcus Leon saskia.

Jason:
[43:35] Exactly and so Marcus has been Super Active on Twitter and he's been super transparent a gander had a.
If memory serves like 60 stores and campers world is going to reopen like,
20 of those stores in so you know he's been like sharing real-time data on Twitter as they make the decision as to which stores they can reopen versus which ones they they.

Scot:
[44:02] So that is really confusing because,
the stores all say the stores closing and we're liquidating everything then he is saying no no no no the store yes or selling all the stuff but the stores going to stay open so I guess they're going to,
no they have their own supplier relationships and Logo replenish the stores and then they're also rebranding them the brand is like.
Cinnamon Big Gander Mountain it's just Gander outdoor but he wanted to create a bunch of distance between the brand but it's like the same essential name side,
Nas represent tracking.

Jason:
[44:36] No I think you got it,
exactly right I think he did not buy the inventory the distressed inventory in the stores so the Liquidator the did has the right to sell all the stuff out of all of those stores and then the stories he reopens he's going to have to replenish your point prison while using the campers world supply chain that he already has.

Scot:
[44:56] Yeah that's commuter Sting If you can make that work because it's certainly very confusing consumers I forgot it's pretty in the weeds try to explain that to him.

Jason:
[45:05] Not for sure I just found the thing interesting you know if this had this this kind of thing plays out all the time when returns go bankrupt and I'm played out you know 15 years ago or 10 years ago when when Circuit City closed.
They give you work in a Circuit City store you have no idea if you had any potential for a new job or what was going to happen and you know you'd be waiting until you read something in the newspaper and now you've got like.
All this this real-time information you jump on Twitter and the you know Marcus is out there tweeting list of stores and saying like Hey we're going to hire people in that store so I did.
I think that's another interesting ramification of the of digital disruption.

Scot:
[45:47] Yeah that's good point I think it is super helpful for the employees to have some some in real-time information what's going on.

Jason:
[45:53] Absolutely So speaking of digital disruption another big guy digital event this year or this week is Google IO.

Scot:
[46:05] You would what you think about that I was not able to watch it real time I read several the summaries and,
yeah it sounds like Google went from in the early days being kind of search for Sony search to than mobile first and now everyone's saying there AI first so the AI Buzz was a Google IO and you have to get excited you're going to be in it's like,
you know,
this thing you can hold up your camera and it'll decode something in the real world and Google's had several iterations of this and they've all been kind of you know nice demos but not like,
game-changing cell I don't know I felt like a real use cases so interesting to see if something was like changing for you.

Jason:
[46:50] Yeah we'll see nothing I would call life-changing but I do think it's interesting,
why is one of these double-edged swords and we we for sure need to do a deep dive in there if you turn on on AI for Commerce because it is over hyped Buzz thing right in and so you know all the big,
Big Rita a big big guy technology companies are talking about becoming a I first in and innocently that was the big play from from Google in,
you know my argument is no one should be excited or buy something because it is or isn't it,
bike was not an outcome and you don't people like I need some of that good at so so we'll we'll talk about that a little bit on the Deep dive,
but I do think it is true that the AI is enabling a bunch of,
much more interesting user experiences and much broader a digital user experiences then have been possible here to for so so I do think that is on the cusp of enabling,
huge of systemic changes to how we shop across a bunch of categories and I am excited about that and you know that,
but I would,
I would encourage people to get much more excited about this specific use cases that are likely to affect them and why they're going to be a better experience than that it has the AI label or doesn't have the a highway.

[48:21] So I think it be fun to do a show where we talked about what some of those near tournament fart termed use cases are but I know one person that's in my camp on this is our our number one listener Jeff Bezos.

Scot:
[48:33] So she possible Deep dive so if you want to let us know your thoughts,
tweet at us or I'm Scott Wingo Scot Wingo in Jason his retailgeek.

[48:49] Or go on her Facebook page and let us know which of these deep-dive topics is most interesting for you so to recap we have business kind of with an flavor of Amazon business what's going on we have.

[49:03] Artificial intelligence and then we have Amazon advertising and and that platform so let us know what's interesting to you.
Jason one big retailer that's been pretty active here in the last week's news that we haven't talked about his Target have you been tracking all the I don't know it's news I think it's more like,
gossip at this point now have you been tracking what's coming out at Target and interesting macro things going on there I'd love to hear your take on.

Jason:
[49:32] Yeah so I think there's some gossip and some news I think they also did have their earnings call this week,
and I did not write it down in the note so we're going from memory so don't hold me to these numbers I think they basically beat the analyst expectations but they definitely had negative same-store sales so,
in my head I want to say that that the animals were pretty thing that be down like 3.7% and they would only down like 3.4% or something like that so.
Definitely not the you guys want to beat analyst expectations but definitely not the kind of thing you claim victory on and and pound your chest about.
When you're just just the shrinking a little more slowly than an analyst. Yes.
They also did an ounce pretty good e-commerce growth I think also above that average so again from memory I want to say.
Then I was like 20% eCommerce growth.

[50:33] But it's interesting like all of those things at Target are in this backdrop of news we talked about in the last several months that the target is really curtail the lot of there.
Forward-looking initiatives in program so they.
You know they have these stores of the future that we're half built then they they announced that they were closing they had this big goldfish initiative.
And now this this Innovation officer westering feel that you know they're working on all these Innovative things and they hired a bunch of people to build them.
And they they abruptly pulled the plug on all those things and parted ways with Wes.
Their Chief digital officer you know they left the company.
Maybe 4-5 months ago they're cheap Innovation officer Casey car of the company this month so it really feels like.
Target is investing all of their chips in their near-term fundamentals like they're they're trying to improve the guest experience in the stores,
and they're all in on the winning in these five signature categories that they're focused on in store.
At the expense of a lot of these these other initiatives then like obviously there.
Their results or to belittle why that you know they don't have an unlimited amount of money to invest in all these initiatives.

[51:56] So it's going to be interesting to see how that played out but in that context we we got some some rumors from her friend Jason Del Rey that he wrote an article about today.
And that was all that they announced that they are selling Casper inside of Target stores,
and that's that's not rumor that that's news they're not actually they're selling the mattresses on the line but they're selling a lot of the accessories in the store so so the Casper have a footprint in the store,
and if you want to buy a mattress you can buy it direct from Casper but you can also now buy it from target.com and the ship it direct to your home,
for people that aren't for my red Casper you know that that is clever combination spring foam mattress that they're able to.
Compressed down enough that they can actually ship it in a UPS box in so this,
this is kind of in line with a lot of other moves we seen Target they like to surprise and Delight their guests by having these popular brands that you wouldn't necessarily expect,
Cabot Target in so regionally that was like designers that were too high in for that you might have thought were too high in for Target but more recently it's been some of these digitally native brands that are showing up in Target so it was Harry's razors and now Casper.
And what Jason's article says is the target tried to go a lot further than just caring that they actually tried to acquire Casper and then when that was unsuccessful that they've taken some sort of investment and Casper.

[53:33] So that's interesting.

Scot:
[53:34] Yeah and I think the number that was been thrown around as a billion do you have you heard what Casper is revenue run rate is how I remember when they crossed like a hundred million me was 2 years ago I heard an update on that.

Jason:
[53:48] Yeah I don't have a number in my head.
Like for sure that they got to like a hundred million in like their second year of existence so I know there's a lot of talk about that but I don't know.
Where they're at right now and it's interesting for Target to take an investment in them right so.
If if I don't know that makes Target a majority shareholder or a minority shareholder or what sort of you know board seats and all those sorts of issues but you could imagine.
Why does Casper sell on Amazon today and will they continue to sell on Amazon with with Target as a majority board member,
would any other retailer B12 Kay Casper with Target as a board member and might see,
sales velocity on those on those in those other retailer stuff like that like it can get messy for a retailer to have an investment in a brand that they're not exclusive to.

