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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: January, 2021
Jan 28, 2021

EP252 - Amazon FBA Roll-ups w Chris Bell CEO of Perch 

[NOTE: The audio quality of this episode is not up to our usual standards due to some internet challenges. But we felt the content was valuable enough to publish the episode anyway.]

A number of firms are acquiring, or some would say rolling up, brands that primarily distribute their products on Amazon using Fulfillment by Amazon. By some accounts, these firms have cumulatively raised over $1B in capitol, and are rapidly acquiring brands.

This week we explore this trend, with the founder of one of these firms, Chris Bell, CEO of Perch. Chris sees Perch as a next generation CPG conglomerate leveraging the Amazon marketplace. While traditional CPGs may review their pricing quarterly, and set marketing strategies annual, Perch adjusts pricing strategy hourly, and advertising strategies daily.

“Amazon marketplace is 2x any CPG and growing faster.”

CHRIS BELL, CEO OF PERCH

In this interview we cover:

  • Overall trend, and how Chris sees the marketplace
  • Perch criteria for acquisitions
  • Synergies for brands in the roll-up model
  • Off Amazon strategy
  • Potential risks of this model, including from Amazon
  • What the potential future of this market looks like

If you’re interested in selling your FBA business to Perch, you can reach them at info@perchhq.com.

Episode 252 of the Jason & Scot show was recorded live on Wednesday, January 27th, 2021.

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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 252 being recorded on Wednesday January 27th,
20:21 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.

Scot:
[0:41] Hey Jason and welcome back Jason Scott show listeners.
In this week’s episode we are going to do a deep dive into a trend that I’ve been really fascinated by and we’ve touched on it on the show a little bit last year.
That trend is that there are a number of firms that are acquiring or some would say rolling up Amazon FBA based businesses.
Sometimes I’ve heard these called Amazon Roll-Ups FBA roll-ups,
what have you and cumulatively if I’m doing my math right these firms have raised about a billion dollars now with this strategy,
globally there are several in the US and there’s some rowing across Europe and other areas so it’s really interesting and I can get a lot of questions
because one of the founders of Channel advisor I get a lot of questions from Amazon FBA Sellers hey
Scot what you think about this and how do I sell my business for a crazy high valuation so we’re going to dig into that in this week’s episode and to walk
just do it we’re really excited to have one of the CEOs of one of these companies we have Chris Bell and he is the CEO of perch Chris welcome to the show.

Chris:
[1:49] Scot nice be here.

Jason:
[1:52] Chris we are thrilled to have you here because one of Scott’s favorite topics is to talk about Amazon so if we don’t have enough Amazon shows he starts to get antsy so I totally appreciate you.
Accommodating us but before we jump in the Amazon we always like to get a little bit of background about our guests and you you came to purchasing a pretty cool e-commerce e way so can you tell us a little bit about.
What you did prior to perch.

Chris:
[2:17] Definitely yeah so I started my career early on I was a computer engineer actually and I my first job was at General Electric Milwaukee designing and implementing software.
I did that for a bit and then actually went into sales I wanted to go get a bit more touch with the customer so I’ve told viewers and software for a couple of years which wouldn’t.
But eventually wanted to do something a little bit more thought provoking so when the business school at Carnegie Mellon after that I went to Bain & Company which the bomb brought me to Boston about 11 years ago,
was that being for six and a half years,
and will it be nice spent about a third of my time in the private Equity Group or I worked on over 40 transactions that leading private Equity institutions probably and then the other two-thirds of the time I work.
So mostly helping them understand their customers and then I’m doing whatever we could to drive.

[3:16] Salesforce Effectiveness pricing products for fitting customer service.
And then after six and a half years of being I wanted to go build something and point I was looking at.
You can wait there along and asked me to come and build their North American supply chain which was really amusing but also enticing it was amusing because those Supply chains.
And I actually tried to back out of the interview process I just thought they had the wrong guy who must be,
and they convinced me and it has all my work previous I’ve been in sales and work mostly on organic growth customer like growth called it in,
and all I talked about was the customer and they said exactly you know for e-commerce supply chain is the key to the customer,
if you think about why people buy they showed me some NPS data which is a festival measure.

[4:15] Process and fifty percent of all of their comments positive or negative related to the supply chain that show up on time was it broken even more soberly pair because heavy bulky things people are entering your house.
Speaker in your living room where the best of the bed in your bedroom and so I got really excited about about this customer vision and just honestly Wayfarer and the team there was amazing so I joined Wayfarer in 2016.
And three and a half years we open 50 buildings across North America 42 final mile Center is deep sort centers whose an absolutely.
Crazy amazing time when I left was but a 3 billion dollar supply chain my favorite factoids,
is when I joined Wayfair on average it took 27 days from click to deliver for a heavy bulky items if you are infrequent but Kevin Conway Fair 27 days later it would be in your living room,
and when I left we were doing 2-day delivery of couches hot tub profanity and so we were kind of Amazon priming that evolved into Bates.
All of the conversion left and customer satisfaction lift and repeat lift that you might expect.
Then you’re given that time we hear is great company I really enjoyed the time I learned a lot and a lot of fun getting in the supply chain and building that but I really wanted to go build something and I started looking around talking a lot of entrepreneurs in the Boston area,
and you know honestly I fell into this space and I really enthralled.

[5:40] I’m here back then you’re rolling up Amazon businesses but it’s not really that big of a thing there’s really only one other person that I do have doing it.
And as I thought about both the opportunity and just you know you guys know this but from the outside we look at Amazon.
You hear it’s big but you just don’t realize how gargantuan this this thing is and you start getting into it and I started I went to a conference in New York and talked to some entrepreneurs that we’re doing this.
One I just thought they were awesome right just really true entrepreneurs we strap their company but their own money into it and had built something really interesting,
and differentiated and then to it felt like a perfect Mint or Matt from my background I’ve done a lot of them a lot of experience in e-commerce a lot of experience and I change which is a common endpoint.
Many small product companies and so I jumped in start.

Jason:
[6:35] That’s awesome Chris two quick things for our listeners for our Millennial listeners and our gen z westeners a copy machine is back in the day.
People used to record ideas on dead trees and sometimes you need a copy of the dead tree so you could actually make a machine that duplicated the dead tree.

Chris:
[6:54] That’s right that’s you that’s a great summer I thank you for that.

Jason:
[6:57] Yeah I’m totally here for you,
and then obviously Scott kind of spilled the beans about what perch is about but maybe they just get a little bit more clarification.
When you say FBA sellers you are talking about,
businesses that focus on selling on the Amazon Marketplace and generally use FBA for fulfillment.

Chris:
[7:26] That’s correct yeah we are today focused on Amazon third-party Marketplace Sellers and you’re right they generally use FPA and you’re probably for you and your listeners you understand the difference between FDA and Marketplace and not Omar.
Hello.
Find more broadly that difference is lost on full two great people but my incorrectly called an FBA sellers for common understanding but we think I go ahead.

Jason:
[7:54] No I was just curious in general do you care if they’re using,
FBA white so in general you have to use FBA to be particularly successful on the Amazon Marketplace so I imagine you’re mostly interested in successful Sellers and that and FBA is kind of a,
a tactic that correlates strongly with successful sellers but like do you actually care like if there was a good business that that had a good run rate and,
you know doing their own fulfillment and like somehow miraculously was winning even without FBA like do you,
is there some Secret Sauce to FBA as far as you’re concerned.

Chris:
[8:35] No not at all we generally you’re right most people who have what we call winning products which is what we look for in diligence.
Are in FBA but they’re not all in FBA and like you said the oftentimes you get a bit of a thumb on the scale but we have looked at solar people Prime products we’ve looked at companies,
that’s just to start going without sewing fulfilled Prime especially in the heavy bulky space,
and again you can win there because Amazon doesn’t give you as much of the thumb on the scale for the heavy bulky stuff they don’t really want that in the Fulfillment centers,
so in general we’re looking for great companies with great products that are winning within their Niche and ninety percent of the time they’re in FDA but it’s not.

Jason:
[9:20] Yeah and I imagine when you do look at a vendor that specializes in big and bulky it starts bringing back all of your your Wayfarer vibes.

Chris:
[9:28] Yeah absolutely I actually I love the big bulky space and I think it’s an interesting,
spot for two reasons one you know you can have an opportunity to differentiate yourself a little bit more in the film inside give an Amazon doesn’t play as well in that space.
Then too we actually find those spaces to be less competitive just because of the working capital requirements you know you can sell $10 widgets with pretty low working capital and so we generally find those remote quantitative.
Sales niches and if you get into a 200 dollar kayak.
There’s just less people who want to sell that thing and therefore you get the mildly positive space we would love to do more.

Jason:
[10:11] Yeah I mean I always like to say well if it was easy eBay would be doing it so.
No I’m telling my friends at eBay I’m just kidding I’m rooting for you the the.
It’s funny I used to like people used to always ask like what’s the,
the category the Amazon isn’t winning at that you could kind of compete where there’s a white space and every time I think of one
it eventually gets eliminated right so originally it was big and bulky items,
and then it was like live plants and as you may know they have a pretty robust wide plant business now
and so I was for a while saying like personalized products and now they’re they’re launching made-to-order apparel so it’s like you can’t win it’s just a matter of when they,
they get around to focusing on the particular problem that you’re good at solving
I do want to dive in a little bit more on your criteria for a company that might fit in your portfolio but before I do we did
hit on wafer a little bit like is there it seems like they’ve had a really good run as a result of covid is there any you still have a lot of friends there is there any remorse about not being in that space at the moment.

Chris:
[11:22] I do have a lot of friends there and I think they’re doing some amazing things but no remorse at all I mean if perch maybe a perch wasn’t going as well as it is I might be looking back and wondering but this has been an absolutely amazing time and.
We are growing really quickly and we’ve been lucky enough to attract an amazing team and so and having the time of my life so no regrets at all.

Scot:
[11:48] Very cool and then let me make sure I understand the founding story so you were did you get recruited by a VC or this was like your your kind of had this idea and you went out and and got funding and launched.

Chris:
[12:02] Yeah much more the latter I had spent some time talking with a whole bunch of entrepreneurs around Boston and I met a couple of folks who were not in this exact space but kind of in the Amazon space more broadly and so kind.
Your Edge my way into it that way and then yeah kind of circled on the idea ended up talking to a bunch of friends and.
And co-workers talked to like neeraj the CEO and founder of Wayfarer about it I’m talking to you game Theo bleep are there about it.
And you know in a circle around different ways like you can see the problem which is.
Consumer products eventually is a game of scale right Procter & Gamble Unilever all these companies,
they are huge and they are highly acquisitive because scale matters you can get,
Austin damage on the supply chain you can access to Capital Access to Talent access other channels part of the reason why all these entrepreneurs are on Amazon,
because Amazon’s done such an amazing job of lowering the barriers to entry the so many other channels have such high barriers to entry in other markets the oh 75% of the companies we’ve acquired only sell in the US,
because one the working capital putting inventory into places the to honestly.
It’s just a big pain to register the fell in the UK it took us four months to get our vat numbers so.

Scot:
[13:22] And a brexit brexit doubled the work so brexit is good for you.

Chris:
[13:24] Oh my gosh it’s such the as this we’re still talking to UPS about shipping things from the eve of the UK and they still aren’t.
We could have done quite yet.
And so so we saw the problem and I so I luckily because I’ve been in Boston for 11 years being at vain,
and being being around this space I have a lot of friends in DC and private equity and also just in the space like I know a couple people who have software companies in the space,
so I just went around and told them hey know what do you think a lot of people say hey build song right that’s what everybody should do is you go build some key to be SAS software,
and like try to compete with teca metrics or poor tile or not even compete with them right but try to solve these problems suits off world it just kept coming around to.

[14:11] The real thing we’re trying to build a scale the only way to build scale is to build scale like real scale,
if you are buying a billion dollars of raw materials a year and we’re not there yet but that’s what we’re getting to and you can’t do that you can’t fake that.
You actually have to be buying a lot of textiles and a lot of plastic and that’s when you get their bill scaling so,
back to this and then it’s also the other part of the story that I find interesting is as you guys alluded to this is a super popular space you know,
Billion Dollar Plus raise,
you know I saw something as a dirty reporting entrance when I launched perch I probably had 250 investor conversations in 49 of them were like yeah kind of a weird idea but you know you probably make some money but not for us and luckily Alex afar.
Site rages you got it and he was super excited and be really quickly from meeting terms.

[15:08] It’s not easy it was really like it was a really not easy path to raise money for this a year and a half ago and now it seems like everybody.
Glad with what we did because we got a head start and we’re pretty clearly ahead of everybody in this space but one we’re enjoying and we worked on the man that lead but it’s it’s it’s just funny how quickly things yes.

Scot:
[15:33] Yeah I feel your pain when I had a SAS company we were like one of the first three and everyone said it was crazy and would never work and then I should do e-commerce and then,
now I’m doing an on-demand Services never thinks I should have B2B SAS time I’m like a cycle off it feels
feel feels like but that’s that’s what we call Innovation Chris works right out on the edge there so if I look at crunchbase which is often wrong it says you guys have raised north of a hundred million is that kind of directionally right.
Yeah and then one other quick
question so so you know so let’s say I’m an Amazon Seller and I’ve been selling you know excess inventory of shoes that’s not really what you’re going for right you’re looking at more kind of,
nascent Brands so so have a direct consumer brand meaning their manufacturing it and,
come up with a product not re selling other people’s products is that is that fair.

Chris:
[16:30] That’s correct yeah as we as I alluded to earlier we are looking for winning products and Brands as we could find them a little bit more about what that means to us.
But we want something that we think is defensible for the medium term,
and I don’t believe that competing for the buy box in a reseller Arrangement is defensible and even if you have an exclusive reseller arrangement,
still that comes up for Renewal right I don’t know if it’s annually every three years but if we’re paying a multiple of earnings we want to believe if we pay three times annual,
sde sorry.
We want to believe that we can get at least six years if not more out of that and so the way that we think that is most likely is you have a trademark you have a brand you have bran.
Let’s get brand registry with Amazon and then on top of that you are winning within your Niche so you have your top of organic search you have great ratings and reviews a low return rate profitable unit economics consistently right we realize sometimes you have to do,
Lightning Deals or other such things to drive some volumes recontact I think that if you are running 25% tacos a generalist.

