Jason & Scot Show Episode 112 Annual Predictions 2018

A weekly podcast with the latest e-commerce news and events. Episode 112 is our annual predictions issue for 2018.

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2017 Recap – Predictions made on episode 64

Jason

  1. Retailers truly embrace Omni-channel  (Attribution/Inventory/promotion/pricing – Yes
  2. A/I – Bots for Customer Service but probably not for transactions, lots of buzz on big data AI but no game changing new experience – No
  3. Personalization – to eliminate friction, not drive new demand.  Data integration not some new product or touchpoint –No
  4. Laggard categories will discover digital (Grocery, Luxury, QSR) – Yes
  5. Microservices – 50% of new platform implementations will be cloud, and Micro-service based solutions will start to emerge – Partial

Jason 2017 Score 2.5/5

Scot

  1. The IPO market is going to be open, but the e-commerce companies will get crowded out by the big tech unicorns like Uber, Snap, pinterest, airbnb, spotify and the like – Partial
  2. Amazon will start to chip away at the Fedex and UPS’s of the world with a service like this in the US.  – No
  3. Machine learning is the new ‘network effect’ – everyone has caught onto the power and competitive moats available from ML and that’s going to be a big theme.  Every vendor you work with from carts to images to upsells to recommendations to search engine results to whatever is going to HAVE to have a ML capability to stay current and keep YOU competitive. – Yes
  4. We’re going to see e-commerce growth accelerate pretty materially in 2017.  We’ve been in this 15% band and I think we will see there was a move up in 2H16 to high teens and we could see 20’s in 2017 – Yes
  5. eBay – it’s a do or die year for eBay, they could potential partner with Alibaba. – No

Scot 2017 Score 2.5/5

2018 Predictions

Scot

  1. Mallageddon 2.0 – We saw 7000 stores close in 2017, I think this accelerates in 2018 as the 30-40% of weak malls fail and we end up with 9000 closures.
  2. Amazon will NOT buy another offline retailer, triples down on private label.
  3. I’m going to re-up on my Amazon logistics prediction, I think I was just a bit too early on that one, but I’ll make it bolder, that Amazon will squarely get in the last mile business in 2018 and compete with FedEx and UPS.Amazon’s ad group will get so large that they have to break out details about it and everyone will be shocked at how large it has gotten so quickly
  4. Walmart will make a big M+A – top candidates would be Instacart, postmates and eBay.
  5. Somebody acquires Magento, or they go public.

Bonus – Amazon comes out with Alexa powered wireless earbuds – because I want them.

Jason

  1. Grocery gets disrupted by digital (led by curbside pickup).  Digital grocery doubles in US, at least one delivery firm peters out.
  2. Drug gets disrupted by digital.
  3. AI Gap – biggest trend of 2018
  4. Voice – Huge but not for commerce.
  5. Payments – Retail digital wallets die (except Starbucks/Walmart/Amazon).  Bitcoin tanks.

Bonus – Amazon launches a wearable.

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Episode 112 of the Jason & Scot show was recorded on Wednesday, January 3rd, 2018.

New beta feature – Google Automated Transcription of the show

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 112 being recorded on Wednesday January 3rd 2018 I’m your host Jason retailgeek Goldberg and as usual I’m here with your Tahoe Scott Wingo.

Scot:
[0:40] Happy New Year Jason and happy New Year to Jason and Scott show listeners Welcome to our first show recorded in 2018.

Jason:
[0:50] It’s very cool I’m excited to start the new year I feel like it’s going to be another action packed one in our in our jonra.

Scot:
[0:59] Yeah that’s the fun thing about retail I feel like we could do a daily podcast weekly is even hard to catch all the news that’s going on.

Jason:
[1:07] That is true but then I feel like there’s a lot of fans begging that me not to do any more than I already do but that was might just be me and not.

Scot:
[1:17] Cool.
What’s up long-time listeners will know that it is a regular feature of our show that the first episode of January is our annual prediction show so this is our third shot at this Jason.
So pretty exciting so let’s take it off by looking at last year’s predictions and seeing how we did Jason was start with you.

Jason:
[1:45] This is the part of the show I hate.

Scot:
[1:47] So if listeners are really really want to learn more about these things you can go back to episode 64 that was the last year’s preview show and I and you can listen to that and see how we did and 16 compared to 17 in here the 17 predictions you don’t have to do that there were going to summarize them for you here but if you really are curious about anything we bring up and want more color,
you can go back to episode 64.
Okay Jason last year you and the way we did this as we had 5 predictions and a bonus so effectively 6 predictions so let’s go through them last year your.
Top prediction was that retailers will truly Embrace omni-channel and you talked about attribution inventory promotions and pricing.
How do you feel that prediction did through 2017.

Jason:
[2:33] Yep. So I generally feel good about that prediction I’m calling that went to win there a bunch of things that happened last year that were,
probably hard for people to observe,
but but most retailers did get more sophisticated about their omni-channel attribution models we saw a ton of retailers move to Universal inventory we saw a lot more Universal pricing and then some of the the highly visible things we saw were like Target made two major Acquisitions in shipped and,
Grand Junction to improve their omni-channel Wal-Mart rolled out of town of omni-channel initiatives with the pickup towers and express returns and discounted ship-to-store,
Kroger and Costco both rolled out curbside pickup so I think across-the-board I’m giving that one true.