Scot:
[54:51] Channel X the thinking goes if I'm going to make these guys are Rockstar.
And I can't own it then I want to participate in that Rockstar creation cycle that's probably what's going on from Target side.
And they probably wouldn't do the deal without investment and then there's also stuff the offense part of it in their defense that kind of says.
And so you things can come with your pretty real needy right of first refusal kind of things so that you keeps one else from buying it are you have at least two by two that so I wouldn't be surprised some of that was in there and in,
Casper.
Must have really wanted the distribution or her felt like it was worth it to accept the investment in any kind of other entanglements that came along with it.

Jason:
[55:35] Yeah and that does it mirrors Casper's a prototypical did you need a brand.
You think about someone like both of those right like very similar,
they cut a deal to get distribution although their primary Channel distribution is direct they cut a deal to get distribution in Nordstrom and they'll at Nordstrom to take an investment in them and so,
in that way this this deal doesn't look so different from that and of course none of us as a sort of aggressively open guide shops at showrooms Casper has some some guide shops or not shops Casper has some showrooms.
So it feels like it's falling on a pretty common playbook for these kinds of companies at this point.

Scot:
[56:20] Yeah and I don't say it feels like I'm outside I don't have any inside information on this it feels like a game of Music chairs is accelerating so,
now we saw Walmart scoop up a couple of these really quickly and the Rumor persistent rumor is bonobos is going to Walmart so then if your target your kind of like.
You know why I need to get in the chair here and we also have heard rumors that they were going to pick up boxed up which is more that Amazon Pantry style kind of competitor so so I think what you're seeing is you know you start to look at the digital I need a vertical brands that are out there at scale,
your dollar shave club's been picked up so now you have Harry's in the Casper,
there's it does to the three largest wins mod causes a lot of times mention of that discussion and bonobos those two are off the table so you're really left with.
Pretty small number of scale over hundred-million-dollar companies there and I am I leaving any off.
Which puts two chicks in there I don't know if that counts.

Jason:
[57:23] Yeah they're slightly different animal but they're like even you know probably larger in scale at this point I think there was some they publicly announced and you know we we have I can only take their word for it at this point but they clean a satellite.
760 or 780 million in annual sales so that's that's a pretty good size company of that church.

Scot:
[57:45] Yeah feels like a four five billion kind of a swing it back there so it's pretty serious to me.

Jason:
[57:52] Exactly some of these might be a little more digestible then than Stitch fix at this point I do think you're right like there's no.
Diminishing number of these I think there is another interesting play where these guys are playing some defense.
Another piece of innovation is so fast now that all these companies that have disrupted Industries,
are not getting very long honeymoon before they themselves are getting disrupted so you think of Dollar Shave Club as disrupting Gillette and Shake.
And you know you could talk about the cool video in the subscription service in all that the real reason Dollar Shave Club disrupted.
Gillette is because you at sell $7 razor blades in Dollar Shave Club sells one dollar razor blades but now you've got dorco who's the.
Razor blade supplier to Dollar Shave Club launching their own subscription service and selling $0.20 razor blades.
You're like hey wait a minute like I was that young fun disrupter with the shockingly low priced and now I've got guys below me in the same thing as happened Warby Parker they're a bunch of direct-to-consumer,
frame manufacturers that are even coming in and even let you lower price points than Warby Parker and the this mattress industry is,
particular competitive so either at the Casper wasn't even the first they were really I would argue the first one to get sort of mainstream awareness.

[59:24] But there are five or six a significant players in this new digital direct-to-consumer mattress space and if you're you're Casper you know you would have had a big incentive to get,
eat a dick the kind of visibility in distribution you get through through Target to differentiate themselves from that competition.

Scot:
[59:45] Yeah there is a,
an interesting data source CB insights had shown when the rumors about Casper came out that there's three or four other mattress companies that are actually in the neighborhood of sales is caspersen Target must be really enamored with Brandon and think that there's some absurd you there with their there.
Fire door password.

Jason:
[1:00:07] Yeah yeah absolutely so it's a it's a fun spectator sport to watch all the stuff planned out right now.
So Scot we're coming close to time but I know you have a pretty cool event coming up do you want to remind the listeners about it.

Scot:
[1:00:24] You know one of the biggest shows the year for e-commerce,
internet retailer Conference & exhibition which is commonly abbreviated IRC and last five years I've been doing a Amazon Workshop they're called Amazon and meet so I'll be at internet retailer love to meet up with any letters that happened to be there Channel have a booth and I'll try to spend some time there,
I'm a bad founder and don't know the booth number but I'm sure it will be in the guide there so I'll be at the booth and look for to see you there and then I'm also speaking at a venture capital friends about,
what's going on in Destin DC and that's June 7th so look forward to seeing everyone as I'm starting to hit the road here in the early summer.

Jason:
[1:01:12] Graco I love it that you are potentially traveling more than me.

Scot:
[1:01:16] Yes I may have to I may be able to a trip report so it's going to be pretty darn exciting.

Jason:
[1:01:21] I tried to be a cool and find the booth number for you while you were talking and I sent you exhibited in too many hours to eat.

Scot:
[1:01:28] Yeah her for quite a while.

Jason:
[1:01:31] Exact,
I still have to put that on the show notes and with that it has happened again we've wasted a perfectly good hour of our listeners time so we certainly want to thank everyone for listening and encourage you to write us a review on iTunes of you enjoyed the show and we would love it if you'd come to our Facebook page and give us some feedback about which of those deep guys would be interesting to you.

[1:01:58] Until next time happy commercing.

 

May 11, 2017

EP083 - Andrea Leigh, selling on and negotiating with Amazon

 

Andrea Leigh is the owner at Andrea K. Leigh Consulting, which helps clients sell on and negotiate with Amazon.  Andrea enjoyed a 10 year career at Amazon where she served in a number of Buying and Category Leadership roles.  Andrea is a recognized expert on Amazon, who has written a number of helpful articles about Amazon on linkedin:

We spoke with Andrea about her background and experiences at Amazon, the digital grocery market and Amazon's efforts in the segment, and the best practices and common pitfalls in working with Amazon.

Andrea will be one of the speakers at "Amazon & Me" an all day workshop on Tuesday June 6th at IRCE, hosted by Scot Wingo.

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

Episode 83 of the Jason & Scot show was recorded on Thursday May 11, 2017.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, 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.

New beta feature - Amazon Automated Transcription of the show:

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 82 being recorded on Wednesday May 10th 2017 I am your host Jason retailgeek Goldberg and as usual I know Scot Wingo.

Scot & Andrea:
[0:39] Hey Jason and welcome Jason Scott show lister's let me first apologize it is peak,
pollen season here in sunny Raleigh North Carolina and my allergies is amitab attacked me and I have a sore throat so I apologize for the the lowness of my voice however I will be doing some Darth Vader quotes later so it will come in handy,
Jason before we dive in it's been about a week and a half before we chatted any road trips you want a report on.

Jason:
[1:08] I do have a couple of days or so very sorry to hear you're feeling under the weather it's sort of Harkens me back to our famous shop talk shows where I didn't have much of a voice.

[1:19] And our live listeners are totally on it that I've got a bunch of my text messages since I just did the intro in this is actually episode 83 so I want to apologize.
For the falls.
Boss intro a minute ago but thank you to all those folks that are listening in the show Live this week I was I got to do a trade show in town in Chicago in my hometown which is a rare treat for me.
Mwb research does a show every year for the B2B in this week I'll be to be online so I.
I just got to go do a presentation there yesterday and talk to some folks about B2B e-commerce which is her that interesting contrast to the the retail stuff that we talked about.

