A weekly podcast with the latest e-commerce news and events. Episode 122 is Part 2 of our ShopTalk 2018 recap.
ShopTalk is an annual trade show held in Las Vegas focused on retail and e-commerce innovation. In it’s third year, it has become the fastest growing can’t miss event in our industry. This year 8,400 industry professionals attended the event (up from 5,400 last year). The 2018 version took place March 18-21, 2018 at the Venetian in Las Vegas.
There is so much content at the show, that we’ve divided our recap into two parts. You can get part 1 here, in Part 2 we cover:
- Grocery Track – Catering to new consumer – Narayan Iyengar, Senior VP of Digital at Albertsons
- Glossier Keynote – Emily Weiss, CEO+Founder
- Amazon Keynote – Eric Broussard – VP of International Marketplaces and Retail
- Coach Keynote – Joshua Schulman
- Walmart Keynote – Mark Lore and Andy Dunn
- Houzz Keynote – Alon Cohen president and co-founder
- Google Keynote – Daniel Alegere, President, Retail and Shopping
- Code Commerce – Erik Nordstrom (President of Nordstrom) and Don Kingsborough (CEO One market)
- Code Commerce – Doordash – Tony Xu, CEO
- Code Commerce – Jennifer Hyman, CEO, Rent the Runway
- eBay Keynote – AI eBay Keynote Jan Pedersen, Chief Scientist and Scott Cutler, SVP, Americas
- Ascena Keynote – Ascena Keynote – David Jaffe, Chairman & CEO
- Boxed Keynote – Chieh Huang, CEO
We’ve been honored to be included on a few lists of top e-commerce podcasts this week.
Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Episode 122 of the Jason & Scot show was recorded on Thursday, March 22, 2018.
Join your hosts Jason “Retailgeek” Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, 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.
[0:25] Welcome to the Jason and Scott show this episode is being recorded on Thursday March 22nd 2018 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.
[0:38] Hey Jason and welcome back Jason Scott show listeners episode wanted to take a rare pause on the show and Pat ourselves on the back.
[0:52] Let’s do it my arm is breaking as I’m doing it.
T-Rex help Pizza patting himself on the back of fun fun dinosaur fact so we have received a couple accolades on the show much to our surprise so first of all there is a site called disruptor daily and they rank podcast and different,
Industries and they put the Jason Scott show on their top 10 retail industry podcast so that was exciting.
And then another company called bold Commerce they put out 16 of the top e-commerce podcast books are pretty intense cuz you can tell they actually listen to all the different podcast out there,
we can even put forth on that one so our goal next year is to move up the list or real happy to be placed in the top quartile there and they took three of their favorite episodes.
And one of them was episode 74 with our good friend Melissa Burdick so thanks to Melissa for helping us make the list next up was.
Episode 89 which was our hot take on the Whole Foods Amazon acquisition and last but not least Andrea.
Like episode 83 so it’s good that we before we even saw this we had have them both back on the show for a second appearance so it’s good that we since those were quite popular that we’ve had those books back on.
[2:13] Yeah you know there’s a little inside baseball on the Jason Scott show there’s a lot of.
Jogging for the first guest to get a third appearance on the show I know it’s very competitive and I’m a little worried that some violence could come into play.
[2:30] The knives are out for sure really kind of trying to figure out what’s going to happen there so this this is a good.
[2:38] Sorry one of the important side note about the Bold Commerce list number 10 on that list was our friend Eric you didn’t at ecommercefuel who’s been doing a great podcast for a very long time and what was cool about that is their favorite episode of of of Andrews was an interview with me,
so basically I’m the most powerful person on the list.
[2:59] Absolutely I don’t think anyone would disagree that.
We’d like to thank our listeners for a we could not be receiving these accolades if it weren’t for you guys. We always talk about it in the show so I’ll put in a plug here,
it definitely helps us to continue to get listeners and receive factly it’s like this if you subscribe to the show so whatever your favorite podcast listening technology is be at the iTunes iOS podcast app or whatever,
please make sure you subscribe that helps us with our podcast SEO rankings and definitely tell your friends.
[3:37] Poop so jumping right in here and episode 122 this is so we we continued.
We concluded Shock Talk yesterday and while it’s still fresh in our minds we wanted update everyone on the highlights from the show so the second part of a two-part series,
back and we back in episode 121 we covered the first half is kind of halftime report of what happened at shoptalk so that covered the Sunday and Monday of the four days and then here in episode 122 we’re going to cover the back half for the second half of shop talk and really dive into what happened Tuesday and Wednesday.
Jason why don’t you kick it off with some of the first things that you attended Tuesday morning.
[4:18] So I have to start with some hearsay news we were recording a podcast so I didn’t get a chance to attend this,
but there was a the grocery track was going on Tuesday morning and at least to me a piece of news broke in the grocery track of the VP of digital at Albertson’s announced that,
Albertsons would be launching a third-party Marketplace in the grocery space on their site later this year so they were they were soliciting,
applications from sellers interested in being on the marketplace.
[4:53] Sprinkle and dumb,
I read the news report and it said something like is almost a dig at Amazon Whole Foods at there’s something about those guys are some brands are leaving and Albertsons was building this Marketplace almost as a home for this works is that is that kind of.
[5:11] At least partially in again I wasn’t at the session so I’m kind of putting some pieces together you know as we’ve covered on the show little bit like there.
There has been some blowback in the Whole Foods acquisition.
And it’s not clear whether this was driven by Amazon or this was a change that,
Whole Foods was in the process of making sort of in parallel with the Amazon acquisition Whole Foods used to have a very sort of local orientation with their suppliers and so individual.
[5:42] Stores could buy from suppliers suppliers could have autonomy to do their own merchandise in the store and they’re welcome to come into the store and set up their own displays and do sampling and things like that.
And coincidental with the Amazon acquisition.
Whole Foods has moved to a much more National management of vendors are some of the small vendors have gotten kicked out some of the vendors have less control over their own stuff in the stores and as you can imagine some of the vendor community.
Is a little disgruntled with that so I think weather.
Weather that’s you know actual discontent or whether you know that’s just a mild annoyance it it certainly makes sense that a competitor like Albertsons would try to make some hey there and I think they.
They mention that’s one of the reasons that they that they wanted to offer a a.
Marketplace alternative to Amazon in the groceries based I would also say in some ways Albertsons has been one of the more digitally aggressive.
Traditional Grocers so that you know that they brought out a lot of the.
Expected program GNC like expect to see like curbside pickup but you know they also made the.
The hugest acquisition in the traditional grocery space they they even spent over a billion dollars on plated to have their own did you admit native meal kit service since I know you know this is.
You. There’s a lot of questions in my mind about how a market place for fresh would work but the.
[7:15] You know I I will certainly be watching it and will cover it on the show.
[7:19] Grateful I’m just excited to have more marketplaces out there this is going to be a theme of today show Ms is Mo marketplaces so,
that’s exciting and it’ll be interesting to see you know they’re what their vision of a grocery market place looks like sometimes we find retailers use the language Marketplace but really what they mean is just kind of Dropship so you know they,
they use EDI and curated kind of a thing and kind of old-school mechanisms to expand their selection versus when I think of marketplace it’s usually much more you know of an Amazon Marketplace, model or even an eBay where you know any brand could go to Albertsons and say Hey I want to join this Marketplace I’ve got this cool hip new that are no energy drink or something and want to make it available to your audience so,
well I’ll be eagerly watching to see what you learn about what it looks like.
[8:08] Yeah yeah and I assume your strength is much deeper than mine in this bed. I suspect you agree it’s not uncommon for a retailer to underestimate the complexities of running a Marketplace.
[8:22] Yes absolutely.
