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Jason & Scot Show Episode 94 News

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A weekly podcast with the latest e-commerce news and events. Episode 94 is a recap of the weeks news.

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Episode 94 of the Jason & Scot show was recorded on Wednesday July 19, 2017.

New beta feature – Google Automated Transcription of the show

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 94 being recorded on Wednesday July 19th 2017 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 Scott show listeners Jason I’m sitting here in 99 degree sunny North Carolina whereabouts in the world are you.

Jason:
[0:50] I am in a relatively cool 94° New York City.

Scot:
[0:55] Nice nothing like the odors of New York in Late July with 94 degree weather it’s a nice city for them.

Jason:
[1:05] Jack me I find that it really brings out the New York bouquet in the in the air.

Scot:
[1:10] The city’s usually pretty dead cuz her once in the Hamptons only have this cursed.

Jason:
[1:14] Exactly Scott I feel like this has been a super exciting week for you I have been living vicariously through you through some exciting news going on this week.

Scot:
[1:25] Yeah for the fellow nerd / Geeks or whatever you like to call yourselves out there this is it’s a big kind of two week 10 day. So you had last weekend e23 which is Star Wars going to insiders conference and they had a lot of good start that’s a Disney conference,
in Star Wars is owned by Disney so they had a lot of interesting news there also around Marvel if you’re into the superhero side of things and then coming up soon if not.
Eminent is a Comic Con I’ve never been to it as a San Diego and and kind of quite a trip from you never try to go like.
Four times it never works out so I kind of gave up but they’ll be a lot of things now it’s there and,
so there was the sizzle reel for Last Jedi which is exciting that’s the movie coming out this December,
and then I think I’m most excited about is their doing Star Wars land which is going to be called the edge of the Galaxy and they’re going to do a Resort in Orlando resort so.
Destiny exciting you’ll you’ll kind of go check in and be assigned kind of a you know.
Personna if you will and I’m sure people will cause play I’m not a big cosplayer but I think.
You and I haven’t discussed it but I think we should talk about having the Jason and Scott show there at lunch in.

[2:38] 2019 lizards that excited we can do a Big Lick meet up there or and we’ll have kind of a rebel versus if kind of thing on the podcast and it’ll be great at least five of us will really enjoy that podcast.

Jason:
[2:50] I’m totally in I’m putting it in my calendar right now.

Scot:
[2:54] Yeah well we have been doing a lot of deep Dives interviews lately and we thought it would be a good time to get back to just news there’s a lot going on in the world of e-commerce even though it’s summer and you would expect,
e-commerce to be slow there’s a ton of news and of course it wouldn’t be a Jason Scott show without Amazon so let’s start with some Amazon news.
Amazon news your margin is their opportunity.

Jason:
[3:28] Yes Scott we’ve obviously did a whole show on the announcement that Amazon was acquiring Whole Foods,
but there’s been some foul on conversation their number people that are speculating including Scott Galloway did a video this week or last week speculating that,
did the potentially the the acquisition won’t be allowed to go through and that the government will try to break it up.

Scot:
[3:59] Yeah you know I think that’s an interesting perspective but you know I think.
Amazon really smart and the the two Tech Titans of kind of tripped over this or IBM and Microsoft and,
what ends up getting you with these Monopoly things first of all what ends up getting with the government is being Monopoly and.
You know the definition of monopoly from the government’s perspective is you just have this obscenely large market share and they argue that this is bad for consumers or businesses because they don’t have toys prices go up in those kinds of things,
and I think I think Amazon has kind of just because they’re scale and what they do they’ve been oculate themselves from the Sprewell so freeze ample.
You know a grocery let’s say there there is no argument that says this will give Amazon a monopoly and grocery because you have yo.
Walmart so far ahead and then Kroger and there’s literally and I think we talked about this make some number six or seven in the Market at.
Kind of like 8 or 9% when you add up Whole Foods plus Amazon so it’s so it’s hard to make a case there and then,
it’s also hard to make a case of this is going to hurt consumers because we all know prices are going to go down so I think Amazon by picking these huge addressable Market areas that they’re in and getting a small piece of them then also relentlessly driving prices down.
I think they’re pretty inoculated from kind of a government.
Kind of rule even even when you look at e-commerce you know you could say Well they’re like 30% and 25% of e-commerce 30 to 33% if you count DMV.

[5:40] That’s Monopoly but then the pricing thing doesn’t really come in there and I think what Amazon would argue is,
well you know you can’t really look at e-commerce because it’s all Commerce and you know when you look at all Commerce then Amazon has 4% of all Commerce so certainly doesn’t feel like a monopoly,
from a market share perspective and also it doesn’t have a pricing thing so I would actually disagree on based on what we know today that Amazon will get split up because I think they’re they’re pretty safe from those two,
kind of pretty simple test that the government uses to look for monopolies.

Jason:
[6:15] Yeah I totally agree I think based on sort of the conventional wisdom it would be highly unlikely because the first thing that happens is they have to define the market and then the market.
The relevant Market here is likely going to be grocery so it’s not going to be,
online or offline and it’s not going to be all of retail is it’s going to be Grocery and Whole Foods has less than 1% market share and Grocery and Amazon has no market share and groceries so you know from that standpoint.
It’s going to be real hard to make a monopoly argument and your point in the US,
antitrust like there has to be tangible damage to Consumers would usually as lack of choice surprise and nobody’s going to be able to make the argument that.
Amazon buy Whole Foods is going to drive prices up if we were talking about your up or something it might be a different case cuz they’re they can make all these arguments that that.
The merger could impede Innovation which is bad for the consumers in the long run but but the US definition is much more narrow so I just I don’t think it applies at all I think the only chance that,
did you know we might see some saber-rattling cuz I do think there’s some politicians that are going to you don’t want to want to make some hay by talking about it but if the end of the day,
it would require like a new antitrust theory in and dramatically new PAW enforcement policies to really see them take action against this this acquisition.

