A weekly podcast with the latest e-commerce news and events. In episode 259 we cover some weekly news and answer listener questions.
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News
Amazon is building Micro Fulfillment Centers to deliver fast-moving grocery & convenience SKUs in under 45mins. Locations include Seattle, DC, Baltimore, Dallas, Nashville, Detroit, Chicago, San Diego, Phoenix launching this year.
Listener Questions
- Ted: will headless commerce take off in 2021? why/why not?
- RetailRazor: Amazon has been getting hit w/an endless series of media articles about their private label development at the expense of other merchants on the platform. But #retailers have been doing this since, well, forever. Ex. – Dept Stores private label apparel. Why is Amazon different?
- Wanda Cadigan: We’re seeing a big increase in visual media use cases for e-com. It’s the new digital proxy for in-store experience. Curious on your thoughts around shoppable video trends and adoption esp. in Americas.
- Darin Archer: When will we have a major paradigm shift from the online store? Category pages and PDP’s seem dated in the era of TikTok. Instagram shopping and all those other things are like pop-up shops. When will retailers make a big step change in the experience?
- Brendan Witcher: When will the Jason And Scot Show T-shirts finally be made available and can I have mine signed before you send it? You guys rock! Thanks for helping to keep balance in the (retail) Force.
- Kevin Cronin: Thoughts on e-com conversion tracking and how it has +/- impacted companies/industry.
- BinhWinn: What do you think is keeping Amazon from entering the promising African market?
- Kelly Goetsch: Looking forward to the episode! I’m seeing all the CX-related vendors (Salesforce, SAP, Bloomreach, Acquia, etc) building or buying CDPs in the past ~12 months. I get the value of CDPs but why were all of these acquisitions done so rapidly? Is this related to 3rd party cookies?
- tec_wiz: We have seen a significant “stimi” bounce on Amazon, do both of you feel the reopening exuberance will keep the sales acceleration going and if so for how long? Interested to see if you two are in the Jamie Dimon camp?
- Trevor Sumner: There will be a multi-billion media shift to in-store. Who controls the brand spend? Will it be media folks? Will shopper marketing and trade dollars increase? How will brand orgs need to transform to take advantage of the digitized store?
- Scott Silverman: What do you think will be the most surprising post-pandemic consumer behaviors that e-commerce retailers should prepare for?
Episode 259 of the Jason & Scot show was recorded live on Thursday April 8, 2021.
Transcript
Jason:
[0:24] Welcome to the Jason and Scott show this is episode 259 being recorded on Thursday April 8 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.
Scot:
[0:39] Hey Jason and welcome back Jason and Scot show listeners Jason how’s your spring going up there and sunny Chicago.
Jason:
[0:47] It is going well but you you’ve already thrown me for a loop I don’t deal with change and you took the year out of our intro thing so I total I’m totally messed up now.
Scot:
[1:01] It’s 20 21 so you’re back.
Jason:
[1:04] Thanks thanks I appreciate you appreciate you saving me ya know spring is going good we had two lovely days of like,
like High 70 low 80 degree weather here and I got super excited and then as is often going to happen in Chicago it was all a mirage because today it’s like 16 raining.
Scot:
[1:24] Want want want sorry to hear that here in North Carolina it’s funny because we’ve had,
Bob’s Ilion New people move to our state some of them from the Midwest a lot from California New York and when they move here we’re always like hey in February,
used to be get ready for pollen season it’s going to be like
unlike anything you’ve ever seen in their lap and like we have pain and San Francisco are you crazy and then are real pollen season hits which were in the thick of right now and they lose their minds because
you literally get a you know coating on your car where your car is essentially just looks like it’s been painted yellow so we are in heavy heavy pollen season right now,
I have seasonal allergies so I am you know pretty pretty loosey-goosey right now I think I’ve had like 16 Benadryl ‘s and 5’s vertex of so if I’m a little spacey it’s due to that.
Jason:
[2:14] I love that yeah I was going to ask if you like develop a stronger immunity system because that would that would wreak havoc on me although it has to be good for the car wash industry.
Scot:
[2:27] It is so that’s the computer that’s the Silver Lining so yes we we are very very busy right now so it’s good a good thing.
Jason:
[2:35] Yeah where I grew up in Southern California we had a very similar issue the saltwater from the beach would make all the cars filthy.
Scot:
[2:45] Good we will have to look at San Diego as a possible location.
Jason:
[2:49] Yeah the beachfront homes in San Diego.
Scot:
[2:53] So tonight we have a lot of good listener questions but before we get to that it wouldn’t be a Jason Scott show if we didn’t talk about a little breaking Amazon news.
Jason:
[3:11] News your margin is their opportunity.
Scot:
[3:20] Jason I was excited as our resident grocery Guru in the chief digital grocery retail.
Grocery grocery store officer I wanted to get your expert opinion I saw this on Twitter I guess there’s a magazine called hungry and it’s missing a bunch of vowels H NG Ry,
hindery and they had a scoop so they have confirmed that Amazon is building 11.
A hundred and forty thousand square foot micro fulfillment centers.
It’s kind of funny to talk about a hundred forty thousand square feet and taught micro but I guess you know when the alternative is a million it is small,
and they are designed to move a hundred thousand fast-moving Grocery and convenience cues in less than 45 minutes,
and the initial set of cities are Seattle Washington D.C Baltimore Dallas Nashville Detroit Chicago San Diego Phoenix and going to be launching them this year.
This is super interesting to me because we had we’ve had several amazonians on the show past amazonians,
and Amazon does these pretty big Cycles on an annual basis where they’re going to make big Investments and to me this was a really big signal that they’ve decided that this is an important category.
So I tweeted about this and then I had several.
[4:39] What I would call Amazon insiders not bullies but people that are maybe in orbit away from Amazon and know what’s kind of going on and the thing that surprised me is that there,
they were saying that go puff we’ve talked a little bit about on the show but I want to use this entree into that to get your thoughts on that too.
They are growing at a tremendous Pace I’ve heard several people say they have over a billion dollars in sales they are a retailer so it’s not a gmv Marketplace kind of thing so GM ve is real Revenue.
