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EP267 - Deep Dive into Food Commerce with Matt Newberg of HNGRY Matt Newberg (@thenewb) is the founder of HNGRY (hngry.tv). In this episode we deep dive into the rapidly changing digital grocery and digital restaurant industries. Topics Covered: Changes in competition between grocery, QSR, and fast casual. Digital restaurant marketplaces (Door Dash, Uber Eats) Digital grocery marketplaces (Instacart) Ghost Kitchens (food industry version of private label) Delivery vs Pickup On Prem vs Off Prem Consumption Emerging digital grocery top-off market (GoPuff, Instacart, DoorDash) Amazon evolving grocery strategy (Amazon Fresh, Just Walk Out, Delivery) Episode 267 of the Jason & Scot show was recorded on Tuesday June 16, 2021. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Transcript Jason: [0:24] Welcome to the Jason and Scot show this is episode 267 being recorded on Tuesday June 15 20 21, I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo. Scot & Matt: [0:40] Hey Jason and welcome back Jason Scott show listeners Jason one topic we have really wanting to do a deep dive on and is one of your favorites, is the impact from covid on the grocery and restaurant industry so we thought we'd invite a True Food expert Matt Newberg he is the founder of hungry hungry is a new media platform examining the impact of technology on how people eat Matt welcome to the show, thanks so much for having me guys it's awesome to be here. Jason: [1:10] Matt we are thrilled to have you nobody but you will ever get this but Clubhouse comes up all the time and I'm like I was on clubhouse back when it was cool in like. Scot & Matt: [1:23] That was fun I really enjoyed that and it's definitely gone somewhere else but but yeah definitely I've tapered off of that a little bit. Jason: [1:32] I've uninstall that I feel like it's totally jumped the shark but you you invited me to a food chat like early on and so I feel like a rare moment of me being an early adopter. Scot & Matt: [1:45] That was fun. Jason: [1:46] That was fun so we're going to jump into all things food and hungry but before we do our listeners always like to get a little bit of. Behind the scenes color on our guests so I'd love to hear a little bit about your background and how you got interested in the food industry. Scot & Matt: [2:06] Yeah course so my background is kind of really in the technology space I was a product manager most recently a Vimeo and. You know I started getting really kind of curious about the food delivery space I'd say towards the end of 2018 I took a trip to India and I've been reading about ghost kitchens and while I was working in Tech I was making video content around food, and it was really kind of just like Food Tours kind of like Munchies style and I. [2:37] When I saw when I heard what Travis kalanick was doing in Allah with Cloud kitchens I decided I had to kind of merge this. Kind of what I was doing with video content and start examining kind of the technology behind the food industry and when I reached LA and early 2019 to shoot this my I just had one of those moments where you kind of see the, you know like the impact of technology inside of a a like food operation it was it was it wasn't like, walking into a q SI restaurant it was like walking into like you know Ground Zero of this like new I didn't know what to think of it and I was just blown away by how many tablets and people screaming and shouting and they're like, you know 20 or 20 some odd kitchens Under One Roof and. [3:31] You know put out a video in 2019 kind of profiling that kind of for the first time giving people a taste of what ghost kitchens were it got a great response and I kind of dropped everything and decided I was going to start writing about, Food & Tack on a weekly basis so that started really ramping up hungry and late 2019 and then the pandemic it and, I've been covering everything from you know, dark convenience stores to ghost kitchens and virtual Brands all the way down to an alternative protein and a few other little Trends here and there like personalized nutrition which is basically wearables and, the gut microbiome and how that's going to basically play a role and personalizing a lot of the food that we eat over the next few decades in my view, and it's been a wild and crazy Journey especially, with everything that's happened I could have never predicted it and I think the timing of me kind of picking this as my as my beat was, it was a great move so it's been it's been a lot of fun. [4:35] Let I have a million questions just on your intro but let's start let's start it I'm not sure Andrew on the show tell me a little bit about the hungry business model are you doing like a sub stack kind of direct crater direct to an audience thing or is it more of a paid video Channel or ad-supported how does that work. Yes it started out with video which was you know it's all been completely free and then I started adding an October I launched a pay wall paid subscription product, for industry insiders and so that gives them access to premium content every week and also maintain a free Weekly Newsletter so the goal is to kind of build this community, of Industry insiders and also you know create a funnel through the free newsletter so that's kind of been the model to date. [5:24] Are you using this abstract platformer can you say what platform oh no I'm using something called ghost which we basically customized, charge is a pretty high commission so just basically pay for the stripe fees and, and that goes subscription is very cheap so yeah basically rolled my own kind of version of sub stack, and with ghosts you get to control more it's you kind of you know they can't just shut you down someday and less like the internet and show you down or something yeah it's like a modern version of WordPress and I should also say that I have a podcast as well called the feed you can check it out I'm definitely nowhere near the number of episodes as you guys but hopefully one day I'll get there and, we know done a few in-depth videos on you can search for them on YouTube and they're about you know they range in length but they're around 20-30 minutes long kind of deep dives into a particular topic. Well the the super secret of our show is when I have three listeners and one of them is Jason's mom so while we're waiting on episode you may be ahead of us on Muslims. Jason: [6:31] We made an early decision to go quality quantity over quality. [6:38] And I should point out the other fact you can't say you have 30 Minute Podcast and that they're deep Dives because we usually haven't finished our intro in the purse. I've heard that all content needs to be more brief and so Scott and I like the buck we don't like to follow the industry Trends we like to set. For too long yeah so there's a bunch of things we want to jump into but side note before we do are you wearing a glucose monitor right now. Scot & Matt: [7:09] No I did that last summer for about a month I tried. Two different programs one was called clear and based in the Netherlands and other ones called levels and since that since I was going into that. Yeah there's been a number of other startups that have popped up that are they're all using the same freestyle Libre technology Hardware sensor which is made by Abbott, and they're just kind of innovating on the software layer layer above like you know, daily logging of your meals and tracking your levels so and then you know obviously making recommendations about what you should or should not eat but it was definitely fun it was definitely like a really good learning experience and I highly recommend anyone do it, you don't have to be a pre-diabetic or diabetic it's really powerful information. Jason: [7:59] Yeah if nothing else I super admire Abbott Labs because you think you figure about. Only about you know forty percent of the American population has diabetes so your Tam is just not big enough if you can only sell to be with diabetes so they figured out a way to sell the glucose monitor to the whole world. But yeah. Scot & Matt: [8:19] Yeah I wish I wish it was for the entire world I mean it's pretty hard because you have to get a doctor's note. Jason: [8:25] Yeah and it's still kind of expensive for not for Off Script use right like yeah and so for listeners that probably don't know what we're talking about like this is this, kind of trend I would call it an extension of the kind of self measurement thing where people are using these real-time glucose monitors that you wear, to get like really detailed insight into how the food you eat in the timing of that impacts your. Your blood glucose throughout the day and they can you know prescribed changes to your diet and lifestyle based on on your body chemistry. So did you find it useful or was it a gimmick for you. Scot & Matt: [9:08] No definitely useful like I have some tips now like in tricks and little hacks like if I'm going to eat something that I know is in a spike my blood sugar I'll take a little bit of apple cider vinegar, to kind of flatten this bike if I do happen to eat something that makes me feel a little sluggish I definitely like walking for about 10 or 15 minutes is a good, Goodwin and then like the order in which you eat foods like always eat your fiber before your carbs so if I'm going to eat pizza I always gotta order a salad, or even better but the salad on the pizza if you're into that sort of thing so, and levels makes it really fun they give you all these little mini hacks that you can do and you can kind of see whether they work for you or not and that's kind of the whole idea it's highly personalized so what my what might work for me, isn't necessarily going to work for you because we you know you and I we might share you know something like 98 to 99 percent of the same DNA but we, we only share a very small percentage of the same gut microbes so that's kind of where the the Magics secret sauce I guess lies. Jason: [10:14] Yeah yeah I think I've talked to several people who did some variation of that program in most say that they were like somewhat surprised that they had like a preconceived notion, that there were certain foods that would like really Spike their blood sugar or wouldn't. That right sometimes the test were validating but often they learned that their body responded a little differently than they expect. Scot & Matt: [10:38] Yeah like I went to town you know I started eating everything under the sun and the first week. Jason: [10:43] Well in the name of science. Scot & Matt: [10:44] Yeah exactly and like honestly eating the cheeseburger wasn't bad it was the it was like the Coca-Cola I had with it or. You know having it's all about the ratio of like fats to carbs and if that's if that ever gets to be you know certain that gets out of whack then you're going to have a spike. Jason: [11:05] That's why I just go pure carbs. Scot & Matt: [11:07] Did you try a venti Starbucks vanilla latte boy Jason you know you can guess what that would have done. Jason: [11:16] Oh my God like yeah I'd be yeah we don't need to go there so let's pivot to be to be food. And that one of the things that I admire about you is you you take your journalism seriously, so if I'm remembering right one of the first conversations I had with you you casually mention that you posed as a Amazon Fresh delivery driver so that you could sneak, Amazon Fresh store that that was at the time a dark store in LA. Scot & Matt: [11:49] Thank you that yes that is correct. Jason: [11:55] So the so that's kind of how I discovered you I am a paid subscriber to the newsletter I've been following you ever since in Scotland I've been wanting to talk about a bunch of these kind of macro food trends, and so I thought you would just be a great person to have a perspective on those so if you'll indulge me for like a 30-second setup. The biggest thing I talked about with clients in terms of this macro trend is, what I call the the breaking down on the swim lanes and by that what I mean is in the pre-pandemic world. There were certain occasions where the American family was going to buy their calories at a grocery store and make their own meal for at-home consumption, and there would be other occasions when they were going to stop at a q Sr like McDonald's and very likely consume those calories in the car on the way home, and there would be other occasions when they were gonna stop at a fast casual restaurant and have a Applebee's sit-down dinner and. Applebee's competed with the other fast-casual restaurants McDonald's competed with the other cure SARS and hi v– or Albertsons competed with the other grocery stores. [13:09] They really didn't they each had a share of the American stomach and they didn't really necessarily compete hard with each other and in my mind one of the things that happened, either coincidentally or because of the pandemic is, they have all moved in each other space and by that what I mean is you can now have you know ready to eat meals delivered from Whole Foods and then an hour, um you can't you know obviously you can get all those those meals delivered for at-home consumption which is mostly how a restaurant meals got consumed in the last year, but you can also use your Mobile Order ahead Applebee's have your meal waiting for you, walk into the restaurant have the food already served pay at a touchscreen and walk out and kind of have it faster turnaround and Applebee's as you would have in a McDonald's. And oh by the way McDonald's we'll do it our groceries with your. Right so so I kind of feel like all those those swim lanes are off and everyone is competing for every calorie now does like am I seeing that right is that. Scot & Matt: [14:14] Absolutely I think it's you know Grocers becoming rest you know they the term grocer Aunt became a thing and then you had restaurants becoming Grocers like your local, you know, Neighborhood Restaurant was using their you know us foods are what are you know their supplier to basically instead of like trying that into prepared food they would just sell those raw ingredients at the onset of the pandemic. Yeah so much so much happening but the job to be done remained the same you know feed me a certain level of quality and nutrition and convenience. Jason: [14:52] I loved restaurant by the way I hadn't heard that so I'll be using that now although your Porter every time I. Scot & Matt: [14:58] I've stolen the calorie swimlane so we're even now. Jason: [15:02] Okay awesome so one thing that just super timely it's Scott. Knows all too well US Department of Commerce publish all this retail sales data every month and I geek out on it and it published this morning, and one of the things I always like to look at that I think has been fascinating is, one of the categories in the US Department of Commerce data is food and beverage retailers and another category is restaurants like the US Department of Commerce. Definition of retail includes restaurant, and so I went back in history and looked at like what's oh cool what's the breakdown in dollars people spent it restaurants versus food and beverage stores and for most of the last decade it was kind of. [15:53] The pandemic hits and it went 70/30 which by the way surprises people people expected like oh restaurants lost even more. Because of home delivery of restaurants rest you know and of course the Qs are staying with drive-through, it was like 7030 and and then it kind of leveled off to maybe like 60/40 5545 and I've been curious to see if it's gonna. Ball all the way back to 50/50 if there's if there's going to be a flip and in this month data so it's middle of June so the Mets data just came out, and the the restaurant Trade Organization is publishing a version of the data this morning that shows that like restaurants surpassed. Grocery stores for the first time and you know since people are the pandemic. And side note they kind of. Jigger the data they're not comparing restaurants to grocery stores they're comparing restaurants and bars too. Scot & Matt: [17:00] Yeah right there. Jason: [17:01] Grocery stores and grocery stores are a subset of the. Food and beverage retail so like I would argue it ought to be food and beverage retail against restaurant and Grocery and in that case the Gap has narrowed but restaurants are still losing but the restaurant industry of course wants to take the most positive spin so he, you followed that at all and you have a hypothesis or a prediction about like with the with the post pandemic ratio looks like. Scot & Matt: [17:29] Totally yeah so it's D I was looking at that data today and I saw Jonathan maze from restaurant, from that restaurant publication published this and I Dig Dug in and I saw that five billion dollar Gap and I was like you're adding in the bars and like subtracting the liquor stores, so that's a five billion dollar Gap. You know in the grand scheme of things yeah you could basically say it's 50/50 now and I would expect that kind of as you know vaccinations are increase and you know the weather gets warmer and that sort of thing, you know historically food at home I think you know pretty much. Eclipse food away from home up until you know it started getting really neck-and-neck I think around like. You know 2019 as the economy was really booming you know I think it's generally a sign of wealth and developed countries is you know a strong strong restaurant, consumption and our consumption so longer-term you know what where does this where does this all go I. [18:37] I think it goes to grocery to be honest with you I I think these things are the same blips that we saw in covid or kind of going to happen in a you know as re-openings happened this summer and so. [18:51] I think longer term you know like the seismic shift of these things like yeah they can they can change on a dime but like the longer term sustainable Trend I think is food at home, and what that looks like it's just going to change it's not going to be it's going to be more meal solution driven things as we as you mentioned. You know where you're getting you know maybe a famous chef has created a frozen type of product or, fresh prepared product or maybe there's even a ghost kitchen inside of a Walmart you know and so then how do these things get counted but clearly anything get sold through these retail channels is going to get counted as food at home and like technically if I'm consuming if I'm consuming restaurant delivery today that's being counted as food away from home right even though I'm consuming it at home, right and deliveries you know something like close to 10% of of the that entire and you know sector so. You know I do think over time as these like quick Commerce players and we'll talk about those you know enter the market they're going to be doing more and more restaurant style meals, and and that will because it works because the unit economics are better in that scenario I think it's just gonna. Still some share away from the unsustainable Marketplace restaurant delivery model. [20:10] When you when you entered the what got you into hungry you talked about Travis's new start up maybe and I'm kind of the the new but I feel like you guys are at a 400 level and I'm still at 101, but you know so maybe explain what it is he's the Uber founder explain what it is he's building and kind of what you know about it and then you know how prevalent are these ghosts and I always get confused because some people say ghost and darkest that the same thing or is there some difference yeah it's all the same ones just slightly friendlier I don't know which ones from your honesty but. Jason: [20:45] Dark Knight versus Casper. Scot & Matt: [20:46] Ghost makes me think the Snapchat so yeah goes kitchen so you know, I think this you know you're seeing these Trends play out in both Grocery and restaurants which is like startups that are basically owning more and more of the value chain so. Cloud kitchens is really at its core real estate company there's a real estate side to it where they're actually going into you know they're buying up distressed properties that are located in these zip codes where there's High, yeah demand for delivery food and you know they do a lot of research into what those demographics are in advance they buy that building at that they basically lease it to you know called 20 or 30. Restaurants you know or food entrepreneurs that want to do delivery they set them up with a tablet that lists them on every single major, delivery Marketplace they also you know can license some of their own in-house Brands to them, and so they own those Brands they own the software tablets and now you're kind of like. [22:00] You know this food entrepreneur trying to make it work for delivery with all these you know twenty to thirty percent commissions and you need to do about like I'd say seven are 50k and, and top-line sales to break even in one of those kitchens they can cost you know six or seven thousand maybe even more and it's about 200 square feet so you can fit like maybe two people in there. And you work for kitchens I guess is kind of about it yeah a lot of people have compared them to we work but the you know they actually we work with leasing spaces and they're buying spaces and the reason they're buying their buying these properties is too. You know really improve the value of that real estate over time and use technology to figure out, what brands should be put into these kitchens who should we go after what virtual brands should we sell what other kind of, non-food kind of convenience items should be sell along side that and I think over time you know it's going to be a full-on. Vertical play where they started with the real estate and they're just going to move into the last mile component because right now with all these drivers coming in you don't gain the efficiencies of true batching because, everything is fragmented across you know we're whoever owns the customer whether it's door – ubereats Postmates and so, what I believe will happen over time is that. [23:21] Kitchens becomes it's kind of like a Smile hyperlocal Amazon that's in your neighborhood and they've just co-located a bunch of restaurants and and they're that, who do enough delivery volume where it doesn't make sense for them to be doing another brick and mortar right so obviously in covid every restaurant became. Effectively a de-facto ghost kitchen because they weren't able to see customers now as dining rooms you know Roar. You know you're not going to be able to do as much delivery volume so the brands that want to do that we'll have a kind of, experience Center that's augmented by this dark infrastructure and the in the goal is to make that infrastructure kind of plug in play and you could light up a bunch of different markets you know pretty quickly and launch new Concepts so, that's a that's kind of a medium winded answer but I can dive into any of those aspects more a couple quick ones so is this like into neighborhoods in Allah and or because he's like a gazillionaire off of uber going public or as this I can you know I'd be shocked that it's in 80 cities and doubling rapidly what's the scale. It's I have I'm tracking close to 60 right now in the US with some good keys and percentage of them are coming online right now. So larger than I would have guessed here 1 and tier 2 markets. [24:47] And then Mark Lori just left Walmart and his doing something kind of like this with his brother are they the same thing or does he have a different concept, I wrote about that one last year that I believe there is something close to 300 million on a 1.3 1.5 billion dollar valuation. It's. Different model because they're actually leveraging instead of ghost kitchens where you have multiple Brands each day are basically retrofitting like Sprint Sprinter vans electric Sprinter vans into kitchens that can basically cook the meal, Watson route to you within this small neighborhood in New Jersey Westfield New Jersey I think and. [25:30] The idea is that they can do more deliveries per per hour and also unlock higher average order value is because there's selling it to families where you know there's four people or maybe more ordering from, this concept so they basically license. Well-known restaurants in New York City and some other cities and then bring them to the suburbs and the ideas that like that brand recognition, you know that there's demand for that brand outside of that core geography and they basically license that concept, on behalf of from the restaurant tour and then they train those chefs in their commissary that's just like one big commissaries not subdivided into ghost kitchens to basically like create these sous vide packs of meals, and then it's just kind of sitting in the back of the van where like the the final prep State the final, work gets done to heat that meal while it's in route to the customer so you could get your food and like. 10 15 minutes depending on where the nearest van is if you put in your address into this app you can kind of see what you got. [26:37] So it's it's a kind of a crazy idea there's no some people when I put that out there they're calling it the quality of food delivery I think was kind of harsh but you know. I've been tracking that one for a while it was called it was going under a stealth name called food truck ink and finally it's called Wonder.com so, be very careful to see how that fits in with Mark Lori's bigger umbrella which he's calling his like new futuristic city. Jason: [27:05] Yeah yeah people are going to want to eat in the city of the future. Scot & Matt: [27:09] I hope so yeah but I hope that they socialized from time to time. Jason: [27:12] Me too one of the things that's interesting about the whole ghost kitchen model is its West capex intensive and coincidence. And an sorry Trend at the moment is because of work from home and remote work like populations are shifting around right now so review. If you had the perfect restaurant location before the pandemic in your spending a fortune on rent. It likely isn't the perfect location anymore because a bunch of your your target audience moved from San Francisco to Austin or whatever. Feels like the ghost kitchens may be able to be a little more agile. Scot & Matt: [27:55] Totally yeah the idea is you. I guess you can sign a yeah you basically signed a 12-month commitment and it depends on. You know the city but they were doing different types of arrangements to get people in there, definitely more flexibility and less yeah you spend 50k to a hundred K on kitchen equipment, I think they're located in markets where you know they expect that demand to continually grow but it when compared to a brick-and-mortar like absolutely like. There was a period where you know even certain ghost kitchens in Manhattan weren't operating because they were in. You know like business districts like by dye and Tribeca and a lot of people had left the city so. You know you were in the clubhouse I think with Corey from zul and and that was that was the example there, but generally speaking I think you know the bed is that you know delivery will continue to grow wherever the cloud kitchen is located because they've kind of. Pick that market on purpose. Jason: [29:03] So let's let's zoom up to Mack returns again for a moment so. Like you know how much of the stomach restaurants will win back like I think the jury's out like you know I'm like at the moment I'm expecting there'll be some Revenge dining if you will and. You know because there's so much pent-up demand that we're definitely going to see a spike in restaurant usage whether that. Persist or not remains to be seen but it feels like one of the things that it's much more likely to be permanent is. Regardless of where you get them a greater percentage of calories are likely consumed at home than before the pandemic I just feel like you know a lot of the restaurant meals are forever going to be delivered now or consumed at home. Scot & Matt: [29:50] Yeah I yeah I think between grocer be between grocery delivery or between Grocery and food delivery at home the yeah home becomes bigger than it was before for yeah I definitely agree. Jason: [30:04] So then one of the the trends that comes up is okay so you know digital grocery wasn't a huge thing before the pandemic it instantly overnight became a huge thing and it's got and I have talked about in a bunch of context on their show. When something is a brand new trend, the smart thing to do in the thing everyone does is outsourced right so when e-commerce for apparel was a brand new thing there were a bunch of you know e-commerce companies you Outsource it to Target and Toys R Us Outsource their e-commerce to a, Bookseller in Seattle called Amazon right and over time as as a business becomes more real and more legit. [30:44] Increasingly as a mistake to Outsource it because it. You know your core customer experience and So lately we've been talking about that a lot with. Digital grocery space and you know so many people Outsource to instacart and is that really in the that made sense in the short run is that a good long-term solution for grocery stores. Obviously restaurants. Very rarely stood up their own digital infrastructure it seems like the overwhelming majority relied on these marketplaces which I guess door – and ubereats are the two. Two biggest and my understanding is that the unit economics or the restaurant totally totally suck through those marketplaces. Is is that going to be the way that customers always discover their delivery restaurant meals or like we've seen in other categories of e-commerce do you think. More restaurants will try to have their own digital ordering experiences or how could that play out. Scot & Matt: [31:44] Yeah I think that the direct channel is going to definitely become you know it's become a must-have you know you have to have your own direct channel so the question is how do you manage these two things right and and this goes for groceries as well as restaurants right, all these apps are kind of disintermediating the relationship between your customer and your business, you know and so the goal is to figure out how to make those sales incremental on the marketplace and then drive you no longer term retention through. Do your own channels and so you know it's the card has its own white-label tack you know they've. They've been able to create a suite of products that you know Grocers can kind of pick and choose from if they don't want the marketplace you know Wegmans is a good example of this they've you know Leverage The White Label, they're also on the marketplace you know as far as the restaurants you know obviously doordash has storefront, I'm pretty skeptical of but you know there's also door – drive on top of all these white label platforms whether it's cow now or, yeah it's square has an integration I think with a door – now so all these POS ordering systems are going to have Integrations with last-mile fulfillment so. [32:59] I think it's just going to be about balancing it out and being smart about how you kind of load balance those two all these different channels and the number of channels is going to continually increase I. And so you know it's a must that you have a you know it's become a mustard every grocer and every restaurant have their own direct ordering and you know, we can get into the microfilm and all that stuff but. Jason: [33:26] I do want to get there it is it's funny, I you know I spent a lot of time with clients in the restaurant space and I talked a lot about needing to own, the customer experience which is increasingly digital I mean I think Panera came out like last month and said that over 50% of all their orders are now from the website so there are digital first restaurant. And every time I bring this up with clients that are like yeah but Jason you don't understand the magnitude of the problem like we could never own our own delivery like you know how much delivery capacity that would require it's impossible to build. And I'm like have you heard of Pizza Hut. Like it seems like there are all these restaurants that just it's endemic in their model that they'll have delivery like every independent Chinese food restaurant in America has always delivered it seems it seems odd that. Restaurants are so reticent to own their own own capacity. Scot & Matt: [34:23] Well it is true that like if you if they were actually going to go and hire all those drivers you know whether they be contractors are full-time employees that, it does require a lot of demand and it does involve a lot of know-how that they don't necessarily have so it does make sense of why this was the Easy Choice in the pandemic for them to like steal so much Airway and, you know because there was no other solution right that's like easy so I think the thing there is to really break down the things that they can do themselves and the things that they should Outsource and I think when it comes to. Yeah delivery that's clear like no no restaurant unless you're you know Domino's or, you know you have a ton of local delivery demand is going to like really operate their own Fleet, a lot of people will just Outsource it to like door – drive or now lift this getting into that space Uber has an API and although has a aggregate kind of API that will allow. Best messages basically paying this real-time Marketplace of these services and just pick whichever is going to be faster and cheaper they can kind of set the parameters of like. You know how fast or how cheap they want it to be and they could pass or subsidize it to the customer so you know that that part I don't expect restaurants to do I absolutely think restaurants need, have their own website whether it's you know some sort of CMS that their licensing from someone else or build it themselves and then integrate it with a door – driver one of these other players. Jason: [35:52] And I guess that is one of the interesting like so if you look at some of the other segments of e-commerce that evolved by a company I talked about often is this company called GSI and in the early days of e-commerce. [36:05] If you know an investor said hey should we get an e-commerce that the CEO ago yeah I'm gonna hire this company GSI to do it TurnKey right because the, in the same way that it was easy and it was an economically meaningful in the same way that you might you know put your menu on door – when it's not economically meaningful, and by far was the easiest thing over time. Every retailer realized hey it's a mistake to Outsource this this business to GSI and we need to own that but Jesus I didn't actually go away or go out of business like a GS I mean a bunch of money in the, the founder of GSI is this guy Mark Ruben who owns the 76ers and Fanatics and a bunch of other good things so he's a success story and Jesus I still exist today, they they operate under different name called radio and they pivoted from, providing all these Services TurnKey and sort of Outsourcing it to providing the Ava cart services that a retailer you know didn't think it made sense right so they weaned in order management. Fulfillment and 3pl services and you know kind of over time so we gradually moved away from the selling everything as a bundle and. Seems to me that like you know you can imagine not all of door – but some part of, instacart and doordash could could follow that same trajectory. Scot & Matt: [37:31] Totally yeah totally see that playing out like that so some of those that you talked about if the restaurant too, as a consumer these things quality of delivery is pretty bad I don't know if there's any good data but mine's probably like 60 to 70% and getting the order right and getting it here kind of within the window and I don't know if that's, I'm in a smaller City so maybe that's just part of the city here but I don't know if you guys in Chicago and La have the same problem. Jason: [38:01] I heard the triangle is going to be the biggest city in America and. Scot & Matt: [38:03] We do we do it were considered a Goldilocks City because we've got this interesting we're kind of like we match the u.s. demographic or something in a certain way anyway City search was launched here because the. So if I'm a restaurant one of the things that makes Amazon Amazon is the control that customer experience so it seems like even if I'm going to use one of these Network things it's not are never going to be a good as doing it myself you just think the economics are not there to do it yourself. [38:32] As far as I know I think Rick yeah it depends what you're saying would you define by doing it yourself if it's owning the customer relationship that's just the front end right so let's Domino's never made. [38:46] Delivering the pizza they make my all the money on the actual, you know Pizza itself on the margin of the products right so do what you do best on that Customer Loyalty right to whatever loyalty system you're going to use with your own front end but outsourced, you know that last mile component where the driver picks it up and you know delivers it to your customer that last component you know and so why should why should anyone have to go and build that. Because if Pizza you've spent all this time the whole thing breaks down when the pizza gets their cold because right. You know they delivered 60 other things and the pizza was last yeah I mean there's there's also you could also you know hire your own Fleet and then leverage these other software players there's one called get Swift there's another one, called on flea basically allow you to manage your own drivers and yeah I think you know part of it is like product Innovation right like obviously Dominos engineer's it's Pizza to be like, yeah keep retain the heat very well and that kind of impacts this comes full circle with the cut the glucose monitor right it's like makes you feel like crap after but you know. But so I think it's kind of a combo of like designing things that work for delivery like literally like testing. You know there are restaurants that would like literally go and. [40:13] Test order their products and see that okay we need to like cook it at this temperature so that by the you know the time it hits this guy's house 30 minutes later it's like at the perfect. You know crunch or whatever and like that's you know that's a little extreme but like you kind of have to factor that in, and then as far as like the drivers you know screwing up and doing other things like I don't know you guys I guess like. I think it's just asking a lot for the long tail of restaurants like forget the major Q Sr s write this you know the long tail of restaurants you know, to to do this kind of thing and you have to remember a lot of the reasons why these guys even got on delivering the first place was because Uber and Postmates and all these guys and door – Offered Logistics when GrubHub just started as a pure market place that was sitting on top of the existing kind of Chinese restaurants and pizzerias that were already set up to do this through the phone right so, they've kind of unlock that for it for a long tale of restaurants I would have never done delivery had they had they not have access to this on-demand Fleet so. I think it's good that Fleet is here to stay but I think the way in which I just think. [41:26] You know the vertically and it's clear that the vertically integrated model is much better and you can see this with like chains like cluster truck. Which is you know just a vertically integrated goes kitchen that works with a shot of Kroger yeah good brand yeah and as Lori didn't come. Jason: [41:44] Cluster truck is what was left. Scot & Matt: [41:46] What a cluster truck. So I think you'll see a mix of this kind of white label with the door – drive and then like the vertically integrated kind of first-party player that you know, is basically delivering and maybe leasing the space or owning more and more Upstream to get better data online, okay when should you fire this item and you know on on your stove top and you know just to make sure that the timing is the food is not just sitting out there waiting for a driver like a lot of these POS connections have not even, been linked up right is like no kind of connection between like what's in my inventory or what. [42:25] Yeah and and and what's being listed on the marketplace right so that's why you get all these like out of stocks and refunds and and, you know restaurants are not updating customers on like what the ETA is are because there's no transparency into those operations because they're operating in completely offline, yep the worst here is our local Moe's where they have six iPads and they forget to check them and yeah exactly I have to go in because you can never get them delivered Within an hour of placement and when you go in there's like all the frustrated ubereats people sitting there waiting and they haven't even pulled the little tab off of the eight iPad that is the growth of what the one that's super frustrating is Panera because they did their own delivery here locally and then they just started Outsourcing it to GrubHub I think in the quality like literally went down, like 80% but they also you know they seem to be ahead and I think Jason one time mentioned over half of their orders are digital now and that that's kind of more like the Starbucks mobile kind of thing we're more and more people are ordering digitally from the restaurant either be in or out you have any interesting data on that or they are they kind of, are they ahead of the Packer they are most restaurants that have mobile ordering getting to that 50% mark. [43:46] No I think I think there's only gonna be so many brands that can own that with the customer I mean Jason probably knows better but you know. There you know the the golden standards are like the sweet greens the Starbucks is and there's payments actually has a great ranking Pym NTS shout-out to the no vowel Club, um they they have a great ranking of. Food delivery apps or restaurant apps by you know how well they they do loyalty and all these other things, Casey's General Store is a very interesting use case that I would say like somewhere in the 60% range of transactions flow through their mobile app whether it's loyalty or delivery or pickup. Which is pretty fascinating. One thing to remember and this goes back to Olo is that the majority of these transactions are going to be pick up or curbside pickup, deliveries still pretty small and, so it's you know as much as everyone talks about delivery delivery delivery I think pick up deserves. [44:56] Yeah Fair mentioned because. That's a lot of people are doing that to just save time when they when they get to the store and I think you're going to see more of this Q are ordering and other types of channels where, you can kind of use the menu and maybe even order before you sit down now is that going to be a romantic night out with your spouse you know when, you're dining out for a nice you know a nice dinner like no but there are certain occasions where it's going to make sense to. Like you shouldn't be waiting right and so that's kind of what this is all about just you no more free time to do more fun stuff. Jason: [45:36] Yeah no I do think that's interesting I think there are going to be use cases where people are going to like consider foregoing the wader to be Advantage right like it's. In some cases it's annoying when the waiters not writing down your order in your you know they're going to get something wrong versus being able to like beam your order exactly how you want it directly to kitchen and there are other times when that ordering is an important part of the. The Ambiance and the experience right. Scot & Matt: [46:05] Totally yeah yep and that's the rise of the Q R that I think we saw the covid-19. Jason: [46:11] Yeah yeah yeah but you're the mighty QR code is back I think that's a article on you're on the homepage right now isn't it. [46:24] Let's come back to them and then I do want to Pivot because in classic Jason Scott Peck fashion were using were burning Through Time, to grocery a little bit because you did you did kind of talk a lot about the, prevalence of pickup versus delivery and I think that that is also very prominent in how it seems like digital grocery is playing out. Um [46:49] The bike in the same way that a you know as a fast TurnKey solution a lot of people Outsource their restaurant business to Door – a lot of Independent Grocers were pretty quick to Outsource their, some quite large Grocers Outsource their gross their digital grocery to instacart and one of the things that's interesting to me about these marketplaces getting a bunch of the business is, they then have opportunities to kind of cherry pick pieces of the business that they want to steal from their Marketplace Partners right and we. Racine Amazon do that with private labels the you know arguably like the door – is our are doing that with ghost kitchens, and there are some rumors about instacart you know having their own warehouses to fulfill, um like top up orders and I'm curious if you have seen any of that or if you. Hypothesis about how that might play out not shockingly instacart totally denies. Scot & Matt: [47:55] So yeah I mean this has been a narrative that's been a been there for a while and it makes sense that people fear those because the constant story with technology and these you know kind of, offline businesses has generally been like David versus Goliath and. I can say so I put out a story about instacart getting into microfilament with Publix, I'm not sure where this is going to be deployed but they're basically, building an MSC with Publix and they may be doing it with more Grocers but this is the info I received. [48:31] And I think it's the cart it's going to be a it would be a very poor decision for them to become a first party retailer and compete against, it's there Grocers and unlike door – where there's I don't know how many. Hundreds of thousands of businesses on there there's only a few hundred Retail Partners on the instacart platform. And each of those partners are very meaningful I mean like the head of the tail are you got Albertsons you got Kroger you know these are big big big partners, and so if they were to ever take that data what those customers aren't they basically have, aggregated and basically wanting competed against those partners that would just be all out Warfare and I don't I'm I've spoken to people there and I've done some homework into this and I really don't think that that's, in the cards for them despite the fact that there's so many other guys coming up who are vertically integrating and and there's obviously lots of Pros to that. When I see in the car doing as a response to that kind of thread is just basically, creating more virtual storefronts on top of like d2c companies or getting into other non-food categories that can be sold from kind of any kind of Warehouse that may not be a two hour. [49:51] Fulfillment time it might be a two-day fulfillment on them that will eventually work its way to same day, that's kind of the high level there it's a lot of other Grocers you know so-and-so cards I think offering MFC micro fulfillment centers are automated, and usually attached to a retail store because you kind of automate the bulk of items you know picking through this system and then you're picking the rest of the store and that has its own set of challenges we can speak that's a very long debate, but you know. Yeah they're not going to centralize that process it's going to be done on a per grocer basis in they're going to offer that in the same kind of fashion I think is they're going to offer that Enterprise white label solution because once you hit, I don't call it three four thousand orders is when you have to start looking at okay I need to move to a dark store I need to do a manual pick in a dark store that's. Attached to my store because you don't want, no customer wants to go in and see all these Shoppers coming in and ruining the experience rights and the Grocer's know that every order that gets fulfilled from like inside the stores. When you're doing this is just going to be lost Revenue so. They definitely want to to not Outsource it but like move it outside of the store because when you start messing with the store your cannibalizing those sales so. Jason: [51:14] That's the equivalent of Scott's experience of standing in line behind the 12 Uber delivery driver. Scot & Matt: [51:19] Exactly and that's that's just like that's kind of the moment where like going back to like why I got into the space when you have those moments where you see like the majority of people here are not actually consuming this food right it's like, then you're like holy crap we've entered in some other weird phase of the future. Jason: [51:36] Yeah I remember I distinctly remember going to pick up a fast food order during a pandemic and I like popped into this restaurant and they have reconfigured the whole dining area to be pick up tables for the eight different food delivery companies. Scot & Matt: [51:50] Yes that's every every restaurant out here is done that and put like little printed signs like this is the door – table this is the GrubHub table. Jason: [51:59] Part of me was like you know what I really want to do is stand outside this window and just like see who's winning cuz you could you could physically watch it. Scot & Matt: [52:07] I should steal that from you yeah I actually walk in with a. Jason: [52:10] What you'll actually do the work I won't so feel free to Steve. Scot & Matt: [52:12] I put on a door – masked because like it just happens to be handy and I was and I got one for free and everyone thinks that like I'm waiting for a door – or so I get to like cut in line it's kind of fun. Jason: [52:25] I like it you mentioned mfcs a couple time in a lot of our listeners will be super familiar with that but just. To take half a step backwards and then I promise to ask a question so grocery delivery is awesome, Walmart and Kroger love selling selling digital grocery better than they love losing the order to Amazon, but the one Inconvenient Truth is that most of those digital grocery orders right now are wildly unprofitable right because. And that old grocery model the customer pays all the way over to pick the product and they pay the labor to drive at home and in the Digital model of customer expects Walmart to pay to pick the product and drive it home. Which is not very favorable so, the the working hypothesis is man you know customers are pretty happy picking up the groceries outside our curb and that saves us the delivery cost, and if we can eventually get robots to pick the order instead of humans which is a micro fulfillment center or a MFC we can cut 90% of the picking cost, so it does seem like that's a big Trend right now are grocery stores by expanding their pilots of these mfcs and investing a lot more in there, their curbside pickup experience. [53:49] Is that the model that you see winning and and to be honest like I'm optimistic that that could potentially be profitable there's other smart people my friends who charita. Is pretty adamant that even with those two Evolutions that digital grocery still doesn't have have workable unit economics. Scot & Matt: [54:09] I think her skepticism is definitely warranted and you know I actually you know was biased in favor of mfcs and I started digging in the last few weeks, into the shuttle MFC technology and as well as the CFC technology that okada's used and. You know I can say that a lot of these early entrance into the market who are doing the shuttle technology and that's like the takeoffs and. Alert innovation. [54:39] You know I think that was like the 1.0 test and I you know Albertsons did say they're going to do like nine of those they'll have nine up and running this year so they are doubling down, but what I did see was like damn attic which has a shuttle product product and is also seen it being used at Amazon Fresh. They're actually recommending autostore for most of their Grocers and auto store, you know the best deployment I think that we can see in the US as a philly Philly deployment It's actually an e-commerce fulfillment center. It's going to sit outside of the city that will do next day and same-day delivery, I think we'll be pretty profitable and I think some of these shuttle ones are the jury's out on whether or not they can actually fulfill the demand fast enough and that they can actually be. You know they can actually have those payback's I think auto stores targeting about a four year payback for Grocers so there's obviously so many variables and so many different things you have real estate costs labor costs you have, Geographic density you know it doesn't make sense to. [55:50] You know plop a huge monolithic C FC which has you know very low per unit picking costs and in a neighborhood like in a town like Cincinnati where there's only three hundred thousand people. Or you know and if you're if you had six million people you know then that kind of works and that's why ocado kind of really works well in the UK, I'm skeptical what that's going to look like with Kroger in the US and so. [56:21] Yeah the short answer is like there's no I think one-size-fits-all deployment because every situation is different, but the hope is that over time you know you can get more and more stuff in the Automation and out of the store and what's happening with some of these early 1.0 players from what I'm hearing is that they thought that they would put. You know 80% of the most popular ordered most popular ordered skus in the Automation and the other 20% wouldn't you know the deli meats and the dairy and all the stuff that is more it's maybe fast-moving or perishable. They keep it in the store it's actually proving out to be more something like 50/50 and at that point it's kind of a mess and you might not be paying that off for a long time so. I think we're going to see autostore emerge as the as the dominant provider here and, and yes it's an NFC technology but it can also be done kind of as an EFC kind of detached it's not as big and monolithic as a 300,000 square foot Kroger facility with a kado it's about a hundred twenty thousand square feet. And it's all about you know can you do same-day pickup same day some same day delivery if you get it in quick enough in the morning or at the night before do next day so. That's what I'm saying. [57:46] Recall were running up against time so you know it wouldn't be a Jason Scott show if we got to sneak a little bit of Amazon talking here so what do you think about all Amazon's good, a bunch of initiatives going on you know we've heard go puff is I think Jason calls him a top off kind of the thing you know they're evidently spinning up to compete with them they obviously on Whole Foods and are doing a tons of things there what do you think about the the sphere of things Amazon is doing and what has the most is most interesting to you or is most likely to be successful. [58:22] So the one thing that I have on Earth over the last month or so was the, kind of center aisle kind of goods your non-perishables being delivered same day from Amazon they actually announced this I think right we're literally like a week before the pandemic hit. That they were starting this in a few cities. And you know then covid happened demand goes through the roof and then they got to kind of just like put that aside but what I'm saying is they have this new kind of fulfillment center that's. Call it 45 miles outside the customer and. [59:01] They are stocking that with about a hundred thousand of the most of the fastest moving skus that are not fresh, and they're building about 2 million square feet square feet per major Metro to do this so I'm actually trying to go down to San Diego and. Do an Amazon order for that and I'll report back you should check it out why just ordered we need you to sneak in there. Well yeah I'm gonna do a delivery that's what I'm saying like I'm Sino Flex driver so get a little lost looking for the bathroom but they they co-locate they're starting to co-locate these next to their larger Suffocation centers, so they're kind of piggybacking on their existing infrastructure. At the same time they're you know they're going to do they're dipping their toe into grocery into fresh I think we're tracking about 36 some odd. Fresh stores open sometime this year. And then obviously they have 500 Whole Food stores that they could take some of those learnings and and apply their I'm not sure how that's going to be leveraged in the entire ecosystem you know there's. Obviously there's so much there's so many products with Amazon whether it's like they had prime now they just finally announced that they were like going to merge that into. [1:00:21] Poor Amazon or fresh I'm not sure and then, you know with Whole Foods they had 365 Whole Foods and now that is getting Consolidated into just Whole Foods so I think you're going to see them move around these different chest pieces and figure out what to do with all their assets, I think like at a higher level what you what this is all leaning towards is this on the grocery front it's you know. Free one-hour delivery from one of these Whole Foods or fresh stores or maybe even a dark fulfillment center. For Prime members and then like for cpg buyers going back to this whole disintermediation thing like a Consolidated by where some brand is able to purchase shelf space and digital. [1:01:05] Placement on the website and building that flywheel between online and offline and then on the go pop stuff that's like maybe. Less perishable they're going to just they're going to they realize that they you know I think. Kind of gave some of that to Walmart and Target to those stores that really want on the kind of same day so now this new infrastructure that they're building out. Yeah I like I mentioned two million square feet is crazy / Metro is going to kind of I think attack that pretty hard. So that's what I'm saying it's two million square feet in Amazon's a small test. One other thing I should mention is that they're also becoming their own distributor so once once these stores become get a certain volume it doesn't make sense to use like Spartan ashore. Unify so they're gonna they've also confirmed in three markets LOL Orlando Maryland that they've also become their own distributor to those stores unlocks more margin. [1:02:08] Allows you know and obviously with all this there their delivery costs are the lowest in the business is estimate there about 50 cents per bag. Call it may be four bucks in order average order values on these things are typically a hundred a hundred thirty bucks. You know a lot of these you know it's the card charges 10% these micro fulfillment guys net like not even including. [1:02:34] Not including the last mile delivery it's still like north of ten percent so instacart is still a really good bet for a lot of retailers because the a lot of this technology that, it was really hot and that they sold that narrative you know isn't panning out to be as cost effective. You know like your friend at Forest or mentioned so that's that's where we are right now. Can't wait to see what happens towards the end of the year as things kind of normalize and more of these these mfcs get deployed and Amazon start to kind of unveil more of these things because I'm seeing San Diego coming up. So we should see more markets get that same day of the hundred thousand skis. Jason: [1:03:18] Side note Scott will be super excited when they when Amazon starts Outsourcing its distribution its grocery distribution capability to its competitors to write. You could you could tell imagine that, we're past out of time but I want to leave you with one lightning question of course in addition to Whole Foods and all this delivery Amazon has obviously watched their own more mainstream grocery format Amazon Fresh, I think you and I have known about this for a while but like it's there's a new cycle right now where everyone is reporting that the next Amazon Fresh store in Seattle, has just walk out technology instead of the – cart do you have a guest 2 years from now like has does Amazon Fresh scale are there two thousand of them are there, none of them are there 10,000 of them one of them what do you. Scot & Matt: [1:04:08] That's a good question I think yeah we're just at the tip of the spear here and I think it's going to be a mix of dark and you know experiential infrastructure. And you know right now that's kind of one in the same I'm going to be curious to see where all these you know we're all this demand gets fulfilled from, but I think you know Amazon's super efficient with their inventory and, you know compared to a lot of other grocers that don't know what's in their store I'm pretty confident that Amazon knows exactly what's inside it at least it's fresh stores you know and maybe they're getting the fill Whole Foods on to that Tech. So you know I think you can unlock a lot with just pure manual picks you know software from the inside the store that gets you to a certain amount of capacity and so the question is how do you keep, going that you Fortress with more retail stores do you build dark infrastructure, I think they're just kind of moving forging like Full Speed Ahead and and I think. It may not be a ton of retail but there's going to be some kind of warehousing that's going to have to be built to support this demand. [1:05:17] And you know I think it's dipping now I think a lot of Grocers are reporting like dipping their online sales as we've seen this massive surgery or talking about with restaurants and this pent-up demand that's down you know maybe. You know somewhere between five to ten percent of its highs so. Well we get to twenty percent penetration over the next you know five three four five years. Maybe I don't know like you know it's hard to say exactly but I think Amazon is is very well positioned and they're and they're doing in a. As close to profitably as anyone could possibly do it so. Jason: [1:05:59] Yeah that it's actually a great Point there's a huge amount of loss in traditional grocery in just out of stock so you know, total five product benefit of rolling out that the just walk out technology to grocery is to have a much better more accurate handle on it. Scot & Matt: [1:06:17] I would just and even think about that but yeah they're doing a lot of that would like see stores and other kind of non-food retail retail as well that could be. Jason: [1:06:25] You know the bane of instant cards you know existence is they don't have accurate inventory from there. My Sellers and obviously that's you know we suddenly have all this right crappy for substitution if you know exactly how many bananas you have you know things things that customer experience can be very different. Scot & Matt: [1:06:45] Yeah I yeah totally I think well it's a guard has to use a I beat to make basically make up for that, waste is a huge thing and if you can solve that problem you boost the margins significantly and then you know you could make you could maybe break even on delivery, so that's going to be that's another huge salute you know challenge for these Grocers and some of these automation players are selling Solutions in that in that kind of category as well. Jason: [1:07:14] Yeah it's definitely going to be an interesting year in the food space and meant we could we could dive into this for another hour but, it is happen again we use more than our allotted time so for sure if listeners have questions or comments about the show feel free to hit us up on Twitter or Facebook page, as always if this is the show that's going to help you jump to that next ring in your career maybe you could do us a favor of jumping on iTunes and finally giving us that five-star review You've been teasing us with. Scot & Matt: [1:07:43] Matt really appreciate you coming on the show if folks want to find you online where where's the best place to find you yeah thanks so much for having us it's always great chatting with you guys, it's hungry dot TV hngry that's hungry with no u dot TV, and as a free Weekly Newsletter as well as you know paid subscription so thank you Jason for your support but yet definitely get on the dot the weekly digest and you can see kind of what's going on, every weekend hungry lands. Jason: [1:08:15] That is awesome the the newsletter is well worth the subscription although I'm pretty sure Matt lost money on mine because the mighty publicist, accounting department trying to sign up for