Scot:
[3:26] Yeah but when I go to Best Buy they still can’t look up my rewards number and if I do an online order they have no idea what happened to the cash register traffic crazy but I’ll still give you this one.

Jason:
[3:37] I think there are still a lot lots of gaps but I would argue in your specific example that’s Alessa not embracing on me channel cuz I would argue,
Best Buy does embrace quite a bit about me channel it’s a date I’ll retailer still have a ton of data silos regardless of Channel and sew-in your point like,
rewards just aren’t willing a greater to the store and that’s a shame.

Scot:
[3:59] 4 meter Omni channel is breaking out of this data silos.

Jason:
[4:03] I only want to live in your happy world I do.

Scot:
[4:06] Cool alright so so far that’s one win and 0 losses.

Jason:
[4:12] Feel free to stop here if we want.

Scot:
[4:14] And that’s it well unfortunately we’ve wasted another 5 minutes of your time.
But seriously your second prediction was calling for Bots for customer service but not transactions lots of buzz on big data and AI but no game-changing new experiences.

Jason:
[4:35] Yep so even though I kind of Madhuri to the prediction by saying more buzzed than game-changing experiences I’m still giving myself a false on this one because I think it was,
even more hype and the last tangible stuff then I was predicting so I think you don’t right out of the gate,
there’s a new chat services and there was a lot of hype about new customer service,
offerings on those chat services but they were universally stupid and none of them got embraced by customers and you know after that initial hype I just don’t think we saw a lot of a lot of traction so I’m giving the whole the whole box thing in 2017 did not happen.

Scot:
[5:19] Even Facebook seems to not be talking about it as much and didn’t one of their big Partners kind of shut down the bar that was it 800-Flowers or everlane or one of those like one of the launch Partners kind of said yeah we’re not doing this anymore.

Jason:
[5:33] Yeah I think that was everlane 800-Flowers is famous or notorious for being one of the first adopters of everything and so it’s almost.
It’s not predictive of something being successful the fact that 800-Flowers is one Embraces it cuz they they like to be the first mover.

Scot:
[5:51] Shut it off though.

Jason:
[5:53] Yeah no absolute.

Scot:
[5:54] Tahlequah this is like it’s either hard to maintain or actually bad customer experience or something I don’t know.
Third is one of your favorite topics personalization,
so you said to eliminate friction but not really Drive new to me and data integration not some new product or touch point I don’t know what any of that means so maybe recap what you were thinking there.

Jason:
[6:17] Yeah so I hate talking about personalization because it’s a amorphous sort of thing,
and so what would I said what would I try to say in the prediction was that I think we’re going to see a lot of better personalization but that doesn’t equal like some magic new widget on the web website that just automatically more personalized than the old widget,
what I was really expecting to see is retailers merge a lot of their Silo data to provide,
more seamless experiences and eliminate friction across the board and you unfortunately already alluded to a perfect example of that not happening,
that you you went into Best Buy and they couldn’t couldn’t figure out your year membership Rewards.
Status with Best Buy and that’s because all those their systems are siloed at Best Buy,
and so in my mind. My prediction was that a lot of those eyelids would get eliminated in 2017 and while I could point to a couple of retailers that had made some progress in eliminating those silos,
I still think there’s a ton of silos and I think we all at Shoppers put up with a lot of ridiculous friction that we don’t even realize,
because of how at retailers of organize their their systems in their data and I I just don’t think we made near as much,
progresses I optimistically hope for 2017 so I’m I’m giving myself a fail on this one as well.

Scot:
[7:48] Wright’s that’s one win to faience your 4th prediction this was a good one ladder categories will discover digital and you mentioned to grocery luxury and Quick Serve restaurants.

Jason:
[8:01] Yep and I feel like this was going to get me back to even I I gave this prediction a true,
for those of you that follow the grocery category you may have heard of the Amazon made an acquisition in the space in the whole food so that was certainly.
A grocery retailer discovering digital we also saw a huge investment from Kroger and Walmart and grocery,
that US are as a Quick Serve restaurants and they all Embrace digital in a big way in 2017 so both McDonald’s and Taco Bell rolled out,
Order ahead of course the the Weider a farm before last year and in this was Starbucks but most of the traditional to SRS,
Nina played significant catch up in 2017 and then also a lot of the luxury Brands got more serious about digital for a long time then they over it we said that,
digital was eroding to their their brands and that they they wanted the experience to be in the dressing room and not online and you know all of those old luxury houses that used to say that launched,
direct-to-consumer e-commerce sites in 2017 some of them even started started,
toe dipping on some of the the marketplaces and and so again you know I think across-the-board grocery Luxury Inn Key West are where three categories that made big strides forward in digital in 2017 so I call that trip.

Scot:
[9:30] I agree that even better than the order had at McDonald’s have you had one of the touchscreen kind of order things those are pretty cool.

Jason:
[9:37] Yep absolutely.

Scot:
[9:39] Less errors on your order.

Jason:
[9:41] To management that you and I are a couple dialogues on,
I know twittering about some of the bad G Management in traditional retail seems like you got a lot of bad physical retail experience is rightly and those those kiosks are all part of the wait time management system at at McDonald’s which is very clever.

