EP200 - Walmart Chief Customer Officer Janey Whiteside
Episode 200 is our 4 year anniversary, featuring an interview with Janey Whiteside, EVP and Chief Customer Officer at Walmart.
Janey Whiteside Interview
In this wide-ranging interview, we cover many topics, including:
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Episode 200 of the Jason & Scot show was recorded on Wednesday October 9th, 2019.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this is episode 200 being recorded on Wednesday October 9th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo.
[0:38] Jason and welcome back Jason Scott show listeners.
You guys can't see us right now but Jason and I are wearing our Tuxedos and that's because we are celebrating our 200th episode and 4 years of podcasting together.
Jason I don't think we've told her origin story so this is probably a good time is any he has been for years so here's my recollection was here.
This lines up with your memory.
[1:03] Yeah and then I'll correct it.
[1:05] It would be a Jason Scott show without a lot of Jason cracking Scott so my memory is we were having some adult beverages after a board meeting that was part of the shop. Org.
Oregon digital Summit held in Philadelphia and this back in 2015 and we were about an hour into a payments discussion and
I decided was just starting to do some podcast listening a little late to the party there but better late than never.
And then you know what you started talking I was like you know every time I'm hanging out with Jason I
I learned a lot about payments and Retail and all that offline stuff that I don't spend a lot of time thinking about
hopefully you learn a lot about e-commerce Marketplace for me and I said you know we should do a podcast where are you talk about your payments and offline stuff next.
Then we pretty quickly moved on to probably personalization or or one of your other favorite topics.
In a week later you called and said hey you know you talked about podcasting I have all the equipment and I'm ready to go and I figured this all out.
What's your first show for singles day and we were Off to the Races so I learned an important life lessons from all this and that is with great power comes great responsibility.
[2:28] Scot I think that might have been Spider-Man's life lesson.
[2:31] Oh yeah you're right sorry I get my my marble and podcasting mixed up the real life lesson was if you're going to pitch Jason on an idea you have to be 100% ready to run with it and be committed for at least 4 years.
[2:45] Yeah yeah you pay a horrible price by pitching a if you're not ready I think the secondary lesson here is if you want to pitch Jason and I have it work pitching something that allows them to buy new electronic Gadget.
[3:00] Yeah so I think when we started this I did a little research into podcasting and it was like the majority of podcast fail in the first Eight Episodes so
my my goal when we started was where we're going to stick with this and and not bail during the first date episodes and I thought you know,
maybe the the 12 members of the shop. Overboard and our friends and family would with them and it's been wildly more successful than that.
[3:25] We 50 x 28 250 external no 25 x.
[3:34] Yeah it's amazing and I I was looking at some of our podcast stats last night and we have now crossed over 176 hours,
of content so if you are so inclined you could listen to us talk for seven straight days without taking a break 24 hours a day.
[3:53] Awesome that's a few hardcore streamers out there.
[3:57] Yeah and if anyone chooses to do that will let us know.
Chicks I'm getting out of this early shows I'm going to stand up and then a couple months and we started adding guest so our first guest was Peter table and that was episode 15,
I also chuckled
several episodes were like 30 minutes and we slowly have prep up to the 60-minute mark and I think our 200th anniversary shows likely to go even maybe a little longer than that.
I was looking at some of the the podcast ads on our most popular guest was Ken worzel who is in the president of digital at Nordstrom he now is still the president of digital but also the CEO of,
I most popular new show was the show we did about Amazon acquiring Whole Foods.
The Deep Dives have been especially popular and surprisingly are most popular Deep dive was on artificial intelligence which is not necessarily what I would have guessed.
[4:49] A man of the guess I sort of to Hall of Fame guess we have a Samir bhavani and who is then with 1010 data that has been really interesting data on.
I know how how people a babe on Amazon and Tamara Gaffney who was with Adobe and had all the data from Adobe analytics on on House customer shocktober holiday
open those guess where I'm free shows and I'm I have to throw in an honorable mention
or Melissa Burdick and the genie dually they both been on two shows and a show fun fact they actually recorded a third show together,
and it never aired because we had some problems with permissions from one of their employees.
[5:32] Those are some awesome facts Jason it's been a great four years and in all seriousness we couldn't have done this and we would have done it without you listeners we really
shit you guys listening to our thoughts around retail and e-commerce each week and we got just amazing feedback questions
guess I would have never imagined we would get on a podcast we really appreciate it and realize we are busy like you are and have a million things you should be doing and you really humbled and honored that you take time to listen to our thoughts.
[6:03] Yeah I want to Echo your sentiments exactly. I'm super grateful particular for those listeners that have stuck with it for a long time like it's now become one of my funnest things to do is go to some industry of van
and you know just random people in line waiting to register or get Starbucks or whatever will occasionally recognize my voice and it's triggered all kinds of fun.
you know in a few rare occasions people even recognize my voice at airport so that's super fun and I'm really grateful for all the listeners that have made this a great show.
[6:34] Well since this is our 200th episode and 4 year anniversary celebration we wanted to do something really really special I like to say it took us two hundred tries and I think we've actually going to deliver on something really exciting.
[6:47] That's a lot of pressure.
That's right Scott I am here with Janey Whiteside Walmart's Executive Vice President and first Chief customer officer which working want to hear more about Jenny welcome to the show.
[7:00] Thank you excited to be here.
[7:01] We are thrilled to have you a tradition we might have on the show with gas is to get a little bit of their background prior to their current role so can you tell us a little bit about what you did before Walmart.
[7:12] Yes so I'm going to age myself hip but before Walmart I spent 20 years at American Express so I started it have a job before that so I was at HSBC
before that 73 companies that you're my twin tiers American Express I in,
when I first started I was I was in finance what if I start my career.
I'm in from banking to planning and finance and was starting to figure out that may be fine arts was wasn't my passion where I want you to go moved over to American Express and I was doing.
Pricing work and realized pretty quickly that there was a lot of people of the other side of the floor the mox's will something the other side of the floor and they seem type of way more fun,
I didn't know we were having I am brushing away and I spread sheets and so you know was given the chance the opportunity to
move over to the new product development team that was really had to spend the night in the next 20 years and a whole variety of various disciplines across marketing.
[8:23] Business Development sales roles in a I feel very passionately that it's really hard to sell on behalf of a company if you don't really understand that.
The customer the brand you know how products are being built and sold and so but a lot of time bringing Business Development sales teams together
did your client management roles and when I left I was actually running the global.
Premium products benefits and services if you think about green go apartment since you're in the cards that the AmEx cards and then,
all of the services that support them somewhat that CM Punk people familiar with the airport lounges.
[9:12] Very cool and.
Obviously American Express his famously quantitative has a ton of data so when you talk about getting to know the customer it feels like you are in a unique position for really know your customers well.
Tell me if I have this right I want to say one of the cool promotions during your tenure at American Express was the beginning of small business Saturday.
[9:37] Yeah so you know I'd like to say it was my idea it wasn't as many people so I did and.
I think what's most interesting honestly about small business sign today at the time of the continuation was.
It was an opportunity.
Afro-American expressed to really do something to celebrate to promote uplift small businesses around the country and it's 9 in in a time of turmoil probably the first time.
I've ever worked on in the strip that was so genuinely in favor of the customer that,
American it wasn't it wasn't a favorite American Express our entire ethos was go find a small business
go go go test it go see it go see what makes them different and I hope he spend some money and if you spend that on National Visa or Mastercard and we don't care I just want you to go and learn what is really different about small businesses and.
From a purpose perspective what was really interesting was everybody wants you to work on it
are you could handpick the talent across the company because everybody felt like you were serving at you know how a purpose and it was just a real passion and dedication of the teams that the continued the
that's where all the way all the way through when I left at least.
[11:01] Yeah and that is very cool because obviously that the whole Purpose Driven campaigns.
Very in Vogue right now like Somers wildly successful some like you don't have dubious authenticity but it it's totally cool to see those those campaigns that were so successful before it was the trend is yours.
Until after doing your bit to help small businesses in America you you change rolls to the diametric opposite of small businesses.
[11:33] Yes I was just as I was talking about small business Saturday I'm going to Parlay this is how do you go from that to.
[11:39] Oh I can transition any.
[11:40] Obviously yes so I am Walmart first ever Chief customer officer.
On paper although you knows you go back through one of things I like to do when I go into any role any job any brand has to go by.
To look for what I like to go back to the archives I like to take a look at where are we today and where we come from.
If you go back and you take a look at the some old made in America bulk or in any of the things that you can see online.
What's super interesting to me is he in his office he was incredibly small and a consummate retard.
Actually a marketing genius way before his time and he start when you start to think about and I will talk in a bit about things like.
Innate segmentation and design targeting and really talkative product positioning and how you do that way ahead of his time and so he really was right he was the first Chief customer officer,
because he was so highly thoughtful about.
A the mission and be the deployment of Batman and how you grow your business and obviously grew it from from it from a small business to the to the world's the world's largest company.
[12:55] I ate a what constitutes a chief customer officer today I like to say it's everything set up at the beginning of the funnel at the end of The Funnel and then and supporting underneath so.
Supa tactically it means.
Unique source of a voice of the customer so and insights days Trends all of the how do we have it how we actually have a single voice of the customer and how do we ensure that that is used,
objectively across the company we will know their fax this yo fake facts this is fake news top news,
we need to make sure that we have the capacity to have a source of data that is used consistently and objectively.
[13:32] How do I identify the right customer Journeys we want to self how do you prioritize those how do you deploy the resources cross-functionally have against those I have a sort of Innovations like new product development.
Group so you may have seen.
Accidentally about will be cool in home which is really actually deliver groceries into the fridge I'm so taking that service expanding that continuing to test and then see if wet weather we take that in there a whole series of other Renovations with with the balcony.
And something about that the sum right at the front of the phone all this as we think but early stage Innovation Chief product officer runs all about you not digital product and then how do you deploy that didn't know many fashion I have a team that runs.
I Services Knotts everything from
gold Financial Services we offer in the store to a credit card to any of the services in and around the store so I think about the build a better the FedEx of the nail salon on the Chick-fil-A that is in a in a in and around the store and drives and drives that as well as I Omni.
Services so if you think about something like cake decorating I you order the cake you order decorating online how do you integrate that even into that Walmart pay all those sorts of things.
[14:48] Interesting enough we run returns and to answer returns really in a custom problems with a huge issue for a second on Maclay and then.
At Walmart that the Walmart Media Group is it as the selling or so as the selling entity against their organization,
CMO. Samo and then I said that is supported by the customer care organizations what happens.
As you transact with us and and how do we support the customer service at the front entrance with folding the organization of the back in times of creating demand for the front and then supporting Anthony.
[15:25] So that's an incredibly broad scope which I imagined doesn't leave a ton of time for side hustles.
And what do you think I predict admire about that structure is you you mention the polls to ask you most like it would early does sit
above marketing so like you know where everybody talks about sort of putting the customer at the center but you guys from literally an org chart standpoint are really putting sort of this customer ownership
like at the center of all of these different disciplines at Walmart which is to my knowledge.
A newer structure that we haven't seen a lot of retail in the past.
[16:03] Yeah I think you're right and you know we have a lot of debate in one of the comments Frankie that I've heard is all well Jamie should see much of the glorified say it
how many different constructs we're saying Mo's Purity demand gen or another company so they have a lot and I like it and take her surgery you didn't hate me to talk about public affairs and Communications rights out Francis I don't have that cuz that's it that's it
different skill but to me there is a difference between
understanding and helping your organization really truly build for the customer and pull that through in an organization that has been built up on it
Orion's Belt tremendous scale 3 absolutely Flawless operation execution and its capacity to,
build create Source amazing products at great price please.
Those we need to continue to do and will continue to do but we need to make sure that we are mindful of the customer
that would that would join if that is really different from how do you create them and what do you do and how do you run a fully optimized Media budget which is in the end.
[17:16] It's amazing the the Spectrum you work with must make your head spin it must be hard to prioritize everything you have on on your plate.
I was going to shout out to listener is one of my favorite books I'm kind of a nerd on amarillo biographies when my favorites around the early 90s was Sam Walton.
[17:36] So I was looking it up this morning actually cuz I was recommending it to somebody it's super easy read
sounds like it would be 90 but actually it's not and I will tell you that more often than not I go back I just didn't know we goes past I don't go back to take a little reader of a section office it's important to me as you think about the ethos of Wilmot weather is so much
goodness in that in times at the thought process Anthony the.
The unwavering dedication to building a business building at the right way and the the notion that.
You can democratize resale,
and just because you have less financial means I know you you live in a you don't live in a city does not mean you shouldn't have access to great quality items at really affordable prices.
[18:27] Yeah it's like urban legend but isn't his office preserved in Bentonville and you can can I go see it and is that true.
[18:34] Yep but yet yes I know yes it's God's office
so done right so I'm so dog sits in it now it's the desk we just did a sort of mild refurb of that space in invented also yet it's that and all its Glory
and you know I haven't asked.
But now I'm going to his eyes when we moved to a new head off his way. So we have met making a new home office I'm assuming somehow it will be lifted and shifted and actually we are we building a replica in the museum,
downtown Fayetteville to so that way you know we have it preserved at 2.
[19:09] Yeah I've got a Funny Story I Heard tell once is that he's like.
Mildly a pain working in a historic office because he's like you know he's like when I first started I like asked if I could get a whiteboard over here and there and they're like they're basically like no you can't.
[19:27] Images like what is wood panels and uses of walk in and appreciate that duck like rearranges the books or something like that to change things that you can change it but I.
It does give you a sense that she will walking in there and thinking about.
Show me like literally Disney ultimate entrepreneurial story.
[19:52] And of course if you do read the biography I would argue his actual office is probably that truck.
Because per your sort of Chief customer officer comment he spent an awful lot of time in the field visiting stores and talking to customers and I I think in the early days it was driving to them in the truck and then and later days it was in the airplane.
[20:13] Yeah I mean Sarah.
There are so many people still around a colleagues of mine who have in them so many missed Asylum stories but
you are absolutely right I mean it so he literally was flying over geography is,
and from the air and it's like the plane would figure out full that in a full that town where was the corner of Main and Central
Wright and salmon in and figure that out and then figure out that that's what you need to do a graph you put your store if that's not micro-targeting you know.
[20:53] I want to start off the questions by kind of starting at the super high level so you guys see so many customers get so much data how do you use all those insights that are gathered to deliver better experiences for Shoppers.
[21:08] It's a great question 160 and 160 million people shopping Walmart everyday
so we are trying to slice and dice and make sure that we
information is usable to do the sorts of things that we want to take from an experiential perspectives if you think about Walmart stata
it's primarily SKU driven right side it's really interesting to me because I was told it's Q level so I would say it's kind of at the base level
what we're trying to do is figure out how you Advocate that.
SKU level Day to you after Butte it to the right kind of customer right what does that cross across payment and is excetera think about is the diametric opposite of America special and you everything about the customer and I couldn't get down to skew
are we going to ever get down to what are they actually dying here I know how many bottles of ketchup we leave so the question is how many did JT die,
when did she use cash when did she use a credit card when you buy them online and when did she go to the store so we lie during a top
just in terms of what people actually do the other piece that we are double triple quadruple clicking on is.
[22:25] How are people actually behaving in the stores and what what are the what are they saying how are they shopping different man how do you use that to make sure that we are old mention that experience and Laura's
seek to rationalize things in the stores for operational efficiency with doing it in a way that makes sense.
Podcast medicine so that's a whole other realm where we have some of the day to we haven't spent a lot of time you know in.
[22:53] Some of the Behavioral Science components an ethnography and actually you know
space space evaluation as well as we think about bringing all of that together so you can come by and all of that day to what is it Louis to do it allows us to really think about who I desire until I get off,
what they really want with some degree of precision because by its very nature you know we serve all of America.
[23:16] Design for everybody because I thought that I bought it as you are busy designing for nobody at that point so how do we design those right experiences how do we prioritize while we go to sign those great experiences and I think probably most importantly.
[23:31] The way I like to say it is you think about going back to my sis I'm what made those first stools so great was he figured out where to put them
you have the right the right product in that was relevant at the right price point
I have really great people in the store who knew who you are and were able to welcome you in and you know it was a Gemini and mouth and Tums a fast frictionless fun,
personal experience I'm not worth trying to recreate that experience at scale with digital tools and so it's really how much can we,
understand about a customer based on what we know where do we need to open that right we don't know how do we old men that such that we can really create the sort of experience is that that most YouTube customers want
across channels and so you know I hate the word Albany but you know but still how do you let people
flow in and out of of online online offline various tools without making the experience really hot and ready Conkey
I'm really on a mission to try to make it fun fun to shop at Walmart physically fun shop at Walmart digitally so I'd like to bring some of that in them too.
[24:48] Yeah a lot of the knowing I will talk about Amazon but you know I never said wow that Amazon experience was fun it was just kind of a transactional
I'm a I'm a four-time entrepreneur and I've done three B2B companies in my latest companies consumer and I found when I was B2B was always easy to say
customer first but it's actually been surprisingly hard because I found its constantly at odds with what the rest of business.
I've been dying to get someone of your tenure on a on a podcast like this and asked you that question.
How do you navigate that and cuz there's times when it's not right to do what the customer wants to know.
Retail returners or getaways price things that the company doesn't make money in surviving the customer still happy how do you think about that and then how do you articulate it into the organization so.
All the way down to that store associate a kind of understand calculus.
[25:45] That's what the key to the code right.
[25:51] You figured it out so I.
[25:52] So I wish I wish I wish I could say to I wish I could say it you know the keys Dakota 62 or so I think,
can you questions go to I'll give you I'll give you a Walmart example if this predates me
you know how his stories of what we got a whole bunch of customer research and what we what we heard was that what we should do is put
at what we should move the pharmacy closer to Webb and it closer to grocery because that's a mission right so we understand that Grocery and Pharmacy tend to be a mission so let's move it away from where it is at the front so nice let's move it towards the food.
Turns out when you do that. That's great but his will happen if they go in and out either to the phones in the grocery they don't go anywhere else in the store right it's it's hard for us to be able to maintain the prices
that we have you in those those those everyday low prices on the food and the food and grocery side if we not
if they're not buying other things so what happens in the in the long run on the back of that decision eventually prices go up.
I said you said to customize hey would you like to have your Pharmacy in Grocery close together
but if you are like it but in the long run that's going to mean that you pay more for those they are to be no I'm quite happy to have to take that extra couple of seconds and so applying that business logic.
Is really important the way that we are watching it through is that.
[27:21] As I said you know I said it's my job to understand objectively who the customer is and what we're hearing from and I've what really hard to.
Build and preserve a voice of the customer team that has no skin in the game in the answer right and that is really important to me so they can be entirely objective.
But not solving finding they bring that forward we use that to them prioritize what we think based on in a whole series of mattresses you can which you can.
Probably figure out something frequency in and size and and then attempt to design the experiences of the solutions against it,
what I that need to do is as we go through that process is so it would bring it inside so we prioritizing I then need to turn to my,
a colleague some of the merchants on my cut my colleagues in operations or in a central operations are running the stores inside okay so here's what I think we need to do.
[28:23] How would we operationalize that and then what tends to happen is we'll say well I know that you want it you know I know that you want to design experience this way.
His reality right that's going to increase cost full-time but if you did it like pretty please find it this way until we take those ideas typically and we pressure test them and say what okay well how would we deploy that.
How and what do you think the intended and unintended consequences that we go back to that idea and it tends to get here and we modify but.
Make sure we haven't stripped out so much that it becomes you know I'm attracted to the customer so it tends to be a super purest start.
Then we can I let me apply some brain power ran into prioritization and then typically as it goes into a coyote operation eyesight.
You come back to actually maybe we solving and with wig Recreation too many problems on the back end or something she was actually.
We can solve several of these problems at one time if we get if we just move some move some things around and so.
Who is it giving tight though between Arrow obviously.
I would like to roll out reptile pets welcome people in high five than when they came in right I'll be able to recognize who they were and have everything ready pack for them.
[29:40] That's not going to work right what is super important to our customers is the consistency with which were able to deliver.
Great items at everyday low prices so number one delivery point is that all the time and then it comes and then comes behind that okay.
What's the right experience that we can build to sit to support that.
[30:02] It's funny as a very young man I was pitching.
Some new new customer experience to a merchant at Walmart and I'm not going to date Myself by saying how long ago this was in the merchant was talking about the operational challenges and I'm like yeah but.
Like you would know this is a much better customer experience and the you know this this wise is Walmart Merchant looks at me and goes Jason White carpets would be a better customer experience to you're probably not going to see those in a Walmart.
Right answer to me like I feel like the inside you have there is is like preserving the voice of the customer in respecting the voice of the customer about putting it in the context of.
This this is larger ecosystem of experience I often you see people make the mistake of just like.
Asking a customer questions getting a customer preference in a vacuum and prove your point.
Is a very complex ecosystem with a lot of inputs and outputs I want to continue the trend of asking you hard questions that we don't know the in.
So I have to be honest like to me thinking about your role one of the things that makes it daunting is.
Typically marketing you know we we try to Target the particular customer right and we think about segmentations and I'm going to Tracy's personas and you know I know Walmart of course has has the Persona of the famous busy mom persona.
But the challenges at your scale you guys are so huge that hundred sixty million Shoppers a week the.
[31:31] Almost any Persona you you create is then too small to be economically relevant to Walmart so so how do you do Marketing in personalization and targeting and world and wedge,
like literally everyone is your customer.
[31:48] So the way you are absolutely right funny that my first kind of couple of weeks and he going you listening tool so I went round am I listening to and I say to everybody okay so who's the customer.
[31:59] And everybody would say what everybody would you mean everybody that it will everybody and I don't know but who is the Target customer,
I understand that you serve everybody,
that does not mean that should talk account some and soda so just as you know you see in a McDonald's is a great example to me right now
people that you see the wife and it's going to be pretty woman the people that you see in the McDonald's advert probably
on a real direct reflection of the people that have something in in in my gums every day but it's a reflection of where they want to go in and what that Target is inside the difference between serving everybody and designing for very specific Target and so
we have done a lot of work on this this idea of the design Target you're not new to it to anybody listening to this you know and we talked about this busy family
spaying a design Target and then we sort of thing about this Continuum these busy families on this continuum
with an entry the Continuum is what is the ultimate driver at any point in time they do they do Flex between.
[33:10] Money in time right everybody
everybody no matter where you are and what is it some point balancing off money in time I'm so you think it went and we think about that designed talk about how do we how do you think about
where we where we playing to be financially.
[33:29] Sensitive busy family it's probably what you would quite to the end to the to the Walmart Shopper but you find interesting things in that like you know it's still not going to go to
15 stores to try and find in a package of pasta lower price that looking for consistency
in the goods they buy and access to the right to the right sofa brands.
[33:52] To your point about making it smaller obviously soon as I start took him at busy family she was exactly that's productive right that's smaller than the entirety of who we still have you not wrong,
I'm so then what we did was a whole bunch of statistical work to say okay well he think about the segments we've done a broad segmentation have six segments across that 160 million.
You think about that how do we statistically correlate to the actions that we would take on behalf of a solving for the busy families
correlate strongly enough to the other segments and so you know I was have this child that I said what round that has this in a ring which is these the time-sensitive is he found his we must protect them they are a cool right we protect them with
always living on everyday low price and in Iran and trying to create the best sort of experience and if we do that.
I know that those are cool to also helping yourself that more,
time sensitive busy, you still needs everyday low cost and infection is expensive but once more than once a mortgage last next to that really wants this little buy online shop shop still components
and then you start TNS you pull out of that Circle we've been correlated those actions that you would take
against the other of the six segments that we understand where we want to how deep we want to go in and how broad you want to go and so we've been working through this.
[35:11] Better part of a year now I think that lens I'm just starting to see most conversations now start with.
Yeah he's abroad picture boy we want to go as we lens for that you know that time since too busy family his will how we might start to think about making slightly,
different decisions don't get me wrong this is not about you know.
I'm moving away from opening price Plano moving away from Braddock go to or any of the above but it allows us to start to think about how would we back to those Janice how would we prioritize where we would do things like
cake ordering all the work that we're doing install maps or you know that what that we've been doing you seen as talk a lot recently about online grocery pick-up and now about delivery those are the sorts of things that you start to look at when you say what
if if time becomes even more of a fact than we thought it was before how would you solve these things differently right lot of work not on the product side now round things like
read email so healthy read emails the busy busy families can run in and pick up at our great-great alternative to pick him up fast food on the way home right side suits that are not true selection right how to how do we do that so it's starting to lens the way that we
crazy experiences and we and whistle and it would have sold the stores.
[36:33] Brickell I'm the I'm the e-commerce side of this podcast partnership in.
Love marketplaces I've started Channel advisor which is a partner of Walmarts and so I couldn't go on without asking a Marketplace question so walmart.com you guys.
It took a while but you guys really have your sea legs on the marketplace how do you see that kind of tying into the customer experience obviously caused an explosion of selection but where are you guys in your thinking around the the. Com.
[37:03] Super important to us so I can you think about a top priority issue him up till you know what will talk a lot about Marketplace of putting time as a brain power
Thor in into that why do I think I'm making sure that I'm Marketplace experience is good enough right.
I'm not in a we recognize that even though you might be buying it from Jamie's toys. The reality is
you have coming to walmart.com to buy that and we need to make sure that we stand behind that experience I'm have the right tools and capabilities to do that and that you are not in any way disadvantaged by buying the marketplace I'm right so I'll give you good example.
It was really important for us to make sure that if you bought a Marketplace item you could return it in the store as well as online right in that time I didn't say oh I see that you bought this is not going to take it back.
Sounds sounds easy but does really hard right side of building a marketplace where you've got fed party sellers when you've got such a you know such a big physical asset is hard.
But it's really I think it's really it's really important because.
[38:16] It's important we have a large selection of items because the reality is I don't want a customer to go anywhere else.
I want a customer to be with us super frequently for groceries and a frozen consumables and we feel really good with a forward-deployed inventory in a in a butt in time is a 95% America to get that frequency.
[38:39] When you're shopping with us her groceries I want to go to fill everything else right I'm so you know and I'm frankly.
Yeah I thinking is you should be able to eat and we should be able to be able to pull people through which is you come to us day in and day out cuz you know that we going to get you those great groceries.
But we have a great selection 1p items that you can add into your basket and by the way if you want to that for the super random thing that we are we are not economically going to have to carry you can get it you can get it now at the same time.
It's a package same bundle yeah what one click away so I think it's really important as customers start to.
Whether they do it I know she had to do it deliberately or not I think people are starting to curate how many places they actually spend time in the past you think about you probably show up in like 30 or 40 different sites.
The one thing Amazon has got people to do right is to just go to one place instead of talk about it as the library affect right my kids.
Use I'm literally lose Amazon as a lively right is turkey disintermediated Google they just go straight into Amazon and becomes it it's really important for us we have the capacity to be able to dislodge that,
with our you know it with without differentiation that's at the Forefront when she's always say that the grocery component.
[39:59] Like it is interesting a lot of these like new digital behaviors are creating.
New opportunities but also new challenges so like want you mentioned all the progress you guys made with online grocery pickup.
I'm a huge fan Advocate it just seems like every time you talk to a customer that's all white changing experience and it's easy to see why busy families are.
