A weekly podcast with the latest e-commerce news and events. Episode 283 is a recap the most significant changes to the retail industry in 2021.
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It’s our final show of 2021!
We recap the US Dept of Commerce November Advanced Retail Sales Data.
We do a deep dive into the retail industries growth from 2019 through November 2021. In those 23 months, the retail industry grew 22%, historically fast growth. There were clear winners and losers. If you want to follow along on with all the data, here is a visual recap of retail growth 2020-2021. (PDF Download).
We also highlight the six most important trends of 2021.
- Amazon fulfillment capacity growth (Amazon and Walmart become shipping companies)
- Social Media becomes the discovery channel for e-commerce (led by live-streaming)
- Ultrafast delivery services
- Amazon invents and starts to scale a grocery store (Amazon Fresh) with just walk out technology
- Retail Media Networks explode, led by Amazon’s $30B in ad sales. Retailers now compete with social media networks for eyeballs
- Apparel has shifted from designer led to consumer led, as evidenced by the meteoric rise of Shein
We’re so very grateful to our audience, both for the time you have shared with us, and for generous opinions, feedback, and knowledge that many of you have shared. We wish you all the very best holidays and New Years, and look forward to seeing you in 2022!
Episode 283 of the Jason & Scot show was recorded on Tuesday, December 21st, 2021
Transcript
Jason:
[0:23] Welcome to the Jason and Scot show
this is episode 283 being recorded on Tuesday sept December twenty first twenty Twenty-One 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 show listeners Jason how are the holidays treating you so far.
Jason:
[0:46] They are treating me really well it’s been super interesting what’s going on in our industry and getting ready to take the family to California to see my mom and brother.
Scot:
[0:59] Very fun California versus Chicago seems like a smart smart choice this time.
Jason:
[1:04] Yes early and my relationship with my wife we agreed that we would visit her Michigan in-laws and Thanksgiving and my California relatives in December seems weather prudent if nothing else.
Scot:
[1:16] Yeah smart I like your
like you’re negotiating strategies so we are recording this here live on December 21st so we are in the very last tail end of holiday 21
and Jason you had some some interesting data that you had parse through that I thought we could start with it’s going to be largely kind of the November data but it’s kind of the best data we have,
until we get into January and see how the holiday played out and then we’ll do a quick
checkpoint on what you’re hearing from clients and then I think both of us wanted to kind of share our big stories for retail and e-commerce for 2021
so why don’t you kick us off with some data.
Jason:
[1:57] That sounds amazing so yeah so the data we are talking about is the US Department of Commerce data we get a an update every month so you know last week we got the,
the update that includes November and in general November sales were up
sixteen percent from November of twenty twenty so I always coach people that we should look at year-over-year not month over month so pretty healthy growth in 2021 from 2020
if you look at year-to-date so January through November
we are up about 18% from 2020 and if you look at e-commerce we were up about 12 percent from November of 2020 so I you know I always
put this data out on social media and I got a ton of,
interesting responses this year on that data everyone’s like
hey Jason why are you comparing to November of 2020 like we’re in the middle of the pandemic everything was all topsy-turvy like it’s like comparing,
pandemic 2021 numbers to pain demick 2020 numbers isn’t very helpful to me because everything is so confusing.
[3:13] And so I kind of took that to heart like you know it is the best kind of comparison we have about how we’re doing but I said oh you know the more interesting comparison is maybe we take.
One step back and we compare the.
The the last two years of data to two years ago so we kind of compare how much growth we’ve had during the pandemic with what girls look like before the pandemic
and I hadn’t hadn’t really done that in a while and what I found was interesting and in a few cases it surprise me.
Scot:
[3:46] I feel like we should create a new word for this I’ll work on it in the vein of a ship again yeah that’s just boring I don’t know.
Jason:
[3:54] Yeah yeah de or.
Yeah every CEO in America has learned to say you’re over two years ago by the way and for it’s super funny for non-gaap metrics in the and in the 10-qs they.
Like it’s they kept they completely cherry-pick like if the number is good they take versus last year and if it’s bad they take versus two years ago.
Scot:
[4:18] Yeah yeah that’s the nice thing you need everything every number needs to be up into the right.
Jason:
[4:23] My takeaway there is you CEOs are oily.
Scot:
[4:25] We know we’re strategic.
Jason:
[4:29] Got it potato potahto.
Scot:
[4:31] Cool what did this year over your year over year over last year review.
