A weekly podcast with the latest e-commerce news and events. In episode 272 we break down the US Dept of Commerce July retail data, and Q2 E-Com data, look at Q2 earnings from Walmart, Target, Home Depot, and Lowes, and discuss a potential Amazon Department store concept.
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US Dept of Commerce Data
In July retail sales were up 13.3% from previous July (down 1.1% from June). Year to Date sales were up 21.1% vs. 2020. Apparel is in the biggest recovery, up 63%.
At peak of pandemic, restaurants lost nearly $51B/mo of sales to grocery stores. In July the gap has closed to $4B in sales. Restaurants sales for the past two months are higher than two years ago.
Retail sales for all of Q2 2021 grew 28.2% from Q2 2020, e-commerce in Q2 grew 9% during the same period (due to the very high covid driven e-com last year). E-Com was 13.3% of retail sales for Q2.
Q2 Retail Earnings Reports
- Walmart – US Comp Store sales up 5.2%, E-Commerce up 6%
- Target – US Comp Store sales up 8.9%, E-Commerce up 10%
- Home Depot– US Comp Store sales up 3.4%, E-Commerce flat
- Lowes– US Comp Store sales down 2.2%, E-Commerce up 7%
Stores selling essential goods are comping against a very large 2020 basis in Q2. Most stores saw increased foot traffic driving store growth. Concerns about Covid resurgence and supply chain disruptions loom for Q3 and Q4.
Amazon News
- NYT wrote that people now spend more at Amazon than Walmart – Jason says the number are debatable and that’s besides the point.
- WSJ wrote Amazon Plans to Open Large Retail Locations Akin to Department Stores. We discuss
Episode 272 of the Jason & Scot show was recorded on Thursday August 20, 2021.
Transcript
Jason:
[0:24] Welcome to the Jason and Scot show,
this is episode 272 being recorded on Thursday august 19 20 21 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 Scott sure listeners Jason we had a little bit of a break in there you had vacation and I got to focus on car washing and it’s good to be back together.
Jason:
[0:53] It is I had a great time but I did miss you.
Scot:
[0:57] Oh I did see that while you are on vacation your company won a big Walmart deal so I think they would like for you to go on vacation more often.
Jason:
[1:09] Yes that is the general consensus the like I have great empathy for anyone in these spaces where you have these like huge drawn-out pitches but this was like.
More than five month pitch and.
Not shockingly it took the the client a little longer to pick a winner then they they promise so I you were kind of.
On pins and needles for a long time and then I went on vacation and we got a good result so I think all my my co-workers my the hundred of my co-workers that were involved in this pitch with me like are all eager for me to work even less than I already do.
Scot:
[1:48] Well I heard it was because Doug mcmillon listens to the podcast.
Jason:
[1:54] Yeah amongst others so Chef to all of our listeners from Walmart thank you so much for putting your trust in me and all the mean things that get said about you on the podcast all come from Scott please remember that.
Scot:
[2:08] Absolutely not I love Homer I probably spend more time in a Walmart than you.
Jason:
[2:13] That is debatable but I do know that you are a legitimate Walmart Shopper and and you have an awesome use case for Walmart.
Scot:
[2:25] Which one are you referring to.
Jason:
[2:26] I feel like Walmart is your go-to for hard to find Star Wars collectible toys.
Scot:
[2:34] That is true I have spent many a midnight at a Walmart waiting for the pegs the toys to be hanging from the pegs and it’s just the best time to be at Walmart is the best people people watching that 12:00 to 3:00 a.m. period.
Jason:
[2:47] Yeah they’re there are some interesting shifts that go on at a Walmart store especially the 24-hour ones.
Scot:
[2:57] And then I’m super jealous because on your vacation you’ve got to go
two galaxies Edge before me and that is for the non Star Wars fan folks in the audience that is the new Star Wars attraction at both the California and Florida Disney parks.
Jason:
[3:16] Exactly and it was awesome we went to California Disneyland as many listeners will know I’m a dad in the body of a grandad so I have a,
almost six year old son so we took him to Disneyland for the first time and generally,
my my Advanced age is a disadvantage but in this one case it was an advantage because I had a much better excuse than you do to take time off from work and go to Galaxy’s Edge.
