Jason & Scot Show Episode 203 – Shopper insights from NPD Checkout

A weekly podcast with the latest e-commerce news and events. Episode 203 is a look at the holiday season with NPD Checkout.


NPD Checkout is a product from NPD that scan physical and digital receipts from a panel of more than 100,000 users to get a unique look into consumer purchase patterns in a variety of product categories.

Jeremy Allen, Group President of Checkout, and Patty Altman, SVP Client and Business Development at Checkout join us to discuss what we can learn about the holiday from their dataset.

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

Episode 203 of the Jason & Scot show was recorded on Tuesday November 16th, 2019.

Automated Transcription of the show


[0:24] Welcome to the Jason and Scott show this episodes is being recorded on Tuesday November 26th 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your squad window.

[0:38] Hey Jason and welcome back Jason Scott show listeners well we’re all here on pins and needles waiting for the first results of holiday 2019 so with that while we’re doing that we would warm up your data analysis brain functionality
with some gas that are focused on retaildata we are really excited to Welcome to the Jason Scott show both of these folks come from NPD
we have Jeremy Allen he is the group president of checkout & Patty Altman choose the SVP client and Business Development check out what kind of showed us.

Jeremy & Patty:
[1:12] Thanks for having us it’s an honor to be with you guys today thank you.

[1:18] We are thrilled to have both of you and I started the tradition on the show we always like to take things off by having the guest share a little bit about their background so I’m Jeremy why don’t why don’t you get a stardust can you tell us how you came to MP3.

Jeremy & Patty:
[1:30] Absolutely so I’ve been with MPD for about the past 4 years my anniversary is coming up in December of this year that we don’t check out business which will get into a lot more in this show but ended check out his MP start up business we use receipts to measure markets and how consumers shop
we’re very very excited about this business it’s been a great
investment and opportunity for us and for our clients prior to doing this and joining mpds spent about five years with Nielsen which is also in the measurement space
I led the marketing effect.
Is there helps clients improve their advertising reaching residents and before that I grew up in Consulting so I spent about fifteen long years at McKinsey & Company.

[2:14] Route 15 years of Mackenzie is actually like 83 years in in people years.

Jeremy & Patty:
[2:19] Yeah and I have all the gray hairs to prove it.

[2:21] Patty can you tell us how you got them pretty.

Jeremy & Patty:
[2:25] Yeah absolutely and thanks as well of her for having me on the show this morning I’m so I did attempt MPG for two years and I work on Jeremy’s team I leave the commercial side of our business the mission of our team is to make sure that our clients use check out by rata latex in the most effective way and typically to drive big strategic
decisions and cover opportunities and all within the the omni-channel space.
Apart MPG I was at its cells for 7 years and I had a variety of leadership positions their everything from leading a Global Communication program,
how to custom Resurgens in Brandon Division and renovation.
Back to the keep probably 222 why I’m here at MPG now is my time that I spent at iri I was alright for 12 years and I was in the Consumer Panel division working with longitudinal panel very similar to what we do
and it was there that I learned the ins and outs of how to best leverage by Rihanna lyrics and really the power of that that information so that you know it’s funny but it feels like coming to MPD is.
Because a lot of those studies that I did in the CPT space years ago things like Brands switching Milos retains you name it there the core of what we do at checkout and how we drive value at our clients.

[3:38] That’s awesome so is it fair to say that you guys basically took the best of Nielsen and ri-ri and brought it to make an even better offering a check out.

Jeremy & Patty:
[3:47] That’s exactly right so what what’s interesting is that panel analytics what that basically means is your tracking the same consumers spending over time it’s been a Mainstay in the cpg space so
there’s a product of meiosis and I are I collaborate on call the homescan panel and that’s where many of those cpg brands
bread and butter analytics come out of that in our space we call a general merchandise in Food Service the industries and MPD tracks there hasn’t been a longitudinal panel before check-out so we’re bringing those exact same discipline as it existed for decades and cpg marketing to general merchandise and it’s it’s been a huge opportunity in our clients are thrilled
trouble that innovation.

[4:27] Ricola just to make sure so Jason are pretty familiar but just make sure listeners are tracking us there’s some kind of two companies in this space there’s Nielsen and NPD Nielsen,
they do a lot of data around cpgs and then you guys do the Nazi party stuff with York on General Merchandise is that a is that a fair characterization.

Jeremy & Patty:
[4:46] That’s exactly right so we track 24 Industries and it’s basically I would check everything that you cannot eat or put on your body so you’re getting personal products so it’s closing its jewelry its beauty products it’s Sporting Goods
it’s we also do food service so restaurant operators all of those things that you find in a Target or Walmart that don’t fall into the cpg category we track.

