Jason & Scot Show Episode 146 Forrester Analyst Sucharita Kodali

A weekly podcast with the latest e-commerce news and events. Episode 146 is an interview with Sucharita (Mulpuru) Kodali, Vice President and Principal Analyst at Forrester Research.

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sucharita kodali

Sucharita (Mulpuru) Kodali @smulpuru is the Vice President and Principal Analyst at Forrester Research covering retail and e-commerce.  She has previously worked at Saks Fifth Ave, Toys R Us, and Walt Disney Company.

In this interview, we cover a wide range of topics including shop.org 2018, Amazon, marketplaces, holiday 2018 predictions, personalization, and the future of e-commerce.

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Episode 146 of The Jason & Scot Show was recorded on Thursday, September 20th, 2018.

http://jasonandscot.com

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.

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 146 being recorded on Thursday September 20th 2018
I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.

Scot:
[0:41] Hey Jason and welcome back Jason and Scott show listeners Jason were sitting here at episode warning 146 knocking on 150 and
there’s someone we’ve been trying to get on the show for a long time but she is so busy
it’s taken almost a hundred fifty episodes for the stars and the moon and the planets to align so we are really really excited to finally have on the Jason and Scott show the
Infamous and famous sucharita kodaly welcome to the show sucharita.

Sucharita:
[1:11] Oh thank you Scott and I’d only been waiting for years to even be invited to the show so this is my moment.

Scot:
[1:20] Usually the inter I give like a little blurb about people and I was like near LinkedIn and there was so many things you’ve done the the ones I’ll just throw out there you’ve got tons of retailers at Walt Disney and of course well known for Forester so
so you’re welcome to show excited to have you.

Sucharita:
[1:41] Thanks for having me I appreciate it finally.

Jason:
[1:46] Hahaha.
I feel like the weight is going to be well worth it as you know from having listened to a couple shows we always like to start by a kind of orienting the listeners with a little bit of background and sort of a.
A quick synopsis of of the scope of your roll now so I know you have a fancy title principal Analyst at Forrester.
What does a principal analyst do.

Sucharita:
[2:10] Yeah I’m pumped Forrester for for for those who don’t know is a technology research company it said based in Cambridge
Massachusetts and we have a number of analysts to focus on different aspects of a technology research and I’ve focused for the 10-plus years that I’ve been at Forrester
I’m on the retail industry so that means digital retail omni-channel issues mobile Commerce
social commerce and anything and everything that really
involves a bit technology or the internet and I work with retailers and a lot of the technology
suppliers and Technology software providers that that support the retail industry.

Jason:
[2:56] Very cool and Anna Scott alluded to it but you you have a prodigious retail background before coming to Forest or can you share their listeners of the synopsis of how you got there.

Sucharita:
[3:08] Yeah yeah there would you pull just before I had joined Forrester I was at a department store so I worked at Saks Fifth Avenue for the saks.com team.
And the four sacks I worked in Big Box retail I was at Toys R Us for for a little while and then before that I was at a startup during the
first.com the late 90s and it was that it was a startup
that was in the e-commerce space selling baby products Baby Style and that was actually founded by a colleague who had worked at Disney
when I was when I was there so so that is that range of experiences except brands
internet start-up department stores in big box.

Jason:
[4:00] Awesome and that you Scott and I are part of the prestigious club we have we’ve all served on the shop. Org
board of directors and you and I were just at shop.org in Las Vegas last week.

Sucharita:
[4:15] Indeed indeed yeah that shopped out of work is where I think I got to know both of you.

Jason:
[4:22] So that alone is a good reason to be part of shop.org to get to meet fabulous people like Scott and sucharita and.
I’m curious I haven’t had a chance to kind of debris that you sent the show any big takeaways or or.
I think thank you you saw or heard of the show that they stood up to you.

Sucharita:
[4:43] You know that the topics that seem to come up have been a lot of the topics I think that that don’t have been
pretty popular in 2018 as you know Jason I know that you had spoken on that like a Ally and machine learning which retailers
I think we’re just still trying to get their arms around what does it mean for their businesses and is there a flexibility and is there applicability really to amateur business that has a large sore foot
print where where is there an opportunity there and in how do they even know
think about leveraging it it to their advantage.
Amazon is always have Perpetual topic of it’s almost kind of every conversation I have with a retailer it almost seems like it
I have done to that territory.
There was that that you know also I think I’m an interest in in just it as an extension of the Amazon discussion around marketplaces.
And that will likely be wanted
the topic said that will probably talk about today is that is that a Facebook and what it’s doing with it
latest Commerce Commerce initiative those are definitely that that the teams that stood out to me that seem to be recurring that that came up over and over again.

Jason:
[6:09] Nice I actually feel bad because Scott wasn’t able to make it this year due to the hurricane.

Sucharita:
[6:15] We miss you Scott.

