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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, 2022
Jan 21, 2022

EP285 - 22021 Full Year and Holiday Data Deep Dive

The US Dept of Commerce December Advanced Retail Sales Data is out, which gives us a full look at 2021 and the 2021 holiday season. So Episode 285 is a data deepdive into 2021.

If you want to follow along, we've made a deck with all the data available at https://retailgeek.com/2021-commerce-recap

Data Sources
US Retail & E-Com Sales Data: US Dept of Commerce
E-Commerce Estimates: eMarketer
Retail Foot Traffic Data: Placer.ai
Web Traffic Data: Similar Web
Holiday Estimates: Adobe, Salesforce, Mastercard

Episode 285 of the Jason & Scot show was recorded on Thursday Jan 20th, 2022.

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:
[0:23] Welcome to the Jason and Scot show this is episode 285 being recorded on Thursday January 20th 2022 that’s a heck of a lot of 2012’s.
I’m your host Jason retailgeek Goldberg and as usual I’m here with your Cohoes Sky Wingo.

Scot:
[0:41] Hey Jason and welcome back Jason Scott chaussures Jason is kind of a shame we neither of us were able to make it in our F but,
one of the things I don’t miss is every year that I’ve gone to in our f for the last three times I’ve went I’ve had trouble getting there or been stuck there so I think
then our F should use this opportunity to move that show out of January and maybe look at something like March or something if they’re going to be in New York.

Jason:
[1:09] Or to the like Bahamas or something.

Scot:
[1:12] Yeah even better yeah let’s make it a destination of it.

Jason:
[1:17] You know you have my vote I’m not sure you have a majority of votes see you if you have mine that would be awesome.

Scot:
[1:24] Yeah just watching and it seemed like some folks went and then they had a lot of cancellations so seemed like it was in kind of one of those weird.
Hybrid states were if you went and then,
person you are going to go see present canceled you sat there in a room with people watching a zoom so that’s number Super satisfying but I do think it seemed like some folks you and I know got together and had some dinners and had fund so hopefully that was that was good for everyone.

Jason:
[1:50] Yeah I had a little bit of foam oh I think you know some people I would have liked to see you know I saw you know social media of them getting together and whatnot and.
It’s just super bad luck I have a feeling if this show was a month later it would be a lot less controversial that traveled to.

Scot:
[2:09] Yeah and what did you want to talk about this week.

Jason:
[2:14] Well you know if we had gone to NRF one of the things that I always like to do it in our f is kind of check in with a lot of our co-workers in the industry and kind of you know get a consensus,
about how the year ended up for everyone and what they thought the big issues were going to be for 20 21.
So since we didn’t get to do that at shop at NRF I thought maybe we could do it on this podcast for our listeners.

Scot:
[2:42] Yeah that sounds good and then I know you always put together a little for your clients kind of the summary deck and I know that’s hard for our podcast listeners so do you have a way to solve that.

Jason:
[2:55] Yeah so what I thought I would do I put together like a 36 slide deck completely full of numbers and what I thought I would do is describe all of the graphs on the podcast.

Scot:
[3:09] Sounds good that sounds good and it’s going to be a we’ll go through it and intricate detail data point by day.

Jason:
[3:14] Yeah because the one complaint I get about the show is that it’s not hard enough to listen to.

Scot:
[3:18] That’s that’s from your mom.

Jason:
[3:22] So that probably isn’t going to work but here so here’s what I did think I do like instead of,
just charging the fortune that we charge clients to go through this presentation I thought I would make a version of the whole deck available to all our listeners so in the event you do want to follow along with the visuals and see the actual data,
we will put a link in the show notes you can hit pause for a second,
you can open up the deck and I will tell you what slides were talking about in case you want to follow along but but Scott keep me honest here we’ll try to make sure we’re talking about in a way that you can kind of just,
just listen along on the podcast and then look at the deck later if that’s the way you prefer to do it.

Scot:
[4:03] Yeah this is a good time if you like receiving awesome decks for your subscription here which is essentially free this is a good time to hit the five star review we always appreciate that and yeah
because we because this is a audio medium we are going to paint pictures with our words and you will see the slides form before your very eyes almost like augmented
virtual reality we’re going to take you to the metaverse on this thing.

Jason:
[4:31] Exactly it’s a meta verse deep dive into a retail in 2021 and let’s jump right into it so.

[4:42] Super quick recap last week the US Department of Commerce publishes published their December
Advanced Data so that gives us the last month of data we need to see the whole year so it’s super exciting for all of us get data Geeks because we now have a complete set of data
the one thing to remember is.
It’s an advanced look and so it doesn’t have the granularity of categories that we would like and one of the categories it doesn’t have is
e-commerce which is highly unfortunate so,
the the Deep dive for the whole year with e-commerce broken out will actually be available in mid-February and that’s also when they published their quarterly.
They’re q4u Commerce data which is a separate report so so we have most of the interesting facts there maybe a couple things that filter in last,
next month but the top line if we add up all retail sales for 2021 we sold just over six point six trillion dollars of stuff last year which is
eighteen percent growth over 20.

[5:53] And it’s 22 percent growth over 2019 and so,
if you do have the deck and you were looking at slide for I show you the last 30 years of growth and the thing that will stand out at you is that this year’s growth.
Is is almost double the average growth we’ve had in any of the last 30 years so unprecedentedly good year.

Scot:
[6:20] This is all retail or not talking e-commerce has.

Jason:
[6:22] Yeah this is this is pure retail will we will double click into e-commerce a little bit later and you know reminder there’s a lot of controversy about what the definition of retail is and so you’ll see millions of different numbers out there and it’s because.
11 data set has automobiles in it and one has doesn’t one has gas in it and one doesn’t you know they’re all these different things I’m using.
The unadulterated numbers from the US Department of Commerce so it does include automobiles it does include gas it does not include restaurants it’s what we call,
in a ICS code 44,000.

Scot:
[7:03] Cool good old code it 44,000.

Jason:
[7:07] If anyone wants to catch me offline and ask for like a different spin I’m happy to talk about how the numbers change when you change your definition but I think that’s too complicated for for the podcast but so before I go any further.
Like is that does that surprise you at all it has is that has that been your perception that these are Monster year that 2020 and 2021 more Monster years for retail because I feel like that’s not necessarily the narrative we’ve been getting in some of the Commerce media.

Scot:
[7:37] Yeah no it feels that is a surprise it makes sense and I’m looking at the slide but it makes sense that we were effectively spring-loaded right because you had the shutdown people really,
you know couldn’t or didn’t buy things from March 20 through and so there’s put up demand but what’s interesting is you really don’t see,
unlike the Great Recession about it no nine you don’t see a retraction before this the splurge and this is way way bigger than that period of time so it is it is surprising.

Jason:
[8:08] Yeah so so,
in aggregate retail did awesome and then on slide 5 I give you this fun way of looking at the data that you and I helped
help kind of evolved together but the idea is that we give you a separate
line chart for 2019 2020 and 2021 and so you can kind of see.
You know how the year stack up against each other and you know.

[8:35] 20:19 was the unaffected by the pandemic than 20/20 happen and of course there was this huge dip in April
when the pandemic first got real for everyone because the NBA cancelled games and it recovered super quick and then you know the rest of 20/20 was actually above 2019 so retail grew.
From 2019 and 2020 even though we were like right in the thick of the pandemic and then in 2021 retail really shot up and the.
The hypothesis here is there are two things that really caused this number one there was a bunch of.
Economic stimulus that was poured into the economy right like there’s a lot of extra money available and consumers were in,
like generally really good Financial shape so there was a lot of potential to spend and then a lot of the things that might have gotten some of that money experiences like travel in restaurants and vacations,
we’re not available in the most consumers so
instead of paying money for a gym you bought a Peloton instead of going to a restaurant you bought groceries and instead of going on vacation you you got new patio furniture right and so you know the combination of,
more money and less things to spend and on ended up being super favorable to retail overall.

Scot:
[9:59] Yeah that makes it so that it’s really a factor of the stimulus is what you’re saying.

Jason:
[10:06] Yeah and we’ll talk about the downside of that if they end of this podcast but so that’s the industry average and I would remind everyone to be cautious.
In thinking about averages because,
very few retailers experience the average right like in general there were big winners and losers based on categories and I’m for the purposes of the podcast we’re not going to talk about category growth or foot traffic.
From 2022 2021 because 2020 was such a weird year because of the pandemic I actually am going to jump ahead in the deck to slide 9 which is where we start talking about,
comparing.
Last year to 2019 so like what the cumulative changes were over the from before the pandemic to you know at the end of the second year of the pandemic so.
Over that two-year growth we grew 22% as I mentioned earlier and so I actually.

[11:09] Put together look at what the average to your growth was every year for the last 30 years and in general the average two-year growth is around 10 to 12 percent so 22% is,
unprecedentedly High.
Two year growth and remember like you know there was in 2008 there was this recession and there was negative growth so you’d think the the year-over-year from that recession would be super high but but this.
2020 and 2021 year is basically the the best years of retail in our lifetime.
And so then I go to slide 10 where I show you how fast each category grew and remember if the industry grew 22%.
You really want to be growing faster than that 22% so the categories that one the grew faster than 22% we’re your new favorite category automobiles.
So they grew at 24 percent which was mildly surprising to me because you,
you know early on you would assume Car Sales slowed down significantly and then of course there have been all these chip shortages that’s made it slightly hard to buy cars,
and yet cars were still one of the bright spots does that surprise you at all or were you totally dialed into that.

Scot:
[12:30] Yeah the counter is the used markets on fire and they’re marking the cars up so there’s kind of like an inflation of car prices in there that I think.
One of the reasons so if there is a car dealers are taking these pretty exorbitant markups on those,
which is kind of short-sighted but that’s what they’re doing and yeah so so it doesn’t surprise me too much when you know
what surprises me is where did it all go so we had this like tsunami you know anything about retail it’s you know it hasn’t been over.
You know like what,
10% for a long time and then you’ve got in the two year ago comparison you get up to maybe like 15% so it’s like a surge year where did it show up like I can’t think.
You know amongst the public companies the Walmarts the targets and that kind of stuff I don’t really see it I don’t see them just like,
blowing up expectations and saying oh my God so much money flooded into our coffers.
I kind of wonder where it went or maybe it’s going to show up and you know in when you when you chart it out it looks like a lot of it came at the end of 21 so maybe we haven’t seen it come out and the public markets but it’s going to be you know I kind of wonder where it went.