Scot & Andrea:
[2:02] Yeah did you get a lot of questions about Amazon business that's whatever you ask me.

Jason:
[2:06] Not as many as I would hope I would take it as a better sign of people were a little more concerned in that space about Amazon business,
perhaps a parallel the sum of things we'll talk about today.
There's some really Advanced B2B e-commerce companies but the general level is pretty digitally immature and so,
you know you tend to be talking to people in that industry that you were talking to retailers about maybe four or five years ago,
and I have a theory that that a lot of the cpg space are also somewhat digitally immature and a rapidly trying to catch up and so we we we make it to hit upon that in today's episode.

Scot & Andrea:
[2:45] Coolest part of your talk to call the audience to Julie immature.

Jason:
[2:48] The love I do talk about the digital maturity curve and I let them judge for themselves where where they're on but my talk.
Is ironic cuz I I was mainly talking.
To stakeholders they were really interested in watching B2B initiatives inside e-commerce initiatives inside their company about how to get c-suite buyin and since I've been kicked out of some easy sweets I thought maybe that was.
And ironic choice for me.

Scot & Andrea:
[3:16] Old Town ironic if your c-suite the immature.

Jason:
[3:19] Exactly I've been in a lot of sweets just for a brief period of time.

Scot & Andrea:
[3:22] You're mature getting kicked out of six weeks.

Jason:
[3:25] Exactly how I'm high on the kick after blow on the maturity curve.

[3:31] Just got one of my favorite thing,
the show is you know from time to time we get some nice listeners that right in and say nice things about the show and had told her to reorder top and something and I always enjoy that,
but I thought you liked this week I may have gotten my favorite piece of fan mail.

Scot & Andrea:
[3:49] Go to zip front and what they say.

Jason:
[3:51] Yeah so it is from a listener and Marie who runs the e-commerce site called dog quality.com and she's a regular listener and.
Had a recent occasion to go to our website where the show notes are and.
There there's an about me tab there with a picture of me and my dog MacGyver and so Emery who obviously is in the dog industry so I'm a guy her and wrote MacGyver a piece of fan mail.

Scot & Andrea:
[4:17] What are you going to read it first.

Jason:
[4:19] Well I won't read the whole letter as she's right kind of currently Doug quality focuses on.
Elder dog quality of life in and products that the older dog specifically need and she was nice enough to say that in the Guyver looked like a spring chicken and probably didn't need any of her products,
but she is she certainly offered hook MacGyver up should should the need ever arise and I was laughing because she doesn't know this but the MacGyver is a frequent guest on the show MacGyver is Jenner sitting on my lap for the show and so he was,
very pleased to find out that he finally got some of the recognition that he he well deserved.

Scot & Andrea:
[4:56] GoFundMe you wear at shoptalk it sounded like he was he was doing your part.

Jason:
[5:00] Actually he is a man of few words but he's much more insightful than I am and I don't know this but I think you have a couple dogs that have at least made a cameo appearance on the show as well don't you.

Scot & Andrea:
[5:13] Yes sometimes in my podcast recording studio here which is also my home office ad my 10 year old Border Collie kit sits on the floor and that we have A1 year old,
Cavalier named Lulu and she usually sits on my lap but tonight they are elsewhere hanging out with the kids.

Jason:
[5:31] Nice.

Scot & Andrea:
[5:33] We'll just before the podcast goes to the dogs we have an exciting guest for listeners tonight.
As you listeners are well aware I'm a little bit obsessed with all things Amazon and every time I talk to tonight's guest I learned a ton about that what makes Amazon tick,
and really spent a decade and Amazon from 05 to 15 and now runs a consulting firm called Andrea Kaley consulting or she helps Brands and sellers with their Amazon strategies as well as other e-commerce growth in it,
I'm hosting a workshop that internet retailer Conference & exhibition which is commonly abbreviated IRC.
And Angie is one of our speakers talking about Advanced strategies for Brands and wanted to go she ate with Amazon and you're welcome to the show thanks for having me.
Cool and so we got Central covered with Jason in Chicago on East in assume you're in Seattle in 7 days.
How's the weather is it is it typical Seattle are you guys getting your sunny days.
Know where we got a little bit of fun but you know it's still we still have to get to the Fourth of July before summer really starts here cool so um.
We really want to jump into it so one background statement before we jump in.
Sometimes be a few back for listeners will jump right into Sonny's topics and I neglect to cover some of the basic so tonight when you use phrases like one p3p hybrid,
we see one PSP specifically in the Amazon context that usually that someone has a wholesale relationship or a first-party relationship with Amazon third-party usually refers to more of a Marketplace kind of relationship.

[7:07] Are the hybrid is a lot water brands now that exploring kind of a dual approach so a wholesale Ana Marketplace approach just wanted to let her listeners kind of have that that little glossary there at the top of the show before we do it.
And I'll turn it over to Jason who is dying to kick off.

Jason:
[7:24] Thanks, let me highlight for a listeners that are not driving weather listening to podcast that the whole one p3p hybrid thing also makes for an excellent drinking game.

[7:39] So it's winter before we we get into that and III.

[7:43] One p3p question for you where I think there may be some Andrea Scott controversy early I hope there is but before we go there.
Maybe we can start with a little bit of background about you and sort of you can walk us through how you got into this industry and what some of your experiences.

Scot & Andrea:
[8:02] The absolutely so I said you know probably the majority of my career at Amazon that was there for 10 years from 2005 to 2015 and I was on I worked in the retail group for the entire time,
I'm in different roles as actually started as one of the founding original buyers for the amazon.com grocery category and you kind of,
migrated my way to the company and number of different roles,
including divisional manager for the baby category and working on getting the Amazon,
baby registry can I prevent in and then good good order with customers as well as a leading category teams for Amazon Fresh,
and,
Rawhide most recently before I left and for the longest actually for a little over three years was a category leader for a hard-line soft lines.
And consumables for Amazon Canada where and we watch consumables and softlines on while I was there I also ran the prime program and Canada and Italy Avon with it with the transportation team,
in addition I've worked on the,
crab process for Canada help develop that and get that thing running up there if that some of the term that everyone is familiar with that's Amazon's term for can't realize any profit.

[9:32] Which is through their way of identifying items that are unprofitable for them.
And I left Amazon two years ago to start my own Consulting practice where I work now with Brands a lot of them that I worked with while I was at Amazon,
you know to help them achieve their goals on Amazon whatever those might be gross profit you know I saw him planning.
Etc and in the category leadership relate Amazon if you're not familiar with that sort of structure at Allegan General Manager and you're responsible for all of,
a buyer vendor management planning in the stock management marketing product management sometimes the technology teams as well so that's a little bit about that rule the last years I have been working.
And Consulting can I have them working directly with Brands doing some speaking and doing some writing.
And a man actually really partner with Melissa Burdick the kind of team up for Consulting practice and so that's,
that's kind of what I've what I've been up to.

Jason:
[10:41] Questions about that you went from being the evil buyer to helping Bray.

[10:51] Kind of like going from the federal government to becoming a lobbyist is there a man.