Scot:
[3:43] Awesome well I’m bummed was it fun how would you rate it.
Jason:
[3:48] I highly recommend it I mean yes the whole trip was fun Galaxy’s Edge lived up to my expectations and there’s.
Kind of too wet in the old days we would have called e-ticket rides in Galaxy’s Edge.
Smugglers Run on the Millennium Falcon and this much more extravagant ride called rise of the resistance and they were both awesome I would say rise of the resistance is the best ride I’ve ever been at an amusement park so so,
totally cool totally worth it and you for sure have to go and I’ll go with you when you’re ready.
Scot:
[4:22] All right strong words were gone we’ll take we’ll take all the listeners will take your mom and you know some of the other folks with us.
Jason:
[4:31] I’m sure a lot of listeners would love to go the one that wouldn’t would be my mom because my six-year-old dragged her on every roller coaster at Disneyland and he had a blast but she was like white-knuckled the entire time.
Scot:
[4:43] Okay so she’s already checked the Box.
Jason:
[4:46] Exactly exactly you’re not a big enough draw only the grandson is a big enough traffic to your bed.
Scot:
[4:53] Well I’m glad you had an awesome vacation and the last time we recorded a podcast was one of my favorite days which is Amazon earnings and today is one of your favorite days of the year this is when the US Department of Commerce who sidebar has been on the podcast they drop a big
load of data what did you discover in the data.
Jason:
[5:15] Yeah so just side note I just to be jealous of my my month Disneyland.
Got got invited to keep working with my my favorite client for for the foreseeable future and I got quarterly e-commerce data from the US Department of Commerce so that’s what I call winning.
But yeah let’s jump into it so.
We’re recording this on a Thursday on Tuesday the US Department of Commerce released their monthly retail sales data so super brief.
Primer recap they published data every month.
For the previous month and that’s called the advanced retail monthly data it’s kind of a quick look at the the month it was 15 days prior.
And then they publish more comprehensive set of data for two months back which would be like 45 days prior.
So so that’s the data that we got on Tuesday and of course we’re all pretty interested in what July looked like because there was this whole kind of.
[6:19] Covid recovery and people rushing back to stores in the pivot from online back to stores and then there you know had been a lot of like negative news and rebounds because of Delta and so you know it’s kind of interesting to see.
See how the the data swung and so in general,
if you were someone that looked at month-over-month retail sales it was a Debbie Downer month so Joel I was about one percent lower than June,
but as I have counseled many times on this show that’s not a very important number to look at what we really want to look at is July 20 21 against July.
20/20 so so year prior data and retail sales for for this July were 13.3% higher,
then last July so ordinarily that would.
Um cause for a party that’s a huge growth like ordinarily we see like kind of for to unit three to four percent growth year over year in total retail sales so 13% is huge.
But of course.
Last July was still pretty impacted by by covid so we have this weird basis and as we’ll talk about later that’s why most retailers are talking about year over two years at this point but so first data point.
[7:44] July was a good month it was up 13 percent from the previous July.
[7:51] We I also like to look at year-to-date sales so I add up all the months and January through July of this year is up 21% versus January through July of last year,
which is also very healthy and again half of that period would have been pre covid versus last year so that’s that’s encouraging and then,
there isn’t a.
[8:14] In awesome measurement of e-commerce in the monthly data especially the advanced monthly data but there is this thing called non store sales which is kind of the closest proxy we have to e-commerce and that’s where things got interesting
it was about 5.9 percent up from last year so way slower growth.
Then you would normally expect for e-commerce so you normally expect retail the girl about four percent in e-commerce to grow 12 to 15% so so retail growing 13% is unusually fast and and Ecommerce growing 6% is unusually slow.
But again if you think about the fact that last July a lot less people are going to stores and instead spending online.
It kind of It kind of fits so I would from my perspective,
there was nothing there was nothing like super anomalous in this data it’s kind of where we would have expected it to be
and then I like to dive into the categories and see if there’s anything important in the categories and again the categories are kind of where you would expect,
by far the category that’s most up this year versus last year on a monthly basis and a year-to-date basis is a Peril so the apparel industry is like.