Steve Pockross has been the CEO of Verblio for nearly five years. As CEO, he applies leading marketplace and SaaS principles to create an industry-leading content creation platform with 3,000 U.S.-based writers supporting the creation of premium content at scale in every niche. Verblio has grown over 400% in the last four years. So, Steve is sharing his insight on why it's important to lead by putting people first and how that contributes to your agency's growth as a whole. 3 Golden Nuggets Exhibit your agency's values. Don't just say what your values are but actually exhibit them. Lead by example and personify the company culture you wish to set. The key to finding great talent is marketing to them. Treat your recruitment like you would a client. Write a unique job description that appeals to the right person and then market to them. Attract agency talent the way you would attract customers for your clients. Three keys to putting people first: (1) willingness to sacrifice other areas, (2) constantly seek feedback, (3) reward people who identify holes in the culture.   [smart_track_player url="https://traffic.libsyn.com/secure/jasonswenk/How_to_Lead_Your_Agency_Team_By_Putting_People_First.mp3" ] Sponsors and Resources Verblio: Today's episode of the Smart Agency Masterclass is sponsored by Verblio. Check out Verblio.com/smartagency and get 50% off your first month of content creation. Our team loves using Verblio because of the ease in their process and their large pool of crowd-sourced writers. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Leading Your Agency Team By Putting People First Jason: [00:00:00] What's up beautiful agency owners! I'm excited. I have another amazing podcast guest who actually has been back several times. I don't know why we keep inviting you back. No, I'm just kidding. He's a good friend of mine and, uh, we'll provide lots of value. And we're going to talk about leading with people first for your agency. Now, before we jump into the show, I want you to do something. I want you to take a screenshot off your phone, listening to the podcast, upload it to Instagram, tag us. And give us a shout-out on Instagram. And then I can shout you back and say, Hey, thanks for listening to the show. So let's go ahead and get an episode. Hey Steve, welcome to the show. Steve:: [00:00:40] Hey Jason. Good to be back. Jason: [00:00:42] Yeah. I don't know. Like I said, I keep inviting you back, I guess you do well each time. So now we'll welcome back for the people that have not checked out the other episodes and we'll link those. Into the show notes of the episodes to make sure you guys go to JasonSwenk.com and check those out. Tell us who you are and what do you do? Steve:: [00:00:58] So I'm Steve. I am the CEO of Verblio. Oh, we are a Denver-based marketplace, content creation platform. So we have a network of highly curated, fantastic writers that we put together with our unique business model and put it on our platform so that we can do high quality content at scale for any niche. And we work primarily for agencies. Jason: [00:01:19] Awesome. Well, welcome back. And let's kind of jump into it, right? So, Let's talk about what does it mean to lead with people first and a growing company? I mean, you guys are, I think, 30 plus employees on your team. And I think a lot of agencies will relate to this. Steve:: [00:01:37] We've been fortunate to have some really high power growth in the last. So I took over as CEO four and a half years ago, and we were talking about what are some of the lessons that we could really pass on to agencies to help them with their growth as well, that can relate between the type of business that we do and the type of work that agencies do. And so one of those big strategies is putting people first. And that might sound like the most cliche strategy of all time. Going back to "Good to Great." Put the right people on the bus first. I think we took a really, well, we think about it and brought it to every aspect of our business. And so I think bringing it to life is really interesting. And hopefully, some of these nuggets that helped us can really help others. And has helped us grow 400% over four and a half years as a bootstrap startup. So with no investment in order to fund that growth, all being organic growth. And it's also helped us grow when I first started, we were 11 people for the first three years. And over the last two years, we've gone from 11 to 30. So how do you accelerate that growth with the right people strategy? And then also, how do you ensure that it continues to build, even as you're expanding rapidly? Jason: [00:02:38] Yeah. A lot of times I see kind of people, they get to certain stages of climbing the mountain, and they kind of backtrack. Right? And like, I'm looking at growing any business or really growing an agency. And it kind of like six phases, right? Like you got staging base camp, the climb, the crux, the crest, and then obviously the summit. And each one of them you're focused on different things. Like at the very beginning, you're focused on how do I build this company and then like, what do I need to focus on? How do I get further ahead, all that kind of stuff. So when you came in and you guys were 11 people, what was the main thing that you were focused on? And what was the big challenge that you were trying to overcome? Steve:: [00:03:18] Well, it's hard to boil it down to just one, considering anybody who's ever taken over a company or a division knows that you're kind of moving into somebody else's house. It's kind of like this: I'm very grateful to have this house. It's really beautiful. I'm excited to live here. And then you question every single choice made about that house. Why are the carpets on the floor? Why are their sconces all over the place? And so I think a lot of those decisions are really frequent to that. So number one is to keep an keep in mind that a lot of people put in a big deal in order for you to get there. And the second is to question everything. So the first thing that was most important to me was instilling my values in the company and then making them not like imposing them, but creating an, "our values." So I knew that whatever I started with, there are things that are just deal breakers for me, like follow up on what you say. If you commit to it, you're going to do it, or you're going to create a natural distrust throughout your organization. And so the very first thing I said at the meeting when people ask me: What would new leadership be like? We started creating those values. And the most important thing was less to say what they were, but really to exhibit them. That I follow up on everything that I'm standing for. That I bring enthusiasm and excitement to my meetings and my projects. That I plan them out. And my very first hire was Paul, who, you know, very well. Whereas partially 'cause I knew he was an amazing marketer, but we really invested very little in marketing at the beginning because we wanted to focus too much on the product. And the most important piece was that Paul exhibited all the values to every other new member of the team. This is what good looks like. The CEO can be there all the time and having members of your team that just emulate those values for you and can start bringing them to life is critical. So that was my first big investment. Jason: [00:04:55] Well, I think you just brought him on because he looked like Will Ferrell. Well, you said a couple of really cool things and a lot of us, I think, you said question everything. And this was for you coming in from an outsider with no emotion coming into it. Now, most people that are listening to the show, they've created it from the ground up. And a lot of times, kind of, what I want you guys to unpack is: you should question everything that you've made the decision to get here. And question everybody on your team as well on an ongoing basis. I mean, I almost think it's kind of quarterly. Like, I live and die by 90 days rather than the year. Sure. We have yearly goals, but I'd rather be able to adjust quicker and, you know, I try to question everything as well. I think that's really good. And then the other thing I love that you mentioned was, you know, marketing. That's one of the first things I tell people is like, you gotta bring in marketing, you know, in the early stages, in order to really build that pipeline. And then, you know, marketing should break sales and sales should break operations and blah, blah, blah, and so on and so on. So I love it. What are some surprising things that happened to you about, you know, building this culture? Steve:: [00:06:13] I think one of the most surprising things was that the values that I, that I set out to create took their own form. They really bonded with the people that we brought on board. So I always talk about my management style as being, I want to run my company like  run my ultimate Frisbee team, so I want it to be incredibly, it's funny cause the ultimate Frisbee teams are the maximum size of 30 people and I just hit 30. So I don't know what I'm going to say now. But it's being super collaborative. It's rooting on for people. It's focusing when you're in your huddles and you're down 12 to 2, you get into the huddle and you talk about how much fun we're going to have and how much enjoyable this is gonna be. And cheer for each other. As opposed to going around and talking about all of the different processes you're going to create  to win the game. It just brings everybody down. And so I really wanted to call it the spirit of the game value and the rest of my team. Uh, there are almost no athletes and they all refer to it these sports is "sports ball," so they captured it. And they basically said that even we, we played like can ultimate Frisbee team, even though 73% of our company doesn't know what a sport is. And then kind of wrote it up in our own really distinct way. It's really interesting how culture is not you. Culture is how all of you make it together. And then when, before we leave the 90 day feedback thing, I think you said something really important. One of my favorite, most important concepts to me of 90 days is every new person, especially if you're an agency owner. You started this place, you're going to have a very distorted view of your reality, because this is yours. This is your baby. And so 90 days is such a great time. Every new hire that comes onto your company, to ask them a really explicit. What happened to the company that wasn't what you expected to happen? How was the setup for you ahead of time? How are we not living up to the things we talk about? Cause I can't see these things. So the question that I asked my teammates and every one on one. And I talked to, I have a one-on-one with everyone in the company, at least quarterly is what are the things that you're seeing that you think I would want to know? Jason: [00:07:59] I love that. Well, you know, I talk with someone recently and we talked about everyone says they have an open door policy. But most of your team members are not going to step through that door. You actually have to go out after them and ask those direct questions like you just did. Be like, what are you seeing that I'm not? Because they're going to see things differently than management and leadership. Talk a little bit about, you know, especially coming in from the outside and having a team of 30. Are you more the mentality now, like when you came in, were you focused on kind of like the what and the, how? Or were you focused on the who? Like, who do I bring in? I know you mentioned bringing in, you know, Will Ferrell. Literally. I wish I had a little overlay right now. I could pop side by side. Like everyone would like, yeah. He's Will Ferrell. I really don't think he looks that much like Will Ferrell, but.. Steve:: [00:08:52] I know you're the only one that doesn't. Jason: [00:08:54] Could we do a vote on your podcast to have people write in. We should, we should. We we'd literally. What we'll do is we'll put a picture of a, him and Will on the very bottom. And then, uh, or maybe we'll put it on Facebook when we post it up. I think that's what we'll do. Steve:: [00:09:12] So back to your actual question. Yes. So you get the what, the how. A lot of people refer to that in another business framework for the exact same question is, do you focus first on the people, the product or the processes? Because these are the three ways you can address all problems. To me, you have to focus on the people first because they decide the processes. They decide the product. They're the ones who are going to be taking your vision 10 levels down and making every decision to bring it to life. And so hiring became our absolute priority of making sure we were bringing on the right people and not making mistakes. And then our second became making sure we kept these people. So our churn levels are just ridiculously low. We waste very few cycles. They say that every person churned might be worth double the amount of their salary in lost time. And the third benefit of having a great culture is you get incredible amounts of productivity and excitement out of it. So we definitely focused on the who first. Jason: [00:10:04] Very cool. Which leads me to kind of the next question is, how do you find really good people? And how do you know when you find really good people? I think that's what a lot of people, you know, in the agency, world struggle. Steve:: [00:10:19] So our hiring strategy and a couple of the things that have that I think have been keys to access. And a lot of these were learning and iterative as we went along. Uh, one of the things that's really important to me that I think everybody can do. And it's all in your power, is to write the most unique killer job description that just attracts the type of people you're looking for. Our job descriptions are fun. I want to read them. I want to laugh at least three times is what I tell my people as they're running them. But I also really want to feel what the job is. So we write killer job descriptions and they'll stand out. How many people actually put that in. That's a big part of your marketing. You are marketing to talent. Most people only market to the roles and responsibilities and the experience. That's a huge way to stand out. The second is to create the criteria of what you're looking for. And if you can be very specific on it and also make it different from what others are looking for. So the hardest way to get talent is to hire, been there, done that. Those are the most expensive, they're most of the competitive. You're going to be fighting in a red ocean for the exact same people. All the other agencies are looking for. Are there qualities that you like in people? For us it's curiosity, creativity, and passionate about something that is not their work. So my number one question in an interview is, if you're ever interviewing with me is what's a class that you took an undergrad that you didn't think you'd be excited about, that you became unbelievably passionate about and why? And somebody who can be passionate about something that's not the job function to me shows distinct curiosity. And I think that's particularly important to marketers out there. So there was a study like most of the skills in marketing in the last three years are different than they were the five years before. Which means you need people who are going to constantly looking for how to improve their skillset. And to me, curiosity is that way to get there. How do you find somebody who just wants to do it and be passionate? So find your unique skill set that other people looking for, make yourself unique, market to them, and then have those as your criteria when you're interviewing. Jason: [00:12:14] Yeah, I would have failed that question. I'd been like, Steve, I hated every class I ever had. Steve:: [00:12:20] That's not true. I refuse to believe Jason: [00:12:23] it's pretty true. But then again, I tell people, I still want to get this shirt going "I'm retired because I'm unemployable." I'm retiredfrom working for someone else. So that would be a good t-shirt. Now that Verblio is 30 plus people. What are some things that you're doing to maintain? You know, the environment, maintain the culture? Because it starts to get out of control. Steve:: [00:12:49] It gets completely out of control. So it's interesting there. Um, so startups like agencies, I mean,  we're all kind of at the same ilk, which is that we start at a certain size and we go through these growth phases, which you coach a lot of your agencies on. So there's the right amount of process for each phase. And someone told me that when you're, uh, when you're a startup, it's like wearing the wrong size clothing all over your body all the time. You either have too much or too little at all times. And so we're working on our people in culture processes really diligently. We brought in a couple of much more process driven people who are much better at this than I am to focus on how do we bring it to life? And we're focused on a few areas. One is we just had to have a platform it's all consolidated in one area. We found an ingenious, one called Leapsome. If anybody's looking for one that brings together so many of these disparate HR platforms. As everybody only seems to be able to do one thing on an HR platform, which I don't know why. One of the most critical factors was be really clear about reviews. What we're looking for are. Creating a much better goal setting platform. So everything rolls up in our OKR style, to very top five goals of the company. So everyone knows what their role is. They update them quarterly basis. It's really process driven and it's way outside my sweet spot. It's not what I like to do. And the last is it has cultural surveys. Every month we send out 10 questions that takes less than 10 minutes to get the feedback from our team. We started this there was no one more than two levels below me. And now there are people five levels below me. How am I going to get that information? How are we going to make rational decisions about what we think is our culture? What we think our communicating, conveying versus what people are actually feeling at different levels of the company. And the last for me is those one-on-one meetings, which is I meet with everyone at least quarterly. But we do probably more one-on-ones at Verblio than anywhere I've ever been. It's a huge investment in time. It means that you're putting people first. This is really key to how we bring this to life. We could be spending that time doing more sales calls. We could be spending that time doing more platform, but we're making sure that we're empathizing with our team or understanding where they're at and we're really communicating. So we're, so we're all working more coherently together. And I think that's an investment that pays off. Jason: [00:14:55] Yeah. You know, it's kind of like when you start having a bigger team or as you start to grow that team, you're all thinking about like, how do I build the right team? And then once you build that right team, you're kind of like, how do I become that leader to them? And then, you know, the next is, is like, how can I actually grow the leaders? Especially when you have that many different layers of going well, I need to make the decision-making spread out. So it's not all flowing to us, you know, and then I'm the toll booth or even my leaders. It's like, how do I create many layers of decision-making power and freedom? And, you know, I was chatting with one agency, and, uh, he was the biggest bottleneck on the operations for a while. And he said, for many years, it was a big struggle on it because on himself, on his family, even on the agency. And then finally, he just got to a point where it was like, I'm going to document 50% of what I know. And then the team could use that as a foundation to build upon and then innovate from that. And it changed everything for him. Uh, and now they're well in the eight-figure mark and just flying to wherever they actually want to go. So, love it. What are some three tips for the listeners who want to make a decision to focus on culture and really kind of catapult them to the next level? Steve:: [00:16:21] I'll see if, I'm going to start talking and see if it ends up being three. So the first tip is what are you sacrificing when you say you want to put culture first? You're going to have to deprioritize something. We invested in an executive coach. When I'm investing in people. And I'm basically trying to find junior talent that has never done it before. What's the one area they're not, they're going to lack is that level of executive coaching. So I sacrificed the salesperson. We didn't bring on a professional salesperson until last year, after growing 300% before we did. So then we focused on an executive coach first. Cause I thought that was more important. That's a big call. That's a hard thing to tell, if you're the owner, then it's a hard thing to tell yourself. And if you have a board like I do, it's a hard thing to argue to them. So how much time is it going to take and work backwards? It's really easy to say, this is my number one priority. It's not easy to say this is my number one priority, and I'm not going to do these three things because of it. So that's my number one. My number two is to get constant feedback. It's really similar to your 90 days, like check in, do surveys. How do you keep yourself honest so you don't believe it? Come up with the right set of questions of celebration. And then number three is every opportunity you can. One of my favorite podcast guests recently, he was telling me about the hardest thing to be a CEO is to not just say one thing once. You have to say it a hundred times and keep repeating yourself until you're bored, is to keep repeating your values. This is an example of why this reflects my values, reward the people publicly. If somebody comes to you with criticism about your culture, where you're not living up to your own values. And you worked really hard to ask people, to give you a feedback, call out that person at the all hands, give them a reward and say, thank you. You are right. You're going to get a better culture, a more curious and critical thinking culture. And you're going to get less yes-people in your company. Jason: [00:18:10] Yeah. I mean, you said it. You got to kind of stand by your values. You know, just literally a little while ago, I was chatting with one of our team members and we, unfortunately, had to ask one of the mastermind members to leave. A new member over two months, there's just too many red flags, just didn't mesh. And we just didn't want it to pollute the rest of the culture. And so it hurts to say no to reoccurring revenue, but at the end of the day, you gotta know you're gonna stand on your values and not sacrifice that. And be kind of a whore for sacrificing it, which a lot of people, you know, do. Steve:: [00:18:53] There could be very few things that are more powerful to a company than fire a client that's been abusive to your people. I think one of the things I've gotten the most positive feedback on is when there was a client that was kvetching about my, uh, some of my people while they were in the room. And I just told him that was absolutely unacceptable on the call. And I think it really, like everyone on the team felt supported. Like they could do whatever they wanted and I'd have their back. But it's hard. I feel that in the moment, especially when somebody is paying your bills and you really need them. Jason: [00:19:21] Oh, yeah. But you know, you get to the kind of the next stage where you're like, I'm not going to sacrifice us. We'll figure it out. And it's just going to be that much better because yeah. Your people are everything. And if you don't have their backs, well, then they're not going to have yours. Like literally they'll hang on until they find the BBD, right? The bigger and better deal. Steve:: [00:19:46] So we've talked about kind of hiring as a people strategy, investing in people and bringing culture to life. And I think the last piece is thinking of, uh, thinking of all of the people related to your company, as your stakeholders, as your clients. For me, it's my writers. We need to treat them special. And like, I want them to have the best writing gigs in the industry so that they feel like this is the place they want to be.. Cause the more excited they are about their job, better the writing and the product will be for our clients. And all around. And so if you it's a virtuous cycle, you bring on the good people who are empathetic and excited and creative and passionate. And they start feeling all the other stakeholders in your business the same way. Jason: [00:20:22] Love it. I love it, steve. Where can people check out more about Verblio? Especially if, uh, if they need some help around content writing, which I highly recommend you guys. You guys rock and are awesome and use you guys for so many years. Steve:: [00:20:36] Cool. Thank you so much. So you can find us at Verblio.com. And you can find my podcast, the Yes and Marketing Podcast, about 54 episodes, which is a broader marketing leadership and people who bring creativity into marketing. And then we have a special offer for jason Swenk listeners out there: get 50% off your first month at Verblio.com/smartagency telling me you heard about this on the Jason's Swenk show, and we'll give you two months of free onboarding as well to help you out. And which we hope is an easy process, but we know that's a big lift for some of you. Jason: [00:21:09] Awesome. Well, thanks so much, Steve. And thanks for coming on the show. And if you guys enjoyed this episode, make sure you comment below. Make sure you subscribe, so you don't miss out a new episode and make sure you actually take Verblio up on that offer. I mean, that's killer, they're giving you 50% off the first couple of months, so it's amazing. Thanks so much for doing that. And if you guys want to leave a comment or review, that will help us out to reach more people, especially if you listen to the whole way through. And until next time have a Swenk day.