[5:10] And then again for listeners that aren’t familiar with how how this works at General at NPD and then you’re working on a sub project within their called check out
in the overall in PD so you’re at least 23 kind of non cpg categories,
I’ll pick one of my favorites which is Automotive how does that work how are you tracking Automotive data.

Jeremy & Patty:
[5:32] Yeah so if I just back up for a second mpd’s been in business for about 50 years and we track these twenty-four Industries and we do it in two primary ways so 1 is what we call a POS which stands for point of sale.
So similar to a Nielsen RI we,
data from retailers to all of their register receipt data we aggregate that data and we classified into a standard hierarchy that we then use the measure products sales
with that we can measure manufacturer brandshare we can measure retailer share and its really we called the data
record set the standard by which companies measure their performance and our Industries so that is what MPD has been doing for 50 years so it’s retailer data aggregated organized and then given to the industry to measure performance that’s one dataset that ipd uses the other one that would be used for a long time is consumer surveys
so a POS data that we get from retailers tells you what sold for how much it sold and how many units sold the consumer data we really go out and ask consumers,
what they bought and why they bought it right so it’s that we called the why behind the buy checkout is a startup that gives us another way to measure what consumers do
the difference with check out that will get into his Patty mention it’s a panel so historically with our consumer data we would ask trackers we would ask the same questions,
different people each month with a panel you’re asking the same questions are getting the same information from the same people over time and that’s where the Innovation comes in for us in these industries.

[7:00] That that is awesome and I always like to talk about the soda panel data as observed Behavior what we actually see customers do versus the survey data is more stated.
Behavior is what customer said they do which may or may not perfectly accurately reflect but they actually did.

Jeremy & Patty:
[7:20] A hundred percent correct and that’s why we love receipt so if I get in to check out for a minute what’s what’s interesting or different about checkout is exactly what you said we would ask consumers what they bought where they bought at why they bought it receipts we don’t have to ask any questions and it’s factual so
we’ll check out those as we have an app called receipt palette available and I owe store on an Android.
Consumer download that app and we asked him to take pictures of all of their receipts for all of their purchases
we also ask them to give us access to the rear seats so the core of checkout is getting a consumer to give us information on everything they purchase
in the form of a receipt with an organized that data in the same way we do our point-of-sale data in the same taxonomy is the same hierarchies is class by the exact same way and with that we can measure what people are buying through their receipts.

[8:08] Perfect and I don’t want to belabor the methodologies so much but it it’s super helpful because it lets us understand where there’s any potential,
data biases in just like what the what the capabilities of the.
The dataset that’s driving the insight into so you’re you have a consumer at this enticing people to take pictures of receipts and.
To me part of the cool part is that you just implied as you’re not just getting in-store Behavior or just online Behavior as,
as some other panels are doing you are actually seeing the same person across their their shopping habits on Amazon or walmart.com and in a Target store at Costco store.

Jeremy & Patty:
[8:50] That’s exactly right and what’s Patty use the term omnichannel that’s exactly with me by omni-channel we’re really interested in trying to understand everything I can supervise.
Where they buy it from a channel perspective and from a retail perspective and from a brand perspective and historically measurement has been Channel Centric right so you have an e-commerce measurement service which we used to provide within checkout
you have a brick-and-mortar measurement service but what was missing there was the interaction across channels and it’s exactly what you just said we might getting purchases across all those different channels retailers and Brands we get a full picture of how a consumers making decisions about what the Spanish word I’ll spend it.

[9:26] Awesome and then you sell to other traditional data collection problems we have,
you don’t care how many different devices be customer used to ShopRite because you’re not using cookies you’re you’re getting the receipt so you see the same customer on their their laptop and iPad for example.
And a you don’t care what the method of payment is right so they pay with cash or a credit card doesn’t doesn’t matter because it get a receipt in either case and you see that receipt.

Jeremy & Patty:
[9:54] That’s exactly right in for some of the industries that we tried tried that we tried cash is extremely important so if you think about food service and people buying a meal at McDonald’s cash is the dominant
method of purchase and if we didn’t track the receipts we miss all those cash purchases that’s one of the advantages over credit cards for example some sources to use credit card data track spending.

[10:14] Perfect sedan is there some unintended bias in your in your pant like because you’re its people that are willing to download and use this app.
It seems reasonable that they might skew more digital and therefore shop online more than then Middle America or anything like that at like you guys feel like there is some.
Some specific biases that you try to account for or or do I have that wrong.

Jeremy & Patty:
[10:40] Yeah there’s always going to be a bias in any panel depending on the data collection depending on what to be an ass to but what we do with with checkout is we use both waiting and projections just to make sure that we are eliminating as much of that bias is possible.
So when we look at results from our panel it is indeed that’s reflective of the average Shopper for that category for that brand for that retailer.

[11:04] Perfect and then as I understand it there’s about a hundred thousand people in the panel right now it sounds like a huge amount but there is like 240 million households in the US.
I’m guessing that you do some dancing math to somehow.
Make the the hundred thousand represent the all the household or all the consumers.