[17:44] We want to see stronger gaming performance.
And I really you know the rating review moat and the return rate that’s action and MCX that it’s really really important to us because that shows.
The customers are speaking right there telling you and everybody else because of the quality product,
and they’re willing to share that with their with their quote are quote friends with others by writing a review for you.

Jason:
[18:12] Got it and I realize you’re talking I failed to ask if there’s a geographic Focus like we joked a little bit about brexit are you everywhere Amazon is are you primarily in Europe in the US or what’s the.

Chris:
[18:26] Yeah today we do North America so we do um.
As you guys know mostly 95% or plus us and then we do panting you and UK in terms of selling Gio’s we purchased businesses from sellers.
Pretty globally maybe 40 or 50 percent in the US.
Yo 40% in Western Europe and then you know 20% interest in Europe and so then it doesn’t matter where the seller is it matters that they have a great product and have the attributes that we.
But even though it’s been mildly amusing that it’s you know even the sellers and Eastern Europe often times they’re only selling on.com in the US that’s.
I’m not the one to go.

Scot:
[19:22] And then any so I imagined when I look at,
these kind of nascent Brands they do tend to Cluster and like cpg so like Health and Beauty supplements is that are those kind of the category hunting grounds that you you tend to focus on.

Chris:
[19:40] We have a little bit of a broader Focus but you’re right that that’s where a lot of Sellers and so because of another part of our of our company thesis is that,
the barriers to entry are come way down if you Google,
launching a product on Amazon you’ll find videos that say make sure you have at least one thousand dollars in the time to launch a new product on Amazon which is amazing for all the bad rap that Amazon gets they have been one of the largest drivers of Entrepreneurship ever,
maybe millions of opportunities for previously didn’t have opportunities 10 years ago if you wanted to launch a new consumer product in health and beauty or housewares,
you probably needed 50 to a hundred to two hundred thousand dollars you probably have to buy a full container load from an Asian manufacturer you have to find some.

[20:29] Peter Griffin give them all sorts of your margin and so it’s been it’s really amazing what they’ve been able to do,
but we we despite the fact that the barriers to entry or come down which is enabling always with launch products it’s still really hard to launch a great product,
we you know we found some research Procter & Gamble still has a 97 percent fail rate on new product launches,
the entrepreneurs we talked to also have a 95 to 99% kill rate of product launches you will launch 20 products and one will be 95 percent of their revenue,
and so in general a big part of what we think is that it’s really hard to want to do products and cross the chasm to be a winning product winning your in your Niche having.
You have to be the number one market share BFW being market share Michigan.
And it’s a couple with that is we stay away from launching meaningful brand extensions if you products right so we look for people for cross,
as of it have that product Market fit and I really with their customers and that’s that’s an important part of our youth.

Scot:
[21:37] And then so a company I started is called Channel buzzer in our theory is if you can do
X on Amazon you can do Y where Y is about the size of X off Amazon is there do you actually help these Brands so so so Amazon’s kind of like are you proving yourself you’ve,
just product-market fit you’re getting good reviews is there a strategy to also start selling off Amazon.

Chris:
[22:03] Yeah there is yeah we’re starting to experiment with a couple of other channels Walmart being the top of lips we don’t have.
Anything that we think would be a perfect fit for ways are yet but obviously Wayfarer is near and dear to my heart,
so any other Marketplace Channel as you as you just said why is never as big as X and so we’re trying to figure out the right resourcing actually believe that the way.
We want to which is a big part of what we’re building is a technology platform that we can run these products across platforms,
and across keogh’s without a ton of humans,
and so we can hear you guys may know you can control almost everything about Amazon great guys you can control your your photography you’re a good Merchant copy or price for ads can,
you can download a bunch of data and you can get your visibility without even log in to sort them for so.

[23:06] But we’re building that we built a lot of those pieces for Amazon to build those things same things for example for Walmart.
Cost about the same from a technology investment perspective and your parent for that investment isn’t quite as high so what we’re doing now is a little bit more.
I’d call it skunkworks you were Walmart actually been coming after us and they’re obviously investing in the marketplace so they’re working with us and giving us some.
Was it some on the scale but they’re kind of helping us with some lunch Cadence and some advertising and some support to get us the list somewhere.
Place and so we’re taking them up on that and we’re going to see how it goes right if that ends up being smaller than expected then then we’ll focus where the money is going better than expected.
But those things we’re doing is we’re getting some of these brands have chasing boil tea customer or less,
so we’re working to monetize those right and how do we leverage social and leverage female Drive traffic either back to Amazon right to drive that organic ranking then move the sales or to their own sites and,
save a little bit on the on the sale speed when you drive it to your own site but then you deal with.
You know so many returns and all you know what the intermitting state sales tax and all that kind.

[24:30] I’m depending on the size of that business brand Stephen looking at multiple channels.
As well as good group that means it’s tough you know it’s easy to hate on Amazon but it’s also where all the dollars are so we’re trying to balance your thoughtful multi-channel strategy with also focusing Road payments.

Jason:
[24:53] Yeah no that makes total sense you you alluded to some of the the tools and automation that you guys have put in place I imagine that is,
one of the synergies that you get by acquiring multiple of these companies like are there other other synergies are advantages you you perceive that you’re getting by aggregating a bunch of these guys or is it,
is it really just a smart Investment Portfolio strategy.

Chris:
[25:22] Yeah there absolutely are we I think you’re right that.
If possible perhaps to do a smart investment strategy group here.
Are I really don’t focus on building but I think could be.
You’re better Department Gamble and you love her and others in the future and I think we can do micrograms are taking share pretty meaningfully from large brands,
and they’re doing that despite all of these challenges that we talked about earlier great despite not having access to Capital despite not being in other markets another channels.
Amazon third-party Marketplace is twice as big as the biggest CPT code paying the world and it’s growing more than twice as fast but the fastest growing which is not the biggest,
and so Michael brands are taking all this share despite their handicaps and we want to accelerate that.
And build a really amazing operating company that is helping these great amazing products of the next level.
Yeah so some of the examples today are on the manufacturing side working with manufacturers both on cost and terms,
and that is every manufacturer is different and what we can get there is different with every with every relationship but the capability of being able to do that well it’s common across same thing with inbound your,
from our Wayfarer relationships we actually have a great relationship.

[26:48] Since broker so we’re helping Salah dating all of our inbound on the full containers we’re getting meaningful reductions by driving volume through a single source and luckily.
Yeah I’d say 75 ish percent of our stuff all comes through Shenzhen and so that it was a not necessarily on purpose but it’s been a nice tail went to that ability to consolidate those with ears.
And then yeah like we talked about on the top-line side as we are building,
our approach to add optimization pricing optimization we don’t price advertised every brand the same but you create the archetypes and we have different product archetype.
And we treat those archetypes like for example you can imagine there are really competitive,
where the key there is to monitor your competitors prices in real time and reactive real time so that you’re always one of the best price items there and then drive as much process by changing and keep your margin,
and there’s other items which is actually probably,
you I’d say 70-plus percent of our portfolio are items we call aspirational where we’re priced maybe 15 or 30% more than most of our competitors but we have a review mode,
and you have a great photography and great merchandising and there is more about understanding what drives people to buy are we holding share there we go there we can invest more in.

[28:14] In sem and kind of ads PPC ads because we find that when you’re more expensive that branding you seeing your image on that first page several times actually batters the best moment they perceive quality when they see.
Over and over again and so what we manage that without cannibalizing too many of our organic sales and so a lot of those.

[28:37] Is the technology but also approaches and thought processes are common and then as I mentioned earlier most of these brands are not in more than one geography and so we have a team that’s solely focus on,
translating easons get it you know the copy,
you’re getting as you guys talked about putting things into Europe and now into the UK is its own Challenge and so getting it over there getting it listed going through launch Cadence getting them ranked driving,
sales is is not the same for every product but is similar right it’s a similar watch Cadence and an approach process,
in general a lot of focus on how do we make these the best brands of the best product and how do we grow them like wildfire.

Jason:
[29:25] I love it I’m curious is there a
a common pattern like like when you do Acquisitions do most of them tend to be have the same strengths and weaknesses or or is it all across the board like do you acquire one company that’s,
that’s great a tad optimization and maybe you know could use some help with price optimization and then the next acquisition is,
the the reciprocal of that or do you know do most of the entrepreneurs on Amazon tend to have the same strengths and weaknesses.

Chris:
[29:56] It is all over the board it’s actually it’s I think I’m going to do it one of my favorite parts of this job is meeting these entrepreneurs and hearing their stories but then also getting into their business with them and seeing what they’ve built we find.
It’s great I feel like every business we learn something we’re always open to the idea that we don’t do it best be aware learning and not even even if we were the best today everything’s changing so quickly Amazon’s to thing,
he’s got these millions of entrepreneurs are innovating so quickly that even if we were somehow the best for one day,
next day some think of something brought up so we’re always talking to them always trying to learn so I would say every acquisition learn something,
and every acquisition there’s a number of things where we feel like we have a better model Renegade varies a lot really interesting some people,
I super cost of course really tight supply chain and cost profile and either good margin or they price their driving a lot of sales through.

[30:57] Chris point,
and others are a hundred percent focused we’ve acquired a couple of companies that were just amazing at Social and engaging customers and I think all sorts of off the platform for ganic traffic on the Amazon.
And and using that to drive both sales but also the as you guys probably done that.
Your halo effect Amazon really likes external traffic coming on and finding your product and buying it and so that was a really neat one to one.

[31:28] Coordinated all of that and they all these people do this in amazingly Scrappy ways you know nobody’s paying somebody 25 Grand a month to go and create a social campaign they you know they figure out ways to.
Part-time VA offshore and I’m ways to recycle content or great new content and cheaper ways and so it’s really interesting it’s a lot of fun to see all these things and corporate.

Scot:
[31:55] Yeah on the back on the Synergy side it seems like a lot of examples are Supply Chain management like what I would call back end kind of stuff maybe a little bit front end with like Amazon optimization
but do you envision a day where where you guys will either.
Have some cross-selling amongst your brands or even like a front door where you know people can come in and shop at the perch collection for lack of a better.

Chris:
[32:20] Yeah absolutely it’s something we talked about and think about quite a bit,
we today for the most part today most of our brands are,
Brands and products and they are found they’re discovered on Amazon through keyword searches and we are able to drive,
usually upside post acquisition on that side of just,
optimizing your keeper try to G and getting more ranking on more keywords and also globally across the envelope it is,
but we are talking about how we won leverage already engaged customers so email us that we acquire the social engagement that we acquire,
and then eventually how do we start driving customers to we started outline view of what we’re calling Master Brands and so I don’t know this is all in development you guys getting a peek behind the curtain here so we haven’t figured all this out,
but.

Scot:
[33:16] We like to call that at Jason and Scott exclusive.

Chris:
[33:18] There you go yeah you’re getting the scoop.
So my current hypothesis is I don’t think that perch is going to be a super consumer-facing brand I had to sell,
because the collection of things we have underneath it,
is so broad today I’m you asked earlier about where we’re focused and we’re focused where the big bucks are but in general it’s pretty spread out we have apparel Brands we have Sports and Outdoor Brands we have,
the house where Beauty Brands and and we’ve been I don’t know if there’s a cohesive customer story about all of those and so we’re we’re Landing instantly creating past two brands,
Polio I buy a product or category and so we’ll have a question and we believe if we have amazing.
You know facial products and skin care products and hair care products and other things in general if you buy one of our things,
the odds that we can email you or connect with you on social and suggest another one and it’s similar adjacent space like that.
The odds that you’ll be interested engaged and maybe convert hi if you purchase skin care products and we then email you about soccer balls for you know punching bag or something.

[34:37] Read it feels a little bit disconnected and so for we’re still we’re still iterating on it but we’re we’ve started.
This idea of Master Brands by product category and driving.
The idea is to keep the sub Rams so the way I’ve described it to a few people is and if you guys have ever been in this fora,
but Sephora has a brand that people know Sephora it’s a store you want to store but if you ever been in one is actually a collection of microgram.
They have the section over here that’s the woman Brooklyn makes her own eyeshadow the section over here are the makeups lipstick from a woman,
there were Brazil and so that’s the idea is to really keep the brand identity because there’s a lot of value and what these entrepreneurs have built and but the build on it and create this trusted Rella where people know that all of the brands within this umbrella,
our quality and have been vetted also that we stand behind them right we’ll have great customer service and a good return policy.

Scot:
[35:40] Yeah I’ve seen some of our customers almost like self form around Persona stew so they’ll be like you know the busy traveler and.
One seller will pick up a bunch of Travelers and then they’ll be kind of a theme across that or you know like you know busy moms and,
then you can actually get broader category expansion because it could be stuff for the car or stuff kids,
some beauty stuff so it’ll be interesting to see how you how you figure out those cross-pollination opportunities the
one I know we’re going to get this question so I’ll go ahead and ask it as quickly as I can hear if someone is interested in talking to you about selling their Amazon business
you know can we have your home phone number or I guess I should say what is the best path is there like can you go to perch your website and just kind of like apply or do you guys kind of have to seek folks out.

Chris:
[36:35] No absolutely we love we get.
I actually pulled this up we have not had a single day in the last 90 days were haven’t gotten one in town who we haven’t gotten at least one inbound dressed so we didn’t had a zero early today on our website so our website is perch hq.com,
so you’re welcome to go there and you can fill out our form it comes out I reach out to you or you or just to get another Jason Scott exclusive I’ll give you my email address and if people just want to email me directly I’m happy,
to direct you to the right folks and that’s just the Press at perch hq.com,
and anybody who likes can email me and I will connect you with the right person on their team to have an initial conversation and in general we love.
Talking to entrepreneurs in this case without talk to you about the process and so I would encourage anybody even if you’re only mildly curious if you if you don’t have time for a 30 minute phone call that’s fine hello are on our website and we’ll add you to our mailing list and will send to you,
what we hope is a.
Helpful monthly newsletter that has thoughts on sale process and Amazon broadly but if you’re also if you want to talk to somebody just get a sense of what is the process feel like.
How do we value companies and things like that to me know and I’ll connect you with our head of MMA and where we gladly jump on the phone for 30 minutes.
What we’re looking for and it’s not a match today great will stay in touch.