Scot:
[10:00] Alright so let’s see we are at 2 and 2 now and so your V addiction,
was extremely retailgeek e microservices 50% of new platform implementations will be cloud and microservice based Solutions will start to emerge.

Jason:
[10:18] Yep and so for those of you that that aren’t Super retailgeek E like this is the notion that most people that run the e-commerce site,
own the software and run it on a server that they own like either on their their services are in a Datacenter that they rent in so this this prediction was really that like half of all the new platforms,
would instead be in the cloud so you know Amazon web services or Google Cloud platform or Microsoft azure,
and that most of them instead of being this big monolithic piece of software would be these newer platforms that are kind of a collection of little api’s or little services,
that you got most think of his Legos that you snap together to create your experiences and.

[11:05] I think these are both super important Trends if you talk to the CIO at any retailer like they’re their the trends that they’re falling and it’s what they hope to add a brace in the future.
But in 2017 at all amounted to more talk than action so.
We we actually didn’t see a lot of rhe platforming in 2017 impact in many ways I’d say it was one of the slowest years in The Last 5 Years in RI platforming.
So it’s hard to call this trend a complete win when there just weren’t that many new platforms.
It is true that of the new platforms the overwhelming majority were on the cloud so I kind of get myself credit for that.
Never retailers like Nordstrom that was on this podcast last year and they talked about migrating everything from an on-premise solution to a cloud-based solution.
We we’ve had a billy May on that on the show who now run is the CEO at Sur La Table and they’re in the process of moving to a cloud-based solution but,
they just weren’t a ton of replat for Mains and the micro service-based architectures while everyone loves talking about.
They had fewer wins in 2017 than I anticipated so I kind of gave myself a half credit on this one Cloud yes microservices know.

Scot:
[12:26] Yeah I think I learned from last year to be less for Bose in my my predictions gives you more chances to be,
so then your bonus was around payments to another one your favorite topics and you said kind of on the topic of digital wallets that something other than PayPal Amazon will achieve 10% of us e-commerce transactions excluding Amazon such as Chase Walmart Apple pay,
Apple sound Safari or the w3c web payment standards could gain traction so give us an update on how you did on that one.

Jason:
[13:06] Yeah so that one would be a mixed one that’s another example of not writing very smart predictions,
it turns out I don’t have a way to measure whether or not specifically say that we did I will say like that Walmart pay actually got more traction and Buzz than I certainly was expecting,
but of course nowhere near 10% of all non Amazon transactions,
and in the one that that I haven’t seen any data about consumer adoption on,
but has gotten a lot of adoption with e-commerce platform supporting it is is the thing I reference there the w3c,
web payment standard and so this is a a super quick recap for listeners this is he,
a new standard for typing your credit card into a web browser it’s an open standard that’s embraced by the 8th the the standards community that publish HTML,
it’s now been implemented by Google so it’s in all the Chrome browsers,
it is in the Microsoft browser it’s it’s not an apple browser yet,
but it makes it dramatically easier to store your credit card on your local machine and safely.
Automatically enter it in in websites when you make payments and so.

[14:39] Again like all the Shopify site supported all the demandware site supported a lot of the big e-commerce sites have added support for it,
so on the one hand.
More than 10% of the top 500 websites probably support it but we don’t know yet whether whether consumers are leveraging it or not so.
It was a bonus so maybe the score doesn’t matter but it definitely felt like a poorly worded prediction and you don’t mix results.

Scot:
[15:08] Yeah I don’t know I wonder if do you think that stripe in Braintree have gotten over 10% cuz they’re doing the majority of Mobile payment.

Jason:
[15:17] They are but I am not sure I consider stripe or Braintree a wallet,
so as a payment processor like they’re they’re like stripe in particular is killing it on the long tail,
Braintree is a little more focused on the mid-market or Enterprise,
companies that let you know there’s some Visa owns a company called cybersource which does great on the on the Enterprise side they all have big market share but they what they don’t let you do is store your credit card once,
and then leverage it across multiple sites that you shop and so they don’t like,
remove a ton of friction from the e-commerce experience because they let you reuse your payment information over and over again.

Scot:
[16:02] When when a side I know you know this but Apple pay rolled out their cash peace and they have been pushing it super hard I can’t,
you know I buy phone alerts me every 5 seconds I need to set up Apple pay now and I’ve actually it’s kind of sad story I’ve given up on Apple pay because I’ve had to set it up so many times between my watch and Os installation like I finally give up on the the the juice wasn’t worth the squeeze on that one but it’s interesting that now that I’m out of it that it really suddenly aggressively wants me to set it up so they must Apple kind of is woken up,
Bond Apple pay stub.

Jason:
[16:37] Yeah that like my my like brief editorial on that like that they have a very good experience,
under certain circumstances,
and they’re they’re doing a good job of expanding those circumstances so this year they want to the ability to to use Apple pay in a browser which was a huge deal and it in late in the year they watch ability to do peer to peer payments with Apple pay in that potentially huge deal,
but the problem the fundamental problem with the Apple pay is,
you know at best and only works for the subset of the world that are that are in the Apple echo system,
and some of these painted things require even a much narrower subset like only on the latest Hardware that has a particular chip in it or only on the very latest version of the operating system in the latest version of the Safari browser,
and so it just,
it it’s not apples goal to be a world dominant ubiquitous payment system right I get it really is just a utility for for Apple users.
And I think that that limits its its broad appeal.

