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

Join hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Founder and Executive Chairman of Channel Advisor, as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
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Now displaying: September, 2019
Sep 27, 2019

EP189 - Code Commerce and Grocery Shop

This episode was recorded right after Jason & Scot received their iPhone 11 Pro Max's.  Jason mentioned a new iOS feature to take full page screenshots.  Here is how to take full page screenshots in iOS 13.

Event Recaps:

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Episode 189 of the Jason & Scot show was recorded on Sunday, September 22nd, 2019.

http://jasonandscot.com

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

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode 189 being recorded on Sunday September 22nd,
2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.

Scot:
[0:39] Jason and welcome back Jason Scott show listeners.
Jason it was we got a lot to cover tonight we'll see what get a couple trip reports before we jump into that I'm dying to know did you get your iPhone 11 on new iPhone day was September 20th.

Jason:
[0:58] I did I was traveling during the week that it was an out so I was like at code Commerce secretly listening to the announcement.
In the audience and then that Friday I was still in New York so I super convenient for my Apple they made it 5:30 a.m. 8:30 a.m. East Coast time so I got to pre-order.
That that Friday and I my phone arrived this is Sunday my phone arrived on Friday.

Scot:
[1:30] Look at it all moved over and everything's rocking.

Jason:
[1:33] I did I think.

Scot:
[1:35] Pictures senior pictures.

Jason:
[1:36] So I suspect we got similar if not exactly the same models I got the 11 Pro Max screen.

Scot:
[1:46] I got the same thing yes you have impeccable taste sir.

Jason:
[1:50] Yes twinsies and I would say the upgrade experience continues to get smoother and less glitch free so,
in general it was super easy one wrinkle I was using a unpopular feature of the 10 which is dual Sims.
And so the way in the the US they don't have two SIM ports so one of your Sims is virtual and one of them is a physical Sim so I had to
a work phone account in a personal phone account and in the upgrade Apple convert your former
esim to a physical Sim so now I have two physical Sims and I can't fit them both in my phone so I'll have to go back to an AT&T store and get a new esim.
For all those people that want to have have a new definition for first world problem.

Scot:
[2:47] Watches get two phones.

Jason:
[2:50] Yeah not a fan I've carried a lot around a lot of phones and it's much easier to have to I mean I have one in the to send feature actually works quite well.
Articulated there different carrier.

Scot:
[3:01] How to upgrade.

Jason:
[3:03] Except for this week I mean I'm still fine I'll I'll still be able to travel with the
with the once a mint I can swing by and AT&T store last time I did this no one in the AT&T store never heard of any ECM but I have a feeling they've got it all I'll Donald in by this time.
And so I don't think we need to cover a lot like it's you know mostly well-known,
new features like you know why she related to camera but there is one secret e-commerce TV feature that I'm I'm kind of happy about 4 maybe only be relevant to his nerves of the show.

Scot:
[3:40] I'm trying to block what is it.

Jason:
[3:43] So
in the the Safari screen capture so when you you do the combination of buttons to take a picture of your screen.
You can now and now gives you the option to grab not just the visible part of the screen but the entire webpage all the way to the bottom.

Scot:
[4:05] Nice so you can get your lung checkouts.

Jason:
[4:09] Yeah yeah and so when you're taking pictures of mobile experience is to illustrate two teams or clients or things like that which is something we do a lot in the old days what you had to do is take a bunch of pictures and Stitch them together.
And so now this is super seamless in it actually works in Safari and male and a couple other programs that weren't as relevant but they're for web pages that's a handy little feature.

Scot:
[4:33] If I'd call that an e-commerce feature as much as it Chief digital strategy retail officer feature.

Jason:
[4:39] Fair enough fair enough a ux,
u.s. benefit I guess and on the flip side I feel like the last three years I've been waiting for the stupid true vision camera to go in the back so that we can finally get our shoe size right but I'll have to wait at least another year for that was.

Scot:
[4:55] Did to get the little pixels and also that we can.

Jason:
[4:59] So that front camera that does your your face recognition has it's an advanced measurement device that measures in 3D in it
in the few retailers that are they use that for clever e-commerce experiences like Warby Parker will measure your face and
recommend frame specifically for your face and it it it's like millimeter accurate so we're there to be a camera like that on the back of the phone you could imagine
measuring a space to make sure that the refrigerator would fit the opening in your kitchen or the sofa would fit in your living room or
exactly what size shoes you should order from a particular vendor Nike watch that feature without the fancy camera but it would be much better with this this hyper accurate camera.

Scot:
[5:47] Yeah he agreed and while you were traveling will you get a pretty cool recognition.

Jason:
[5:52] We did we did that must have been you because I was busy not focusing on the podcast.

Scot:
[5:57] It was snot me I think it was it was so it was just people someone out there likes our content.

Jason:
[6:05] Are the Luminous body of work.

Scot:
[6:07] What is a if you know how many hours that people have to listen to us.

Jason:
[6:11] We we yeah we're about 200 hours.

Scot:
[6:16] That's a it's a lot of us out there in the universe.

Jason:
[6:21] Yes yes so if you ever have The Misfortune of hearing me speak in person I usually open up by saying in the highly unlikely event you don't get enough of me in the next 30 minutes there's 200 more hours of me on the interweb.

Scot:
[6:31] Google I got a lot to cover let's jump into it first when I get a trip report from recode decode that was held in beautiful New York City September 10th how's the show.

Jason:
[6:46] Yeah it was awesome so we waited to that in the last segment but this is
code recode the the publication which is now owned by box them a very fancy show that I went too early in the year that they call
code conference and Jason Del Rey there has been enough that show a couple times is the Commerce
correspondent for them and he is started the series of events called code Commerce so used to be,
like an evening event on top of other shows where he would have like three speakers and now for the,
third year in a row he's had his own Standalone two day event in New York city so this is the third annual code Commerce,
and I like it it's a conference more than a trade show so there there's a few exhibitors but.

[7:38] It mostly is a single agenda of speakers everybody sits in the room with since to the same speakers,
there are no presentations that are all interviews with journalist mostly Vox journalist interviewing the the gas so it's a pretty dynamic.
Dialogue and you know sometimes people you know that stuff out that maybe they didn't plan to,
the audience is allowed to ask questions and so I got a little fired up at some point and ask some some questions and some of the speakers,
and so I just really like it they get a really good collection of speakers.
And I feel like the format lends itself to getting really useful stuff it's small and intimate so the networking was great I got to meet and talk to a lot of.
Listeners on the show I got to meet a couple of guests that we've had on the show that week we did not have in person so.
That was fun so all-in-all a good thing that one other thing I should say is in addition to that,
that's her speaker format they also have a half-day of off sites where you pick one and let you choose your own adventure of these I ate different offsides and they take you behind the scenes of a of a retail or e-commerce business.
And know that those can be cool to I had a complex so I didn't get to do that this year but in.

[8:57] Let's see what's hot in 90 seconds or less there's probably 18 speakers at the event so there,
there's a guy Kim Downing used to be the chief creative officer at Neiman Marcus
he moved to a mall of group in the New Jersey called triple five and they're they're famous for having taken over this mall development in New Jersey called The American Dream It's At Nigam all owned by the same folks that own Mall of America
I've been trying to open it for 20 plus years it's supposed to open next month don't hold your breath based on their past track record
openings and not doing it and I have to be honest like like these guys seemed totally disconnected from reality like there
just talking about what a great experience it is and how everyone in Manhattan is going to want to go to New Jersey to escape Manhattan and you know go shop for other necessities at this this giant mega mall and it's
you know it's the anchor tenant in the mall is Barney's who's already bankrupt you know all the other tenants are tenants that have eight other stores in Manhattan and it just it just seems like,
yeah he came up there pitching a small development like half an hour after Scott Galloway did 45 minutes on why malls were dead.

[10:14] So not super exciting.
They we had Jason Drogi who's the vice president of uber everything so that's all the services at Uber besides
the car-sharing so he does all the restaurant delivery
that you know food is a particularly interesting area for me it was an interesting interview at the end I got up and asked him if his service was good for the the restaurants because I like,
there's a lot of evidence that.
That all these delivery services are disaster for the restaurants cuz the margins are super low the customers are super opportunistic and the restaurants can't sell liquor in most cases which is where they make most of their profit so I had a premise that.
That these services are a disaster for the restaurant and the services are not 20% of all restaurant consumption so that's a pretty big.
Inflection points and Jason did not have a kid a very good satisfying answer for why he was he was good for the restaurant business.

Scot:
[11:15] Do you lease disagree with you.

Jason:
[11:17] Like she did not make a strong argument we were talking about that after the fact he kind of like pivot away from the question.
And talked about you know what like you know how they could be good for restaurants but not like the underlying economics of it being tough.
Scott Galloway did a couple things he recorded a podcast the final episode of Land of the Giants with Jason Del Rey and he did a 45 minute presentation
I most enjoyed it I've sometimes been critical I think Scott is super funny and has a lot of insightful things to say,
but he has a tendency to be highly repetitive so if you seen him once and then you see him a bunch of other times.

[12:01] It's a lot of the same content which is maybe something all I'll public speakers struggle with but I would actually say most of the content in this show.
Mabon thoughts I'd heard of his before from Twitter or what. That was the first time you put them together in a presentation so I thought that was good and interesting and he was.
You know he's been super negative on the wework IPO and you know so we spent a lot of time talking about those guys.
He's eating a kind of a bullish on breaking up Amazon so he shared his POV on.
And that whole thing and you know just.
Had some sort of interesting controversial povs which is what he's he's usually known for he also pointed out.
That light from his perspective the mall business is just totally dead and the specialty apparel business is next to go after that.
That voted poorly than for the American dream project which is a mall full specialty apparel.

[13:04] So next up Jennifer Hyman from Rent the Runway so that's,
awesome story she's one of the three really well-known female entrepreneurs in our space and that was an interesting conversation talking a lot less about the the original model and more of their.
Their monthly rental model and and you know some of that the new competition that's emerged in the rental space so that was an interesting conversation.
David Kahn the CEO of Birkenstocks Scott you'd be familiar with him because he's he's had he's been one of those outspoken controversial positions on Amazon they were selling a ton of shoes on Amazon.
Century pulled off the platform completely because they felt like they couldn't protect their intellectual property.
Now they're they're back on Amazon in a very conservative mild way they've authorized a few resellers to sell an Amazon but they don't sell Direct.
And David was prominently featured in the episode of Land of the Giants that focused on.
Why Amazon could be bad for companies and potential should be broken up so is interesting to hear from David and I was joking with you before the show.
You know what brand like Birkenstocks you you kind of expect that hippie would like long hair and Birkenstocks to walk on stage and he can't you know he's like a witch I could bank or in a in a like custom suit so it's kind of funny.

[14:25] So then we had your favorite brand on a BofA Steph Korey and Jen Rubio from away until they talked a lot about their.
There a growth strategy and and you know some of the success they've had in their retail strategy moving forward and that was all.

[14:45] Someone interesting Max Webb Gin who's the founder of a firm which is an interesting payment model that a lot of e-commerce sites use their.
Sort of an interesting financial model they're there like a no fees lending system so you get charged no late fees.
There's some really interesting novel things about it and he he was sharing that we had Marie.
Myrna Levine who's the VP of global Partnerships at Facebook and so she was mostly talking about Instagram and in Instagram checkout which is.
Something near and dear to do e-commerce smokes and a little bit about the Facebook Marketplace.
And again you know she painted a pretty Rosy picture I got a chance to get up and ask her a couple questions I asked her you know if.
I said hey there's a bunch of from my perspective yqx problems with Instagram check out that make a not very appealing to Brands like most notably you can only sell one product at a time.
And ask if they plan with all of that and she she said that yeah they still consider Instagram check out a real early beta and that they would expect it to evolve a lot before General release,
and I said you know bigger picture you talked about how important it is for consumers to have stored payment information to make things like this work.

[16:08] You know is it realistic that customers are going to ever trust Facebook with their payment information by giving your your track record and she totally dodged that question and talked about like all the great security features they were using for payment.
Which was not the point right like obviously I'm sure Facebook is using the best.
Encryption technology in tokenization but it's at the point is there there a damaged brand when it comes to trust in.
It's going to be really interesting with it I can get a bunch of consumers to give him payment information and give her a chance to answer that and she she was not a very compelling enter answer.

[16:45] And then wrap it up probably the big Marquee interview was Mark Lori who's the president of digital at Walmart Jason did written,
that's somewhat negative article that was like super popular a few months before so.
How to take props to mark 4 for coming into the lions den and facing him.
And I not shockingly well polished Walmart exec did not break a bunch of news in the interview.
But it was interesting to see him there and you know there are few questions where would say like.
He did not seem as enthusiastic as you would expect someone to be that was,
I'm super fired up about the role like I think Jason you know like tried to grill them on whether he was going to leave Walmart at the end of five years
and you know Marge answer is it like absolutely I live like committed to be there and she seems like wait are you staying because you love it or because you made a commitment.

[17:44] So that that was really interesting generators one of the co-founders of Harry's that's a great idea to see story Julie rain Wainwright is the CEO of Rio Rio was.
One of the most colorful interviews of the show so that was cool and then
Tara walpert who's the VP of agencies that use Google who's mainly focus on YouTube and so she talked a lot about like how how there,
they're expanding influencer marketing and expanding Commerce features on YouTube so
pretty rich robust lineup that had a in a bunch of different stuff for different people and I thought it was well worth the time.

Scot:
[18:27] Code to seems like Lori had bet a lot on grocery kind of going to show with the pickup and then also all those Acquisitions they did on digitally native brands for loose stool kind of
your gear just harder or had the blue kind of come off that Rose.

Jason:
[18:44] I think the answer is yes or no so I think they're Walmart is Super Bowl champs grocery part of Jason's article was Mark tends to get a lot of credit for digital Grocery and apparently that's creating some
conflict because most of the digital grocery work actually happens in the stores and you know Mark was like
hey it like that's totally fair like this the stores are killing it on digital Grocery and yeah we probably do get disproportionate amount of the credit totally understandable that digital groceries going awesome so he like I would say he had a good answer and double down on digital grocery
digital native Brands if it was a little bit like
yeah I originally we bought some Brands and that's no longer the strategy that were much more bullish on incubating brands from scratch in house then we are buying Brands and he confirmed the rumor that Jason Delray had heard that.
One of the Acquisitions ModCloth that they're there might even be discussions going on to sell it back to someone else.

[19:42] So I think Mark like with Express that he was still bullish on the space,
but that's why you know they had to learn at Walmart that like buying a brand and integrating it was was probably a challenge so he pointed out he pointed till I come
all is well home which is a de jure need a brand that they incubated in house and then there was kind of a third category that they were talking a lot of a little bit about and you may have seen some news
sort of you know turning up the the focus on the marketplace which is probably near and dear to your heart and I think they've announced the pilot of fulfillment by Walmart which for the first time there duet
they're not that helpful products for some of the third parties and that they have an interest in dramatically improving their tool set and you're improving the experience for third-party sellers so.

Scot:
[20:33] Seems like a one theme with Rent the Runway and maybe a way would be diepio Market to that come up because diepio Market's been somewhat open with Chewie getting out and,
real real and a couple of other folks and those guys are kind of both could be on in the pipeline the Jason drone to a month.

Jason:
[20:54] He did yeah yeah so there was in the pre-ipo companies were mostly pretty koi which You is kind of what you would expect
the date you know they're open to it in aren't you know I'm close but that they don't need to go public and that's not that you know they didn't start the pump the company to necessarily
go public Julie Wainwright you know who's at the real real and they they finish their offering already right am I.

Scot:
[21:20] Yeah they been out for all the done really well.

Jason:
[21:23] Yeah and so she you know she had a lot more sort of insight about what either the the pros and cons have been on the other side and.
And you know how there was some interesting conversation about.

[21:40] The impact of competitors and their successful IPO you know bringing more people out of the woodwork she also has a totally fair an interesting POV about being a,
female entrepreneur and some of the challenges raising money and she's like you know she talked a lot about how like.
Should have been a lot of time convincing every male investor why,
that the business use case was even appealing to women and she's like you don't know nobody that we work at Uber ever had to explain to an investor,
that white small businesses need office space or people need a ride right but but she often would have to convince someone that that.
You know that women would benefit from buying these used luxury goods and that often authentication was a super important thing in so she she told some funny stories and,
I felt was a sort of appropriately cocky she talked about 1 BC that like.
So I didn't get the pitch and like felt like all the money they were investing in in selling authentic products was
was a waste of time and now that they've had the successful IPO that VC has funded a new competitor and is like publish blog post talking about the importance of authenticity,
and I think she's like whatever dude we were here before you and will be here after your death which is kind of nice in both.

Scot:
[23:07] Yeah I've heard the Rent the Runway and the Stitch fix lady's house somewhere story where a bunch of mail DC's wouldn't invest because they didn't understand the concept or they would say I don't know if I don't think my wife would use this.

Jason:
[23:18] Yeah and I think that sounds like the common Trend right is that everybody's market research as they go ask their wife and that you know that's pretty small sample size.

Scot:
[23:26] Yeah cost of the new zip from there had a mini Starbucks and went to Vegas for grocery shopper.

Jason:
[23:33] I did I would load it up on Starbucks order my phone and Jen it out to grocery shop which is in Las Vegas so is reminder this is the second year of grocery shop grocery shop is a a show by the folks Miss founded,
shoptalk that's focused primarily on grocery in cpg and so.
Drew really fast it was maybe 1,500 people last year was 3,000 people this year
that it was at the Venetian and felt a lot like shop Taco Shop talk and grocery Shopper moving to Mandalay Bay next year for people that care about their Las Vegas venues there Starbucks at both so it's kind of neutral to me.