Jeremy & Patty:
[11:28] Yes fancy math is exactly what we applied the right now that we we have marketing research and Sciences here who are the best in the industry you know well known people who have been doing this for many years and we have,
but the waiting system to make sure who’s in our panel is represented appropriately and then projection systems to make sure they could reject out what the total us.
Population would behave so we take that hundred thousand and make a represent the total US population.
If I can just add that hundred thousand by early next year will be a hundred and fifty thousand so we continue to invest
expand the panel because we believe we can accurately represent the population with a hundred thousand but in many of our Industries sample size is critical so the more panelist we have.
The more industry’s categories Brands and products we can track US were always trying to invest and expand the panel for that reason.

[12:18] Cool that’s really helpful in thanks for going to the Jason Gatlin of data questions
I’m sure you guys get this from clients all the time so it’s fine. Not foreign to
what time 21 I’m analyzing data I find the real value is in kind of surprises both both positive and negative if you will what are some of the most interesting surprises that you guys have seen from this project over.

Jeremy & Patty:
[12:43] So what was really interesting for me one of the very first things that we did when we got the first.
Long enough term data set to be able to observe consumer behaviors as we broke pick people up
based on how much they spent online so imagine a portion of the population that spends less than 25% of their spend online versus another portion of the population which are heavily engaged in e-commerce it’s been more than 75% of their spend online and we really trying to find out it’s do retail
preferences change and you would think they obviously would but do they change and how did they change based on how much of a spend
how much spend people do online and how engage they are the e-commerce what was interesting is people that are primarily brick-and-mortar the number one retailer as you might expect
Texas Walmart people that are primarily online Shoppers the number one retailer as you might expect was Amazon what was fascinating though was to look at how the other retail price is changed over time and what we’re really trying to understand was where the,
brick-and-mortar retailers able through their.com offerings to maintain their fair share of the market as people moved online.
And for the most part they weren’t right and a big question that we’re working with our retail clients on its how do I present a multi-channel omni-channel offered it to Consumers so that whether they love coming into my store
or whether they really rather stay home and shop online they’re choosing me as their retailer and an interesting example is.

[14:08] Has been a phenomenal job of using their store assets using a.com offering really making a friendly for consumers and actually do better with consumers as the as consumers shift from buying.

[14:21] Predominantly in stores to predominantly online bestbuy.com picks up more than their fair share of that heavy online consumer cohort.
That was fascinating and we use that as an example with our retail clients to say hey don’t worry about.
Amazon as the p.m. if you can win you can create a compelling offer for consumers do what you do well use all of your assets.
And you can actually win with consumers as they make that shift online.
Dimension Automotive earlier that said it’s a really good example for automotive clients where online penetration is still low.
What is your thinking about consumers moving more online for automotive purchases those retailers were really trying to figure out how did we win from the very beginning with an omni-channel multichannel offering for those consumers.

[15:04] Recalls on any other insights from so it’s this population that’s like using less than 25% so I guess they’re doing more Walmart any other interesting would like.
What is that type of a person is it the lower-income cohort or that certain parts of the country or how would you think about that person.

Jeremy & Patty:
[15:27] There’s definitely excuse lower-income and more Middle America as you would.
So we’re still saying is it in you guys know this way better than we do we still see that internet
Ecommerce shopping go SKU to where the population centers that skews toward the coast that’s where you had the Leading Edge Shoppers that are much more comfortable with technology
you have a much higher presence of internet availability although it’s becoming ubiquitous now so it’s middle of the country and lower-income that desk you toward that lower online engagement cohort.

[16:01] So you you mentioned something that was interesting.
You talk about a retailer like Best Buy sort of out I’ll come out punching their weight in omni-channel which is fascinating to me I have a premise that.
In our industry a lot we we we work based on these
urban legends and you know we often don’t have data and so like by where did math like omni-channel spend Shoppers tend to spend more than in-store Shoppers in that.
That sounded good when some CEO set it to the the shareholders and then it became.
Serve a defective fact in our industry and then the data sets like yours come up and we get to either confirm or debunk some of those urban legends so am I am specific I am curious I’m at specific example.
Is your data showing that omni-channel Spinners to Shoppers that use both online and in-store tend to be more valuable for retailers or or is that an urban legend.

Jeremy & Patty:
[17:03] I think it depends on the category so a lot of times what we do is we’ll segments consumers based on spending into a heavy spending group and a category medium or light the heavy your suspenders,
you tend to be people that have,
uptmore multi-channel engagement so I would say in general and it sounds like you were hoping that I would debunk this one I would say in general or data would tend to agree with that premise but it really depends upon the category.

[17:31] In fairness I’m probably out of business if you debunk that that so I’m fine.