Scot:
[17:43] So I just kind of keeping score there I think you got a solid 2 to 3 out of your 6 predictions so it will give you a kind of 50%.

Jason:
[17:51] Yeah that was basically my performance in college so I’m okay with it.

Scot:
[17:55] I think it’s a baseball baseball you be here.

Jason:
[17:58] Yeah that would be much better hitter than I was a student hi Scott you I think of is much more cerebral than me so let’s see how you did.

[18:09] I like setting the table. You’re super smart and you’re always like really really prescient about your prediction so,
I’m sure you nailed it I think your first prediction was about the IPO markets and that there was going to be a lot more,
action in the IPO Market in 2017 but the e-commerce companies might get crowded out of the space as of these big Uber snap Pinterest Airbnb spotify’s in the like all do their IPOs side note did I hear a rumor that Spotify,
maybe Miss 2017 and just just filed this year.

Scot:
[18:44] I know why why could they not do it earlier but I don’t know where is an Uber would have filed if they didn’t have to go to there.
Poop show that they’re Lawton right now that with the name cian all snap made it out and.
Actually did pretty poorly and effectively close the idea window for the big guys and then they all have their own issues so I mentioned Uber kind of imploded on some things there I don’t airbnb’s is prior.
Great candidate for next year Pinterest I don’t know.
Were there on the revenue they change their Chief Revenue people a lot which makes me nervous. And then as you mentioned spotify’s filed the.
You’re kind of the thing I got wrong here is Stitch fix made it out we talked about a lot of the show and I’m super happy for them,
another one that was frequently mentioned as a possible IPO can it was chewy and they got Acquired and then Casper is always been kind of out there as as Dollar Shave Club Dollar Shave Club good acquired to also I’m so.
You know I think the IPOs to watch for next year and e-commerce world are going to be.
Casper and then some watches his big guys and how they perform so.
It’s worded the wording on the sun makes it hard to know so the window did open so I get credit for that but I was kind of wrong on the mix of companies that got out so I gave my car myself half credit on that.

Jason:
[20:07] That seems fair so your second prediction I was when we talked about a lot on the show,
Amazon will start to chip away at FedEx and UPS,
are logistic services in the US and you convoluted we made it a 2018 prediction you said hey and 2818 Amazon could even expand into peer-to-peer in River suggest X.

Scot:
[20:32] Yeah they I’m going to get myself a fail on this one when we talk about new predictions I want to talk about it again but when things.
The trend that we talked about on the show but I think it’s good to summarize it here the amount of consumers that want.
Things over to them is outpacing the investment that FedEx and UPS are making and also USPS so there something has to give and it some point.
Amazon being the largest I’d I’m fully.
Going to committed that they’re going to build their own capability was flexing what would happen in 2017 is flex was started influxes an Uber light delivery system eating 1099 drivers they have an app.
Amazon signals to them and then they come and make deliveries they started this for Prime now and increasingly through 2017 we saw Amazon using Flex the driver system for just normal deliveries as well.
And even in the holiday ever heard a lot of reports of a mixture so flex and then actually fulfillment center employees doing deliveries and all kinds of things so I think.
I think some of this happened behind the scenes but it wasn’t kind of to the degree I was thinking in this year so it’s something’s going to give so we’ll see.
Thought I’ll get myself a fail this year.

Jason:
[21:48] Tough grader but I like it,
your third prediction was about machine learning and you you said that was going to be the new network effect that everyone’s trying to recognize the power and competitive mode that are available for machine learning and it’s going to be a dick theme,
every vendor you work with some Cars 2 images recommendations engines you know search engines are all going to have to have machine one and capability.
Test a current then and keep keep their customers competitive.

Scot:
[22:18] Yeah again I should have been less wordy on that one but.
I’m going to say when you when you look at kind of the cloud vendors out there so I’ll I’ll say Amazon for sure is all in on machine learning.
As part of their Cloud conference which is called AWS reinvent.
It was all machine learning all the time pretty much most of the new Innovations they talked about over there is multiple tracks but the biggest track was machine learning Google this year at their annual conference the kind of said we went from.
You know search first it’s a mobile first to machine learning first and they they’re putting.
You all their resources into Ai and machine learning and then if we if we can look at the the.
E-commerce endures you can’t throw a stick it in these trade shows without hitting a machine learning or AI vendors to everyone that I run into every vendor is now fully is probably even.
Little bit bubbly you know so it seems hard that all this can live up to the hype at this point.
But you know what I look at the platform guys you certainly know more about this than I do but but Salesforce is done a lot of really interesting things we had Rob on the show.
I kind of talked about this a little bit so they have Einstein is there a machine learning platform and weeding Dad into the platform previously known as demand where is pretty interesting and I think very indicative of what we’re going to be here I’m as as goes even deeper.
So I’m giving myself a yes on this one.