Scot:
[7:45] You’re the one thing Scott did bring up that I I do think Center esting is.
Yeah will Amazon be a trillion dollar company not to give you a more interesting is what is the first trillion-dollar company going to be and I think the three candidates are,
Amazon Apple and Google and so just kind of like size that up for listeners to so the way you think about this is every stock has a market cap which essentially the number of outstanding shares times its current price.
And right now apple is ahead with 787 billion dollar market cap,
their stocks it about 151 so did get to a trillion they need to go up with CT.
50% so that would put their stock at like 2:25.
And then number two right now you have Google also known as alphabet now and they are at 670 billion and their their stock is kind of somewhere to Amazon’s right now it’s at about $1,000 so they effectively have to get up towards $2,000 in their stock.
Assuming there’s no splits between now and that that mythical point when they hit a trillion.
Amazon’s actually the laggard so you know in amongst these three so fruit number one is Apple at 787 number to is Google at 678 and then number 3 and quite a distant number three is Amazon at about 5.
500 billion dollars so half of the way to a trillion dollar market cap so they’re stuck what have to go to mm so you know.
A lot of people would lead Apple we’ll get there because we got this kind of iPhone supercycle happening with the often leaked not not verified iPhone 8.

[9:22] I’m starting to see some negativity around that because a lot of the components as these Wall Street guys dig into the supply chain,
looks like it’s going to be hard to get the components so a lot of people are saying a is going to be very expensive phone and it be it’s going to push to next year,
the supply so you know maybe this iPhone 8 Super Cycle doesn’t happen or it’s delayed but anyway it it’s going to be you know I think a lot of things have to go.
Amazon’s way to beat Apple there who knows Google you know what let’s see how they do they got a lot of.
Great things are doing you know some of these things in Google lab probably need to hit for them to kind of get to that trillion dollars cuz it feels like search is kind of running out of gas a little bit.

Jason:
[10:03] Yeah I mean that’s.
The one thing at Amazon has going for them versus the other two is they have much smaller market share in a lot of their businesses so there’s a lot more Headroom than it feels like.
There there is for apple and Google’s mature businesses to your point is.
If Google hits a homerun with a ton of his vehicles or something like that that that could certainly be the thing to do at 2.

Scot:
[10:27] Yeah that’s like so we’ll be watching it really close here at the Jason’s gotcha.

Jason:
[10:33] Other Amazon news this actually happened a couple weeks ago when we were doing other shows,
but I’ve heard some more recent conversation about it is well and that was Nikes decision to start selling on the Amazon platform.
And,
that was kind of a deal because Nike had been sort of a vocal opponent of selling through Amazon and so it was it was really seen in the marketplace as he some of the last brand holdouts Nike and honest company which had both kind of over it we said they wouldn’t.
They didn’t think Amazon was right for the brand are now both.
Selling in in in case of Nike that announcement had a head of favorable impact on Nike stock at had a negative impact on all the other Sporting Good stocks like Dick’s Sporting Goods.
And so you know people were kind of saying like hey this is another another Amazon Milestone is they’re getting all these hold out Brands to sell in the plant form.
But the more recent conversation has been like it doesn’t appear that Nikes necessarily.
Embracing the platform and putting their whole product line on it and sort of like using it as a primary point of distribution.
You know when you work at like what Nike had on the platform for Prime day versus a lot of their competitors you know it was only a smattering of product and a lot of people have taken a theory that.
That Nike is in her the business relationship with Amazon so that Nike will have more leverage and get more support from Amazon and protecting their brand and you know in for saying.

[12:15] You know fake products on the platform and the,
really it’s it’s more of that level of a relationship then then it is you know Nike selling all their goods direct through Amazon.

Scot:
[12:27] Yeah and um I wouldn’t have certainly there’s some counterfeit stuff in Amazon sexy pretty good it even before the way shapath pulled Leasing.
Anything that seems counterfeit,
but a lot of it is really more around third party and controlling the third party and so-so as sweet we had an inkling this was coming because a lot of third parties that sell Nike items,
I were alerted that you have come July they would no longer be able to sell on the platform so so now I keep definitely leverage their power to control the third-party Marketplace as a question for Amazon is is the you know are they driving enough sales and selection to Nike to replace and even be.
Automatically ahead of that was was that deal a good deal for Amazon so it’ll be interesting to watch that because Amazon has no qualms of kind of,
terminating deals if they’re not making sense for consumers so this could be interesting to see how that plays out in there is nothing argument that Nike actually flexed its muscles and,
will Amazon one of them badly enough on the site that they they did this kind of very rare brand gating where they now Gates this brand from third parties and I can probably count on one hand the number of brands of succeeded in doing that.

Jason:
[13:39] Yeah yeah it’s going to be fascinating to see how that that all plays out and regardless it does get Nike on the platform and once they get a taste you know it remains to be seen what they’ll do like you know they can easily expand the assortment overtime.

[13:55] Another interesting piece of news that made me think of you is Amazon the launched a new platform this week which is called Amazon Spark.

[14:06] And this is the latest in a series of new new tools and Amazon has offered that are really about helping consumers with Discover it.
So you know you think of Amazon is being great destination when you know what you want and you use the search engine you go right to your PDP and you buy the products.
But what spark is really about is browsing visual content and having shoppable photos so the photos can have hot spots in the hot spots are linked to.
Amazon Asians and you you can sort of a reveal and add to cart button and put stuff in your car.

[14:43] Straight from these these photos so this gives a tool to influencers and Affiliates to start.
Publishing their own pinterest-style visual content on the Amazon platform and Shoppers can curate that content based on their personal interests and when they you know.
See a picture of a toddler playing with some blocks that you think would be fun for your child you can.
You can click on the blocks and Adam to your cart so in interesting new shopping model for.
For Amazon and it made me think of you because a couple weeks ago you publish this very cool Amazon scape sort of listening all of the.
The different tools in the Amazon Echo System and is willing to put together the outline for Tonight Show I couldn’t help but thinking that you’re your three-week-old Amazon scape is is wildly out of date already.

Scot:
[15:35] Yeah yeah that thing is a blessing and a curse like some of these kind of projects I seem to bite off at theirs.

[15:44] Is it good like 6 things I need to add on to their already which is just pretty amazing considering it is 3 weeks and then we don’t we don’t really talk about a lot of the cloud-based stuff on the show but there’s already been several Cloud things I need to add on there.
And it’s this kind of is a good kind of.

