A weekly podcast with the latest e-commerce news and events. Episode 221 covers recent news including logistics moves from UPS, FedEx, and Amazon.
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Episode 221 covers recent news including logistics moves from UPS, FedEx, and Amazon.
Past Events
Upcoming Events
- NRF Global Trends from the Reopening of Stores June 8th, 11am ET.
Hear from retail industry leaders Jason Goldberg, chief commerce officer of Publicis, and Sucharita Kodali, VP and principal analyst at Forrester, on what retailers are seeing as their global stores reopen post-COVID-19
Amazon News
- Amazon adds 12 new planes (now has 80 on it’s way to 200).
- Prime day moved to September, Summer Sales June 22nd.
- Amazon Grocery Store coming to Chicago
- Lowes- Same store sales up 11.2%, e-commerce up 80%
Other News
- Gucci – Personalized Video Shopper
- UPS/FedEx – Surcharges
- Kylie Jenner – Inflated revenue ($177 million last year)
- Instacart Media Network
- Target Instagram Checkout
- Shopify Marketcap $90B, IBM $114B
- Lickable Screen – Norimaki Synthesizer
Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Episode 221 of the Jason & Scot show was recorded live on Wednesday, June 3rd, 2020.
Transcript
Jason:
[0:24] Welcome to the Jason and Scott show this is episode 221 being recorded on Wednesday June 3rd 2020, I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.
Scot:
[0:40] Hey Jason and welcome back Jason Scott show listeners well given the tragic events this week we totally understand if Talking Shop isn’t really a top priority for you but we thought that some of our listeners may be in the mood for a little bit of a mental distraction we sure are,
and there is some interesting news happening in the world of Commerce so we thought we would bring you what’s been going on the last couple weeks with that Focus before we jump into the e-commerce retail payments news Jason what have you been up to.
Jason:
[1:11] Yeah I have been just talking covid non-stop with clients which is exhausting and mostly depressing to be totally honest with you Scott.
But I get some point we should will probably do a deep dive on the show about all that but that is not tonight.
I did do a couple between all these talks I have done a couple of interviews recently so in the highly unlikely event,
you want even more Jason opinion there’s a couple new written things out there so I’ll put some links in the show notes but I got a chance to do an interview with the national retail Federation that they published last week,
and then a past guests on the show Chris Perry does these interviews on LinkedIn that he calls leaders of change and since he couldn’t find any leaders this week he interviewed me instead.
Scot:
[2:04] I missed it in RF thing what was the overall topic on that.
Jason:
[2:09] Well you know talking a lot a brief interview about the.
Adoption and transition to digital and commerce so stuff that,
maybe not very shocking to listeners on our show but to a lot of the more traditional brick-and-mortar retail side of in RF they still needs an evangelizing so.
So they wheeled me out to talk digital transformation.
Scot:
[2:36] What’s digital how do payments work stuff like that what are these smartphones that people speak of.
[2:51] Well let’s tease the covid think so what are your clients thinking about are they thinking about kind of I keep hearing this new normal,
which is kind of maybe overdone but maybe that’s your favorite it’s actually faster Forsyth.
But you know so I think we all agree there’s going to be a lot of consumer Behavior changes is that kind of like what people want to know about her.
Jason:
[3:11] That is part of,
Rashad tobacco Allah who was on our show a month or two ago I can’t I can’t keep track of time anymore he calls it the new abnormal which maybe feels more apropos to me,
but we are like a super interesting thing is there’s a bunch of.
New behaviors were seeing from consumer mostly As a result of shelter-in-place orders and so there’s there’s.
Really interesting questions about each of those behaviors.
Are they permanent new behavior is there going to be a counter Behavior as soon as the shelter-in-place orders of lift which like we are now starting to see,
shelter in place order is lifted is is there going to be a new behavior that some some place in between the old and the new the scenario planning about like which of these are permanent versus temporary shifting in shopping Behavior,
are super interesting so we have a lot of conversations about that,
but I’ll be honest a lot of my clients are looking on the slightly longer Horizon and you know what they’re really thinking a lot about now is,
kind of shifting into the recession Playbook and how they you know appeal the more value oriented consumers and you know how,
deep and along the recession is likely to be and what the potential recovery looks like.
[4:36] So a lot of kind of conversations about how how the recession will likely impact various businesses,
um one I bring up and we talked a lot with clients about is.