Quickly adopting this new behavior and it seems like you guys are killing it on for filling that behavior The Dilemma in my mind is.
You got these beautiful stores that are designed to surprise and Delight people by discovering other products they want to buy when they come for their essential oils and you've got this you know,
super valuable center of the store where we can discover an instapot while we're we're shopping for our groceries or Pharmacy or all these other things
and for sure there's a bunch of purchases that in my mind a lot of consumers and never put on a shopping list like I never put the Oreos or the gum on the shopping list I secretly sneak them into the cart bike at the last minute so in the world.
You're helping everyone sort of transition to shopping off of a list and doing online grocery pickup.
Is there a risk of losing that that impulse purchase and that that you know how to how do you.
Help customers discover new things in a world in which you're sort of forming a list habit of you will.
[41:18] So is Mariska.
I'm working really hard so yes and I think it's two-fold right one is
even though you might be doing pickup.
We still need to create a really great stores that exactly do that right surprise and delight and every so often you going to want to come in
right and so how we do that and think about balancing when we pull people into sores versus when they didn't pick up,
really really bored so thinking about the physical dimension of this and then on the the digital space you're absolutely right like how do you
how do you.
[42:01] Create that impulse purchase behavior and where do you know where do you do it in the van so which I seen him in a lot of ways of where in the purchase.
In the in the patches funnel do you do it the high-end you want.
Is it Joy Lights of the discovery phase right is it is it through the checking out phase is it through in a
do you want a present product upfront I see that you're buying bananas and you should go get during these other things and where do you want to use different sorts of tools.
[42:31] Digital allows you to do really interesting League you get it right I'm taking about your very first question about dates or is
we can actually start to and I do things so we can have done somewhat with BuzzFeed on shuffle
I like shoppable recipes you think about the generation of that this world and make sure you could say I'm feeding a family of four
and once got celiac disease and one is in one has a biology I need six meals right prison to it right presenting percent what I should
why should be able to do by
oh and by the way they still miss Tita here are a few things that you might want to think that I would even chew it did I all we know who else is in your household so let me show you those things.
As we think about services like in home what's super exciting to me about that is somebody going into the home how about we start to think about
physical training of products right was so if we know that you've got two boys at home when doing groceries how about we drop off these four or five things
if you like them keep them if you don't we'll pick him up when we come back how do you how do you start to think about.
[43:41] The services that we have on the predictive are the predicted nature what we can do to release a type of pus license and just think it's just a surprise until I feel that the impulse in a different kind of way right.
[43:55] That's a sneak, like predictive for or try before you buy kind of.
One thing that's kind of rocks e-commerce world it's kind of funny if you think about it is Amazon's come out with a bunch of private labels and everyone's all up in arms and you know.
And then you read that that Sam book and he talks about the Old Roy dog food or is it old what's the dogs safe.
How about I think what is Amazon's done though is that kind of taking it from you this is kind of like the product you bought two what products are like this kind of found this customer segment.
That wasn't there before and they've created a whole new thing and targets gotten really good at this as well where where are you guys in your thinking about that at Walmart of private labeling and how that fits in.
[44:51] So we have a.
Big and very fast growing really exciting private label business across Walmart right on the stores have that long for you, and you think about some of the
Rhymes that sit within that on the Walmart side and on the same side I sometimes amazing private label products to,
so you know that continues to get a lot of time a lot of attention a lot of focus on his idea is really like really growing and we are super excited about we will continue to do that and also that both,
online and offline
obviously we have acquired some direct to Consumer Brands we have created some direct to Consumer Brands everything from soda prenovost to it to Old well and that remains an important part of a strategy
I know we're thinking through which brands are going to be online or online-only and when and why should things be sold in the stores will continue to do that as we round out that rotor assortment.
[45:55] And then I think that's an interesting piece you know for me in the middle which is how do we think about.
Next-gen which is not in a.
Make a scene and I can let you know I make his Mark products private label products or in a great value toilet paper but you think about the work that we've been doing to incubate product either ourselves with Supply so I think about.
Kristen and Dax and hello Bella or I think about some of the work that we've been doing and they are not in the ladies ladies shaving space on we've worked with,
big Brands to to develop custom product
it's that sits in at 6 and I stores you can grab the apparel space weather is the weather going to be like Alan and Sofia and that collections scoop,
you know I take a class at New York fashion brands that we both now and now we have that collection so we working through the many various ways we can think about using different brands within the family and and how do you deploy them,
I think what makes us very different now is it is not our intention to,
ever bring people into the Walmart family sell their products online and then use that to you noted to use that data to then.
[47:16] The time and where we want to get why we want to put private label product it's a different approaches with incubating because I was a two shows us that the arrow
price that either adapt in the market or is it capital particular price point in the market must put in Italy open price point Verizon in in many cases I think we can create
product the right way about that price point and that's really really where we going.
[47:49] So there's a side pause here that I'll fix we were just sorting question.
[47:50] We were just sorting question.
[47:56] We just put a note in her on the time so I don't mess up.
That makes total sense I want to go back to you earlier when you were talking about your scope you mentioned a bunch of the things in one of the things you mentioned that you don't hear all that much about is Walmart pay we we have.
We spent a lot of time talking about digital Wallets on the on the show and sort of,
consistent theme is there all these amazing customer experiences that happened in places like Asia.
Haven't been a successful here and my friend this is part of the reason they haven't been as successful here is there is not.
Super convenient seamless digital wallets like they're their there is an Asia either promise that Walmart pay is secretly more successful and meaningful than.
A lot of people give him credit for and you guys just don't talk about it that much so am I am I wrong is it an important amenity at Walmart or or Walmart shoppers using it and had Patty you think about it.
[48:55] Yes I just did the first part of that question.
As we think about you guys you do it I've been studying it super apps I would obviously a particular prevalent in in Asia now it's interesting when you take a look at my super apps
I mean most of them developed out of what I tried and then and then group
elements is usually the consistent glow across all the super apps right so as we think about where we go with
with Arab stretching super apps you write won't pay becomes interested component of that so I'm I mean won't pay is
is successful customers use it if you look at a licensed in the latest credit card that we just went through Capital One right you enroll at in Walmart pay you get a significant Advantage from doing that
it is a Hope In Our intention that we leaned into that mall in store maybe around the store right around the store and in your in your community so.
[49:56] Creating opportunities to just make it much more Flawless and if you enrolled in Walmart pay we know more about you and that's for we pretend she can offer you a series of experiences that we couldn't
if you didn't know it's about as much about you writing so so me making sure that there is enough value
and functionality in Walmart pay the people choose to enroll and engagement not just download it but engaging it
is super important because then that means I can get more right I can get more information about you which goes back to me said that I can create much better experiences for you right I can,
gets come and go or at United We will we will know more about your behavior which might make up my allow us to do different sorts of things on the back end in terms of returning products or not unlocking out of sorts of things inside it becomes it does become
for us that glue that allows us to then start to think about okay well how do we create,
all the sorts of in an ongoing experiences this what to do right it's not where it needs to be and we need to create more of an instinctive reason for being in and benefit.
But it is important positive of how we anchor in and where we go I'm going.
[51:15] It wouldn't be a Jason Scott shoaf we did talk a little bit more about Amazon we also talked a lot about Walmart.
But you mentioned I think you said when your kids kind of got trapped in the the prime prime trap and it's hard to get them out of there
we seen a lot recently is Amazon you is using that and if people are starting their and now they're pulling ad dollars away from companies like Google.
Go to Walmart's made some moves in the ad Network.
Space is well soul of your thoughts on how do you view advertising and and maybe been a broader question of how do you how do you use their stop people or get him out of that.
Prime trap that you get stuck in.
[51:56] So stop with the prime trap I think you know.
I firmly believe that there is a Tipping Point one way or the other white right and there's a Tipping Point that got people into Prime
all the stupid people that get people out of prime I think it's a price of prime goes up right people to come over flat reflective on
what am I really getting into and what do I need so the number of times that I people have people say will I get free shipping with prime I know you just paid for the beginning of the year so free
differently is is really intriguing it says you think about the Tipping Point on oan and you think about the services within the
how do we know which customers to really start to take a look at
is it really worth it run if I can get same Goods or more Goods at the same or better price can system at the same delivery
do I really want to be paying $129 a year for
whatever is The Marvelous mrs. maisel and the content that that we've got six how do you nudge people how do we start to show people that are
better options at Outback the pieces of this and then and then again then the Tipping Point starts to come up and now I need to evaluate what else is in there and and what do I get on the ad business yet I mentioned I need the Walmart Media Group.
[53:18] Yeah but saying you dismiss for us and so we are,
committed to building a world-class a world-class what I caught a world-class advertising business the people would be proud and would choose to advertise on whether it's at Walmart or not
why does a difference between leaning on the supplies to do it but this is this is this is a platform that people want access to an obviously
about just got to the deli put the more that we can slice and dice and and a half back today to the more attractive it becomes.
[53:47] What I think is different about what we are going to do and I philosophy is we believe in creating really great
customer experiences and creating an environment in which you can continue to trust Walmart to do the right thing
buy you as a customer on biodata I'm so we famously
commit to Everyday Low Price Rite he famously have shunned you know some of that you had to shopping boxing gloves we haven't taken money to be able to place products in stores we are not going to break that philosophy not ethos online we will only
any experiences that we sell against will be in our opinion a creature to the customer
and so are we spend a lot of time actually tweet we've been told him he's going to the plans look at do we believe this is good for the customer is it confusing,
do they actually understand what's going on here.
[54:50] Would we be willing to corrupt search algorithm no right those results around and there are some decisions that we've made very recently about things that we will not sell because I don't think it's in the in the in the best interest of the customer so it's a different ethos that we have around
Walton Walton way we can do and then one that is absolutely predicated on
the Trust on privacy and security of your data that I think it's is potentially like him with some of the other models out at today.
[55:19] I do think that's one of the fundamental challenges like is sort of digital advertising for retailers is a relatively newer phenomenon and everyone struggling with.
You know how do you maximize your business opportunity there while still saying customer-centric and you know there certainly are a lot of people that feel that like in the case of Amazon particularly.
[55:41] Visited while taking money and in some cases like aren't giving customers the best search results as a result so it's it's interesting to see how everyone sort of makes those decisions for their own business,
I'm super happy we've been spending the most of the time and in this conversation talking about things that I view is sort of core to the customer and in super relevant,
intermediate for today and not a lot of shiny baubles but I got to be honest I wasn't do kind of like The Shining pot.
Pivot for just a minute to sort of innovation and you know you follow the Walmart there are a bunch of sort of cool Innovations you got.
Alphabots you've got you know that in real life store that's not far from here Sam's Club Now jet black all all these sorts of things.
Any of those projects that you think are like you're particularly excited about or that you think are likely to turn into a.
A supervillain and customer experience I got I would assume a bunch of those projects you'll learn things from.
And then you know maybe it'll be a different iteration of that that ultimately delivers on the customer promise like what what should a listener's look forward to.
Really double down on at Walmart.
[56:54] So it looks like I got it the secret of one away which is Walnut was seve how to stop at store right this would have liked future so,
first woman to spot in is is what I took right and so super excited about
the capability and the service that we can build that what that actually what that actually means in terms of I love the idea of somebody coming in and putting groceries in my fridge mean never having to worry about them
and then where do you take that in times of maybe it was not just groceries could it be and I could it be prescriptions could it be something else by the way when's the wedding if I come in once a week and pick up my dry cleaning and where else can you go in the service
where else could we go with Hardware right so can you move to full auto replenishment right can you start to think about it
is all sorts of super interesting ideas we've we've got in there that could be controlled through the what if you had like ovens
but you could Papa you know what I'm really great ready-made meal in before you left and didn't you could you could set it at United to Cookeville right from your phone when you're on the way home from work except really excited about that black I think
conversational Commerce underneath that is really interesting to me as his voice.
[58:17] And you know the capacity to be able to walk around create list when I show up.
I always forget something that I and I couldn't check out my oh shoot I should put apples and I should put something else in.
[58:33] I love the idea of an episode of war and you and any point a text but when I say apples it knows that you know
will but we know that I buy in a full pack of organic honey honeycrisp apples it's not it's not coming up with anything else it becomes super plus nice to you and you I'm really excited excited about
conversational Commerce capability where it allows us to power at scale we get back I think it's great and I
I use it all the time I left you may have to just text and I.
[59:06] Kitchen paper and it's apparently off. It's here in the afternoon this in a meeting say I like but the scale of the conversation, spiteful.
It's something that I'm I'm really excited about and obviously at some point we need to.
Leaning upscale to what you're seeing about whether they see IR else will someone for Jamie's done with the signs and Times of Skyland go in and out right you don't have to check out lines in the store.
Is an issue for us it is an issue for us ticket holiday time because he wants me to find him waiting in line how do we stop to not make that have to be a reality for customers.
But do it anyway the design on the back end so I would be remiss if I didn't say there was so much innovation technology that is going into.
[1:00:00] Think I got pick up Tawas which of facilitating online grocery Central operations Team all doing in and around the stores,
to make them in a tip to make it be able to lean into this customer experiences and to appropriately ultimate when he did.
All the rarest gives us the end of the fiscal capacity to be able to do some of these other things I'm about half the customer or on behalf of the associate there is so much Innovation Frank is going into,
yeah they've even got the training academy is and some of the virtual reality would doing in the and some of the things you're going to see is coming out with this year or which types of leads its way back to creating a,
more efficient happier Associates who create a really great customer experience and I'm so that they also.
[1:00:52] Nice I have to admit during an answer the one thing I did have some sympathy for the poor jet black person that gets your orders cuz that's got to be like high stress when the boss is like ordering stuff,
and it supposed to show up quickly at her home the it's funny when you guys first announce the in-home you know I got called by a lot of media that want you know they're quick sound bite in the the
typical narrative was our consumers really going to trust a stranger. Coming to your home and in my typical answer was.
Like that's not comfortable Behavior today that's not what we're all used to,
but if I'd come to you five years ago and said are you going to trust calling strangers on the internet to come pick you up in their car you would have had a similar reaction and you know customer behavior is obviously.
It's it's easy to see that same shift happen.
With this in-home opportunity like you know if the amenities are there and to me the funniest thing was when you watched it.
One of the first in-home services Mark Lori did and of course you have them all wearing body cams as a sort of a security measure and I'm chuckling because I'm like.
If there's one person I'm not worried about stealing from me it's it's Mark who's made quite a lot of money on his last last two companies.
[1:02:07] Yeah you know what is interesting though.
About what you say is you're absolutely right right mean the as you come up with an idea wouldn't be great for groceries if we can put groceries in people's faces that that's great.
I don't know that I want a stranger in my home what I really excited about sign who leads the team and he's got an amazing organization what I'm most excited that they did was they said Okay so.
What was solving for is he asked the other logistics behind being able to do this but that's irrelevant if we don't solve the trust Factor.
So what are we going to need to do to solve the trust factor that has gone if that has done everything from,
the locks that are put on in and the security behind not behind the book The Body cams
behind the selection the training of the associates who do it I'm Frankie like how do you protect the security of the associate 2.
And in many cases and so it's a really interesting case study of actually solving for the intangible which is the trust component.
Much more important in solving the tangible right and you know we're still we're expanding our testing and I was still going through and had how do you start to scale something like this spot.
[1:03:26] It does
it does require you to do things something different and announce never going to be for everybody right it's never going to be for everybody it's not you know and it's always going to be higher touch
interesting Lee you know economically it has some some real positives for us right as well but it's just it's so being that intangible
what are the things will you have to take off
to make somebody feel comfortable having access to having access to your home and those are the access pieces and then looking somebody comes into home and putting groceries in your fridge
I'm a mess up the fridge I know they said they squash things are they put them in wrong are you going to admit all of those levels of how do you get somebody to relinquish control.
Of that customer Jetty patrolling Kush control enough that they not worried about
the security of the delivery component right after the execution of that cuz otherwise it's not taking that stress away from somebody right they just sitting there watching watching to make sure it's happening the ultimate goal and Harry's you are so trust you you're so trusting of the service that you forget they have to do it.
[1:04:36] Just like an Uber type experience where it's become so second-nature now that you don't really.
[1:04:41] Right I mean yeah I mean you don't I think something and then when you get those spikes and something unfortunately terrible happens.
If you start at that is now shocking right it's it's become such the norm that when something terrible happens it made you know you like it wow
several years ago right I mean I grew up in the UK and grew up in the world right now in London
can cabbage. Puff the knowledge you need and they were like bag and I don't have that the notion of.
Somebody could I could become an Uber driver tomorrow riding on a mini didn't even think about that
you getting into a car with a stranger who probably doesn't know where they going is relying on Waze Stevens and even tell you where the real trouble Rock.
[1:05:33] We really appreciate your time and we're kind of getting up to time one last question we were to hop in our retail time machine trademark Jason Scott,
and go to 2030 explain to listeners, like what would you love for that Walmart shopping experience to be like kind of 5 to 10 years in the future.
[1:05:55] Who's great question.
I'd love for you know I'd love for our stores to still be around but to be really interesting gauging places where people went to enjoyed going,
and when and when.
[1:06:19] To have fun as opposed to it you know so the bracing yourself to go and do you get your weekly shop so how do we create all the fat but then how do you augment that.
Gigi's Lee beforehand so that you know when you're in that you can actually focus on having the fun
and you know and I'm just really grateful us experience is so it will actually you're walking in and you've already pre-ordered your gross is not coming to you but you know you're able to.
Donkey basketball with LeBron in the sports Department through virtual reality right or I shall getting close to the store we're reminding you that it's your nephew's birthday next week
what's the packing groceries why don't you go take a look at Lego and you know it's probably how you got eliminated reality popping out of your phone right and you're able to do
but you know most of the tasks while still that I think is probably way to go but like for us.
You mentioned it earlier but nobody ever says that I mustn't fun right there's a functional nature to to retile particular in the retail space that we're in with.
How do we how do we turn that that functional into
antiphon I want things a fun you start to engage with the more and so it becomes a real it becomes a want to do buses I must've really excited about doing the grocery shopping at Walmart,
that would be great.
[1:07:45] That is an awesome vision and that's going to be a,
good place to end it because it's no surprise even on our fourth anniversary show we've completely used up all of our listeners allotted time,
Janey really appreciate you taking the time to come chat with us and share some of the Visions for where Walmart's going as always if you enjoy the show feel free to leave us a comment on Twitter or face,
and I for sure if you haven't done it already up here for years in for God sake It's Time to Get on iTunes and finally give us that five star review.
[1:08:18] Exchanging really appreciate you taking time to be on the show and helping us celebrate 200 episodes in 4 years.
[1:08:24] You are very welcome honest be here thank you.
[1:08:26] Until next time happy commercing.
EP199 - Dreamforce and Retail Earnings
Episode 199 covers the 2019 Dreamforce Conference as well as this weeks news including Walmart and Target earnings reports..
Salesforce held their annual Dreamforce Conference in San Francisco this week. They launched a major new functionality "Customer 360 Truth" a universal customer data platform.
Singles Day - 11.11 Day - $38.38 billion US (up 26% YoY)
Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
Episode 199 of the Jason & Scot show was recorded on Thursday November 21st, 2019.
Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this is episode 199 being recorded on Wednesday November 20th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your compost Scott Wingo.
[0:39] Hey Jason and welcome back Jason Scott show listeners,
well that's pretty exciting times here it's November 20th we are about seven days away from Thanksgiving T minus 7 Days folks to Holiday kicks in
some would argue it done right after Halloween but I like to think of it really kind of kicking off at Thanksgiving,
Jason was kick-off I saw on Twitter Some Noise around the world's largest Starbucks where you the first person in there.
[1:08] Sadly I was not a side note on Thanksgiving I've been training all week by eating pumpkin pies.
[1:14] Nice already.
[1:14] Getting ready. I think it's a rookie mistake to just go in the Thanksgiving cold without a good one.
[1:21] If you been pumpkin spice latte into it as well.
[1:25] I don't I stick with my classic ice cream key around I'm weird.
I did try to get my classic iced drink at the world's largest Starbucks which opened on Friday.
So a little less than a week ago in Chicago,
and I struck out so I was out of town Friday I went there Saturday morning at 8 when the store scheduled to open and there was already an hour line waiting to get in.
And I had families in toddler with me so I we had to abort in.
Do a plan B so I'll have to go back and visit another time that kind of an impressive draw that it's drawing that kind of crab for a retail store open.
[2:06] You think the world's largest could hold more people.
[2:09] That was my promise I actually thought they would be popular but it would still be easy to get in because.
It was on Michigan Avenue which is like the premier shopping location on in Chicago and this was formerly The Crate & Barrel flagship store,
so it was a four-storey 40,000 square foot furniture store that they've converted into a Coffee Roastery.
So my assumption was it could hold an awful lot of people but apparently they're still you were still sort of them dating how many people they let in.
[2:40] Is this one of those doesn't really have much mobile order it's going to be a food concentration there's no venti takeaway cups all that kind of strangeness.
[2:51] Semite so that the concept of this is called The Reserve Roastery I want to say it's the like this one.
If I have this right the first one was in Seattle there's another one in New York this is the third one in the US there's one in Shanghai there's one in Italy on which is controversial,
enter this is like the premiere Starbucks concept it was a pet project of the founder of Howard Schultz the founder of Starbucks.
It does have all the regular stuff you could place a mobile order there you can get all your traditional drinks.
But it has a lot more stuff so they roast beans there and if you go to any Starbucks anywhere in the world and you buy a reserve being the beans that come in the the black and gold Packaging.
[3:37] I got roasted in one of these roasteries so they're so it is a commercial Roastery but then they have kind of a you know it's a it's a beautiful.
Kind of handmade Roastery with all glass windows so you can watch them working and they have kind of a Willy Wonka set up where they have these,
translucent vacuum tubes that lead from the Roasterie to all the coffee bars in the in the building and said the beans like,
fly through the tubes over your head so you can watch the beans getting delivered for making coffee.
Any of your classic drinks with a much wider variety of beans that make a bunch of other drinks that aren't typical they make a bunch of drinks mixed with alcohol that have ice cream that was stand-alone restaurant everything merchandising section,
this is all based on the other roasteries I visited and I'm assuming that what we're going to see in the Rock somewhat localized so when I'm assuming we're going to see you soon.
Cool architecture in some variation of all that in this the Chicago store will have to report on it after I physically get in one.
[4:46] Awesome well I'm here at home in North Carolina and you are out in California at drink for so tell us what's going on at dreamforce.
[4:57] Dreamforce has the annual trade show for salesforce.com sales force is based in San Francisco so this is kind of on their home turf and that I saw someone refer to this is a quite Big Show it's it's every hotel room in the city of.
San Francisco sold out I think I saw that I was like 40,000 people are here attending it so they they call it Burning Man for people with jobs.
Which I thought was pretty funny because there is a lot of like chocolate brand building entertainment experiences in addition to the sort of.
Salesforce product experience is so that like really extravagant.
White outdoor Forest that they built in they give away free expressos the forest has like.
Like a redwood tree that you can drive through and you know all this kind of cool stuff and have a lot of celebrity speakers,
show Emilia Clarke from Game of Thrones this year Megan Rapinoe dying from USA World Cup team this year,
a Beckham the musical act is like Fleetwood Mac and then the the big headliner Tina I mean Tim Cook is speaking but the big headliner is Barack Obama speaking tomorrow so they get a lot of.
Interesting to listen to people that are you know probably not talking about the marketing cloud.
[6:23] Yeah and then so then they that they talked a lot about a lot of social kind of stuff obviously so that the CEO of Salesforce is really into that and then I usually wear like crazy shoes.
[6:37] Yeah he likes a mark Billy off is a very Progressive CEO and he be like there's a lot of really good causes and so we highlight some of those,
on the stage right he's built through hospitals in San Francisco and sponsored some public schools and things that are kind of cool but they do they have like they have content about helping people to,
be more Mindful and they they have a whole exhibit full of actual monks that are helping people to meditate you know they have a lot of bad like Arianna Huffington talking about like.
Trust and transparency and yeah I just I mean yeah she wouldn't go into the sweet thing but.
Yesterday they have a lot of people talking about like their pet interest which are you know potentially interesting helpful lifestyle Tibbetts.
But then they also do generally make some big product announcements at Salesforce and and so like.
I'm not sure this is going to go down as the biggest year but there's some I guess I'm reasonably sized interesting new announcements.
[7:46] How much of the show is there like a track for e-commerce and an of the you know they're there I guess they called the Commerce club now is that a thing or is it.
[7:59] There is there so there's a there's a Commerce track Commerce is like integrated into the the Keynotes along with the other clouds but I will say.
They're shifting a little bit more from products to rolls so,
when they were product-based like the Commerce cloud is about e-commerce in the marketing cloud is about sending emails,
and you know that they're kind of Shifting the content to be more roll bass content so it's a retailer or a b2c company and that that roll.
Yeah would obviously you need Commerce and marketing cloud and CRM and customer success rights are there.
I would say like they haven't completely transition there still are definitely some products and Trick Tracks and there's there's a stand-alone Commerce keynote for example as well as some.
Dedicated Commerce content in the the main stage keynote but I do think I feel like it is Shifting more it won't surprise me if a couple years from now there's a retail track.
Not accomplished you know that's a pretty reasonable thing to do.
[9:07] What are the highlights of utena the show.
[9:09] Yep so the a big one so one thing that like.
Obviously is well known to you but you know very first Cloud companies so in fact when they launched the company they launched it at Oracle world and they they did like fake picketing outside of Oracle works at World saying like.
Like free software you know and put it in the cloud and it was you know this whole like counterculture thing,
and anyways I still feel like they are a really good example of the cloud like they,
it took a lot of feedback on features from their customers and their customers can vote on the features they most want in every quarter they do a new release and you go to the home from work on Friday and you come back to work on Monday and suddenly you have all these new features,
that where that features most requested by their customers and so that doesn't sound like rocket science but a lot of other Cloud companies I still think like.
You're not getting the full advantage that you should from the cloud and so at the show what they tend to do is release some major new feature.
It's free and instantly available to all the that users on the cloud so I can couple years ago they launched Einstein which was their AI module and it was,
you know a free new thing for all their customers so this year they watch them a major new platform that's free to August and customers of customer 360 true.
[10:32] I think they're starting to struggle with their naming conventions a little bit here.
But that this is is interesting like I feel like this is very on-trend so it's a couple of,
can a customer data features rolled into a meta offering so the Met offerings called customer 360 truth and I think truth stands for kind of,
the single source of Truth for all customer data and the the modules inside of it is they have kind of a data manager that lets you map all your data from your various Salesforce and non Salesforce systems,
into a single Universal.
[11:10] Data platform so it's based on customer and it has a unique ID for each customer so like normally we would call that a CDP or a customer data platform,
so it seems like Salesforce has launched one and they made it free to all their existing customers,
and said that the actual example that use on stage was a retail example they had Louis Vuitton they commented you know.
Despite the fact that Louis Vuitton uses marketing cloud in the Commerce Cloud that the you know the keynote speaker bought some cool Louis Vuitton shoes.
Last week and he got an email you know marketing on this week because the in-store POS doesn't know you know that the the email system doesn't know that the insert POS old shoes.
I'm inside with this new 360 data manager you can't.