[16:02] Switch off Segway into Jeff Wilkie I think that’s how you say his name Wilke I’ve always heard people d’amazon climb lucky I guess you could argue that the es Island and its will,
he’s pre senior guy at Amazon and I have never seen him speak and he was actually Fortune had one of these kind of frou-frou Aspen the things called the brainstorm Tech Conference,
you and I are too busy to accept our invitations to Keynote so maybe next year will be there but Jeff Wilkie was he was over the only had a lot of free time and popped on over there he runs the he’s effectively he’s got like a CEO title which is really unusual a lot of people behind the scenes say that he is the likely success successor,
to Jeff Bezos holder that’s all all this person,
NADA it has not been designated that anyway I’ve never seen this guy talk and he was really excellent in so we’ll put a show note up there’s like a 30 minute video from a talk he gave,
allies Amazon guys at comedy shows they don’t like talk about Amazon in a meeting way and,
but what I like to do is pick up Tim bits of culture in and you’re the one question having build some businesses is.
How do you do so much and obviously they have like 300,000 people and you can do a lot but you know I’ve been in.
Visit large companies like that and it just get so wrapped up and caught up and PowerPoint gnosis and meetings and in that kind of thing.
And this interview is really good cuz he spends a fair amount of time talking about that and it’s funny he says you know his is the short answer is they create separable single-threaded teams so.

[17:39] It’s almost like a developed it approach they’ve taken with cloud computing is like their cultural approach so it’s almost like every team and.
Amazon is its own little service and gets to focus on that service and if it needs to work externally that’s fine it’ll it’ll kind of create a little mechanism for doing that but then.
That team spends 99% of time.
Focusing on it an interview and had no idea what he meant by that and so so he went out and bought a couple examples and he kind of said you know what will do is will we in the early days of Alexa we hard one person and all they did was think about Alexis and we didn’t.
We didn’t tie them up with anything it didn’t have to.
Time with the rest of the system or anything like that we talk to people that like Microsoft and Sony’s other companies that’s what starts to really hamstring them is the funny story like the early Xbox almost died because they wanted to have Internet Explorer,
the main window on it like the IAT wanted it to have that so they actually.
Creepy little teams in Amazon create leaders they go build teams and nothing gets in their way and,
this is pretty amazing at the scale Amazon is that you know there’s not a legal team at Brand team when you get in these larger companies I’m sure you interact with them daily.
The it becomes a culture of know and somehow Amazon has created this kind of,
primordial soup that still continues that allows many ideas to flourish and die and and and,
yeah it seems like they’re going to with that culture they’ll be innovating and out innovating a lot of companies for a long time so if you’re interested in that topic will put it in the show notes there’s a 30 minute video that’s very much worth your time.

Jason:
[19:16] Yeah I mean to me the interesting thing you know talking about,
software development is sort of a metaphor for organizational design he even talked about the way the teams interacting with each other being sort of like an API where you.
Add Define inputs and outputs and that’s all you worried about and you you know other than that you know weeders in one business weren’t getting involved or getting in the in the shorts of,
leaders of the other businesses which which you know as you were saying it made a lot of sense.

Scot:
[19:47] Yeah I’ve been an Amazon meetings where an Amazon is a very buttoned-up company.

[19:53] But because they’re so singularly focused you’ll go and so like the one Pea in the 3p teams don’t really know each other how their systems work.
And it’s kind of funny like we’ll have to explain to that will be like well.

[20:07] Did you guys know you have the Seller Central thing over here and it’s got this that in like really who runs that in your like.

[20:15] Your trip is just kind of really interesting,
yeah it does create a little misalignment in some ways but I think what they’ve done is they done the calculus and said it you know focus and moving quick is better than alignment in some.
Some ways maybe lime it’s not the right word but like a little bit of duplication of effort happens so I think it went having built again I’ll route to a large organization,
you start to really worry Nashua duplicating effort here and you make sure these teams are talking and sharing stuff and it doesn’t it seems like Amazon to just turn all that out it’s just like go as fast as you need to you know.

[20:50] Go fast and break stuff and it’s easier said than done in a company the size so that does really interesting that talk so highly recommended.

Jason:
[20:58] For sure and in that that model probably explains.
How they’re able to maintain this incredible pace of innovation and you know.

[21:09] Part of that Innovation is all these new product offerings that are launching that we’re having to talk about on the show and it’s it has the unintended consequence of the podcast sometimes feeling like an Amazon podcast because I missed this week and.
Yeah sure know if they want antenna products we already talked about Spark,
you know another big one this week is meal kits right and so they they’ve launched their own meal kits which you know.
Cuz very negative reaction on the part of a blue apron and some of the traditional competitors there but they they just seem like they’re able to.
Innovate and get these these products in new categories and new services.
Out incredibly quickly in and obviously part of the reason they do that is because they’re.
You know they’re out there all independent and running in parallel as opposed to having dependencies on each other.

Scot:
[22:02] Yeah meal kits was interesting because it was almost kind of like.
Accidental news because so a company in the UK saw that one of the Amazon entities created a trademark for from yokuts and I think the trademark is some it’s like a more of a slogan and it says something like.
We prepare it you cook it and that’s kind of what then they pulled that thread and they found that they’re working on meal kits what’s funny because I had a friend.
What I heard is it was going to be for fresh only so I had a friend look into this and Bill kids have actually been sold on fresh for like 90 days and it started with a couple and their Amazon meal kits and now they actually have about 20 meal kits and,
you know what’s cool about these is there’s a good better best so the Amazon brand is a lot like amazonbasics it’s a basic meal,
it’s usually a beef or chicken and pork in a vegetarian option and it’s $19.

[23:01] Didn’t have third parties selling on there so there’s another one and it’s called Tyson and something,
and it’s more like $25 and it’s all chicken because it’s Tyson and you tell Dave come up with the recipes and everything and the food quality goes up a little bit and then there’s a fancier one that’s called Martha and something,
and that one is like 35 and it’s got you know skirt steak and,
fancy sauces and all this kind of stuff so it’s really interesting that you know of very.
I would argue there are Dion Generation 4 where is a lot of these delivery subscription kits you know they’re not a.
Great customer experience in many ways you and I have talked about how we will try to unmanned lot of people terminate and you know the problem is you don’t control when the food comes used on this Relentless treadmill of food,
and if there’s a meal you don’t like you kind of feel obligated to you don’t get to pick the meal and so Amazon by just kind of having these meal kits that.
Seeing you know there’s good better best soda number one there’s three price points and number two,
I get to pick it and when I want it and it just seems like a more natural way of doing this this kind of prepared meal Thing versus having it kind of like come on this kind of Relentless schedule where you fall behind and start to feel guilty you’re not cooking all your meals.