[24:17] The end it was also a good show I'd say it in a different way so most of the the Keynotes at this show were Marquee brands,
but the content was less interesting to me because for the most part their brands aren't allowed to come up and just give a commercial for their,
their business and that you know there weren't like critical questions or necessarily new content so well.
You might have been interested in a lot of the companies in the Keynotes there are folks like Target and,
beyond meat and honesty and ortado in Procter & Gamble that were giving key notes Coca-Cola Sam's Club.

[25:04] Either wasn't a ton of like interesting new useful takeaways
in that contents but the the 3,000 + people that attended the show where all
industry insiders there a lot of the breakout panels that were where super interesting and they were just that I just had a ton of useful conversations,
at the cocktail parties and you know at the Starbucks between sessions and just felt like that the networking was super valuable for me so.
Kind of the opposite of a recode it was less about content and more about networking.

[25:43] I did host a couple of panels so I was the MC for two panels I did.
A panel called preparing for grocery Commerce that was kind of targeted at people grocer that are just getting into e-commerce and I had three panelist on that session I had to,
a Stephen Raymond who's the VP of e-commerce at Hain Celestial which is a house of brands most notable for their Celestial teas,
I had Wayne Dewayne who's been on this podcast he's the VP of e-commerce at constellation brands.
Which is a bunch of alcohol and Spirits brands,
so we actually drink some Coronas on stage while we were chatting so that was a big hit.
And then I had to Dan Bracken who's the VP of consumer Insight at Church & Dwight which is a.
A big cpg so they each kind of gave their their learnings and best advice for new people entering the e-commerce grocery space I got good feedback that that was useful.

[26:38] And then on the second day I did a more advanced panel on connecting customer data points so far this one we had kind of to Keynote panelist.
We have to bring in a retailer so the retailer is a Steve Henning who's the VP of digital.
For Wakefern Food Group which is a big Co-op of of Grocers.
And talked about where they are and in data and what their customer data strategy is and got an all the bits and bytes of,
add emps and.
All those sorts of things and then for the brand perspective we had Doug stranton who's the chief digital Commerce officer at the Hershey Company so
got got his perspective and Doug has a bonus that was also the chief digital officer at Unilever for number of years so
so it was kind of their in a lot of their formative so a lot of interesting insights from both of those guys you know when you're getting into the hardcore
management of data and activating that data for customer experiences.

Scot:
[27:43] The so.
What's kind of the meta Topic at grocery is it still curb versus home or is it Amazon jump the shark with Whole Foods or more.
Almost feels like maybe Brands going direct his kind of.

Jason:
[28:03] So this show like so it is.
Like there's a lot of groceries at the show but there's a lot of cpgs at the show so one big thing is the whole disruption of cpgs right that the there's a lot of digital native brands that have lines that are like competing with income in cpg,
and you know I'd say a year ago the dialogue was like this is a huge disruption in this year like there's more evidence that those brands are,
you can achieve a certain level of success but then are really sort of plateauing,
the the incumbency Bee Gees have not successfully launched a new a lot of new products and so there's a lot of dialogue,
about how those companies are doing things to get more customer intimacy and get better connected to the customer
and watch products that are more relevant to customers and then they're there was an awful lot of talk about the sort of third approach in this whole thing which is retailers launching brands,
and how those those retail brands have been successful and how they've evolved a lot from the original,
start a private label and in fact one of the the Keynotes Stephanie winquest use the EVP of food at Target.
You know they launched a major new grocery brand for Target but basically at the show so.

[29:24] So her keynote was a lot about this new food brand in that.
The that the Retailer's sort of competing with the the incumbent and Challenger cpgs is was a big conversation at the show.

Scot:
[29:37] Yeah and then I'm watching your Twitter feed it seems like there is some interesting Target kind of talking going on there with what did we learn from Target.

Jason:
[29:46] Well I talk about that you like so Target is maybe the poster child for being the most successful at that strategy so they want to strike 5 brands.
Now sell over 2 billion dollars but one place where they haven't been big as in grocery and so in fact,
like grocery was a newish strategy for target maybe we'll call it seven or eight years ago and well a lot of categories at Target or any kind of known for surprising and delighting customers and having these.
You know premium products that that the customer wouldn't expect.
Grocery was always sort of the me to category for Target like like if you needed something that they may have had it but it wasn't something.

[30:24] You were excited about acquiring.
Inside out you know a lot of this conversation was about Target doubling down on Grocery and you know trying to get to the point where they're surprised is.
And Delight for grocery in the same way that they they are four other categories and they said they launched a new owned brand for food called good and gather they kind of retired a lot of their older brands.
And you know this is a a focus on.
Simpler products fewer ingredients non-GMO mostly Organics in so it's not so much a knock off of a of a national brand but you know what a set of products that they think I'm particularly targeted at the.
Target guest and they're forecasting this will be the the biggest.
I'm on brand that Target has which is pretty big because you know some of that apparel brand cell cell 2 billion dollars each a year so.

[31:27] So if they hit that forecasts that that will be somewhat impressive so that was a lot of the the target conversation I would also say you like shipt.
You know there is a lot of conversation about curbside pickup & Home Delivery Target owns
the company in that spaceship. And there's a lot of talk about how successful that's been for Target but ship still is in the business of providing the services for other party so shipped had a big.
Presence on the trade show flooring was a big sponsor and said there's there's a lot of talk about Last Mile in the Bears pros and cons of the different meth.

Scot:
[32:00] Code for their highlights from grocery.

Jason:
[32:06] For me those were a bunch of big takeaways I got to sit sit down with a couple bucks and record a couple podcast that will get out of here in the weeks to come so I mentioned Doug Stratton who's the chief digital officer at Hershey
you and I are both chocolate Advocates so like we wouldn't miss the chance,
to get a podcast with him and then I also got to sit down with a zebra car while who's the VP of Shopper marketing at the Coca-Cola Company in,
can I talk about how coke is thinking about digital and what what they're doing in in digital which is interesting you know it is interesting like we are now.
Grocery is a very low margin business,
the average sale price for a lot of these products or the Brand's is super low and so historically these have not been very digital categories you you don't think of.
A big digital investment to sell dollar candy bars or cans of soda,
but you know now these guys are you know front-and-center focusing on digital because it's really starting to impact their business.

Scot:
[33:09] Wrinkle in the other Megatron to uncover before we jump into some news.

Jason:
[33:13] Nope nope I think that's a ton but if you're in that space I would definitely think about putting that on your on your wrist for next year and come visit us at Mandalay Bay.

Scot:
[33:22] I forgot to ask when you're in New York did you get to see the new Apple store or did you miss me.

Jason:
[33:28] I didn't sit at the Apple Store at you open this Friday so I've done some video walkthroughs you and I are going to be back in New York Knicks next month together so maybe if schedules permit would be super fun we should go visit the store together.

Scot:
[33:43] Awesome I look forward to that Coldwell wanting to lose last couple minutes to talk about some news and it wouldn't be a Jason Scott show without some Amazon news.

Jason:
[34:00] Amazon news new your margin is there opportunity.

Scot:
[34:10] To a lot of news out there on Amazon some of it I was going to put into the political bucket before we talk about that though you're one of the things that kind of hid in my world it was interesting was they made a big investment
and Order of electric vehicles Tesla has competitor called rivian,
and ribbons coming out with trucks with electric platforms so Amazon announced not only
they invest an undisclosed amount that they were part of a $700 round and they were listed first which kind of flies are the largest but they ordered a hundred thousand electric delivery vehicles from
Caribbean and they're saying they should have prototypes in 20/20 start volume out in 2021 and have them all on the road by 2024
this is kind of interesting because Amazon has not really said much about a green lot of Amazon employees have been.

[35:09] Rallying internally Jason Del Rey has written about this so it was kind of a
pretty big vote for our insert limit their carbon footprint as a company and then it's also interesting because
they are propping up a big rival to two,
Tesla in the form of rivian and you know Elon and Jeff are going at it as latest Rockets So Alive people kind of said this is kind of
another way for Bezos to really kind of get under a Elon Musk in by supporting a competitor.

Jason:
[35:41] Interesting so we might see some Amazon high speed trains in the near future to them.

Scot:
[35:49] Whatever the Rival to boring could be.

Jason:
[35:55] Exactly the thing that toy strike me about this which seems like Amazon's exact Playbook is I want to say they made this huge announcement the day before there was a big scheduled
like green demonstration and a bunch of Amazon employees were planning on walking out to
Tess art of advocate for Amazon embracing
adrenal footprint and so do I get Amazon has historically been very good at these like proactive PR moves and it seems like this was
they were totally able to leverage that this time.

Scot:
[36:29] Yeah yeah. They have a picture of the Prototype van will link to it and show notes it looks really good so it's going to be interesting that the big question is really the range on these things so,
you know the I don't know how much it typical Prime band drives a day but I see him on the road constantly so be interesting to see if they have to come up with some clever way of rapidly charging these things are or they're going to ship them in a different way or something.

Jason:
[36:54] They each do half a day's delivery so that's why they had to get so many.

Scot:
[36:57] Yes it could be it could be part of it so I don't I don't know the ranges.

Jason:
[37:00] Quick clarification question for me so like obviously Tesla makes a bunch of electric vehicles and I know they've talked about business vehicles and trucks but as far as I know they don't they don't have a,
like a van form-factor I feel like Amazon's about Sprinter vans in the past which is the big,
Mercedes V8 like is it obvious that this is a trivium's a direct competitor with like is this worse news for Tesla or is it worse news for Mercedes.

Scot:
[37:26] I think it's probably worse news for Mercedes
Elon if this is a tweet or live interview I've seen him talk about how he really likes the Mercedes Sprinter and they should work together on the electric one
he always has little twinkle in his eye and you can't tell if he's just basically crazy or if there's something going on there I think Mercedes a Tesla have crossed licensed a lot of technology to
I wouldn't be surprised if this doesn't Force something go on there between Tesla and Mercedes to get the Sprinter platform Electric.

Jason:
[37:59] Got you and I assumed that like the Des customer will then be FedEx.

Scot:
[38:05] What FedEx use it so UPS actually has a big electric thing going already and I don't know who they are platform is on that it's,
maybe I don't know I don't know what UPS uses but I've seen them them talk a lot about getting to carbon-neutral pretty quickly and they have some electric fans out there.

Jason:
[38:30] That's going to be an interesting space to watch if only to a podcast about that kind of stuff.

Scot:
[38:34] We will will keep track of it here and then also on the vehicle to podcast where it's been even more time talking about that
Scot vehicle Trends going on how about on the political side there's been a lot of negative stuff out there on Amazon and so I'll turn to you for this the highlights on that.

Jason:
[38:51] Yes I know. Scott loves talking about the political stuff it's his favorite thing to do so it's a big big,
generosity on his part time to pass it over to me.

[39:05] So you know there continues to be a bunch of Niger negative sentiment you got all these Democratic candidates talking about breaking up Amazon without.

[39:16] Necessarily obvious reason why the last couple weeks there were some actual that government announcements about like
looking into antitrust issues in the one that affect an Amazon was that the FTC was talking about probing some of the 3p practices and in the one that comes with the most is,
Amazon,
disadvantaging third-party sellers in favor of their own practices so essentially like the The Narrative goes you can't both play in the game and be the referee it's not fair,
that you're selling products in competition with your Marketplace Sellers and you,
control things like whose product shows up in Search and how visible every product is and so,
that's a big narrative like the counter narrative is like this is in a remotely new idea retards have been selling their own products for over a hundred years
they always put their own products and favorable positions and they charge brands in order to have have good positioning in the store said that like there's,
there's nothing particularly new that Amazon's doing that Walmart and Woolworths before then,
didn't do but it is getting a lot of visibility and one of the the big articles that came up there was kind of interesting is Wall Street Journal.

[40:46] Actually like ran an article where they they talk to some Amazon Engineers that like,
confidential confidential admitted that Amazon had changed their search engine to intentionally by us their own products and so again debatable whether that's,
illegal or immoral in any way and I'll leave that to others to decide
but one way it's interesting is Jeff has always talked about being the most customer-centric company in the world and wanting to have the best experience for customers and
it's super controversial if you search for Energizer batteries like
pretty obvious what your intent is and you would imagine the best experience would be too quickly get you to Energizer batteries but when amazonbasics batteries have higher visibility on that search term then Energizer batteries,
like arguably like you're trying to boost your own profits at the expense of being customer-centric and so it's kind of a.

[41:49] A pretty tangible example of of where Amazon might be drifting from their their idealistic morals,
and so that that's been a little interesting to follow that,
that exact issue is one of the episodes of Land of the Giants and a former guest on the show Charlie Cole who's the the chief digital officer at to me and Samsung by cheat he very explicitly said it is like look,
I don't mind competing with Amazon that's totally fair they can make products to compete with me that's totally fair but when people search for my product on Amazon and they intentionally put their products in front of them
that's not a good customer experience and just don't lie and say you're trying to be customer-centric when you're doing stuff like that was gonna as blunt as Charlie put it so
an interesting space.

Scot:
[42:39] Yeah I guess cleaners and go to watch them navigate through this stuff and you have the counter argument would be well retailers for doing it for years and.
Old Roy,
dog food in a Walmart is in front of the Purina dog food that kind of thinks sometimes you know these the physical arguments don't really translate to to the digital where you know it
customer is clearly expressed a brand new you should get them their quickie soap to be a lineman.

Jason:
[43:08] Yeah yeah like a little less controversial but like you know there's some labels like Amazon choice and and some new labels that they're testing and people are like is Amazon gaming nose and I I may have made a smart a tweet at some point where I showed like staff picks from Trader Joe's and I'm like
oh my god do you think some of these might not actually be stabbed pics.

Scot:
[43:29] Go in any other needs any other Amazon usually cover.

Jason:
[43:36] I think those those were the big things I know we're running short on time so let's let's get to our last genre.

Scot:
[43:46] We haven't talked to her about Mulligan lately but I was reading some reports that a we've already had over 7,000 store closures heading 7300 as of September 1st I think that's more than we've ever had in any previous year
and we still got three to four months ago,
another world retail you kind of if you can make it through October you you're probably not going to close for December that thing's going to be pretty pretty bad if you're going to close for those two months
so I think it will slow down but I think we have a chance of hitting 8 or 9 K hear some of the
this is based on data from video so some of the top store closures are Payless with 2,300 stores Gymboree with 750 Charlotte Russe.
And then on the watchlist they have several companies that are our kind of they look at this kind of load of
ducks to assets and then also are they losing money making money in kind of protective time when there may be a chapter 11 events Forever 21 is on there a JCPenney at send a Pier One in Francesca's chokes,
I'm surprised this didn't include more mattress worse cuz around me you know we still have like eight thousand mattress stores just in Raleigh-Durham and they're pretty much all closed all the sudden
I wonder if this is under-reporting a little bit and I was kind of surprised that mattress stores weren't one of the big contributors.

Jason:
[45:15] We'll see that's a great point because it's something funny came out about all this so
I think the macro points are totally true like that we are seeing more store closures in a single year than we ever seen before there are actually like we'll see if they come to play or not but like that
on that watch was the one that they're like strong rumors are really preparing for a
a bankruptcy which would be somewhat surprising at this point is Forever 21 because prove your point like.
You know you really wouldn't want to go in a bankruptcy right right before the holiday season and there are there rumors that,
if they did that the malls might be a potentially bail them out as they have,
I've done for at least one of their apparel retailer in the past Aeropostale so that's kind of interesting but I I see the inside baseball I found an interesting study also,
so this instead of you just said it is from video and they did a bunch of their own research so most of their store closure information came from,
public disclosures so
it's public companies that said in a 10K or an investor call that they're planning to close X number of stores.

[46:28] And so that's that was their data source for the store closings and like I'm sure all the stores are closing video also cited the source that we see most commonly for tracking these store closing closings and openings
which is core site which is a research firm that does this really useful
can a weekly tracker on how many stores are closing and how many stars are opening a bunch of stores have open this year not enough to offset the closings and that
that would also be a first so while there been a lot of closing in the last couple years that I've actually been more openings than clothes XO,
this could be the first year we had a net negative and course I may have had a net negative last year even that now that I think about it but.
Here's what's interesting about that so all of these companies are arbitrarily picking a list of well-known retailers in tracking.

[47:20] The opening and closing and said there's another market research firm out there IHL that does a bunch of retail research.
And they conducted a lot more comprehensive study and they said hey we are going to look at every retailer that operates 50 or more stores in North America and track how many they've opened and closed.
And we're going to estimate where they don't have public disclosures or we're going to call them and ask and we're going to use real estate records and so instead of just kind of.
Tracking press releases we're going to really do the math on all this and,
they not surprisingly they found more store closures then then video or.

[48:02] Coresite but they found way more store openings than either of these companies so pretty this IHL research that came out,
there are still more stores opening then closing it just interesting to think about like I,
I think our macro points are
totally true that retails not going away that were way over stored in the US that we we do need to be closing stores in our closing stores in there that's a
a necessary adjustment but it is interesting I feel like
in the Echo chamber of our space like this coresight research gets its reported and recited and blended into other people's research on the time and was kind of funny to see this I shall study come out and explicitly point out that.
Coresight research is not particularly rigorous and somewhat random so it was like a little inside baseball research fight.

Scot:
[48:56] Yeah and I wish square footage is what really matters right because you know Closing one JCPenney is is like I don't know.