Relatively easily Plum all that data together and then the marketing Cloud knows to you know Market stuff to people that already bought their shoes instead of,
to try to sell you the shoes you already bought so,
the CDP space is pretty popular right now makes total sense that sells words would be in it kind of big news that they are not trying to sell it but they are giving it away and because they a lot of companies already have a lot of their data in Salesforce.
[12:30] That's a pretty big competitive advantage of its kind of one click and you load all that data and all the data mapping and stuff is already done for you so that's pretty slick.
New problem we're all struggling with is data governance and privacy,
you know there's a European data standard and the California did a standard goes Live January 1st and so suddenly we all need new metadata about,
who has permission what rights to us or what data and how we collected and all that sort of stuff so
part of this 360 trap trust is a privacy and data governance module which is a product a lot of people are having to buy right now to get compliant so that's interesting,
and then they have a customer in audience is module I may have the name wrong,
this to me sounds sort of like what we would in the advertising space traditionally call a DMP or data management platform and so this is kind of,
ability that take all the state of that you now a aggregated,
and like create audiences and segments for specific campaigns and specific uses so it's the ability to do really sophisticated slicing and dicing of all this customer data you have,
and the work with it.
Known data IE people that you actually know and also unknown data IE you know an honest users that I've text you but haven't identified themselves,
so that's kind of a pretty comprehensive interesting product that they want that's basically available immediately we stand.
[13:59] In their sandbox so I'm sure some customers are excited about that.
[14:03] Is the CDP thing on acquisition or something they build organically.
[14:06] To the best of my knowledge they built that because I am not familiar of this specific acquisition there are like,
a lot of the plumbing like so a big part of this is is data mapping and transformation and they they bought a very big company in that space mulesoft.
Last year so it wouldn't surprise me if they revered some of that capability in here but you know they also had new announcements around how you'll stop is developing as a standalone tool so.
So don't know I'm not specifically aware that they bought a CDP.
[14:37] Do this is disrupted in the CDP world because if you already have a salesperson you get this for free then you're going to.
[14:44] I think if you're a.
[14:45] Buy another city.
[14:46] Has has like you know very much data in the Salesforce Cloud it's it's definitely going to be a much tougher sell for anyone else and you know I would say a lot of people that have had a lot of trouble getting.
The anticipated return or value out of it right like they you know the IT department to love to move around all this data and buy all these new tools that they often don't have buying from the business users in the office.
Don't don't change their marketing activities based on having these new tools and so you don't get a very good Roi and.
Because Salesforce has a lot of the marketing tools.
Yeah I think they have a better chance to be successful and I think it's going to mostly go head-to-head with Adobe that you know also has a very robust marketing stack and has their own CDP,
but yeah I'm sure the rest of the CDP vendors would rather a Salesforce have not gotten into this place.
[15:41] And then if I remember from our deep dive on personalization that's kind of the heart of personalization alive times has this CDP thing.
[15:49] Exactly in Encino sales force has a lot of person with Asian features they have a pretty robust a eye capability the day they have Brandon Einstein and so,
kind of one of the cool things about the cloud is like you do do this mate data mapping you plug better data into it and all the recommendation tools you have and they iTunes you have.
Just start working better without really having to do any new implementations or anything else which is to me pretty cool kind of like when you get up in the morning and your test was faster.
[16:21] And then add some more.
[16:23] Some other product announcements I mention Einstein a couple of times that big Einstein announcement is that they there beta testing Einstein voice so this is a natural language processing engine for all the sales for school,
and so that they use case they damn it is you know you're in.
In a sales meeting with a customer and you walked out of the meeting and now you kind of dictate your notes into the Salesforce app you just using natural language and you know Salesforce logs at contact in the CRA,
you don't create the forecast if that's appropriate their you know all those kinds of things they did a couple other use cases that are kind of cool where.
It can listen to the sales calls on the phone and listen to customer service calls on the phone and,
either do kind of post call analysis and recommend different things to the salesperson than what they actually did you know based on its artificial intelligence,
when the case of the customer service module it can be calling up like knowledge articles in and and helpful resolution to a problem just while it's listening to the,
the customer service person talk to the customer so voice.
That seemed a little less like live in a little more kind of this is the early version.
[17:45] And then they now have some partnership well I guess those first ones not a partnership Salesforce about Tableau last year which is a big.
[17:55] Data visualization data analytics tool.
Today announced that the full integration of Tableau and Salesforce so now your Salesforce customer you get the whole Tableau capability set to use against your data for free so that's kind of cool.
Is Salesforce a much better fate of visualization and analytics capability and then they announce Partnerships with three other companies so they announce the apartment or they,
renew to partnership with apple the announces partnership a few years ago and this mostly takes the form of they launched on the sales force apps to run on iOS and so they have a.
Interface for all their tools that runs on iOS and and that's where they demoed Einstein voice is Kentucky into that app and stuff that was kind of cool.
They announced a partnership with Amazon and I would call this one the least interesting they.
[18:52] Have made a version of their customer service module stand alone and they're selling it as a as an app on AWS sojourn AWS customer you can turn on this.
Customer success portal from Salesforce they announced that some of that Einstein voice stuff that we just talked about is available in beta on the Alexa devices.
I'm so you potentially could dictate yourselves notes into an Alexa instead of in your phone.
And they announce some training material that sells horse has a big warning portal and they announce the AWS training is is now available on the Michelle Sports training for so a pedestrian stuff there I would say,
and then the last announcement which was a little surprising to me was a partnership with Microsoft.
And the the biggest component of this is that they're moving the whole marketing Cloud to Microsoft Azure so this is to my knowledge the first time Salesforce is kind of formally picked.
A public Cloud to host their Solutions on I think you're the for like most of the apps that run on Salesforce his own cloud so interesting and I'm sure a big win for Microsoft.
[20:03] The so I guess that won't really be back customers just got like the back ends where it says.
[20:10] Yeah I know it's Maura inside baseball thing like I'm sure you know if your Google Cloud platform you're upset and I you know I almost feel like the AWS announcements might have been to kind of soften the blow that they didn't pick it up.
[20:24] Brickell the other big event that has happened since our last podcast that were recovered news is singles day did you track a I had to be at a fleet conference so I was not able to track lost a very close see did you see how that one.
[20:38] I did I kept an eye on it it's it's almost gone so mature that it like personally I'll say it's like slightly less exciting for me.
Then it was four years ago when we started this podcast for example but not shockingly they had another big year so,
total sales for the day we're 38.38 billion dollars in US so that's a.
Huge number that's more than six times bigger than the biggest e-commerce stay in North America.
The scales just amazing and they're all these ridiculous stats about how many orders they take in the first minute in the first hour and all that stuff by partly because.
Bape resell all the sales for so much that customers have chewed up a lot of purchases and they log on the first or second of the sale and click by,
to my knowledge alibaba's never had any major infrastructure problems with this day which is like super impressive to me,
is this feels like one of the biggest stress test of it and a delivery infrastructure in the world then it seems like they nail it every year.
The one thing I would say so that that 30 billion dollars represents 26% year-over-year growth which is where the first time ever a deceleration in the rate of growth.
[21:56] So you know the day might be kind of maturing a little bit the thing I go in a single day looking for most is if there's any evidence that there.
[22:06] Expanding their International reach so single day like definitely.
A place to a broader audience than just China but it tends to live primarily in Asia and there's some you know Western retailers that try to piggyback on it but but Alibaba themselves you know their main pushes get Western brands,
on the platform selling to Asia for singles day not get Western consumer shopping on Singles day.
And I would say like I saw less evidence this year than I had in the past that they were even sort of leaning in that direction,
but it's definitely true that you know Western Brands tend to be amongst the biggest Sellers and fastest runners,
on Singles day like it was a mix this year so they were like 15 brands that did over a billion one,
in sales and that was like Chinese companies like way way,
a Japanese company like Fast retailing that owns Uniqlo and then you know it's apple and Nike so,
kind of a good mix food supplements are actually the biggest category so you know it's a lot of people buying like like gourmet food and nutritional supplements.
Mostly imported products and then Cosmetics makeup Beauty are the second biggest category in her quite huge.
[23:30] And then you know stuff like and Mike are like diapers do well to so so good day all around.
[23:39] It felt like generally continuations of trends that we seen in the past rather than something while be different this year.
[23:45] Used to be on Amazon would be up on that list as well have I wonder if they had a good singles day and I didn't see anything about.
[23:52] I didn't see them referenced and you know singles Day falls on Veterans Day in the US and obviously you know it's a.
Short. Of time before Thanksgiving and this year because.
You know there are fewer days between Thanksgiving and Christmas like a lot of people started their Thanksgiving promotions earlier so you know it all together.
[24:18] Yeah Google when did Jason Scott show without some Amazon news.
[24:22] Amazon news new your margin is there opportunity.
[24:36] Big amazon news that we want a report on is
discovernursing so on the 13th of November not called this kind of the holiday punch in the news Nike pretty publicly announced that they are going to suspend that
pilot program where they were selling Direct on Amazon there's a lot of this started this in 2017 there's a lot of speculation that so John Donahoe who was CEO of eBay and then went to,
assassin company for a while and then it now has become CEO of Nike he had something to do with this obviously not a huge Amazon fan
so that was pretty interesting Jason what it what did you make of that one.
[25:20] Well there's a lot of speculation I Channelview the speculation that like when Nike started this pilot in there in 2017 I think it was,
did it wasn't necessarily an effort to sell a ton of product on Amazon and Nike sort of felt like they had to be on Amazon for their customers the speculation was,
did they wanted more leverage over Amazon to help and get Amazon to cooperate with sort of anti counterfeit anti gray marketing.
And so you know a lot of us think that they they put
a limited assortment of Nike products and certainly not the like poppy are new releases on Amazon in order to have a more formal business relationship with Amazon to achieve some of these softer goals
and you don't now the inference is that didn't work very well or Donahue felt like it wasn't worth it or or you know whatever the case is but it,
doesn't it never seemed like it was a full court press to create an amazing Amazon Nike brand experience on Amazon.
I still like I think it's interesting I think it definitely gives cover to a lot of other brands that are on the fence about whether they should be on Amazon or not like I definitely think when Amazon Nike moved on there.
It made it harder for other brands to say like we don't think that's right for our brands,
and now like I think it did they're not on there I think it makes it easier for other brands that make that say move what it what do you think about that.
[26:48] Yeah Yeah lyrics and see what how other brands react
part of I think what Nike was thinking when they did this was they could control part of this was simultaneously Amazon put the clamps on people selling Nike products and if so
I haven't heard anything but I'll be interesting to see if those,
yo come off as well and then so will happen is this product will still be on on Amazon but just did the third-party Marketplace and argue,
Amazon Prime makes more money that way anyway so I think Amazon will be okay I wouldn't I wouldn't cry for an hour don't stay up all night worrying about Amazon Chase.
[27:28] I was not going to but you actually reminded me of another day point I actually heard some rumors that in the run-up to this that Nike may have been.
Actively soliciting some of their authorized dealers to be comforted party sellers so like Nike may have even decided to help make sure that the.
The product stayed on the platform when they pulled off the one piece sales.
And I would just add one another thing that's a little more about Nike than Amazon but the to me.
Nike being on Amazon was kind of counterintuitive because the same time they announced this pilot they announce this big initiative to cut way back on the number of wholesalers that they had,
in the premise was we only want to work with retailers that have a really differentiated customer experience otherwise we would just rather sell the rest.
[28:19] And so they literally had like 30,000 businesses that were selling Nike shoes and allegedly they tried to cut that down to 40 in these forty all had to kind of commit to have an enhanced Nike experience so think of like,
Nordstrom with a Nike shop and shop for things like that,
so to be kind of a commodity on Amazon at the same time you making that other shift kind of fell in kangaroo it is and they really had a lot of success with that initiative so,
in 2013 so while ago 19% of their sales were direct-to-consumer today 30% of their cells are directions to consumer in it it's a that's a big number and Nikes case so that's pretty successful.
[29:02] They're like 35% of their their their online sales are growing at 35% same-store sales growth like 6% so like most of the growth is coming from,
their online direct to Consumer which is super interesting and I talked a lot about Nike being really good at digital in-store and doing a lot of really smart things,
in their house of Innovations and their Nike towns and the one bit of news I didn't get to cover when it happened but that I think is super interesting is,
Nike has this really good app that lets you kind of specify shoes you want to try on and in a Nike store of the shoes get delivered to a locker and you can try them on and buy them without ever having to talk to a Nike salesperson there now.
Piloting that capability in Foot Locker stores so you walk into a Foot Locker in the upper east side of Manhattan and you can.
Use the Nike Plus app to try to win merchandise and Foot Locker store you can order merchandise and it gets delivered to a Nike Locker inside the Foot Locker store it's a,
it's super smart and interesting for Nike it was shocking to me for Foot Locker because it essentially means that Footlocker is encouraging.
Customers to use the Nike app in Footlocker and you know like that doesn't help their Adidas sales very much so it was it that was it.
An interesting thing that I've never seen before where a brand had a successfully done a takeover of the in-store digital experience of a retailer.
[30:32] Yeah yeah must be complicated to manage all these different brand experiences at some point.
[30:36] And then one other like so I started with an irony of and I'll finish with an irony this announcement that they're pulling off of Amazon happened two days after single day and of course Nike is one of the biggest presences and is all in on,
I'm single day so that you know they one of those 40 retailers definitely is Ali Baba.
[30:56] One of the R9 listeners were one of the kind of previous holiday punches in the nose that Amazon received was from Toys R Us so we'll see how this goes for Nike.
Never a good idea to kind of flip your nose in Amazon so maybe we'll see some amazonbasics shoes with swoosh like things on them.
[31:18] Yep. Be interesting.
[31:19] Another quick Amazon one they did announce that they are going to start a week of Black Friday deals on the 22nd so they're they're going to have a week of
Black Friday deals so it'll be interesting to see the kind of settled on on this deal format with a good kind of a combo of
it got the gold box it got some Lightning Deals at the other day and then they wrote a bunch of that stuff in the past experiment was video and whatnot.
I'll be watching on the 22nd just going to get a flavor for is there some new kind of platform at the deals as a kickoff Black Friday deals.
[31:57] Yeah yeah I'm watching it in a we talked a little bit about this but the you know they also publish their physical toy catalog and one of the things they did a really good job this year and the toy catalog is.
Digital integration in the paper catalog in it and sort of quick to buy capability and so.
I thought that was really smart and then I noticed that the Walmart toy catalog holiday catalog just came out and is the first time Walmart has implemented that capability as well so that seems like the new the new standard and catalogs as you finally have to.
You don't make your catalog digital friendly.
[32:33] The any other Amazon news before we go on to Walmart earnings.
[32:40] Just too quick to bits on grocery so we've talked about the fact that Walmart or Amazon has some real estate in Los Angeles and that and that they intend to open in grocery stores in Los Angeles.
They they responded to some press inquiries last week,
and in one of the one of the questions was are these stores going to be Jay Watts stores just walk out store so will they will they use Amazon go in this La Market in these much bigger grocery stores and Amazon said no so,
that was kind of a definitive answer that you have these grocery stores aren't going to be bigger go stores and of course all the speculation is that they're going to be.
Lower price of grocery stores like Target in a broader audience.
[33:26] So we're all going to be eager to see when in January these doors open and I'll sure make a truck out to LA.
Take it out of the winter and do some shopping in the new Amazon grocery concept but then there was an article that came out this week that although they're not using,
Amazon go in this La Market concept that they're opening,
Amazon did admit that they have a dark store at private store that they don't you know what let test customers and employees into in Seattle this a 20,000 square foot grocery store,
that is using the Amazon Go technology so they apparently are pressure testing and stress testing,
the the Amazon Go technology for a bigger form factor store which is interesting and in that same article they also acknowledge that they're actively talking to several retailers,
about attentively licensing the technology and one of the ideas was apparently Amazon has productized kind of a small kiosk version of The Go technology.
That you might use it like an airport or a hotel lobby and that a sibo which is a sort of a gourmet food and convenience store concept it's in a lot of airports.
Was apparently named as a potential licensee for that so give me interesting stuff to watch.
[34:50] Record then we have a couple earnings to report on super stuff is Walmart.
[34:56] And not shocking but they they had a good earnings call so Revenue was up 3.3% same-store sales in the US were up 6.6% so
the US is doing better than International for them econ was up 41% so that's right in the range that they've been.
[35:16] Announcing a recorder they've been kind of bouncing around between 39 and 45 per cent they promised that for the year that be up 40% so 41%,
feels good and Doug mcmillon acknowledged that the bulk of that gross in e-commerce is Grocery and specifically grocery pick-up and and he did kind of,
talk about the the elephant in the room on that that that growth is not particularly profitable and you know one of the goals for Walmart is that they need to do a much better job of.
Selling more stuff to those those grocery customers to make the sales more profitable and so what's interesting about that is the aov,
on grocery pick-up is already higher like twice as high as the it'll be in the store but what isn't happening in grocery is you're not adding any general merchandise to that order,
and though that's you know one of the big challenges that that Doug mcmillon talked about is they got to turn online grocery customers into overall Walmart customers.
And you know we were at the moment there's a separate app that you use to buy groceries then there is to buy general merchandise and so you know.
[36:29] They call that the gold and blue app and don't be surprised if you see,
the feature set of those two apps kind of merge in order to affect the School of the Dead was talking about but it is interesting to me either.
1400 their stores now do grocery delivery $3,000 stores now do grocery pickup,
again they have about 4,000 stores in the US so they can expand for another quarter and a thousand more stores and keep having this kind of growth,
you know is very likely that growth is going to slow down once they get to 4000 stores that are all doing grocery pick-up and delivery and then it's going to be really critical that they,
change the customer Behavior or their other cops are going to be really challenging and then kind of related to the
earnings announcement they did introduce their new CEO for the us so that used to be a CEO named Greg foran he left to become the president of New Zealand airlines he's a native New Zealander so,
best way to drag and they promoted John firmer who was the former CEO of Sam's Club to be the president of the u.s.
So he's a longtime Walmart guy but he's a really young guy so.
[37:42] Congrats and it's going to be interesting to see how he does it Walmart and then they back filled his job with Katherine Maclay who used to run Neighborhood Market so that's.
The stand-alone Walmart grocery concept and so she steps up to become the CEO of Sam's Club so some some internal matriculation happening it at,
[38:05] Sunmark Lori reports right to McMillan right so would does he is eCommerce, cross-section so the u.s. guide actually just run stores in the Commerce a separate how does that.
[38:19] Yeah yeah so there's two presidents of the US there's there's the president of stores which it was dragging now John and there's the president of digital which is Mark they both report to the CEO.
At Walmart which is Doug mcmillon and the like there's a chief customer officer,
that's kind of above marketing and she reports to both of them so she coming to you don't have to report that to the digital and the stores.
And you know I think some of the old articles from last year about Walmart we're about like some sort of friction between the store guy in the digital guy in the fact that you know.
A lot of the digital growth was actually being delivered by the stores with this online grocery pick-up and that you know Mark was kind of getting credit for it but it was probably,
the store guide doing most of the work so it'll be interesting.
John's a little younger than Greg you know I think it's a fair assumption that he's a little more.
Digitally native then dragged was and so it'll be interesting to see if he has a different relationship with Mark and Greg.
[39:25] Selena on the heels of that we had Target earnings and this is what in the world of all straight we effectively call a beat and raised so this is really well-received by Wall Street,
so the beat part expectations was EPS of a dollar 19 came in well north of that at a dollar 36 and then they bumped up
the guidance at Wall Street was expecting 592 620 on the revenue side and they came in at 6:45 to 6:45 so they kind of move the range of guidance up above all she was acting self
shares were up pretty sharply I saw,
thanks to this so that was good and then there was a e-commerce was up 31%.
Gets me back to this question we should we talk about Pride like every 10 shows or so if everyone's e-commerce is growing north of 30%,
these are big companies so Amazon's at like 25 Walmart we have at 41 Target here at 31 how on Earth,
even like Shopify is growing forget their number but it's it's like 30% I think last time I saw GMB wise.
[40:40] Then we have e-commerce growing at 15% I I.
I don't know how that works something something has to be like a negative growth even eBay is like just flat so it's not going to really be a negative trim there so I can look inclusion e-commerce is either going faster than we think it is or,
or there's some peace some dark matter in there that we don't have any visibility on that
I'd like to me but I digress did you see anything interesting in the Target earnings date they
the talk a lot about ship-from-store some sure you if you were interested in that.
[41:13] Yep yeah that was super interesting that we talked about it before but my answer to your conundrum below is that e-commerce is growing faster than we think,
and the problem is like all of these these,
companies that come out and say e-commerce is growing at 15% of index there their forecast of the US Department of Commerce data in the US Department of Commerce data is flawed for,
Ecommerce particularly for omni-channel e-commerce and so when Walmart says they grow 41% and that's mostly people going to pick up groceries at the curb the US Department of Commerce counts that is best for sale so that's part of your bra.
But in any case yeah the target announcement was super interesting to me for some of the granular data they shared about their curbside pickup so first of all they said hey we grew 31%,
80% of that gross was pickup in-store orders.
So so that the that you know they bought this company ship they they really enhance their curbside pickup capabilities they do deliveries from store and they do they actually
built with all male rooms in the back of all their stores and they do ship from store and so.
[42:27] That store inventory is being used for 80% of their digital growth which is huge and then most interesting is that they said that when a customer comes to the store to pick up an order so we don't have to ship it to the customer.
That takes 80% out of our cost or 90% rather out of our costs 08,
curbside pickup order Casas 10% of what a ship to home order cost us and when we get a ship the homeowner and we can ship it from a store.
That cost that's 40% cheaper than ship from a fulfillment center and so,
the you know a debate has always been like Ashley stores aren't going to be as efficient at picking and shipping as a fulfillment center so you know the unit economics could arguably be worse the pic and chip,
and then the counter argument is but your shipping in a way shorter distance because the inventory is already a lot closer to the customer and so the shipping cost should be well or and you know people debated about whether that netted a positive or negative for the retailer and what Target is saying as.
Man we can ship something from the store that I get there faster to the customer and it says it's a bunch of money and we can get the customer to come to us and pick it up it saves us,
a boatload of money and that's what most of our customers are doing so.
[43:46] To me that's super encouraging for Target and it's fascinating and it really high like me.
The difference between the Walmart and Target strategy.
[43:59] So one problem with all the ship from store and pick up in store stuff is you can only sell the inventory you have in the store right,
is a target's got 65,000 skews in the store and soda Target digital strategy is to sell those 65,000 skus,
either Walmart you had like 200,000 skews in the store
but you're trying to compete with Amazon for the total wallet share and you're trying to sell tens of millions or hundreds of millions of skews and throat you know Walmart is totally leaned into building more fulfillment centers in developing a Marketplace,
and that that kind of thing to sort of get there their catalog up to be you know competitive with Amazon and they're making progress and doing that,
but it really makes the unit economics challenging for Walmart whereas Target is selling a much more constrained,
catalog but they're actually able to do that profitably you know it's kind of not sure once Reggie's right or wrong but it feels like,
Walmart is trying to hit a homerun and compete with Amazon and Target is trying to head a sort of a single or a double and you know being more successful at doing.
[45:09] The one thing that doesn't add up for me so the store has 65,000 items Target's website has I would imagine orders of magnitude more than that right.
[45:21] Maybe a order of magnitude more they have more but it's not their target does not have millions of products.
[45:27] That's what's to say it's a hundred.
[45:30] Yeah could be two hundred thousand.
[45:32] Yeah but what's a 200000 the chances are.
Yeah that the thing you order online is not going to be in the store so do they know are they pushing people to order things in the store and some way like the top of search results.
How are they or just happens to be the head of the distribution curve and that's kind of the 80/20 rule.
[45:54] So I do I think it's partly that that 80/20 rule but I do think target is more actively merchandising the in-store assortment in are you know,
then there are some other retailers and you know it is I think it's two because they have a.
Metronidazole a lot of items but and I don't know this for a fact but I would bet you anything did the percentage of customers on target,
Define products through the guided navigation is much higher,
then the percentage of people that find products through the guided navigation on Amazon or Walmart like the Walmart and Amazon assortments are so big
The Galley navigation is use very little and almost everybody has to find things through search but Target is so much more known for curation,
a lot more with target cells are their own Brands brands that are exclusively available through Target.
And like I do think they have like a more chill rated taxonomy that's more friendly to shopping and so,
you know part part of this is a self-fulfilling prophecy is that you know more people are clicking through the menus they're saying the first page of that menu result they're buying stuff that's all stuff that's in the store.
I think that's literally the target strategy and it's kind of opposite of the Amazon Walmart strategy.
[47:14] And then a couple Acquisitions to talk about the first one that I think shocked both of us PayPal acquired honey-honey is a
well, browser extension so it sits there you install it into your Chrome or your Safari or your Internet Explorer,
messenger name that always forget and you know what kind of watch is your shopping behavior and if it sees you throw something in your cart somewhere it will go and try to find a lower price so essentially just like.
[47:43] Scot Anderson there's tons of these out there none of them have got no attraction but for some reason honey is done a really good job with marketing and and seems to have a pretty good user base
the thing that shocking about this one is a couple things first of all the price tag of four billion dollars this is asbestos,
we've seen reported this 200 billion dollar Revenue company just got a 20 x multiple so that's just me there was some kind of a bidding war hear the other thing I wonder how PayPal navigated is
I would imagine so if you think of
Amazon having 50% of e-commerce it's probably 50% of the honey I'm activity or more is on Amazon.
[48:28] My understanding is there some kind of an affiliate relationship they're so so Amazon hasn't black honey but now that it has a new owner I'm Amazon
you know do I really want it your PayPal owning this there's going to be some,
preference PayPal payments Amazon doesn't take PayPal,
yell at my say something happens and they are in Amazon turns off honey which which is very viable yeah you can look at the IP in and just shut the
crawlers down that they have you know that thing has huge exposure from getting an award Amazon so I hope PayPal is thoughts through that and,
got some somewhere around that challenged his communication to see what happens to that one.
[49:13] Yeah and I can try to shut them down they can make it way harder for honey but like there are companies that successfully still.
Do stuff with Amazon even though Amazon doesn't want them to I'm not saying that's the position you want to be in but I'm not sure it would completely exclude on that would just make it much harder if Amazon. Active it at preventing it,
but I think they might have a broader version of that problem you know Visa V PayPal in that like I I don't know that much about honey but I imagine that the retailers have a love-hate relationship with him if,
you're not a honey partner and people are shopping on your site and honey is trying to divert those customers to a site that is a honey partner,
you don't like honey very much right so if your target you're not paying honey and when you you know try to buy stuff on On Target it's saying like hey there's this other retailer that has a lower price,
or you know honey you says like hey they have a promo code over here these kinds of things.
You have the potential to to alienate a bunch of retailers and those are the same retailers that PayPal is trying to get to a doctor platform,
so it is possible that they're going to have some customer conflict here don't don't know enough to know that for sure yet but but it's going to be interesting to see how it all plays out and improve your point.
I sure hope PayPal thought through that when they paid for billion dollars for me.
[50:43] Yeah we should probably rename this segment Scott and Jason are super jealous or why didn't we think of that so it so number one congrats.
Short forgetting this exit and then the other one that was kind of mind-blowing was Kylie Jenner she started a makeup company and you know obviously she's she in her hole
Kardashian Clan there are a really big influencers this has blown up
2 / 200 million in Revenue very quickly and she sold half the business to
the large conglomerate in the beauty category called Cody for 600 million which is effectively gives that a 1.2 billion dollar valuation in the real mind-blower
is the company has six employees.
