A weekly podcast with the latest e-commerce news and events. Episode 198 covers the 2019 holiday forecasts, store visits, and news.
A weekly podcast with the latest e-commerce news and events. Episode 198 covers the 2019 holiday forecasts, store visits, and news.
Jason & Scot both received the new Apple AirPods Pro and the Amazon Echo Buds. Both liked the Apple product better. Echo buds had better noise cancelation, but an inferior fit/design, poor microphone, and a case that’s too big for a pocket.
- Nordstrom NYC Flagship
- Amazon Bookstore remodels and FourStar
- Macy’s new Story display
- Starbucks Pickup Only location
- Gap CEO, Art Peck steps down
- Sears Closing 96 more stores, leaving 182 Sears and Kmart stores
- Barneys Liquidation
- Assets – Great American Group and Tiger Capital Group
- IP – Authentic Brands, will be licensed to Saks Fifth Ave
- Profitero Price Study (Amazon is price leader)
- Shopify – Adds an Email ESP
- First Insight Study “Amazon Past it’s Prime” – Pretty silly methodology (stated preferences of 1000 people), don’t put too much stock in it.
Nov-Dec excludes automobile dealers, gasoline stations and restaurant
November – January
Total Retail 4.5% to 5% rise in 2019 (vs. 3.1% last year)
Digital $144-$149B 14-18% growth (up from 11.2% in 2018)
Online 14% vs 10.8% last year
November 1 to December 31
MetaForecast (summary of the forecasts):
14.25% Online (range is 13-18%)
4.35% Total Retail (range is 3.7% – 5.3%) – last yr was 2.1%
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Episode 196 of the Jason & Scot show was recorded on Thursday November 7th, 2019.
Automated Transcription of the show
[0:24] Welcome to the Jason and Scott show this is episode 198 being recorded on Thursday November 7th 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your Cup host Scott Wingo.
[0:39] Hey Jason and welcome back Jason Scott show listeners Jason Ritter episode 198 and we have a really big surprise for everyone on episode 200 I’m giddy all over with excitement.
[0:51] I know I am to every each time I say one of those big numbers in the intro I’m like oh my God we’re going to have to learn how to start saying the twos it’s like our Y2K day.
[1:01] For those listeners that haven’t seen Jason give a life talk he always talks about how if you enjoy the talk there’s over X hours of him out on the internet,
pretty soon you can build a role that part of your side over to 200.
[1:17] I know it turns out I’ve been lying cuz I generally like round up to 200 hours in those live talks and in preparation for our big 200 anniversary show I did the math and it’s actually like 176 hours of us.
[1:31] Close enough we’ll get there eventually keep plugging away.
[1:36] Yeah we might tonight who knows.
[1:43] Anyway so Thanksgiving is only three weeks away so we thought
we would spend a fair amount of this episode looking at the Holiday forecast but before we do I’ll be Gadget Geeks we wanted to talk a little bit about that first so you and I both had the fortune to get the latest new
your devices so airpod pros and Echo buds came out and everyone on Twitter was wondering how your
experience with both of us went so so give us your review.
[2:18] Yeah so I was super excited they both ride the same day I don’t know if Amazon like stepped on the gas to make that happen or or maybe Apple did but that was coincidental so I have to say,
that I like the airpod pros better than the echo buds for almost everything and somewhat disappointingly.
On my use case which I mainly use these things as my phone interface for being on conference calls like 8 hours a day.
I’m not sure that either one of them are better than the original airpods.
[2:53] Controversial so you don’t like the noise cancelling of the air pump.
[2:59] Well so couple of things and I I literally did a test and I even I recorded some audio files so one thing when you’re using it as a phone interface I don’t like to wear both.
Are you positive same time.
[3:14] You’re that one of your guy.
[3:15] Because I do want to hear I sent you have unlimited battery life because I can have one in for two hours while the other one is charging in the case,
pop the the charged one in take the uncharged one out and I can literally like I literally have these a tower block swear I’m just on the phone.
And any of these products work for that when you only wear one at a time but none of them do noise cancellation when you only have one ear in SoDo for phone use noise cancellation doesn’t work,
I do occasionally listen to music and to me the airpod pros sound much better than the echo buds.
But I did test both of their noise cancellation and that the echo Beds which have Bose technology in them definitely have stronger noise-cancellation they they eliminate more background noise than the airpod pros.
[4:08] So one idea to solve your 11.1 ear problem is just to get two sets you up I have,
12 of these things at this point so why not just put both in and then recharge and then switch every 2 hours.
[4:25] That’s what the dirty secret of my family is left to my own devices I would have way too many sets but I can’t off setting that my wife is very Adept at losing them.
So it’s one of the rare things we’re like like my strength balance is out or weakness within most of everything else that’s the office.
[4:41] So your sets go to backfill her lost sets.
[4:44] It does seem that way,
but I do I feel like the airpods are more comfortable.
The echo beds like are more in your ear and they it just feels like a big thing in your ear I mean if it’s going to be kind of personal to everyone but I tested the microphone cuz I was curious,
which one sounded better in the airpod pros are basically the same as the airpods on the microphone which,
is a pretty good microphone and it does a decent job of eliminating background noise and it does a really good job surprisingly of eliminating wind noise,
the echo buds that there’s no stems of the microphone is in your ear and not surprisingly it sounds much worse.
Just a tinge of closer your mouth is helpful but the roads are horrible in the wind like almost unusable.