Jason:
[49:04] Yeah you have to open off a lot of the way stores to make up for a JCPenney.

Scot:
[49:07] Yeah yes that's what really matters and I've never seen anyone really be able to track that very well unfortunately.

Jason:
[49:12] No no and I unfortunately like we've all seen the summaries of the IHL I'll confess it's inexpensive study to buy so I haven't actually.
Bought the research but I don't think they have the the net square footage in there but just anecdotally if you look at the list of stores that are open and closing you're absolutely right like in general
there's there's more bigger stores closing in smaller stores open.

Scot:
[49:37] One one last thing to make sure you put on your your calendar the Disney plus subscriptions it opened up so you can go ahead and pre buy that so on November 12th,
and they have exciting new Star Wars TV live action show called The Mandalorian that off and up is pretty excited about to make sure you sign up for that Jason.
Star Wars fan listeners.

Jason:
[50:02] And before any listeners Panic Scott and I promise to pre-record a podcast so that we don't have to skip a week while Scott is binging the Mandalorian.

Scot:
[50:12] Yes sadly I don't think they're going to do a bench so I think they're going to do it's hard for traditional TV people to get their heads around it but they're going to have kind of really someone a week or something so I have time to podcast.

Jason:
[50:25] Good news good news in like slightly related there is this interesting thing
Target in Disney have announced that they're opening these permanent shopping shops
and so you're going to see a bunch of unique Disney merchandise at Target
I think that is potentially going to be beneficial to you Scott but I seen speculation that the Disney plus service could be one of the things that's heavily merchandised in that.
In that assortment.

Scot:
[50:55] Cool hopefully I'll have more Star Wars Target exclusives those are those are the good ones.

Jason:
[51:00] Exactly what was in that is a great place to wrap up this new show cuz we've come out perfectly use the a lot of time as always if if I wasn't Earth have a question or comment
feel free to hit us up on our Facebook page or on Twitter
as always if you have time we sure would appreciate if you go to iTunes and finally give us that five star review that we've desperately been begging for
but we have a we sure appreciate your time today and we have a bunch of great shows in the pipeline so appreciate you keep listening.
Until next time happy commercing.

Sep 20, 2019

EP188 - CarMax CMO Jim Lyski

Jim Lyski is the CMO of CarMax. In this broad-ranging interview, we discuss the keynote Jim delivered at EtailEast, "CarMax Goes All-In On Omni-Channel: Building, Scaling And Deploying With Speed", as well as discussing the digital disruption of the automobile business, and where it might all be going.

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

Episode 188 of the Jason & Scot show was recorded on Wednesday, August 21st, 2019. live from the eTail East trade show in Boston, MA.

http://jasonandscot.com

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

Updated 9/23: Fixed editing mistake in audio file (sorry!)

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show
this episode is being recorded live from the etail East trade show in Boston on Wednesday August 21st 2019 I'm your host Jason retailgeek Goldberg and unfortunately Scott was unable to join us today so I'm solo,
but I'm making up for it by having a great guest on the show welcome to the show today Jim whiskey the CMO at CarMax.

Jim:
[0:50] Thank you for having me Jason.

Jason:
[0:53] I am super excited to have you on the show and I suspected most of our listeners are familiar with CarMax but may not fully perceive the scope so can you kind of give us the soda elevator pitch.

Jim:
[1:07] Sure like where the nation's largest retailer used vehicles and we're basically Coast to Coast with over 200 stores and we sell three-quarters of a million cars a year.

Jason:
[1:21] That is awesome and full disclosure for me I spend some of my formative years at Best Buy until I still like I can't hear CarMax without thinking the enemy at Circuit City.

Jim:
[1:32] Yeah yeah we were a spun out a Circuit City in 1994 so.

Jason:
[1:38] I'm dating myself I know that that is awesome.
You are the cinema what sorta is the scope of us Eno at a company like CarMax like what what sort of things do you get involved in and how do you spend your day.

Jim:
[1:54] Yeah well I think you know the CMO rolls a little different every company but that CarMax I'm ahead of all the traditional brand things so I can advertise in Communications PR
as well as strategy marketing strategy and Analytics,
and then an additional. I also had a product organization so the product team focuses on how we represent ourselves digitally as well as in the stores.

Jason:
[2:21] Got it so that whole in-store experience are in dealership experience and the digital version of that is all in your scope so it sounds kind of like a part-time job then.

Jim:
[2:31] Yeah exactly.

Jason:
[2:34] And how did you come to CarMax what was your background prior to CarMax.

Jim:
[2:38] Well I started off my marketing career at FedEx been about a dozen years there ended up heading up all u.s. marketing for them eventually,
then I went over to Cigna Healthcare Nationwide Insurance and most recently Scotts Miracle-Gro.

Jason:
[2:54] That awesome so you know we talked about e-commerce allowed on the show and there's this book retailer in the in Seattle I Amazon the comes up periodically and so,
FedEx makes a lot of cameos on the show and we're talking about logistics but lately the big news is they sure to boldly,
fired their customer a little bit in an Amazon as a impassioned Observer do you follow that all is that stuff.

Jim:
[3:22] I think everybody in retail I last saw that and being a former associate FedEx it was particularly interesting.
I don't know why they did it but that's pretty smart company so I'm assuming they weren't making any money.

Jason:
[3:37] Yeah I know I tend to think you have a finite amount of delivery capacity and if you sell all that to the,
company with the most leveraged in the world you have to sell it at the the lowest price point and I have a feeling FedEx wisely figured out that,
they can sell their capacity Elsewhere for more money at the same time that an exit probably Amazon's probably investing in their own capacity pretty aggressive.

Jim:
[4:03] Yeah Amazon I don't know if you go through any neighborhood in America now you're going to see those Amazon trucks everywhere.

Jason:
[4:09] Oh my God the trucks to now and soon there's now a San Francisco to Seattle it's the drones on that these on the sidewalk there is crazy.

Jim:
[4:17] Yeah well then FedEx has her own little robot making deliveries to so I think it's going to be a dangerous place here pretty soon.

Jason:
[4:25] I know I know my poor four year olds going to have to learn to skateboard somewhere else I don't know how that's going to happen the FedEx drone is even cooler though cuz he can climb stairs and stuff.

Jim:
[4:34] Yeah it looks pretty cool.

Jason:
[4:36] Yeah yeah I like that video so you know I have to tell you before we jump in any further or Coho Scott is super bummed to not be here with me today is where both e-commerce guys Scott founded,
well known company in Tipton public in e-commerce paste but he.
Started a new business a couple years ago on demand car washes.
And today he's now expanded into like 13 states and raised a bunch of money and so he's become a total car guy so I know I just wanted to spiritually give Scott a shout out that I'm here and you're not.

Jim:
[5:13] Yeah and he's really going to be pissed because we're going to go on a test drive and in a Ferrari F40 the right after this interview.

Jason:
[5:21] That you went you didn't I just bet that I can I drive around in the black one.

Jim:
[5:24] Level of a little race.

Jason:
[5:28] Yeah exactly yeah she's a guy and he's going to point out that like potentially in a straight line the test I can take the Ferrari but I'm going to point out that is long as we put a curve in there we're in great shape.

Jim:
[5:42] Plus you and I are going to look a lot cooler than sky.

Jason:
[5:45] Yeah well that was true even without.
I love it when he's not here to defend himself that's my favorite thing so.
Tomorrow you are speaking in detail in your session title your keynote is Carmax goes all-in on omni-channel building scaling and deployment speed,
and so I'm assuming you've thought about what you're going to say tomorrow or you going to work on that after this.

Jim:
[6:10] No I thinking if you have any words of wisdom I'm going to incorporate that was sent to my speech tomorrow but I have an outline at least.

Jason:
[6:16] Yeah well what has mostly made a success for me is making fun of Scott so I feel like.
Did they send you do that on stage you'll you'll be ahead with the audience no matter what.
I promise not to let any of us Tomatoes audience listen to the show in advance can you get a sort of a high-level about what your POV is about like what it what do you mean by going all-in on omni-channel.

Jim:
[6:39] I think it's pretty clear across all our retailers that the consumer expects to be able to conduct business with the with Brands both online and in-store with retail brand and I think you see brands
that are traditionally brick-and-mortar going into the online space and vice versa right so,
Arctic is going to be just how did we excel at both.
Make it a seamless experience and then scale at out Across the Nation we're right in the midst of rolling this out or we're not in about 45 States right now and
by February we'll have more than 50% of our customers on our omni-channel experience that stuff is really just about
like how do you do that how you take a massive company and and make this pivot really really quickly.

Jason:
[7:28] Yeah and I know it's it's doing pretty easy right you just sent out a memo and everyone changes behavior in.

Jim:
[7:33] Yeah we didn't we only have 25000 Scioscia it's on the front line so I think they should be able to modify Behavior within a week or two.

Jason:
[7:40] Yeah that seems like I mean maybe give it three ways to be safe yeah
so I think of Carmax as being sort of an original disrupter of the car shopping experience but now the Choppers are used to all of these digital amenities and how many channel has has become
prevalent and I assume
that different said all the consumers have shopping unit doing buy online pickup in-store at at apparel store or a consumer electronics store now impact their expectations,
when they shop for a much more expensive higher consideration I don't like an automobile.

Jim:
[8:15] Yeah I think you're pretty spot-on on that the the major major difference is that this is a very considered purchase so far lot of our customers this is the largest purchase they've ever made an and four others maybe it's the second largest so,
the a buying journey is as nonlinear and it kind of starts and stops and it's squirrels a little and so being able to,
give the consumer a lot of you know full credit for everything they've done online.
Or when they eventually walking to the stores extremely difficult but but absolutely critic.

Jason:
[8:51] And so it's digging in that little bit like there's two things I'm always interested in so one is.
The customer-facing Experience so I've done a bunch of research on your website before I ever go to the store probably let you know evaluated your inventory and I you know I probably should have preferences and I might have even there all day
Pacific Beach vehicle before I land at the store.
Does anyone in the store know all those things I did or do I have to start over with that sales associate in the dealership.

Jim:
[9:19] Yeah so last year you'd probably have to start all over but this year are we rolled out across all of our stores are CRM platform which is salesforce.com,
and we take all the information and all that work that you've done online make sure that's readily available to the customer and the associate both,
and so we try to make it like I said very seamless experience where you don't have to repeat the effort that you re put in and you actually get credit for it and you can progress quite quickly so,
if you progress pretty fully online that you can walk into the store and get the keys and drive off in about 15 minutes,
still have to sign some papers each State's a little different but 15 minutes 14 minutes is the fastest we've done one so far but,
that's quite a different experience to walking it a dealer spending all afternoon they're getting put in an office with the finance manager and you know,
eventually walking out feeling like I don't know if I got a good deal.

Jason:
[10:24] Yeah yeah you're almost at parity with the guys that steal the car now.

Jim:
[10:27] Elvis.

Jason:
[10:28] It's almost as frictionless.

Jim:
[10:29] I got it I got to trim five more minutes.

Jason:
[10:31] Yeah hopefully we'll make it so personal us that they'll stop wanting us to you
I would be ideal and then the other thing is interesting to me is the attribution so you mentioned it's a considered purchase so you probably invest in a bunch in marketing vehicles and probably not very helpful to focus on the last click attribution and see how many people.
Immediately transacted so do you guys have a notion of a omni-channel attribution model to try to understand how how your marketing is impacting.

Jim:
[11:01] Yeah absolutely Remy we do multi-touch attribution and we we.
I do again.
I'll just I can answer you have to repeat if it's a question if you don't want to.

Jason:
[11:15] I'm going to just put a little Mark in there go ahead.

Jim:
[11:18] So yeah we do multi-touch attribution analysis and being able to figure out exactly that customer journey and what was influential in the making the decisions has been pretty critical to our marketing Investments.

Jason:
[11:34] Sorry now I'm getting distracted yeah I'm just going to cause for one second they're sorry.

Jim:
[11:39] Yeah that's good it's hard.
Little quips painful for both of us.

Jason:
[11:58] If that's the most painful thing we have to endure will be in good good shape.
And how many dealerships did you say you had or how many.

Jim:
[12:13] Storefronts Wacom stores so we're at what are we up to and we're almost at 2:10 am I supposed to know.

Jason:
[12:24] What you just did you at we on vacation during his last tour opening.
They're probably kind of persnickety about accuracy.

Jim:
[12:32] I think Lubbock Texas was 208 I think.

Jason:
[12:41] Awesome.
So that is that certainly makes sense with you have over 200 stores now are there any particular challenges with a doing omni-channel at that kind of national scale or is it actually easier when you're covering the whole country.

Jim:
[13:00] Yeah I know I don't know which would be easier but but it is been pretty challenging because it's a behavioral change for our Associates and so.
We were in kind of the original disruptor in this industry we rolled out no-haggle pricing,
and you know and that allow the consumer to have a great retail experience in the used car industry nobody did that and it was highly differentiating.
The backbone is delivering that experience are our Frontline Associates that are in the stores and so we have about 25,000 of them and
if we're going to roll out a new experience to the consumer we first have to make sure that are sociopaths are very aware very comfortable and very well trained on it,
because we're not going to take a step back in the end delivering an awesome experience.

Jason:
[13:48] Yeah I know that makes total sense in Dysart have a philosophy that most of these customer experiences are about 10%
technology and Platforms in 90%,
people in organizational change management so I'm guessing when you deploy that CRM 25,000 Associates last year that was a big cultural shift that you had to be a sort of embraced and reinforced was.

Jim:
[14:13] Yeah absolutely,
I think it was one of those who Moved My Cheese kind of moments for them and so you had to show him how they're going to be more successful,
how they're going to be able to provide an even better experience at maybe a little bit more personalized experience to the consumer are Associates that really care about delivering a great experience and.
I don't know if you know this but,
all of our sales consultant for example if they are on a flat commission they don't care what car you're in so they're not in Center to put you in the car you can't afford there and send it to put you in the car if that best fits your needs,
and anything that we can do on the technology side on the data side to allow them to better fit you into a great vehicle,
the happier they are until once we show them how how salesforce.com was able to provide them information that allowed at personalization they bought in holy until,
we've been able to we've been very pleased with the experience that we're delivering right now.

Jason:
[15:15] Yeah that's awesome and I can imagine there's a little bit of the internal communication to sort of evangelize those benefits to those those internal Associates it's it's funny cuz in a lot of retail categories
people now experimenting with self-service technology UI digital you know amenities or or you know experiences on the phone that the Shopper can use themselves,
and it it's always the case that the most cost-effective way to deliver a digital digital experience inside of a store is to digitally enable that,
sales associate turns out it's really hard to get customers to download your app and I'm not going to say it's easy but it's easier to get those 25,000 Associates using your app.

Jim:
[15:57] Yes absolutely.

Jason:
[15:58] So what do think I'm curious about is on the title of your your topic you qualified it at speed,
and I suspect this is somewhat relative like what does feed mean at Carmax is that transformation you're trying to change over a course of years is it something this year like what what is the the speed goal.

Jim:
[16:21] That's an interesting question I never thought of it as a speed goal but the way I've thought about it is that.
We are the industry leader we have a good distance between us and number two,
and I want to extend that distance so when I intubate I want to get it out faster and faster faster I want to do it at a pace that nobody else can keep up with so when we think about speed.
We think about delivering those objectives every quarter.
And then you know we obviously plan out years and one year and multiple years in advance but it's really kind of,
orienting our product teams about delivering that next iteration or that next Improvement in a relatively short amount of time usually in about a two-week Sprint site.

Jason:
[17:07] So what's pivot a little bit to the car buying experience.
Categorize things in a two experiences there there's the used vehicle experience and there's a new experience in WoW,
like York really known for used vehicles I think you do own some new car dealerships as well a few,
so but that gives you enough of a taste to the maybe you can weigh in on this little bit.
The new car buying experience in u.s. like I would argue totally sucks
and a big part of the reason why is there this multi-tiered distribution system right so there's got you not coming to manufactures the car and they have to sell it to a local dealer who sells it to a consumer in so give
the expense is going to improve.
Every local dealer has it independently decided they're going to improve the experience and sort of deploy it out like the manufacturer can't do something at scale and dictate that that all these dealers do it,
in the used car business you don't have that multi-tiered model you guys on the inventory you're on the hook to sell the stuff and you're on the hook to invent the experience across.

[18:16] Your 208 stores to deliver that experience,
so as customer expectations Elevate and I bought a used car and I had a great experience or I bought you know some some something else,
it was a tie bought a wedding ring or some other high considered item I did Julian had this great experience and now I'm going to buy a new car for the first time and I have this sort of could you experience the website that I'm doing research on can't even give me a price because.
Mercedes website doesn't sell car hairs and a night you know the,
refer me to a dealer is kind of a I don't know what to email marketing for him or something you know they're all these these frictions that consumers are increasingly not used to is
is there any hope that that's going to change in the u.s. is economic like art are we going to figure out how to deliver a good experience through that multi-tier distribution model is.
Are consumers ultimately going to put pressure on the model and you know I know there's at least one car manufacturer that's trying to.
Disrupt that like what what are your thoughts about the evolution of the new car buying experience.