Jeremy & Patty:
[17:34] Okay I thought you wanted me to be a contrarian and I can’t be on that point.

[17:40] Yeah yeah yeah if you jumped in and said any money you you spend on digital is a total waste of funds on.

Jeremy & Patty:
[17:46] Fair enough.

[17:48] So thank God I dodged that bullet I don’t put you on the spot but were there any other sort of.
Surprises to you in terms of omni-channel behavior or are there any retailers that you would have expected that are doing you know really well at capturing their share.
Any categories that tennis humoral new channel.

Jeremy & Patty:
[18:08] So in terms of categories it’s cute. You know what I what I will point out is the automotive example that I pointed out earlier I would say there’s a couple of categories like Automotive in Home Improvement.

[18:20] Where they’ve been able to to benefit from watching other categories and other retailers as consumers shifted online and those retailers didn’t embrace it.
And really take advantage of all the assets that they had to make sure that they were getting their fair share
they’re doing a better job out of the gate with an omni-channel offer so if you think about an advance for example to buy online pickup in-store which is a unique
capability that you have if you have a physical store location of your changing the muffler on your car it’s pretty urgent for you to get it quickly right you may not be able to wait till the next day,
but to be able to do the shopping figure out what part you need to be able to look up a model number online.
Select exactly what you need and then go drive over and pick it up to be able to complete the repair or Auto retailers founded that was a very compelling value proposition so figuring out.
What you do well and where you can win,
and where your stores actually are a benefit to you is it something that I’ve really been impressed with with with some of the other retailers we’ve observed and Home Improvement similar as much earlier.
Many people thought you don’t got you’re never going to buy lumber online while you’re right but there’s a huge assortment of items that are in a Home Depot or Lowe’s many of them are very friendly for e-commerce and being able had a
to figure out that buy online pickup in-store the multichannel offer they can really learn from your Best in Class retailers like Target that have done a really good job,
figuring out how to appeal to the consumer with all the different channels and features that they offer.

[19:48] That’s true that you and I did want to clarify one thing because you have different different companies use categories definition slightly differently when you say Automotive do you mean actual,
vehicle sales or do you mean like automotive aftermarket parts and accessories.

Jeremy & Patty:
[20:05] Thanks for clarifying only automotive aftermarket parts and accessories we do not track vehicle sales.

[20:12] Perfect so then the target example which is particularly interesting to me,
because I feel like we’ve seen this really interesting Behavior we have the Walmarts of the world,
in my mind are really trying to go toe-to-toe with Amazon and and you know Amazon’s got 800 million items online
Walmarts in a rapidly expanding their offering and you know trying to match same-day shipping and all of that I feel like when they zig zag Target actually zagged and said hey you know what we’re not going to be the everything store.
We’re going to carry a curated assortment in that a storm is going to live in our stores and we’re going to use our stores,
much more centrally than Walmart does for example so you know their car chipped and they they ship a significant portion of all their e-commerce orders from the back of their stores and they do same-day delivery from the store inventory,
in my mind when I look at those two companies I go what you know Walmart’s really playing for assortment price and convenience and Target is really.
Playing for curation and omni-channel does that show up in your data of it like you know.
The omni-channel is more relevant to Target than Walmart.

Jeremy & Patty:
[21:24] So I agree completely with the stories that you just laid out on those two companies and our data does support that at least as of right now.
At target.com is doing better than walmart.com in a fair share sense with people that are heavier online consumers.
That’s the facts would support that Emmett and I you know I love about the shift example that you brought up as a very consistent with the Target brand right so
you know what I was growing up and I guess I’m old but people call Target Tarjay right but if you think about the shipt delivery service you have these part-time and in many cases working moms or
work-from-home moms that are coming into your home they’re unpacking your groceries they feel like they’re part of the family too very personalized,
brand experience of the way they’ve done it is very consistent with their brand Heritage in my opinion.

[22:15] Wrinkle in Time it wouldn’t be a Jason Scott show who didn’t talk a little bit about Amazon you’ve already mentioned them a little bit there
what are things are ice and I’m curious about is when you get the macro numbers you see that the Amazons about half of online sales since my first question are related Amazon his
is that track what you guys are saying.

Jeremy & Patty:
[22:38] Yeah that’s a really interesting and question I’m arguing shows that about 43% of total online sales moves or Amazon to Summit.
That’s the way you just quoted but I think it would really have to know is that there’s just a ton of variation across Industries so for example if you look at something like softline industry is like apparel about 20% moved through Amazon as opposed to Choice which,
approach 70% and think about the differences between those two industries toys is often for a specific occasion is often around a holiday it’s often for gift giving purchase so that combination of what.
The product is 4 or the gifted of the occasion is for as much as the desire to have a specific online experience tends to drive the Reliance on Amazon vs.
The rest of the online space.