Scot & Andrea:
[10:54] You know it feels like there should be,
the Empire is not but I mean I really feel like for the most part the work that I do is really Amazon's best interest I mean when it's actually one of the reasons I wanted to start my order form I mean in the early days of the Amazon Vendor Manager spent a lot of time with her and I spend time with my brand I'll be in them figure out how to grow how to use the platform head understand it to be successful and kind of coaching them and teaching,
and you as Amazon,
skilled and crew become more automated and that's my role grew and I took on my two teams I just found that I was sending you know very little time talking with brands,
an Amazon in Genoa spending very little time kind of in that teaching capacity,
and so you know that was kind of one of the reasons that I wanted to do this,
I think would just like a small amount of Education about the Amazon platform,
no Brands can see some really amazing success by applying some really basic principles and it's not hard you know it's it's I think it can be pretty straightforward once you understand how Amazon is different from other retailers.
Quarter certain types of Brands you properly work with her show cpg seems to be a real house kind of area for you or your little bit all of them.
You know I've been all over the map where's and small and end in any number of different categories but I will say that this species tend to have kind of the biggest challenges on Amazon pretty early because they were you know they're they're off and doing a pretty sizable businesses.

[12:34] In addition to I'm just having a lot of products that are really difficult for Amazon to ship profitably so I think they kind of think they they have the most challenges,
I'm as it relates to Krista voorhis with the with the,
a platformer a business model where products are shipped directly to customers often in the single units but I've but I work with all kinds of brands.
Across all categories.

Jason:
[12:59] Nice and you mentioned um baby for a while and if I have the time line right the Quincy acquisition happened right in the middle of your tenure.

Scot & Andrea:
[13:08] Right in the millimeter exactly and it's funny because I remember when they first got on our radar and we were and we were really thinking about like they're getting some really great friends on the site and how are they doing that and I remember thinking like we should go for this we should do we should go get them,
we should call them but I'm and it's it's really interesting but I mean you know you know how all acquisitions go it's pretty it's pretty hush-hush internal lake cinemas that stuff happening.

Jason:
[13:37] Yeah but so did you literally go from hating them and they were an amethyst to like becoming a partner.

Scot & Andrea:
[13:45] You know I had moved on to another category by the time we actually started integrated integrating with them but you know I was there I was definitely there for the acquisition piece and you know they were doing.
Three steps hi I'm just doing a really nice job pretty Leanne diapers.com,
Beano getting new customers and as we all know that time when the consumer becomes a parent is just such a pivotal point in terms of brand loyalty and brand switching is really high at that point and they were really they were seeing a lot of success with some of their marketing tactics,
in an option that consumer as well as you know getting a lot of kind of more perceived higher-end baby Brands to to partner with them.

Jason:
[14:31] Nice and I don't know we've talked about this on the show and I will surely understand if you don't want to share an opinion but you know there's been a little controversy is his Wizards probably do know.

Scot & Andrea:
[14:42] Fish.

Jason:
[14:43] They spend down Quincy Quincy this year and there's at least one of our friends in the media Jason Delray that that.
So it has this hypothesis that it literally was out of spite for markquart who's who's competing with them Amazon it at Walmart and I'll just pay for the.
I personally don't believe I don't know what the real logic was behind spinning a down I can imagine there's a story that we don't know but I have a hard time.

[15:14] You know potentially several hundred people are getting laid off space. Out of some competitive spy on the part of of Jeff.

Scot & Andrea:
[15:23] Yeah I read Jason's article about that.
Yeah I read that article that I mean I think that's possible and obviously I don't know I don't work there anymore but I,
email Amazon just serve god with a needed out of that relationship,
and there wasn't a lot of sense in keeping up separate websites me over the years Amazon had tried to spin out other web sites and it's just really challenging it's really challenging to drive traffic to a new site I mean as hell with the endless launch and then take down they got so mad it is so much traffic through going to their native site so kind of continuing to some,
pour it into additional websites just seems really.
Really tough and I'm not really sure why that would be a great strategy for them and you know if you think about like they sort of got what they needed that of that Arrangement they were able to you know take out app,
who is Fab a fast-growing and competitor that was getting a lot of traction you know this is going back like 10 years ago.
And then them from sort of like,
becoming you know a real material competitor and then in addition to that you know they were able you know to integrate some of that inventory or those Brands under their own site no maybe some of the brands or harder for them to.
Dino to acquire so I still feel like they got what they needed and it's really expensive.
Having a Second Sight means possible there was some slight there it is truly when you look at that whole it's Story I mean it's like a soap opera.

[16:58] Terms of the level of drama.
I mean it's just fascinating but I think Amazon is a company with more Integrity than.
You know that one that might you know I have all that and you know I just have a lot of people suffer.

Jason:
[17:18] No I think the URL consolidation makes a lot of sense and there are just good business reasons for.
Amazon ultimately to go there at the one I I guess ironic thing is they thought they were making an acquisition to take out a competitor and all that money that used in the acquisition ultimately was used to create a new competitor so I guess.

Scot & Andrea:
[17:37] Flatbush feel like soap opera or irony I'm not really sure that's why I need that's the real twist in it.

Jason:
[17:46] The irony of me is that I use the word irony wrong all the time.

[17:52] So changing topics you mention the crap program in Canada and we we talked about a crap a little bit on one of the other shows.
But maybe you're in a good position to confirm or deny.
The rumor is that that was started as an internal term that was not intended to be.

Scot & Andrea:
[18:13] Yeah.
Exactly what I read in one of my articles he was not intended to be public-facing it all it was a term that was developed by the finance team like I'm very clearly recall this and I don't know I can't imagine they share this room just funny,
and you know I remember seeing in the fruit one of the first meetings where the finance team brought us this program and the program itself makes sense you look at stuff is unprofitable and figure out how to get it more profitable,
I put the acronym Chris is really terrible and I member we all kind of looked at each other like this or go it's like really and you know I don't think it was ever meant to be other two vendors but now it's out there and now it's like an industry term.

Jason:
[19:01] It's it's really awkward cuz they a category that's particularly vulnerable to crap is of course toilet paper in so when you're,
to a cpg manufacturer that's talking about their total,
trapped out it's really on the potty humor goes goes downhill really fast.

Scot & Andrea:
[19:19] Yeah and I mean I don't think that I don't think the procedure of that was lost on them right I mean diapers and toilet paper or two of the kind of like really on really difficult items to ship,
take us to Harris profitably and so I'm pretty sure that was so,
Davidson strategy around the name but the funny part is like by the time I left we were just tossing it around in meetings and like it was the term has lost all of its like conversations,
and I think it's funny now and I talked with Brands and I and I talked about crab and,
really quiet like Amazon came up with it hasn't explained it so disgusting.

Jason:
[20:02] So the shocking part to me is not that any of that happened the shocking part to me is when you move to Canada that you didn't find a nicer friendlier term for Canada because it's Canada just say is nicer.

Scot & Andrea:
[20:10] You know that's a really good point like at that point it didn't even occur to me that when we started the program in Canada we could have called it something else but you know it's too late now.

Jason:
[20:25] So one one last topic before I let Scot get a word in edgewise,
at the beginning the show you talked about or Scott introduced the concept of one p and 3p and we talked a lot about 1p and 3p.
And when a 3p seller is using FBA as their distribution strategy.
Scot and the show generally talked about them being a 3p seller that uses NFPA and I've noticed in some of your writing that you call.
FBA sellers to pee so I'm just curious if you and Scott and have our are aligned on that vernacular or of or.

Scot & Andrea:
[21:05] I mean I think I think I think it's 3 PS1 of encompassing both Merchant sold as well as,
social Diana son so you know where Amazon a store in the inventory shipping on your behalf they are still there that's to pay the sizzle by Amazon program,
mn3 can include that but I usually it's referring to Merchants that ship out of their own warehouses.

Jason:
[21:29] Got it so what do you call a vendor for field FBA.

Scot & Andrea:
[21:34] I would call that she pee.

Jason:
[21:36] Gotta and Scott are you are you okay with that.