Jim:
[19:21] Yeah yeah I think it's got a modify for a few reasons so one I'm a big believer in macro trance and is certainly a macro Trend around customers expectations,
customers expectations have never grabbed it toward gravitated south has gone up and up and up and so the consumers becoming every year,
less willing to put up with stuff that suboptimal buying a car is going to be no different secondly.
All the oems desperately would love to control the experience all the way through but these dealer groups have a ton of power I mean I can
only imagine the meetings where the dealers come in and they are unveiling new makes and models and new commercials and,
you're not telling telling the marketing department that he hate the commercials and I me I can only imagine how those go because it's crazy how much power that they have,
and they don't do what they don't want to do know some of them are very Progressive and they get right in line and they see the big picture and but most most,
dealers in my experience are really about extracting as much money out of your wallet as they can,
and that just doesn't align with the consumers expectations so I think they're going to have to modify in and when things like,
autonomous vehicles and things come out in the future I think it's just going to put the increasing pressure on that bed modify.

Jason:
[20:44] Yeah no for sure another macro Trend when were taking American census been interesting to me.
The people in the buying used cars I assume for almost as long as there have been cars
it's a high high capital expenditure for your point and it it like it's not a new paradigm that you would buy used car it's not a new paradigm that you buy a used home but I'm noticing is,
previously owned products are becoming more popular in many more categories so I in a parallel we now have,
you know monthly rentals of business attire from Rent the Runway and we have
the real real just going public with sell all these previously owned luxury goods and thredup has been on the show and all that you know as consumers get more and more used to,
getting a better value from these previously owned things does that make it like,
even more likely that they're going to make a decision to a used car versus a new car or I had the had those sort of go-karts already played themselves out.

Jim:
[21:48] You know I I I hope it does but I don't know if I will but I hope it does cuz the difference in value you get from a lightly-used vehicle in a brand new vehicle is monstrous if you look at the depreciation curve Cindy years 1 and 2.
Nuts and for some cars that's it's significantly nuts.

Jason:
[22:08] Oh my God yeah I know I mention Scott's a big test with man so I just let him by all these new vehicles every time they come out with the new color he has to buy one and then I I just tried to buy his old ones off of them witches has worked out.

Jim:
[22:19] Yeah you're saving about 30% probably.
So I think so I think you know that's helped the train keeps going that way as consumers get more and more comfortable with it I think that one counter to that is,
that a car is still a status symbol and haven't you know be like Scott and you want the latest and greatest the shiniest in the most gadgets and,
yeah you're willing to pay for it and there's always going to be a subset of the consumer that does that which is great for us I mean you and I who don't mind buying one and two year old car that has all the latest gadgets and is awesome.

Jason:
[22:55] Yeah I know for sure once more so because you just highlighted something like there are all these,
like a pretty different missions that different car owners might have right in for some people it's utility to get to work for four other people it's a you know part of their identity and a status symbol,
when you're thinking about marketing and driving traffic to your stores,
I do have a sort of persona base model and you do different kinds of campaigns for those those different personas or if you figured out how to.

Jim:
[23:31] Yeah I know we definitely have a Target I think I'll great marketers know where the bullseye of the dartboard is and that's where you aim that doesn't mean you aren't going to get customers outside of that as a bull's-eye but you always have a bullseye in so we have one,
I always tend to be very considered purchasers like they're they think about,
the value that we just talked about of a used vehicle they think about the functionality they also think about you know it's just something they like and want to,
I want to have you know kind of represent them a bit so they're very very consider they do a lot of research,
and appreciate our cars have been really well conditioned well kept in on 90 day warranty is all that stuff really matters to them and so that's our Target we go after them and I and we did a lot of others outside the target.
That's that would be the Persona we go after.

Jason:
[24:26] Don't you in are there any like particular marketing tactics that you feel like are the bread-and-butter that have been most successful for you that you.

Jim:
[24:35] 04 us.
I don't think any particular tactic other than talking about value I think value is a strong tactic like, I don't know if you know this we don't have sales.
We'd obviously don't have a call that's you know that what we are founded on we don't give discounts to different,
user groups or anything like that it the prices the prices the price and so we've never in a broken out Labor Day sale and you know Mother's Day sale and God knows what the next one's going to be but,
but we've relied on we feel that this is a great value that we're offering and so we try to educate around that and it's done pretty well for us.

Jason:
[25:18] I sort of think of you as having what I would calling everyday low price So Pro,
and it's funny in if you survey all retail through edlp retailers tend to do better than promotional retailers the the one caveat is once you become promotional,
it's virtually impossible to recover your edlp position until we've seen some bad examples in recent memory of our friends that like Macy's or JCPenney trying to.
Make that shift and have it not go well.

Jim:
[25:49] Yeah definitely be careful how you condition your consumer.

Jason:
[25:52] Yeah it turns out they will learn and that's one of the most fascinating things to me about all these in this reason I think it's absolutely true in yours.
The traditional model used to really rely on what I'll call in information imbalance like the the traditional not highly regarded used car dealership,
had a lot more information than the person buying a car so only the dealership new the history of the car and what the true value of that car was and likely all the information the buyer was going to get.
Was the information that the deal are deemed appropriate to share them which was,
likely to be self-serving information today we have this massive transparency we have all these information sources and it feels like,
there's nothing that could be known about that vehicle that the consumer isn't going to know if they choose to before they,
they buy the car and so I know that site in your case,
you make a lot of that information available so I let you know you can get that information from your own digital tools you've enabled your salespeople digital tools so they have a bunch of information and then they're there is a bunch of third-party tools,
that the consumers can use as part of their consideration process as well do you view those third-party tools as a good thing because they help,
consumers figure out what the right vehicle is and you know you have the right vehicle at the best value or.
Would you prefer that you could keep that customer in your own Echo System more.

Jim:
[27:17] Oh no I think we prefer having transparency in this industry we think if it was fully transparent and accurately transparent we would do a even better than we're doing now.
I think some of those tools are partially true and partially not I mean when you look at things like.
I get onto the site and says all this vehicle is a good deal and I would ever great deal good deal what you don't know what you know what they don't know and hence the consumer doesn't have frame damage.
And that's not a good deal with a car with frame damage or this car may have an electrical issue going on,
it's still get salt we have some markets where where the average price of a liked like vehicle with our inventory is actually below hours.
But when we look at the cars and we We examined over 2 million cars a year we look at the cars we.
Passed on buying those cars to retail because we knew there's something wrong and now we're watching them being sold at these other dealerships and think there's no way the consumers really going to know that even when they use.
All these third-party tools they just look at something and say oh great deal okay.

Jason:
[28:35] Got you so I think so some of those tools are bring to our surprising deals with like you know I can't imagine like that does arm the customer with some some new tools that they didn't have previously,
think of there being tools that give people a pretty detailed history of the car,
are you saying that those like his reserve or imperfect in terms of like identifying the potential flaws or evaluators of the vehicle.

Jim:
[29:03] There definitely are two also you can go and look at vehicle history and those tools are better than not having any,
and they are not 100% accurate by any stretch and sew what they know so some of those tools use you no police reports and DMV data will not every DMV Department reports and whatever,
police reports and other shoes other kind of data and it's just imperfect and so.
They do catch some things for sure like if I was on one of those sites and I sawed this car has electrical issue or it has a toners or something like that would be like all right that's definitely a no,
so I know that's that's it you know not a good car but there's some false positive there's some listed is clean it just are not clean.

Jason:
[29:55] Sure and I can imagine a lot of them seem like they're based on public record so the car has been in an accident rate I know that if the frame is Rusted or it was mistreated in some way that didn't create a police reports,
that's where like you you need to like have significant car knowledge or a smart friend.

Jim:
[30:13] Exactly like I could you know I could get in an accident in my car you know a single-vehicle accident and I'm not going to report this to the police write a report that happens all the time.

Jason:
[30:24] Shirt go go trade it in the CarMax and get a new one.

Jim:
[30:28] Yeah we buy any car any car.

Jason:
[30:30] Yeah but you probably are pretty good at evaluating the True Value.

Jim:
[30:34] Yeah I have all the cards that we buy which is in a four hundred thousand a year even more like six hundred thousand year only about a third of them make the cut to get retailed again the Russian we auction off to other dealers who are going to sell them to you.

Jason:
[30:48] Got you all right show me a pivot to one more macro Trend I keep hearing that
teenagers are slower to get driver's licenses in a lot of Metro's in the like obviously they're all these ride-sharing services that make it,
more possible to not own a vehicle at all.
I'm inferring from that that potentially like car ownership may have Pete and I'm just curious why am I dead wrong and we're buying more cars than ever or or is growth slowing down like what is the overall status of car ownership.

Jim:
[31:22] Yeah I know we look at this pretty closely in the overall status continues to grow so we look at a stat that is a number of vehicles per household and that's actually increased over the last decade,
with the Advent of ride-sharing and all of that still moving up and then obviously the United States continues to grow in that household so,
are we see vehicle gross till we haven't really seen at Plateau it may be plateauing in new or something or subcategory but overall,
it's been a very minimal effect in some very dense markets it's probably more exact exacerbated but,
across most of America's it's a minor thing.

Jason:
[32:03] Great all my in-laws from Detroit are now going to Ward over me that I've been wrong when I told him that that.

Jim:
[32:08] I'm glad I could help you.

Jason:
[32:10] Yeah probably more important than you help my in-laws than me anyway so,
Swiss turn to the Future for just a second if you could put your sort of future has had on we get in that time machine and go visit a CarMax store in 2025.
Is it going to feel a lot like the the experience you're rolling out right now or do you feel like it's going to continue to evolve another any particular areas you're hoping it involves in.

Jim:
[32:38] Yeah I know,
I as I mention we're going to be rolling out this Omni experience to most of the country by February but that still leaves another third of the country to go or so and so,
with about 5 years from now it'll feel mostly similar I think we're going to continue to innovate aggressively and iterate
they offering I think the consumers going to get more and more comfortable doing more and more online so I would Envision that the visits to the physical stores is going to continue to go down in time,
I mentioned we're already down to about 15 minutes that doesn't mean everyone's 15 minutes,
but we think more and more will move towards that sub our level 30 30 minutes or less basically so I think that's I'll be the primary feeling that you would see if you walk if we walked in the store five years from now.

Jason:
[33:32] There's a lot of other categories that retail that have been disrupted by digital and the the store is role as a,
Discovery in browsing his is greatly diminished but it's its role as a service and fulfillment center for that shopping experience has expanded and it sounds like like you're anticipating to see more of that same progression in your space.

Jim:
[33:55] Yeah I think they're still be a strong merchandising aspect to this because you're going to buy a car you're going to be sitting there for hours and hours,
ever used car we are Iowa State ever used cars like a snowflake everyone's different they had a different owner different miles different conditions you just did somebody smoker not smoking all this you just like want to sit in it,
and and will bring the car to you will let you test drive it at your house but a lot of consumers just want to come see you in a couple different cars make sure that you know the Honda Odyssey is the car that they really want and
all the different car seats and everything fit in it and,
I don't think that's going to change too much I think more Marvel by sight unseen but largely.
We want you to test drive it before you buy this it means a lot of money.

Jason:
[34:45] Yeah and there is right I'm perfectly fine with people buying something digitally but there is this some fun psychology element there's a thing called the endowment effect in like once you you try something,
you now imagine yourself owning it and so now I frankly the psychological promise is am I going to get this car back to the gym or am I going to keep it right so literally
like it's a loss aversion like one once I imagine owning that this and now in effect kicks in and it's it's you know frankly much,
much more likely that they're going to buy so I like I certainly feel like there's there's always a role for that that that physical Tryon and for that endowment effect to kick in.
You highlighted one thing I want to just follow up on a little bit like every car is a snowflake and that it could be so again if I may use a new car dealership I have this merchandise.
1 car,
and hopefully the dealership makes a bundt or the manufacturer makes a bunch of them that are exactly like that one car maybe with some different color paints in your inventory,
you you could have a large quantity of the exact same make model but each one is.
For your point unique and might have different value based on its attributes and all these different things.

[36:02] How do you try to meant like I meant I could imagine as an e-commerce guy I'm like oh my God that's a pain in the neck like every SKU.
Is is quantity wine and when however much I'm going to invest in the digital shelf for that skinny one stack ourselves that investment goes with it so I.
Why are there some particular digital amenities you think about her how do you think about like.
Telling the story of each individual car is it just kind of value that you can afford to invest a lot in each one or.

Jim:
[36:33] How is like I don't I don't know how many Nissan Altimas I sold last year but it was a lot.
Literally in the tens of thousands and I took.
Pics 30 pictures of each one of those 360 degree pictures on Interiors Stills exterior shots.
And you know I'd highlight if they had new tires or or what-have-you we describe all the features and we did that last year over 750,000 times,
so I wish I could take one picture of one Nissan and then say it represents all but that's how it's not as transparent as we like to be,
so we invest in it because we think it's the right thing to do and you know we're hunting for way to do it more and more efficiently but we spent about.
Then I'm probably every 14 minutes we produce a new car in a store right self-storage taking cars reconditioning,
trading L replacing parts that are worn touching up paint,
waxing and polishing pictures all that every 14 minutes they're rolling out and we do that across you know dozens and dozens of our stars and so it's just the right thing to do and we invested time in the money to get it done right.

Jason:
[37:54] That is interesting and I mean I certainly agree with that approach in the apparel industry there are these off-price retailers in
they get very thin inventory
of items but they're high value items right and so I think I'd like a TJ Maxx for example in until they you know often they talk about their store experience as a treasure hunt there's,
there's one really good Jewel in there and you're only going to find it if you come visit that store,
and there's a lot of talk they just had an earnings report in their way behind on digital and they would say yeah because digital is not important to us you can't have the Treasure Hunt online we can't create a great digital experience for all these,
unique items that we have no depth one of inside they've kind of said oh digital is for selling other stuff in addition to the the treasure hunt you find in our store,
I feel like you're you're sort of an extent but the fact that that's not necessarily true or sustainable and I you know I feel like there's a bunch of advantages to the,
transparency of having all that inventory online and and you sort of do Evan online digital treasure hunt.

Jim:
[39:02] Absolutely and I think you know I like I can't imagine saying you know being able to do that you know when a digital Treasure Hunt is impossible when you got companies like eBay out there that's,
all it is is a digital treasure head right so,
yeah we believe we believe that it's worth it and we believe that's what the consumer wants I can't imagine not aggressively digitally merchandise in my view.

Jason:
[39:30] That makes a lot of sense and that's going to be a perfect place to leave it because it happened again we've used up all our listeners a lot of time so if folks want to continue the conversation you're welcome to jump on our Facebook page or hit us up on Twitter,
Jim is the listeners want to get in touch with you to hang out somewhere on the Digital internet like LinkedIn.

Jim:
[39:52] Other than spying on my kids yeah I think LinkedIn is probably the safest place to hit to sniff me out.

Jason:
[39:58] All right well hopefully with your kids won't listen to this episode and we'll put your LinkedIn profile in the show notes I bet you I really enjoyed our chat and I really appreciate the time you took today.

Jim:
[40:08] Thanks for having me it's been great.

Jason:
[40:09] And until next time happy commercing.

Sep 13, 2019

EP187 - Euromonitor Michelle Evans - Commerce 2040

 

Michelle Evans (@mevans14) is the Senior Head of Global Digital Consumer Research at Euromonitor Intl. She recently published a new report, "Commerce 2040: Revolutionary Tech Will Boost Consumer Engagement."

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

Episode 187 of the Jason & Scot show was recorded on Wednesday, September 4. 2019.

http://jasonandscot.com

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

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 187 being recorded on Wednesday September 4th 2019,
I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo.

Scot:
[0:39] Hey Jason's going to be back with you welcome back Jason and Scott show listeners
Jason the folks over at euromonitor recently released a really awesome report that's right up our alley here at the Jason Scott show it's called Commerce 2040.
So if you're doing the math on that is 2019 when recording that so it's about 21 years in the future
it's a broad and Really Brave look at where retails going by 2040 as well as some of the intersections of Commerce in the home and entertainment.
And help us walk through it here on the show we have the report's author Michelle Evans Michelle is the senior head of digital Global consumer research at euromonitor and joins us live from Chicago.

Michelle:
[1:28] Thanks for having me.

Scot:
[1:29] It's great to have you Michelle on the show I just want to report Jason has four words in his title and you have six so I believe you should get paid 50% more so we'll we'll discuss that after the show how the correlation of,
titles word titles and compensation should match.

Michelle:
[1:48] I appreciate the appeal for more.

Jason:
[1:53] Michelle you're Taylor just one of many reasons you should probably get paid more than you.
That kind of time on the show but would you always like to kick out the show by getting a little bit of syrup for your background for a guest so can you tell us a little bit how you found yourself in the.
The consumer research world.

Michelle:
[2:14] Yeah actually I started as a journalist initially in my career and during the recession
I had a come-to-jesus moment beside it probably wasn't the best for me a long-term so I started looking for other jobs so I was last at crain's Chicago business which is a business publication in Chicago
operates other places as well they have City pubs but,
I started looking at research jobs PR jobs that kind of thing euromonitor was actually looking for a former business journalist and so I joined I started focusing first on payments
I dream about 9 years ago did that for a good four years and then I brought to leadership
Nigeria to launch a product called today and we covered did Chelan are more Berkeley German offers from
retail too Foodservice to travel to a beauty and personal-care but I thought we could do something more for our clients provide
Marvel 360 look at the digital consumer so it launched in February of 2016.

Jason:
[3:28] That's awesome and for our most loyal listeners they're going to be somewhat familiar with euromonitor because you are actually the second Michelle from euromonitor that's been on the show.

Michelle:
[3:38] Correct.

Jason:
[3:39] But Michelle Grant was on the show number of years ago back in episode 34 when we're still figuring out how to do it so now that we've got all the Kinks worked out.
We're at we're excited to have the Aging.

Michelle:
[3:55] Work work side Reebok.