Jason:
[6:17] I know it’s not the same.

Scot:
[6:18] Is the first one I’ve missed and I think I’m going to say tennis shoes on it it was very strange not going this year but I’ve heard a recap so I saved.

Jason:
[6:28] Nice if you’re doing the math at home that means Scott started going shop.org when he was a teenager.
But you gave it talk there’s a secret session on the giveaway that the inside scoop is it shut that or there’s a secret invite only session call Executive afternoon and Shop. Org.
Then all the fancy people attend and that’s when they get all the big brains to present.
And you were one of the presenters at that section and you actually talked a lot about marketplaces and I was as I was listening I was thinking of myself.
Scot Migos toys.

Sucharita:
[7:02] Well this is wet that Scott’s been evangelizing for for so long right is it is how much of the world is is now marketplaces how much of retail is now Marketplace is and the Forrester stats are that globally marketplaces are now.
50 more than 50% of all of e-commerce projected to be north of 60% in 5 years or so
so your call at has always been right Scot Wingo.

Scot:
[7:29] Thanks thank you I need to bring you on on all my meeting so you can talk.
I’ll just put a quote then I’ll just put on my slides Scot Wingo is always right situated so
you know one of the things we identified early in the Chow beiser was sweet we started going to China and realizing
you over there it’s like 90% marketplaces to do feel like we’re heading towards that kind of world or do you think you feel like that kind of balancing point in the 50 to 60% range right where do you think that goes.

Sucharita:
[8:03] Well I’m a large you’re right I mean it’s there’s a large part of e-commerce that is China it is the largest e-commerce Market in the world and when most of the e-commerce in the largest market is marketplaces it’s going to be skewed a little bit that figures for the US I think we have our life
more like 30 to 40%.

Scot:
[8:23] That was a global to 50%.

Sucharita:
[8:25] So yeah sorry I if if that wasn’t clear
but that so so where is the saturation point for for marketplaces in the US and I think that that is a question that’s all smelly
what’s there to nuances I think that are important with that question 1 is how broadly we Define marketplaces once you get into defining marketplaces with travel or potentially with food or other categories
it becomes the penetration numbers change and it’s actually even higher because there are certain categories that are entirely marketplaces like in a large marketplaces like ride-hailing.

[9:05] So so that is why I think that there’s a there’s a there’s a very narrow definition of e-commerce that we have now which is about
30 categories of physical goods and within those 30 categories the future I think is ultimately I intertwined with the future of Amazon in retail and I think that’s the at the big that’s one of my big questions is given
Amazon’s first-party margins which I don’t I think are probably the lowest margins of all of its key category is that it does business in Risky Business says that it participates in I think it really begs the question of yet you know do they
do they consider do they lean into their
higher margin businesses like advertising or cloud or hardware and ultimately
give up on on some of the retail on pieces and they’ve become more of or they become more of a service at service provider and in that in in that scenario I actually think.

[10:13] We may see a cab to that market place to Unistaff.
Maybe we won’t get to 70 or 80% liking somebody you know some of these other markets like China or north of that but.
But I did it for I think it’s it’s it’s heavily dependent on your what sort of happens in the next five years with Amazon.

Scot:
[10:34] Yep so we we’ve already kind of jumped into it but it wouldn’t be a Jason Scott show without talking about Amazon so it’s a good Market Marketplace kind of approach
I had a 30000 foot question for you I were Twitter buddies and you know if I kind of look at the trend your your kind of.
Not anti Amazon but I get the vibe that you’re kind of feeling like you know
maybe they’ll come under more scrutiny around some stuff with what’s going on there.

Sucharita:
[11:01] Well I think that it there a lot of people that think that I did you know there’s there’s no question that
there are there certain
things that happened on Amazon there are CEOs of companies like Birkenstock and Swatch that have called out you know that there are fake versions of their product on on Amazon so you have
counterfeit issues you have pricing issues there
yet you know there are issues related to the authenticity of reviews on the other number of products that I bought an Amazon that I’ll have like 500 positive reviews and then you get the product and the packaging
contact this URL for support and it’s it’s a URL for some heat for a non-existent website.

[11:55] There is all kinds of there all kinds of issues with you know it’s gotten to Amazon has gotten so big and even though they have some of the most Brilliant Minds in retail working.
There are there are there a lot of fraudsters in the marketplace that are
one step ahead and constantly you know it’s it’s a whack-a-mole situation for Amazon so so my so anyway my net-net of my
by my salon Soliloquy here is that I think that there are.
A few different directions that Amazon could be tackled it could be you know that you have State’s attorney generals.

