Info

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.
RSS Feed Subscribe in Apple Podcasts
The Jason & Scot Show - E-Commerce And Retail News
2018
June
May
April
March
February
January


2017
December
November
October
September
August
July
June
May
April
March
February
January


2016
December
November
October
September
August
July
June
May
April
March
February
January


2015
December
November


All Episodes
Archives
Now displaying: June, 2018
Jun 29, 2018

Amazon News

Industry News

Supreme court rules in favor of South Dakota in South Dakota v. Wayfair, Inc., et al.  The ruling effectively overturns the previous Quill Corp. v. North Dakota precedent and opens the door for all states to require e-commerce sites to collect and remit sales taxes to states.

  • Amazon stands to be the biggest winner in the ruling.  Amazon already collects sales tax on all 1P sales.  Amazon will now be able to charge 3P merchants 2.9% to collect tax for them.  Amazon 1P will be more competitive with 3P and other e-commerce sites (eBay, NewEgg, etc..).
  • Small E-Commerce sites and marketplace sellers are the biggest losers, as they will now need to collect sales tax (and likely pay a 3rd party to do it on their behalf), and navigate a multitude of complex out of state sales tax laws that are likely to emerge.
  • All eyes turn now turn to Congress, to see if they will pass a law to clarify/simplify the sales tax collection issue on behalf of small businesses.

Listener Questions

Alex Volakis asks: Should others try the Warby Parker school bus store concept. Who do you think would benefit most from it?

Amit Agarwal asks: Do customers like bundled products or do they like to create their own bundles? What are different merchandising tactics used to sell a collection of products?

Jill Dvorak asks: Any leadership or managing through change tactics. at the corporate level to infuse more nimbleness in established brands?

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

Episode 136 of the Jason & Scot show was recorded on Thursday, June 28th 2018.

http://jasonandscot.com

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

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 136 being recorded on Thursday June 28th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.

Scot:
[0:40] Hey Jason welcome back Jason and Scott show listeners.
Well Jason listeners that are paying very close attention will notice we took a little bit of summer vacation off so we haven't really podcast for last couple weeks
but it's exciting to get back to it and we have a lot of news report on and some analysis of some big things that happened in e-commerce of the last couple of weeks
plus we've had some listeners very patiently waiting some for with some questions that they wanted to ask us so that's going to be rude the real focus of the show tonight.
So let's start off with some.
Amazon news your margin is there.
It wouldn't be a Jason Scott show without some Amazon news and there is no shortage today we're going to go through kind of the cream of the crop here so that the big one is and I know you've been on pins and needles Jason like I am is when is Amazon Prime day
well it has leaks and it looks like it's going to be July 16th to 17th
and like last year they're going to do kind of the day of the half of deals so I'm pretty excited I've been saving some of my Gadget money on the side and I'm going to be watching carefully to see what's offered this year.

Jason:
[2:04] Yeah I am right there with you it's it feels like
as the as it gets more and more in French do not do the deals and stuff get better every year and I think there's been some interesting evidence that it's now starting to have a meaningful impact on back-to-school that people are literally.
Like planning their back-to-school spend around Sunday.

Scot:
[2:25] Yeah any gadgets on your wishlist or I think you already have every flavor of the Amazon Echo if it's cracked but anything not that you don't have.

Jason:
[2:35] So to be honest of the stuff that's currently available I there's nothing on my wishlist so I'll be.
Curious to hear if there's some deal that usually it'll be a deal on something that entices me or something that's relatively new released there are some new fire products that I don't have
but I'm not sure I really need to add him to my repertoire.

Scot:
[2:58] Got it I I save all year for my little accessory cables so I'll probably be buying like
20 iOS cables and USB C use and we go to those like crazy at my house so this is my time of year when I stock up on all that good stuff.

Jason:
[3:14] My wife thinks I have a hoarding problem with those things and I like but I'm not smart enough to wait for the deal so I you know I get my eyes I would be the one customer that would do the subscription service from anchor.

Scot:
[3:26] Yes I Do by a lot of anchor product on Prime day that's like there the juicy stuff I keep an eye out for.

Jason:
[3:32] Yes and I'm a little OCD about it I like I have much cooked my cables color coded so I got all my lightning cables are red and All Nite Nite my USB or black so I can.
Easily visually identify what I need.

Scot:
[3:50] Brickell there was a big acquisition today I know that you're probably excited about cuz we've talked about this category on the show did you see that one.

Jason:
[3:56] I did I did and I have to go back and check our predictions but I think this is even one of my predictions for the air which I'm so excited about.

Scot:
[4:05] Darn it.

Jason:
[4:07] Yes I I thought you might not have considered that but there today Amazon announced that they acquired a company called pillpack and this is a 1 billion dollar acquisition which is not the biggest obviously with with Whole Foods but
on the bigger side of the Acquisitions for Amazon and pillpack is a male fulfillment Pharmacy.
They specialize in custom packaging so their primary customer are.
Dogs that have chronic conditions and have to take multiple prescriptions daily and pill pack make these.
Custom packages of their particular caplet so you get this right you know nicely old.
Baggy of the pills you're supposed to take everyday and so that simplifies life for a lot of people that have to take a lot of medications.
And it is a good customer experience and arguably.

[5:04] It is in and of itself a nice way to reduce friction and improve the.
The prescription processed but I think the reason most people are are super interested in the Amazon acquisition is less because of their unique Twist on mail-order prescriptions and more the fact that.
This is Amazon buying a licensed Pharmacy and jumping into the pharmacy space with two feet.
We've seen them sort of toad it before course they they made an investment in drugstore.com many years ago and last year they got a bunch of.
Medical equipment pharmaceutical licenses in a bunch of states which allowed them to sell like.

[5:47] Oxygen dispensing equipment and gloves and a lot of the the medical equipment but this is now giving them access to actually fill.
Prescription medications and so you know a lot of us have been speculating that this would be another industry that Amazon would attack.
And you're as usually happens with these things with Amazon.
That you know I think they're market cap went up by you had ate the investment a billion dollars their market cap went up by like 15 or 20 billion today depending on what time you looked,
and the big pharmaceutical companies Walgreens and CVS
lost about 15 billion dollars in market cap today and it was kind of funny I think Walgreens had an investor call today and and that you know that.
That the Walgreens CEO at you know actually other the phrase that we we make fun of on the show all the time,
that he's not very worried about Amazon that pharmaceutical Pharmacy is much more complicated than all the other categories Amazon's tackled and it'll be much different.

Scot:
[6:50] I'll never figure it out just like a apparel and what Macy's said there they can't figure it out return.

Jason:
[6:55] Exactly return Macy's is positive the returns are too complicated and all the apparel companies are positive that everyone wants to try clothes on before they order on them.
And not excetera excetera usually a Bad Bet there are complications to the pharmacy but I would argue that that Amazon is very good at solving for complications.
And then just a couple other sort of interesting Snippets around the acquisition there are rumors that that.
Walmart was the primary acquire of pill pack and the Amazon swooped in at the last minute with a higher offer and sort of.
Stole pill pack out from under Walmart.

Scot:
[7:40] Do you know if I know Amazon with myself registering in a bunch of States just go back to them into all the us or you know.

Jason:
[7:51] I don't think so but I think he'll pack has only certain states that they had access to and there still is a pretty big bear you're like like still having the pharmaceutical licenses one thing but really,
be a hundred percent in the pharmacy space you also need all the insurers.
To agree to partner with you and light accept your.
Your claims against all the various insurance companies and so what would a lot of the traditional pharmacies think is the big barrier to Amazon is the Amazon doesn't have those.
There's deals with all the insurers and so you know.
Not sayings on can't cut all those deals and they probably will but that's potentially a multi-year process and so a lot of people are speculating that the day 1 Amazon would focus on
the subset of the pharmaceutical Market that's paying out-of-pocket for for medication either because they're under uninsured or because the.
Because they have some limitations or restrictions on the insurance that make them want to pay out of pocket and then you know there's.
I got some speculation that Amazon would would even acquire an insurer which would then of course let them be the Fulfillment partner for that right and there's.
There's that you know there's a separate initiative the Amazon is doing with Warren Buffett.

[9:19] Yeah around revamping Healthcare and and you know one of the the speculated outcomes of that is a potential new insurance product that could potentially partner with and with Amazon Pharmacy.

Scot:
[9:30] Yeah they just announced the CEO for that energy so seems like it's getting some momentum there for those who didn't listen to kind of our predictions for the year maybe you know what
what's this mean for a CVS or Walgreens near us a Amazon successfully
can compete on the pharmacy side at least the pill dispensing are those things convenient enough still or do you think that this is a problem.

Jason:
[9:57] Yep so here's what's interesting so that the traditional drug stores that are Walgreens and CVS is.
Their whole business is predicated on foot traffic coming in to fill prescriptions in so the.
Like they they don't tend to be super price competitive on all the over-the-counter products that they sell in the store and they don't tend to be a destination for any of those products for very many consumers but what happens is you going to get your Lipitor and you realize.
That you need some snacks or you need some tissue paper or you need some Advil or whatever the case is while you're in the store.
And so have a significant number of customers no longer need to visit Walgreens to pick up their prescription.
The Walgreens brick-and-mortar model literally doesn't work like there is not a like another compelling reason for traffic to go in those stores.

[10:56] And so you know either that would you know put Walgreens in huge distress or Walgreens would have to sort of find some way to reinvent their their retail space.
And you know most most of that analysts look at those retailers and say hey the big Investments those guys are making these are in insurance companies and they're really their their plan is to sort of pivot from being a brick-and-mortar retailer to being a.
A healthcare provider that's not tied to brick and mortar.
And you knows we talk about a few times on the show Amazon doesn't have to capture 50% of the pharmacy market or anything like it you know if they can take a a 10% or 15% and in the traffic of those stores.

[11:38] Like that probably put them over a Tipping Point that makes those doors not profitable and so it's.
A very material threat to traditional drug stores.
Whether Amazon successful or not if a bunch of consumers just decide that it's better to have their Pharmaceuticals delivered to home.
I'm in there many companies trying to do that then you know that puts that same stress on those drug stores,
it's been interesting the kind of traditional mail order pharmacy hasn't really gained a lot of momentum so there's a insurers insurance companies drive people to mail order pharmacy and there's a percentage of.
Consumers there get their stuff VIA mail order at the percentage of people that use my order has actually shrunk a little bit in the last couple of years and so it'll be interesting if.
Amazon can come up with a new enough experience or these custom pill packs are a big enough value-add that they,
you know permanently change that that consumer Behavior which will you know really put a challenge in the drugstores and I I would expect to see a ton of drug stores close.

Scot:
[12:44] It just sounds so slow mail delivery.

Jason:
[12:47] Yeah and maybe mail is the wrong word right like I mean you know you can imagine all kinds of same-day fulfillment centers like at the moment.
You know people tend to get get the home delivery of
prescriptions when they're tronic things that you take you around right and when you you know God forbid you're sick and the doctor calls in a prescription or you go see a doctor and they call in a prescription that you pick up like those are the things you're more likely to walk in and
and get that but of course there's no reason that pharmacies couldn't.
Prepare those those meds or Amazon you don't own pharmacies couldn't prepare those meds and deliver on in 1 hour to your house.

Scot:
[13:26] Yeah yes so it could be a cool Prime thing like Prime Pharmacy where yeah Auto refills the pharmacies I deal with like they never called the doctor and do stuff right so Amazon consult a lot of that stuff so.

Jason:
[13:41] There's a ton of friction in
current experience that like we as consumers are just learn to deal with that that you can imagine someone like Amazon taking out of the experience and and make it game changing like in the in the same way that Uber disrupted the taxi industry.

Scot:
[13:57] Cope well that was one of your predictions of one of mine was about Amazon delivery and today there was an announcement about that sort kind of kind of
even on this I guess
Amazon sent out this really interesting effectively up a call to on chores to build delivery capability that that Amazon will then leverage there as we've covered on the show a lot there
the really worried about the capacity out there in the network they're building their own direct this is really what I would consider a call to arms for entrepreneurs to build a 1099 kind of delivery Network
yeah I talked about going out starting a business for a minimum of 10K
wish you the vans that are Amazon branded uniforms and then they talk about how and their models of doing this.

[14:43] You can make up to $300,000 in profit a year that's pretty interesting in.
A little unknown thing is FedEx Ground did this they had
they had a lot of 1099s their individuals and then there was some kind of a court thing that happened where that was deemed
did they should be employees so they world all that up into businesses so when you see FedEx Ground delivery out there it is a it is a 1099 Network it'll frequently say you know
FedEx Ground operated by and they'll be some little LLC brand they're kind of small down by the door.
Doubt they have built a similar, Network so
this is going to be interesting to see how Amazon build this out if they're certain areas they're targeting and then also what this means for the flex drivers which is more of an Uber individual kind of a thing there's a lot of work
a lot of
people believe the Uber 1099 model is at risk that that same kind of litigation will happen that they're actually should be treated as employees this would
Guild Amazon another kind of an option on delivery if that were to happen to the flex driver thing too so so kind of covers several basis I thought that was pretty interesting.

Jason:
[15:55] Yeah and I in my mind I could imagine.
That it's easier for Amazon to enforce and Achieve certain service levels with these.
Individual with his business operators over the 1099s i e you know it's like you can require these businesses to buy these Amazon branded trucks into wear Amazon uniforms and things that are like,
less convenient and economically viable to impose on individual 1099 work.

Scot:
[16:32] Yeah I should have mentioned it but one of the things they're going to provide is the software so there,
I can give you all the software needed to run a business like this I think it's from an acquisition they did that they have kind of been using internally or maybe as part of flex and now they've there they're part of this whole deal is they will give you the software
which is kind of a clever way for them to have visibility into the SLA is right they can kind of see if your using their software in the cloud presumably they be able to see you know how you're doing against LA's
the required to use their software because they didn't want to be able to see them.