Scot & Andrea:
[21:40] I try to keep it simpler so I think that would maybe confuse people,
chicken official Amazon me cancers that just no actually never heard these turns until I left.
And they're sort of what a lot of my clients used to describe the different business models and with some of the folks in this kind of like ancillary Amazon industry send you so that's it those are the ones I've adopted but you know there's a really simple version is one piece retail,
is Amazon buying product from Brands and reselling it and then 3p is where,
the brand or the other retailers uses Amazon's platformer services.
Who is one thing I wanted to jump into before we get to nerdy on e-commerce side is is on your bio you are part of the Amazon or raise our program of study that a lot as a internet I'm kind of obsessed with Amazon's culture in and how they,
such a large company she needs Innovative and doesn't seem to have a lot of bureaucracy and it seems like the bar razor program is kind of,
last couple years decided as a really kind of key contributor that four letters that aren't following that is close to as I am maybe give us a quick background a bar razor and,
tell us about your experience being in that program.
Yeah absolutely I'm in if you really interested in Amazon's culture and how they say Innovative actually you love my next article I got one coming out another week that's just the really just phones and on that specific topic.

[23:13] I would love that actually if I could really use some other program,
and I think this is some Polish so I don't think there's anything like confidential here but it's essentially her Amazon where there's a set of interviewers that are meant to,
teach other interviewers how to interview so this is like so the more experienced said of interviewers go through specific training to teach others had a interview and then you know you need to have.
I need to have someone in this from this program at least you did when I was there on every interview Loop scissors or busy,
and you know that the idea is not that that's like the tough interview or whatever I think that's been written before actually not true it's it's the person that facilitates the conversation and really drive out all of the insights from the interview from all of the people who interviewed the candidate,
and really make sure that you're having a cohesive discussion and that you're applying kind of them.
Does cats a consistent set of principles to hiring decisions across the company and so it's not your consistency,
and for maintaining the culture not true,
being like a really particularly tough interviewer although probably some of them are really tough interviewers so I was in that program most of my time there I mean cuz I was,
I know I started there you know kind of it before they started some of their real significant growth.

[24:50] And I got into it early and I think by the time I left I have done almost a thousand interviews and you know,
mayilada hires connect during that time. Cool so you're in the interview and then you also delete a post interview kind of debrief is that I would have her.
Exactly exactly any ideas just really for consistency and for us I think the same is true in any organization where you've got some time so it's on interview Loops it University experience or.

[25:23] I'm in after struggling a little more to apply some of the principles,
you know the leadership principles are still learning the leadership principles and so is their kind of someone in the room that's got some experience with that and can help guide the conversation.
Clannad articles I've read say it,
cuz of this book number one usually by razor is in a different apartment and so you would be the Barbies are for like engineering or something and some other person would bar raise for fire,
a person like that I mean it's like I couldn't I couldn't facilitate a conversation about someone who's going to,
be on my team you know you want certain external perspective but I think that's just a general in your dream practice Amazon anyway regardless of whether it's a bar raise or not it's just a lot of perspectives on a Candida think the weirdest interview I've ever participated in was for it was,
like a mad scientist like an economist,
I remember prepping for That interview and just thinking like what am I going to ask him if I did try to get this person some Economist questions I would be hard-pressed to judge the quality of the answer and I remember though it's sitting in the defense I didn't know anything about the contents of this person's work but it was room market like the process of,
determining if they work a candidate was like,
damn I mean was really it really didn't change so do you have a go to question like why are manhole covers round how do you do the mountains.

[27:01] You know I think one of my favorite ones someone who asked I heard someone else asked in an interview as part of our thing is like you to train people you Shadow and you,
we go along and someone it's something that like your job is to lunch the houseplants categor live houseplants category on Amazon like what we did see how would you approach this,
is this at lunch or something and I remember just thinking like,
that's a tough one it's just kind of shocking anyway.

Jason:
[27:30] I think that's where you go to selling seeds.

Scot & Andrea:
[27:33] Exactly exactly.

Jason:
[27:37] A in it it occurs to me that like in addition that Consulting with brands on how to do a Amazon you could also do interview Consulting for a candidates have you helped anyone interview since you up.

Scot & Andrea:
[27:49] I'm in a little bit here and there I can do some projects on it and I had a Consulting project recently where there was a component of it where they were looking for some some guidance in their organizational structure,
and had it had a sort of resource this business and what skill sets and things like that are critical to a little bit but you know the core of it has been,
if people don't want people just tend to want to talk to me about her half and one piece EP 3 p and headed to go see it with Amazon Amino seem to be a bit,
the topics that are the biggest draw.

Jason:
[28:28] I asked questions I always like to ask XM is zonians I've never work for Amazon but.
I have great admiration for the company in the caliber of former employees I've met all the reading I do it frankly comes off as a totally unappealing place to work.

[28:50] Talk to ex amazonians that sort of Concur and I talked to ones that wildly disagree and so I guess I'm just curious.

Scot & Andrea:
[28:57] Most of the ones that don't agree probably still work there no I thought it was an amazing,
inspiring place to work I mean I have.
I just had a really incredible experience there I feel really fortunate to have worked with the high-quality caliber of people that I was but I interacted with you know I wasn't working with more and more on Clans and other organizations and just realizing how remarkable that was,
I want a time I mean I feel like I had some pretty nice career trajectory there that you might not see it,
another types of organizations I mean I thought it was an amazing place I think you know when you think about like that,
I'm bossy Channel article of it was like,
it was right when I was leaving that that article was published about how terrible it is to work at the corporate headquarters and the people cry at their desks and you know that article everything except probably some of that I feel like some of the past employee like the people who'd been fired sort of testimonials sounded off like they didn't sound consistent with the company that I knew,
the rest of the day that was like pretty true I mean if I'm really hurt it's really hard hard to make history and you work you working with some of the smartest people,
I think around but the article was just really um.
And it will be amazing there any Amazon.

[30:28] Top 5 Business Schools all those people we have a choice we have to work there and they have lots of options there for a reason and it's because it's super inspiring and you can be Innovative and build your own business,
you should hire a nanny is taking a lot of responsibility,
I'm here if you have an idea and it's a good one and you can put together a good business case for it it still even though it's a big company now it's still the type of place where you can,
you can see that through and so I mean I think it's I think it's an incredible place or I didn't see it it's a it's a.
It's like running a marathon you know you can't do it has to look at has to stop at some point I think it's hard to it would be hard to work there your whole life.
There's no free snacks.

Jason:
[31:19] Bananas free banana.

Scot & Andrea:
[31:20] There's no reason I give you the Sheep pens you know just don't know books are like that you know the $0.50 ones there's no there's no curse reality leadership principles you can use PowerPoint Jason I make a living on power,
Point sucks really dense white papers,
I think I think I got some of the best writing training.
Bear in just being a headache ran the most about and data into like the shortest way if you possible.

Jason:
[31:58] Yeah so that brings up one of my biggest garage with X amazonians I'm I'm always super excited when I hired one because I'm thinking like I'm going to get these really insightful well-written long-form deliverables.
And then I keep getting these crappy power points from them.

Scot & Andrea:
[32:14] They're just so excited he's her.

Jason:
[32:15] Exact exact.

Scot & Andrea:
[32:16] That's just for so many years and now all I can I cancel team does a star play for almost everything I'm one of those people I totally am.

Jason:
[32:26] Yeah so that was a little bit disappointing for me I have to be honest.
You don't want of the categories that I am super interested in at the moment it's been a lot of time and is grocery in and you use us and gray.
Experience in the impression Amazon might my premise is in North America.

[32:48] Wholesale e-commerce like the battles basically already already been one right like you don't frequent frequent statement in my practices you're not going to Amazon Amazon and so you're looking for Winchester or you know.
Little place around the edges but like you nor anyone else is necessary going to just build.
400 million skier general merchandise catalog in and capture majority market share from Amazon but I do believe that grocery is a huge category potentially larger than general merchandise.
Did just now is coming into play for for digital Commerce City.