[5:39] Which verse Chicago I’d seems important.
[5:42] Yeah yeah I am sometimes on my way to Starbucks while I’m doing these call so that and as you know I’m quite Speedy so I create a lot of wind just walking.
[5:50] You’re like the flash down there that’s the problem.
[5:56] But I will say.
It is mildly cool in my house having the echo buds because I have so much of this novelty home automation around my house,
that way this thing in your ear like just being able to like very quietly other anywhere in the house like you know to do something and have it happen does give you none of us Tony Stark.
[6:17] Yeah I was kind of a little depressed by that go buds cuz they do feel like having a giant,
ball of wax in your ears or something in there that feels heavy and like you don’t want to move your head around and I’ll pop out these wings but I just didn’t I think I lost some II I open the package and then you know,
I was I’ve been predicting that it would be awesome to have Alexa in your ear like that,
but then I’m in an open Office so and it’s good news canceling so I’m sitting there screaming Alexa play this,
it’s actually can’t raise it that much it is good for exercise though if you wanted me to get Alexa to play a certain song or something or skip or whatever drink exercise so I found it but then like exercising and moving around alot
they don’t feel good so they didn’t live up to my expectations.
[7:07] No I agree I was underwhelmed and to be honest I kind of just qualified on the second I opened the box because the case is too big.
[7:16] It’s like a bar soap.
[7:18] Yeah I mean I carry these things in my pocket all the time and the echo buds case just wouldn’t fit in my my pocket.
But that being said on the last show I did reference that I was installing a new Gadget which is Echo control for my kitchen sink.
And I have now successfully installed that and as predicted like nobody needs this.
It’s it’s no easier to just turn on and off your water than it is to tell Echo to turn on and off your water but I will say there were two things that use cases that I didn’t consider it a kind of cool like you can tell it.
Eco fill 2 cups of water.
What is exactly two cups of water which can be kind of Handy for some things and then my four year old son thinks this is the greatest thing on the planet.
[8:11] The two cups of water or the.
[8:12] No sitting in the kitchen turning on and off the faucet.
Yeah so what’s the new entertainment device in my house.
[8:19] Pretty soon we’ll just lose all use of our Limbs and it’ll be like that in Wall-E where we’re just in the chairs and slurping sodas and talking into computers.
[8:32] I’m moving one step closer to that Wally vision of future everyday.
[8:35] Awesome thanks for the gadget updates I think you are actually in big beautiful New York City for this episode which makes me wonder in the interesting trip reports.
[8:48] Yeah yeah I got to visit a few stores I’ve actually been in New York last week and this week and last week there was a big retail opening in New York
Nordstrom open their flagship store in New York so you know how to see Nordstrom based in Seattle they cannot expand it on the West Coast,
and they they now have you know this,
this flagship store in the heart of the retail Echo System here in Manhattan so it’s a big deal to see what that store would look like.
And while I would I would say it’s a excellent implementation of a traditional department store.
[9:26] And so you know it had a lot of a cool smart features so there was a lot of personalization options there’s a lot of places where you could,
you’re by your jeans and have them embellished like in the store,
they have alterations while you wait which is pretty cool so they have like Taylor’s on every floor and you can actually watch the tailor like hemming pants and stuff,
they had some really you know extravagant shopping shops like there’s a new a really cool Nike shop and Shop bunch of good restaurants.
Some nice digital amenities they do,
same day delivery they have a rich buy online pickup in-store experience so a lot of cool stuff but nothing that’s going to.
Revitalize the department store category I don’t think it’s going to be really interesting because it’s like this may be the best apartment store in.
[10:28] Manhattan you know where the caveat that for most people the best department store to the one who’s a storm it matches your taste the most.
But you know they’re there so many department stores in Manhattan that have this Rich brand history that Nordstrom doesn’t have your.
Like it’s going to be interesting to see if they’re able to win over consumers or not.
[10:48] Where is it it’s not in Hudson yards.
[10:52] No no no no so it’s very near Central Park on like Broadway and 57th in this kind of completes their New York deployment so they actually open the men’s store a couple years ago,
maybe 18 months ago and now the store is across the street from that,
so it’s a women at home is this new store men’s across the street they already have a couple Nordstrom Rack switch is there discount Concepts in New York and then they have two of these satellite stores that they call Nordstrom local,
Nordstrom local is kind of a.
A digital extension of Nordstrom you can do by my pickup in-store there you can do returns there you know it it’s a lot of omni-channel amenities they don’t have inventory there so you don’t go shopping for new stuff,
but if you want you no personal shopper to help you or you want to pick up some digital purchases or things like that that a couple of these digital.
Nurse Mobile stores in one of the clever amenities they launched in Nordstrom local,
maybe a month ago is that they would accept returns from their competitors so you can return your Macy’s purchases at this Nordstrom local.
[12:06] How’s that work.
[12:07] Unauthorized you return them to Nordstrom Nordstrom packages them up and drive them to Macy’s for you.
[12:15] But then like how do they verify the cattle they avoid fraud like.
[12:19] Yeah I haven’t gone through the experience so I think like you know he is probably like I mean.
Nordstrom isn’t crediting you the money when you drop them off like they’re just providing a minute e of packaging them in.
And you know mailing on the listen e-commerce thing or or taking to the store but like if the store doesn’t give you a credit your York of your visas going to be with Macy’s not with Nordstrom.
[12:41] So it’s more than just to drop off not a full return.