Jason:
[23:48] .. I think that’s fair I think you nailed it that the the vendors were all embracing it and I and I think there’s a rain everyone did embrace it exactly you said the big vendors I think we’re all in with like,
a huge amount of effort and then I think the long tail vendors,
certainly added machine learning to their marketing and nothing else so I certainly think you nailed it there I’m not sure if there was,
ubiquitous progress in terms of the actual retailers and customers embracing all those vendors Solutions in in 2017 Infiniti that’s what you predicted.

Scot:
[24:22] Yeah at least separate data silos you talk about to be a problem you know so if you don’t have the single view of the customer machine learning can’t really get it.
How’s it going because it’s going to see little pieces what’s happening there so so that this can be an impediment to so he’s Advanced Technologies with the traditional omni-channel multi-data Silo retailer.

Jason:
[24:42] Yep so then you’re 4th prediction,
was what I think we’re all rooting for we’re going to see e-commerce growth accelerate material in 2017 and so you were saying hey it’s been at 15% the last couple years,
will see you move up in the second half of 2016 in the high teens and we we could even see the 20% sin 2017.

Scot:
[25:08] Yeah what I learned about this one was I should have thought something that I would know by the time the next show world around so we the jury is out on this one cuz we just don’t know how the year ended up.
Receive data out of MasterCard comscore a couple those folks that are pointing to iTunes and I’m seeing 1819 % the one Dana Point I want to see is Amazon.
I think it’s pretty sure that Amazon is going to come in north of 20% but I think there’s a shot and released just talking about.
The strength of prime and your 5 billion Prime things and I don’t know.
Nursing Amazon kind of leaning into it like there right now so it makes me feel like.

[25:53] Maybe their Q4 came in more towards 30% and that would make me feel a lot better that that Savannah’s on comes in kind of north of 25 then I think the whole holiday for everyone came in.
20% something myself yes based on the data available and kind of the body language coming out of Amazon right now.

Jason:
[26:10] I think that’s fair,
incident in your V prediction was about eBay in you you basically said it was a big infection year for eBay assorted do or die and then they could even potentially do a partnership with someone like Alibaba.

Scot:
[26:29] Yeah yeah that didn’t happen so I guess it wasn’t a do-or-die you’re so you know on the negative side they lost how Lawton who it was so great leader there.
Friend of both of ours is over at Macy’s now so it’s a win for Macy’s but you don’t know company is one person so you may is doing a lot of great things are getting more structured data from sellers their category tent is.
Things to do while they are improving their relationships with sellers they’re improving buyer.
Programs that are implementing a prime like program so they’re doing a lot of good stuff it just seems like when you when you look at this kind of Battle of Titans that goes on there and you’ve got.
You know the the Google’s the Amazons the Walmart this guy’s just have so many resources compared to eBay now eBay’s kind of.
Small in that world it just feels like they have more leverage is part of something else but I called it wrong so I’m going to get myself a big fat zero on that.

Jason:
[27:26] Fair enough and then your bonus prediction was awesomely bold Amazon will release another phone.

Scot:
[27:34] Yeah this is Phil I kind of thought it would be interesting to have internet to have Alexa to swing back and visit the phone and make it a kind of an Alexa oriented phone didn’t do it so I was wrong.

Jason:
[27:48] I like the prediction nevertheless and if I’m doing my math right that put you also at,
about two and a half out of 5 so we sort of sort of both finish the same I don’t want to say tide because it wasn’t a contest.

Scot:
[28:04] Yeah but together we had a hundred percent that’s why piece of people listen to the show.

Jason:
[28:11] But enough about the past let’s talk about what’s going to happen in 2018.

Scot:
[28:18] Yep so so I had some predictions to walk us through here so first of all I am reading a lot of articles that say.
Retail is on the upswing and everything’s great.
You have that happens every Q4 and I think it’s going to be short-lived I think we’re going to see Mama getting to oh this year last year we saw 7,000 stores close.
And I think you sent me more than that they close this year so I’m saying you know,
I still think there’s 30 to 40% malls out there that are very weak and failing and I’m going to say the store closure goes up and I just kind of picked a number because I learn to be more specific I sent from last year’s predictions,
I meant to say we have 9,000 or higher closures by the end of 2018 so it will be an even worse year than 2017.
I get a lot of tweets from these kinds of predictions.
I want stores be open but I just think it’s the reality that things are going a little bit worse in the the physical.
Store World especially malls before they get better I do think this is not an official prediction but I think you know 2018 oh probably be the low point then we’ll we’ll come back out of it.

Jason:
[29:30] Yeah I’m going to pile on your prediction in just say that,
both are true like retail could do better in 2018 we have so many stores in us that 9000 Source could close and retail sales could still go up,
so so that the two aren’t necessarily completely related but for sure seems like there’s still a bunch of vulnerable malls and vulnerable department stores in it,
frankly it wouldn’t surprise me if this is the year we see Sears close its doors.

Scot:
[30:00] The second one in this was kind of.
I was going to make this anyway but today in the press a friend of ours Gene Munster was out saying hey I think Amazon is going to buy Target and and he had kind of some interesting reasons behind that.
Scott Galloway is been kind of pounding his chest that they’re going to buy either Macy’s or Nordstrom’s or something like that I’m going to go out and say I think Amazon’s plate is full with Whole Foods they did that very specifically for grocery,
and they’re not going to buy another on.
Online retailer of size I think they’ll still open their own book stores will Pisces some more of that as grocery go kind of things and that kind of thing but I just don’t see them buying another brick and mortar retailer,
Chicago long with that I think that they had huge success with private label and they’re going to Triple down on that so kind of a double Amazon prediction there.