How the world changes because of the changes in the landscape so we’re seeing tons of stores closed we’re seeing tons of,
market share getting Consolidated into the biggest players in every category and so if you’re a brand as many of my clients are it’s a pretty big deal like the,
your top few customers are you know getting a lot more leverage over you than they had before and so you know the.
People have to think about operating in a different competitive landscape than.
Then they were thinking about pre covid and then II 10 we we have brought in like these epidemiologists and these economists and we’re you know trying to do the best job possible a painting a picture of.
Of like.
How what recovery looks like for this whole thing and it’s mostly super Debbie Downer news and it’s you know it’s mostly evidence that like there’s going to be repercussions from this that last for a considerable period of time so folks that were hoping,
that like this is really something they just have to worry about through the rest of 2020 or maybe even 20 21 or are unfortunately probably optimistic so so having a lot of conversations about consumers about why that might be.
Scot:
[6:05] Wait at ease up an exciting Deep dive that we may put down next week that will depress the hell out of you.
Jason:
[6:11] Yeah yeah exactly I do try to put some happy moments in there as bits of levity.
Scot:
[6:19] Nice I’m sure that Lance roll know real well.
Jason:
[6:22] Yeah yeah you were just channeling my wife right there by pointing out that I’m not as funny as I think I am.
Scot:
[6:28] We have to keep keep your ego in check their Jason how about upcoming events anything on the horizon that’s interesting.
Jason:
[6:39] Yeah there’s a few things booked but one that’s going to be fun is another internet thing they’re doing a live webinar about global Trends from the reopening of stores.
And they’ve asked Sue charita code I’m Al Peru.
Longtime friend of the show and myself too.
Kind of share some of the global trends that we’re seeing from markets that may be reopened sooner than the US has like in particular China,
and you know what we can learn from those those markets in terms of how things are likely to reopen here and I don’t want to spoil it but I think there’s going to be a,
third guest panelists that we can’t announce yet but hopefully.
As if surgery and I weren’t enough that will make it even more interesting so that’s a webinar on June 8 so if people are interested in registering for that I will put a link in the show notes for that as well.
Scot:
[7:37] Registering right now I’m curious to find out who the mysterious third guest is.
Jason:
[7:42] Yes I know that’s it’s what we call a teaser in the in the professional promotion business as I’m in.
Scot:
[7:49] Nice and I spoiler alert it’s not me so boom that narrows it down to 300 million other potential guess I guess.
Jason:
[7:58] Exactly most of which would not be as interesting as you yeah.
Scot:
[8:02] Thank you okay people get enough of the the Jason Scott show we want to keep it exclusive here suture Rita can only have one of us on our shows at a time.
Awesome let’s jump into news it wouldn’t be a Jason Scott show without.
Jason:
[8:19] Amazon news new your margin is their opportunity.
Scot:
[8:33] So Jason I saw a couple interesting things going on with the Amazon so first of all let’s talk about logistics I don’t know about you but with kind of
pandemic and all the other stuff going on the Amazon Prime Vans have been humming here in my neighborhood and then I saw that Amazon is beefing up their plane Fleet
they have about 80 now they’ve added 12 recently and have plans to get to 200 planes
putting that in the comparison FedEx has 650 planes so still very small compared to FedEx and then,
I being in the fleet Fleet World here suddenly I’m very interested in the size of their Fleet
and it’s really interesting so Amazon rolled out their delivery service provider program and when they did that they announced they had a
acquired 20,000 Mercedes sprinters that is early nineteenth announce that
and then since then they’ve been really quiet about updating the number of vehicles in that Fleet and I feel like they probably are.
[9:36] Double if not triple that so another thing I’ve learned watching Amazon over the last 20 years is when they get really quiet about something that means.
There’s something going on there
so I feel like they’ve really grown that Fleet and then the other news on the Fleetside is they did place an order with ribbon who is the electric truck provider they ordered kind of a hundred thousand of those trucks that’s out there I think those are 20
2120 22 kind of thing and I’m sure it’s going to take years for Ruby and to produce that many vehicles
but that was interesting for those of you that keep up with that and then we reported on a previous new show that
there was rumors that Amazon was going to move Prime day from its home in June late June to September that was never confirmed or denied by Amazon.
