A weekly podcast with the latest e-commerce news and events. Episode 97 is a recap of the weeks news.
Congratulations to friend of the show Billy May, on his new appointment as CEO of Sur La Table. Billy was a guest on episode 23.
- Amazon Instant Pickup, allows pickup 2 minutes after ordering popular items, on 5 college campus’s.
- Amazon stock briefly went down after President Trump attacked them on Twitter.
- Amazon Treasure Truck expanding to 5 new cities (Chicago, Dallas, Los Angeles, Houston, Atlanta).
PrivateExclusive Labels taking off according to 1010Data.
- Amazon is rumored to be entering the ticket sales business
- Rumor of Amazon “Anytime” messaging App
- Amazon was mentioned in 15% of the S&P500 earning calls this quarter
- US Dept of Commerce reported that e-commerce grew 16.3% in Q2 – half of that was from amazon. Fastest growth since early 2012 – 12.1% of total sales.
- TJX sales up 6%
- Gap earnings slightly up; they announce new BOPIS test.
- Dicks Sporting Goods, CEO, Ed Stack:
- “There’s a lot of people right now … in retail and in this industry in panic mode,” Stack added. “They seem to be in panic mode with how they’re pricing, and we think it’s going to continue to be promotional, and at times irrational, going forward.”
- Stack said he noticed heavier promotions and price cuts particularly on athletic apparel, electronics, and hunting, fishing and camping gear beginning around Father’s Day this year. “And it continued to be very promotional — not only from retailers but also from some of the brands on a direct-to-consumer basis.”
- Walmart Online grew 60% y/y
- Target acquired that same day delivery company Grand Junction
- Alibaba 56% y/y growth vs 49% projected- Adj EBITDA margins of 50%. Jack Ma talks about New Retail concept (such as Hema Grocery store)
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Episode 97 of the Jason & Scot show was recorded on Saturday August 19, 2017.
New beta feature – Google Automated Transcription of the show
[0:25] Welcome to the Jason and Scott show this is episode 97 being recorded on Saturday August 19th 2017 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott Wingo.
[0:40] Hey Jason and welcome back Jason and Scott show listeners we took a little break Jason was on vacation so I took podcast vacation.
And what we found is over the summer it’s harder to put gas so we we took some breaks from guest So today we’re going to talking about news but before we jump into the news Jason what’s new with you.
[1:00] I am super excited cuz one of my good friends launched his business in a new sitting this this month I wait that you.
[1:09] Yeah yeah we.
Yep so the still involved the channel visor exec chairman but spending the bulk of my time at new company called spiffy which is on demand Car Wash and we launched in Dallas.
Early August so we’re excited about that and we’ve already added something like Fifty office parks in Dallas so the Dallas folks the people of Dallas really love having their car cleaned apparently.
[1:35] I’m happy to hear that hopefully some of our dallas-based fans will get a chance to try it out and they can leave us some feedback on Facebook about whether you’re going to go to for two on your entrepreneurship or not.
[1:46] Yeah yeah I would love to hear how they enjoy the service.
[1:51] Awesome other than that I’m a Jeanette’s taking up a bunch of times have been a good summer.
[1:56] It has been yeah yeah kind of deep into back-to-school catch all the kids back to school so that was have two in college and one in middle school so lot of lot of variety going on at the back to school this year.
[2:11] I have heard a rumor that there’s this increasing trend of parents fulfilling all their backed of consumer purchase needs with this newfangled e-commerce thing did you try any of that.
[2:23] We did a lot of e-commerce around the back to school time yes absolutely.
[2:27] I’m happy to hear it that’s important dress rehearsal for all of us for for the big holiday season but did you try any of the like back-to-school specific Services by chance.
[2:39] Did not in one of the things that kind of feels at colleges their mailrooms aren’t open until like a week dip in there a week so you can’t just kind like ship all this stuff there and pick it up I’m fortunately ship it to your house and then take it with you.
[2:53] That is fascinating I would have thought that problem is addressed and I think we’re going to have some news tonight that’s Loosely related to that.
[3:02] Cool I’ll leave that as a spoiler to keep people waiting until after the banter is over and we get into the news.
[3:09] It’s a tease if you tell it’s a spoiler if you if you don’t then it’s a tease teaser.
[3:14] That’s a fair point thank you very much for correcting me.
[3:17] How’s your vacay.
[3:18] It was great we my family is all from the Midwest from the Detroit area my in-laws so,
the lady rent a beach house somewhere on the on the shores of Lake Michigan every summer so so we took the family up there,
got to hang out with all my nieces and nephews which was a lot of fun and is a fun week in Chicago because it’s the air show so the Blue Angels are in town and they they fly directly over my condo so I got the,
here here and see some frightening Lee close together jets flying around.