[23:26] And you guys so if I kind of think of this giant pie of e-commerce you guys are seeing what what percent do you think you see of the whole pie if you’re not doing cpg and apparel.

Jeremy & Patty:
[23:39] We do do apparel we don’t do CBG and I I don’t know what the shit I honestly don’t know the answer to that.

[23:46] I thought there’s something like if you couldn’t put on your body or something.

Jeremy & Patty:
[23:51] Oh yeah no personal products so that they probably the best bad example that I lay that.

[23:57] I was thinking sweaters not Nada Massacre.

Jeremy & Patty:
[24:01] Will mascara retract it’s more the lotions and deodorant tuxedo.

[24:05] Okay why it’s complicated.

Jeremy & Patty:
[24:07] It is complicated.

[24:08] So so you know you when you read the headlines and and Jason I got there and talked to a lot of retailers and I’ve spoken it in PT shows about Amazon you do get this feeling that they’re on this kind of like
unassailable on and unbeatable
does the data indicate any kind of tips that you would give to retailers are brands of of how to draw a quote-unquote beat Amazon or or two at least kind of slow down there their head weigh.

Jeremy & Patty:
[24:36] So I just got I think it’s a lot of what we have been talking about I’d I think and then we have to be careful right because all these retailers are friends of ours and we want everyone to play nicely,
seed to having a physical store where you can engage with consumers on a different level and be there for them and build a relationship and greet them in person
inform an impression of a brand that’s a connection with a person is a real Advantage being able to ship from your store being able to let somebody
things up the same day if it’s available there’s some advantages that a physical brick-and-mortar Network give you as a retailer.
But I think when unexploited right I look at headlines from and you’ll remember these from 10 or 20 years ago that talked about the death of the store right and there was probably a credible point of view those before it at some point that people would never go into stores anymore.
There may stores made banners that are doing great because they realize that there are some things that consumers want from a store and we would just encourage all of our.
Retailers that have that physical presence to take advantage of that figure out what they can do uniquely to connect to a consumer when they come into the store to strengthen the connection to the brand,
and it’s powerful.

[25:45] Yeah I just to add to a Jeremy was saying it’s really only about the it’s really all about the consumer not about the channel so the clients are either reach other manufacturers who are seeing really operating at at the highest capacity or those that always keep the consumer Central,
to the story so whether it’s an experience of walking into a brick-and-mortar store physical location or if it’s purchasing at their direct consumer or a.
A person in a curated site the message the field of communication is all holistic and fits together so it’s a shopping at the consumer experience and not a channel experience.

[26:18] Yeah that makes total sense I’m always like I’m less interested in which retailers are doing well against Amazon are there any of the categories that you track where.
Where do you feel like Amazon isn’t as dominant so there’s more online white space.

Jeremy & Patty:
[26:35] So Patty mention just a cystically apparel and it’s offline categories especially when you get the fashion is one where
we see a lot of players other than Amazon do well right there a lot of. Com Pure Play e-commerce retailers that have brands that speak to something and see
to Consumers and stand for something and those who really well right I think that’s a place where
we would all knowledge that there are a lot of other players in that space and it’s not one that Amazon seems to be dominating or moving toward dominance.

[27:08] Yeah I know that makes sense I it’s funny I get asked all the time like like what categories can we get in.
Where Amazon is nrt winning and and I have to come up with a different answer every year because Amazon.
Conquesting more categories but like I used to say live plants and now they’re shipping live Christmas trees.
I feel like I can’t win on that.
I meant you regretting I didn’t ask you a question earlier when I was in the data gauntlets Y100 the I know for a fact that both retailers and brands are customer of your data,
but I’m guessing how they use it is slightly different like can you share after the brief example of.
You know what the typical use cases for retail and what they might do differently as a result of your data and then what the typical use cases for a product manufacturer.

Jeremy & Patty:
[28:00] Yeah I know absolutely end and we work with a ton of different clients are really using checkout in a multitude of ways whether they’re retailer or whether there are brand so you know
in MN across both quite honestly all of them are always interested in the basic or metrics of how consumer shop
we have a product you’re called Essentials which in any other company would be things like a purchase summary of purchase Transit a shopping bath
and both from a retailer and a Matic manufacture perspective they need this information and they use this information to understand the core foundation of the health of their brand.
So things like penetration what percent of the population is is buying my product or buying right how much do they purchase over the course of the year do I have a a penetration strategy or do I have a virus strategy and how does it differ from my competition,
that’s always critical one thing that I adore one study that we find it actually Bridges the gap between retailers
and manufacturers of something for the leakage tray and basically would have leakage tree does is it looks from a conservative from a retailer lens what trip.
A retailer is missing or or not converting for specific category and from there we can identify that opportunity and how much dollars are being missed because.
Is going to the competitor and who is that competitor in addition what we can do is the next.