[10:27] But they have announced that they are doing a June 22nd summer sale I’m doing air quotes for those of you that can’t see me which is everybody you know so it’s really interesting so it’s almost kind of like
they’re keeping the slot toning it down and then maybe they’ll do a September,
and they just essentially said kind of messaging was that they were doing this to jumpstart summer sales what do you think about the logistics moves and then this summer sale Jason.
Jason:
[10:55] Yeah it’s complicated so the logistic moves ya like,
there’s going to be some other logistics news non Amazon news later in the show that kind of Dove two doves tails on this but it’s so smart in such a huge advantage,
to own more of your own fulfillment and Logistics capability and that’s like that’s going to be an increasing competitive Advantage so even if Amazon never does anything but use that capacity for their own internal needs,
um it’s a big deal and like when you’re comparing Amazon to any traditional retailer like saying you own a tea 737s.
Is like you know a pretty giant step ahead of Walmart or anyone else in terms of.
Of logistic capability and I haven’t heard anything about this but I’m partly wondering since like all the airlines the passenger Airlines aren’t using their planes are planes like can you get used planes just cheaper right now.
As they all downsize I don’t know.
Scot:
[12:00] Absolutely yeah there’s got to be a used car markets crashing I’m sure the plane Market is tough too.
Jason:
[12:05] Yeah so smart stuff there that just going to extend the the digital advantage that Amazon has,
more on that later and then the sale thing is really complicated Prime is so successful that a lot of my clients now try to counter.
Program against Prime day and so,
in unintended consequence of all this ambiguity about primed as it’s driving a bunch of other retailers nuts right because,
they like to plan some counter programming and they have no idea like win or what Amazon is going to do so that’s kind of interesting I think it’s really interesting if they’re going to land in a September date because,
um potentially September ends up being a better permanent date for that big tent post than.
[12:58] The traditional summer date does right because it it potentially just kicks off holiday even earlier,
and they can kind of maintain that momentum.
Like from September all the way through holiday that that could be interesting there’s some risk associated with that but they’re in a way they’re going to get a free test this year to see how it goes so so I’m going to be watching that that Prime day carefully.
And then this September date sliding this in is interesting and controversial a like vendors aren’t getting as much notice as they,
they normally would so in a way this is like the first Prime day where vendors got kind of.
You know are getting solicited at the last minute to see if they want to participate and what kind of deals they want to offer.
[13:48] And you know so in some ways it won’t be as comp it certainly won’t be as comprehensive as a traditional Prime day is,
the you know it’s debatable whether Amazon is like all the way back with their service levels and so.
You know adding a big demand spike in June is a little risky right like because if their.
If I look at customer SATs cores from Amazon they’ve dropped down there’s a lot more negative reviews for fulfillment from Amazon the last couple of months than there usually are,
and now you know they’re going to put more pressure on their system so it’s a little,
interesting that they feel confident enough to do a summer sale and then you know there’s always going to be detractors but there’s a lot of people talking about like is just the climate in the country.
Um right to be doing a big sale right now when there’s so much you know negative stuff going on.
[14:44] You know I don’t know that’s that’s tough tough to judge but you know I think one way or another,
the remainder of this year is going to be the mother of all liquidation sales as all the apparel companies try to,
you know sell that that stale inventory that’s been locked in their stores for the last three months and
you know everybody’s going to be downsizing tons of stores are closing and all that distress inventory is going to get liquidated through all these other channels so I think like,
you know the Amazon summer sale is going to be one of many price oriented promotions that consumers are just going to get flooded with it’s going to it’s going to be a really interesting consumer experiment but don’t pay full price for anything this year.
Scot:
[15:27] I’ll take that advice to Heart.
Jason:
[15:31] Yeah.
Scot:
[15:31] So I saw that someone I forget who did the investigation on this but there was a there was a building sold in your neck of the woods and people have identified that Amazon’s up to something and that building.
Jason:
[15:44] Yeah I have said this before and you know people are still skeptical but I’m convinced that Chicago is Amazon’s favorite Market,
almost every new cool thing they do they either do in Chicago first or they bring it to Chicago extremely quickly after they do it somewhere else first.
And so for listeners that follow Amazon closely.
There is a new Amazon grocery store that was scheduled to already be open in Woodland Hills California which is a suburb of Los Angeles.