Jason:
[24:15] Yeah I know I agree I think the order on demand component is that is a big win like you know I’ve been doing a lot of consumer research for some clients and.

[24:25] Meal planning and healthy eating and Fresh Foods are all very high on the decision tree for consumers but at the same time they’re super,
times of compressed in they have very limited bandwidth and so meal gets really fit that Niche that they,
they let families feel like they’re making fresh healthy food and they say the family time into your point you know when you can order them onto me and you can.
Pick the taste that you want you know on the date you want and not have the sort of Relentless pressure of a mandatory subscription coming to your house.

[25:01] Another interesting thing about the mule kicks is that it seems like they’re showing some real food Innovation so one of the things I read was,
that they would be offering ground beef hamburger patties made from single cows and so you know.
One of the health challenges with ground beef is you need to get,
meat from a bunch of different animals in them any one of those animals have any diseases that in your potentially at risk and so that that forces everyone to make sure that the ground beef is is,
cook sufficiently to,
to all those viruses and so you don’t get the super juicy flavorful meat so by offering single cow ground beef they they offer product that’s safer to cook at a lower temperature and I liked it just never considered that before and you think about the the challenging Logistics of.

[25:54] You know.
Making that product in a meat processing plant and you know it seems like Amazon signing up for some pretty significant Innovation their versus just sort of Outsourcing these foods from the traditional suppliers.

Scot:
[26:09] Yeah and done just servants clear this is available to Amazon Prime fresh subscribers which is that full-on grocery deliver delivery subscription.
But I think we’ve seen this program where they test things there but random up they get them too.
You know 30 40 50 skews then would be very easy for them to move this across platforms the next platform I would expect to see it in would be.
Prime now and then obviously like the the pickup in the go in Seattle but that’s that’s kind of a small footprint and then it.

[26:41] My Prime now I would put it in a 40-45 markets that would be interesting and then,
that point they could figure out how to make it part of just kind of the normal Amazon kind of infrastructure so this can be really interesting to watch them with these meal kits and we’ll keep reporting what we see there another kind of tidbit for you,
my friend is in the beta for the Amazon Prime pick up and he’s tried it two or three times and.
Every time he tries it he picks a he like literally lives 20 miles away from the pickup Center he’s seats at 15 minute window and it’s ready in 5 minutes he said it’s like the best thing that they have ever tried for grocery it’s just like.
Dothan availability window seems high now that could be a part of the pilot program maybe they’re not just putting a lot of people to their but the it is so far really under-promise and over-deliver it as far as the timing and.

[27:34] He said the quality of the food is very good date they actually kind of prefer it to Fresh in some ways cuz it’s kind of gives a little bit more control over when they get things and.
So I thought that was interesting.

Jason:
[27:47] Yeah absolutely everywhere we’ve seen at testing of of buy online pickup in-store for grocery like you you see huge adoption so,
that doesn’t surprise me a funny antidote I saw a professional chef in Seattle rotor review of Amazon go where she she orders and ingredients and,
similar experience she had she had great service there but she gave the the.
Actual food products that she got sort of a mediocre results like somewhere apparently like very high-quality ingredients and some of them were pretty disappointing including like this this Marquis piece of fish that she bought,
my guess was pretty disappointing and what was funny about it is she wrote this is a review that got published in the New Yorker and so it’s this like,
you know well written 2000 word.
Weird review and she published a link to the New Yorker article on Twitter and cc’d Amazon help their customer service spot in the automated response from the the bot to this link with this long article was,
you know where we’re sorry you experienced a problem can you please give us a little more detail about what went wrong.

Scot:
[28:55] Bots going to ride and that’s actually a good segue into there’s a new this one’s kind of in the rumor category so this is on,
I’m not known if it’s going to happen or not unverified I guess I should say but a lot of people got in surveys asking about an Amazon messaging app that appears to be called according to the survey anytime,
this is kind of like one of those things we scratch on your like why would Amazon do messaging you know clearly all these messaging apps are out there and way ahead.
But I do think Amazon has couple things going for them so,
the popularity of Alexis so it’d be interesting to have a voice component to messaging you know so so right now none of these messaging systems really connect well into voice so that’s kind of interesting with the new Amazon.
Ecko show I believe I had a chance to play with yours yet.

Jason:
[29:47] I have them.

Scot:
[29:49] Yeah it’s a little bit of a social network kind of a thing going with it so so I think they’re kind of getting you know they may be seeing some early data there that says hey this is common air sting,
maybe there’s a chance we can build a little bit of a social network here so so if you on your phone if you give it access it slips in your contacts and now,
you can call other people that have those devices so so it’s almost that and then I think the third thing and probably most important they could bring to bear as if some of this cognitive an AI so we talked to Andrea frigg’s ample and you know she talked about how you can chat with an Amazon vendor bought and,
it will negotiate on Amazon’s behalf you seen it with the help but so I think there’s they’ve got this really kind of interesting a platform that’s probably second to none that.
Could be interesting to leverage in.

Jason:
[30:44] Anschutz got we just had a little audio glitch can you hear me.

Scot:
[30:51] Area.

Jason:
[30:52] Okay so it was my fault I open another tab I just can’t do that like cuz.

[31:00] I was trying to look up another product but let me just quit.

[31:07] 550 parts to so you were it was the sentence when you’re talking about you just started the the Andrea AI.

Scot:
[31:20] Tell me to say the third like start there.

Jason:
[31:24] Yeah that would be best.

Scot:
[31:30] The third piece Amazon brings to Bear is this kind of AI engine now we don’t know all of their building in there you can see some hints of it through AWS,
and if you remember we had to Andrea on the show and she was talking about this hands off the wheel initiative where.
You know dude you’re as a vendor you’re singing or negotiating with to chat system and its actual robot on the other side and most owners only realize it’s a robot so apparently have some really amazing internal AI technology maybe you’ve seen it on that help. You mentioned so it’ll be you know interesting that’s kind of one of the ways they could commercialize this,
yeah and then you think how can Amazon use the messaging well imagine you could ask Amazon about any product.
You know you could send messages between Alexis and all the devices so I don’t I don’t know it interesting to see if this one becomes real and what they’re using it for.

Jason:
[32:18] Yeah I am a mixed feelings at you know always interesting to see,
Innovative new products and it’s way better than the current state of messaging apps like that that could be a peeling I sort of have a little bit of messenger for two you get the moment I feel like I have you know a.