Jason:
[17:08] Yeah I mean I read through the whole program and to me it feels exactly like franchisee model like I mean they've they've completely template eyes the whole business they they give you all the processes and software like they literally have like.
The Dead
training program down in the hiring recommendations for these businesses and they have the whole economic model is it like they essentially say that like hey you know depending on how quickly you scale
you're going to make between you're going to net between 70k and 300K a year in this business.

[17:48] Anything else about the Amazon do it by the way what
I just found someone interesting the Amazon delivery was this big plans PR thing and they had a bunch of media to Seattle and they you know gave the media all the story under embargo and so
you know today was the big announced a and they got a bunch of press over that over all that and then it
it feels like I kind of got stepped on when they announce the pillpack acquisition you know which they did none of this pre-press planning for.

Scot:
[18:20] Yeah yes sometimes the best plans going to get
Crush by that the dip The Pride react to Walmart into that position was on its own timetable that they couldn't control and it just kind of unfortunately probably landed on the same day happen sometimes.

Jason:
[18:36] Another interesting thing that came out last week is
at age does this evaluation of all the top advertisers every year and a surprise,
appearance on the top 10 list was Amazon as the fourth largest Advertiser in the United States
so they're spending more on Advertising then folks like for GM and they're the retailer that spending a listen advertising so they're actually spending more and advertising than Walmart it.

Scot:
[19:10] Yep that's interesting it's funny because it's for you know for the longest time basil said they would never really do marketing cuz they prefer to put all that money into shipping fee and you know that that word of mouse with mouth was the best marketing but then once they came out.
With Kindle they had to really kind of start doing some marketing In and Out imagine if you looked up the bulk of that is going to be around Alexa.

Jason:
[19:34] Yeah no I think that's I think that's why Fair they develop a bunch of owned Brands and they've they've had the market to support those owned brands.
But I do think you know that and they've kind of had them float on this they are also investing a lot more in Performance Marketing for just a core retail business at the moment then they.
They have it in the recent past said so you know you leveraging Google products and things like that to drive more traffic to Amazon.

Scot:
[20:03] Another interesting Amazon news piece this is kind of more internal facing but I think listeners will find it
pretty fascinating it was a little bit of clickbait so that you know the article came out of Bloomberg and it it showed one of the the Kiva warehouse robots and it said you know
Amazon's robots are moving for the warehouse to headquarters which kind of you like what are they going to deliver pencils or what's going on
what's really happening is as we've reported on the show we had to Andrea lay on and she was telling us about some projects they had internally where an AI World very frequently negotiate with indoors and they call it this whole hands off the wheel initiative,
there's several layers so that there's there's vendor negotiations but then there's also you know on the first party side.

[20:52] Putting machines against humans to see who can piss pick the best products to put on Amazon and buy.

[21:00] And at the same time you also have the marketplace side of Amazon
so what's happening is it looks like they're squishing all this together now the guy that ran the third-party marketplaces moved over to a new project that's on an ounce Peter Pharisee so they wrapped up
the marketplace and the 1pt mused to be very despair teams you I would go to Amazon in
in meetings and introduce people across his team so it was funny and it looks like the Common Thread there is less peep
so more machines can imagine these categories because they effectively do a better job more machines doing negotiations
and less people and then this kind of integration of 1p and 3p
I think this is good because we found a lot of vendors get really confused and mixed messaging from Amazon where they'll go to one team in Amazon the go to the marketplace apparel team and say hey we want to do X Y and Z in those say you know oh no you have to do this that the other and then the one p team will get a whole different answer so I think this ultimately be good and you're the 3p team the three-piece cider Amazon
bigger than the one piece side so
I think it'll be great to have a lot of that DNA kind of mixed in there and you know there's a downside this Automation and
can be pretty frustrating to companies that are used to the old school you know having going to.

[22:23] Bendle and chicken someone's hand and showing them the products and those kinds of things this is
essentially you can stay home and chat robot and have the same outcome of the Amazon now so you know it'll be interesting to see how vendors net out on this change but it did
pretty interesting the automation you know what they at least according to Amazon's data has beat out people is as it comes to merchandising and negotiating with Thunders.

Jason:
[22:50] Yeah for sure who the things are interesting to me about that merger I do feel like there's a way when they were more siloed in which sellers could potentially take advantage of this I was so I do think they're brands that,
wanted to sell 3p on Amazon didn't want to be one piece hours because they wanted to control their own pricing like in in principle,
if you're going to be a three-piece seller on Amazon Amazon has the right to like also be a one piece seller but a lot of,
Brie and seemingly fell between the cracks there and we're able to be pure 3-piece hours without being bothered by the 1p guys and there's a lot of speculation that now that one p m 3 p r kind of merging that
like you know that Aunt Amazon going to be a lot more purposeful about who can be a 3p seller without without Amazon having the option to be a one piece hour.

[23:46] So it'll be interesting to see how that plays out,
and then that's the thing that I chuckle at with the hands off the wheel I think it's a super app metaphor if you're a very big seller on Amazon
you do have a a human contact and you have this personal relationship
and I think what's funny about that is it's exactly like the the safety driver in the autonomous vehicles like
you know it maybe makes you feel better that there's a guy sitting in the driver seat but he actually isn't touching the steering wheel and so you can have all the good conversations and take him to dinner and do other relationship building you want.
But at the end of the day it's the computer that's deciding you know what the the terms of your your trade relationship are with Amazon.

Scot:
[24:35] Summary of some of the Amazon highlights over the last couple of weeks
biggest news item is our very own Supreme Court in the United States got involved in e-commerce and I know you have a lot of interesting insights on this one so I'm anxious to hear your thoughts about what happened there.

Jason:
[24:57] So this is a case that the Supreme Court heard several months ago and they they ruled I guess this would be the last week now.
The actual case the Supreme Court ruled on is called South Dakota vs Wayfair Overstock and do egg and a lot of people sort of shorten it to South Dakota vs Wayfair.
And essentially South Dakota passed a law that said we're going to require sell sellers.
To collect sales tax when people in South Dakota buy goods from them even if the seller doesn't have.
A presence in South Dakota and that there's actually a precedent.
Based on a ruling the Supreme Court ruled on in 1992 that South Dakota can't do that right like there's this.
President called quill which was confusingly enough it was actually quill vs North Dakota.
That the Supreme Court ruled on a 1992 that essentially said.

[26:03] In order for a seller to be required to collect sales tax for a given State they had to have a physical presence in that state to establish Nexus and so a lot of.
Pure play online retailers.
Based on that rule like avoided having a presence in big populated states so that they didn't have to charge sales tax in those States.
And it actually determined where Amazon's corporate headquarters would be when Jeff Bezos was starting the company that.
President was already in place and so they they pick Seattle because it was a good techhub that didn't have a huge population and wouldn't be a huge customer base and avoided.
Having a presence in States like California that would be huge customer bases and in the early days of Amazon.
Amazon was super restricted with their employees they wouldn't let their employees you know do business travel to the states they wouldn't let the campus recruiters like go to the the job fairs in the college dates because they were there being super careful too.
Avoid establishing a physical presence so they could have avoided paying taxes.

[27:11] Into this this the Supreme Court in this ruling essentially reverses that quill precedents and so so so now it's going to be possible for states to pass a law that essentially require.
I'm all us out of state sellers to collect sales tax and remitted to the the states.

[27:34] And you know there's a couple of interesting things in that first of all.
You are a ton of the media you know I was writing about how what a big win for Mainstreet this was and you know how was a blow to Amazon and.
You know that the national retail Federation you know kind of claim though it was a victory for retailers and in tax fairness and all these things.
The reality is in my mind the biggest winner in this deal is Amazon and the reason I say that is because.
Amazon is already collecting tax Amazon gave up avoiding that Nexus a number of years ago.
They're collecting tax in every state that has attacks and the reason they do that is they wanted to put distribution centers everywhere and they wanted to put Prime now centers everywhere and they just found it.
Was better for them to collect the taxes then to have all these impediments on where they could have a physical presence.
So this actually makes Amazon more competitive with other online pure plays right so it it it actually makes Amazon more competitive with Overstock and Newegg and and like all these.
Visa vertical specialty retailers like a faucet that you know specialize in plumbing fixtures in our aren't collecting tax.
So it helps Amazon's 1p business be more competitive.

[28:52] That detect the sales tax that Amazon isn't collecting is from 3-piece hours who have the option to collect the tax or not and most don't.
And so this ruling is going to require all of Amazon's 3p sellers to collect tax which is actually going to make Amazon's 1p business more competitive with the 3p business so that's a win.
Also Amazon charges a 2.9% fee on all sales.
In order to calculate and collect tax for those 3p seller so this is a huge new service fee that Amazon is going to start collecting from all their Marketplace vendors so that's a.
A big win.
This ruling makes Amazon more competitive with everyone else and really doesn't hurt Amazon's competitiveness.
In any meaningful way.

[29:47] Which is which is interesting and I would argue a lot of the the the media and info Scott wrong when they when they first heard about this announcement.
Who's probably getting hurt by this is a lot of the small sellers right if you are a a a small business that's primarily selling via 3p on Amazon and eBay.
You know your your cost just went up and potentially.
There are about 12,000 tax jurisdictions in the US and so every one of those jurisdictions in theory could now pass a law that says you have to collect their tax and they can each have their own rules for the tax.
And So It Goes could be a huge burden to the sellers.

[30:32] Track and calculate these 12,000 different tax laws and so you're not allowed to have to cut the tax but you have to pay a bunch of money to collect the tax.
Properly and that is a potential big burden for the small sellers.
I would argue there's very few small brick-and-mortar retailers that aren't also trying to sell online and aren't also trying to ship out of state.
So you know when people talk about this benefiting Main Street it's only benefiting the dinosaurs on Main Street that haven't figured out how to launch a Shopify site yet right.
And so so it is going to be a potential burden on a new small businesses.
And what's going to be most interesting to watch now is that the South Dakota version of the tax law is a very mild version of the law.
It essentially says that all the different cities in South Dakota can't charge their own individual taxes that that dumb.
We're going to have a Statewide system that's easier for businesses to comply with.
And it'll also says that the state can't collect taxes retroactively so no one's going to be on the hook for their sales over the last 5 years but.

[31:44] Any new state could now pass out a more aggressive version of the law
it has more burdens for the the small business and that even tries to retroactively collect taxes for The Last 5 Years
and it's it's unclear based on the Supreme Court ruling weather
whether the states will be able to get away with the more aggressive version of this wall so that it's it's kind of going to the tech
e-commerce taxes into a little bit of chaos while this all plays out and you know I think.

[32:15] Everyone's hope which seems like a long shot is that what what could really simplify all this is it Congress sort of enacted a
a lot the clarified what what how State should treat the taxes and Congress could pass a national law that essentially say is all the states have to,
you know follow the same system in charge the same rate and there's lots of draft of these kind of laws there was one that was drafted a couple years ago called The Marketplace Fairness Act
and it could allow all the states to collect sales tax but dramatically simplify the process of collecting those taxes for all the the online Sellers and protect all the online Sellers from retroactive taxes and things like that so
like the right thing to do for our economy would be for Congress to pass a law but it you know it seems like
there's a lot of partisan stuff going on in Congress and you know doesn't seem like there their they're passing a heck of a lot of common sense legislation at the moment.

Scot:
[33:19] Another interesting win for Amazon is there's a fair number of people that don't use at ba because
Amazon just parked around an FBI and if you're one of these companies that's really you know of a carefully watching where your Nexus is you can't say to Amazon
you can't say two things you can't say I only want my product Cindy's FBA facilities you also can't say you know where is my product right now so I can make sure that I'm tracking where I kind of I could have Nexus or not so presumably this
get rid of that both objection and now you might as well just use that Paso another win for Amazon is FBA if we're going to go to a world pretty quickly here which seems like what you're predicting where every state is charging some form of tax.
The NFPA is another enough was going to get more users because it's going to be enough there are no negatives for for doing that around Nexus.
How do you say so if I may say I'ma an eBay or an Amazon Seller today what do I do do I need to start,
cutting taxes out there one should start that right now like what's the action item on.

Jason:
[34:30] Yeah so at the moment you're only on the hook for the state you have a physical Nexus and and South Dakota.
The each state has to pass an out-of-state tax collection law in order for them to then put this burden on on sellers
and there are a number of states that have laws going through their state legislature right now
and so you like your your immediate action is that you you do need to start you do not have a tax liability in South Dakota based on this ruling
but you can anticipate
didn't very short order all the states are desperate for money so of course they're all going to pass along some of the legislators are in a position to do it real fast summer going to be slow and and complicated
the burden is going to keep going up and almost you know certainly
the the way that most sellers are going to have to do this is you're going to have to pay a third party to calculate
and remit all these taxes on your behalf and so that's another big winner in this is
companies like taxjar and vertex and Olvera and those those companies that help businesses calculate and remit sale.

Scot:
[35:44] Yeah now,
physical stores the taxes get down to you know literally the municipality so you could be in you know Secaucus New Jersey and they have a different apparel tax there's a tax on shipping but then certain there's no food tax or something that you cross into another area
and the taxes are all different do you think this is going to get that complex or are you to the municipalities going to try to take there
local tax structure in Buckhannon National kind of for that City kind of.

Jason:
[36:16] So here is going to be the balancing act all the municipalities would have like to pass their own laws so Secaucus would definitely like to have their own tax collection law and have their there sales tax laws imposed on all out of
the jurisdiction Cellars the thing that's going to keep them all from doing that is that there's a
a clause in the the the.