[51:29] Yeah that Revenue per employee works out to be pretty good huh.
[51:32] Yeah I have a feeling Kylie may take a disproportionate amount of that but we don't.
[51:40] Yeah I know it's that super anything in that I mean it's a nuanced but I think Cody actually bought 51% so that's that a controlling interest.
Which is somewhat interesting like I wonder if that will in any way put off Kylie Jenner fans but I mean mad props to her like I think she's actually totally changed the way influencers think about monetizing,
their popularity comes before this they all would take money to,
sell other people's stuff and this model has been so successful that you now see a lot of other popular influencer saying hey.
I'm not going to promote someone else's product. No launch my own products and so there there's a lot of lot of folks trying to follow in her footsteps but this is a.
You know what that huge home run and congrats Shopify by the way cuz that's this probably the biggest biggest retailer on the shop.
and it's also important to point out that this is also a DMV be kind kind of a strategy here so imagine
fairly large percentage of her sales are from her website and then she does I think she does sell thru I always get
it could use which one but she's in either Sephora or Ulta.
[52:55] Yep and I think she started out online only and then only in the last year has she added the the wholesale distribution but so yeah for sure.
[53:06] So Jason and I have a big announcement we are starting the Jason and Scott beauty company and we're going to come out with a palette for Holiday 2020 so stay to.
[53:16] Yep yeah we're not to upgrade the servers for the mass influx of traffic we get for that but
looking forward to it and it will include a browser plug-in which will help you buy a product instead of anyone else's product on the web so we're kind of think of it is,
honey + Kylie Jenner.
[53:35] Yep we'll just call it Scott and Jason honey or something like that we're still working on the brand.
[53:40] Exactly send your suggestions to Scott,
and sadly that's going to be we're going to have to leave it cuz we have used up all our a lot of time as always if you have any questions or comments you have to hit us up on Twitter or Facebook page
and I please please please this is a great time for holidays to give us that special gift and go to iTunes and give us that five star review the the reviews key
keep coming but we we want and need more and we really appreciate it.
[54:10] Thanks everyone we're probably stay tuned for episode 200 you're going to love it.
[54:18] Yeah absolutely that's going to be fun next week and until then Happy commercing.
EP198 - Holiday Forecasts
A weekly podcast with the latest e-commerce news and events. Episode 198 covers the 2019 holiday forecasts, store visits, and news.
Jason & Scot both received the new Apple AirPods Pro and the Amazon Echo Buds. Both liked the Apple product better. Echo buds had better noise cancelation, but an inferior fit/design, poor microphone, and a case that’s too big for a pocket.
Nov-Dec excludes automobile dealers, gasoline stations and restaurant
November – January
Total Retail 4.5% to 5% rise in 2019 (vs. 3.1% last year)
Digital $144-$149B 14-18% growth (up from 11.2% in 2018)
Online 14% vs 10.8% last year
November 1 to December 31
MetaForecast (summary of the forecasts):
14.25% Online (range is 13-18%)
4.35% Total Retail (range is 3.7% – 5.3%) – last yr was 2.1%
Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Episode 196 of the Jason & Scot show was recorded on Thursday November 7th, 2019.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this is episode 198 being recorded on Thursday November 7th 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your Cup host Scott Wingo.
[0:39] Hey Jason and welcome back Jason Scott show listeners Jason Ritter episode 198 and we have a really big surprise for everyone on episode 200 I’m giddy all over with excitement.
[0:51] I know I am to every each time I say one of those big numbers in the intro I’m like oh my God we’re going to have to learn how to start saying the twos it’s like our Y2K day.
[1:01] For those listeners that haven’t seen Jason give a life talk he always talks about how if you enjoy the talk there’s over X hours of him out on the internet,
pretty soon you can build a role that part of your side over to 200.
[1:17] I know it turns out I’ve been lying cuz I generally like round up to 200 hours in those live talks and in preparation for our big 200 anniversary show I did the math and it’s actually like 176 hours of us.
[1:31] Close enough we’ll get there eventually keep plugging away.
[1:36] Yeah we might tonight who knows.
[1:43] Anyway so Thanksgiving is only three weeks away so we thought
we would spend a fair amount of this episode looking at the Holiday forecast but before we do I’ll be Gadget Geeks we wanted to talk a little bit about that first so you and I both had the fortune to get the latest new
your devices so airpod pros and Echo buds came out and everyone on Twitter was wondering how your
experience with both of us went so so give us your review.
[2:18] Yeah so I was super excited they both ride the same day I don’t know if Amazon like stepped on the gas to make that happen or or maybe Apple did but that was coincidental so I have to say,
that I like the airpod pros better than the echo buds for almost everything and somewhat disappointingly.
On my use case which I mainly use these things as my phone interface for being on conference calls like 8 hours a day.
I’m not sure that either one of them are better than the original airpods.
[2:53] Controversial so you don’t like the noise cancelling of the air pump.
[2:59] Well so couple of things and I I literally did a test and I even I recorded some audio files so one thing when you’re using it as a phone interface I don’t like to wear both.
Are you positive same time.
[3:14] You’re that one of your guy.
[3:15] Because I do want to hear I sent you have unlimited battery life because I can have one in for two hours while the other one is charging in the case,
pop the the charged one in take the uncharged one out and I can literally like I literally have these a tower block swear I’m just on the phone.
And any of these products work for that when you only wear one at a time but none of them do noise cancellation when you only have one ear in SoDo for phone use noise cancellation doesn’t work,
I do occasionally listen to music and to me the airpod pros sound much better than the echo buds.
But I did test both of their noise cancellation and that the echo Beds which have Bose technology in them definitely have stronger noise-cancellation they they eliminate more background noise than the airpod pros.
[4:08] So one idea to solve your 11.1 ear problem is just to get two sets you up I have,
12 of these things at this point so why not just put both in and then recharge and then switch every 2 hours.
[4:25] That’s what the dirty secret of my family is left to my own devices I would have way too many sets but I can’t off setting that my wife is very Adept at losing them.
So it’s one of the rare things we’re like like my strength balance is out or weakness within most of everything else that’s the office.
[4:41] So your sets go to backfill her lost sets.
[4:44] It does seem that way,
but I do I feel like the airpods are more comfortable.
The echo beds like are more in your ear and they it just feels like a big thing in your ear I mean if it’s going to be kind of personal to everyone but I tested the microphone cuz I was curious,
which one sounded better in the airpod pros are basically the same as the airpods on the microphone which,
is a pretty good microphone and it does a decent job of eliminating background noise and it does a really good job surprisingly of eliminating wind noise,
the echo buds that there’s no stems of the microphone is in your ear and not surprisingly it sounds much worse.
Just a tinge of closer your mouth is helpful but the roads are horrible in the wind like almost unusable.
[5:39] Which verse Chicago I’d seems important.
[5:42] Yeah yeah I am sometimes on my way to Starbucks while I’m doing these call so that and as you know I’m quite Speedy so I create a lot of wind just walking.
[5:50] You’re like the flash down there that’s the problem.
[5:56] But I will say.
It is mildly cool in my house having the echo buds because I have so much of this novelty home automation around my house,
that way this thing in your ear like just being able to like very quietly other anywhere in the house like you know to do something and have it happen does give you none of us Tony Stark.
[6:17] Yeah I was kind of a little depressed by that go buds cuz they do feel like having a giant,
ball of wax in your ears or something in there that feels heavy and like you don’t want to move your head around and I’ll pop out these wings but I just didn’t I think I lost some II I open the package and then you know,
I was I’ve been predicting that it would be awesome to have Alexa in your ear like that,
but then I’m in an open Office so and it’s good news canceling so I’m sitting there screaming Alexa play this,
it’s actually can’t raise it that much it is good for exercise though if you wanted me to get Alexa to play a certain song or something or skip or whatever drink exercise so I found it but then like exercising and moving around alot
they don’t feel good so they didn’t live up to my expectations.
[7:07] No I agree I was underwhelmed and to be honest I kind of just qualified on the second I opened the box because the case is too big.
[7:16] It’s like a bar soap.
[7:18] Yeah I mean I carry these things in my pocket all the time and the echo buds case just wouldn’t fit in my my pocket.
But that being said on the last show I did reference that I was installing a new Gadget which is Echo control for my kitchen sink.
And I have now successfully installed that and as predicted like nobody needs this.
It’s it’s no easier to just turn on and off your water than it is to tell Echo to turn on and off your water but I will say there were two things that use cases that I didn’t consider it a kind of cool like you can tell it.
Eco fill 2 cups of water.
What is exactly two cups of water which can be kind of Handy for some things and then my four year old son thinks this is the greatest thing on the planet.
[8:11] The two cups of water or the.
[8:12] No sitting in the kitchen turning on and off the faucet.
Yeah so what’s the new entertainment device in my house.
[8:19] Pretty soon we’ll just lose all use of our Limbs and it’ll be like that in Wall-E where we’re just in the chairs and slurping sodas and talking into computers.
[8:32] I’m moving one step closer to that Wally vision of future everyday.
[8:35] Awesome thanks for the gadget updates I think you are actually in big beautiful New York City for this episode which makes me wonder in the interesting trip reports.
[8:48] Yeah yeah I got to visit a few stores I’ve actually been in New York last week and this week and last week there was a big retail opening in New York
Nordstrom open their flagship store in New York so you know how to see Nordstrom based in Seattle they cannot expand it on the West Coast,
and they they now have you know this,
this flagship store in the heart of the retail Echo System here in Manhattan so it’s a big deal to see what that store would look like.
And while I would I would say it’s a excellent implementation of a traditional department store.
[9:26] And so you know it had a lot of a cool smart features so there was a lot of personalization options there’s a lot of places where you could,
you’re by your jeans and have them embellished like in the store,
they have alterations while you wait which is pretty cool so they have like Taylor’s on every floor and you can actually watch the tailor like hemming pants and stuff,
they had some really you know extravagant shopping shops like there’s a new a really cool Nike shop and Shop bunch of good restaurants.
Some nice digital amenities they do,
same day delivery they have a rich buy online pickup in-store experience so a lot of cool stuff but nothing that’s going to.
Revitalize the department store category I don’t think it’s going to be really interesting because it’s like this may be the best apartment store in.
[10:28] Manhattan you know where the caveat that for most people the best department store to the one who’s a storm it matches your taste the most.
But you know they’re there so many department stores in Manhattan that have this Rich brand history that Nordstrom doesn’t have your.
Like it’s going to be interesting to see if they’re able to win over consumers or not.
[10:48] Where is it it’s not in Hudson yards.
[10:52] No no no no so it’s very near Central Park on like Broadway and 57th in this kind of completes their New York deployment so they actually open the men’s store a couple years ago,
maybe 18 months ago and now the store is across the street from that,
so it’s a women at home is this new store men’s across the street they already have a couple Nordstrom Rack switch is there discount Concepts in New York and then they have two of these satellite stores that they call Nordstrom local,
Nordstrom local is kind of a.
A digital extension of Nordstrom you can do by my pickup in-store there you can do returns there you know it it’s a lot of omni-channel amenities they don’t have inventory there so you don’t go shopping for new stuff,
but if you want you no personal shopper to help you or you want to pick up some digital purchases or things like that that a couple of these digital.
Nurse Mobile stores in one of the clever amenities they launched in Nordstrom local,
maybe a month ago is that they would accept returns from their competitors so you can return your Macy’s purchases at this Nordstrom local.
[12:06] How’s that work.
[12:07] Unauthorized you return them to Nordstrom Nordstrom packages them up and drive them to Macy’s for you.
[12:15] But then like how do they verify the cattle they avoid fraud like.
[12:19] Yeah I haven’t gone through the experience so I think like you know he is probably like I mean.
Nordstrom isn’t crediting you the money when you drop them off like they’re just providing a minute e of packaging them in.
And you know mailing on the listen e-commerce thing or or taking to the store but like if the store doesn’t give you a credit your York of your visas going to be with Macy’s not with Nordstrom.
[12:41] So it’s more than just to drop off not a full return.
[12:45] Exactly it’s not like happy returns for for these competitors.
[12:49] What else what else.
[12:51] Yep so then I’m staying this week down in Tribeca which is very close to the Amazon 4-star store so I went back there to check it out,
I like that store more than some people like it continues to be super busy there was not a lot of new stuff going on there like you know the assortment kind of pivoted to Holiday,
and I did grab you a Nordstrom toy catalog because you I saw on Twitter that you didn’t get one so.
[13:19] I’m sorry yeah an Amazon toy catalog so which is.
[13:23] Awesome thanks. It has a great Star Wars section I look forward to seeing.
[13:26] Yeah yeah I just got to figure out how to get it to you.
[13:32] I like the 4-star store as well it’s at like a cool I bought several things in there that I didn’t know existed you know and it’s kind of cool to see them I like
dissection where they have those exclusives that are kind of like the things I’ve gotten from Kickstarter a lot of that stuff I kind of want
touch it because I’ve had so many weird bad experiences with that kind of stuff so that’s my favorite part of the store it’s got kind of a beta of kind of a feel to it and I will section.
[13:57] Yeah no for sure and I mean my promise is always been at that store and the bookstores are sort of Trojan horses they’re really Amazon device stores,
and as the Amazon devices like the echo system gets more and more complicated pun intended,
you know what a broader assortment of Echoes and rings and you know and then all the stuff that works with them it it’s super helpful to have.
A store that sort of show the lacrosse device experiences.
And that that that reminded me so where I live in Chicago is within a mile of an Amazon bookstore and that bookstore got remodel the last month so I went back to it this weekend before I came here
and that’s pretty interesting to because the original bookstore Concepts.
Like many bookstores really tried to have kind of a third-place feel so there’s a lot of soft seating where you can kind of sit and read a book and charge your phone while you’re reading a book in the the one of my neighborhood had that Intelligentsia coffee shop.
[15:01] And the remodel what they basically did is tear out all of those.
Dwell time amenities to make more room for more Amazon devices,
and I got rid of the coffee shop they got rid of this off seeding they added a bigger Amazon device section and then you know one upgrade that maybe it’s only interesting to me but.
All of these doors try to match online and offline pricing the online pricing changes all the time so when they watch the book stores they had what I thought was a horror riff experience you couldn’t tell the price of anything and you had to scan,
everything with your phone,
in order to find out what the current price was didn’t want to have paper price tags then you know fast forward a couple years they open the sports star store and they deployed digital price tag so that they could always have a current price and so you had this weird. Where.
The four-star stores and the newest book stores at digital prices and the older bookstores had no prices and now they’re remodeling the older bookstores and not surprisingly they they did add the digital price tags.
[16:08] You love a digital price tag.
[16:11] Well I’ve been predicting that it’s going to be the big year of them for every year for like 4 years old.
And now I’m going to be extra stubborn because I predicted the Amazon was going to have that Echo your your phone for like 3 years and it never happened and then I finally gave up and made it so,
now I need to stick to my guns also in Tribeca is a very tight to store called showfields I think I’ve talked about it before it’s in this family of physical Marketplace at so.
The landlord raised the cool retail space brands of lease a shelf and then they sell their own products on the shelves so we’ve talked about betta is being a model of that neighborhood goods for poster,
there there’s a number of these Concepts and there’s one that’s here just here in New York I’m called showfields and they’ve been getting a lot of Buzz lately for.
Having a retail show where they put on like some retail theater and I’ve been reading about this so I want to go check it out so so I went back to the Schofield store and.
I’ve kind of decided that the the gimmick of the the retail theater is actually kind of annoying.
[17:29] So they have it it’s a three-story store you know with a bunch of PODS and The Usual Suspects of all these I Challenger brands that have rented a spot so it’s.
toothbrushes and and all that sort of stuff like that there is a cool assortment of vendors in here they’re selling stuff I will I will totally give them that they’re each renting,
a space to show their product into what they’ve done is the bottom floor is kind of cell service browsing the third floor self-serving browsing and the second floor instead of having quitting sales associates they have actors,
and the idea behind these actors as they like.
They have like a canned presentation about the products in about how they use the products in their life and it it really is just like a presentation from a salesperson.
But it it’s like you walk in the store and they they confuse Everyone by going are you here to shop or go in the tour.
And it’s like well if you want to shopping in the stuff on the second floor you can’t avoid being on the tour if you want to see anything on the 1st or 3rd floor is the tourism going to help you.
So it just it seemed a little like overly gimmicky and you know God forbid you just want to look at the product on your own on the second floor like you can’t cuz this.
Desperate actor is trying to earn a sag card in a retail store.
[18:54] There’s a I went there and it had a slide do they still have the side where you at.
[18:58] They did.
[18:59] Top floor income.
[19:00] Yeah so from 3rd to 2nd you go down you can go down the slide which I’ve course did and I videoed it so look for the Twitter video of me going down the slide which I know people are super eager to see and its significance does a couple rotations in it.
[19:13] Did you have your some of your pods and Phyllis.
[19:16] I didn’t.
[19:18] Could have been a good wind test.
[19:19] Yeah yeah yeah they were in my pocket and I think both of my knees did survive the slide so that that was good news but here’s here’s what I’m going to say tool
replacements for shoelaces so they are like these permanent rubber bands you get them in any color you want in,
and then it turns anyway shoe into a slip on shoe and I’ll try that I tried to buy a pack and you can’t pay for them.
On the lake on the floor where they are.
Or at least it didn’t seem like you could like there was no salesperson to pay there’s no cash register so I go down to the ground floor and I said Hey how do I pay for these things in there like you were supposed to.
Pay for them up there there’s like one salesperson she must have been busy with someone else but no worries I can bring you up and so then it’s like.
Should I go between dollars and unlike would said they were $14 and she’s like when we call up and ask and she’s like well.
It’s $14 if you pick your own colors individually and grab 14 of them but if you buy a pack of 14 that are all one color you have to pay $20.
[20:32] So you’re saying like like if I if I go up there and just pick 14 of this exact color,
you’re only going to charge me for it if I want them in the bag I have to pay 20 and she’s like yeah I’m afraid so right and it and it was like a super awkward transaction and like,
basically I abandon my physical card and walked out without my music,
and as I’m walking out I’m thinking about it and I’m like you know why there’s so much friction in this is such a bad the buying experience it’s because the store does not have a kpi for retail sales.
Right like they’re they’re TGI’s rents.
And so that you know that they’ve optimized everything for this customer experience and and you know getting good brands to come in but you know the people haven’t thought through like actually selling things and being financially.
Lastly whenever I’m in New York City I always go to B&H Photo on like
33rd Street which is kind of my adult Disneyland and then I generally will walk to Macy’s from there and check it out,
so watch the Macy’s a block away from the Macy’s is this cool new Starbucks concept that I had been reading about that just open the day I was there called Starbucks pick up.
Inside this is a a mobile order pickup only location allegedly you can’t place an order in the store but secretly you can.
[21:54] It’s our put some pictures online but this like whole store is optimized for people that just Place their orders,
why can pick it up not get in line and place orders there’s a cash register but it’s kind of like it in the counter and you don’t see the Baristas or the.
The the expresso machines like they just have all these alphabetize counters where you you come and get your.
[22:19] I think so I think that’s going to be a New Concept the Starbucks is going to use in a lot of the highball volume order stores because.
The mobile what is in the stores are really disrupted the normal flow of the Starbucks and so this is part of their,
their solution set for that in this is a pilot so that was kind of interesting and then I did pop into the Macy’s and it was the third installment of story he just on live the day I was there,
so you know you remember story was this going to retail theater times app that,
I was in for the downtown Manhattan. By Macy’s they opened him up in a bunch of Macy’s in the first team was colors so they had,
August beautiful merchandise that was a sorted by color in the department that you know they ran that for about a month and then the second scene was Miracle glow.
It was like a lot of gardening stuff and they had some cool merchandise but you know my joke was it in this I wasn’t joking it did not smell very appetising in that department like there was a lot of live Miracle-Gro manure.
[23:26] In that department and so you know usually when you’re trying to trade a great retail experience you don’t want it to smell like manure into that went for about a month and now they’re on their third one,
which is Holiday Inn so you know this is like a good theme cuz it’s all like sort of gift face the the merchandise thing is really attractive they have a bunch of cool different than yet,
again like a big scene is personalization so there’s a number of products that you can come and get personalized.
Uniquely to you and 4 story I feel like this is a particularly strong theme because one of the challenges with all these Discovery experiences.
You know is why would people go there what mission would they have that would get solved by going there right like no one walked into Macy’s thinking I want to see what I can do with Miracle Grow.
Until I’d argue that theme didn’t have a lot of reason to go there but the holiday theme when you’re looking for gifts for people.
Things like a much stronger and more more cognizant theme so I thought that was pretty well done.
[24:30] Yeah that’s what I’ve always been a little skeptical that but the,
my wife and daughters love that and they’ll suspend tons of time they like the discovery aspect of the the story even even inside the Macy’s so I think we did the miracle glow one in the holiday one before.
[24:48] And to me it’s,
I think those Concepts work better when they’re inside of a store that serves other missions right so you know you need some new back-to-school clothes you going to Macy’s free back-to-school clothes and you go check out this other Discovery experience while you’re there like I think storage,
that are exclusively a discovery experience that don’t need any other Mission like it just harder to get traffic to.
[25:11] Yep the cackle TV is stuff.
[25:15] So that’s a lot of store visits we also do have some you know some news items this week Commerce news.
[25:29] Yep what you fire fire sup on them.
[25:32] That will fire is well maybe not fire but,
the the surprising news today is the CEO of Gap is stepping down so there’s a gentleman art pack,
I want two things I’ve always liked is he he was the VP of e-commerce a gap and got promoted into the the CEO role.
Gap has not been super successful during his tenure,
last year they announced this big move that they’re going to spin off Old Navy as a separate company than the rest of the Gap Brands were going to be operated is you know this new Co,
and they had an earnings call today that was not very good and then they announced that that art was stepping down.
And so you know they announced an interim CEO who happens to be the the son of the founder who’s been a board member,
but I think the intent is to go out and do a search for a new CEO.
I’m into this kind of follows to me a trend like last last year we talked about a lot of CEOs that hid it step down recently and said there’s another big one.
[26:41] Yeah what what I don’t like about the strength as there’s no transparency so,
they’re not giving reasons for lies people in NY can that in the case of Under Armour it really was bad because Kevin plank a step down and then you know they had to announce regular days so,
because he didn’t answer why you kind of assumed you was kind of hiding it either gets like it makes it look way worse than probably maybe those actually we’re disconnected we don’t know but when when you have this lack of transparency,
makes you wonder what’s going on.
[27:14] Yeah and I think the same story at Nike like there was great financial performance in Nike
but there was a lot of sort of negative press like around the whole Alberto Salazar thing and treatment of women Executives and treatment of female sponsored athletes like there’s a bad news and then
you know the CEO of a well-performing company in Assateague steps down and they don’t give any specific reasons like the inference is that you know he’s.
He’s accountable for a lot of those there’s missteps and then. You know it’s not sure.
Retail that the CEO of McDonald’s was let go this week for impropriety so a lot of lot of them.
Churn at the at the big chair for a lot of lot of these in a couple of cases they were you know I’m kissing McDonald’s and Nike they were financially performing very well so stock that she took a hit when those guys left.
[28:11] Cool Indian new section filed under arm Olive Garden today Sears announced they’re going to close 96 more stores so I think that’s about a hundred and eighty stores between Sears and Kmart
so I’ll have to do is do that two more times and they’ll be done.
[28:32] Yeah I went hopefully that you know it’s not death of a Thousand Cuts but yeah sad for all the other folks that were working in the stores but like certainly not surprising news.
Retail I get a news in a banker Barney’s had declared bankruptcy a while ago and we were waiting to see if they would be able to restructure and continue operations or they were going to get liquidated and last week it was announced,
that they were in fact going to get liquidated so basically,
all the assets of the company which is all that inventory they had in their stores got sold to a liquidation company and it’s called Great America group and Great America is now selling at a discount all of that may see all that Barney’s merchandise.
And like to be honest the a lot of people in the luxury space were really like holding their breath.
Hey hoping Barney’s wasn’t going to liquidate but if they were going to liquidate like oh my God where they can have a bunch of designer you know what jewelry Brands deeply discounted going into this holiday season was that going to have a,
a trickle-down effect on the rest of them.
[29:44] The the retail space and was you know everybody in that category going to get ticket for this and it seems like,
Great American is not sort of a quick churns cell everything in a fire sale kind of Liquidator and they you know there’s like 500.
Million dollars worth of inventory year and they want to get that value out of it and so the sales are going on right now are very superficial it’s like 5% off on all this stuff,
and I think people are kind of taking us II release that even if they subsequently have to discount from this merchandise a lot more to sell it it seems like they’re not going to just come until after holiday and so that will at least Preserve,
holiday season for some folks and side note apparently lvmh had this crazy contract this vendor agreement with Barney’s,
the in the event that that they did default that lvmh had the right to take all the merchandise back rather than have it be Wicked.
So far they have an exercise that Clause but apparently like they’re so protective of their brand that they made sure that like you know they wouldn’t have a bunch of there their stuff get deeply discounted on the market in any case.
[30:56] It’s actually pretty smart.
[30:57] It’s really smart I think you should think more people should do that like I think you’d have to have a lot of Leverage in order to get that kind of vendor agreement,
sign because that’s like a that’s some kind of liability that that Barney’s had to carry on the books and I don’t like it from the accounting standpoint I’m sure that was super annoyed.
And then the other half a Barney’s is this intellectual property and that got bought by this company called authentic Brands which is been going to license it to others and they’ve already announced the first licensee is going to be,
Saks Fifth Avenue order the parent company is Hudson Bay Company but so it seems like there’s going to be some Barney’s branded departments or merchandise inside of Saks Fifth Avenue in the future.
[31:38] What are the things that happened with sacks when they get sold as their headquarters building was worth more than probably didn’t tire retailers does Barney’s have a big real estate portfolio that would be,
maybe more valuable than a bunch of these these items.
[31:54] That is a good question so exact had a lot of real estate but that famously was this New York flagship store that was worth like a billion dollars by itself and somehow wasn’t completely valued in the acquisition like I assume some people lost their job over that,
the I don’t know what the real estate situation is with Barney’s if they own the real estate or they were Reese’s I do know that the New York store which is like they’re you know the biggest up there I think it’s 7 stores or something.
Is a going to continue operations for like a year in some like diminished capacity so it,
is there a recent doesn’t sound like there’s a piece of real estate that they’re going to be able to liquidate quickly there.
But we shall see I haven’t read about the specific Real Estate Value yet a little more.
Start a digital news Prophet Chira which is one of the data providers that we talked about on the show sometime did a pretty comprehensive fry study going in the holiday.
And I was a little surprised by the results like basically they took a big shopping cart of products and price you know a bunch of different retailers on this big shopping cart,
and divided in there like four categories of products and Amazon was the low price in all 12 categories.
[33:15] Was I surprised.
[33:16] Well I like despite the fact that Amazon’s really aggressive on price I actually don’t think of Amazon as fundamentally a price leader like I think of them as a,
basketball work like I don’t think they like historically I don’t feel like they’ve always tried to be the lowest price on everything. I think they have.