And then they didn’t acquisition of an alcohol company that was also about a billion dollars so now they’ve got kind of a two billion dollar company they’re going after some categories and areas Amazon is very keen to get to so the grocery and alcohol,
I looked him up in some of the databases that go plows raised over two billion dollars you know squarely in the,
if passed the Unicorn status which is over a billion dollar valuation I think they’re into the DECA unicorn kind of status
so really interesting moves here you’re kind of I guess a battle between these two folks breaking out into the open what do you think about all that.
Jason:
[5:49] Yeah yeah there’s a lot of interesting stuff going on there the maybe I’ll start with BevMo and work backwards to Amazon Amazon or go puff and work backwards to Amazon.
The you know we talk a lot about covid accelerating trends that already existed this whole notion of.
Delivering alcoholic beverages was already really starting to pick up some steam we’ve had drizzly on the show before which was one is one of the dominant players in in alcohol delivery and most of them are via these.
These are complicated Marketplace models because you have to do the delivery from someone that has a liquor license.
[6:30] And so then the pandemic vastly accelerated liquor delivery because under normal circumstances the vast majority of alcohol is consumed.
What the industry calls on premises which means at a bar and so because you know Bars were closed or constrained so much,
we certainly were consuming way more alcohol at home which means we had to buy it or get it delivered,
we got a bunch of meals delivered from restaurants that weren’t allowed to bundle alcohol with them in many cases so all of these Trends made it really accelerated the alcohol delivery industry and.
I don’t you know we don’t there’s not great numbers but my sense is that no one benefited more than go puff and partly because they,
are closer to a first-party model so they did by a very significant alcohol chain on the west coast BevMo.
Um so they own a bunch of their own liquor licenses they own a lot of product that they deliver to people,
and they actually started out not delivering the liquor but delivering the snacks so go puff started out do everything you know Munchies presumably to people that were high.
[7:47] Um hence the go puff delivering snacks on college campuses and so.
Part of their model is they actually inventory their own snacks they have these micro fulfillment centers and so buying BevMo give them a bunch of liquor licenses and it also gave them a bunch of locations that they could stage.
[8:09] There there fast-moving food alcohol items and go puff is always focused on cold so they’re one of the best.
Nationwide cold chain one hour delivery services so if you need to store something cold and then deliver it.
They’re one of the few options out there so for all those reasons.
Go puff is booming then you know we throw in the trend we’ve talked about a lot on this show the retail media networks and all these sellers you know monetizing their business by selling ads,
so you know go puff has been able to successfully get a nice chunk of AD revenue from that,
and I have to believe Amazon sees that and says hey we need you know they obviously have a lot of their own plans and capabilities around to our delivery of those kind of items,
and I’ll bet you go puff is sort of accelerating Amazon’s aspirations.
Scot:
[9:06] Another another Insider told me that go puff has an ad Network that’s kind of getting a fair amount of traction and that’s another thing that Amazon’s attention you know we’ve talked about on the show that they’re their ad Network.
It’s getting a lot of steam it’s kind of getting to be almost the scale of AWS and contributing quite a bit of profit
it’s in the kind of pesky other category so it has some other things mixed in there but from what we can tell it’s pretty pretty large and growing making Amazon the third largest ad Network behind Google and Facebook.
What do you think about does that make sense to you or you familiar with this go puff ad Network.
Jason:
[9:46] Yeah a little bit It’s Tricky I do think they’re generating some significant Revenue.
The the wrinkle is.
Advertising for alcohol is dicey so you know so I think what go puff is generating the most is is right these ad revenue from the these like cpg snacks and things like that that are getting delivered,
with the alcohol like the you know the bummer is the alcohol people spend so much money on pram and with that clothes they would have shifted a bunch of money into these other channels but it’s.
It’s risky to do and and you know most of the big players aren’t willing to take those.
Those sort of risks with with the various compliance and to do so.
So that’s a little complicated and then I you know I would say they’re probably generating a bunch of Revenue but it’s not a very mature platform with a lot of tools yet and so I haven’t seen any.
Any sizing on it.
Scot:
[10:46] So that is the news and now let’s go into.
Jason:
[11:01] This question question question question question.
Scot:
[11:08] All right our first listener question comes from Ted and he says and I’m going to shoot this one over to you Jason well headless Commerce take off in 2021 why or why not.
Jason:
[11:23] Yeah,
talked about a lot we’ve covered it few times on this show just for people that may not be familiar it’s a it’s a method of.
Implementing an e-commerce site so instead of a piece of software that’s kind of a monolithic software that has all the check out functions and product catalog functions and all those sorts of things with the user interface.
Um it’s a it’s a system where,
where the software company provides a bunch of apis and you kind of build your own e-commerce experience leveraging those apis and it generally you build your own user interface so hence it’s headless,
um and it’s the definitely the most trendy architecture right now it’s talked about the most.
[12:16] The and it kind of is catching on but the reality is we’re just not really going to know because one of the problems with headless Comet or it’s a benefit of headless Commerce but it’s a problem when you’re tracking it is.
You can do it very piecemeal right so you could you could have mostly monolithic software and you could say oh you know what,
my checkout isn’t very good and I can’t take all the the alternative payment methods I’d like so I’m just gonna,
improve my checkout flow and so you could add a couple headless apis just for the checkout flow and it could be.
Four percent of your total e-commerce site but now you’re partly headless so you know so I would say.
[13:02] Most people that build something new are going to adopt a technology like that but it often is very incremental versus a big bang where you kind of rip out everything you had and put something else in so it’s it’s a little bit like the.
The so slowly increasing water temperature in the Frog like we’re all getting boiled by headless Commerce but like I don’t know when you’ll officially declare it like taking off versus not taking off.
Scot:
[13:29] Yeah and so some of the big players so there’s Commerce tool or tools and then,
Faisal has a company called Fabric and we had some confusion over multiple Fabrics but he is one of the fabrics and then anyone else there’s because I’ve seen
I’ve seen some of the Shopify folks and sidebar it seems like they’ve hired everyone I know in e-commerce at Shopify those guys are hiring it’s like some kind of an incredible clip right now.