[8:23] Yep so then we wrapped up the podcast we were recording and we made it to the first keynote in the morning which was Emily Weiss who’s the CEO and founder of glass CA.
Garcia is a cool digitally native brand in the beauty space that has been experiencing rapid growth and gets a lot of Buzz and Emily you know strictly talked about is one of the sword.
Next Generation female leaders of successful company so it was interesting to hear from her.
And she talked a lot about sort of what she called the new definition of a brand.
And you know this is a theme that continued with some of the other speakers and that.
I’ve been continuing to have with some folks on Twitter you know right up to Showtime today.
But there’s that you know this notion of of another company no longer being in charge in the consumer being in charge and so you know Emily describe glassy a as a brand that was really designed.
Around listening to the customer instead of talking to the customer until she talked a lot about how traditional.
Brands when they when they you know want to be more customer-centric there their real goal is to make the customer feel like they’re heard and you know she was making the point that.
Making customers feel like their hood is heard is a far cry from actually hearing customers.
[9:55] Answer sheet you know she thinks a lot of their you know what their goals are disingenuous and then it’s much harder to build a company that’s really responsive to things are hearing from customers.
And that the way this manifest itself is she’s like you know the days when a customer turns to an expert be that a spokesperson or brand.
For product Discovery are sort of over in her mind and she thinks that you know today,
with the Advent of digital in 1 to 100 and all this transparency that consumers are much more likely to turn to the their peers for product Discovery than they are to,
decentralized experts and and her proofpoint for that is the 80% of all of her customers came to Glass EA based on a peer recommendation and so,
that was interesting to me because it’s a it’s a thing that that comes up in a couple of the other presentations on on Wednesday about the role of,
a brand and how important brand is in the role of of sort of spokespersons and celebrity endorsers in those sorts of things so so more to come on that.
[11:01] Close confused for most of this one because where I come from we call it glossier and I was like where is the glossier person and never could find them.
[11:12] Yep when you work for a French company you learn to make everything sound a little more pompous.
[11:21] Then I after the glossier keynote we had Amazon and this exciting as they had to Amazon Keynotes at the show which is pretty unusual usually pretty.
Turtle wish they didn’t like to come to these events and really say much but at if your member in the first half we talked about the Amazon go execs they’re talking about that and then here we had Eric Broussard. He is a VP of international,
International marketplaces and Retail at Amazon.
[11:49] And it’s really interesting because you know what what Amazon has done is built over a hundred 75 Global fulfillment centers but they were very country-specific so you could load balance.
[12:04] Products made in the USA Fountain Centers let’s say you.
You were a third party and you’re using a PA and you were selling widgets and you would send those widgets in the Amazon list they saw a thousand Amazon what kind of load balance those across is fulfillment centers based on where anticipates the the local points of demand.
That’s really cool.
[12:25] But Amazon historically hasn’t had a way for you to really leverage that week we’ve had several customers really but their heads up against this where they wanted to expand to the UK for example and leverage app,
Amazon Local UK people were like well you have to have an entity and you have to have a bank account and you have to have a tax document and you have to have insurance document and you know you have to,
do you all these different things so.
So really this is a program it was on spin working on for a while and you know I don’t know if formally announce it here but they are,
they’re kind of getting a lot of details so so so see what they can do now is your product can be seamlessly sold globally across the all the hundred seventy-five phone is Interstate that’s a great use cases so.
[13:13] You could be a u.s. seller and then sound of Europe you can you know as you know they’re really big in Indiana they have like 40 performance centers in India that’s a huge Battleground for them Japan China are there now in Australia.
There’s rumor still be in Brazil at some point so you could really use Amazon for your Global infrastructure and.
Interesting about this that gives Amazon a huge Edge is Amazon’s also invested a ton of money into their catalog and you know so Dave.
Unlike a Marketplace like eBay which is more freeform not and where everyone that sells an Xbox or something kind of.
Describes it in their own unique way on Amazon they have this kind of golden description of.
Every Xbox and whatnot and what’s nice about that is it allows them to then as they going to other countries translate that that skew or that a sand once.
And then now you as a seller if you match up against that and it’s the same products as in like less you say France in the US you get kind of translation for free.
I just kind of the punchline they’re so so that’s a really nice benefit of the Amazon Marketplace solution say really talked about.
Kind of a six-step process where they made it,
insanely easy to sell globally system as you send your inventory so whatever your country you’re in and also this is all cross-country so you could be an idiot seller as well as a UK cell or whatever so whatever you said your inventory into FBA they receive it in storage.
[14:44] And then it becomes Prime enabled and then Amazon you can tell Amazon what countries you want to listen to and then they will put the product into this country’s and they will load balance across country so number three.
The customer orders the product number for Amazon pick packs and ships they handled the front end customer service so if someone has a question about the product,
eye of your delivery or anything like that they have their entire force of local folks even handle the reverse Logistics through back to the system so,
pretty amazing and a lot of people questioned Amazon’s got money.
Don’t doubt for this performance centers of the powerful things you can do when you do have that ass that you know they have to look at all the other.
Companies out there no one has as many assets like this as Amazon so so you can eBay when they’re doing cross-border trade.
They’re using and I think someone like a Pitney Bowes or something to kind of do the freight forwarding which is great and I’m sure that’s a very capable thing.
But it’s not hundred 75 fulfillment centers it’s kind of a reshipping, model versus a get it native and sell the ones he too,
A2Z efficiently out on stage two examples of this one was exploding kittens if you don’t know exploding kittens it’s a fun card game that and.
[16:06] Kittens do not get hurt in this game is Callicoon oh except the draw for is an exploding kitten that’s kind of the short version of it and then.
[16:14] They talked about how Amazon enabled them to essentially Go Global with you cut a five-person company that was really focused on creating a card game with witches.
Pretty amazing and then they booking did that we just got very untrue real story with Phillips and Phillips talked about how they launch the product and India using the Amazon Global selling offering so what’s the one thing that’s interesting is.
All the big guys were very much in by big eisenmann Google Facebook Amazon eBay all their talks were really geared towards.
How do you say wanted Brands to kind of get on their platforms which is pretty interesting cuz you know 3 years ago it was all about Sellers and that kind of thing now.
Everyone really excited about more emerging Brands and old-school Brands and how to get them on to these platforms so those are my takeaways from them.
[17:05] Yeah and once I don’t own that one there’s a show in Las Vegas earlier in March called Prosper which is,
show really targeted at Amazon sellers I did not attend but one of the news items out of that was they formally did announce this program in North America and so they like apparently it’s at least formally been,
announced that anyone can opt-in if you have FBA inventory in the US that they’ll now will fill it in Mexico or Canada if you choose.
[17:40] So it seems like it it’s a real thing and I I really like I was super interested in that because it just seems.
Where you like we are to be successful. This is all one in 2D versus you know the sort of complicated orchestration and multiple partners like handing off the Box between.
Freight forwarders & Custom agents and all those sorts of things.
[18:05] When you do that you lose things like trackability in a little details like that.
[18:10] Exactly and the way the package arrives at the customer may not be the customer experience you want.
[18:17] So then the next keynote was the president of coaches Joshua Schulman.
And very different than the Amazon presentation is a brand presentation and coached of her listeners is going through a little bit of a change you know the parent company used to be coach when they were a single brand.
In the last I think year or two years they’ve acquired a couple companies so they acquired.
Alegria shoe manufacturer Stuart Weitzman and then last year they acquired Kate Spade and so they become sort of a house of luxury Brands and they renamed.
The parent company tapestry so Josh was the president of Coach which is you know the biggest of three brands owned by tapestry.
And Joshua talked a little bit about this this Big Brand Evolution that coaches just kind of completing.
They over a number of years had really kind of moved from,
luxury to mid-market so they they had gotten very promotional they were selling throw out of department stores that were very Promotional and a lot of people felt like the equity in the brand have greatly eroded.