[29:22] To help him activate or identify strategies you which to to convert.
Trinity why I say it’s also a great manufacturer play as well as you know I mentioned earlier I’ve been in the cpg world many many years and category management functions or just the bread and butter of how manufacturers work with many retailers,
the Crux of that was always we could read.

[29:43] So that was pretty commonplace in the cpg world the reality is it’s less common place here so we’re finding manufacturers who are really successful with retailers are using strategies like leakage trees to help them understand how to improve their business,
and that in turn of course also helps create a better relationship and also opportunities for the manufacturer without retailer.

[30:07] Awesome very cool Inn in general is check out a tool that like.
Is it a turn key tool that a client would use themselves or is it is it sort of a data set and what the client buys from from you is Insight from a person that’s using that data.

Jeremy & Patty:
[30:23] Yeah that’s a really great question and we really think that’s the value proposition about checkout we right size the offer to wear or what stage a manufacturer and retailer my baby
so for example we have some really sophisticated clients who either came from the cpg world and they use a vuse us before they understand these metrics and and how to use them to a really affect
acid level are we having Seltzer platform for those clients where they can go in and pull those measures that I talked about earlier that really are the essentials of the core of the,
understanding business the other side of the equation where there are usually a pretty complex issues that need to be answered
big dollars are on the line we have a team of experts here who understand the categories that we deal with
from a retailer or manufacturer point of you understand the issues that they’re being challenged with and how the best way we could line up what the client is looking to do
versus how checkout can assist
and can drive solutions the other thing that’s really unique about us and MPG is because we have those POs and consumer asset
we can tell the complete picture so we can start from up from a step from a sell-side on the POS why cells might be up or down if that’s the challenge of client is facing,
we could then look at the consumer data to understand some occasion base or some other information about how people
might have their attitudes towards towards a specific product brand or retailer and then we really bring it home with the check out their data and that check a data completely focused on helping to understand.

[31:53] What strategies you need to employ that are going to motivate be Shopper or the consumer that you want to attract
still get it can be self-serve or it can be a very curated experience where we are handed lock
step with you I’m from start to finish on the solution and what you can do with that solution.

[32:09] Cool I like that this is the first time I’ve heard the term leakage tree.
Feel like I want to go cut down the forest of leakage trees.

Jeremy & Patty:
[32:18] Ocean of of leakage is really important going to be think about what the fundamentally what it means of the retailers been successful.
Bringing someone into their store and yet they’re choosing to leave their store to buy somewhere else right so being able to figure out what was I missing from this category from a category perspective or a brand perspective or rice.
What didn’t I have that made that consumer we’re already did the hard work to get them into my store what am I missing so they had to go to one of my competitors to make that purchase that’s powerful and we do that across all the categories to show retail is where they’re leaking and why.

[32:53] What were the topics on kind of fascinated with is what we call Molly getting right so we’re definitely seeing problems at malls obviously this point Macy’s just recently announced their reporting and they kind of blames their problems on the fact that a lot of the other anchor tenants at malls like like Sears are closing
the sum of the day that I’ve seen I can’t remember where this comes from but it do showing
not only are Mal visits down but the intramall shock visits are down to so people are going to Great Reigns actually going to the mall and going to the Apple Store and getting some airpods and leaving the mall they’re not they’re not kind of.
Reading the restaurant six stores that they used to you guys have any kind of multi-level insights that you can talk about.

Jeremy & Patty:
[33:38] It’s a great question and probably something we should study but we haven’t so I will put that on the list of things that we should look at.
But we would have a solution for it so it’s a client did come to us and said they wanted to understand that we have something called the sequencing study which we can understand over a course of a day of someone,
shopping experience if they purchase at Macy’s what they did.
My mother was brick-and-mortar or did they then go online and purchase something through them to be purchasing something during the course of the of the day we can help identify where they had to go out from that initial purchase to get other items that could be online it could be in store.

[34:16] So kind of a little bit of a pivot here this is something that Jason I have been pondering for literally
I’m 5 years now so here on the show we talk a lot about the data out there at a macro level of Hephaestus e-commerce growing
I’m so generally you have comscore I think it’s the Department of Commerce but it’s do the Census Bureau they say that online sales are going to 15% and they kind of
put something like a new survey you look at 13 to 15% of sales are online but then you know on the show we always do his new shows and we have Amazon is over 25% Walmart’s over 30% this just online sales Target at 50%,
Shopify even like eBay is kind of relatively flat so it feels like.
Either someone is losing tremendous share in there that that we don’t see or the 15% number is wrong you guys have any
any insight into which of those things as possible or maybe there’s something I haven’t even imagined is going on here.