Jason:
[38:01] Nice and I’ll just try to save you a little bit of email traffic if if you are focused on that busy traveler Persona that Scott mentioned probably don’t bother to email.
I’m just I’m kidding but it’s not maybe the best time for the busy Traveler
I am curious we talked a little bit about your fundraising do you share anything publicly about like your your your overall scales or sales velocity or anything like that to kind of,
give us an idea of your order of magnitude.

Chris:
[38:33] And we have not shared anything about our revenue and locally we did share in December that we had acquired or 20th brand and we have since then wired handful more and so we’re.
Moving quickly.

Jason:
[38:49] Got it and so would you say maybe then like five Pharma packs is that where your Noms teasing sorry.

Chris:
[38:55] It’s tuned and it may be give us 6 months.

Scot:
[39:01] Cool and then on the competitive set so the ones in the u.s. I’m tracking is and I may get these names wrong if I don’t care about apologize if they’re listening there’s Gojo or go yeah I guess and I think they’re in Austin
and then thracia or thrashy oh how do you guys think you differ and I’m kind of curious,
have you seen any bidding wars break out there seems to be enough people kind of poking around here that maybe there’s been some some auctions going on with some of the bigger brands.

Chris:
[39:32] Yeah sure it is it is very clearly getting a little bit more competitive over the last six or so months I’d say when we first started.
We were mostly competing against SBA buyers so people who get an SBA loan and go and try to buy one of these businesses and run as a lifestyle business was the most common profile we’re up against.
And now we do run up against actually I don’t think I’ve seen.
Go to at least not my name against us but we do see I actually don’t know if you pronounce of grass to regress show but we do see them.
I work frequently and we see a kind of a smattering of other folks and it is it’s getting a little bit more competitive I think as you get some of these new entrants a lot of them are hungry to make their first deal.
Or a few deals and so they’re willing to strap a little bit but we’re focused on.

[40:30] Doing what we do best which is finding great entrepreneurs.
And treating them well work at being fair and transparent and the whole we know what we’re doing we’ve done this a lot we have a really good track record in the Brand’s we’ve acquired performing really well.
And it’s a 300 billion dollar market place and so we are focused on building like I said a great lasting company.
How we differ I mean in the eyes of the entrepreneurs at the end of the day.
I think the most important thing we can do is treat them and this is what I tell Nate who’s our head of m&a constantly that they are.
Break beat them with respect to do some typically really amazing.
And being fair and transparent and full with them and taking good care of their brand.
We’ll go a really long way we still get a lot of our deals referrals from prior sellers,
besides you know who maybe don’t know about these competitors or don’t have it have had the same experience with them but had such a great experience with us they tell people they can’t follow us,
if they’re thinking about selling their business and we think that referral base and the word of us I’m being good at what we do around the country as well and then on the I also think.

[41:46] As I mentioned earlier that we don’t view ourselves as investors we’re not trying to take a private Equity approach and just collect a bunch of assets we’re trying to build a real amazing technology focused e-commerce company,
and with the best products in the world and we hope we can make a bunch of these household brand names but I think over the medium term that will prove out and we’ll have we’ll have those brand names and the goal there is then,
get analogy I use is your most tech entrepreneurs want to sell through Google right that’s just it’s that you get to tell your friends Google bought my company,
and you know you built something amazing or something like Google is going to pay to buy your company and I think if we build the right operating company then that’s what we can get to we are the brands that we own will be,
Global names and will be really well known and will be known that they’re part of our portfolio and in the immediate term as you said it’s a little bit.

[42:45] Yeah I think in a few years,
the it’s all going to come out in the wash and I with the team were building and the track work they were building I expect will be will be there and then it’s no longer you know they’re saying this and works in the proof will be in the pudding,
and that’ll one make it easy rest for it to continue by Brands will we can show that we can double and triple in 10x then what we’re time.
And to hopefully he’ll make us a buyer of choice because it’s not just about the dollars people actually care about the brand and want their brand to be in the hands of the company that’s going.
The most successful it can be.

Jason:
[43:23] You know it’s funny as you’re talking I’m I can’t help thinking there’s a sound byte we play a lot on the show from Amazon your margin is our opportunity.
The end,
like I totally agree with you that Amazon has been an amazing incubator for entrepreneurship and growth and I you know it’s a lot easier to write the negative stories than the positive stories
but that being said like is there a risk like that you.
Get to successful that this model Bears out and then Amazon decides they want to play more directly in that model or maybe even for some unrelated reason,
they change the search algorithm or or FBA or something else in a way that derogatory affects your portfolio like is there a concern about kind of Amazon as a single point of failure.

Chris:
[44:17] Um yes absolutely there is right it’s something that I think about a lot I think so I mean there’s a few things that what you said in there,
better probably worth addressing the first one is is Amazon going to try to take more of this crop the pool yes absolutely right there definitely Google’s doing it,
great five years ago you maybe had two sponsored spots of reporting people search now it’s half or two-thirds of the page is all sponsored and they have.

[44:46] Skulls and all sorts of Amazon has and will continue to do the same thing,
and that’s where that’s that will be something that is a challenge for us but back to your complaints I think it will be less of a challenge for us than for the entrepreneur,
right if we have the right scale we can pull cost other supply chain to expand our margin we have the best engine that optimizing that’s good.
We are driving traffic off Amazon,
these customers off Amazon in a way that just frankly almost impossible to do if you’re writing five million dollar Revenue business then it will hit all of us but I expect will be best position to.
To cope with it and to continue to grow and be successful in it and then to your other question I know.
Do we have actual examples I’m going to turn your evil eye on us and smite us.
You know you know we could be a ten billion dollar company and they probably wouldn’t notice right it’s a printer billion dollar market place I mean you probably noticed like you’re not.

[45:53] Any means but if we went have Indigo shooting her with them right we would still be just a tiny drop in their master.
And so I think the odds that they us as a threat anytime soon and try to mitigate us at a specific.
Or last year ago dare anybody like that I think it’s just pretty small and a bunch of ways we’re trying to help Amazon and accelerate the Playbook be we are.
Trying to buy great products we’re trying to keep them in stock we’re trying to drive cost out and give that contact to the customer,
it’s the customers telling us they won’t they’re calling us they want higher quality higher priced products we also lose if we follow the data but in general we’re trying to be a high-quality seller stand behind our products you know we give.
Here we go full refunds if there’s an issue for example right you know a lot of people don’t or make Amazon deal with that we really are trying to build.
Great company of great Brands and products into the in general as we’ve never been Amazon.

[46:53] They are seeking out good sellers they’ve created a little bit of a problem for themselves with all of their.
For creating direct from China especially manufacturers and that has been some good out of that for sure and that’s lower cost.

[47:09] But they’ve also created a lot of bad sellers,
that is one of the top priorities is I understand it within the marketplace ecosystem today is weeding out and getting rid of bad sellers who are selling company that items and so we are the antithesis of that,
I’m hoping they should embrace that.
And then if we keep doing that and we’re good seller and we diversify our Channel over time and we’re not all on Amazon and I think one hopefully we can find a way to get into a good.

[47:40] Your balance with Amazon and be valued part in the time and they’re a good channel for us and then to becomes less important over time as we.
Yeah it’s a risk and it’s something we think about,
it’s hard to imagine that they they do something to us and it was a one last point on that is they’ve also you brought you guys probably know about this,
a I being such a boon for entrepreneurs they have also created a bit of a political liability you know is those got called in front of Congress there’s antitrust legislation brewing and the EU,
trying to push Amazon to separate their first party in third-party business because the EU is saying you’re competing with these entrepreneurs,
and you can’t be and all this you know stuff about them stealing data and so I actually think they and trying to do much aggressive here,
is heart I think it’s getting harder there by as you said earlier every everywhere they were these opportunity there’s sucking it up which is great there also quickly becoming,
big tax and people are getting afraid of except the politicians are getting pretty big Tech so I think they’re going to try to lately in the space for a while.

Scot:
[48:50] Where do you it’s kind of fun to kind of play forward
do you think that I know it’s an e-commerce it’s hard but that’s the fun part of this Jason I do an annual prediction show and it’s a it’s always a very humbling to especially this year for me to see how that turns out so if we kind of fast forward three to five years
you guys are
acquiring like sounds like about 20-ish Brands a year maybe you can crank that up so you’ve got hundreds of Brands what what do you,
what’s the endgame you just keep rolling or do you start.
Like offering the your own fulfillment offerings or something or like start kind of you know productizing almost like Amazon does some of the things you build or where do you see things going.

Chris:
[49:37] Yeah we are aiming for.
Being a consumer Products company that owns at least a handful of household names and so what I think that looks like and.
Don’t know if that’s five years away or a little bit longer but what I think that looks like is we are selling multi-channel as we’re selling we also have our site.
We’re selling through any other Marketplace that is big enough to be meaningful and maybe Walmart will be there you know Google is,
I’m actually feels like a drug only but get things off the ground we’ll figure it out.
Facebook and Instagram get stores off the ground will be selling their but well whoever is Meaningful in the space plus direct consumer.
We’ll be doing that will likely be in brick-and-mortar in some way and selling some of these products.
That’s still even though we’re going to make now that will pop back to being 50 people spending at least a year new most likely and.
And with all of that right so we’ll have we’ll be using FBA most likely but we’ll also have our own fulfillment for our multi-channel will also have likely a physical distribution so that we can replenish the stores because that’s the different working capital and inventory.

[50:53] Will be likely more Global than just north of North America and the UK so pushing into South America Eastern Europe Maybe,
some more Asian countries that will have to see the products don’t translate quite as well over there.

[51:10] Yeah that’s the idea is we’re kind of we’re a multibillion-dollar company that obviously isn’t that the scale of somebody like parking gamble yet,
but is looking like they’re on a path,
to having these household names and the big difference being key for e-commerce and like I said we’ll have a brick-and-mortar shred you will be doing that but you’re one of the things I talked about quite a lot that’s good thing about Justin traditional sleepy,
this traditional cpg sets bracing annually maybe quarterly if they’re feeling really happy but we set pricing sometimes hourly,
we end and same thing with ads and things like that and so we’re building a really different Tech platform and a really different process and approach to managing these brands,
but I think and accelerates the share game that there already are already experiencing and if we can take that Global and take that across channels.
I think it can be a really powerful story and I hope I hope we have people we have you are were publicly traded company and and some can continue to grow and.

Scot:
[52:15] Maybe with a SPAC we can pull that into.

Chris:
[52:17] There you go yes.
It’s becoming I don’t know if you guys have heard this I’ve heard several investors say SPAC that it’s like it’s becoming a verb.

Scot:
[52:26] Yeah wow.

Jason:
[52:27] You could spec that and then you could hope that a bunch of hedge funds short you so that you could get run up by the the Robin Hood hours.

Chris:
[52:34] There you go I like it.

Jason:
[52:36] I feel like we’ve mapped out your whole your whole growth strategy there I like it.

Chris:
[52:39] I think a notes.

Jason:
[52:41] Chris I love that vision for the future I look forward to having you back on the show when you’ve achieved all of that,
but that’s probably going to be a good place to leave it for today because it’s happen again we’ve used up all of our allotted time as always if listeners have a comment or question there welcome to hit us up on our Facebook page or Twitter
I will certainly include your contact info in the show notes and as always if folks enjoyed this episode we sure would appreciate it if you jump on iTunes and right us that,
that five star review before you sell your business to Chris.

Chris:
[53:18] Great thanks guys really appreciate it at this is little fun.

Scot:
[53:22] Thanks Chris we really appreciate it this has been a Hot Topic and he did a great job of walking us through it we truly appreciate.

Chris:
[53:29] Awesome looking for the talking again soon.

Jason:
[53:31] Until next time Happy Commercing!

Jan 22, 2021

EP251 - 2021 Annual Predictions

2020 Recap – Predictions made on episode 204

2020 Predictions Recap

Scot

  1. Shopify wilts a bit – new competition comes out with different angles (marketcap stays static) – No
  2. Fedex does something drastic – buy eBay? Merge with Alibaba? No (but shoprunner for 0.5)
  3. The year of returns – “happy returns” – a startup raises $100M+ in space. No (but 0.5 for year of returns)
  4. Mallageddon continues At least another 8k stores Yes 8721 stores +1
  5. Google gets aggressive in ecommerce Yes +1 (Bill Ready, etc…)

Score 3/5

Jason

  1. Walmart – growth slows due to completion of grocery build out. Marc Lore leaves Walmart. No on growth, yes on Marc Lore (0.5)
  2. Amazon – Opens affordable grocery concept. Digital grocery wars heat up. Yes
  3. Owned brands continue to grow. 5% of retail in 2019, could be 8-10% in 2020 (as measured by IRI, for CPG private label). Yes
  4. Installment Payments heat up – At least one company is acquired (Affirm, Afterpay, Klarna, QuadPay, Sizzle) Yes (IPO’s)
  5. Digital in-store heats up, QR codes make a comeback Yes

Score 4.5/5

2021 Predictions

Jason:

  1. Made to Order apparel business > 9 figures
  2. Retailer offers viable health alt insurance option to consumers
  3. Grocery E-Com > 10%  someone deploys(not pilots) MFC
  4. Amazon Shopify Competitor (shipping solution)
  5. Retail Media > $20B

Bonus – More store closures in 2021 than 2020.