[16:17] It’s about a 20 memory serves 22,000 square foot store,
it was scheduled to open already like reporters had gone by and it was pretty close to opening prior to covid,
and then as a result of covid the store didn’t open but it’s very clear that Amazon has been using it as a dark store to do grocery delivery so we’ve seen a bunch of delivery drivers in the parking lot shuttling orders,
back and forth and a lot of speculation this this store is not it’s a grocery store it’s not branded Whole Foods,
it’s much bigger than Amazon go Amazon went on record and said it’s not going to have the cashier OS self checkout system that that Amazon go stores have hashtag J Watson,
so it’s going to be a traditional grocery store under a different Banner than Whole Foods and then the big Revelation was,
that a significant chunk of this 22,000 square foot store is what we call an automated micro fulfillment center in the back of the store so this is a.
[17:25] In Auto picking robot that stores a lot of the groceries in different climate zones and you know when it gets an order it fills all the bags with all the products,
and so this is a brand new grocery concept from Amazon we’re super excited to see it if that that auto replenishment system is already running,
that’s a great tool to use for a dark store so that’s make sense why they’re doing this thing in LA
and so now they’ve announced a second store which is almost certainly going to be in the same Banner is that La store here in Chicago but it’s 43,000 square feet so that’s very large by grocery store standards,
to put things in perspective it’s a former Babies R Us store so it’s a.
Scot:
[18:07] It’s a bigger than a whole food so Whole Foods feels like we have one that has like an extended.
Jason:
[18:12] Yeah they range the biggest Whole Foods are in that 42 I think there might even be a 50,000 square-foot Whole Food store but but a lot of Whole Food stores are in the 20 to 30,000 square feet so 43 is on the big side for Whole Foods.
Like like a bigger Whole Foods this store like is reputed to have restaurants & dining service and things in it’s going to be interesting to see.
If those were pretty covid plans and how those plans change because of covid.
But I’m excited like even even if we’re not doing a lot of international travel sometime this summer the store supposed to open so I’ll get to go do a,
store visit and report on what Amazon sees the future of non Whole Foods Grocery looks like so it’s,
that is some exciting news.
Scot:
[19:02] Is the robot thing on modified Qibla or is it a whole new you.
Jason:
[19:05] No like so third party if you’re a general merchandise system like there’s a couple of these automated picking systems out there like perfect pick and auto store,
and how they mostly work as their bin based so products it in a bin and a Big Grid and then these like,
robots can Shuffle around the bins and so most of these micro fulfillment centers and these are companies like Fabric and take off Technologies Walmart has when they invested in called alphabat,
they’re these they’re kind of like the automated picking systems except the bins live in different temperature zones so usually they have a ambient temperature zone a refrigerated temperatures own and a frozen temperature zone,
so that when they get a grocery order they can you know grab the cereal from the ambient temperature and the,
the milk from the refrigerated and the frozen pizzas from the.
The Frozen aggregate those all in a shopping bag and then put them in your car for curbside pickup or put them in a delivery guys car for home delivery and,
my speculation is,
that’s also going to be used for in-store customers so I have a feeling you’re not going to be shopping for cereal in these stores and walking down an aisle of cereal I think you’re going to get your cereal bye.
[20:25] Placing an order on your mobile phone and the and,
the micro fulfillment center filling the bag with your cereal and I have a feeling the mean like physical things you’re going to do in this store our shop for things that you want to pick yourself like produce and meat and things like that but that’s entirely just my speculation at this point.
But those micro fulfillment centers are super important.
[20:47] It reduces the cost to pick a grocery order and remember a grocery order likely has sixty to a hundred twenty items in it versus a.
An apparel order is going to have like one to two items in it so the cost to pick that order the auto-replenishment micro fulfillment systems,
reduce that cost by about 90% so they’re they’re basically essential if we’re ever going to get the unit economics for digital grocery to make sense.
Scot:
[21:15] Michael the and we’ll talk about that a little bit more later in the show how about any interesting Amazon news your non Amazon news retraction.
Jason:
[21:23] Yeah yeah they’re a few random things I probably think this things more interesting than anyone else but Gucci has launched a pretty clever service.
In response to covid so they’re calling it a personalized video shopper,
and so essentially what they’ve done is they’ve set up a store in their customer service center and they have.
Customer service reps are like literally using a FaceTime like service,
to show you merchandise they that you’re thinking about buying so it’s kind of like a sales assisted experience our client telling experience,
over video conference so you’re thinking about buying a handbag like the a sales person that you’re talking live to can actually like.
[22:13] Grab that handbag off the shelf and show it to you for example and.