[36:45] Though the prevailing tax laws that says
States cannot put an undue burden on cross-state Commerce.
And so the argument is going to be that it every municipality have their own set of laws and Secaucus has a tax holiday on this particular day and doesn't text food and all these different things
the bat is going to trigger the Commerce Clause and and put an undue burden right and so part of the reason that the Supreme Court said they ruled in favor of South Dakota is because the law is was very carefully written to try to minimize that
the the bird and right inside they don't date the it explicitly does not allow individual municipalities in South Dakota to have their own tax laws like they are there there's a Statewide
tax system for out-of-state Sellers and so it knows.
Supreme Court rule on any other than the South Dakota version so if Secaucus now pass is a really you know burdensome law and again Secaucus could also say and you owe is taxes for The Last 5 Years of sales.

[37:58] Then you know someone's going to be able to litigate that and say it's a violation of the Commerce Clause and that potentially could make it back to the Supreme Court and you you know,
the Supreme Court could choose to hear it or not and they could you know essentially say hey the South Dakota version is
we going to bed the more you know arduous Secaucus version is not legal and so you know every States going to have to balance how aggressive they want to be
you know with with how much we go Jeopardy they they they want to assume you know in case these things get where to get it.

Scot:
[38:36] Yes it feels like it's going to take like 5 to 10 years for this all the sort out and it's kind of a
kind of a boring Plumbing topic but I think it's important for listeners cuz a lot of articles I read we're super confusing and I think you did a good job of summarizing.

Jason:
[38:50] One last point that just was kind of sad I give you actually listen to the
the oral arguments in the case like the justices were asking really good questions how expensive is it for a small business to calculate their tax liability if this if we rule in favor of South Dakota
how you know how much is incremental cost is is that going to impose on Wayfair bright and.
It was really embarrassing,
how little tangible information the lawyers in both side of this case had and how e-commerce works and I I say that like.
If your lawyer like arguing a case before The Supreme Court that is like the Superbowl of
litigation right and you'd expect like the most prepared best teams and yet you know it it's felt like the
the level of preparation in knowledge about how digital Commerce work you know was was pretty pretty lacking in the justices openly expressed frustration that they couldn't get.
You know clear answers to who you know some some reasonable questions about this so it you know it's further further evidence that,
you know the economy and Technology are way way way ahead of the legal system.

Scot:
[40:08] Oh I nominate you to be a expert for the next to supreme court hearing on this.

Jason:
[40:13] Yeah I would make myself available that would be a pretty awesome gig.

Scot:
[40:19] Yeah and you get to wear a suit how fun is that.

Jason:
[40:21] I I have done some federal expert witness stuff in the you know I am willing to wear a suit for the the fees that you're able to charge as an expert witness.

Scot:
[40:31] Cool that that kind of wraps up the news section of the show and let's transition into some listener questions.

[40:44] Question question question question question.
Alright get the echo turned way up on that one our first question is pretty Technical and it comes from a friend of the show Scott Silverman this one goes back you mentioned this kind of
in a phrase recently sniffing the tires Scott wants to know what do you recommend is the best technique for sniffing tires.

Jason:
[41:15] Hey Scott I totally appreciate the question
sort of two-party answer if you are a casual Tire sniffer I think what you want to do is just you know get down on the ground get your nose is close to the tires as possible and you know really just sort of
in intake the the fumes but if you're going to be a serious professional Tire sniffer what you really want to do is
get the hydraulic jack and raise the car up to nose level because that actually
allows a lot more oxygen under the tires which which you know helps more molecules get in your nose and really get you the whole bouquet of the tire.

Scot:
[41:56] And of course it's important to take the vehicle for a spin before you do this you get that like nice fresh smell.

Jason:
[42:03] Yeah you do want the rubber warmed up absolutely great point.

Scot:
[42:06] Our second questions comes from and I'll do a blanket apology there's some last names in here that may be a little tricky but I'll do my best this is from Alex Velasquez and he asks should others try the Warby Parker school bus tour concept and who do you think
would benefit most from it I had no idea what this was so I figured this was a good question for you.

Jason:
[42:27] Yep so this is one of the early marketing tactics at Warby Parker did I think they actually did this before they open the formal store I'm so they I think they may be
were using their corporate headquarters is a showroom but essentially what they did is they bought an old school bus decked it out
and started driving to events and venues and things
and letting people try on their glasses and it was a super effective marketing vehicle it's sort of a mobile pop-up store if you will
and so in general I would say those kinds of things are a great tactic particularly for e-commerce business is what
you know you feel like you'd benefit from a physical presence so I got a pop-up store avoids a lot of the costs of
permanent rent you know which a lot of the times of the year the traffic in that that store is going to be low so you can do a pop-up just around Peak times and instead of it being fixed to one location the idea behind this bus is you could send the bus to a lot of different locations
so there you know what be purchased per ticket clever and they've done a bunch of versions of since the school bus
so they continue to use that tactic I do think it's a good customer acquisition and brand building tactic.

[43:45] The there's actually a retailer that's been doing it much longer LL Bean literally have a.
A bus built in the shape of their iconic rubber boot that they drive around and let people try on boots and kind of build their brand.
Do that and they send it to outdoor festivals and stuff where where people might be interested in the boots so I think it's a good tactic.
A lot of Brands could potentially benefit from it but the brands that would most benefit from it.
Is if there's a a physical a or experiential element to the kind of products you're selling,
so that it's not only are you building your brand awareness but you're also helping people you don't get that tactical experience so if you're selling.
You know food and and you going to give people a chance to try it or you're selling apparel that gives people a chance to try sizes or.
I feel the textiles are or you know things like that are particularly going to benefit from these kind of mobile pop-up store.

Scot:
[44:51] Cool and thanks for the question Alex.

Jason:
[44:59] So I think the next question is from vomit.
A gyro and thanks God for just claiming that were massacring names do customers like bundled products or do they like to create their own bundles what are different merchandising tactics used to sell collections of product.

Scot:
[45:19] Yeah this is this is a good one you know it it kind of depends so.
I like a system where the consumer has the you know a fair amount of power and convenience and they can choose to either buy a core
product and its Associated add-ons and you have any Commerce system that is smart enough to kind of recommend the right things you know so it's not kind of recommending
these things that are kind of random but they're frequently bought together. Which is a feature that you see on Amazon all the time
now one tactic where this comes up a lot is in the world of marketplaces where.
Frequently you'll be selling where you see this the most is in digital cameras this is
kind of case study of this so what you see is you go to Amazon and you search for you know a Canon D40 which is a common camera
and you know the tops quc is that core camera body SKU.

[46:18] But then what a lot of people do is they will create a new skew by creating unique bundle.
And I'll take a camera a memory card a set of lenses and a bag and a variety of things and I'll create a new skew a new Ace in in Amazon parlance and that is you can kind of a.
You should have separate from the competitors for that Coeur Camera.

[46:43] The be there for you know when consumer searches for Canon D40 if you've done this right you should have a pretty good shot at showing up higher level and then see
you can effectively have a price that is much just submitted Lee discounted for that bundle and you're effectively hiding
you know the discount in the margin by obfuscating it to the consumer making it harder for them to price compare so some things now
you know this whole truth holds true for other marketplaces like eBay and Walmart eye center now the downside of this is Marketplace in her wise to the store frequently kind of challenging these things and saying you know
does a bundle really make sense what are you doing here are you kind of ruining the customer experience.

[47:33] So I've seen that used in it as a merchandising tactic there on your own website to
I don't think I've seen as we have a child as we have this very clever skateboard a Cellar and they've come up with a couple private labels like their own wheels and things like that so when they they take a deck and skateboarding you have the deck which is just sold without wheels and and the the other pieces there and then they
they take some private label stuff or owned brands do use Jason's language and it does create this kind of unique bundle that then isn't available anywhere else,
and they can do a lot of relaxing things with pricing on that because they can't really change
do the map the price but when they put their wheels on there they can offer this bundle that that is never more competitive anything else out there because they have
got a known brand on the wheels and they have more margin and they can pass it on to the consumer so those are some of the things that come to mind for me Jason anything you want to add on bundling.

Jason:
[48:31] Yeah I would just say like the there are two similar but different things in my expenses,
in different circumstances consumers want both so so every
e-commerce platform uses a different vernacular but, binocular would be bundles versus kits right and so in this scenario a bundle
could be.

[48:56] A set of things that are recommended to go together right so shop the look you you one quick button and you add the blouse the pants the belt and shoes.
But all four things get separately added to your cart and then you could edit the cart you could get two pair of the the blouses if you wanted and you could delete the shoes if you already had two shoes for example so it's,
a shopping convenience to put related items together
you know in and apparel is a common version of that like in crafting it could be a kit or project I got all the.
All the items you need to make a sweater or something like that in food it could be by the recipe to get all the ingredients for a particular dish.
But you know of course the customer might already have salt so you you know the customer could take salt out of the cart after they.
They bought that bundle in a kids are often.
Hard coded things that have to go together so it's one skew it shows up as one line item in the car you can't edit it.
If any of the items in that cat are unavailable then the itin.
The kid is unavailable in the order we get back ordered and things like that and so there are certain types of products.
That lend themselves to kits and to your point.
If you're going to have a special price on the the multiple item configuration than you probably want that to be a kid because you wouldn't want customers to.

[50:25] Then delete three of the four items and still get a special price.
But in some cases you just want to make it easier for people to buy multiple things and have a higher overall cart and then there's.
A lot of nuances in the kits are they.
Hard-coated manual kits what you would often cause static it where you know the skews are permanently tied together are there Dynamic kits that are built by recommendation engines or things like that are there
customizable kids you know that have different options that customers can pick via VIA attribute type selections and
and so it is super complicated thing and it is one of the things that can differentiate some of the e-commerce platforms from the others is
their support for a broad range of these different options vary wildly
and then when you throw in the ability to offer promotions on top of these bundles or kits that can get super complicated and so that you know
if you know that that's a core part of your business that might drive you to select one one eCommerce platform versus another because it might have better support for the
that the particular model year use.

Scot:
[51:35] Is anyone using AI to solve this like.
Yeah I think I need Amazon's is kind of a group thing I'm sure there's gotta be like 10 AI vendors out there trying to solve this kind of Phoenix recommended product.

Jason:
[51:51] Yeah and I mean this man takes get tricky like I would argue that the
the Panic recommendation vendors that have been around for 12 years like they're rich relevance in a certain is like they're there heavily AI base solution so it's almost like.
Saying it AI recommendations versus not as kind of a difficult distinction to make the,
that most of the product recommendation product that I'm aware of the you know are going to be closer to you. The most common model is
they're going to recommend other products and you have to click each product separately to add it to the car
they may offer bundles which is one-click ordering right in in Amazon does bundle the recommendations the right so right below the main product information on the product detail page
there's always going to be up by these bring three things together which is you know it's the AI base recommendation engine is putting the three things that you most want together and you can choose to add one two or three of those things to your cart so that just that
S Mart Convenience that Amazon's done to try to get the aov up that's the company that's the best example of using AI to actually create
schitt's if you will is probably going to be Stitch fix right because they send one skew to your house which is a fixed with five items in it and they're primarily using AI to select which five items they send to your app.

Scot:
[53:18] Wrinkled her next question
comes from jeweled work and she a skinny leadership or managing through change tactics and then over on the Facebook group I asked for clarification on that if I gave her a couple choices there and she said
you're more at the corporate level so let's assume you're one of these Brands that's been around for a hundred years this is very much in the news right now where allottees activists are going into the established Brands and brand houses and shaking them up and you know really getting agitated they're not doing enough direct-to-consumer you seen folks like Campbell's down 30 40% due to all these changes happening and you know I heard your question is essentially
how did these companies become more Nimble you know you've had this guy a hundred year plus world where the consumer didn't change very much and now they're changing constantly.
What what do you recommend a brand do to get more nipple.

Jason:
[54:13] Yeah it's a great question Jill and the real answers if I had a perfect recommendation
I probably wouldn't be bothering to do this podcast cuz it would make my job so much easier that I'd be you know waiting on an island somewhere because it is a huge challenge in general you see digital native companies are much better at being agile and nimble
then big established Brands and it just so happens in my practice I mainly work with
big established Brands and they all struggle with being at a a speed disadvantage
TD small companies and the one exception is you know that the giant company Amazon is annoyingly.
Add jolyn and Innovative despite their their size in the fact that they're you know now 20 years old.
So two things to think about here the first is like a big question always comes up is.

[55:07] Ivory Tower Innovation versus Grassroots Innovation right so you know Ivory Tower would be,
let's set up an innovation lab right you know your target let's set up an innovation lab you know your Minneapolis wet set up at univation lab in
San Mateo California and let's hire a bunch of people whose only job is to be Innovative and let them come up with all the new ideas.
And if you're a store manager in Minnesota you know it's not your job to be Innovative right and so I having a dedicated focus on Innovation the hope his bees Innovation labs.
Can can be more efficient you know there was a huge Trend in retail towards these labs and.
Target Nordstrom Zappos Walmart you know all we're opening opening these stand-alone labs.

[55:56] While some retailers definitely still have these Labs I would argue the trend is a little bit against the stand-alone lab so we've seen a lot of the retailers including Target Nordstrom.
And a post move away from the dedicated Innovation lab model and so the alternative is.
Create the ability for Innovation to come from the the main line Grassroots employees right into the the Marquee example of this is not a retail for me it's it's a Doe B and they had this clever product called.