I see them all talking about how they effectively,
are at least framing Shopify as being a headless player which doesn’t make sense to me bless there’s like some study Pi is enough moveth so who are the players and is Shopify a player.
Jason:
[14:10] Yeah so there’s kind of a couple categories of platforms that that offer headless Commerce and it’s such a buzzword I like a lot of other things I would argue people that like.
Are are not very truly headless Commerce.
Have an offering they would call head owes Commerce but so there’s a bunch of traditional platforms that were monoliths that saw this trend coming and kind of pivoted right so,
to me that would be someone like an Alaska path,
that that kind of had a turnkey platform and they really like focused on the Headless version of that platform and today I think.
[14:45] Any new customer is probably mostly headless the all of the the brand new platforms tend to be headless so certainly fabric.
Um
There there’s a bunch of small players it’s pretty fragmented industry you mentioned Commerce tools which to my knowledge
was really the first platform out there that was headed west so there now they’ve been I want to say they’ve been doing headrests for like 10 years they were originally a spin-off of hybris before sap bottom.
And so those guys have been doing ahead of us for a long time and.
Traction but then there’s the the traditional SAS players and the two biggest examples would be Salesforce Commerce Cloud which formerly was demandware and Shopify in both of those are.
Monolith software that’s offered via SAS but both companies have recognized the Headless Trend and have launched.
Separate products which are an API SAS model so you can rent.
Salesforce Commerce apis and build your own head with solution that leverages the Salesforce infrastructure and similarly you can.
Via Shopify plus you can rent apis from Shopify and build a headless solution and Shopify plus so they they both are very legitimate.
[16:11] Head West Solutions but I would say you know as a percentage of their total user base it’s a small minority of their user base that have that headless configuration.
And then in the case of Salesforce one other note I would make is,
one of the problems with headless is okay so now you don’t have a user experience or a GUI and you have to build that yourself and there’s cost associated with that and you may or may not be good at that you may not follow all the,
the industry convention so there’s pros and cons to not getting a,
a store in a box and particularly as we talked about on this show a lot mobile is so complicated and evolving so fast that there was a company out there called MOBA 5 that had built a really good.
Mobile user interface that could leverage all of these these Head West Commerce tax and they were acquired last year by Salesforce because that’s.
There’s so much energy there so now somewhat ironically,
you can buy MOBA fi user interface and Salesforce Commerce cloud apis and put them together and I you know you’re technically headless on the one hand but on the other hand you got a complete TurnKey solution from Salesforce.
Scot:
[17:30] Yeah it’s like when you were a kid remember those things that had like three little sections and you can change the purple head the body and the feet so sounds like that’s kind of where we’re going to.
Jason:
[17:39] Yeah I mean that the simple metaphor for these platforms are like Legos right so you know you get a kid a little Legos and you can you can snap them together like the picture on the outside of the box or you can you know snap them together in an entirely different way if you.
[17:57] Um
so let’s go to the next question also from Twitter this is from retail razor and the question is
Amazon has been getting hit with an endless series of media articles about the private label development at the expense of other merchants on the platform,
but retailers have been doing this since well forever example department stores private label apparel why is Amazon different.
Scot:
[18:25] Yeah and this is a while I’m an Amazon Guru I’m not a huge on politics but but this is a political kind of thing that’s going on here so
you know you’ve got so you got Jeff Bezos world’s richest man I think at this point yeah I think Elon is kind of
catching up to him at some point I think they crossed for a little bit one what does.
Jason:
[18:50] They did but it shouldn’t even count because you know Jeff Bezos has like ex-wife that also has 40 billion dollars.
Scot:
[18:57] True yeah but she’s not giving it away as quickly as you can so she may actually.
Jason:
[19:02] She’s much more admirable than him that’s true.
Scot:
[19:05] She may be the millionaire poor house and then,
you know another thing is he bought the Washington Post which is you know also seems to have caused a lot more political kind of Venom to come his way.
And you know Amazon itself is a big company and you know there’s they’re just easy to shoot at and so you’re hearing a lot of talk antitrust talk a lot of folks want to break them up,
the two most vocal that I see are Bernie Sanders and Elizabeth Warren yeah they very much want to break those guys up Bernie Sanders is always talking about how they pay more and you know.
If you look at the disparity between what Jeff Bezos makes and the $15 an hour employee that’s a big number.
[20:01] Let’s Elizabeth warrant then there’s Amazon doesn’t pay taxes because they take every penny they make in plow it back into growing and hiring more people and and buying where houses and building,
we just talked about they’re going to build you know what it was at Eleven Hundred and forty thousand square feet facility centers that’s not cheap I don’t know.
Each of those maybe 50 million bucks so that’s 6 billion dollars right there,
you know so so they don’t they take every penny of profit and they just see such a big opportunity they keep plowing it in and therefore they don’t make profit and you get taxed on profit so they don’t really pay taxes and then of course everything he does a lot of you know.
Corporate all legal but corporate setups so that they can avoid taxes like.
They’ll have their European group and some kind of a tax-free area and you know they will set up the structure of the companies to minimize taxes globally and then also the United States.
[21:02] So I think that’s why they’re under a Target and then you know there’s it’s also really easy to find third-party sellers that are brands that have sold on there and a private label came out of their stuff and it’s,
it’s kind of catnip for reporters to find a,
it’s very easy to find people that are very upset about Amazon I see it on Twitter all the time yeah there’s third-party sellers that are very unhappy about the way they’re treated and creates a lot of possible content.
So that’s that’s my take I think it is.
If this ever got into a court and you were looking at the facts I think retail razors right that there’s nothing new going on here and it’s kind of silly to argue this,
it’s even silly the argue the antitrust argument because you know I think it’s pretty fair to Define Amazon in the same context as Walmart right and.
[21:57] Walmart is as big or bigger so it’s not like Amazon is got some.
Position compared to like a Walmart targets really big there are other very big large retailers and there’s it’s also hard to point to note the consumer being harmed.
Poor consumers they’re getting cheaper stuff faster its there’s not a lot of,
it’s not like a monopoly where your price gouging or there’s no choice anything Amazon’s Lord prices and increased choice.