[9:32] Sixty-three percent better this year than it was last year because they were just absolutely creamed by by covid last year
restaurants and bars or up thirty percent over last year but then there’s some some categories that actually did well in covid but are still pretty significantly up so things like furniture and home,
Sporting Goods those and consumer electronics are all up significantly.
Even though they generally got a covid boost so.
That that is pretty interesting and then the thing that I most look at specifically related to covid is.
In covid everyone bought all their food from grocery stores instead of restaurant so restaurants got creamed grocery stores did really well and so we’ve been watching to see if that.
[10:26] Goes back to pre covid levels and it’s getting awfully close so you know in.
March of last year seventy percent of the calories got sold by grocery stores 30% by restaurants and that’s a that’s a that meant 60 billion dollars a month in sales that used to go to restaurants were going to grocery store so that’s huge.
And in July that Gap it became kind of,
52 versus forty eight percent so only a 4% Delta and pre covid-19 t-50 so that’s that’s about four and a half or five billion dollars a month,
that grocery store still winning that they didn’t win before covid but not surprisingly.
Like people were eager to go back to restaurants and they are going back to restaurants and that’s one of several indications we’ve seen that while.
Digital grocery grew a lot during covid and it’s going to keep some of those gains it does not appear to keeping all of those games and we are seeing some backslide and we’re seeing that in things like like instacart sales as well.
Scot:
[11:40] Yeah there’s been wasn’t there a rumor that instacart was looking to be acquired.
Jason:
[11:46] Yeah yeah there’s a few things out there there is a rumor that instacart was talking to doordash.
And then Super interesting this week and I’ll put a link to it in the show notes former guest and friend of the show Dan McCarthy who remembers the,
the professor at Emory that specializes in in customer lifetime value and cohort analysis he got a big.
Set of credit card panel data from Ernst research and he was able to use it to kind of.
[12:20] Back into the gmv which in the restaurant business or the grocery business they actually would call govt Gross order value
um and he was able to kind of figure out the size and stickiness of doordash and instacart and what he found was,
instacart got a bigger covid bump than door – but that door – is much stickier and and has a much higher rate of repeat customers than instacart in fact.
About 30% of he found that about 30% of door –
Shoppers repeat and only about 20% of instacart Shoppers repeat and that that difference,
is is very meaningful in the financial outcomes for those two companies and he kind of estimated that
insta cards govt is probably around twenty three billion dollars on an annualized run rate so he kind of looked at it and said hey
instacart does appear to have significant weakness versus door – and and so it kind of lien when the some Credence and some tangible Nest to the.
The rumor that you know instacart might be on a covid peak in trying to sell at it’s at its high we’ve also heard just some rumors that they’re you know struggling to retain some of their there,
customer Sellers and some things like that so so it’s going to be an interesting space to follow.
Scot:
[13:48] Any other surprises from the dinner.
Jason:
[13:50] Nothing wildly surprising in later in this podcast we’re going to talk about earnings and we’re going to talk about Home Depot and Lowe’s reported and so sort of a preview I would say like.
Um the do-it-yourself category was a category that did really well in in covid-19,
um and so you you know it’s interesting to see like if that sticky if
have you know as people are starting to go out more are they are they stopping the investment in their home and or are they reinvesting in their home this year is that a new habit so
I’ve been watching the do-it-yourself space and it had modest growth.
From last year so I want to from memory I want to say it was about eighteen percent up from last year and last year was a very.
Hi year so that that’s interesting and I won’t spoil it but it’s going to be that number will be even more interesting when we talk about how Lowe’s and Home Depot.
Scot:
[14:53] Let’s jump into it.
Jason:
[14:54] Okay so the next thing I wanted to talk about is so I mentioned that this monthly data doesn’t have awesome e-commerce data in it.
The US Department of Commerce publishes much better e-commerce data but they only publish a quarterly and that’s why this week is so fun is because this is one of those quarter months when they publish both the monthly data and the quarterly data so we just today
got the cue to e-commerce data from the US Department of Commerce and the top line here is
Q to 2021 Drew about 28% from Q2 2020 and e-commerce.