Jason:
[13:42] Yeah so I would argue that we are seeing it like in the big companies in the Amazon Walmart Target Kroger and certainly Home Depot and dicks we are seeing it.
And so I think the car one is a harder one to see because the car you know the actual car dealers are so fragmented because they’re all franchisees.

Scot:
[14:05] Carvanha has seen it carvanha.

Jason:
[14:06] The Used Car Guys for sure saw it so let’s come back to that in one second let’s talk about the other two categories that were above the industry average
building materials and garden supplies right so that’s Home Depot and Lowe’s
and you know they’re there to your growth Stacks were like significantly up from previous years and again.
Part of the reason they would be up as people spend a lot more money on their homes when they were traveling last and then and so that category group thirty percent over two years and then Sporting Goods grew 38 percent over two years
so that’s you know dicks and sporting goods and and those folks and they were seeing like
like I want to say the two year growth stack on dicks would be is like 94% or something so.

Scot:
[14:56] Yeah.

Jason:
[14:59] So and then the categories that still like had,
by historic standards great growth but did not grow as fast as the industry average grocery stores so only grew 16 percent I have to say that surprised me a little bit because I would have.
Expected you know with the hit that restaurants took that the grocery would have outperformed the industry average but you know it doesn’t seem like it.
It did and then,
furnishings and furniture and Home Furnishings grew at 21 percent so about the industry average and again because of all the money people spend on their homes I kind of would have expected that to be higher so those two things.
Surprise me a little bit.
And then the the categories that were you know more significantly hurt by the pandemic like gas and clothing,
you know clothing was still up 13% gas was up 15%.
And that’s what hurt looks like right like so you know up 13 percent against the industry average of 22 percent like that’s.
You know kind of the the low end and you know I think if you talk to apparel people during the pandemic they would have said like oh we’re you know we’re experiencing Armageddon if you compare this 13% growth too
you know any of the last five or six years for apparel this would have been a great year.

[16:23] And then the most inexplicable to me of all and I think it just has to do with the mix in this category is Electronics and appliances are only up 6%.
And I I’m totally open if you have a hypothesis cop but like I think everybody bought a lot of extra Home Tech.
So especially the beginning of the pandemic everyone’s buying extra computers for their kids for homeschooling and everybody’s updating their work from home stuff,
and you know over the two-year course of the pandemic you know everybody remodeled their kitchen about new appliances so I’m a little befuddled.
Why that you know that category is literally the bottom of the Barrel in this the US Department of Commerce data and it’s only six percent of growth.

Scot:
[17:13] Yeah let me look at the year.

Jason:
[17:18] I have a so while you’re looking I’ll just I’ll tell you I my.
My unfortunate hypothesis so there’s an enormous flaw in the US Department of Commerce data and that flaw is that they call e-commerce or non stores.
A category.
So you’re either a Peril sale if you sell the clothes through a store or your Anon store sale if you sell the clothes online,
and so if you sell a TV out of Best Buy you’re in electronic sale but if you sell the TV online for curbside pickup.
You’re a.
Non-store sale and so I didn’t mention this earlier but the category that actually grew the most by far during the pandemic is non store sales which are 38% and we,
have any good way to know how that breaks down by category so my hypothesis is the electronics category actually probably
did better but the it over index to sales going online and therefore it gets office gated
in this US Department of Commerce data.

Scot:
[18:32] Yeah and then accentuating this is the supply chain problems hashtag Supply pain where you know a lot of that stuff you would go into the store for especially big appliances where you kind of want to see it and touch it and feel it before you order it,
I know on the order of 10 people that cannot get washers and dryers.
So you know that that was all like this big appliances are in and they’ve been waiting since you know,
Q3 last year to get these things it’s insane so that could have you know so you have this kind of double edged double whammy of a lot of stuff moving
online or non-store from the store in the store or struggling because they can’t get inventory for the shelves and you know every electronics item has a chip.

Jason:
[19:20] Yeah so I do like that I will say it from the data it looks like more of the group The Slowdown was in,
20/20 than 2021 which like kind of argues it like.

Scot:
[19:35] Yeah attribution.

Jason:
[19:37] Yeah so but I don’t I don’t know
and so then so that so far everything we’ve talked about is US Department of Commerce data so I’m also super interested in how many people walked into a store so I asked our friends at Placer AI which is a,
a company that has access to a huge panel of consumers that have software on their phones and it tracks where they go anonymously
and they use that data to forecast.
Retail foot traffic across the country and so I put together a data set so on Slide.

[20:21] 11 of the deck you can see how the 20 21 foot traffic every month compared to 2019 and so for the first half of 2021,
um foot traffic in retail was still down between 10% and 0%,
versus 2019 so fewer people are going to stores in 2021 then we’re going to stores before the pandemic.
And then by July we had our first kind of Positive Growth since the pandemic so July and August we’re kind of up for and six percent over 20 19 respectively,
then we had another slight dip in September and then we had a pretty prominent dip in December of 2021 which was probably the Omicron variant kicking in.

[21:12] But so in aggregate.
There are still fewer people walking in a brick-and-mortar stores in the United States of America in 2021 than walked in a brick-and-mortar stores in 2019.

Scot:
[21:24] There are some it almost like it seems to be correlated an inverse correlation with case count right so in the summer cases were kind of low everything was feeling pretty good and then we had kind of the surge the Omicron surged kind of come back and
here at the very tail end of 21 we saw a really plummet.

Jason:
[21:42] Yeah no for sure and there are lots of people that I have been correlating these statistics to case counts or hospitalizations or.
Or mortality or any of those things in there are strong correlations so you’re certainly right.

[21:56] Um so then I I said all right well let’s double-click on some of the categories that might be interesting and one category that I mainly double clicked on for you was Automotive so for folks that don’t know Automotive is the biggest.
Category of retail spending and which kind of makes sense because it’s the.
The highest ticket item so 1.5 trillion dollars in in car sales in 2021 which is 23 percent of all retail spending so we said 6.6%.
Six point six trillion in retail 1.5 trillion of it was cars and that’s up as we said earlier 24% from 2019 and then I give you kind of the,
the shape of that Demand right and and you know so again,
the best month in the history of car sales was April of 2021 and then it’s been,
tapering off a little bit since then but still up
significantly from 2020 and 2021 is up nominally from from 2019 so a very vibrant year even though per your point you know
it’s actually hard to get vehicles right so a lot of this this.
Increase in sales is an increase in price points and inflation versus unit sold but I think it is a little bit of both.

Scot:
[23:20] Yeah the other changes there’s a pull forward because what dealers have started doing is pre sailing Vehicles so it’s almost like an auction where they’ll say Jason I know you want this IMA Mustang and we got three coming in and August but if you want one of those I’m going to need you to,
pay me to there now I don’t know how that correlates to these numbers but we’re seeing this big pull forward of the consumer
dollars into the auto category because of this pre-sale thing where,
historically it was you would go test-drive negotiate and then buy the car and it was sitting on the lot the inventory model is kind of flipped right now which is interesting.

Jason:
[23:59] Yeah yeah and I know not not related to sales velocity necessarily but another interesting thing is.
The amount of test drives per sale is way down like it used to be like three test drives per sale and now it might be less than one test drive per sale.

Scot:
[24:17] Yeah it’s kind of it’s fun being in the auto category because some in some ways I feel like I’ve seen the movie before right so for example remember when Zappos came out and they disrupted the shoe category by saying free 365 returns,
well then everyone would just buy would say well sometimes I’m an 11 sometimes in 11 half and 10 half I’ll just order all three in return to.
So then everyone had to adapt that new model because consumers flocked to it
and the car industry carvanha has had a seven day return for a vehicle and that’s how they got around the test drive and everyone laughed at him and was like why would you do that that’s ridiculous and then the pandemic it and everyone had to kind of adopt that model so that’s that’s gotten rid of the test drive most dealers now have had to adapt
to that that more customer friendly model and effectively have like a seven day return window.

Jason:
[25:06] Yeah and you know you’ve heard me say this before but I’ve been following the ottoman of
category relatively closely and the grocery category for two big reasons they’re they’re the two biggest pieces of consumer spending
but also before the Pandemic those were the two categories that were released digitally disrupted like a small percentage of cars were sold online a small percentage of groceries sold online and so those two categories were the most disrupted by digital they they got
the most digital fastest as a result of the pandemic so I’ve been super interesting because
per your point a lot of the learnings that we’ve had over the last 20 years in the apparel industry in the consumer electronics Industry and the home industry like are now
you know playing out in an accelerated basis in the automobile industry and in the grocery industry.

Scot:
[25:57] Yeah 11 cool example and I know you know these guys so yeah I tell folks a lot about how Walmart budget and it was kind of like this this analog kind of old-school company building bringing deep digital DNA and we would see a lot of that not emotive category and sure enough
Discount Tire which is a brick-and-mortar tire shop family-owned what are they like 100 years old or something like that and
they just bought Tire Rec which is kind of the you know the online incumbent and they’re merging those two companies together so
it’s funny because everyone thinks I’m kind of a Nostradamus of this stuff because but it’s really just,
the exact same thing we saw happen in e-commerce with other categories as happening in the automotive category.

Jason:
[26:42] Groundhog Day yeah sometimes when I’m impatient I really have to avoid telling clients so I know you need to figure this out for yourself but I know how it is.

Scot:
[26:52] Yeah.

Jason:
[26:54] But so I mentioned the grocery category that’s the next category that I want to talk about briefly so now we’re on slide 14 of the deck,
and groceries the second biggest category of consumer spending it’s fourteen percent of all retail spending so it’s,
901 billion dollars in 2021 and and I mentioned grocery was up pretty significantly up 16 percent but but that you know that is a little less than the industry average
and I give folks that that same kind of three-year year-over-year graph if they want to see it
but then a bonus data breakdown I always like to do for the grocery industry is on slide 16 and this is a,
a line graph with two data points grocery store sales and restaurant sales,
and what’s interesting about that is for like a pretty significant period of time about a 10-year period.
Sales were split almost 50/50 between restaurants and grocery stores so all the the American calories were kind of divided 50/50 between
McDonald’s on Applebee’s and Walmart and Kroger and in the pandemic exactly what you would expect to happen
grocery sales shot up and restaurant sales you know took a nosedive.