[56:29] Process called the Adobe Redbox and essentially any employee at Adobe that thinks they have a good idea for a new.
Product or process or or service at Adobe can apply for this thing called in Adobe red box and it's a Innovation kit.
And it's all the tools you need to sort of prototype your idea and get it to a level where you can present it.
288 sort of jury of Senior Management at the.
Add Adobe and so it you know it's pretty clever it has things like a debit card in it that you can use to buy you don't web hosting services and it has.
You know I'm feeling codes you can get to you know provide to some of your colleagues have them help you with certain things.
And said that the idea is to make it easy for anybody with a good idea anywhere across the the organization to pursue that idea.

[57:30] And so it the moment I see more retailers trying to Foster Innovation through.
Providing processes and tools to their main line employees than I do the Ivory Tower but I certainly seen both work and I've seen both fail.
The biggest advice I give to Legacy clients.
To succeed in Innovation is not so much where that Innovation sits in the organization it's how The Innovation is approached and here like I highly recommend.
Serta imitating the Amazon model right so you know Amazon famous we have this to Pizza teen model in the the premise behind that is.
Hey any project we do we're going to narrow the scope such that it can be performed by you know a team no larger than could be fed by two pizzas.
So that could be you no one four digit software developer or you know it might be six or seven people in your department.

[58:31] But the idea being.
The way to do Innovation is not to do some Grand pilot that has to integrate with 37 Legacy systems and has to get approval from 18 different departments and requires a team of 40.
And you know by the time you you get an experience to live you will spend so much money and effort that you know if if the experience isn't successful.
You know you you passed your company of Fortune and even if it is successful like the the business probably you know shifted from the time you started to the time you finish.
The most successful Innovations are when you can you know find gorilla ways to do things scale at and make the the.
Hiwot as independent and distinct from the rest of the organization as possible right and so to me the great example of that is.

[59:23] Amazon Prime now,
you know when they said like hey we want to deliver stuff in one hour they didn't say all right let's get a meeting together with the leaders of the Fulfillment center and figure out how we carve off some space in the Fulfillment center and figure it out we,
change all our software in the Fulfillment center to support this one hour delivery and do all these things they they got some guys that said hey we're going to buy our own you know even though we own all this stuff,
we're going to buy our own building for this pilot and we're going to write our own software and we're going to just keep things as simple and independent as possible get the experience out there in front of the customer as quickly as possible and learn from the customer,
which elements of our idea are valuable and value by the customer and which ones aren't then we're going to refine it from there and only after we've.
Proven The Innovation and unrefined it are we going to figure out how to integrate it into the rest of the Enterprise so I really like that sort of.
Independence and you know we highly encourage a lot of these big Legacy Brands to sort of adopt a more agile.
Business process so we talked about ad Joel a lot as a development technique technique but it really can be a a business process and you know sort of isolate these these projects as much as possible and make an independent initiative.

Scot:
[1:00:40] That's awesome so I'm up I come out at from a startup
bad guy perspective I'm on my 4th company I started and like you have worked with a lot of Brands and I think the step a lot of them get wrong is what I would call buying soda
I'll start doing something kind of innovative like selling director something and then the VP of sales will say woohoo oh hey wait a minute what are we doing I've gotten upset
Channel partner that's upset wrestling direct and then doll the panic in the unwind the whole thing
so before you go down some of the steps you recommended you know I think.

[1:01:17] The key is got to get complete buy-in from the whole management team that this is going to be something they're there once committed to a book that I I
now that kind of started this discussion is the innovator's Dilemma. This is kind of a must-read for people interest in this topic in this by Clayton Christensen I will put a link in the show notes and you know what does essentially does it talks about,
how do companies get in this position and why and then it has some cases of the very few companies that have gotten out of this position so it's really
important to get that buying from everybody because if everyone's not bought in you'll get this whole failure cycle of trying to do something really Innovative as a brand and then it gets squashed by people that really aren't bought in and then
you know there nothing too happens and companies that are large and older is
a lot of ideas get squished because what I call exception base management where you come up with this idea and then to what is start to happen to edge cases well you know
what if you know a you know what if this isn't profitable what if this and that the other and that.

[1:02:25] Becomes you just get kind of stuck in tar with that you have to have to get everyone bought into taking some risk that the company's also not used to Basil's has a really good letter on this stuff about it Amazon where they have
commit to disagree is kind of thing you know so so you know we disagree but let's try it and see what happens like why not try it.
Go try something and
to that and there's really good book Jason mention you're taking some of these ads all kind of Concepts out of software development putting them in your company one of my favorites is called Lean Startup sat is geared towards when you're starting a company but I think big companies can learn a lot there and it kind of educate you on the languages start upset you know
Facebook kind of famously has said go fast and break stuff and that's really kind of craving orientation towards not worrying about the exceptions and guessing
put something out there
and take a little risk and then see how customers react to it and then course-correct quickly so the answer to you know what is what you know maybe not and.

[1:03:30] We won't know until you try so you got to kind of get your culture oriented towards trying stuff rapidly,
iterating versus kind of a 18 month cycle of planning and hand-wringing and getting every little detail done and then putting something out to be agile yet to be able to put something out and fail
I go over and over again the case study there for Amazon that's classic is the fire phone you know they they put a phone out there there's a million reasons that would fail and it failed Jason I think they're the only people that have one
but if they didn't fail at that Fire Phone
they would have never done Echo because they really wanted to be in the platform World they realized the failure the phone that that was going to be at and then they went all in on Echo and.
That is part of the culture they have is it's okay to fail just going to do it quickly and inner eight and learn you can't just kind of like digging infinitely deep hole.

Jason:
[1:04:23] Yeah that's great advice.
Scot we have a few more a great listener questions but I actually think we are going to have to hold them for our next show because it has happened again we've used up the an hour of our listeners very valuable time.
And so if you enjoy the show we certainly would appreciate that that five star review on iTunes if you have anymore questions or follow-ups on these questions please do jump on her Facebook page and drop us a line or hit either of us up on Twitter because we will pick up the remainder of these questions and any new ones in the next show.

Scot:
[1:05:03] Thanks for joining server buddy.

Jason:
[1:05:05] Until next time happy commercing.

Jun 18, 2018

Chuck Davis is the CEO of Prodege (Swagbucks, MyPoints, and Shopathome), a leading rewards discovery site.  Chuck was the first President of E-Commerce for the Walt Disney Company, former CEO for ShopZilla, former CEO of Fandango, and is a former Shop.org board member.

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

Episode 135 of the Jason & Scot show was recorded on Tuesday, June 5th, 2018.

http://jasonandscot.com

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

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 135 being recorded on Tuesday June 5th 2018 I'm your host Jason retailgeek Goldberg and as always I'm here with your Tahoe Scott Wingo.

Scot & Chuck:
[0:40] Hey Jason in welcome back Jason Scott show listeners,
Jason will real fortunate to have with us this week would I consider to be one of the Statesman of digital and e-commerce truck Davis,
Chuck and I overlapped on the shop.org board for a little bit there and get to know each other and we've been trying to get him on the show for a while and finally all the moons and stars aligned and where,
excited to have Chuck on the show today welcome Chuck thank you I'm glad to be here thanks for having me.

Jason:
[1:09] Entirely our pleasure,
so usually won't have gas on I like to sort of memorize the the key digital places they've work so that I can you introduce your background of the audience but in your case that was impossible I couldn't remember all the cool places you had work.

Scot & Chuck:
[1:25] Yeah I don't know about that but I am you want me to jump in on that.

[1:32] Okay well I'm 22 years in digital following a publishing career so the 22 years of digital.
You know I think it's better to start off in the beginning I started at time Inc and I I was,
on the life monthly magazine that was briefly alive after the weekly went out of business and it was very important part of my career because,
weekly life Saturday evening post look all went out of business because they had one Revenue stream they really had two but one they gave away in that would circulation maybe they were getting $0.10 a week but they were getting a dollar a week and add Revenue,
and when television came those Publications went away cuz he Advertiser switch to TV so on my first job at life,
I learned there had to be two revenue streams they should be 50/50 and I went on a Sports Illustrated next.
And you'll remember that from the football phones and sneaker phones and helping with Michael Jordan videos who was the first big,
video purchase at the NBA at ever seen 400,000 I think on my first phone call they had to create a video to Vision the next day and then moved on a TV Guide,
in Radnor Pennsylvania which was the biggest magazine in the country at the time it was 14 million circulation,
and while I was there Netscape went public and all of a sudden that man it was opening day for a new industry called the internet.

[3:03] And other than AOL CompuServe in Prodigy there were no employees in this new industry so as soon as there was a browser I I had five.
Offers in the internet within 90 days of.
Netscape going public and I called 1 800 Gateway in ordered my first computer,
I mean things were moving very fast then and and I think the logic was will Chuck and get eyeballs to a publication that no one really needs maybe he can get eyeballs to my website.
So there were a bunch of startups in Northern Cal and I landed a Disney in Southern Cal to start their e-commerce and that word e-commerce had not been invented yet.
So a Michael Ovitz was President he had been there 11.
I was only there is present for 11 months and he says Chuck who knows if this internet thing as a fat or not but if it's a fad will find you another job of the Walt Disney Company,
so I hopped on a plane went back to Radnor Pennsylvania told my wife while we could do the start up north or we could go to Southern Cal and we could.
Get a job at Disney and if the internet's a fad will have another you know will still stay they'll be something else there.
So that's why I started my internet 22 years ago and my first job and.
Launch Disney Store we lunch Disney Travel ESPN came into the fold 6 months after I got there so I launched an ESPN store in NASCAR Store.

[4:35] Then infoseek I bought by Disney and we had all these go product I got to eat product groups and my concept was learn from a big company.
And then.

[4:46] I should do that smaller company thing but when I jump off I should know more about technology so 40 years after Disney I went to bizrate which became Shopzilla.
And that's where you know me from Scott because I was on the shop.org board there and that was an interesting time because the industry was building up from the o.

[5:10] Oak rash and that took a few years to build up and all of our companies of the board members were suffering at the same time.
At the same time the industry was including shop.org and which was a not-for-profit that went significantly negative at that time but.
What we found with bizrate after a series of cuts.
Are their business started hockey sticking and it became a comparison shopping site and did really well in the ew Scripps company bought that in 05.

[5:44] For over 500 million dollars so that we were working with all the retailers we had research that helped guide the shopping decisions for the consumer to know who to trust to buy online cuz at the beginning of the internet.
No one trusted.
Anyone online and Dad the credit card wasn't deemed to be safe I'm not even sure if purchases online recovered at the beginning of the internet anyway after Scripps bought Shopzilla.

[6:14] I went to Fandango which was in the same building and West LA Fandango have 35 employees it was.
It was kind of paused wasn't clear where it was going to go and quickly we scale back company and.
Comcast bought it and I stayed on and.
For another 40 years or so and that all worked out really well that was backed by tcv in Palo Alto.
And I became a venture partner with tcv and I eventually found the founder Joseph Garlits of Swagbucks.
And the parent company is called Protege with Addy Protege and.
And Joseph and I became good friends and I became his chair Herman and.
He said he wanted me to be the CEO and you never raised outside money and it was already a big company without money and I said you you don't have to have outside money you've already gone through the hardest part.
And he wanted to do it and so tcv came in on that deal to that's our only investor that is the company of that today that's what we're going to talk about,
so I presume we're going to talk about it a little so Protege is a reward consumer rewards platform.
Where consumers have learned about 250 million dollars on the Swagbucks site and almost 550 million on the three protists.

[7:45] Dating sites in free gift cards and we do this on our site from consumer shopping.
Where I'll learn a commission and I'll share that commission with the consumer who will get points and redeem those points from free gift cards from basically all the Merchants Online plus PayPal.

[8:08] Also from filling out surveys and sharing their opinion and from watching short-form videos that have ads on them.
So those are three main businesses and we have 3 brand Swagbucks.
Shop at home in my points the last two Brands we acquired over the last that's a couple years is that what you wanted to hear.
Perfect yet I wanted to just take a little bit in the past just cuz I'm curious I'm I'm I'm a huge user of Fandango.
Tulsa Lil Bit about that stint in. I love the little ad with the paper bag people just that was that created during your tenure it was but let me tell you the best story for Fandango so I started there as chairman.
And I was chairman of Shopzilla and they were same building as take the elevator up and down,
I was facing myself out of one company and phasing myself into the next company and about 1/2 year later I became the CEO and on my,
first day is a CEO again we only have 35 employees at Fandango but a couple guys fat me down.
Are they came to my office to Tech Guys and they go Chuck they're only like 5 of us who write code and we just and we know you have lots of things you want to test.
But we also know that we need you to know that we're also here part-time really because we're working on a secret project with Apple.
And I go well I don't understand am I paying For You full time but I'm getting you half time and they go that is correct and I go on that quite sure.

[9:43] This is a good idea is it a good ideas it's a good project you're working on does Fandango benefit from this they go what we're not quite sure and.

[9:53] And I said was it a bad project cuz I'll get our lawyer and I'll get you out of this and they go well we're not quite sure about that either now pause that thought for six months so that was July of 06 January of 07.
My Blackberry is is vibrating so much.
I figured someone was calling me and there was no one on the phone it was I was getting so many bbm's remember that that was a text message before we had text and and.
They were saying Chuck turn on.

[10:27] Turn on CNBC Steve Jobs is presenting at macworld he's showing this new product called an iPhone and he's buying movie tickets on Fandango.
Tell my team built the first app for the first iPhone and a CEO I didn't even know it was coming that's how secretive apple apple is and that did help Propel Fandango new excited we're all using very much.

[10:53] Brickell.