[32:36] Community of people that communicate via SMS or via.
Apple iMessage or video Google voice chat and you know so part of me is worried about.
Fragmenting this messaging even further with another app not feeling super appealing,
I have to say that I have found the the drop-in feature on the Alexa more useful than I expected to so in my house it’s it’s actually getting used as a pretty useful intercom right like so you know my wife will be putting our son to bed and it’ll be 10 to read a story and she you know she can just with her voice while she’s holding our son you know drop in and the room I man and tell me that we’re we’re ready for story time and that kind of stuff super interest has been,
will useful in our house unless fired up to be able to drop into family members house and use that versus all the other.
Other messaging tools we have so so we’ll have to see how that all plays out.

Scot:
[33:36] Yeah another angle and I forgot to mention this is there’s a lot of rumors that slack is out there for sale and and it’s a business productivity chat out really for lack of a better word so maybe what we’re hearing is really going to be less concerned more kind of business productivity,
and that would actually slide in well with kind of these private e apps that they’ve been putting out like chime and whatnot so we’ll be there some see if what direction they go here.

Jason:
[34:00] Absolutely and let me just say.
Slack message fragmentation is the bane of my existence cuz I’m a member of about 50 slack teams and it’s it’s pretty hard to monitor them all at once so hopefully Amazon does acquire them and fixes that,
another service that came out was there home installation service in so a lot of people have kind of taken the colonist Amazon’s version of Geek Squad,
and I’m not sure this is completely confirmed but there were number of job listings that were sort of the precursor to the service,
the made it seem like these were going to be W-2 employees than Amazon was actually hiring that would do home installation of things like,
consumer electronics in so you know we haven’t had the test yet but on Prime day I had my mother buy a new printer for her house that she needed and as she purchased that with home installation from Amazon sawall,
I hope we in a future podcast Bill to talk about how well that goes.

Scot:
[35:01] Yeah maybe we can have your mom in it on as a guest how awesome would that be.

Jason:
[35:04] It would be totally awesome the downside would be that you know that would we lose our number one listener that week.

Scot:
[35:11] Yeah you’re right she would price to listen to I think we should do it.

Jason:
[35:15] Gotcha well I will mention it to her when I when I get the the printer install recap,
but it is interesting to me that they’re adding services and you know in the old days if that like.

[35:28] They were really trying to build a business that didn’t require human interaction and you know there’s all this talk about like if we have if you ever need to talk to a human that we did our job wrong and you know more recently.

[35:40] A ton of the services are depending on humans and you know you’re seeing Amazon hire a lot more people and in Creed jobs and you know I felt like you know despite the fact that this home insulation was a brand new service,
was heavily promoted on Prime day and,
you know it was it was it both had prominent space on the on the pdp’s and and it was being offered it’s an aggressive promotional prices as well.

Scot:
[36:03] Yeah and they have this is on my Amazon skate but they also have a home Marketplace called Amazon home services and.
It doesn’t have such there’s kind of to entry points to where it’s popular is in checkout upsell so if you’re buying a big screen TV or.
Printer and you want to buy insulation to get a pretty good attached right there where we’re not seeing a lot of volume is when people kind of go through the top of the funnel and kind of say,
oh I need to go to Amazon to get my house cleaned and it’s just think I think people don’t think that way and they try to boil the ocean there’s like literally everything you could do in one place and it’s,
it’s a little bit of water down by experience but you know I’m obviously you kind of deep into this on-demand Services world and I think Amazon you know.
I’m interested in it for all the reasons Amazon is I suspect it’s it’s a very big huge dress will Market if you look at GDP.
It’s 80% Pro Services 20% products so,
you know it’s four times as big and Theory as products and the terrible customer experience you know think about when was the last time you had a great service at your home,
yeah you have no power in the thing you get these delivery Windows the guy never shows up if he does he knocks and runs is just like a really terrible experience so so I think there’s there’s a really big adjustable Market there that it’s probably pretty interesting to Amazon and what kind of see how serious they get about it.

Jason:
[37:35] Yeah that’s going to be another Super interesting one now watch in in the last,
new service I noticed is from the back of a service for brands for for number of yours Amazon has offered branded landing pages but they were pretty rudimentary answer the last month they they did a major refresh to the brand pages.
And these new pages are pretty cool they’re they’re based on a much more modern framework they’re based on a react framework but what school is.
You can now have multiple pages of URLs for your for your brand page so you know if you’re a brand that has multiple categories of products you can have your own navigation with links to a,
to a category page within your brand page which is a pretty common need and something that they didn’t support before some multi page.
Brand landing pages is really powerful they’ve added the ability to support rich media which is huge.
For a long time we’ve actually advised clients to put a lot of brand content.
Yeah in What’s called the A-Plus section of their pdp’s and that’s because you know maybe someone’s just shopping for your brand but typically an Amazon.
Eat when they search for you the brand that the results going to take him to a PDP and so the PDP had this sort of be the.
The main page for each individual skew or a sin but it also had the kind of act as an ambassador for that category of product and so so you saw a lot of folks commonly put.

[39:08] Rich media in their pdp’s that was really meant to be at the category of brand level and so now they’ve they’ve enabled you to put all that content where it really belongs on its own.
On brand Pages Nat super powerful and then you know equally helpful,
they’ve added a real CMS in Vendor Central that let you can manage these Pages pretty easily you know even for a business use or not necessarily,
a technical are creative user so this is pretty new future,
that is if you are brand selling on Amazon you know you should have on your roadmap to be implementing these Pages as quickly as possible because if the moment it’s definitely a competitive Advantage for the folks of adopted at and,
I always like to appoint people to like the the happy belly brand page you know which is Amazon’s own product to see what you know some of the best practices are.

Scot:
[39:59] Yeah and you know what’s interesting is a lot of these e-commerce platforms especially that’s in bees have pivoted because there’s not a lot of small retailers that are doing this that well out there in the world so most of them riveted towards France and I saw this is a little bit of a shot across the bow of some of those guys essentially saying.
You know.
We have a lot of Leverage with Brands and this could actually be a pretty nice e-commerce site for Brands overtime Amazon had been in the web.
Web store business that got out of that and I’m not saying they’re going back into it but when I looked at this I kind of thought you know a brand what else do I need you know it’s almost.