Jeremy & Patty:
[35:18] So I don’t know what’s driving it but I can say that you’re the Department of Commerce number of 15% is consistent with our numbers we see growth from 13 to
1316 %
quarter-on-quarter that’s something we publish instead of a new card retail Trends that’s very consistent with the numbers that were seeing so when you see outline examples of people with double-digit growth 40 50% growth at you know I guess I would be with you that they must be taking share from somewhere but I also don’t know where that is coming from.

[35:49] Maybe maybe another way to ask for Smite my senses at Sonny’s brick-and-mortar guys that
I just really not continuing to keep their share so I’ll pick on like a JCPenney’s cuz they’ve been in the news but not asking you specifically but I guess one counterexample is.
Are there examples of omni-channel going really poorly and is that more the norm than it going really well like like the best by example.

Jeremy & Patty:
[36:15] I think it is I think it is a bit by default right so if you don’t pay attention to it and you don’t build an omni-channel offering you don’t have it. Com presents that appeals to your consumers and you don’t invest in it,
you know kind of has to go poorly because you’re up against people that are doing it really really well right they
know how to cure a disorder and online in a different way they know how to use the building have an endless shelf online they know how to do targeted marketing to bring people out of their sight so if you’re not doing that your. Com presents can feel take off and I think you’ve raised a great example we probably do have many retail examples
it’s not a place where they’ve invested maybe because they had to focus on other areas and it hasn’t taken off and they probably are not capturing their fair share.

[36:58] Which is of course always sad and it’s I guess it’s going to remain a mystery why we have this,
Spirit of numbers my own Theory,
we talked to the very beginning sort of surveys versus observed behavior that the US Department of Commerce data which which mini data providers in Dexter dated to.
Essentially is a survey they send a letter to a retailer and say,
what percentage of the sales were online in a mini cases they’ve been sending that letter to the same guy for 40 years and that’s a store.
You know the answer to that survey doesn’t necessarily like tie directly to the Erp system of every retail.
Be that as it may I’m I’m kind of curious you have all this like juicy real data from customers.
I have to imagine that there’s.
Some kind of common mistakes that you you see repeated over and over again that you try to evangelize with customers like art are there any reoccurring themes that you tend to talk about that you can share with her audience.

Jeremy & Patty:
[38:03] Can it comes back I think too little bit of what we spoke about before really the The Shopper or the or the the
consumer has to be the center of every single
strategy so it’s not enough to just say oh we need a direct-to-consumer we need brand. Com website to hell,
pimenta our sales it has to be something meaningful and fit,
what’s a consumer expect for the Shopper expects but the experience what they know about the brand I’m so really has to all fit together what we know that some of our clients have moved away from having a Circle D, or separate digital teams we still see,
being a separate function when really it should be just one holistic approach I’m it should not be separated so where we see clients when he more often than not is where the consumer experience is address elastically and it’s not Silo different channels where we don’t see it happening is where it
it’s either an afterthought or it’s not a connected experience for the shopper.

[39:02] Yeah we certainly will observe the same it’s kind of sad that we’re still having this conversation in.

Jeremy & Patty:
[39:07] Grid.

[39:08] In 2019 but it do my experience recharge I’ve gotten a lot better at about talking about.
Having the customer at the center in in not having silos but that doesn’t necessarily mean that the the organization in the metrics that they pay attention to behind behind the scenes are are perfectly in the.

[39:29] What are so this is kind of so we’ve talked a lot about kind of what I called kind near window of what the date is telling you what was kind of project it forward and I’ll kind of leave it to you guys too
to figure that out
the one one way we see a lot of people talk about this as though look at kind of the millennial and gen Z he’s got to see that generation and then protect their behavior for work but what’s the date of essentially telling you guys about the future.

Jeremy & Patty:
[39:57] That’s a broad question future of retail.
And younger Generations are choosing to spend more on,
experiences and I’m sure you guys have done many podcasts on that growth experience spending but experience and services are getting an increasing share of spending our clients that sell Goods
are trying to figure out how to leverage and capitalize on that so it is similar experience brands,
where retailers or experiences that their consumers that have an affinity for their brand or also drawn to so could be Acquisitions it could be Co promotions it could be,
I tried to tie in and Merchandising their products where they wouldn’t have before but that’s an increasing concern for our clients,
a consumer’s younger consumers especially are moving more and more away from buying stuff is the central feature of where they like to spend their money and and getting experiences and memories out of it.

[40:55] Related to that is is the notion of committee consumption which I think we may have coined that term but if you look at any any consumers discretionary spending.
They have an increasing share of that spending every month it’s committed before their first paycheck comes in and things like streaming services things like your cable bill things like your cell phone bill.
Things like video game memberships you know they’re all the different streaming services that have been the news lately that have launched consumers are spending more and more of their money
before even comes in in this this notion committee consumption so that’s crowding-out discretionary spend on goods and that’s a real challenge for clients as well so figuring out you know these subscription models are interesting
from any traditional e-commerce retailers are brick-and-mortar retailers and your subscription service is coming up there will my consumers be willing to
dedicate a portion of my spends or their spander of their income every month to me and there are several big retail Brands like Nordstrom.
But have a service where you can spend a certain amount a hundred bucks a month for four outfits they’ll send it to your door you can return the ones you don’t like but they’re trying to figure out how they can get in on this
an ocean of a consumer saying okay every month you’re going to get a portion of my spend and if you can’t win with that you’re going to lose cuz you’ll get crowded out and I think that’s been fascinating and we’re trying to.
Work with our clients to see how they can work through that.