[12:38] Brett unipack reading some case with the but you no wonder that the guys of consumer protection laws we have
it another artist at the
DUI Mantee trust commissioner I’m just the other day who said that you know she’s looking at some of the pricing issues with who or what the data that Amazon is collecting from Marketplace Sellers and does that affect
the pricing of UniFirst versus third-party merchandised so so there are a lot of different I think
constituents within government regulation that I think may have some some legs to stand on with respect to addressing these issues I mean that I can’t think of other business that’s had a first and third party Marketplace in.

[13:30] Piano ever and you know kind of that also has
instant transparency of information and
there there just no laws around this so it’s it’s difficult to retrofit our existing laws on topics like predatory pricing or price-fixing.
When it you know what Amazon May doing may be doing their site nuances to those to those issues.

Scot:
[13:58] Yes and hq2 you want to share Charlotte.

Sucharita:
[14:00] Might my guess what Charlotte was do was kicked out of the first round better shot.

Scot:
[14:13] Yep yep we’re on the short list.

Sucharita:
[14:15] Write the short list of a my my my bets would actually be on Boston.

Scot:
[14:19] A lot of people are saying DC because of a lobbying thing which I don’t understand at that tire lot of lobbyists 20,000 lobbyist.
So Jason I got in a vigorous debate with some people about Amazon go
they were they announced they were going to open a couple more people like this is crazy and stupid and then they announce they’re going to open 3000 leakage that they may open
what would you think about the Amazon go store in the strategy there.

Sucharita:
[14:50] Well I think that you know when when things like this are said with Anonymous sources it
it does become more questionable that I want to see the lease it is and I’m going to wait and let you know I’m not going to speculate too too early because I feel like
we’ve seen this movie before you know when Amazon took out the lease at the Empire State Building everyone thought that was going to transform you know grocery in retail and
distribution in New York City
you know after they launch the bookstore’s there was speculation that it was you know they were going to have you know hundreds of them throughout the country there by think 15.
You know when they even launched with Amazon Fresh you know I think that there was some speculation that they were going to be in you know hundred plus cities and
you know what a very short. Of time and that roll out spend a lot
a lot slower so I I don’t know that I completely believe the rumors there’s a part of me that that wonder is you know is it
is it somebody who’s trying to short grocery stocks is planning these Rivers you know so I’m not I’m not I’m not sure that I fully believe it.
Also be the logic of of opening that many stores that do require such a high capital investment.

[16:14] I’m usually pretty small format stores.
Especially ones that are not selling high-ticket goods and you know a lot of what they’re selling or these you know convenience store items are lunch for someone.
You’re not talking about you know business that is like 10 or 15 million dollars per location and I’d be surprised if it was even that much so.
Terribly High capital investment for a business that ultimately
I don’t know how much of an impact is going to have on Amazon’s overall business at this point I mean the kind of bet that Amazon needs to make now now that it’s like a 200 billion dollar plus company
it has to be really big and and I don’t even know that you know kind of opening a convenience store chain is going to deliver.
Those kind of numbers for them.

Scot:
[17:14] Yeah and we like we like to say it’s a trillion-dollar company just use the bigger number.

Sucharita:
[17:19] Google valuation versus Revenue right.

Jason:
[17:24] Yeah that is a very first world problem when you get to the scale where.
Buying a business is only interesting to you if it as a potential to be huge and an Amazon certainly has entered that phase.
Sign on Amazon go if the rumors are true and they roll a 3,000 there’s an interesting question does that disrupt convenience stores I-80 is that horrible news for 7-Eleven or is it actually worse news for like.
GSR Quick Serve restaurants like Subway sandwiches and those folks because it really seems like the in the first few stores.
The the purpose people have her going to the store is to get lunch more so than you know get emergency convenience items.

Sucharita:
[18:09] Right right yeah I think that that’s that the end up an unknown I mean that whether it ends up being more of a grab-and-go restaurant
dsmi restaurant semi going to pick up some Essentials I mean when I when I visited one time and they had meal kits
bars in a wine all kinds of eating it seemed almost like it was an experiment on you know what are what are things that people can can carry
consumed in the next few hours so so yeah it’ll be it’ll be interesting to see I mean I don’t know that 7-Eleven and.
Gas station convenience stores are going to be necessarily that disrupted the reason being that you’re fundamentally it’s gas or cigarettes or the other some other driver of the visit to those stores
as far as as as Amazon goes ability to provide food I think yes they become essentially a new
at the dispensary to come like a new quick service restaurant in in the space
you know when it’s I think that that’s just the natural competition in the restaurant industry and it’s so hyper competitive and it’s so hyper competitive I don’t know that any given quick service restaurant is going to feel the pain because there are
their players that come and go in any Market within the restaurant industry in a year’s time any.