[12:45] Exactly it’s not like happy returns for for these competitors.
[12:49] What else what else.
[12:51] Yep so then I’m staying this week down in Tribeca which is very close to the Amazon 4-star store so I went back there to check it out,
I like that store more than some people like it continues to be super busy there was not a lot of new stuff going on there like you know the assortment kind of pivoted to Holiday,
and I did grab you a Nordstrom toy catalog because you I saw on Twitter that you didn’t get one so.
[13:19] I’m sorry yeah an Amazon toy catalog so which is.
[13:23] Awesome thanks. It has a great Star Wars section I look forward to seeing.
[13:26] Yeah yeah I just got to figure out how to get it to you.
[13:32] I like the 4-star store as well it’s at like a cool I bought several things in there that I didn’t know existed you know and it’s kind of cool to see them I like
dissection where they have those exclusives that are kind of like the things I’ve gotten from Kickstarter a lot of that stuff I kind of want
touch it because I’ve had so many weird bad experiences with that kind of stuff so that’s my favorite part of the store it’s got kind of a beta of kind of a feel to it and I will section.
[13:57] Yeah no for sure and I mean my promise is always been at that store and the bookstores are sort of Trojan horses they’re really Amazon device stores,
and as the Amazon devices like the echo system gets more and more complicated pun intended,
you know what a broader assortment of Echoes and rings and you know and then all the stuff that works with them it it’s super helpful to have.
A store that sort of show the lacrosse device experiences.
And that that that reminded me so where I live in Chicago is within a mile of an Amazon bookstore and that bookstore got remodel the last month so I went back to it this weekend before I came here
and that’s pretty interesting to because the original bookstore Concepts.
Like many bookstores really tried to have kind of a third-place feel so there’s a lot of soft seating where you can kind of sit and read a book and charge your phone while you’re reading a book in the the one of my neighborhood had that Intelligentsia coffee shop.
[15:01] And the remodel what they basically did is tear out all of those.
Dwell time amenities to make more room for more Amazon devices,
and I got rid of the coffee shop they got rid of this off seeding they added a bigger Amazon device section and then you know one upgrade that maybe it’s only interesting to me but.
All of these doors try to match online and offline pricing the online pricing changes all the time so when they watch the book stores they had what I thought was a horror riff experience you couldn’t tell the price of anything and you had to scan,
everything with your phone,
in order to find out what the current price was didn’t want to have paper price tags then you know fast forward a couple years they open the sports star store and they deployed digital price tag so that they could always have a current price and so you had this weird. Where.
The four-star stores and the newest book stores at digital prices and the older bookstores had no prices and now they’re remodeling the older bookstores and not surprisingly they they did add the digital price tags.
[16:08] You love a digital price tag.
[16:11] Well I’ve been predicting that it’s going to be the big year of them for every year for like 4 years old.
And now I’m going to be extra stubborn because I predicted the Amazon was going to have that Echo your your phone for like 3 years and it never happened and then I finally gave up and made it so,
now I need to stick to my guns also in Tribeca is a very tight to store called showfields I think I’ve talked about it before it’s in this family of physical Marketplace at so.
The landlord raised the cool retail space brands of lease a shelf and then they sell their own products on the shelves so we’ve talked about betta is being a model of that neighborhood goods for poster,
there there’s a number of these Concepts and there’s one that’s here just here in New York I’m called showfields and they’ve been getting a lot of Buzz lately for.
Having a retail show where they put on like some retail theater and I’ve been reading about this so I want to go check it out so so I went back to the Schofield store and.
I’ve kind of decided that the the gimmick of the the retail theater is actually kind of annoying.
[17:29] So they have it it’s a three-story store you know with a bunch of PODS and The Usual Suspects of all these I Challenger brands that have rented a spot so it’s.
toothbrushes and and all that sort of stuff like that there is a cool assortment of vendors in here they’re selling stuff I will I will totally give them that they’re each renting,
a space to show their product into what they’ve done is the bottom floor is kind of cell service browsing the third floor self-serving browsing and the second floor instead of having quitting sales associates they have actors,
and the idea behind these actors as they like.
They have like a canned presentation about the products in about how they use the products in their life and it it really is just like a presentation from a salesperson.
But it it’s like you walk in the store and they they confuse Everyone by going are you here to shop or go in the tour.
And it’s like well if you want to shopping in the stuff on the second floor you can’t avoid being on the tour if you want to see anything on the 1st or 3rd floor is the tourism going to help you.
So it just it seemed a little like overly gimmicky and you know God forbid you just want to look at the product on your own on the second floor like you can’t cuz this.
Desperate actor is trying to earn a sag card in a retail store.
[18:54] There’s a I went there and it had a slide do they still have the side where you at.
[18:58] They did.
[18:59] Top floor income.
[19:00] Yeah so from 3rd to 2nd you go down you can go down the slide which I’ve course did and I videoed it so look for the Twitter video of me going down the slide which I know people are super eager to see and its significance does a couple rotations in it.
[19:13] Did you have your some of your pods and Phyllis.
[19:16] I didn’t.
[19:18] Could have been a good wind test.
[19:19] Yeah yeah yeah they were in my pocket and I think both of my knees did survive the slide so that that was good news but here’s here’s what I’m going to say tool
replacements for shoelaces so they are like these permanent rubber bands you get them in any color you want in,
and then it turns anyway shoe into a slip on shoe and I’ll try that I tried to buy a pack and you can’t pay for them.