[33:30] We deliver that in so I do feel like it's a white space and I think we're seeing sort of Walmart Amazon and you know to a lesser extent the.
The pure plays in Kroger and stuff all all battling it out is that it are you following that category at all still in.

Scot & Andrea:
[33:48] Oh absolutely absolutely both Serta professionally and also personally my husband has a firm idea quickly build,
Play click and collect software so I follow it.
Religiously and he mentioned the consumables categories are there in Norma semi dwarf,
the other general merchandise categories but I think the beauty of them for e-commerce is that they uh they drive frequency in traffic,
and you know I think once,
once Amazon in one Southern retailers can I caught on to this they realized how important it is to make this work online because you know when you think about it like you only buy coffee maker like every couple of years I need a picture in TV is like those don't those types of products,
don't drive frequency and visit people like every week,
so you know these categories I mean this forever or the trip drivers and they called them truck drivers.
They got people in the store we sell them for their stuff I mean the same model those two Outta mind,
you got customers traffic through the consumable categories and then in a while they're there hopefully they buy other things.

Jason:
[35:04] Yeah until 8 and I was here in Seattle so you get to see a lot of the first iteration of concepts of I assume you've walked by the ghost or if you haven't snuck in with an old age anything in.

[35:18] Don't get in trouble on the show don't get in trouble on the show.

Scot & Andrea:
[35:21] And we also because we can never even rolled out,
wake me to tell Gram here for a while where I think that was only in like two or three markets we're in this I think this is the precursor to Prime now where,
or they would deliver your stuff and like a bag on your porch with no over boxing or anything,
I mean I'm sure it was really expensive to get all the stuff that was pretty cool and you can sign up for like a tote day was like a regular schedule day so we get all kinds of Pilots here which is kind of funny to see experimentation with Amazon so yeah I've been by the ghost or I haven't gone in,
and I think it's really I think it's.
One of the more remarkable technology that Amazon has Philip Justin just walk out technology.

Jason:
[36:12] #JY.

Scot & Andrea:
[36:14] Is she literally just walked out of the store was actually sounds kind of awful if I'm shopping with my kids but I'm sure Amazon for your at the above.

Jason:
[36:23] As we pointed out early on when they want that concept that they're claiming it's his big new revolutionary thing and myself and one of my peers we're using that technology in high school so.

[36:34] Not sure it's quite as impressive if you got a chance to go by the the fresh pickup location yet.

Scot & Andrea:
[36:43] No I haven't but that's the second lunch of those in Seattle we had another pilot years ago to pick up points so CA,
I'm seeing the model and I know where the spot is in fact I was thinking maybe next week I don't think it's up and running yet but I was going to go do a drive by and just check it out to pick up stations in Seattle I mean like it it looks like I'm driving through it looks like a drive-in burger joint with like all the ankle parking,
pretty is pretty cool and then another just bring it all out and put it in your in your car but I mean this figuring out pickup,
I mean it's super expensive to ship dog food to customers dog food to Prime customer and you're totally upside down economics,
and you know in order to be competitive and figure out how to make money in the space you have to figure out how to get people to come to you and sell them a bunch of stuff at once.

Jason:
[37:41] Yeah for sure and it I do think that's going to be the dominant model for grocery like I think you know it and you use only strings this with.
Fresh but like you know most of the Amazon Goods get delivered on a route and you can bundle a bunch of deliveries and I can be really efficient but when you deliver fresh in the person has to be home to receive it because they have to put it in the refrigerator,
settling you're not doing routes accepting in a few really high Denso occasions you're doing individual deliveries and that,
that's super expensive in for most of the country the economics just don't work and so it seems like saving all that shopping time and having that pick up.
I it was my. That's going to be the the mainstream digital grocery experience and I have literally nothing.
Thousands of consumer interviews where they just talk about it being life-changing when they start using that that feature from whomever they use it from.

Scot & Andrea:
[38:35] Witches,
which is really funny because like this isn't a new feature like I used to when I was a kid we used to call the grocery store and we tell him what we wanted and we drive by and pick it up there's not a new model,
scale is probably a new model I mean I just grew up in a small town but I think what's really interesting is the whole evolution of this thing like I remember going to trade shows and like 2006 going to like that candy and confectionery and.
And talking with Brands and saying, sell on Amazon and they were like that's crazy like why would you sell food on Amazon and then there was like they all signed up.
NN and now it's like a race It Was a Race for a long time you know who would get there first two and half capture all the market share who can work most strategically with Amazon and other in Walmart and can whomever else and then everyone knows everyone knows grocery had a great day,
now it's like it's kale and now he's calories are in a small anymore for these retailers and now they're just like a.
I'm probably suck and so how do you figure out how to make it work and that's I mean that's where I think a lot of experimentation comes into play through a lot of these players it was trying models to see what might work,
you know in Seattle we have fresh we have Prime now we have pickup points we have a,
Amazon go store anything for a different model for the Amazons experimenting with an S with Amazon and then you're seeing really the rise of cook and cut which I totally agree with you I think I can collect is the next,
that's the next thing because I'm already fatiguing I mean I've been shopping for my groceries online since you lunch freshman 2007 here and I'm sitting at the pricing you know it's just it's just cheaper like you just it is because the economics are different and they don't have to ship it to me and another driver.

[40:21] And I'm sure Amazon's figured out you know how to make all that stuff work,
and the reality is it's just worse than even the prime now and even instacart and I were to costco.com and safeway.com you like all the different models and even has to offer higher prices on some of it in store specials online and so I mean as a consumer and fatiguing,
of the pricing I'm Slicker she's just as much like and it's tempting to go back to the store and horrible so I see.

Jason:
[40:53] Scot would be horrified if you did that.

Scot & Andrea:
[40:55] You're so right for the next model,
and I believe it's click and collect and I believe in you profitable and I believe whatever groceries get on board with this the fastest are the ones that are going to,
you know they really going to kill all the share.

Jason:
[41:11] Yeah I think that Title Wave is is coming it's going to be fun to watch you're certainly right it's not a new model there used to be this thing in the world called the milkman.

Scot & Andrea:
[41:20] Totally we actually the mailbox I mean we know when delivered anything to it but it still existed in her house.

Jason:
[41:27] Yeah absolutely so at the end of the day do you think there's a chance that someone other than Amazon wins that space so I could you foresee a Walmart or a Kroger someone else.

Scot & Andrea:
[41:40] Will depend on how fast we can both I mean that's really what it comes down to it's not a complicated model you ordered online you know you pick it out your stores and you know you let customers come pick it up we've got it here at Fred Meyer local in Seattle,
I'm so it's not I don't think it's a challenging model that I think a lot of these larger groceries or kind of,
I don't want to say freaking out but their head of flummoxed by the concept of like setting up a retailer website what does that mean how do you up so customers how you do it right how do you let Brandon getting on it because you're basically recreating like an Amazon,
.com grocery store online and let you know that feels really overwhelming,
and so I don't think they're moving real fast and I think it's just going to be like humuhumu fast but I do think it will be hard to compete with Amazon's Automation and personalization as it relates to marketing.
They're just they're just so good at it and so far you don't haven't seen any other retailers that have even touched it and that's either really where you get like that,
if you're able to drive customers to larger basket sizes online and help them discover products and be productive about like when they're about to run out of things and that kind of thing.
It's funny I said the big fan of this show Silicon Valley and that this is not a spoiler but in last week's episode they,
the two the characters went to the grocery store and they were the only non tasker's in the grocery store there's like 80 people in the grocery store.