Jason:
[3:58] So for folks that they don't have that episode fresh in their mind can you refresh everyone's memory about sort of who your monitor isn't what you guys do.

Michelle:
[4:08] For sure so you're a reminder we're based out of London we have 15 offices globally and we are market research firm we have
we do both strategic and and now have to go research
our history has been in more strategic planning so we have data and Analysis to clients subscribed to,
as part of a syndicated offer then they also made you custom work with us as well to answer a specific business question for them.

Jason:
[4:43] That is terrific in the end Michelle Grant had to focus on a particular industry segment which is retail and you have a focus on this particular.
I don't know we call it a demographic but the the digital consumer so you're looking through the lens of the consumer's life where as she's walking through the lens of.
This this one particular shopping Mission and a consumer has do I sort of had that right.

Michelle:
[5:11] Yeah you're pretty close so we have within our syndicated database different systems Pages a client subscribe to so there's a
30 + that are more industry-driven so retailing being one of them travel food service and then we have some
but are we block them either on their economies or consumers are in my case so what digital consumer we are thinking about it
more from the
customer vantage point in more like our motto is to think about how Tech is changing Commerce so really it's
Commerce that happens you know maybe it's in a store maybe it's online our retail system looks at the sale of goods so
in general consumer were thinking about those type of purchases but also travel Food Service entertainment I'm kind of that.
Consumer-facing Commerce experience.

Scot:
[6:13] Colorful next to the background sounds like you got a lot of ground to cover and we were really excited to see the report so you want to jump into that the report probably looks it when I think of his kind of three use cases so you talk about entertainment venue kind of the home and then retail store and I thought just for fun because you told it in that sequence we would actually go the reverse so so
because we really Reach Out focused here I thought we'd anchor on that and start without me so the first question I have is you
here we are 2019 and there's a record number of stores closing in Mall's closing at least the US and think it's kind of a global Trend and feels like there's still a lot more stores that are going to close side if you read some books a like 30% of malls will close
so so I guess my starting question is do we even have stores in 2014.

Michelle:
[7:03] I think for sure any of the key part is that stores are going to evolve so obviously through the history of retail there's always been changes where you know people in the USA might have
lived in shop downtown
you know several decades ago and then eventually went to Suburbia specialty retailer is Rose and popularity and you know now we're seeing them to Klein so I think there's a natural kind of
evolution of things have happened in terms of what you know clearly it's more of a kind of a.
Probably a generational shift it feels more severe what's going on.
Certainly some economic factors and Technology playing a role and I'd say you know though we see.
Online sales obviously from gross Sandpoint outpacing what is Boston Store you also when you when we serve a consumers you ask, why do you shop and store and it's a c
Lexi lore touch things before they purchase some so 47% of global consumers say that
they'll want to go in store I just think stores are probably going to change around those.

Scot:
[8:21] Do you think we'll have them all, format or is it going to be more of just kind of individual little Standalone stores.

Michelle:
[8:30] I think the mall format cuz it could certainly be feasible and I think what we're seeing as malls today is If you,
consider some of the department stores are closing and some
you're more of like entertainment Concepts that are coming in more of the restaurants there is a.
Little shopping center in Chicago in the north and Clybourn area
it's it's small it's not a huge mall by any means but it opened the last couple years
and I am always struck whenever I go there because there is a grocery store so I might have more frequent football there there's a jewelry store
remember like a candy shop that kind of thing there's also
pleather of entertainment options so there's a cinema I think there's some other entertainment and then
also a lot of food service options so giving you a variety of reasons to go and enjoy yourself and as your lingering perhaps shopping then.

Jason:
[9:34] Awesome and I I want to dig into that but before I do I just wanted to compliment you over on the report I think it's super smart.
To forecast the future 21 years out Scott and I do these forecast every year and then annoyingly a year later Scott likes to do a show where he reminds everyone of all the things I forecasted a year ago.
And that never goes well for me and I'm thinking that like.
Bye-bye doing at 21 years out your way less likely to have people pulling out your old report in 21 years.

Michelle:
[10:07] I hope so that's my that was my makeup there.

Jason:
[10:11] Going back to our original theme of ways in which Michelle is smarter than Jason.
Reading between the lines when you were describing the report in the the specific missions that people would still have in brick and mortar stores,
I made an inference and I'm not sure you explicitly call that which is maybe retail isn't as.
Maybe physical retail isn't as important or replenishment as it is today and that you know it more has this roll around these these special missions like like something you want to try before you buy,
when you just want to serendipitously discover some.

Michelle:
[10:49] Yeah so when you think about different
sort of purchases I think you've hit the nail on the head we talked about this a little bit in the home environment which. Rob is going to talk about in a few more minutes and I think dads were the replenish
Amazon you obviously iot is starting to take off Smart appliances and whatnot so the idea of your washing machine belt.
Shade or inform you when you need to charge it those kind of purchases could be outside of mice more so in terms of
physical Outlet which is what we talked about in the in the retail store section we think that there's going to be kind of suppose by categories that there would be a convenience store for those those purchases that are
Shirley just impulse buys I'm where you're walking down the street and and you just want to water or you.
You know we're going home to make dinner and you you know you need milk or whatever that item is there that you don't want to have delivered and then the other type of
storefront there would be would be more of an experiential Center I'm so this gets to that point of consumers Battle of touch feel,
experience products that require oftentimes more consideration so maybe it's something like Furniture maybe it's apparel,
beauty products I'm also come to mine.

Jason:
[12:18] Yeah and in a report when you talk about these sort of experiential centers.
It sounds like the bar is significantly raised over like what we think of is experiential retail today so I today you throw a coffee shop into a retail store and now it's it's experiential retail but like what what are some of the examples of.
Of the kind of experiential Center that you guys are envisioning and 24.

Michelle:
[12:44] Yes or no example that we included in the report is around the idea of a sports apparel store so you might have and I think there's there's flavors of this that an Under Armour my do in a flagship store
were you you know you can go in and let's say
there's treadmills where you might try on shoes you know trying to see how they fit what we're talkin about also in that scenario is why does it have to be a treadmill if you're trying to buy cleats because you play soccer why couldn't it have more of a substance that's more like turf or grass something I've seen in some stores today is this notion of taking a shower of concept in game if I in it so obviously you could go in there it could be for trying on the product or it could just be
are you competing against yourself for 6 months ago or competing against a friend
and I think a big saying is also like the kind of testing areas so you see some of that with with beauty products today and you'll leveraging AR to kind of see how that.

[13:53] Shade looks on you and that type of thing what we are talking about in this world is a room that's sort of changes
and you see some of it with changing lighting but we're even talking about change in temperature or changing to rain so a story that we talked about in the report is,
this lady is preparing for a trip to Patagonia because I went Patagonia this year so that was top of mind
and I you know needed to buy a winter coat so she's prompted to go into the store because
they have this type of information on her interest her she's able to go into this room with this winter Co and see how it would truly feel because we know there's,
I was like think about when you you know by clothes that they need to keep you warm and it's.
70° in a store it's hard to to kind of get that sense of how it might work and then the other big element that we talked about.
With this particular example is this idea of.

[15:00] Very much a game that you can play and we think for those retailers that really kind of nail and experience and make it unique that they could certainly even charge entry
2 to allow consumer Steven to play this game so what we've
outlined in the report is the idea that
you know maybe LeBron James is your favorite player and so you always dream about playing him in NBA Finals so we have some imagery in the report and so there is in the image graphic
ran or holographic representation of LeBron.
You as a consumer you have the ball and in your getting ready to take the game-winning shot so if there's those kind of experiences that really.
Bring to life something that you might not be able to experience I'll swear you know perhaps that's something that a consumer might be willing to pay to build experience.

Jason:
[16:02] I like it and just a clarification for listeners that LeBron James she's talking about is LeBron James jr. who will be the.

Michelle:
[16:09] In 2040.

Jason:
[16:13] And I came back you might be coming up on the end of his career by that but I'm I'm pleased to hear because you know for people that believe in global warming I'm I was somewhat worried you might not need a coat in Patagonia in 20.

Michelle:
[16:27] Yeah that's that's touch-and-go right now you have a good point there.

Scot:
[16:33] So you're on the show we're big fans of AR VR 3D printing and some of those things that when Jason I talked a lot about them retailers kind of glaze over because they feel really gimmicky and and
not like they're not going in Back to Future I was excited to see those mentioned in the report how do you how do you see those fitting into the store of the future.

Michelle:
[16:53] Yes I think you're right we actually do
an annual survey of Industry professionals globally where we ask them about Technologies and where they're investing right now
like looking out 5 years a eyes number one I'll choose number 2 but seems like 3D printing.
Still fairly low arvr is kind of middle of the pack so it it certainly mirrors what what I hear as well and I think you know in that survey we asked them all so well why are you not investing in the topic,
the top reason back of tends to be a lack of a clear business use case so I think we're still going with how this,
you know how smooth the business forward arvr is certainly something that comes in quite a bit in this report for sure.

[17:49] I think you know where this,
a r I think about the use cases even today and terms of you know you know the being able to try on makeup.
Being able to you know see.
Clothes on yourself made it when you're not in the store the sizing getting more accurate sizing that type of thing and hopefully you know when we think about VR and we think about
those kind of headsets I'm across the worlds we we keep calling them world's or environments in the report
when we talk about VR and we think about the headsets we think about them being that more
Spiffy's and something like the Google Glasses that we've seen in the past something that.
You know you might actually wear that it would be a fashionable piece of I wear it wouldn't be maybe as intrusive as well
time to bring things to life 3D printing is something we talked about in the retail store area and I don't know that we're,
that it would come to a place where you know everything is printing on-site what we've talked about is
if if you're trying on a shirt in the fitting room and in maybe it's a V cop that you want to run to cut maybe you can make small adjustments like that and have it printed.

Scot:
[19:16] Call how about I think you talked a little bit about kind of to use your Patagonia example where if you were trying on something you could you could see yourself and kind of us an AR mirror so we can see how,
maybe they don't actually have the Garment there in the store and you can see how a different color would look or something like that you see that kind of
technology being in the store or more kind of in the home.

Michelle:
[19:41] Why thinking both places are certainly and we can talk about it probably more in the home but,
we had a pretty detailed imagery and in the report where we talked about a woman trying on
product in the mirror and in what the experience around now with the you know I do think smart mirrors.
In the retail environment have been around for a few years for sure and where we're seeing them more and more I think there's definitely a strong use case for those in terms of how they can.
Kind of extended use cases and and helps it move.
Bring different colors or Cuts or whatever it is to life for a consumer.

Jason:
[20:33] Yeah said to me it's like there's an it's hard to talk about each of these three things separately because in some ways I feel like they do overlap a lot and since you are.
You know I'm kind of taking the the perception of the consumer that makes perfect sense.
You talk a lot in the report about like increased demand for personalization and I feel like that's one of the areas where.
You know some flavors of this 3D printing make an awful lot of sense is it like it's probably not true in 2040.
That very many people are all walking around wearing a carbon copy of the same thing.
Like we're using the same thing right like it you don't you don't have the same glasses prescription and it just feels like by 2040.
There's going to be much more opportunity for for everything we use a known in life to be much more tailored to us and our unique.
Differences in taste and flavor.

Michelle:
[21:29] I think that's entirely accurate and
personalizations a common theme across the report certainly what you're talking about is is more so that product we bring home and the ability to kind of slice and dice it
so what we want which I think is going to be certainly more feasible and it is probably,
you know what I was describing with that 3D scenario is that if you're trying it on in a fitting room a certain shirt and you can see different cuts of it you can see different colors of it you know maybe this is a shirt
today that's only sold in two colors in one cut but in 2040 could be in 03 * 8
Bridal 24 different versions of it that could be slightly different not to mention just the cut of the shirt you know like the way it fits you write the nobility we would have some more Taylor it,
to a consumer as well.

Scot:
[22:28] 2 with the store of the future it wouldn't be a Jason Scott Shofu didn't talk about Amazon is is Amazon play a role in 2040.

Michelle:
[22:38] Will it be around in 2040.

Scot:
[22:43] For they are they what's Amazon look like in 2040.

Michelle:
[22:48] Are they serious.
Yeah that's that's quite a ways out I would say if they continue on the same trajectory and
and I'll continue to put the customer first and
adhere to that sort of business principal than in theory they would still continue to be relevant obviously the world is fast changing so any number of things could happen you know I think with Amazon.
And in the in the society that we live in as opposed to somewhere like a China just the sheer amount of of size that they have.
Their tentacles so many different areas know they are the antitrust thing also comes up in what they might look at look like come in but you know I think Amazon also knows that,
I can't fall asleep at wheel because.
You know there's a lot of players like a like a Sears or a blockbuster Kodak they're all classic examples of people that were top of their industry and then.
Lost Focus.

Scot:
[24:00] Yap's alethea you have to kind of self self innovator or else you'll get an intubated.

Jason:
[24:10] Yeah I do.
I mean obviously I could go either either way but I do that you know Jeff Bezos has this quote that I admire,
no Empire has successfully predicted it done to my eyes,
he seems much more aware of How likely it is that bite by keys I just got a question of if Amazon well.
Go pass relevance win and then he has the funny one liner I just want to make sure it out as me.

Michelle:
[24:41] Yeah and I think they kind of their other strategy is Bill in that defensive mindset right like they're they're always coming out fighting from their regard.

Jason:
[24:52] I do think it's going to be interesting I do you know I think it's easy to kind of bifurcate retail into the like all that you just sort of Need for filament replenishment and.
That's obviously the the way the area that Amazon's dominating and leaning and then there's all of this sort of.
Experiential you know personalization all these sorts of things that Amazon doesn't plan as much like I think it's rather Complicated by these non-retail businesses than Amazon's really selling at so like you know.
Maybe they're they're the backbone of the internet in 2040 and in retail has become a boring industry that they don't Focus.

Michelle:
[25:33] If you if you think about Amazon.
If we assume what I'm talking about Commerce 24 it comes to fruition and we think about Holly Amazon layers over it obviously they could dominate when it comes to kind of that General the filament of a
replenish our products that I talked about in the home area you know maybe in a retail store maybe it's questionable I was so they pushed into stores more so and they certainly could do more
I think a big area when we talked about their future as with Alexa
and if they're able to win that battle to you to be one of the default choices for consumers because certainly across this report I talked a lot about that kind of voice first
mentality.

Jason:
[26:19] Oh for sure like part of me is like I'll be thrilled it by 2040 they finally know which lights I mean when I say.

Michelle:
[26:26] Stars of things to be worked out for sure.

Jason:
[26:32] That's a video of machine learning is it like you're going to incrementally get better every year for the rest of life like I'm like you know the human brain which like does not end.
Over over the Long Haul so yeah I know I do think that's interesting and I'll just be at the moment like in some ways they're they're much smarter about trying to make their technology open in ubiquitous.
There's like some interesting news about just how much renewed effort they have in winning the the car dashboard and how far they're going to go to give away the voice technology to the car manufacturer or something like that because I.

Michelle:
[27:10] Well it's it it's the operating system of the future right now is it going to be it feels like the next generation of like the Apple iOS kind of battle.

Jason:
[27:23] Yeah for sure and I do I'm going to go back up I'm not I'm definitely not going to get in the business of predicting and Amazon's demise but I will say like one thing that is interesting about.
You know so today personalization is a lot about personalized they experience and I do believe that increasingly is going to be economically viable to personalize products as we already talked about.
And so-so For Better or Worse one of Amazon shoe disadvantages in retail is.
They've just invested orders of magnitude more in their fulfillment Network than anyone else since they're able to,
hold more good closer to the customer and get it to the much faster and cheaper than anyone in their orders of magnitude ahead of everyone so they made this huge investment.
It now gives them this huge advantage and service-level I'm which is all really smart but one thing that's interesting is it the world does go to.
Products that are made to order and made on demand a lot of that existing an investment gets depreciated.
So it it just either that is one of the things that you could imagine sort of.
Being a little bit of a equalizer and reducing some of Amazon's competitive Advantage if it is a place.

Michelle:
[28:41] Well I'm thinking about you know even if it doesn't go that way to like how fast can it get you know it is it you know they're down to 1 hour for some products can they really get it to me faster it feels like.

Jason:
[28:57] Oh yeah the patent is they're going to have it waiting in your basement before you know you need it.

Michelle:
[29:00] Going to be creepy Leo living in my second bedroom or something.

Jason:
[29:05] I mean the picture of your basement.

Michelle:
[29:08] Oh that makes sense then that's those people work down there.

Jason:
[29:16] Bebe cool iron is in 24.

Michelle:
[29:18] Yeah I just feels like even on that front that other retailers could catch up I guess it's my point.

Jason:
[29:27] Know for sure it's going to I hope I'm I do want to pick up a little bit though we constantly talk about today and you know his butthole.
Digital disruption and like in particular like everything's omni-channel like all these debates about how you measure sit like.
Is that all gone away by 2040 like is there like a people still talking about these channels is different things and you know are we still.
Segmenting sales by like people that deliver online and people that deliver and store what it what is omni-channel mean in 20.

Michelle:
[30:05] Well if we're going to get to this Vision I would hope on your channels and non-existent I think that's what it's really about is.
Is not looking at it by these various channels and drawing these lines as much as it's about just being you know having a product.
When the consumer wants to shop for it and where they want to buy at excetera excetera so if it's picking it up on their way home from a convenience store location or if it's having it shipped from that,
that store to their home you know I think that's probably what really holds back retail and additional era today it's those kind of / it started because.
Digital camera on 2nd right is so I think you almost have to get past that in and look at solving it from where the consumer vantage point from their point of view.