On the lake on the floor where they are.
Or at least it didn’t seem like you could like there was no salesperson to pay there’s no cash register so I go down to the ground floor and I said Hey how do I pay for these things in there like you were supposed to.
Pay for them up there there’s like one salesperson she must have been busy with someone else but no worries I can bring you up and so then it’s like.
Should I go between dollars and unlike would said they were $14 and she’s like when we call up and ask and she’s like well.
It’s $14 if you pick your own colors individually and grab 14 of them but if you buy a pack of 14 that are all one color you have to pay $20.
[20:32] So you’re saying like like if I if I go up there and just pick 14 of this exact color,
you’re only going to charge me for it if I want them in the bag I have to pay 20 and she’s like yeah I’m afraid so right and it and it was like a super awkward transaction and like,
basically I abandon my physical card and walked out without my music,
and as I’m walking out I’m thinking about it and I’m like you know why there’s so much friction in this is such a bad the buying experience it’s because the store does not have a kpi for retail sales.
Right like they’re they’re TGI’s rents.
And so that you know that they’ve optimized everything for this customer experience and and you know getting good brands to come in but you know the people haven’t thought through like actually selling things and being financially.
Lastly whenever I’m in New York City I always go to B&H Photo on like
33rd Street which is kind of my adult Disneyland and then I generally will walk to Macy’s from there and check it out,
so watch the Macy’s a block away from the Macy’s is this cool new Starbucks concept that I had been reading about that just open the day I was there called Starbucks pick up.
Inside this is a a mobile order pickup only location allegedly you can’t place an order in the store but secretly you can.
[21:54] It’s our put some pictures online but this like whole store is optimized for people that just Place their orders,
why can pick it up not get in line and place orders there’s a cash register but it’s kind of like it in the counter and you don’t see the Baristas or the.
The the expresso machines like they just have all these alphabetize counters where you you come and get your.
[22:19] I think so I think that’s going to be a New Concept the Starbucks is going to use in a lot of the highball volume order stores because.
The mobile what is in the stores are really disrupted the normal flow of the Starbucks and so this is part of their,
their solution set for that in this is a pilot so that was kind of interesting and then I did pop into the Macy’s and it was the third installment of story he just on live the day I was there,
so you know you remember story was this going to retail theater times app that,
I was in for the downtown Manhattan. By Macy’s they opened him up in a bunch of Macy’s in the first team was colors so they had,
August beautiful merchandise that was a sorted by color in the department that you know they ran that for about a month and then the second scene was Miracle glow.
It was like a lot of gardening stuff and they had some cool merchandise but you know my joke was it in this I wasn’t joking it did not smell very appetising in that department like there was a lot of live Miracle-Gro manure.
[23:26] In that department and so you know usually when you’re trying to trade a great retail experience you don’t want it to smell like manure into that went for about a month and now they’re on their third one,
which is Holiday Inn so you know this is like a good theme cuz it’s all like sort of gift face the the merchandise thing is really attractive they have a bunch of cool different than yet,
again like a big scene is personalization so there’s a number of products that you can come and get personalized.
Uniquely to you and 4 story I feel like this is a particularly strong theme because one of the challenges with all these Discovery experiences.
You know is why would people go there what mission would they have that would get solved by going there right like no one walked into Macy’s thinking I want to see what I can do with Miracle Grow.
Until I’d argue that theme didn’t have a lot of reason to go there but the holiday theme when you’re looking for gifts for people.
Things like a much stronger and more more cognizant theme so I thought that was pretty well done.
[24:30] Yeah that’s what I’ve always been a little skeptical that but the,
my wife and daughters love that and they’ll suspend tons of time they like the discovery aspect of the the story even even inside the Macy’s so I think we did the miracle glow one in the holiday one before.
[24:48] And to me it’s,
I think those Concepts work better when they’re inside of a store that serves other missions right so you know you need some new back-to-school clothes you going to Macy’s free back-to-school clothes and you go check out this other Discovery experience while you’re there like I think storage,
that are exclusively a discovery experience that don’t need any other Mission like it just harder to get traffic to.
[25:11] Yep the cackle TV is stuff.
[25:15] So that’s a lot of store visits we also do have some you know some news items this week Commerce news.
[25:29] Yep what you fire fire sup on them.
[25:32] That will fire is well maybe not fire but,
the the surprising news today is the CEO of Gap is stepping down so there’s a gentleman art pack,
I want two things I’ve always liked is he he was the VP of e-commerce a gap and got promoted into the the CEO role.
Gap has not been super successful during his tenure,
last year they announced this big move that they’re going to spin off Old Navy as a separate company than the rest of the Gap Brands were going to be operated is you know this new Co,
and they had an earnings call today that was not very good and then they announced that that art was stepping down.
And so you know they announced an interim CEO who happens to be the the son of the founder who’s been a board member,
but I think the intent is to go out and do a search for a new CEO.
I’m into this kind of follows to me a trend like last last year we talked about a lot of CEOs that hid it step down recently and said there’s another big one.
[26:41] Yeah what what I don’t like about the strength as there’s no transparency so,
they’re not giving reasons for lies people in NY can that in the case of Under Armour it really was bad because Kevin plank a step down and then you know they had to announce regular days so,
because he didn’t answer why you kind of assumed you was kind of hiding it either gets like it makes it look way worse than probably maybe those actually we’re disconnected we don’t know but when when you have this lack of transparency,
makes you wonder what’s going on.