[28:13] Over the course of the pandemic they’ve moved back closer and kind of come summer of 2021 they actually came back to where they used to be so they were kind of level again and we were like I wonder if that,
if if that Gap is over but then Omicron appears to have open that Gap backup
so at the moment there is still about a ten billion dollar a month discrepancy between spending on on groceries and spending on restaurant so
potentially bad news for the restaurants.

Scot:
[28:48] Yeah well you wouldn’t know it at my restaurants or so they’re they’re they’re super busy.

Jason:
[28:53] Nice.

Scot:
[28:55] Could be you know we you know it’s interesting traveling around the country a little bit now it’s like living in 50 different.
Countries the way they’re covid policies are so you go to you go to Florida and Texas and everything’s just open and normal and then you go to the north east or the west coast and things are very much shut down,
and here in our kind of a kind of in the middle but we’re still struggling our restaurants part of it could be that they’re just closing all the time so we have several restaurants that just can’t
keep their doors open due to this kind of constant struggle between in
team members employees and supply chain so you’ll you’ll go and they’ll have to close early because they didn’t have anyone to work that shift and then you’ll go and they’ll be like we’re out of
you know it’ll be a salad place in they’ll be out of lettuce you’re like yeah guess may not have needed open but they’ll be in there with nothing to do so so it’s really.
The economy is having a really hard time it’s really kind of sputtering right now across those things which which could fall into restaurants and bars you know this,
looking into this year into 22.
There’s a lot of grocery stores are have bare shelves and I don’t I was going to actually because you’re the grocery guy I don’t know what’s broken in the supply chain there because obviously we don’t rely on China for you know,
a lot of that stuff so it’s not the that specific thing but that seems to have really become discombobulated as well.

Jason:
[30:21] Yeah so yeah for sure there it turns out like there is for a,
a fair segment of the grocery products there is an international component right like so there are weird ingredients
that we do depend a lot on on Imports for right so you know even if the Mondelez cookies are made in the US the sugar for the Mondelez cookies is not and so it
it is possible for the shipping to to have an impact on Oreo availability it just it tends to be delayed because it’s
it’s more the ingredient than the finished goods that that is getting in.

Scot:
[31:01] Catching you know maybe the package.

Jason:
[31:03] The cpg guys even more so right so a lot of the chemicals that get used in cpg products and a lot of the the,
the packaging like blue ink for a while was one of the the the constraining factors and so you know,
Brands did have a hard decision to make do we like change the color of our packaging so we keep stay on the shelf or do we you know try to stay true to our brand and wait for morning.
Which are not decisions you imagine ever have having to make.
Um and then you know grocery is have its groceries a very fragile ecosystem margins are really thin and so.
More so than other categories of retail the wage inflation has a Major Impact in it it actually.
There’s a low-wage workers all the way along that supply chain and so you know a big thing that takes out.
Domestic food is you know there’s a round of covid at the meat processing plant.
And that that can you know be a big Regional hit I walked into a breakfast place last weekend and they were out of eggs,
and I’m like wait a minute I haven’t heard about an egg shortage or like are we having an egg shortage and the guys I know are our manager just screwed up the hole.

[32:27] Yeah but I was I was with you I guess yeah what it’s questionable why you open if you’re a breakfast,
restaurant and you don’t have any eggs or you should at least put a vegan sign up or something I don’t know.
So I always like to talk about a parallel because for a long time apparel is like one of the crown jewels of the retail category and people are super excited about that and you know there was an ERA when those were the best jobs so up,
Peril is much more it’s about five percent of retail sales it was 303 billion despite the fact that we all have been living in sweatpants for the last two years apparel sales were still up 13%,
that definitely was a mostly due to a 2022 2021 recovery 2020 was a really bad year for apparel and it started to come back so apparel is one of the few categories on Slide,
18 where I give you the three-year graph of the the category it’s one of the few categories where the 2020 sales were consistently below the 2019 sales and then 2021 they,
they came back up to the top and you know one interesting fact about a parallel that I give you a data breakdown on 19 is.

[33:41] Apparel has just been getting cheaper over time that in the 1990s apparel was seven percent of retail spending and now it’s about four and a half percent of retail spending and that’s a largely because
good clothes are just less expensive and and you know the same
closet that an American would have had in 1990 Hassel asks in 2022 and so if you’re growing in the apparel industry
you’re you’re growing in a shrinking Market which is you know always a challenge to do.

Scot:
[34:15] The entire Farm it’s kind of shocking to see April 2020 you know touching effectively zero sales and monthly apparel that’s crazy that I feel for those guys that must have been a scary.

Jason:
[34:28] For most of these graphs I change edit the scale to make the graph as high resolution as possible so the bottom of the graph isn’t zero but in a Peril it absolutely is.

Scot:
[34:38] Yeah might as well be easier yeah.

Jason:
[34:40] Um and so,
so that’s enough of the categories I know a lot of listeners on our show were particularly interested in e-commerce I wanted to talk about e-commerce for a minute I mentioned the official.
Breakdown of e-commerce you know we won’t get for December until the middle of February we do get a,
a kind of proxy for e-commerce which is called non store sales it is a it is a bigger bucket and it has more other stuff in it than just e-commerce but if I look at,
the 11 months of internet data and then the the one month of non store sales data.
It’s pretty clear that we’re going to come in around a trillion dollars in e-commerce sales so if the official numbers work out the way I think this will be the first year the e-commerce in the u.s. is over a trillion dollars.
Um that would represent 16 percent of retail sales so 16 doesn’t sound like a huge number,
but again it just depends on what your denominator is that 16 percent is you know overall of retail which includes,
cars which are getting more digital but still aren’t very digital it includes gas which is you know only digital in a couple neighborhoods in San Francisco,
um and so I you know you start pulling out some of those traditionally non-digital categories and you know.

[36:02] That one trillion dollars represents about you know between 20 and 25% of all the categories that that you know people are willing to buy online and so it’s become a very meaningful mix and obviously.
It was the fastest growing because of the pandemic but inside 21 I show you the the.
The three-year breakdown and the thing that’s unique about e-commerce versus some of these other categories.

[36:32] E-commerce head its monster growth in 2020.
So the two-year growth numbers are still amazing but the one year growth numbers from 2021 to 2020 are not so great because we’re comping against.

[36:46] A monster year and it’s been interesting because like Shopify stock is down because their comps aren’t very good right but really there you know.
They’re comping against these monster numbers.
You know lots of retailers are calling me right now and they’re in a panic because they’re not they didn’t hit their goals and their their you know numbers are wrong and I’m like.
I mean they’re you know their numbers are soft and I’m like well but let’s look at what really happened like you had unprecedented growth over the last two years and you’re you know you potentially are.
Thinking about it in the right way so on slide 22 I give you my,
entire story of the world going digital in one slide and it’s a little hard,
hard to follow but basically what I show you is I show you the brick-and-mortar sales every year or every quarter and then on top of that I show you the e-commerce sales so you can see the e-commerce growing you can see kind of,
as a portion of retail what it is and then I show you the rate of growth for for retail and e-commerce and until the pandemic we had a pretty consistent story,
e-commerce was growing at like between 15 and 20% a year and brick-and-mortar was growing at three to four percent a year and that was pretty reliable,
so then the pandemic happens and brick-and-mortar shrinks for a quarter and e-commerce explodes by you know over 40%.

[38:10] And since that time they’ve been coming back and so for the first time in my life time in Q2 of 2021.
Brick-and-mortar actually grew faster than e-commerce for the first time ever.
Largely because of the you know they’re comping against these these you know huge huge March of 2020
and you know I will see you when the data comes out next month but I have a feeling we’re regressing pretty quickly now back to the kind of the
the pre-pandemic rates of growth like we absorbed all this big e-commerce growth for two years and I can you know I kind of think we’re gonna see e-commerce level back down at that 10 to 15 percent growth every quarter and and Retail drop back down to the 45 percent growth of quarter.

Scot:
[39:06] Well I think it’s you know
I think the silver lining for me is and I’m the e-commerce guy here is we had the Surge and then we actually did kind of even better than the surgeon you know you could have painted a story that said this will kind of flip – for your to as it kind of the subsides and then
then we get back to normal so so the rising tide kind of stuck and created a new high and then we have continued to grow from there
how does I know this this agitates you which is why I bring it up but you know this does not support you know that
Theory out there that we pulled forward like five years of e-commerce.

Jason:
[39:43] Yeah no we we didn’t and most of the evidence now is that.
We’re we’re not even way ahead of where we would have been that like like we we got the sales early but that.
The future growth is.
Slightly slower as a result so that like five or 10 years from now you know will see this this blip on the graph but we’ll kind of you know end up at the same
same place we would have end up without the the pandemic is most people’s projections that’s less to true in some of these,
digitally immature categories like grocery or automobiles where we really did probably pull in you know kind of accelerate two to three years into the future.
And so I did on slide 23 I give you the our estimates of the 2021 e-commerce sales for a bunch of retailers because I’m often surprised people.
Don’t necessarily have.

[40:52] The the best perception about how the relative size of all these retailers so these estimates come from emarketer there there gmv us estimate for Amazon is on the high side of all the estimates I.
I look at but they have 20 21 gmv for Amazon and about three hundred seventy six billion.
Walmart’s the second largest e-commerce site by a lot at 60 billion so quite a bit smarter than Amazon.
Until recently eBay would have been the second biggest site and Walmart’s approaching twice as big as eBay now so they have shot past eBay.
To get to 60 billion eBay’s at 38 billion apple is at 37 billion and then like people people forget how big a player apple is alone I saw a funny stat that like.
If the air buds alone the air pods alone were a company like it would be the 10th largest company.

Scot:
[41:50] Yeah that’s crazy.

Jason:
[41:52] And so then you get like a Home Depot is almost 20 billion targets 8 almost 19 billion Best Buys on you know over 16 billion,
Costco who’s the bane of my existence Costco like pays the least attention to digital they you know always talk about how unimportant digital is and how they don’t like it,
and I tell everyone what a horrible mistake that is and then Costco continues to Excel and despite not trying they sell 14 billion dollars a year on line.

[42:24] So then you can see the rest of the the top 15 on that slide on slide 23 if you’re interested but it’s interesting to understand the.
The relative size of some of these companies.
And so then you know one of the things that people always ask about is what did holiday look like particularly so the next section of this deck is,
a double click on on holiday 2021 and so.
I’m defining holiday as November and December sales that somewhat controversial because there’s a lot of different ways to think about it.
If we just look at November and December sales this holiday period was the the largest retail holiday ever.
And it drew about 16.1%,
which is vastly faster growth than any other holiday like the next biggest holiday was 10% so so kind of the same story for the whole year we get in Holiday it was a monster holiday,
um
You know again that depends a little bit on how you Define retail in RF likes to pull gas out of their number so they’re there they would say holiday was 14 percent growth which is still.
A monster number.
So then I went back to our friends and place Rai and said hey what is foot traffic look like every week of holiday.