Like honestly I don’t care that much about that feature for Gucci but I actually think that that experience makes a lot of sense,
I don’t remember we’ve talked about on the show a lot but most of my appliances have died during covid and so I’ve had to like replace all my my laundry and kitchen appliances,
and we had to shop all those without going to the store right and it frankly would have been super helpful if a sales person could have.
Why gone on FaceTime and showed me you know some of the refrigerators they were recommending in person,
and I just think in this new world where less people are going to be allowed in a store and where you know they’re trying to amplify the effectiveness of human salespeople,
this idea of salespeople telepresence is going to going to be a bigger idea so I’m interested to see,
how customers take to this the Gucci version of that that experience would you want to Alive salesperson help you with your Gucci shopping Scott.
Scot:
[23:18] I insist on it generally when I do my Gucci shopping I was at where was I,
I was in a foreign land I was in Italy and went to Louis Vuitton store and they were doing this
of course this is way before covid
and then it was interesting because there was two lines there was a Chinese line and then a non-chinese line and the Chinese line they had Chinese speakers that would come and meet the Chinese people that were in that line and then those folks
very frequently it seemed like they had been paid to come.
[23:58] Almost as a personal physical Shopper but then they would fire up a FaceTime and so you had a good not good cheap but a Louis Vuitton sales person a Chinese person and then they would be talking to someone on a FaceTime and showing
the wall of product and they would I watch this it would
each transaction was like a good 30 minutes they would pull down some bags someone on the FaceTime would say well show me that one over there and then they would pull it down and look inside of it so there it was clear the person on the FaceTime that was doing the shopping so so
it’s a maybe maybe Gucci kind of got this idea from some of their Chinese Shoppers watching how they’re doing it and then
yeah we’ve had I’m on the board of a non-profit
that helps homeless folks that are coming out of homelessness they frequently get into you know a residence,
like a habitat or something like that but they don’t have any furniture so this this company provides this really cool showroom where they can come pick up their Furniture right now they can’t come to the showroom so they’re doing the same thing they’re doing face times with the clients to show them here’s six different couches we have do you want this green one
what are the measurements that kind of thing so it’s interesting I think I think Innovation comes from these this necessity of we can’t be there what’s the next best thing.
Jason:
[25:21] Yeah no it’s fascinating and you think about it like a pre covid problem is
you got a super busy store in Manhattan and then there’s a store in Iowa that’s not very busy,
why can’t you use those salespeople in Iowa to help customers and in that Manhattan store or vice versa depending on the time zones,
um in that makes a lot of sense and then you think about a highly sales assisted experience like a Neiman Marcus.
If you go to the website you don’t get any of that personalized service that you’re used to from the store and why is that right and as people are shifting to digital shopping more and more and are forced to because of covid.
You know it just makes sense that you’d want to replicate some of that high-touch sales assistant experience so I think we’re going to see more of this and you know in most ways covid is kind of a,
a time machine that’s accelerating things like this is the kind of experience,
people would have talked about for a long time but wouldn’t have done because it’s too much effort and it’s too low a priority to do but now because of covid,
there there you know quickly putting stuff out there and seeing if customers like it or not so I’m excited about those kinds of tests.
[26:34] It’s– earlier in the Amazon news that there was even more Logistics news so let’s jump right to that,
earlier or the end of last week UPS announced that they were going to start charging surcharges for big shippers.
And in this is the latest step in something that we’ve been seeing a lot of.
[26:57] UPS and FedEx are seeing shipping Demand right now for e-commerce that’s very comparable to what you would typically see over holiday,
and and you know traditionally,
UPS and FedEx scale up for holiday and they hire a bunch of seasonal labor and they do all these things to try to handle that holiday Peak so now they’re having.
Equivalent Peak that they were not you know that they had no ability to prepare for in any way and so what’s happening is their demand outpaces their capacity,
and so when you win you have a limited Supply and high demand what you do is you charge more for that supply and so,
early on like several weeks ago UPS you know notice this trend that like all these closed retailers were trying to use their stores as Dart stores and ship stuff from inventory from stores.
And that all required more UPS capacity so UPS put a surcharge on that,
now they’re putting a surcharge even on the Fulfillment centers because they’re just dramatically exceeding their forecast for shipping packages,
and then this week FedEx kind of match that surcharge and they’ve added some,
some enhanced charges as well and so you know you’re a retailer you’re not selling anything through your stores right now your only bright spot is e-commerce which is way up.