[40:40] It feels very modern and kind of next-generation so the nurse and see what else they do with us.

Jason:
[40:46] Yeah and it definitely like just the the trend of adding better tools for Sailors is very welcome so hopefully they they do a lot more.

Scot:
[40:56] Yeah and while I was just just now poking around I noticed they’ve moved up to the homepage the treasure truck so,
so the treasure truck I don’t know the Genesis of this to you but it’s kind of legendary in Seattle so every day there’s this truck to drive around and it has like it all seems like something we would do but I don’t think it’s associated with his guys,
but everyday there’s like a great deal so people in Seattle that you get a text and it will say the treasure truck is by the museum and it has you know a backpack for half off or something like that and you rush down there and get it it’s like.
Supposed to be really fun and I was meaning to mention earlier because they.
They put the meal kits on the treasure truck which is they put a lot of beta stuff on there so that was interesting but now I’ve noticed today they pushed a video out with kind of funny pirate and now they have on home page where the truck is going to be traveling around the country,
let’s go interesting new thing and good news it’s already on the Amazon scape so I was I was that was when I knew about.

Jason:
[41:54] Nice I’ve actually run into the treasure truck at some events so they they send it for example to Las Vegas for CES and I actually asked the driver if if he considered it sort of on Wheels and he was actually a little offended.

Scot:
[42:10] Another couple of tidbits of news so.
After the the frothy,
Prime day there’s some interesting analyst out on the Wall Street with some reports so first of all credit Swiss came out and they have a new analyst there and he picked up his coverage of Amazon what I thought was a refreshing is most guys if you and I’ve talked about this on the show a lot but,
a lot of folks still don’t understand that Amazon has effectively to businesses there’s the retail business which we call one p.
In that line of business everything they sell counts as Revenue so if they sell $100 widget a hundred dollars of Revenue.
Pretty simple same as retail the one that trips are one up is the third party part which is the marketplace so if they sell $100 widget Amazon can only recognize the revenue from that widget which is their commission or their take rate.
Across Amazon at on average is about 10%.
C’est Cela widget $400 in Amazon gets recognized $10 of Revenue because of gaap accounting rules I always have argued for a long time and I was kind of like.
The only guy out there saying this now most people have kind of come over the can’t really think of Amazon that way because one Walmart will say that that.
That hundred-dollar which it was a pair of Nike shoes and.
And dicks lost out on $100 not $10 so when you actually unpack all that and we used to have to do this through a pretty arcane mechanism now Amazon gives you a lot of Clues to get there.

[43:42] Ineffectively the punchline is you think of Amazon is about 130 billion dollar retailer with actually about 250 billion so credit Swiss was out and they had you know it was pretty nursing date that she kind of has a 2017 estimate of.
230,
38 billion it kind of see him getting pretty close to five hundred billion over the next couple years which is which is pretty amazing that would be kind of Walmart territory so I thought that was a good report,
and then some of these things are surveys so you know you and I are not huge fans of surveys,
but RBC had when I only put some of the more Salient things here it was kind of interesting so some of the RBC is Mark mahaney he’s kind of a very kind of legendary.
Analyst on Walmart I mean sorry on Amazon.
And some history questions are interesting so you know you hear from a lot of people will no one wants.
Same day or next hour delivery in a new survey yes I would like 60% of people said well of course I would love this and I would use it on a on a regular basis.
You’re some more they talked about some category questions so.
Only 7% of those surveyed in this is a survey of quantity about 2,000 people and only 7% said they had tried grocery but 13% said they wanted to buy more grocery so yeah I’m kind of.
Signals of a large intent of an interest there on the top categories that were purchased on Amazon according to the survey were apparel Electronics.

[45:16] Home furnishings and of those are surprises but the fourth one I thought you’d be interested in a cpg so 31% of the folks had bought a cpg item on Amazon I don’t think Dave.
Dundas multiple years but I bet if we if they had cpg would be down there with grocery last year so something and if something’s going on and people are buying more CPT at Amazon which I think,
Dutch well for the grocery business.

[45:43] 12% said they use same-day delivery so that’s up from 2015 with 6% so doubling.
And then yep Prime is best.
And then this is pretty fascinating so they asked Which online retail site has the Lost prices Amazon 64% the next closest was Walmart in eBay at 11%,
which has the best selection Amazon at 82%.
EBay at 6% Walmart at 4% which is the most convenient Amazon 76% Walmart 8,
eBay five so these charts are funny their bar charts and they’re so tall dad is kind of change the perspective to even pull some of the retailers,
into the chart so so if you think about if those this kind of classic Bezos thing that he said and is is 97 letter,
we think people won’t get tired of low prices great selection and convenience / free shipping and turns out I think he was right.
And that’s kind of the recipe for for how well they’ve been doing so will put a link to that up in the show notes for those that are kind of like going to get super geeky on this stuff but might take away was cpg is on the rise and Amazon,
Prime is huge,
in Amazon hisses pulled away so far from comping competitors they don’t even really show up on the radar anymore which which you know they could be disheartening if I was out there competing with Amazon.

Jason:
[47:13] For sure but speaking of competitors they’re not necessarily pulling away from.
I did see a couple interesting pieces of non Amazon news and one of them is from our friends at Alibaba which which is certainly is holding their own obviously in different markets against Amazon.
But I find it kind of funny you know you’d only Bob I invented this this holiday singles day and you no one could argue that the.
That Prime day was coming knock off on on Singles day well I stumbled across a cool video which I’ll post a link to,
of a physical grocery store that was designed and open by Alibaba called Hema supermarket and so this is a fairly digital High service,
grocery store in China I’m going to both had some kind of e-commerce Innovations there’s a quick and collect and they’re you know a ton of Shoppers are picking orders and they have like a good infrastructure for helping those,
does that Shoppers pick their orders from the Shelf have a barcode on every skew and you can scan them with Alibaba app you can you know.
Quickly check out using Ally pay and things like that and then they had some of the the usual cultural differences of of Asian supermarkets versus Western supermarkets,
for example most of the seafood is alive and you actually.
Pick your own crawfish or your own Lobster like you know out of a bin with tongs and you can actually hand it to a chef who will then prepare your your freshly selected Seafood for you too.

[48:54] To consume right in the store so some interesting things there and it you know just occurred to me you know what what a coincidence that they would.
You know be getting in grocery and you know with some Amazon Girish feeling.
Teachers you don’t feel like these these two Giants are heavily sort of borrowing or competing with each other at the moment.