Scot:
[31:05] William I'm excited to shop in the store 2040 hopefully we can all do a repeat of this episode and we'll just on January first week of January
E-40 we'll get together and I guess Chicago would be convenient for you guys and we'll go see the store of 2042
anniversary this episode so let's go home because you do paint this picture where you know today I don't really think much about shopping at home you've got them really kind of all integrated Ruston Way
and when you described that house the future actually reminds me of Jason's house cuz I think he's got like 50 Alexa's
you can see through his refrigerator and it orders things is espresso machine knows he needs an espresso every 10 minutes.
Self self espressos for those of us who don't already live in the house at 2040 give us a walkthrough of what what you think that looks like.

Michelle:
[32:00] Yeah for sure so I think we are starting to see some of those Technologies come in as you describe it
20/20 starts we come up the volume higher because that's when several different Appliance manufacturers say that,
all lines of their products.
Will be connected so you'll see more of that come in at home so you know as we think about it you know voice is Paramount across all these worlds where we talked about it
and then you know when the home certainly plays a role certainly the the the speakers are
hearing a voice like we should Google home and Alexa as well
you know there is an imagery and Aaron Imaging report where we have a connected fridge and it's still the same set up sort of idea that you might have stay we can make a list or order something I didn't see about.
You know the 2040 version is the level personalization that comes in is what we're talking about is that it ties in to that individuals Health System let's say you know what maybe you're.

[33:11] Wearing something like a Fitbit is tracking your exercise you know tracking your food and and when you go into the fridge at 8 to grab whatever it slaps you on the rest and says you know this is going to know your calorie count or what-have-you we also show
a lot more screens couple different places in the kitchen in the bedroom so.
You know anything about the interaction screw in the kitchen how you could monitor different levels or whether is energy temperature security excetera.

[33:45] In the home or I mean in the the bedroom specifically we have is interactive mirror and this is
one of my favorite parts of the world to kind of imagined and wrap my head around is that we have the same mother she's just trying on outfit for the morning
two interactive mirror so she can quickly see what's in her closet kind of
you using the technology just throw it on or there's ability using social media of tomorrow or private communication channels
picture send it either sure girlfriend that she trusts will actually give her an opinion or to a group of random strangers and then there's an element where you could invite a holograph brand rep.
Into your home now I don't think this is something that's going to be.

[34:35] I'm not going to be invited to every brand into my home but I'm thinking about someone
like an apparel retailer in the US whitehouseblackmarket that's a place that I shop at quite a bit it's a place and I'm comfortable buying online because I
I've shopped enough in person that I know they're Cuts so I would know what sizes fit me best
so if they're also very like a commission driven so there is no stylist there right on top of you when you go into the the outlet and in terms of helping you so I could see someone like that. Kind of
Grand where they they already provide value in your life when you shop with them so you can invite them into the home to help you
finish out a certain look so you have the skirt but what about a top that would go grade or a certain belter or what have you.

Jason:
[35:33] Yeah one of the things that excites me about that vision is today as a retailer.
You get a lot of data about what consumers own but very little data about how they actually.
Use what they write so,
yo like it's it's a very but it's very binary like they have skinny jeans are they don't have skinny jeans they have it at you. But there's no contact and so you know when I read that sort of,
homes in REO in ueno now like you don't give the customer Ops in and you know all that everything aligns you cannot share with that brand.
Analytics on what you know what's actually in your closet and how often you wash it and how and how often you wear it and what you wear it with.
And you know you could imagine the the AI recommendation engines of the future.
Things bad with that much with your data source could be you know much more accurate at.
Sort of you know truly finding things that made my life better than than the kind of basic recommendations that we have today and things like that so.

Michelle:
[36:43] Yeah and I don't want to creep out your entire audience face by any means I I don't think this is going to be every brand it's going to take a certain,
there's a certain trust you would have other brand like that alright to give them that kind of information but once they've established that trust,
I could see that type of thing.

Jason:
[37:02] I think one of the interesting trust ones to play out is the whole and you you paint a little bit of this in the report to is the whole integration of bike shopping and health care right though.
You can imagine again that that facilitates a lot of better experiences if.
Your grocery store knows that you have diabetes like like forget just like telling you if you're buying your calorie counter not like are you buying doctor approved items and are you know all of those kinds of things to come in a play but they're right there are potentially some.
Some huge trust barriers enabling some of those experiences.
But I do want to keep the audience out and so.
The the potentially cool or creepy part to me is you got you seem to be pretty in on the robotic assistance so it like is are we straight up Jetsons are we going to get a sparrow.

Michelle:
[37:58] If they can fold my laundry I'm all about them coming so we talked about robotic-assisted from the idea that I might share one
there could be different business models like maybe the outright own maybe they're leasing renting that type of thing there's a screen on its belly and stomach where we can see.

[38:25] Show me the interactive screen where they able to talk to him or you know maybe they see entertainment program Maine
or maybe Brands actually are able to push out messages through there but throughout our images as robot.
Plays a role in one of them he.
You know gets the products that were delivered that day and bring some to the kitchen in the one.
In the bedroom on Mom's getting ready he's playing with the small child so he's not outright the babysitter mom still in the room but it's
he's playing educational games with the kid and the scenario where describing here is you know it's a small kid they're playing blocks and the kid says
you know where we are.
You know what we're bubble he says Mom I'm bored in Oakland by the next Edition so what we're talkin about here's the idea that you know if you have
you would.
Police are out right on this robot and then you would buy in a certain packages so in that case maybe you bought the package for a two year old to three year old and now I need to upgrade to the four-year-old package something like that.

Jason:
[39:37] It's going to be interesting are you familiar there's a uk-based television series called humans.

Michelle:
[39:49] No I'm not but I need to watch it at.

Jason:
[39:51] Stay awake I think it's on AMC in the US and it a door a couple of Seasons or one season has was dislike.
Somewhat distant future when like households were just started by affluent household could now afford the the Schumann eyes robots,
and of course they're getting better every year and said they're all these financing plans and if you're middle class family like.
You know do you make the financial sacrifices to invest in one of these things or do you have something symport you know and I.
Because it's DJ's are psychos off the rails and ultimately you can't figure out like who the Androids are in the humans in.
Driver bolt and try to of the pilot is very much in line with with a painted so you should know.

Scot:
[40:50] Clear you are in the report you suggest a lot of bran ways Brands inject themselves into the house you've given us a couple of those examples you Yeltsin reduce this kind of concept of passive consumption
explain what that is and why connected home ring set alarm.

Michelle:
[41:06] Yeah for sure so I think we're starting to move into the air like I said 20/20 is a key or where there's a lot more appliances
in the marketplace Mass consumers naturally upgrade things these appliances will be connected so the kind of Pastor consumption you know it's going to tie to those were punished for products I don't think.
Any of us get up in the morning and work
like super excited to go buy Tide laundry detergent so those kind of product choices are product decisions purchase decisions that we could just
essentially automate so we we see
technology today now that it's going to be even better into these machines you know it's able to measure consumption rather than purchase history that the retailer would have so some of this could be
I'll try to my settings are still a question if the consumer want to be removed entirely or if they want to be paying down their phone to okay a decision
but I think long-term is we think about this idea of passive consumption is certainly starts to.

[42:14] You know shake up the retail industry as we know it consumer Appliance manufacturers with with.
Attack in these appliances are able to get closer to Consumers offer things like remote monitoring maintenance kind of things to keep that relationship going you know what,
just because.
You know it's going to notify you need me more laundry detergent doesn't mean a retailer has to fulfill that there's a potential potential probably for a brand to do that as well so I think it starts to change the whole paradigm
and it has a big impact anything about loyal to two because,
you know you're a lock into a decision so there's less opportunities upon which a cpg brand like a a P&G could influence you to buy Tide
I'm just switching by that versus what you might have been buying before.

Jason:
[43:11] Yeah I I D I think that's.
Interesting totally viable in my in my mind that is another scenario that potentially causes Amazon to have to order the Amazons of the world.
To have to Pivot right because,
again there they build their business to try to be the world's most customer-centric business customer kind of.
That their customer Persona today is a human and you know they built they invested in all these warehouses in this huge assortment because they feel like customers like huge assortment and they like to get the goods real fast.
If the customer of the future is the LG dishwasher and it is ordering its own soap.
You can imagine some of the things Amazon's investing and being less important right like the LG dishwasher might run a reverse auction and buy the soap from whoever can you know provide soap that has meat specs.
They can provide it the cheapest and unlike the human that doesn't notice they're out of soap and told her out of soap and they needed in one hour the LG dishwasher that knows exactly how how frequently you've been washing dishes for the last 10 years.
Can can order the soap well in advance and wants the cheapest Zillow soap that can be delivered on a very slow cost-efficient method.

[44:31] I do think that that's going to be another that that's a potential another interesting.
Curve that that some of the players of today might have to think about but I was more excited in your home thing you saw their super practical problem there's no porch piracy in 2014.

Michelle:
[44:49] I'm glad I did that.

Jason:
[44:55] Write like in CNS because the the delivery Guy waits until they know you're home and then they deliver the.
Stages of close to you and then using this all the spectator they do it when you're home which I think is bad I do want to Pivot the to the entertainment venues in 2040.
There are a bunch of a cool ideas and it seems like a VR plays a super prominent role you want to talk about that a little bit.

Michelle:
[45:22] For sure so you know I live in Chicago I'm actually a Cubs season ticket holder so we go to a ton of games and so when you think about.
Dad experience that you have at the stadium today and then what am I be in 20 years you kind of have to just start to.

[45:43] Weber jetting more technology to add to that in-stadium experience
because it's already commented home I I was in a conversation with friends this weekend and someone was talking about the upcoming Bears game and how much a ticket cost and I don't want to deal with parking and all of that nonsense
and I can just watch it when I can watch it at home on my 80 inch whatever TV so you know obviously.
The stadium operators are competing in a new way you know against
against the streaming services and in the technology you have at home to bring it
Sabrina game The Lies We talked about is a are so think about those cool glasses that I described earlier that we would naturally have so how can we take AR and Leo over the action.

[46:38] Deep in it
so an example might be like from the baseball realm a key stat they often throw around you know what a picture is how many pitches is it you're on the game and you know that's going to start arrest come out as he hits a hundred or hundred five why have you
what if you had all their stats because the players.
When you could see their endurance level as something else is happening in the sixth inning he's just getting worn out because he pitched on three days rest.
What other factors come into a horse's Commerce Elementary as well where you can order food
to your seed order it too kind of a click-and-collect kind of location and then also Tynan to you watching the game the ability to order
pre-order merchandise as well you know based on what players you might be taking an interest in.

Scot:
[47:34] Cool one of the things we haven't talked about his drones and there's a little bit of drone delivery in there but but here in the entertainment world you talk about this kind of cool you could be sitting there watching things and then switch to a different camera from from the Drone is
how do you see those playing into the whole event situation.

Michelle:
[47:55] Yes I think it's just about you know.
Angles on the game that you know so you know I think about it in terms of
what you might see at home that you don't actually see when you're in person at the game from your seat currently you know if you guys I'm sure
you guys have been probably Wrigley Field it's going through a lot of upgrades right now but if you think it back a few years ago without the jumbotrons without
Cheap Eats around the stadium the idea of being able to see a closed play you know you want to re-watch it you want to build understand how it.
What is the Players really say for whatever the scenario was so I think that's another way another kind of layer to it.

Jason:
[48:43] That like it's going to be awesome to live in that world Michelle in that's actually going to be a great place to me baby cuz
once again we have used up our a lot of time for the show but if folks have a burning question and want to continue the dialogue we certainly encourage westerners to jump on our Facebook page or hit us up on Twitter
Michelle is Whispers you want to contact you what's the best way to to find you online.

Michelle:
[49:11] For sure I am on Twitter and also linked Denso on Twitter it would be at Nevins in Evans 1/4 and then online Michelle Evans.

Scot:
[49:26] Cool we really appreciate taking time out of planning our feet are 21 + years future so to come on the show.

Michelle:
[49:35] Thank you was a pleasure to be with you guys.

Jason:
[49:38] Until next time happy commercing.

Sep 5, 2019

 

EP186 - BottleKeeper CEO Adam Callinan

 

Adam Callinan is the co-founder and CEO of Bottlekeeper (@thebottlekeeper).  In this broad-ranging interview we discuss Bottlekeepers origin, their experience on Shark Tank, Amazon strategy, protecting intellectual property, and challenges and opportunities of scaling a direct to consumer business.

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Episode 186 of the Jason & Scot show was recorded on Tuesday, August 20th, 2019. live from the eTail East trade show in Boston, MA.

http://jasonandscot.com

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

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded live from the etail East trade show in Boston on Tuesday August 20th
2019 I'm your host Jason retailgeek Goldberg and unfortunately Scott was unable to join us so I am so low today but I've made up for it by to juuling a great guests to join us on the show Welcome today Adam Calhoun and he's the co-founder and CEO of bottlekeeper
welcome to the show Adam.

Adam:
[0:53] Now you're having me.

Jason:
[0:53] We are super excited to have you as you have a great story as Messengers are going to get in just a minute but for those that haven't already had the life-changing experience of owning a bottlekeeper,
what it what is the elevator pitch on bottlekeeper.

Adam:
[1:09] So it is a bit admittedly it's a bit challenging to just fully explained it is a very visual product but I'll do my best.
Bottlekeeper is effectively it's a stainless steel bottle like a water bottle that we've all seen for 20 years,
and the base of that bottle screws off and so the inside of the the body of that bottle is is insulated with neoprene so that you can put a beer bottle inside the body of the bottle screw the base back on there's a built-in bottle opener into the cap,
I've been a seals being closed bottle and does all these great things will also helps to keep your beer bottle which is now enclosed much colder much longer and it's protected from what we say is gravity induced explosions,
I lie when you drop your beer bottle on a pool deck Kubota Beach Etc broken glasses bad.

Jason:
[1:53] So so I have heard so if I called it a beer cozy on steroids would that be offensive or is that.

Adam:
[2:00] It's important, defensive and me to tell in 1981 was the first patent for the super old-school thumb is he so it was time for redo.

Jason:
[2:13] Time for an upgrade right so we get massively better cold we get the bottle protection I'm not sure you Market it this way but there's potentially a stealth elements to the product.

Adam:
[2:24] I need a wee wee Focus pretty heavily on that keep it cold and protected live there.

Jason:
[2:30] Fair enough and I feel like most of our listeners have imagined that their dream job would be to be a CEO of a company in the adult beverage base.
I was going to ask his it's like are you going to ruin it and say it sucks and you were like 80-hour weeks and it's super stressful.
Or you can nice.

Adam:
[2:49] Now it's amazing I mean we we were very very intentional early on in starting this company my co-founder partner Matt Campbell and I about doing,
ignore my previous world was a lifestyle that was built around a business and so and going into bottlekeeper and launching and I wanted to do the polar opposite that was build a business around a lifestyle in my lifestyle,
living in Southern California I spent a lot of time in the water and on the beach and traveling with my wife and so we built that mentality into the framework of the business which even now and we launched in 2013 even now six plus years later.
It's fun I mean it's really casual it's really relaxed we have you know our team has unlimited vacation we have mandatory work-from-home Fridays because I literally I was trying to get people to work from home on Fridays and they keep coming in so now it's like.
You got to work from home on Fridays so it's just it's a very fun casual flexible products.

Jason:
[3:45] That that is totally awesome and I know you guys have a pretty funny origin story like how did you come up with this idea.

Adam:
[3:55] Yeah so my cousin again co-founder partner Matt was sitting on the beach drinking a beer out of a red party cup.
85° outside we know how the story goes right it's warm in 4 minutes and drinking warm beer is about as fun as having a tooth pulled,
so he at the same time he's also,
that particular about drinking beer out of bottles that's just something you would always prefer to have a beer out of the bottle so he's looking around he sees people drinking out of we're just normal off-the-shelf water bottles with her everywhere today.
And thinks himself why can't I just take one of those and put a beer bottle inside of it and really the only way to do that is by cutting it in half,
so he went and purchased a bunch of off-the-shelf water bottles a handful and Vise grip them to a table hack saw them in half,
cut up some old neoprene College Koozies and super glue them inside and his favorite beer bottle fit perfectly,
and what this did was it created an opportunity to keep a beer a lot colder a lot longer while simultaneously protecting the bottle because again he's on a beach he lives in Phoenix Arizona has a pool is all these places where,
it's hot and glass you know, doesn't make sense in this was the quick and easy solution to that problem.

Jason:
[5:06] That is awesome so we made a product for that and I heard a rumor that you you did a quick and dirty test to find out if there be a customer demand for the product.

Adam:
[5:20] Yeah when when you know we started doing this together we we burn it up in early 2013 we,
I was not admittedly super I thought was a really really cool product to fit my lifestyle gray but I wasn't overly convinced him particularly have never been in the consumer product business before that we could sell it that we could get people interested enough in the product
to sell it at a real price point NADA this is Hobby price why put a real price on with real margins so I built a website
just a landing page with a video that I shot on a GoPro and plugged an email capture system into a MailChimp and,
you know basically I spent $500 on Google AdWords in and sent people to the website they just basically said if you think this is cool and you want to know when it comes out leave your email and it converted reasonably well and it wasn't a 5% but even at 1% like we'd at least prove the people that were,
you know we're interested enough in it not knowing what the price was to go on to the next phase which R Us was crowdfunding.