Scot:

  1. Amazon move to same day prime by opening a huge wave of neighborhood DCs (near DSPs)
  2. Shipping (Shopify) – launch own DSP
  3. Shopify marketplace 
  4. ‘zero friction addiction’ sticks – I’ve seen 30-40% repeated a lot, I think it’s 60-80%. commerce penetration says at 16% or better in 2021.
  5. spac/ipo? Dnvb wave

Bonus: post-covid anti-consumerism/materialism wave

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

Episode 251 of the Jason & Scot show was recorded on Thursday, January 21st, 2021.

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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 251 being recorded on Thursday January 21st
2021 that’s a lot of twenty ones I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.

Scot:
[0:42] Hey Jason and welcome back Jason Scott show listeners.
It’s our annual tradition here at the Jason Scott show put out some predictions it’s a little bit of a Jason versus Scott competition to see which of us is best at predicting the trends,
and the future of retail e-commerce and payments.

[1:01] If you’ve been following us for a while way back in episode 204 that’s when we made our predictions for 2020 we did that in I believe January of 2020 just like we’re doing here in 2021.
And way back then we combined an annual recap and then we did our predictions and that show was six hours,
so being why is podcasters we decided that’s a lot of Jason Scott to just in one sitting so,
good news we have split it up this year so last week we did the annual recap and then this year that frees us up to do the predictions.
So what we like to do here is go through our predictions and score how we did so that’ll be the first half of this episode,
and then to make it fun we like to read each other’s predictions and see how the other person did and then try to do a,
yeah a negotiation I guess I would call it yeah so we try to come to terms with some kind of a scoring it’s always hard is.
Use a bit Jason so bad try to try to sandbag a little bit so we’ll see if that works out this year.
Jason anything you want to add before we jump into it.

Jason:
[2:18] No I want this to be one of my favorite shows of the year but as you alluded to I generally get shellacked so bad that it starts out fun for me and by the end I’m just totally depressed.

Scot:
[2:31] Yeah well we’ll see we’ll see how it goes free this year.

Jason:
[2:34] Yeah it’s a new year so I’m optimistic it’s like the San Diego chart or La chargers at the beginning of the Season before they have to pay anyone.

Scot:
[2:44] I will say when we first started podcasting you said Scott I’ve read all these articles in the biggest thing is being consistent and that was in 2015,
so dang if we haven’t been consistent so we started in November of 2015 so then we did 16 17 18 19,
20 so this will be our sixth year of making these predictions if I’m doing my math right.

Jason:
[3:08] That I don’t think you are right.

Scot:
[3:11] I may have an N plus 1 from this is either our fifth or sixth year of doing these predictions.

Jason:
[3:18] We’ll get the intern on that but let’s let’s jump into them so I have your 2020 predictions in front of me,
and your first one was kind of Doom and Gloom you is I’m recalling in January of 2020 Shopify was very hot and Buzzy and
I believe your prediction was that they would Wilt a little bit and that new competition would come on in with more Innovative angles and that they would have a decline.

Scot:
[3:48] Yeah I kind of blame you for this when you get me so sold on headless Commerce I probably jumped the gun a little bit also again we made these predictions in January and I don’t think we had even heard of coronavirus at that point.
I don’t know do you remember.

Jason:
[4:04] It was not common because I had a trip coming up at the time to China I had actually like they were starting to like,
mildly talk about it in January then but definitely yeah these predictions were not influenced by any Corona awareness.

Scot:
[4:24] So this was a total zero.

Jason:
[4:27] Yeah I want to say their stock was at 450 when you made that prediction and you can get it for the budget price of 1193 right now.

Scot:
[4:35] Yeah it was super overpriced and then covid hit and then the revenue surged from like 50 percent growth to a hundred percent growth and then the stock followed and yeah so that was a bad one so that that one was a zero it was a dud.

Jason:
[4:49] It’s good it’s good to get one of those under your belt though,
um so then your second prediction was that FedEx would do something dramatic like by eBay or merge with Ali Baba.

Scot:
[5:06] Yeah the driver on this one is you know the the Amazon is exerting pressure across multiple ecosystems simultaneously and one of them is shipping,
and I do feel like UPS and FedEx are feeling that pressure again the pandemic just kind of change this one so everyone I think.
Yep stopped worrying about oh my gosh what’s going to happen with the Amazon to how do we ship so many packages and so this was a Miss 2,
I will throw myself to the the jury though there was the shop Runner acquisition which I think is massively.
This effectively gives FedEx a complete Prime competitor so they’re going they’ve won up to Amazon.
Shop owners better than Prime 10 times as many subscribers I.

Jason:
[5:57] I believe.

Scot:
[5:58] Well I have to have someone fact.

Jason:
[5:59] Amazon might actually be getting out of the Prime business because they just they don’t want to compete with the the FedEx shop Runner duopoly.

Scot:
[6:08] Could happen.

Jason:
[6:09] Yeah I totally see the spirit of this prediction there was a lot of financial stress on FedEx and yeah I could you could imagine something,
big happening I think this illustrates to me like one of my biggest learnings from having done a bunch of these prediction shows which is.
Having a good idea of what might happen isn’t even as useful as,
getting lucky on the time Horizon because I feel like you and I have both made predictions that.
But we’re just too early right or or something like that so still wouldn’t surprise me to see,
some dramatic evolution of those those carriers I’ll give you half a point for shop running because I’m a generous guy,
I believe in the earnings call someone asked if chaperone was going to have an impact on their financials and they said not that it wasn’t a material acquisition but.
I kind of suspect sharpener was a little bit of a sort of a budget exit for for shop Runner.

Scot:
[7:18] That’s corporate speak for this is the future of our company.

Jason:
[7:22] Who knows maybe maybe it will be I hope it is for them so I’ll give you I’m giving you zero on Shopify I’ll give you half a point for for shop Runner I believe they also bought a cardboard box company that you failed to mention.
I’m joking.

Scot:
[7:37] Okay number three.

Jason:
[7:41] Yeah so number three this will be the year of returns and you predicted that happy returns which is one of the the vendors that facilitates e-commerce returns,
would make a huge cash raised in the in the space you said they’d raise a hundred million dollars.

Scot:
[8:03] In this one I failed to learn from many of your failures which are being too specific so I was super specific here I tried to capture it by making your returns,
I will again throw myself to the jury that we did have returned again so the,
other side of the ship again coin is we are now swimming in returns you know could be,
super specific and say that really didn’t happen in the year it did happen in the bookends of our episodes though so I don’t know,
I’ll be generous to you on that one for one of your predictions of you be generous to me so I do feel like it is a big return to your and there were several articles written about the you know this,
there’s one did you see it where it should look UPS facility and people like literally swimming in packages,
so you know I do think it was a year of returns where there was a much brighter light.
Shine on that but happy returns did not raise their hundred million bummer for those guys,
there was so I did look and there was a fair amount of funding activity so happy return this has raised 25 return logic to,
Loop returns 15 million so it is a hot category I get a lot of calls from VC’s poking around this category so.
So I don’t actually know how to score this one so I’ll defer to you.

Jason:
[9:25] Yeah I’ll give you half a point because I agree it was just a poorly worded prediction I think the spirit of your predictions that it would be a significant year for returns is fair.
As it happens like it’s going to be 20 21 is going to be the big return year and while there was a lot of returns the first half of January a lot of that still,
going to be in progress and we certainly haven’t seen any of the numbers yet but I would certainly concur that there’s going to be a lot of.
Interesting things going on in returns this year in response to,
do you know the huge spike in e-commerce sales we saw we saw last year so I’ll give you half a point.

Scot:
[10:09] So generous.

Jason:
[10:11] Yeah well you know it’s the I feel like when you when you lose by a lot like there’s no point in playing really tight defense.
And I feel like this next one is not going to be very controversial on the scoring.
Mulligan and continues in 2020 and I thank you you couldn’t have known what a disaster 2020 is going to be from malls or would be come from Al’s.
Foot traffic in the malls is probably down fifty percent for the year,
sales for the anchor stores is down more than 30 percent for the year so is a disaster again you are pretty specific on your prediction you you said that at least 8,000 stores would close and,
I believe that the source that you and I must use for that had the number at 8720 one so you you cleared it by 10%.

Scot:
[11:10] Yeah this is where oddly enough to pandemic Health my prediction.
I don’t know I feel like I feel like there’s some be another feel like the big wave is actually coming this year have you seen any predictions on that are you going to punch suffocate on that.

Jason:
[11:25] So I do have a mild prediction in the space like the the public prediction that comes up most often is,
it is a huge amount of stores closing but over a five-year period so not necessarily all this year or next year
but like 25 percent of retail stores closing over the next five years is the is the number and a thousand Mall’s closing over the next five years are the are the,
kind of often reported public ones.

Scot:
[11:56] Yeah I could see it I’m I’m for newer listeners I’m down in North Carolina and,
we have I’m in the Raleigh-Durham area there’s a little town called Carrie and it has kind of like a beam all and it just go by by epic games and they’re going to turn it into a headquarters I’ve been doing some little road trips around like going to the mountains recently,
and the malls up there are literally maybe like 10% of the stores are open it’s like the weirdest thing in these small Southern malls that used to have,
if they’d have a belk a Sears a JC Penney and Macy’s.
Generally two of those anchors are gone and sometimes they’ll be 1 acre left sometimes maybe none so you’ll be in the mall and like the whole anchor is just like cordoned off with effectively duct tape or sometimes they’ll put some really weird stuff in there like,
little tables of these people selling random tchotchkes like almost like a bizarre but I think it’s really really very odd and then there’s all these other weird dead parts of the mall where they’ll put in,
you know like they’ll have like Thursday night Magic the Gathering night no.
But it’s like 8,000 square feet used one night for some you know game event for something so it’s really strange going into some of these malls that are on their last leg.

Jason:
[13:11] Yeah.
Excuse me the that the top malls are still doing pretty well although they were even negatively affected by by covid but yeah you know covid-19,
apparel is already in trouble and covid-19 you / rough on apparel and of course.
You know as apparel goes department stores go and his department store just go malls go so you basically had covid knocking down this,
series of,
of dominoes and yeah it’s it’s going to be pretty rough couple of years for you know I personally doubt that we’re ever going to see.
Department stores or apparel stores or malls get back to kind of pretty pandemic levels.

Scot:
[14:03] I know this one took shop so let’s move on.

Jason:
[14:05] Yeah exactly figuratively and literally and so then your fifth prediction in this one’s going to be yeah I’m going to be curious to hear you you talk to this one Google gets aggressive in e-commerce.

Scot:
[14:19] Yeah and
this one I was careful to not say that it would work and so what they did if we kind of recap the highlights of 2020 from Google what they’ve done is they hired a guy Bill ready from PayPal so they went out and found someone that,
you know has e-commerce chops to bring into the company,
he immediately kind of opened up Headey throttled Google shopping so let every Merchant kind of come in there then they’ve invested a lot on,
this program is really weird because it has like 16 different names I like by on Google but they don’t really call it that they call it Google shopping actions I think it’s at the latest name.

Jason:
[14:58] I think you are correct yes.

Scot:
[15:00] Yeah which doesn’t really make any sense to me so again I didn’t say they’d be effective on these things it’s just say that,
aggressive so then they that sir I think of that as their Marketplace I don’t think they like to call it that but to me it’s a Marketplace because you buy on Google and just like buy on Amazon and then they were out the order to you versus sending people to your website your,
your responsive website so they took away all the missions for that so that advertisers would would utilize it more and and I guess they must have gotten,
push back and then so and then they’ve been they also change the commission’s on Google shopping they.
I remember they changed economics I couldn’t find an article to find the time on that but I remember that happening there too so yeah and then you know the,
those are the things that say they got a little bit of aggressive there.

Jason:
[15:57] Yeah well so I think with your caveat I’ll totally agree and give you a point I think they did.
Do do a lot and I’m not even going to say that they have won’t work but they haven’t yielded.
Significant results yet but but certainly like we’ve seen a lot of activity there so I’ll give you the point,
so you get Molly get in in Google full points so that’s two I gave you half for FedEx and happy returns so that’s three out of five for your 2020.

Scot:
[16:30] Awesome 60% predicting that’s a it’s actually pretty good,
one thing I would comment on here that’s interesting is there was a report out by Cowan John Blackledge and,
I tweeted on this and I sent it to you Jason not know if you had time to read it but they went out and did a survey and I’ll let you opine on surveys but it was a lot of folks like you so as a lot of these super fancy Executives at Ad Agency type places.

Jason:
[16:58] Most of them had shorter titles than me.

Scot:
[17:00] That have long titles except longest titles where yours is longest and effectively said you know what are you seeing with Amazon ads and I thought it was really fascinating,
the I don’t want to spend our whole show on it but one of the ones that really got my attention was you know,
there was the usual do you see people spending more or less on Amazon ads and Evans like more and then the most interesting one was amongst your client base where are the dollars coming from,
and one way they asked the question it was like largely TV but then another way they asked the question it was kind of like,
within your maybe they think the question had a digital framing so it was kind of like within your,
customers digital budget where the dollars coming from and it was like 80 percent Google,
number one was Facebook so it was like really taking sheer from Facebook but then also from Google Now they didn’t I wish the had gotten a little bit nuanced there because you and I know,
critical Google includes a fair amount of double-click kind of banner ad type stuff display.

[18:14] They didn’t explicitly say Google search so it would have been nice to see in that broken out because it could be what the the digital strategic,
senior VP directors were saying was you know it’s Google display not Google search but in any case,
the message to me was Amazon’s number three,
pretty far behind the duopoly of Facebook and Google but you know they the other chart those interesting was the asking you know what do you say what are your clients say has the highest return on ad spend and Amazon was like Head and Shoulders above,
so it’s really fascinating reading all the survey results directionally said to me.

[19:00] You know if I’m Google and Facebook I need to be paying a lot more attention to what’s going on in Amazon and figure out how to try to stop them,
so that was the reason I made this prediction and I think anything I would,
I haven’t done this but I do think you’re going to see the rest of the ad world really Step Up,
and then the thing this new is the increased pressure so they got Amazon one front they’ve got kind of privacy concerns on the other,
and then like iOS is coming you know more about this than I do but iOS is coming out with this thing that’s just kind of like really kill a lot of their tracking,
and then then you got the government coming after them on the other side so so it’s gonna be really interesting to see you know Facebook Google and how they navigate this this three-way encroachment that’s happening on.