[15:38] I’m sorry tale so that’s all of retail which like that’s way higher growth than you normally see and eCommerce growth was 9% for that period so lower.
Then you would normally expect to see right and again that kind of follows the trend here.
E-commerce was artificially High last year and so you know even though it’s growing it’s growing against a bigger base and so the growth this year does not look as big.
So a lot of people are you know trying to talk about.
Growth on a two-year stack but that 9% growth becomes super interesting when you think back to Amazon you know Amazon got beat up because their rate of growth slowed a lot they were down to 22 percent
but 22% still means you’re more than growing more than twice as fast as the industry average.
And as we’re going to see you later like much faster than most of their competitors so so that that is pretty interesting and then a ton of news then writes like e-commerce is down.
Because nine percent is lower than we would usually expect but I just want to remind people.
That down doesn’t mean what you think it means like like we sold more stuff online in Q2 of this year than we did Q2 of last year and Q2 of last year was amazing.
It’s just the rate of growth is slowing down.
Scot:
[17:02] This is where I always get confused because the headlines that came across my CNBC trackers were retail sales were down 1.1 percent and worse than expected.
Jason:
[17:14] Yeah so that was.
Scot:
[17:15] How do I reconcile that with 28%.
Jason:
[17:18] Yeah well so the 1% is monthly and it was that mean that was down month over month so that’s June to July so,
July 2 July monthly going back the retail sales were actually up by 13 percent which is much more healthy and Q2.
Versus last Q2 retail sales are up what did I just say 20 that’s the.
Scot:
[17:48] But okay but then the month-on-month is interesting because why do you you know if we’re still coming out of covid you would expect it to be kind of climbing up even if we were heading into the fall or.
Jason:
[18:00] What you have to remember about consumer spending patterns and Retail is there it’s all heavily driven by these purchased occasions and there’s a bunch of purchase occasions that are tied to date and so the spending patterns you’d expect to see in
July are different than the spending patterns you’d expect to see in June so there’s there’s more people spending on summer activities in June than July and there’s more people starting to spend on back to school in July then in June and so there are all these
factors that make it really hard to.
Compare month-over-month in West you you do some like heavy seasonal adjustment gymnastics and even that tends to not work because,
some of these these purchase occasion shift from month to month from year to year so sorry it’s complicated.
Scot:
[18:51] Got it dads and grads will scrap it up two dads and grads being in June.
Jason:
[18:57] Yeah but so I mean my biggest takeaway is like as a retail I guarantee you every retail team I work with care a lot more about there.
Their sales bases from last year than they do their sales bases from last month.
Now the Miss versus analysts expectations that’s a separate story and some you know obviously is you know like investors tend to get squeamish when,
when the recharge missed the analyst expectations but it’s super hard to predict analyst
it’s a tough job for the analyst right now given all the uncertainty around health and covid and we simultaneously have states where
they’re throwing parades because covid over and people are opening up and then we have states where their reinstituting Mass mandates so it’s.
It’s like high degree of uncertainty at the.
[19:51] Um so in that climate some poor companies had to report their earnings and face investors and so this was to me a fun week for earnings calls,
Walmart reported their their Q2 earnings Target reported their Q2 earnings Lowe’s and Home Depot reported their Q2 earnings and then TJ Maxx reported their cue turning so it’s a pretty fun week in retail earnings
um and.
Again I tend to focus more on the operational metrics and less on the investor metrics so you know there were some beets and some misses in there that impacted stock performance and I don’t
pay that much attention to those.
[20:33] As a reminder because Amazon reported a couple months ago and we did a whole show a couple weeks ago we did a whole show about it,
Amazon is predominantly e-commerce and Amazon’s Q2 was up 22 percent from Q2 of last year so so,
put that data point in your head and then you go okay home Walmart and Target how did you guys do Target was up eight point nine percent.
Which was a beet and Walmart was up 5.2% which I want to say was a meat if I’m if I’m remembering right so so both those retailers did pretty well they
sold a ton of stuff last year during covid and they sold significantly more this year.
Um with less of a covid impact and less of an economic stimulus impact and so that that.
Was pretty encouraging both retailers throughout cautions about.