Watch the competition and make sure that they were competitive on everything and that they were the lowest price on some sort of Keystone items that people tend to pay attention to this,
shows that he did they change that strategy or I was wrong in thinking that was their strategy because it seems pretty clear,
that that they are the low price guys going in the holiday,
you know Walmart was closest to them and in a few categories was very close but in other categories there’s like a pretty significant Gap and then folks like Target had a pretty consistent.
Against the Amazon so it seems like this is another phase of the bifurcation where you know you have the guys that are going for big assortment and going for super low prices and almost every other retailers going for some sort of,
more curated exclusive assortment and and more moderate prices I just thought that was that was interesting I’ll put a link to the study.
[34:30] In the digital news category Shopify launched a new amenity for their platform this this week which is their own email service provider so now for the first time you can kind of,
natively run email campaign,
in the Shopify echo system before this you’d use a plug into a another ESP like MailChimp or or a cheetah male or one one of those,
and you know now shopify’s getting into that space themselves which a lot of Shopify users are super excited about because they felt like that was,
you know it’s a super important tactic for driving traffic to your store and I felt like that was sort of the weak Link in the.
[35:10] In the Shopify echo system in a back to life based on some new data privacy rights over the last couple months a lot of the other efps at Dunham’s moved away from the Shopify echo system and.
That seemed kind of surprising until you saw this announcement at the shop if I wasn’t worried about it because they knew they were going to offer their own ESP.
And the reason that’s interesting to me is you know you think about how Shopify is going to continue to evolve and people a lot of people talk about them being a potential Amazon competitor.
You want to talk about that I don’t think of them as fundamentally an Amazon competitor cuz I think Amazon’s main value-add is that is providing traffic,
Shopify doesn’t provide any traffic but I think this more much more clearly put Shopify in the,
the marketing stack technology competition set so you know competing more directly with the sales courses in the Adobes of the world.
Kind of makes you wonder so so once you kind of add to email capability then you know if you listen to customers the next thing we’re going to want is a more robust CRM right because you’re just keeping a bunch of email addresses and hitting what’s emails isn’t good enough,
you going to a segment so then the segment you’re going to want to know that Jason have a dog or a cat did he buy what did he buy from me and now you’re kind of squarely into Skyrim territory and then once you do that then,
I got an order management system their warehouse management Prime like.
The filament capabilities are interesting to see their kind of Warren Moore capito with this cloud guys.
[36:49] Yeah I’m for sure and when she got that rich database of consumers and their preferences you don’t just want to email them you want to buy the lookalike audiences on Facebook and all those things as well so so there could be all kinds of advertising activations in that stack hit someone.
[37:05] Indian last piece of news I want to, not because I’ve been driving me nuts all week like 2 weeks ago
This research company first Insight published a study and they picked an excellent clickbait name for the study they called it Amazon past its prime.
And the the conclusions of the study are that consumers are losing interest in Amazon their preferring Amazon unless off and and in fact the majority of consumers in this study.
Prefer to do their online shopping at Walmart rather than Amazon,
I have counted no less than 50 articles written online about this,
you know different aspects of this huge trend of consumers moving away from Amazon towards Walmart.
And the reason to drive mean is because that is not a huge.
The studies of a they surveyed a thousand people and ask them where they went shopping they didn’t watch where they go shopping or look at the receipts or anything they like,
they surveyed someone in the middle of doing something else and said like what e-commerce side do you use an,
501 of the thousand people they asked set you know thought of the word Walmart before they thought of the word Amazon.
[38:23] What’s the sub Bentonville thousand people.
[38:26] I don’t I don’t know what the methodology and I’m going to hope that they have good Geographic diversity in there.
Obviously you know the part of the country were Walmart’s the strongest in the parts of the country were Amazon’s the strongest tend to be pretty bifurcated so,
you know if there’s any Geographic Claus but it’s only a thousand people it doesn’t even matter like it’s way too small a sample size 190 million Shoppers go to Walmart every month,
more than 10 times that amount go to Amazon every month they surveyed a thousand people like it’s not statistically significant and.
I’ve said it a million times we have tons of evidence to the fact stated preference surveys are irrelevant like customers get it wrong all the time like if I jumped in the email accounts for those thousand users.
The the amount that shopped in Amazon vs Walmart would have no correlation to what they sat like people just don’t think like that and so you know.
What kind of silly study and I was in a frankly surprised by all the journalists and analysts that like.
Just you know consumed it and took it and run with it ran with that like I I love for there to be competition for Amazon I love nothing more than for Walmart to be kicking Amazon’s but like,
the survey is certainly not evidence that they are.
[39:43] Yucca Dental graphic up and it’s just simply every little part of the infographic is wrong based on Amazon’s results,
it says Amazon Prime membership is dropping and it shows low chart that used to be 60% and now it’s like 52%.
All those measures are wrong like frequency is down you know the frequency measure at Amazon is paid items and
at its fastest quarter last quarter if you listen to our last episode in a year so all this is this is a,
very bad survey to scratch your head.
[40:27] Yeah and again I don’t blame someone for doing some some cheesy content marketing tickets in traffic I’m I don’t like it but it it happens all the time I’m more disappointed by all the like to me more credible people that.
That like sided all you have to do is listen to podcast once a week and you’ll save yourself some embarrassment.
So should we finally get to what the audience is just really been waiting for.
[40:56] Yeah let’s talk about the holiday.
[40:58] Yeah couple quick precursors we’re going to talk about a bunch of different holiday forecast and kind of how they all roll up but a few things to remember,
every company that forecast holiday sales has a different definition of retail so I like the big ones are is gas in her in or not in retail is food in or not in our cars and you’re not in it so.
[41:19] None of these forecasts are perfect Apples to Apples cuz none of them have the same definition of retail,
and even worse these are all holiday forecast and there’s a shocking Variety in what people consider holiday,
so a lot of people think holidays November and December other people think is November through January there’s some people that think it’s just you for which is October through December and so again there’s a lot of variance in,
in what times are the people are talking about and sometimes they tell you and other times they really don’t so you’re gonna just left the guess what they think holiday is,
most of these forecasts are going to compare their forecast this year with what actually happened last year and I just want to remind our listeners that last year sucks,
there’s a lot of negative things going on there was a government shutdown there was a complicated tax cut that people don’t realize but was kind of in their monthly,
Paychex the stock market took a big drop and so consumer confidence was very low and one of the things that we that we
so I was the savings rate went way up so people I less confidence and they were saving more of their money instead of spending it over holiday so it was a bad holiday last year,
and then this year you know all those cans does macro Trends are more favorable the economy in general feels more favorable you know there’s a couple negative things dangling out there.
[42:42] But one of the big infrastructure things this year is that there are significantly fewer days between Thanksgiving and Christmas.
And when I first say that to people sometimes they look at me funny because they think there’s you know the calendar is always a calendar I remember Thanksgiving falls on the last Thursday in November and so depending on on the counter breaks down.
[43:03] That could be in a different week so last year Thanksgiving was on Thursday November 22nd this year Thanksgiving is on,
November 28th so last year,
there were 34 days between Thanksgiving and Christmas this year are there only 28 days between Thanksgiving and Christmas so there are six less days,
and that’s really scary to a lot of retailers they feel like they have less days to sell their stuff they have left days in West days in this crime shopping. And so frankly,
it really impacted a lot of holiday plans like retailers I started buying as much as earlier they certainly week their Black Friday sales much earlier and that they’re proactively doing a lot of things to mitigate this perception.
That that they’re going to sell last because they have less days between Thanksgiving and Christmas and as I mentioned on the last show there’s actually if you look at the big picture and the history of retail there’s a fair amount of empirical evidence.
That the number of days doesn’t actually affect holiday sales in that like when there are more days,
the sales get spread out over more days on there fewer days the same sales happening you know in the more concentrated set of Daiso.
You know whether it impact or not remains to be seen but you are for sure any time a retailer doesn’t have a good holiday. One of the things I can guarantee you they’re going to blame.
Is the six days.
[44:24] And weather Lafayette weather.
[44:25] Yeah we always going to be in the weather dries Lee all weather is bad for retail if it’s too warm they’re not selling enough valuable coats and it’s too cold they’re not going outside to buy stuff so it seems like no weather is good for retail,
especially when your comps are for I would also remind people that all these forecasts are about Revenue,
and the much more important thing for a retailer than revenue is profit,
and you know retail share a lot about their comms particularly if they’re a public company and said there’s a lot of levers they can pull to make sure that they hit the revenue goals and one of those revenues is how much they discount the stuff,
and so you know one of the things went when it looks like there’s going to be a soft holiday season retailers turn up all these knobs and discount things,
more aggressively and they hit the revenue numbers but then their Q4 earnings come out in the earnings stock because,
they sold all that stuff at a Deeper Discount and there’s already some evidence that you know because of the sexual today’s that retailers are leaning on that discount,
whoever you know earlier and and you know that could be indicative of a not very profitable holiday season the the other thing that makes me think.
[45:43] Profits could be a little bit challenge is it’s already very clear that retards have bought a lot more digital ads this year than they did last year and again that could be us,
reaction to the the fewer days you know they’re spending more nads trying to catch more eyeballs and obviously Those ads have it cost in that also affects.
[46:06] So those are kind of nice things to bear in mind when we talk about the forecast.
[46:10] Jeff kick ass off your you’re up first.
[46:14] Three different kinds of companies doing forecast there companies that just forecast total retail sales the most Lee Brick and Mortar and e-commerce is a part of that,
there companies that forecast brick and mortar and then break out the digital sales and then there’s companies that just forecast digital sales,
so we’re going to start with a brick-and-mortar folks in the first we’re going to go with is one of the most commonly cited one you know an organization you and I are both involved with the national retail Federation rnrf.
They do a forecast every year their holiday definition is November and December they’re definition of categories excludes automobile dealers gasoline stations and restaurants.
So they are forecasting that total retail sales are going to grow between 3.8 and 4.2% this year so last year.
[47:05] Sales only grew 2.1% against it was a sucky year so they’re forecasting up pretty healthy acceleration of growth this year over last year,
you know, the middle of the range will be 4% so 4% vs 2.1%,
last really sucked if you look at the last five years the average was 3.7% so 4% is even better than the last the the trailing five your average if you care,
that means it’s about 730 billion dollars worth of worth of sales,
and one thing I’ll say about the NRF is they’re starting to develop a reputation as being overly optimistic,
and so I will say you know I kept highlighting the last year we did 2.1% gross interests forecasted.
Like 4.6% growth of us so they missed it pretty badly last year so they’re they’re forecast this year’s actually lower than their forecast,
last year and so you know hopefully,
they’re going to be more accurate this time around but what you know if you talk to that had Economist it interrupt but they’re going to tell you is.
There are more microeconomics factors,
affecting sales than ever before and therefore they feel like the the sphere of uncertainty around forecasting these sales as much higher than it’s ever been so they would actually say that like it’s tougher than ever to do these four.
[48:30] Did they talk about the six days.
[48:33] Not specifically in the forecast as I recall they also didn’t talk about the weather.
The sign out like we joke about the weather I’m skeptical about the weather there’s like a huge white paper from IBM talk to you know which owns The Weather Channel,
talking about how forecast that don’t factor in the weather are wildly inaccurate self-serving study but then the other.
Forecasts we have for Pure brick-and-mortar sales is from a strategic consulting company called alixpartners
put a link in their there they’re forecast had a lot less inherited with it but basically they’re forecasting between 4.4 and 5.3% so even higher than the interests forecast their holiday,
a. Is November through January and they don’t tell you what product categories are in there so soup your brick-and-mortar forecast,
one is about 4 % one is about,
4.6% and you know both of those are significantly higher than actual sales last year at 2.1%.
[49:42] As the Commerce guy on the show I’ll kick it off with the next to that that have both offline and online retail
first up is Deloitte I will put a linked to theirs in the show notes they’re expecting total sales this holiday to exceed 1.1 trillion they Define the holiday is actually November through Jan 1
and they’re expecting offline or total retail to be in the range of 4 1/2 to 5% which fuel
pretty hot or are kind of on the on the high side and then they’re saying digital will be in the range of 14 and 80%
and that would be up from last year’s forecast
and they’re looking at about $1,500 per household,
for Holiday which you know is pretty robust I think that includes mostly High Spenders in that category.
[50:38] Yeah I think I saw something where it like the high Spenders spend on average $2,000 per household but like you know the account for the majority of spending.
[50:48] Awesome and then I wonder so it’s too bad you bought all your gadgets before November because well maybe maybe they’ll count November so that they could be you could nudge that $2,000.
[51:00] Yes I’m frequently accused of having a very narrow window between desire and fulfillment.
[51:07] Appnexus kantar and again will put a link to this in the show notes day to find holiday is October to December which is pretty interesting so it kind of Loops in
Halloween 2 to some extent which is kind of aggressive
but that’s how they Define and they’re saying till retail 3.8% and then online 40% so you starting to sense a theme Here mid-teens seems to be where where a lot of these forecaster zeroing in on.
[51:43] Jason tell us about Salesforce.
[51:45] So then the last category are folks that are only for casting online sales in a way these are the most interesting because these are vendors,
that have a big user base so they’re actually using the data from their user base as the basis for their forecasts and then extrapolating it to the rest of.
Of the the industry the first one is Salesforce there to finding holiday is November one through December 31st so there’s two months and they’re forecasting digital revenue for holidays going to grow at 13%,
so that’s going to be like a hundred 36 billion in sales,
and you know that’s a pretty robust forecast one of the things that I like about Salesforce is they actually have a live dashboard that runs over the holiday. Where you can see what the latest trends are in real time so I’ll put a link to their,
their holiday Hub in there as well and then a forecast we’ve used a lot on this show is from Adobe,
he has a bunch of products that are used by e-commerce sites and in particular that and analytics product that use by a lot of e-commerce site so they see a pretty big chunk.
Of e-commerce sales and they use that to base their forecasts on their defining holiday is November and December and they are forecasting 14.1% online growth which is 143 billion dollars based on their,
their definition of retail so a couple healthy forecast for online sales.
[53:13] Cool so if we kind of summarize everything and look we come up with online that the average of the forecast is just North of 14%
the range is between 13 and 18% and if you recall the the setup from Amazon was pretty robust they
they’re going at like 22% and third quarter so I kind of feel like even this is a little conservative cuz just Amazon alone being happy be Commerce if it if they can do,
20% Then That imply the rest has to go at like 10% can I get to this 14% so lefse but
I feel like these things are a little on the conservative side but yeah we’ll see,
the Russian thing is we used to rely on comscore for kind of a you know how did we do last year and they it’s best we can tell would love to if any listeners know otherwise
they’ve stopped kind of rounding up the entire holiday they’ll talk more about certain days and Trends they they’re not out on record saying 2018 was X percent so
they used to be our go-to so there is no really good one source for how last year was so you know it’s hard to
compare that to how last year was I feel like it’s 2 to 3% higher than kind of like what we saw last year but you know there’s no clear date of went out there.
The Jason wants you some rest total retail.
[54:42] So kind of the the average of the four total retail forecast is like 4.35%,
the range was like 37253 and again last year was 2.1 so very healthy total retail gross,
this year vs last year and again last year was a pretty down here,
but these forecasts are all slightly better than the five-year average so that’s.
Potentially a good thing on the revenue side again if I were betting I don’t think it’s going to be a phenomenal year on the profitability side I think.
Yeah they’re already have been a lot of Paris in the the retailers and manufacturers seem of each other.
Cost of the Terrace cuz they haven’t really you know been priced in prices are pretty competitive as we stopping that profits Euro study there’s a bunch of studies that people are spending more on ads and discounting earlier so,
you know I think we may Goose The Top Line and not have a phenomenal bottom line but I would love to be wrong.
[55:47] But that is going to be a good place to eat it because I feel like we’ve used up a little bit more than her a lot of time but hopefully it was all valuable and if you did find it useful we’d love it if you jump on iTunes and finally give us a 5-star review,
if you have any further questions or want to chat about anything we talked about tonight as always hit us up on our Twitter accounts or leave a message on her Facebook page.
And Scott and it’s always nice chatting with you.
[56:15] YouTube thanks everyone we really appreciate it we hope you’re locked down with all your holiday
pricing strategies your inventory everything’s locked and loaded we got singles day which is going to come kick it off here coming up next week will keep you posted on what we’re seeing out there and e-commerce and retailing.
[56:33] And in the very near future are very special 4 year anniversary 200 episode so that you sure to catch that one until next time happy commercing.
EP197 - Personalization Deep Dive
This episode is a deep dive into Personalization.
Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Episode 197 of the Jason & Scot show was recorded on Monday, September 30. 2019.
Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Monday September 30th 2019 I'm your host Jason retailgeek Goldberg and as usual Wingo.
[0:37] He Jason and welcome back Jason Scott show listeners a couple exciting things number one we are in the same room which rarely happens I think maybe one 18th of our episodes are in person we're we're in the same room so that's always fun.
[0:52] Are we always going to see you at their my favorite and when we need to break out and you know use the big brains 100% of our brain for an episode I feel like we do our best work when we're together in the room.
[1:02] Absolute between us we have a brain so one of the big request we've been getting a lot of lately is for another Deep dive.
[1:12] Jason and Scott show.
[1:25] So today show is going to be a deep dive and about a year ago so apologies. Everybody we we put out a call for listener request on deep Dives and one of the number one requested topics was personalization,
that is one of Jason Specialties he's flying around the country constantly giving this talk for millions of dollars an hour so you guys are getting a great treat
the only cost for this one is five stars so if you like what you hear give us five stars other people are paying high
9 figures for this talk so I'm going to be a fly on the wall in this one I'm going to inject hopefully some kind of intelligent comments as we go along but Nick kick it over to Jason who's going to,
dive deep into the world of personalization.
[2:13] Did you just tell everyone that I go around the world with a can presentation that's exactly the same for every audience that's about personalization.
[2:21] I'm sure you personalize it that's let's talk about that do you personalize your personalization.
[2:25] I for sure personally the cover slide and nothing else.
[2:28] Okay well that counts.
[2:30] Yeah and we we may talk about that but I've tried to break the show up into four main components today we're going to do a little bit of talking about,
definition of personalization and level setting everyone get kind of all of us on the same page then I'm going to talk about what I see as sort of best practices today,
country folks are doing and what some of the best examples are out there personalization
and we're going to as we always do in the show kind of pivot to the near future and talk about what's coming and what's what's down the road a little bit in terms of personalization and maybe wrap things up with a,
couple of conclusions and recommendations that folks can take to their day job if they're thinking about personalization.
[3:14] So with that let's Jump Right In to the definition and the first thing I would like to remind people about more talking about personalization is.
[3:25] The beginning of Commerce by the phone almost all shopping experience were personalized like shopping was a very one one experienced you are usually working directly with a merchant,
and that Merchant was personalizing the shopping experience,
to every one of their customers so yeah if you're old enough to have watched a Little House on the Prairie and you think of mr. Ingalls General Store,
misery Ingles new all the customers that came into a store most of the goods were in the back and a stockroom so you talked to mr. Ingalls told him what you wanted to buy he'd go back,
get your goods and if you bought less sugar than you did last month or you bought more flour or something like that,
he very likely would have a conversation with you about why you were changing your order and he would know about you and he would personalize that shopping experience to your needs,
and so what his sort of happened is the population of the Earth dramatically expanded from that General Store format and we were no longer able,
deliver that personalized one-on-one experience to every Shopper and so we kind of,
went to the the ear of mass marketing and mass retail and you'll be able to fit a bunch of customers in the store and have a beer a self-service and so what's interesting to me is all of this modern digital Shopper marketing,
what is really doing is letting us get back to the kind of one-to-one experience that mr. Ingles used to deliver.
[4:53] I'm sorry mr. Olson used to deliver but now do it at scale and so when we're talking about personalization,
to me it's really getting back to the best practices of the origins of Commerce that being said,
one thing that always annoys me about this topic is,
personalization isn't a single thing it's a tactic and it's a whole range of tactics and so.
[5:23] Frankly I see a ton of studies and there's always a sort of Talking Heads talking about like,
oh gosh 60% of customers want a more personalized experience if you deploy personalization you have 13% greater sales or higher A RVs or all these different things,
and I was like to remind people that somewhat absurd because,
there's no definition for what. Personalization is it's it's a tactic it's kind of like saying stores with green paint will sell more stuff well,
where is the green paint and what color is the tree in paint and in some cases it might have a prominent pronounced effect in some cases it might have a negative effect so I just when I talk to clients that are starting a personalization initiative I like always start by reminding them,
we're trying to achieve is not personalization like the goal isn't just to have something to be more personalized than it was before,
personalizing things to make them more relevant to the customer and make the customer more successful and so I always like to begin with that end in mind that were the outcome we're really seeking is relevancy not personalization.
[6:32] So then to all of our listeners out there probably have 50 things they could be working on if you can't say spend X get why then how do you help them understand where to put personalization and their party list.
[6:44] So I actually wouldn't I wouldn't have personalization as a initiative on my road map and say I'm prioritizing it number 12 I would have initiatives on my road map like,
improve my conversion rate increase my customer lifetime value increase my engagement with my content I would have bills like that and,
in the process of achieving some of those goals one of the tactics that's going to be very helpful is to personalize the experience to achieve those goals so it's always a red flag,
when I see people that have quote-unquote personalization on there on the road map and you know I'm somewhere,
negative and sarcastic,
one of the Retailer's that's been the awful lot of time talking about their personalization success and they get used as an example all the time is a brand that was bought by QVC called Zulily a daily deal,
and they made the road shows and then all these case studies about their personalization and the really,
did they generate millions of custom landing pages every day for their customers.
[7:55] 99% of that custom landing page means that it says welcome Scott in the right-hand corner when you go to that page,
so technically that is personalized they know who you are in the page changed but if the offers aren't more relevant if it didn't somehow make you more successful,
it's it's not a meaningful personalization.
[8:16] One More For Dummies question that hopefully some other listeners have so when I talk to a Lottery retailers they always some retailers you go visit their older obsessed with Persona so you'll go to visit some
extra pictures on the wall that say you know this is Debbie she's a soccer mom she's
40 - 35 she's got two kids and she lives in suburban and then doll,
a lot of times they'll customize the user experience for those people in Dick's Sporting Goods does a lot of this as does
so and I Best Buy one of the guys for the book The Angel customer demon customer in a lot of the Persona stuff comes out of that if you and I think she has like
cat lovers dog lovers and,
both animal lovers so if you go and you kind of have the experience so you know when your database that Jason is a cat person and he is a dad of a toddler and that's Persona is that personalization,
and then you have time of different experience that person.
[9:19] To me that absolutely is personalization it's on the spectrum of personalization right so if you're someone that has historically had like a one-size-fits-all marketing program you have 5 million names in your email list,
once a week you blast all five million of those people of the exact same email and you instead go hey you know what,
half of that email list for dog lovers and half for cat lovers so I'm going to segment my email list in the two chunks and I'm going to email a cat email 2/2 and a dog email to have that absolutely is personalization,
it's not as far on the spectrum is saying,
this emails going to Scott and I know that he only buys grain-free cat food and so I'm going to send him a very specific email that only he got based on his unique attributes,
personas are a very useful way to do this sort of intermediate step and often,
frankly that that still today is the high value stem so often the ROI you get from going from,
a one-size-fits-all campaign to a Cygnet a campaign,
is much more significant than the incremental Ryu you get by going to the much more expensive dynamically generated when one campaign if you will.
[10:39] Coke so hopefully you will I'm sure you'll hit on the Spectrum but the reason I bring it up is a lot of these start-up I'm a startup guy and all you start up Brands come to me and they said look I want to do,
discount personalization stuff and their you know to them it's a 5 or 10 million dollar project cuz there's this database I know you guys have something name for this database that like,
put all the stuff together there's a serum feeds into it and then like all this data.
[11:02] The customer data platform.
[11:03] Yeah the CDP yeah and then you know they go look at the vendors for that and that's like in a couple million box and then like the project on it and all so just feels unobtainable
mom and you know it just feels like this huge thing to do personalization whereas my recommendation is just start with pre simple segmentation and then even then
you know you can get a little bit of refinement in there and even that you talked about it and email marketing even on your website you know you can kind of have in your Skyrim
are there cat or dog person and then showing a little bit different content feels like you should get a that's more of a $100,000 project versus a 10 million dollar project.
[11:39] And we'll get into that a little bit better off and it's even are they return customer versus a first-time customer right maybe I don't like are they already in my email marketing list maybe I don't need to use that pop up to interrupt others who were asking for their email address when I already have.
[11:53] Yeah or push the product I know they just bought 5 minutes ago.
[11:56] Exactly like so very often it's those simple steps that are that are high Roi we're not going to get deep in,
personas but I will like since you brought it up I'll make one comment on person personas the mistake a lot of people make on personas is they start internally in,
so they go who do we imagine our customer is who do we want our customer and so I'll be,
retail R I work with has a Persona and very rarely does the Persona on the wall map the demographics of their customer base so,
almost always the Persona is this like young hip stylish woman.
[12:40] Affluent urbanite stylish.
[12:45] Who is coming from women that are 15 years older and are doing more utilitarian shopping until,
is aspirational personas there's there's places where they can be beneficial but often people confuse those with her actual personas.
[13:01] The same thing with them.
[13:02] And the same thing with demographics like people often start by saying like,
we should do things different from Millennials then we do for Boomers and they they take some random trait and then,
ascribe different experiences to that different trait of the customer and that's actually opposite of how you really want to do it what you really want to do is say,
like who are most valuable customers and what traits do they have in common and it's so it may be aged and maybe geography and maybe use case,
personalization based on some traits as opposed to identifying the trades Based on data is a a common mistake week we see in marketing,
I wanted to sort of talk about what some of the common kinds of personalization that that we see today because there's so many different touch point,
they can be personalized and they can be personalized on different spectrums.
[13:57] Personalization acronyms.
[14:01] Instead of just giving you my opinion which obviously my opinion is very near and dear to my own heart,
I wanted to use some data to start a frame that since so I study you would be familiar with it is they interact partners with Forester every year and they do this state of online retailing study,
and so what they do is they go out to hundreds of retailers and e-commerce shops and they have them fill out a survey answering a bunch of questions about their business and some of those questions pertain directly,
personalization so one up for purposes of our deep dive one of the most interesting questions is.
[14:39] What personalization touchpoint do you or tactic do you prioritize the highest and you know what are the next 10 and Ray,
so looking across the whole sort of study,
touchpoints that retailer said that they were focused on and that they were prioritizing so the number one personalized touchpoint,
in the sort of study is personalized recommendations in email so would that essentially means is,
you probably got a generic emailed it was the same for everyone but at some point in that email we're product tiles that were recommending a particular product that you might be interested in buying,
and those product tiles were personalized unique for you based on some attributes that that retailer had learned about you so they're using tools like,
annotate or certona richrelevance are Dynamic yield against the database to decide what products are recommended Scott and those could be different than the product that came in the recommendation to me.
[15:44] Of all things that can be personalized that's the highest priority the second highest priorities what we already talked about it segmenting that email is based on some attributes we know about the customer so instead of one-size-fits-all,
partition that email and make static content but static content it's more catered to that particular segment,
[16:09] Syntactic is marketing messages on other.