About Jason McGeeJason McGee, IBM Fellow, is VP and CTO at IBM Cloud Platform. Jason is currently responsible for technical strategy and architecture for all of IBM’s Cloud Platform, across public, dedicated, and local delivery models. Previously Jason has served as CTO of Cloud Foundation Services, Chief Architect of PureApplication System, WebSphere Extended Deployment, WebSphere sMash, and WebSphere Application Server on distributed platforms.   Twitter: @jrmcgee LinkedIn: https://www.linkedin.com/in/jrmcgee/ IBM Cloud Code Engine: Learn more during this live virtual event on April 14th (also available on-demand after April 14th) Read more: https://www.ibm.com/cloud/code-engine Get started today: https://cloud.ibm.com/docs/codeengine?topic=codeengine-getting-started Watch this episode on YouTube: https://youtu.be/yH_mgW2kGzUThis episode sponsored by IBM Cloud.Transcript:Jeremy: Hi, everyone. I'm Jeremy Daly and this is Serverless Chats. Today I'm joined by Jason McGee. Hey Jason, thanks for joining me.Jason: Thanks for having me.Jeremy: So you are an IBM fellow and the VP and CTO of the IBM Cloud platform. So I'd love it if you could tell our guests a little bit about yourself and what it is that you do at IBM.Jason: Sure. I spend my day at IBM worried about developers and platform services on our public cloud. So I'm responsible for both the technical strategy and the delivery of our Kubernetes and OpenShift platforms, our serverless environments, and kind of all the things that surround that space, logging, and monitoring and other developer tools that kind of make up the developer platform for IBM Cloud.Jeremy: And what about yourself? What's your background?Jason: Been a software, kind of middleware guy, my whole life. I used to be the chief architect for WebSphere app server. So I spent the last 20 plus years working on enterprise application platforms and helping companies be able to build mission-critical business systems.Jeremy: Awesome. So I had Michael Behrendt on the show not too long ago and it was great. We talked about a whole bunch of different things. IBM's point of view of serverless. We talked a little bit about the future of serverless and we talked about the IBM Cloud Code Engine, which I want to get into, but for the benefit of our listeners and just because I'm so fascinated by some of the things that IBM is doing now with serverless, it's just super interesting. So could you sort of give me your point of view or IBM's point of view on serverless and just sort of refresh the listener's memory sort of about how IBM is thinking about serverless and how they're probably thinking about it maybe differently than some of the other cloud providers?Jason: Yeah, sure. I mean, it's such a fascinating space and it's really changed a lot, I think, over the last five years or so from its kind of maybe beginnings in being very aligned with serverless functions and kind of event-driven computing and becoming a more general concept about how developers especially can consume cloud platforms. I think if you look at the IBM perspective on serverless, there's a couple layers to the problem that we think about. First is we've been pretty clear that we think Kubernetes and distributions of Kubernetes like OpenShift are kind of the key foundation compute environment for developers to use going forward. And we've done a ton of work in kind of building out our Kubernetes and OpenShift platforms and delivering them as a service on our public cloud. And that's an incredibly flexible platform that you can really build any kind of application. I think over the last five years, we've proven we can run anything on Kubernetes databases and AI and stateless apps and whatever you want.Jeremy: Right.Jason: So very, very flexible. However, sometimes flexible also means complicated and it means that there's lots to manage and there's lots of concepts to get your head around. And so we've been thinking a lot about, well, how do you actually consume a platform like Kubernetes more easily? How does the developer stay more focused on what they're really trying to do, which is like build application logic, solve problems? Now they don't really want to stand up coop clusters and configure security policies. They just want to write code and run code and they want to get the power of cloud to do that. Right? And so I think serverless has kind of morphed to be, for us, more about the experience that we can build on top of that container platform that's more oriented around how developers get work done and allows them to kind of more easily take advantage of the scale and power of public clouds without having to kind of take on the burden of a lot of that kind of work and management.And so the work that we've been doing is really aligned in that direction, that we've been working in projects like Knative, in the open source community to build simpler abstractions on top of Kubernetes. And we've been starting to deliver those in our cloud through things like Code Engine.Jeremy: Yeah. And I think that's interesting too because I always have, this is probably the wrong way to say it, but it's sort of a chip on my shoulder about Kubernetes because it just got so complicated. Right? It's just so many things that you have to do, so hard to manage. And as a serverless guy myself, I love just the simplicity of being able to write some code and just get it out there, have it auto scale, tie into all those events. So I think that a lot of cloud providers have sort of moved that way to say like, "Well, we're going to manage your Kubernetes cluster for you." Right? Which essentially is just, I think moving backwards, but also moving forwards at the same time, if that makes sense. But so in terms of the use cases that this opens up because now you're not necessarily limited to a sort of bespoke implementation of some serverless platform, you have a lot more capabilities. So what types of use cases does this open up?Jason: Yeah. I mean, I may have a couple of comments on that. I mean, so I think with Kubernetes, you have the complexity of managing the Kubernetes environment, but even if that's totally taken care of for you, and even if you're using a managed Kubernetes service like the things we offer on IBM Cloud, you still have that kind of resource burden of using Kubernetes. You have services and pods and replica sets and namespaces and all kinds of concepts that you have to kind of wrap your head around and know how to use in the right way. And so there's a value in like, "Can we abstract that? Can we move away from that?" And it's not like this idea hasn't been tried before. I mean, we've had paths platforms, like kind of Cloud Foundry style, Heroku, very opinionated paths environments in the past and they definitely simplify the user experience. However, they came with this negative, which is if you don't fit within the box of the opinion ...Jeremy: Right.Jason: ... then you can't do what you want to do. And the cost of going outside the box was super high. Maybe you had to completely switched platforms. You were completely blocked. You to switch to some other approach. And so part of what's informing us and as we think about this is how do you have more of a continuum? You have a simple model. It's aligned around what you're doing. Just run my source code, just run my container image. I want to run a batch job, but it's all running on one platform. They're running next to each other. You can drop down a layer into Kubernetes if you want to. If what you're trying to accomplish needs some of that flexibility, you should have access to it without having to kind of start over. And so that's kind of how we've approached the problem a little bit differently is bringing this all together into kind of one unified serverless environment on top of Kubernetes.And that lets us handle different use cases. That lets those handle kind of stateless, data processing and functions. That lets us handle simple web apps. That lets us handle very data-intensive, high-scale computation and data processing, async processing like batch all in one combined way.Jeremy: Right. Yeah. And I think it's interesting because there are artificial limitations may be put in place sometimes on serverless platforms. If you think about AWS Lambda, for example, you get 15 minutes of compute and they bumped things up. So now, and again, I've just sort of grew up in the AWS environment, but they have things like 10 gigs for a function or something like that. And so they've increased these things, but they are sort of artificial limits that I think, depending on the type of workload that you're doing, they can really get in your way, especially if, like you said, you're doing these data-intensive things. So from an IBM perspective, I mean that's sort of gone, right?Jason: Right. Exactly. That's a great, very concrete way to look at the problem. The approaches that have been taken in some of the other cloud environments is these different use cases like serverless functions, single containers, batch processing, they're different services. And every service has its own kind of limitations or rules about what you can and cannot do. How long your thing can execute, how big your code can be, how much data you can transfer. We've taken a different approach to say, "Let's eliminate all those limits and let's have one logical service, one environment that supports all those styles." We can still expose a simplified kind of consumption model for the developer like just give me your source code or just give me your image, but I can run it in a way that doesn't have those computational limits, and therefore I can do more. Right? I can run more kinds of workloads. I don't run up against some of those walls that kind of stopped me from getting my work done.Jeremy: Right. Right. Yeah. And I like that approach too because I'm a big fan of managed services. I think that if you have a service that does image recognition for you, that's great. And do you have a service that does queuing for you? That's great. But in some cases, you start stringing together so many different services and I feel like you lose a lot of that control. So I like that idea of just basically being able to say, "Look, I've got the compute. I can do whatever I need to do with it. It will scale to whatever I needed to scale to." And I think that's where this idea of IBM Cloud Code Engine comes in, which just became GA so I'd love it if you could tell the listeners exactly what that is.Jason: Yeah, absolutely. So, so Code Engine is the new service that we launched that makes some of these concepts I've been talking about real. It is a service that allows developers to deploy functions, containers, source code, batch jobs, into IBM Cloud. The entire environment behind that application is managed for you. So we handle you don't manage clusters, you don't provision infrastructure. You can scale all the way to zero. So you can literally only pay for what you're using. You can scale up to thousands of cores that are in parallel processing your application and we manage that entire runtime environment for you. So you can think of it as a multi-tenant shared Kubernetes-based runtime environment that you can run your workloads on that presents to you the personality that you need for different workloads. And because it's all in one service, if you have an application that's like a mix of some single containers and batch jobs, they can actually talk to each other, they can talk to each other over a private network connection. They can work together instead of being kind of siloed in these completely different environments.Jeremy: Right? Yeah. And so from the developer, I guess, perspective, you had mentioned that you can deploy just code or you could deploy a container if you want to. So what does that developer experience look like? So is this something where I could just say, "Look, I don't need to have a whole ops team now managing this for me. If I just want to write code, deploy it into these things, I'm sure there's some things I need to know," but for the most part, what does that developer experience look like?Jason: Yeah. So you absolutely could do it without a whole ops team. The experience right now, there's like maybe kind of three basic entry points. You can give me source code and we will take care of compiling that source code, combining with a runtime, executing it for you, giving it a web end point, scaling it. You can give me some hints about kind of how much resource you think you need and things like that and we can scale that up and down and manage it for you, including all the way down to zero. That's nice if you're coming from maybe a historical paths background or it's just like, "Here's my code, run it for me." You can have that experience with Code Engine. You could also start with a container image. So lots of developers now, because of things like Kubernetes and Docker, are very familiar and comfortable with packaging up their application as a container image, but you don't want to then deal with creating a cluster and dealing with Kubes.So you can just say like, "Here's my image, run it for me." And one of the advantages we have with Code Engine is we can really do that with any container image. You don't have to have a container image that follows some particular framework that's built in a very special way. We can take any container image and you can just literally point me at the image and say, "Run this for me," and Code Engine will execute it and scale it and manage it for you. Or you can start with a batch job interface. So like a more of an async kind of parallel job submission model. So maybe I'm doing Monte Carlo simulations or data processing and I want to parallelize that across a whole bunch of machines and cores, Code Engine gives you an interface for that. So as a developer, you kind of start with one of those three entry points and let Code Engine take care of how to run that and scale it and keep it highly available and things like that.Jeremy: Right. So I love the idea of the batch jobs. I want to talk about that a little bit more, but let's go back to some of the use cases here. So what if I was building just like a REST API, that seems to be a very popular, serverless use case, what would I do for that? Do I need to have some sort of an API type gateway type thing in front of it? Or how does that work?Jason: No, Code Engine provides all that for you. So you would literally either just take your implementation and package it in a container or point us at your source code directory. If you have source code, we use things like Paketo Buildpacks to build a runtime around that source code. And so you can use different languages. So you can either point us, with our CLI tool, you point us at the source code directory and we'll build it and package it in a runtime and run it for you. Or you point us out a container image that you've uploaded to our container registry or to your container registry of choice and then Code Engine will execute that for you. It will give you that web end point, right? So it'll give you a HTTP end point that you can use to access that service. And it will watch the demand on that system and scale it up and down as needed. And by default, we'll just scale it to zero. So it'll just be kind of registered in the system and it'll take care of scaling it up as needed to handle the demand on the app.Jeremy: All right. Cool. And then what about these batch jobs? So I talked a little bit about this with Michael and this idea of being able to run massively parallel execution. So how does that all work?Jason: Yeah. So similar, obviously with batch, there's a little bit more kind of metadata that you have to provide to describe the job and what you want to execute and how things relate to each other. So there's some input data you provide along with the implementation of the batch job, which itself could just be like a container image and you submit that job. So the CLI interface is a little bit different. You're not standing up a long-running REST end point, you're submitting a job to Code Engine for execution, and it will go take that job and execute it and parallelize it for you. You can also use Frameworks on top. One of the things we've been doing a lot of work on, maybe Michael talked about it a little bit when he was here, is some work we're doing around Ray. Ray is a really interesting new project that lets you do kind of distributed computing, especially around data workloads in a really easy way.And so you can actually stand up Ray on top of Code Engine and so Ray acts as kind of the application interface for the developer to be able to easily parallelize their code, particularly Python code, and then Code Engine acts as the runtime below it. And you can take a simple function in Python, mark it as Ray remote and it'll now execute on the cloud and distribute itself across a thousand cores. And you get your answer back 20 times faster than you would have running it locally. And so you can have those kinds of async environments as well.Jeremy: Awesome. And so what about some customers? So do you have customers that are having success with this now?Jason: Yeah, we have a number. I mean, we have the European Microbiology Laboratory, which is using it to do science processing and provide access for scientists to the large-scale compute environments of the cloud. We have some airlines that are leveraging this. The airline scenarios, I think, the scenario is actually kind of interesting because it shows the power of combining REST end points, more interactive workloads with batch workloads. In their case, they're exploring using it to do dynamic pricing. So if you think about how you do dynamic pricing, there's kind of two dimensions. It's like, there's a very interactive, somebody is getting a price on a ticket or a route, and you want to be able to present them with dynamic price information as part of that web interaction. But then there's like a data processing angle.You're looking at all kinds of data coming from your backend systems from route data, from the fleet and historical information. And you're trying to decide what the right price table is for that route. And so you're doing batch processing in the background, and then you're doing this interactive processing. You can implement both halves on serverless with Code Engine and they scale as needed. If you're getting a lot of traffic on the web front end, it scales up as needed without you having to do anything. So they can kind of combine both halves in one environment.Jeremy: Right. Right. And so in terms of, I think we kind of talked about this a little bit, but when you see all these different services, right, and no matter what it is, whether it's Google's Kubernetes engine that they run or it's EKS on AWS or something like that, I think a lot of people look at these and like, "Oh, it's just another managed Kubernetes cluster." Right? So what are the major differences? I know we talked about it a little bit, but maybe you could just be a little bit more succinct and sort of talk about why is it so different than other sort of previous generations of tools or some of the other competing products out there.Jason: Yeah. So if you look kind of behind the curtain on Code Engine, you'd see a couple of things. One is there is Kubernetes there, there is a Kubernetes environment there. The differences that Kubernetes environment is completely managed by the Code Engine service. So we're not, if you look at, in IBM Cloud, we have the IBM Cloud Kubernetes service and our Red Hat OpenShift service. So in those services, we're managing a cluster on your behalf, but we give you the cluster. It's like, "Here's your Kube cluster. We'll manage its life cycle, but you have direct access to it." With Code Engine, we have Kube cluster there, we completely manage it in all respects. You have no kind of direct access to it. That allows us to manage scale and capacity. We run that in a multi-tenant way. I mean, we have security and isolation between tenants, but logically you can think of it as like a big Kube cluster that lots of users are sharing, which is how the pay as you go model ultimately works because we're keeping track of what you're actually running and just charging you for that.So one part of it is fully managing that runtime environment. We've layered on top of that things like Knative so that we have that developer abstraction like a simpler way to define services, to do the source code and image stuff that I talked about. That's coming through largely through things like Knative, which again, we're completely running for you, but it gives you some of that simple interface now that we talked about, and we're doing that in an open-source way with the community. So it's not like proprietary to IBM Cloud. And then on top of that, we built kind of the batch processing system. So batch scheduling and some of these unique interfaces, the command line interface and the user experience to get into that environment for the different workflows that I talked about. And one of the cool things is, because we built it on top of that Kubernetes layer, we can also expose the Kubernetes API if we want.So like the Ray example I gave you, Ray doesn't really know anything about Code Engine, but Ray knows how to deploy and leverage a Kube cluster. So we're able to actually hand Ray the Kubernetes API server end point inside of Code Engine for your instance. And that framework can use Kubernetes to stand itself up. And then you can use the kind of simple abstractions on top, and that's still all in Code Engine. It's still pay as you go and it still scales to zero. And so that's what I meant by this you can kind of blend the lines and drop down to or the framework can drop down to something like Kubernetes as needed to give you that flexibility.Jeremy: Yeah, that's awesome. So you mentioned you have a fully managed Kubernetes service and then you also have a bunch of other serverless services that run within the IBM Cloud. So OpenWhisk or, I guess, IBM Cloud functions now. And then also, I mean, you mentioned Cloud Foundry, which is sort of a pass, but it also sort of an easy-to-use serverless environment in a sense. Right? And so I guess, is this like an evolution? Is this where you suggest people go?Jason: Yeah. Yeah. So I think the simplest way to think about it is yes, Code Engine is the evolution of those ideas. It doesn't necessarily have a direct technical lineage, always, between those projects, but the problem that functions with IBM Cloud functions that Whisk was trying to solve and the problem that Cloud Foundry was trying to solve with source code, start from source code paths, are both represented in what we're doing in Code Engine. So Code Engine will be the kind of natural evolution path for those workloads and for the problems that those users are using those platforms for. The Cloud Foundry one, I think, is super interesting, in the sense that with the rise of Kubernetes has clearly pivoted many people who were doing Cloud Foundry into doing Kubernetes.Jeremy: Yeah.Jason: And people are using Kubernetes as their foundation and the Cloud Foundry project, which we're deeply involved in, has done a lot of work to kind of realign Cloud Foundry with Kubernetes in a better way. But what never went away, what people always still saw value in with Cloud Foundry was the simple push my source code developer experience. Right? And so that still carries forward. And with Code Engine, we're taking that same experience that we had in Cloud Foundry, and we're bringing it into this new service and bringing it onto Kubernetes seat, so the developer still gets that similar experience, but without the boundaries that we talked about. The challenge with Cloud Foundry was always like, oh, as soon as you want to do stateful things, or you want to do async jobs, Cloud Foundry didn't solve that problem. Go use a Kube cluster or go use some completely different environment. And so it's kind of the same experience with the boundaries removed and that's where we would see people go.Jeremy: Right. So if I'm in one of those services, now, if I've got things written in Cloud Functions or in Cloud Foundry, and I've hit some of those limits, or I just want to take advantage of some of the cooler things that Code Engine does, is there a simple migration path for those?Jason: Yeah. In general, yes. For Cloud Foundry, for sure. It's pretty straightforward to take the same source code directory that you have and just push it to Code Engine instead. Right? So I think the path for a Cloud Foundry, I mean, there's edge cases with everything obviously, but the base of workflow is the same. You can use the same source input directories. We mapped to Paketo Buildpacks, which Cloud Foundry, a lot of that stuff came out of Cloud Foundry. And so that has a really clean path. For Cloud Functions. There's a little bit of a timing thing in general, yeah, you can take your same functions. You can run them on Code Engine. OpenWhisk has some advantages still that we haven't quite gotten built into Code Engine yet. It's got faster startup times, for example, right? The runtime model behind Code Engine, we're still starting a container, like a full container.In OpenWhisk we had done a bunch of work on warm start of containers and container pooling so we can get like small number of milliseconds startup times on those functions. And some of that hasn't worked its way into Code Engine yet. So there are still some cases with Cloud Functions where it has some capability that doesn't quite exist in Code Engine yet, but over time that will get filled in and there'll be a simple path there to move all those workloads over to Code Engine as well.Jeremy: Right. So with Code Engine, because you mentioned this idea of sort of like the cold starts. So does Code Engine keep containers warm for a certain amount of time or is it always a cold start?Jason: It is, in general, a cold start. It can keep some of them, like in the scale up scale down cycle, it may keep them around for a while, so it doesn't be overly aggressive about scaling them down and bringing them right back. But it's not doing some of the warm start tricks yet that OpenWhisk was doing where we have a pool of primed container instances, and then we're injecting code into them and running them. That's work-in-progress. There's work to do both in Knative to improve that stack and then stuff to do in Code Engine. There's a balancing act there too ...Jeremy: Yeah, definitely.Jason: ... on things like network isolation and getting on customer VPC networks and other things which are harder to do in that warm start model.Jeremy: Yeah, definitely. All right. So if somebody wanted to get started with Code Engine, what's the best way for them to do that, just sign up and start writing some code or how do they do that?Jason: Yeah, kind of. I mean, obviously, we've been talking a lot about how developers use these things. And so I always think the best way to get started is either to build something on it or to try out some specific source code project. We have a lot of things that we've done to try to make that easy. So there's a Code Engine landing page on IBM Cloud. It has some great examples to guide you through those three starting points I talked about, start from source code, start from image and do batch. We have some really nice tutorials, like specific text analysis tutorials, for example, that'll show you how to build applications on Code Engine. And we actually have a pretty cool Git repo, which will take you through tons of samples of how to use Code Engine to solve all kinds of problems.So there's a lot of really good code assets out there that a developer could go to and actually try something real on Code Engine and the getting started experience is super easy. You've got IBM Cloud, you log in and you go to Code Engine, you create a project, you push an image and then a couple of minutes you'll have something up and running that you can play with.Jeremy: Amazing. All right. So I love watching the evolution of things and again, just this different way that, that IBM is thinking about serverless and, again, trying to make it easier. Because I always look back and I think of Lambda when it first came out, I was like, "Oh, it's so easy. You just put some code there and it's just done for you." And then we got more and more complex and more and more complex. And not that we didn't need to, I mean, some of this complexity is absolutely necessary, but I'm just curious, seeing the evolution and where things have gone, I talked to a bunch of people earlier about, Roger Graba, for example, who was one of the first people involved with the IBM or the OpenWhisk project, I guess it was Apache OpenWhisk or it became Apache OpenWhisk, whatever what it was, seeing that evolution and seeing the changes that these different cloud providers have gone through, seeing the changes that IBM has gone through and where you sort of are now with Cloud Code Engine.I'd love to get your perspective here on where you think this is going, not just maybe what the future is for IBM, but what you think the future of serverless is and just cloud computing maybe in general. I know that's a lot of question.Jason: I'll give you a long answer.Jeremy: Perfect. Jason: So that brings to mind two things. First, let me talk about the complexity thing for a second. Managing complexity is always hard. You are so right. That many things start out with a value prop of like, this is easy. And then as people use, the more you add more, and then three years later, we're like, "We need a new thing that's easy because that other thing is too hard now." And there's no magic pill for that. That's always a hard problem to manage. However, one of the things I like about the approach that we're trying to take with Code Engine is because we've layered it on Kubernetes, It gives us a way to kind of decide where we want that complexity to show up. When we had a Cloud Functions OpenWhisk stack and we had a Cloud Foundry stack and you had a Kubernetes stack, you had to try to solve all problems within each stack.So each stack was getting more complex because you were trying to like, "Oh, I need storage. And I need like private networking. And I need all these things." With Code Engine, I think we have an opportunity to say, once you cross some line, we're just going to ask you to drop down a layer and go use it directly in Kubernetes, right? You can push some of the complexity down and that allows us to hold a harder line on complexity in the developer layer on top. So it's the balancing act we're trying to play is because we built it on a common platform, we don't have to solve all problems in Code Engine directly.Jeremy: Right.Jason: So that's kind of my viewpoint on the complexity problem. On the evolution, it's really interesting. So one of the other things that my team's working on and launched recently is this thing called IBM Cloud Satellite, which is about distributing cloud outside of cloud data centers so you can kind of consume cloud services anywhere you want. So cloud computing in general, and this is not just an IBM thing, in the industry cloud computing is diversifying to be kind of omnipresent. You can consume cloud on-prem, at the edge, in our cloud data centers, wherever you want. There's a programming model dimension to that problem, too. As you specially go to the edge, you kind of want some of these simple to consume, easy to deploy, scale to zero, resource-efficient, you need some kind of model like that because at the edge, especially, you don't have 2000 cores worth of compute to go deal with.You have one box in a retail store, or you have two servers in the back of the distribution center. And so I think things like Code Engine layered on top of distributed cloud and in our case, things like Satellite, is actually a really powerful combination. I think we're going to see serverless become the dominant application development and deployment model, especially for these edge use cases, because it combines ease of deployment and management with efficiency and scale to zero footprint, which are all really attractive when you get outside of a mega data center like you have in cloud.Jeremy: Right. Right. So I love this idea, too, about sort of expose the complexity when the complexity needs to be exposed. I love this idea of sort of creating same defaults, right? If you could default Kubernetes to do all the optimal things that you would need it to do for use case X, if you could just do that for me and then if I say, "Oh, I want to tweak this one thing," then be able to kind of go down to that level. But I love this idea of you mentioned about edge too because that's one of those things that I think, from a programming model, as you said, how do you write code that's sort of, I guess, environment-aware? How does it know what's running at the edge versus running in a data center versus running maybe in a hybrid cloud and partially in your own private cloud or your own private data center? That model, just wrapping your head around it from a developer standpoint, I think is incredibly complex right there.Jason: Yeah. It is. And sometimes it's like, how do they know? And then sometimes it's like, how do I just operate at a high enough level of abstraction that like the differences between those environments can get handled below me? If I'm consuming Kubernetes clusters directly, the shape of that Kubernetes cluster in like a retail store or a telco data center in Atlanta somewhere or in the cloud are going to all be different because you have a different amount of capacity. You have a different networking arm. So you're going to have to deal with the differences. If I'm giving you a container image and saying, "Run this," the developer doesn't have to deal with those differences. The provider might have to deal with those differences but the developer doesn't have to deal with those differences. So that's where I think things like serverless and approaches like Code Engine really come to be much more valuable because you're just dealing at this higher level of abstraction and then Satellite and Code Engine and other services can kind of magically deal with the complexity for you.Jeremy: Yeah. And so I know we talked a lot about Kubernetes and what's running underneath a lot of these services. Is that something you see, though, as being that sort of common format across all these different services, or do you think that something will evolve beyond Kubernetes to become a standard?Jason: Right now, I really think that Kubernetes will become the base platform. What Kubernetes is will probably keep evolving. And I'm not saying it's Kubernetes forever, but I don't think we should underestimate the power of the kind of industry-wide alignment that exists around containerization and Kubernetes as the next infrastructure platform, if you will, because that's kind of really what it is. And I told you at the beginning, I used to build webs for apps servers. So I was like very involved in the whole Java app server era, the late 90s and early 2000s. And at that time, the industry kind of aligned around two platforms, Java and .net, as the two dominant, at least enterprise, application platforms. We have everyone aligned on Kube. Literally, there's nobody in the industry who's not like, "Kubernetes is the platform." So I think it will be the abstraction for infrastructure in all these environments. The question will be, how do you consume it? Who manages it? How's it delivered? How does it optimize itself? And then at what level do you consume?And I don't think Code Engine is the end of it at all. I think there's lots of room for improving the consumption experience on top of Kubernetes for these developer use cases.Jeremy: Yeah. Yeah. And that's actually was going to be my next question, sort of where do you see, what's the next evolution of Code Engine, right? So is that going to be kind of driving into specific use cases more and trying to solve those or becoming more flexible? How do you see the developers, I don't know, in five years, maybe this probably a hard question, but in five years, how are we going to be writing cloud applications?Jason: Yeah. It's a great and super hard question, but I think projects like Ray, I think, are an interesting forward look into where this might go. One of the things that I've always felt like, if I look at the whole history of paths in particular over the last five, six, seven years, paths has always been about simplifying the experience for the developers, but fundamentally, most paths environments don't change anything about how you write the code. They change how you package the code, how you deploy the code, how the code is executed, and how the dependencies of the code are satisfied. But the actual code you write probably wasn't any different. Right? And that's where I think there's the next step is like, how do we actually get into the languages, into the code structure itself to be able to take advantage of cloud capacity, to be able to take advantage of scale and there's lots of projects that have taken attempts at that.Ray, as an example, I think is a particularly interesting one, because there's some good examples where you can take a Python function, you literally add like one annotation to it in the language, and now it becomes remotely executable and horizontally scalable for you.Jeremy: Right.Jason: It's that kind of stuff that I think three or four years from now, there'll be a lot more of, where we're actually changing how code is written because that code can assume there's some containerized, scalable fabric out there somewhere that it can go execute on top of.Jeremy: Right. Yeah. And I think that that pendulum swing for developers, especially, well, developers in the cloud, who's they used to be writing a bunch of code, whether it was JavaScript or Python or Java, whatever it was and then all of a sudden now they have to switch context and be like, "All right, now I have to write a YAML file in order to configure my cloud resources," and that sort of back and forth. So yeah, that marrying of basically saying like a programming language for the cloud is a really interesting concept.Jason: And I think the distributed cloud notion, funnily enough, is a big enabler of that. Because, I don't know, the other tension I see right now is like, let's say you wanted to use Lambda or you want to use serverless functions. That only works in your cloud environment, but you're also running something at the edge or you're running something in your data center, so you're forced to kind of use different approaches, which tends to force you to kind of some common denominator models.Jeremy: Right. Right.Jason: And so you're kind of holding back from really adopting some of these newer models because of the diversity. Well, if cloud goes everywhere and those services go everywhere, then now I can just say, "Well, I'll use the serverless model everywhere. And so I can really deeply adopt it." So I think the distributed cloud thing will open up the opportunity to embed these approaches more deeply in kind of day-to-day development activities.Jeremy: Yeah. No, I love that. I'm all for that approach because I think this split-brain sort of approach to it is getting very complex and it's not super easy. So is there anything else that you'd like to let the listeners know about IBM Cloud Code Engine?Jason: No. I mean, I think we touched on a lot of the motivation behind it and the kind of core capabilities. I would just encourage you to go check it out, go check out the space, go give it a try and love to hear people's feedback as they do that.Jeremy: Awesome. Well, first of all, I got to make sure I thank IBM Cloud for sponsoring this episode because just the team over there and everything that all of you are working on is amazing stuff and I appreciate the support. We appreciate the support in the community for what you're doing. So if people want to find out more about you or more about Cloud Code Engine, how do they do that?Jason: Yeah. And you can find me on Twitter, JRMcGee, or LinkedIn. For me personally, I love to talk to people. For Code Engine, I think the best place to start is the product page, which is ibm.com/cloud/code-engine. And from there, you can get to all of the code examples I talked about.Jeremy: Awesome. All right. Well, I will put all that stuff in the show notes. Thanks again, Jason.Jason: Yeah. Great. Thanks, Jeremy.