[27:14] Yeah and I think the same story at Nike like there was great financial performance in Nike
but there was a lot of sort of negative press like around the whole Alberto Salazar thing and treatment of women Executives and treatment of female sponsored athletes like there’s a bad news and then
you know the CEO of a well-performing company in Assateague steps down and they don’t give any specific reasons like the inference is that you know he’s.
He’s accountable for a lot of those there’s missteps and then. You know it’s not sure.
Retail that the CEO of McDonald’s was let go this week for impropriety so a lot of lot of them.
Churn at the at the big chair for a lot of lot of these in a couple of cases they were you know I’m kissing McDonald’s and Nike they were financially performing very well so stock that she took a hit when those guys left.
[28:11] Cool Indian new section filed under arm Olive Garden today Sears announced they’re going to close 96 more stores so I think that’s about a hundred and eighty stores between Sears and Kmart
so I’ll have to do is do that two more times and they’ll be done.
[28:32] Yeah I went hopefully that you know it’s not death of a Thousand Cuts but yeah sad for all the other folks that were working in the stores but like certainly not surprising news.
Retail I get a news in a banker Barney’s had declared bankruptcy a while ago and we were waiting to see if they would be able to restructure and continue operations or they were going to get liquidated and last week it was announced,
that they were in fact going to get liquidated so basically,
all the assets of the company which is all that inventory they had in their stores got sold to a liquidation company and it’s called Great America group and Great America is now selling at a discount all of that may see all that Barney’s merchandise.
And like to be honest the a lot of people in the luxury space were really like holding their breath.
Hey hoping Barney’s wasn’t going to liquidate but if they were going to liquidate like oh my God where they can have a bunch of designer you know what jewelry Brands deeply discounted going into this holiday season was that going to have a,
a trickle-down effect on the rest of them.
[29:44] The the retail space and was you know everybody in that category going to get ticket for this and it seems like,
Great American is not sort of a quick churns cell everything in a fire sale kind of Liquidator and they you know there’s like 500.
Million dollars worth of inventory year and they want to get that value out of it and so the sales are going on right now are very superficial it’s like 5% off on all this stuff,
and I think people are kind of taking us II release that even if they subsequently have to discount from this merchandise a lot more to sell it it seems like they’re not going to just come until after holiday and so that will at least Preserve,
holiday season for some folks and side note apparently lvmh had this crazy contract this vendor agreement with Barney’s,
the in the event that that they did default that lvmh had the right to take all the merchandise back rather than have it be Wicked.
So far they have an exercise that Clause but apparently like they’re so protective of their brand that they made sure that like you know they wouldn’t have a bunch of there their stuff get deeply discounted on the market in any case.
[30:56] It’s actually pretty smart.
[30:57] It’s really smart I think you should think more people should do that like I think you’d have to have a lot of Leverage in order to get that kind of vendor agreement,
sign because that’s like a that’s some kind of liability that that Barney’s had to carry on the books and I don’t like it from the accounting standpoint I’m sure that was super annoyed.
And then the other half a Barney’s is this intellectual property and that got bought by this company called authentic Brands which is been going to license it to others and they’ve already announced the first licensee is going to be,
Saks Fifth Avenue order the parent company is Hudson Bay Company but so it seems like there’s going to be some Barney’s branded departments or merchandise inside of Saks Fifth Avenue in the future.
[31:38] What are the things that happened with sacks when they get sold as their headquarters building was worth more than probably didn’t tire retailers does Barney’s have a big real estate portfolio that would be,
maybe more valuable than a bunch of these these items.
[31:54] That is a good question so exact had a lot of real estate but that famously was this New York flagship store that was worth like a billion dollars by itself and somehow wasn’t completely valued in the acquisition like I assume some people lost their job over that,
the I don’t know what the real estate situation is with Barney’s if they own the real estate or they were Reese’s I do know that the New York store which is like they’re you know the biggest up there I think it’s 7 stores or something.
Is a going to continue operations for like a year in some like diminished capacity so it,
is there a recent doesn’t sound like there’s a piece of real estate that they’re going to be able to liquidate quickly there.
But we shall see I haven’t read about the specific Real Estate Value yet a little more.
Start a digital news Prophet Chira which is one of the data providers that we talked about on the show sometime did a pretty comprehensive fry study going in the holiday.
And I was a little surprised by the results like basically they took a big shopping cart of products and price you know a bunch of different retailers on this big shopping cart,
and divided in there like four categories of products and Amazon was the low price in all 12 categories.
[33:15] Was I surprised.
[33:16] Well I like despite the fact that Amazon’s really aggressive on price I actually don’t think of Amazon as fundamentally a price leader like I think of them as a,
basketball work like I don’t think they like historically I don’t feel like they’ve always tried to be the lowest price on everything. I think they have.
Watch the competition and make sure that they were competitive on everything and that they were the lowest price on some sort of Keystone items that people tend to pay attention to this,
shows that he did they change that strategy or I was wrong in thinking that was their strategy because it seems pretty clear,
that that they are the low price guys going in the holiday,
you know Walmart was closest to them and in a few categories was very close but in other categories there’s like a pretty significant Gap and then folks like Target had a pretty consistent.
Against the Amazon so it seems like this is another phase of the bifurcation where you know you have the guys that are going for big assortment and going for super low prices and almost every other retailers going for some sort of,
more curated exclusive assortment and and more moderate prices I just thought that was that was interesting I’ll put a link to the study.