[43:49] And that to me was kind of interesting so.
You know December foot traffic was down overall I’ll remind you because of Omicron but if we kind of look at the the weekly data for Holiday foot traffic was actually up versus 2019.
Leading into the Thanksgiving weekend and so then the weekend that was way down was Thanksgiving weekend way less people went to stores on Black Friday,
then went to stores in 2019 about six percent less,
and then you know the rest of holiday was slightly above so if it weren’t for the decline in Black Friday traffic I would say foot traffic and Retail was up about 2%,
over 2019 but that Black Friday dip pulled the whole thing down to where we still aren’t back to 2019 levels does that kind of make sense.

[44:44] And so one of the things that is a common narrative about holiday and I’ve even contributed to this narrative is,
man retailers are really trying to pull sales in and holiday starting earlier in October and you know holidays flattening it’s less about these big,
spikes on on Black Friday and Cyber Monday and so now that we have real data I’m like oh well let’s see how,
how that really held up in the first thing to know is.
The early sales in October was kind of a myth like there was not an unusual spike in sales in October and so you know.

[45:20] There was not a huge success in pulling sales into October and so then what I did is I went to similarweb which similar web has a data set of e-commerce site visits and what I like about that is,
we can get much more accurate granular data than we can on like foot traffic or you know foot traffic or lucky to get weekly data but for e-commerce we can get
daily number of sessions or unique visitors or things like that so I said hey let’s take the hundred biggest e-commerce sites in the US and let’s see total visits and let’s compare,
2019 with 2021 and the first thing to remember is.
You know Thanksgiving doesn’t fall on the same day every year and so what I did is I normalize those I said let’s not do November 1st through December 31st,
let’s do the 25 days before Black Friday in the 32 days after Black Friday so that we could kind of.
Match up the the flow and what you’ll see is there was a lot more traffic on e-commerce sites every day of holiday in 2021 than 20 then 20,
except for two days Black Friday and Cyber Monday and Black Friday and Cyber Monday 2021 with still above.
2019 but they were nearly the same and so.
The I guess what this would say is this partially Bears out our hypothesis.

[46:48] E-commerce visits did level out like the traffic did get spread out to the whole 60 days more than ever before but those those two tent poles are still tent poles and they still are by far the busiest days,
so I you know I definitely you know think that the narrative that like those Temple days don’t matter anymore is kind of a misnomer and they you know they got nearly twice as many visits as a normal holiday day.
Did that surprise you at all.

Scot:
[47:20] The surgeon the chart 21 is interesting at the end I think that’s my procrastinator people.

Jason:
[47:28] So so yeah so.

Scot:
[47:29] It’s where I shop.

Jason:
[47:29] It’s God’s talking about is the gap between 2019 and 2020 is pretty consistent but then opens up the most ever has,
um the very end of the holiday and my hypothesis for that is again this is e-commerce it’s Omicron again so I.
There was pent-up demand to go to stores people were going the store store traffic was going up and then store traffic fell off a cliff
the last half of December as people started getting nervous and so I think that you know drove more people to e-commerce again as my least is my hypothesis.

[48:03] And so so that I think is a super interesting data set I definitely am grateful to have access to the similarweb stuff and wow I was diving into their data Isles
one of the cool things there’s we can see traffic on individual website so I said,
well let’s see who the winners and losers are in terms of traffic and the story here is.
The the traffic is disproportionately going to the the big high-performing sites so you know not surprisingly,
Amazon gets the most traffic but they also got the biggest chunk of traffic growth so sometimes you’d say hey the biggest most established players should be the hardest to grow.
Amazon Druids traffic faster than any other top 10 retailer which is pretty impressive,
and then the next biggest grower was Walmart so this is kind of the story of the rich getting richer and you know traffic and sales consolidating on the,
those those very big a sites which is kind of the story you see on slide 29 if you’re following along on the deck.

Scot:
[49:12] The thing that fascinates me about this data is you have like Etsy with the fourth most traffic but then they’re like one of the smaller e-commerce sites right so does that,
yeah it does that mean no well that’s apples and oranges I guess that’s all of retail in the previous comparison.

Jason:
[49:30] No that was at Seas.
These e-commerce sales are about little less than 8 billion in the u.s. versus like Walmart at 60 billion but then Ed C does have like like nearly as much traffic as Walmart right like.
I want to say they did 600 million,
visits over the holiday period versus Walmart did like 1.1 billion so,
so you know despite Walmart being 10 times as large they only had twice as much traffic and I think part of the reason for that is the the.
Kind of thin long tail nature of Ed c means that their overall conversion rate and the amount of you know pay visits you have to do to find what you want is.
Is higher than then it is on Walmart where you’re more likely to go to Walmart with with high purchase intent for a particular item and these days it’s pretty easy to find that item and get out.
Um and that kind of is born out Ebay is still the second large just traffic site even though they’re they’re shrinking and again eBay’s almost half the size of Walmart but eBay is traffic is still higher than Walmart’s.

Scot:
[50:52] Yeah it’s a huge it’s kind of sad in one way but it’s a huge opportunity Bay could get their act together and convert that traffic the way Walmart is they.

Jason:
[51:00] Yeah if I could redo our.
Our predictions episode so you know I talked about in a number of times on this that one of the big trends is retail media networks and you know people selling ads
what this data set uncovers more than anything else is the untapped opportunities Ed C needs to get a retail media Network up as soon as possible because I,
as far as I know they don’t have one.
So they should be monetizing that traffic because that that that that’s a valuable asset they’re not they’re not leaning into yet for all our Etsy listeners so then I will just say in this is you know the Chrome Legend in me,
during holiday we talk a lot about these
estimates from companies right so Adobe you know you know we have on the show and they give us their real time estimates based on on all the customers they see we have sales force on the show every year and they give us real time estimates
and then you know when we talk about that I don’t think we’ve had on the show is Mastercard has this product called spending pulse which is,
kind of an anonymous aggregated view of all the people that buy stuff with MasterCard and.

[52:08] Just just for interest Adobe MasterCard in Salesforce all agree,
um that the e-commerce grew about 10% in in Holiday 9 or 10% and holiday of 2021
and that passes the smell test again we don’t have the e-commerce data for for December yet so I don’t really know but that.
That feels like the right order magnitude so I think you know these guys all credibly predicted,
the shape of holiday e-commerce but the only one of these guys that predicts brick and mortar is Mastercard right Adobe and Salesforce are pure online retailers and
every year I always get weird data from MasterCard and I say this because the whole.
The whole world and especially the media like publish this MasterCard data far and wide and and treat it as fax MasterCard like on December 26th said that,
retail sales were going to be up 8.5% and that meant they were going to be up 10.7% versus 2019.
And so we now know from the US Department of Commerce data that that they were off by 50%.
So just call out to my friends at MasterCard that I’d be curious to understand what’s going on there from my.

Scot:
[53:31] Your category thing.

Jason:
[53:32] Yeah from my seat Well they argue it’s not but from my seat there consistently off on the brick-and-mortar number so I’m I’m curious and so then.

[53:42] Every time I have this conversation with a colleague or a client the especially someone that maybe doesn’t live and breathe e-commerce every day is soon as you start talking about this monster growth number,
what everyone asks is yeah Jason but how much of that is inflation right because the thing we hear about in the media the most.
Is is inflation inflation inflation and so you know it stands to reason if.

[54:09] You know if something grew by 10% and people are paying more you know ten percent more for everything then that explains it and this you know this is an inflation story not a growth in consumer demand story and so I like to put in.
Just a little kind of inflation picture at the end.
The so I give I give folks a graph of the government,
inflation numbers for for for these three years and and what you can see is that like for most of the pandemic inflation.
Kind of stayed in the normal range and then we started this,
this huge climb not until January of 2021 so if you remember like all a lot of this growth were talking about was 2020 growth,
inflation doesn’t explain that growth at all there is significant inflation in all of 2021 and it’s historically High
it’s you know depending on how you want to count it could be a 40-year high and so it finished in December.

[55:14] At seven percent and so if you figure normal inflation,
is a about 11 and a half percent inflation was already high before the pandemic at 2.3 percent.
You know if you say alright it should have been at 2.3 percent and it’s at seven percent then you could.
Say that the kind of back half of 2021 sales that you know.
That three or four percent of it can be explained by inflation but definitely not this 22% were talking about.

[55:48] And I don’t know if you been thinking about her talking about the inflation a lot it’s kind of.
It’s it’s kind of funny because I always like to remind people the long-term picture we’re all paying way less for goods than we ever did before so I kind of pull this.
This 20-year inflation number to remind people that like we’re paying fifty percent for a pair of what we paid 20 years ago we’re paying,
30% last for personal products and beauty products were paying 17 percent last four cars we’re paying 12% less for food all the tangible stuff we buy is getting cheaper because we’re getting better at making,
and where the American family’s budget is going is to Services right so you know the American families having to pay way less for hard goods and food and way more for housing education and Healthcare and that’s the big macro picture,
but then we’ve had like the we talked about a lot of the growth in retail coming from all this economic stimulus,
the the downside of that economic stimulus is.

[56:47] It actually is one of the contributing factors to inflation right like the people have more money to spend,
um they buy more the supply chain wasn’t prepared for that buy more and so we have,
supply chain disruption and so now you have Supply going down and demand going up and what do people do in a rational Market when they they have high demand and low Supply they they charge more,
um and so then you know people say hey everything I buy is more expensive I need to get paid more and we have this unprecedented leverage that workers have right now
because the labor shortage so they’re all negotiating better prices and guess what that means they can afford.
Pay more again and and manufacturers are you know having more costs of labor for making stuff so they’re charging more and what’s been super interesting and all this is,
you know it’s kind of an excuse for manufacturers to charge you more like most of these manufacturers that are raising their prices are also setting record profits so it’s not like.
True that like.
All of this information is manufacturers passing costs on to Consumers it’s a little bit of the the you know opportunity of the moment of you.

Scot:
[58:01] Yep it’s complicated to the inflation a lot of its gas and then to your point a lot of it’s stuff that doesn’t have this inherent
deflationary element to it like healthcare and we’re paying more and more for healthcare education anything that has a service component is shooting way up.
But even even in the short term though like yeah everything at the grocery store is insane right now it’s crazy.