Jason:
[19:37] Yeah yeah it’s it’s really going to be interesting to watch the one thing it was interesting to me that you know they just open the third one in Chicago first one had a big kitchen in it second one was very close to the first one in Seattle and I didn’t have a kitchen because presumably.
That kitchen was sort of a hub for spoke of a story but the first one in Chicago does in fact have a kitchen and so you know when you’re when you think about it like that.
Well a lot of the traditional convenience stores may have some food but they don’t actually have fresh food they’re preparing on site.
And I think we did hear from one of the Amazon execs that that’s so far that be my sandwiches they’re number one’s cute whereas like a convenience store it would be a beverage.
In the old days cigarettes.
It’s going to get you some lunch another category that people are selling speculating Amazon is is on the cusp of disrupting is the pharmacy
I know they bought till pack earlier this year any any thoughts about Amazon’s true aspirations in the pharmacy space and how that might play.

Sucharita:
[20:42] Yeah I mean it will this is it’s a it’s a fascinating one because going. To the point about they need to go after really really huge markets obviously Healthcare is one of the biggest and one of the fundamental advantages of healthcare is it it’s a sec
actually growing unlike retail which is growing probably at the rate of inflation that Healthcare is growing.
Faster than inflation and to be part of that
probably one of the more scalable aspects of it in there on the prescription drug side versus on the provider side and by the way there actually let you know there was the whole announcement of Amazon with Berkshire Hathaway JP Morgan which is actually an experiment on the provider side too but on the
the prescription drug side of it makes it makes a ton of sense it’s an enormous mark.
You know a hundred billion dollars plus there’s inefficiency in that space and if Amazon is able to do to help support that.
And Chad make life easier for for everyone in the Echo System whether it’s.
A medical provider or whether it is a patient that’s that’s a that’s a transformational thing so so that makes actually a lot more sense to me because that’s that’s a market that
that that is one of those markets that could be meaningful to a company that is still 200 billion dollars in Revenue.

Scot:
[22:10] So just tap it a little bit when when retailers asked you what to do about Amazon what what kind of what are you.

Sucharita:
[22:17] I think that
there’s a lot to learn from Amazon Amazon executes of course incredibly well they there they have they make
customer so happy with with their fabulous customer experience whether it’s shipping or how easy it is to
return something or how easy it is to track
merchandize or you find whatever it is that that you’re looking for I’m so so all of that I think is is absolutely worth emulating and you know I always point out that
one of our data points says that one of the things that consumers want from any website is just visibility until when you know when an item is supposed to arrive
and you’re Amazon’s been doing that for years but yet to this day most e-commerce site still don’t have it so when the question is you know what should we do about Amazon my
first inclination is to take the best parts of it because you know they said some pretty good standards in.
In a great customer experience and so I think that that’s that’s that’s one of the things that you can do there I think that there are our other opportunities from the standpoint of leveraging a lot of the information of a night I think that Amazon is one of the
largest open source product databases.

[23:35] And I’m going to expose a lot of what’s actually selling on their site when you dig into categories and subcategories and Sub sub categories and I don’t know that there are a lot of companies that
take advantage of that data to see if there are opportunities and trends that benefit them to
now it’s light from from Dad I think that’s one of the biggest questions that we got about Amazon are related to
well how do we how do we engage with them as a as a partner on do we sell on the Amazon Marketplace knowing that it is it could be
you know deal with the devil if you know where exposing everything from emergency to.
Velocity and dumb is that is that something that could come back to haunt us if they
Jordan shoes Deb to private label or or basically
take the best aspects owns of you know kind of merchandised universes do we go at it and try to sell something to sell our products direct-to-consumer through other channels and and that I think is those are those are tough act to existential decisions that
be at the right answer is going to vary from company to company it’s going to depend on everything from your culture to what it is that you actually sell to you know what kinds of barriers to competition your brand is has even set up if any.

[25:00] But that but yeah it said it’s a it’s a complicated relationship I think the easiest answer is you take the best of what they’ve already established and and you know of an embrace it and
harder side it’s a big kind of how do you how do you spell exist in this you know in a world where
online it such a dominant force and it is that it’s it’s it’s proven to be.

[25:28] Front of me to at it too many Brands and retailers you know I used to work at Toys R Us and see it you know kind of a lot of that there was a big huge lawsuit in an hour more than a decade all of that when you go back and read
you know they’re the ultimately wet that the judge wrote about it
you’re so much of of what happened then when Toys R Us was selling on Amazon platform.
Still applies today in Amazon’s approach toward its Partners so so that this this notion and this is concerned that their front of me is is absolutely.

Jason:
[26:07] Yeah one of the fun games to play on Amazon is sort of imagine what categories are going to disrupt next do you have any prognostications you care to make about about love wet wet the next big move might be.