[34:30] In the digital news category Shopify launched a new amenity for their platform this this week which is their own email service provider so now for the first time you can kind of,
natively run email campaign,
in the Shopify echo system before this you’d use a plug into a another ESP like MailChimp or or a cheetah male or one one of those,
and you know now shopify’s getting into that space themselves which a lot of Shopify users are super excited about because they felt like that was,
you know it’s a super important tactic for driving traffic to your store and I felt like that was sort of the weak Link in the.
[35:10] In the Shopify echo system in a back to life based on some new data privacy rights over the last couple months a lot of the other efps at Dunham’s moved away from the Shopify echo system and.
That seemed kind of surprising until you saw this announcement at the shop if I wasn’t worried about it because they knew they were going to offer their own ESP.
And the reason that’s interesting to me is you know you think about how Shopify is going to continue to evolve and people a lot of people talk about them being a potential Amazon competitor.
You want to talk about that I don’t think of them as fundamentally an Amazon competitor cuz I think Amazon’s main value-add is that is providing traffic,
Shopify doesn’t provide any traffic but I think this more much more clearly put Shopify in the,
the marketing stack technology competition set so you know competing more directly with the sales courses in the Adobes of the world.
Kind of makes you wonder so so once you kind of add to email capability then you know if you listen to customers the next thing we’re going to want is a more robust CRM right because you’re just keeping a bunch of email addresses and hitting what’s emails isn’t good enough,
you going to a segment so then the segment you’re going to want to know that Jason have a dog or a cat did he buy what did he buy from me and now you’re kind of squarely into Skyrim territory and then once you do that then,
I got an order management system their warehouse management Prime like.
The filament capabilities are interesting to see their kind of Warren Moore capito with this cloud guys.
[36:49] Yeah I’m for sure and when she got that rich database of consumers and their preferences you don’t just want to email them you want to buy the lookalike audiences on Facebook and all those things as well so so there could be all kinds of advertising activations in that stack hit someone.
[37:05] Indian last piece of news I want to, not because I’ve been driving me nuts all week like 2 weeks ago
This research company first Insight published a study and they picked an excellent clickbait name for the study they called it Amazon past its prime.
And the the conclusions of the study are that consumers are losing interest in Amazon their preferring Amazon unless off and and in fact the majority of consumers in this study.
Prefer to do their online shopping at Walmart rather than Amazon,
I have counted no less than 50 articles written online about this,
you know different aspects of this huge trend of consumers moving away from Amazon towards Walmart.
And the reason to drive mean is because that is not a huge.
The studies of a they surveyed a thousand people and ask them where they went shopping they didn’t watch where they go shopping or look at the receipts or anything they like,
they surveyed someone in the middle of doing something else and said like what e-commerce side do you use an,
501 of the thousand people they asked set you know thought of the word Walmart before they thought of the word Amazon.
[38:23] What’s the sub Bentonville thousand people.
[38:26] I don’t I don’t know what the methodology and I’m going to hope that they have good Geographic diversity in there.
Obviously you know the part of the country were Walmart’s the strongest in the parts of the country were Amazon’s the strongest tend to be pretty bifurcated so,
you know if there’s any Geographic Claus but it’s only a thousand people it doesn’t even matter like it’s way too small a sample size 190 million Shoppers go to Walmart every month,
more than 10 times that amount go to Amazon every month they surveyed a thousand people like it’s not statistically significant and.
I’ve said it a million times we have tons of evidence to the fact stated preference surveys are irrelevant like customers get it wrong all the time like if I jumped in the email accounts for those thousand users.
The the amount that shopped in Amazon vs Walmart would have no correlation to what they sat like people just don’t think like that and so you know.
What kind of silly study and I was in a frankly surprised by all the journalists and analysts that like.
Just you know consumed it and took it and run with it ran with that like I I love for there to be competition for Amazon I love nothing more than for Walmart to be kicking Amazon’s but like,
the survey is certainly not evidence that they are.
[39:43] Yucca Dental graphic up and it’s just simply every little part of the infographic is wrong based on Amazon’s results,
it says Amazon Prime membership is dropping and it shows low chart that used to be 60% and now it’s like 52%.
All those measures are wrong like frequency is down you know the frequency measure at Amazon is paid items and
at its fastest quarter last quarter if you listen to our last episode in a year so all this is this is a,
very bad survey to scratch your head.
[40:27] Yeah and again I don’t blame someone for doing some some cheesy content marketing tickets in traffic I’m I don’t like it but it it happens all the time I’m more disappointed by all the like to me more credible people that.
That like sided all you have to do is listen to podcast once a week and you’ll save yourself some embarrassment.
So should we finally get to what the audience is just really been waiting for.
[40:56] Yeah let’s talk about the holiday.
[40:58] Yeah couple quick precursors we’re going to talk about a bunch of different holiday forecast and kind of how they all roll up but a few things to remember,
every company that forecast holiday sales has a different definition of retail so I like the big ones are is gas in her in or not in retail is food in or not in our cars and you’re not in it so.