[3:55] And isn’t that Michigan Beach week that week you don’t have Starbucks and have you recovered from them.
[4:01] You’re going to have to give me more detail I I’m not aware there is a week when I don’t have Starbucks.
[4:06] I thought that’s weak where you don’t have access to start.
[4:09] So there have been occasions where we were so remote that I was not able to have Starbucks and so I actually travel with my own Starbucks syrup,
accoutrements and then an espresso machine tool my own shots but this summer we’ve tended to move around venues and so this summer wasn’t remote enough so I was able to go to.
A Starbucks in bedded in a Meyer that was only a few miles from our rental place so I got to spend some time and Meyer which is great Midwest Hypermarket the compete successfully with Walmart and then,
I got my full fix of Starbucks.
[4:50] Good I was worried about.
[4:52] I appreciate the concern and thanks for yeah that’s funny that you remember that.
[4:57] What do you want to do is send a shout-out to one of the friends of the show Billy may he was at Abercrombie he was on Jason can you have one of the interns look up the episode that Billy was on one of our most popular episodes,
and he has just recently been announced that he is the CEO of Sur La Table so congrats to Billy.
I don’t know the specifics of it but Jason I’m pretty sure being on the show can give him credit for that clear move so.
Yeah I think once you’re on the Jason Scott show your your career is on a meteoric.
[5:33] Rocketship kind of a think Peter Cobb is now on the board of.
Discount shoe warehouse so lot of Greg pulsifer is over at General Mills now so one of our Our Guest of moving up in the world Kevin or tell went to Nike.
[5:50] Just do it.
[5:51] I do I feel like there’s a basically unbroken string of your career catching fire once once you get on the Jason and Scott show and of course the loyal listeners remember that Billy was on episode 23 he was one of our earliest,
yes and wow this is statistically not true I’ve always promised Billy that I would say it was our most listened to episode.
[6:13] Cool well let’s jump into the e-commerce and Retail news with some Amazon news.
[6:35] Yes a couple new interesting things on the Amazon blotter this this week or the last couple weeks that I think is per ticket interesting is that Amazon has announced a new.
A delivery method that they’re calling instant pick up and so the notion here is that you can pick up items 2 minutes after you place an e-commerce order for them.
[7:02] And so when you first hear that you go wait a minute that’s that’s the Majestics of that are mind-boggling how would they ever do that.
And what it really is it the moment is there’s a handful of pickup locations that Amazon has and I think they might exclusively be on college campuses at the moment so you reference some of the mailroom problems on college campuses.
E-commerce has been a huge disruption to college campus mailrooms and one of the remedies has been the Amazon his open their own pick up Depot in the number of college campuses which is this pretty fancy operation.
And so reading between the lines of the instant pick up announcement.
They’re using those college campus pick up Depots and they’re going to pre inventory in assortment of the most popular ordered items.
Presumably over time those will be the items that are most needed with with no weed time and you know they’ll have sort of a walker type thing and once you place an order to go have someone that pulls that out of inventory and puts it in the locker for you.
Instantly so when you need a new.
Lightning headphone for your iPhone or a new battery or something like that you’ll be able to get it right away and I almost think of it as sort of a big version of the.
The sort of Commerce vending machines that you see at some big businesses in airports that have like the you know the the most popular Best Buy items.
[8:31] Yeah there’s some food places that are kind of working this way now where you know there’s a kitchen and they put the food into, the Walker system didn’t you go to a noodle shop that if I remember that right.
[8:41] And I’m not going to remember the name off the top my head but it’s like a healthy Asian themed,
Bowl restaurant that’s a lot of like stir-fried stuff in the Bay Area and it’s a completely,
no human interaction you order on basically iPads and then your your food is delivered the food in a locker and you open that locker and you get the food shockingly quick and it’s delicious and healthy and.
They don’t have to pay a person to talk to you other than when I was there it was early and they had a few concierge’s out there that were trying to teach you how to use the iPads of you put them figure it out.
[9:22] Yeah Regal when when quick when I saw Amazon stock was down like 5% one day and you $1,000 that’s that’s.
Fifty bucks says a holy cow it’s going on so couldn’t find any couldn’t find anything in that I looked and,
president Trump tweeted that you know I’m pretty negative Amazon tweeten I think what happens is he gets pretty cheesed off by the depressed,
and Jeff Bezos owns the Washington Post in creates this kind of feedback cycle so his tweet was Amazon is doing great damage to tax-paying retailers,
town cities and states throughout the US are being hurt many jobs being lost so you know wall Street’s reaction to that is wow that increases the.
[10:06] Chances of some kind of a. Monopoly kind of thing so not clear what’s going to happen there’s obviously a lot of weird things that happen to Twitter world and politics and what not but that was interesting that meal for no reason,
that the stock was down pretty material amount and then it was ended up being kind of a tweet from from the White House.