Jason:
[19:50] Yeah yeah there’s a lot of market dynamics going on it’s super interesting and you know I think you summarized it pretty well I would just for listeners that don’t follow adtech that much.

[20:02] 2021 is a weird year a lot of traditional television you know goes on new programming a lot of which didn’t come out this year and on Live Events a lot of which didn’t happen this year so you know it was super easy for marketers to shift,
a lot of those event television dollars to other channels so digital got a lot of those dollars but then there was a lot of.
Politics and controversy going on in the world and there was a lot of concern around brand protection when you just you know bottle out of digital ads on Facebook would they show up next to,
you know inappropriate negative news and all sorts of other things and so one way in which Amazon,
benefits is it’s a very brand safe place like there’s no negative editorial on Amazon it’s very brand safe place to put your money in a storm and I would basically agree with the sentiment of the Cowan survey,
amongst all my clients Amazon has the most mindshare as a,
a new advertising vehicle I would I would almost argue they have too much mindshare like people people are irrationally focused on them,
and I you know I’m not sure they always measure their ads in the best way so I would I would always be curious to talk with someone about what their success criteria are when they think that Amazon has the highest row ads but,
um but that’s maybe for another show.

Scot:
[21:31] Yeah we’ll do a am Jason debunks your Amazon row s shop that’ll be a barrel of monkeys.

Jason:
[21:36] Exactly not saying it’s a it’s I mean it’s a good vehicle there’s good eyeballs to be had there but it definitely needs to be part of a portfolio and you strategically.

Scot:
[21:45] Okay I’m just giving you a hard time well ads Chief row as bubble popper to your title okay let’s jump into your predictions.

Jason:
[21:57] Yeah I know the audience is super excited for these.

Scot:
[22:00] I’ll create a dramatic pause here.
Number one Walmart this one you are very explicit you said Walmart’s growth is going to slow way way down,
because they’re gonna lap their Grocery and people are just so tired of curbside grocery just.
Done with it it’s just so boring and then you said,
and and I’ll put a huge emphasis on the ant here and Mark Lori leaves Walmart so as you and I know with logic gonna have both sides of that and this is clearly not a norm.
So first I thought you were going to win this one with that first with the mark Laurie thing so this is a bit of news Mark Laurie hat is leaving Walmart it was announced.
This week last week.

Jason:
[22:52] You asked for it yet.

Scot:
[22:53] Last week.
He’s going to build the city of the future how exciting is that you did not have that in your prediction so I think that’s a Miss if you could if you had had Mark Lori Leafs Walmart to them say future I would have just like,
drop the mic and giving you a thousand points and walked off at this point in the show,
so in all seriousness the growth did not slow the pandemic cut against you on this one you know Walmart’s been growing at a tremendous Pace due to endemic and they were the only store open,
so that has really helped them immensely during during these times,
so since you were generous with generous with me I will be generous with you and that’s definitely a half point because of the Lori part but the first part is kind of smelly so,
I think I’m just being so so generous here.

Jason:
[23:42] Yeah I’m not sure it’s any more smelly than the Shopify will crater,
so I feel like we have parity there the differences I gave you half a well not you only had the Shopify prediction I feel like it’s pretty clear this I have Point prediction my I feel like my logic behind Walmart was sound and
thrilled to be wrong sorry sorry for why I’m wrong but obviously grocery to dramatically accelerated so I couldn’t I couldn’t have been more wrong on that half,
but almost certainly the first place anyone heard that Mark Glory might be leaving Walmart was was on our show a year ago so.
I’ll take that.

Scot:
[24:23] And then yeah so good work on that one but you missed the city of the future thing.
And I’m going to be excited you know hopefully Mark if you’re listening we would love to be the podcasters for the city of the future I think I think we would be doing a good job there Jason wants to be would you say you want to be the Marshal or the sheriff or something you want to ride on that.

Jason:
[24:40] That would be even cooler especially if I get to wear like Mandalorian armor but I was I was hoping for deputy mayor.

Scot:
[24:49] Okay Deputy Mayor do you get to ride horses deputy mayor or no.

Jason:
[24:53] I feel like if your Deputy Mayor you get to decide what you write.

Scot:
[24:58] You guys have that sense of cowboy up there in Chicago you could you could borrow his horse.

Jason:
[25:02] Yeah I’m hoping the story city of the future is somewhere tropical but I’m kind of worried that Manhattan is so affordable right now that he might buy that and turn it into a city of the future.

Scot:
[25:13] Brooklyn strict strikethrough city of the future.
Um okay you’re number two was related to Amazon and you did a little clever hedging here you said they’re going to open an affordable grocery Concept in the digital grocery Wars will heat up,
you are really right on the digital grocery were part of that that one how do you score yourself on the opening up an affordable grocery.

Jason:
[25:41] I scare myself a hundred percent they we now have five Amazon Fresh stores in California and two in Chicago.

Scot:
[25:52] And then what’s the that’s the big one that has them – cart thing right.

Jason:
[25:57] Yeah yeah so it’s – card it’s like a 20,000 square foot grocery store and it’s it’s you know very competitive prices on Main Line groceries as opposed to the,
that expensive premium brands that are exclusively carried at Whole Foods.

Scot:
[26:14] Whole paycheck.

Jason:
[26:15] Exactly the hey.

Scot:
[26:15] Um Okay cool so that that’s a plus one.

Jason:
[26:19] Yeah and grocery words heated up more than I could have ever known thanks to covid-19.

Scot:
[26:24] Yeah yeah that was a nail down.
Um number three owned Brands continue to grow five percent of retail and to five percent of retail in 2019 could be eight to ten percent in 2020 as measured by RI for CPT private label.
I don’t know what the back into that means but yeah how did Dad Edge do.

Jason:
[26:48] I got it I’ll be on it so iri is a data reporting company that tracks,
sales by product category in,
the grocery and mass base and they they have a data set for private label.
In hindsight I inadvertently sandbagged this a little bit I think the spirit of what I intended was that.
Private label would rapidly grow in 2020 in that that has absolutely been true it’s growing it like four times the,
pace of national Brands the penetration according to iri is actually a little higher than I wrote here so they’re fifteen percent right now.
So I feel like I hit both the spirit and I inadvertently wept the number more than I meant to.

Scot:
[27:44] Wow now do they break out private late what you call you have a.

Jason:
[27:50] No I do differentiate exclusive Brands versus private label and they don’t to them it’s all private label.
They do Break It Out by subcategories like fresh Frozen Frozen shelf-stable stuff like that the,
it was a big year for private label Target launched at the very beginning of the year a significant new brand that they expect good and gather they expect,
it to eventually be a 20 billion dollar your brand and it sold more than two billion dollars in the first year so,
those brands are selling really well like every digitally native brand we’ve ever talked about that gets all this Buzz not one of them has sold two billion dollars in a year so.
Yeah yeah absolutely but so I’m taking that one.

Scot:
[28:39] Okay that’s fair enough so that puts you two and a half so within Striking Distance of me so hopefully your next to or total misses,
number four for you was installment payments heat up at least one company is acquired and you listed a firm after pay dalarna I like to say that one quad pay and sizzle.

Jason:
[28:59] I made this prediction exclusively so you could say karna.

Scot:
[29:03] Sizzle karna learn.
So this one was a win so a firm went public after pay is public know they did a spec what happened they expect it up.
Let me see I can’t remember after the note they went they did a public offering.
In Australia that’s why it was weird yeah I remember it was like kind of a little unusual it wasn’t listed in the u.s. so they did an IPO not you know,
if I were going to be nitpicky I would say neither of them was acquired which is your prediction but it did heat up,
it’s funny I’ve been meaning to send you some screenshots I was buying a couple things and literally four of these would be on the,
the checkout and it was really weird because they would have their almost competing at the checkout with like different offers so some of them would say,
two payments of 59 and no-one would say six payments of 4 and I was like sitting there like,
oh my God like his average consumer the calculus on this thing is kind of wacky of how to figure out which of these 12 offers is going to be best.

Jason:
[30:13] Yeah yeah the cognitive load can get pretty high when they start NASCAR racing up the checkout with multiple buy now pay later options.

Scot:
[30:20] Yeah and there’s some point it seems like it would hurt conversions because there’s like the what’s that thing about choice you guys talk about all the time.

Jason:
[30:27] Yeah Paradox of choice is what you’re thinking of but yeah they’re just a lot more friction yeah.

Scot:
[30:32] Once you got four of them you’re going to be like yeah I’m not gonna buy this thing so so that puts you over the top at three and a half right there.

Jason:
[30:42] You can hear the music and In fairness I like if you were going to be a really strict greater I actually don’t think any of these got acquired like prove your point the,
partly because it heated up faster than I expected and their valuations are too high to get acquired now like for the most part,
The Firm did their IPO ass week and I think it went up 90% after the so they underpriced it.

Scot:
[31:07] Yeah it’s now a bad IPO if you don’t more than double them first.

Jason:
[31:10] Gotcha.

Scot:
[31:11] We’ll have to do a whole show on that and then your last one I feel.
You know even though I’m losing I feel good for you because you’ve been talking about this for literally since the first day I met you you’re probably like the first day I met you or probably like,
let’s talk about Hugh are codes and how excited I am about him so this is like me claiming you know making my annual prediction that Amazon’s going to be with FedEx,
I know it’s going to happen it’s just whenever I’ve given up on it at this point so you predicting QR codes you get the persistent award you’ve been saying it for years
so
you know every time I go to one of the restaurants here in North Carolina that’s open I think of you because I have to scan a QR code to get my menu and then I do this cool little scan of a
another the little receipt to pay and
you know QR codes are definitely back you totally called this one the pandemic you got the pandemic assist so that was a solid one,
any other interesting use cases you’ve seen.

Jason:
[32:14] Yeah no so pretty Point like obviously I did not foresee the covid use cases but all these contact us things you know certainly came up the thing we talked about just a second ago the bill me now pay me later pay later services,
have introduced a lot more QR codes because they you know they started out offering their service online and not in stores and then as they got bigger they all wanted in-store Solutions and those are mostly activated,
via an in-store QR code so like I want to say,
after pay you can now use it like CVS drugstore with the QR code,
um PayPal rolled out in store payments with a QR code and then of course thanks to covid,
Starbucks Mobile payment just completely exploded and so they’ve they say now that over 25% of all their sales are via QR code so,
so lots of different use cases and then a few stores are starting to roll them out on shelf Edge as well for product information so,
some some Walmart prototype stores and a few other stores letting you scan QR codes,
to get product information in the store the Nike House of Innovations.

Scot:
[33:35] Well congratulations you cleaned my clock this year so 4.5 versus three so that was a 90% prediction rate very very impressive my friend.

Jason:
[33:45] Even a broken clock is right twice a year or twice a day but yeah.
I ruined that one.

Scot:
[33:54] That’s ironic.

Jason:
[33:55] Yeah I will say I’m super grateful because I feel like you and I have both had this thing where we predicted something that didn’t happen and then we skipped a year and it happened.
Like oxa earbuds for example or something you know and so I.

Scot:
[34:13] Yeah that was when I made for a while and then it finally happened the year I didn’t.

Jason:
[34:16] Exactly exactly so I’m grateful that I didn’t miss the QR year.

Scot:
[34:21] Well a blind squirrel finds a broken clock at least twice a year so as you as everyone knows.

Jason:
[34:25] Yeah yeah I’m I’m clearly not the sharpest bulb in the drawer.

Scot:
[34:29] Okay hopefully that flows into your predictions let’s see it’s you are the winner in the champion of 2020 what do you have in store for listeners for 2021 predictions.

Jason:
[34:44] Yeah yeah well I’m excited about these for now we’ll see what happens a year from now,
but so prediction number one made-to-order apparel business achieves nine figures in Revenue so that’s a hundred million dollars if I did my math right,
um I’m super bullish on these on made-to-order taking a significant chunk out of the apparel business as people may know,
um Amazon launched made-to-order t-shirt M Taylor Nike a lot a lot of folks doing pilots and kind of,
dipping their toe asked year and so I’m going to go out on a limb and say at least one of these catches some scale and 2021.

Scot:
[35:30] What are some examples of some of them these this does not have to be part of your prediction I’m not kneeling you down because specific but I want to make sure I understand.

Jason:
[35:35] Yeah yeah so so Amazon made for me Product would be 1M Taylor in ticino Nike ID proper cloth.

Scot:
[35:50] Doesn’t it Jesus have one week like print the souls or something.

Jason:
[35:53] Yeah they’re so there’s a ton in Footwear that’s kind of cosmetic personalization so Vans Converse David us Adidas had custom sweater pilot,
there’s a small direct-to-consumer apparel brand called Ministry of Supply that has some interesting like,
in-store weaving machine so there’s,
there’s a number of things it’s mostly been a novelty up till now so I feel like this is a stretch prediction to get 200 million in Revenue.

Scot:
[36:30] We will see in your shirt Nike ID already isn’t there.

Jason:
[36:36] So that’s going to be a tricky one because to me.

Scot:
[36:38] I’m wise to your sandbagging.

Jason:
[36:39] They don’t break out the revenue for that so I like I doubt I’ll be able to use that one as a win.

Scot:
[36:45] Okay alright I’m going to have to come back and listen to this if next year you use it as when all right.

Jason:
[36:49] Yeah I can Bank on you not remembering it or not be willing not be willing to remember re-listen to the show.

Scot:
[36:57] I just set a calendar appointment for for January 21 2022 so I’m on I’m headed.

Jason:
[37:04] Yeah so prediction number to a retailer will offer a viable health insurance alternative to Consumers so,
the spirit of this retailers are totally leaning into Healthcare initiatives Amazon of course went all in with a pharmacy they offer some healthcare options for employees at this point so that could become,
consumer-facing Walmart has opened a handful of healthcare clinics Walgreens just announced a significant new division with 200 employees focused on delivering Healthcare so,
um
my I am predicting that one of these gets to scale and offers a viable Nationwide Healthcare alternative that does not require traditional insurance.