[41:19] None of these forecasts are perfect Apples to Apples cuz none of them have the same definition of retail,
and even worse these are all holiday forecast and there’s a shocking Variety in what people consider holiday,
so a lot of people think holidays November and December other people think is November through January there’s some people that think it’s just you for which is October through December and so again there’s a lot of variance in,
in what times are the people are talking about and sometimes they tell you and other times they really don’t so you’re gonna just left the guess what they think holiday is,
most of these forecasts are going to compare their forecast this year with what actually happened last year and I just want to remind our listeners that last year sucks,
there’s a lot of negative things going on there was a government shutdown there was a complicated tax cut that people don’t realize but was kind of in their monthly,
Paychex the stock market took a big drop and so consumer confidence was very low and one of the things that we that we
so I was the savings rate went way up so people I less confidence and they were saving more of their money instead of spending it over holiday so it was a bad holiday last year,
and then this year you know all those cans does macro Trends are more favorable the economy in general feels more favorable you know there’s a couple negative things dangling out there.
[42:42] But one of the big infrastructure things this year is that there are significantly fewer days between Thanksgiving and Christmas.
And when I first say that to people sometimes they look at me funny because they think there’s you know the calendar is always a calendar I remember Thanksgiving falls on the last Thursday in November and so depending on on the counter breaks down.
[43:03] That could be in a different week so last year Thanksgiving was on Thursday November 22nd this year Thanksgiving is on,
November 28th so last year,
there were 34 days between Thanksgiving and Christmas this year are there only 28 days between Thanksgiving and Christmas so there are six less days,
and that’s really scary to a lot of retailers they feel like they have less days to sell their stuff they have left days in West days in this crime shopping. And so frankly,
it really impacted a lot of holiday plans like retailers I started buying as much as earlier they certainly week their Black Friday sales much earlier and that they’re proactively doing a lot of things to mitigate this perception.
That that they’re going to sell last because they have less days between Thanksgiving and Christmas and as I mentioned on the last show there’s actually if you look at the big picture and the history of retail there’s a fair amount of empirical evidence.
That the number of days doesn’t actually affect holiday sales in that like when there are more days,
the sales get spread out over more days on there fewer days the same sales happening you know in the more concentrated set of Daiso.
You know whether it impact or not remains to be seen but you are for sure any time a retailer doesn’t have a good holiday. One of the things I can guarantee you they’re going to blame.
Is the six days.
[44:24] And weather Lafayette weather.
[44:25] Yeah we always going to be in the weather dries Lee all weather is bad for retail if it’s too warm they’re not selling enough valuable coats and it’s too cold they’re not going outside to buy stuff so it seems like no weather is good for retail,
especially when your comps are for I would also remind people that all these forecasts are about Revenue,
and the much more important thing for a retailer than revenue is profit,
and you know retail share a lot about their comms particularly if they’re a public company and said there’s a lot of levers they can pull to make sure that they hit the revenue goals and one of those revenues is how much they discount the stuff,
and so you know one of the things went when it looks like there’s going to be a soft holiday season retailers turn up all these knobs and discount things,
more aggressively and they hit the revenue numbers but then their Q4 earnings come out in the earnings stock because,
they sold all that stuff at a Deeper Discount and there’s already some evidence that you know because of the sexual today’s that retailers are leaning on that discount,
whoever you know earlier and and you know that could be indicative of a not very profitable holiday season the the other thing that makes me think.
[45:43] Profits could be a little bit challenge is it’s already very clear that retards have bought a lot more digital ads this year than they did last year and again that could be us,
reaction to the the fewer days you know they’re spending more nads trying to catch more eyeballs and obviously Those ads have it cost in that also affects.
[46:06] So those are kind of nice things to bear in mind when we talk about the forecast.
[46:10] Jeff kick ass off your you’re up first.
[46:14] Three different kinds of companies doing forecast there companies that just forecast total retail sales the most Lee Brick and Mortar and e-commerce is a part of that,
there companies that forecast brick and mortar and then break out the digital sales and then there’s companies that just forecast digital sales,
so we’re going to start with a brick-and-mortar folks in the first we’re going to go with is one of the most commonly cited one you know an organization you and I are both involved with the national retail Federation rnrf.
They do a forecast every year their holiday definition is November and December they’re definition of categories excludes automobile dealers gasoline stations and restaurants.
So they are forecasting that total retail sales are going to grow between 3.8 and 4.2% this year so last year.
[47:05] Sales only grew 2.1% against it was a sucky year so they’re forecasting up pretty healthy acceleration of growth this year over last year,
you know, the middle of the range will be 4% so 4% vs 2.1%,
last really sucked if you look at the last five years the average was 3.7% so 4% is even better than the last the the trailing five your average if you care,
that means it’s about 730 billion dollars worth of worth of sales,
and one thing I’ll say about the NRF is they’re starting to develop a reputation as being overly optimistic,
and so I will say you know I kept highlighting the last year we did 2.1% gross interests forecasted.
Like 4.6% growth of us so they missed it pretty badly last year so they’re they’re forecast this year’s actually lower than their forecast,
last year and so you know hopefully,
they’re going to be more accurate this time around but what you know if you talk to that had Economist it interrupt but they’re going to tell you is.
There are more microeconomics factors,
affecting sales than ever before and therefore they feel like the the sphere of uncertainty around forecasting these sales as much higher than it’s ever been so they would actually say that like it’s tougher than ever to do these four.
[48:30] Did they talk about the six days.
[48:33] Not specifically in the forecast as I recall they also didn’t talk about the weather.
The sign out like we joke about the weather I’m skeptical about the weather there’s like a huge white paper from IBM talk to you know which owns The Weather Channel,
talking about how forecast that don’t factor in the weather are wildly inaccurate self-serving study but then the other.