Iris Shoor is the founder and CEO of Oribio, a web analytics tool. After two successful startups, she is growing her third startup. Oribi, an AI-based web analytics tool dedicated to making analytics easy for everyone, without the help from analysts and developers. (And, no code needed!) Iris is passionate about simple products, creative marketing, great UX, building a unique culture, and most of all—people. She's on the show talking about how she helps her team aspire to reach their goals with personal development. She also shares how your digital agency can show clients success on their funnels and campaigns by using a new analytics tool.   Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM 3 Golden Nuggets The best way to inspire your team is by understanding their personal needs for professional development. Understand their career goals and meet them there to encourage growth. Perks like free food and amenities are nice, ultimately not what retains really great team members.  Clients don't benefit from reports on their funnels and campaigns. They need to understand where the customers are coming from and why. This helps your clients It's important to set goals with your clients for what success looks like, then measure and benchmark results throughout so clients understand the value you're bringing to the table. Sponsors and Resources Oribi: Today's episode of the Smart Agency Masterclass is sponsored by Oribi. Check out Oribi.io/smartagency for a free trial. Plus when you sign up for Oribi get 20% off the first three months with promo code: Smart Agency Show Transcripts Jason: [00:00:00] On this episode, I talk with an amazing entrepreneur that's in her third business. She's a rockstar. She talks about personal development of your employees, how to keep them. But most importantly, we talk about how to prove your value. To your clients, so you can actually charge more. I think all of us need to do that. We're always constantly wondering how do we prove our value to our clients? Well, this is the episode for you and it will prove your worth. Hey, Iris. Welcome to the show. Iris: [00:00:40] Hey Jason. Jason: [00:00:41] I'm excited to have you on and, so tell us who you are and what do you do? Iris:: [00:00:46] Okay. So I'm CEO for Oribi. I'm a serial entrepreneur. This is my third startup for the other two companies that have been leading the product and marketing. Um, I love marketing and I was always amazed that with how difficult it is to measure marketing. And that's why I started the Oribi and we raised 27 million dollars today. And worked with thousands of customers around the world. And we were doing marketing under the tech set, hopefully, better than other tools. Jason: [00:01:19] Oh, it's awesome. Yeah. Definitely check out the tool and it was very cool. But before we get into the tool, I wanted to ask you because a lot of agency owners, obviously everyone listening, we're hiring people, we're always hiring people. And I read a blog post that you had on your blog. And I was like, Oh, that's interesting. Tell us a little bit about, you know, just giving people pizza and feeding them is not really what will keep them. Iris: [00:01:43] Yeah. I feel it's something like I find that baby ironic about this is that we want to hire the best people, the smartest vehicles, the most innovative people and treat them like a small children. And you need to be very cautious with them and you need to give them beer and pizza. And do you want the smartest people? And they usually want to, to lead interesting innovations, they want to grow. They want to learn new things. And for some reason, most of the work environment are mostly about just conquering people and their employees. And it's something that you really trying to do at Oribi, is to focus more on the personal development and giving them more independence. And. The way I see my role as a manager is to really let people shine. And to find their unique voice and to help them do it rather than having like lots of Ben and Jerry's and the kitchen. So, yeah, that's how I see it. Jason: [00:02:48] Yeah. For many years, you know, I thought it was like, Hey, you know, we'll, we'll, we'll bring in lines, you know, like the Googles of the world, right? Like, especially that one movie of the internship with Vince Vaughn and Owen Wilson right there, like I can have five bananas it's free. And I think. That will draw in the wrong people. Sometimes it won't keep them. Iris: [00:03:10] Yeah. Also we can like, um, it's all standard. So it's not that you have like a free pizza and ice cream and everybody will stay because of it. So, yeah, I agree with like, we have nice food over here, but this is not the main thing that we do. And they see that people are looking for something more personal and more deep. Jason: [00:03:32] Yup. Let's talk about a little bit about personal development, right? Since we're on the topic of keeping our employees, right? Like we're attracting the right ones. How do you guys help out with personal development? Because I feel, you know, when people come in, if you're just expecting them just to do their job, right. They're going to be like, okay, like, they're going to be excited for a little while. Like I remember when I sold my agency, I was very motivated. To help out with the new company. And then when the dream squashers came in and started, you know, squashing our dreams, I started getting de-motivated and I was an, A- player. And I literally went to like an F- player. I'm like, you know, you better sell this company or I'm going to be the worst employee ever. And I find a lot of people are like that. So what's some things that you can help out employees with on personal development? Iris: [00:04:24] Yeah. So, so that's a very interesting question. It seems like for me, the main thing that I benefit from being a certain type of entrepreneur and going fast was a rollercoaster every day is that I feel that it really challenged me with, learning new stuff all the time, inventing staff being creative, and they really feel that a huge part of my personal development is, me being forced to learning, uh, sales and marketing and different types of marketing and then managing and firing people. And I really wanted to give this experience to my employees. So instead of thinking of it as a funnel for rollercoaster also, it's something that they can step up using this platform. And an interesting story is that when it started at Oribi a few years ago, we actually had the budget for each employee for personal development. And I asked each one of them, what do you want to work on? If it's like a writing, public speaking, learning how to design. And then I have a list of like 50 things that they want to learn. And I was amazed to see that like half of their flow is new, what they want to work on, but we didn't have a clue. So they said, okay, so as a developer and not interested in public speaking or writing or anything else. So funny that they did learn is that most people don't really understand what they want to work on, but they do want the encouragement and the platform. When something arrives to, to really go in-depth . So tell me to do this change, how this program and receive the results have been really worked out well. And today it's more about working with employees on their personal challenges. Yes. Within the professional environment, what do they find challenging? How do they want to work on it? And sometimes we, we do help with them with top coaching. Is there internal or external? And, but the main thing is just about seeing them. Like for me, it's about things that unique voice of each one of the employees, and really try to encourage them to speak in this voice rather than being part of the company and where we are within the same box. Jason: [00:06:34] Awesome. Great. Let's kind of change, focus. And let's talk about, because I know a lot of agencies because I chat with them all day long. A lot of times they have a hard time showing their clients results. And I think that's, if you look at it like a stoplight, that's a red light. That's something that you really need to work on because if you can't show your clients results, then they don't know the value, which means you're going to lose them. And you're just literally trying to hold onto them rather than going. This is what's working. This is not what's working. So talk to me a little bit about how did you come up with the current company now of really making it very easy for agencies to see what's currently working. Like, you know, when I was going through the tool and going through the funnel, I was like, that's pretty cool. Like, I could literally go, hey, here's the starting page and here's the page I want them to get to. What's my percentage and all that. So talk a little bit about that. Iris: [00:07:34] Yeah. So, yeah, I do agree. This is like the main challenge. So today about 30% of our customers are agencies and probably most of the other 70% of the customers are working with agencies. So we hear those from agencies that they're unable to communicate their amazing work to the customers. And we also hear a lot from customers of agencies. If they're, they don't trust the agency, they don't really understand what they're doing and in my opinion, the main, the main challenge is how big can the agency go ? Cause something that happens a lot is agencies want to deliver the best results, but in many cases, they really stay up the funnel. So they drive traffic or they drive sign-ups and they're sure they're doing like amazing work. That's e-commerce show up or the companies that don't see an increase in sales. And the immediate result is a distrust. And they don't understand what they're doing. And they said it's the key thing for, for both parties to work well together, to understand which results they're measuring. And in most cases, it will be the sales-qualified leads. And in most cases, it's not very easy to track it. So the dimension that we're doing it really different things than other tools. It's creating a very simple solution. For defining all the different events. So instead of using code, you can easily understand what is the qualifying lead, how many people requested a demo? How many of them paid later? How many of them churn? How many of those approaches, which product, how many of them returned? And they say that once the agency can then create a high-level picture and can go into the entire funnel, the entire flow, understand all the different metrics. The communication is much better. They can understand what's working well. Does there, like an example I can give you is like two years ago where I was working with an agency and they manage my Facebook ads, I've been on maternity leave. So I haven't used the results for like months. And they told me it's doing amazingly well. They managed to reduce the cost by 50%. Then I entered the numbers and I saw that the sign-ups are actually. The cost per signup is much lower but that, hardly no one converts and it's so that they use like ads of like kittens. Everybody clicks sign up it very simple, but nobody really converted. And if they could have seen like the entire funnel easily to understand what's converting, who isn't, and compare it with other time periods, they would have been able to understand what they're doing wrong. So it's mostly about creating like a very solid ground for communication and for seeing all the important KPIs. Jason: [00:10:23] Yeah. I totally agree with you. It's you know, if I was an agency right now, You know, a lot of times you need to test out the waters with your prospects. And I remember this and I see this all the time. I would take on the wrong clients and the client would tell me one thing. They'd be like, oh, we're driving, you know, this much traffic and we're converting at this. Like, we can get them to this page. They're going to convert. And if it was me, what I would do now, And I guess you can sort of do it through Google tag manager, but that's very, it's kind of like, you have to be a mad scientist. I feel like they'll make that work. Uh, like I don't understand. I'm like, wow. Like I throw up in my hands, but I haven't been in the weeds in a while, but like, if you could set up the tracking and the measuring ahead of time and you do like a test project with the client, like don't even do anything other than just set up analytic tracking and the dashboard and then go back to them and go, here's our recommendation based on the past 30 days, then I think you could blow your competition out of the water. You both probably have a lot happier clients, because you're only taking on the right ones rather than taking on the living, breathing ones for now. Right. There'll be dead later. Iris: [00:11:44] Yeah, definitely. So yeah, I really like setting up the goals and mutual goals is super important and how to measure them. And now to see that they feel that it's doing this injustice for both parties is attribution and which became much more challenging from one year to another. And then in many cases like the agency and things, they're doing amazing work, how are they in the conversions, the agencies, so that, okay, everybody we're exposed to your brand from Facebook ads and, that they both met her via direct as a company says that the hard content in convert and coming from Facebook ads over here as well, I've seen that, um, there's many companies or agencies. They try to really like try to attribute to every single conversion it's really, really hard today. So, and when you facing the numbers coming from Facebook and Google, it's becoming even more challenging. So it's more about understanding the trends. If you're doing like a massive change, even if you can attribute everything, you can see how impacted, if you're working with different channels, you can understand the correlation between them. Jason: [00:12:56] Yeah. Tell me a little bit more about like, when someone can dive deeper into the analytics and amazes me too, or maybe it's just because it's been complex up until this point with really. Kind of diving into the analytics, like why do you feel that more agencies don't really dive into that to really understand it, to deliver the best value? Because I truly believe that people want to deliver their best stuff, but sometimes they just, they don't. Iris: [00:13:26] Yeah, I think it's mainly because it's a, it's a lot of work.. And as I told you before, like the, the main goal for me with Oribi is to help companies answer is the very trivial questions in a simple way. So it always amaze me that I try to answer questions, like where do my best customers come from and how is campaigns really doing. So the other, like exactly the same question that every company asks and today it's still lots of work. So you need developers to define events and every time it changed the website, you need to change it into maintaining and, um, So I seen it today. It's mostly about if the process is pretty complex, we need developers, as it takes time. I don't believe it's because people don't want to see the full picture or the people don't want to be data-driven. I say that today, something that we really see that even marketers, that they're not really into numbers and they love writing content and be more on the creative side, they really want to understand what is the impact of the work and to measure it and to understand what to do home. Jason: [00:14:38] So tell us a little bit more about why people need to check this tool out? Cause I checked it out. It was really pretty amazing. I was like, Oh, I didn't know I needed to change this and that. And it gave me some insights that weren't available to me before. Iris: [00:14:55] Yeah. So today, I guess it's most of the listeners are using Google analytics. It's always fascinated me that with Google analytics, we choose the market and there are other like very high end tools, that are very, very extensive require local integrations. And you can find some tools that are more around like max or just like landing pages, but there isn't like a good solution for marketing. And what they're doing at Oribi is creating marketing analytics that doesn't require developers, so he can define all the events without using code. You can do it yourself. You can get to more interesting events that we can create different rules for different rules, and then you can easily create finance and correlations and to analyze a user behavior and to do everything yourself, it's very simple. And also to export this data, to Facebook ads or to Google ads and to email automation, so you can create better audiences. And yeah, our main goal is to really give the power to the marketing team. And two they're very dependent on developers. If you're a part of a small company, usually we don't have developers. If you're part of a larger company, usually you need to wait like two months until they have time to, and the new event or, or change something. And is it for me, like the inspiration or company, like Shopify for where you can build your own e-commerce store, to change it, and to do the same for, analytics. Jason: [00:16:32] Awesome. Is there a special offer that you have for our audience listening in if they want to check you guys out, which I highly recommend everyone go do. Iris: [00:16:41] Yeah, definitely. So can enter Oribi.io then sign up for the free trial. The installation is super simple. If you're using like Wordpress or Shopify, it's just plug-in. If not, you can edit scripts, you can enjoy a free trial. When you decide to purchase Oribi, you can enjoy a 20% off discount for the first three months. And just write us on chat or email that you arrived via this podcast, and we'll be happy to provide a discount. Jason: [00:17:08] Awesome. Well, great. Well, everyone go check that out. Iris, is there anything I did not ask you that you think would benefit the audience? Iris: [00:17:15] I would say that something that I find pretty amazing is that most people will put tons of time in creating like the best content and videos and a stunning website. And we'll hardly measure it.. So I think there is much to do with like funnel optimization and website optimization. Okay. And let's say for example, that you invest a lot in writing content for SEO and getting direct traffic, and you probably can find out with two weeks of fare, changing the website, making some AB tests and changing the messaging and the call to action. You will be able to increase the conversion rate by 70%, by 50%. So I would say that most people's they're really into the content itself and the efforts themselves. And don't put enough time in optimizing the funnel, like the conversion. So there are a lot of low-hanging fruits over there and lots of opportunities to get you to great results. Jason: [00:18:19] Awesome. Well, Iris, thanks so much for coming on the show and everybody listening. If you guys want to check out Oribi, go to Oribi.io and check it out, do the free trial. And then, uh, if you guys want to take it on, uh, even more, make sure you reach out to them and say, Hey, I heard of you guys from the Smart Agency Master Class, and they'll give you 20% off for the first three months. And, uh, until next time have a Swenk day. Thanks, Iris. Thank you.

Jason Rosario is the Executive Producer and Host of Yahoo! News original web series Dear Men, host of Hey Jason the podcast, and in 2017 he founded The Lives of Men, a social impact and creative agency that explores themes around masculinity, mental health, culture. Jason joins Stef to discuss how to choose to create change in our lives and also the world. Produced by LegRoom Creative Engineered by www.podcaststudioservices.com

Today’s guitar villain is Jason Richardson, a technical master of guitar playing and an equally adept composer of complex and interesting music. If you tabbed out his guitar solos, they’d look like barcodes. If someone asks Jason, "Hey Jason, how fast?" Jason simply responds "YES". We’re gonna break the speed limit and have a great time doing it on this episode of Guitar Villains.Intro and Jason Richardson's supervillain alter-ego: Burning Questions: 7:50The best $1,730 ever spent: 11:50How to play as fast as humanly possible: 13:40Name Those Notes: 16:55Blending cinematic and classical genres with metal: 26:05Jason's new signature EBMM Rorschach Red Cutlass: 31:17Almost dying in Austria: 41:28Jason's favorite airplane album: 46:16Jason's dream band: 48:25Jason's supervillain advice: 51:30Jason's new signature Ernie Ball Music Man CutlassFollow Jason on YouTubeSign up for Guitar Super System, the most popular independent guitar learning platform on the internet: http://bit.ly/GVJR005

Hey Jason w fuck you --- Support this podcast: https://anchor.fm/sports-dudes/support

On this week's Bonus Features, Ross articulates approximately where Atlantis would have been located in the world, the siblings discuss the backgrounds of some of our supporting characters, and their underwhelming feelings about Timothee Chalamet. Copyright 2020 Sorry Mom Productions  ***DONATE TO BAIL FUNDS FOR PROTESTORS*** Here's a list of movies that are a better use of your time right now: 13th (dir. Ava DuVernay)|Moonlight (dir. Barry Jenkins) |The Hate U Give (dir. George Tillman Jr.) | Dear White People (dir. Justin Simien)FIND MORE HERE ***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITEDON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)PDX Bail Project FundThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSBiracial Unicorns | Pass the Mic | The Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

On this week's Kicking & Streaming, the siblings take a deep dive into one of their all-time faves. There's bad voice impressions, speculation about some of the characters' sexuality, and the siblings become emotional about James Newton Howard's score.  Copyright 2020 Sorry Mom Productions  ***DONATE TO BAIL FUNDS FOR PROTESTORS*** Here's a list of movies that are a better use of your time right now: 13th (dir. Ava DuVernay)|Moonlight (dir. Barry Jenkins) |The Hate U Give (dir. George Tillman Jr.) | Dear White People (dir. Justin Simien)FIND MORE HERE ***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITEDON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)PDX Bail Project FundThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSBiracial Unicorns | Pass the Mic | The Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

On this week's Bonus Features, Ross learns something new about Mel Gibson, Carie learns about Ross's only beef with his roommate, and Ross explains why he is technically a Scottish lord.  ***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITEDON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)PDX Bail Project FundThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSBiracial Unicorns | Pass the Mic | The Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

On this week's episode, Ross and Carie draw many parallels between Chicken Run and A Bug's Life. Carie loves the dark humor and Ross is predictably frustrated with the fact he has to talk about Mel Gibson.  Here's a list of movies that are a better use of your time right now: 13th (dir. Ava DuVernay)|Moonlight (dir. Barry Jenkins) |The Hate U Give (dir. George Tillman Jr.) | Dear White People (dir. Justin Simien)FIND MORE HERE***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITEDON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)PDX Bail Project FundThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSBiracial Unicorns | Pass the Mic | The Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space  

On this week's Bonus Features, Ross explains the origin of his fear of grasshoppers. Carie explains why she hates Everybody Loves Raymond, and Ross provides a loud public health service announcement. Here's a list of movies that are a better use of your time right now: 13th (dir. Ava DuVernay)|Moonlight (dir. Barry Jenkins) |The Hate U Give (dir. George Tillman Jr.) | Dear White People (dir. Justin Simien)FIND MORE HERE***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITEDON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSBiracial Unicorns | Episode 34 | White SaviorPass the Mic | The Harriet Movie & The Woke WarsThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

This week we cover Pixar's A Bug's Life, a story of innovation and rebellion. It's not quite that serious, but Carie and Ross are definitely here for the bug humor.  Ross discusses his exetensial love for Geri's Game and Carie can't deal with actual sociopath, Kevin Spacey. Here's a list of movies that are a better use of your time right now: 13th (dir. Ava DuVernay)|Moonlight (dir. Barry Jenkins) |The Hate U Give (dir. George Tillman Jr.) | Dear White People (dir. Justin Simien)FIND MORE HERE***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITE DON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSBiracial Unicorns | Episode 34 | White SaviorPass the Mic | The Harriet Movie & The Woke WarsThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

On this week's episode, the siblings break down the white savior movie, Freedom Writers. Ross goes through the roof over Patrick Dempsey's character, and Carie points the finger at the institutions who did not get dragged in this movie. Also, there's lots of white people acting really white. Related Media: Freedom Writers Behind the Scenes; Real Freedom Writers w/ Connie Chung (cir. 1994-95) Erin Gruwell Ted Talk; InnerVIEWS with Maria Reyes, a Freedom Writer; A Conversation on Race & Privilege w/ Angela Davis & Jane ElliotHere's a list of movies that are a better use of your time right now: 13th (dir. Ava DuVernay)|Moonlight (dir. Barry Jenkins) |The Hate U Give (dir. George Tillman Jr.) | Dear White People (dir. Justin Simien)FIND MORE HERE***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITEBiracial Unicorns | Episode 34 | White SaviorPass the Mic | The Harriet Movie & The Woke WarsWhite Savior Movie – Late Night w/ Seth MyersHow White Savior Movies Hurt Hollywood DON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

On this week's episode, the siblings rehash the romantic subplot that was cut for time. Related Media: Allison Janney as CJ Craig in White House Press Room  BLM WEBSITEALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?DON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectBLACK PODCASTSThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

We know this is a long one, folx, but frankly, there are too many people watching The Help (2011) right now, and we did not hold back. This week, the siblings attempt to have a productive conversation about why White Savior Movies can give audiences false impressions about racial reconciliation and why these narratives are built for White Comfort. Here's a list of movies that are a better use of your time right now: 13th (dir. Ava DuVernay)|Moonlight (dir. Barry Jenkins) |The Hate U Give (dir. George Tillman Jr.) | Dear White People (dir. Justin Simien)FIND MORE HERE***DON'T FORGET TO CLICK AROUND THE LINKS BELOW***BLM WEBSITEBiracial Unicorns | Episode 34 | White SaviorPass the Mic | The Harriet Movie & The Woke WarsWhite Savior Movie – Late Night w/ Seth MyersHow White Savior Movies Hurt HollywoodHe said he wouldn’t mind dying, if - Myrlie EversWhy Hollywood’s White Savior Obsession Is an Extension of ColonialismViola Davis Regrets Making The Help 'The Help' isn't a helpful resource on racism 'The Help' is trending on Netflix, and it's the worst type of 'white savior' movie Is The Help Based On A True Story? Why I'm Just Saying No to 'The Help' and Its Historical Whitewash 'The Help': Softening Segregation for a Feel-Good Flick How Racist is “The Help”? DON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?BLACK PODCASTSThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

On this week's Bonus Features, Ross reveals a strange way to get rid of the burps. BLM WEBSITEALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?DON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectBLACK PODCASTSThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

This week, Carie and Ross break down one of Ross's long-time favorites, The Birdcage (1996). We have Robin Williams in a mustache TWO WEEKS IN A ROW. Nathan Lane is incomporable as always, and CHRISTINE BARANSKI IS BACK! Carie does a lot of squeaking/slash screaming in this one. General content warning for homophobia, racism and general insufferable white-man fatigue. Copyright 2020 Sorry Mom ProductionsBLM WEBSITEALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?DON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectBLACK PODCASTSThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

On this week's Bonus Features, Ross talks about how much he's loving Avatar: The Last Airbender (HE'S NEVER SEEN IT, FOLX!). BLM WEBSITEALLY EDUCATION:For Our White Friends Desiring to Be AlliesTalking Race with Young ChildrenThe Lies We Tell About RiotsDon’t think you’re racist?DON’T TWEET—ACTWays You Can Help (this link has EVVVVERYTHING—petitions/donations/protest education/pro bono counsel and more!)The Bail ProjectThe Sentencing ProjectBLACK PODCASTSThe Nod |Hella Black the podcast | Reid This Reid That |Everyday Black Men |Hey Jason | Affirm |Confessions of a Werkaholic |Black Girl Podcast |Black Women About Business | The Minority Trailblazer |H.E.R. Space