[10:54] Is it also in your background you did a stint kind of with TCB which stands for tech technology crossover Ventures they're one of the story to VC firms out there in the Bay Area and I know that they are involved in your current company,
are you still active with those guys so what's that relationship like.
PCV is a great company and has great funds and I've known them for a long time I was fortunate enough to Jay Hogue found me he was on the board of Fandango and brought me in,
to be his partner on that.
And then that Pat a happy outcome and and then afterwards he asked if I would be a venture partner with tcv that helps sit in sourcing deals and coaching current Founders Inn,
and just helping in the industry it did Girardi are all around and having someone on the inside is in a bad thing to do having a great.
Growth Equity company like tcv has been fabulous for me,
we brought them into Protege and they are the only investor in this company so I'm thrilled Jay Hogue and and.
Maiorano board were thrilled to have them both and it's been a great relationship both ways.
Well Jason I know is chomping at the bit to talk loyalty so I'll turn it over to him on that side.

Jason:
[12:20] Scot is fascinating and.

[12:26] But you just got matching loyalty but I'm not sure why I think of Swagbucks first and foremost as a loyalty program right like you're you're really.

[12:35] A traffic generation program for for a retail site right like you I would partner with you.
Predominantly to get more new Shoppers to my site that that are already cut in the Swagbucks a ecosystem do I do I have that right.

Scot & Chuck:
[12:52] That is right and that's not dissimilar from what you know from my days at bizrate Shopzilla that there's a lot of lead generation that that comes from our shopping channel we.
Transacted or LED two transactions of over 500 million dollars last year in our shop Channel.

Jason:
[13:16] Wow that's that's awesome and when I think about that like traffic jam versus loyalty like you know most people in they say loyalty they think of this traditional.
Sir points for purchase program and in the hope is.
You know if I get a bunch of points with Best Buy that that's going to let you know Anchorage people to want to use those points at Best Buy so that you know Best Buy will keep keep that customer loyal and it.

[13:41] Like there's a lot of talk in the industry like these days there's a lot of fatigue with those kind of programs because.
Consumers have so many are members of so many of these different programs that that none of them necessarily Drive loyalty but in your case.
They're those customers are building value that they can use anywhere they want right so that it doesn't have that same fatigue Dynamic that.
A Retailer's branded Welty program might have.

Scot & Chuck:
[14:09] One of the highlights of our whole platform is we have a horizontal platform versus a vertical so not only can you shop.
Are any of the e-commerce sites out there but you can fill out surveys and watch videos and earn points from that.
And redeem those points for shopping at your favorite retailers too so I think you have to look at it like an ecosystem.
That everyone put something in a wreath,
Taylor gets listed here they wait to see which customers come points are earned those points are usually redeemed to go back to that same retail or sometimes I'll go to other retailers.
In the end everyone's happy cuz everyone's getting a good mix of incremental orders.

Jason:
[14:59] That that makes total sense and I I feel like even when we were looking at single retailer Affinity programs.

[15:06] Like one of the characteristics of the best ones is they always.

[15:10] Rewarded orange insanitized behaviors in addition to shopping so you might get you no points for buying but you might also get points for you know being a loyal.

[15:20] Customer and wearing their clothes out in public and sharing them on Instagram or introducing new customers to the brand or things like that ends in so it feels like Swagbucks has many of those same,
same characteristics and I'm assuming behind-the-scenes that that means like to other constituencies you have RR.

[15:39] Clients that want to do market research and are willing to pay.

[15:42] To get your your user base to answer those surveys and and clients that want to find eyeballs for their advertisements and are willing to pay to have have your your users watch those videos is that is that right I do swear to have.

[15:55] Three can sit you and seizes its customers the retailers the the the researchers in the advertisers.

Scot & Chuck:
[16:03] We have at least three we we.

[16:07] Transactive it on 25 million surveys last year and we had six billion video views so those areas are very large also but we also have,
just your run-of-the-mill everyday search powered by Yahoo on our site.
So when you do a search result every end sample you got a reward for that also we also have games on our site on channel in our play area.

[16:36] So yeah there are many ways to earn what I think separates us from other sites that might only work on shopping is where a fun place to go.
You you're going to be surprised with something new everyday.
And we take a lot of pride in that we want to be fun we want to be rewarding we wanted to be a place you want to go and you want to be rewarded for your time.
Your engagement is worth something and we want to make sure you get rewarded for it.

Jason:
[17:06] That that makes perfect sense it now I think I understand hopefully the listeners understand the ecosystem you know I'm always curious to ask all the entrepreneurs on the show is how do you get.
What is your customer acquisition strategy how do you get customers into that echo system for the first time.

Scot & Chuck:
[17:26] And one of the unique things we do is we've got a referral program or a member can introduce another member.
And we will give the introducer 10% of the points from their friend for life.

[17:43] So if I introduce you and you start playing and then shopping and filling out surveys and watching videos and you earn points.
The company is going to give me 10% on top of what you earned as a reward for life.
For that introduction I made so there's almost a buddy system built in,
where I'm going to keep track of you and let you know of new areas that I liked on the site and vice-versa you're going to close that loop with me and tell me tell me how much fun you had and how much you learned in the past month.

[18:17] So that's one way we bring people in another really Innovative way.

[18:22] That is fairly new is we launched a trivia app called swag IQ and this is.
This was created I'd say in March April and we get.
Tens of thousands of people coming on every day 8 p.m. eastern Time 5 p.m. Pacific and we have a 10 question game and what's unique about Swagbucks.
Is we have our own currency is called SB and one point equals one penny it's $0.01.
So we can give points out or sbe's out every time you got a question correct on our 10-question nightly trivia game.
You don't have to just be the grand prize winner to win $2,500 or whatever that days for word is you're getting rewards all along the way and that has a strong following that.
Introduces people to our currency who then come to the site to shop.
Fill out surveys and share their opinions watch videos and search through Yahoo so it's all related so yeah we've got interesting lead-gen.
Opportunities and an execution across our platform.
Brickell and this is interesting to on the last episode that Jason I had we are going to the Mary Meeker deck and she had a section about China and you're a big thing in China right now is this intersection of kind of shopping and entertainment it sounds like you guys are.

[19:58] We're kind of bringing some of that to the US any other interesting kind of,
bottles you seen at that intersection especially on the how do you how do you bring entertainment into the e-commerce and shopping piece.
You know you brought up that's by the other the other question ago and we did a whole swag IQ episode last week.
That had to do with that spy that Best Buy had an electronic circular.
On our site of different promotions going on in their in their store,
and we had an entire game to tie in Best Buy two to the survey rewarding our customers for,
for looking at the circular and getting familiar with the different specials going on in the store so there's many new innovative ways to cross-promote e-commerce,
to cross-promote customer acquisition and to be engaged in a fun way.
It's interesting at a theoretical level because you know we're as consumers were giving our quote-unquote R-value away for free till I use social media companies and you guys are kind of.
Actually paying for it which is you know which is interesting because you you're obviously seeing you know the the government come in and got,
a look at what's happening there and in a lot of consumers are upset they didn't realize what they're giving away and you know how much how much is kind of going along with that data where is you guys are making a much more clear kind of value proposition I think.

[21:36] Well we like to think so too but the real.
The real rubber meets the road moment is when we have a live screen in our lobby of our office here in El Segundo which is by.
LAX to the Los Angeles airport and our lives screen shows.

[21:56] Depiction of the United States and shows who's redeeming a card in which city at that moment for which retailer and how much money it is.
Do we have done something like this at Fandango or people are buying movie tickets but what this does is it shows the total number of cards card value it's been redeemed since Inception.
And when I came in this morning we were at 541 million dollars of cards that have been redeemed,
and just watching that grow everyday is a heck of a lot more fun than seeing the billboard in Times Square showing how many people have died of cancer or in the more current way. What the national debt is per person in the US,
this is fun people like earning rewards and the rewards just power the whole system of e-commerce,
cool it was switch gears a little bit when we talk to retailers a lot of them have kind of had their quote on quote mobile moment which means more than half the traffic's kind of coming from mobile and Buy Mobile I mean smartphones imagine with an interactive platform like yours you you kind of crossed over that,
how many books are in writing to you guys to the extent you can disclose things through mobile vs. desktop and any other interesting mobiletrans you guys are seen.

[23:15] You know we've got very different channels on our sites as some work better on mobile than a mother's friend since the video channel called watch.
Watching videos remotely like that or odor or in a mobile way is very good but a lot of people like that stop to so-so for surveys or answer channel does very well on mobile.

[23:43] People get to see me,
get a bigger picture online on the desktop so it's the same thing with e-commerce some things can be transacted quickly on mobile and others are better on desktop so I can't give you numbers but I can tell you that.
Many fat most consumers migrate back and forth and were there in all areas.

[24:07] The swag IQ game is is it mobile.
Is basically a mobile game and that allows me to play anywhere I couldn't play last night we had two games last night I played the first game and made it to the 8th question before I got tripped up.
I think it was a nice I got ripped out that was the furthest I'd ever gotten and we had a second Flash game 45 minutes later and I.
I want to make sure I didn't have a car accidents I had that running in the car on the way home but I did not play it to dangerous but I'm at least able to hear it and hear the question.

Jason:
[24:44] Yeah I almost want to suggest that you use the GPS to disable the the the trivia game win when the phone is moving it auto speeds.

Scot & Chuck:
[24:56] You just log off I do just log off so I can focus on the road in California that's an important thing.

Jason:
[25:03] Yeah for sure and are you finding like so I like a lot of.

[25:07] That the activities you have are sort of endemically mobilelite what is you mentioned are you finding that that's primarily the.
The platform that new customers are coming into on like the majority of the new customer acquisition on the mobile platform is that growing faster for you than the the desktop.

Scot & Chuck:
[25:28] Now that's a good question and you could steer what users you get if your sophisticated in your in your customer acquisition efforts you can buy for Kate,
your mobile customer acquisition efforts and give them a mobile experience and your desktop,
customer acquisition efforts and give them a desktop experience and the N acknowledge that there's going to be migration across the two,
but the primary way that someone comes in it's probably a good predictor and the economics as you know are different from Mobile in four.
stop so I can just tell you that we play in both and we mark it to both and we get organic from both.
And I think it's important to keep track of.

[26:16] And obviously the mobile metrics for this industry let alone my company have are getting better all the time the screen is definitely smaller.
So so it's it sometimes harder to get the message for a partner so that's part of the.
Constructive tension that is there between what the consumer wants and what the partner wants,
because they might want for Real Estate so all of that is a constructive tension and we make sure we have great products and both.

Jason:
[26:54] Yeah and that gives like a common challenge that the guests are seeing is you know.

[27:01] Increasing percentage of their other user bases are are becoming predominantly mobile.

[27:07] Which generally good thing you know people certainly happy happy to see that but.

[27:13] It it does feel like in most cases it's slightly harder to monetize that mobile traffic so for eCommerce sites like the conversion rate in the HOV from mobile devices tends to be lower than desktop and as you mentioned in that in the advertising platforms there's just less.

[27:28] Less pixels that can be ads and so you know it's time for us to monetize I think Mary Meeker in her deck even highlights that like.

[27:37] The the one kind of advertising that sort of wagging consumer.

[27:43] Eyeballs is mobile that there's sort of a gap between you know how many consumers are moving to Mobile and how many advertisers are moving a mobile site after I got the challenge we all have two faces.
More bar users becoming more mobile and it being slightly harder to monetize those mobile users.

Scot & Chuck:
[27:59] Yeah it might be harder to monetize but I'm just speaking as a general industry trend,
and but the retention or the time spent,
on mobile is probably more so if you go back to the metric from early days in the internet of pageviews so I know is somebody irrelevant now that would be Alien video but time spent.

[28:23] Could be more on mobile so if you're making less.
In your example of advertising per page view you're getting many more page views.

[28:34] On mobile because the customer likes the likes operating that way right it's their favorite way so.
So I think in total.

[28:46] The companies can make more money on mobile just for more usage even though they're making less per,
moment were / transactor / / screen.
Or Percy p.m. from something that is on a smaller pixelization.

Jason:
[29:08] Yeah I know that's a that's a great point because you know I think the worldwide Trend there's already more mobile more minutes being.
More digital minutes are on mobile devices than on desktop devices and of course that's only going to grow because you got that mobile screen with you.

[29:25] 24 hours a day and all those other screens are with you can serve we left so I that I got I think that's a great point I want to change.

[29:33] Slightly to the topic of personalization because it strikes me,
you guys get a very detailed view of your users over time so you see a lot of their shopping behavior and what their individual purchases are but you also see a lot of these other consumer Behavior you know when they're when they're using your games when they're watching your videos when they're taking your surveys all those sorts of things,
that seems like a super valuable source of consumer Insight do you use that too.
Change to the customer experience at all I might like will the the offers that I see when I come to your site be personalized based on my past Behavior or is that something you're thinking about.

Scot & Chuck:
[30:13] Certainly we know what people like and don't like,
and where they tend to spend more time and there are many ways where we use that information to give a better experience to the consumer but we've got a long way to go.
We've got a long way to go and most of our customers.
I like bouncing around and and engaging in different channels on our on our site so.
So that makes it in the increasing challenge because should I be showing you more sites to shop on that I think you would like or.
Have I noticed you fill out a survey 2 days a week and I want to show you we've got.
Some surveys I might be right up your alley based on the consumer products you've you've answered before so there's a real estate play.
As there always has been and how much should be personalized horses how much is standard or that day's daily promo.
That's an inherent tension that I think is healthy within an organization you might have some partner who needs.
Need something,
blast it out to as many people as possible in a day and then the question is do you show that to someone in it and have it override personalization and many times it does so,
I don't want you to think that the whole world is fully personalized yet there's a lot of data we could help.