Sucharita:
[26:21] Well I think that you know what I’ve been thinking for a while is I think they’re going to make another go at mobile phones we know that they’re their first attempt at the fire phone was loose a disaster but that was just a thing
wrong item wrong time you not the right
the right mix of value for for the customer but the Despicable phone being a space is so large and is one of
again those categories that would be meaningful to a company that’s already 200 billion dollars
that it it almost seems that they would be foolish not to take the IP that they had development that’s their playbook right is like you know nothing’s a failure everything is
you know learning opportunity that you build on later I mean I’m actually more surprised that.
After all the failures and challenges with grocery which is such a low-margin category they keep going after that
whereas phones which are you know when you look at you know Apple’s number is a really high margin category why
why they haven’t Give Mickey why they haven’t made another attempt there I think there are other categories like you know potentially you know Automotive or travel that are also substantial.
That they may tackle in some way shape or form.

[27:48] But and I’m actually in a frankly surprised they haven’t already done something in in the automotive space but but I think that’s hardware makes a lot of sense and also given.
So much of the unicorn of the credibility they’ve now built with with Echo.
As a hardware manufacturer I think that you know any attempt at a phone this time around will be more positively receive.

Jason:
[28:17] Yeah that’s really the reason why I guess I’m hoping is wrong because.
We we do these forecast at the beginning of every year Scott and I are highly competitive and I think you may have just agreed with one of his his pics in the forecast so I just for the sake of me winning I’m I’m hoping that doesn’t happen but I.

Scot:
[28:37] Sucharita is truly a genius.

Sucharita:
[28:39] What we’re just going to link to one another Twitter Scott.

Jason:
[28:46] I’m actually going to go back to an Andre at at that show and I’m going to add a prediction that Amazon is going to get into the microwave oven business.
Cuz I didn’t answer I see that one coming back I don’t know if you guys got the news Amazon announced 14 new Alexa enabled products today and you know there’s a microwave oven in a wall clock.

Scot:
[29:05] Yep I thought you’d be excited about the microwave it has a order more popcorn but I know you can’t talk about you love the buttons being integrated so that’s exciting.

Jason:
[29:14] So needless pivot off of Amazon for second and we could certainly talk about them all day.
Most other retailers that are definitely trying to compete with Amazon have a very unique attribute they have these these physical stores that Amazon doesn’t have.
Any any thoughts about the best way to leverage those those stores and sort of omni-channel way as a competitive advantage or what what are you saying going on in that that’s out of the fence.

Sucharita:
[29:43] Yeah it’s so I one of those pieces at Forrester that I just finished up doing research on is retailer LED media networks and it’s funny that because this Amazon actually the biggest of retailer let me in it works but there are actually a lot of meat media networks bad
that are less well-known but are successful growing profitable and really interesting engines of
profitability for for retail or so
Best Buy has one target has one Walmart has one and you know Credit Union there other players in retail that are in the Commerce Pace like Expedia that have had these media networks as well and the most successful ones are seeing double-digit percents of their sales
coming from these media networks and their.
Profitable been there for retail business so I said okay so what’s the implication there and I think that the takeaway is that retailers have opportunity
take advantage of the assets they have and monetize them in other ways and for some of these large mass Merchants one of those ways is to see
what they have as traffic you know they the biggest Merchants have more.

[31:07] Captive visitors who are engaged for longer periods of time than most media
prettiest out there whether it’s a magazine or you know what
a TV show or you know a movie I mean it’s it’s an incredibly powerful.
I said that they have that very few have taken advantage of and some of that spin just historically.

[31:30] They never knew how to take advantage of that into technology didn’t exist to necessarily make it scalable there maybe like a TV that would be mounted in Walmart stores this is before
Cloud these things would break down and no one would know and it may take months before somebody figured out that it needed to be fixed and you know there goes you know the media that should have been
visible in that particular Store so slow but things are different now and you know I think.
These online media networks are proven that there is an ability to get alternative revenue and I I see this as an opportunity.
For other large mass Merchants whether they’re hyper markets or.

[32:17] Even drug stores convenience stores that attract broad audiences of
so so that’s one thing I think just the
overall mix of how retailers look at inventory the idea of stores within stores and Market places within storage and being more inventory light letting the brands be
more of the stewards of what’s in that physical store I think those those are those are definitely things that have to to to be different I mean what I’m describing is more kind of you know play is Sean how do you monetize the store and how do you think about.
Destroyed from in a different financial model not just you know having a lot of inventory and selling it but ultimately all of that also needs to be wrapped
into a great visual experience and you know when you look at retail I’m especially the big National chains.

[33:17] Supposedly the most experiential like Mall based apparel Merchant the really for the most part haven’t changed that much and you know that the Adena from when they started too often where they are now.
But the sector that I’ll look at 4
visual inspiration is the ruler look at the restaurant industry I mean there are so many different
restaurants out there that cater to so many different demographics and you know whether it is the highest-end booty
the culture or whether it is you know kind of mass you know there’s a lot of innovation in in the restaurant space and.
Part of that is due to Innovation and Yuna food and ingredients and menu items a lot of it is also in.