Jason:
[4:37] Yeah so if we say hey from how much has retailgeek grown in 2020 and 2021 as a two-year stack it has grown 22 percent,
so you know people talk about like all the struggles and challenges we had during the pandemic but if I see
if I got in a time machine and no pandemic just told every retail CEO how would you feel about growing 22% over the next two years,
the vast majority of CEOs would have jumped at that and then if you said and our life is going to be totally disrupted by this pandemic.
[5:14] I think every retail CEO in America would have said I’d be thrilled to get through the next two years with 22 percent growth so that was
interesting and then I said I wonder how that compares historically so I got in the hot tub time machine and I pulled all the data from 1990 through today and I restated
every year as its growth versus the previous two years to kind of come up with this standard metric to compare against the 22 percent
and 22% is unprecedentedly high it’s by far the biggest two-year growth we’ve had since 1990 there’s only a few years that
that just tickled 15% so I can 2000 we hit 15 percent and in 1994 we hit 15% but like,
most of the.
The this last decade we were kind of tickling in the kind of six to eight percent growth so 22 percent growth.
On average for the whole retail industry is a huge win and unprecedentedly more growth than we would traditionally get does that surprise you at all.
Scot:
[6:26] It doesn’t sort of make sure I understand it’s all retail so it’s offline and online in Aggregate and then you can’t just divide it by 2 right because there’s compounding in there so it’s not really two years of 11 it’s probably like I don’t know 12 in an 8 or something.
Jason:
[6:41] Yes so you are correct now and.
That 20 yes and all of this data it does include compounding the the compounding is an interesting point which will come up in a another piece of data in
in just a minute but yeah so this is all like literally looking at the.
Aggregate sales for 2019 and the aggregate sales for 2021 and saying how much bigger was 2021 than 2019.
Scot:
[7:08] Yeah did you run a kegger so in MBA school they would say well you can actually unpack the compounding by look at the compounded annual growth rate.
Jason:
[7:17] Yes yes I am familiar with the math I did not.
Scot:
[7:21] Okay it was two years it’s not going to be that substantial yeah repeat.
Jason:
[7:24] No that’s the yeah it’s right typically like with like a five-year Horizon it makes a lot more sense but yeah it would have been interesting but it just I had to your data so I was just trying to come up with an Apples to Apples.
Scot:
[7:36] Not feels feels like a wind.
Jason:
[7:38] Yeah so then I said alright well that’s interesting on average retail is a huge win.
[7:44] Very obviously there are winners and losers so I said alright well let’s look at all the categories that the US Department of Commerce gives us.
Based on that 2-year stack and there were you know and who was at the industry average who wildly outperformed the industry average and who underperformed the industry average and
there are some things that made total sense to me and we’re not surprising and then there were some pretty big surprises in there so,
the the category that out of the US Department of Commerce data that grew the fastest was,
non store sales which is kind of our e-commerce proxy right and it grew 39 percent so almost twice as fast its total retail that’s pretty intuitive you know again you’re hearing a lot of.
E-commerce growth is slowing.
Wagon November as more people went back to stores you know compared to this like you know pandemic impacted 20/20 but when you look at onto your stack,
e-commerce is still the fastest growing part of retail at group 39% from 2019
and that certainly didn’t surprise me the next two categories sporting goods and building materials,
also really didn’t surprise me because we kind of talked about them being,
the big pandemic winners that like you know people then go to the gym so they bought stuff from Dick’s Sporting Goods people didn’t go on vacation so they built a new patio with materials from Home Depot and so kind of all the that Services Revenue.
[9:14] Shifted into retail and that gave sporting goods and building materials a big a big kiss.
Motor Vehicles which at one point people were saying like oh my God that’s going to be a horrible category in the pandemic Motor Vehicles actually outperformed the industry average so they grew at 24 percent versus 22 percent for total retail.
And then here’s where we start getting surprises.
Slightly below the industry average was furniture and Home Furnishing so that grew at 21 percent versus the industry average of 22 and if you just asked me to bet I would have said in the same way that building materials and Home Improvement stores.
Got extra spending from the pandemic I would have expected furniture stores to get extra spending from the pandemic as well and so it surprised me that they were only at the industry average and the only my only hypothesis is.
Did they have more disruptions from supply chain like why.
Was it just harder for them to scale up to make more sofas to meet the increased demand and so they,
they grew healthy but they didn’t grow as healthy as they might have because they they couldn’t double their us Workforce to build more couches.