[28:18] Eight normal piece of bad news is that unit economics on that e-commerce order usually are worse than the in-store order was and now you get even worse news UPS and FedEx want to charge you more than usual the ship that stuff.
And it’s a real conundrum like if these shift to digital are permanent,
um then the costs are just going to go up because UPS and FedEx just don’t have that extra capacity.
And that’s why I was sort of alluding the fact that it’s a huge overwhelming advantage to Amazon that they can deliver a good chunk of their.
Um their packages themselves and then you know they’re the last leg in this stool of logistics.
That the United States Postal Service which most e-commerce businesses heavily rely on,
is in huge huge financial Jeopardy right now and nobody knows how that’s going to play out if they’re going to get bailed out or they’re going to be able to find some way.
To continue operations without getting bailed out or we’re going to see some.
Significantly diminished service from the US Post Office so it is a very tumultuous time in e-commerce Logistics.
Scot:
[29:30] And these surcharges are in effect now are there talk about holiday.
Jason:
[29:33] Nope they’re in effect now like you would expect so normally what what the shippers do is they ask for a forecast and they price,
your your services based on that forecast and then if you significantly exceed that forecast they charge you surcharges over holiday,
and you know three holidays when you normally are going to see the rate increases the kind of annual rate increases the shippers have but now they’re putting a surcharges in effect for summer.
Scot:
[30:03] Wow crazy preparing for the summer sell I guess.
Jason:
[30:07] Yeah yeah yeah so that’s going to be super interesting stuff to play out,
and that’s going to be another nail in the coffin for I know what your favorite e-commerce business which is Kylie Jenner cosmetics.
Scot:
[30:24] OMG I love me some Kardashians tell me more.
Jason:
[30:27] Yeah well so you know about a year ago there was all this press that Kylie Jenner has become the the the youngest self-made billionaire,
and that was largely as a result of you know her being an influencer like most members of our family but instead of Hawking other people’s stuff she launched her own Cosmetics brand,
and you know there are all these reports that it was wildly successful and,
like you know they were increasing estimates that that she had sold over a billion dollars in more than 500 million dollars a year and you know her,
right as we know now didn’t necessarily know what the time the her PR agency is like you know selling all these stories about how successful she is and how successful the Cosmetics industry is,
and you know frankly.
[31:20] This this e-commerce site is frequently cited as the biggest case study for Shopify like it’s supposedly the highest volume highest revenue,
store on Shopify featured prominently in in a shareholder meeting for,
for Shopify well last year that she sold half the business to a large Cosmetics company khadi and,
Cody rather and.
The financials their public company the financials just came out and it’s a significant business but it’s way smaller than.
Had been represented so so for the last 12 months they had a hundred and seventy seven million in sales so that that’s a decent.
Sort of midsize d2c brand but it’s nowhere close to the Unicorn that they were they were sort of claiming.
Scot:
[32:18] Well that’s so Revenue they value in Revenue aren’t the same right.
Jason:
[32:24] No no but they had claimed that like I want to say over like an 18-month period that they had achieved a billion in Revenue,
the now confusingly the valuation that that Cody paid was a like reported but you know never confirmed.
That that it was close to a billion dollar valuation now she only sold 50% of it and like who knows what sort of.
Incentives where you know performance incentives were tied to that but either,
if they paid like it was a billion dollar run rate than they wildly overpaid and I kind of I kind of doubt that,
like fraudulently represented Revenue in the sale so I have a feeling they just knew it was a smaller business than the pr folks had been pitching to Fortune Magazine.
Scot:
[33:19] Yeah Anderson Well 5.
Jason:
[33:20] Yeah so sad news Kylie is probably not a billionaire.
Scot:
[33:24] Well there’s you know it’s growing fast it could get a five times I don’t know those like wildly profitable or there a subscription Revenue in there it’s not out of the realm of possibility.
Jason:
[33:33] No it’s again it’s still a successful business and and like you know I think she’s objectively a successful entrepreneur I just it’s kind of funny when they’re like dramatically inflating their own success I guess.
Scot:
[33:47] Yes I’m shocked.
Jason:
[33:50] Yes yes I know shocked and disappointed so.
I don’t know why we put these stories in this order because it feels really incongruities that we have these these like random stories but another one that’s interesting to me is instacart has launched a self-service media Network so,
I don’t know what spend a ton of time on this I was not Super Bowl champs instacart going into covid like for a variety of reasons.