Since 2011, Will has co-founded two multi-family investment firms in Texas. Will has transacted over $350MM as deal sponsor / syndicator, totaling over 7,000 units. Every deal to date has returned over 100% profit to the investment group with a typical hold time of 2 years. In 2010, Will established and operated a multifamily-specific materials import company that greatly reduced the cost and logistical headaches of renovating multi-family projects. He routinely visited sourcing factories until he sold the company in 2018. Will is licensed and registered as a real estate broker in the State of Texas. He has formally held the SEC / FINRA Series 7 and 66 licenses, and worked with TD Ameritrade and Fidelity as a stock broker. Will enjoys international travel for business and adventure, and is obsessed with cars and music. He is a Dance Club DJ throughout the Philippines. He regularly organizes and sponsors children's medical / surgical outreaches in South East Asia. Will is on the Board of Directors of the Ruel Foundation, and founder of Angel Capitalist. Both provide vital medical care to needy children as well as economic investments in the Philippines with more than 500 children treated to date. Website: www.angelcapitalist.com   Thank you so much for listening! WE ARE SO GRATEFUL!!!! Our Sponsor:  Multifamily Foundation If you are serious about learning how to buy apartment buildings then don't wait, go to www.multifamilyfoundation.com and let us help you build your foundation. Investing for Lifestyle and Legacy: https://www.yarusiholdings.com/ Our ENTIRE Podcast, Books and Health Suggestions: https://www.amazon.com/shop/yarusiholdings Subscribe To Us On YouTube: https://www.youtube.com/channel/UC1SuXB01d14DC8ZnEWpRQdQ?sub_confi rmation=1 Subscribe To Us on #Libsyn: http://multifamilyfoundation.libsyn.com/website Subscribe To Us on iTunes: https://podcasts.apple.com/us/podcast/the-multifamily-foundation/id1484177595   Transcription: Hello. Again, welcome back to the Jason and PLE project. Super excited to be here with you today. Of course, we love you. Checking in with us. Love you, giving us all this great feedback. You'd be like, wait here, go over. Give us a ratings review. Doesn't have to be five stars. Just has to be, we want to hear from you. We want you to dive in, tell us what we're doing. Tell us what else we can bring you. And today we have will Crozier on the show. He will. How you doing? Hey Jason. Great. How are you? Good. Good. So excited to have well on the show, he's actually in Texas with living full time in the Philippines came back of course, with COVID, but he's got such a tremendous track record here, and we'd love to have him on the show since 2011. He's co-founded two multi-family investment firms in Texas with transacting over 350 million as a deal sponsor, syndicator totalling over 7,000 units.   And on average, over a hundred percent profit to the investment group with a tickle whole time two years. And if that wasn't enough in 2010, he established a multifamily specifically cereals import company that greatly reduced the cost and logistical headaches of renovating multifamily product projects. And he sold the company in 2018. He's also has a number of licenses, series seven series 66, working as a broker. And to add that on top, he's got many passions in terms of international travel for business and adventure, obsessed with cars and music, and some of the awesome things he's doing. He's on the board of directors for the rural foundation and founder of angel capitalist, both which provide vital medical care to needy children, as well as economic investments in the Philippines with more than 500 children treated to date. I mean, that's super cool, man. So excited to have you on the show.   I'll jump in. Cause you know, a lot of people right now, small business owners, we're investors, they're listening to this and they hear a lot of things that you're doing to, you know, continue to give back. One thing you've done to, to find an additional layer to the multifamily area was to produce or start the import company. What was the thought track there was that that was pre doing the investments and, or was it second to the investments? And then from there you decided this was a good track to add onto. Yeah, it was sort of concurrent. I mean, we had an issues actually sourcing the materials we needed to renovate fast enough. We started taking on bigger and bigger, bigger projects and the big box stores couldn't even keep up with our demand. It sounds weird, but they would start delivering the wrong fan or the long, the wrong light or their own faucet. And the prices would be all over the place. And just like, ah, this is messing everything up. We guys standing up guys standing around with the hands in the pocket and you know, wasting everyone's time and money. So kind of took it into our own hands. Flew over to China, started meeting the, uh, the factory owners and they started pulling containers in and it sounds real easy, but I'll tell you it was a headache, but once I got going, it was definitely it.   That's   Awesome. And what were some of the, the key lessons learned one from a business standpoint where two, from a logistical standpoint, bringing on an additional line to your multifamily investment firms? Well, everyone talks about real estate, sort of like multiple streams of income thing jumping into this firm. It was a multiple streams of expense. Like it was just money, money out everywhere. It was this money out and it was, it was, it was a headache, but, uh, once, once we stabilized and um, our investments stabilized and we started picking up a reputation for good product bucks, you know, we were selling at a good price and it was exactly what other owners needed. It was what we needed. So it's what everyone needed. And it was on time and it was delivered for, you know, B and C projects, a multifamily project. So it kind of just took off and, uh, it was managing cashflow, I think was the number one thing.   It took 10 years off my life in those five years. So I know from working in a, having a number of businesses and working with family business, that that's one of the parts as you grow, right? It's that cashflow because it's that, it's that beauty of you're growing, but you're trying to anticipate the growing going forward and you're trying not to cut your knees off and you're trying to be optimistic, but optimistic sometimes you're not even as optimistic and as it gets bigger, you're trying to basically catch a rolling ball is rolling down a Hill. You're trying to catch up with it. And as you look at an analogy, as you're looking at an environment today, if you were to start over right now in 2020, with all you've done, you know, you came back 2011 where we had not December, but it wasn't as optimistic as maybe six months ago, you know, in 2011, how are you looking at your investment opportunities today?   I had a long call just yes, yesterday. Uh, the people who kind of came up to five years behind me or whatever. Um, if I was going to start all over again, it's a great time to start over. I mean, don't, don't necessarily jump in right now, not this second, but you know, wait, watch the dust to settle there's opportunities coming our way. There's a lot of sloppy handlers, a distant absentee owners there. They're going to fumble it. There's going to be opportunities back in the market. And that's really cool. And I'm positioning myself to be able to, to back those people, to back those sponsors, to invest with them, to guarantee loans and things like that. So yeah, it's, it's, it's a team sport and everyone's getting ready for the next round. I think that that's the key word team sport. And sometimes when people start out, they try and do everything in themselves and they forget that the ability to grow, these are, these are really businesses that you're going to narrow and correcting them.   And the more you put on an infrastructure, the more you can grow and you can do, like you did grow to 350 million, 7,000 units in a quick fashion and have a good turnover. What you did here now to two was the objective from the beginning, always to it traveled international. It was just the goal of, of doing multimillion. Do what you're doing is to find a different perspective on how you want to handle life, or it's just always been built into your life. And you found businesses that fit your life. Yeah. It wasn't the goal for sure. I think my goal was, uh, yeah, big houses, fancy light cars, you know, that, that was the goal. It really was. Um, I was born really early poor and that just always amazed me and seemed really cool. And I did that for awhile and then I got really bored of it.   And like two or three years is all it took and I'm like, okay, glad I did it and need to probably do it just to satisfy that itch. And then it kind of just sold everything and moved forward with something else. And you moved over to the Philippines, was Sammy from there, or w w what was the, what was the choice to, to move to the Philippines? Uh, as quickly as I can, when I was in China, a lot on this import company, all the coolest people I met in China were all Filipino. So they're like, come on over, come on over. And, you know, English was strong and there's a lot of cultural bond between Americans and Filipinos and it just fit really naturally. I love the people, the culture, the weather. It's. It's great. It's home now. Oh, that's so cool. So cool.   So are you still actively investing in multifamily? Why they're here in the States or now are you pushing into your other passions or your focus on angel capitalist? I'm certainly pushing forward with angel Apolis and we can talk about that for a bit, but, you know, it's always best to earn dollars, especially when you've got the team and the network, the infrastructure in place. So I'm still deal sponsoring a couple of the larger deals here in Texas. Uh, I'm investing, as I'd mentioned as kind of a key principle guarantor on a lot of other people's projects. So I'm a passive investor more and more as I can be, or just kind of a semi passive, just try to help out where I can to, to get the deals done, to get better loan terms, lend the balance sheet and these kinds of things to, to make it go around a little bit better, but, but more and more, my emphasis moves over to angel capitalist in the Philippines.   I love it. And you talked about, you know, the, the big house, the cars and how that just got tired. And, and I think a lot of people have that same thing, right? They start out making, you know, when you do you, you have that approach. That that's the first thing. When you grow eyes that your, your choice and your objectives were, were bigger than this. And it does that lead to where angel capitalist really started from it. Did. I can remember the exact moment when I was, uh, I was jogging in the morning near my big fancy house, and I was just amazed by it. It was just beautiful, everything about it was just like, you know, I did it like, I was so excited about it and almost that second, my mind flipped over and started thinking about, okay, in my garage, I've got a Bentley, I got my old 69 Camaro.   I just picked up my car, Rory. And it was just like, I gotta go buy another one. And it was just like that moment. I caught myself when I'm like, is the next sporadic the thing that satisfies that itch, not, not even close, not even close. And that's like, I started on unraveling it at that point, just putting it all behind me. And, uh, and, uh, the amazing work that you can do with small amounts of money in so many parts of the world, or even here in the U S it's just amazing what a little bit done with care, you know, uh, micro, um, humanitarian micro charities where it's at. And if you just note in you're with the people, and you're talking to the people and day by day, you're with these people, you can identify with the needs are and efficiently help them to become healthy,   To advance their life, to feed their children, to grow a business. And I became addicted to that very, very quickly. Uh, how can I do more of that instead of buying the a hundred dollar bottle of wine at my stick dinner, you know, let's divert those funds to do something much, much better. You know, when people think about giving back, lots of times they think that that means they have to have a lot of money, right? They have to have this big fund set aside. So I I'll do it, you know, in a couple of years when I started to have this nest egg and other points, and you talked about just finding these causes, even though micro causes, how did, what was the first thing that stood out to you in terms of identifying the causes that were really hugely   Impactful to you, and you want to make a difference on, yeah, it was children's surgeries and that's what I'm mostly addicted to, because it's hard to find things that are pure, like a hundred percent pure that someone's not going to monkey with. There's not some agenda, there's not some huge overhead or issue with what you're doing or it's political or something. I've found that that children who have done nothing wrong, they cannot help themselves. And then you do a life changing surgery that one day they go into the surgery and the next day they come out and their entire future has changed. I became addicted to that, and it was actually a, an eyesight of cataract surgery. That was my very, very first one. I was just being a lazy tourist, a bump, like drinking, hanging out on the beach. And, and, uh, I heard about this girl who needed about a $180 surgery, so she could see, you know, and I just thrown that amount of oil on lunch and a couple of parties the night before.   And I'm like, you know, I'm slow, I'm very slow to figure this stuff out, but eventually I figure it out. And I'm like, that is what I want to do. And we did it and now she sees, and, and then it started spiraling. I started building infrastructure and all the lessons I've learned here in business, in the United States about scaling, about growing about trusted advisors, about handling money, about trust. I don't, I spend a lot of my own money on this, but really it's key. I do a lot of crowdsourcing. I throw up a new case that we find, I throw it up on social media. I'm like, you know, who wants to get in on this with me? Cause most people do. Most people are like, that's really cool. I want to do that too. And so it's really just cooperative and everything I've learned in business translates so well into what we're doing now over there,   In terms of the scaling aspect of your business, what's been the best growth factor you've taken from your business and put it into this right here.   Hi, I'm a syndicator, you know, I didn't have any money to do these big apartment projects. Uh, so, so it was about convincing a few people to trust in me. And then once you get the ball rolling and you have a track record and you have trust built up and a reputation and a network, you lend that to much, much bigger projects. And that's what I'm working on now. And basically starting to syndicate larger and larger humanitarian projects in the Philippines. And this is the same people. It's literally the same people that I just made, you know, hundreds or millions of dollars for in the past few years. And they're there, same trust in me, the same reputation did they, if anyone else wants to participate, they'll be like, yeah. You know, I trust him with them. He's over there. He's spending his own money to make this stuff happen. So let's jump in there. So it's, it's all teams it's in its reputation and it's building those relationships of trust.   Yeah. And you're right, right. So, and I think that goes back to a lot of people's perception, Yvonne buying multi-families that you have to have this large bank roll ahead of you, but it's really just making sure that what you say is what you do, having the right terminology. When you talk to people that you can make sure that they understand that you're going to go out there and times are not going to be easy. There, there things are going to happen, but you're going to put in the work and make sure that you're there every step of the way to make it happen. And the cool thing about this is you talk about the cataract surgery. It's something apartment buildings may take a while to turn around, right? It's not like a flip where you can be in and out in a month. You may have two years, three years to see that see the after effect, but the surgery, you can, you could see how that changes so quickly. Right? So you get that immediate point when you had that first one happened, what was, what was the, the internal response? What was your first thought or your emotion from it?   I was addicted. I mean, there was nothing else to say, but that, and you know, when you're doing this kind of business, it's nice to have that external affirmation from everyone. Oh, well, you're a good guy. You're doing all this good stuff and on and on. And it feels good to hear that I liked that, but actually it's, for me, it's my own selfish reasons. Like it makes me happier and more excited than anything else that I'm doing. So I'm doing it for myself. So it's not as selfless and altruistic because it sounds, it's just, it's the coolest thing that I can do in my life. So that's why I'm doing it.   Yeah. I love that. And just the effect of, of person, right. Just imagine, I'm just thinking of my mind, like it, you, you, you vision the vision, right? That just to be able to see something, it gives you such a whole different perspective, right? Just like they say, a picture can create a thousand words. And so for someone to go from not seeing to have an at first sight, you can just imagine the visual, just all the things that must come to mind when someone has that effect. And it's just cool that you could, and it's, it's daunting, right? Because we think of everything on unmasked capacity. Like maybe that surgery here would be like 10,000 hours, but somewhere else, it's a hundred, $180 and you're able to go and just change them in the future. And I love that. What is the, the next steps, which the future with angel capitalist.   So I haven't even been released this yet. You know, you're the first one I'm, I'm really working, uh, to put out a game plan that everyone can watch. Everyone can see that soon. I'm going to move from, I'm asking for a hundred bucks, I'm asking you to match my 500 or a thousand dollars for this next surgical outreach. I'm going to start hunting whales similar to what we did in, uh, in, in multifamily investing. And by that, we're not going to go get a harpoon in a big boat. I'm going to talk, I'm talking more to build the relationship and the bridges with people who, who have huge amounts of money and don't know where to put it. Cause that's actually what we always face in the apartment world with investors. They have a lot of money. They want to deploy it all. They need to get it invested. They just don't know who they can trust. They don't know the right market cycles or whatever. I want to be one of the people that they trust that I've, that I publicly aired   What we're doing publicly shown that track record the portfolio, the resume of what we've done for humans and how tiny, tiny bits of money it can help so much. And I wanted to do that on a much larger scale form. I would like to say, Hey, give me your million. Who do you have? Where's your auntie? Is she, is she unwinding? Her life wants to put her money to good care. Now in good hands, fly over and meet with me, meet with my team. Let's really start scaling this up. Cause there's so many more people we can help. There's there's, there's never going to be enough. And I'm just going to try and do my best with them. If there's a person listening to it, doesn't have the track record, right. It hasn't done a project hasn't hasn't had the impact, uh, but they love this and they want to get involved.   They're just not sure how to get started with what are some suggestions for someone to, to build character, build trust as they continue to grow in what they want to do. You know, I think a lot of us hate social media because of all of the woes that it brings to us, but just sort of putting your profiles on public and being transparent about your failures, showing all the terrible days that you have just showing when there's a success, really enjoy it with everybody. It just, I've had to be a lot more transparent. It's caused me a lot of problems. I'll tell you it's caused a lot of stressful days and nights and just attacks and weird threats and stuff. But the goal is worth it. Whether you're building that business or trying to do something great on like the humanitarian charity side, you will have that trust.   And no matter what I throw on social media, it always gets funded now. And it's, it's people give me 20 bucks, you know, like here's 20, but it gets funded because we built that in. And I think that that's been, been key is being transparent. And also just like you said, do what you say you're going to do except the plan and do it. Yeah. And it it's, it's funny. Cause social media, you do, you have to get out there and talk about what you want to do. It's just the idea of having a resume. Right. And showing people, your resumes as long gone, and the future of it is going to be that someone just going to Google you and just see what you're doing. Cause that's an easier fix. And we always look for the easy, right. And there's a lot of people out there that, that use that to, to attack people just because maybe they're dealing with their own, whatever right behind, behind the curtain where it just it's, it's so easy to type something.   But if I, you know, if I'm sitting there face to face with you, I would never say that. Right know, like right there, funny, but in effect is so easy. If you just say, Hey listen, you know, I'm so sorry. You feel that when you get back to them, it's crazy. But it's the world that we've all grown into is going to continue to be that way. And what's cool is that you can create and track what you're doing for your legacy. You know, you can go and show no other family, other, other friends, you know, 30 years from now, you know, this is what we were doing at this point in this hour, you're using this impact and it, and like it creates our own, like, I, I will say like history books, right. In a weird way. It's like, it's becoming like the new history book, like using social media is. And so it's almost, it's almost like it's almost hurting you if you don't put your stuff up because it gives the rest of your family for generations, the ability to see where it was. Cause the pictures we don't take, we don't like relish. Those pictures are on the phone. And then that people's phones get erased. You don't have pictures where like you find   Them in the attic anymore and say, Hey, here's the, all my grandma from like 60 years ago, here's this picture. And it just, it's amazing how it continues to transform and how those steps go forward. As you, as you look into your next steps and you've gone over to the Philippines and talk to us about what you're doing as a DJ is just as something that you just love. Don't, you've always had a passion for   Rock band since I was 13 or whatever. And then rock kind of died. I don't know, 10 years, I don't know where it is. It's hiding someday somewhere. I'm a rocket, I'm a drummer and a guitarist, but you know, I want, I love music. I wanted to participate. And before when I was in business, I always felt guilty. I always felt guilty to like take an hour and like strum on my guitar or whatever. And now it's also that I have that twinge of guilt. Sometimes I'll be like trying to remix something and I just like invested three hours in it. And it's like, wow, the, the best use of my time. But at the end of the day, we're here to be happy. We're here to pursue our interests and our talents. And it's something I'm passionate about. So I try to do it all. I try to do it both or everything   Going forward. How do you identify the best use of your time? I think we all feel that we're, we're overwhelmed with these, these tasks and maybe have a hard time identifying what's important for me to do right now.   Yeah. I have, I guess, two answers to that sort of the, the logical side of me. I was just listening to Elon Musk on a podcast the other day. And, uh, he, he left, he wanted to build his own house. He wanted to like design it and he says, he's an OCD guy. I think that's pretty obvious. And he was going to like map out every detail of it. And he's like, I could spend a few years doing that or it could get our assets to Mars. You know, she's like, I should probably focus on going to Mars. Right. So, um, you know, me, I guess that's sort of the same thing. I, I need to put a lot of priority on, on helping people's lives, changing, changing their life, their future, giving them an opportunity of health, of wellbeing, of an economic opportunity to feed their family.   But on the flip side of that, I think that we can work ourselves to death into the dirt and never take a moment to enjoy our life. And I think we're here to be happy. I think that's the number one thing. So if you put a priority on being happy yourself, personally, I think that good things will fall into place where you're actually happy just helping people are growing your business or being an advocate for better change. So I would say, how do you allocate your time and doing those things that make you happy is probably the other answer.   Yeah. I love that heard the same podcast on Joe Rogan and it was, it struck me too. It was the same thing. It was like, yeah, I was going to buy it, you know, build this like a Ironman house or Ironman house, or I guess the Mars kind of think the Mars thing might be more important on these projects, you know, but that's, that's funny and it gives it an even on the highest scale, it still makes sense for your life, right. And what you can do on your level, wherever you are in your life, that you get to put those in place. And so I've absolutely enjoyed this. This has been awesome. Super appreciate what you're doing. I'm going to definitely continue follow up and see what you're doing   More and just be involved and for others, uh, angel capitalist.com, where else is the best way for them to connect with you? I'm very much active on Facebook. So they'll we'll Crozier. Uh, angel capitalist has got a page there. Angel capitalist.com. Cap ex ventures is my other business. That's more multifamily centric. So you can reach me there too. But any one of those will get to me happy to talk to anyone who is interested in the same things. Yeah. Business real estate growth. Love it. Well, thank you so much. Really appreciate your time.   This has been great. Thank you everyone. Listen. Super appreciate you guys. Talk to you shortly. Join us by your second cup of coffee. Every Monday through Friday at noon live every day, bringing us our best content we've done so far. Super excited, super engaging bunch of great guests. We're here to answer your questions in. So appreciating listening, make sure to check this out. Can't wait to see you. See acast.com/privacy for privacy and opt-out information.

In this episode of the Healthy, Wealthy and Smart Podcast, I welcome Jason Van Orden on the show to discuss personal branding strategies. Jason helps thought leaders to reach a larger audience with their ideas, create new income streams from their expertise, and build business models that align with their values and goals. As a consultant, trainer, and strategist, he draws from more than fourteen years of researching top Internet influencers and experimenting with his own personal experience. His experience includes creating multiple successful brands, launching over 60 online courses, teaching more than 10,000 entrepreneurs, generating seven figures in online course sales, and 8 million downloads of his podcast. His mission is to help visionaries with impactful ideas to connect with the people they serve best and the problems they can most uniquely solve. In this episode, we discuss: -Three keys to good brand positioning -How to overcome imposter syndrome and position yourself as an expert -The magnetic messaging framework -The compounding effect of your impact on the world -And so much more!   Resources: Jason Van Orden Website Jason Van Orden Facebook Jason Van Orden Business Page Jason Van Orden Twitter Jason Van Orden LinkedIn Jason Van Orden Instagram Impact Podcast Free Gift: https://impactdownloads.com/messaging   For more information on Jason: Since 2005, Jason has worked with over 6000 students and clients, teaching them how to monetize their unique brilliance with content marketing, scalable courses, and automated sales systems. Many of his and students have built multi-million dollar businesses and have become top authors, bloggers, podcasters, and speakers in their field. In September of 2005, Jason co-founded the first ever podcast about internet business and online marketing. It quickly became one of the top business podcasts in the world. To this day it’s one of the most profitable podcasts on iTunes — having generated millions of dollars in sales directly from his podcast. Jason has spoken around the world at some of the biggest conferences (such as CES, National Association of Broadcasters, New Media Expo, and many others) teaching how to use Internet media to launch and grow influential personal brands. In 2006, he wrote the bestselling book, Promoting Your Podcast, in which he was the first to “crack the code” for optimizing podcasts to get maximum exposure on iTunes. His work has been used to teach marketing at the university level and has been referenced on sites such as Forbes.com and Entrepreneur.com. He also practices what he preaches, having created world-class, influential brands of his own.   Read the full transcript below: Karen Litzy (00:01): Hey Jason, welcome to the podcast. I am so happy to have you on today. Jason Van Orden (00:05): Well it's great to be here. Karen, thank you so much for having me. Karen Litzy (00:08): Yes, and as you know, I've been a fan of yours for a while and as my audience knows, I actually took your course on how to kind of juice up your podcast last year and I thought it was super helpful. So I want to thank you for that and I sort of raved about it to my fans on social media and here in the podcast. So it's such a, it's going to be so great to have you on today. So, yeah, thanks. And today we're going to be talking about if creating an irresistible brand and then once you have that brand, how do you create sources of income? Because of course we all want to make a living, we all want to help as many people as we can while we're doing it. But the first question I have for you is, what is your definition of a irresistible brand? Jason Van Orden (01:04): Sure, yeah. Good question. So in the work that I do, you know, I work with people who have expertise that they want to get out there in a bigger way and you know, some kind of message, some kind of stories. So you know, they really want to be recognized or known or even just increase their own ability to help and impact and reach people with what they do. So just to let people know, I'll be talking mostly in the vein of what a personal brand is. I know sometimes we would hear a brand and we think like Coca Cola or AT and T and certainly there are much bigger brand companies as well, but we also don't want to confuse it with brand identity like logos and like your letter head. And certainly, you know, those are assets that get used in order to maybe establish a recognition of a brand. Jason Van Orden (01:49): But really, yeah, what we'll be talking about and how I define as much more about like how are you perceived in the marketplace, especially by those that you want to reach and do business with you, you know, the people that you want to serve and that you want to perk up, pay attention, and listen when you've got something cool to share or sell or you know, offer as help. So, it has to do with, you know, them seeing, you know, here's who you are, here's what you do, here's who you help and here's what you have to offer to them. And hopefully those perceptions are accurate and complete and compelling so that you successfully can get their attention and move them towards doing business with you. So that's kind of an in brief how I would make some of the specifications of the word brand to make sure that we're clear about what we're talking about. Karen Litzy (02:38): Yeah. And I think that's really helpful because I think you're exactly right. When people think of brands, they do think of those big international, huge brands, like you said, Coca-Cola, Nike, Apple, which is certainly a brand. But I think for the sake of the audience listening to this, they want to know about that more personal brand identity that you were talking about. So let's talk about how to create that. So how do you create this sort of irresistible brand that you want your ideal customers, you want to be perceived as something that is so necessary for them. How do you create that? Jason Van Orden (03:21): So yeah, there are three pieces to having a good brand positioning. And, and by position, I mean, again, establishing that place in the marketplace that you want to sit. And so the first is to know like, okay, well here's who I ideally want to reach and serve and being very clear about that. I mean, there's an example I use for instance, digital photography is, I have a recently a client I was working with, who wanted, you know, a successful digital photographer wanted to get out there and help other digital photographers. You know, had great career, great clients and projects and things, and he knew there are a lot of people who kind of knew his work and wanted to be, do some of what he had been able to accomplish. And so, you know, I was like, okay, great. Jason Van Orden (04:09): I want to build up my brand more and not just you know, do this. This work where I got hired to go and do thermography and digital photography. And so I said, well, we need to get very clear about who do you want to help with these skills. Is it the already established professional? Is it the somebody who wants to make that jump now to being a professional, you know, they've studied and they've, you know, pretty serious hobbyist or something. Or do you want to help people who just have an iPhone and wanting to take more beautiful pictures with their iPhone? Like these are all different audiences, but under that umbrella of digital photography. So it's being very clear. And sometimes that's specifying a specific demographic though it needs to go. I think even in much, much deeper than that. Jason Van Orden (04:51): And you know, are there certain age groups, but the biggest thing to really understand is what are the outcomes or results that you want to help them to reach? I think it's really important to define the target customer, the intended customer in that way. Because when it comes down to it, I mean their age and their gender or these different things might help you if you're running ads and want to know where to reach them. But really ultimately the way you want to define them as it's like, Oh, these are their unfulfilled needs. These are what are the things they're actively looking for. These are the pains they're experiencing or the goals that they haven't met that they would like to meet. And those are the things that I can help them with, which is the second piece. Jason Van Orden (05:35): Once you know the ideal customer that you want to reach and serve, the second piece is, Okay, well how do you want to serve them? What are you going to deliver if you are there specific ones of their pains that you want to help them with or the unfulfilled goals that you want to help them with. And we call that, you know, the value proposition or the thing that you are presenting to them, whether, you know, and might be as services or products or other things we can get. It's a into that later. But so it's who are you serving, how are you going to serve them? And then there's also this third piece that's just who you are. And particularly in the work that I do and helping people with their personal branding there's a lot of noise on the internet and it can feel sometimes if you are somebody who ever does post on Facebook or put something out there and maybe you're hoping people might see it, it's easy to feel like, Oh, that's just going to get lost in this sea of sameness. Jason Van Orden (06:31): And so many people saying different things or the same seemingly the same things. And it's knowing that as tried as this might sound, you know, we each have our unique perspective, our unique approach, the experiences we've been through. We have our you know, our approach to things to bring to the table. And in the same way, here's my vision for people who want to have a personal brand is that in the same way that Spotify now has really trained us to be able to find whatever we want to listen to. I mean, whatever genre, whatever into your popular music like you can, there's a vast catalog and now it's not about what 100 CDs you own. It's like now you like near infinite choice. And so you have these very personalized playlist and stuff and Spotify is insanely good at them. Jason Van Orden (07:19): Making recommendations for us as well in that same way, be thanks to the internet over the last 10, 15 years, all the other myriad of problems and populations who need help out there and in solving and guidance, you know, there's a slice of the world that's looking for your approach, for your flavor. You are that hidden gem of a band on Spotify, quote unquote, right. So it's something about the way you show up and make them feel they're present the information or guide them or the values you have or some kind of shared meaning or something where you know, you seem a lot like they, you know, you've been in the place that they have in the past and they resonate with that. So that's the third piece of the personal brand is knowing what you bring to the table in those ways. Jason Van Orden (08:06): And it just really owning and realizing that you do have that perspective that many people will want to specifically hear from you.   Karen Litzy: Okay. Wow. Okay. So I am going to recap that really quickly. So first you're where you want to be clear about who you want to serve. Then you want to be clear on how you're going to serve them. And then who are you and what do you bring to the table? I mean these are, I feel like number one kind of getting clear about who you want to serve. I don't know for me that's probably the easiest of the three. But getting, I think drilling down to who are you and what do you bring to the table that can be kind of difficult to pull out of yourself. Do you have any tips for the listeners on how they might be able to do that? Jason Van Orden (09:04): Absolutely. For me, I'm being totally selfish, absolutely not a problem. It can be hard to uncover those things. And one of the reasons why is that we often don't see what is interesting or special or valuable because it's commonplace to us and you know, and then just get old human nature. We haven't yet imposture syndrome or just feel like, Oh to like, you know, say, Oh, I'm strong in this area. Just feels not humble or something. So, you know, these things get in our way of seeing what we have to offer. And so in the work that I do, I have a lot of exercises and frameworks and things that I walk clients through to help them uncover and discover the different parts of their voice and that we're talking about. So I'll just drill into to one area here that I think is really important. Jason Van Orden (09:53): Like I said, very noisy on the internet, but if you can get this, this sense of resonance resonances, you know, if you've ever you know, maybe you've been seeing it in the shower or something happened, just hear it just the right note and it's just like, Ooh, it just gets really big. And because you hit just that right note that in that space sounds really big and that's what you want when somebody comes across you and your message. So here's a little framework in my research about personal branding, I've seen a lot of work. I've seen a lot of research I've done out there about the importance of purpose based brands. And when I say that I'm talking about companies like whole foods or Patagonia, there's a very specific identity. They stand for certain things. They have a certain vision of the future. Jason Van Orden (10:38): They guide their company according to that. Their messaging community, certain things in a very clear and compelling way. And that's just two of many examples I could go to. And the research is clear that that leads to more loyal customers, repeat customers, you know, fans and advocates that share your stuff with other people. And this is what consumers want today. Thank goodness. You know, I think 10, 15 years of some really just like shenanigans in the corporate world, not only I dimension, just upcoming generation of millennials, that purpose based stuff has gotten really, really important. So what does that mean for you? How can you you know, if you're feeling driven by all this, you probably do have some kind of purpose inside you. But what does that even mean to like clarify and communicate that? So here's a little framework that I have. Jason Van Orden (11:23): I went and I study kind of the work I've done helping build personal brands as well as some of these companies and what they do. And I came up with five elements. I'll just briefly go through, I call this the magnetic messaging framework and it is one of many facets he can pull up to really find that uniqueness about you. So first thing is beliefs. What do you believe at the core that drives the core of the work that you do? What do you believe about the world? What do you believe that maybe goes counter to what is popular, you know, wisdom in your industry. What do you want the people that you want to reach and serve? What do you want them to believe after they've worked with you or come across, you know, your offerings, what do you want them to believe about themselves and about the world? Jason Van Orden (12:04): So I'll just use myself as a quick example here. I have this belief that we do need more people out there building that personal brand, rising up and owning it and going and finding that slice of the world that they can help. And if we can have a ground swell of that will solve a lot more of the world's problems than if we were just to leave it to, you know, big corporations, big organizations, government, whatever. I mean, Hey, they have their part to plead to. But this is a wonderful opportunity the internet has given us. And that's a belief that I have one of many that drive my work. Second of all, vision, what is the vision you have of the future? I'm not talking about just a vision statement for your business and all that might be important, but paint a picture like this is the future I want to see and work for and create. Jason Van Orden (12:44): I'll give you an example from another woman that I was coaching where she is in the health. And actually she was in the dieting, you know, what you'd call even the dieting industry and she has as a recently in last couple of years, stop using that word at all. She came across some research and things. She said, that's it. I gotta stop talking about dieting when it comes to the women I'm working with, you know, with helping them love their bodies and different things. And, you know, she decided I have to take a completely different approach and she now believes it has this vision of the future where like we get rid of the dieting industry or that world, it may seem like a huge daunting task, which is like, we absolutely need to take that down. It is not serving us well. Jason Van Orden (13:22): So that's, you know, a big vision thing. It's bigger than her. And when people do business with her, they are, they also see themselves as being a part of that and people want to be part of something bigger. Again, going back to companies like Patagonia or whole foods, there is a certain vision you know, Patagonia is all about like the sustainable future, right? So what does that vision you want to create? So beliefs and vision, value, we always talk already talked about it a little bit as being very clear about what you offer to them, what's in it for them if they do business for you. The fourth thing is contribution. So what do you bring? What does your work do that goes beyond the monetary exchange and the value exchange with your customer. I mean, that's important and they pay you and you render a service or give them the product or whatever the case may be. Jason Van Orden (14:04): But how does that contribute to the community or the industry or even the world at large? And I'd like to think that in the work that I do helping elevate all of these thought leaders that it contributes in that will solve more of the world's problems. I mean, I'm not claiming that myself, I can go in and help enough people to solve all the world's problems, but I'll make more of the dent if I help more people find with their ideas and their expertise, the people in the problems in the populations they can help the most. And so that's how I see my work contributing even beyond what it does for directly to my icons, my customers. And then the final thing is a reason why you do what you do other than making money. And for me, once I was one simple example is I see it as a compounding of my own impact and specifically working with people who want to have a personal brand and be a thought leader or get their ideas and things out there in a bigger way. Jason Van Orden (14:58): It's like, well, Hey, it's like compound interest. I help you know, a person they go help 10 or a hundred or a thousand. Then I helped another person and they help 10 or a hundred or thousand. And so that's a reason why I do what I do besides money or the freedom directly benefiting to me. So those five things, beliefs, vision, value, contribution, and reason why, if you flesh those things out and then talk about them in your content and your keynote speeches with your clients in your marketing, in your say on your website, on your about page, on your social media, now you're going to be creating something that really has a uniqueness around it. And that's one key way to do that. Karen Litzy (15:35): That was great. Thank you so much. And I really loved that end piece. How you finished on that? That concept of compound interest. Yeah. Because oftentimes we don't think about what we do as effecting the, we kind of only think about it as I am working with a patient and I make a difference in that patient's life. Right? But I'm not thinking that because I made a difference in this patient's life. They were able to make a difference in their children or their parents or their friends or their family because they're going out and doing what they're meant to do because I help them do that. Karen Litzy (16:18): And I just, yeah, I just, I love that concept and I don't think I've heard it really put quite that way before. And I think it's just wonderful to think about it that way so that when, cause oftentimes as healthcare providers we can be a little shy, I guess it could be the word or uncomfortable with asking for monetary exchange for what we do. Right, right. And yeah, a lot of times, especially in healthcare, you're tied to that insurance system where, you know, you're waiting for the insurance to pay you or you could have a cash based business where the patient pays you directly. But so often there's this shyness or this inability to kind of ask for that monetary contribution. And I think people get so fixated on that that you forget about all the other stuff that you're doing. That sort of compound interest that you said goes beyond that monetary amount. Because I think if people see that, then the monetary amount, yes, we need to make a living, but people will be like, yeah, sure, here you go. I get it. Jason Van Orden (17:33): Yeah. Right. And when they understand yeah, and it definitely comes across again, by the time they do business with you, with this kind of messaging. Yeah. People, not only are they just like identified with you and like, no, I want, I want you, I want to be the one to help me. But yeah, they understand that and whether it's conscious or unconscious and says, yeah, this idea of like, Oh, I'm also part of something a little bigger than me here. This is cool. You know? And that's what people want these days. Karen Litzy (17:59): Yeah, absolutely. Well, now let's say we fast forward. We have gone through that framework. We feel like we have a good solid footing on what our brand is and our messaging. So let's step into now how to create sources of income from that messaging. And that messaging, of course, is using our expertise. Jason Van Orden (18:28): Yeah. So when it comes to creating different sources of income, there's one key asset to be very clear with. And then I can share another four-part framework. I'm big fan of frameworks and we've actually covered some of the pieces of that framework which are being very clear. So there's four pieces to coming up with some kind of offer. When I say offer, it could be a service, it could be a product, you know, something that you're offering to people to buy and exchange value with you. So the first piece is well, we already talked about knowing very clearly who your ideal audience, customer client is. And then the second piece is being very clear about understanding the outcomes and the results and the unfulfilled needs. What's most important to them, what's top of mind? What is their, what I call their tooth ache, pain and other, they literally have a two thing. Jason Van Orden (19:18): But I use that as an example because if we have a tooth ache and it's not going away, we're going to call the dentist and go get it checked out. Right? It suddenly becomes a top of mind thing. So how do you know what that is? Well, you go when you talk to them. I'm always encouraging my clients to go and do market research in the form of having conversations with people who fit the description of their ideal person, the person that they want to reach. And this could be current clients or past clients are also just people who aren't, haven't done business with them. But you know, for you, Karen could be listeners of your podcast or people who are on your email newsletter list and you know if you regularly get on the phone with them and it's not to say like, Hey, I have this idea for a product. Jason Van Orden (19:59): What do you think? It's really to listen a lot and ask good questions to hear about their experience. You know, what are they dealing with? What are they trying to accomplish? Why haven't they reached that? That's the big thing is why haven't they been able to do that thing that they want to do yet? What myths and misconceptions are they maybe dealing with? What questions do they have? What's not? What knowledge gaps, what tools do they need to acquire, what have they tried before that maybe didn't work for them? So you know, the better you understand their experience in this way, then you as the expert can, you'll see the through lines, the thread that draws the jury, that ties these conversations together. And you can kind of like read the tea leaves so to speak and go, Oh, okay, I'm seeing something that's missing here. Jason Van Orden (20:36): Or something that I think that I could do in a particularly helpful way. And then at that point, you've got, you know, those first two key components, your ideal customer and their ideal thing that's really important to them. And that's, we're going to come up with a great, a great offer. Now to get a little more specific at that point, you as the expert have some kind of process and this is the third piece, some kind of process for helping them get from a to B. You know, so if you're a physical therapist, I mean, I, I'm not claiming to know that much about physical therapy, right? But like I've done some before. I had a knee injury and then you need to get some range of motion back. Right? So the third, the physical therapist I went to see, you know, immediately, you know, it was assessing and everything and then in her mind was, you know, going, okay, yeah, here are the things we're going to need to do to do over the next several weeks. Jason Van Orden (21:25): Then a process to bring that to bring that about. I have a certain process that I go through to help my clients, you know, figure out what their personal brand is or you know, create and launch their first online pro, you know, I different. And so if you're very clear about what that process is and particularly kind of your unique approach to it, again, going back to what's unique about what you offer that process now is something that you can wrap in a variety of what I call experiences, which is the fourth piece. So we have the ideal client or customer, we have their ideal outcome. We have your process for helping them reach that outcome. And now it's just a matter of wrapping it in different experiences. Now, here's what I mean by that. If we imagine a spectrum and on one end of the spectrum is kind of your, what I call your high end high high touch offers. Jason Van Orden (22:13): So that would be, you know, as a physical therapist, the hands on one-on-one work as a consultant, as a coach showing up one-on-one or the, you know, so it's much more nuanced and direct and people are going to pay more for that kind of experience and expertise on the other end of the spectrum with clients that I work with is something that would be like purely hands off. Something like a digital course for instance, that you know, somebody can buy the so, you know, say I went online and I'm sure there's a lot of physical therapists can be like, Whoa, bad idea. You need to actually go to a physical therapist and understand that maybe you know, putting aside my ignorance about all of the physical therapy, you know, maybe then as a thing, after they worked with you for several weeks or whatever, there's some, you know, downloadable set of videos that then they can go through on their own at home or you know, whatever it is that you're wanting to help people with. Jason Van Orden (23:02): So that's at the other end of the spectrum, purely digital do it themselves. And then there's everything in between and you're basically asking yourself three questions. It's like, okay, how are people going to get access to me through this offer? And so, you know, is that going to be direct one on one? Is it going to be, maybe there's some kind of, you know, a lot of my clients end up performing some kind of like group Q and a or coaching calls, whether they can help a group of people at once. It's kind of like, you know, your Lyft or Uber share ride. If the driver has three people in the car, they're getting paid by three people as opposed to one person. Right? So that's a, you know, how do they get access to you and finding a more scalable way to do that. Jason Van Orden (23:38): The second thing is how do they get access to the information? And that might be, you know, through like you did that podcasting course. I did that, the information, there was a series of group calls, several people on a call and I was doing those trainings and then saying, here's where you can walk away now and the action steps and what to do next this week with what we've talked about. So how do they access the information or the knowledge or the tools? And then the third question is how do they access each other? And this is a powerful thing and wrapping in an experience. Because if you have a lot of people showing up, have similar goals and desires, it's actually you really valuable for them to be a part of a group of people who are working towards similar things and normalizes, you know, the issues that they're dealing with. Jason Van Orden (24:22): And they can get insights from others who are in the same place as they are. And this is where we see things like Facebook groups or LinkedIn groups or Slack you know, channels or ways that your clients can actually talk to each other, which again, it's huge value without your direct input. Other than that you connected them. So when you have those four pieces, the ideal client, their ideal outcome, your process for getting them there and then deciding of what is the experience, you know, now you can craft. And the cool thing about knowing clearly what that process is and maybe take that first piece of the process that's like an assessment piece or whatever the first step is. And you can make that a smaller product and make it lower price. So it's easy for people to go like, okay, yeah, I'll say yes. Jason Van Orden (25:04): Did that baby step into doing work? You know, or experiencing your expertise in some way. And then all the research tells us they're likely that way. More likely now to do business with you again and spend more money with you at that point. Or maybe you decide it's time to write a book. Okay. The book is maybe an overview of your process or you get invited to do a keynote. It's like, okay, there's, well here's one slice of my process, one, one, one piece of what I help people with. And that can be the basis for that for that keynote. Or maybe you decide, okay, now I want the entire process packaged up as a group coaching type experience that happens over eight weeks online or a two day workshop or right now you can, you can play with it in a lot of different ways, but that process is a really important asset. So those are your four steps and kind of how all those pieces come together. Karen Litzy (25:51): Awesome. Well, I love a good framework. So thank you for that. And there's one thing that you said as you are kind of going through that framework that I just want to back up and touch upon is that idea of being an expert. So oftentimes, and again, you touched upon this as well, is that feeling of imposter syndrome and things like that. Is that feeling of, am I really the expert? Like there are people out there who might have more experience than I do. How can I put myself out there as the expert? So what do you say to that? Jason Van Orden (26:29): Well, there probably are plenty of people out there who have more expertise than you. There always will be there. People have there have more expertise or experience in marketing branding to me. But again, it goes, there are too for people to do business with you. It's about trust. And trust is actually made of two components. It's made of credibility, which, you know, that's expertise. Have you, you know, done the hours of mastery. You've gotten the degree if you need it or whatever. It goes into that credibility. Have you gotten results for people before? And we lean on that a lot and that's okay. It is important. But then likability, credibility plus likability is trust. And often that likability is even more important than the credibility. Now again, you need to be able to deliver the results, but what does that likability, well, that goes back to resonance and for some reason, I mean, I think we've all, you know, I could have gone to one physical therapist and been like, yeah, something just doesn't drive here. Jason Van Orden (27:16): I need to go to another whatever for whatever reason. Right? And at that point, it wouldn't have been like, which one has more experience? It's like, which one do I vibe with? Or if you've ever gone to like hired a therapist or something like that, right? Just to kind of give a little more of an extreme example. But so that's one thing I would say. Another thing is that you know, if you do struggle with impostor syndrome, a great Google search to do is imposter syndrome celebrities. And you're gonna see a huge list of like Tina Fey and Tom Hanks and Maya Angelou and people who are like stories. Like, why are these people like doubting themselves? They're like, amazing. Then another thing that I would say to that is, you know, that process of going and having those conversations with your marketplace, those can be very energizing and actually confidence boosting. Jason Van Orden (28:04): Cause as you're talking and hearing their experience, it starts, you start going seeing it's like, Oh yeah, I can help with that and start getting excited about it and wanting to do it. And so that's another, you know, little anecdote to that. And in the end it's, you know, you don't ever have to be claimed to be something that you're not, you know, you very clear and you know, again, what your strengths are, where you can create results to what extent, and there are going to be people that just decide to work with you for a number of reasons. And it's not just going to be price or geography. Sometimes it might be, but again, if you know, that resonance piece comes in a lot too. So there's a few different things. And then the last thing is all I can say is like, go back to my belief that it's like, look, there's so many people in this world, 8 billion plus lots of problems to solve. Lots of people looking for guidance and help. So, you know, be that one specific band on Spotify, be that one person that knows that slice of the world is looking for. I'm going, you know what, you're the person I've been waiting for to hear this from. So how can I work with you? And that's what we're going for. Karen Litzy (29:08): Perfect. I love it. Now as we wrap things up here if you could leave the audience, although I think what you just said was probably, I shouldn't have even asked this question, but I'm going to ask it anyway because I want you to be able to kind of give the major points you want people to walk away with from this conversation, even though there were so, so many, I took a lot of notes. Jason Van Orden (29:34): Yeah. I mean, I'll just punctuate kind of the big point. And, and with just a very brief anecdote or story, and that is like back in 2008, I got a phone call from a woman in Austin, Texas. She had a child, she was pregnant or no, she had two kids at the time. And she, both of her pregnancies had been very high risk. In fact, she had gotten put on bed rest, you know, or you have to stay there for months and I'm sure that's gotta be so stressful. And it was a really difficult time for her. She from the African American community and she just found that particularly in that population, the resources for high risk pregnancies were really under like the date. There just wasn't enough of them. So, you know, fast forward, she's got her two healthy kids, thank goodness everything. Jason Van Orden (30:19): And she's like, I want, I need to share my experience and my story, you know, she's even gotten, you know, gone and gotten some what's the word I'm looking for, you know, accreditations or even, I can't remember exactly what she, you know, went and trained in, but she definitely got some that credibility expertise part, but then she also wanted to share her story. And so she said, can you help me launch a podcast? I said, yes, absolutely. So she hired me to coach her and consult her through that. And you know, fast forward a few months, or maybe it was a half a year or so, and she started getting emails from people in Ireland and Australia and Oman in the middle East. And you know, this one woman and in Oman said look, I gotta thank you for helping. Like save my child. Jason Van Orden (31:04): I hadn't, no, when I found out that I had to be on bed rest and there was this high risk of losing my pregnancy, like I didn't know what to do and where I live, there really isn't like what much support or empathy and so your story, your podcast, your perspective, your expertise gave me the strength, the will, the knowledge to be able to get through that difficult time. So what I'm trying to punctuate there is like how many of those connections are waiting for you out there, the listener, you know, who's listening to this right now and whether you reach them through a podcast or a blog or videos or through social media or speaking or whatever the case may be. There are absolutely those stories. You know, that that story can be true of you. And that's why I do what I do is to multiply that phenomenon that I've seen time and time and time again over the last 10 or 15 years. Karen Litzy (31:54): Yeah, I mean you just, you never know who's listening or reading or watching and you never know how the words that you say can truly, truly affect another person. And that's a great exit story is a great example of that. Jason Van Orden (32:10): And I don't know if you can hear a little bit of music, Karen? But somebody is having a dance party with their car suddenly. So that's not just me like, you know, winding down our interview with like, I'm going to do a saucer. Karen Litzy (32:21): You're in a play, you're going to play yourself off at the Oscars. Just slowly playing yourself off. That's so thoughtful. Well, actually before you exit, I have one last question. So I ask everyone this, knowing where you are now, in your life and in your career, what advice would you give to yourself as that young guy straight out of school? Jason Van Orden (32:49): Yeah. Well wow, that's a big one. I mean, I think what I would say is that, you know, you're only scratching the surface when it comes to what's possible for you and especially in getting to know yourself. So just, you know, keep searching, keep looking, keep discovering and uncovering the layers of yourself. And because, you know, that guy thought he was going to be an engineer for the rest of his life and so many other, I'm such a different person now and that's good. I mean a lot of growth and hard things and went very different directions than I thought, but it would just be that encouragement. It's like, look, you're just getting started and thinking is going to be very different. But you know, keep, keep digging and hoping and pushing and even when it gets hard. Karen Litzy (33:35): Great advice. Thank you so much. Now Jason, where can people find you? Jason Van Orden (33:40): Yeah, so I actually have a new podcast where we dive into stuff like this. It's a podcast called impact, a subtitle, how to build or how to grow your thought leadership brand and business. And so you can check that out and find it on all the major directories or at jasonvanorden.com. And then the one other thing I'll mention is if you go to magneticmessaging.download, you can download, you know, I went very quickly through those five aspects of the messaging, but you can download the framework, it's like a full guide with questions. Take you through that and if you want to dig into that exercise some more. So that's magneticmessaging.download. Karen Litzy (34:20): Awesome. Well thank you so much. And just for everyone listening, we'll have the links to everything that Jason just said. So his podcast, his website and the magnetic messaging over at the show notes for this episode at podcast.Healthywealthysmart.com. So if you weren't taking notes like I did, don't worry one click and we'll take you to everything that Jason just mentioned. So Jason, thank you so much for taking the time out and coming on the podcast. I really appreciate it. This was great. Jason Van Orden (34:50): Yeah, so much fun. Thank you Karen Karen Litzy (34:52): And everyone else. Thanks so much for listening. Have a great couple of days and stay healthy, wealthy, and smart.   Thanks for listening and subscribing to the podcast! Make sure to connect with me on twitter, instagram  and facebook to stay updated on all of the latest!  Show your support for the show by leaving a rating and review on Apple Podcasts!