[34:06] The visual look and the inviting nature of the establishment and that’s part of the reason that the restaurant industry which is.
For the most part offline I mean there’s now online ordering but you know it’s still an experience where people go to the
the venue for the most part and even in the age of seamless and all of the delivery space at the delivery company is I mean it’s still the vast majority is is is still in the the physical store I mean that’s a space that’s grown like 30 or 40 times in the last few decades
and I’m it’s because there has been innovation in the experience and if retailers applied that same Innovations their businesses I think.
You know me they would they would probably bring a lot more people back to the shorts.

Scot:
[34:55] People speaking of storage to every store I go to now is full of Halloween gear we’re sitting here at September 20th Halloween will will come and go pretty quickly and there were looking at holiday 18 our friend Casey over at delete they just released their forecast and they’re saying online growth
17 to 22% which is pretty robust I think last year they said
that they measure 18% based on the categories and stuff where where have you guys put out your Forrester report and and where where do you think that’s going to end up.

Sucharita:
[35:29] Yeah we’re in the midst right now of figuring out those numbers were not quite as a aggressive as Casey’s number is our figures are in
the low-teens they’ve been about there for the last couple of years and you know part of part of that is
it is is you just kind of that historic Trend and so much of it is is about
the key holidays it’s around that it’s Black Friday Cyber Monday you know this person in demand that really generates so much such a high volume of the sales
there’s one other big unknown and for this particular holiday season and that’s what effect the terrorists are going to have on on retail I mean the the latest round which takes a fact.

[36:20] Any day now effects
a lot of consumer goods in a lot of holiday items like apparel accessories Footwear Consumer Electronics Home Goods so it’ll be
it didn’t even even though we’re probably not going to be in a revised our forecast down for that reason you know we’ll see and at the end of December and in January if there was any impact in if there wasn’t
yeah we can he is a great sigh of relief for the holiday season but then
yet you know it. That just means that were delaying the inevitable and the impact will be seen in q1.

Scot:
[37:00] Got it so the tariffs are the possible Grinch this year that’s going to a bummer.

Sucharita:
[37:05] Yeah yeah I mean what’s that mean that the terrorists are 10% right on most of these goods and when you look at some of the mass merchandised particularly
you know in nabbed and HomeGoods are electronics that the margins are any then
stop by for some of those categories so the retailer couldn’t even absorb it if they wanted to so
will you absolutely will see some of those eventually show up and in what consumers have to pay.

Scot:
[37:37] This actually brings up a topic that that kind of we hit on the show sometimes you know we will do these news reports and everyone’s reporting so I can Amazon
Q2 was like 30% growth and Walmart was 40% and Targets this all the online numbers.
And then Target was like in a 30%.
But then e-commerce is growing 15% even even like shopify’s GMB kind of an aggregate is growing at like 20 or 30%.
So have you have you thought about the site I kind of end up
there’s there’s some people in the industry that kind of say they think the number to 15% kind of off because it’s Baseline to this government number and it’s a survey and comes were bass lines off of that
it is a question I ask myself is if the biggest slices of the wedge of the pie are growing.
Twice a 15% than the ones were not talking about have to be something has to be losing Trinidad share for e-commerce going to be growing 15%.

Sucharita:
[38:43] Sears JCPenney
yeah I think that it’s there is you know there’s that psychological bias called survivorship by us that that we hear about which is that
yeah you know we could we talked about the 6s cases and 6s cases talk about themselves and what you end up with is
kind of have an understanding or seemingly and understanding that that that everyone’s doing well.
But when in and I do see a lot of the the numbers from specific retailers because we.

[39:22] They still out our surveys and not everyone is is doing that well I mean there are absolutely do you know kind of some of these thieves.
Some of the big box stores this past year for the last couple of quarters have been doing fairly well but
a lot of small ones are not and Gina there are a number of companies that are that are dying you know a lot of
a lot of retailers in the big box space you know I mean Toys R Us great I’m Staples you know Office Depot you know there’s so many.
Companies that are included in Indy’s figures that you don’t you don’t always think about because they’re not
really publicizing Derek their stats but that’s that I think is an important piece to keep in mind there’s also and I think they get the other prevailing pieces then.

[40:18] An e-commerce the big have been getting bigger which is ironic because e-commerce was supposed to be an equalizer right it was supposed to be in a zero barriers to entry and anybody can you can come in.
But you know what you are seeing as you know you’re seeing company is like that like it look at you know Amazon getting more share Walmart getting more share getting disproportionate share to the growth of the industry and.
Neon we definitely know that it’s harder to attract customers it’s harder to let you know kind of gain mindshare on the internet these days and you know that could be part of
part of the issue 2 is that there are 800,000 e-commerce Merchants out there in the United States so you know this is many of them are or are not
piecing double-digit growth and I think that stuff you know likely where the figures that we see are coming from.