Scot:
[10:23] The feels right the furniture industry has been here in North Carolina that’s our primary one and they’re just destroyed by the supply chain they can’t there was a series of events that couldn’t get phone because of the fire and awesome remember that that seems like a year ago but it actually wasn’t
go to the summer and then
with this quote-unquote Supply pain they haven’t been able to get the other inputs like anything fabric while that stuff made in China and shipped over here and sitting on a boat somewhere.
Jason:
[10:50] Yeah and I feel like it’s a double whammy for them because it’s harder than ever to make stuff but there’s actually they could sell more than ever before if they could make it so it’s like,
it almost feels worse than knowing there’s demand that you can’t meet.
Scot:
[11:01] Yeah it’s painful.
Jason:
[11:03] Yeah so then general merchandise grew at 16 percent versus of retail 22 percent
and then the one that surprised me most that I talk about a lot is grocery grew at 16 percent versus the industry average of 22 percent and I would have said man a ton of spending shifted from restaurants to grocery stores they were another pandemic winner
and so I’ll be honest I don’t have a perfect hypothesis for why.
Again sixteen percent is Healthy Growth and by historical standards it’s better than any two-year period since 1990 so I don’t want to say oh
you know they had a rough time they had a good time but surprising that they were below the industry average to me a little bit.
You have any great Insight that I didn’t think of on why that would be.
Scot:
[11:52] I don’t maybe it’s like a mix thing underneath the hood like the e-commerce grew so much doesn’t it like well I’ll be in this category are rules so if.
Jason:
[12:02] Imperfect yes so you are right like one of the wrinkles in all of this is.
The way the US Department of Commerce treats e-commerce as another category which is unfortunate right because
you know when someone shifts from buying a exercise bike in a Dick Sporting Good to buying a dick exercise bike from Dick’s Sporting Goods.com.
The sale leaves the sporting good category in enters the non-store category and so that’s.
That’s not really Apples to Apples and then of course this is all done with surveys that are in perfectly filled out by human beings and so how different retailers respond to that survey is also inconsistent so you got it.
This data is super helpful directionally but you definitely don’t want to get too wrapped around the axle of the minutiae of the data because it’s just an imperfect methodology.
[12:52] And so then the the categories they did the worst,
do make sense with one outlier for a couple hours for me so gasoline only grew at 14%,
you know again make sense to me that they you know underperformed when people aren’t commuting to work surprising 14%
sales are still pretty good growth clothing is near the bottom at 12% growth so again clothing over the last two years did not shrink they still grew at 12% which might have been their average rate of growth I should do that waiters pulled just
the category growth over the last 30 years.
But compared all these other categories obviously closing was was poor and the Very lowest category is restaurants and bars which still grew six percent so that all makes sense but then there were two
two categories in the cellar that I would have expected to do better health and personal care grew at 11%
and Electronics and Appliances grew at seven percent so those are both pretty far under the industry average and you know those are two categories.
They had some complication they had pros and cons you know within that category but by and large I guess I was surprised to see them so well.
Scot:
[14:06] Yet Health and Beauty one because Aaron was zooming like the makeup sales shot way up so it’s got to be a you know it was e-commerce.
Jason:
[14:15] Lipstick sales actually went way down because of the Mask but mascara and skincare went way up it’s so funny bye.
Um so,
then I just did one other sanity check so you know people like a couple people a couple of Industry analysts even like responded to my data and said yeah just don’t believe the numbers and I’m like
just some understanding you you’re saying you don’t believe the US Department of Commerce numbers not like I didn’t make any of these numbers upright bike.
[14:45] And and the US Department of Commerce data is imperfect I would argue it’s.
The best we have access to and it’s it’s a bunch of you know PhD in statistics that have you know the force of law to you know to enforce compliance with their survey so I
it’s better than any other survey out there for whatever that’s worth but so I thought how can I do a chance sanity check on this data and I’m like oh
all the public retailers are required to report their growth every quarter
so we could try to create a year over two year growth
for all of these public retailers and compare it to the industry data and some of these public retailers are in a particular category so you can you know pretty safely assume all their sales are in that category so you could kind of use that as a sanity check
so I pulled I don’t know I guess it’s about 25
companies and I converted their quarterly growth into a two-year stack
and here I will confess I took a shortcut and if there’s any mathematicians that want to help me solve this problem I will toy do it these.
Draws numbers are not compounded growth so the problem is we don’t have annual growth rates from the Retailer’s we have quarterly growth rate so basically you have to.
Aggregate for quarters of growth and then.
[16:11] Calculate it over two years and so I took a lazy shortcut and I just added their.