Jason:
[43:11] That is a great point like I the one you're at your hair percent right about the price fatigue the one loophole is it can be really cheap to deliver groceries to your home when you get a venture capitalist to pay the delivery fee.

Scot & Andrea:
[43:22] For Google.

Jason:
[43:25] I feel like at the moment there's this the short window of opportunity I encourage everyone to use all that good Andreessen Horowitz money to deliver their groceries.

Scot & Andrea:
[43:37] I'm just change topics little bit so then your Consulting gig you can spend a lot of time with Brands you talked about the things they want to talk about which is crap and pricing going to go see a Ting one piece of p3p.
What are some of the pitfalls you see them falling into an ear do they they come to you and they say oh my gosh I've got,
does problem with her your what are some of the pitfalls that you wish things would have oil for they come to.
What are the three things like people they were staying for a bit but a consistent being that I'm seeing is that a lot of them in the CPC space are only thinking like one or two years ahead and it's kind of a reactive model,
a reaction way of thinking to Amazon's kind of,
anyways have a crap program but I think they're getting a little stricter about it and kind of the last one to two years and so a lot of his friends are going items crapped out,
they're trying to keep up with like how to,
how to leverage Amazon's new marketing platforms and they're just really focused on the here and now and not I don't think thinking too much about where's the where's this thing go into yours me Amazon's never going to make money shipping dog food and cat litter across the United States alike what is the future of this look like and I don't think a lot of them are spending.
Enough time thinking about that because this is when you want to plant your seeds for that so you know if it's the next big model is me nice I might.
My opinion is on Amazon they're really going to figure out the pantry program I mean the way to economically ship products to customers.
You know that that is secreted that is.

[45:07] Freshly unprofitable in a direct-to-customer at least should be model is to put in a box of the whole bunch of other stuff so it perfectly fits and charge the customer like a nominal fee that they're not going to really.
And I worry too much about and then ship them a whole bunch of stuff at once and that's basically what the pantry program is and that program seems to be doing pretty well for them.
Iskra.
Really fast cording to some of the brands that I work with that are participating in it so I mean I think you thinking about like where the future is and Pantry still kinda challenging it's hard to hear item set up an assault like an automated thing yet,
and so in thinking about like where where is the next gen of this thing going,
because I mean in the writing on the wall is it like Amazon is not going to keep seeing all these products to lose money in this in the consumable space or they're just going to get really refined assortment.
And so programs like Pantry Paramus Lake you know Prime now or the pickup points or whatever those are the Amazon ones but then like what we're talking about click and collect like.
I think that you know expanding their,
nearest Thinking Outside those kind of the current challenges you're having with your Amazon retail businesses is critical and the brands that are doing that are the ones they're going to be set up for Success because they planted seeds and cut it started that smell,
this is nursing one side so let's step outside consumables and take out a category that's like maybe more mature like up.

[46:39] Electronics repair or something the one that I keep hearing is when the Randall say when I think 5 or 10 years down the line.
Amazon tonight exclusive retailer and that scares me because it's a race to zero so that's why a lot of brands are on the doubt that's that's one of the reasons you did they have map pricing in controlling the 3p Marketplace,
do you think that's that you know you're obviously have drunk a little bit of Amazon Kool-Aid over the last 10 years but no.
Is that what we're going to be facing his is this kind of you know it brings have a logical argument to not be on Amazon because they're kind of feeding their own destruction.
But I don't think I mean it would be difficult to not be on the phone because of the opportunity that presents to Branzino just from League of Revenue prospective,
and sometimes from profit perspective too but I think it's I don't think it's a wise choice,
anti depends on a lot of factors but it's not a wise choice to like think of Amazon is your exclusive e-commerce player me the brands that I see that have healthier businesses.
With Amazon are ones that sell to multiple e-commerce players and are investing in other ones not investing like investors but you know investing time and energy into getting their business up and running and marketing and things like that on some of the other players and so that's where,
I think that some of your business model is feeling more Diversified but if you thinking that you're going to be exclusive on Amazon I mean they change the game there every 6 months,
and you know it only takes kind of like one change that's in congress with your business model to be out.

[48:17] And here maybe that's private label or meet you maybe they want your private label of your product or maybe they either come to you with terms like negotiation terms that are unacceptable to you or that you can't you can't actually if you can accommodate,
can I still run a business and if they're your only Taylor you're kind of in a really tough spot,
yeah I don't think they're setting up Amazon to be exclusive I think they see Amazon becoming a de-facto exclusive because when they look at the online players,
Amazon so much bigger than everyone else to.
That it's hard to build that diversity that you're talking about that that's not what they worry about that kind of say my brain is priced wrong is right now so maybe there is a strategy right now.
I don't help Amazon be the the 800-pound gorilla well and I think that's where it's important,
that's what's important to look on Amazon at some of your third party Partners I need your address with Amazon you've presumably all are presumably also selling to other people that are reselling on Amazon it is important to look at their ass and selling across multiple platforms,
Samsung,
and so you know they're giving you any not might be still small but they're giving you some distribution also they're also giving you an alternative if you don't want to sell directly to Amazon anymore but you still and have a presence there and have a good brand experience and help you have sales,
Anthem anything that's kind of like a another diversification strategy you look so,
so is private label it was kind of jump into that a little bit what are you tell Brands when they say hey I'm really concerned that you know Amazon just opened up a private label in my category.

[49:50] How do you explain that I mean I think they should be concerned but it's not.
Eminem retailer tender copying top selling products it's not too similar differences you know how they're able to manipulate the digital shelf to be able to savor products.
Over others,
and you know we don't have any like confirmation that they're doing that but it sure seems like they are when you look at the site and I know you're searching for backpacks and you know the one that looks just like the other one,
private label comes up before it in the search results really totally it's something really scared about for sure but if you're also kind of going back to the concept of diversification if you've been,
yeah totally.
If your business is so driven by one or two skews you know you're a right candidate for it for Amazon taking on serve a private label.
Copy had approached and so you know figure out how to grow other sections of your business so that you're not completely dependent on laptops Q,
because Amazon Michael private label it I think it's probably a good idea and it you know I've seen them give like favoring some of the marketing and and obviously all the marketing is free for them so there,
those are going to be really high origin ID on this but they look like they're just going after pretty much every category now which means I mean that makes sense for them to do.

Jason:
[51:26] I think you may have inadvertently given this the secret sauce away earlier I just get into the live plants category.

Scot & Andrea:
[51:33] Really difficult for Amazon to copy must be because they kept asking it as an interview question and they never launched it so there you go.

Jason:
[51:41] Exactly which is odd because I feel like that's one of the first categories than invented cologne.

Scot & Andrea:
[51:46] Actually I think that I actually might be irony I'm not sure.

Jason:
[51:52] Yes Neil thank you for that.

[51:57] So I know you're going to be at IRC in a couple weeks and I understand it right that topic is tips for negotiating with Amazon can you totally ruin the irce panel.
Giving our listener some of the high-level pitfalls and tips.

Scot & Andrea:
[52:14] Yeah yeah.
Blue am so I mean the presentations really just going to talk about it I think it's another one of those areas where a little bit of Education will really help Brands be successful in their negotiations and the biggest.
And the bastard of a feeling or pitfalls that I saw when I was out in the sun because she with friends is just friends not preparing for the negotiation not coming with with data me with questions you know not being prepared,
I'm not really thinking through,
the Amazons perspective and being kind of blindsided by some of the ass and granite Amazon desert huge so it makes sense to be helpless by the numbers,
and so I will talk a little bit about that in the presentation will talk about how to prepare,
you know what information to request from Amazon if you have an opportunity to do so I mean I think,
an important thing is he knows the lot of times,
especially some of the mid-tier the smaller hands are not actually negotiate with a live person and so how do you navigate that right like you probably negotiate with a robot doesn't look like a robot in the email comes to you but looks like a.
Can a person that it's you know it's definitely an automated it's going automated process so we'll talk about how to.
How to prepare am had to actually execute and then you know what kind of go through some of the typical ass from Amazon and and talk about like when he's made me sense for you like.