And so for the last you know I guess I would say 2 years coaches been making this over to effort to.
Take themselves out of the discount supply chain as Joshua says is it that you know we are focused on reducing our promotional impressions.
And that’s it.
He’s probably a smart thing to do it it’s both been reflected in coaches results which which have been much much more favorable this last year.
[19:55] But also as we’ve talked a lot about this show that you know Casey well and Bob would say the retail bifurcation,
but there’s a lot of Market customers and you can do real well catering in them and there’s a lot of Deep Discount customers and you can do really well catering to them but where you really don’t want to be is the uncomfortable middle in between those two extremes,
and that’s kind of where coach at Swift and so they’ve kind of done a successful job of moving themselves back up market so so Joshua was talking a little bit about that.
He did such a dress department stores which I found interesting I’m not I’m not sure that they mentioned it but Joshua is new to Kochi he became the president of coach last year and he was formerly the president of.
Bergdorf Goodman which is one of the you know the the.
[20:44] Kind of historic famous luxury department store so obviously you know he has a strong affinity for department stores and he shared his POV that you know department stores aren’t going away there an important part of the ecosystem.
And then he kind of talked about the future of the coach brand.
And you know a big part of coaches future he believes is personalization so coaches rolled out a lot of capability to customize handbags on an individual basis so now from their website you can.
Personalize a lot of your products and their coach owns a bunch of different stores they’re starting to deploy that.
Personalization capability in the stores as well so you know instead of getting the same bag as everyone else you can get a bag that’s completely unique just for you.
Which I do agree that I think is an important part of the evolution of all these Brands and then his last point in.
North America which is coach’s Home Market that you know where Promontory thought of is a handbag manufacturer and so they’re they’re investing a lot in.
Redefining themselves as a Lifestyle brand and in that sort of a jargon for,
where we’re going to sell apparel and other items in addition to Handbags and he talked about markets like China where,
they’ve been a Lifestyle brand from the beginning because they had this much broader assortment when they first went into that market and how differently the Chinese customer thinks about Coach then the the North American customer and so that that was sort of his pitch for the evolution of the brand.
[22:16] Recap my favorite part of that one was Courtney Reagan I’m a big CNBC junkie and she didn’t really do it here but on TV I’ve seen her,
when you I think what happens is Sony’s Executives meet these reporters and they just kind of assumed they’re just general business reporters and don’t know the industry Courtney has like an MBA in economics and Retail and she’s been at this for for a long time and I’ve seen her just eviscerate Executives before I guess are good she had,
Lundgren tied up in knots one time.
When you just talk about the Amazon competition so I was kind of really waiting there for her to catch him in the Trap in and I think she went pretty easy on him because the cameras weren’t rolling I do think you know why.
What are these guys seem like they’re in denial about stories it’s like they won’t admit that.
Yeah it’s a challenge or something like I got a really weird vibe from him that everything’s hunky-dory Pollyanna you know stores are great brands are great and you know.
I can talk doses PR or if he was like really believed it also if that was kind of you know a little concerning.
[23:20] Yeah and I think there is a theme you know all of these guys came on and they’re they’re defending their legacy ass that’s right so he’s talking a lot about how important the store experience is and in addition to,
you know the Wholesale stores that coach yells through coach owns a bunch of their own store so they certainly have a expensive asset there that they want the world to believe is valuable and I would argue,
is valuable and it’s going to come into play on some of the other teammates were going to talk about later when you know when,
the CEOs have to spend a lot of their time justifying why their legacy assets are so valuable like you know it’s it’s it’s fair to question you know if they really were that valuable they probably wouldn’t have to spend a lot of their time saying they were valuable.
[24:02] Yap exactly.
[24:03] And by the way I randomly I happen to be sitting for that keynote next to Warren Thomas who’s the other retail reporter at CNBC so that was so we were we were watching Courtney together was kind of fun.
[24:17] So then the next keynote was a very good get for shoptalk it was Mark Lori that the digital president at Walmart and Andy done the,
the founder of bonobos which is now a brand owned by Walmart.
[24:35] Yeah this was a last-minute addition which I thought was interesting it almost kind of felt like maybe they came because they had something to say so I think we were all you really waiting on this one.
That that probably is true and I would argue that in a way that made it so it be less interest in keynote than it might have otherwise been for me because as we’ve covered on this show Walmart had a very visible Miss on there,
their Ecommerce growth last quarter in their their stock took a pretty significant hit as a result of that and so you know that was the 1st? Was was to,
kind of talked about in justify,
the the in a fact that they had something like 20 or 25% growth versus the 40% growth that folks were expecting and you know I’m really interested in and hearing him talk about that like it it did take up the bulk of,
this particular a keynote and you know I would have been interested to hear a little bit more about about some other aspects but I will say,
Mark’s answer which seems like it’s now that the corporate line there is essentially that Walmart planned,
to have slower growth and Q4 and that it was sort of a retooling quarter for them you know after that had had several quarters of,
a very fast growth and he kind of pointed out that look we don’t give quarterly guidance we gave annual guidance and we hit our annual guidance so we don’t understand why everyone was so surprised.
[26:12] And I like I I think it’s fair to say we’re all a little cynical of that that story.
[26:17] Yeah I don’t know if it’s because of the podcast or what not but I think.
Between the two of us if I had 40 people come up and offer that they thought that was totally BS that you know the drill line was that you know nobody in retail plans for the 4th quarter to be a reach 1/4.
[26:33] I think I think the the summary they’re like well I think for an update they hit their annual guidance and that’s all great if your plan is to have a soft fourth-quarter it’s a bad plan.
[26:46] So other than that there were some interesting tidbits from that presentation you know Marc reported that they’re up to seventy-five million skews for sale which is you know from a couple years ago that they were in the you know couple million skews so that’s.
Astronomic growth I would assume the bulk of that is Marketplace and there’s you know a slight bit of controversy,
here in the there is a former Walmart exact it’s actually suing Walmart and one of his main claims is that Walmart store to artificially inflates this number bye.
By saying how many skus are in the database and not necessarily actively for sale but I think I think directionally.
Walmart has added an awful lot of skews and is within an order of magnitude of of Amazon which is pretty impressive.
[27:36] Is what I think Amazon’s about 400 million skew something in that range.
[27:42] So then he did talk about you saying we talked about a lot on the podcast which is Walmart’s grocery Grocery progress then I’ll have 1200 stores that do grocery pick-up and so what that means is 1200 cities where customers can order groceries.
Online and I drive by the store and pick it up and you know except for those 1,200 stores you can’t order fresh groceries from Walmart so.
That this is this weird thing and I think the analyst had until he picked up on you.
When you’re talking about store sales you talk a lot about same-store sales cuz you compare apples to apples when you talk online you talk you know General growth.
But now you really have this third category which is sort of.
Online grocery growth which is a hybrid you can only deliver if you have a store and able to do so so there are 1,200 stores and they they expect open another thousand storms this year.
You know you’re my mind that has been the primary driver of their they’re huge e-commerce growth and so I think they need to open a thousand or 1200 more stores this year to comp well against.
Against the last year or they’re going to they’re going to laugh all those those grocery stores they opened last year and then and that would dramatically swell their comps.
He also mentioned that they are now in 100 metros with same day delivery this is this Blended solution where I think they’re using to live they’re using Uber and they’re letting their own employees do deliveries.
So that that is interesting we we will hear about that from Target as well and then Andy talked a lot about the did you need a vertical brand which is a term he coined and and how that fits into the Walmart strategy.
[29:23] I think it’s Mark Lori that always uses this metaphor a bit but they talk about the the.
The analogy of Walmart to Netflix and they say you know I got you.