[10:25] Yeah I mean like regardless of how you feel that any of that there’s at least one slight irony there a lot of people that deserve that that Amazon can basically drop,
a press release and Wipeout you know a huge piece of the,
the market cap of of any competitor and so it’s at least somewhat humorous to think that there’s at least a person that can drop the tweet and put a little dent in.
In Amazon’s networth listeners probably know this but the.
Jeff Bezos does on the Washington Post Amazon doesn’t write like that,
fake only gets mentioned in the in the Trump versus Bezos disputes,
but it’s also pretty factually untrue that Amazon doesn’t pay taxes like we we assume when Trump is talking about that he’s talking about collecting sales tax which.
Again technically Merchants don’t pay sales tax they collect sales tax that consumers pay.
But as hopefully most listeners know by now Amazon collect sales tax,
in the majority of markets that they’re in so they cut deals with a bunch of states,
you know their various timelines for Windows will kick in those will kick in but but many of them have already kicked in in the big States and so Amazon’s collecting an awful lot of sales tax and I haven’t seen a lot of this yet,
but I would expect this year like based on some of this negative press,
I would expect to start seeing some PR from Amazon I’ll bet you they’re one of the largest sales tax collectors.
[12:00] In the country right so you know.
If even the us we were just talking about this you know there’s lots of estimates on the gmv if if they’re selling 120 hundred fifty billion dollars worth of stuff and if they’re collecting sales tax on 75% of that.
That’s going to put them in the top 20 sales tax collectors in the US.
[12:25] Yeah what you could be talking about is corporate tax so you don’t have his own doesn’t have profits and then they have these very huge no else not operating losses from.
From the past so you compare on them to a Macy’s or something they also have a much lower tax rate from a corporate tax respective.
Hard to know exactly which taxes being talked about.
[12:51] Yes true.
[12:57] And this is what I missed from a little while ago but the end of them,
July Amazon announced the expansion of a program we talked about on the show few times the treasure truck so this is a truck that tends to stock one item it’s based in Seattle and every day of your if you subscribe to this SMS list,
they they send you an SMS saying hey the treasure at truck has,
adeel 60 bucks for a Nintendo Classic this this today only and you can accept the deal on your phone and the truck will come to a location near you and you pick up the.
The item so it’s kind of them buy online pickup at truck.
Experience so I don’t know exactly how you pronounce that acronym bow pit Maybe.
[13:46] And that was in Seattle only I had seen them specific to a couple special events like the,
Consumer Electronics Show in Las Vegas and now it looks like they’re expanding into six other cities in one of the cities of Chicago,
so I I have a signed up on the list and hopefully sometime this month I’ll start getting getting a deal texts.
[14:09] Hope there is some there’s two kind of.
Dust up surround Amazon private label a editor at Quartz magazine was digging through some of the trademark filings out there and found in about 20 kind of unannounced private labels.
As you know I do that Amazon escapes so I went through all these and some of them I would say about half of them we’re right in other half you know what happens is Amazon May file these trademarks but then never do anything with him a big corporations have.
[14:39] If someone has an idea I’m sure that is far off an email the trade markets created and they may or may not use it.
So some of the ones that were mentioned in there weren’t really valid in that they’re not actually being used for for that or and then if you go to Amazon it’s a big you see the things being sold when you dig into it they’re actually different brands not the ones.
Believe me that was interesting and then more recently this week the.
The data company 1010data came out with some pretty interesting data around the private labels and some the ones that I know our listeners have been really interested in or some of the apparel items so.
The first time I’ve seen data on Lark and Ro button-down some of the newer ones Amazon Elements which is more cpg and.
The first half of 2017 this estimates and this is I think one of these companies that looks at the cash register receipts than in emails that people give them access to through some and.
What they’re saying is some of these.
Like I lost pic on button down to about a million dollars in the first half of the Year seems low to me I just kind of surprised that low.
But then saw the growth rates of these are pretty tremendous in.
If some of the categories like batteries Amazon is really starting to get to be over half of of the sales of batteries online and things like that so,
continuing to watch private label something that that you know we can courage Brands and retailers to really think about how that fits in with her strategy.
[16:12] Yeah and it it it does seem to keep,
expanding two things that kind of jumped in my mind when I saw that news number one there is this,
kind of gray area about what is an Amazon private label so I think one example there was a article that went around talking about,
how Amazon and launched a private label wine and then,
Amazon dog doesn’t own their own own Vineyards and they don’t have their own wine label maker that’s making this wine so they’re obviously.
Paying someone to produce this wine and wines getting sold on in some of their label and Amazon kind of denied it was one of their brands and that it’s it’s actually like a.