Their performance the rest of this year and so both retailers I think had some negative movement in their stock based on there,
um on there like forward-looking expectations but not based on their performance so so again.
[21:53] Amazon twenty two percent Target at eight nine percent will call it and Walmart at 5%.
Um that’s their total sales e-commerce was a much more interesting story targets e-commerce grew ten percent.
[22:09] And Walmart’s e-commerce grew three percent and those numbers are tiny by historical standards right so
Amazon is all e-commerce so their 20% growth means their e-commerce grew 22% so the so Amazon’s e-commerce grew more than twice as fast as Target and more than four times as fast or about four times as fast as Walmart
so that that makes Amazon’s performance look even more impressive if you think about Target like last year.
[22:41] They grew a hundred and ninety-five percent so,
so again like really sucky to comp against that that huge huge Peak and last year Walmart grew a hundred percent so they’re comping against a huge Peak so the,
the story of Q 2 for all these retailers is going to be,
you know how do they hold on in their total retail sales can they kind of beat the industry average and then.
You know where do they fall on e-commerce and candidly like.
Target Walmart and Amazon kind of don’t surprise me what surprised me was Lowe’s and Home Depot so remember I told you earlier that,
the do-it-yourself category is crony US Department of Commerce is performing reasonably well it’s like up like eighteen percent so.
Home Depot with retail sales for the quarter were only up 3.4 percent and lows sales were down 2.2%.
[23:52] So
Kind of hard to reconcile that in my head like there are many other do-it-yourself retailers besides Lowe’s and Home Depot.
I almost think this is like highlighting a problem in the US Department of Commerce categorization because it just,
I can’t put together a model where Home Depot only grew by 3 / 3.4% where lows went backwards 2.2% and yet the whole do-it-yourself category went forward,
yeah but that being said Home Depot’s e-commerce and super cheesy how they report this like they Home Depot totally tried to bury this but Home Depot’s e-commerce growth was flat,
they did not grow from last quarter from this quarter last year again off a big basis they grew a hundred percent last year and then was grew seven percent.
Which you know again that that’s actually better growth than Walmart and Lowe’s also had a big basis they had a hundred and thirty five percent so
on an e-commerce standpoint you’d say like glows actually kind of out performed in e-commerce but then the bad news for Lowe’s is they way underperformed and in terms of a brick-and-mortar thing which is of course much more meaningful to them.
[25:11] Um so those were kind of the monthly earnings so.
That I you know I think that is a trend the other thing that came out in these earnings calls is both Walmart and Target talked about how last year retail traffic was way down but ticket size was way up people came to the store to last and they bought more in each,
trip almost all the retail growth we saw this quarter was from increased trip frequency,
so it was almost all tied to more people walking into Targets in Walmart like there’s probably pent-up demand go shopping from people that were we’re doing more of their spending online so this is kind of,
all of these data points are converging to say that
people are are had kind of online fatigue and we’re happy to go back to stores and we’re seeing that in the industry data we’re seeing that in the earnings data and you know it’s going to be really interesting to look at Q 3 because.
It’s not clear that that trend is going to continue based on some of the the health news and.
State restrictions that are getting imposed and certainly based on some of the international news.
Scot:
[26:22] Yet it was this time last year when we kind of coined the ship again,
I wonder if we’re teeing up for you even kind of a tougher holiday this this may be kind of teased out of the date a little bit like maybe
maybe Lowe’s was down because of supply chain issues of you know they just couldn’t stop the stores I don’t know that that’s one way to explain kind of why one retailer would be doing bad but the category did it better,
and yeah so you know the supply chains are all jammed up there’s just all the way from Manufacturing
to hear stories of you can’t get room on boats and certainly planes and then when it gets here you can’t get it off the dock because there’s not enough trucks
and then you know I’m living the nightmare scenario where you can’t buy vehicles and I have a business built on being buying Vehicles so you know there’s you know.
The whole system’s and need to add capacity for delivering more and there’s literally no vehicles to be had due to this tube shortage so it’s gonna be really interesting next four months to see how this plays out.