20 growth to their 2021 growth so we have basically seven quarters of growth for most of these retailers and it’s it’s
what they call a two-year stack which means growth from 2019 plus 2020 and while the math is not right there by the way right because of.
Like the compounding problem of your 2020 growth include your you know growth over 2019.
This is how most retailers reported in their earnings so when they talk about to your growth
for these non-gaap measures where they try to put themselves in the best light and they report their two year growth they’re almost never talking about a compounded number like if you read the footnote.
They’re they’re adding the growth from those two years so this is how they’re doing the math in most cases
for whatever that’s worth but so that’s way more precursor than we need the retailer that grew the public retailer the grew the most over the last two years total shocker to me I would not have expected in a million years is Burlington Coat Factory.
That Drew 85% and to put that in perspective,
they sell apparel which did not do very well in the pandemic and they turned off their website their e-commerce site the month before the pandemic.
So they didn’t sell any a long line.
Scot:
[17:34] They’re not really opening a lot of stores either.
Jason:
[17:36] No I mean they may have opened a couple stores over the whole two years but like this is mostly comp sales growth so it actually kind of,
factors out new store.
Scot:
[17:46] Okay so it’s cops okay.
Jason:
[17:47] Yeah this is these numbers that ye are based on currency adjusted comp
sales just in the u.s. wherever possible
so so Burlington’s a total outliner congratulations to them surprising to me Amazon is was the second fastest grower and all public retail at 61 percent over two years which.
Doesn’t surprise me that super impressive but you’d expect to see them near the top of this list then you see Dick’s Sporting Goods at 57 percent and again,
like from from the industry data Sporting Goods was the second fastest growing category behind e-commerce so Amazon as a proxy for e-commerce and dicks is approximately for sporting goods
makes total sense but then things start getting interesting the next fastest grower was Ulta
which is personal care at 36 percent so they grew much better than did the.
The personal care category now they’re less than half the personal care category the slightly bigger version of them would be Sephora but Sephora is actually owned.
Buy a house of Brands and so it’s harder to get their data.
[19:01] Bed Bath & Beyond group 35% which is impressive Target group 34 percent,
Home Depot which again was in one of these these outperforming categories grew 33% was group 28% by comparison Best Buy grew 29% in this it doesn’t surprise me the best bike route 29 percent but this is.
Makes that the fact that Electronics was one of the slowest growing categories at 7% make even less percent make even less sense I guess it’s it’s hard to imagine how.
Electronics only grew seven percent over the last two years when you know everyone bought all this extra equipment for homeschooling and home entertainment and then with Best Buy growing 29 percent it’s even harder to imagine.
Scot:
[19:53] Yeah maybe in a perfect world you could then split like something like that into store non-store store / e-commerce and maybe that would tell the story.
Jason:
[20:00] Yeah yeah again that’s like one of the few the,
my few answers to to a number of these anomalies and then I know this is like all these numbers in a podcast sock but like then you start getting into like Abercrombie & Fitch 28% Costco 26 percent,
Cole’s Nordstrom’s Walmart grew at 21% which again for you know a huge company,
the fortune one company to grow at the industry average is pretty good Nike grew at 20%.
T.j. Maxx at 15% and the the bottom three.
A surprise into not surprises so the second worse and third two words were Dollar Tree in Dollar General at 10% growth which is kind of surprising.
You know consumers were kind of flush with cash with all the extra economic stimulus they weren’t really slowing down their spending and so like
you know maybe it wasn’t a great season for the value shoppers but a lot of the news was about how these dollar stores were opening tons of stores and we’re really thriving so interesting that they both only Drew.
10% and then the the worst performing public company on this was Macy’s which grew six percent over the two years not totally surprising.
Scot:
[21:18] Isn’t that the one that Prophet G said was going to crush.
Jason:
[21:24] Be there be there the future of retailers Macy’s not Amazon yeah this chart unfortunately yeah contradicts that prediction so we’ll have to wait and see are you Scott Galloway fans you just hang on hang on to your stick to your guns.
Scot:
[21:38] Good luck with that.
Jason:
[21:41] Yeah so that’s my the rabbit hole that the stupid November numbers took me down so as you can imagine none of my clients got any deliverables in November.
Scot:
[21:52] When people tell you they don’t believe the data what are they reacting to.
Jason:
[21:57] I think there’s a couple categories there are people that are like hey it’s the the month-over-month is interesting but like.
Who cares right because these are all anomalous months and that’s why I went for this two-year stack and and so.