Jason:
[6:18] Play up first. That is totally cool it wouldn't have been that much earlier that it would have been super expensive than unfeasible to even do a basic test like that.

Adam:
[6:29] No question and that's when you look at these sorts of things you know you can it's really in hindsight it's really easy to point out that the things that were really lucky and one of those the timing I mean had we try to do this in 2008 it would have been a totally different story.

Jason:
[6:42] Yeah and you're not the first entrepreneur on the show to say hey we
we put up sort of a faux buying experience even before we knew how to make products in fact I think we had tuft and needle on the show and he literally had a bye but and took an order in the first day.

Adam:
[6:58] That's awesome yeah we didn't take it quite that far but I can send there's a lot of Value Inn in doing that particularly when he basically combined what was Frost Phase 1 and Phase 2 he combined that into one phase which was can you get people out of the credit card information and click by.

Jason:
[7:13] So they also not available 5 years earlier would have been that that crowd crowdfunding component can you talk a little bit about that. I said you had any experience doing a crowdfunding project.

Adam:
[7:23] I mean I was pretty guy come from the medical world at that point and Matt is a also not turn over but has been in the alternative fuel conversion space since college so neither of us have any experience.

Jason:
[7:34] Kickstarter or Indiegogo or one of those.

Adam:
[7:36] We used fundable we actually got declined from Kickstarter at the time they were I guess we're focusing on our projects and things like that so I I met somebody who was a Founder CEO of honorable and they were super helpful and got us off on the right foot.

Jason:
[7:50] Awesome so then that's Circa 2013/2014.

Adam:
[7:57] That was the about September 2013 was the beginning of the crowdfunding it went on for 2 months.
Was really successful for us not in the amount of funds raised it wasn't super expensive to start this company so that wasn't the point but we we set up a low goal,
we
more than tripled that goal and it was it the real proof of concept that we can get people to enter their credit card information and click by and having these people not be like our parents in front of him.

Jason:
[8:23] Yep but it and it's only gave you some sort of Market validation that you had a.

Adam:
[8:27] 100% of men. That is the validation right we had something people were interested in and we're willing to pay real money for.

Jason:
[8:33] Yeah yeah so now you so now I assume you start chewing up and Manufacturing you fulfill those orders was it easy to grow organically from there or how did you say.

Adam:
[8:46] No.

Jason:
[8:48] I was being slightly start a.

Adam:
[8:49] Yeah it was not easy at all I mean it with this was like a funny side project for almost a year and not because we didn't love it and think it was amazing we just haven't figured out how to do it yet.
Sew-in yeah we we did that I built a real website on I think I'm bored press if plug-in woocommerce to it and you some funny Dragon drop that it hurts I don't have code.
And we started taking pre-orders at the end of the crowdfunding cycle so we had started doing some testing on actually being an e-commerce business in the fall we ship those orders in the first week of January 2014 barely missing Christmas which is awesome.
And I'm just literally just fumbled along for 8 months.

[9:30] We are doing two or $3,000 a month in Revenue I had two other kind of side project things I was doing maths in a running as fuel conversion company,
I'm so we're still doing this we're trying to do it we just haven't figured out how to make it work yet.
And something really important happened for us and that was in in about August of 2014 Facebook launched their video advertising platform,
so I thought of you again I'm not a videographer I'm not never done this before so I just took you off the shelf Camera DSLR that I had from some previous trip.
And propped it up on a backpack in the sand and had this sort of demonstration video that was abusively long in today's standards of digital marketing at least with respect to Facebook and things like that and put it on Facebook and it exploded.
Just went from you know 5 or so thousand dollars in August to like.
10 in September to 25 in October to 50 in November to 60 in the first seven days of December and we saw a lot of product cuz we had no expectation that this was going to have.
That was that was the point of which you know we were.
Clearly earlier on may be in September after like holy hell is actually working and then it just continued to work because with Facebook if you just keep putting money into a particular when you're at the smaller scale and you can achieve the same results.

Jason:
[10:46] Yeah that's awesome so during that that run up as you started getting that heavy Traction in this volume started really getting up did I did like WordPress break and all that sort of stuff and did you have to migrate I'm assuming.

Adam:
[10:59] Oh yeah we were we were in.
Way over our heads and by we I mean me my was responsible for the front end of the business the tech The Branding the marketing OSF mats with multiple for the back end with the inventory is the manufacturing or financials on this important stuff so yeah I was weighing over my head I mean we.
Do we couldn't ever get enough bandwidth to support the girl that we were doing and we Band-Aid patched it for.
A year easily are removed to Shopify which was one of the smartest things we ever did in the summer 2015.

Jason:
[11:30] And then fast forward a couple of years and you guys were on Shark Tank.

Adam:
[11:39] We were in the November of last year.

Jason:
[11:42] I'll put in the show notes but it's like season 6 episode.

Adam:
[11:48] It season 10.

Jason:
[11:51] Episode 6.

Adam:
[11:51] Season 10 I think it's episode 6.

Jason:
[11:54] Sex so so we'll put it in there before you get you can get on the show as a regular follower I sort of thing marked even as an unbroken record of investing in every Beer Company.

Adam:
[12:06] There might be a theme there.

Jason:
[12:08] So I don't know I don't know if you targeted that at all but just a side note.

Adam:
[12:12] Yeah he had this great quote and up one of the Publications that came out of that nose actually became the title of this article it was something to the effect of every time I drink a beer I invest a billion dollars.

Jason:
[12:22] Well I hope he's got a good Roi on that that could be an awesome investment strategy if it's working,
so you're so happen to have a guest shark A-Rod and in the beginning of your pitch to demonstrate the protection element of bottlekeeper you,
I handed him a baseball and let him throw a baseball at your product and I'm actually thinking I would be in your shoes terrified at this moment because if I make a rod look bad.
He doesn't like it at flush.
Like this could go totally sideways so luckily there's no listeners on the show so I guess we'll never get out did he nail it in the First Take.

Adam:
[13:05] He did I'm in the guy's a Hall of Famer.

Jason:
[13:07] Yeah.

Adam:
[13:08] It was surprising how I mean he nailed it dead center in the middle 60 plus miles an hour in a full business suit and dress shoes on a hardwood floor from 30 yards.

Jason:
[13:18] Which.
Yeah I mean he's there I got to do it but you still is I feel like it's impressive nonetheless so you took a risk until I paid off and on the show you Altima got a deal with Mark and Lori,
like pretty meaningful valuation when the fun things to me is a lot of people come on that show,
very early revenue or pre-revenue in like asking for sort of a wack evaluation and they get beat up,
I almost got the impression they felt like you were a little silly until they found out about your your existing Revenue run rates and then it became a different kind of gum.

Adam:
[13:57] Yeah which any of that was is,
very very planned out right I mean our goal it wasn't our goal wasn't to go on in and look silly but it was to go on and then get to the point where 3 numbers and have them all,
set up in their chairs and even even with you got to structure all these things right even with a rod drawing we designed that around having a run on the show we didn't say we want to do this experiment that all the time we have a run it was what do we need to include in our patch so that we can,
so that we can guarantee they will air our episode and it's like you have a rod throwing a ball on National Television there's no way they're not going to.

Jason:
[14:33] Yeah it's too. It's brilliant and I've been told by other shark tank entrepreneurs on the show that one of the things that can be frustrating is you don't actually know when your shows going to air.
Until I can be,
dislike again you're likely to have a big bump in in demand from the show in the band planning and hardening your systems can all be a challenge in your case I think you got a really lucky air date did you not.

Adam:
[15:01] We Dad we are the night before Cyber Monday.

Jason:
[15:03] Oh my gosh so tons of demand a peak time in you already on Shopify at that point so did things hold up in.

Adam:
[15:13] Yeah I mean from a from a texting Point yeah every everything that I'm in the fortunate thing for us in that experience was that we had already been in business for,
five or six years we've already done millions of dollar in route dollars and revenue we had,
you know we had put all the pieces in place through other learning mistakes and we were around that we've been on other TV shows prior to that's the we had these huge bumps in Things Fall Apart and so we got to patch all those holes
in advance and the other part was we had we work this great deal there manufacturing group where they were basically they would create,
I think it was it was up to 10 containers of product on their dime and basically hold them in a facility in the US and we could draw from them as we wanted so that really D risks,
our inventories going into Shark Tank cuz you're right we find out three weeks before it was going to air that was going to air.

Jason:
[15:57] Wow that's awesome in my distant past we used to do some work with Oprah Winfrey in like early on in her list she would literally put these entrepreneurs out of business cuz she like you create so much demand and like so,
you would have had to invent all these new disciplines about how you handle this this one ridiculous spike in your business that's a first world problem though my friend.
So so you're on the show the product looks gray By Carolyn season on the show you get this nice bump and I think you said like,
like a 300% increase in rent do I have that.

Adam:
[16:33] Yeah as of that night and then grilling to Cyber Monday we had we were already up W Revere so then we basically increase 300%,
the night of and it lasted through the subsequent week minute tell off a little bit the beauty of TV now versus TV 10 years ago did you get this huge Spike spike lives on a movie still
something like temperate not sock. It's slower it's like 5% of our traffic today we can still point of Shark Tank,
start in November of last year it reared in Des in January of this year but even then this up lives on.

Jason:
[17:10] The rears its the DVR now and on demand you get this nice a long tail.

Adam:
[17:12] Horse HD streaming systems.
Over the course of the week following the Airing weekend directly attribute an additional million dollars in Revenue just to Shark Tank nuts customer acquisition free which is a beautiful thing.

Jason:
[17:27] That that is awesome so that could be is valuable for being on the show you raise some Capital which I assume you were able to invest wisely and that's valuable I'm.
An argument that sharks off and make on the show is
did they have special skills and they'll help the entrepreneurs and so I'm always curious like I've done some math it's kind of funny
Mark has done a bunch of deals and he's like oh I will help you with your website and take care of all that and I hurt your back is done a bunch of those basically they're putting people on Shopify in Magento.
If you don't know about that.
Yeah that's why I'm just like to the extent you can say like you like do you get intangible incremental benefit from a shark investor versus you know like sort of anonymous money from a Visa.

Adam:
[18:19] Yeah I mean.
Anytime from our standpoint we're end up into this point we've had no investors are. So we've always looked at taking on Capital as a means of taking on,
assets that go far beyond Capital what do we you know what is the person bringing to the table outside of just money cuz we don't necessarily need the money that bad now it's part of the pushback we got with going on Shark Tank,
I was worried it was relatively apparent that we weren't there only for the money which a lot of companies go there for cuz they're about to die.
So each of them has a different skills that each of them has a different.
Thing they can they can contribute teams of people that can contribute I'm I can't really speak to them specifically prank their deals on going so,
we don't have a ton of experience in working with him directly but you.

Jason:
[19:08] Yeah it's going to be interesting to follow and it certainly is a fun story I want to turn the O2
what is often done fun part of the School entrepreneurship which is the whole hassle around knockoffs in protecting your IP
and this came up on your episode even a little bit like it is and I I get that they film this long for our thing and they added it down to 30 minutes,
that would like 8 minutes or whatever and it's
but like it almost seemed like you came on you totally shocked them with your Revenue run rates and you have good margins of good unit economics and then they're like we'll how much of you netting and it wasn't a huge number in it
it took awhile to figure out they like oh we've been spending a fortune protecting r i p,
so tell me a little bit about that.

Adam:
[20:07] Yeah it's.
United consumer product world where you have to deal with patents and knockoffs it's just a very unfortunate and mind-numbing part of the business but it but a reality so,
we we started to see knockoff products show up in on Amazon in 2015 late 2015 it exploded in 2016 and although we had patents filed they were still pending or inactive so you can't do anything about you just watch this happen which is brutal,
through that explosion in 2016 we we had over a hundred companies on Amazon selling fake they're not saying they're bottlekeeper so it's not counterfeit product released Amazon takes up are really seriously swear able to deal with that because of the trademark something that we had but,
when are patent did go live in November of 2016 we had to get really really really aggressive with defending the brand we had to make a decision,
are we going to grow more in Top Line and effectively bottom line.

[21:04] In 2017 or are we going to take some money out of marketing and aggressively Defender Brandon we did the ladder we know we're in this for the long run we spent a lot of time your building what we,
you know very much believe in and then and so we spent about a half a million dollars in 2017 and lawsuit suing a different companies.
I'm getting consent judgments and doing all these important things as part of a strategy that will and update thought at least at the time that would put us in a position to better Defender patents moving forward which worked in Heights at work really well but it was really expensive,
when you can take in the you know what I'm talking about that on the show that half million dollars we have to take out of her marketing Budget on retained earnings were Castle business,
so how to come from somewhere in the only place I could come from was was marketing so.

Jason:
[21:54] So I should have asked before but were you already selling on Amazon prior to the counterfeiters or did the counterfeiters show up on Amazon before you.

Adam:
[22:04] They should open Amazon before us that's why we went on Amazon.

Jason:
[22:07] Yeah I was going to say okay so you're selling direct if I have this right you filed a provisional patent before you really started selling the product or early on.

Adam:
[22:19] The provisional is something and it said this early I'll preface is that I'm not an attorney so talk to you later but the provisional something that you file that's kind of like a placeholder it's an inexpensive patent it last for a year,
and it basically like puts your place in line if it ends up working out and you want to come in I want to file a utility or a designer whatever patent on top of that so we had a provisional in place I mean frankly before Matt and I even came together and decided to do that.
We filed the Utility Patent didn't think December of 2013 and it didn't go live until November 2016 is it really long.

Jason:
[22:52] Yeah not fun either so also not an attorney on the side but like in general the,
super important thing about those patent filings is your filing date,
right and so you don't cost a certain amount of money and and both filing fees but also just to prepare a patent and so instead of spending all that money to file a full patent you can in fact,
take this cheaper path which is a provisional patent but the provisional patent gives you that all-important filing day,
I'm so if you have a bunch of money provisional patent actually not a good idea you should just go right for the patent and save the thousand bucks from the provision.

Adam:
[23:32] I mean I haven't even believe in that if you're testing a new concept as we come out with new stuff the first thing we do is file a provisional patent we're not sure it's going to work I mean our first and that's not like a small.

Jason:
[23:46] No no that's it shoot.
So so you get the date from this provisional.

Adam:
[23:53] That's the important part.

Jason:
[23:54] Yeah and then when it converts to a full patent application that still retains the provisionals date so that's the whole point of the provisional patent,
it's totally unpredictable how long the pageant can issue in it,
it comes down to a bunch of luck about the examiner you catch and if there's a lot of questions and you have to do a lot of defense and you know do additional primary and all that stuff so you could issue in a year,
and you could issue per your point in 5 years or longer so in your case,
people say you selling direct knock it off and start selling the knockoffs on Amazon under a different brand before your patented issue.

Adam:
[24:38] Yeah an end of the challenge there is that weird.
Heavily marketing bottlekeeper spending millions of dollars your marketing bottlekeeper on Facebook and all these other channels so why we had to be there is because people were then going to Amazon searching for bottlekeeper and please knock offs are coming up so we had to be at the top of the list for Bobby's reason.

Jason:
[24:55] Yet so you had to show up in their search
I won't make you say it but many people would also say that a lot of the amenities that Amazon does offer for brand protection,
are easier easier to Avail yourself of if you're a seller on Amazon
so like frankly a lot of people become sellers on Amazon specifically so they can do brand registry and and eventually get a wrap and have some recourse is for some of this.

Adam:
[25:23] Yeah I know the kicker there is he that doesn't happen till you get to a significant amount of scale.

Jason:
[25:28] Yeah which feels kind of oily, it's also like,
repeatedly how it plays out on most of the international market place is so you know you're trying to be on Team all at Ali Baba you know again has a lot more,
IP protection tools when your seller then when you're just a disinterested third party,
so so that prompts you to move to the Amazon platform so now you're playing at a crate
on the same sales that you in the past would have captured direct but presumably also exposes you to a bunch more customers so you may not have gone on Amazon for,
necessary the best of reasons but in hindsight.
Are you sort of neutral about being on Amazon like you feel like there is an at economic Advantage if you like is a disadvantage or not prepared.

Adam:
[26:22] Oh man how much time do we have.

Jason:
[26:23] I'll do a long show forever talk.

Adam:
[26:27] We if we look at the from a consumer brand if we look at the overall picture of what Amazon does for us is consumer brand I would call a negative.
You're right that we get exposure to new customers but the problem with our product is it's really hard to sell in a still image it's really hard for someone to look at it that doesn't know what it is and go I know what you do with that you put a beer inside of it
so it's not like we're selling socks,
yeah I mean when someone goes to Amazon looking for socks and we're one of the results that comes up and they love our socks and I wish it was it was that it was that simple I mean,
that be a beautiful thing but unfortunately it's not so the other challenging part is that in the customer that purchase
purchases from Amazon is Amazon's customer is not your customer that our customer we don't really know who that customer is they don't get to experience any any part of our Brandon
and buying Direct in the processing funny copy and follow-up emails that are super fun and engaging in personal thank-you note every single customer that buys from her site gets from me personally that comes from my address
they respond to it it comes to me and I respond every one of them. That's a really really important part of our brand that's how we get tremendous feedback that's how we design our new products,
so we've.

[27:41] We're hoping with some of the things Amazon is has put in place and we need to give them credit they have put in place a number of things that have been tremendously helpful like the patent infringement portal and brand registry which they just launched in the fall of last year that has been tremendously helpful.
But from a consumer brand stamp when it's really really really hard to invest heavily in acquiring customers on Amazon when they're really not our customers.