Now that being said if you look at Europe Dave kind of defined monopolies differently in there it doesn’t have to be a consumer damage so there’s a lot of talk about that kind of coming,
and then the Biden Administration hired someone that has that similar kind of a take on on antitrust that it’s really.
The size and not the the consumer.
[22:50] So those are my loose reading of some of the political winds you know what.
My take is companies move a thousand times faster than governments and they’ll be able to,
navigate whatever the government throws out them succeed if we all remember well you and I remember the Microsoft all the who are around antitrust,
Microsoft’s doing okay after that they’re they did find they had to just kind of do some,
little things around their browser they spend a bunch of money around it but at the end of the day it was effectively a slap on the wrist of anything so so I don’t think it’s just a lot of noise and I don’t really foresee there being anything that slows down Amazon from this.
How about you Jason.
Jason:
[23:31] Yeah I mean there’s a lot there I won’t rehash it all but.
[23:39] I think you’re right like I think the biggest companies in capitalist economies are always,
targets for a lot of concern and they’re generally there are always some valid concerns and there’s always a lot of.
Scrutiny that isn’t necessarily valid right and certainly you know Walmart’s head is fair its fair share and before that Sears did and,
before that Montgomery Ward’s and Woolworths and A&P like you can go back as far as you want,
these big huge retailers like there have always been concerns about their size.
The bottom line is the you know us antitrust laws are not super strong and the way they’re in written and enforced today.
I just don’t think.
Amazon has very much risk so per your point they’re probably way more exposed in Europe where there’s a much broader perspective on,
but the the thing that a lot of these lawmakers are going after is just,
right / retail razors Point like is it kind of a misunderstanding like there’s this thing oh my gosh Amazon’s using.
[24:49] Sales data from their third-party sellers to design their first party products and when you say it like that it doesn’t sound very fair,
but the point is retailers have been doing that for the entire history of retail I mean you know Sears had a lot of Their Own Private Label products in the Sears catalog you know listeners may be familiar with Brands like Kenmore and crap.
[25:12] Craftsman and you know all these these various brands that Sears built right you know doing these exact same thing so,
that’s not new they’re some antitrust people would say oh but you know what’s different about Amazon is there also a platform in an ad Network and they get extra data from that,
that a traditional retailer wouldn’t get so they would say I don’t object to Amazon using the retail data to make their own products but I object to them using their,
their platform data and their their the ad spend data that they’re getting,
but even that to me is a thin argument because every other retailer have advertising programs and co-op programs and slotting fees and things like that so I just.
Um
I think there’s some legitimate things to look at all these companies about but I think that particular one is a hard argument and and again the US antitrust laws are pretty heavily in Amazon’s favor
so I think we’re always going to hear about this stuff but I don’t think.
Amazon’s fundamentally different than than previous private-label efforts the one thing that is better about Amazon you know and therefore you know potentially more concerning is.
Amazon.
[26:32] Collects a lot more data about how you shop and what you don’t buy right so a traditional retailer doesn’t know very well.
What other products you considered on the way to buying the brand that you bought but Amazon you know because by virtue of them being online,
they collect much more data about your browsing behavior before you buy and so that’s not saying it’s it’s an antitrust violation to use that data but that is a new data set that you know Sears and Walmart,
didn’t necessarily have it at their disposal so yeah I think we’ll keep hearing about it the,
you kind of alluded to it but one funny thing that happened this week our Prime not funny dramas on,
the rumor is that Jeff was upset that Amazon Executives weren’t defending Amazon aggressively enough for all of this this noise,
and so it appears that a bunch of Amazon execs totally stepped up their social presence and started arguing.
[27:30] Up to and including arguing with like sitting Congress people on Twitter,
um a congressperson you know is complaining about labor standards in Amazon and made reference to Amazon employees having a pee and Bottles because they can’t take a break,
and a senior vice president Amazon like chimed in like that’s absurd I can’t believe you believe those rumors,
if that was really true do you think people would really want to work for us.
Um and then a week later Amazon had to print a retraction and say like it turns out a bunch of our employees do have to be in bottles.
[28:03] But so do UPS’s so that probably like when you have to issue that press release that’s not a good look.
Scot:
[28:10] Yeah that’s a tough one and it is confusing because there’s the DSP program aren’t really Amazon employees but they’re just that I guess during a branded truck they get that kind of assumed.
Jason:
[28:22] Yeah so again.
Scot:
[28:23] This one is this next one is for you Jason and it comes from listener Wanda cadogan.
[28:47] Wanda hope you enjoyed that we know that’s your favorite song now to your question we are seeing a big increase in visual media use cases for e-commerce it’s the new digital proxy for in-store experience
I’m curious about your thoughts around Shopville video Trends in adoption especially in the Americas.
There’s a there was another question that will kind of group together here in this one came from Darren Archer when will we have a major paradigm shift from the online store
category pages and pdp’s seem dated in the era of tick tock Instagram shopping and all these other things that are like pop-up shops when will retailers big change step change in the experience.
Jason:
[29:27] Yeah both good questions and I do I do agree they’re bundled and
side note I think I’m assuming daren’t an Archer is a former Adobe Alaska path and now at the Gap so so he,
has definitely been around a lot of the issues that were we’re talking about today.
So so yeah the.
Video Commerce and is often called live-streaming Commerce although a ton of it is not live streaming is huge right now it’s it’s even Huger in China where by some estimates,
eleven or twelve percent of all e-commerce is live streaming,
um more more consumers start their shopping trip on Ali Baba’s a live streaming site than they do on Team all right now,
so so this live streaming Commerce has totally exploded in China and there.
Appears to be appetite for it in the US as well and so you’re definitely seeing.
The platforms that that can support it so most notably Instagram and Tik Tok.
Um are we leaning heavily into it and we’ve seen Walmart due to two pilots where they had Commerce events on Tik-Tok now,
and.
[30:54] The jury’s out on like social commerce in the in the west is way smaller than it is in China so it may be 12 percent of e-commerce and in China and it’s like 4% of e-commerce here so,
so it has a ways to go in the jury is out on whether Chinese consumers are different than Western consumers and it’s never going to catch on or whether they’re just ahead of Western consumers and they kind of WEP frog.