Jason:
[27:35] Yeah no a hundred percent agree I’m super concerned about holiday the inventory levels like wouldn’t really show up in the,
the kind of reported earnings like where it would come up in is the transcript of the investor calls and I’ll confess
I didn’t listen live to I did listen to Walmart and Target I didn’t listen live to Home Depot or Lowe’s I kind of skimmed the transcript so I can’t I don’t I did not see,
then calling out supply chain as a reason for this quarter’s performance it definitely was called out as a risk factor for there.
Their future performance and what was a little interesting is
Walmart and Target vote both went to Great Lengths to express that they felt like they were going to be in a good inventory position for holiday
and I say that because none of us are expecting them to be in a great inventory position for holiday so they’re they’re trying to.
Push back that narrative and it like obviously those are two of the biggest retailers that have a lot of Leverage over the supply chain so it’s like,
you know if anyone can buy inventory it’s going to be them and they’re saying they’ve invested early and they think they’ve got the inventory they need for Holiday locked up.
Your points are all,
super valid like every step in the supply chain is more expensive and more fragile right now and the one that you didn’t mention is.
[29:05] It’s also just harder globally to get stuff made and you know if you look at the global,
like flow of covid there’s really only one economy economy that completely recovered and got a hundred percent of their retail foot traffic back for example and that was China and guess what China is,
like in the throes of a Delta pandemic and
foot traffic to retail as way down like they’ve had a back slide and that has impacted factory production and productivity and you know you mentioned one tangible,
way that’s playing out as these chip shortages but like there’s a bunch of them and then we also have this Global labor shortage,
and a place where it’s been particularly hard to hire people is in warehouses and factories and so I here in the United States we’ve got like a bunch of Labor shortages we’ve got a bunch of
labor dispute so I want to say Mondelez has like three big factories under strike so
Santa may not be able to get Oreos this Christmas like there’s a lot of those things playing out right now so I would say,
that Walmart and Target may have locked up enough inventory but there’s.
[30:21] Severe uncertainty about the holiday and I think everything we talked about for ship again in last year’s going to be worse this year.
FedEx and UPS have both announced their surcharges for holiday and they’ve already informed most of their customers of what there,
how they quotas will be so that’s going to for sure come into play the US Post Office which historically has not had surcharges is adding surcharges this year so lots of stuff going down and again,
I’ll be shocked of Amazon has as much capacity as they want but you know Amazon unique amongst all these retailers owns a lot of their own capacity and in fact.
They’re huge Amazon air Hub in Cincinnati just went online so.
Yeah yeah and even when you can get stuff it’s just more expensive like I want to say that like average price of a container with six thousand dollars last year and it’s 22 thousand dollars right now so.
Scot:
[31:19] Effort Amazon Seller say 40,000 I don’t know.
Jason:
[31:23] I think yeah it depends on what you know but yeah and so I again I’ve seen like.
Retailers by part of a porch in Canada I want to say,
um Canadian Tire like literally bought a shipping Port you know we’ve seen lots of retailers including Home Depot by their own container Freighters like,
we’re seeing all kinds of crazy reaches up into the supply chain to try to protect capacity so it’s it’s definitely going to be interesting.
Scot:
[31:54] We will keep listeners posted well this is the place to go to where we’re called it last year early and we’re going to keep tracking it and calling it early this year.
Yeah and then since we’re doing a news episode it wouldn’t be a Jason and Scot show without a little.
Jason:
[32:15] News new your margin is there opportunity.
Scot:
[32:23] That’s right Amazon news
Jason I saw this one got your dander up a little bit on on the the Twitter there was a New York Times article where they talked about how Amazon is now officially a hundred percent
without any argument bigger than Walmart
and an article what they do is they use a third-party source for GM v data which I actually appreciate this because for a very long time I was trying to help educate
people that that you can’t just look at Amazon Revenue numbers that their impact is bigger because there’s this kind of
Iceberg neath the surface of gmv
that matters because if someone buys something from a 3rd party seller for $100 other retailers lost $100 they didn’t lose the around $10 commission that Amazon shows us Revenue
so
I thought this was pretty interesting and when you you gross up now the number they used was pretty aggressive I don’t know who this this Source was I don’t have a subscription but
it seemed a little aggressive and the lines are definitely going to cross I thought maybe they had pulled it into your to what we’re I know this kind of got you a little agitated what
what do you think about this.