Netflix is a super successful model you can go watch a bunch of other people’s movies on Netflix but increasingly,
the big draw to Netflix are these first-party content that Netflix created exclusively like house of cards or Orange is the New Black and so to Andy and Mark these,
did you need a vertical Brands like bonobos ModCloth are.
The sort of unique videos in the in the Netflix model I don’t know what they meant to but they did make an announcement that I had not.
She heard before which is that all of those did you need a Brands will eventually find their way onto the jet sales platform which many of them are not right now so that would be ModCloth for example would be sold through Jets and,
Martinez said the high level strategy is look where we’re redefining the jet brand we’re going to use jet as,
the brand to win affluent Urban Millennials and you know which sort of perfectly complements the markets that the Walmart brand is really good at winning.
[30:44] Couple funny things in their answer to the question of the bonobos being on chat was,
your Delray Jason had gone out and search and I found like this pictures of monkeys since he couldn’t find my notes they kind of lost Jason he was like so going to be a media company I don’t think he understood the,
metaphor of unique,
original content that they were trying to make their butt but it is it’s early as you know it’s definitely I think it’s a very valid strategy it’s kind of like Prime exclusives that Amazon is doing the challenge with Walmart is,
you know they’ve got like 8 things going on that that are pretty intense and each of their own and their e-commerce.
Peace is not at a scale that Amazon is so sweet hard for them to execute well in all of this.
[31:39] The warmers.
[31:44] I think that was the main main adjust of the Andy and Mark show other than.
[31:49] Are you crushing on Andy Dalton.
[31:50] Andy Andy had some really cool slippers on that apparently where the celebrity got married in.
[31:56] Took a picture,
I guess my picture that was circling this fine then up next was house in the house Houzz,
and houses really cool story so I actually know one of the founders his name is Alana and he was from 2001 to 2010 he ran a bunch of engineering groups at eBay and his wife’s name is I’ll probably put you this but,
[32:26] And they are from Israel and they moved to Silicon Valley and by house probably for a bazillion dollars and they were they were working on refurbishing the house I think about.
8 years ago now and you know what they found was there was no.
Great Ecommerce experience for Furnishing your house so house is borns they built house is a way it’s kind of a it started out as really a place where.
Counting is a super vertical Pinterest so.
If you did a project where you refurbish your kitchen for example and you wanted and a designer wanted to maybe kind of get involved it was coming designer Marketplace so you could get ideas from other people could have done it and then also designers and an end designers like,
because it was a way for them to acquire customers and that’s how they were kind of monetizing it.
Then what happened is there so many do-it-yourselfers that would say hey I really like how Jason and his wife did their kitchen.
I want to and I can see this faucet in there that I really like and this countertop but I want to know exactly what it is and how to go buy it.
So there’s this disconnect between the,
products you would see in these kitchens in other rooms are being refurbished and ability to buy them so they created a product Marketplace on there in full disclosure we’ve been a partner of there is that channel visor for a very long time,
I used to be more of a paid less than kind of moved to a pure market place we can buy them all and house and they’ve been a great partner verse so it was cool to hear the story I’ve never heard the story from kind of that.
[34:00] That start to where they are now and here they are today they fit 10 million items on the marketplace they’ve got over 20,000 Sellers and 40 million monthly active users so you know it’s pretty pretty neat that they kind of just.
Really solve the problem and we’re able to build a couple different ways of monetizing that on there he was interviewed by Alfred Lynn who was one of the.
[34:28] Yeah that’s a good question yeah I think he was there at the beginning I do not know if he’s officially a founder or not.
[34:34] Yep but he left free shortly after the Amazon acquisition and Joint Sequoia which is one of the.
List of blue chips are in the Bay Area so a lot of his questions I wasn’t sure the retailers were rocking on cuz he’s talking about MARC station strategies,
yeah he’s like going kind of deep into the VC language they’re so it’s kind of interesting and then,
the last thing I thought was interesting was they did talk about you know,
they are so this is really big right now in the home category,
where you know you can not eat you can use augmented reality to look at a room and being a piece of furniture or a faucet or something like that or maybe in the cabinet you can kind of get a feel for how that’s been looking so they have a million skus that are when I call a are enabled and,
this was one that will make sure that we caught that,
it improves your conversion 11 x when when people are using they are to look at an item,
so in my calculus I kind of said well that was conversion rate something like two to three percent so what is that like 33%.
[35:39] What your kiss makes sense cuz people going to be pretty far down the funnel if you’re going to be like okay I’m going to go home,
I’m going to fire up the say our thing and I’m going to drop that widget that piece of furniture whatever it is into my room to see if it’s it’s so it’s so I guess it does kind of like a really big bump to me.
[35:57] Does that jive with you.
[35:58] It does and I think YG for the reason you mentioned like I don’t think if you just took any random Shopper on that site and force them to to use an AR experience that they would suddenly convert.
11 x better so I don’t think they expect you know why these friends probably is better is,
I don’t think it it’s this the magic Silver Bullet to cause everyone to buy.
I think you have to already have a much higher buying intense.
To be interested in trying they are Peter so you have to already be more attached to the item and you’re investing more time and in kind of setting it up on your phone and walking to the environment where you want to use it and so it’s it’s,
it’s one step below are on the funnel and in so I think it is a great tactic,
they are also that your web urging a something we talked about in the show Google and and,
Apple have both rolled out AR kits for their operating system that make it way easier to do this kind of stuff well and so.
Pals wizard of the pilot user of those two stacks the what people is usually underestimate when they implement this feature,
is you need a source of really good data to have the 3D models of all these items into the fact that they have a million items out of there,
their inventory of,
you know that they have good 3D models for is is to me pretty impressive and that that now is officially the big barrier for any other retailer that wants to add this feature is just how do you get the good 3D data and I I think in the long run.
[37:32] The brands are all you know in the same way that they have to provide a long and short description for a retailer when they want to sell something you know what the brands are going to have to start providing 3D files for for these things as well.
[37:45] Yeah that seems like a very large number to me because you and I know most manufactures is a struggle to get a you know a human readable short description you know so they’ll be like.
Wooden chair so I kind of was locking the logic I was like wow that’s a million is like 10% that’s why I would have guessed.
[38:07] Generally these first-generation experiences it’s more the retailer created the data themselves.
[38:14] Yeah so they must be like you,
getting the products in and scan I know people will shoot videos and practice way there’s these houses that get quantity one of these things to do that so I was thinking maybe they picked they have the benefit of knowing the top 10% items get them into a studio and then you can run a scan on them that was did you wrote did you walk to the same process.
[38:34] Yeah and they didn’t talk about how they do it that’s and I would have love for them to Deep dive into that but that’s exactly what I would assume and it does create this interesting thing so,
and house where is really weird category cuz a lot of furniture is.
It’s not really branded Furniture it’s like private label furniture that a bunch of different retailers all sell the same thing and call it something wildly different so there is some office case in their butt.
[39:03] If you think about it house now has that in owns that 3D data the manufacturer doesn’t so when.
[39:13] Amazon or Crate & Barrel or some other seller wants to sell that same item you know they they,
they’re going to eat at to spend the same money has spent or the manufacturers are going to have to go spend the money to do a 3D scan the file or,
go back to the designer and get the 3D CAD files from the designer in so it does it does create this new work stream this is how,
a lot of new attributes in e-commerce this is how they start the first time someone a retailer wants to use in the retailer has to invent them and once it becomes a best practice it gets put back on the manufacturer and eventually the manufacturer gets couldn’t provide that mean the same as it is true a digital images.
[39:52] It also made me wonder you know the wafer ones talked about a lot that made me wonder how many models they have and if they’re doing something somewhere.