Jason:
[30:56] Nice I like it I like you being contrarian.

Scot:
[31:01] Write number three for me is I’m going to go back to my Amazon Logistics prediction because I think this is inevitable because of the you know what he charged this out the lines have to cross at some point at some point the number of packages,
to be delivered even by Amazon alone exceed the capacity to be delivered out there Amazon I’m sure he’s aware of that and you know if I’m down my I’m kind of.

[31:24] Planning for that eventuality so so again I think that in 2018 that.
You know that they are going to essentially do a lot more with Last Mile and effectively compete with FedEx and UPS certainly for their own packages and maybe for others.

[31:41] Number for TSO on this one we haven’t talked about Walmart in the prediction so I wanted to throw something in there for them I think I think Mark Lori is not done and I think they’ve done a lot there and I think she is just.
Starting to get swinging and you know I think the Walmart Wall Street likes this kind of really aggressive posture that they’ve adopted and I think that gives them a lot of flexibility so as I think will win what’s next on is.
Play I think they do a big m&a and you know part of me you would know better than that.
Groceries in wrestling I don’t think they buy another grocery store though so I can’t think what would it look like like Trader Joe’s or something.
Yeah so.
You know now that Target is bought shipped I could see Walmart taken out instacart or Postmates and then eBay is still kind of out there and I think.
Would be very powerful as a Marketplace partner for Walmart so I kind of put them in that bucket as well.

Jason:
[32:51] Cool cool.

Scot:
[32:52] Then any comments on them.

Jason:
[32:56] No I mean I feel like they’ve been rewarded for all the Acquisitions that they made in the last 18 months are there probably in Bolton so I would certainly be surprised,
Ted not see some acquisition activity in in.
2018 your your prediction seem to be around capability and infrastructure which could totally be a lot of their Acquisitions that’s far have been.
Actual Brands and so it’ll,
it just that out that’ll be interesting to see how that you know where where the focus is in 2018 and I suspect it could be opportunistic as much as strategic in terms of who’s available at the right price.

Scot:
[33:36] Yeah it kind of ties back to last year’s Casper thing.
You know that’s a nice scaled-up brand that once it starts down diepio path you have kind of this one time shot to go buy them I think that’s probably why she got taken out I think they were kind of,
Abdul pathan when you start filing for an IPO and having m&a talks so that could not throw that one in there to Casper could be a candidate.
My V prediction here is and I’m kind of getting into your world a little bit just cuz I wanted to see your reaction or anything.
Platform guy but you know the one platform that seems kind of out there alone is Magento so they were part of eBay they spun out that private Equity that means the Tock the clock is ticking,
it’s a great platform I think that they kind of do this tool path that they start down the going public and then they probably get acquired,
I’m not sure who acquires them seems like maybe a lot of the.
Cloud guide a lot of big guys have their Cloud solution nailed at this point.
Maybe Oracle maybe sap maybe IBM.
And so now you have more insight into the to the possible choir is it still learn to be less specific I’m not going to be specific on a choir so I think so kind of gets added into a larger Cloud offering.

Jason:
[35:01] Interesting yeah so it’s it was a weird year in platforms as far as I’m concerned like for a long time,
you got a lot of retailers that had no platform and said you know every year a bunch of retailers were buying a platform to start selling direct to sell digital am so you had to want a platform sales every year or you had a bunch of retailers it invested early and we’re in some outdated platform and so there you know every every like 3 to 5 years retailers were rhe platforming as the technology got dramatically better,
and so you ended up with these three huge Enterprises sap IBM in Oracle.
That were you know making a fortune on all these reply for meetings you had demandware now I’m by Salesforce to the big cloud one.
For long-time Magento dominated the long tail and then you know more recently Shopify sort of a cloud SAS version of.
Avalon tail has his emerged in course there’s a lot of other platforms but was weird that 2017 is.
No the Enterprise ones did particularly well I feel like the pace of RI platforming dramatically slowed down.
You’re hard-pressed to find someone that doesn’t already have a platform so there’s less new customers entering the market so it’s more replat forming and it feels like people.
Sort of the come to the realization that you don’t dramatically get better customer experiences just by replat for me and so it seems like a lot more people just invested in.
New tools are new plugins or new customer experiences for their existing platforms rather than reply for me.

[36:35] And I feel like that was an economic challenge for all these big companies that were used to.
A lot of expense every platforming happening every year and then you add insult to injury.
They’re able to charge a lot more or are certainly recognize a lot more revenue for selling a big expensive on Primm.
Perpetual software license then they are for selling s a service and so I think,
all the big guys had this double whammy of the economic model shifted that wasn’t favorable in terms of a gaap reporting in the customer slow down and so that you might find in a way that puts those,
does kind of Legacy guys that might have snapped at Magento for their customer base in the less of a acquisition posture so,
I would personally be a little surprised if one of those big 3 Snapchat Magento Magento still is an interesting asset and that they have tons of users,
in some ways there are more modern platform and something a lot of the other ones we talked about because they have kind of free architected more recently.