Scot:
[49:16] Yeah I think we should do a Jason Scott show roadkill have to work with our sponsors to see if we can get a week at that shirt at store.

Jason:
[49:23] How much are either of us are in adventure enough eater to be like we might have to bring someone with us.

Scot:
[49:32] Another kind of interesting startup that launched that got a fair amount of fanfare I think it’s cuz they raised capital is called brand lesson I was so curious about this so now I had to go in and order some stuff so it actually came today and first of all it’s kind of.

[49:48] It’s super ironic because you get this very vanilla brown box and all it has is on like 80 lb a 80 Point font is brandless trademark,
alright your brand is brandless and they care about their brand but then everything to talk about his being unbranded yet they’re branded with the.
Brandless it’s kind of hard to everyone at work was like really confused by the whole thing and it at.
I gave up trying to explain explain it but he’s got to do is it’s kind of like taking that private label unbranded new.
Peanut butter or something and privatizing it and so their whole brand promises you don’t play quote unquote the brand tax.
And then everything is $3 so we’ll see I ordered some K-Cups and have not tried those yet but you know the dollar.
The the cost per K-Cup is about half of a branded one or a little bit less so that’s pretty good deal if it ends up being good,
some of the things that that people in the office were like this ad good snacks so they had.
Quinoa crisp which were essentially healthy Cheetos so those were popular and then they had a wide selection of candies that we’re brand was so they had you know the equivalent had gummy worms and gummy bears and this kind of thing,
everyone felt like the quality of those was really good so Buena.
It’s interesting I’ll keep you posted some of the other stuff we try but it was kind of a fun kind of again making it was.
Yeah good enough that I gave it a shot and it works really well came quickly products seem to be pretty good.

Jason:
[51:23] The interesting they’re getting a little buzz cuz they they’re sort of the mash-up of all the popular Trends right now right so that you know they have,
hundreds of products that are essentially a cpg company with like food and cleaning products and and you know all the other things you would think of a of a,
a craft in a PNG you know kind of Assortment but they’re also heavy on the on the organic.
Quality transparent sourcing and so you know you know there’s a lot of ingredients that aren’t allowed in the products and they have have this like high quality Organics story.
And then they’re your point a good value so you know $3 for a premium product that the based on the name you would assume doesn’t.
Invest a bunch of money in advertising right like they’re brainless and so it seems super interesting.
I have to say I think there’s a huge flaw in their current business model and so not to say you know that they won’t pivot and discover a successful model but the problem I have is.
You see them and you instantly think private label and so your go private labels been successful these guys should be successful but the.
The shoes difference between brandless and private label is you don’t have to do marketing for private label products right because you,
you put the bleach on the Shelf in the supermarket right next to the Clorox bleach and and people walk to that shelf with buying intent and they see the private label is is cheaper than.
The national brand and so some people will you know make that trade off.

[52:54] Brandless isn’t in on a shelf next to a another product right like there’s there’s no one walking by the only place to buy brandless is on Brandon and Brandon has no organic traffic,
so guess what brandless is going to have to do in order to get people to discover them and come to their site and buy their stuff.

[53:16] They’re going have to spend a fortune on Advertising right and and said that the closest model we have are the guys that jet that we’re spending you know originally $100 a consumer for acquisition costs and,
you know maybe got it down to 50 bucks of consumer and so the irony here is you know they’re calling themselves Brandis and trying to position themselves as a product that doesn’t have to sync a bunch of money in advertising,
but they’re probably going to have to spend a fortune on Advertising to get people to go to their site and I would argue that even have a worse problem.
You know they can’t advertise $3 peanut butter and get someone to come to the site that just wants peanut butter because the other thing you know whether three Dar products,
you have to buy 26 of them to get free shipping and is Jeff Bezos already proved nobody wants to buy anything without free shipping and so you have to find a consumer that’s all in and willing to order.
26 products to get the free shipping and so that the ads you have to run the Google pieles you know probably can’t even be at the product level they have to be at this like.

[54:14] You know cpg level and I I just think that’s that’s going to be a really challenging story for them to.
Digitally acquire consumers that want to buy that many products from them so I’m I’m sure we’ll see them pivot on their shipping model they have a club at the moment with you,
pay money to just reduce the shipping cost which I’m not confident in and you know.

[54:35] Eventually like they’ll either have to decide to distribute through places that are Eddie had buying intent like Amazon or traditional retailers or they’re going have to spend an awful lot of money to get people to their site.

Scot:
[54:47] Yeah it’s cuz the the two boxes came within days of each other but it reminded me of boxed so very much kind of similar box size model and and do you know fill the box to get it shipped to you, then.

Jason:
[55:02] Yep other little pieces of news this one’s kind of interesting to me but in separate announcements over the last two weeks.
Both Apple pay and Samsung pay have announced that they will allow you to use PayPal as a method of payment on there.
Their digital wallets and,
to me that’s a pretty big piece of news for two reasons number one there are kinds of tender you can have them PayPal that you couldn’t have an Apple pay for example so you can have your checking account you know when do electronic fund transfers linked to PayPal you can’t do that in Apple pay but now you can link your checking account to PayPal put PayPal in your Apple pay digital wallet and now you can use those super you know seamless,
Apple pay experience to pull money straight out of your checking account no credit card required and so that.
That seems pretty interesting it seems like a big win for PayPal that both of these these digital wallets you know which are.
In some ways competitive with PayPal have both decided to support PayPal and you know my my very superficial read is.
If Apple pay and Samsung pay we’re getting a ton of traction onboarding their own customers,
they probably wouldn’t want to accept Paypal in the fact that they are accepting PayPal is probably a nod to the fact that that,
an awful lot more consumers of stored their payment information with PayPal then then either Apple or Samsung are getting organically and so they’re they’re having to go to where the payment cards are.

Scot:
[56:33] Yeah very interesting so I guess it’s signals weakness right.

Jason:
[56:37] Potentially yeah that’s really the way I read it.

Scot:
[56:40] Yeah it’s kind of frustrating time of this thing so I was early adopter on Apple pay and then between like.

[56:47] Updating my phones in my watches I have to read it like delete all my credit cards every time and every atom I have given up and you think I would be like the perfect person for this but literally that cycle of going in and out with my credit card so many times this may be just be like easier to use the stupid.