My point was I think like when people are saying hey I don’t I don’t believe the data I actually don’t think they meant they don’t believe that this is the data that the US Department of Commerce reported I think they’re both saying in some cases,
I don’t think the US Department of Commerce can count very well and what they mostly hang their hat on is is the non store sales not being right and that’s fair right like when someone at Best Buy fills out a survey
the US Department of Commerce would like them to put their e-commerce sales in one box and their store sales in another box.
[22:47] And do they do that I don’t know right and does every retailer do that.
Properly and consistently I can tell you that the person assigned to fill out the surveys is generally not the most senior accountant at the it’s usually not the CFO.
Um so so that is imperfect and then what I think they’re saying more is.
Maybe don’t make all your future plans based on like this snapshot of the world because you know we are looking at a
unique set of circumstances that resulted in this data right so if you mistakenly thought my takeaway was
retail is better than ever and you know everybody should double down because you know retailers is the most thriving industry in the world 22 percent growth is amazing and it’s going to continue forever.
[23:36] Yeah no that’s not what I’m saying I’m just saying that like it’s interesting there were positive and negative impacts on all these businesses as a result of the pandemic but on the aggregate.
The impact was disproportionately positive and I don’t think that that is sustainable right like I you know I think we will hope to drop down to the regular the sort of pre-pandemic growth levels and potentially.
We pulled some growth forward and we might even see some more lean years because we you know absorb so much growth this time.
Scot:
[24:10] This a long way of you saying you now agree with the the Goldman Sachs chart that showed five years of acceleration.
Jason:
[24:15] No no I think that still is pretty clear and they were primarily talking about e-commerce which definitely didn’t happen.
Scot:
[24:23] Checking.
Jason:
[24:25] So that’s my my deep dive into data and if there’s
there can’t be anything more fun than listening to a podcast about a bunch of dudes being a bunch of numbers so I will I’ll do two things I’ll try to put some of this data in the show notes but what I’ll do is I’ll put a link in the show notes to download some charts with this data in it.
Scot:
[24:46] Very cool I actually like you spewing data so maybe I’m just an audience of one.
Jason:
[24:53] You may be in a liar.
Scot:
[24:56] So what are you seeing so that kind of gets us through November what are you seeing here in December I poked around on the usual spots for the Adobe and the sales force and a couple others
and it’s really weird they’ve been kind of quiet since since kind of the Cyber week what what are you hearing from your clients.
Jason:
[25:17] Yeah so I don’t know like there’s not good data that’s already reporting December sales for holiday but so anecdotally talking to a bunch of clients and talking to some of these companies that do have internal data.
December is looking like a good month right and so the.
My kind of aggregate estimate is holiday for 2021 is going to end up being about.
Nine percent bigger than holiday 2020 and again you say well as nine percent good or bad by historical standards it’s pretty darn good
most most years we get about a holiday grows less than the rest of the year because there’s so much extra volume in it so most years we get about five percent growth in holiday in 2019 we got four percent
growth 9% is a big number and last year was a pretty big growth year and so.
Um you know also around nine percent so nine percent on top of 9% is a.
Pretty big deal I have seen some estimates that think it’ll grow even more than nine percent this year to put that in perspective the last time before last year there grew nine percent would have been like 1999
so so not only do we have great growth over two years we do have great holiday growth one huge caveat.
[26:43] The trend up until about a week ago was,
that more people were returning to the store store traffic was going up we were seeing kind of pre-pandemic shopping behaviors and e-commerce was still a big deal bigger than ever before but the rate of growth was swelling because,
there was so much pent-up demand and go to stores lots of people were planning on getting together with their family like there was a funny Walmart stat about you know how much bigger the turkeys were that got sold this year than last year because people were,
we’re entertaining a lot more so,
unfortunately in kind of real-time chats with most of my clients in the last week
we have seen foot traffic to stores dramatically curtail and it feels like.
We’re very quickly getting a lot of negative Media news around and I say media but I guess it’s based on the data about
Omicron and the hypothesis is there either,
Omicron has people scared and so they’re not going to stores or a second hypothesis is everyone desperately wants to have their family gathering so they’re being extra cautious leading up to Christmas but in either case,
we’re seeing this last-minute pivot to e-commerce and that has some impacts like the shipping companies that actually been doing.
[28:04] Much better job this year than last year on keeping up with ship again in but if suddenly everyone you know runs towards e-commerce these last two weeks that could really put.
[28:15] Shipping in Jeopardy in a in a really vulnerable time when they have a lot of Labor challenges so yeah I don’t know it’s kind of a Debbie Downer bit of news in this whole thing.