Jason:
[58:27] Yeah and food and gas are historically more volatile so inflation goes up and down more like side note you have to take all these numbers with a grain of salt because the way they measure it is,
they measure the cost of a basket of goods that an average American bought but they built the basket of goods in like 1945.
And so it’s not the right past it’s for today there’s no iPhone in that basket.

Scot:
[58:50] Yeah.

Jason:
[58:52] So yeah so it’s interesting fun it’s fun for me because I’ll actually be on Good Morning America this weekend talking about inflation.
Yeah always fun but yeah I.
I’m with you if you take what’s called core inflation where you pull gas and food out inflation’s like 4.5% so for most of these retail categories,
it’s part of the story but it definitely would be a mistake to Discount all this growth and say oh it’s just.
And that’s my scoop that’s your 36 slide deck that you’re all welcome to grab and use my thanks to all the the data providers that contributed to all of it so I have a,
a bibliography at the end so if you’re interested in starting to track any of this data on your own I tried to make that easy for you.

Scot:
[59:41] Yeah when we do when we post the show will also try to get on our socials because I’ve had some people say they can’t find the show notes and so we’ll make sure that we disseminate this wide and so everyone has it.

Jason:
[59:55] Well Scott not surprisingly we were able to perfectly fill up an hour with this one topic.
So hopefully you found value in this is Scott mentioned the top of the show if you did we sure would appreciate that five-star review,
but thanks everyone for kind of following Along on this like pretty dry difficult data dump episode I hope I hope it was useful please,
give us feedback if you liked it or if it was not the right format.

Scot:
[1:00:23] People of data in retailgeek delivers and until next time.

Jason:
[1:00:28] Happy commercing!

Jan 7, 2022

EP284 - 2022 Annual Predictions h

2021 Predictions Recap

Jason:

  1. Made to Order apparel business > 9 figures Yes
  2. Retailer offers viable health alt insurance option to consumers No
  3. Grocery E-Com > 10%  someone deploys(not pilots) MFC Yes
  4. Amazon Shopify Competitor (shipping solution) No
  5. Retail Media > $20B Yes

Bonus – More store closures in 2021 than 2020. No

Jason Total Score: 3 of 5

Scot:

  1. Amazon move to same day prime by opening a huge wave of neighborhood DCs (near DSPs) Yes
  2. Shipping (Shopify) – launch own DSP No
  3. Shopify marketplace No
  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. Yes
  5. spac/ipo? Dnvb wave Yes

Bonus: post-covid anti-consumerism/materialism wave No

Scot Total Score: 3 of 5

We have a tie, including the tie-breaker. Here are some relevent links:

2022 Predictions

Jason:

  1. NFTs, Web 3, Metaverse, and Ultrafast delivery services are all overhyped and don’t deliver meaningful commerce revenue in 2022.
  2. Shein exceeds $30B in annual sales, disrupting apparel industry
  3. Adoption of BNPL services slows down to less than 15% CAGR in 2022.
  4. Amazon opens more than 100 Amazon Fresh grocery stores
  5. Last Mile evolves Veho, X-Delivery, shipium, or Instacart gets aquired

Scot:

  1. Amazon launches a competitor to Shopify webstore, possibly via a headless solution on AWS
  2. Amazon wins ultra-fast delivery. Gopuff, Gorilla, or  Jokr goes out of business in 2022
  3. Metaverse gets lots of buzz but no revenue
  4. Livestream commerce goes mainstream in the US 
  5. Fabric gets acquired

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

Episode 284 of the Jason & Scot show was recorded on Thursday, January 6th, 2022.

ttp://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:
[0:23] Welcome to the Jason and Scot show this is episode 284 being recorded on Thursday January sixth
2022 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott Wingo.

Scot:
[0:40] Hey Jason and welcome back Jason Scott she listeners happy New Year Jason and listeners it’s 2022 here we are we made it.

Jason:
[0:49] I know I feel like I’m already winning because the intern type 2021 in the show notes and when I read the intro I caught it in my head I feel like that I’m impressed with myself right now.

Scot:
[1:00] Boom yep and there that was bad timing because there is a performance review coming up so that in turn is going to be in some pretty pretty thin ice here so we’ll see hopefully they make it through.

Jason:
[1:13] Might be another year probation before he gets to start taking a salary.

Scot:
[1:18] Yeah most important question are you watching the book of Boba Fett.

Jason:
[1:24] I am I am we have to be careful not to do any spoilers but.

Scot:
[1:29] Never spoilers never a million spoiler.

Jason:
[1:31] Spoiler free pass.

Scot:
[1:33] I believe he got eaten by that giant thing in the desert oh sorry those spoiler.

Jason:
[1:39] Yeah.
Yeah there are I will let I’m not going to reveal anything but there is sand in the new episodes.

Scot:
[1:49] Yeah yeah he want he like Star Wars you get a lot of sand in some people hate sand but Boba doesn’t seem to mind.

Jason:
[1:57] No I think he’s had to adjust but yeah really well done show been enjoying it felt like there was a end of the year there was kind of a little role in television programming in our household so it’s been exciting too
Taz some of these series come back.

Scot:
[2:13] Let’s jump into it cuz this is sometimes one of our longest episode so we’re going to try to try to not go too crazy long.

Jason:
[2:20] I feel like we just lost half our listenership right there.

Scot:
[2:23] Like I don’t believe that this is gonna be a three-hour I am happy that Joe Rogan is starting to do these like three-hour heh,
episodes it makes me feel better about our one hour winds so this is every the first show of every year is been are many many year,
tradition to go through our past years predictions and then formulate our predictions for the upcoming year,
and that is this show it is the 2021 prediction review 2022 prediction Revelation show feel like we need a sound effect for that,
but.

Jason:
[3:00] I have a sound effect but I feel like I’m going to leave yours in.

Scot:
[3:02] If you can beat that you know over override it there.

[3:10] So the way we do this is we do have to show is kind of doing our predictions and kind of self scoring ourselves in Jason’s it’s kind of,
banging your head against a book typically self-flagellation or whatever it’s called and then and then we are back after the show is hopefully we learn from these predictions we made and we,
cast them forward to see what’s going to happen this year so I feel like Jason we should I think you actually won last year if I remember.

Jason:
[3:41] In a major upset I feel like I had been like over 45 the the previous app that seasons.

Scot:
[3:48] Yeah yeah so you get the dubious honor of getting to rate your 2021 predictions first so why don’t you kick us off.

Jason:
[3:54] Awesome yeah and spoiler alert we do not learn from the previous years.

Scot:
[4:00] Well part of making predictions is you yeah yeah yeah you got to kind of put it out there and that’s risky.

Jason:
[4:07] Sure so I’m always looking forward to this episode I’m super excited about it I get
you know jazzed weeks in advance and then I like dust off last year’s forecast and suddenly I’m a gloomy because I realize I’m not near as clever as I remembered myself
so that’ll just set the tone up front so my first prediction last year was that more
personalized made to order products would be taking off this year and my specific prediction was made to order a parallel with grow to be a nine figure 9 digit,
business in 2021 and so good news bad news that happened so,
if you add up the revenue from Indochina oh and suit supply,
proper cloth and not standard you actually get now about 250 million in Revenue which is,
considerably higher than nine figures.

[5:14] In hindsight it wasn’t that good of a prediction like we are pretty close to nine figures before last year.
And so it wasn’t as stretchy as I had hoped and I had in mind a lot of more.
Well we’re in consumer products pivoting the made to order and I specifically had been watching some some Amazon Pilots around made to order and they didn’t really grow this year at also,
technically I guess it was it happened but I don’t feel very good about my first one.

Scot:
[5:46] Okay yeah well it’s a win just take the W dude.

Jason:
[5:53] Okay all right yeah well I’ll try to be more more strict going forward or just make better predictions so my second one,
there’s been a lot of initiatives around retailers weaning in the healthcare and I propose that at least one retailer would,
launch their own health insurance or offer some alternative solution to health insurance,
and while there were a bunch of investments in health care and Amazon you know in particular has done a lot in the last year I don’t think that really happened so I’m giving that a no.

Scot:
[6:29] Yeah and in fact that was like a huge loss because Amazon Unwound their big partnership that made it seem like they were going to do a lot more in this myth.

Jason:
[6:37] Yeah that there is some Nuance there they they were part of a Consortium and they bailed on the Consortium but then they invested a lot more money and did several acquisitions,
and expanded the scope of their own internal initiatives and it almost look like the the internal stakeholders didn’t like partnering with Goldman Sachs and Berkshire Hathaway but nevertheless.
I’m I’m not taking that that win that that didn’t happen so.

Scot:
[7:09] What attracted such a big L kind of swamps the W from the first one.

Jason:
[7:14] Yeah cleaner it correctly so the next one was interesting I said that e-commerce would
grocery e-commerce penetration with grow above 10% and I said someone will deploy not just pilot these micro fulfillment centers for grocery in both of those things basically happen so
bricks me clicks which is one of the more credible sources out there for tracking grocery penetration has us at about fourteen percent penetration right now.
So we definitely passed that ten percent threshold obviously aided by,
the pandemic and the various waves and then several retailers leaned into mfcs a couple small retailers did deploy them,
across all of their stores so like a chibi for example is aggressively rolling out mfcs
Walmart I want to say spent like 14 billion dollars on on MFC so real money is,
is getting invested in there so I think generally I feel good about my my grocery production number three so so.
Two yeses and a know so far.

Scot:
[8:29] Is this a bricks and clicks thing is that a can mere mortals get that or is that something you get.

Jason:
[8:35] Well there’s a there’s a paid version which is well worth it if you follow the industry but they do publish their monthly forecasts for free on their website at bricks me cliques.com.
It’s pretty interesting so there you know we get.
Grocery sales data from the US Department of Commerce and e-commerce data but we don’t get grocery e-commerce so there’s the grocery e-commerce we only get from a couple of these third-party private.
Data providers and they all do it primarily based on.
Big panels of consumer surveys so that’s what bricks me clicks does but they they have some like pretty interesting data like you can look at what percentage of those grocery e-commerce orders were home delivery versus curbside pickup and stuff like that.

Scot:
[9:26] Very cool there’s a how do they get their data.

Jason:
[9:30] Panel so they’re there.
Yeah they’re serving a bunch of consumers yeah.