I kind of felt like they had you know serve their purpose but they were declining in in utility for their traditional market and that they were having a kind of Chase smaller Grocers and and kind of move down Market.
And covid.
[34:34] Totally boosted their prospects so they’ve had a cured quarter they become way more important for way more Grocers than I would have anticipated.
And one of the ramifications of that is they now have enough traffic on their site that they have.
Meaningfully large audience to sell advertisements to.
Um and you know every retailer is trying to model Amazon and launch their own advertising Network,
but a huge problem with most of these retailers of their traffic just isn’t big enough to have very good reach so if you’re if you’re Walmart you know you you have pretty big reach so you can you can credibly launch an ad Network.
But like you know even at like Target or Kroger size it’s a pretty Niche audience and so now like instacart because they aggregate Shoppers across so many different Grocers.
Instacart becomes the you know.
[35:30] Third or fourth largest potential retail media Network out there and then a world when people can’t go in stores to see in-store displays anymore,
brands are looking to invest a lot more in retail media networks than they were a quarter ago so,
this is another favorable Trend Instagram the that will be watching closely and Instagram has launched it with an API so you can actually do.
Self-service ads and programmatic ads so you can kind of you know buy stuff on an automated basis and have it show up in Instagram I’m sorry instacart.
Scot:
[36:05] Yeah I see I’m a
unlike you I guess I’m a frequent instacart user and they’ll do a lot of clever things like you throw something in the cart and that brand will then come and say Hey will kind of cover your shipping if you throw two more of our things in the car and they’ll give you like,
then they’ll put you an experience where you just kind of picking from that Brands items that are available in that storm so is that is that kind of like a that an ad unit inside of there that they’re buying or.
Jason:
[36:30] It was I would say the historically those have been more manual.
Scot:
[36:35] So now they’ve kind of made a programmatic.
Jason:
[36:36] Yeah now I mean the big news is they’ve added this programmatic aspect but I actually think you’re going to see a lot more of that like when instacart was doing it before it was kind of controversial because.
On the one hand you’re eroding conversion right like you’re making it more complicated to check out you put the stuff in you wanted and you just want to leave and now they’re trying to sell you a bunch of extra stuff.
Um there’s very high abandonment in e-commerce so so I by doing those offers your you’re hurting conversion and increasing abandonment.
But the flip side is,
there’s not a lot of unplanned purchases and impulse buys in digital e-commerce and so by having those offers you know close to check out or those Dynamic offers based on what’s already in your cart,
um they’re increasing the size of your basket and.
In the old world they were you know most grocery retailers were just happy to close the sale so they were loath to do a lot of that cart base promotions in the New World.
A much more significant chunk of their businesses now digital and they need that that bigger cart to make it profitable so I think you’re going to see a lot of retailers adopt more of those kinds of.
Dynamic marketing tactics in the car.
[37:58] I think half the time I talked about that instacart story I called instacart Instagram so apologize for that and perhaps that’s because the next news item is.
The that Target is the latest.
Brand to be leveraging the the native check out feature an Instagram in this is super interesting to me because.
You know they’ve had this Instagram check out for a while and they launched it with like 20 Brands and they’re all brands that make sense that would be trying to sell stuff on Instagram so they’re mostly Beauty Brands or fashion brands,
Nike has had some interesting successes on the platform but they were all like companies that with a small number of skus that you know we’re heavily like influence or driven categories,
and now target has put thousands of skus for sale on Instagram so that’s going to be an interesting.
Test and like a less obvious Testa me so I’ll be really curious to see if that gets any traction or how that plays out,
obviously Target does have some fashion and some home decor so maybe it’s going to be skewed in that direction but I’m,
I’m going to be following that that new pilot quickly but however you slice it it’s further proof that the social networks are really leaning into Commerce and especially as covid is kind of.
Accelerated digital Commerce they all want to be playing in that space.
Scot:
[39:27] Very cool how about even watching shopify’s market caps or lately.
Jason:
[39:34] Yeah so again like hey you see the trend for covid is that it’s shifting more people to shop digitally so who can you invest in to ride that wave one of the best investments has been Shopify,
and their market cap is now up to 90 billion.
And shockingly like that’s getting super close to IBM’s market cap at a hundred and fourteen billion and so it’s going to be super interesting if they keep going at their current to trajectories,
in the next quarter we could see Shopify have a larger market cap than all of IBM which is just mind-boggling to me.