You know a seller that created a new brand that they were selling on the 3p Marketplace on Amazon.
[17:05] And so are the ones I as a one-piece seller to Amazon and so there it kind of is this interesting thing you know if Amazon encourages the manufacturer to make a product to fill a gap versus Amazon commissioning a manufacturer.
There you know there’s kind of this this gray area that’s it’s hard for a Observer that just sees that.
That’s some new new brand popped up on Amazon that that they’re not familiar with is it a true.
Amazon owns brand or is it a Amazon and courage brand I guess is the the distinction there.
One of the things I was like to.
Joke with client about is I’m trying to get people to stop saying private label particularly in context Amazon right like a private label had this original connotation that was.
There’s a national brand.
And then there was a private label in the private label was intended to be on the Shelf in the store next to the National brand and have a large e the same value propositional brand.
Without all the marketing at a lower cost and so you know the consumer had to decide am I getting.
Bear branded aspirin or am I going to get a generic aspirin for a little less money.
Many of the Amazon products are designed to have unique value propositions and so they’re trying to not build private labels although some probably are fit the classic definition of private labels like amazonbasics.
[18:36] Let me know these brands are intended to be a stand-alone brands that have their own value propositions,
and you know have they have their own to me and then be,
the national Brands not exclusively on price but based on features and and other aspects of the product and the the most glaring example is of course their most successful,
in house brand which is Echo right or,
and so I’m sure of your product manager at Sony that’s responsible for Bluetooth speakers you don’t think of echo is a private label you think of it is a national brand that’s frankly kicking their butt.
[19:16] Yeah yeah it is tricky maybe we’ll do a deep dive on this and come up with a new framework for people to think about it.
[19:23] Oh no I have to think of some new thoughts and Edition ones I just shared.
[19:27] Yeah yeah you can do it just had vacation your brain is fresh.
[19:32] Thanks for the vote of confidence.
[19:34] One quick one Amazon should have closed the Whole Foods deal by now but the regulatory kind of review of it is still underway so they’ve extended that and,
to my knowledge was pretty open-ended didn’t kind of say a week or two weeks so that deal still has not closed.
And then there was another rumor while you’re on vacation that Amazon’s getting into event tickets that they see that as a,
an opportunity where the customer experience isn’t very great and that they want to kind of get in there and compete with the ticket masters live Nations the world which I,
as a guy that buys a fair number of tickets I would love to see more competition in that space.
[20:14] Yeah and I thought I read a rumor that they maybe even tried to acquire or partner with Ticketmaster and when that didn’t work out that they now seem to be moving in the direction of building their own service.
[20:27] I didn’t stuff.
[20:28] Not what I that time time will tell it certainly would not surprise me it certainly seems like it it fits the Amazon Mo and you know they want to be the everything store.
[20:41] Yes and we just got to the end of earning season and there’s some some new kind of July comps that that came out as well and I thought it was interesting I sorry for that,
there’s a company that goes through all the different transcripts and looks for different indexes them all and they reported for the S&P 500.
Over 15% of the conference calls with Wallstreet mentioned Amazon in some way that’s high-water Mark in it it’s interesting when you kind of go through the day actually will put in the show notes we don’t have time to do it but they go through,
if some of the highlights and you have the real estate companies all talking about it grocery cpg.
All the brands that are out there and of course retailers and then specialty stores like Auto Parts and things that nature in,
it’s kind of interesting here that your point earlier that.
I would have to have an Amazon story all the sudden in it used to be just kind of a retail thing but now they’re very just like the last 3 years there,
they’re pretty spread so wide that a very large swath of that the public companies have to have kind of an answer to the Amazon question.
[21:48] Yeah I wonder if UPS and FedEx were on that list of companies dimensioned of.
[21:52] They have in the past I absolutely have heard that yet so I don’t know if they were on the list or not.
[21:59] Side note everytime our intern ask for a raise I remind him that his job could be to read all the S&P 500 earnings transcripts and count how many times Amazon was mentioned.
[22:14] So believe it or not there is some.
Digital Shopper marketing news outside of the world of Amazon in one of those is at the US Department of Commerce published their Q2 data.
Which is a very useful data set that we we always like to follow and I think they came out and said 16.3% growth for e-commerce.
[22:42] In Q2 this year.
[22:44] Yeah yeah yeah tribute half of that to Amazon which is good so so when I kind of,
back to the math as we talked on the show here for long time a lot of lot of folks didn’t take into account the 3p part of Amazon but now it looks like the Department of Commerce is actually Factory that in so,
yeah that’s that’s pretty good to see them kind of catch up to that.
They come to a lot of the shows the guys the team that does this I think that she doesn’t the podcast so shut up to them if they’re listening I don’t know if you’ve ever talked to them but they.