Scot:
[37:57] Okay and so this is pretty brave given Amazon just and wound their their initiative with was it JP Morgan and yeah.

Jason:
[38:05] But I am I’m banking on the fact that they Unwound that because they think they have a better solution on their own we’ll see.

[38:16] So then number three we talked about the grocery war is heating up last year and then of course thanks to covid a heated up a lot more than expected,
um so I think that the interesting one this year is I am predicting that they are going to stay at these very high levels,
our friend Sue charita from Forrester just wrote a grocery article yesterday and she talked about how it was a huge year for digital grocery but they in 2021 all the restaurants are going to open back up,
and that she expected digital grocery to shrink back down maybe not to pre-pandemic levels but to go down a lot,
um I actually don’t think that’s going to happen I think that a ton of people have formed a new digital grocery habit I’m not saying they’re going to do all their grocery shopping online,
but I think on a go-forward basis a big chunk of people are going to do a significant piece of their grocery shopping online and so I think,
um next year that for 2021 10% of all groceries will be sold online,
and I think as a result of that retailers are going to have to invest in operationalizing those those services and making them more profitable so I think it’s pretty likely that a,
a least one retailer will roll out these these micro fulfillment centers on a broader basis than just a pilot.

Scot:
[39:43] Cool and specifically for grocery though because they are envisioning they would need to be refrigerated or.

Jason:
[39:50] Yeah most of them are at least two climate zones many are three climate zones so frequently they have like ambient refrigerated and Frozen.

Scot:
[39:59] Three climate zones nice is Rainforest in Ops.

Jason:
[40:01] Yeah I don’t I don’t know if it’s an option it doesn’t seem like a practical option.
Maybe if you’re selling like fish or plants in your in your extra fulfillment center.

Scot:
[40:14] Bananas you want to keep your bananas fresh up on the on the on the coconut trees.

Jason:
[40:20] All right not sure that’s how that works but okay so the number four and this is why I’m glad I’m going first because I feared that I would be stealing a prediction from you,
so the.
There was a lot of Buzz last year that Jeff Bezos Scott was getting personally involved in a Shopify competitor.
And so so my prediction is that Amazon will watch a Shopify combat,
which doesn’t seem that bold given that it was it was
strongly rumored last year but my specific prediction is I think I have an idea of what it will be and I don’t think it’s what most people are expecting I think most people are.
Expecting them to launch some kind of web store that competes with Shopify,
and I think what Amazon is going to do to compete with Shopify is they’re going to open up their fulfillment Network to,
for for third for sellers to fulfill their orders from their own websites and on a limited basis Amazon has,
done this in the past and even does a little bit of this now but I think they’re really going to productize and make a lot more competitive,
and offering where you put your inventory in the Amazon with just X Network and when you collect orders on your own website Amazon will cost effectively deliver them using their own delivery Fleet.

Scot:
[41:47] So they’ll make FBA kind of like more of a generic shipping solution kind of like almost like meaningless shit.

Jason:
[41:54] Exactly exactly a standalone offer that doesn’t require the Amazon Marketplace exactly.

Scot:
[41:59] Anderson all right.

Jason:
[42:03] And then I have a.

Scot:
[42:05] So no front-end SMB e-commerce thing is part of that.

[42:18] You’re keeping it generic so you can catch a lot of possible.

Jason:
[42:22] Trying to keep it reasonable exactly.
The the so my V prediction goes back to a trend that you were talking about the the Amazon media and I do think Amazon media is going to continue to be the,
by far the biggest player of the Retailer’s but there’s a ton of,
effort going on behind other retailers to get in on that action as well so,
Walmart has you know launched a major media initiative the Walmart Media Group target has an initiative called Target Rundell Kroger has an initiative called Kroger Precision marketing,
and perhaps the fastest-growing of all these growing faster even than Amazon is,
instacart who is like one of the biggest beneficiaries of covid is now selling a ton of media so I think in aggregate all of these retailers selling ads are going to exceed 20 billion dollars in ad sales in.
2021.

Scot:
[43:21] Brickell they’ll be an arson to do have a way of tracking that.

Jason:
[43:25] We do not up perfect way but a number of the the stock analysts report on that emarketer has done,
estimates on them in the past and some pieces of it we have actual data for.

Scot:
[43:44] Cool and then one of the things one of the behind the scenes things listeners may not know is we always do six predictions in case some of our Collide and I don’t think we had collisions can you want to reveal your six this kind of a bonus.

Jason:
[43:58] Yeah you you correctly predicted that over 8,000 stores would close last year
and a lot of people feel like 20/20 was the peak covid year and they’re all these you know extra things,
I actually think 2021 is going to be worse for store closures than 2020 so I’m predicting that will have more this year than we did last year.

Scot:
[44:21] So over a thousand seven hundred.

Jason:
[44:23] 31

Scot:
[44:24] What if 31 all right that’s a very specific prediction I like it.

Jason:
[44:29] When I wrote it it wasn’t that specific but then you had.

Scot:
[44:33] I’ll put it in the show notes.

Jason:
[44:36] So so Scott what do you what do you what do you think’s going to happen this year.

Scot:
[44:40] Yeah so you know this one’s tough because I definitely feel the pain this year I think,
I think I’ve had three or four years of pretty well walloping you so it felt really weird to not win this year so,
dug deep on these and hopefully I’ll reverse it for next year.
So number one it wouldn’t be a Jason Scott show without talking about Amazon a little bit more so I do have an Amazon predictions,
I do think that they are going to use so they used covid to really scale up this DSP program and as you and I have talked about ship again they were somewhat immune from ship again as they control their own destiny,
I think they’re going to really Flex on that and I think,
I think covid has the Silver Lining to Amazon of covid around shipping is I think it’s given them the path to get to same day Prime,
for you know a lot more places in a lot more skews so I think we’re going to see them really crank up one day shipping so that’s my prediction.

Jason:
[45:43] Okay and where do you how do you envision that gets Quantified like what is cranked up mean like it gets used a lot more or they offer it a lot more places or.

Scot:
[45:54] I think they’ll be an announcement now that I would imagine it’ll come and kind of Q3 where Amazon is going to announce for the holidays you know a.
Millions of items available for same-day delivery through the holiday period something like that I think it’ll be a pretty material.

Jason:
[46:10] Okay I like it.

Scot:
[46:11] Change and I think they’re going to execute it and then,
actually had written this down in there was an article that came out that talked about how they’re going to use these little micro DC’s there’s an article I think it was,
squarely in the speculation do you remember who is it that is this guy’s in Seattle that come out with the stuff but,
anyway they were speculating that Amazon is going to open up mm kind of micro DC’s so I don’t know about a specific number like that but it was interesting that I think I think a lot of people are seeing that this this could be the direction they go.
Number two I do think so my train of thought here is,
you know if your quote-unquote arming the rebels in your Shopify and and I was reluctant to make another Shopify protection but but here we go so then I did too so in this one I’m thinking if you’re arming the rebels you know what.

[47:05] With ship again what the rebels need the rebels being smaller kind of retailers they need a lot of help with shipping right so FedEx and UPS are not adding enough capacity they’re really expensive first while guys,
so then using USPS they were total epic fail during holiday 2020,
so and then Shopify is already kind of got one little toe in this water with their fulfillment by Shopify every what they call it that’s what I call it so,
you know if you’re them and you’re sitting on this massive hoard of cash and market cap and you want to help your,
300,000 if you get the number but this very large number of smaller businesses the,
imagine having Shopify trucks just kind of driving around you know I think that would be really interesting and,
it kind of ties with one of my other predictions but I think I think Amazon has proven to folks you can build last-mile fulfillment.
With a lot less than you would think I think a lot of folks looked and said well I’ll have to build FedEx that is you know fifty billion dollars,
but I think all in Amazon DSP program was was relatively like under four or five billion dollars from them to build out and.

[48:23] What they did is they essentially use kind of almost a franchise model where all these local entrepreneurs fair amount of the risk and do a fair amount of execution and then Amazon can,
work the incentives in the system so so I think what’s going to happen is Shopify we’ll look at that decode it and it makes a ton of sense for someone else to do it,
sometimes I bounce between maybe like a one of the ship Bob’s or some of those guys doing it but I just don’t think anyone else has the resources I don’t think Google would do it I just don’t think they would,
they would do this I don’t think Walmart would do it so I think someone’s going to do it in my best guess is it’s going to be Shopify.

Jason:
[49:00] Interesting one bit of Commerce news I’ll throw in that maybe supports that is,
is listeners will know that the traditional carriers often have these um surge prices over holiday and now they’ve announced that they’re just going to keep the surge prices on.
So it’s just it’s getting it’s getting more expensive and it’s it’s you know challenges the unit economics for a lot of product category so having some Alternatives could be interesting.

Scot:
[49:28] Yeah yeah and then my third prediction is also Shopify so so you know since that worked out so well for me last time,
and then here again if I’m arming the rebels and I keep saying that because that’s kind of like their little catch phrase now you know one of the things that’s risky for Shopify is,
I would bet that their stores in aggregate get sixty percent plus of their traffic from Facebook and social,
um Facebook and other social folks which are largely Facebook’s of the.

[50:07] The giant 800-pound gorilla here is there on Instagram,
you know they have their own check out they’re starting to promote and Shopify as an option and whatnot but at some point the,
you know so I mentioned this earlier these guys are under pressure the sad models under pressure from the privacy and the government and Amazon and everyone else,
they’re increasing their work on Marketplace and other Commerce initiatives and then at some point do they say,
we want a power that check out now and capture some comics from that because if you look at it Shopify almost,
you know a very large portion of shopify’s Revenue comes from monetizing the shopping cart,
so things like affirm things like PayPal things like their own payment system,
etcetera so someone is going to get greedy on that and Facebook has kind of a pole position so if your Shopify,
you need a hedge for that where you say if the amount of traffic going to our aggregate stores goes down we need to be able to drive them traffic and,
Shopify has been kind of creeping up on this this is where you kind of have disagreed.
They had this happen always forget what it used to be called it’s now called the shop app and it’s really just basically tracking your package and you know that kind of thing but that could become a front door so.

[51:29] I think Shopify will have some option where you will be able to either get free traffic or by traffic from some app that’s installed on millions of phones that has some kind of a front door shopping experience.
I don’t think it’s going to be like.
You know I think it’s going to be more at the store level not the item level so meaning you could say I’m looking for stores that have really cool,
dutch ovens and it will show you those kind of things but I don’t think you’ll be able to say you know,
Star Wars Mandalorian six inch figure and get a result across all the Shopify stores.

Jason:
[52:05] Interesting all right.

Scot:
[52:07] You need that make you throw up in your mouth.

Jason:
[52:09] No like a lot of smart people think that that’s going to be a play like it.
And I’m not convinced it won’t be my point is just like everyone’s like oh my gosh shopify’s winning and all these things they’re clearly going to do that and my point is just.
Generating traffic and marketing yourselves to Consumers to get consumer eyeballs is a wildly different skill than anything shopify’s demonstrated so none of their previous success to me other than their access to Capital,
really makes them more likely to succeed in,
generating a lot of consumer traffic so I just think it’s it has some risk and then it has some complication,
um in some ways that that new service would compete with the rebels right so that’s you know always one of the,
the conflicts of having a Marketplace and fulfilling you know,
providing services to people that want to sell direct so,
we will see on that one I do like to point out everyone they keep liking use that metaphor of arming the rebels but if my Star Wars wars correct,
the rebels eventually took all those arms and they blew up an under-construction death star with like a million enslaved construction workers on it so I’m not sure that that’s always a good thing.

Scot:
[53:32] Yeah yes it’s always a different perspective of who the rebels are right.

Jason:
[53:36] Exactly.

Scot:
[53:37] Um and then okay so then my next one so this is number four this is code related and I keep reading these articles about you know here in 2021,
and you and I have had vastly different views of when covid-19,
you know but but you know what I’ve been reading is a lot of people are predicting that these new habits we form will go away and we’ll go kind of back to the old way of the old ways covid ways and I’m specifically saying you know,
we the digital adoption,
I’ve seen I’ve seen a lot of surveys that say people are gonna kind of have thirty percent of this kind of new digital lifestyle stick,
I think that’s actually the opposite I think 70% is going to stick,
and the reason why is I like this phrase zero friction addiction what once you’ve gotten used to this kind of digital lifestyle of stuff showing up at your house,
you know the digital Grocery and all the things that are going on,
it amplifies the friction of that experience in a weird way that messes with your mind that that is hard to explain to people,
and there’s some interesting studies about this but I think,
I think we’re going to stay at this elevated adoption rate of digital will come down some but I think it’s going to stay a lot hotter than people think it will.

Jason:
[55:01] Yeah I certainly agree with the sentiment of that prediction I talked a lot about,
these behaviors being One Way doors and two-way doors there some of the things people walk through it’s easy for them to walk back through a tar and other things once you go through that door it’s kind of a,
permanent decision and I think a lot of these new behaviors are one-way door so I generally agree you’re going to this will be an interesting one with the judges next year because I’m not sure exactly how to quantify it but.

Scot:
[55:31] Yeah let me say can we use percentage of sales that are retailgeek.

Jason:
[55:37] Sure that our digital you mean okay what kind of percentage do are you expecting.

Scot:
[55:44] Well the trick is that the were numbers not out so I don’t know where we landed last year.

Jason:
[55:48] So we’re so,
we can’t January of twenty twenty thirteen percent of all retail so the broadest definition of retail straight from the US Commerce 13 percent penetration the peak of,
nineteen percent penetration in April and pretty consistently for the last four months of the year sixteen percent so we kind of jump from 13 to 16.

Scot:
[56:16] I’ve seen a chart that shows.

Jason:
[56:18] 34 yeah that’s that’s my friends and Mackenzie that smoked something and made a prediction that never came to fruition.
They did also they were defining a narrower definition of retail they were taking a bunch of things out of retail they said can’t it doesn’t include cars because people don’t buy cars online it doesn’t include food because people don’t buy food online,
and of course the both of those hypotheses are totally wrong and covid because people bought a lot of cars and food online.