Um so we’ll have to see but I can tell you a ton of retailers and brands are super interested right now and the part of the reason is implied in Wanda’s question.
Um a sort of Inconvenient Truth about all of this e-commerce that we’ve invented is.
We’ve made it very easy to find products that you know you want and buy them and we’ve taken all the friction out of the buying process and so you know there’s a saying.
E-commerce solved buying but broke shopping,
right so you know it’s super easy to buy stuff you can go on Amazon there’s 800 million products you type it in the search engine a product pops up you click one button and it shows up two hours later you’re good.
Um weather is not is.
[32:09] Discovering products you never knew you wanted right like there’s never like creating demand for products a lot of the things that traditionally stores were good at and a lot of you know Discovery experiences that happen in stores.
E-commerce isn’t particularly good at and so the hypothesis is that this social commerce.
Has the potential to replace all those Discovery experiences and the way I think of it as kind of decoupling Commerce like the buying and browsing used to both happen in a store and that was kind of the monolithic solution.
[32:46] The digital disruption of Commerce means.
Buying and browsing now can be decoupled and browsing can happen in all these micro moments on Tick-Tock and Pinterest and and taobao,
and the buying can happen in another moment on Amazon or Walmart or or wherever else so,
I definitely think there,
it is we’re going to see it can continue to increase I don’t know whether we’ll catch up to China in the near future or not but they’re you know appears to be a lot of Headroom and therefore sure is a lot of interest.
Of in retailers and brands that want to experiment in the space and platforms that want to you know capitalize on those experiments so I have major,
social commerce initiatives with almost every client right now that are kind of you know mostly in the test and learn mode.
Scot:
[33:43] Um couple things you didn’t mention Amazon’s poke around here they have Amazon live which is this video program that’s kind of running and it’s pretty terrible right now but you know I’ve seen some stuff start to get some traction there.
They have a couple of influencers that that hop on there and don’t forget that Amazon owns twitch so there’s,
there’s Twitches really started with video game streaming and there’s there’s a lot more that platform is widening there’s some interesting things we’ve had some Congress people get on there we’ve had,
um
[34:18] There’s a lot of interesting music content and then there’s a lot of innovative new social media companies like Clubhouse and some point maybe they’ll be some selling that happens to some of those channels.
The other one is I highly recommend everyone make sure you listen to our deep dive episode recently.
We talked about all the changing privacy rules I think that’s going to be another Catalyst for this because Facebook is in this kind of squeeze between Apple and Google in a way.
Facebook doesn’t have a platform like they do so,
Facebook could lose some ad revenue and they’re doing a lot to replace that through a variety of different experiments and I think we’ll see a Facebook doing a lot more in this this area,
and they on Instagrams and Instagram alive is getting a lot of Engagement as well so,
a lot of interesting platforms were this kind of live streaming and more social commerce could come from.
Jason:
[35:16] Yeah hundred percent Amazon’s done a ton of experiments and and twitch is a very powerful platform so like I certainly.
I think Amazon is you know at the front of this trend along with several other Front Runners.
Scot:
[35:32] This one this one this next question is it’s a it’s a tough one so I’m going to throw it at you here
comes from Brendan Witcher and I can’t hear his name without hearing the
toss a coin to hear what your song and anyway mr. whicher says when will the Jason and Scot show t-shirts finally be made available in can I have mine signed before you send it you guys rock thanks for helping to keep balance in the,
parentheses retail Force thanks Brendon Jason any your our chief swag officer Chief swag digital retail grocery officer what
what’s the take.
Jason:
[36:08] Yeah great question Brandon appreciate it.
So we do have some swag and I’m sure I’m going to regret saying this but if you ping me on Twitter I will be happy to send any listeners some Jason and Scott.
Riri a pliable stickers for your laptops and and the your bedroom windows and all that good stuff.
We have not offered t-shirts I’m open to it I have to be honest got and you weigh in on this as well.
Rrr logo Works reasonably as podcast cover art,
but it’s kind of intricate for a t-shirt I just I’m not sure what looks cool like I feel like we need a more elegant logo.
For a T-shirt and then side note I would also point out like you and I have both lost some significant weight since the characters were done so I like part of me before we invested in a lot of apparel I’d want like skinny or characters.
Scot:
[37:12] Yeah yeah we’ll have to maybe we’ll have a con reader contest readers can submit their their artwork let’s see you again from and then most of.
Jason:
[37:22] Yeah and side note when he says bring balance to the force I assume we all knew that you’re the dark side of that.
Scot:
[37:29] Okay ouch I’ll point out that your son is clearly on the dark side.
Jason:
[37:36] Well but my son also likes you more than me so that’s further proof.
Scot:
[37:40] I can’t no accounting for Taste okay back to real questions
so this one is from Kevin Cronin what are your thoughts on e-commerce conversion tracking and how it has positively and negatively impacted companies in the industry.
Jason:
[37:59] Wow so I don’t know what your angle for asking this question is but it’s a great question in my mind I am anti e-commerce conversion so it’s a.
[38:10] Super important and useful metric
but for my entire career I’ve been walking into situations where people were using it as a kpi and for me it’s an incredibly stupid kpi because I can’t tell you how many times I’ve had clients a Json I want to hire you to improve my conversion,
and my answer is always the same that’s awesome I accept because,
I’m gonna do a white make your eCommerce site password only so that only good customers that I know have buying intent are going to come in and your conversion rates going to go through the roof,
you’re your revenue and traffic will go way down right because conversion is related to all these other things,
um and while it’s possible to do multi-session conversion the overwhelming majority of people when they talk about e-commerce conversion are talking about single session conversion,
and very often it’s not profitable the cell one thing one time.
And so again so for all of those reasons I think you need better kpis like for sure conversion is a metric that that should be included in your.
Your overall ecosystem but that’s not the thing that should be steering your business and and I don’t know if this is,
what you were implying in your question Kevin but like there’s a shockingly high amount of e-commerce operators that that give too much Credence to conversion.
Scot:
[39:37] Interesting or you guys give products away if you really want to increase conversion.
Jason:
[39:42] Yeah yeah I can sell dollar bills for for 98 cents and have a very high conversion rate I would throw.