[53:47] Who who who doesn't make sense for it to think about like the cross. Program or when would it make sense for you to invest in some of the,
the larger marketing programs or or Crap allow answer you know we'll kind of talk a little bit about that.
One of the things you introduce me to his this house get this wrong but like driving the car really fast with your.
Foot on the gas your hands off the wheel tell tell us more about that Provisions growing quickly and scaling and it's really critical more and more automated.
And so you know I'm seeing with my clients and also one of the forums like the Lincoln Group and things like that that a lot of brands are just really at the end.
At the receiving end of more automation than ever before and they're hearing from their buyers you know how critical it is that they continue automated and you know not Place manual.
Borders and let the system do its thing can have their hands off the wheel that's the hands off the wheel concept so you know and that's definitely you always been kind of a push it Amazon but I feel like it's getting,
my friends are seeing more of it and I'm in recent here.
An interest Amazon's interesting automation when you negotiate with the with that machine doesn't sound like Alexa.
I mean if you get on the phone you're talking to a real person.

Jason:
[55:20] For now for now.

Scot & Andrea:
[55:21] I'm sorry Jason we're going to cut your crap allowance.

Jason:
[55:26] Here's the tip you're not talking to a real person when it's Sign May Day that's always.

Scot & Andrea:
[55:31] Chicken area.

Jason:
[55:34] Come on you guys don't get Amazon Fire jokes.

Scot & Andrea:
[55:36] No I guess I totally get it.

Jason:
[55:40] Scot snoody the lack of systems we have to go somewhere for him although annoyingly Scott's car can drive really fast with a hands off the wheel which I'm a little jealous.

Scot & Andrea:
[55:51] Do you have a self-driving car have a tablet doesn't have that that future though I got I was too early in the doctor its equivalent of having an iPhone 1 right now.

Jason:
[56:04] You can still drive really fast with your hands off the wheel once.

Scot & Andrea:
[56:07] Yeah just let me know.

Jason:
[56:11] Exactly and any big mistakes you see people making in negotiations.

Scot & Andrea:
[56:18] Yeah I mean I think this one is just giving like a specially for the platform or have experience I have significant growth and so it's like one of the first time actually talking to someone like a live person they just give too much away in the first year,
that you know they don't hold back enough funding for themselves,
Cindy has Amazon ever use an annual negotiation process that you every year and they're going to want more and you know you don't want to give it all away,
in the in there for a couple years of Amazon you've got a kind of pre the reserves at or or just kind of the other it's just kind of,
signing up for the most you can possibly do for that year from a from a Amazon funding perspective and that doesn't give you any kind of slush fund for the stuff they're going to come to you with.
Fourth root beer like participation in certain marketing programs that you know they didn't know about the weekend because you know they're.
A plan a little bit more in a three to six months in advance or are you know price-matching error or some chargeback store.
I don't want to be in a position all year we're all of those little things are extraordinary painful cuz you already gave them like the most you could give them that you're so I always recommend a can of creating a reserved sign for yourself,
you know don't like some leftover money is there be no room in your budget to pay for some of the things throughout the year.

Jason:
[57:43] That Prime days only two months away don't don't touch.

Scot & Andrea:
[57:49] So I never been a Brandon or works for me but I meant it would be really weird because there's probably this old school believing believe that you reformulation ships and I know I've been a bit more couple times and.
You just see the brand raps just kind of going through there and you know it's almost like the airports Gear Drive for them there's a whole infrastructure and there's this whole,
pilgrimage to Walmart meet that guy try to build a relationship drugs drinks the Dan Draper Martini lunch and all that stuff and then you probably do all that then you try to.
If I go try to beats when Amazon that I won't meet with you unless you're like.
Super Dee duper Top Gear brand so then now you're kind of talking to this AI machine and these brands that kind of holiday how they feel.
Yeah yeah especially some of the larger more established ones that are really accustomed to working with brick-and-mortar there they believe that they will be able to see crater 6s on Amazon to forming a relationship with their buyers,
and I will tell you like the last thing those buyers wanted to do it for him,
bladder relationships because it's extremely time-consuming it doesn't help them execute on their initiatives might get them like that anymore Co-op,
they can also get that by sending out like a hundred automated emails and so you know I still remember kind of,
the concept of like Thursday Amazon buying team they're in their jeans and occasionally flip flops,
I'm at the brand comes to visit and they're all wearing their suits and they want to do a line review and like that concept it's just totally lost.

[59:30] Play baby and they're not going to make it they're not going to make selection choices they're going to list everything on the side so it doesn't.
The best interest to learn a whole lot about the products and which ones are different from one another.
So yeah I mean I definitely see a lot of her and still trying to formulation ships but I'm also seeing a lot of emerges getting like Savvy about that,
he has already had a couple of turnovers and their Vendor Manager and they're realizing that like actually the best thing they can do is educate them so.
About the,
Phat Farm and how it works because of no sex that's really understand how the form works that I work with it and keep keep up with the changes to it I think it you know,
the Amazon I think just there was a Jeff quote once and he said we're not in the business of selling things were in the business of helping people buy things and they just,
Amazon believes they are a platform for selling things they don't believe they're retailer wish I think kind of speaks to you know why they don't think the relationship development super important.
That's an important Point Jason spends more time with the offline guys than I do but up but I'm always.
Stricken by there's the still believe there's still this belief and I'm a computer engineering guy but there's just believe that there's this Merchant King,
Merchant Prince water be called Jason and you know they can predict what people are going to do and they go and they buy that hot thing in the ghetto,
the create fashion themselves and that I'm console surprised how much that still exists and I think you know this this Amazon model of.

[1:01:02] Why should she choose like put everything up and let the customer he just seems so obvious to me.
But it really is so counter to hell all these other companies are built that that.
It's the step to get even closer to that existential dilemma than they are right now which is hard to believe but just console amazing to me in the retail world that that no one else really gets that.
Universal some elements of that and that's really like in my opinion when I was a fire that was like the most exciting thing about being a buyer what if you find the next big thing,
like what is it what if you're the one that brought it on the side and I'm ever going to trade shows in finding like weird and scary products reticulate like the Expos and,
Ambien like maybe this is like the new coconut water like we don't know what is going to be so I think there's still some elements of that but I mean definitely a lot less than than traditional retailers,
stop and come from a line review I guess.

Jason:
[1:01:59] Well it has happened again we've used up our allotted hour Andrea thank you very much for us spending time in the educating all of us and especially for educating Scot.

Scot & Andrea:
[1:02:13] But thank you for having me on the show and it was really great to be here.
Yeah right I said at the top of you everytime I talk to you I learned a hundred things I think I have checks at least that many boxes that is good take me awhile to counter but we're in that that neighborhood,
it is reminder to listener see if you enjoyed Andrews view on Amazon brand strategy and then and other topics she's one of the speakers at internet retailer conference in exhibitions Amazon and me Workshop,
which is right around the corner it'll be June 6th in Chicago,
and Andrea is folks want to follow you your writing online you mentioned you got some articles coming out where's the best place that can find is that a Twitter handle or a,
that chatter where where do you hang out online I am mostly on LinkedIn so you can find me on LinkedIn and it's Andrea Leigh Leigh.

[1:03:05] Possible thanks again really appreciate it.

Jason:
[1:03:07] Yeah and we'll make sure to get that in the show now so until next time happy commercing.

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