On this episode of Hey Jason! I Sit down with Reggie Butler, CEO and Founder of Performance Paradigm, a capital consultancy whose mission is to improve organizational culture and workforce engagement. Reggie is a leader in the Diversity, Equity, and Inclusion space and works with some of the leading Fortune 100 companies to develop inclusive cultures. Check out our wide-ranging interview on this episode of Hey Jason! The Podcast. --- Support this podcast: https://anchor.fm/heyjason/support

Usually, paying attention to your body, mind, and health is the last thing you do when it comes to your business. It’s time to focus on yourself first! Today, I am talking to Tony LeBlanc, second-generation property manager and author of The Doorpreneur: Property Management Beyond the Rent Roll. Tony shares the keys to debunking the rent roll paradox when chasing doors to grow.  You’ll Learn... [03:00] Software Engineer Stint: Tech geek at heart that brings love of technology into property management space. [04:30] What is rent roll paradox? Property management companies that constantly rely on getting new doors to grow their business.  [05:42] Chasing doors creates havoc and stress due to inefficiencies. [08:45] Expanding Territories/Locations: The bigger and more geographically dispersed a business gets, the more opportunities arise that aren’t taken advantage of.  [10:56] Would you want two doors making the same amount, or one door making same amount as two? One door, if the goal is revenue/profit, it's not just about adding doors.  [12:30] Premature Expansion: Go-to once a company reaches a certain size; anything premature is generally not a good thing. [14:13] Entrepreneur’s Journey: Everyone hits stagnation or desire for more. They get distracted by opportunity.  [15:11] Opportunities vs. Expansion: Think it through, be disciplined, and follow good habits before making the jump and knowing where you’re going. [17:40] Cycle of Suck: Bad owners, properties, reputation, and false scarcity. [18:15] Property management is changing. It’s future is a foundation full of opportunities. [21:50] Dinosaur Dictators vs. Millennials Seeking Meaning and Purpose: Good property management can change the world.  [22:45] Tony’s Aha Moment: We matter and play an important role in thousands of people’s day-to-day life. [28:30] Target on Back: How to deal with being overwhelmed as a property manager. [32:14] When we create and have constraints, when we're limited in our time and attention, we innovate. Tweetables Growth doesn't happen by accident. Personal growth is gateway to business growth. Chasing Doors: Is all you care about being introduced to new people, close deals, and get more doors? Property management’s growth is defined by doors that it turns down, not doors it gets. Focus is power. Cut something out in your life to achieve something. Resources The Doorpreneur by Tony LeBlanc Ground Floor Property Management National Association of Residential Property Managers (NARPM) Cycle of Suck DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube Transcript Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers are those that love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. My guest today is Tony LeBlanc from Canada. Welcome Tony, how are you doing? Tony: Hey man, I'm doing great, Jason. Thanks for having me. Jason: I'm really excited to have you on the show. You've been on before a long time ago and I was telling you in the green room before the show, but I think we resonate with a lot of similar values. I think we're both growth-minded people. I read your Doorpreneur book, which everybody should take a look at. And I think we have a similar mindset that growth doesn't happen by accident and personal growth is the gateway to business growth. I think we probably would both agree. Tony: Absolutely. Jason: I posted about this just the other day. I think it's the last thing that everybody wants to pay attention to in their business, is themselves. They’ll focus on everything external. “I need more leads. I need this. I need this.” Ironically, if I could change the person or get them clear on themselves, then all of those things end up changing by default, everything. Website marketing, everything into changing by default if you focus on yourself first. Tony give people a little bit of background. Maybe those that had heard you before, bring them up-to-date. Tell us a little bit about who Tony is. Tony: Sure, thanks Jason. I said my name's Tony LeBlanc from eastern Canada. Born and raised out here. I am a second generation property manager. It wasn't my first career of choice. I actually got into it as my second career. My first career was a 15-year stint as a software engineer with IBM which provided me an amazing experience visiting the world and working with a lot of great people in that domain. I'm a tech geek at heart. I love technology and I don't think that'll ever go away. It’s been interesting to bring that into the property management world, because as everybody knows, technology in the property management space is still not, in my opinion, where it should be. I still think we’re 5-10 years behind some of the stuff that we should have out there available to us. I still find it very difficult to run my business with the standard property management software that they have out there. After I left IBM, I started my management company which had been running out for about 10 years, called Ground Floor Property Management. We have been very well-received in our community. We now have three locations and I am now an author. I've basically taken everything that I've learnt from IBM, from life, and from the last 10 years of growing my property management company as well as the spin offs that we've created over the years, and that's where I am today, introducing the doorpreneur way. Jason: Perfect. The title of the show is the Keys to Debunking the Rent Roll Paradox. What is the rent roll paradox? Tony: The rent roll paradox is the fact that most, if not all property management companies out there, are constantly relying on getting new doors to grow their business. I believe there's a different way. I believe there is a much better way than doing that. And I say that from experience. For the first five years of running Ground Floor, my property management company, I was nothing but a door chaser. I just wanted to grow, grow, grow, grow. That's all I cared about. I just wanted to be introduced to new people, close deals, and get more doors. We got to the point to where we reached almost 2000 doors in five years. That’s across three locations. It was fast, it was intense, and it was incredibly painful. Incredibly painful. Now that I've gotten into the second five-year phase of the management journey, I've learned a lot looking back, and I realized that as I was going through that growth phase, I'm just adding more doors, and more doors, and more doors. I was causing a lot of havoc and stress on myself and my staff, but I was leaving an incredible amount of money on the table because of inefficiencies. If anybody's growing a property management company, when you're getting doors pouring in—we do multi-rise mostly, not just single family—it's a lot of work. We've onboarded 50, 60, 124 unit buildings, and it consumes you for a period of time. If you don't give the proper amount of space in between those growth, it becomes rough, but you don't want to take your foot off the gas if you're like me. Jason: Yeah, so let's touch on this real quick. I tell people this all the time. If somebody calls me and they say, “I am thinking of starting a property management business,” I say, “Do you want me to talk you into it or out of it?” because I get to see inside hundreds of companies. They usually laugh, but they usually stay into it. The thing is, this property management is easily death by a thousand cuts. Tony: Absolutely. Jason: If you have one little problem with one door and then you have a thousand doors, you have thousands of those problems over and over again. That's why it's so critical to shore up some of these leaks early on, because if you're having problems now and you feel like it's stressful now, just adding more doors is throwing gasoline on whatever fire you have. If that fire is a bad fire, then it's just going to explode. It’s going to be worse. Customer service goes down. You have more complaints and it compounds. Usually, they have to make significant changes just to go from 50-60 units under management to break past that first sand trap—I call 50-60 door the solopreneur sand trap—to break 100 doors. Just to do that, they have to change everything. Ironically, I’ll real estate companies that are doing property management on the side, break past that barrier artificially without making the necessary changes. They don't get technology in place, they don’t get systems in place, and it will pass it. One of my case studies was a client that had 600 units under management, single family, and was making $0 in this business. I said, “How are you doing that?” he’s like, “I've $3 million a month in real estate every month or whatever. I'm doing real estate.” Property management can be death by a thousand cuts. You have this pain, but you have growth and I'm sure a lot of people are like, “I would love that problem. I would love the problem to deal with, to figure out how to get 2000 doors and quit crying,” so tell us a little bit about your experience after that. Tony: One of the big things was expanding into different territories. Our headquarters, which is my main office, we’re doing extremely well. We then split off to another city within an hour-and-a-half away, and that ended up going well. The third location came in and that started off really well, but then about a year later, we started looking at all three locations individually, and we started seeing a lot of gaps, and a lot of issues that we're struggling with. We made a conscious effort to obviously fix a lot of those things and it made us really pull the curtain back and look at the overall business as it sat. The bigger we got and the more geographically dispersed that we became, we started seeing a lot of opportunities that we were just not taking advantage of. When I started the management company 10 years ago, I had maintenance as part of the division. That's the way my mother did it and that's the way I wanted to do it. I always wanted to have my own maintenance guys on my payroll so that I can control that and we still do that to this day. What really became evident as we're studying and looking at our rent rolls across all three locations, was the amount of money that was being spent outside in terms of different trades, different services that were required on all these properties. To be quite honest with you, I was getting tired of chasing doors. It wasn't as enticing anymore. Don't get me wrong, we still grow, we still love getting new doors, but something had changed in me. Then we were really started looking at what can we do beyond just getting more doors and that's really when the whole doorpreneur philosophy was born. Our first pivot into a new business that serviced our portfolios was landscaping [...] and that's where everything grew from there. Jason: Here's an obvious question. Would you rather have two doors that are making the same amount or one door that's making the same amount as two? Tony: Definitely one. Absolutely. Jason: Absolutely. If the goal is revenue, the goal is profit, and it's not just about adding doors. Everyone focuses on that one multiplier, it is doors. Everyone's trying to get a deal and it's like one deal per door. What if you can get multiple doors per deal? What if you can get multiple years per door? What about duration? There's all these other factors they’re not paying attention to. There are some property managers out there that are replacing every door every year. They're usually about 50-60 units, they're getting on an accidental investor that leaves every year, they have to replace every damn door every year, and they're like, “We’re adding doors, why aren’t we growing?” It seems so obvious. Tony: The major shift for us has been quality over quantity. I say no to more doors today than I ever have in my 10-year career running this company. It's really all about where can we take this? Where can we take that door and what can it do in the long term? Jason: Yeah. I think a property management company’s growth will always be defined by the doors that they're willing to turn down, not the doors they're able to get on for sure. I think another thing going back to your rent roll paradox, you talked about expanding into locations. I think that's a go-to once a company hits a certain size, they're like, “We did it here, let's go here.” They just had me speak on this at the Ironman conference on a panel and I call that, premature expansion. Anything premature is generally not a good thing. A lot of people think, “Well, we did this here, we're hitting a cap in our door account, so instead of expanding our revenue opportunities with those doors, or here, or figuring out other ways to hit different parts of the market here, let's just go find a new market. We’ll do it all over again,” they don't realize it's worse than being twice as hard in starting a new location. Tony: 100%. The stories that I can tell you about the two locations that we can open. It all comes back to a fundamental need of chasing doors. It’s like that's all you're able to see. We got this tunnel vision. It's like, “Okay, I've grown here and I think I'm as big as I can get. Where else can I go and chase more doors?” It's fulfilling for the first little while. It's fun, it’s exciting, but there's an emptiness to it in the end. I think I'm a little bit different than maybe probably a lot of traditional type property managers. I knew when I started Ground Floor that it was going to be something much bigger than just a property management company. I had that vision 10-15 years ago and just running after doors, it lasted for 3-4 years and then I was like, “Okay, what's next? Is this it? What else can I do in here?” That's when a lot of other things started coming along. Jason: I think that's common for every entrepreneur in the entrepreneurial journey. If they really are an entrepreneurial-minded person, they're going to hit this stagnation or this desire for more. The desire to do more. Sometimes that goes south and they do it in negative or dysfunctional ways. I started out just doing websites. Then I go like, “Hey, I could make residual income if I'm doing the hosting for these websites. I could do this. They also need the service.” I think as entrepreneurs, we also get distracted by opportunity. We see it everywhere and it keeps us sometimes from even achieving the goal we're working on right now. How do you find that balance between seeing all the opportunity and expanding into new areas, but making sure that you're actually getting stuff done? Tony: I'll be honest with you. The first couple of years, I was so focused. I had my head down so bad in terms of just getting the doors and growing my local office, that it was so busy and it was all so fast that I didn't have time to look at anything else. It's when I get a little bit of breathing room that I started looking at the different locations. I don't necessarily regret it, but I probably would have thought about it a little bit longer before I need the jump. If I look at myself now, it really comes down to being disciplined and a lot of good habits. Like I said, I say no to more business today than I ever have. I am 100% focused. Property management is my life. If it's not in property management or in my sphere, I'm not interested. I don't have time for it, I don't make time for it, and I'm very blunt with that. I have an extremely tough schedule that I follow. I do a lot of stuff for myself personally, and then that translates over to the business side. I know where I'm going. It's kind of fun to where you'll have other guys or people that'll come in and say, “I got these cool opportunities, I got this, I got this,” I'm like, “Cool, good for you. I hope it works.” Me? I'm not interested. I got my path and I know what I'm doing. Jason: Yeah. I did hit up for opportunities all the time. Different property management there's like, “Hey, we could do this cool thing together.” I’m like, “No, we can't.” Focus is power like with anything. You could be a flood light or you could be a laser and actually cut something out in your life and achieve something. All right. Can we touch on your book a little bit? I read through it. I think there's some interesting ideas in there. I don't know where we should start, but you've got this book, you call it The Doorpreneur: Property Management Beyond the Rent Roll. It's a quick read. I think it's a good read. You share a little bit of your journey and some of the things you've gone through. I think we've done some similar things. I'm going to quote a part of it. It says, “We are the problem and we are the solution.” You were talking about how property management had a bad rep because we're allowing it to. I think that's the case. Everyone who’s heard of me, if they listen to my show at all, talk about the cycle of suck. If you haven't, just google “Property Management Cycle of Suck” and you'll find an old video I did on it. I think that the industry as a whole is that's where they are. It's caught in the cycle of suck. It has a bad reputation because everyone's taking on bad owners, and they're taking on bad properties, and they're not being picky, and they feel all the scarcity. Everybody's trying to do the same stuff that's not working which creates false scarcity in the industry and there's no scarcity in property management. You said that you believe the industry's time has come. What do you see for this industry? You say it's on the brink of change. I feel that, too. I feel like there's a shift going on right now. I'm hoping that DoorGrow is helping to push that forward. What do you see for the future of property management? Tony: Just over the last few years, I would say probably in the last 4-5 years, I will say that you’ve had a part in this in terms of, you're starting to see a lot more people get together and talk about property management, and not just NARPM. I know that’s a big organization in the States, but in order for an industry to really take over, I believe it's got to go beyond just the regulation of the groups that are that are like that. It's exciting to see a lot of that happening, whether if it's groups online or different organizations, all sorts of cool stuff. But I'm also seeing that the opportunities that are becoming present in all these different places are becoming much more attractive to different people. It's like you're seeing the density being built in a lot of different cities—the rise of renting out in this whole generation of millennials—in terms of it being a renter's nation. That is providing a good foundation for a lot of required property managers to come out here and start managing these properties. The tools are getting better. They're not amazing yet, and I'm speaking in terms of technology. Those things are getting better over time. But more and more, I'm seeing the property management is getting away from the old school that started in the business 30, 40, 50 years ago, and you're seeing a new breed of property management come into the picture, which is they’re a lot more professional, they're running real businesses, it's not just a side gig from a realtor, or it's not just this big owner that owns a big portfolio and he decided to manage a few places on the side so he can make a few bucks and pay for him running his own stuff. They're seeing legitimate people, business people coming into the space and making a run at it, and that's what we need. We need professionals coming in and we need professionally-run businesses. More than ever today, I'm seeing and talking to a lot of people that are running greater businesses and it's exciting, because I think the opportunity is huge. But it's also at the same time somewhat limited because I know I've done this long enough. I've been around it my entire life. This business is tough. It is not for everybody. We're going to have the turnover that's going to come through and hopefully the good will stick and make the business better for everybody. Better first impression of the business, better for us working in the industry, being able to grow together, and making it all better together. Jason: Yeah. I think that the way to change the industry is obviously to have healthy businesses. Healthy business owners in this industry, leading the way, and they have to be profitable. I think also there's a huge opportunity right now in that, millennials are the workforce largely. I think a lot of people, they’ve gotten a bad rep. A lot of people think they're lazy, they’re unmotivated, and I find that to be patently false. I think millennials are our new generation of workers that don't want to do menial work. They don't want to do something without meaning. I think this is a huge opportunity for business owners that are not acting like dinosaurs saying, “I'm paying you to do something so just freaking do it.” Those are the dinosaur dictators that think, “Well, I give them money. Why don't they just do everything amazingly?” Millennials want purpose and I think there's an opportunity now for business owners that believe they have a purpose, that there's a greater vision for what they do. You touched on that in your book. I talked quite a bit about that as well. People have heard me say, “I believe good property management can change the world. It can have a significant impact. We’re affecting families. We’re affecting lives.” I could have that impact through my clients, which is what gets me excited about showing up helping property management business owners lead the way and do good work. They can't do that if they're struggling. Tony: Yeah. The biggest aha moment I've had in my career with Ground Floor, my management company, was four years ago. We had an offsite meeting with all my staff. We’re about 50 people with all 3-4 different companies. I was looking at the rent roll, I showed it to everybody on the big screen, and I'm like, “We've got 2000 apartments,” roughly it was right around there, that we're almost full all the time, “and if I take an average, we’ll probably have around 3000-3500 people that live in properties that we take care of. Guys, we matter. You cannot not look at that and how important of a role we play in day-to-day life for close to 4000 people.” I'm like, “That's pretty special.” Like I explained in the book, we’re a part of all sorts of experiences for these people. We've seen deaths, we've seen births, we've seen marriages, we've seen plenty of divorces, we've seen it all. It happens underneath our roofs. Again, I grew up in the business, I've seen it all from a personal standpoint, and now I've seen it all from running a business. There are no ifs or ands about it. It's a special business. Jason: All of those different situations require some activity or involvement with the property manager. I mean, even if it's just maintaining the property and doing some maintenance, it's affecting these families lives, and it's affecting these sometimes challenging moments that they're going through. Those interactions can be positive, helpful interactions, or it can deepen their words, they can cause more pain, and the ripple effect property managers have is huge. Property management is death by a thousand cuts. It also can be a ripple effect of a thousand possible positive interactions on a regular basis. I know property management can be tough. I hear about it all the time. I know how difficult it can be to run a business. I know that. Every entrepreneur knows that. It doesn't get easier the bigger you get, often. It can sometimes get more challenging. But it makes it worth it when you have somebody that comes to you and says, “Hey, you made my life better,” or, “You had an impact,” and those little moments we don't always hear about them, but when they do come through, they do. That’s why we do what we do. Tony: Yeah. I think a lot of property managers will be able to agree with me, that there's an old saying that the phone never rings with good news in our business. If someone’s calling, it's usually something bad on the other line. It’s either a complaint, or an issue, or something. It’s almost like you have to come into the office each day knowing that you may not get a million praises from the outside, and that's why the office environment is sacred for you and your staff, for the people running the business. I just hired a new girl a few weeks ago and I'm very honest and transparent during our interview. I was like, “You're new to this industry and you are going to struggle. It’s going to be really tough. It’s going to test you emotionally. It’s going to test your ability to deal with a million things going on at the same time, it's going to test you in every way possible.” I asked her the other day, she’s going on her third week and she's like, “I knew it was going to be tough, but I didn't think there would be so much that I had to learn,” but the office environment is such a way that we're very much a team, we help each other out, we have each other's backs. If there's a difficult situation, other people step in. You really have to have that environment because it can really help the overall business. If not, it can get in get a little lonely. Jason: Yeah. The turnover in property management businesses regarding staff can be pretty high. I think one way to mitigate that is what you're talking about, it's creating a really positive culture, a safe place within the business, a place in which your team members are allowed to make mistakes, they're allowed to screw up, and they're allowed to figure things out. Otherwise, they start hiding stuff. Tony: And start costing you money. Bad mistake. Jason: I think it's important to realize, a lot of times in any business, the people that are really attacking or really causing you grief, are hurt people. They're hurting on the inside. It's not even really usually about you. We were talking about before the show how I've been really attacked lately in some forums and some groups. I have several people messaging me privately and lots of people that message me like, “Hey Jason, you don’t deserve this, you’ve done a lot for us,” and it's ironic because in property management, we deal with this. Everybody gets these negative reviews. They feel unjust and unfair, they didn’t give the deposit back which rightly so probably, you're being attacked, and these people have nothing better to do than just try to destroy your business. That's just part of being in business, I think. In general, you're always going to have haters. The bigger you get, the bigger the target is on your back. You just have more people that you're dealing with. I definitely got a target. You dealing with 4000 maybe potential constituents connected to your business that you're impacting, all the owners, all the renters, everything, you have a big target, Tony, on your back. Tony: Yeah. It's overwhelming in the best of days. That’s probably one of the, I would say, either the first or the second biggest problem overall arching in this industry is how do you deal with the overwhelm of dealing with so many different things. If we were to count all the different balls that we’re juggling in the area at any given time as an owner even as a property manager, it's a lot. That's why I've gone to the depths that I did with the book in terms of putting the importance on lifestyle, in terms of installing good habits, in terms of being healthy, working out, just simple things because if you're going to go in this industry and you're going to make a run at it, you got to be firing on all cylinders. A big part of that is your body, your relationships at home, your relationships with your kids. You got to go into the office with a clear mindset. If not, it's going to be rough. I've walked in the holes in my office on many days after either having an argument with one of my kids or having an argument with my queen and that's like, “I can't do anything in here. I have zero patience and I just want everybody to stay away from me.” That's not a way to run a business. Jason: That's how I would feel if I'm hungry. That's how I would feel if I didn't get enough sleep the night before. We tend to start externalizing these challenges. That's why even people coming to my program they're like, “Well, I wanted to grow my business, why are you having me focus on some of the silly stuff like drinking water?” I get picked on about some of those things but I know the impact that it's had on my own life to get the basics in place and have that foundation so that you can tackle the world. We have one vehicle in which we approach everything in life and that's our body. Tony: Yeah, absolutely. Jason: Our current ability distinct cognitively, to function, to be able to deal with stress, be able to see objectively, to be able to handle all the stuff that gets thrown out as a business, to be able to see alternatives and ideas, all of it has to do with our brain and being able to function on all four cylinders or however many you might have. Tony: Absolutely. I'm a true believer. I've always been an athletic guy. 2019, I've taken it up a notch and done some other things. Jason: I've noticed. Tony: Yeah. It's funny because 8½ months getting ready for an Ironman, I made more money in that eight months than I probably did in the last two years by just condensing the amount of time that I had and the focus that was required to do it, and to pull it off. I still look back at it and like, “How did I do that?” and I'm still digesting it all because it’s still fairly new, but it's taught me so many lessons that I'm going to be able to take forth with the new stuff that I'm doing. The very first video that I made to get ready for my Ironman training and it was January or February, it's like I'm doing this because I need to become somebody different in order to launch this book, to write this book, to finish this book, and to grow beyond the book. It was amazing. It was a journey like I can't explain Jason: I’ll point out one thing that's very obvious to me because I've seen it in you, I've seen it in a hundreds of entrepreneurs. When we create constraints, when we have constraints, when we're limited in our time or limited in our attention, we innovate. That's when our brain starts to really fire and we get really, really creative. It's the same thing with our team members. If you give them unlimited time to do something and unlimited resources and money to do something, they're going to do it in the most costly, time-sucky way possible. But when you create constraints and having a goal of doing something big like an Ironman, where you're going to put your body to some massive stress, you have to be prepared for that, and you know what it's actually going to take, then it gets really difficult and it creates constraint. I'll point out to everybody. I've seen this in lots and lots of businesses and I've seen in my own life when we have constraints. You don’t notice, you come up with ideas when money get scarce. When you have a team member leave, all of a sudden, you're changing things that they've been doing a status quo forever. A lot of these challenges that we perceive as challenges really are opportunities for us to innovate and to grow and to change. I'm not sure if Tony will make it back here, but I'm sure Tony would love for you guys to reach out. Tony, I'm going to plug you. He's got his book, Doorpreneur, and I recommend you check that out. You can go to doorpreneur.com You can preorder it now. Make sure you get his book. Check it out. I think there's some really great value. It's a quick read, it’s only 125 pages, and I think you'll really enjoy it. He's got some previews of the first four chapters on his site doorpreneur.com and it looks like you'll be able to get it on Amazon and in some other places. We'll go ahead and wrap this up. So if you are property management entrepreneur, and you are wanting to add doors, and you are wanting to get your business in alignment, and you are wanting to create that space for yourself, you feel like you're the hamster on the treadmill, then reach out. You can check us out at doorgrow.com.