Jason:
[41:12] Yeah I certainly will buy that the survivorship bias light.
Affects how we do this I do still think though there’s some goofiness and have and numbers are collected and reported by the the
the census Department
like there’s actually some tangible examples that they report you can get the date of is IC Code and you know for example if you take the ssic code that Walmart sand and you look at e-commerce sales in that ssic code
total sales e-commerce sales for that ssic code are way lower than Walmart’s e-commerce sales so there’s
something’s getting Miss coded or like it’s even sales are getting attributed in a different bucket or you know it again.
In many cases of these are self-reported numbers to the retailers just have to make a mistake in order for the data it’ll be wrong so potentially.
Simulation of of some of these weird data collections in this new industry and some of the survivorship bias that your your highlighting.

Sucharita:
[42:13] That’s a fair point Jason I mean I think that the truth is and this is the dirty secret of a forecasting is that.
There’s no there’s no one knows what the right answer is because there’s nobody has every datapoint
and you know as a as a result of that Unifour casts you no matter who puts them out or a combination of a little you know in a little bit of Art and Science so you know there is the date of points that you do know and do you have different
types of data points that you can gather some can be in Summerside data .7 could be you know retailer.
Yeah they’re always questions around how accurately or how truthfully you know companies and people may be answering
some of these reported numbers and they’re even very few even when you’re talking about the census it’s not getting figures from from
yeah the IRS it’s getting again it’s getting figures from a survey
defense is definitely has the ability test unit has the government behind it so you know there is presumably a little bit.
You know the sense of responsibility that people have to have reporting numbers truthfully but even they aren’t going to get
every single data point so there’s there’s absolutely extrapolation and within that extrapolation there is a lot of
there’s there’s there’s a lot of speculating and that’s where the art comes in.

Jason:
[43:42] And we’re not going to sell that on the podcast unfortunately.
But I do want to Pivot.
An annoyance I have and I’m just curious you you would have some sort of analogous conversations on with clients I’m sure I get asked a lot about these trends that in my mind are simultaneously like overhyped buzzwords.
And really important trends.
I got to talk about one of those a shop.org a I like you know I sort of my my POV was.
That it’s grammatically overhyped in a lot of people you know her are trying to implement a I just to say they implemented a i
but in the long run it’s going to have these really profound effect on on our industry and be hugely disruptive the one of those trends that comes up the most in my world is personalization.
I’m curious if you have a a point of view about personalization like is anybody doing it well or are we doing enough of it are we doing too much of it what your.
What’s your thoughts.

Sucharita:
[44:42] Why yes yes it said it did yeah incredibly I probably one of the most frequently asked questions that that we get
I mean my perspective and I’d love to hear your thoughts too because I know that you’ll have a point of view on it is that I don’t know that people know
even what it means I think that a lot of people still think that personalization means the recommendation and Jen’s there other people who think that personalization means getting as much data as you can collect
they don’t have any plan for how they’re going to use the data that they collect you know I mean some of the
the best examples when I
pink at you know kind of the heart of it what’s great personalization is you know when a sales associate or somebody that you’ve had a business interaction with her some,
Commerce interaction with to send the thank-you note you know where they do something special for you.
In a bathtub a great examples of peanut butter personalizing an experience that’s incredibly welcome but that type of personalization.

[45:49] Doesn’t get considered in the discussions that that retailers are having about personalization.
I’m so I’d I think that you know there’s it’s your personalization data-gathering.
Big data analytics officer I think all of these terms get get co-mingled and there is not.
Even a great.

[46:16] Did you know there’s not even I don’t I haven’t seen any great examples of companies that have have have truly you know kind of Taken personalization and created some unique strategy.
And have made you know billions and billions of dollars from it I don’t know I mean that maybe I’m mistaken have you.

Jason:
[46:37] No I’m desperately looking for that example cuz we get asked for it all the time and I I’m sort of a I like mine with you I am fond of reminding people personalization isn’t an outcome it’s attacked it right and so
you know how I get annoyed when people say the goal is to have personalization because like your goal should be to use a packet your goal should be to achieve some some help come.

Sucharita:
[46:58] Exactly cuz then you’re just checking the box right I mean you’re not really you know kind of delay you’re not doing anything for your business that’s that’s meaning for for your customers.

Jason:
[47:08] Yeah like so I would argue most person was it when people say personalization what they really the outcome they’re hoping to achieve is relevant city right like is never more relevant experience that therefore connect better with the Shopper in in case of Commerce.
Like I know I can’t think of any front in experiences that are.
Fabulously personalized should therefore be more relevant for the Shopper I would argue like a maybe like a stitch fix is a good example of personalization in the custom assortment they offer customers pretty personalized to them.
But not so much on that on the front end shopping.