Really nice group of folks and they are the come to all the shows and try to kind of tune the data based on what they’re hearing and I have give them that feedback a lot so I don’t know if it had any impact on them including that there but it’s good to see.
[23:30] Yeah yeah I’d be fascinated to hear how they sort of estimate 3p or what they’re using is there 3p estimate to factor in there,
we should definitely have them on the show I have met a few of them as well I will throw one Counterpoint out there there there are a fair number of detractors that don’t,
feel that the the methodology that they use for e-commerce is entirely accurate right and I think it would be impossible for it to be,
perfect I find it to be a super valuable data set and one of the things that,
in general is really valuable about it is they’ve been using this consistent methodology for a long time so you can kind of look at how things are trending in and shifting overtime,
but that their definition of e-commerce and what’s in and out of that let you know has a few things that you know you.
You probably wouldn’t agree make make perfect sense of you were inventing the categories from scratch.
[24:27] Yeah and I’ve got a lot of arguments about this lately if not arguments with interesting discussions with people and you know so what what I also here and I don’t know,
I haven’t had time to take into this but you know the other kind of doubles argument about this data set is it’s a business survey it’s a small number of businesses,
the bulk of the businesses are kind of B2B kind of company so they’re selling you no widgets and fasteners and cogs and gears and stuff.
So then my argument is while the come squirting is very highly correlated so it seems like it checks out their argument is no it goes other way comes grow actually use it as an input the Department of Commerce data so that their date is lined with it so,
I don’t know what to believe Mabel get someone on the show and do a little panel where we can kind of get someone to talk about the veracity of this data.
[25:19] That that would be great so we can get some of the the panel guys like comscore 1010data and the US Department of Commerce so we could have a shootout.
[25:26] Yeah Jason and Scott show data wrestling match.
[25:31] I love it.
[25:33] The sum of the cops are out and one of the big Winners is TJMaxx they,
the cops are up 6% that’s for July and so that’s pretty interesting we will talk about this on the show where there’s this kind of,
password if you are a value oriented retailer you doing really well right now so,
the dollar store bears are doing well all the TJ Max’s Ross stores companies like that if your convenience oriented which tends to fall over towards the e-commerce side Amazon it’s up to you doing well,
and the folks that are kind of stuck in the middle of your not value or convenience right now you’re going to pretty bad spot so the Macy’s.
The sports folks all those guys are really having tough comps right now.
[26:19] Yeah and said that makes it all the more interesting like one of the categories you talk about is having a pretty tough time is apparel.
And GAP announce their earnings and they actually eat doubt some slightly improve numbers this quarter so I want to say that their profits were up 1% this quarter,
versus being down to the previous quarter so like that’s certainly not letting the the world on fire but.
The you know you certainly always like to be more profitable than you you were the previous quarter and in a category that’s that’s you know super distressed.
That’s an interesting data point I was I was joking around with one of the Forrester analyst on Twitter today.
I would not take that news you know they’re up against a really soft comp.
And I would argue you know that a lot of the Peril in history and in gap is a perfectly good example of it.
Have a lot of institutional headwinds I’m not sure I would take that that.
[27:24] The nice up to get this quarter in and use that as a reason to invest in the in the category but never the less good news for the gap.
And an interesting subtext in there they announced they were piloting a new customer experience for them which is buy online pickup in-store.
[27:41] And for many listeners this show they might say wait a minute Gap wasn’t offering buy online pickup in-store that seems like table sakes for an omni-channel retailer.
Gap has been one of the largest proponents and one of the earliest adopters of Reserve online pickup in-store so they’re normal experience was.
We won’t charge you till you get to the store I’m so you you’ll reserve it will pull the product.
I have it ready for you and you know when the mean reasons you’d want to do Reserve online instead of buy online is because you like that customer to come to the Gap Store discover a few other things that they didn’t know they needed an add them to the transaction.
And that’s easier to do when you have a reserve online.
It also is kind of a lower threshold to get the customer to reserve cuz they don’t have to put any money down up front and so they’ve been one of the big proponents of reserved online and what’s not said and.
The earnings call that I’d be really interested in is.
Are they throwing the towel in on Resort online are they if they decided that the pros and cons of of bopis versus reserver.
I can tell you enough that they’re now shifting to what is the much more common industry practice.
I don’t know but I’ll I’ll certainly be digging to see if we if we can learn any more about what that shifts about.
[28:57] Yeah I don’t have any data but my bed is when you survey customers like reserve reserve and pickup is like a.
Like to wait in line which is not convenient so people want convenience and if you’re if you’re going to put your priority of go pick up more stuff we’re not going to get convenient so you’ll buy more stuff that that Jesus customers often today’s world.