Jason:
[28:07] Shirt and you can act like if you think about it there's two kinds of traffic that's hitting your PDP like there's people that got exposed to your top of the funnel marketing activities off Amazon,
and so I want to hear funny YouTube videos or the television ads you're not doing which will get you in a minute,
are all these other things and like you already created an intent to buy
they go to Amazon and buy it instead of to your website and buy it and so it's lower-margin I didn't ask but you're probably also fulfilling via FBA and paying all those fees.

Adam:
[28:41] Yeah maybe actually Mark the product up on it was on the weekly or so to cover those please number one and also to give the customer incentive to come back.

Jason:
[28:50] I like it in that still gives you that visibility in search but protect you from some of that Marginal Road and that's a great tactic if,
the product still Converse at that high price I promise if you price at to hide and no one buys it then it actually doesn't show up in search.

Adam:
[29:06] So it's it's funny when,
when we first launched the product we launched it and one color one size and it didn't have the built-in opener wasn't powder-coated didn't have all that sort of bells muscles that it now has.
And as we launched colors and then when an Amazon we did it with our what we color 1.0 product.
That one for the product we were selling our website for 24 1999 $20 and you're selling it on Amazon for 25 but it was selling perfectly well on Amazon a 25 which was kind of that light bulb of did we underpriced are Prada,
and that is we launched new bells and whistles and things that came directly from feedback from our customers,
we looked at that pricing auto very differently and priced it well above what we thought would be reasonable and realize that we have not yet got to that pricing ceiling yet,
Amazon for helping us figure that out.

Jason:
[29:54] That that is a terrific unintended benefit I guess.
But so you have that version of the traffic in that converts and it's great but,
that again we'd rather you don't get to meet that cuss around that thing and then you have people that maybe didn't know they needed your product Discover it on Amazon and prove your point,
when those people at your PDP they probably don't convert near as well because your your storytelling and you're you're sort of want to buy contact content on Amazon is less compelling than it is on you.

Adam:
[30:27] Yeah it's it's significantly more limited.

Jason:
[30:29] So now I want to Pivot to another thing that I was actually expecting the Sharks to beat you up about and the Beast in the final edit it it you got a total pass on it,
you mention what a boom Facebook video ads for you were,
it sounds like it one point in your Evolution like you were you were very dependent on Facebook that that was your primary marketing via.

Adam:
[30:55] Yeah I mean even through today we're still dependent on Facebook we're just being very aggressive and diversifying that Revenue.

Jason:
[31:01] Yeah and for your point,
early on it's like as much Capital as you have you can buy more more profitable eyeballs from Facebook with that that capital in your Capital constrained.
There comes a point though when the cost per eyeball starts going up as you have to buy,
broader and broader audiences and as Facebook just as the monitor talk about their their cpn's are CPAs,
while they going up over time and as they scale and if that's your primary marketing vehicle you you have to worry that you're eventually going to hit some inflection point when.
We can't keep growing the same way you were and so like what are you doing or what hat what are you trying to sort of diversify that the customer acquisition from Facebook info sorry,
super long question when we're saying Facebook are we primarily talking about classic but Facebook or do you mean Facebook as sort of Facebook and Instagram.

Adam:
[32:03] Separate the two so classically Facebook we treat those two channels differently so looking,
I mean everything you said it sounds like crack the bigger you got the harder it is to generate Returns on Facebook now.
Combined with that is the fact that today you know Facebook isn't growing like it used to grow up really domestically at least which is where our main consuming audiences and.
The number of marketers advertises on Facebook is up significant let me know anybody with a harpy can go in and create an ad account on Facebook and sell their Wares.

Jason:
[32:37] Even I could do it.

Adam:
[32:38] I could do a lot I mean I figure it out,
the kicker bass simple supply and demand economics at least flatlined Supply and increase demand just gets more expensive,
couple on top of that we have Facebook removing a pretty significant amount of targeting as a result of all the scandals and things have come out which just means it's more expensive for us to go and find,
customer that we know exactly who that customer is and if we can Target them based on these Civics then then we do have to go to your point go broader which just makes more expensive naturally so we're focusing heavily on,
we do advertised on Instagram that doesn't convert that's a great brand building getting eyeballs to a but hasn't has to work we can but it real well for us.
We advertise in some capacity on all the socials Pinterest has worked really well for a tickly seasonally in and around Father's Day and key for the one that really surprised me and our marketing team is TV.
I'm TV is at a place where there is a lot of additional technology that wasn't there 10 years ago.

[33:45] TV ad-buying so the technology is not only in being able to attribute a sale to somebody saying.
Adam TV commercial on a specific Channel but it's also being able to buy the space on that channel now they're these live auctions that are all you know automated that
a really good TV buying company can go and get really inexpensive ads based on really good channels during great times a day that are in and I'll say the third position in a channel lineup rap commercial instead of the first,
but it's like $200
for an ad on Hallmark Channel during the holidays he was the sort of thing it could be really really really inexpensive when it's done correctly and combining that with the fact we're doing all around creative in house,
we can crank out high-quality creative and test the hell out of things before we hit need to go and put real budgets behind them.

Jason:
[34:34] And so it would be great if I said like that there this nice combination of there's way more inventory of Television than there's ever been before and there's slightly less competition for that inventory and so.

Adam:
[34:46] Yeah I mean if people are moving the advertisement for the attribution when you can just get it's just so much more clear.
TV gets less expensive I mean there's not necessarily less viewers there's less linear TV viewers
but even in the in the Digital streaming advertising and Digital streaming TV is great because you that's much easier to track that attribution issues IP matching and that's crystal clear in the linear side where it's somebody you know I'm sitting down watching TV.
Yeah you you kind of got to follow him a little bit one of the ways that we've been successful doing that as is with a simple hear about us how'd you hear about us and our checkout funnel and being really specific.
To the name of the channel in that dungeon feel like TV cuz if you're advertising 10 channels you're not going to know which ones doing well cuz I'm going to do really well in summer like any normal advertising Channel.

Jason:
[35:34] Yeah I think it's the old I want to make a quote half my ads are working I just don't know which half the,
so TV has been good the I also heard a story that you were doing at least an outdoor,
pilot it's a week like normally we've got digital outdoor and that means you're buying like a digital billboard or something that you are buying a digital boat.

Adam:
[36:02] This is Mike's American are a head of marketing is really really really smart guys I was coming up with these funny.
Interesting things to test a nut wheel of testing stuff so we
starting earlier this Summer started testing a bottlekeeper add video that's on a digital screen on the side of a boat that just drives up and down the coasts I named Ali in Florida and a couple other states as a
5 or 10% off discount code on and try to help us track conversions and it works really really well
the challenges scale most of these marketing things that work really well as getting the scale and it but I was another pleasant surprise.

Jason:
[36:36] Yeah yeah and did the guy that pitch that happen to own a boat in like.

Adam:
[36:40] Yeah it was like this is this guy's belt that's that's the downside of this is It's not like there's one company that does this it's like Joe's boat in Miami Jimmy's boat in Baton Rouge like it it's quite desperate see if we work them individually but it is an interesting.

Jason:
[36:54] And eventually one of those boats is going to hit a manatee and there's going to be all kind.

Adam:
[36:57] That'll be the end of it.

Jason:
[36:58] Yeah yeah I hope I hope that doesn't happen to you so lots of stuff in flight for customer acquisition the other big change I heard is you are now if he's piloting some retail.
So hot like talk to us about how like how you come to the why weren't you in retail in the beginning what changed that made sense for retail now and how's that.

Adam:
[37:21] Yeah you know what the beginning from my,
prior 10 years in the medical world experience was really labor-intensive and really hard to manage at least from a logistic stamp why there was lots of just stuff people in multiple States and delivery vehicles and warehouses and all the stuff,
she couldn't get away from it so when we started bottlekeeper the idea was to do the opposite of that let's think I said earlier let's build a business around a lifestyle,
the sort of like Drop Dead question when we looked at opportunities was do we need to hire people to to accomplish it if the answer was yes and we just didn't do it,
one of those things as retail as we started you know murdering people hammering stuff on Facebook with millions of dollars on Advertising retailers,
none of that and they are start sending an enquiries and interested in whether it's a big retailer with small Roots retailer we didn't know what to do with them cuz we couldn't read that just set that we're not doing this.
You know I was looking kind of at the GoPro model where they went completely direct-to-consumer for a long time and by the time they went to retail they got to make some,
in a pretty decent demands because they had the consumer yeah they had way more leverage and I always made sense to me and it sort of fit my my operating model of let's do this without people so.
Fast forward a couple years we as people retailers were coming to the site we were just saying hey we're not ready at between this waitlist and we'll let you know when we are so we had.

[38:40] 3000 us retailers on a waitlist,
we had a significant in the the how did you hear about us on the waitlist was customers coming in and saying why don't you have this which is really important piece owning the customer which was back twice challenging to design Amazon is a huge part of the puzzle,
so come 2017 or patent infringement staff gets largely cleaned up,
I'm 2018 we see the writing on the wall with Facebook we're starting to hit that point at which,
you know our Yang and yang with expense and return it starting to get out of alignment we're looking for other Revenue models,
so that one we were we have historically been a pretty seasonal business we do about a third of our Revenue during Father's Day and half of Revenue in the last 6 weeks of the year,
so that gives us 9 months of the year that we know have low sales were losing money and some of those,
I mean as we continue to grow our losing money in a lot of those,
I mean that's made up for in these other two seasons so it just got to the point where retail we had enough demand we needed to try to level out a revenue throughout the year and not be so dependent on Facebook and our other social channels doing marketing,
and some retail started to make sense so we actually this all started when a sales and he's now our director of sales this guy that had been in the the consumer space retail space for a long time.
Reach Out blindly ends at Ace Hardware wants you.

[40:06] And one company that I will totally plug happily that we've always looked at as sort of a model of brand building Done Right is yeti.
It's an amazing job building a brand on relatively limited amounts mean I know they have a huge patent portfolio now that early on they had a couple of Pattinson,
and protective of their drinkware lines in the sort of stuff that's that's hard to patent cuz it's that's been around forever yet,
they build this following where people will go and spend 50 or $70 on a cop that you can buy for $5 literally anywhere else and I mean they just IPO they were filling the dollars,
clearly that works for them so.
Is a store that Yeti is heavily in so that was the first big retailer that came to us and they were you not saying we want to work together you want to sell your products that and then it started to make sense so we,
brought on this order for Versailles who's awesome and what he does
and started that conversation we started opening up Ace locations they have four thousand or so domestic stores,
started opening that up in the fall of 2018 so by the end of the year we had two hundred or so stores,
started explaining to a bunch of a very select retailers,
and as of the first six months of this year we're going over 4,000 domestic store so we're growing rapidly into retail and now with launching new products and stuff just on our our big pipeline we get to add to those shelf the Shelf space that we now have.

Jason:
[41:28] That that is awesome I'm curious you you mentioned earlier on that like the product really needs the video demonstration to sell so one of the challenges of that retail shelf is your problem actually looks a heck of a lot like a Yeti water bottle,
on that on that shelf like a bee are you thinking about or if you experimented with any like video pop or anything to try to tell that story in retail.

Adam:
[41:53] So this is this is a huge consideration in launching into retail my nightmare is that
bottlekeeper ends up in the hydration Isle of a store sitting with all the other water bottles it will get lost so the benefit of having a bit of Leverage and going into the retailers that are saying please please no I'm not I don't know me to oversell it
they wanted the product and we had enough leverage to be able to say I'll kill you can you can have it if you do these couple of things and one of those is used our merchandising that we created,
I mean our counter display has a physical bottlekeeper unit broken open on it like glued to the front of this would display so you can't miss what this product is.
It's like they have to use the kicker.

Jason:
[42:34] Yep and is it like do you try to get merchandise in the beer section is that.

Adam:
[42:40] It just depends on the store I mean our again our sort of no-go zone is is hydration yet this is cousin doesn't but in
entrance doors yeah I mean we have like,
Meijer a great you know high and grocer that's perfect to be in the beer in the rear section I mean on a couple of sets a Whole Foods all these places that have grape your collections it works really well.

Jason:
[43:02] Awesome the I forgot to ask International so are you guys selling much International now is that in the expansion.

Adam:
[43:13] It is a big part of the expansion we have we actually physically launched into Australia in 2015 were some really good learning experience.

Jason:
[43:21] Then think about that but that's like one of your fate area would be where is it hard to keep beer cold.

Adam:
[43:25] Yeah and Australia versus a lot of the other places you can lie.

Jason:
[43:27] Like Greenland probably not as high on.

Adam:
[43:29] Yeah UK is not quite up there either but I mean Australia it's hot most of the population lives on the coast they like beer speak English,
it made sense to do that really good learning experience you know we sold physically they're out of a warehouse that was contracted and had a physical presence there learn quickly that there,
Amazon doesn't have quite the hold their that they have here so consumers aren't quite trained up on e-commerce,
so having a physical presence there is really really important over in the midst of working with Distributors to go the more traditional retail route as well as in a bunch of different countries yes is the really long answer to your question.

Jason:
[44:05] And obviously I'm sure you're ahead of me on this one by one of the sake things is of course all that IP work you did in the US you now have to start thinking about duplicating time what time is potentially a lot.

Adam:
[44:19] Yeah I mean there's you know that,
the downside of the very beginning of the company of not going in raising a bunch of money is that when it came time to file patents lien filing patents in all jurisdictions is phenomenally expensive and so there's some places that we just don't have coverage we just have to rely on the fact.
Certain countries really enjoy using American brands and.

Jason:
[44:44] For sure until we're getting we're running up on time I want to give it to the last topic
but I would be remiss if I didn't point out one of the funniest things of the day so you were funny only to me but you were on a panel at detail on Startup founder stories,
until they were like three three great Founders that had you each had heard of a wildly different story that you all share it and I feel like there's actually a bunch of,
useful practical learning that the audience probably got from all three of you but the one thing that all three of you had in common that it seemed like there was violent agreement on was that you should do all this marketing and concentration in house and that agencies
don't work very well and I don't know if you know this but I work for a giant agency,
so I'm laughing I'm thinking of my French overlords listening to this podcast and they're like nice TV is coming back we have a hundred and twenty thousand people that know how to produce great TV and then the next thing is but,
it's now easy enough and there's a bunch of significant benefits to do it in-house which I would totally agree with.
Yeah so I just wanted to get that out there for all my co-workers listening to the show I think the takeaway was agency sock was kind of.

Adam:
[46:01] No I buy my ticket would be that there is there's a time and we do use agencies were multiple points throughout our growth there's a time and a place,
and even today we are TV buying we're not doing RT to buy internally like it would be impossible for us to do that so we still do use agencies in a couple.

Jason:
[46:17] No I die till I get I just thought it was funny so I'm having fun.

Adam:
[46:20] Glad the other guy Adam really got into that one so you can lay down.

Jason:
[46:23] T it sounds like a couple of the other guys had some like particularly bad rebranding experience,
what does not hard to imagine so pivoting forward you put your future hat on in your imagining 2025a.
What does the world at bottlekeeper look like a view.
Dramatically expanded product lines have you like so this business to somebody in your living on the beach with like a concierge to bring you cold beer so you don't care anymore like what's the.

Adam:
[46:55] I mean we're not we're not even remotely close to where I would think of the acquisition time there's a lot of stuff you want to accomplish and we're certainly in it for the long haul I mean
you know we we spent a lot of time internally part of the downside of naming the company after your first product is launching your second product becomes kind of interesting so we spent a lot of time internally,
being able to better articulate why we as a business are doing this why is we we as a group of people are coming in and doing all the stuff everyday and as we get to better articulate that
I'm at we are getting a lot better at articulating. That will allow us to expand into other.
Verticals that I can't even imagine today I mean again looking at yet either a good example they started as a cooler and I was all a dog bowl expensive dog bowl,
so it took 10 years to get to that or what not but but there's a there's a lot of a lot of room for growth.

Jason:
[47:47] Yeah it's a crazy story like that you.
8 years ago they were primarily super expensive cooler manufacturer that was like known as are the niches today that they had this like super powerful brand and a Scraper on a product some people are like wow overnight success you did all this stuff in
5-day years there 23 year olds.

Adam:
[48:08] Yeah I was definitely not 5-day ears that's for sure.

Jason:
[48:10] Yeah I mean it's like it's it's the age-old story everybody's an overnight success 20 years it,
will listen am I super enjoyed talking to you about this is going to be a great place for us to leave it because it's happen again we've used up all our a lot of time but if listeners have any burning questions or comments and they want to continue the dialogue they're totally welcome to join our Facebook page
where you will see a lot of bottlekeeper ads I did some research for the show and your retargeting is now stalking me.

Adam:
[48:43] Perfect it's working.

Jason:
[48:46] Yeah yeah yeah and I'm a good guy so I clicked on every one of those ads for you.

Adam:
[48:50] Okay yeah thanks thanks for that.

Jason:
[48:52] Yeah I'm here for you maybe I should buy a product after I click on that. I don't know if that would be better I'm kidding,
but that we would love that as always if you enjoy the show please give us that five star review on iTunes Adam if people are inspired by the show and want to get in touch with you like what's the best way to,
to reach you.

Adam:
[49:12] I mean you can find me on Twitter Adam underscore callanan out. I will tell you in advance I don't use it a whole lot much to my had a PR sugar in,
I mean our bottlekeeper accounts of the best way we're still a small team super connected so if something comes to that I'll definitely about it.

Jason:
[49:28] Awesome I will wish those social accounts in the show notes and Adam really enjoyed their conversation thanks very much for making the time until next time happy commercing.

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