Sucharita:
[47:46] Right right right and I think that you know sometimes some company is make it carried away with it you know this idea of relevancy doesn’t matter as much if you have a small or limited product catalog you know it’s like then you’re over personalizing you know you just want people to see everything in your you know 50
product catalog and it doesn’t make sense to necessarily you know go more granular than than that.
You don’t make the tennis sounds if you have a catalog with you know 5 million products but I think.
You know that that’s part of the the challenge 2.
Anytime within you know small product how I can get very nuanced if you know if it’s a VW purchase or if it’s a very complicated purchase but
but but yeah I mean there’s there’s often this the sense that you know personalization is some silver bullets and you know it’s not.

Jason:
[48:41] Yeah and I 10% agree like you know sometimes you don’t need personalization if if your product is super relevant to a huge audience you have a great product and you can make the same offer to all of them and I would argue that that’s Apple for example.
And you know if you can take the best personalized e-commerce experience in the world and I’ll take apple and I’ll probably retire before you.

Sucharita:
[49:02] Exactly and I think also you know I mean maybe if some of the Holy Grail is is loyalty like how do we get
you know the outcome being in this store this belief that somehow personalization is tied to loyalty or tied to more loyalty and and I think that’s where so you know there is a little bit of
fallacy because
the best loyalty programs out there it’s not necessarily about personalization it’s just that
they give you free stuff for her you know they just they just have amazing prices or perks.

Scot:
[49:40] Cool so we spent a lot of time kind of in the in the present may be stretching out the holiday but but let’s going to go to 325 and maybe 10 years out what her what are some of the things that are on your radar that that you think retailers brands should be thinking about
our show is talked about everything from drones 3D printing to a rvr what what are some of the things that get you excited about the future of online retail.

Sucharita:
[50:04] I think that within Rudy tail the the biggest changes are going to be in.
Disrupting the orthodoxies of retail and what I mean by that is that retails fundamentally constrained by
a few things that
they’ve always done you know they’ve always owned inventory they’ve always you know hired store associates to do certain tasks and they don’t even share those store associate with other stores in their chain they
did they have real estate that they have bought you skin a 20 30 year 50 year long leases that they’re they’re stuck with.

[50:50] And when I say the orthodoxies change I think all of that changes in the future so it may not be you know and in some cases technology will
will potentially in power and change aspects of that like for instance with labor force
differences in the most retailers now you know will have their store associates and they they
put them on their shifts and they come in and the store associates only work with
that particular store but there are companies out there there companies like shiftgig for instance that actually have a Marketplace of basically store for workers and as a store you can tap into that market place based on who’s available who’s
worked at your store before you know who has good ratings from their managers and who’s in a potentially train to unload a truck
or he knows how to work the returns desk or whatever the task maybe that you need and that kind of nimbleness I think is is what
will transform
retail in the future it’s really about rethinking how are things done now and are there ways to
change that dysfunction in the future for our for the better in the future.

Jason:
[52:13] I do agree I think that that is a very interesting for the evolution and you know how can we leverage that that in Star labor force across a bigger pool of customers with.
Telepresence is in all of those sorts of things.

Sucharita:
[52:27] Right absolutely
absolutely yeah the new question I think that you know me we’ve spent so much time in the last year talking about omni-channel but for the most part it’s really still only in the realm of fulfillment issues and
it you know me there’s any channel merchandising omni-channel customer service on. You know there’s so many different places where
cross-channel present exactly like what you described and why can’t I FaceTime you know somebody who knows everything about being a Sony.
TV’s when I want to purchase a Sony TV like you know that’s that just seems like that’s a logical thing to do.

Jason:
[53:07] For sure and I hope we do see that in the in the near future I think they’re actually may have even been a few vendors in that space in the Innovation Center in shop. Org.
Some of those guys will make it.
But that’s going to be a great place to leave it because it has happened again we’ve used up all our a lot of time but if you have a burning question that we didn’t answer on Today Show or you have a comment we
encouraged you to jump on the Facebook and continue the conversation there
as always if you enjoy the show the way you cannot repay us is to jump on to iTunes and give us that 5-star review it really helps us to continue to build our audience.

Scot:
[53:46] Sucharita we really appreciate you coming on here this evening and sorry it took a hundred 50 episodes for us to line up everything but let’s let’s have you back on in less than before
episode 1 300 your very active online where do you Journal edirect people if they want to see your your thoughts about what’s going on up.

Sucharita:
[54:07] Am I I am a big Twitter fan so I would say Twitter yes my Twitter handle is an decimal Peru which is which is the name before I started using my married name is s m u l t u r u.

Jason:
[54:22] Awesome we will put that in the show notes sucharita as always it’s been a true pleasure thanks very much for coming on the show.

Sucharita:
[54:29] Thanks so much Jason and Scot.

Jason:
[54:30] And until next time happy comercing.

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