Scot:
[9:38] All right I’m going to remember you you did that.

Jason:
[9:42] You make you make use with what is available.
Um and directionally emarketer published some grocery data and they kind of roll together a bunch of people’s forecast there’s another company out there called mercado’s that publish them data and it also aligns,
directionally that there we are over 10%
where they disagree more is where we started before the pandemic so some of them have us starting at like two-and-a-half or three percent some of them have as high as six percent before.
Um over 10 now.
And if you’re super interested in the interest of prolonging the show frequent friend and guest of the show Professor Dan McCarthy they he and his students just published an interesting.
Cohort analysis of,
um how the pandemic impacted digital restaurant sales so closely related to digital grocery right and obviously a lot more people ordered restaurant food for delivery during the pandemic but his interesting question was,
um

[10:49] Was that you know a pandemic Spike and it’s going to go down back down to pre-pandemic levels or is it a permanent shift and what can we suss out and the way they did it is they looked at cohorts that.
They ordering from restaurants for home delivery before the pandemic and how their behavior change versus first time users and what they found is like most of the growth was.
Households that were already using restaurant delivery increase their usage and it appears to be more sticky the smaller cohort of people that ordered from restaurants for the first time during the pandemic,
that behavior did not stick and they’re not continuing to order but still the sales are up higher.
There’s a nice long digression for you that wasn’t one of my forecast.

Scot:
[11:33] Always appreciate the commentary.

Jason:
[11:36] Yeah I’m here for you man so forecast number four was.
I predicted that Amazon’s Shopify competitor would be revealed,
in this is a thing that we had heard about called project Santos but no one really knew what it was I said hey we’re going to find out what it is and I think it’s going to be a shipping solution to compete with,
to fulfill orders for Shopify and take take you know a piece of the Shopify gmv.
And it was in fact revealed so that’s the good news it was not a shipping solution so so project Santos turned out to be,
a point-of-sale system for brick-and-mortar retailers that Amazon is developing,
and has still not released but is purported to be small business POS system that’s going to compete with Shopify and square and some other folks in that space so,
I’m giving that a no.

Scot:
[12:42] All right I agree on the phone.

Jason:
[12:44] Cool cool.
Interesting news and Evolutions there to talk about on one of our subsequent new shows is there some interesting patterns that Shopify and others of,
have filed in that space so we get to my fifth prediction my fifth prediction was that retail media networks were going to take off in 2021 and that they would generate more than 20 billion dollars in ad revenues,
and put things in perspective like the year before we had only seen about 10 billion and AD Revenue so that was a meaningful prediction and that.
Totally happen so according to emarketer we did 24 billion,
in calendar year 2021 in ads that were invested in retail media Networks,
um Amazon is on a run rate right now to do about 30 billion dollars a year and everybody and their brother is launching a retail media Network so the Gap is launching a retail media Network which is.
Interesting most of these,
retail media networks are selling ads to what we would call endemic Advertiser so your Duracell batteries you sell batteries at Walmart you buy an ad from Walmart for Duracell batteries to help more people find them.

[13:57] Gap doesn’t sell other people’s stuff so there are no endemic advertisers on the Gap right and so super interesting that even they are trying to monetize their traffic.
You know you name it they watched a retail media Network this year and just today I want to say Best Buy which already had a retail media Network,
launched a new rebranded retail media Network and they’re now selling ads to non-endemic advertisers as well so so that when I feel like I hit pretty well.

[14:28] So you add that up and that is three corrects and and to to mrs. and folks careful listeners will note we also made a bonus prediction and the case that we tied,
in my.
My bonus prediction was that we would have even more store closures in 2021 than we did in 2020 and I was wildly wrong,
so
caveat here are the data everyone uses when they quote store closures is this core site data and core site is kind of anecdotal data and it’s totally tracking Big Chain,
retailers but based on their data there is like 41 percent fewer store closures in 2021 than 20/20 so so we’ll call that a huge mess,
um I would argue that all the store closures that happen this year were small independent retailers that got wiped out by these big chains,
and we really don’t have a good data source for for those but nevertheless I’ll accept that I lost the bonus round badly.

Scot:
[15:28] Yeah in fact isn’t there a record number of stores opened.

Jason:
[15:33] Yeah so a separate issue from the store closings is hey where there are more openings and there,
there there were so not a record number of openings but the but from that course I data set more store opens opened than closed last year which so we would have had a net increase in stores.
That that’s interesting I wouldn’t encourage retailers to pay too much attention to that because it really matters.
The nature of the closed and open stores I get almost rather follow,
net gains or losses in retail square footage because if you have a bunch of Macy’s stores closed and you have a bunch of Dollar General stores open your closing 100,000 square foot store and opening a 10,000 square foot store.

Scot:
[16:22] Awesome and then you had all right so then if we include your bonus you’re even so three wins and three else.

Jason:
[16:35] Exactly I like to think of it as three wins and two L’s and the bonus only comes up if you can tie me.

Scot:
[16:41] Okay alright let’s see how I did so.

Jason:
[16:46] Yeah I’m excited to hear this.

Scot:
[16:48] Yeah so just to remind everyone this was done a year ago in January of 21 we were merely.
Nine months months depends on when you start depending I guess nine months into two covid.

Jason:
[17:01] That’s a calendar year ago but it was actually four years of Lifetime ago.

Scot:
[17:06] Yeah it feels like it for sure,
all right so my first thing I always like to kick off with an Amazon prediction so my Amazon prediction last year was that we would move to same day Prime by opening a huge wave of neighborhood DC’s.
And they would be near dsps and I got that one right that one,
don’t feels obvious like I don’t feel like I was making too much of a prediction but at the time I remember being worried about it because I think they they were still doing most of the dsps this is where time dilation happens during covid the four-year thing you mentioned.
They’ve just built up an incredible amount of.
They call him I called him neighborhood DC’s they call him delivery stations now I think is the official name where they have built you know just tons of these these interesting new.
Footprints where they house a bunch of these dsps Under One Roof and then they for deploy a lot of that days
things to be delivered into that out of a fulfillment center and then the the dsps just line up and deliver that stuff so it’s been really interesting to watch them build that,
so I would count that one as a win.

Jason:
[18:18] Yeah no I totally agree I’m often surprised by how many people still have this outdated model of Amazon and they imagine the Amazon is primarily doing two day shipping.

Scot:
[18:29] Yeah no it is they have really cranked it up especially I’m out I’m in North Carolina you’re in Chicago and you guys are probably getting stuff you know.

Jason:
[18:38] Yeah we we are we were in early market for same-day delivery and we’re kind of an epicenter for a lot of of their delivery products and the vast majority of stuff I order,
um my I get two offers for wind to have it delivered between 4 and 8 a.m. or between 8 a.m. and 10 a.m. the next day.
So some stuff I get same day I would just tell you there were I was listening to an Amazon earnings call and someone asked them if they were were concerned about all these ultra-fast delivery services that were popping up all these VC funded,
you know 15 minutes to 1 hour delivery services that are mostly sent in one one-block radius in New York and the Amazon CFO was like.
You know those those Services deliver,
an assortment of 4,000 skews to a five-block radius we’re currently delivering about 400,000 skews Same Day to all of America we feel pretty good about our offering what’s the.

Scot:
[19:42] Boom drops the mic walk.
Haha okay sticking to Logistics which is interesting because I was poking around and Logistics a year ago and I
you know in hindsight the perfect prediction would be there’s going to be a supply chain problem but I did not
I did not pick that one sadly instead I said you know Shopify,
so my logic here was kind of looking at the chessboard at that point in time we all know Amazon’s kind of,
turning the guns toward Shopify if your Shopify you know those guns are turning towards you so one of the things you do is try to get into the delivery world.
They have tried but they pretty publicly there was Toby was in,
was it Bloomberg he did kind of a cover story on one of the Business magazines and in there he basically admitted that you know hey were.
Pretty bad at this fulfillment stuff and I think they had a customer say that they’re embarrassing really bad and you know it almost seemed like there are not going to go deeper into fulfillment so I missed on that one but Asterix.
I think they should and I think it’s going to be a pretty big strategic.
Blind spot if you’re an arm the rebels in e-commerce you’re gonna need to help them get the products to consumers in that last mile that’s going to be where the battle is and I feel like it’s a bit of a soft underbelly for them right now.

Jason:
[21:11] Yeah generally agree.
An interesting side note that the CEO of instacart just got named to the Shopify board and I inadvertently started a little bit of
LinkedIn debate about like
how soon it would be before that was a potential conflict of interest and a lot of people chimed in that they thought instacart was a potential acquisition Target of Shopify which might be one way for them to to get into the the Fulfillment business.

Scot:
[21:48] Yeah but even that’s a conflict of interest rent mean proofs proves your point not you know.

Jason:
[21:53] Yeah I mean clearly I’m right but that’s a separate issue.

Scot:
[22:07] You don’t think this will ever happen and everyone else in the world thinks it will so you know,
this one’s tricky I could make some argument that they are doing more on this and then that same article they do start to talk about it being more of a central by it I’m talking about the shop app that they have,
um doing more around that centralizing your your Shopify,
you know whole experience in aggregate including some search functionality they have added some search haven’t looked at lately but I’ve seen to Twitter traffic that they have added some stuff there,
but I’ll all I’ll take the L on this one I but I still think.
That it’s going to be something they do more of down the road probably in a different flavor than a traditional Marketplace but I think it’s an area that they have to explore it is more in their wheelhouse than the Fulfillment sign.

Jason:
[23:02] For sure I certainly agree with that and I would encourage you to double down on that prediction for Fort Wayne tonight but I will say like two things I was clearly wrong on the shop a.

[23:17] Like is getting much broader adoption than I would have expected because I would argue it’s mostly a shipping tracking app.
It has some like Merchants search capabilities it doesn’t really have product search capabilities at least in general release but it’s.
At various times it’s been the most downloaded retail app and it’s bouncing around in the top four so a lot of people are getting that app and so per your point,
you know they have a bunch of merchants they have a bunch of users with this app which is really hard to do this app has some Marketplace of like features and then you know I don’t know you I’m sure you saw but bradstone,
got to go visit Shopify and do an interview with Toby and he in his article he kind of painted a picture that that.
Internal stakeholders at Shopify were wildly divided and didn’t agree about.
If Shopify should do a Marketplace and what it would look like and so that that makes me think.
They’re you know having the same debate we are and Toby himself weighed in that he’s like.
You’re not going to see us compete with our Merchants so if they do a Marketplace as probably going to have to look.
You know considerably different than the kind of marketplace I think some people are thinking about but but it’s an interesting space.