[57:03] Monkey tip line.

Jason:
[57:04] I I would totally argue with you except that like none of my cards are in my Apple watch right now for that very reason.

Scot:
[57:10] Retailgeek call Jeff.

Jason:
[57:13] I’ll fix it right after the show.

Scot:
[57:17] Cool one thing I saw that was interesting is we talked a lot about digital native vertical Brands we’ve had ModCloth on the show but no Bose also known as Walmart and,
everland is one of the popular DMV bees and the big Trend with these guys is opening up pop-up stores or physical stores so everlane announce their opening a store,
and I believe it’s going to be there going to open up a store in the San Francisco Mission and then I can have some pop ups at their headquarters and then also in New York City.

Jason:
[57:50] Very cool I’ll be looking forward to seeing what they do in the permanent store you know they had a lot of innovation on their website and you know do a lot of interesting things so hopefully they’ll they’ll have a fresh take on retail as well.

Scot:
[58:04] I think you should get up at like 6 a.m. tomorrow and go check it out.

Jason:
[58:08] Unfortunately I think the first that that for stores only going to be in the Mission District and I don’t think they’ve even announce the date yet so that maybe a later show.

Scot:
[58:17] I think there’s a pop-up in New York you can.

Jason:
[58:19] There is a pop-up but I have been to that.

[58:23] And for the record I will be up at 6 a.m. tomorrow anyway so for my client that’s expecting to see me I’ll be there.
Another one that I saw.

[58:35] Is a new e-commerce platform so this is very cleverly named platform is called new store.
And it’s it’s from a well-known character in the e-commerce platform space a guy and I’m not sure I’m pronouncing his last name right but I I call him Steve Shambhala.

[58:54] And Steve is well known for having found at a company called intershop which is a.

[59:01] A well-established e-commerce platform originated from Germany the kind of Frank Leah grew up with hybris hybris got sold for a large amount of money to to sap.
An inner shop really didn’t get as much traction but what what internship was most well known for is.
It was the platform that GSI commerce was based on and so you could you can buy the platform yourself from inner shop or you could rent in adoration of GSI from.
Of inner shop from from GSI so so Steven is back with a new e-commerce platform and it has in it a bunch of the things you would expect to see in.
A brand new made from scratch,
Commerce platform from somebody that knows the market well and so it’s it’s heavily mobile-centric it leverages a lot of the latest technology in Mobile so it leverages mobile accelerated pages from Google most exciting for me it natively supports Progressive web apps which is really exciting capability for for enhancing the mobile experience and having fast loading Rich pages,
and you know it does have,
sort of the full stack which is you know one of the common Trends we’re seeing a new e-commerce platforms it’s not just a storefront it has the the order management system it has some omni-channel feature so I can support you know an inventory model in your store and.

[1:00:32] On your website and buy online pickup in-store and all those sorts of things so I know he raised the money I think it was like 50 million dollars was a series B and it’ll be interesting to see if they get some Traction in the e-commerce platform space.

Scot:
[1:00:48] Yeah yeah I know Steven well and he has plenty of capital to go retire so it’s interesting to see him going to stay in the space and continue to innovate after after kind of.
Starting in the early days and then.
Founder of demandware and now it kind of working on I think he calls it like Commerce 3.0 so so kudos to him from the unreal stamp point for for having the gustow to stay in there for so long.

Jason:
[1:01:10] It’s it’s an addictive cat.

Scot:
[1:01:11] Last it really is it’s a lot of fun last one I saw was,
and this one is kind of funny because we stop talking about Amazon opening fulfillment centers on the show cuz they open like to a month right now but Walmart actually had has announced the opening of a pretty massive e-commerce for phone at Center it harder to keep track of them cuz Walmart doesn’t announce them like.
Amazon does now but I’m pretty sure this is the 7th one so they’re they’re kind of in the high single digits in,
I’m ninety-nine percent sure I’m right on that if it not number 7 but this one is truly pretty large so it’s Amazon’s largest fulfillment centers gift 1.2 million square feet,
does puppy is 2.2 million square feet that spans two buildings it’s in Florida it’s got 1,500 jobs one of the low blurbs always read these things I’m kind of a.
Logistics nerd is they said this next generation.
Pickup module system so not exactly sure what that is I mean I know it pickup is but I don’t know what the module system is sounds like some proprietary way of doing things it if effectively has 33 miles of shelves so I was thinking wow that’s that’s a lot of if you had to,
if you unfortunately ended up on one end of that and you had to walk to the other end to get the widget that would be bad so hopefully their systems more optimized than that.

Jason:
[1:02:30] Yeah I think it’s actually automated I think part of that pickup module system is that the that you know what’s the automated shelving systems where you know the sort of shells are stored in 3D in it,
it pulled the Shelf to the Picker instead of the Picker having a go to the Shelf.

Scot:
[1:02:47] So the Shelf could have to travel 33 months.

Jason:
[1:02:49] Yeah well probably only in a in a really bad sort would it have to go that far but yeah.

Scot:
[1:02:55] I want to see these 33 miles that’s maybe it’s like if you stack them they would go to the moon or something I don’t know it didn’t it didn’t make sense to me so I thought I would.

[1:03:07] Maybe I’m sure of the listener out there we have Folks at Walmart they can explain it to us.

Jason:
[1:03:11] That’s the one thing I know for sure is if I ever need to hide the Ark of the Covenant I know where I’m going.

Scot:
[1:03:17] Yep we’re going to put it in Florida in the Walmart fulfillment center.

Jason:
[1:03:21] Awesome,
and Scott that’s probably going to be a great place to wrap it up because it’s happened again we’ve wasted a perfectly good hour of our listeners time as always we would encourage you to continue the dialogue on Facebook interview particularly like today show we would greatly appreciate a review on iTunes.

Scot:
[1:03:40] Thanks everyone and also we are looking to do another listener question show so I use that Facebook page to shoot us your questions or you can send them to retailgeek or Scot Scot just want Wingo Wingo on Twitter and we hope to get your questions so we can have a show just of listener questions.

Jason:
[1:03:58] That’s going to be awesome and if any of our listeners are listening to this on the day it’s published and you happen to be going to Comic Con in San Diego or in RF Tech in San Diego I will be there so,
feel free to drop me a line on Twitter and it’d be great to meet up so until next time happy commercing.

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