Scot:
[56:50] Yeah if this Mackenzie company had achieved digital research retail officer then they would not have missed that one so.

Jason:
[56:58] Pretty confident Mackenzie has people with longer titles than me but yeah.

Scot:
[57:02] Okay so I will take so all right so you think it’s settled down in Q3 you 16% so he said.
Yeah so I think it’s going to come off 30% off high so so I’ll say we stick it.
Well if I see 14 necessarily not more than January is.

Jason:
[57:24] It’s one more than January.

Scot:
[57:26] Yeah thanks I’ll say we stay at 16.

Jason:
[57:29] Okay Bolt.

Scot:
[57:31] Okay you’re right now alright prediction and were five,
this has been a nursing so there’s a lot of really weird things going in the financial markets we don’t have time to go into them but one of the ones that’s fascinating is I mentioned earlier IPOs are doubling,
um yeah so and then just this just recently we had Poshmark go public and do quite well,
so I think we’re going to see is,
you know and then there’s this weird thing there’s a space vehicle called a spec which is a special purpose acquisition company where you create this shell of a company it has a you raise Capital into it an optional capital and then you say,
this thing is a vehicle for going in and buying a company that will effectively go public,
so it’s this very kind of weird way to go public through a back door way it used to be very kids today would call its us which is short for suspicious,
now it’s become kind of a thing,
um so I think they’re going to chew through a lot of the companies like open door that are kind of unicorny and have a lot of Buzz and then I think it’s going to become it’s going to start looking for a new space and I think,
you know there’s a lot of Buzz around these DMV bees so I think some of these DMV bees will kind of go public through this mechanism,
um so some of them would be like keeps hims hers that the right one and then.

[58:54] There’s a bunch in kind of like that category there’s a bunch of beauty I could see glossy a they’ll probably go the traditional route.

[59:04] What’s like a tear to too glossy a Kylie’s are they adhere to.

Jason:
[59:09] I don’t think they would call themselves tier 2 but there I mean there’s a million South Korean health and beauty.

Scot:
[59:17] Yeah and maybe even like.
This could be an exit Vin one of the trends that I’ve been fascinated by but I did make this shot is this there’s these companies buying up,
kind of micro brands that are born on Amazon and aggregating them together and forming companies were actually have one on the show soon this could be an interesting exit vehicle for them,
so so I think we’re going to see a wave of that e-commerce in 2021 is my.

Jason:
[59:44] Got it so someone buys up all the foam mattress companies and specs them up got it.

Scot:
[59:48] Yeah yes pack them up.

Jason:
[59:50] I like it is that gonna is there any reason that they would clamp down on this backs it feels like they’re they’re like super peeking is that an abuse in some way.

Scot:
[1:00:01] You’re more government regulation guy that I am I’m sure they’ll think of some reason.

Jason:
[1:00:09] Gotcha ya know but I mean it doesn’t like just when you sit to a Layman it sounds kind of sketchy right.

Scot:
[1:00:16] It is a so it’s a way for for more risky companies to make it into the public markets now there’s a school of thought that says there is an investor that you know,
that wants more exposure of those things right because you know it would have been great.

Jason:
[1:00:33] Products cavea.

Scot:
[1:00:35] Give me a more wide range but then there’s another side of that argument that is you know these these poor kids are on Robin Hood and they saw a firm because they’ve seen it in a check out and they just put you know $500 in there and,
if you’re good because it doubled and if some of these.
Hot IPOs are specs you know if the crater then that’s going to be a problem there are several there are some so there’s one,
Nicola there’s some of the electric car category that have no revenue and just pure speculative and and Dave,
they flopped over that could create a wave of Regulation that says.
Kind of depends on why we these are going public are they are they going public because they’re sturdy and financially viable and vetted or is it,
that they have agreed that they will share their information publicly and it’s up to the investor to take decide what risk them.

Jason:
[1:01:27] Got it okay and then I think that was five so do you have a bonus.

Scot:
[1:01:31] I do I think you know I see a lot I watch a lot of CNBC and there’s a fair number of Talking Heads that kind of say,
you know once covid zof caught covid on covid off you know once covid off we’re going to see an explosion of people going out and buying new outfits and stuff like that and I don’t think that’s going to happen I think we’re going to see the,
the I think we’re going to see this kind of actual,
anti-consumerism materialism wave there’s been a little bit of that generational but I think it’s going to be bigger and I think it’s going to be people wanting you know part of its just going to be people spending money on doing stuff there’s so much pent-up demand go to,
concerts vacations Leisure stuff whatever whatever whatever that is,
but then I think there’s going to be this weird kind of,
you know anti-consumerism wave if you will and I think that’s going to really Advantage companies like the real real thread up,
a lot of those companies that are in kind of that would you call it second hand or Consignment I don’t know the right.

Jason:
[1:02:33] Previously owned yeah.

Scot:
[1:02:34] Previously on gently gently on so I think we’re going to see you know.
I don’t think we’re going to see people run out and buy yep six suits so this is,
conversely this is bad for the Macy’s the Nordstrom’s and those kind of folks I just don’t think there’s this huge pent-up demand to buy you know fancy cocktail dresses and stuff.

[1:02:59] Don’t know how to measure this one that’s why it’s in the bonus category.

Jason:
[1:03:01] That totally totally fair I am it’s funny you like in briefings I do on covid I do talk a lot about a forthcoming,
Roaring 20s that is kind of a backlash too,
to the pandemic but I’m with you I think most of that is,
spending on services and experiences not Material Goods,
so that’s people like you know craving eat out more and go to more wive concerts and events and things like that,
then it is you know filling up their closets with clothes so I think you’re right there I for a variety of reasons,
the clothes thing is going to going to be,
not we’re not going to see a ton of growth in a parallel regardless except for the made-to-order that I predicted.

Scot:
[1:03:57] And athleisure seems to be resilient.

Jason:
[1:03:59] So that’ll be that’ll be good in,
I think we’ve concluded our predictions but I did get a note from the intern while you were sharing yours that you were exactly right our first prediction show was,
January 7th 2016 so this is our sixth sixth prediction show which is.
But more fun he sent me your 2016 predictions and one of them you used again this year.

Scot:
[1:04:31] Really which one.

Jason:
[1:04:32] So you’re six predictions 2016 will be the year chat Commerce know Amazon will make some big moves in logistics yes jet will get acquired yes,
um Google will make a bold move in e-commerce that surprises everyone.

Scot:
[1:04:50] I didn’t even know it was a retread man.

Jason:
[1:04:53] I like it and then Ali Baba singles day won’t work in the u.s. yes so you did really well for our inaugural show,
and the one that you might not have gone right I didn’t check with how we scored it the what you probably got four out of five and the one you didn’t get right you’re still you’re still Reviving for this year so I love.

Scot:
[1:05:12] I’m persistent I’ve learned from your persistence on QR codes did you predict QR codes.
Okay alright.

Jason:
[1:05:23] Yeah well Scott it will surprise no one that is happen again and we have blown through our allotted time we thought this would be a shorter show because we didn’t have the the,
the year recap in it but we managed to stretch it out to an hour anyway but hopefully it was fun to listen to as much fun as it was for us to make and if you enjoyed it we it’ll of that five star review,
especially shout out to all us nerds who have listened to all six versions of the prediction show we’re certainly grateful for your,
your support and your continued Allegiance.

Scot:
[1:06:00] Thanks everyone feel free to let us know your predictions on Twitter I’m Scot Wingo with one t Jason is retailgeek with
two e’s in geek and over on LinkedIn we have a page and then on Facebook we look forward to hearing what you think will happen in 2021.

Jason:
[1:06:19] Until next time happy Commercing.

Jan 8, 2021

EP250- Holiday 2020 Recap

This week we recap the commerce results for Holiday 2020 (including the data sources you can use to get a read for yourself), give an update on #shipageddon, and cover some industry news.

  2019 2020 YoY %Ch
Stores $864.69 $822.79 -4.8%
Online $140.28 $190.47 35.8%
Total $1004.97 $1013.26 0.8%
Nov-Dec Sales estimates from e-marketer $B

Shipageddon Recap:

Episode 250 of the Jason & Scot show was recorded live on Thursday, January 7th, 2021.

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.

Transcript

Jason:
[0:40] Hey Jason and welcome back Jason's got.

Scot:
[0:42] Jason's got show listeners happy New Year Jason it's a new year and you actually said.

Jason:
[0:47] Said the wrong year in the intro so we need to we need to jolt your brain bring it back back into 2021 here get you out of the.

Scot:
[0:54] 2020 one here get you out of the.

Jason:
[0:56] Time traveling hot tub.

[1:05] The grace period ended on the 7th at about 9 p.m. so.
What did you have a it's been been a long time already so.

Scot:
[1:24] The 250 episodes we do about 50 a year so that feels like we've been at this about five years of.

[1:42] Yeah I think have outlasted.

Jason:
[1:42] Have outlasted your wife at this point we're pretty close if I recall sticks.

[2:01] Yeah if you can survive covid then you can survive anything the also you get to.

Scot:
[2:05] The also you get to update your slide and say if you enjoy this talk there's 250 hours.

Jason:
[2:09] 250 hours of me out on the internet.

[2:17] It's a chuckle errands like did you have a good holiday.

[2:54] Cool and I saw you updated your profile picture everywhere that got a lot of lot of chatter out on the interwebs so that was good you you're actually smiling in your new.

Scot:
[3:01] Actually smiling in your new profile picture that's.

Jason:
[3:30] The good news is you haven't changed your Zoom Avatar so I'm sitting here looking at Good Ol.

Scot:
[3:36] 2020 scally Jason or just the one I've.

Jason:
[3:36] Sally Jason would just the one I've known for five years so I'm going to stick with.

[3:56] The one of the character chur kind of things.

[4:29] That's very cool did you get any fun.

Scot:
[4:31] Any fun gadgets.

Jason:
[4:33] To report on for for the listeners.

[4:50] Yes.

[5:58] So it's true.

Scot:
[5:59] Transparent so you're looking through the.

Jason:
[6:00] You're looking through the camera and the camera can't see it.

[6:26] Brickell.

[7:36] Zell.

Scot:
[7:39] Oh oh am I rlu.

Jason:
[7:40] Mayer L you and I okay cool awesome to some good new stuff there.

Scot:
[7:59] To a beachy destination sir.

Jason:
[8:00] A beachy destinations that was good got a little we're here in the.

Scot:
[8:04] The very cold North.

Jason:
[8:05] Carolina so we're get down before T so we had to escape that warm weather which was good and.
There yeah we are we are pretty 10 and then on the gadget side I am I'm like eight steps below you I finally get it.
Kind of more modern dlsr without a mirror that I can do better streaming with so I've been having fun trying to get the firmware update on that that's been an adventure.

Scot:
[8:35] A lot of Mandalorian stuff including a baby Yoda you want to say.

Jason:
[8:38] That's amazing.

[8:51] My name is Greg ooh so that was good.

Scot:
[8:54] That was good yeah so it was it was great.

Jason:
[8:57] And then.

Scot:
[8:59] PS 5 and I.

Jason:
[8:59] S5 and I got an Xbox x so we're caught up on the consoles which is good I always like to keep those current and so that's been left on.

[9:19] They did a really good job on that with the industrial design and the online components and all that jazz so that is actually getting more play than the Xbox right now.
Then there was a.

Scot:
[9:31] There was a software guy who was really fascinating to watch this.

Jason:
[9:33] It was really fascinating to watch this cyberpunk debacle have you tracked this you probably did yeah so they they release this game there was all this.

Scot:
[9:40] Release this game there was all this.

Jason:
[9:42] And then it was so buggy that Sony actually if anyone bought it through the online portal or through the Sony Channel if you will they refunded everybody even kind of.

Scot:
[9:54] Unbeknownst to the game.

Jason:
[9:55] Developer and that caused a whole Rift between them and the game developers working hard the.

Scot:
[10:02] It's a classic.

Jason:
[10:02] Example of better sometimes we fall into this go fast and break.

Scot:
[10:06] Sometimes we fall into this go fast and Break Stuff mindset but this was one of those.

Jason:
[10:09] But this was one of those times when that did not work.

Scot:
[10:22] But there are some fun YouTube.

Jason:
[10:24] There's a lot to learn about this just Google cyberpunk bugs and you'll be.

Scot:
[10:27] Bugs and you'll be driving your little car around.

Jason:
[10:30] And you'll end up inside of a building all kinds of.

Scot:
[10:32] All kinds of all kinds of very strange glitches.

[10:40] Well it's January and you know what that means it is a vent time.

Jason:
[10:43] It is event time and you are you always speak it a lot of these January events walk us through what.

Scot:
[10:47] These generally events walk us through what you have coming.

Jason:
[12:56] Yeah I'm going to miss standing outside the Javits Center and freezing pelting rain and sleet trying to get a cabin and is available and rolling a suitcase through all that misery.

Scot:
[13:28] The thing I'd never gotten about in RF and I do love it.

Jason:
[13:31] It because you and I get to go see all our buddies.

Scot:
[13:33] Buddy's it's over the weekend and like some of the best contents on like Saturday and Sunday and.

Jason:
[13:36] And then like some of the best contents on like Saturday and Sunday and it's just like come on guys.
I know that does that but they're kind of like we're retail we're going to have a weekend meeting just like.

Scot:
[14:36] I think they all attack the opposite side of that argument.

Jason:
[14:37] All attack the opposite side of that argument is your not often do and I think they would show that.

Scot:
[14:42] Retail is flexible and able to change with the times.

Jason:
[14:43] Bull and able to change with the Times by getting rid of the weekend hours.
Covid come game no choice.

Scot:
[15:05] Yeah usually we try to.

Jason:
[15:06] We try to wrap it up we do a recap and predictions in one show at all.

Scot:
[15:10] And show it always is.

Jason:
[15:11] Is an hour and a half which is a little long so this.

Scot:
[15:15] This time we're going to split it up.