Scot:
[24:41] Yeah,
yeah and then so we’ll see if this comes up again in predictions and then I the super risky thing I did last year was made a covid prediction I’ve learned my lesson there
remember to week two weeks and we’re done anyway we my prediction was we will be shocked how much quote-unquote zero friction addiction sticks I’ve seen 30 to 40% repeated a lot and I think it’s going to be much much higher
and then so I think there is some good data that points to that we haven’t seen a decrease in the growth of you know online
even as we’ve gotten into a post covid World we’re kind of getting back into one with with
all the Quran right now but and to your point there’s a lot of interesting data like like Dan and his group did that show that it’s been pretty sticky.

Jason:
[25:37] Yeah no I think that’s totally fair a lot of people are in correctly predicting that that it’s going to revert but yeah I think I think all the tangible evidence points to it being sticky.

Scot:
[25:52] Okay and then my fifth prediction was given all the heat around these specs and IPOs that we would have
20:21 would be a banner year for digitally native vertical Brands either going pilot getting Acquired and doing IPOs,
I want to made this one I felt like it was going to be much more around these facts but then the specs pivoted and started doing these really weird esoteric things that end up,
not doing very well but where I kind of snuck the win out on this one is we did have three companies that we’ve tracked in our kind of the
oh geez of digital native vertical Brands go public so we had War be Rent the Runway and I’ll Birds now they haven’t done great since they went public but they did get out and they had you know the kind of met their pricing and went public and are still out there
and so so there you go so that was a yes.

Jason:
[26:51] Yeah yeah I will certainly give that one too.

Scot:
[26:54] All right so at this point I am let’s see three yeses and to nose.

Jason:
[27:02] So we’re tied so the bonus comes up what was your bonus.

Scot:
[27:07] My
bonus was that there will be I was much more optimal another covid so I got lucky on the first one I felt like we’re going
we’re going to in 21 we would be post covid and
people would kind of stop buying stuff just generally and really focus on going out and doing things and seeing the world over the holiday I went down to Orlando for three or four days and it felt like,
there’s definitely a segment of the population that that’s out there doing that they all seem to be in Florida right now and maybe some in Texas
but I think if you look at the data there’s nothing to really support
that in fact the we’ve talked on this show about the e-commerce data and Retail data and it all seems quite robust so we have not hit a.n.t. consumer materialism wave that that I predicted.

[28:03] Cough so it turns out that I think we’re effectively tied is that I’m doing the math right on.

Jason:
[28:09] I think you are and and I think all our listeners will agree that a tie is basically a huge win for me.

Scot:
[28:15] Given our past history yes it’s the first time we’ve had a feels like soccer or that we’re in England where that is a possible outcome.

Jason:
[28:23] Exactly I think I think my high school soccer team just just tied your your Premier League team.

Scot:
[28:31] Yep cool so yeah that but you know it fun to do these things because
I would say in a volatile world like we aren’t getting half of these things right I think you would agree with me that we’re pretty awesome you know we there’s other people out there that make predictions and they throw so much junk against the wall they get like
five percent right but and they do big Victory lap so I think if you look at our records pretty good pretty solid.

Jason:
[29:01] Yeah no I agree and I don’t think we sandbag very much either I mean sometimes in hindsight they feel like sandbags but I feel like we stretch ourselves so,
so I will definitely take them.
So how are you going to like pay off that that self-congratulatory pat on the back Scott you’re gonna have to come up with some Whoppers for this year.

[29:32] I don’t I don’t what do you want to do I’m sure we lost all our listeners except for my mom so whichever she prefers.

Scot:
[29:39] I’ll go first so so my predictions this year,
so my Amazon prediction number one and this is for 2022 is I predict Jeff Bezos is going to have a midlife crisis and run around
it was in Miami with hot chicks and other exotic locations and take a lot of selfies for Instagram.

Jason:
[30:05] If you had said in dubious fashion choices than I might give it to you.
Scot I’m not sure but I think as of January 6 that’s already happened.

Scot:
[30:16] Yeah yeah yeah okay you got me that ones are what they call retcon and in the world where it has already happened alright or series prediction is
I’m gonna I’m gonna double down kind of on your prediction I’m going to steal your prediction from last year and say
I guess this isn’t exactly what you predicted but I do feel like,
Amazon is very serious about Shopify in that same article I was talking about where,
Toby was there a next Amazon you know an anonymous sex annum Amazon Source you have to take that with a grain of salt said these guys crushed us they came out of nowhere and destroyed us and where we were blindsided,
that seems.

[31:03] Pretty pretty Amplified but I do think they have their guns trained on them so I’m going to say we’re going to see Amazon come out with a serious competitor this year,
and I think it’s gonna you know,
I imagine it could even be like a web store offering even though they started this and got rid of it I think they’re going to get pretty serious about it and now I could see them come out with a,
you probably won’t have a lot of Headway in the first year but they’re gonna I think they’re gonna go right out these guys the thing that’s hard to predict,
there’s some interesting things they could do it with AWS and headless so I’m going to kind of give myself a little space there that it could be headless versus kind of a more monolithic type SAS kind of an offering but yeah,
so I think they’re going to get pretty serious about.

Jason:
[31:54] Okay yeah yeah I could I like that I can’t I see that and you could imagine bundling like AWS Commerce platform with a bunch of the traditional merchant services from Amazon like fulfillment and payment and stuff like that.

Scot:
[32:08] Another Amazon one is
and you kind of foreshadow this when you’re talking about the Amazon thing there’s there’s hundreds of millions of dollars if not billions going into these do have a name for them fast.

Jason:
[32:23] Yeah well ultra-fast delivery is the.

Scot:
[32:25] Ultra-fast slurry okay these companies so there’s like go puff and there’s one that has like an animal name like.
Gorilla yeah Joker yep
yeah I’ve been I don’t know how DC is letting them do that one but anyway you know so these guys have raised billions of dollars and it’s a hot Market but I think Amazon is kind of going to train their guns on that and I think they’re going to put a real hurting on them,
I think we’ll see I’ll be pretty risky here and say one of them will close their doors one of those so I’ll put it here in the notes so to keep me honest so,
go puff gorilla and or Joker one of those three big ones probably doesn’t make it out of 22.

[33:19] Okay,
so that’s 1/2 so this is my third one I realize I’m actually short protection will have to do one on the flyer the Bezos wanted kind of counted in my head but that was early prediction you know the at the end of
21 we had Facebook changes name to metaverse and since they did that you can’t throw a rock without reading a thousand articles about the maneuvers.
In fact today on Twitter there was a big Walmart video you know kind of showing an metaverse shopping experience mock-up kind of thing that was kind of fun,
the I think there’s going to be I think there should be a lot of hype and 22 I’m actually kinda already burned out on it and a lot of you know what does metaverse shopping look like and there’s going to be lots of excitement and smoke but no fire and no Ray.
So I think it’s going to be the flash in the pan when we look back on 22 so I think it’s going to not a lot of activity there I think it’ll be like,
you know chat Commerce and social commerce and a lot of these things that had a lot of buzz in their era AI Commerce machine learning Commerce all these things that had huge amount of Buzz and then turned out to not really have substance.

[34:37] Okay and then the inverse of that is I think one of the things that there’s been a lot of talk about that
is going to have substance is live streaming of kind of video live video e-commerce integration so I think that one is going to be more mainstream there’s there’s a little.
Amazon has tried this and failed it’s big and Ali Baba I’m I’ll qualify this and say in the u.s. too so I’m not trying to be sneaky here and you know,
there’s not a lot of I’ve seen some startups trying to get traction here but they’re in like supermicro verticals but
that’s how I things get adopted is you kind of build some habits in these small behaviors and then they can go mainstream so I think we’ll look back on 22 when we do our
20:23 show and we will see live streaming has gone mainstream so that is one and then let’s see,
I may have to come back with another.

Jason:
[35:35] Yeah I’ll let you you can make fun of mine and then you I’ll let you cherry pick after hearing my.

Scot:
[35:41] Okay any reaction to my my for so far.

Jason:
[35:44] No I so a I should have come to rehearsal because I feel like we’re gonna get off the right off the bat with some potential overlap but.
I definitely.

[36:00] I think we’re going to see some way Amazon very seriously competes with Shopify I think it’s not going to be the way most most people expect that your your description seems totally plausible is we’re about to see I have a,
an opinion on some of these ultra-fast delivery services and The Meta versed both of which you touched
and then I got to be honest I am nervous about live streaming like I could I definitely am not bearish I could see it going either way
a ton of Commerce happens via live stream in China and we’re starting to get a lot of Commerce.
Video content get consumed in the u.s. what’s not working very well at the moment is the buy now button at the end of those videos and so you kind of have,
indirect livestream commerce’s is already starting to happen in pretty high volume here in the US and a bunch of people are investing in in.
Trying to take it that that last click.
And I have reasonable confidence that it could work so at the very least I know a lot of retailers and a lot of my clients are going to be trying it pretty pretty heavily this year so we shall see.

Scot:
[37:15] I came up with my fifth.

Jason:
[37:17] I knew if I just rambled that I would give you enough room for one.

Scot:
[37:20] Yeah this one is a risky one but you know our friend Faisal started Fabric and I’m going to predict that that company has so much Buzz they’re going to get acquired in
this year so that was risky because they’re super early stage where is it it’ll it’ll it’ll have to be a big number to take them off the table at this point but I think someone’s going to going to,
pay that number.

Jason:
[37:45] Yeah to fun ways that could go I feel like he’s pretty – on Shopify so it would be awesome Shopify acquired them but you could also Imagine AWS acquiring them and and making two of your predictions come true.

Scot:
[37:59] Yeah or or adobe or you know IBM IBM’s kind of on the sidelines lately they’ve got a whole.

Jason:
[38:07] Yeah yeah they kind of got out of the those software platforms I would be I mean but not to say they couldn’t pivot and come back in for sure.

Scot:
[38:14] Yeah yeah and then let’s see I said Adobe I’ve and Salesforce.