I had something else I was going to add to the conversion conversation but I’ve totally lost my train of thought so I should have come to rehearsal.
Scot:
[40:00] Are so all the tracking changes aren’t going to really change conversion while still no when people are on our side.
Jason:
[40:09] On site conversion again if you’re doing more nuanced multi-touch attribution type conversions there some of the depreciation of the third party cookies and the in the mobile tracking is.
Going to make that more difficult so we’ll see how that that all.
Toys out oh I do remember my other point on conversion a fun fact about conversion average conversion rates on e-commerce sites today,
are almost identical to what they were in 2000 like the its chin mobile has changed a lot but.
[40:46] The the overall desktop conversion rate hasn’t changed very much like a cross,
there’s huge deviation but across a ton of sites it’s about 2% of Visitors by something as we’ve already talked about.
Stupid metric and a lot of those people didn’t come to the side to buy something maybe they wanted to check your store hours or your your your store address or all sorts of other things,
but what I always chuckle about that is there’s this whole industry of conversion rate optimization companies and what they do is they come in with this one tactic which is multivariate testing,
and they say like we’re going to improve your user experience and dramatically improve your conversion rate and there’s a bunch of companies that have been doing that for 20 years,
and yet the conversion rate in our experiences today is exactly the same as it was 20 years ago and so like we like to joke that like all conversion optimization regresses to the mean.
How’s that for a math joke.
Scot:
[41:45] It is good if conversion isn’t a good kpi then what are Jason recommended gibbous.
Jason:
[41:53] Yeah so go listen to.
Our customer lifetime value show with Dan McCarthy and and to me metrics around LTV or seal the are much more valuable,
then then just conversion rate even if you’re going to adopt a conversion rate I like to do some some more.
More derived conversion rates that I sometimes call the real conversion rate where I infer your mission from some of your on-site behavior and I only look at the conversion rate of people that actually had some buying intent right so,
so in that example you would,
you would take all the people that used your store locator or you know left on the rating and review page or something else or the warranty page
you wouldn’t count all of them in your conversion rate because they probably had some mission that they accomplished on your website that was other than buying something but for sure.
Having a multi-touch attribution system and ultimately getting to a COV or LTV as the way to go as far as I’m concerned.
So let’s move on to the next question bin win what do you guys think is keeping Amazon from entering the promising African Market.
Scot:
[43:20] Yeah Amazon’s Geographic expansion has definitely slowed if you look at kind of the last markets they’ve opened up,
think they’re opening a Poland right now,
India has been a big one and they’ve just really that one seems to I’ll use this analogy of kind of the snake eating the pig right so so India seems they went storming in there and it seems to have been a handful for them
they really haven’t done a huge meaningful expansion since India my recollection I don’t think Poland would count as huge,
then there’s Brazil and Australia are kind of in that category of most recently geographies they’ve opened and I think what’s going on there is.
You know they have to evaluate every opportunity just like any other company even though they’re huge they have not endless resources so they’re always having to figure out where to apply them.
And you know I could say the same thing for South America South America.
Commerce is really complicated because you’ve got a big cluster of countries you’ve got different languages currencies shipping things,
now mercadolibre in South America has gone in there and figured all that out Africa is you take,
you take South America and I think Africa is like four times the complexity there inside of Africa you’ve got on the order of 50 countries.
[44:45] Lots of complexity and you know if your Amazon do you.
Go after that or can you go get that in 10 years let it mature and worry more about go puff taking you know a big grocery category United States,
so I think that’s really what it is it’s a prioritization exercise and for whatever reason Africa just has made it to that priority I guess you could say they’ve also expanded the Middle East through that acquisition they did,
of a big Marketplace there yeah haven’t really heard much about that I haven’t heard them adding 1 p 2 that or anything or
I only think they rebranded I think they wanted it as almost like Zappos as its own kind of little Standalone thing sounds kind of weird because in the past when they would go into a new geography by acquisition they would Rebrand it too
Amazon Japan it was on China this raw Acquisitions to my knowledge they haven’t rebranded suit could all and
kind of the brand their Stokes I think that’s what is required is a sure thing Jason Do you have a.
Jason:
[45:51] Yeah well I’m not sure if you’re aware of this but strategy is actually one of the words in my title.
[45:58] And it’s a little known fact but in order to get a strategy certificate you have to have a great affinity for a 2 by 2 Matrix,
and I don’t know if you remember who did this I feel bad that I don’t but I used to attend the channel advisor conferences and they would always do this great.
Session on the latest trends and opportunities in global expansion and they always started with this 2 by 2 Matrix and,
one axis is complexity and the other axis is opportunity right and so you think complexity how hard is it to go into that,
Channel what you know what’s the regulatory environment what’s the currency environment what’s the language environment and Africa is actually High complexity because,
there really is no African continent from a Commerce standpoint,
there’s a bunch of countries there’s like 50 for different countries mostly with unique languages and unique regulations and unique currencies so the complexity is very high,
and the opportunity at the moment is pretty low penetration of e-commerce in Africa on a per capita basis is much lower in the spend is much lower than a lot of these more established market so I,
I’m sure there’s a long-term aspiration for Amazon to dominate the whole planet before they get to Mars but,
in the short run I just feel like that Africa hasn’t done as well on that on that two by two Matrix that I got from Channel advisor.
Scot:
[47:26] Yeah and I’ve actually talked to a fair number of South Africans and they order a lot from Amazon and Amazon has some kind of a global cross-border trade thing where you can actually shop from Amazon and get it shipped to you in South African and not crazy amount of time
so there is an interesting not native Amazon shopping going on in certain areas of Africa that I’ve heard about.
Jason:
[47:52] Yeah for sure and not saying there’s not an opportunity now I’m just saying if you’re if you have limited treasure that it may not you know you may get more value out of your India investment then you are Africa and the short run.
Scot:
[48:04] Yeah and if you’re already like covering half of the opportunity through this cross-border trade solution than that even is better.
All right here’s one for you Jason this comes from Kelly gauche I think is how you’re going to feel so looking forward to that pisode I’m seeing all the CX related vendors Salesforce sap Bloom reach,
acquia Etc building or buying cdp’s in the past 12 months I get the value of cdp’s but why we’re all of these Acquisitions done so rapidly is this related to the third-party cookie changes coming.