Freedom of time, money, relationships, and purpose is what we all want. Property managers, realtors, and investors help clients build wealth through real estate.  Today, I am talking to Steve Welty, owner of Good Life Property Management business and podcast. He enjoys meeting amazing people and indoctrinating listeners with his philosophies.  You’ll Learn... [03:23] Stop whining about solvable issues, such as online reviews to get warm leads.  [04:41] Steve surfs to success with Good Life Property Management.  [06:43] Podcast Passion Project: Do content for content's sake; add value to people's lives for opportunities and connections to come your way. [10:19] Don’t lose focus on why and what fires you up; limit time and effort spent on your business to achieve outcomes. [15:00] Purpose of Business: Not to make money; build a business that makes money.  [16:25] How to be happy: Create momentum for other people to gain momentum. If you wish to become great, learn to become the servant of many. [18:12] Zig when they Zag: Success outside outsource sandbox to reduce costs.  [18:55] Results-based Biz: Hire young, smart, motivated people and leave them alone.  [19:31] Big Issues, Big Success: More people can lead to more problems; paint a compelling vision to keep good people and let them do what they want to do.  [20:10] Move Out and Outwork Others: Create freedom of time and money by hiring CFO or profit first coach/accountant to offer advice, not control over finances.  [26:10] Value-add Revenue Sources: If you don't charge for it, you're doing it poorly.  [28:25] Opportunities in Other States/Markets: Pop-up shops to buy cash flow property.  [29:05] To Die List and Time Study: Procrastination problem property managers and owners experience.  [35:00] Barriers/Protections: Teach team and customers how to treat and reach you.  [37:35] Opinions vs. Observations: Co-creation/coaching is transformational and transactional superpower that changes lives.  [46:45] Give up control and allow people to fail, or you create an unsafe business.  [52:30] What Matters: Million ways to get to end results and outcomes.  [54:05] Hire and Fire: Center on core values; be reliable, positive, and go-giver (RPG). [57:10] Epiphany: Everything worthwhile lives on the other side of fear.  [1:03:05] Money is one side of it. Easiest decision to make is to be a different person.  Tweetables Do content for content's sake. Limit time in your business; achieve outcomes with least amount of effort. Add limitations or constraints to create a necessity for innovation. First key to greater time, money, and purpose is to create space for yourself. Resources Steve Welty’s Email Good Life Property Management Good Life Property Management Podcast Steve Welty on Spotify Steve Welty on Apple PM Grow Orange Tree Property Management GatherKudos National Association of Residential Property Managers (NARPM) Brad Larson Gary Vaynerchuk The 4-hour Workweek by Tim Ferriss Todd Breen Making Money is Killing Your Business by Chuck Blakeman How I Built This with Guy Raz Let My People Go Surfing by Yvon Chouinard  Voxer Jason Goldberg (Strategic Coach) Extreme Ownership Book E-Myth Book The Go-Giver  KingJasonHull’s Whimple on SoundCloud DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube DoorGrow Website Score Quiz Transcript Jason: Welcome DoorGrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you're open to doing things a little bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners, we want to change the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull. The founder and CEO of DoorGrow. Now, let's get into the show. Today's guest, I’m really excited, we’re hanging out with Steve Welty. Steve, welcome to the DoorGrow show. Steve: What’s up Jason? Good to be here. Jason: Steve and I were reminiscing. I saw Steve at a broker owner conference, the very first one I went to several years ago and we were sitting at the same table and I guess I said hi to you and we were chatting it up. Steve: Yeah. It's funny, I remember that day very vividly and it's interesting because I have a very poor memory. You were the mysterious man behind me and you were dressed really nice. Jason: I don't dress nice anymore. I'm too lazy now. Steve: Yeah, you're just soaking it all, but we were talking before the show, was that really one of your first conferences? Jason: That was the first conference I'd gone to, yeah. My dad had just started property management business. He's got maybe about 200 doors now, but he had just started a property management business. He had been a hospital administrator for 30 years or something and he said, “I'm going to do what Bryan’s doing and start a property management business.” My brother has got maybe 1000 doors or something like that and he is out of Orange County. Not too far from you down San Diego. He thought, “Bryan’s doing it, maybe I could do this too.” He decided to become an entrepreneur. Caught the bug. It's been fun to watch that, but I was like, “Dad, let's go do this. I want to see what happens there. The only way I can go is if I'm with you, you're a broker owner.” I was his director of marketing and I was just the fly on the wall for Orange Tree Property Management, just checking out what goes on a broker owner. I just want to see what happened there. It was challenging for me though because the entire time I'm hearing people talk about problems, and challenges, and I'm just biting my tongue the whole time. I’m like, “I could solve that challenge. I can help with that.” I just had to sit there and be quiet. I've even got a text message from one of my clients that was sitting in the room and he said, “I'll bet this is just killing you right now,” I texted him back, “You have no idea.” It was just really funny to hear people whining about stuff that I think is solvable. Steve: What was something out of all those issues you're biting your tongue about that you can reflect on today. Jason: Now you’re interviewing me. Steve: I'm interested to hear that. Jason: I remember one of the things that really killed me was people were like, “How do you deal with your online reviews? How do you get more positive online reviews?” We have our system GatherKudos, and we have coaching material around that that we’d go through with clients to figure out how to identify peak happiness, leverage a lot of reciprocity, how to get more reviews, how to build a system in your business as part of your onboarding process with new tenants so you get more reviews. I think that's a better system to have than even most marketing systems, because that creates warm leads. I was just sitting there listening to them talk and some of the ideas were, “We're okay, we're good,” but I was like, “This is so solvable.” Steve: Reviews are still a big issue, six years later or whatever it is. Jason: Correct. Steve: People still can’t figure it out. It’s tough. I still try to figure it out on a daily basis. Jason. Yeah. Cool. Steve, you've got an awesome property management business. You've got your own podcast that you do. You've got a lot of stuff going on. Help my audience understand who you are and give us a little bit of background on Steve, your adventures in property management, and how you got into it. Steve: For sure. I graduated from San Diego State 2005 and stayed in construction for a little while. I was working with constructions in college, just bumming around, surfing, and doing whatever I was doing. Got my real estate license finally and did some deals 2006-2007. I hear a lot of stories like this, it’s like 2006-2007 sales, all of our sales, we should start a Facebook group for sales guys that flamed out, well I think it is, it’s probably called than NARPM of Facebook group. It seemed like everyone has that story. I made some nice checks in sales and I thought I was great, and then I became broke very fast. I was 26-27 and I was broke. I was applying for any job that I could get and I went to work for a French entrepreneur in Carlsbad as a personal assistant. He wanted someone to manage his property manager that had a real estate license because he didn't trust his property manager. Jason: Okay, so you were the spy that was going to monitor whether he was doing his job or not. Steve: Yeah, most managers hate it when the owner micromanages you. Imagine a realtor micromanaging you. I was like, “Yeah, I can do that,” I never managed anything in my life, but I figured it out and worked with him. He actually taught me some great business lessons looking back, but two years in, it was very stressful working for him. He was not the nicest guy, but he did teach me a lot and then I went out on my own with a business partner at the time. We decided, “Hey, let's start our own management company and just got it enough off the ground to allow me to quit my job, be on property management with my partner I think in 2008. We grew that until about 2012 and then we decided to part ways. I started Good Life in 2013 and then been doing Good Life ever since. I started the Good Life Property Management podcast which has nothing to do with clients, nothing to do with getting new customers. It was really a passion project and something I learned out of that was that I encourage people to do content for content's sake if their heart tells them to do that. A lot of times we try to figure out, “Well, how am I going to monetize that?” I remember when I asked Brad Larson, I think he was one of the first people to do a podcast that was a property manager. I was like, “What are you doing this for?” and he was like, “Oh, it's fun,” I was like, “It didn’t make any sense, you're wasting time.” When you add value, like Gary V—a lot of people have really put this in the forefront—when you add value to people's lives, opportunities come your way, connections come your way. I have so much fun doing the Good Life Property Management podcast and we serve the same community you serve which is property management entrepreneurs. I don't run ads. I have ran ads in the past, but I don't anymore. I don't necessarily get anything out of it other than just meeting cool people and getting to indoctrinate my listeners with my philosophies which are really along the same lines in a lot of ways as you, Jason. I really resonate with your manifesto in a lot of ways, so that's cool. That's it. I'm big into music. I do a lot of music. Steve Welty, I’m on Spotify and Apple, and that's my passion. I'm going more and more into that. Also, we have tried mastermind for property management entrepreneurs to max out their business and life. That's what's up for me. Jason: Cool stuff. I think we have a lot in common. Not only are we both California guys. A lot of people listening may not know this, but I had a band in college. I wrote all the music, I played guitar. I didn’t know I was an entrepreneur then. I didn't know that was in my blood, but I was the guy going door-to-door with a guitar and a clipboard pre selling CDs at girl’s dorms that I could fund to self-produce an album, and I was playing music. Steve: That’s [...]. Jason: I know, it was pretty crazy. The album is on SoundCloud if people are searching for it. Steve: Let’s check it out, what’s it called, how can we find it? Jason: My username on SoundCloud is my username everywhere, which is KingJasonHull, and the album is called Whimple, that was the name of my band. Steve: I love it. I think you told me that a while back, but I forgot, but I'm really fascinated with that because that was my story, too. I was a songwriter. That was hustle. I give you street credit like going dorm-to-dorm, playing for chicks, that's pretty cool. I thought I was going to be a rock star. That was my deal, but it's so funny looking back. I didn’t even practice. I just thought I have the natural talent and I used to drink a lot so I was probably delusional. I had this moment, this crossroads where I was like, “Okay, you're not going make it,” I'm not going to be okay being older and broke, so I'm going to go on a business route. I just gave up music completely, and then I was in a strategic coach workshop. I have given it up five or six years and I met this entrepreneur. I was telling him about my story. I was like, “I don't really play music anymore,” and he's like, “Oh, that sucks.” I’m like, “Yeah, it does suck.” Then he’s like, “Well, you have a guitar in your office don’t you?” and I was like, “No.” He’s like, “Well you’re the boss, aren’t you?” Jason: I can see it right behind you. Steve: Yeah, right now I do it. He’s like, “You’re the boss.” I’m like, “Yeah.” He’s like, “Well, why don’t you try this, try just putting a guitar in your office. Just make a commitment to picking it up once a day even if it's for one second.” It really resonated with me because I had given up a part of myself that was really important because I think a lot of time as business owners, we just get so focused on like, “We got to make this company work,” and we’d lose focus of why and what fires us up on an internal level. I did that and that about two years ago, fast forward to today, I'm putting many hours a day into music, into song writing, into recording, into building my audience and it's helped my business so much because when you limit the amount of time that you're in your business, you can only do the things that you're really good at and so that's what I'm really passionate about, is figuring out how can I achieve an outcome with the least amount of effort possible. Jason: Yeah, because when we add limitation or constraint, it creates the byproduct of limitation or creating a constraint is it creates a necessity for innovation. If you have unlimited amounts of time, unlimited amounts of money, unlimited whatever, there's no innovation because it's so easy to be lazy. It's so easy to just let things unfold in a different way, but when we have some time constraints or we have some financial constraints, we have to get creative and that's where the genius starts to come out, that's where new ideas start to come out. I've noticed that even with team members, if I say “I need this done by this time,” they get creative or if I need this done under this budget, they get creative, then they start to innovate. If I say, “Yeah, do it whenever, take as much time as you want, spend as much money as you want,” there's no innovation. They're just going to go towards whatever seems easiest, which is the status quo. Steve: Yeah, you nailed it. I've been really interested in constraints. I had a son, my first child, he’s six months old, Myles, and I was encouraged by a friend of mine. He said “Take 30 days off, Steve,” he's like “It'll be the best thing you ever did for your business. Don't check in, don't do anything. Take 30 days off. Be with your son.” It was in December, so it was like the perfect time and so I did that, and man he was right. It really levelled up my business, my team got way better. They were already good, but just putting these things into place that force you to grow. That 30 days off was huge. Next year I'm planning a 60-day trip to another country that I’m really passionate about using that. I even got my operations manager. He doesn't work out of the office anymore. I moved out of my office a long time ago because when you're in the office, you are often the bottleneck for your company and everyone comes to you for the answers and the solutions. I really grabbed on to that concept and constantly looking for new ways to use constraints to my advantage. Jason: I love it. It's been awhile since I've told the client to do this, but a lot of clients will ask questions like, “How do I become a business owner instead of my own best employee?” I would tell them, “You just start doing it. You take a vacation.” If you schedule a week-long vacation, if you're not taking vacations, for those listening, you schedule week long vacation and you can't take off a week, you're going to have to figure out how to make everything not fall apart for that week. To go 30 days, that's incredible, 60 days is ridiculous, that's pretty awesome. At that point, you've arrived as owner of the company instead of being your own best employee. I noticed when I would take off time or vacation, I would be surprised by how my team would step up. I'd be surprised by the things leading up to that vacation, more would get done than would get done sometimes in months. There are so many little things that you need to get dialed in. “Oh my gosh, they’re going to be gone for a week. How are we going to live without Jason? We got to get this.” My team would say, “Hey Jason, I need this,” or, “I need to access to this,” or, “I need to know how to do this.” Suddenly everybody's rallying around this idea of taking some stuff off your plate because they need to be able to make sure things don't break and it creates the possibility for you to do that more or forever. Steve: Yeah, and I think its baby steps. I remember when I first read the four-hour work week. I thought Tim Ferriss was a god. I was like, that makes no sense. Jason: Did you almost move to Thailand? Steve: Close, but no, it was just really interesting. I guess from a personal level, having time was even more appealing than being a billionaire I guess to me personally. When I see people like Todd Breen and other people talk at NARPM that would talk about running your business from the beach or not is just very appealing to me. I wanted to grow a self-managing company and it was baby steps. There's this book called Making Money is Killing Your Business and they say it really why. It says the purpose of the business is not to make money, it's to build a business that makes money, like time and money equals wealth. Your business should throw off time and money. Now, if you want to then use that extra time to just pour more time in your business, doesn't mean you got to go live on a beach. You could do other adventures. For me, what's really worked and what I'm super blessed to have now is that it's created space in my life to actually start cultivating the other things that light me up, like music, other things. It gives you those options, but that's what I think in our industry especially in a lot of industries, we want to help people, help them anyway we can to experience that. Jason: They say, “What the world needs is people that are alive” I think as entrepreneurs that's where we feel. We want momentum. That's what we crave. The rest of the world, they're just trying to figure out how to be happy. “If I could just be happy then everything would be great.” It's whether they're happy or sad, depressed or excited, but for entrepreneurs, I feel like our two speeds are momentum or stuck, that's it. It’s momentum or overwhelm. We either feel like we're in complete overwhelm, we’re stuck, we can't move forward or we’re frustrated, or were on fire and alive. That's my version of happy or sad. I want to feel like I'm in momentum and I feel like as entrepreneurs, we get momentum when we give it away. When we create momentum for other people, whether it's our clients or the people in our family, the people around us, when we're creating momentum for other people, we get that sense of momentum, too. Steve: Yeah, and that's something I resonate with and I’ve heard you talk about it Jason. I love that message. I really think that the blue ocean is caring about people more than anyone else, like proactively putting the people in your life in the forefront, figuring out, “Who do I want to be a hero to?” and being a hero is usually used in a reactive way. Jason: Right, like there's a crisis or a problem, now you're going to be a hero. Steve: Right, as opposed to being a proactive hero like spending time and saying, “Okay, who are the most essential people or buckets or groups of people in my life and how can I serve them more deeply and impactfully today,” because the best quote of success I've ever heard is something like become a servant of many. If you wish to become great, learn to become the servant of many. I sometimes get a little jaded in certain groups because you constantly hear the feedbacks, the reduce the cost, the get it all out sourced. I use VAs, I look to reduce cost, I look to get fair fees, so I'm not knocking that, but everyone's playing in that sandbox. I'm very interested in seeing what is everyone else doing and how can I do the opposite because that's one of the ways to become successful that I've learned is that you go zig when they zag. That’s cliché. You can't do that when you're buried in tenant complaints and one-star reviews and a team you have to micromanage. I'm a big believer in hiring young, smart, motivated people and leaving them alone. We're a results-based company at Good Life. You can work from home, you could bring your dog, although actually our manager of our building said we can't anymore. I don't really care, with the exception of a couple like the front desk needs to be there in case someone walks in and things like that, but do your thing. There's a great podcast I heard yesterday on how I built this with Guy Raz where the owner of Patagonia wrote this book called “Let Them Go Surfing” and it's all about that. I think our biggest issues once we get to a certain size is people problems, and then we don't know why we can't keep good people, it’s because we don't paint it in a compelling vision. We micromanage. We don't let them do what they want to do. We try to fit corporate bureaucracies into the more entrepreneurial company that people want to be a part of these days. Would you rather follow just checklists and not have a future or would you rather be able to create your own future? Like I tell my team, “You can become anything with me. The sky's the limit wherever you want to go.” So, I think those are big parts of success. Jason: That's really what we're talking about today. The topic is freedom of time, money, and relationships through better business practices. What are some of the practices that you've implemented at Good Life that you feel like you've created more freedom of time and money? Steve: It starts with the business owner and probably a series of game changers. The first was moving out of my office. I had this epiphany and I was taught this by someone and I told the team, we had a meeting, I said, “I apologize. I've stood in the way of you guy’s future and I apologize for it. When I'm here, I'm the bottle neck. I'm stunting your growth. You can come to me for all the answers,” and the fact is as entrepreneurs if you serve 100 people and say, “Where do you do your best work?” nobody says at their office, who does the best work at their office? Why are we working out of our offices? It's just because that's how it's always been done. I kicked myself out. I don't have a desk at my office on purpose. I used to have the stereotypical nicest office in the corner with the best view, and then it freed up so much space, it helped my team grow. Once I created that space, now I work out of my home, and the first key to greater time, money, and purpose is to create space I believe, for yourself. I came from a place where three or four years ago, my dad always taught me outwork everyone else. I remember one time he came to visit me at a college and he asked me how much I was working, I said about 60 hours a week. He’s like, “60 hours? I work 60 hours, I'm retired. What the hell is wrong with you?” Jason: Step it up Steve. Steve: Yeah, and it's great. I love my dad. His work ethic was the reason I'm here today, because it got me to that. There are seasons of life. I knew there had to be a better way, so when I'd made that decision to move out of my office, I said, “Hey, you guys are going to have a bigger opportunity to move up now.” Some of the other things we did was hiring an operations manager. That was huge. That created space and that was something I look forward, and it took me probably eight or nine months to pull the trigger on that, but the operations manager was huge. Slowly but surely, I went from just being stressed out all the time, not having any space in my life. An over-scheduled entrepreneur has no time to transform. I said, “Alright, I'm going to create some space,” and then all the ideas and all the answers start bubbling to the surface because spiritually we all have all the answers inside of us, just we’re so distracted and so just going that we don't allow it. Jason: We’re preloaded, we're in fight or flight, we're up in our monkey brain, and all the great things, our greatest geniuses as an entrepreneur can't bubble up or can't come through when we're in that state. Steve: Exactly, and so that's time that just forced me to get more time because as an entrepreneur, you can make that decision. Jason: We’re buying time. Every person that we pay on our team, we’re buying time. That's what we're buying. I think the mistake we make as entrepreneurs, a lot of entrepreneurs I see, they go hire based on an org chart. They don't hire based on what they personally need in order to off load or get themselves out of the things that they don't really energetically enjoy. You getting an operations manager if you're a visionary entrepreneur is brilliant, because that's like the yin to the yang. It's the exact opposite personality type of the driven entrepreneur is to have somebody that is systems-minded, process-minded, and that can make sure everything's running. Generally, us entrepreneurs, we’re terrible managers. We think we're great at everything, but we're really terrible managers and usually the operations manager is much better at making sure everything runs smoothly. Steve: It's hard to take off or get more time initially if you don't have the money. The money component is important. I went on a Mastermind trip to Mexico a few years back with a handful of people and we looked at everyone's P&L and that was one of the biggest game changers for me was not only understanding my numbers. I think everyone needs a CFO at least part time or at least some outside eyes on the business is so important. Jason: I have a profit first coach and accountant. I'm not really a big fan of having a CFO in a business. Usually, my take on it is every story I've heard of embezzlement or of challenges it's always like the CFOs, and so they're also the crusher of all hopes and dreams. I don't want somebody making too big of decisions there personally, but I want to be coached, and I want to have input and I want to have insight from a third-party perspective, but I don't want them to have control over my stuff. Steve: Totally. I get that. I don't have a CFO, we use a profit coach. Jason: Yeah, similar thing. Steve: Right, but I found that I wasn't going to build a business I thought I was going to build because I'm a feel guy. Like I learn by doing. Does this feel right and I’ll make a decision, but I make decisions very quickly. I'm a high quick start, so I'll make 10 decisions, eight will be bad, two will be great but in the same time that someone else makes one decision. I sometimes can stay a step ahead, but I had to add some revenues and I wanted them to be value-added revenue sources where everyone was a win-win-win, so things like doing inspections better in charging for them. When you don't charge for something, you usually do them poorly. Every manager that doesn't charge for inspections, I guarantee 90% of you are behind on your inspections. Jason: Let's say that again. I like that concept. If you don't charge for it, you're probably doing it poorly. Steve: Right. I'm a believer in this. Just take inspections for example. You go survey people around NARPM or any property management group and everyone's behind on their inspections so they don't do them right. We send a letter to our clients. We said, “Hey, inspections are actually really important. This is when we identify how well the tenant is taking care of the place is when we get out in front of preventive maintenance and it needs to be done well, so we need to hire someone to do this full time and we want to invest in this X amount we charge. It’s going to probably save you three times at least that amount by getting out in front of some of this stuff,” so that was a win-win and our clients loved it. Maybe they didn't want to get charged initially, but once they saw the improved inspection, once they saw the improved communication and results, that was a big win. Then just some other ones that we added in. I think you got to keep the investor fees-friendly. The worst thing we can do as managers is fee our owners to death and they’d get out of the business. Ultimately, the freedom of time, money, relationships, and purpose is what we want, but it's a human need. It's what your clients want, too. So, we have a unique position as property managers, realtors, and investors ourselves in a lot of cases to help people build wealth through real estate. You're a manager and you make it easy, because if you don't make it easy, they burn out and they sell, but if they hold that house specially in San Diego for 30 years, that’s all you have to do and you've set your family up for life. They burn out, so we have a big position, a big part to play here. Jason: I love it, and I love that it’s like a mantra, having others build through real estate, and ultimately what property managers could be allowed towards doing. It’s not just managing a property. If your interests are in line with theirs, which that's their goal. Their goal is to build some wealth, otherwise, why would they be holding on to that property. Steve: Exactly. There's different ways to do that. Right now, we're looking at some other states to buy cash flow property and figure out how to have our owners follow us into some of these other markets. I think with technology these days, that's what all the venture people are doing, how to just pop up shops anywhere. That's something that's exciting to me right now because in San Diego it doesn't make sense to buy an $800,000 house that rents for $2800. We're sitting on some stuff when the market turns for San Diego, but yeah, there's different opportunities out there. Jason: Alright, cool. What should we talk about next? Steve: You know what I'm interested in? I actually thought of this today, and there's some things I've been thinking about doing that I procrastinate on. You know the saying… Jason: I think every business owner can say that. Steve: I know right? Jason: I call it the to-die list. We all have to do list of stuff. Just last week, I have my weekly commitments and I realized I was carrying all of these things over from week-to-week. I'm the guy that says to my clients, “If there's anything on your to do list for more than two weeks, you're not the person that should be doing it.” That's the problem. Yes, we all tend to do that as entrepreneurs. We tend to hold on to things instead of finding the right person to do them or giving it up somebody else. Steve: That’s so true. Jason: Talk about the to die list. Steve: Yeah, the to die list. I was thinking about this today. Two examples of things I have been procrastinating on. One, I don't want to answer email, anymore. I literally want to have email leave my life. I have gotten email down to just like 10 minutes a day at the end of the day, have an assistant, but literally that is still bugging me. I once got this really inspiring auto responder from this really smart cool guy, let’s see if I can find it. Jason: I don't deal with email anymore? Steve: He said, “Thank you for your message. Perhaps you are overwhelmed by email. In fact, last year I sent 43,742 emails, read and review countless more so in order to serve our stakeholders much more efficiently, I have asked my highly capable assistant that’s in New York to review, assign and reply all my email request moving forward,” and then it says some other stuff. That's something I want to do, but it's big and scary, and yeah, I know I'll probably have to respond to some emails, but I'm talking about eliminating it more. I'm like, “Why don’t I just try that? Why do I have to make this decision I procrastinate on forever? Why don't I just try that?” I think it comes back to we don't want to fail like that, we're always raised with, “There is no try, it's to do or die,” or whatever. You don't try, you either do it or you don't, but it's like, “Why can't I just try that? I have an assistant. Why don’t I run that for two or three weeks and see how it goes?” The other thing and I'm sure you've probably thought of this, Jason, is like Gary V, having maybe a semi full-time person doing vlogs, recording not just every few days, like every day. I'm just sitting on that and I'm like, “Well, why don't I just try it for like a freaking month?” I think there's so much possibility with that and I wanted to see what you thought because I'm like, “I don't have to commit to it.” There's so much stuff. Even hiring someone. I was thinking about hiring a GM or an operations manager for eight or nine months. What if I just said, “Hey, let's try it.” I mean this isn’t Canada or some other places where I don't think you can fire people. Try it, hire the person, and if it doesn't work out, let them go. Jason: Yeah. Let's go back to the email and then we can go the other thing. Here's how I identify stuff. I mentioned this on the previous episode, but I personally will do a time study probably about once a quarter and if I bring on a new team member that takes something off my plate, because how I identify what I need to get off my plate is by doing a time study. I have to be accountable. Where's my time actually going and which things are low dollar an hour work, which things are things that I don't enjoy. I actually write a plus or minus sign next to each thing that I'm doing, whether it energizes me or it drains me, and then identify the things that are tactical or strategic, things that are self-care versus family time. I have a whole system, I take clients through for doing time studies. When I do this, that helps me get clarity for what I need to get rid of. I gave up email a long time ago because I hated email. It was always a minus sign, it was always tactical, it was never like my hopes and dreams were coming true when I was writing an email. I don't even look at my email. So, if you've emailed me, I'm sorry, I don't look at it. My assistant will take care of the email. She reads it. If she has any questions, she sends me a message through a walkie talkie app, because I don't want to type to her. She'll send me a voice message through Voxer. We use Voxer and I use it with coaching clients, she will send me a Voxer voice message and say “Jason, what do you think, how should we respond to this email. They're asking this.” I say, “Just tell them this, this and this, but say it nicer than I just said.” Then she’ll take care of it, and she's asking me questions throughout the day. We also do daily huddles as a team and that's usually where she gets most of her questions in. I say, “Is anybody stuck on anything?” She's like, “Yeah, did you get my message about this?” “No, I wasn't paying attention.” “Okay, what do you need?” I answer it and she can respond to the email for me. She's gotten really good at understanding over time, she gets better and better at knowing my voice, knowing what I would say and she takes care of more and more and more. Every day she'll give me a short list, “Here are the emails I don't know what to do with. You need to take care of these,” and I begrudgingly will deal with them within a day or two. That's how it works. [...] then I’ll talk with them and move them forward, but outside of that, usually she hands it off to my team or has somebody else in the team deal with it. If it's support-related, I think most of my clients have learned that they're not getting a fast response by coming to me directly. They get their best response by emailing our support email address or system and so I think every property manager needs to do the same. Initially, when you're small you're the guy. They probably have your cell phone number. Tenants owners, everybody, and eventually you change your phone number and you create some barriers and protections, you have to educate and teach people how you want them to treat you, and you’re going to teach your customers what are the right channels and you have to teach your team what are the right channels. My days are pretty quiet. Steve: I love that. That's super inspiring. You fired me up even more and I love how you said it's tactical. It's very transactional-tactical. I want to be playing in the sandbox of transformational. I feel like I'm retired now because I do what I want and I'm blessed to say that. There's been a lot of hard work behind that, but I'm to the point to where I'm not going to do stuff that doesn't light me up and there's a small subset of tasks like creating content—podcast is one of them—that I could do all day and I have endless energy for. That's where I add the most value. So, the bigger the impact on people that I can have is going to be when I'm fired up and passionate and not dragging off of email, but I think we don't give ourselves permission to do that. You saying that, I'm all in now. I was 80% in, Jason, now I'm all in. I hope some listeners are all in to move forward. That's what I love about podcasts and other things with so much being shared these days. A lot of times we think things, or we know things internally, or we feel things a certain way, but we don't give ourselves permission to actually say that or feel that in public because sometimes we just need someone else to say it to give us the courage. I've noticed that happening so much lately that I finally got pissed, and I'm like, “You know what? I'm making a list of everything that I believe in whole-heartedly, that I think is a little off mainstream maybe.” That way I can have it in writing and I'm just going to start saying these things because I'm tired of being, “Oh yeah, and I felt that way, too,” but I never said anything. Jason: I mention this on the previous episode, too, that I've been really opinionated in the past and I've realized that I think I'm a little more humble now that I realized my way isn't always the exact right way for everyone, so I'm learning. I was just in Columbus for a week and one of the things that really hit me hard is that I've been really opinionated and I think it's important to put out things more as observations rather than gospel truth. Somebody may love email or somebody may hate doing podcast stuff. Everybody is different and I think everybody's perception is different, everybody's experiences as to what works or doesn't work in marketing could be different, their market might be different. There are so many variables involved, so I think moving forward, my content is a lot more observational because I've realized I was attracting clients or creating monsters in the industry that are hyper-opinionated and the hyper-opinionated people become like, “Oh my God, [...],” but the problem is they create a lot of negativity in the industry. They become the rampant [...] guys that are heartless, that want to crush all the hopes and dreams of every tenant on the planet. We need to be careful in any business or any industry in being too opinionated because what ends up happening is we end up attracting most opinionated people. Those are the people that turn on you. Those are the owners you don't want eventually. Those are the people that give you the negative reviews when one little thing goes wrong. I want open minded people, and these are the clients that I’ve loved the most, but I was attracting less of them per capita because of the message that was so in your face. “This is the [...], do this,” and I was just so strong willed that way and I realize now that that creates its own monster. I think it's important to share though, honestly, these little things that we have, that are weird about is or that are woo-woo that we feel like the rest of the world will judge. To say. “This is me, this is how I am, this is my experience,” and yeah I think you when we let our freak flag fly, so to speak, there are people that run with it. As long as we're not, “Hey, this is the gospel truth. This is the only way to do it,” we're not going to turn off so much so many of the people that don't resonate. They might go, “You know, Jason, that’s cool that you're into that weird stuff, but I'm more of a practical guy and I don’t resonate with that, but I like a lot of the stuff you say.” If I say, “This is the only way to do it,” I'm forcing them to make a choice to go all in and do everything my way or the highway. Steve: Your coach helped you nail that idea. I had that opposite issue. I think the issue for me was that I didn't want to ever come off as opinionated. I'm scared almost having an opinion because I'm like, “Do your thing, man,” so I’m always quick to anything I believe in. I'm quick to say, “Do what works for you. This is just my journey. Do what works for you.” I think like attracts like and that's a really cool observation that you started attracting all these opinionated people. The coaching thing, I love that you have coaches and you’re a coach yourself because the power of coaching has changed my life. Strategic coach, I work with Jason Goldberg. Every time I have a call with him, I transform. It's really crazy. If there's one thing I'm super high on right now, it's co-creation. Co-creation is the super power that nobody's talking about and I've experienced it in many ways. First through music. Although I normally do music on my own and I'll just write songs. When I get in the room with the right people, they don't even have to be a great musician, it's just that the energy. If we’re vibrating on the same frequency, things just come out so great. I played with this rapper the other day. Two of our new songs are two of my favorite songs I've recorded in the past year. Back when I had a casual mastermind that we used to do, helping each other co-create, kick this process back to you, now you kick it back to me and blah, blah, blah, everything just accelerated. So, I think outside eyes on the business, coaches, casual masterminds, paid masterminds, whatever it is, I think the more we're interacting with others and having a sounding board, the faster we're going to get to where we're going and the more transformative the experience will be. Jason: I agree. To touch on that, every single person you'll notice, everybody listening will know this is true. You can talk about it in terms of inner energy or spirituality or whatever, but every single person that you’re around brings out a different side of you. There are people that when I'm around them, I feel I'm freaking hilarious, I’m the funniest guy on the planet. They’re laughing at everything I say. It's awesome. Then there's people that I'm around that I feel I'm super mental, analytical, and logical. That's how they perceive me and that's what they bring out in me. And there are people that feel I'm this emotional sensitive person. My kids would probably say, “No, he’s Mr. Analytical.” There are different people that bring out a different side to us. This is also why I have a strong introverted side. I need space away from people to reconnect with who I am and to make I'm me. I feel when we're around other people, part of it is how they perceive and see us, brings that out in us, it allows us to be [...] energy and yes absolutely there's this connection and a certain combination of different people, or different energies, or different whatever that will create a different music. You've got the Beatles, for example. These four guys came together and they created all kinds of interesting sounds and music that had a really strong impact and all them wrote songs [...], but on their own, none of them really created as strong of a situation without the others. Just the energy between Paul McCartney and John Lennon was pretty magical. Steve: Totally, and country artists or country songwriters write typically with at least two but usually three or four people in the same room. I think there's parallels because I can speak from experience. I was constantly, with the exception of going to maybe two conferences a year, I was at the desk in my office, head down, genius with 1000 helpers, although I wasn't a genius that is just a saying I’ve heard by any stretch of the imagination. Jason: The emperor with no clothes. Steve: Right, the fool with too much control, and that’s the thing now. I'm in charge, but I'm not in control and that’s self-freeing. It's the people, my people that are awesome are in control and the cool thing now to get to the impact or the purpose part that is super firing me up these days is that I've gotten to a point now to where my job with Good Life is to take care of my team. It's to figure out how can I make their lives better. How can I figure out, what are their dangers, their opportunities, their strengths? Where do they want to be in three years? How can I cultivate that? How can I make it so all of them would run through a wall for me and take a bullet for me because if they would do that, they will treat my money like their money, my company like their company. The reason I started really researching how, I was like how does the military sail hundreds of 18-year-olds across the sea and set up forward military bases. It's just mind boggling, and I read Extreme Ownership. It’s a great book, some other books, but you talk about decentralized command. The top gives them the mission and then that leader gives them the mission and then the lieutenant, I’m butchering correct words. Jason: The hierarchy? Steve: Yeah, the hierarchy, but they are allowed to come up with the game plan and the battle plan. One of my jobs at Good Life is to make it okay to fail. To be okay to test things and screw things up and get beat up over it. Jason: Because if they're afraid to fail, guess what happens? They start hiding crap from you. Then there's all the secret stuff going on then there’s interoffice politics, there’s backbiting. People have to be allowed to fail and not feel they're going to have their head chopped off. Otherwise, you have a business that’s unsafe for you. I love the idea of you giving up control, I've given up control over my email. I don't even know what's getting sent out half the time, but I've created trust and I trust her. She's very cautious in how she does it. I've given up my schedule. I was in Vegas last week, the week before that I think it was in Columbus, a week before that I was I think in Phoenix. I don't choose anymore. My assistant, she's like, “Here’s a speaking opportunity. You're going to go speak here.” She sets up these podcast episodes, everything I've given up autonomy on my time, but I still blackout Mondays and Fridays so I can do some of the things I want and then I have my weekends, but you give up control. The higher you move up in your business, the less control you have and the more you give to the people around you. I just do what they tell me to do. I show up. My job is to support them. I love what you were saying that you've transitioned because I think as we start out as entrepreneurs and we get our first few team members. We’re always asking the question and frustrated why can't my team just do what I say. Then eventually we transition and we transform and evolve and realizing they are some of our best assets, they're supporting us, they're better at us in things that they do, they love their areas of expertise and now it's, how can I support them? How can I help them get ahead? How can I make it easier? How can I help them avoid burnout? You also threw out the words transformational and transactional, and I think those are two very different leadership styles that I think are important to point out. I think what you’ve just been describing is you're trying to create a team that is transformational. Transformational leadership is where you give them an outcome and say, “That's where I want to go,” and they say, “Great,. We'll figure it out, we'll help you get there.” Transactional leadership is, “We're going to go here and here's exactly how we’re going to do it and we’ll do it my way,” and then there's no buy-in, there’s no ownership, they don't get to fail because if they do what you tell them to do and it doesn't work, whose fault is it? It’s mine, but that means they can't win too. If they can't fail, they can never win, and you're never going to keep A players on your team that never get to win. This is why people get so frustrated by millennials, because they're dinosaur business owners, they're running their business like assholes, they're tyrants, they're trying to micromanage their team, tell everybody to do it, and it’s transactional. They're saying, “I'm giving you money, just do what I tell you to do. I paid you, do it.” Millennials don't stand for that. They value themselves more. They want something beyond just being told what to do and getting a paycheck. Believe me, I have team members on my team that would just be there to show up and [...] and get their check. They don't believe in you, they don’t believe in the company, they're hypers, and they go home and complain about you, and the job, and they live for the weekends. But if team members enjoy the work and they feel they have freedom and they have autonomy, you have their discretionary time. They're thinking about you after work. “How can we make this better?” They’re thinking about you on the weekends. They do extra stuff because they're in love with what they're doing. Steve: Totally. Now, you said that really well and I think what comes up for me as the EMyth, which was a very transformational book to use that word for me. Checklist, at certain points at Good Life, we are a results based company, but a lot of times I get pulled to these meetings it’s like this person is not… they checked the box and they didn't do it or they didn't check the box and they should have, you know I mean? What's the results? Is the days on market good? Where is his KPIs? Although they’re good, we have this back and forth. So, here's something that I want to stick my flag in the sand as something that's not conventional and goes away from my instinct which is let them figure it out. I don't care about the checklist. We're not all going to be McDonald's. Honestly, I'm not trying to scale my business across the whole country, if I was, I probably would have to make sure everybody checks that box, but I'm really interested in the small giants approach, where it's going deep with the smaller amount of people, still having a big business that makes a big impact. I say, “Hey, look at the results. Make it a results-based company because they can own it. They have more ownership in that regard.” Something else that comes to mind was, I remember I used to walk into the office when I used to go to the office every day and people would be on YouTube and I would freaking be so mad. They're watching some videos, I would stew about, I wouldn’t say anything right away. I would go in my office and fume. Then I remember I talked to a friend about it, someone I respect, a mentor. He's like, “Man, you got to let that go. If they get the results, who cares how many cat videos they're watching. You want a fun environment. If you go lay the hammer down on that, you're going to not have the team that you need to have to make your dreams come true.” Someone I respected telling me that was me letting go of a helium balloon. All this weight was just lifted and I was free. I didn't have to micromanage. Jason: I think it's interesting because sometimes usually the person or the team that gets really caught up on the checklist and everything being done a certain way, that's usually the operations person. They love that stuff, and it needs to be done this way, but I think that's our job as the visionaries to remind them it's the outcome that matters. It's the end result that matters. The end result is making sure we have a profitable business. The end result is to make sure that we're honoring our customers and we're treating people well. These sort of things, if we want to get to the outcome. How we get to that outcome, there's probably a million ways we can do it, and whether a certain box wasn't checked or certain thing didn't end up happening. Well, maybe that process is too cumbersome. Maybe it needs to be supplied, as long as getting a result. There’s always this balance. You can have a 30-point checklist that somebody has to complete, but if you can get it down to 10 steps and they can actually do it every time and it doesn't feel it’s in the way, then you're better off than the people that are operating without looking at a process document because most people don’t. They'll do it once and then just skip it. You need something that they can live with on an ongoing basis. I think that's really important to point out what you said is that it's the results, that results don't lie, it's the outcome that really matters. So, I think if you take a step back and say, “Well, what outcome are we going to achieve? Somebody's talking about checklist not being done well. What was the outcome we were trying to achieve? What's the outcome? Okay, did we achieve it? Who was responsible for it and how do we know whether it got done or not? Okay great, well then we're good, maybe we should change the process.” Steve: Exactly. Those are some things, but the exciting part is having freedom of time, money, relationships, the people you work with, the people you get to do business with, I know you talk a lot about firing the bad clients. That was an amazing experience, our profit went way up when we fired the wrong types of clients and getting really centered on our core values because then it's easy to hire and fire people and hire clients based on your core values. Ours are really simple. It’s RPG: be reliable, be positive, and be a go giver. It's based off that book, The Go Giver, and it's just simple. We used to have seven or eight, but then I couldn't even remember what they were and they felt weird, so we made it really simple. Now, my business development manager just goes down the list, like, “Are they reliable? Were they at the appointment on time? Did they send you the thing they said they were going to send you?” It just makes this compass of how to do business with the type of people that are going to make you successful. Jason: That's one of the things that coach clients through is to get clear on their three, maybe four core values because you can have a list to 10, you can have 20, but really your team aren’t going to remember all of those and you can usually boil it down to three core things. For us, ours are a little bit different. One of my core values is just transparency. That's originally why I call my company Open Potion and in just creating transparency I think in the industry has created some various significant shifts. I think also for [...] just how I operate. That's a value that is central to me and I want my team to espouse and really our companies are just extensions of us. It's my Iron Man suit that I get the strap on every day, that's my team and everything around me. It increases my capacity. It makes me feel a super human. I'm getting more done. I've got India handling my email and Adam handing fulfillment. I feel like I’m a superhuman. Steve: He’s awesome, by the way. Jason: Thank you. I think of other things I'm really big on is just eliminating constraints and looking for the big constraints that are preventing momentum, so that I can create momentum. It’s all about creating momentum for my clients and for myself. I think it's going to be different for everybody. With all the different things that we are inspired or that resonates with us and I think every business owner needs to get clear on really what their values are because you can't have it. There are only two types of team members. There are hiders we talked about that are hiding and they are living for the weekend and they show up for paycheck or there's believers. The only way you can have believers is if you have something for them to believe in. If you want believers on your team and you want clients that believe in you, you have to have values that you make transparent or clear to the marketplace or to your team so that they can they can buy in to them. It's amazing to see companies get to a large size without even having that in place. Once you get it in place, I imagine the shift is traumatic for the culture. Steve: And if there's one last thing I would leave the listeners with that’s going to be probably the most impactful thing for me in the last 24 months was, I had this epiphany that everything worthwhile lives on the other side of fear. I knew that instinctually and I've been told that before. You know how you can read a book, that's why they say re-read the books that you love because you read it four times and then you'll start to actually really get it. I knew that, but I didn't really get it and it hit me, it became crystal clear. I was like, “Okay, if I want my dreams to happen and be fulfilled and live a life that I want, I have to figure out what scares me and do that.” I have a two-part test. Does it scare me, part one. Part two, does my heart tell me to do it? If the answer to both of those is yes, you do it. I even made a wristband that says, “What scares you, do that.” I don't have it on me right now, I took it off. Just to remind me and it goes back to the try thing. All my biggest leaps came after I did something I wasn't prepared for and I was scared to do, like going to that mastermind. I couldn’t afford it, it was really expensive. Hiring my operations manager, hiring a marketing manager. I gave a talk recently at PM Grow that I thought I was going to be broke after I hired my marketing person because I didn't think I have the margin and we ended up having our best year ever. It comes back to the try thing. Figure out what scares you, do that, try it, whatever it is. I think that's where we make our biggest leaps and that's what sets people apart from living a life that they intended to having regrets, which is the number one regrets of the dying is that they didn't live a life true to themselves, instead they lived a life other people expected them to live. That's the thing that scares me more than anything in the world and so I’m passionate about sharing that message. Jason: Steve, it’s been awesome having you on the show. I'll second that. It really is that voice deep down that is that voice of truth, and also you can ask yourself deep down, “Do I really want to be doing this?” Deep down, “Should I be doing this thing?” Deep down, “Does this really resonates with me,” and if the answer isn't a, “Hell yes,” then there's a lack of congruency and I think that's where you're saying your heart is yes. I think [...] of something that isn't working is the death of something inside you. It means change, something has to die. You want to know what's really interesting? I've noticed a lot of this on [...]. The scariest thing to kill or to allow to die is the fantasy of something great. I’ll explain this, I've noticed this a lot lately with business owners. They have this fantasy of having a really healthy business, or having a business that is growing, or a business that they contribute, or they get to do great things, and that fantasy is so exciting to them and juicy to them that they don't want to take action on it, because to take action on it means they have to kill it. They have the brutally pull out the knife and slaughter their fantasy the second they start taking action towards it, because now reality sets in. Reality is never going to be at that level that the fantasy was, but it's better because it's real. I usually use the example of my friend in high school that wanted to be a rock star, which sounds like you. You had to eventually give up the fantasy of being a rock star or you have to choose into it fully. He had this fantasy of being a rock star and he would buy expensive guitars and amplifiers, and he wouldn't take guitar lessons. He won’t love the fantasy of having this fantasy of being a rock star and as long as he can buy cool guitars and keep imagining this future that would never happen, he was happy, but he didn't want to go sleep in his car and do gigs, tour round, work his butt off, and practice nine hours a day. He didn’t want to do any of that. That's reality. Reality means some work. Initially, if you're listening to this and you’re like, “This is great. Jason and Steve have these companies and making all this money, they've got their assistants. It must be so nice for them.” They're probably listening and going, “I don't get it. I'm not there.” You may have to be the person listening that you right now, it's time for you to double down. It's time for you to hustle. It's time for you to do stuff that scares you. It's time for you to get off of the fantasy of whatever you're hoping of doing or hoping of starting to really get out there and do the work, the hard work to make it happen and you listen to that voice, you get to that place. You get to that place eventually where you're now are able to focus on your team. You're able to be a coach and a mentor to people around you instead of the person trying to figure out how to get everybody to do everything. I think that transition really involves taking those scary leaps. I think every coach that I've hired was a leap. None of them were cheap. Every coach I've hired, every program or training I bought into, some of them I couldn't even afford at the time. They were risks, but I knew deep down it was a yes. I just knew it was a yes and it terrified me. I think for those that are really analytical and logical, they're like, “I don't get it Jason,” but for anybody else listening. If you have that voice deep down inside that is saying, “Hey, this is what's next for you. You've known it. You've been avoiding it and you're trying to figure out how to make it all feel safe, take the leap, and jump and do it. Worst case scenario, you're going to learn some powerful lessons.” I had lessons where I spent a lot of money and it didn't work out. A lot of money. I've probably lots of money making some bad choices, but I wouldn't trade those lessons and I've learned from them. Steve: Yeah, and money is just one side of it. Making a decision to be a different person, or to take more time off, or to go into a completely different field, that's probably the easiest one to do is scratch a check for something. Sometimes our way of being is probably what gets in the way of most of our issues because you can't solve the problem with the same mind that created it. Creating some space and getting clear always helps, getting clear on what you're trying to do and the life you're trying to live. At the end of the day, we’re the writer, director, producer of our own store and I love how you said, you kill off the fantasy because that's true. It's scary. I think that's why a lot of people don't delegate it or it takes so long to delegate because it's scary. If you give that up, what are you going to do? Then you actually might have to sit with yourself and figure out what's next and nobody wants to be alone with themselves. That's a scary place. It's through the work, it's through conquering those demons slowly over time that I've seen good results, so it's a process. Take it easy on yourself and do what's doable. I beat myself up a lot over the years and it's I think we're all pretty ambitious. Don't kill yourself. Life's too short. Just have fun with. Do what’s doable. Jason: Well, Steve, it’s been awesome having on the