[39:59] Yeah and if you think about it in this category is even more ugly like a,
the hardware the 3D scan these big items is more convoluted than then you know like simple tabletop items and so much of the stuff is drop shipped like if these were shoes that sat in a filming Center you can imagine sitting up shop and seeing a bunch of shoes in the Fulfillment center but a lot of these things.
You know you like it in the case of Wayfair they never pass through a Wayfair facility where Wayfair could scan them.
[40:27] F R Anderson cool so after house we had a Google up and the Google one was probably if I was going to pick one that was my highlight of this would have been it and even then I think it was,
how what Google announced the show was largely misunderstood so I wanna spend some time on that because I think it’s,
pretty important so what are the interesting things that’s going on is the the guy that used to run retailer Google his name was John a furnace and he was he left to join Pinterest and saw him several times the show he was there with pry like 50 Pinterest people which I thought was interesting because,
you know I’m easily sink shoptalk in Pinterest so I just got this vibe that there’s something going on there.
And I don’t know what it is but but he’s also like his official title there is SVP of ads okay so that makes sense and commerce it Pinterest so pictures has had when I would call some.
Pretty you know man e-commerce things that got rich pins they did a little Marketplace I kind of went about it in a weird way that was not very.
Customer friendly was easy to implement but not a great customer experience so I almost kind of like was wondering you know.
Why is Pinterest have so many people here why they hire Al Fitness e-commerce have answers but I just thought was interesting to see that so anyway,
Daniel is a great addition to the retail team so it’s official title is president of retail and shopping at Google I talk to a lot of googlers and they were all really excited because this kind of the folks that are in the Google shopping side and they’ve been working on retail for a long time.
[41:59] I feel like retail is really elevating at Google and.
The person they talk about Daniel has been a senior leader Google for quite a while I think his prior title.
[42:13] I was stressing yeah he was like Global and strategic Partnerships so you know he he was quite a senior person and,
he’s also well known a Google you know these companies like a Google or an Amazon aren’t really known for their ability to partner with other people wear as you know I think he has led the charge in certain categories were partnering is going to be essential for the wedding so I was really eager to hear what he had to talk about he went through you know.
[42:40] I don’t think whatever Google people get up there they have to kind of go through the rigmarole of,
we have seven properties that were billing users were Google where mazing here’s the big trends we see the meat and potatoes of his talk to me was the announcement of I called this Universal shopping cart and I’m not a fan of that I’ve had these two spirit things at Google,
send it. Google Assistant which we know and love on the show they’ve had Google Express.
What started out as a kind of delivery service in a couple of areas and just think of it as kind of one hour type.
Product and then they’ve had product listing ads and so through a the pieles are a.
A shopping enabled kind of a not enabled e-commerce ad unit if you will so far.
20 products that has a price and that kind of stuff so they put them all under this umbrella now and they’ve actually.
The cool thing for me is I sent you they built on Marketplace on the park posting ads and that they taking a couple shots at this last time I was called by on Google and.
It was just so micro so it was like 5 merchants on Android only Angie had to have Google pay and it had to be enabled it had to have this that in you but time you slice all that stuff you’re looking at like you know.
500000 users which which is nothing but in the world of Google with all these billion dollar properties it’s like why are you so where she going after these like you know,
like slice of a size of a slice of a slice but unfortunately are not doing a great job of describing it I think about it is you can now take any SKU and have it available in a lot of different flavors so so first of all.
[44:26] If it’s like what I would call an e-commerce Q me you’re going to ship it either from a fulfillment center or a store so kind of like a two-day plus kind of a thing you can make that viable in a Google search result.
Is that product is near the user and available for delivery same day that’s another option Source, these rings of availability.
And then also you can make that SKU available to Google assistant so example that they have used a lot is as you know target has a private label cpg brand called up and up.
[44:55] So they show this this detergent that has been enabled with this new ad unit that’s called shopping action,
abled then there’s three use cases so you can say OK Google,
buy up and up laundry detergent and it will it will know then.
Based on where you are if you can get it kind of same day or in an e-commerce kind of a Note 2 day type experience so you it will ask you and if it’s available in both It’ll ask you which one you want.
The baby shopping shipping fees and stuff there and then if you’re in the Google Express experience you’ll see that product because it is available at a local store and then if you’re in a sponsored.
Pla you will see it there as well so there.
You know we are at Channel advisor we are in early partner on this and it I can say they said on stage,
Target and Ultra Ultra are seeing 20% left from that,
police unit and I can say there’s there’s several other people in there and and this is causing really good lift for folks in this is something I think it’s been a long time coming,
there’s certainly some attribution things in there but but I think happens if the desktop metaphor doesn’t work on mobile the whole go search for detergent go in to target.com forget your credentials.
Get a password reset login put it in your Target card.
Then order Denver enter your credit card that’s such a drag because up further in the stack the phone already knows who you are and you already have your credit card in the Play Store so why not just use those credentials so so this is another attempt I think at kind of.
[46:38] Elevating that transaction higher in this. So I’m excited about it and they went to Great pains not to call the Marketplace but my mind it’s Marketplace.
[46:48] So so I took this to mean Google is getting a lot more serious about Marketplace and how do they surface this product and make it.
Yo and partner with retailers to two.
I think the big win here is going to be closing the mobile Gap and what did Al furnace did is he came from the Travel Group.
At Google where they did this to an Indus was controversial because some people thought they were kind of going around to Travel Systems and stuff but you can actually buy a hotel room right on,
Google mobile and dramatically increase conversion rates versus kind of like that again that desktop metaphor of OK Google says there’s a hotel over here,
now let me go to that hotel site and then iterate through you can actually go by that room on Google Now I’m so so I think they seen some really interesting things on travel and they want to bring it here they did a 100 of it over the last 2 years that didn’t get a lot of success and then this time it’s feels like they’re taking a much bigger at that swing.
[47:46] For sure like I do think they’re taking a bigger swing it’s going to be interesting to see how it plays out.
Huge difference between travel and most of the sort of product Commerce you know,
in travel you’re mainly trying to sell a room or a flight and if you can bundle other travel Services into that sell it’s great but like the overwhelming majority of the time it’s a win the book a room,
a lot of individual items that you sell an e-commerce are only profitable if you get the customer to buy more than one thing and so you know that the level of difficulty for Google is is much higher in the Commerce base than the travel space in my mind because,
it can’t just be.
Click to buy button in search results because that that frankly is going to drive everyone a single item purchase is a oviso go down and you know the artiste rest.
Profitability in the in the whole ekosistem would get even more stress so it’s going to it’s going to be interesting to see how all that plays out to.
I I get so one funny thing the economic model is different than most other Google ads units in in you know most cases your you’re paying for that.
That exposure in the ad world and you know Google is charging much more like a Marketplace hear your your you know paying at a crate on the on the stuff that Google help you sell or you know in the.
The ad business they call this a rev-share model and when the word got out that they were watching this format.
All the traditional SEO guys piano.
[49:17] Because they misinterpreted this as Google will now share the profits with you and elevate your listings in organic search so they.
They said it was a you know several days of panic on Twitter where it where that was sort of going around I guess one other interesting outcome of this is.
It also creates the scenario where you may not have paid to have a pla show up.
But Google me decide to place your POA extra times that you didn’t pay for and take the rev-share from it and so that that’s it in aspect of this program as well as the Google can Canal run Google funded pla.
[49:57] Yeah it’s going to be really interesting to see and I know we’re going to type for time but let’s talk about some of the implications in a future show.
[50:06] For sure we had to run from that Keynote.
To another event that that they is sort of an event within an event Jason Del Rey from recode they they host a.
A dinner or in the evening at shoptalk they call code Commerce and so you know he he typically gets like about three interesting speakers,
you know at at this sort of show within a show and so we.
We hooked it from the keynote to join Jason’s event and there’s some interesting speakers there as well so the 1st guys up there.