Jason:
[48:42] Good question so sidenote Kelly is the chief technology officer at Commerce tools who were talking about earlier and he’s also the author of.
I think at least two books that are published by Riley on headless Commerce so we probably should have forwarded the Headless Commerce question to Kelly.
With regards to his CDP question for listeners that may not be familiar CDP stands for customer data platform.
Um and so this is a tool that was primarily developed for advertising although it’s now used for some other things.
Where you build a database of unique customer IDs and what you know about those customers and you use it for marketing purposes and mostly for targeting ads win to win to show what adds to what customers.
Um and they are super trendy right now the.
[49:38] Has the acquisition spree been been accelerated by the Privacy changes that we talked about a couple weeks ago.
My short answer is probably but it’s interesting because those privacy changes both help and hurt cdp’s,
they make that first party data in a CDP more valuable,
um but they actually make it harder to collect that data and they make it harder to activate that data on not first-party data and so I in the aggregate.
I’m not sure.
[50:14] I sort of doubt that all these Acquisitions are because the cdp’s very clearly go up in value as a result of these privacy changes in some ways.
[50:26] More customers opting out and more attention to privacy means that cdp’s get smaller,
um and the the alternative versions of these things that don’t have uniquely identifiable data for an individual customer which are often called dmps.
Maybe get bigger so that’s my long answer to say I don’t think it’s purely related to the,
changes in privacy what I think is related to is,
the the whole category in notion of personalization is super hyped and popular right now we actually did a deep dive on personalization a year ago that frankly I still think stands up pretty well,
and in it I kind of highlight that at the moment a lot of this personalization is probably overhyped.
[51:17] You know in the last year there was a lot of investment dollars that were you know looking harder for a home,
you know there’s a lot of Buzz and hype around personalization and a lot of confusion about privacy and so I suspect that all of those factors.
Um contributed to the the shopping spree and cdp’s but in the long run and because of the privacy issues I think the way this all plays out is.
Um instead of it being super valuable for everyone to have a CDP that there’s going to be a small handful of cdp’s that are you know operated by people that have a ton of first-party data that are going to be most valuable.
Scot:
[51:57] Yeah I’ll just throw in there as a guy that watches kind of the SAS space and startups you have this kind of interesting musical chairs / Supply Domino thing that goes on,
so you know one of the the big cloud players and I think the bigger ones would be like Salesforce sap Adobe then obviously.
You know you have a little bit IBM they’re not really as aggressive especially on the e-commerce side now maybe Oracle
but even they been quiet so those are the three really right now but you know what let’s say for some reason Salesforce buy something then the Corp Dev groups of other guys are out there looking and saying hmm.
If there’s 10 of these then then you don’t have to do anything but if there’s one more than your Adobe or sap you have to be kind of quick because.
These Cloud companies are really in an arms race against each other and.
They never want to have one of them with some advantage over the others so it’s such a big space the multiples that those companies enjoy are so big,
there’s a lot of Risk by not not having something so that could be one of the reasons you saw this kind of fast uptake by something was really more of,
competitive concerns and keeping up with the Joneses and then a lack of Supply I don’t are there tons of CDP companies or are they kind of rare.
Jason:
[53:23] Um
There there’s a ton of CDP companies that it’s a long tale type thing where only only you know there’s a finite supply of ones that have significant customers in them so that you that me teacher
you think so I’m going to call that the domino theory of acquisition.
The ones that first first acquisition Domino Falls at triggers a bunch of other Acquisitions is nobody wants to be the loser in the musical chairs right.
Scot:
[53:49] Yeah.
Jason:
[53:51] So let’s move on to the next question this is from Tech whiz
we’ve seen a significant stimuli bounce on Amazon do both of you feel the reopening exuberance will keep the sales acceleration going and if so for how long interested to see if you two are in the Jamie dimon camp.
Scot:
[54:13] Yeah and I love these economics questions because I always beat you on these Jason so,
so
it’s gonna be interesting so if you kind of so you got two things going on here number one in our world your of your comps are very important right so same-store sales and comps and stuff,
and that’s going to get it super easy right now because this March is obviously way better than last March and April it’s going to be way better
for a lot of people.
From a store perspective but then on the e-commerce side it’s going to be inverted so e-commerce is going to face really tough comps retail is going to look really good and then just so that’s going to be one aspect.
And then we talked last week about that channel advisor blog and a couple other folks that were talking about this kind of.
Material bump in sales from the stimulus checks kind of going out and you know so the.
[55:17] I think what’s going to happen is there tide is going to rise so.
Hard from the money being pumped into the system by not only stimulus checks but just.
You know we just had another two trillion dollars go out there’s talk of a four trillion dollar infrastructure,
some people are saying that should be five or six trillion we’ve never had so much money pumped into the system,
so I kind of in my mind the metaphor there is the tide is going to rise very quickly and e-commerce will benefit from that so if we had just the year-over-year affect Commerce would look like flat to down I think.
But because the tides going to be rising I think we’re going to have a really nice continued growth in e-commerce.
[56:04] I also when you one of my favorite.
But I’m a huge fan of Elon Musk and people eyes asking me on how how are you able to do these things that you do he always goes to core principles and His World core principles are physics you know Rocket Fuel Burns of this right in that custody.
In our world the core principles are consumer behaviors and I’m I’m convinced that.
You know go puff and instant card and all these things that that people have sampled through the pain Dynamic their addictive and I use that phrase zero friction addiction.
The pretty sticky because once you have that really super low friction great experience it amplifies the friction of the the higher friction experience.
So I think those things are going to stick it kind of a rate of 80% way more secure than a lot of people I think.
[56:57] I don’t know if that puts me the Jamie I’m in Camp but I.
I think those are the things so a negative is summarized a negative vizier of your comps are going to be hard on Commerce a positive is the.
Not only the stimulus checks but the macro stimulus going on and then the third one is,
I do think the zero friction addiction is going to also surprise people so I think that Nets out that we’re going to be surprised that we see the sales acceleration keep going and.