Jason:
[33:39] Yeah yeah so it’s super interesting it’s a great article it’s it prompted a lot of conversation I am mildly annoyed so first of all
the I have seen as a result of this this article got written in the New York Times and it’s a very accurate article.
But it then got echoed by hundreds of other Publications and it got.
Progressively worse so a I thought that would warm your heart is a ton of these articles go to Great Lengths to explain why revenue is in a valid way to compare these retailers and what gmv is and it’s like.
They all have discovered this year what you’ve been been teaching all of us for four.
Probably 10 years now at this point we’re old but so that was kind of fun so the New York Times article the headline first of all was people now spend more at Amazon than at.
[34:33] And then the subtitle is the biggest e-commerce company outside of China has unseated the biggest brick-and-mortar seller.
And so what this article is saying is,
they’re using a gmv estimate from a data company that sells data to investors and so it’s a Wall Street analyst firm called factset and facts that said,
Walmart’s trailing 12-month gmv,
was 500 Global GMB was five hundred sixty six billion dollars and Amazons
12-month gmv was six hundred and ten billion dollars so for the first time Amazon’s Global gmv is higher than Walmart’s and so Amazon has finally passed.
Past Walmart and you know we’ve hit this big milestone that everyone should be talking about right like so that was their article and nothing in its wrong I would argue that the fact that data tends to be on the aggressive side but,
maybe aggressive for both and,
facts that is not estimating gmv for Walmart just you know like they’re using revenue for Walmart and they’re using GM V for Amazon and as you know,
Walmart now has a meaningful Marketplace why got you know I don’t think they’ve disclosed what the.
[35:59] The ratio of 1 Peter 3 p is but Walmart has said they’re going to sell 75 billion dollars online this year so.
That you know their gmv is likely significantly larger than their revenue
but the biggest reason this isn’t an apples-to-apples comparison is these two companies don’t sell in the same countries right so Amazon’s and many more countries than Walmart so you know their incontinence that that Walmart isn’t in and,
the there India is a quite large Market both of these companies are significant players in India,
the Amazon includes India sales in their gym
in the fact that Jim V there are the facts that GMB includes am India for Amazon Walmart revenue does not include any India sales because Walmart owns a minority majority interest in Flipkart.
[36:53] Um but that’s that’s really the way Amazon does business in India as well like
if you’re doing Apples to Apples I would argue that it’s probably true that Walmart is still slightly bigger than Amazon of you if you put India back into these numbers and and do a gmv estimate for Walmart instead but I don’t,
even really care about that what’s annoying is everyone that read the New York Times article then wrote a new article saying Amazon’s the biggest retailer in the world and that’s,
wildly untrue because.
Ali Baba’s gmv is bigger is like 1.3 trillion right so its bigger than Walmart plus Amazon’s estimate in these articles and that’s why the New York Times had to write the most awkward headline ever that’s like,
outside of China even and you go well why are they saying outside of China when both Walmart and Amazon are competing in China well it’s because they don’t want to talk about the fact that they’re both way smaller than Ali Baba.
[37:51] And so so again like I just I kind of don’t think this is a very big milestone I think Amazon spins more
time and effort trying to sell more stuff in the US than anywhere else and Walmart spends more time and effort trying to sell in the US than anywhere else it’s the whole market for both countries
for companies it’s highly likely that Amazon is going to pass Walmart for sales in the US in the near future I don’t think they have yet and when they do
that will be a big milestone that will be like when Walmart passed Sears Versailles in like 1990 but to me that’s the big milestone that this,
this kind of facts that data thing that New York Times is trying to spin and then you know everyone else misreported like to me it’s.
Not that interesting and so I’m kind of annoyed how much Buzz it’s gotten but I just blew it and gave it a bunch more buzz on the podcast.
Scot:
[38:44] Okay another one Amazon this was kind of the big
big topic today there was a leak or someone figured out that Amazon is going to open a department store.
How do you feel about Amazon departments course I feel like they’re going to have put Target out of business in six months.
Jason:
[39:09] I just sold all my Target stock it so it’s over.
I’m kidding yeah so I mean this is interesting news the.