Was Eric Nordstrom who’s one of the three.
Nordstrom Brothers running Nordstrom’s right now and who does not do a lot of public event so that that is kind of a cool get and he was on stage with.
This gentleman Don Kingsborough who’s from a company called one market and I’ll get into that in just a second so having Eric there.
[51:14] Would be cool under any circumstances but news and come out bad day that the board of directors of Nordstrom had sort of turned down the Nordstrom families offer to buy.
The company back and take it private and so the the you know according to the reports the deal is dead now.
And so you know that was obviously a piece of news that Jason went right at Eric about.
And which Eric had very little interest in discussing and probably let you know wasn’t at Liberty to discuss it created some sort of.
A humorous for us awkward for Eric moments at the beginning of that interview.
[51:54] God knowing you Delray didn’t what up it kept coming up he kept on them.
[51:59] Exactly and I kind of a funny line he’s like you know I’d like to say I appreciate the question but I really don’t.
That’s what I heard of humorist in so he’s he was on stage with this guy Don Kingsborough and Don is the CEO of a company called One Market.
And there are there a spin-off out of a incubation lab that’s owned by Westfield malls in so I don’t think.
[52:26] Westfield may still hold an interest in one market but they’re separate entity now I think they probably figured out that nobody would want to.
Participate with one market if they were exclusively owned by this one mall and one market is kind of an interesting venture.
You know personally I’m a little skeptical on it but the the gist of it is that hey,
Amazon has walked up a big chunk of the market and then this huge unfair Advantage Amazon has all this data about the consumer,
they see way more of the consumers purchase behavior and more the browsing Behavior than anyone else and they’re really putting all the traditional retailers at a disadvantage because no one retailer.
With the you know possible exception of of Walmart really has the the.
Date of his ability to know the customer as well as Amazon does and so what Market is an effort to say let’s create a data Coop where all the retailers share everything they know about a consumer,
and then we’ll make.
That data available to any of the retailers in the coop to improve their experience and they have to make that data available in a,
a very limited way like they can’t share.
Personally identifiable information from one retailer to another and they they can’t you know give one retailer another retailers customers but essentially if.
If you’re a customer and you’ve done a bunch of shopping at coach and so coach knows you really well and then you walk into Michael Kors.
[54:02] And you know Michael Kors says Hey I just met this guy Scot wingo and he’s in the coop database the the,
One Market would be able to share some of the the enhanced data they know about Scott Wingo that they learned from Scott shopping with coach,
and so so at at it. I don’t know if I explained that very well but at the highest level this is sort of a customer data Co-op to compete with,
[54:30] Yeah I have to say I’ve never met non-don before but he seemed like a really story guy it did like it has a really great since it like PayPal and places so so no doubt he can build with it he says Google but I honestly didn’t understand if it about it.
I did I guess I didn’t get to use case it’s like I don’t really care if I go to Southpoint mall and then I go to Crabtree mall and didn’t know about me like,
I just don’t understand,
but I couldn’t really get my head around you space and maybe that’s cuz I’m a very transactional Mall person am I going to the Apple store to get my airpods that’s it I’m not I’m not like a browser baby but I don’t know I kind of missed the use case.
[55:06] So you you are so you are hitting on one of the potential liabilities of this model is none of these retailers are pretty good at using the data they do already have about all of us when we shop and so it’s it’s hard to say that their biggest problem is they don’t know enough about us,
but it is fair to say you know the date that they are worried that they know less about us than Amazon does so I can I get that a big problem with this model is is,
anytime you explain anything like this model to a consumer they’re going to immediately panic and get creeped out and it it just sounds like big brother,
and so it’s.
We’ll have to see if it’s focused on the Legacy mall guys in a Dina retailers and of course they have a bunch of other headwinds that are unrelated to any of this so,
I don’t know I’ll be honest though I did get the impression,
the Don has a personal relationship with Eric and that the deal struck and by the way Nordstrom is one of the retards participating in one market so I suspect the deal struck was,
Eric will come onto code Commerce and talk with Jason Delray if he gets to bring down with him and gone gets to make a pitch for one market.
[56:14] Yeah and they didn’t talk about it but I kind of got the vibe Nordstrom Ava invested in that that entity.
[56:21] Yeah that well so it’s a it’s a co-op I think all the retailers that participate are basically investors why do you own a piece of it so it’s so absolutely.
[56:30] Until Eric had a vested interest in Dawn doing well and you know let me just say like I don’t think Jason had a lot of super interesting questions for Don I think he was a lot more focused on what did you get out of there.
[56:45] So I am not sure it was a lot of interesting Nordstrom revelations in in this interview other than.
You know the plan at Nordstrom’s to do what they’ve always been doing you know it’s the fact that we didn’t buy the company back doesn’t change anything was kind of Eric’s message.
I thought it was kind of a just a funny random story Eric telling the story about his dad Bruce Nordstrom that was in a former president of Nordstrom’s and how whenever someone would call Nordstrom department store.
How Bruce would be really upset and say we’re not a department store where specialty store and you know for the.
[57:23] You know if I was listening Nordstrom started out as a shoe retailer and they they still like have a lot of that DNA and.
Eric said if not you know I would be like whatever Dad where we’re big store with a escalator so call it what you want and it just was a funny moment for me thinking of this I store a retail family like having these arguments around the Thanksgiving table about whether there a department store or not.
[57:47] Yeah I’d never met at Nordstrom’s that was kind of cool.
[57:51] The other thing that came up a little bit which is interesting I don’t think Eric Shirley new information but Nordstrom has the store in Los Angeles called Nordstrom local,
and this is a small a small store by Nordstrom’s standards I think it still pretty big I think it’s like that twenty thousand square foot store which a full Nordstrom might be why.
50000 square feet.
[58:14] And there is no inventory for sale in the store so it’s kind of like a bona bus guide shop like it’s either you know there’s personalized customer experiences and shopping concierge and lots of mannequins that you can look at,
but then you you order the product in Nordstrom ships at your house and the talking point that Jason was focused on was.
I’ve heard a lot about the store in the fact that it’s.
It’s not profitable and isn’t likely to be profitable in the in the near future and so this feels like.
Kind of a project or an investment for Nordstrom and you know aren’t you worried about not being able to make those kind of Investments going forward since you you know you were unsuccessful in in going private.
And I think Eric’s point was no we we paid for this without going private then we we do lots of things like this all the time so this is sort of business as usual for us is,
and we do some things we expect to be profitable right away and we do some things that we expect to learn from and hope to make a profit in the longer Horizon.
[59:18] Call the sex would really quick so I was excited at shoptalk surely but also could Commerce there was a little bit more,
kind of of the different models out there this one I would put kind of squarely in the on-demand economy bucket which is I’m obviously pretty fascinated with,
funny company in this is in the food delivery category where there is a battle royale going on so they had the CEO doordash in his name is Tony shoe,
oh that’s spelled XU and then he was on stage with one of the leaders at the Cheesecake Factory which is a very popular restaurant and they had just announced that they are doing a delivery food delivery for cheesecake through doordash.
And I didn’t realize it until I saw eBay partnership,
from 2009 to 2011 so that was cool to see someone from the world of e-commerce kind of spread his wings and becoming an option or.
The one of the.
Big news items us and Kara Swisher did the interview here and she couldn’t seem to get her head around the fact they just raised over $509 so they’re there well beyond the Unicorn.
Status which is Sue sought-after in the Bay Area which means you have a valuation over billion I would Hazard a guess or pry a deck of corn which is a 10 billion dollar valuation so there’s so there’s aislers GrubHub which is actually,
public there’s the big one that’s really gaining popularity is ubereats and then there’s many many more of these there.