Forecasts we have for Pure brick-and-mortar sales is from a strategic consulting company called alixpartners
put a link in their there they’re forecast had a lot less inherited with it but basically they’re forecasting between 4.4 and 5.3% so even higher than the interests forecast their holiday,
a. Is November through January and they don’t tell you what product categories are in there so soup your brick-and-mortar forecast,
one is about 4 % one is about,
4.6% and you know both of those are significantly higher than actual sales last year at 2.1%.
[49:42] As the Commerce guy on the show I’ll kick it off with the next to that that have both offline and online retail
first up is Deloitte I will put a linked to theirs in the show notes they’re expecting total sales this holiday to exceed 1.1 trillion they Define the holiday is actually November through Jan 1
and they’re expecting offline or total retail to be in the range of 4 1/2 to 5% which fuel
pretty hot or are kind of on the on the high side and then they’re saying digital will be in the range of 14 and 80%
and that would be up from last year’s forecast
and they’re looking at about $1,500 per household,
for Holiday which you know is pretty robust I think that includes mostly High Spenders in that category.
[50:38] Yeah I think I saw something where it like the high Spenders spend on average $2,000 per household but like you know the account for the majority of spending.
[50:48] Awesome and then I wonder so it’s too bad you bought all your gadgets before November because well maybe maybe they’ll count November so that they could be you could nudge that $2,000.
[51:00] Yes I’m frequently accused of having a very narrow window between desire and fulfillment.
[51:07] Appnexus kantar and again will put a link to this in the show notes day to find holiday is October to December which is pretty interesting so it kind of Loops in
Halloween 2 to some extent which is kind of aggressive
but that’s how they Define and they’re saying till retail 3.8% and then online 40% so you starting to sense a theme Here mid-teens seems to be where where a lot of these forecaster zeroing in on.
[51:43] Jason tell us about Salesforce.
[51:45] So then the last category are folks that are only for casting online sales in a way these are the most interesting because these are vendors,
that have a big user base so they’re actually using the data from their user base as the basis for their forecasts and then extrapolating it to the rest of.
Of the the industry the first one is Salesforce there to finding holiday is November one through December 31st so there’s two months and they’re forecasting digital revenue for holidays going to grow at 13%,
so that’s going to be like a hundred 36 billion in sales,
and you know that’s a pretty robust forecast one of the things that I like about Salesforce is they actually have a live dashboard that runs over the holiday. Where you can see what the latest trends are in real time so I’ll put a link to their,
their holiday Hub in there as well and then a forecast we’ve used a lot on this show is from Adobe,
he has a bunch of products that are used by e-commerce sites and in particular that and analytics product that use by a lot of e-commerce site so they see a pretty big chunk.
Of e-commerce sales and they use that to base their forecasts on their defining holiday is November and December and they are forecasting 14.1% online growth which is 143 billion dollars based on their,
their definition of retail so a couple healthy forecast for online sales.
[53:13] Cool so if we kind of summarize everything and look we come up with online that the average of the forecast is just North of 14%
the range is between 13 and 18% and if you recall the the setup from Amazon was pretty robust they
they’re going at like 22% and third quarter so I kind of feel like even this is a little conservative cuz just Amazon alone being happy be Commerce if it if they can do,
20% Then That imply the rest has to go at like 10% can I get to this 14% so lefse but
I feel like these things are a little on the conservative side but yeah we’ll see,
the Russian thing is we used to rely on comscore for kind of a you know how did we do last year and they it’s best we can tell would love to if any listeners know otherwise
they’ve stopped kind of rounding up the entire holiday they’ll talk more about certain days and Trends they they’re not out on record saying 2018 was X percent so
they used to be our go-to so there is no really good one source for how last year was so you know it’s hard to
compare that to how last year was I feel like it’s 2 to 3% higher than kind of like what we saw last year but you know there’s no clear date of went out there.
The Jason wants you some rest total retail.
[54:42] So kind of the the average of the four total retail forecast is like 4.35%,
the range was like 37253 and again last year was 2.1 so very healthy total retail gross,
this year vs last year and again last year was a pretty down here,
but these forecasts are all slightly better than the five-year average so that’s.
Potentially a good thing on the revenue side again if I were betting I don’t think it’s going to be a phenomenal year on the profitability side I think.
Yeah they’re already have been a lot of Paris in the the retailers and manufacturers seem of each other.
Cost of the Terrace cuz they haven’t really you know been priced in prices are pretty competitive as we stopping that profits Euro study there’s a bunch of studies that people are spending more on ads and discounting earlier so,
you know I think we may Goose The Top Line and not have a phenomenal bottom line but I would love to be wrong.
[55:47] But that is going to be a good place to eat it because I feel like we’ve used up a little bit more than her a lot of time but hopefully it was all valuable and if you did find it useful we’d love it if you jump on iTunes and finally give us a 5-star review,
if you have any further questions or want to chat about anything we talked about tonight as always hit us up on our Twitter accounts or leave a message on her Facebook page.
And Scott and it’s always nice chatting with you.
[56:15] YouTube thanks everyone we really appreciate it we hope you’re locked down with all your holiday
pricing strategies your inventory everything’s locked and loaded we got singles day which is going to come kick it off here coming up next week will keep you posted on what we’re seeing out there and e-commerce and retailing.
[56:33] And in the very near future are very special 4 year anniversary 200 episode so that you sure to catch that one until next time happy commercing.