[31:47] Give it a better experience but it hasn't taken fully over where where everything gets down to that level,
Brickell describes what you feel this ecosystem and it's kind of has elements of a Marketplace as well and we kind of started Market places with traditional Market,
places like the eBay marketplace now we have coyotes hybrids with Amazon which is retailer with a third-party Marketplace and then even you can Skype I think of uber and Airbnb is a Marketplace when I talk to people,
adult marketplaces one of the interesting challenges is it's almost like buying your building 2,
two businesses simultaneously and getting that right on the supply side of the demand side can be tricky is that been a challenge for you guys how do you guys think you think about yourself as a Marketplace.
Well certainly I've I've been in Marketplace environments before cuz bizrate Shopzilla was a Marketplace and.
And we have elements of that heater to where we do need to make sure demand and Supply can be evenly met as much as possible but.
I will tell you this I've enjoyed being in businesses that don't have warehouses.
I got nothing against warehouses I work with lots of companies that have them but the marketplace business,
helps me focus on what I think we're good with and what we're good with his matching up the right consumer with the right products to be shopping for or or seeing on our site.

[33:28] And therefore I don't have to worry as much about the distribution or the logistics of a warehouse nothing against that it's just,
to your point a Marketplace still is very different it's getting the right traffic to the right place to meet the right demand.

[33:47] What's what's the most surprising thing you guys have experienced as you maybe a product you would have never thought would be popular or any any interesting consumer insights you can share.

[34:00] Well there a lot of deals that come on that do really well we have charity deals at do well or you could sponsor a different.
Different things there we saw a lot of razors.
Write Dollar Shave has been a nice partner of hours and and we're happy to see that that's always a lively one I think the the one of the pleasant surprises has been.
The Innovation to keep coming one thing I've learned is you can't be static in any business for long.
You know we're in jog here businesses so they change so quickly so if someone on my team as a great idea.
Will often let them try it.

[34:49] So that's how we launched swag IQ 3 months ago someone wanted to do trivia game we have our own spin on it we have our hose to come in in the afternoon now we're getting in the theme.
Games we had a baseball game a couple nights ago for the first day of the NBA playoffs NBA Finals we had an NBA Finals trivia game which was pretty interesting and and.
We will just keep growing we will keep innovating we will keep coming up with new areas are consumers tell us what they want to see they posted on Facebook they tell us directly.

[35:28] The employees here,
tell me what they want we use an outside firm to to capture all of the employee ideas and we review the Mineral Company meetings each quarter and I'd say close to half of them we end up unimplemented.
So and if we don't get enough.
We wonder why everyone has been submitted one per quarter cuz there's always things that could be better and having that philosophy I think is very important and having the openness to just keep trying keep.
Keep tinkering keep launching new things while scaling and sticking to your mission and making sure you're true to it.

Jason:
[36:09] Very cool.

[36:11] You know Chuck one of the things we always want to make sure we take advantage of when we have someone that that has a deep digital experience like yourself is kind of get your view of where you think it's all going like,
do you do you have a clear idea what you think the future of e-commerce is or what what you know some of the big big trends.

[36:31] To think about now are for the next 3 to 5 years.

Scot & Chuck:
[36:35] I think it's hard I think it's hard to really 10 it because it changes so often like I never knew scooters were going to be so big and in the last month I've learned that.

[36:46] Bird the chest when just raise the rent,
had a billion dollar valuation its 13th month and and things like that that are just out on the sidewalks of Santa Monica had no idea that these businesses got so big,
so they're going to be a lot of new things that come up that none of us have ever thought of and I would say.

[37:13] I backed the question up a different way if you were 22 and getting out of college today I would recommend if you were my kid you make sure you get into something.
Along this digital Revolution this is a time where.
Brick-and-mortar has been laid but we have no idea how tall this building is going to be or how wide it's going to be or where it's going and you want to be there to be in this industry to live it breathe it.
And have a great journey cuz it is one fun way to go and it wasn't always this way in Prior Generations the grew up in.
Went to factories in and lived in the world wasn't changing as quickly as it is today.

Jason:
[38:00] Chuck that is terrific advice and that's going to be a great place to leave it for this week because once again we've used up all our a lot of time but if folks have questions for for chukar want to learn more about Swagbucks,
will will make sure we include that the company information in the show notes and will continue dialogue about the show on her Facebook page so you're welcome to go there if you have questions and as always if you enjoyed this episode we sure would appreciate that,
five star review on iTunes.

Scot & Chuck:
[38:29] Chuck thanks for joining us if people are are you a Twitter or LinkedIn her or is there a certain way if you have business. You put them out there I think it's probably the best way to find me.
Do you want to do that Chuck Davis protege.
P r o d e g really really appreciate you taking time out of your busy day to share your thoughts with us and hope you have a great day.

[38:57] Thank you guys thank Scott and Jason.

Jason:
[38:59] Until next time happy commercing.

Jun 6, 2018

Episode 134 is a recap of Mary Meekers "Internet Trends 2018" report, and the weeks news.

Industry News

Mary Meeker, State of the Internet 2018

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

Episode 134 of the Jason & Scot show was recorded on Monday, June 4th 2018.

http://jasonandscot.com

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

Transcript

Jason: 
[0:25] Welcome to the Jason and Scott show this is episode 134 being recorded on Monday June 4th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.

Scot: 
[0:39] Hey Jason um welcome back Jason Scott show listeners Jason's been kind of a busy kickoff to Summer here and we talk tonight this week we would cover some e-commerce news.

[0:56] Last time we talked about news there was the hot take on Adobe in Magento before we dig into that though and even more important question give me your spoiler-free review of Star Wars a solo story.

Jason: 
[1:11] Yeah well you know I took my wife to to the movie for our 5th wedding anniversary cuz I'm a very romantic guy.
And we really liked it I I feel like I owe the new Star Wars movies I've really enjoyed this or the new stories so and Rotel more than a rogue one more than.

[1:34] I I may be in the main trilogy.

Scot: 
[1:37] Awesome what is 5th year anniversary I always say it's paper to my wife to so I can avoid it.

Jason: 
[1:43] But yeah I I pretend everything is paper or dessert or cubic zirconia which apparently is not one of the anniversaries either.

Scot: 
[1:50] 10 tens another good one. They're on their give her some aluminum foil.

Jason: 
[1:55] When I pretend I'm taking her to Disney World for the the Star Wars Hotel.

Scot: 
[2:00] Nice.

Jason: 
[2:01] I'm just kidding we have to go probably sooner than 10.

Scot: 
[2:03] 10 m e t i n.

Jason: 
[2:05] Tell Tim I got it yes I like sorry I thought we were already planning my tent and a.

Scot: 
[2:10] Paper paper in Tempe.

Jason: 
[2:11] The odds of her being able to put up with me for 5 more years aren't you no not that impressive.

Scot: 
[2:16] I don't know the how about and then.

Jason: 
[2:20] Her or you for that matter.

Scot: 
[2:22] Yeah it's been a long 3 years her the trip reports and you covered a really cool conference around grocery tote us about.

[2:36] What all is going on with the exciting grocery folks.

Jason: 
[2:38] So Royal Bank of Canada has as this event every year focused on all that investors that are falling that that category so I got to go do a keynote on how did you disrupting.
Digital is disrupting grocery so that was a fun talk and they they pretended to laugh at my jokes which I always appreciate.
And there are a ton of CEOs there so I got to sit in a briefing with the CEO of Kellogg and he had some pretty.

[3:12] Pithy of comments that I think at some Traction in my Twitter feed he was kind of joking about how how these um.

[3:22] Startups are awesome and they all go to a hundred million dollars and then pray to God to be acquired by someone like dog craft.

[3:32] And the MPD did we cover their conference last year did pretty cool recap on the evolution of the grocery so there's a.

[3:42] You know obviously groceries a big piece of consumer spending and getting jujuy disrupted by digital right now so lot of people are trying to figure out what the what the sort of ramifications of all that will be in place marpat.

Scot: 
[3:56] Pulling in your talk to you the whole curbside versus delivery and and all that.

Jason: 
[4:02] So you know what I actually was a little higher level I was talking about some of the.
The main ways in which consumers purchase decision patterns are changing over all and it changed and other categories and how those apply to grocery so.
I didn't get the Deep dive into the tactics of grocery pickup versus home delivery for these guys that'll maybe next year stock but the.
Did talk a lot about her.
People need more information to make purchase decisions and social proof in absolute value and transparency are becoming a much bigger deal and you know what retailers are doing that well and what retailer still has some work to do there.

[4:45] And you know this sort of big big trend of Brands and retailers colliding and all the all the the.
Retail are starting to look more like brands of the you know snap up all these products and acquire meal kits and watch all these organic,
and I mean organic is in in home in in house new products that they did they're launching and that you know how all the brands are trying to figure out how to go direct to consumer.

Scot: 
[5:10] Brickell so let's jump into the news first of all just travel outline tonight without would cover,
sometimes we put kind of what we call other news is kind of tidbits at the end and it always gets bumped so we thought we'd kind of reverse that so you get the delicious Tibbets first and then we're going to talk about Apple's conference and then what are the big events that Jason I both being beta Geeks get excited about is Mary Meeker had her 2018 deck out so we're going to wrap up the show and go over the Meeker deck,
so that,
being said what would jump into Walmart they had a shareholder meeting that was just one of those things that they they hold and it's not quite as big as Warren Buffett,
pretty somewhere where thousands and thousands people go in and hear Walmart's annual report did you see any interesting news out of that.

Jason: 
[6:01] Yeah the other number to thinks it is that annual event that Walmart ahold usually a week or two after their their earnings.
I report and also usually right after a board meeting and I'm heading may not have as many shareholders come to the meeting as one that's for Berkshire Hathaway but the other thing that Walmart does is they bring,
thousands of Associates from all of all their various businesses all over the world and so the the sports arena where they hold the event is.

[6:34] Way more friendly they usually get some dick music acts and an interesting and see.
And you know they often have launched projects or talked about you know there their focuses and initiatives.

[6:53] For the year so it's a good if you're Walmart follower it's a good thing to attend it's kind of a pain in the neck because it.
Basically puts the small town of Bentonville in in Arkansas at capacity so I give you don't plan well in advance.
You're likely staying at a hotel like pretty far away like maybe down in the college or something and.
Hard. You don't get in a restaurant and all those sorts of things so I would I was actually pleased to follow this year's shareholder meeting from afar rather than attend in person as well as I have done none number times in the past.

Scot: 
[7:31] Call seems like the big thing that blew up is this jet black tell us more about that.

Jason: 
[7:37] So the rumors of this is are coming out a couple weeks before the shareholders meeting but they officially announced this new service.
At the shareholders meeting called jet black and one of our glory is Lieutenant Jennifer Fleiss came out to.

[7:54] To introduce that folks might recognize Jennifer.
She runs the the I keep going store 9 and its taurate.
The incubation lab for Walmart but she also is one of the original founders of Rent the Runway so has a lot of.
Interesting bespoke apparel expertise.
And jet black is a new concierge service that Walmart is piloting at the moment just in Manhattan and just for people that live in particular types of dwelling.
So you have to live in a condo or an apartment building with a doorman.
So the date they can use the Fulfillment methods that they have in mind and essentially what they're doing is there they're providing a.
Personal shopper for everyone that's in this program you pay a monthly fee.
I think they're experimenting with a couple different price points on the monthly fee it might be like 50 or $100 a month at the moment.

[9:00] And essentially you can call or even send a SMS message and say hey I need a new outfit to wear for this party or I need a birthday present for a 4 year old girl.
Or I need a very specific thing,
and your your personal shopper will track all your preferences and past purchases and you don't either get the specific thing you asked for or.
Or make a smart recommendation based on what what information you give in a mini cases Bill do same-day delivery so they'll,
like you you can simply send a text message and have something show up at your door man when you come home from work for your building in New York so it's a very.
High-touch data-driven model they're saying that they have some AI chatbots as part of the system but there's also a lot of human interaction and intervention.
And it's a it's a huge.

[10:01] Push for Walmart to try to learn how to capture these more affluent customers.
They're really the only part of the US market you know that Walmart hasn't captured yet so,
in Walmart owns a big swath of of the u.s. send you know the one the one demographic the date that they don't do particularly well in is.
These affluent Shoppers in in Walmart doesn't have a store in New York City for example and so,
watching this this service is interesting and it's semi branded jet which is also interesting right like it's not clear whether the jet in jet black is for the Walmart check brand or they just.
Chose to pick a descriptive version of black to name the the product so that's going to be a little interesting and it's,
you know it's going to be interesting to see if socialites in New York will will you know subscribe to this this high-touch Services provided by Walmart who they you know,
with what historically look down their nose at.

Scot: 
[11:04] Yeah yeah there's several startups in this area that have raced pretty considerable Capital one's called I think Alfred it's two women that have done it and it's cut.
It's got kind of maybe half product half concierge services kind of a thing so you can have,
yeah. Only can you say hey I've got it I need a gift for this party I'm going to but please deliver it to this address which may be some services along with the items that they could be interesting to see how that goes.

Jason: 
[11:35] Yeah for sure and.
You know a lot of the folks in my industry are super eager to try it out and so we've all applied you know for the closed Beta And so you know we all had to go and claim that we're housewives in New York.

Scot: 
[11:51] Funny when they show up in Chicago.

Jason: 
[11:56] Exactly.

Scot: 
[11:58] Other interesting retail news so a lot of retailers they have a combat off calendar q1 so they're just announcing their queue on but it's not January February March it's more February March April,
that they were hearing about now some of the Ulta in Sears were interesting I found because it's kind of Tale of Two Cities this kind of.
Bifurcation that that we hear a lot about.