[16:10] What is marketing messages on other sites so that's things like,
remerge remarketing in the ads that follow you around the internet and use that you know the fact that you browse for a product on our website to recommend products from other people sites,
that on sites recommendation so that's the same as the email recommendation but instead of showing it to you in an email we're showing it to you on a category page or product detail page and soda,
ramazan that's the people that bought this also bought this or browse for this also browse for that or those those kinds of recommendations,
the number 5 on the list is personalized messages on devices in stores so that's usually geofencing the mobile phone and popping up an offer or a promotion on the phone when you know you walked into the store,
number six is personalized discounts so custom offers,
something unique we know about you number seven is the Zulily example that I brought up for her,
addressing the customer by name instead of treating them as is unknown entity and number eight is giving better info.
[17:27] Open history to sales associates in the store so that they can deliver a more personalized experience to the retailer rights of all the things in the world that can be personalized,
the sort of state of our industry has those are the eight that retailers are tending to focus the most on and putting the most energy in right now,
and I would argue that those are all pretty pedestrian.
[17:53] Marketing messages on other sites could be part of the problem with the challenges is so see a Google ad you know Google doesn't give you enough information to really kind of know hey this is Jason and his login and kissing him a very targeted an ad campaign.
[18:09] Although I would say the digital ads are becoming an easy touch point for that personalization so there are now a lot of Google ad formats that can be dynamically generated and so instead of,
one you may have a a breath of creative in Google automatically assembles the creative for a given customer and even more so,
super Tom in advertising format on Facebook are look-alikes which is sort of another form of personalization like only showing that ad for a targeted audience that you think it's highly relevant for.
[18:45] How come with all this personalization technology out there the number one retargeting thing when I buy something off Amazon is the thing I just bought my question why are people doing that.
[18:56] Executions are hard and we're going to talk about that later.
[19:01] The pitfalls but like you know you.
[19:05] When you run into retailers that have like hey we have a specific initiative on a road map called personalization and then,
when you want we want to build this really expensive custom,
Farmall are things to to drive personalization.
[19:18] 2dr personalization and very often.
[19:21] Am I cool that's a great aspirational goal could we start by just using the exclusion list.
[19:26] Country Market.
[19:28] To not Market something to someone that they already bought right in that to me is a way higher value for my personalization because not only are you likely paying for.
[19:37] Likely paying for an imp.
[19:38] Depression that's not adding any value,
it's actually adding negative value like when you see a retailer advertising something that you just bought your immediate perception as discussed this retailer doesn't care about me they don't know me they're not trying to,
experiencer know what I want they're just using some real Brute Force marketing techniques to try to sell more junk.
[20:02] Yeah and sometimes it's ahead faking you like wait a minute,
pretty sure I ordered that let me go make sure certainly they would be advertising to me if I already ordered that then I'm like well let me go check and make sure the order went through but didn't create this negative perception that they have no idea what's going on in my orders.
[20:19] I guess the one thing I will say is good news like to go out to me the sort of list is a little disappointing right way.
[20:27] They're much more versions of.
[20:30] Personalization in the ones on this West but I will say the majority of things on this list have the potential to dream meaning for you to drive incremental results so,
couple of these are around segmenting audiences which we just talked about is a potentially.
[20:44] Potentially a relatively easy.
[20:46] A relatively easy high-value form of personalization and these product tiles beat that with the.
[20:56] They're not part of his super sexy in our industry,
but I've seen a lot of studies that suggest something like 35% of all of Amazon's revenue comes from those recommendation tiles so customers find them Super Value,
are you on a site like Amazon where the catalog is huge and unmanageable there even more valuable,
I'm so if you if you're a retailer with a more pure rated catalog you know maybe like recommendations don't at 35% but but still,
is there a super meaningful tactic and I.
[21:30] I was checking when I walk around.
[21:30] When I walk around the trade show floor and people are like we've invented this new thing called artificial intelligence and you can use it to recommend fraud,
and I'm like yeah I must have good eCommerce sites have been doing that since 1990s.
[21:43] Isn't one of the vendors a bunch of Amazon guys that left to kind of day essentially said hey this is so powerful at Amazon that we will create our own his net richrelevance are they at their service.
[21:54] I would almost say that you just described all the person,
obligatory part of your sales pitches that you you say that you are part of the Amazon team that helping me.
[22:02] You say that you were part of the Amazon team that helped invented their version.
[22:07] There are because this is been such a high-value tactic there companies that have been around for a long time and do this so that.
[22:11] I've been around for a long time and do this so that like I think of.
[22:14] That is sort of the rich relevance my buys and certona as kind of the,
the first-generation recommendation engines and I mean we're not getting an event or selection on the show,
to working with a vendor that's been doing this for 10 or 15 years because they actually have,
manically refine their abilities and they've seen a lot of data from customers and so you know you.
[22:39] You get things like we've already had 10.
[22:41] And wine customers and so we tuned are all our rhythms to do a great job of recommending wine so if you're a wine vendor,
train to the recommendation systems based on a lot of other one customers on the flip side,
this is also an odd category where there's a lot of new shiny vendors that have just come to the market with Next Generation Solutions and you don't very often touting more modern machine learning based approaches.
[23:09] And in some.
[23:11] Cases they have invented a new mouse trap and so it may have some some architectural or competitive Advantage is so it's a area where the good news is you have a lot of choice the bad news is you really have to do some investigation to figure out,
the best solution for us.
[23:27] Call if you don't like the Soro list what's the Jason list.
[23:32] Going to get to the Jason list in,
this is an what's an what's an XO so.
[23:36] 3 question for pause on that for just one second one more thing I wanted to talk about in.
[23:43] Current state is another question on the sort of list is how do you judge the success.
[23:47] Judge the success of your per.
[23:50] Personalization into the top three metrics that retailer said they were using today to judge the success of their personalization efforts were conversion rate,
through rate and average order value,
and well those are generally important metrics for all e-commerce with actually I'm somewhat disappointed that those are the primary metrics people are using to judge personalization,
there could be a lot of great personalization that saw the customer's problem that didn't cause the customer necessary to buy more stuff so I would r,
aov is not directly related to personalization and very,
personalization is based on all the attributes we've already learned from you will each time you come we learn more about you and therefore the personalization can be better so the personalization you get on,
touch with me should be much better than the personalization you got on your first touch with me and if I'm only evaluating these personalization.
[24:52] Based on the individual.
[24:53] When the individual experience the individual visit,
conversion rate I'm not thinking about or noticing that some of those customers were resulting from 8 touches and in a much richer dataset than some of these customers that were Anonymous I'm on their first touch in Sol,
it's really important.
[25:14] You know if you want to get.
[25:15] Personalization writing you're going to be investing meaningfully and changing your experiences what you want to be optimizing the person was a shin for is really customer lifetime value now.
[25:24] Not the outcome.
[25:25] The outcome of a single session or a single single customer interaction and so to me that feels like a mistake that can often cause you to invest in the wrong tack.
[25:37] Do you recommend people run kind of A and A B test so no personalization and then personalization in and can I use that Benchmark the lifetime value.
[25:47] You can but I'm actually not so interested in personalization versus no personalization I'm interested in current state versus potential new state,
take care of your current state is personalized or not if your current state.
[26:03] If you're trying to say is personalized I'm testing that newest.
[26:07] Experience versus your current one not against nothing,
if you will and then the last thing that I like to point out this kind of a sad fact of our current state of affairs in personalization is most personalization today is delivered through some kind of Point solution from a vendor so,
that specialize in send an email right so they collect a bunch of information about the customers and 2nd at the email there vendors that specialize in recommendation tiles on your website we talked about a bunch of those.
[26:35] There are vendors.
[26:36] There is that personalize your your digital advertising campaigns and at the moment all of these Point Solutions want to be easy.
[26:44] I want to be easy to buy.
[26:45] I am easy to install so they tend to.
[26:47] How to be sassy.
[26:49] Space solutions that are very lightweight to install in your stack.
[26:52] Call in your stack and have their own.
[26:55] The databases where they collect information so they want to tag on your site to learn about the customer and then they use what they learn to personalize their touchpoint and of course,
downside of that is the personalized email.
[27:09] Nails aren't benefiting from the learning.
[27:09] Benefiting from the earnings of the recommendations tool on your website at all or the recommendation Tools in your customer service engine or,
creative that you're learning how to make for your ads isn't been having a payoff on your own website in your own dicks perience is and so like clearly the current state of Point Solutions is somewhat problematic.
[27:33] Like obviously it would be much better.
[27:35] If you aggregated everything you knew about the customer in a single data repository and leverage that single view of the customer,
personalize your experience across all these touchpoints and that's kind of.
[27:49] That that idealistic in and say that you talk to me.
[27:51] Idealistic in in state that you talked about earlier that hey maybe you know there is an argument for having a CDP and having all these tools,
bridge at CDP but to be honest like before I invested millions of dollars in that cdpi,
maybe I don't need the world's best vendor for each one of these touchpoints maybe one vendor that could do multiple touch points and share their own database is good enough in a way that going to not create more silos.
[28:18] Yeah it seems like a good CRM system is kind of the key to this and then also if you want to get smarter you know uses,
the example of wine earlier really good product data seems like you know those are going to be table Stakes for for being able to do any of this conversation to talk about,
but then it also seems like we always see these kind of like you know
all the big companies trying to go on these stacks of things now that's a big Trend in the vendor side so is that happening are like so we've got the cloud guys who've got the sales worth Cloud the Adobe Cloud the sap cloud and
is there some other Cloud I guess Microsoft back in the game now and then so you got all the cloud guys and then you probably have some of the
the platform guys in there most of platform guys have been acquired by the cloud guys but I'm sure they're still
platform guys I'm in any of the all these kind of like Loosely you know hanging out their vendors like the conversion guys,
or are they all trying to piece it together with their offering and get you two are they trying to solve that problem or they just kind of spline together Point Solutions.
[29:24] It's a partially it's as these Solutions become more table Stakes it's more calm,
version of these experience personalized version of these experiences is built into the core platforms are clouds so they're almost certainly,
mandation engine in your base installation of Shopify or Salesforce Commerce cloud or or any any of those platforms and their their customers that will use that bass version,
it's still super common that people like to go shop for their own Point Solutions and layer that in but increasingly the.
[30:06] The plant puns are.
[30:07] Giving you some reason and benefit not to not to do that right like him so you know the,
in the case of Salesforce Commerce cloud,
they have this artificial intelligent engine that they developed at Salesforce call Einstein and the the first appearance of Einstein in the Salesforce Commerce cloud is,
this native product recommendations based on their Advanced machine-learning and so increasingly they would say they maybe don't buy the point solution use our Advanced Einstein,
[30:39] Still quickly point out yeah but I am.
[30:42] Einstein seeing boat parts for the first time and we know every attribute about boat parts because we've worked with 10 vendors that sell boat parts oh,
they're still arguments both ways,
obviously your data is a little cleaner and more Universal if you can get by with a the solutions that come from your platform Bender,
so pivoting to sort of Jason's recommendations and this will come as no shock based on.
[31:10] Is no shock based on some of the.
[31:12] Conversations we've already had.
[31:14] I don't like.
[31:16] I can start by saying like hey let's create the world's most expensive database and use the most advanced math in the world to you no dramatically change the shopping experience I like to start with the low-hanging fruit.
[31:29] Answer the first question.
[31:29] Answer the first question I asked when where.
[31:32] I'm talking about any kind of.
[31:34] Personalization initiative is where are all the places in our customer Journey when we're asking the customer for some piece of information that we already have.
[31:37] All the places in our customer Journey when we're asking the customer for some piece of information that we already have and.
[31:45] If you take an inventory of this in your customer Journey you were going to be shy.
[31:48] Shot how many times.
[31:50] You ask someone for an email address you are,
how many times you ask someone for their preferred shipping address like all of this information we collect over and over again and it's super frustrating when a customer trust us with that information.
[32:08] And then we don't pay it off and I'm talking about.
[32:11] The simplest things in the world that no one thinks of no customer that's created an account with you can remember.
[32:17] Their password so here's what happens.
[32:18] So here's what happens when they go to your site they it says type your email address and they take their email address and then it says type your password in the customer goes oh no I don't know my password so hopefully right below that is a link that says.
[32:33] What if you forgot your password and when you put that link what all.
[32:34] Password and when you click that link what always have,
go to a new page with a form that says type your email address which you just did 3 seconds ago right and that's a super simple thing to fix programmatically and grab that info from the previous View.
[32:46] To fix programmatically and grab Daddy that's what kind of like not.
[32:52] That's the kind of like not sexy personalization.
[32:56] The dramatic.
[32:58] Broccoli helps customers and so you know I like to always start with this bassline don't collect any information about the customer unless you're.
[33:06] Prepared to use that.
[33:07] To give them a better customer experience and first and foremost that means never have to ask the customer for the same piece of information.
[33:15] So once you've knocked out.
[33:15] So once you've knocked out those things.
[33:18] The next one I like to highlight is the one you just hit don't promote stuff that I already bought.
[33:22] But I already bought right so the most overt version of that is the retargeting ads for the thing that I just bought from you and I'll be honest there's two reasons that happens there's a lazy reason.
[33:37] Which is all of those retargeting tools have a tool called.
[33:38] Which is all of those retargeting tools have a tool called an exclusion list and So when you buy something I should put you on the exclusion list for.
[33:44] You on the exclusion list for that product.
[33:47] And then that add you never show up again and there's a lot of reasons why someone may have skip the plumbing step in doing that.
[33:52] Skip the plumbing step in doing that.
[33:55] I'm in that to me a super lazy.
[33:57] Sometimes you browsed that product Anon.
[34:01] A product anonymously.
[34:04] And then you bought it via some other mechanism it so I don't actually know.
[34:04] NBA some other mechanism in so I don't actually know.
[34:08] Honest third party.
[34:09] I hate that you're the same person that bought that product so there can be.
[34:14] Can you use cases that are harder.
[34:15] Where to sell for than others but minimizing the times when you promote that stuff they already sold his huge but I want to remind people.
[34:22] Away bigger.
[34:23] Yusuke says in that retargeting the retardant in particular,
is Virgin but how many emails do you think you get from app.
[34:33] And what are you wearing on your wrist right now and do you have that fancy new iPhone 11 Pro Max in Europe.
[34:40] 11 Promax in your pocket I did guess.
[34:44] So what are the featured items on every single email you've gotten from Apple in the last two weeks since you got.
[34:51] What's the park sorry.
[34:53] It's as simple as they do a one-size-fits-all mailing and said they mailed you the exact same thing and they did.
[35:00] Did you get it from the carrier who should also know it for now.
[35:05] Totally hanging fruit that totally eroded your confidence and relationship in that that brand on a subconscious level right in so,
fix those things first and then after you stopped asking.
[35:17] Stop asking people for information you already know and stop trying to sell them.
[35:21] Go and stop trying to sell them products that they already bought then you can get into the sexy stuff of surprising and delighting customers by giving on these personalized experiences that they didn't,
how to make their shopping better right and those,
Moosejaw mountaineering when you're buying ski boots and was John knows what size ski boots you bought last season and help remind you of what size you bought before you have to select a size right like,
is Boots do you want last year you bought 9 and 1/2 like those those kinds of surprise and Delight moments or hay a year ago you bought your dad a gift from Sephora.
[36:01] To get this year like those kind of like more.
[36:02] This year like those kind of like more advanced personalization a surprise.
[36:07] But to me they're kind of later in the.
[36:07] But to me they're kind of later in the Spectrum after we get those table Stakes squared away,
talk a little bit about the 360 degree view of the customer but that really is,
and increasingly something that you need to think about even if you don't want to invest in the fancy CDP and all those tools today you still are collecting information about new customers everyday,
one thing I would highly recommend every customer invest in is some basic data governance,
around personalization and then David data privacy and by that what I mean is make sure you're disclosing to the customer what you're collecting and how you're going to use it because 4 years from now you're going that way more advanced personalization tools that are available.
[36:50] You have way more advanced personalization tools that are available to you right now and you're going to want to use all this data that you've.
[36:55] I use all this data that you've collected over the last 5 years in your business.
[36:59] And if you think.
[37:00] The European in California privacy laws are kind of restricted right now.
[37:04] Now there's a good bet they're going to.
[37:06] Can be more restrictive down the road and it'll be a shame.
[37:09] And it'll be a shame if you're not allowed to use any.
[37:12] Any of your data because you didn't follow best data governance practices and how you collected it but just by,
policy in the right disclosures when you collect that data today it frees you much more to leverage that data in the future when they will be better ways to Leverage.
[37:29] Is there a day where the Privacy stuff will be ramped up so high we won't be able to do the level personalization talk about.
[37:36] For sure there will be some levels of personalization we want to do.
[37:43] Like a lot of customers that come to a site on unauthenticated meaning is the first time they came to the side.
[37:49] Or they've been a disciple.
[37:51] Before and maybe even create an account but I didn't give them a compelling reason to log in with.
[37:55] When they came back.
[37:56] Cancel a look like an anonymous user to me and there are actually a lot of evil technology tactics we can use.
[38:05] You recognize that uh nothing.
[38:06] Recognize that unauthenticated user.
[38:09] Look at all of the different settings that they've made in their brows are increasing almost a unique fingerprint from their brows or to identify them,
close to uniquely we can share data with other vendors secretly to identify them pretty unique Lake,
people sites would have come across a.
[38:28] Cross-site in browser cookies and all of those kinds of tactics are slowly but surely getting.
[38:32] Ticks are slowly but surely getting turned off and so absolutely it is harder to personalize an experience for unauthenticated user today than it used to be because of some of these,
you like frankly very good consumer protections that are put in place and so like you know we just have,
live within the constraints that are offered but there are a ton of things we can still do with it within those constraints.
[38:59] Yeah that's as consumer I find myself preferring apps for your my best commonly shop things via food delivery or in that stuff because the apps never they don't consciously bug me for my username and password,
Scot interesting that they're held kind of a different standard than the website guys that the the app on your phone to remind even when I just did my whole as you upgrade OS has and then move phones they do a pretty good job of the,
login credentials following you in and not kind of having to remember everything.
[39:28] So your authentication on your amp is much more persistent than your authentication on the web.
[39:34] The browser gently by default.
[39:35] Gently by default live cookies expire and some. Of time but even,
at some point many users have an occasion to clear their cookies and it might have had nothing to do with you it might have been they didn't try some other side they used or said some other problem.
[39:49] That's another problem but on the.
[39:50] The browser the settings are Universal So when you say clear all my cookies the easiest thing to do is clear.
[39:53] The easiest thing to do is clear the cookies.
[39:56] For every set you've ever been to,
you're much more granular a working with a single site so you know people tend to just didn't used to be the case in amps by the way you used to be when they upgraded the operating system that wiped out all those authentications now that they're.
[40:10] Yeah they're way better at even having those authentic.
[40:14] Even having those authentications persist,
operating system upgrades the downside is to me in this ecosystem of Commerce for the most part apps are way overrated,
best users use your app,
that's super valuable to them but the amount the percentage of your total Shopper base that are willing to download and regularly use your app is very small and so it's almost always a mistake to feel like because I have a good app experience I have a good experience.
[40:44] So with that caveat.
[40:47] I would totally agree.
[40:48] And that leads me to my next best pract.
[40:49] I was mean to my next best practice one of the most important things you can do for personalization is give the user a really good reason to I.
[40:58] Identify themselves every time.
[40:58] By themselves every time they interact with you so that you are dealing with an authenticated user right allows you to give them a much better experience that's much lower,
more loyalty and so one of the most compelling reasons we give to customers to authenticate themselves every time they come back to my site is by offering them some kind of loyalty,
so it's not a coincidence that when we look at some of the retailers that are best at personalization they tend to be the retailers that have the most successful highest engaged customer loyalty and a fin and an affinity program,
historically that's kind of but points for purchase program increasingly they're more nuanced than that in so there can be a lot of,
the the Loyalty program and I often talked about it being a frequency program instead of a loyalty program cuz it's really.
[41:51] Is it really about getting the customer.
[41:54] To come in interact with you a lot as opposed to exclusively,
implementing a loyalty program that resonates with your customers that causes them to authenticate themselves every time they come to your side is a super valuable tactic that enables all of these other personalizations to be more successful,
so with that being said most common question I get is who's greater personalization who should I Benchmark myself against and it's always really hard to answer because a,
who's better at what kind of personalization as we talked about early there's no Universal definition so is Zulily greatest personalization because they create all these Dynamic home pages with your name on it,
[42:39] But what does good.
[42:39] But what does good personalization look like and I always I struggle to give an answer but I'm happy to report that,
vendor out there sail through his started doing I think this is the third year of pretty cool personalization index and so what they've done is they've said,
hey we think there's about a hundred.
[42:57] What is the e-commerce.
[42:58] Front ways that e-commerce sites typically personalize their site and we're going to look at the top 500 e-commerce sites.
[43:06] And evaluate all of them against.
[43:07] How you ate all of them against these hundred criteria and sort of a sensuous for them so they.
[43:13] Essentially created a framework and then they apply this framework to these 500 sites which is a significant amount of work and 10 so you can download and we'll put a link in the show notes their personalization index,
top 10 retailers on their personal visit relation index are generally retailers we think of is.
[43:29] Index are generally retards we think of is being pretty good at Italy.
[43:33] Personalization so number one is Sephora it's by the way 95% of all Sephora's.
[43:38] 95% of all Sephora's Revenue.
[43:41] Comes from their frequency program and they're great at getting customers to engage with him.
[43:47] They don't send out a lot of mass.
[43:49] Emails like almost all the emails are targeted and triggered based on activities that you had with Sephora so I would totally argue I would totally agree that Sephora is,
petitioner of personalization,
they know you're the best and they they leverage what they know to improve your experience number 2 on that list is Nordstrom they have some very strong personalization points number 3 on that list is Rent the Runway,
this is getting into an area that's more,
future looking Rent the Runway is acting only personalizing Experian,
personalizing the assortment in the merchandising based on what they know about you so you know they're using your personal preferences to decide.
[44:30] You know they're using your personal preferences to decide.
[44:33] What sizes and styles of stuff they should even offer which is interesting Home Depot is on is number 4 on the list Best Buy's number 5,
DSW is number 6 Ulta's number 7 Urban Outfitters and number 8 Adidas is number 9 and Wayfair is number 10,
full disclosure the sales.
[44:58] Who pick their own hundred attributes and you and I could quibble with whether they picked.
[45:01] Quibble with whether they pick the right hundred attributes and how many points you should get for everything so I wouldn't necessarily use this as a literal.
[45:08] Like these are absolutely the 10 best.
[45:09] These are absolutely the 10 best companies in personalization Anderson companies.
[45:13] But I think I great.
[45:14] Malaysian that aren't necessarily aren't even on this list.
[45:17] With that being said if you are doing an internal project in your saying hey who should we Benchmark ourselves with who's better personalization like neither.
[45:20] If you're doing an internal project in your saying hey who should we Benchmark ourselves with whose go to personalization like to me this is as good a list as any as a sort of start.
[45:29] A company that show their math are talking like proving why they.
[45:32] It showed their math are talking like proving why they think someone's go to personalization which is super.
[45:38] In your experience let's say your kind of world-class like this what's it going to do to the lifetime value of your customer are you going to get like,
I'm in a material so that customers worth $200 is going to go to 500 or what have you seen anonymously amongst your clients as the output of the increasing customer lifetime value.
[45:57] I'm not trying to be coy it's super hard to answer because almost no one's going from 0 to best-in-class.
[46:08] You probably were very incremental so,
it's hard to measure the whole lifetime journey of their personalization unless you've been working with a client for a very long time so very often we do the.
[46:20] Often we do things like.
[46:23] Hey let's remediate all of those you know redundant information request.
[46:28] And like honestly those kinds of.
[46:29] Honestly those kinds of changes rarely show like single session.
[46:33] Young wild improvements.
[46:34] But they show meaningful changes.
[46:37] Things like NPS score and meaningful changes in in things like customer lifetime value.
[46:43] What time value.
[46:46] Second tier of personalization where we say like hey I'm going to use every touchpoint I have with a customer.
[46:52] The customer to promote something meaning.
[46:54] Painful and not something they already.
[46:55] I absolutely have customers that have seen 50% increase.
[46:57] Absolutely have customers that have seen 50% increases in customer lifetime value in the first Hugo hey Jason that seems like,
Improvement like how is that possible but when you think about it if you're hitting someone 30 times a year with a marketing message.
[47:12] Three times a year with a marketing message and some hand your best version of that message is impactful and really causes customers to take something for.
[47:17] Something your best version of that message is impactful and really causes customers to take something criminal action and buy something.
[47:25] And instead of using your best message you're squandering a bunch.
[47:26] Using your best message you're squandering a bunch of those 30 interactions by hitting them with something that's totally irrelevant to them and they're for sure.
[47:34] We're not going to buy like essentially you've doubled or tripled your.
[47:36] Essentially you doubled or tripled your frequency without any risk.
[47:42] Of increased unsub.
[47:43] Subscribes or filtering or other problems that you usually have when you increase your frequency.
[47:49] So you're getting more.
[47:51] Morning hits for free essentially so that that can be super high value and then that sort of third tier.
[47:54] Back and be super high value and then that sort of third tier is is sort of all across the board if you're someone that had no product recommendations and you have a big complicated catalog and you add product recommendations you prob.
[48:00] Is sort of all across the board if you're someone that had no product recommendations and you have a big complicated catalog and you add product recommendations you probably are going to see a 20 or 30% lift in sales like if you're someone that has,
can you add recommendation tiles probably not going to be as meaningful because most customers are going to be able to manage your whole catalog without the recommendations,
[48:27] That's kind of where we're at today in terms of.
[48:28] Where we're at today in terms of who's doing well and what they're doing but what I spend most of my time talking about is.
[48:33] But what I spend most of my time talking about is where the puck is going to be what are people going to be thinking about what's going to be the best.
[48:40] This is next year or.
[48:44] Are they in the next 18 months.
[48:45] Answer to years what should readers be investing in.
[48:47] Investing in now.
[48:48] All anticipating the the you know continuing changes that customer expectations are going to have so the kind of things that come up here.
[48:57] There are richer versions of.
[48:58] Richer versions of personalization there that that that third tier of personalization so today machine language gets hyped a lot and it gets hyped as a.
[49:08] Way to improve product.
[49:09] Recommendations which I would argue about recommendations have been machine learning learning days for 10 years,
is easy to see in the future actual experiences change based on machine learning so as in.
[49:26] I see you have a complicated product catalog and you have a tax on.
[49:27] See you have a complicated product catalog and you have a taxonomy for the that catalog right what are the first categories you see in that drop down list is it women's apparel because you sell the most women's apparel.
[49:41] Well would it be interesting for.
[49:41] Well would it be interesting for men if men's apparel showed up higher than women's apparel.
[49:47] If I know that.
[49:48] I know that you're a plumber should the plumbing taxonomy show up it.
[49:54] Home Depot with more prevalent than the carpenter.
[49:55] People with more prevalent than the carpentry products at Home Depot until we're starting to see,
personalization extend beyond the.
[50:05] And Beyond those those basic recommendations and in many cases.
[50:07] Emendations and in many cases the the the latest versions of machine learning,
can not only improve the personalization they can actually make suggestions or give hypotheses for what should be personalized.
[50:23] To have the most meaning.
[50:24] People change so supposed.
[50:26] Having aux.