[37:39] There,
there may be a step closer to cloud and some of these other guys but they’re not pure Cloud their step closer to microservices but they’re not pure microservices so,
there I don’t know if they’re there an interesting I said they’ve got a bunch of users there maybe a half-step more modern and then so you know could could someone want to accelerate their own plan by by acquiring what Magento has,
you you could totally see it but it definitely isn’t a slam dunk.

Scot:
[38:11] And then assess my main 5 and then my bonus at this is really because I want it to be true,
and I know Jeff Bezos listen to the show so I have airpods which I really like but the Siri on them really stinks so what I want is Amazon to come out with Alexa powered wireless earbuds kind of an airpod competitor but with Alexa because I just want to sit there and have a conversation with Alexa what while I have little white things in my ears or whatever color the potty black or something so so my prediction is that Amazon will come out with that in 2018 and I have my fingers and toes crossed.

Jason:
[38:51] I like it the other way that can happen is Amazon and apple could just merge I don’t think either could acquire each other.
So so they could just merge and then they could put they could replace Siri with Alexa and then the airpods what’s your point of great Hardware could just have Alexa in the world would be a happy place.

Scot:
[39:10] My prediction is more likely than yours but I encourage you to make your prediction in your section.

Jason:
[39:16] No no no no I’m leaving that one firmly in your section alright,
well let’s run down my 5 so we we talk a little bit about grocery it was a prediction that they would wake up to digital last year I think this is the year that they totally get disrupted by digital and I think the thing that’s going to,
mainly drive that is curbside pickup,
so I actually think the digital grocery revenue is going to double in 2018 / 2017 we’re going to see a bunch of retards,
roll out a lot more capability to take digital orders for grocery.
And I think some of these delivery services could be the odd man out a lot of people have invested in building is delivery services like instacart.
And I actually think if if we see huge momentum for curbside pickup that we could see you know at least one of those delivery services get too stressed and have to do some kind of.
Disadvantaged transaction and that that that could include instacart as far as I’m concerned.

[40:22] So that’s my first prediction is a lot more of us will be shopping for groceries digitally in 2018.

Scot:
[40:30] You think curbside not not full on delivery.

Jason:
[40:33] Yeah I mean I think there’s some rich rich neighborhoods that are highly dense that the delivery will make a lot of sense.
And you know that might disproportionately be people that listen to the show but I think for the average American it’s going to be picking up your groceries on your way home from soccer practice.
I think that’s a.
Winning experience it’s 1% of sales in the US at 6% of sales in the UK it’s like 12% of sales in South Korea.
I think the early Pilots of all been so successful in the US that we’re just going to see sea rabbit adoption which by the way is going to mean that the retailers like Kroger and Walmart are going to report.
Much higher than industry average e-commerce sales in 28 growth in 2018 because they’re there the guys that are going to most benefit from.
From this grocery disruption I think an Amazon’s case it means we’re going to see Amazon roll out some kind of national capability for curbside pickup whether that means leveraging Whole Foods are building more of the.
Amazonfresh pickup locations or acquiring some other other business.
Opportunistic Lee that’s you know distressed in that the Amazon can get a really good deal on to give them more of these pick up Depot location.

Scot:
[41:55] Cool what’s number two.

Jason:
[41:56] Number 2 is a after grocery gets disrupted Pharmacy / prescription drugs are going to get disrupted by digital in in 2018.
So we we’ve seen some some early moves from Amazon that they might be getting into medical equipment.
And it wouldn’t surprise me of Amazon is the big drug disrupter in 2018 I know you predicted that they wouldn’t do a retail acquisition in 2018.
Well I kind of agree that they’re probably not strategically looking to acquire another big retailer I think I prefer Amazon has a lot of cash in there totally opportunistic so if the right deal fell into their laps I think they would do it.
And I actually think digital could so distressed the drug business that the drug retailers become.
A very economical acquisition or we can see some of the drug guys move out of the retail business and into the the insurance business more and then just want to spin off the retail and sell it cheap.
Here’s the thing to know about drug 60% of all their sales are traffic that came in to fill a prescription so if consumers start for filling their prescriptions VIA mail at home.
Or ordering stuff online and having it delivered to home then those retail stores don’t work if there’s not enough traffic in there to dry them.
They’re they’re not price competitive they tend to sell stuff at full pop retail and there’s too many of them so you add all that up and it would not take a huge amount of digital success to totally disrupt the drug business.

[43:37] And then you got the fact that the scariest business retailer in the world Amazon is is looking pretty carefully at the space.
And I think one way or another it’s a safe bet that drug gets heavily disrupted in 28.

Scot:
[43:48] Go to could help me with my 9000 stores I need.

Jason:
[43:51] Yeah absolutely and I I mean I also think just the changes in the insurance.
Industries in the US in the government Healthcare and all those other things are are potentially favorable consumers are learning that you have to shop for prices on your prescription meds just like you do.
You know any any other consumer expense and I think that that’s going to further open the door for that stuff so I hopefully it does help you out.