[29:17] Yeah know I tend to agree and you know there’s there’s.
Execution problems with both but you know I think one of the challenges in a store like Gap is executing on these thing so you know when you reserve online do you walk in the store and,
and this product really have been pulled for you and it’s the right products and they had in stock what they said they had in stock there there’s a lot of things to go wrong and in some ways when it’s reserved online there’s a little less economic pressure on the,
on the store to execute and so that can then a road customer confidence in the service.
[29:54] Yeah Absol.
When did I fall it really closely those pretty resting is so so we had the failure of Sports Authority and Dick’s Sporting Goods,
down pre substantially after their Crow the results and the CEO is needs Ed stack he had pretty interesting quote here I’ll read a couple exits.
This was in when he got into the Q&A with Wall Street there are they missed on the I think they kind of came in line on the top line but then their bottom line the profits weren’t really there and gross margin seem to be under pressure and,
the CEO kind of win a little bit or rant kind of a no therapy session he said there’s there’s a lot of people right now in retail and the sports industry that are in panic mode.
In panic mode he said they they’re freaked out about how their pricing how we’re pricing.
It’s going to be it’s going to continue to be Promotional and at times irrational going forward.
Well you can imagine Wallstreet didn’t like that word irrational so that that was not well-received and you know what I think I saw some notes that said it’s going to be a structural change.
These guys where they’re going to have to you know there.
The energy price matching with Amazon they’re going to have to just kind of take much lower gross margins they had going forward so really big pressure there and then another little piece that listens would be interested in.
Is he kind of finished up and said it’s going to.
It’s continues to be very promotional not only from retailers but also from some of the brands on a direct consumer basis so.
[31:26] She had this kind of like this crunch scenario where retailers are stuck in the middle you’ve got online guys like Amazon and.
They are much more efficient and they can have a different model that that has lower gross margins lower prices passes amount of consumers and then you have Brands go Direct on the other side.
You specifically asked about Amazon having Nike selling on there.
He said you know I don’t think you’ve seen anything we’re watching it very closely we’ve talked tonight Nike a lot about it so pretty interesting going to.
Another in a crunch there with with retailers.
[32:00] Yeah and I wouldn’t expect to see a lot of a,
concerning behavior on Nikes part yet but what can definitely happen is you know all the all these other players win this when the retailer closes,
if you were Under Armour Adidas or Puma,
you are the forecast for the year and you built you you manufacture product based on that forecast and part of that forecast was that there be a bunch of Sports Authorities that would each have to buy a certain amount of inventory to put on their shelves,
and so when they stop buying at inventory because they’re out of business or there’s been retail consolidation or whatever,
and the market gets flooded with cheap product because some Liquidator buys the existing inventory that those things happen,
you as the manufacturer are suddenly not going to make your numbers and so that likely is going to trigger a bunch of other you know bad behaviors that ultimately result in mr. Stax observation right like you could either,
try to sell that stuff to direct a consumer and you could get more promotional to do it,
you could get more promotional in incentives you offer your you’re surviving wholesale Partners to get them to sell through more stuff there’s you know like there is,
second and third tier effects on all of this stuff that that create a negative spiral of momentum in the category.
[33:21] Yeah two other quick ones in this kind of same bucket Foot Locker was asked about Amazon on their conference call and the CEO kind of pounded his chest that we don’t worry about them we have you know the latest and greatest and sneakers come Dawson Amazon doesn’t get them,
as long history of people that have said that they’re not worried about him son and or Amazon can’t compete that they’re either out of business are going out of business so.
We should start a Jason Scott pool where you know people that foolishly.
Poke the bear the Amazon bear end up paying for it down the line and another one I did read article wear under armour,
to your point earlier they had some lines that were at a retailer they liquidated some of them to Kohl’s and ended up really kind of craving this.
Bad cycle between I forget who the other retailer was Maven Dick’s Sporting Goods the created some bad blood and and ended up that you know that.
The other retailer didn’t want that product line anymore in the not all just going to have to go to Kohl’s and more of a discount kind of a format so it’s a lot a lot of.
Gnashing of teeth out there and in the Sporting Goods got over.
[34:26] Yep and then I haven’t fought a closely but I I think we’re waiting to hear for regulatory approval on Cabela’s Bass Pro Shop so that’s another.
Like potential significant disruption in that space of those two guys merch.
[34:48] So another retailer earnings that came out this month it’s to me super interesting is the largest retailer in the world Walmart,
they had another,
slightly profitable quarter in the stores so I want to say they were up one or 2% or someplace between one and 2% so that if memory serves that’s like the 12th consecutive quarter of.
Brick-and-mortar growth for them and just to put that in perspective,
not very many retailers have had a dunwell 12 quarters in a row so there’s an obvious inference to make that Walmart is.