Scot:
[40:11] Yeah they should have dumped all the mainframes all the services and then put all the wood behind the websphere e-commerce engine and made it available Des embiez that who knew that was the strategy and don’t by Red Hat.
Jason:
[40:26] Yeah it’s crazy.
Scot:
[40:27] Cloud forget Cloud forget blockchain.
Jason:
[40:30] Like like IBM has this huge portfolio products like one small product in that portfolio was at one time the world’s most successful commercial e-commerce platform IBM websphere Commerce,
and it literally had like the largest market share of Enterprise clients and you know the most big clients relying on it and then you have this like.
Startup platform that was you know exclusively catering to small businesses in Shopify and you you fast forward five years and,
IBM had to sell off that Commerce platform and now it’s owned by another integrator and Shopify is almost as big as all of IBM it’s just it’s a.
It’s really interesting.
Scot:
[41:17] Yeah and remember Yahoo back when I started chela’s or we had to do a Yahoo store integration because it was the hot platform they totally squandered that that was that was a good platform and they just kept up with the times and mobile and everything that could have been
Hugh.
Jason:
[41:32] No absolutely yeah and in fact like you know who else had a third-party Web Store platform for small businesses at one point was Amazon.
Scot:
[41:41] Yeah.
Jason:
[41:42] So they you know arguably like they could have leaned into that and you know not not ever created the opportunity for Shopify to exist.
Scot:
[41:51] Yeah and it’s funny because Shopify is adding FBA and payments and all the stuff Amazon already has.
Jason:
[41:59] Yeah yeah I mean a lot of people are are trying to position Shopify as the big amazon competitor I don’t particularly by that narrative I think they’re way more.
Complementary than they are competitive but like you know they are like you know slowly shifting into a more competitive posture with each other so that’s going to be interesting to see play out.
And then I’ve saved the most exciting news for last Scott.
Scot:
[42:23] I saw this on Twitter go ahead and throw it out there.
Jason:
[42:28] Yeah this is perhaps the most covid friendly invention of all times a scientist in Japan has invented a lickable screen,
and it can simulate like any any food flavor on your tongue when you lick this little portable device.
Scot:
[42:49] Okay and what are these cases.
Jason:
[42:52] Well it virtual shopping for food right like you you want to
decide which dishes to order from your your blue apron or your Factor whatever your meal service is or try the new flavor of Oreos before you go to the store,
you know in theory you could have one of these peripherals on your computer at home and,
you you could fry the Green Tea Oreos,
or the cherry blossom Starbucks latte at home before you make a trip to go buy one in in person.
You know I’m I’m slightly skeptical that it’s awesome just to talk about a lickable screen.
Scot:
[43:39] Yeah there was a smell of vision thing you remember this there’s like some accessory that had like all these different there’s something like X number of things that mix together can make almost any smell or and someone had that it never really caught on and on.
Jason:
[43:52] Yeah there are so there are a lot of commercial or a factory emitters,
and there are retailers that use them like there’s a lot of retailers that have a signature smell that they pipe into the store casinos are sort of famous for this.
And you know there’s there are experts that know what kind of smells like encourage people to dwell longer and spend more money and things like that so smell is a super important,
part of the experience and I totally get it but man you know.
Customers at the moment don’t even want to use a touchscreen much less a lick screen so I feel like the timing may not be.
Scot:
[44:36] Yeah we’ll see I think you owe it to our listeners to buy one of these and then you can report on it.
Jason:
[44:43] I for sure will inside note well I think the science is really tricky in a way taste is easier to do than smell because there is.
Like almost Limitless variety of all these Esters to make different smells,
but like taste is really like five different senses and so what these guys have figured out is,
we just need these five different gels that each trigger one of the five taste senses and by just you know delivering them in the right ratios we can simulate almost any any food flavor so it’s kind of interesting.
And we did promise a shorter later show this week so that is going to do it for this show as always if we screwed something up more than usual feel free to let us know on Twitter or Facebook,
please please please jump on iTunes and give us that five star review,
but we really appreciate everyone listening and you know I hope everyone is safe and doing as well is possible in these.
Unprecedented uncertain times that we’re living through right now.
Scot:
[45:45] Thanks for joining us everyone and until next time.
Jason:
[45:48] Happy commercing.
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