You know the thing that can this is probably a topic for another time but then the thing that concerns me is
we’ve never put this much money out there we’ve never printed so much money and at some point inflation is going to be a problem and we’re starting to see it in certain parts of the economy and food cost and Home Building
things are getting pretty hot already so that could be the thing that slows it down I think that’ll probably be a
early next year problem that will have to worry about what do you think Jason.
Jason:
[58:01] Yeah it is I mean in general I think in aggregate if you look at all of these favorable and unfavorable Trends it’s,
the favorable are going to outweigh it so I think like industry averages for both retail and e-commerce will continue to go up.
But the real story is going to be the winners and losers right so there there are definitely categories of consumer spending,
that are likely to go backwards a little bit you know next year right like there’s huge pent-up demand for travel,
and so some of those dollars that people have been you know investing in their home this year,
are not going to get reinvested in their home next year they’re going to get invest in a new trip or more time in the bars and more restaurant food instead of grocery food,
so I do think.
There are going to be some people that are going to struggle to comp because they they were disproportionate beneficiaries this year and,
and there’s going to be a counter Trend next year.
[59:05] I also do think there is a little bit of a bifurcation there’s big chunks of the economy that are booming and you don’t have all this extra cash pouring in and the savings rate is going up and,
all of these good things,
, there’s a huge chunk of the economy that were low-wage workers many of which worked in the restaurant industry and half the restaurants aren’t going to reopen and it’s going to take five years for those jobs to come back.
And there’s going to be no more economic stimulus for the rest of this year next year because once the health problem goes away,
there’s going to be no appetite for passing it and so those people are going to have a really hard time in the industries that are,
tied to those people are going to be challenging so I think we’re going to see a both ways but on the aggregate there’s going to be more good economic news than not,
and I’m calling it right now you’re going to see it check me in a year I wish I could go back to the prediction show
the new catchphrase is yacht yeah which is year over two years ago and and I’m predicting that
when you do the word cloud of all the things CEOs say in their in their shareholder meetings for the next year that yeah is going to show up a little bit.
Scot:
[1:00:15] Yeah
okay that’s weird prediction but if you say so so we are we have two questions left and we’re up against time so we’re going the lightning round Jason lightning round for you this comes from Trevor Sumner
there will be a multibillion-dollar media shift to in-store who controls the brand spin.
Will be media folks will Shopper marketing and trade dollars increase how will brand organizations need to transform to take advantage of the digitized store.
That’s an easy one to answer and Twitter a tweet length.
Jason:
[1:00:50] Yeah it actually is easy to answer and lightning around like that whole industry in the siloed budgets get disrupted
in the long run and I don’t know how many years it’s going to take all those budgets get Consolidated in the silos breakdown right so there there’s going to be a marketing person a CMO that that
owns all of that spend and there’s not going to be a separate trade budget and all these separate retail budgets and they’re going to you know
consider the next best dollar for you know Super Bowl ads against ads on the Shelf at Walmart.
Scot:
[1:01:24] I don’t have an opinion on that so we’ll go on to the next question and it comes from this was from Facebook Scott Silverman
what do you think will be the most surprising post pandemic consumer behaviors that e-commerce retailers should prepare for.
Jason:
[1:01:41] Scot you want to go first Scot to Scott.
Scot:
[1:01:45] Um sure I yeah I you know I think the things that we’ve already tried are sticky.
I’ll be controversial there’s a lot of Buzz that people are all going to work from home I think that’s over balloon I think,
90% plus the folks will go back to an office they’ll get pulled in they think they’re going to work remote and then
you know what’ll happen is another domino effect so sales teams are not efficient working from home so you’ll have a sales floor and then those folks would be like well why isn’t the marketing team here supporting
yes and in the marketing team will kind of come in and then
they’ll be like well why aren’t the accounting folks here you know we have all these questions and now I have to hop on a zoom decimal question and they’ll be like well let’s bring the engineering team in and suddenly the whole company will be back in an office so I think that’s one that’s not going to
that’s a lot of people are assuming it’s going to change that’s not it doesn’t really impact e-commerce per se but that’s one that I’ll be slightly controversial,
how about you Jason.
Jason:
[1:02:49] Goodwin I’m so we don’t have time to get into it I don’t totally agree with you on that one so that’ll be fun will visit it again later I totally get where you’re coming from though,
the the short-term one that everyone talks about that I’m many on is peacocking right like that that you know we’ve all been wearing sweats sweatpants and,
and sitting in our homes for a year and so there’s going to be this counter-reaction where everyone’s going to want to wear you know you know stand out and go be very.
Um gregarious and outgoing like that’s kind of what happened in the Roaring 20s after the Spanish Flu in 1918.
Um so so there is some of that.
Um that we might see in the short term to me the big the big thing that’s happened that people aren’t talking about enough is consolidation right that the,
the pandemic dramatically and disproportionately benefited big chains over small Independence in every category but especially in retailgeek.
Um and so I’ll Paris publish a new version but.
Almost every public company that has reported their e-commerce growth Drew dramatically more than the industry average.
[1:04:00] And the reason that’s possible is because a ton of Mom and Pops shrunk and I think there’s all kinds of implications for that but you know,
Walmart Albertsons and Kroger were 40 percent of of a cpgs business before the pandemic and now they’re going to be 60% and that that’s going to be a,
shift in the balance of power and a shifting leverage and and they’re all these other implications around.
This enormous consolidation the chain restaurants are doing fine but all the independent restaurants are gone bars everything.
I think there’s all kinds of implications from that that we’re just starting to think about are you in on that one’s got.
Scot:
[1:04:42] I disagree on some of that stuff but yeah well we’ll have to this is a good topic will have to revisit.
Jason:
[1:04:49] Yeah I like it it’s a great question Scott always appreciate your participation and that is going to be a good place to leave it because we have used up our allotted time plus gods for bonus minutes,
so as always if we if you disagree with our answer or didn’t get to our reading get your question feel free to hit us up on Facebook or Twitter,
um and you know as always if you enjoyed the show please give us that five star review on iTunes.
Scot:
[1:05:19] Thanks everyone and.
Jason:
[1:05:20] Until next time happy commercing!
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