[35:31] Benefiting from a lot of the hardships that other retailers are are experiencing and that there.
Well well position weather the storm with a little bit more Elbow Room than then.
A lot of other retailers but the super interesting thing is that they’re online growth was up.
60% for the quarter from from this quarter last year and to put that in perspective.
Last quarter they were up 62% so that’s now two consecutive quarters with astronomical growth.
Obviously it’s much easier to grow a small number then a big number so you know it’s almost not worth comparing that to Amazon even though it is much faster growth than Amazon but I’ll remind everyone.
These guys are the second largest e-commerce site in the u.s. they’re going to sell unipres north of 15 billion dollars this year,
and so you know if you think about the e-commerce Industries growing in about 15 to 18% depending on which numbers you use,
that Amazon is growing at like 25% and Walmart is growing it like 60% most of e-commerce isn’t growing that fast,
if the two biggest players out there our way outperforming the rest of the market like usually in a mature Market you see exactly the opposite you see everyone else growing faster than the the guys at the top of the echo system so,
all super interesting and then I guess one other spin on that like.
[37:06] Walmart has acquired a bunch of companies that have meaningful e-commerce Revenue so obviously I mean jets in these year-over-year numbers but Moose Jaw ModCloth bonobos,
would all be new and so what the Senate could look at this and say oh will there.
Their e-commerce growth is way up because they through acquisition but they’re claiming they claimed last quarter and I think they claimed again this quarter that more than 50% of their growth is organic.
[37:40] Yeah yeah saw a Goldman Sachs report where they actually kind of backed into it and their estimate was 30% organic growth 30% from Acquisitions so they they kind of put it right at that 50% so I don’t.
[37:53] Yeah so even if so that still has them growing faster than Amazon.
One interesting contacts for this this is the the growth in the mark Glory when he took over for Neil and,
there is sort of the big shift in philosophy at Walmart like they Walmart really used to focus,
walmart.com used to focus on stuff you couldn’t get in the store so I’ll they,
they had a you know a couple million skews there they’re mostly trying to sell the stuff that people wouldn’t traditionally buy from the store so barbecue swingset things things that were inconvenient to buy from a store.
And the mark Lori era at Walmart is really about selling daily Essentials online and so that’s a pretty big shift in philosophy you seen the skew can’t go way up at Walmart and these these first two quarters tell me,
did that strategies really working and the reason I point that out is that’s a really interesting shift and philosophies you know tis.
E-commerce best suited to to,
fill in the gaps that are hard to do and brick-and-mortar stores and sort of rounded out or should your e-commerce offering really mirror your in-store offering and cater to the the same customer base and it seems like at least an Walmart’s case,
they’re they’re doing Best Buy by shifting to try to meet the same kind of needs online that they’ve traditionally men in store.
[39:20] Yes a Star Wars toy collector I get to go to lots of Walmarts and one thing I’ve definitely notice in the last 6 months is a lot.
One more integration with online in the store so you know just little things like they have these poles out front that keep,
cars from driving into the Walmart I think now they have these kind of sleeves on them that talk about online,
online pickup buy online pickup would be in the very back of the store and it was never staffed now it’s moved back to the front of the store couple of my Walmarts are really pushing the,
dedicate a lot of lanes for for grocery pick-up and,
you know I saw I haven’t used that but I saw this one person get it in like for Walmart employees came out and we’re like,
just yeah team loading the car with groceries it was pretty guitars like a priority that they had a lot of lot of Associates really working on it so it’s definitely at the store level there doing a lot too.
[40:13] Yep yep and that particular Zaza that pick up curbside experience and they they continue to greatly expand that so I know in California they added a ton of stores with curbside pickup.
[40:29] Which only works well for groceries in this or two things.
[40:34] And then when you talk about Walmart it’s hard to not talk about Target and a couple interesting things have happened at Target lately they they’ve done a few interesting Partnerships we I think in the past I’ve talked about their Harry’s partnership.
I can’t remember did we talk about the Casper partnership on the show yet we did.
[40:54] Yeah and so you know they’ve been doing these these Partnerships with some of these digitally native brands.
In this month they acquired Grand Junction which is a same-day delivery service.
Which is interesting so they’re there now offering same-day delivery for for a number a subset of their products.
Yeah they used to have this partnership with curbside and they they abruptly canceled that partnership and then they’ve turned out and acquired a same-day delivery so that’s.
That’s it interesting thing to think about it Target is it certainly seems like Target doesn’t feel like.
Curbside pickup is the the best solution for them and and same-day home delivery is going to be a good solution.
And I forget what they caught but they also launched a new service with just kind of their version of Prime Pantry that sort of a a bulk replenishment service this month as well.