[50:27] Next person say oh I saw our competitors are personalizing this thing that we're not maybe we should test that,
you can actually have if you have a lot of traffic on your site you can start we're starting to be able to use artificial intelligence to suggest what kinds of personalization would most improve our customer experience which is,
kind of cool science fiction.
[50:46] Personalized personalization rametta.
[50:48] Exactly another big one for most customers that have a big product catalog and don't argue like this this could have the most pronounced affected Amazon is.
[51:01] So today when you go to a retailer with a big catalog and you type in a search term and I type in a search term we're going to get the exact same result,
but if you were I go to Google and both type in a search term in a Google we'll get wild a different results,
based on what we've typed in the past and what we clicked on and where we live and all the information Google knows about us and so it only stands to reason that if search is an important Discovery tool,
we ought to be adopting that sort of Google style approach and personalizing search based on all the things we know about and so,
we're now just starting to see the first generation of of search engines that that have that kind of AI based personalization built in.
like moving away from the experience as a little bit to think about other ways that personalization is starting to change is what if I personalized the delivery or personalized The Shipping schedule I'm right so one interesting,
Amazon has a Panton on predictive shipping meaning send stuff to you before you asked for it,
to surprise and Delight you and if they're wrong and you don't want it you just don't pay for it right and an even simpler,
if you live in a big Condo building maybe I should put the hundred products that your condo buildings most likely to buy in the basement of that Condo building,
to feel out of the microfilament Center in your basement instead of having to ship it to you so we're starting to see personalization of the supply chain which to me is pretty interesting.
[52:35] Or a staging an Amazon Locker and then when you order it just do it gets downstairs already a scope.
[52:44] Of course it like I would put all the auto replenishment experiences like.
[52:48] When the Keurig coffee maker knows you use your last K-Cup or you're about to use your ask a cop.
[52:49] When the Keurig coffee maker knows you use your last K-Cup or you're about to use your last K-Cup and could order more more coffee pods for you or when you know Walmart sees how much peanut butter you buy in a month and they know when the ship you knew peanut butter like.
[53:04] Those kinds of things to me are open.
[53:04] Seems to me you're a particularly interesting version of personalization,
we're starting to see a lot more personalization in even what products people carry so to me like Stitch fix is a.
[53:15] Give me like Stitch fix is a particularly good example of this where they're using what they learn about their customers.
[53:17] Sample of this where they're using what they learn about their customers to decide what products to carry and Merchandising on the site right in,
has a a version of this in essentially their hands off the wheel approach and instead of having a bunch of merchants and buyers deciding what people might want,
save a bunch of data scientist that are personalizing the product catalog based on on the actual Behavior they're so they're seeing in their Echo CS,
I'm there other retailers that are doing that Adore Me Is You know a woman's brand that uses a lot of data to to improve their product offering.
[53:58] Begin again at the moment but some interesting Partnerships between technology companies in.
[54:00] Partnerships between technology companies in traditional brands with their designing new products based.
[54:04] New products Based on data.
[54:07] Nai so there's this Shinola partnership with Market sites where where they're using AI to tell Shinola what new products to make him.
[54:17] Brand on Tommy Hilfiger has.
[54:18] Tommy Hilfiger has a partnership with IBM in the fashion institute to make new products based on.
[54:24] New products based on personalization.
[54:27] Mission data instead of the intuition of a of a product designer or Merchant said to me that's an interesting area.
[54:33] Sing area that the.
[54:34] The future is getting going to.
[54:36] The biggest area.
[54:38] They were moving to is forget personalized.
[54:39] Please forget personalizing the experience less personalized the products right inside the simplest version of this is.
[54:50] Figurations we used to.
[54:51] Make the decision about what config.
[54:53] Integration of customer could buy and free bundle them for.
[54:56] So if you bought the original Apple watch Apple decided which.
[55:01] Which band went with which color why.
[55:03] But today if you want to buy.
[55:04] Hey if you want to buy a gen is a Gen 5.
[55:07] A series 535i.
[55:07] Series 5 Apple watch you're getting the Apple Watch Studio experience we're essentially a person will show you the whole assortment of bands cases and let you do custom bundle.
[55:22] Any can figure any.
[55:23] Football formation that makes sense for you.
[55:26] We're starting to see a lot of what I talk.
[55:29] All creation where brand sell a product that's pre-manufactured.
[55:31] But then they do some kind of.
[55:34] Embellishment or customization.
[55:37] At the point of purchase so that's why.
[55:38] I purchased so that's like the Levi's Custom Tailor Shop that they don't embroider your jeans or so custom patches on your clothes.
[55:45] Put on your clothes.
[55:47] The more you need just to you Ralph Lauren has a similar experience,
he will let you design and create your own shoes arafah is a mens bicycle.
[55:58] Old company that it has some.
[55:59] It has some personalization options a little Eliza there.
[56:03] There's an increasing amount of.
[56:04] Increasing amount of places where I can invest in bellush the base model with with unique things that make it personal just to me,
and to me that's an interim step increasingly there.
[56:15] Make the product from.
[56:16] The product from scratch,
just for you and I enjoy the moment apparel is really where this is being sort of glad so if you go to the Boston version.
[56:26] A version of minutes.
[56:27] Supply they actually have a computer weaving machine in the store that makes custom SmartWool Blazers for for customers based on their unique criteria,
Adidas has made a sweaters on demand for customers and then there's a whole set of apparel companies that like use the phone to measure you the camera on the phone to measure you and then make custom products to order so that's
mtailor proper cloth or red thread or unspun you know even things like indochino are really sort of,
build-to-order model where you can you can have a significant degree of personalization,
I'm so that that is somewhat interesting in the end just like with the coke the the data-driven merch,
instead of having the customer decide what would be cool what if we use technology and the customers data to anticipate what a personalized product was that Scott would want so,
there their initiatives like H&M partnering with zzz me,
to create personalized fashion for customers based on unique things they know about that customer and there's a bunch of them a brands that are are personalizing fit for exam.
[57:43] They don't have seen talk is Doug Mack at Fanatics I think he said something like 60 70 80% of their products have some kind of customization and that's just like you know you would think people just buy the Jersey whatever but apparently people love to put,
their name on it or whatever.
[57:59] And if you think about it that's such a huge win for the retailer write you a couple things happen returns are a huge problem in e-commerce and personalized Prada,
a Chihuahua return rate that great,
it's easier to not offer returns when a product has been personalized but even when you do there's a thing called the endowment effect like if it's something has your name on it you're less likely to send it back then and then,
it feels like a generic object I would also argue that it's a potential mode against a big marketplaces like Amazon so you know one of the,
great at yet is personalized product and I would argue in life are Amazon's biggest competitive Advantage they have a number of them but the biggest one is they have,
best most robust distribution system in the world,
a lot of that Advantage goes away when the product has to be made or personalized before it shipped to.
[58:59] Yeah definitely one of the few areas you put on that's not an Amazon core competencies gives you a little seem to compete with me.
[59:05] And I like like most things I probably wouldn't Bank on that being a forever,
but right right now there's an area of opportunity there so we're coming up on time but just to sort of rap,
the things to me that are most important when you're thinking about getting serious about personalization is this whole notion,
try to achieve personalization optimized for relevancy like optimized for a better customer experience that has a higher custom customer lifetime value,
focus on those outcomes not the specific tactics and if you're going to do one thing right now.
[59:45] Even though you may not.
[59:45] Even though you may not be ready to to make it big investments in new personalization tools or dramatically different customer experiences is invest a little bit of time and,
in updating your data governance policies and making sure that you're doing the right disclosures when you collect information because I'm so many more of our experiences 2 years down the road are going to be data powered and it would just be a shame,
you don't have access to the next two years of your customer data because you didn't collect it in the right way so that's a really low cost mistake that you can avoid right now.
[1:00:19] Is there a,
is there a set of best practices we can point people do or anything out there on what do you collect should I ask people their gender should ask them their age should I and then how do I you know how do I make sure that I'm getting data that I can keep for the long term.
[1:00:34] So I mean a couple of.
[1:00:35] I mean a couple of things.
[1:00:37] The first thing is you mostly want to get your disclosures right like when you collect the data when you.
[1:00:41] Like the data when you ask the customer for.
[1:00:43] Verde. Most of the the newer privacy policies and customer protections.
[1:00:49] Really center around.
[1:00:50] Really center around fully disclosing to the customer how you're going to use something so in the old world,
Sprint email address and you didn't necessarily have to tell them how you were going to use that email address today,
probably have to tell them that if they give you the email address you're going to use it to send marketing emails to them but you're also going to use it as an.
[1:01:13] As unique identifier to.
[1:01:13] Fire to identify that customer when they come to you in the future when I click on those filters on a search,
by certain attributes in the old days you just clicked on those filters and the assortment Nero,
today you probably want a disclosure at the bottom of that box saying I'm going to collect the attributes that are important to you and I may use those for future personalization so just getting the disclosure rate is,
a a huge.
[1:01:45] Elements of a.
[1:01:45] Picture of a a best practice that you should be thinking about in terms of data governance,
and with that I think it's happen again we have Perfectly Used up our a lot of time but if this is wedded your whistle about personalization then we,
job and we love to continue the conversation on Twitter or Facebook so feel free to go there as always if this deep dive was beneficial for you,
we sure would appreciate it if you'd go on iTunes and give us that five star review.
[1:02:14] Thanks Jason I know I learned a ton and hopefully listeners did as well.
[1:02:18] I appreciate it's got until next time happy commercing.
EP196 - Apple Flagship, News, and Listener Questions
A weekly podcast with the latest e-commerce news and events. Episode 1946 covers a visit to Apple's new flagship on 5th Ave in NYC, recent industry news, and listener questions.
Apple 5th Ave Flagship Reopens
Q1: Michelle Grant - Amazon and Walmart have patents around predictive shipping. Could you speculate on what impact predictive shipping will have on commerce? You mentioned it in episode 187, but it would be great to get more details.
Q2: Holly Marie Pfeifer What’s the future look like for personalization with ITP cracking down on Safari and talks about Google being close behind in restricting third party cookies?
Q3: Jeff Vogl I saw Jason’s question to Tobi about performance and PWAs, do you see them actually sticking? I know they “hot” right now, but how many PWAs do either of you have on your phone? Of those, besides Amazon, how many do you really use? Seems like something that works for the Amazons and Nordstrom’s of the world, but do you see it as a mid market reality?
Q4: Karri Koivuniemi Any new info regarding what Adobe is doing with the Magento? What's your brief take on the current ecom platform landscape?
Episode 196 of the Jason & Scot show was recorded on Thursday October 24th, 2019.
Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Thursday October 24th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.
[0:37] Hey Jason and welcome back Jason Scott show listeners,
Jason I've been firmly planted here in North Carolina lately but I understand you've been traveling around a lot and one of the places I'm super jelly that you got to go to is Apple's new flagship tell tell us about that experience.
[0:57] I sure sucks. So this is the Fifth Avenue Apple Store in New York city so this was one of the first kind of.
Architectural a distinct stores that Apple opened.
And I I would I shouldn't remember what year it opened that I don't so it was called the cube so you know it was an underground store but above the ground they built this giant glass cube,
with the floating Apple logo in it and you you kind of walk in and you either take a glass elevator or walk down this glass stairway into this underground store and the store has been closed for,
probably a year while they were remodeling it and they opened it.
Just in time for the iPhone 11 launch so I wasn't there on the launch day but I was there the next week and got a chance to check it out.
[1:50] Wrinkle does it have that or they caught Town Hall kind of I would like the big wall in them.
[1:57] Yeah it does it it is there new.
Format the sort of city format so it has live trees in it it has a big Auditorium where they have a lot of educational content.
This is already a quite large door and that it dramatically expanding in size so it's,
it's a very big store one of the you know the old one was underground and it was all artificial lighting one of the things they did this time as they installed a bunch of.
Fancy skylights so you know skylights throughout the roof and they all have light meters on them so the ambient light in the store,
adjust to how bright the sky lights are so when it's bright outside the store is almost you know fully sunlit,
but at night or on on overcast days there's more to ambient Lighting in the store so it's sort of a clever.
[2:56] Fancy system I check a little bit because the this was the first store to have the glass staircase and that that's become a signature item for apple and then this door it was quite,
controversial that the staircase is super expensive to build,
and then a couple years after they opened it they had to remodel it and they upgraded the staircase and I don't know if you remember this but at the time like,
the vendor took out the old staircase and through the stairs away in dumpsters outside of.
[3:29] The store and entrepreneurial Apple Fans when dumpster diving collected these.
These individual stairs from the glass stairs and sold them on eBay for quite a lot of money and.
[3:45] I'm not forget dumpster dive to make some money.
[3:48] Apple is really well I'm glad you didn't because Apple was really pissed and they they liked sued everyone that had one and tried to get them back and they like famous with,
fire the vendor that did the work and you know if it became this Big Brand thing the Apple didn't want these like.
This old Remnant from their store out on the market today it felt like a ginormous over reaction to a.
You know some fans like like loving the Nostalgia of Apple but I will say it rains and snows a lot of New York and it was super impractical like all these people with wet shoes.
Walk into the super slippery glass stairwell and the first thing Apple had to do like the first week they open the store is they had to hire a full-time guy with a mop.
Just to be like constantly cleaning the stairwell and overtime with Abate they did is they threw in the towel and they they had like rubber,
did they would have over the glass stairwell for you know the winter season and so when I went back the first thing I was interested in it was that you at the stairwell and they totally gave up on the glass stairwell and it's now metal steps with like.
Like a traction on it and stuff and I I imagine to myself that that was a about a piece of value engineering that they could only do after Steve Jobs have passed because I don't think he would have never accepted that.
[5:16] How pedestrian metal stairs I would never go in that store.
[5:19] Yet still at school the story is beautiful but I would not say it like.
Move the ball forward in any meaningful way like it it uses all of the the traditional Apple gestures it feels very much like any of their other more modern Flagship stores and it's,
it's quite big but there's nothing that you can get at that store that you can get at dozens of other Apple Stores and bigger equals.
More of the same stuff not necessarily new stuff so in general like based on the amount of hype they had around the store I would call it slightly overwhelming it's a perfectly fine store there's nothing wrong with it but.
It wasn't as I don't know evolutionary over previous stores as I had hoped.
[6:07] You mean underwhelming you said overwhelming.
[6:09] Oh gosh yes I apologize exactly meant underwhelming one kind of cool thing,
yeah because some of the the new products that the what's it called the homepod is meant to be a sort of an audio file,
Calibre product like they do hit now have like a.
Like I so living room and then in an enclosed whistling space where you can kind of walk into a a little living room with a leather couch that's a little reminiscent of these.
Magnavox ads from the 80s and you know listen to the airpod in a in an enclosed room instead of just on one of their wooden tables.
And there's a secret exit I guess is the other interesting thing now so if you do.
[6:57] Yeah so if you you know there's a tourist entrance which is this stairwell and they're often is a line to get the bag down the stairs and into the store and it it's cool but it's kind of inconvenient answer they now have a like a.
10 of a discrete stairwell and a side entrance that you can like if you're local and needed to grab something you could pop in and out without going through the tourist entrance.
So that's mine my scoop on Apple Fifth Avenue.
[7:26] Any other trip reports to of what you've seen out there.
[7:31] Also on that trip I visited some other New York retail that we talked about the Nike House of innovation store before and I want to go back cuz I've been there during the grand opening
and to their true that they've done a month they continue to evolve that store and they actually had a pretty cool exhibit on the ground floor so.
They have a a new like cushioning technology that they're promoting that uses thousands of little beads in the shoes.
And so they they built kind of like I don't know what the best way to call it like almost like like one of those ping pong ball pits.
[8:11] That you that you know kids would play in they built a giant caged pit,
were the entire floor is this cushioning technology and then they figured out a way to project a digital image on the entire floor so they have things like.
You know I cash a fake colored balls thing where you can run around and kick balls around and try to pop balls they're all virtual balls but it causes you to jump up and down on this floor a lot and you can you know you have all these bites.
Different sort of instagrammable physical moments and you know people were in New York were in line to sort of get their picture taken in this so I kind of cool novel.
Digital physical experience and.
In the way you got in line is you had to be a nikeplus member and be running the app in the store and only then could you get in the queue so I thought that was kind of a clever experiential elements.
To add to the to the Nike store and Nikes leaning heavily into forcing you to be a nikeplus member and having a lot of self-service mobile experiences in the store so this this kind of perfectly played into all of those things.
[9:26] Lyrical will this episode of the Jason Scott show aside from the the trip reports is really focused on we're going to do some non Amazon news so you're where we have been Curry Amazon a lot here lately so wanted to catch up on some non Amazon news
then we've also had a fair number of Wooster questions kind of TWP out on our Facebook page for we've had a pretty good discussion going so Jason watch on the new side.
[9:53] So the first news item was sort of saving for our holiday show it's already starting to come up a few times so I thought I would that we needed to briefly mention it here.
The way the calendar works this year.
Thanksgiving falls on the latest calendar day it possibly could which means there are six fewer days between Thanksgiving and Christmas.
Then there were last year and the reason I bring this up is,
a lot of retailers are going to tell you you know that if they're their sales are soft at all it was because they had fewer selling days to sell this year and it already came up in the Amazon earnings call which was today,
in a couple of other retailers have already issued cautionary tales that they have 6 who is selling days.
And maybe we'll talk about this little bit more in a in a holiday took a show but,
what are listener should know is that there's no science to the fact that when there's fewer days between Thanksgiving and Christmas that consumers spend less for holiday so like.
[11:01] Back in the 1950s holiday shopping started on Thanksgiving and went through Christmas but for the last several decades holiday show shopping and started in the very beginning of November and went through Christmas.
And there are still the same 61 days.
Between November 1st and Christmas and New Year's at that there have always been in so like what tends to happen is when there are fewer days between Thanksgiving and Christmas.
Purchases get compressed more and then there's less of a lowlands in shopping between the.
Thanksgiving holiday in the Christmas cut off but I just want to sort of pre-plant listeners cuz we're already starting to see articles.
Almost all of the retail data supports the fact that the number of days between Thanksgiving and Christmas doesn't have a material impact on.
Holiday sales so when you hear that be skeptical it's a little like when retailers by in the weather.
[12:01] She just took away the everyone's excuse for a bad holiday.
[12:04] Yeah yeah sorry about that but like I feel like there should not be an excuse like everyone should have a good holiday.
Unless something wacky happens with tariffs between now and then.
I would seems unlikely so more newsy is so now get off my soapbox more Newsies stuff this week there was a new launch of a,
a very boring Lee names product called the EMV,
SRC in EMV is the name of a joint venture that MasterCard Visa Discover Card Diners Club.
And a couple other companies started so it's a joint venture of all the credit card companies and SRC stands for secure retail checkout.
So they watch the new product this week and,
longtime listeners will remember that most of the credit card companies tried to wash their own check out services so there was a thing called check out by Visa there's MasterCard check out and these guys all wanted their home button on your Ecommerce checkout page,
to have a alternative checkout flow.
That was provided by the credit card company and they wanted to store your credit card instead of having the the retailer store the credit.
[13:22] And they all have kind of you know what those products died they were never very successful customers number adopted them until they have now launched a new initiative,
which has the same same sort of goals but it's not branded for an individual credit card it's it's branded as.
Click and buy and it's you know in it it obviously works with any of the the credit cards and so it's an alternative checkout flow that's really designed that compete with PayPal.
And today they announced their first three retailers head had launched and I think those retailers are Rakuten.
November which is a donation site for a charity and one of the movie theaters at had launched and so this is.
In theory an easier faster more secure way for for customers to check out and if you store your credit card in it on one side.
And you could use that store credit card and any other site that use this flow and they so they've made the flow available for free and it's open so.
And I think it's kind of lame.
[14:34] Zoe has a big setup for it being line.
[14:37] Yeah well so it's a step in the right direction when I get weight makes way more sense that they have to have a joint product in the each try to have their own product I used to call that.
NASCAR in the checkout where you know all these different companies wanted to put their logo on your check out.
So now you know it's Consolidated down to one there absolutely is a customer benefit like if you know the customer would love to be able to store their payment information in one secure place,
and then be able to use it in any of the places they shop so if a bunch of retailers all adopted this checkout flow.
It would save customers time cuz they could go to a new retailer that they never shopped at before and still not have to type their.
They're shipping address and payment information because it would be stored in the the EMV SRC.
So that makes sense and I think it's a smart play for for the company is to consolidate but here's my problem.
[15:33] The people that should be the best in the world at a checkout form should be the credit card companies and they should you know follow all the best practices and make it as a little friction as possible and therefore isn't that great bike it's very kind of.
A pedestrian middle-of-the-road checkout with a lot of practices that we now know aren't the best.
They make you type every individual field for address and you know we know it works way better to have a single feel than and use like a a Maps API to do a autosuggest.
You know it just it's surprising they didn't have a great check out for a while and then like PayPal.
They make it kind of redundant so the way that these first retailers implemented it. You have to type your shipping address.
Before you select your payment method so you don't have the benefit of this service should be that you don't have to take your shipping address but the retailers are making you type your shipping address before you get to the payment method so.
To me that was just kind of disappointing.
[16:40] So we'll see we'll see if it get some adoption or they do a Gentoo and try to you know I'm sure they're all listening to this and you know we'll take my advice.
Which I will happily give them for free so a couple other little news Tibbetts that I promise will be shorter.
Best Buy hasn't has announced that they're moving to one day delivery for e-commerce so you know obviously,
Amazon send big ripples in the industry by doing one day delivery in Walmart quickly announced they would match and Target matches by using,
store delivery and so now you know we see another big player Best Buy feeling like they're forced to go to one day delivery which I'm sure is going to be.
A very expensive thing for Best Buy to implement so that's interesting seeing seeing more retailers follow suit there.
Today is actually a big day in New York retail,
there's there a Nordstrom store has been a flagship store has been playing there for a couple years and it just open today so Nordstrom open the men's store a little over a year ago in New York and now they have a you know like one of the best examples of there.
Their women store available in New York City and I know that.
The New York retail trade press was shopping at store today and I'll head that very favorable comments about the first day.
[18:04] Cool I saw an article that said your Nordstrom was doing all this stuff to improve the brand and into Wall Street just kind of young and I think the Stock's been down about 25% year-to-date
whatever they're doing hasn't been seem to get traction.
[18:21] Yeah I mean like for a while the the growth had been in the discount stores which it for Nordstrom is Nordstrom Rack
in the main light stores have been lagging and that you know they finally had to conceive the day the discount stores were cannibalizing the main line stores and you know opening 1 new story isn't likely to really move the needle
this is like by all accounts has a great store it's a risky store because like vemos.
Retail saturated Market in the world for sort of luxury department stores is New York City and you know that most of their competitors have,
how much longer relationship with with the New York Shopper so,
for for local New Yorkers it's going to be interesting to see whether whether Nordstrom is able to entice them,
I see a lot of shopping in New York happens from Taurus and Nordstrom has a good brand so,
I by no means think it's it's not going to work but I kind of think this could be become Nordstrom's best store and it still isn't going to be.
You know a huge economic windfall you know happy story in the stock goes through the roof.
[19:37] Diametrically opposed one of those historic New York department store brands Barneys has been in bankruptcy for a while and we are all waiting to see if they were going to,
be able to emerge from bankruptcy with some sort of restructuring or they were going to liquidate or what the story was.
You know Barney's is a strong luxury department store brand in New York Bike there you know heavily feet up.
Featured in the The Sex in the City TV show.
And you answer a lot of New Yorkers had a strong affinity for the brand.
And then out today that they are not going to be able to restructure so they they sold all the assets to a company called authentic brand Group which is a we often Call ABG.
I'm an ABG the holding company that owns the licenses to a bunch of.
Mostly failed retailer so it's like the Nine West and Nautica and Frederick's of Hollywood and they license out the the.
[20:45] The intellectual property for these these Brands to operators that want to run stores and so they it seems like the intention is to close all the bunnies doors except one in Boston.
And they have already announced that they have a customer that they're going to license.
The brand asset to and that customer is Hudson Bay Company which owns Saks Fifth Avenue so.
Yeah Saks and Barneys would have been you know direct bitter competitors for a long time and you know it.
Clear how they're going to use it yet but like in some way Saks Fifth Avenue is going to try to Leverage The Barney's brand which is.
Interesting but almost certainly bad news for all the.
The employees working in the in the Barney stores and you know people that like had a particular affinity for the bunnies experience.
[21:36] How many Barney stores are there again.
[21:38] Yes I was afraid you were going to ask me that and.
[21:41] Have a uncanny Central would get one of our interns to work on it while I'm fucking in a.
[21:46] Yeah if we ever had like notes or or like rehearsals or something like that would be super helpful under 10 I want.
[21:54] We do rehearse every show three times so I don't don't get blisters confused by by the don't make it seem like we don't prepare for this thing.
[22:02] Got you in my head I want to say at 7 stores so it's not a huge number of stores the a few of them ended up being inserted wackadoodle places like they open the wheel Las Vegas store.
[22:17] They're pretty big.
[22:18] Yeah it was their big beautiful stores.
[22:21] Macy's size in my brain 20000 square feet.
[22:23] Yeah but they were like no I think they're like considerably larger like 230,000 square feet.
[22:33] This could be good from all again or bad depends on your perspective.
so I think they are like they are an anchor in a couple of miles but there's like something you know that the Manhattan stores were mostly freestanding stores
their first non Manhattan store was like a Chicago store from the 90s I think they have a good store in Beverly Hills
they actually there's two me a doom the mall trying to open in New Jersey
it's called American dream and it's it's owned by the same people that own Mall of America and they've been trying to open the small for like 20 years and it's supposedly,
can a partially open this month but guess who the the tenant retail anchor was supposed to be in that mall.
[23:23] You got it so that's where obviously not happening so that's a yet another setback for for those guys I'm sorry not rooting against them but it just seems like that.
A little bit of a wackadoodle concept in the current market it so definitely you know sad,
to see Barney's go it'll be interesting to see what sax does with the brand you know sex is on kind of turnaround of their own trying to change their fortune and so,
you know I think there's a lot of evidence that.
When's red algae that does not work is to take to distress Brands and add them together so Kenny Mart plus years was not significantly stronger than Sears alone
so what will see if if Saks and Barney's have a different approach.
[24:15] Doesn't that don't sound terribly promising.
[24:18] I'm super negative on these news items today I should have found some happier news.
[24:22] You're grumpy Jason forgot grumpy Jason tonight.
[24:24] Yeah also it's not a good week to be a retail brand CEO it seems like they're all losing their jobs.
[24:31] Yeah and it's not entirely clear so an interesting one is both the Nike and UnderArmour CEOs have switched over.
it's not entirely clear what's going on the lot of them site you know kind of standard just want to spend more time with family and all their stew lot of rumors that there's a lot of meat you kind of stuff happening out there that.
You know that this is one reaction that I have no idea if that's true or not,
eBay's CEO left in September that was kind one of the first ones and he just had a disagreement with a board board
I want some start kind of dismantling eBay and if he wants all the parts to stay together so they the CFO took over there but
I mention eBay because the new CEO of Nike is John Donohue who was the previous to Devin winning CEO of eBay,
from eBay for SAS software business called servicenow and now he's running Nike,
the new CFO is currently running until Under Armour I think president of the US took over on a reminder.