[42:15] That that is super fascinating a trend we talked a lot about on the show we call Auto replenishment in so you you can imagine like if your.
You know a general Merchant with a hundred thousand views on the shelf and you’re seeing that higher and higher percentage of consumption shift to this committed consumption like can you make.
Paper towels and toilet paper committed us consumption by you know providing some service where those things just show up in the customer doesn’t have to shop for them again so.
Yeah it’ll be interesting to see if what you said of fighting against that trended we if we seen more more retailers try to embrace that Trend you feel like that could be successful in.
In a broader range of categories in Weston today.

Jeremy & Patty:
[43:00] I think we’re seeing a it expand and we’re seeing trial I don’t know that we’ve seen proof I mean that the again you guys are the experts in the e-commerce and Amazon space but the statistics that you see on what people are willing to spend.
Or how they’re willing to engage when they have Prime memberships the amount of a purchasing that they do in the frequency of that purchasing on Amazon
what is Auto replenishment in the number of boxes that are showing up on their door crowding-out unit trips to,
two other retailers were they may have bought the paper towels or the cleaning products it’s astonishing right
the purchase frequency on Amazon dwarfs and its factors 10 to 1 but it’s a it’s a it’s a big multiple so I think Amazon certainly and in that case has gotten it right.
A black Porter other claims that are trying to figure out how they can win with that and some of the apparel manufacturers I think you’re a really good examples there.

[43:52] Yeah that’s awesome along those lines Amazon made a pretty clever announcement this week day they launched a new product called the dash shelf have you guys seen this.

Jeremy & Patty:
[44:05] I have not.

[44:06] It’s so it’s a a smart shelf that’s design for their B2B customer so you’d put it in on your your Office Products shell for your pantry in your business and it.
It weighs the products that are on the shelf and automatically reorders when the the Shelf gets below a certain level of inventory so they’re essentially.
Pushing automated Inventory management out to all these small businesses for you know ordering you know coffee and cleaning supplies for businesses which if I’m Office Depot or Staples or one of those companies.
I bet that would be pretty scary because they’re you know again taking a bunch of that discretionary spending and shifting it to committed Amazon consumption.

Jeremy & Patty:
[44:52] I love that I had not heard of it so thank you for telling me about and I love that idea.

[44:56] Ever you just kind of startup question the would look at your data can you tell if someone is a promise or not and can you do guys project and say hey we think there’s this many prime users.

Jeremy & Patty:
[45:08] I don’t have the projected answer but yes we can tell if someone is a prime user as I mentioned before we have access to e-commerce receipt so in those receipts pill identify
if your Prime member so we can see that was interesting and I mentioned before the purchase frequency that we see him on our users that are Prime members is about 35 purchases,
the average purchase that we see from other retailers is in the new 2 to 5 range so it’s just massive the,
engagement and loyalty that Amazon has been able to create with that Prime Membership which by the way you know we’ve looked at all the things you get with prime that really is a good value for consumers and I think consumers recognize that so it’s
I’m certainly not the first person to say it but it’s a brilliant thing that they’ve done in it and we see it hard at in terms of Engagement that consumers cat.

[45:55] And that that 35 is over the course of a week here.

Jeremy & Patty:
[46:00] Over the course of a year.

[46:01] Yeah Jason does that in the day at Amazon.

Jeremy & Patty:
[46:03] It was really interesting to their spending typically is lower but with that many purchases over 35 different occasions and it’s you know close to 2,000 on average per year.

[46:17] That’s that’s crazy that’s a huge like endemic advantage and I’m assuming it’s a mean because if it was a medium Scott’s you know that wasn’t Star Wars purchases a year from Amazon would probably have a.
I’m more skewing effect on the data.

Jeremy & Patty:
[46:32] Yes they were that’s an average.

[46:33] But that’s actually going to be a great place to end it because
it’s happen again we’ve used up all our allotted time but if we’ve whet your appetite and you want to continue this conversation you’re welcome to hit us up on Twitter or leave us a question on our Facebook page as always we
we really appreciate it if you jump on iTunes and give us that that five star review,
but Jeremy Patty is a real pleasure to talk to you today and thanks for sharing some of the insights from the checkout.

Jeremy & Patty:
[47:03] Thanks so much for having us thank you.

[47:07] Until next time happy commercing.

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