Jason:
[38:20] Interesting okay well I’m going to jump into mine and again we did not dedupe these I bundled several of yours and made them more negative,
so my first prediction is what’s not gonna happen and I lumped in a bunch of very trendy things that people are super hyped about and
I said I don’t think any of these are going to be economically meaningful in 2022 so it’s in ft’s which I know,
are near to your heart than mine I I do believe there’s some Niche use cases where in Ft is totally makes sense and I know you play in some of those,
those Niche cases but there are so many people that just think crypto in general and nft is in particular are going to be,
a huge part of Commerce I don’t think they’re going to be very economically meaningful and in 2022 even more so I don’t think web 3 is going to have any impact I’m starting to get a lot of questions about,
how Bigcommerce is going to change because of web three in my answer is it’s not,
I think the metaverse is going to fail pretty miserably as a Commerce,
play and I’m also going to say all of these Venture funded ultra-fast delivery startups are going to fail so that’s not to say that.

[39:36] Amazon,
instacart or even go puff couldn’t win but like all these these Sand Hill Road back startups that are delivering in Manhattan I don’t think any of them are gonna change consumer Behavior enough to really matter economically in,
so that’s my Chrome Legend hey all the cool things that talking has like to talk about aren’t very important one.

Scot:
[40:02] Well I don’t think that overlaps too much no no I I disagree but we’ll see.

Jason:
[40:09] Knox awesome those are the.

Scot:
[40:11] What’s your specific prediction like there will be less in ft’s and 2022 and is in of T volume.

Jason:
[40:19] Yeah yeah.

Scot:
[40:20] Let’s put that one down oh that’s that’s the prediction last in a $50 transacted.

Jason:
[40:26] Well so like I don’t so full disclosure I can throw out a number but like I don’t know of a credible source for tracking in Ft Revenue dollars.

Scot:
[40:40] Yeah there’s some there’s gmv trackers so open sea and is the biggest Market Place than there’s like three or four others.

Jason:
[40:46] Okay I was mostly thinking like the there’s there’s not going to be meaningful revenue from the US Department of Commerce retail sales data that’s enough.

Scot:
[40:57] Wow that’s there it’s going to take them 50 years before they can spell it.

Jason:
[41:02] Well I know they’re not going to report it that’s what I’m saying but I’m just saying like there’s an Amazon Walmart the the top 10 eCommerce sites in the US are not going to have any meaningful revenue from in FTS.
Yeah but nobody’s going to do anything with webbed three in Commerce and nobody’s going to buy anything with a virtual reality headset.
Or from gorillas outside of one block.

Scot:
[41:40] Okay.

Jason:
[41:42] So
I’ll try to get less – now a company that we’ve talked about on the show a couple times that people don’t talk about enough and I’m kind of using them as a surrogate for a whole new trend but is the the.
Ultra fast fashion brand Chien which is a apparel brand the.
The they’re estimated to have sold about 10 to 15 billion dollars worth of Apparel in 2021 and I think they’re going to exceed 30 billion dollars in apparel sales and 2022 which is going to make them.
A top 3 apparel retailer in the US.

[42:24] And I said they’re kind of a surrogate for a trend this is democratized merchandising so this is,
instead of Mickey Drexler deciding what the cool kids should wear in high school instead of easy deciding what the cool kids should wear in high school this is,
algorithms watching what the cool kids post that they are wearing in high school on tick-tock,
and then making it in two weeks and selling it to all the kids that want to be cool,
and so it’s kind of the perfect manifestation of what Amazon called hands off the wheel where they stopped having Merchants pick products and instead kind of use data to,
to drive their catalog and I think she is gonna continue to have great success there and it’s,
it’s disrupting the fashion industry more than a lot of people in the fashion industry realize but I think,
it’s going to become extremely evident in 2022 that it’s disrupting the apparel business.

Scot:
[43:23] And then are you are you putting a specific number on it and if so how much is that over last year.

Jason:
[43:27] Sorry I thought I said it yeah so I think they’re going to sell more than 30 billion dollars of Apparel in 2022.

Scot:
[43:34] What they do in 21.

Jason:
[43:36] The estimates they’re not public but the estimates are between 10 and 15 billion so more than double.

Scot:
[43:42] Okay all right.

Jason:
[43:44] Again not trying to sandbag.
So third one and I guess I’m going back to my my negative Nelly so one of the hottest trends of 2021 and the prediction I have seen the most people do and I fully expected you to do so I’m,
totally bombed is that buy now pay later services are going to continue to explode,
and in 2021 by some estimates they grew 30% in their you know wildly adopted,
it’s the fastest-growing payment type in in e-commerce in 2021 you’re starting to see it expand from just e-commerce to in-store purchases as well,
and it’s moving down Market to you know from from
expensive High consideration items to a lot of lower cost more impulse items so by all accounts the future of payments and credit is buy now pay later in my prediction is
that it slows down and 2222 I’m not saying it’s necessarily going to flop,
but I think you’re going to see only about 15 percent growth over 20.

[44:52] One versus the 30% that they had this year so I think the rate of growth Cuts in half and I think there’s a couple reasons behind that,
I think the bill is going to come due for a lot of these products and a lot of these consumers are not going to be able to pay for the products they purchase,
and I think you’re going to start to see a ton of writedowns and the financial reality of renting money to subprime lenders without like significant collateral is going to kind of start to,
catch up with some of these companies I think the Credit Agencies are going to start to lean into this more and that’s going to take away one of the competitive advantages that they had and I think we might even see some some regulation because like there’s some,
some very financially responsible companies in the buy now pay later ecosystem but there’s also some,
some kind of rebranded payday loan players in that space and so I think there’s just going to be a lot of erosion of trust and and some- stories that will slow down the rate of growth.

Scot:
[45:59] Gaap negative or positive on the next.

Jason:
[46:04] Yeah we’re going positive again I’m yeah I’m alternating I’m and I’m going to throw an Amazon one to you I think Amazon opens more than 100 grocery stores in 2022.
Not whole food so Amazon Fresh doors,
um and that you know again that that would be about three times as many stores as they have ever opened Amazon book stores or five star store so.
It’s not the thousands of stores that some people have talked about but it’s also a much faster pace of brick-and-mortar growth than we’ve ever seen from Amazon.

Scot:
[46:41] Yeah that I will be excited to see this one.

Jason:
[46:46] And you know most of them will be in Chicago so that’ll be fun for me.

Scot:
[46:50] Of the 500 stores they’ll be like 75.

Jason:
[46:54] Yeah exactly I’ll be surrounded,
yeah so I think that’s a super interesting space I’ve talked about it a bunch it was you know the growth of digital commerce was one of my grocery commerce was one of my big ones and I think it’s just the big category of consumer spending that Amazon.
Doesn’t play meaningfully and Whole Foods is very Niche and I just think it’s a moonshot imperative for Amazon to win Grocery and I don’t think you can win digital grocery without having brick-and-mortar grocery as well.

[47:29] So that I think gives me 4 so my last one,
is I think there’s going to be a lot of interesting Activity one of the categories of e-commerce I’m most interested in watching in 2022 is Last Mile,
there’s going to be a lot all kinds of different Evolutions but the specific prediction I’ll make is one of these new,
um I’ll call them FedEx UPS competitors is going to sort of get get acquired or have some meaningful liquidation event and so so there’s a couple of startups that are kind of,
Next Generation parcel delivery services like vejo index delivery ship IAM is a bunch of X Amazon guys and I’m going to say that,
instacart original business model could even slow down and instacart could get acquired,
primarily to be a last mile delivery service by someone so so one of those companies gets acquired,
as part of the buzz around owning your own Last Mile in 2022.

Scot:
[48:38] Yep and does that include so there’s all these like ship Bob Shapiro those kind of guys your that’s not.

Jason:
[48:45] I think there’s going to be a lot of I think they’re an interesting space to in most cases they’re not actually delivering products they’re they’re facilitating delivery of products or tracking delivery of products and so I tried to keep this pure to the,
guys that have access to trucks and are driving products to people’s houses but.
Yeah so no I’m not I won’t call it a win if it’s if those are the only ones that get acquired.

Scot:
[49:13] And then any other bonus prediction so I kind of had to stretch to get my 5 but anything else you want.

Jason:
[49:20] So
so yeah you know I do all my best thinking on dog walks and so I you know I might thinking about all these cool predictions and I came home with like 40 of them and so I struggled to narrow it down to these five
and so then kind of the next class of predictions that just sounded.
Too easy in a way but you know last year digital Commerce kind of slowed down a little bit compared to Brick and Mortar Commerce it was a huge year in brick-and-mortar growth.
Because e-commerce had grown so fast the year before so I think that that.
That Paradox gets inverted again this year so I think we see way faster e-commerce growth than we do brick-and-mortar growth,
I think curbside which was a big thing in 2020 and 2021 becomes even bigger thing in 2022,
I think you’re gonna see a ton of stores redesign their parking lot I noticed H-E-B just opened a new store and as 26 Bays,
for curbside pickup so I think those those are the big things in the you know the big macro story that we’ll see in 2022.
I recognize that less controversial than my official five predictions.

Scot:
[50:34] Yeah okay cool I think that’s a good set of 10 predictions there any anything else you want to just let people marinate on that for little bit.

Jason:
[50:42] No I if folks strongly agree or disagree I’d love to hear about it on social media and if you have different predictions,
throw them our way on Twitter Facebook and we’ll be happy to debate them on our next show.

Scot:
[50:59] Yeah yeah maybe we could introduce some listener predictions as part of this going forward that would be kind of fun it also reminds me we need to we haven’t done a deep dive in a while and maybe you know we touched on in ft’s web 3 meta those are
pretty good topics for deep Dives maybe even buy now pay later so usually we hit a new slow down in the e-commerce world,
kind of in that March April May time frame after we get the q1 results so maybe we’ll throw some deep Dives in there so that,
if those topics are interesting we’re happy to kind of go deep on those I guess looking back the live streaming when I don’t think we’ve done a deep dive on that either so those are all areas where between the two of us we have a pretty good bit of domain knowledge that we could
make sure that is out there and available if you want to go deeper on one of those topics so let us know think about your preferences on 20-22 content around that type of a topic as well.

Jason:
[51:56] Yeah I will look forward to all of that.
And of course if you did find this show fun at all or you learned anything the best way you could reward us as jump on iTunes and leave us that 2022 five-star review all those reviews you wrote in 2021 don’t count anymore
so you need to get back on iTunes and leave us up fresh review and feel free to make fun of Scott in the review that’s always appreciated.

Scot:
[52:22] Or Jason’s title.

Jason:
[52:24] One of my many titles.

Scot:
[52:25] All right thanks everybody.

Jason:
[52:29] And until next time happy commercing.

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