[25:44] Yeah internal promotion what's a little interesting they're like I think you're right on Nike so 890 had phenomenal
economic performance and Nike Revenue probably doubled during Mark Mike Parker's rain in Nike so that one didn't feel,
like financial performance-related and there was a lot of controversy around.
Like they're not being a lot of gender diversity in the senior management team at Nike and
you know some sunlight you know not very good policies for treating female athletes in Nike inside I don't know if the cumulative effect of all of that was the deal or if he just chose to leave like Tiana I haven't heard any strong rumors on Nike but it almost certainly wasn't financial performance and Nikes case because they were you know they're frankly doing really well
Under Armour has struggled more and what's interesting there is like the biggest rival for Under Armour has been the North American market and so you know now that the founder Kevin plank steps down I think he still the chairman of the board
ebony step down from the day today and the guy they promote is the president of North America which is the market that that has been struggling so
interesting and nothing else.
[27:02] So that wraps up the news for show there was one thing I wanted to mention the news so I think one of the most under-reported and discussed in the industry Market places that I'm excited about
I is the Google marketplace now they don't call it that I think that's part of the problem that the the way they articulate this
to sellers what I would call sellers Merchants if they call it,
Google shopping actions which is a terrible name and then for consumers you you can see it called by on Google the spin around 4
about two years if I recall and it's been on this kind of slow boil and what's,
reason I mention it in the new section is here today right before we got on I got a email from Google shopping saying they were having a flash sale that's like you can't have a flashlight
but look at what they've done is they've gone to all the the sellers that are in the buy on Google program,
I'm in first while they've upgraded the program where I was able to use it on my iPhone and my Apple browser,
I'm on my desktop and it's much easier to use than a
then it has been in previous iterations work Sky Android only intact and to kind of like the Google Play permissions in and.
[28:23] Payment methods do you have set up so it's really good experience so we'll put a link in the show notes to the splash page and I was able to get $40 off of a pair of iPods that had my eye on the new generation of some older ones
so I was just blown away by The Experience got a really nice one page checkout the shipping was very Amazon asking that is Snappy so you know there's there's we talked about on the show about how
Amazon's ads are really threatening Google looks like Google's waking up to this and I'm cautiously optimistic that this Mark this kind of by on Google it is a pretty interesting new and trending Marketplace world and I would encourage our our
books to maybe this experiment without as a holiday item I think it's relatively easy to turn on if you already have you know
you can go to Google shopping list.
[29:22] Yep and it correct me if I have this wrong but in my mind this is sort of the successor to what used to be called Google Express rides are there there's both of delivery service but there was a,
Google Express shopping portal where they aggregated all the items that work,
being sold by Google Express and now they have this new portal which is shopping. Google.com which Aggregates all the sellers that are using the the.
Google shopping actions tools to sell products on the Google platform is that am I thinking about that right.
[29:59] Yesterday so they had two actions separate then they kind of had it inside of Express then Express kind of as we.
As you know it kind of went away and now they're kind of gotten rid of that brand this far as I understand so they've gone through kind of like four or five iterations here that have been.
Part of the reason I don't think a lot of people are talking about this is it
it is very confusing but now I just want experience I went through was actually really good reggae email and it said there's a flash sale prices were really good it seems like Google was supplementing them took me to a page that was,
coherence and really only shop on Google items that the only other thing I've noticed is you can now if you do a search result
Uber Google shopping I get an Amazon Prime like filter which says you know hey show me only the buy on Google items that are in this market place and what's nice about that is
you know it's got a cart metaphor so I don't have to go to 6 different retailers websites to buy stuff and
and then the flash sale is nice because it also has a bunch of additional discounts to really nail the user experience it still think they need to do a lot on The Branding but I think.
This is good cuz I can Foundation we have the right pieces in place to go do some Brandon that would make sense.
[31:20] Yeah I know and it definitely seems like
Google is fully committed to figuring shopping out and it makes sense that they would cuz obviously you know there's a lot of chatter about Amazon stealing ad revenue from Google news so you know if your,
if your Google it would make sense that you'd want to have a viable shopping experience to try to protect that Revenue.
[31:43] Absolute cool that wraps up our news part of program and let's jump into some listener questions.
[31:57] Questions their questionnaire questionnaire questions.
[32:02] Jason you know I don't,
I feel like I've put my thumb on the scale or something but mostly questions are actually in your realm so I'm going to we're going to go into an interview style here.
We usually like to alternate but really miss these are in your room so
jump into a man and you're going to be the guy answering most of them so the first question comes from longtime listener frequent guests Michelle Grant and she says Amazon and Walmart have both have patents around predictive shipping could you speculate on what impact predictive shipping will have on Commerce
we mentioned it in episode 187 but she'd like to get more details.
[32:41] Oh. Now I have to try to remember what we said in 187 better than Michelle remembers it and that light.
[32:47] You said you were the world's leading expert on it is Farrakhan.
[32:50] Yeah I trust Michelle's memory a lot more than I trust must be haven't heard about predictive shipping before like super literally it's
this notion of another way to call it would be in Tissa Batory shipping to say like hey using big data and your
typical trans I assume you're about to run out of peanut butter so I'm going to send you a new jar of peanut butter and if I'm right and you needed peanut butter great you keep the peanut butter and I'll charge your account for it if I'm wrong
here's some super easy way to return in the peanut butter and you won't be charged for it so.
[33:34] It's a specific version of a broader category of experiences that I'll call Auto replenishment right and you know Auto replenishment to me is this notion that,
today my shopping is very inquisitive like if you need peanut butter,
you either go online find the right peanut butter added to your card and buy it or you drive your store find the peanut butter and and pay for it but you you had to take a bunch of overt actions to get that peanut butter
and increasingly in the future there going to be a lot of products that you're going to get implicit lie without having to take all those steps and so,
the ways you might get an implicit product or it might be predicted we ship to you which is what Michelle was specifically asking about.
[34:21] You might have a webcam in your kitchen that's keeping this noticing how much you use peanut butter and ordering pink peanut butter for you when you when you need it kind of like a video version of Amazon Alexa.
You might have a smart trash can that notices what packages you throw away and automatically reorder them.
You might have a fridge that let you very easily tell it when you use the last of the milk or the eggs or something and increasingly you might have a bunch of.
Internet-enabled devices that know when they're out of their consumables right so already you can have a water filter pitcher that knows when it needs a new filter in orders that you can have a dishwasher that orders more soap when it needs it,
and so you know there's a.
Using all of these techniques that iot devices the smart kitchen and the predictive shipping there's a significant amount of purchases that we that we have to explicitly do today that will probably happen in puts Italy in the.
The not-too-distant future incident.
[35:26] Specifically answered Michelle's question I think the cumulative effect of all of this Auto replenishment can have a huge pronounced effect on retail,
so so I've had my team do some sort of.
Studies on you know what percentage of products in a typical Walmart store for example.
[35:51] Would be suitable for auto replenishment and in the answer is it ends up being about 40% of the skews in a Walmart are things that you could.
Reasonably expect to be fulfilled via Auto replenishment,
and so imagine the world was calling five years from now when you never go to the store to get toilet paper or paper towels or peanut butter because through one mechanism or another all those things.
Show up when you need them at your house suddenly the Walmart store is 40% too big and.
[36:26] A bunch of the reasons that you had to go to a store have gone away so the number of visits that you have to that store,
have gone away in the amount of Isles you're going to walk in that store that are you know potentially going to cause you to serendipitous we discover new products and impulse items,
have gone away and so the you know we talked in most markets that like if you can change the market by 10 or 15%.
That really is an inflection point that can dramatically change the whole market and so if.
Auto replenishment can get to 40% like that that would be.
A pronounced change in retail and the way I like to talk to retards about it the way I think about it is you know I used to spend a lot of time at Best Buy.
The 40,000 square foot store 10,000 square feet of that store where designed to sell these things that came on plastic circles called music.
[37:26] And people would buy a new music in some cases every week so you might visit a Best Buy store 50 times to buy music and you probably only shop for a TV every 2 or 3 years.
[37:37] Because you come to that store every week,
you have to walk by the TVs and when you're ready to buy a TV. Most likely buy it from Best Buy so what happens in the world when no one buys plastic circles anymore and you all download your music on Spotify.
[37:50] Suddenly the 40,000 square-foot Best Buy store is 10000 square feet too big and has a huge economic problem and then Best Buy's case.
They they really struggled with what to do with that Gap that was both the traffic driver and you are significant,
square footage in their store they tried a bunch of things today what they mostly do is outsourced that space they sublease that space so Apple buy some of that space Samsung buy some of that space,
Microsoft buy some of that space and they sort of have a Bazaar of of a brand funded displays that I have taken up that space
and they've done some different things to,
replace the traffic they provide lawn services there now weaning into Health Smart Home all these different things but none of the things were
completely successful at replacing the traffic that that CDs wants gave to Best Buy and you know it's very possible
that grocery stores and you know major Mass merchants
will go through this same same Quagmire where where they'll have to figure out you know changes to their business model to accommodate the fact that they're certain kind of products that we're just not likely to,
explicitly shop for at some point in the future do you buy my version of the future at all.
[39:11] I do you know the thing I would add and eating you do a,
ask it what you talked you do where you talk about this where you wouldn't when you just drive it people may be saying you know that's really weird like stuff I haven't ordered shows of my house that's weird
but what I think happens is where I need to loosen up to that little bit and use the example of you know 10 years ago people would say never get in the car the stranger now we press a button on her phone and do it all the time
ride sharing apps and don't think twice about it if people put all their food on Instagram and stuff thanks to her behavior changes faster than we give it credit for
and how do you say example of Stitch fix right so there's there's millions of subscribers to stitch fix that are used to the cycle of I get a box of stuff and I return pretty good chunk of it and I keep some
I think that's the kind of the format it would take is you imagine you get all use Amazon cuz that's my
I go to you say yes imagine you just kind of get this weekly box from Amazon and in there,
you keep 60 70% of it and then Amazon's coming to your house so much in your neighborhood so much they don't mind picking up a bunch of stuff I hate you get back convenience factor without
way you would you would really think of it as wasteful I think a lot of people kind of look at in the weather be super wasteful cuz it's actually more efficient.
[40:29] Put more stuff in that box and it's Greener if you could be, the math of that in an Amazon you could actually pass a bunch of shipping savings to you as well
when you stay so I didn't hear you say is just a simple one
and I think the Amazon patents kind of Simply around one of the times I saw was around you know
frequently people in my house on my Amazon account will throw things in the car and just kind of like leave it there for their fries and they won't check out to Amazon could preemptively ship stuff like that to you know so or if you spent a fair amount of time on an item page and items under their not to do that with a high
consideration product like a digital camera
but you know what say you're you're you know you're looking at a pair of shoes they can go ahead and ship you two or three sizes that shoe knowing you'll probably take one and you were probably going to do that exact same
real kind of return pattern anyway if they've shipped that with a bunch of other stuff already on its way it kind of Ride Along Ride Along quote a quote for free or for very little,
there's just kind of like science fiction where all the devices are ordering for you but there's kind of simpler stuff we can do in the interim to get there.
[41:39] Oh for sure and I would even say it like,
there's lots of signal the retailer can use to inform that prediction and you met you know the browsing signals that you mention the the stuff left in car that the actual purchase history but,
like let me give you a scenario that's even easier so what happens when Kroger buys a popular app for tracking your calories online and they now know for a big chunk of their customers
like what they ate at every meal because you logged your food consumption into your diet at right
so now Kroger knows not only what you browse for and what you bought but actually when you consume it and so they can you know super accurately,
predict when you need more of those items and it it you know it's not black magic or anything like there's a gentleman reason that some users would want to tell Kroger when they use those items,
because I got some some benefit for that and I guess they're one of the thing I throw in there is predictive shipping doesn't.
[42:44] Automatically mean to your house so there's a flavor predictive shipping that in essence is already have and it happening some of the Amazon patterns for predictive shipping,
actually are proposing that they would predict that we ship popular items
to the basement of your condo building our apartment building right so I can predict like
I can aggravate the predictions for you know the 50 people that live in this building and I can
Amazon can we space in though in the basement of that building and they can stage the stuff that that buildings most likely to buy in the basements and then when they get ordered the delivery cost is from the basement to
the the unit instead of from the Fulfillment center to the unit right so a flavor predictive shipping is.
[43:33] Predictably staging the stuff closer to the consumer and I would argue Prime now is sort of a version of that already where you know they have
they put them in centers that are several hours from metropolitan areas and those those filming centers have a million items and then they take the 60,000 items that they're most likely to sell to that metropolitan area and they put that in a smaller Warehouse that's a 30 minute drive from
most of the residents in that City and you know increasingly
they might stage even more popular items more closely the customers to enable the one day delivery in all these other services so I I feel like baby steps in predictive shipping is kind of staging items closer and I do think it's totally realistic that
In Our Lifetime you know there's white I did it just doesn't make sense that you should have to stress about running out of toilet paper.
it's going to be one thing the e-commerce industry delivers to the world cool our second question comes from Holly Marie Pfeiffer and it says what's the future look like for personalization with ITP cracking down on Safari and talks about Google being closed behind and restricting third-party cookies.
[44:45] Yeah well so I'm have to interpret this question.
Partly because there was a thing called 3rd party cookies and they mostly are already
not allowed so you know a cookie is a little digital footprint and it gets laughed when you visit a website and it can store some data,
that that website uses about you right and so for a while it was possible to four.
When you visit us a Retailer's websites a walmart.com
Walmart could have permission to go look at a cookie that shared amongst many websites and that was called a third-party cookie
Vera Bradley security reasons browsers don't allow that anymore so walmart.com can only see cookies that are designed for walmart.com and no other website can see those cookies so it said that kind of.
Personalization has already tightened up but there are lots of other ways that browsers try to identify you and share information about you
and I think Holly's main point is
the internet is kind of cracking down on all of those ways so there's a thing called browser fingerprinting.
And essentially you know I can ask the browser.
[46:12] For thousands of settings that you have set in your unique browser and your combination of settings for all those settings kind of.
Equals a unique fingerprint that's going to be different than almost any other user on the internet and so by.
[46:27] Asking your browser all those questions I can create a unique fingerprint for you to identify you uniquely Scott even if you delete all your cookies and so there's a you know a fair amount of.
Advertising based personalization on the web that leverages these fingerprinting Technologies,
and increasingly the browser is not letting you asking all those questions because they realized that it was being exploited for for privacy reasons,
and by default the browser isn't storing cookies at all or is much more restrictive than its privacy policies then then they used to be and so there are a lot of us that feel like,
a lot of the ways that a marketer would have leverage third-party data to improve.
Their ability to Market to you when you're in a particular website are all things that for a variety of privacy reasons are,
going away and they're going to be more restricted right and so you know today when you go visit a website you visit Walmart Walmart knows everything that you told Walmart about it but Walmart can also go to.
Axiom and Epsilon and all these third parties and buy a bunch of extra data about you that they could potentially use to Market to you,
and you know there's probably like.
[47:47] Nearer than further future when marketers aren't going to be allowed to apply any of that third-party data to you so they're only going to be allowed to use data,
about you that you had explicitly provided to them and and they they have disclosed their collecting and what they're doing with and so,
it does change a bunch of marketing tactics that does change.
Did the palette of personalisation options that you have available but frankly like I would argue that we are doing an extraordinary crappy job of personalizing experiences
to all the data that we have access today in to the fact that some of that data might be less accessible to us as marketers in the future
you know do a great job with all the data you have before you you're crying about not having access to more day that's why I feel like there is a huge opportunity to dramatically improve personalization
you don't even with just first-party data and so I personally don't view it as a a disaster
that the sort of wild west of third-party data is is likely going to go away.
[49:02] Call Melinda secret time time so we'll probably maybe do the short version of these
this next question comes from Jeff Vogel I saw Jason's question to Toby about performance and pwas do you see them actually sticking I know they are hot right now but how many pwa either of you have on your phone
of those besides Amazon how many do you use seems like something that works for the Amazon to Nordstrom's the world but do you see it as a mid-market reality.
[49:33] Oh Jeff it's so cruel. Just short answers and then gives me a juicy p p w a question.
[49:41] Take all the time you want it's our podcast.
[49:45] Yeah yeah that's got so so first of all the the question he's referencing is the founder and CEO of Shopify did a kind of ask me anything on Twitter,
that's Toby and I took the liberty of asking him a question about you know is there any plans to dramatically improve,
on Shopify sites and specifically of Shopify was going to move to something like Progressive web apps and Toby was nice enough to give a video response to my question and he said we're absolutely,
doing major evolutions of our performance right now so stay tuned for you no big announcements about us optimizing our performance which candidly is a problem with Shopify it's not a particularly.
Bass performing e-commerce experience at the moment
so glad to hear that Toby is committed to fixing that and I floated pwas as one of the primary ways you would do that and Toby didn't agree with me like so he's like we support pwa,
but that's really not the best way to get performance so this requires like a slightly deeper dive.
Jeff I suspect the way you're thinking about pwas is exactly backwards right sappy wa stands for Progressive web app.
[51:07] And it has this unfortunate word in it app and so when most people here that they go oh,
pwa is a replacement for Native apps and what you would do is you go to a website that's a pwa and you'd quick save on my homepage and now you have an icon on your phone that you can click.
Anytime you want to do lunch this pwa and you know he he's referencing that guy shike aren't only really big companies going to be able to convince people to save the pwa is to their homepage.
And here's a funny thing what a pwa really is is it's a best practice way to build a mobile website.
[51:45] And you never have to store it on your homepage it simply means if starbucks.com is built as a pwa when you go to starbucks.com from your mobile phone.
You're going to get a highly mobile optimized experience that's likely to load much faster be perceived as welding Fastener and support the very latest.
Mobile capabilities in your browser so it's using your browser to deliver a great mobile experience native apps,
are indexed by Google so if you do a search on Google you're not going to get pointers to the,
the interior content inside of a native app but a progressive web app is a website so it all of its content is indexed on Google you can get a result on Google click on that result and it'll take you right to that part of the progressive web app.
It just so happens that as an optional feature of progressive web apps.
[52:37] If it's a app if it's a website you use a lot you can save it to your desktop in or to your phone home screen and then there will be an icon that you can use to lunch at but you're really just watching.
That Brands website and so I actually think.
Pwa most benefits the not Amazon's of the world Amazon is about the only retailer that successfully has God than 50 million consumers to download and install their app like almost no other retailer can get a native app installed on a lot of.
Devices Amazon can so if you're not Amazon and you want to Rich mobile experience.
[53:15] A pwa is the way to go right now so I at the moment disagree with Toby I think.
Pwa is are much more important for mobile performance then apparently Toby believes they are.
Time will tell there are a bunch of retailers that have launched pwas and a reporting dramatically better.
Performance and therefore business metrics as a result the example I use a lot is in the US Starbucks has a mobile app and super successful.
But as they've expanded all these other countries they didn't rewrite that mobile app they built a pwa so in China the way you would do mobile order and pay the way you would do Starbucks pay is through the pwa website that Starbucks belt,
and they have built a a pwa version of their website in the US now and you can try it and it basically it'll mobile web browser gives you all the functionality.
[54:13] Previously you you would have needed an app to get so I think it's a really good experience.
You don't see tons and tons of deployments right now because they're frankly really hard to build them so they're expensive to build.
I'm in a ton of retailers just spent a bunch of money building building a responsive design website and saw the last thing they want is Jason Goldberg to fly in and go your responsive website sucks you should build a really expensive pwa to replace it right and so.
Quite frankly there just a lot of retailers that aren't in cycle on.
Making that kind of investment right now but almost every retailer that is having to make a new investment in their mobile experiences.
[54:51] Is adopting pwa in the first crop of those that did are getting great performance so.
I'm actually curious to have a Toby's a super smart guy.
Cheers to have a longer conversation with him then you can have on Twitter to understand why she's not as bullish but my.
Sort of skeptical suspicion is Shopify just isn't particularly well architected to.
Replace the webstore model with a pwa web store and you know they built their own Paradigm they they have this development language called liquid and Toby obviously loves
the stuff that he built so he believes the fastest way to get a mobile website is a better implementation and liquid and they support pwa is kind of a bolt on but not really is
coordinated technology and so I suspect part of Toby's hesitation is that his architecture just doesn't support it as well but,
hopefully I'll get the chance to have a deeper die with him and then we'll find out.
[55:58] Cool that's a good tie into this final listener question this comes from Carrie and I'm not going to say carries last name cuz I won't say it right so will call Kerry k
any new information regarding with a Dobby is doing with the Magento platform
and kind of a it's a two-parter here as we're trying to go fast and then this is one you can do really fast what's your brief take on the current status of all of the Commerce platforms.
[56:25] Yeah so that it's a better time than you might imagine because I'm like Shopify Magento is kind of all in on Progressive web apps,
like here here's a kind of my Readers Digest on the Adobe and Magento first and then the overall landscape later
show magenta was a super popular e-commerce platform it's been deployed millions of times it's you know most people that the plated didn't pay for it and it's you know open source on-prem solution and that was called magenta 1.0 so there's
Tennessee. They're they're still running magenta 1.0 there's a you know even more sites that installed magenta 1.0 at one point and then just kind of abandon their business right so,
it's been a super popular platform for a long time in the last three or four years if you were small business that wanted to do lunch and e-commerce site you were Louis less likely to pick.
Magenta which is hard to install and host and all these things and way more likely to pick Shopify so Shopify his gain way more traction while I would argue Magento has lost a lot of traction with small businesses,
but while that was happening,
Magento didn't stand still they built Magento 2.0 which was much more modern architecture for an e-commerce platform it was better in a lot of ways.
[57:44] And only one piece of bad news Magento got very few people to use Magento 2 and very few of the,
the the magenta one sites have migrated to Magento 2,
but Magento 2 is better in most ways and today Magento 2 is one of the platforms that had the best native support for Progressive web app.
well they don't have like Magento is kind of A Tale of Two Cities they have a long in the tooth old e-commerce platform that that has a lot of flaws but has a huge install in loyal install base,
and they have a new platform which is much better which supports much more modern standards and better security.
And they don't have a lot of traction with it yet and then you know when they found them in that circumstance they got bought by Adobe.
Which you know it has a huge investment in content management this platform called Adobe experience manager AEM.
An AEM scomar strategy was to partner with e-commerce platforms so you know what a job you would say is.
Run AEM in IBM websphere or run a.m. and sap hybris together and we have these design patterns that let you run these two super you know expensive complicated pieces of the software together.
[59:12] So at the moment.
I would say Adobe has not merge those two strategies like they now that they own Magento they they have a strategy that says hey run AEM and Magento together.
Like we used to talk about running hybris or sap.
And like I don't think they've got a lot of traction on that like it it frankly doesn't fit because in Magento is cheap and then in a.m. is expensive so if there's not.
Like a huge amount of overlap of someone that wants those two platforms.
And then separately they have this pure magenta solution which is hey you don't need a Content management solution adopter magenta to you know Embrace Progressive web apps and embrace the future and its really great solution so,
what we're all waiting for is Adobe to kind of reconcile those two strategies and say like hey how does
AEM fit into the Magento 2 pwa
World am is not very good at pwas but you know with Magento is selling their vision of the future there they're talking heavily about pwa so
is there in a little bit of an awkward place right now and we're all waiting to see how they they reconcile those those two pads there's there's a number of ways they could do it
and frankly adobe's acquired a lot of other Technologies in the past and ultimately been able to do a pretty good job of weaving them together.
[1:00:38] And then the second part of that question was some of the other platforms you've spent a fair amount of time on Shopify and Magento maybe throw was still a little big conversation there and then walk up
to Salesforce Oracle sap platforms.
[1:00:57] Play my one sentence answer is the state of e-commerce platforms right now is.
Convoluted right so that you know that the entry-level small business platforms of choice Magento and Shopify and as I've already mentioned Shopify phenomenally gaining traction,
and very low low risk easy implementation a lot of things going for it Magento
1.0 open source not so much not gaining a lot of new users One Step Up from that they're their platforms that are you meant to be like slightly more Enterprise friendly like you mentioned Bigcommerce
and I would call you I would say Bigcommerce as a kind of.
Stayed flat and Shopify his kind of successfully moved into Bigcommerce is space so they have a new flavor of shutters not that new now but.
A newer flavor of Shopify called Shopify plus which kind of targets directly the Bigcommerce is of the world which were maybe like one step up Market from.
From Shopify Bigcommerce is going to support more things like B2B workflows and things that that Shopify probably doesn't have yet they're a bunch of.
[1:02:11] Newer platforms at the next step up that don't have very big installed bases but they're all these platforms like,
Commerce Tools in Alaska path and you know a whole set of platforms that each have some pros and cons but just don't have a huge installed base.
And then you get up to the what what was the Big 4 which platform is most likely to be used by my clients and be used by it like big Enterprise clients it was demandware which is now Salesforce Commerce Cloud which.
Is doing really well has a lot of traction and you know they're probably doing a really good job of evolving the platform.
And then there are these three on-prem so in that that pop on his cloud-hosted platform.
Dentistry on Prem platforms that were really big amongst Enterprises there was IBM websphere Commerce which I didn't actually sold and you know now.
Is a little bit of forts platform there's Oracle atg and there's sap hybris and I would argue that all three of those platforms have wildly lostine.
As users have seen how expensive and high-risk they are to install and how long the installation takes and how much of that experience you get out of these smaller cheaper platforms for a fraction of the price.
[1:03:39] Sap hybris has a bunch of features that are not in Shopify plus but once you paid $10,000 for a year of Shopify Plus.
It's really hard to spend millions of dollars and wait 9 months or 12 months for implementation of,
of sap hybris so I would like say at the moment the Enterprise platforms are really kind of tanking,
it remains to be seen what what will replace them do man wear his you know star Salesforce Commerce cloud is done by far the best of those Enterprise Solutions,
and the the small business guys are growing up with their clients and so you know that the shopify's in the world have have many more Enterprise clients now that some of those.
Originally small businesses like Warby Parker you know have gotten bigger on that platform.
And not you not argue there's a bunch of new technologies that all the it guys like that are micro service-based and all of these new Frameworks,
and it seems like that's what all the customers want but like.
No one platform has kind of won the majority of users on that platform so at the moment it's a it's a very fragmented market and it's it's difficult to pick a winner so it's to be honest not the best time in the world to pick a new platform if you don't have to.
[1:04:58] Yes some of the api-based funds called themselves headless which I think is bad Ben marketing unless it's Halloween.
[1:05:05] Yes and pretend most of like there's not perfect overlap but most of the Headless systems or API BAE systems are.
What we would call Micro service pay system there are ways to be headed west without microservices but that's getting in the nuances that we probably don't need to get into on the show.
[1:05:25] Can you be headless without microservices but still do pwas without third-party cookies and predictive shipping.
[1:05:34] I was going to say yes till you threw in.
[1:05:37] Cool started to sound like a little word salad which means it's probably time to land the plane here.
[1:05:46] Yep if I'm totally confused anyone and you want to ask me five questions feel free to hit us up on Twitter or Facebook page,
you know is if we added value on the show we sure would love it if you jump on the iTunes and get us that five star review where one of the best reviewed e-commerce podcast on the web and frankly we'd like to keep that status and I need your help to do it.
[1:06:09] We hope you enjoy this episode of industry news and listener questions.
[1:06:15] Until next time happy commercing.