Scot:
[28:26] Yeah yeah I’m a crime that has a it’s going to put next year kind of up into a question mark of what happens is and then.
The thing that’s really frustrating trying to operate a business during this time frame is the bookmarks of good and bad are so wide that.
Dirty you have no idea but you drive a truck through and right there 180 degrees so you read one new source it’s like oh it’s super mild and it’s almost going to act like its own vaccine then you see another source and it’s like we’re all gonna die.
Somewhere hopefully we’re somewhere in the middle there.
Jason:
[28:58] Amen Ya Know It’s Tricky yeah and kind of evaluating all these data sources that’s like the new the new societal challenge right.
Scot:
[29:09] It really is.
Jason:
[29:12] So I’m wondering so that’s that’s kind of my holiday snapshot some good news and some bad news in there I wanted to take a couple minutes
on this podcast because I think this is going to be our last show of the year to kind of zoom out from the minutiae and just kind of think about the year in totality and kind of,
don’t know you know highlight what we think are the big things that happened in our industry this year that might impact us going forward how do you feel about that.
Scot:
[29:39] Let’s do it you want to go first.
Jason:
[29:41] I mostly wanted you to go first because I thought I would surprise you and make you get bet answers while I thought about it.
Scot:
[29:48] Okay I’ll go first so so I’m going to try to limit it to three because we.
Yeah we could go on for for a long time here so I think the highlights of this year for me,
it would be a Jason and Scot show if we didn’t think a little bit about Amazon the.
Build out of Amazon’s shipping infrastructure and I feel like we say this every year but it’s accelerating and there’s some really good data we want to have a guest on that’s publishing some data on this just Amazon has built more capacity in the last
two years than they had in the last 10 so they’ve used the pandemic as a you know
the response to it and they’ve gotten kind of cover I guess you could say is to really.
10x down on fulfillment infrastructure where where you get the most feeling of that is that the last mile which is this DS p– program that they’ve just really scaled up massively.
This touches my my day job because it’s Biffy we’d service a lot of these folks and they’re just they’re everywhere and,
you know it used to be they would kind of work out a fulfillment systems then they built these fulfillment centers now they’ve got these see the last word of station what are they call them.
[31:02] Delivery stations that have a whole new nomenclature where they now are have these forward-deployed areas where the dsps are almost housed and Aggregates you’ll go to these places and it’s pretty well that I’ve seen several of them now
and they’ll be like 20 dsps operating out of there these little micro businesses and you know just.
[31:22] Prime Vans as far as I can see.
Where is the stat that I think is kind of the most interesting is the Amazon did disclose that they plan to ship more than
then FedEx this year and then I think they said in the next couple of years they’ll exceed the USPS as far as package delivery it doesn’t surprise me just given the scale that they are throwing at this thing.
For example you can’t buy a van today because the Amazon is just pretty ordered all the vans so it’s pretty fascinating the scale they’ve done there.
The thing that in our will do our annual predictions but I’ve been annually predicting that they would compete more directly with FedEx and UPS by offering just package delivery to anybody I just feels like we’re a lot closer to that but I say that every year so we’ll see,
the other surprise for me
is the explosion of this 15-minute grocery delivery world the most people have probably their first experience this or the first company heard was go puff and it wasn’t really a 15-minute thing it was just kind of faster it was almost
hours then you had instacart really scale up and then what’s happened is the service level on these things it’s got lower to the point where they’re all trying to get you something in 15 minutes.
It’s a smaller number of skus than you would get with like Amazon’s 300 million skus available so it’s typically going to be.
[32:43] You know you probably have a cool word for it but it’s like snacks and
oh my gosh I’m out of a soda I need or ice cream things that you kind of have an urgent hankering for and are willing to pay to scratch that itch a little bit more.
On the shipping and handling fees and those kinds of things these are kinds of things when I talk to people they’re like yeah that little
the economics will never work in the be no one will ever use it and then everyone’s always surprised because you can never underestimate the convenience or any consumer that when you give them the choice to do something with convenience they will,
they will do it and they will order things you would never have thought about.
I remember when Amazon rolled out Prime now they were shocked that the toilet paper and personal products were such a high considered item and it’s just you know.
People people don’t plan ahead and they run out of stuff and they want it right then and there willing to pay extra for it so that one’s pretty interesting and you track this probably even better I do Amazon’s going after this one and then there’s like,
10 startups in there that are have all raised,
billions of dollars go puff just announcer one and a half billion dollar extension of their last round by layering on some debt so there’s one called like gorillas or gorillas and.