[44:16] So my third prediction is that the.
What I’m calling the the machine winning Gap is going to be the biggest trend for 2018 so you already said in a pretty last year that all the vendors would Embrace machine learning in a big way I think that totally happened.
I mentioned I didn’t think a lot of retailers that necessarily.
Fully Embrace machine learning and in 2017 I think they’re only a few examples.
In 2018 I think we’re going to see some retailers dramatically Embrace machine learning.
And we’re going to see a bunch of other retailers not embrace it does not have the resources or just you know be superficial and you know pay lip service or buy some.
Some small product that leverages it and so I think we’re going to see a big gap I think we’re going to see some retailers that are really good at machine learning and have.
Have them built it into their culture and a breaking down all those data silos and they’re just looking for every opportunity to train a logarithm is with all this customer data and use it to.
Deliver way better customer experiences and we’re going to see a bunch of other retailers that either don’t do anything or a very superficial and I think we’re going to see a big gap and customer experiences between those two camps.
I think you know obviously the the folks in Embrace machine learning we are going to be well positioned for the future in the sweater or doctors are going to get left behind.

[45:39] I don’t know how will measure that exactly so number for,
is voice I get asked that voice all the time that speak about natural language processing in boys Commerce I’m actually think 2018 is going to be a huge year for voice,
I go to CES this weekend I’m expecting we’re going to see you way more,
voice interfaces than ever before and I do think there’s going to be a lot more adoption of them in 2018 then there has been so far which I think 2017 was a big year but I actually don’t think.
A very big use case for all of these voice interfaces is going to be Commerce so my my prediction is,
voice continues to be a big deal for for interfaces for home automation for stuff like that but that it’s not going to be a big.
Use case for ordering products and the one exception to that is going to be the sort of Auto replenishment and using.
Using voice to add things to your auto replenishment list and kind of pause your list and modified and do those kind of think so I think with the exception of that one category where your.
You’re adjusting your consumable orders I think voices overhyped for Commerce is that a Debbie Downer for you.

Scot:
[46:59] You’re such a voice guy I’m so processing it I’m in shock.

Jason:
[47:03] I do like the sound of my own voice that is true.

[47:07] My fist it wouldn’t be a Jason and Scott prediction show if I didn’t talk about payments.

[47:17] So there’s a big Trend towards every retailer launching their own digital wallets Target is launching a digital while at right now in my big prediction is none of these retail brand of digital wallets are going to work.
I think there’s only room in the world the North American market for three digital wallets I think that’s going to be Starbucks Walmart Amazon so I don’t think other retailers are are going down the right path by,
by trying to implement that,
and I would heavily advised folks to 2 or I wouldn’t advise anyone now that I think about it but I think big point is going to take this year so I know there’s been a lot of Buzz and hide about Bitcoin,
super optimistic about blockchain and cyber cyber currencies in general but I just I don’t think Bitcoins going to be.
The viable currency to to emerge out of all this.

Scot:
[48:09] The okay so does that include blockchain and other coins or are just pick one.

Jason:
[48:17] So I don’t think we’re going to see a legal currency.
That the Cyber currency in 2018 I think we’re going to see blockchain becoming a super important technology for,
storing value for for Franklin sharing a lot of data and doing interesting things and a lot of Industry so I I certainly think blockchain is a super important and valuable,
technology but I don’t think we’re going to see you,
a branded currency emerge as a meaningful competitor to $2 and in 2018,
and I think the coin is going to be considerably less valuable on December 31st then it was December 31st of this year.

Scot:
[49:00] It’s too bad you didn’t make that prediction last year.

Jason:
[49:03] Yep.

Scot:
[49:04] That’s a good on Jack tonight we had many listeners ask for a deep dive on crypto and blockchain,
that is on our list for 2018 so we plan on doing a deep dive on that just so I do think and do some Sherby agree I think it’s important for folks in retail and e-commerce to have a pretty,
be a basic understanding of this technology and especially the blockchain cuz I think it’s going to be one of those things that there is reality there and it survives the hype and is pretty interesting,
track.

Jason:
[49:38] Totally I’m looking forward to that jump,
and then I did also do a bonus and I arguably we have the same bonus prediction so I tried not to overlap with you on any of the,
irregular predictions but I’m I feel like I’m comfortable space on the bonus I wisely decided to make my version slightly broader than yours so I have a better chance of being right,
I think we see Amazon watch some kind of wearable in 2018 and so the earbuds is a,
total good guess but some other kind of wearable speaker like I think some way to take the the,
Alexa technology with you is is something that Amazon’s going to figure out how to offer in 2018.

Scot:
[50:28] Cool I hope you’re right and I hope it’s your butts.

Jason:
[50:31] Yeah we should have to see that is the beauty TuneIn the episode 211.

[50:40] Scot that is all the time we allotted for tonight show or trying to get the shows a little shorter in 2018 so I predict were only moderately successful.
But I super appreciate everyone listening we will put all these predictions in the show notes so that they’re there memorialized and you can make fun of acid their dramatically wrong at the end of 2018.
If you have any thoughts about any of these predictions well for you to jump on Facebook and share your thoughts and if you enjoy their our show and enjoy this episode we certainly appreciate that five star review.
On iTunes.

Scot:
[51:18] Thanks everyone for joining us have a great 2018.

Jason:
[51:22] And until next time happy commercing.

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