[41:51] Yes starts with an R I can’t remember the name either.
[41:53] I’ll go get our intern on it while we while we go on.
[41:57] What are the last companies to report Q2 every year is Alibaba and it’s because,
they are a Chinese company that has is held by us entity in Hong Kong it’s it’s kind of a complicated way that you have to do things if you’re Chinese company so they came out this week and,
blew away expectations across the board so the stocks hitting new highs and there’s a lot of really interesting things on that conference call.
One of the things that was interesting is their growth is really reacceleration Alibaba so while she was expecting 49% growth night that was kind of stretching it came in at 56%.
And they their adjusted ebitda margins are north of 50% so.
[42:43] Yo if you if you look at kind of the pure Marketplace model there’s there’s almost no.
Cost in there so so there’s causes whatever it cost to push bits around on a computer and an over the wire and and then there’s some sales and marketing and some R&D and that’s about it so 50%.
Emergency pretty pretty crazy there cloud computing platform that competes they to be us is doing really well and it was a big contributor to that.
They also cited taobao which is their P2P Cana Marketplace they’ve changed the u.s. and Jason I thought you would find this interesting they did.
Big personalization project at Alibaba that rolled out and they said that that’s driving a lot of growth where there they’re learning more and more about their customers that are dropped by buying from the marketplace and.
What to recommend to them and get them to buy across the whole family of services and products.
[43:34] Nothing that that’s really nursing with Ali Baba is just like Amazon they are doing a lot more in physical retail they’ve been buying some physical retail opening stores.
In a couple interesting things the CEO said he said imagine the store we can pick up items from the shelf and in the same time.
Be there stuff that’s not in the store of the you can scan with your phone and then you just tell the store you know look just have everything delivered to my house and it just goes there because you have stuff to do after you go shop.
[44:02] Another example that used is a see you go to the grocery store and get something for dinner but then.
You didn’t know you wanted for the rest of the week so you just want to order a meal online so what they’re seeing from the Chinese consumer in and sounds a lot like the US consumer is.
[44:20] They’re looking for a spot Navy convenience in speed and total flexibility that the favors the customer versus the retailer that’s what they’re really building towards they call that new retail.
And here’s the quote on that with new retail satisfying ever-increasing consumer expectations is no longer an incremental game it’s disrupt.
And in the same sense that we were going to have to.
We have to disrupt e-commerce first and embrace the physical world in and kind of just tear down all the barriers between them so is very flexible is kind of like Beyond even kind of the normal things we think about in omni-channel.
You seem us experiences between the on and offline world is what I Bob is trying to build in.
[45:00] What’s interesting is as they go into the more physical store if they’re kind of merging the marketplace in there so just like we talked about on the show it’s that concession type model is really kind of happening in the physical retail World Air in China.
You haven’t seen that the US but it is going to be interesting to watch that and see if that time makes its way over here.
[45:19] Yeah for sure the the the new retail Mall of the Alibaba talks about it’s not entirely hypothetical either they’ve actually opened a handful of these,
Next Generation grocery stores they call Hema and said there is actually some video tours of them available online I’ll try to put a.
A link in the show notes but what’s interesting is when you design a store from scratch for some of those experiences versus you know most of the stores were familiar with in u.s. was a traditional store.
That they retrofitted a buy online pickup in-store or a Home Delivery Service or something to,
it’s pretty interesting to see how the store looks different when it’s designed from scratch to do that so,
one of the the utilities that I found interesting is they they literally have this conveyor belt in the.
The store with these hooks that like pick up bags of groceries and lift on out of the store like into a Depot area for home delivery,
and so the ends are Shoppers run around they they use you know mobile phone,
get the list of items that they’re going to ship home for a customer and then they like.
You know super efficiently just just hang these bags on a hook scan a barcode and that bag gets shuttled off somewhere to.
For a home delivery so couple interesting things like that they they heavily rely on barcodes in the store for product information so you can.
Need to scan a QR code to get you know the product information about all the products in the store China doesn’t have the same.
[46:55] Labeling laws that we do in the US so there’s even more need to learn about products for for Discerning Shoppers and in China so just some kind of interesting evolution of the store and for your first point.
They’re making so much money that they have significant resources to invest in figuring out the future of retail.
And like almost everyone else they’ve kind of figured out that the long-term future of retail isn’t exclusively online so they’re they’re putting some.
Some real resources and figuring out what the.
[47:27] Physical store of the future looks like in a digitally disrupted World them so you know I for one on and thrilled to see them trying to do that.
[47:39] And I think that that is all the news we had for listeners this this.
Week so as a special treat we have not wasted a perfectly good hours of our spare time,
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[48:17] Thanks everyone and.
[48:19] Until next week happy commercing.