I would say it’s very vague news at this point like I don’t think it surprises anyone that Amazon is interested in and is probably moving forward with trying a bunch of different retail floor mats I do think Amazon realizes that.
That brick-and-mortar is important I don’t think they think of themselves as purely an online,
retail and they’ve been investing a bunch of brick and mortar and a category they want to do better and is a parallel and they have been making a lot of progress in a parallel so it’s not shocking that they would be
trying to experiment with some apparel formats so so this news is kind of exciting I’d be eager to see what they what stores they do open and I’m aisle
you know quickly go visit them when they do to see what see what they’re trying but.
From this article it’s hard to know exactly what they’re talking about so the the leases that the.
The reporter found in this is an exclusive article from Wall Street Journal.
The wheezes they found were for thirty thousand-square-foot stores so the first thing is again everyone saying like Amazon’s getting into the department store business.
There are almost no 30,000 square foot department stores most department stores are much bigger than 30,000 square feet.
[40:33] Whatever it’s worth the the article says that apparel is one of the categories that’s likely in this new store from Anonymous sources that talk to them.
So does that mean it’s primarily an apparel store so that would make it like a Kohl’s or T.J.Maxx eyes store and that could be interesting and meaningful or does it mean it’s a
general merchandise store that has some apparel and also has a full grocery store because there’s a lot of
20,000 25,000 square foot grocery stores so 30,000 square feet.
Isn’t that much different than the the bigger store formats we’ve already seen Amazon starting to experiment with so I guess I’m just saying.
Any brick-and-mortar news from Amazon is interesting I’ll be super eager to follow it but there was nothing,
to me and this announcement that goes man my mind’s blown this is a major Game Changer or some some new industry that wasn’t worried about Amazon last week should be super worried about them this week like I think all those Industries should have already been worried.
Scot:
[41:35] Yeah and a lot of people I saw coming and we’re saying they’re abandoning the bookstore this means the 4-star store
doesn’t work they’re getting rid of just je wat technology the Amazon goes towards and I think people just kind of,
Amazon.
At the heart of their DNA is to experiment with stuff doesn’t just because they’re experimenting with something doesn’t mean the other things failed they can run they have the resources to run
300 experiments retail store experiment simultaneously if they want to and that you can’t really read that kind of stuff into them I think that’s really jumping the gun.
Jason:
[42:12] No I would a hundred percent agree with that and again it’s built right into their leadership principles like small autonomous teams right so it’s not like it’s one big entity and they can only do one thing at a time.
They’ve got you know a ton of entities that are doing a ton of things at a time so I I certainly.
Scot:
[42:28] Purposely don’t talk to each other because it was a slow not yeah.
Jason:
[42:31] Yeah absolutely.
So excited to see them doing new things I do think when they open new store formats they tend to be more Innovative than than traditional retailers that are opening new format so I hope they open them and I will be there when they do.
Scot:
[42:48] And then while we were on the podcast Tesla announced they have a new robot swiped will have to you have to order one of those and then give us a gadget unboxing kind of walkthrough of how that goes.
Jason:
[43:02] I feel like you are higher on the Tesla waiting list than I am so we may have to leverage your status but I’m all for doing a robot Deep dive at our earliest convenience.
Scot:
[43:12] Yeah humanoid robots kind of freaked me out so I think I’ll lose my status to send it to your hostel we’ll see if it a skynet’s you or not.
Jason:
[43:20] Yeah isn’t is there another Terminator movie coming out I think there is.
Scot:
[43:23] There’s always another Terminator movie coming out sometime.
Jason:
[43:26] Fair enough
awesome we’ll listen we set a goal for ourselves to do a shorter concise show and I said I think we can knock this out in 30 minutes so I totally blew that this
feels like about 45 minutes but hopefully it was valuable to listeners if it was we sure would appreciate,
five star review on iTunes if you have any questions or we got anything wrong in the show you want to talk about we would encourage you to hit us up on Twitter or Facebook.
Scot:
[43:57] Yeah I like to think we gave everyone 50% more for their money today so you’re welcome.
Jason:
[44:03] Yeah and you and I earned fifty percent less what’s 50% of zero awesome well until next time happy commercing!
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