[1:00:48] Pretend food did this is like prepared food delivery companies and if you widen the radius little bit to include ingredient make yourself kinds of things than the category it’s even even.
Even got more crowded and so she’s kind of hammering on like you know why would you waste so much money and that kind of thing.
This is I commiserate with the size opportunity and he’s right you know this is a multibillion-dollar opportunity if they can get 5% of all restaurants business to be,
true you’re just in the industry and they capture 30% of that that ends up being a,
a really really big number so any talked about I think you said there in 30 markets and they’re going to get into 80 so there there’s a geographic component of this,
yeah when funny question was she asking what are you scared most of these at the telephone and she was like.
[1:01:41] What you mean and you know it’s just like that’s the customer experience they’re up against is they kind of have to be better than just calling the restaurant on the phone to do take out with witch and and then you obviously have to go get it but I thought that was kind of interesting.
[1:01:55] And then you and I is kind of funny you and I had kind of had this discussion around you know with these with this business isn’t good for the restaurants in bad and,
there’s an argument that the sex it hurts marching,
because you’re already paying for that kitchen staff and everything and then if they’re making meals for this pickup you don’t get a lot of that up sell that you get in the restaurant is your same argument that they made with the Google marketplace,
when you went to people go to restaurant have a meal there’s alcohol involved there’s maybe a dessert that you didn’t plan to have appetizers and that kind of thing,
Raz I think,
I would guess the ticket when you’re doing takeout or delivery is much less and you obviously don’t get alcohol sales which is where there’s a lot of margin but they got to ask a question about that and the cheesecake guy I explained that you don’t know it’s really.
Incremental business so they already have the fixed cost of the kitchen and they viewed it as incremental and they therefore you know yes the margin is lower.
Then an end in a dine in guest.
But it’s incremental margin so you going to help the prophet leave the restaurant so I thought that was an interesting argument you a lot of people that I talk to after.
Forecast skeptical about that so and then he did talk about at the Cheesecake Factory.
Like 2 years ago they had 8% take out and now it’s kind of risen to 12%.
[1:03:18] Didn’t ever say if this was exclusive because one of these guys do is they will actually kind of order as if their customer and then said their drivers so they don’t have to have a you know a relationship with the restaurant so I know GrubHub does that for example so.
Part of that 12% is not only doordash but probably all the other delivery guys too and then lasalette said that they said that.
25% of doordash volume is from chains and then.
I thought they said the rest was for Independence but I think you took a note and tweeted 5% so.
[1:03:51] No no no. That’s a typo in your notes you are exactly right 75%.
[1:03:54] He has a deep restaurant background I think.
I think he said his parents are restaurant for sure.
[1:04:06] Is Mom still run the restaurant.
[1:04:07] Yeah but then somewhere in there someone said I think he said his grandparents also had a restaurant I I couldn’t tell it maybe his mom is taking over the enrichment videos.
You can’t came back to his roots and,
I’m really understood the restaurant business deeply and then final comment when asked you know there’s always competitors out there when asked how they’re going to win I thought his answer was pretty clever he said you know we’re really just focused on this we’re not doing self-driving cars were not doing.
[1:04:33] You know building a whole delivery Network that separate were really focus on how do we deliver an amazing dining experience and you know how do we in the he said it was very Amazon way of thinking it out we measure every second.
Between when the order comes in and it gets delivered and how do we get the food there hot fresh so I left that you know thinking,
here’s a guy that’s really kind of gets it he understands the customer and he’s going to Worcester 500 million so so I felt like he had a pretty good shot at winning and I was excited to see where they take it.
[1:05:04] That I would also argue that he already has a considerably better customer experience than a lot of his competitor so I’d like some of that that focus and Care like is already very evident in in their customer experience.
[1:05:20] Yeah one one example of that was even worrying about you when they deliver the cheesecake from the Cheesecake Factory making sure the slice looks perfect and it hasn’t like flipped on its side or getting off stuck around in the container,
that’s those kind of details that I spent a lot of my day on this site I really appreciated that level of detail that they think about.
[1:05:38] Yeah for sure and I think that I would just you know mention that listeners this is an area to pay attention to the whole food consumption industry is going through major disruption right now and it’s really unclear.
What the future looks like but you know when the friction to get food restaurant food delivered home is way lower suddenly those restaurants are competing with.
What used to be grocery trips when you buy ingredients and make your own dinner and they’re competing with the Ready-to-Eat food at the grocery store sells and you know the digital enablement of all this thing also makes,
a bunch of the restaurants compete that didn’t used to compete go so maybe you would have done to a fast food restaurant in the past cuz you only had a limited amount of time but now if you can,
place your order for Cheesecake Factory before you get to the store and know that when you arrive there’s a table wet,
ready for you and your food is going to be there in 2 minutes and then when you’re done you can walk out and not have to pay because you’ll get automatically charged,
Southern you can eat at Cheesecake Factory you know in about the same amount of time that used to eat at a fast food restaurant so all of these digital is enabling all of these former you know different channels to suddenly compete with each other and it’s it’s it’s super interesting.
OneNote on the cheesecake guy he kind of poo-pooed some of those experiences and he’s like yeah we’re never going to have tablets on RR.
Tables which is sort of taking a shot at like Applebee’s and Chili’s and some other chains that are experimenting with that because we just think the customer wants.
[1:07:13] A personal experience and interaction with a server in.
[1:07:17] That could be true and you could be right that’s also a justification that you always hear from the slow mover when when his competitors are adopting stuff that he hasn’t been able to adopt.
[1:07:28] So what’s interesting space to watch.
[1:07:32] I’m sitting in the last presenter at commerce was Jennifer Heyman from Rent the Runway so she’s another entrepreneur that has really killed that she invented this clever model of renting apparel versus buying it,
they you know by all accounts have ever grown rapidly like I don’t think they’ve they’ve talked about their exit yet.
But that you know could could be in the Horizon the thing that she shared that was news to me and pretty interesting.
The original rent the runway model you know they really focused on.
Women that needed something to wear for a special occasion so it’s your spring formal it’s at your company party,
and you might rent a designer dress that you would you would never you know want to own and we’re at one time to that event and that’s really you know the First Market that Rent the Runway went after,
there for a long time they really been focused on this subscription model where they essentially get their Shopper their customer to pay a fixed amount of money every month.
And get a rental apparel to wear every month and depending on how how much you pay you get a different level of.
Frequency of new outfits and so the Unlimited all-you-can-drink Model is about 160 bucks a month.
And she and she loves you that they were having a lot of success with this Hunter and $60 a month subscription service and that the average subscriber that opted into that program is wearing Rent the Runway apparel a hundred and fifty days a year.
[1:09:10] And so she did not tell us exactly what their penetration was with that model and that would have been really interesting to know but if there’s a cohort of women that are 150 days a year wearing stuff.
Did they rent it instead of own,
that that really foretells of a paradigm shift in the apparel business I mean that’s that’s a lot like you know half of all car owners leasing their car instead of buying it and so,
that was surprising to me that she got that level of adoption and that that I think that’s pretty interesting and well worth watching.
[1:09:47] I called then after that we went to the Google party which was amazing and you and I we are security folks were kind enough to let Wyclef Jean and we did a selfie with them so if you’re,
Wyclef fan like we are you can check that out on Twitter.
[1:10:06] Yeah he seemed really thrilled to get the picture he’s I know she spread it all over social media I might even be his profile pic now Jack’s.
[1:10:12] I’m sure it is the other thing I learned as we need to like we need a posse we need someone to constantly Facebook living us and we need a social media manager and we need big Burly security guard so that on our wish list.
[1:10:27] The other two things we need is a stylist and talent.
[1:10:30] Yes yeah we’ll listen to Posse first then work on this Earth.
[1:10:34] Yeah I agree with you I think I think that the first thing same way easier to get.