Jason:
[15:16] We're going to cover a bit of a recap and some news here today and kind of put a bow on 20/20 and then next week we'll put our big prediction show.

Scot:
[15:30] Bomb this is a.

Jason:
[15:32] To remind folks that we love 5 star ratings so.

Scot:
[15:37] Go to your favorite podcast listener and leave us sir.

Jason:
[15:37] Favorite podcast listener and leave us some ratings that would be great.

Scot:
[15:43] So Jason let's kick.

Jason:
[15:44] Off the recap of the year with our favorite topic ship again what has what's your conclusion for how that went I saw Amazon.

Scot:
[15:52] I saw Amazon's some stuff out there what did we learn.

Jason:
[15:54] Without their what did we learn from them.

Scot:
[17:13] The it is I wish there was more public data out there.

Jason:
[17:17] There was more public data out there.
Feels like what happened is FedEx and UPS by being really stringent on what they took they were able to get most of their deliveries done you know so there are some some cases where they.

Scot:
[17:32] So there are some some cases where they miss some things but what I think that happened is because she.

Jason:
[17:37] Happened is because shippers.

Scot:
[17:41] Get as much through those two channels they really flooded.

Jason:
[17:42] They really flooded USPS so you know.

Scot:
[17:45] There's no unfortunately no the USPS.

Jason:
[17:47] No the USPS doesn't kind of generate a report that says hey look how many.

Scot:
[17:49] Says hey look how many packages we missed but since you and I were really well known for.

Jason:
[17:53] I were really well known for ship again and we got a lot of reports that there were some things that got there really.

Scot:
[17:58] No individually we had some stuff ordered in early December that didn't.

Jason:
[17:58] Really we had some stuff ordered in early December that didn't show up until literally.
A timeframe I had done a calculation that would be somewhere between 8 to 12 million packages with my guess that ended up late they're the folks that ship.
We had them on and they talked about their their tracker so if you go look at that they still have it up you can see that the the.

Scot:
[18:26] Days to ship got up as high as.

Jason:
[18:27] Is kind of mid 627 so six and a half days.

Scot:
[18:33] That's I think that's actually short because.

Jason:
[18:36] Is when you look at the time it was taking you know days to just.

Scot:
[18:40] Days to just get the tracking numbers entered in the system.

Jason:
[18:43] System on the front end of the whole process and even a lot of times on the back end as well so we would we'd have a package delivered and then three days later I get.

Scot:
[18:46] You know on the back end as well so we would we'd have a package delivered and then three days later I'll get a notification from the USPS.

Jason:
[18:53] It had been delivered so it seems like their infrastructure not only their their Hardware infrastructure with trucks and whatnot was.

Scot:
[18:56] That not only their their Hardware infrastructure with trucks and whatnot was maxed out but but off definitely the.

Jason:
[19:02] The software side as.

Scot:
[19:06] That was interesting.

Jason:
[19:07] Is interesting and then that teases up for return again.

Scot:
[19:10] In which I guess we'll talk.

Jason:
[19:11] Talk about on the next show possibly if that's one of our predictions maybe it is maybe it isn't anything else you saw on ship again.

Scot:
[22:00] Yeah.

Jason:
[22:00] It's super frustrating if something is late and it's just.

Scot:
[22:01] Being if something is late and it's just kind of like the.

Jason:
[22:05] The shipper has not uploaded the information nearest like what you have.

Scot:
[22:06] Uploaded the information nearest like what you haven't your go-to as consumer is told me this thing shipped but I'm going to the tracking and it's not looking like.

Jason:
[22:10] Is consumer is told me this thing shipped but I'm going to the tracking and it's not looking like anything's.

Scot:
[22:19] Of course sweetie you have been updating clients on kind of the year-end summary walk.

Jason:
[22:20] So we you have been updating clients on kind of the year-end summary walk us through some of the highlights.

[29:52] One thing I would add is and you may be going there the the shape of the holiday so if we kind of kick off Thanksgiving.
Normally have.

Scot:
[30:02] Have this kind of.

Jason:
[30:03] This kind of.

Scot:
[30:05] You know V shape so you have this.

Jason:
[30:07] Like at the beginning then you have this kind of lull around the 12th to 15th.

Scot:
[30:08] Then you have this kind of lull around the 12th to 15th of December and then you have like what I.

Jason:
[30:13] The Precast procrastinator pop this year it was.

Scot:
[30:15] Pop this year it was like a down sloping line so we didn't have that.

Jason:
[30:19] That kind of shape to the v in the e-commerce side of things and I think that was.

Scot:
[30:23] And I think that was I think you I played a role in that because we educated people on ship again we saved Christmas jacent.

Jason:
[30:27] People on ship again we saved Christmas jacent.

Scot:
[30:35] Gradually since you so we.

Jason:
[30:36] We think hopefully we know in all seriousness hopefully we did help out by alerting people.

Scot:
[30:41] By alerting people to shop early.

Jason:
[30:42] Earlier because.

Scot:
[30:45] I think we ended up at last count I think.

Jason:
[30:48] We end up with like 30 or 40 public.

Scot:
[30:49] Applications really in these are pretty material ones like today today's show and stuff.

Jason:
[30:54] Picked up ship again so hopefully it did play a role.

Scot:
[30:55] So hopefully it did play a role in not causing that that back-end surge to really.

Jason:
[31:11] Amongst us the two of us here.

[36:42] Yeah and I'll be watching for when Amazon.

Scot:
[36:43] Be watching for when Amazon announces Q4 so if the master.

Jason:
[36:47] Hugh for so if the MasterCard data's right and Amazon grew that fast that could be pretty surprising I think to everybody so that's going.

Scot:
[36:53] Pretty surprising I think to everybody so that's going to be interesting to see.

Jason:
[36:57] They benefited from it and you know where Etsy and zup and Shopify so we'll be reporting on all that as it comes out.

Scot:
[37:40] Did I see you too.

Jason:
[37:41] Tweet over the holiday that you wrote some code to.

Scot:
[37:42] They that you wrote some code to pull this.

Jason:
[37:46] Good news.

Scot:
[37:47] Cloud Jason.

Jason:
[40:08] You'll have this running on your watch you can press a button on your watch and tell us how the how the Department of Commerce day.

Scot:
[40:21] Okay that'll be your.

Jason:
[40:21] Okay that'll be your 2022.

Scot:
[40:45] Anything.

Jason:
[41:24] Yeah it's going to be a fascinating Year from that perspective.

Scot:
[41:27] Let's jump into some news it wouldn't be the Jason Scott show without someone.

Jason:
[41:30] The Jason Scott show without some.

[41:45] Natsu in true fashioned we in the.

Scot:
[41:45] In true fashion we in the chip Again part of the show we.

Jason:
[41:49] We did talk a little bit about some of the news.

Scot:
[41:52] News out of Amazon.

Jason:
[41:53] On but there's been a lot more.

Scot:
[41:56] The ones I saw that I wanted to get your hot take on.

Jason:
[41:57] So that I wanted to get your hot take on I think it was.

Scot:
[42:00] I think it was two or three years ago Amazon partnered with let's see Berkshire.

Jason:
[42:01] Is on partnered with let's see Berkshire Hathaway and was at JP Morgan and they were going to do this kind of Trifecta go solve Health Care thing and it was called even and I know.

Scot:
[42:08] Trifecta go solve Health Care thing and it was called even and I noticed as a scene BC junkie the big news I think it is.

Jason:
[42:14] The big news I think it was last week was that they have Unwound that effort and then you've been talking about.

Scot:
[42:23] And you've been talking about how Walmart is kind of got its eyes.

Jason:
[42:25] Art is kind of got its eyes on this the same kind of area what's your take on that.

[44:51] Did you see any other interesting Amazon news.

[45:59] Wow.

Scot:
[46:02] There was a lot of noise about.

Jason:
[46:03] There was a lot of noise about Shopify and Amazon working on a kind of a inside effort to counteract their thing in fact someone said you know besos is highly engaged.

Scot:
[46:11] Inside effort to counteract their thing in fact someone said you know besos is highly engaged and digging into that did you read that.

Jason:
[46:20] And what you make of it.

Scot:
[47:19] Design Web Store it was confusing because everyone everyone called it a dip us.

Jason:
[47:19] It was confusing because everyone everyone called it if us.

[48:17] It's tricky because yeah maybe.

Scot:
[48:20] Yeah maybe we'll talk about this let's save it for the picture.

Jason:
[48:22] Diction check well well pile on the teases yet.

Scot:
[55:33] Then sort of these t-shirts meant to be like undershirts or.

Jason:
[55:34] Is t-shirts meant to be like undershirts or.

Scot:
[55:37] We'll get something printed on them or how to.

Jason:
[55:38] Printed on them or how does that work.

[56:10] Awesome and then.

Scot:
[56:12] Lidar on the iPhone is on the back of the phone.

Jason:
[56:13] Are on the iPhone is on the back of the phone so are you having to kind of like.

Scot:
[56:18] Mounted on a tripod and stand in front of it while someone lines it up early.

Jason:
[56:19] In stand in front of it while someone lines it up / like how did you.

Scot:
[56:23] All that off because you can't really do a.

Jason:
[57:58] So not only does Jeff have your picture.

Scot:
[57:59] So not only does Jeff have your picture he.

Jason:
[58:27] Yeah.

Scot:
[58:28] That's crazy oh sidebar it is a very sad day for Jeff he is no longer the richest man.

Jason:
[58:44] It is yeah if I had to go if I had to take one of my favorite.

Scot:
[58:45] Had to go if I had to take one of my favorite Billionaire's to a deserted island though it probably be long so I'm excited.

Jason:
[58:49] Alonzo I'm excited for.

[58:57] Yeah Jeff is comes across as kind of Will Graham.

Scot:
[59:05] Any other Amazon news before we.

Jason:
[59:08] News before we head to some other news.

Scot:
[1:00:02] Yeah we're converting.

Jason:
[1:00:03] Hurting malls in to.

Scot:
[1:00:04] Vomits understood it's like this huge shift of things happening in.

Jason:
[1:00:08] All these.

[1:01:12] Good did you did you put him in the little cart and does it.

Scot:
[1:01:13] Did you put him in the little cart and does it like ring him up it's like you just bought.

Jason:
[1:01:17] Son you bought a child.

Scot:
[1:01:53] Rick.

[1:05:21] They're probably running it.

Jason:
[1:05:22] In the background and they'll do that that's good because they can check it against the cart.

[1:06:48] You know when you do these machine learning algorithms to so what.

Scot:
[1:06:49] These machine learning algorithms to so what they're probably doing is recording from the.

Jason:
[1:06:53] And then they have the cart is the source of Truth and then they can go run you know 8,000 simulations of the sea.

Scot:
[1:06:59] Actions over the ceiling data and and it will learn the.

Jason:
[1:07:01] Learn the machine learning algorithm will use the cart data as the thing to learn.
Why they need that that one piece of data and they don't need it for very long either they could still have some Target of 99.9% accuracy or.

Scot:
[1:07:10] Piece of data and they don't need it for very long either they could still have some Target of 99.9% accuracy or whatever it is and so you could see.
Maybe a thousand carts that have enough data that they didn't take the cart part out and then trust the.

[1:07:43] Having gone on one of these visits I'd bet they did.

Jason:
[1:07:43] On one of these visits I'd bet they didn't climb up into the shelves and pull off the digital fact aguirre's and figure out.

Scot:
[1:07:50] Out where they went and all the all the things that retailgeek.

Jason:
[1:08:23] Our cameras.
Uh cool coming out of Amazon news one of my weird Hobbies.

Scot:
[1:08:32] Is not keyboarding.

Jason:
[1:08:34] Love to watch read s ones and follow the road.

Scot:
[1:08:35] Watch read s ones and follow the road shows for folks that have so to roadshows are live a lot of people aren't aware that when you go public when you start your Roadshow.

Jason:
[1:08:43] Aren't aware that when you go public when you start your Roadshow which is usually closed outside of covid imagine this is all being done by Zoom.

Scot:
[1:08:52] But you actually put it up on this public website.

Jason:
[1:08:54] Retail Roadshow in right now.

Scot:
[1:08:56] Now there's two that I think listeners would find interesting there's Poshmark and back.

Jason:
[1:08:58] Find interesting there's Poshmark and Petco so those are really good to watch and strongly recommend them so the only be up there are typically four seven to 10 days so.

Scot:
[1:09:02] To watch and strongly recommend them so the only be up there are typically four seven to 10 days so this one.

Jason:
[1:09:12] Sid strongly recommend checking that out.

Scot:
[1:09:15] Um as an entrepreneur I love watching these because they're kind of the ultimate pitches if you will.

Jason:
[1:09:22] These are companies that are obviously pretty large they're either.

Scot:
[1:09:25] There are hundreds of millions if not billions.

Jason:
[1:09:26] Is not billions of dollars in size.

Scot:
[1:09:29] Always learn something about how they pitch their company how they talk about it how they.

Jason:
[1:09:32] About it how they frame things so I like it from a nacho real perspective.

Scot:
[1:09:36] Factor but then I always.

Jason:
[1:09:37] Learn something about cohorts or new category.

Scot:
[1:09:43] How they talk about subscriptions there's always a ton to learn.

Jason:
[1:09:45] Learn from this I strongly recommend.

Scot:
[1:09:47] Listeners and then you send me a really cool deck tell me about this consumer Trends deck that you.

[1:11:56] VC now so maybe maybe she'll add some more content liven it up Shake It Up especially when she hears that.

Jason:
[1:12:02] Show you when she hears that you switched a farmer.

Scot:
[1:12:05] That's going to be a shot across the bow for.

[1:12:42] Yeah and 250 episodes we really appreciate everyone's support we wouldn't be doing this if.

Jason:
[1:12:45] Everyone's support we wouldn't be doing this if we didn't have really engaged listeners we love all the feedback we get from you guys and really appreciate it and looking forward to another great year of.

Scot:
[1:12:49] The engage listeners we love all the feedback we get from you guys and really appreciate it and looking forward to another great year of Commerce.

Jason:
Happy Commercing!

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