[33:55] Tons of these things out there but Amazon scaling it up too so it’s gonna be interesting to see if any of these guys can make Headway against Amazon or Famas on will just crush them.
[34:05] And then the last one is live-streaming this one sputtering in the US,
every data point outside the US indicates it’s a thing and I do think this one’s going to translate from I’ve seen it
I’ve seen data that shows that as a has expanded out of China and that’s kind of where maybe a year ago we were talking about it largely on Alibaba platform.
But now I think it’s there’s European startups I’m starting to see some categories in the US where this is interesting
I followed the collectible category and there’s a couple of the hot companies are they do these live streams where they will do.
Unboxings so they will they will buy a pack of cards from like the 80s and then they will open them live and and see what’s in there and and you know,
it’s kind of riveting if you’re if you’re into that and you’re like I wonder you know there’s a one in 100 chance that this has a Michael Jordan rookie card or something and they pull that the column poles that can be fascinating so there’s a lot of.
Kind of very specific category activity going there that I think I think a lot of us thought okay Amazon’s and do this Amazon is tried and it’s been
pretty terrible but I think it’s going to come from these really niche of Articles at first and they’re going to figure it out and then you’ll see it get more more momentum up into the broader retailers so those are those are my three.
Jason:
[35:27] Wow those are three good ones I feel like you stole my three I’m just kidding
um no but I totally agree with all those I do think like we’ve actually seen Amazon launch some.
Selling of shipping services and I’ve seen Stan said they’re going to deliver 90% of their own packages this holiday so like I think that definitely is a thing even Walmart is now,
selling shipping services to other people including Home Depot so that’s totally interesting Trend hundred percent agree on the live streaming
like I kind of call it the D bundling of shopping and you know we have all these e-commerce sites that are good at buying things but we’re not very good at product Discovery and it seems like social and video or where a lot of the,
the new product discoveries coming from and then that that ultra-fast delivery for filling orders to give you all the words you are asking about the that that’s a huge thing and if you think about you know how much retailers are struggling with with
grocery profitability like it’s a double whammy that wow they’re trying to figure out how to solve for profitability the consumers moving to this even
you know inherently less profitable order so it’s going to be that that’s going to be an interesting disruption of the industry so if I were to add 3 to that.
I do think just the whole pandemic.
[36:41] Acceleration of great digital grocery like is when I talk about a lot and I still think that that is a huge thing like all those predictions about how much the pandemic was accelerating e-commerce for probably wrong but grocery delivery
Ecommerce probably did get accelerated five years and to me
maybe you know what will ultimately end up being one of the most important things that happened during the pandemic is Amazon invented a new grocery store right this Amazon Fresh concept
and it’s starting to scale there’s more than 30 of them now they have just walk out technology in them which
I would have bet against them having this quickly and there are there are lots of investigative journalists that have found.
Some interesting real estate footprints that would imply that it’s going to scale their that there’s a business plan footing out here that had like 300 of these in the UK which is a small island
um I think we could look back five years from now and see Amazon is a very meaningful brick-and-mortar grocer and and I think
20:21 is the year it it happened without us totally
acknowledging it so I think Jay W groceries an interesting Evolution one that I end up talking about a lot with my clients also driven by Amazon is retail media networks right so you know Amazon,
is that a run right now of about 30 billion dollars in ads it’s probably the most profitable business Amazon has I think this this.
[38:08] Battle for eyeballs between retailers and traditional digital platforms is super interesting and I think you know you set the layer who is.
One of the the.
The key guys at Amazon media like we had him on the show when he moved to Fresh Direct and he’s now running Walmart Connect Four
for Walmart so you’re seeing the Retailer’s hire these like credible media sales people and I think that’s a.
[38:37] A going forward a significant part of every retailers plan is how to be their own media Network how to get eyeballs and how to monetize those eyeballs and that’s a new new skill for a retailer so I think that’s a big deal and then
the last one I’m gonna throw out,
is one that I am surprised doesn’t get talked about more but it’s the apparel retailer she in and I think they are super interesting they’ve had phenomenal success they’re probably globally the largest apparel
reseller on the planet right now and their their annual revenues are more than than H&M and Zara combined so so remarkable.