[12:20] Sears was kind of one side of that story and they're cops were down 12% year-over-year same-store sales were down 12%. Going to close another 70 store so they're kind of doing this kind of a shaving knock stores as they going to spiral around conversely,
Ulta who we talked about on the show it is Crush their earnings and there's their comps were up pretty concerned and they're opening 34 stores,
search this really interesting kind of changing the guard going on in retail,
Mall based vs. Melt Mall based categories like Beauty doing well little lemon did well at least your and we continue these Trends we talked about on the show a lot,
I continue to go on and a lot of them at the bifurcation another area that's doing really well is a wholesale clubs and dollar stores so that kind of value-oriented side of the equation is doing well also.

Jason: 
[13:14] Yeah yeah it for sure and then.
I think Macy's also had their earnings and also was favorable so they think they there.
They're the revenues up 3.6% and cops were at 3.9% and check me on this, but I think this was the second consecutive quarter of favorable comps for them after a very long streak of negative comps.

Scot: 
[13:42] Yeah yeah on our good friend how is over there and so I think he can take credit for about this cuz it happened on his watch always always good you know to to land somewhere and then have things turn around right when you do it so we'll give how all the current flow.

Jason: 
[13:56] For sure and they they.
Do you have a bunch of initiatives that have gone live that that in some ways feel like they they at least partially have house fingerprints on them you know since.

[14:09] Shoptalk they've been really touting this this pilot of mobile scan a self scan check out that they've been rapidly expanding to a bunch of stores I find that super interesting because on one hand I feel like it.

[14:24] Saw the very real problem that that Choppers have with Macy's in fact I think they it's the number one report a complaint at Macy's is that you can't find.

[14:33] A cart to check you out after you made your purchases.
And so this is a sort of self-service thing where you pick your clothes you scanned them with your mobile app if they have security tags on them you you show.
The digital receipt at the door and someone takes those tags off and you you get out of the store much faster.
Minute parently Macy's Shoppers are really responding well to that service and it makes a lot of sense the one thing that's interesting as we've seen a few other retailers.
Pilot it and then sort of step back a little bit so you know Walmart had a pretty significant test of.
Mobile scan self checkout and they did it in both Sam's Club and Walmart and then they they rolled it out at Sam's Club and it seems like they turned it off at Walmart so I you know I think there was.

[15:18] A different learning there and maybe it's at a different shopping dynamic.

[15:22] I bet you know also are like turning up the heat on some of their their e-commerce fulfillment things today they did launch a new drop-ship program so they're expanding their.

[15:34] Their catalog by listing more vendor product that they don't even carry themselves and having the vendor ship that stuff Direct.
A lot of times for a retailer that's a baby step towards a true market place so if if this program successful for then maybe we'll see.
See Macy's launch of marketplace down down the road they also,
launch there buying on ship to store and in for lizards that don't track this carefully,
that's a slightly different flavor than buy online pickup in-store so buy online pickup in-store means.
The goods are already on the Shelf in the store customer orders online and then they go get in there you know someone pulls the one off the shelf and save it for him and they get that one,
in buy online ship to store the goods are still coming out of the e-commerce fulfillment center but instead of sending the goods to the consumers home which is expensive they should the goods to the consumers near store in the consumer I can come and pick it up for free,
it's a big win for the retailer cuz the delivery cost for my to lower and that customers going to walk in the store and potentially discover other things and so this,
the boss or buy online ship to store program is a new thing at Macy's if that also has been one of the major initiatives at Walmart,
over the last couple years and Macy says that they're going to rapidly scale all this program so so interesting digital stuff happening at Macy's.

Scot: 
[16:57] This is why not I thought you'd find interesting so Target had mixed results so on the positive side their foot traffic was up,
over 3.7% year-over-year which is really good in the world of offline retail you know where you're going to look in it at 2 and 3% comps then they said e-commerce grew 28%,
which is interesting and then we just had it wasn't Walmart in kind of 30% which footnote when all these things come out and always reminds me of this discussion we had on the show where.
Everyone's growing 30% than who is not growing 30% why is e-commerce only growing 15-day 18%.
What to save that discussion again for another day and get some Gaston to help us understand that.

[17:42] Anyway but that was the positive side but then while she was expecting a buck,
39 on you. And it came in at a buck 32 so it's a pretty big mess on the bottom line in the management team essentially said look e-commerce grew faster than we were expecting and it's expensive and crowded are margins so they really blamed,
the bottom line Miss on the the nice kind of hit on the e-commerce growing at 28% number so it kind of.
Whenever that happens I kind of think of Amazon has a lot of retailers in this really tough.
Lose lose situation where you know you lose if you don't grow your eCommerce then if you do Gregory Commerce City but I was going to Crater and Amazon has kind of figured out how to do that way more efficiently than these folks that I've invested all there.
Best looking into the store infrastructure but catching up on these things but Amazon's got a nice kind of you have 15-year lead so interesting kind of a reminder of that trap that I think Amazon has retailers in.

Jason: 
[18:45] Yeah and you know potentially this is just the new normal and Retail is obviously we're going to continue to see if shift in the sales mix to online sales and you know inherently from a retailer those those sales are less profitable so there's more pressure on margins than ever before,
and you know,
if you're if you're just expecting you know that they're eventually going to get back to that same margin level that they were at pre-digital that that might be unrealistic expectation.

Scot: 
[19:15] Yeah absolutely pivoting to the other recent event you know usually in the world of keep them this is,
pretty exciting but it's kind of mediocre out here today so today Apple kicked off their what do I worldwide developers conference creatively called WWDC and,
Prime most interesting thing it and there's there's new versions of all the operating systems coming out it really kind of it there's a theme for this when I think it was less positive fix bunch of stuff so so apples been inviting a lot.
And it's crowded just got a lot of dangling threads and things that aren't kind of a hundred percent so looks like.
This kind of generation for the next 6 months is going to be kind of you know some consistency so for example I always have trouble going between my phone and my iPad cuz the you is totally different cuz I have a 10 and it's different than the operating system on the iPad.

[20:08] They're going to raid a lot more of the stuff on the Mac Etc by the most interesting part of the day I thought was Wall Street reacted very positively to Apple.

[20:18] And you know we talked about on the show little bit there's kind of interesting race to see which of the the.
The Horseman of the internet are going to be the first $20 company in a big boom it was made today is Apple went up 5 to 6% so where it stands as of today which is recording this is June 4th after the market closed.
Apple is got a pretty considerable lead at 942 billion so really kind of 58 billion away which seem 58 million billion away from a trillion.
Seems like a lot but when you kind of think about percentage is another kind of 6% move on Apple and you'll be there so that's going to be interesting to watch.
Amazon if you've been keeping track Amazon used to be dead last now there in 800 and 8 billion in Amazon is also doing very well but not quite keeping Pace with apple and then Google has done quite well and they're sitting at about 8.
Switching with Amazon back and forth depending on how the stocks do then Microsoft at 781 the real laggard who was in the race is really kind of falling off is Facebook at 560 billion.

[21:25] So yeah it's pretty interesting I think.

[21:28] Think will happen is it's hard to tell who's going at their first right now you would kind of call Apple getting their first but I think we're going to see a scenario where we have like.
You know 3 or 4 trillion dollar companies so it's it's not going to be kind of the trillion-dollar company I think I think some of these companies that have built these massive platforms that are just soaking up.
Dollars across all these categories are are going to be each of them will be joined our company's so it could be we'll keep people posted on that.

[21:55] The three some things interesting obviously they're coming on there a lot of scrutiny and Regulatory concern and things for him going on there.
Apple really sue a lot of shade at them in the WWE.
DC so some of the features coming out although they don't specifically talk about Facebook there things for you know.

[22:16] Making you look even more Anonymous than ever and specifically getting away around some of the ways Facebook tries to fingerprint you as a user that was interesting perhaps the most interesting is there any missing some features that allow you to,
manage the amount of time you're using your devices and the time of day and things of that nature and then also a fair amount new features around that same topic around children so you can kind of say hey I'm going to let my kids have 30 minutes on their device,
after school so they can call me and be in touch but then that's it I'm not going to let them.
I'm going to lock them out of the device between you know that the school hours and then in the evenings as well so.

[22:59] It's interesting to see if that any of that will will cause kind of the reduction in online time,
your people are kind of addicted to these social media use cases primary Facebook's family up of apps so those were some of the interesting kind of high-level things I saw out of the conference,
what did you say it was interesting.

Jason: 
[23:18] Yeah so I think you hit it right like it.
I don't think they were huge Commerce Centric announcements at the show I think they Lowered Expectations for the show coming in by saying hey.
Probably not going to launch a lot of major new stuff we're going to you know we have a significant focus on fixing a lot of the stuff we've already made.
But they did announce an upgrade to their augmented reality stack so what they call a Arquette they they announce 2.0 which has Richard features.
We talked several times about how.
They are probably has a lot more application in VR does for for shopping in the in the near-term and.

[24:01] Historically it's required a lot of horsepower in a lot of special software.
To do decent AR on phones and now you know Apple and Google are both making it much more ubiquitous in much easier to code.
SAR Kit 2.0 can be interesting one of the date Apple literally has a new app coming out with a arcade 2.0 called measure which is sort of a using your your camera as a.
Surprisingly accurate ruler to be able to measure dimensions of rooms and things like that.
And we talked a number X about out you know how these cameras get better at measuring things.
That can apply to a whole bunch of Commerce use cases of fitment for clothes and visualisations and fitment for furniture and housewares and all these sorts of things.
Become much more more possible as as these capabilities expand there were no Hardware announcements at the show but there's a lot of rumors that the next iPhone.
Will have a triple camera on it and that third camera being a depth sensor and so.
You know there already is a really sophisticated depth sensor on the front of the camera for measuring your face.
Did they put a sophisticated temp sensor on the back of that next phone that could really open the doors to some interesting.
Apparel fit man and Maid to Order apparel over the phone and all sorts of think so.
So what Cantina watch that closely they did announce a potential very scary new feature for Safari so this is going back to the the Privacy stuff that you talked about that they're adding.

[25:37] The ability to block third-party cookies in Safari and so you like.
It is probably a good thing for users but it breaks an awful lot of the internet like almost all the news sites you can rely heavily on all these third-party cookies from all these contents indicator is an ad.
I platforms and things and and if if all of these Publishers have to adapt to a world in which third-party cookies don't work.
That's going to be a pretty big paradigm shift.
Inform me then like the like this is a double DIN for apple apple gets to say we care about users privacy and we're eliminating you know evil advertisers ability to track US.

[26:19] But when the the content sites that are.
Time are we making money by selling ads around free content they give you when they lose the ability to monetize their content through these add platforms.
It actually forces them onto Apple news and Google news as their only source of monetization for their their content so you know Apple announced the new version of their.
Their news platform at the same time they're making it harder for these these news Publishers 2.
To monetize their own content so so you know you can look at that as a coincidence or nefarious plan.

[26:58] This is already in Safari but I just want to highlight for folks that you know recent updates of to Safari added the ability for Apple to finally support Progressive web apps.
They been in the Google browser for a while and this.
People not talking about this is enough this is a huge Paradigm change for how to do mobile you can do way better mobile e-commerce sites using the pwa.
What are called Progressive web apps then you then you can using traditional mobile websites and certainly.
Better play for most retailers than doing mobile apps and now that you can do one code base and have it work on most of the Google and Apple devices.
Every retailer really should be redoing their mobile right now and interesting Lee not very many are and you know,
my my hypothesis is that part of the problem is that all these retailers have mobile fatigue that they,
you know in the last year they just want the responsive site and they felt like that meant they were done at mobile,
and now no one wants to talk about redoing their mobile again to support all these new mobile standards like Progressive web apps and accelerated mobile pages and leveraging this these new payment Technologies like the payment request API,
these are all best practices that make a huge difference in in Mobile, so it's going to be interesting.
To see how that that all plays out did you see any other cool stuff at the at the Apple conference that's worth noting.

Scot: 
[28:31] The other at the keynote there was kind of two that had a little bit of a Commerce flavor and they were are within the augmented reality World which which we we talked a lot about on the show,
side note we do have a deep dive into a rvr that,
you should check out if any of this sounds interesting to you so one of things they did is they had a group of folks from Lego there and they had a table with,
I just one of these little village kind of sets you know where they do kind of get you to buy one and then you can buy a multiple Village so they had this kind of apartment building set,
I didn't they could look through their iPads and they could do some really cool stuff that could go inside of that apartment building set virtually and See Kai animated Lego.
People living and doing things in there and then they kind of pull out other sets and look at how they would look next that set then there was a lot of animated.
Play around there so the building could catch on fire and then someone could have the little Lego fire people come out in a Lego helicopter and does really interesting cuz you could,
many people can have a shared 3D experience and then you know so you could imagine.

[29:41] Husband wife in a designer having a shared 3D experience in a house.
Planning where Furniture would go or the redesign of a kitchen and those kinds of things and then the other one that had e-commerce implications was Fender the Guitar Company,
at least actually showed this is kind of interesting example where they went to the website and designed a guitar.
And then they press the button and there's this new way of communicating these models that button than kind of.

[30:11] Creator 3D model put it into the AR kit and you can kind of like then see a 3D version of the guitar that was designed then they Presta and that was kind of in just kind of a white space you can kind of spin it and see it,
which is a terribly new for the world e-commerce and you could actually see it kind of like.
Sitting I don't know why you want to do some guitar kind of sitting on its stand and and you can even kind of like you know Vision it in your environment so.
These 3D models are starting to get kind of more transportable between experiences which is interesting and they announce the new new model.
Sweet file format for this that seems like a relatively big deal and you know it may have e-commerce implications cuz I do hear from eCommerce folks you know.
Everyone's out there creating these 3D models and there's a lot of duplication of effort so at some point.
If you're a brand you made that may just be part of the digital package you give to somebody is an AR model that everyone can kind of consumed versus.
Oh I have to.