And so then you abandon me.
[1:10:41] Yeah I had to call the East Coast was the siren song so I had to head back,
to continue working on my day job but fortunately I have a podcast partner and I didn’t have to go to the Wednesday content but you did so tell us some of the highlights.
[1:10:58] So it’s the Wednesdays for the half-day and you can imagine a lot of people went home I think they probably had better attendance then than they otherwise would have because a lot of the East Coasters,
got stuck here as a result of a snow storm on the East Coast,
so they were there three final key notes and I think they were good Keno so that way you know interesting to the catch the first one was a eBay keynote and they had two execs from eBay they had,
John Peterson who’s the chief AI scientist at eBay in this presentation was mostly about Ai and then they had Scott Cutler who I’m guessing you know who is the SVP of America’s for eBay.
[1:11:39] I have not met Scott up.
A bunch of people have the he’s out of Step Up which is cool because StubHub has proven that vertical experience is on eBay or good thing and I’ve been a big fan of so I’m optimistic maybe he’ll bring that into the eBay world,
in a deeper way.
[1:12:00] Sew-in in front of he it seem like he kind of cute it up he gave the,
the kind of high-level presentation on eBay and then handed it over to yawn to talk about some of the AI things and young may have been a little.
[1:12:15] Technical for some of the audience but they they did get you some of that aiu’s cases that the eBay is using and that was pretty interesting in the the.
The most interesting one to me.
So AA eBay has some of the the augmented reality stuff that we were talking about with house there they’re using.
[1:12:42] Image recognition to categorize a lot of pictures and that attributes to a product listings on things like that but the most interesting one is this,
feature where a eBay seller can decide what box to ship their item in.
By using augmented reality to visualize their product in the various eBay box sizes.
So this is you could almost think of this as a seller facing feature instead of a customer-facing feature and they they kind of demo mode you know how that the seller could use this tool to visualize the boxing picks,
pick the best box and ship last air and spoiler alert we we also recorded and.
Podcast with Bob Cummins from eBay and and he’ll be talking a lot more about that feature on that podcast when we get it published.
[1:13:37] Yeah I’m excited to hear that one.
[1:13:41] So then that the next keynote was David Jaffe who’s the CEO of a Cena group for those that aren’t familiar with that name there another house of brands in a parallel space,
David got up and gave a very traditional retailer presentation talking about how the customer is changed and we all have to you know be more personalized and we all have to embrace omni-channel and stores are super important,
but you know we have to use them in these new wave.
[1:14:08] So the last keynote is a super cool company this is and I think I’m going to put mispronounces name unless you you save me Scott but is it I think is Shay.
[1:14:22] So he’s the wrong I’m sorry so he’s the CEO of boxed.
[1:14:30] The we’ve had box on the show right.
[1:14:33] We have yes not Shay but one of the one of the folks there.
[1:14:38] Yeah and the keynote for boxed was.
He started out by saying hey I came in this whole you know corporate presentation all about us and I kind of decided that if I were in the audience I would find that super boring so I threw it away and I just want to let you know tell you some stories about how we got started.
And so I think he won the audience over right away with with that and he he you know show them these pictures of.
[1:15:06] Him and his Dell computer and you know a pallet of cardboard boxes in what look like his bedroom and they talked about you know this is the beginning of boxed or as my mother-in-law called in unemployment.
Any shared all these stories about how his mother-in-law was horrified and you know they didn’t think he was good enough for,
tracker for her daughter and how this business was not instilling confidence and then later they got traction and they moved to the garage and set up racks in the garage and eventually they have all these like storage pods.
At side his house and this is like a house in a typical suburb in New Jersey and how all his neighbors had assumed that that he was starting a drug dealing business.
[1:15:52] And it was just kind of a fun origin story about boxed.
[1:15:59] Yeah I’m not sure there was like a huge take away about their strategy he did like briefly touch on on you know their core value proposition which is.
You know e-commerce is tough to be profitable and when you ship you know a few things in a in a box it’s it’s definitely not profitable and so their whole model is based on you know getting customers to buy more and and shipping.
In bulk he did not touch on these at all but they’re all these other amazing stories about other aspects of box.
I think Shay personally pays for all of his employees wedding so if you work there and you get married you know he gives you like a $10,000 budget to cover your wedding and I think he’s paying for,
College tuition for the children of any of the employees and so he you know he’s an interesting guy that obviously cares a lot about his employees he mainly promote from within so you know most of the management team are,
guy that started out in the the warehouse and you don’t even use has in many cases,
people they’re doing a great job off and you know that may not have even completed their High School degree diploma so.
[1:17:08] Interesting story fun to listen to I’m not sure there was like a ton of takeaways that you would go home and apply directly to your to your giant e-commerce business but he definitely is taking,
a slightly different path and I I’m sure he’s engendered a lot more Customer Loyalty employee loyalty than the average e-commerce company.
[1:17:28] Yeah one one tweet I saw and I wanted to verify with you is he somewhere in there he said that one of their top customers is Amazon doing test orders from them so they he showed like some screenshot where yeah it was test order one at amazon.com test order to test order 3,
so it seems like they are stair kind of secret shopping him a lot over there.
[1:17:48] Yes I don’t think you said it was one of their top customers but he did make a joke about one of his early customers that he really appreciated whose first name was tested last name order who lived in Seattle by the name of Amazon.
[1:18:04] Yep this is a good time to do it so Amazon is just kind of change the price Model for they’re competing me up for the pantry thing too so I wonder I wonder if that was her reaction to box.
[1:18:17] Yeah it easily could have been and just just a recap for listeners that don’t know like you know Prime used to be there was a minimum I’m sorry Prime.
[1:18:27] Pantry was essentially you you pay a fee for a box and then you get to,
put as many Pantry items in the in that box as as you like for a fixed fee and so it was sort of a model similar to box to get you to buy a big box of stuff but the problem with the Prime Pantry model was,
that you had to pay this this $6 fee upfront to start the box and so you know there was,
you would only do it if you knew you were buying a lot of stuff in there was kind of this high threshold to start the Box,
and so now the pivot in the economic model is you no longer.
[1:19:06] Pay for each box and instead you pay a subscription and I don’t remember exactly what description is I want to say it’s like 10 bucks a month.
I might be wrong on that.
[1:19:17] Yep I guess like 999.
[1:19:19] And so in the one on one hand it’s a it’s a higher bar to get someone to do a monthly subscription than it is to do like an on-demand thing.
Once you do that subscription there’s now very little sort of friction to leveraging it and I think what Amazon found was that the the $6 per box was was,
you know a lot of friction for anyone to use the box that they weren’t getting as much add option and that you know now they can sell this this subscription service and start getting more you know,
maybe a smaller group of users but much more frequent use of of the program in so that,
in that does feel like a reaction to box.
[1:20:03] And I’d say it’s happen again with you start a lot of time that we’ve actually used way more than are a lot of time,
so is as you can tell from listening to that yesterday showing today show there was a lot going on at shoptalk so that’s,
you know I feel like we did a fast recap and it was two and a half hours if people do have any questions or you feel like we miss something or you want to continue the conversation we’d love to hear from you on Facebook.
Scot and I spent a lot of time on this so we sure would appreciate that 5-star review on iTunes but thank you very much for you know the two or three Wisner that stuck it out for all two and a half hours.
[1:20:41] I think they’ll be more if this is riveting so last comment while we’re at shoptalk we get some really great guest on the show and over the next 5 weeks we’re going to be releasing some of yours from Johnson & Johnson 1010data eBay Walgreens American Eagle sub on top Hatter and Comcast Ventures so make sure you hit that subscribe button cuz we are going to have a lot of content coming out over the following weeks.
[1:21:08] Publishing storm and until next time happy commercing.