[39:18] Story of fast acceleration but the bigger story here is,
to me Sheehan is very representative of the democratization of apparel that like for the longest time
we expected Mickey Drexler or Versace or
Yeezy to tell us like what was cool to wear and then we waited until we can buy those clothes and we bought them
and I just I think that model is totally dead now I think the apparel that sells best the stuff that she and sells the stuff that target cells the stuff that
Stitch fix cells is frankly based on customer data it’s watching customers finding out what they like and then making it really fast and so
Sheehan isn’t isn’t fashion driven by a stylist It’s Fashion driven by Tick-Tock right and an Instagram and I think that’s a,
a lot of apparel companies haven’t gotten the memo yet that the consumer is now squarely in charge of these fashion trends.
Scot:
[40:18] Yeah saw an article about these guys were this this one lady she did this Argyle Sweater outfit and.
It was on Instagram it got some viral love they took that and it created a hole
the outfit they had copied it or I guess fast fashion and I don’t know how the how the IP Works in this world but they had replicated it and they I think they even used her picture which I think was with articles about that she didn’t really you know,
realize that that effectively shows open sourcing this thing to the world and then it became a top seller for them like in 60 days it was insane how fast that they identified the trend and get the.
The product out there it was like you know NASCAR fashion or something.
Jason:
[41:03] Yeah it’s crazy if you think about like the fashion traditionally worked like.
Dudes would show up in Paris at the Fashion Show and show these cool Styles and then everyone would steal those Styles and send them an effector he’s and two years later those fact those Fashions would be available at Neiman Marcus.
Two years later and in so the genius of Gap was that they got those Fashions to the mall,
18 months later instead of two years later and the the disruption of H&M and Zara was that they got them to the mall six months later instead of 18 months later right.
She and sees that woman in the crop-top Argyle Sweater
and they have they have that fashion available in a week and here’s what super interesting they don’t make a million of them and hope they sell which is what all those other retailers had to do,
they make 12 of them and if those 12 sell in 8 seconds versus 20 seconds then they make thousands of them.
Right and so it’s really data-driven real-time a/b testing on apparel trans at a speed that that these kind of traditional apparel Brands can’t even imagine.
Scot:
[42:13] That’s because they have the factory right there that they’re able to do that or like to have some.
Jason:
[42:17] Yeah and they.
In Shane’s case they don’t own the factories they have a net like that it’s a gig worker economy for factories right like so in the same way that boober recruits a bunch of Uber drivers she and recruits a bunch of factories that they then go to and say hey we’ve got some
some ideas for some new models and find one of those factories that accepts the order and makes the
the stuff and so in sometimes there’s our Factory driven ideas sometimes there she and driven ideas but but yeah that’s that’s the model and you know there is a
Dark Side to this I got you know a lot of its there’s a lot of questions about the labor standards and practices at a bunch of these factories and of course there’s.
You know a lot of the stuff that gets bought on Shion is super cheap and gets worn once and so it’s a ecological disaster I would argue the industry it’s disrupting is also.
Kind of a you know it has a lot of dark sides and and is not very sustainable so I like I’m not sure she and improves on on any of those problems but from a pure consumer demand standpoint,
I don’t think we’re ever going back to you know these like anointed tastemakers that like decide what we’re all going to wear for the next year.
Scot:
[43:32] Yet clearly clearly that model is sailed having.
Jason:
[43:36] Indeed well listen Scott I know we both have to run but that is probably a great place to wrap up our final show of
20:21 I need to take some downtime not to see my family or anything like that but
in early January we always like to record the forecasts show and hit
traditionally you crush me and so I feel like I need to spend a lot more time thinking about my forecast before the forecast show comes up.
Scot:
[44:07] Yeah challenge accepted I will also be thinking about this in a background processes I’m enjoying the holiday I think this is a good time to thank our listeners you know we’ve
you know we’ve seen our listenership grow pretty steadily over the years and we really appreciate everyone giving us time to
your day to talk about the topics we talk about and we get a lot of great feedback and really engaged set of listeners and we really appreciate you listening
and if you want to share your appreciation one of the ways you can do that is through a five star rating so fire up your favorite
podcast listening technology and if you would leave us a five starters we that would be the perfect holiday gift for us.
Jason:
[44:47] Yeah that’s exact five stars is exactly my size to Scott.
Scot:
[44:50] How about that.
Jason:
[44:53] Awesome well most of can’t appreciate enough the listeners for spending this time with us every week this is a lot of fun for us to do and I learned so much from
the the chats I have with folks after they listen to the podcast so I’m that is one of the things I’m super grateful for.
Scot:
[45:10] Everyone have a great holiday Jason you how enjoy your trip to California.
Jason:
[45:14] Thank you you have a wonderful holiday as well and until next time happy commercing!
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