[31:12] At maybe house needs one in the Ikea needs another and I don't know the Wayfair app needs another or they're all creating on a duplicating work so soon.
Scot a nursing implications out there for a our shopping for for what that's worth is probably many years out still.

Jason: 
[31:30] For sure but I think it exactly mirrors like the early days of e-commerce if you want any conversate you you hired your own photographer and took pictures of all the products you are selling because,
the manufacturer wasn't used to giving you digital,
versions of all their photos in overtime like we do all these pretty robust system is where you know manufacturers now syndicated a lot of digital content to e-commerce sites to help them merchandise products and I think you're exactly right you know that,
the early a are examples that the retailer all recreated 3D models of the manufacturer's products which you know is expensive for the retailers in,
oh by the way may or may not have been an accurate representation of the manufacturer's product until I think over time you'll see,
that syndicating that 3D data just you know being another another attribute that a manufacturer has to provide to a retailer when they sell a product.

Scot: 
[32:25] Yeah and then last will note the the one thing that as I was reading a summary of all the changes coming.
get me the most excited is I probably like you I am double authenticated on everything I do so probably 4 or 5 times a day I have to send myself a code and take that code and type it into a variety of,
different devices they're coming out with a new feature in across the operating system family called security code autofill so if you generator code to your phone and you need to go type that in over on your desktop if you're in the Apple ecosystem and you have the messages and all wired up it'll say,
when you going to tap in that code it'll say should I just use that code that came from this message you got about 5 seconds ago so that made me very excited I think that's going to.
Save Me by 40 hours a year and typing coats and remembering all the seven digits over and over and over again.

Jason: 
[33:19] Yeah for sure I'm definitely looking forward to that to multi-factor authentication is super important and everyone should be using it and it's kind of a pain in the neck at the moment so,
so reducing some of that friction is I'm all for it so we wanted to use the last bit of time on Today Show to talk about,
part of the recode conference or code Commerce conference is it's called us it is a Big Show at in California every year put on by our friends at recode and Kara Swisher,
and they get really Marquis keynote speakers every year and some of them have been very commercentre so I think 2 years ago Jeff Bezos was there and made some significant news,
this year there were not a lot of.
Connor speakers that are super excited about I think the big Keynotes were like the CEO of uber and CEO Spotify and Airbnb,
I know Katrina Lake had a little presentation who's the founder of Stitch fix but to me the big presentation,
did they have every year that always has some relevance to digital Commerce is one of the partners at the Kleiner Perkins on Mary Meeker does this annual,
presentation called the state of the internet which is a super data-driven deep dive into the the major Global Trends in digital and so this year.

[34:51] She did that presentation again and and what was the count was it like three hundred two hundred and something.

Scot: 
[34:57] 300 yeah right at 300.

Jason: 
[34:59] Yeah yeah almost 300 slides so for me that that's about how many sides I prepare for a 15 minute presentation.

Scot: 
[35:06] Yes Jason I have gone to those slides in want to kind of boil it down to 15 minutes that matters to you guys,
it may be handy will put a link to the PDF in the show notes so that you kind of like the zip to the slide numbers that that we reference as we go through this is kind of the takeaways we got from the e-commerce section so it's a macro trends.
Pretty much what I call, Steady As She Goes the some of the things from the macro Trends section the growth of the internet is slowing people are spending only 5.9 hours a day online that growth is kind of really slow down,
a lot of the growth kind of interior there is in messaging and video she referenced which is this platform which is streaming gaming that it's really up into the right.

Jason: 
[35:55] Natasha Lyonne by Emma.

[35:59] Don't I just spoke over you but exactly is owned by Amazon.

Scot: 
[36:03] Yes yes exactly.

[36:04] And then kind of the new thing this year is because of the you know the amount of internet time and and the companies that we talked about just a Min ago there is increased government scrutiny of course which creates this kind of.
Interesting Paradox that increasingly the the you know the displacement of the internet need more and more data from you to have these great personalized experiences.
But you know, regulatory perspective are you really clear the date of your giving up how it's being used to his thing shared with so you know she kind of.
Pretty easily predicted that's going to be an ongoing challenge for everybody Facebook's kind of squirrely kind of caught up in that right now but I don't see how anyone is really immune from it.
When they're singing areas I thought was.

[36:51] Investing in Tech in this kind of thing is at the highest ever over the 20 years they've been tracking it here in 2018 and that's both.
That's that's kind of venture capital if you will set private company investing at the same time when you look at public companies they're spending more on R&D than ever has been spent a slide 40 is interesting and it does show.
Amazon at the top there some people that really track this will know to that Amazon does put some of the acquisition of regional content in their R&D budget so.
I may not be quite as big and scary but I think it's only like two billion of that is original content so it still keeps them at number one in the R&D spending public company R&D spending is up 18% year-over-year so when you had those two things together.
If you thought the piece of Animation was going to slow down you're probably incorrect cuz if dollars are the the leading harbinger of innovation which I do think is true both public companies and private companies have,
getting larger and larger investment than ever.
Before I'm even at our scale percentage-wise it's a very large number so new slow down on Innovation even though the internet growth is slowing.

[38:04] And then from there.
Jason the e-commerce section really kind of kicks off on page 44 I thought you know last year there's a lot around ads in the ad ecosystem and I thought this year we got it.
Well it's not worth shattering who got more kind of of the Meeker deck was on e-commerce so is that would cover each of our car highlights here Jason what were some of the takeaways for you in that section.

Jason: 
[38:28] Yeah yeah and I'd start out by saying like I really look forward to this presentation every year in in in every year in the past,
there been in major insightful takeaways that were like major nutrients I hadn't really thought of that were super valuable to think of and so,
looking for that again this year and I have to say this year felt a lot more interested to me was a lot more Hades trans we talked about in the past or accelerating these Trends we've been talking about for a long time or decelerating,
I didn't have as many like aha moments as I have in the past and maybe that's just sort of the price you pay for this being the fifth or sixth time she's done this.
But that being said I agree I think she did a deeper dive in Commerce she kind of talked about a lot of Commerce trends that would be old hats at to folks that listen to the show in terms of.
You know 14% of 14% eCommerce growth in US 16% world.
The cheese is some really low numbers but like I think she has about 8% of all.
Retail sales being e-commerce now internet that's again the broadest definition of retail that includes I'd gas and things like that.
But then the big things are interesting to me,
she really focused on this this trend of personalization and everyone talks about personalization but she really excited as evidence for the fact that people are willing to trade.

[40:01] Privacy for personalization even in this it is crazy privacy climate.
She's highlighting services like Waze and Uber and snap.
And even next door which is kind of interesting service where people are willing to give a lot of Geo located data in exchange for this personalized experience and so she showed the rapid growth of all these sort of.

[40:27] Services that she defined is highly personalized services.
I thought that was interesting in the e-commerce delivery section she she talked a lot about the limited growth of a UPS FedEx in the US Post Office and Anna as we talked about a bunch of times on this show.
There's a huge gap in the the growth and knows those carriers ability to deliver packages and the 30% e-commerce growth that everyone is claiming they're having.
So that you know that certainly is going to be a recurring theme we're going to hear about.
And in the past she talked. She talks a lot about ads digital ads in general this time she talk kind of specifically about Commerce ads,
and she's talking about how these ads that have a conference call to action or emerging is one of the most effective formats of digital ads so she talks about.
Google Play is having three times the engagement is there another advertising platforms.
She talked about you know the Facebook's continued traction and then cheat you know how I did that Amazon is emerged as a.
A true huge advertising platform in that you interview they have a 4 billion dollar run rate they're growing 42% year-over-year.
The you know I thought that was pretty interesting she talked a lot about the adoption of subscriptions Commerce and how the subscription services are growing so she with you.

[41:59] Amazon Prime as a as a key Tampa subscription obviously but also.
Netflix and Spotify and Dropbox and Stitch fix and Peloton and how these things are all going up into the right.
88 Ranch she talked about a number of times that she hit again this year is her version of the mobile gap which is sort of.
And advertising look at the mobile Gap that essentially advertisers disproportionately spend on every other.
Platform compared to his percentage of audience consumption.

[42:32] Advertisers are still dramatically under spending on mobile advertising compared to audience consumption of mobile and so she thinks there's about a 7 billion dollar opportunity there and adds shifting to mobile being the.
The platform.
And then when she got out of the Commerce section the other the last thing also to highlight that there was really interesting to me we've talked about the bifurcation.
Spending power a lot on the show and certainly Casey well and buys been on a couple times who's done a lot of thought leadership in that.

[43:05] That's based she had some pretty detailed data that.
You know despite the fact that there's a lot of economic indicators that are really growing household debt is it highest level ever,
and she shows this really scary chart it says so I had 103 wear in 1968 the.
Ratio of debt to income and the amount of personal savings that people had were both similar things right and.
Debt to income ratio is a bad thing in personal savings is a good thing if you're talking about a family's Financial Health.
And from 1968 till today those two Transit been going in opposite directions were saving less every year than we did the year before and our debt-to-income ratio is getting higher every year than the year before and so we're opening up this huge gap in.
You know families being over leveraged and not having a lot of savings.
And she highlights that part of the reason for that is healthcare insurance costs and housing costs are going way up and people are having to spend more of their budget on those things.
Which subsequently means people are spending Less on food entertainment and apparel.
And we talked a lot about people spending Less on apparel but it's kind of interesting she's highlighting data that you know people are spending Less on entertainment experiences and food.
And you know compared to some of the hard Goods we said hey.
Experiences in in food are doing better but she's highlighting that like in reality I like all of those the spending categories are challenged as people are having to spend more of their.

[44:45] Their wallet to pay back their college loans in their health care and I guess the last part of the bifurcation was interesting to me as a she talked about,
this decision Walmart made back in 1990 to get in the grocery and how they pretty quickly became the largest Grocer in the US,
and that one of the big impacts of that is that grocery prices have gone down every year from 1990 to today and so today,
food costs are are you permanently and substantially down from 1990 and that's that's a row did every Grocers ability to make margins and and you know we talked earlier on the show and we think digital,
has the potential to do that to a lot a lot of other categories as well.

Scot: 
[45:31] Free cool so quickly some of the things I wanted to just point out to listeners from the deck that just kind of be aware of onside 50 she has kind of a look at some of the different,
Tools around e-commerce and where the the current state of the art isn't it kind of has a framework for looking at the online store platform the payment platform fraud prevention prevention.

[45:51] Purchase financing customer support Discovery process and then the delivery process so, weird order there I usually put kind of like Discovery at the top and Delivery at the bottom what not but but.
The guy interesting to highlight those things have a fun chart on 63 where she shows kind of the evolution of finding products,
where are you kind of have the old school to search box and then here we are today with voice search kind of Married With fulfillment,
using Amazon is example and then using Google as an example, showing again that same kind of growth from simple organic search kind of.
Google connect me to.
Is that like 1997 car time frame all the way to the current shopping options actions where everything is really kind of integrated and you can buy right from the platform.

[46:42] You know what.

[46:45] The Firm she works where has really big China group and they always chime in on here and I always find there's this really good insights China's ahead of us as far as penetration and growth of e-commerce is well as mobile so.
They're stuffing some insights there I think sometimes we ever read those here in the US so I think a lot of the rush to kind of copy the you know the messaging and the Commerce within messaging is.
Is probably not going to take off cuz it's kind of pretty unique to that that environment that ecosystem in China.
That being said there are some really interesting things there's a couple I wanted to point out,
I'm number one is Alibaba is on a really big they talked about this there see you I was at the conference as well they've invested a lot in these stores called him a human they call it dope lusso which is online plus offline,
which is kind of their version the kind of version of omni-channel if you will but it's much more of like.
Shops in those kinds of things so it's kind of like a Next Generation retail so you can see their.
What airlines I found interesting is some of the top apps in the US are these entertainment apps like HQ trivia most commonly abbreviated HQ,
in China this really cool apps that have kind of married entertainment shopping and of course Ali Baba does this round singles day but there's more of that are kind of doing it,
when I found really interesting to talk about your ended a lot of research on it this was a concept it's kind of invite.

[48:12] The 2000 time frame a lot of companies try this e-commerce it didn't work in those called group buying where they would say hey I've got this widget and if you can get a hundred people to buy it I'll lower the price.
The problem that is in those time frames we didn't have the platforms for telling a hundred of our friends very quickly but now has social media we do.

[48:31] Chili's discount Next Generation platforms are tied into messaging and social media and whatnot and the Really geared towards and sending the consumer to share to get a discount.

[48:40] The one on site 86 that she talked about is called pin duo duo and now I'd encourage listeners don't have time to go into it but I think that's really interesting concept and,
could be used for a way to do liquidation and Sky really.
To be like the next flash-sale kind of a model so I thought that was interesting,
and yep. That kind of were some of the highlights I wanted to point out for folks and you know if that stuff is interesting to you let us know on her Facebook page and we can kind of dig into some of the area's deeper on one of the feature shows.

Jason: 
[49:14] Yeah yeah we do have to do a deep diver that makes sense on any of this specific areas it's,
super dense deck and said there's you know a lot of potential things to take away,
but that's probably a great place to leave it for this week because it's happen again we've used all of our a lot of time again there there is further conversation we love to hear from you on Facebook again if this was valuable episode for you we sure appreciate it if you jump over to iTunes and give us that 5-star review to that that feedback is what keeps us going.

Scot: 
[49:47] Thanks everyone for joining us and have a great week.

Jason: 
[49:50] Until next time happy commercing.

1