On this week's episode, we're joined by Jason Rosario - director of The Lives of Men, host of the web series "Dear Men" and the podcast "Hey Jason." We discuss how he copes with dealing with failure, making the unconventional choice and the challenges of negotiating masculinity as a Black/Latinx man. We also hear from a dad who is struggling with pushback to raising his son in a feminist way.

“Ello it’s Jason Statham and my movie called #HobbsAndShaw is coming out this week and you should watch it.” Hey Jason, thanks for coming in to tell us about that. We’re going to review it today. “And happy birthday to Cody Hall!” Oh wow, how did you know it’s birthday today? You’re a good friend. Thanks for joining us, along with special guests directors Tyler Nilson & Michael Schwartz who are here to talk about their new movie, #ThePeanutButterFalcon. Come hang out with the Collider Live crew as we wish a very happy birthday to Cody and Harry Potter, with Kristian Harloff, Roxy Striar, Josh Macuga, Mark Reilly, Cody, and Alex Marzoña! Follow Tyler Nilson: https://twitter.com/tylernilson The Peanut Butter Falcon is in limited theaters August 9, and goes wide August 23! 00:00 IT’S CODY’S BIRTHDAY!; Peanut Butter Falcons, shirts 11:37 The Irishman trailer thoughts 19:50 Bachelorette talk 36:43 Dungeons & Dragons movie hires directors Jonathan Goldstein and John Francis Daley 42:21 Kristian’s neighbors are odd, dog impressions 49:24 James Wan to direct another horror movie before Aquaman 2 1:06:29 Martin Scorsese reteaming with Robert De Niro and Leonardo DiCaprio after The Irishman 1:11:43 Hobbs & Shaw review 1:30:22 Tyler Nilson and Michael Schwartz join to talk about The Peanut Butter Falcon, tuning into Roxy’s live chat, how they got their movie made, how Josh Brolin contributed, making the movie they wanted to make, working with their eclectic cast, Zack acting in his first movie, and what’s next!

Jay welcomes her first IN MY HEAD in-studio guest, the multi-hyphenated Jason Rosario. These two get real and raw as they discuss socialization, machismo, the struggles of co-parenting, and how we can love each other better.   EPISODE 9: “Teach Me How To Love!”   In a rare interview, Jason Rosario gets very personal with Jay Blessed as he shares his daily battle with depression and speaks on his relationship with his mother, the absence of his father and the pain he experienced in co-parenting. This refreshing male perspective is wrapped in honesty, vulnerability and humble surrender. Listen as Jason and Jay get real on Episode 9: "Teach Me How To Love."   ABOUT JASON ROSARIO: Jason Rosario is a Social Entrepreneur, Cultural Creative, host of the new podcast "Hey Jason" and the Executive Producer and host of the Yahoo original web series “Dear Men,” which explores the evolution of manhood. In 2017 Jason founded The Lives of Men (TLoM) as a vehicle for Black and Latino men to explore healthier frameworks of masculinity while serving as a resource as they navigate various life stages. As a motivational speaker and media personality, Jason’s talks often focus on the intersection of self-actualization, identity, and masculinity. With a unique blend of style, culture, education, and spirituality, his aim is to inspire, activate and nurture the development of well-rounded men. He is a graduate of NYU’s Stern School of Business. Check out Jason’s most recent feature in Black Enterprise: JASON ROSARIO: INSPIRING A MOVEMENT OF HEALTHY MANHOOD   What's Playing In Jay's Head? Music Soulchild's "Teach Me" Are you working on loving yourself or have you successfully gotten to that healthy place? Use the hashtag #HeadwithJB and share your experience with us on social media.   Listen to IN MY HEAD with Jay Blessed on Apple Podcast, Google Play, Stitcher, TuneIn, Soundcloud or Spotify! PLEASE SUBSCRIBE, DOWNLOAD, SHARE, LEAVE A POSITIVE RATING AND COMMENT!  Click to follow and tag Jay Blessed on social media: Twitter, Instagram, Facebook. Make sure to visit her official website www.JayBlessed.com – “A Human Experience From A Caribbean Perspective.”   In My Head Soundtrack by Venor Yard.  Jay Blessed Media & KSAP Production

Jason Rosario, founder of The Lives of Men and Host of the Yahoo! News original series, Dear Men invites you to an open forum discussing masculinity and manhood. This is HEY JASON! --- Support this podcast: https://anchor.fm/heyjason/support

What happens to Black Boy Joy when that boy becomes a man? On this episode of UNGENTRIFIED, I am joined by Jason Rosario (), creator of the digital platform The Lives of Men, and host of the new Yahoo show, Dear Men, and we try to find the answer to that question by breaking down what factors give Black men a chance to be their authentic selves. Listen and give us your opinion!   Guest: Jason Rosario () Website:    Resources/People/Articles Mentioned in Podcast:   Chef’s Table on Netflix Osvaldo’s song, “Fly Like Birds” Maslow’s Hierarchy of Needs Check out Jason’s show on Yahoo, , which drops new episodes every Wednesday and be on the lookout for Jason’s upcoming podcast, “Hey Jason.”   Follow the conversation: @ungentrifiedpod on / @kentwjohnson on /   #ungentrifiedpod   Email us your questions/comments at .

On this episode of the Healthy Wealthy and Smart Podcast, I welcome Dr. Jason Falvey on the show to discuss healthcare fake news.  Dr. Jason Falvey is a physical therapist working as a post-doctoral research fellow at Yale University in New Haven, CT.  Jason’s research interests focus on improving post-acute care quality and outcomes for older adults recovering from major medical events, such as surgery or critical illness. In this episode, we discuss: -The definition of fake news as it relates to healthcare and medical disinformation -What Jason recommends you do when you encounter articles with a high comment to retweet ratio -How you can avoid falling trap to your biases by crowdsourcing to interpretate literature -The importance of seeking information not affirmation -And so much more!   Resources: NY Times Fight Fake News Why Healthcare Professionals Should Speak Out Against False Beliefs Jason Falvey Twitter Jason Falvey Yale Email: jason.falvey@yale.edu  The Outcomes Summit, use the discount code: LITZY For more information on Jason: Dr. Jason Falvey is a physical therapist working as a post-doctoral research fellow at Yale University in New Haven, CT. He holds a bachelors degree in English, and a doctor of physical therapy degree from Husson University in Bangor, Maine and a PhD in Rehabilitation Science from the University of Colorado, Anschutz Medical Campus.  He is also a board-certified geriatric clinical specialist. Jason’s research interests focus on improving post-acute care quality and outcomes for older adults recovering from major medical events, such as surgery or critical illness. To date, Jason has authored or co-authored 18 peer reviewed papers in widely read rehabilitation journals.   Read the full transcript below: Karen Litzy:                   00:01                Hey Jason, welcome back to the podcast. I'm happy to have you back on even though we're not talking about what we usually talk about when you're on these podcasts and we have our specials with Sandy Hilton and Sarah Haag but I think this is still a really great topic and I'm happy to have you on to dive into it. Jason Falvey:                 00:24                It’s great to be back and I have been excited to present this topic for a couple of months. While it’s no sex podcast part five I think we can definitely got come up with some interesting points for the audience. Karen Litzy:                   00:37                Yeah, I think so too. And so everyone today we are talking about fake news as it relates to health care. Because I know a lot of you that are listening are in the healthcare world and if you're not, this is also a great way for you to kind of understand that everything that you read on social media isn't true gasp, right. So, Jason, let's talk about first, what in your opinion, is the definition of fake news as it relates to healthcare and let's say medical disinformation? Jason Falvey:                 01:19                Yeah, I like the term medical disinformation because fakes news is not nearly as common in medicine, you know, as far as the falsified information. But medical disinformation is much more common than people may realize. The context is most of the hundred shared articles of last year, over 50% of them are of poor evidence quality when experts have actually rated that. So when I talk about fake news and medical disinformation, I'm really kind of breaking it down to a handful of categories. So there's fake news that's rare, but it does happen that's false or completely inflammatory, you know, that is completely falsified data, or completely false claims that are created to either scare somebody into making different health care decisions or drive them towards a curative product that may be your marketing. So that’s not common, but that definitely is out there. I think the more common pieces of fake news and medical disinformation are hyperbolic and intentional. Jason Falvey:                 02:34                So the splashy headline that says Bacon Causes Cancer, you know, where people are putting that headline so it’s clicked on and read when the real story behind a lot of that evidence is substantially more nuanced. And then there's also hyperbolic and unintentional where a well meaning university employee publishes a press release on investigators article and misstates or over-interprets the conclusions to be much broader, more sweeping than they are suggesting that a drug cures cancer or Alzheimer when really it was affective in early stage studies for one particular protein in a mouse model. So those are the three definitions I tend to stick with, but really it's medical information that's not fully accurate, that’s shared widely and may influence healthcare decision making. Karen Litzy:                   03:32                When we talk about these flashy headlines and this medical disinformation whether intentional or unintentional, as healthcare professionals, sometimes we're responsible for sharing that. It's not just the lay public. Right. So when you look at these headlines and you read through let's say a press release, is that where it ends? Do you say to yourself, yeah, this sounds good. I'm going to share it. Jason Falvey:                 04:05                I think that should be the focus of what we talk about today and that is how do we as health care providers recognize fake news? How do we kind of avoid unintentionally sharing it and how do we avoid intentionally sharing it? So I think my guiding principle for all of these things, for any healthcare professional, it's Hippocratic oath, it's do no harm. And then health care beyond what we do with patients and beyond the hands on care that we provide sharing misinformation, whether intentionally or unintentionally has the potential to cause harm. Patients for going standard of care treatment and in lieu of an alternative medicine or unproven other therapy that may actually cause their health to decline, you know, or causing them to participate in a treatment that is unlikely to benefit them and causes harm both financially or time and potentially health care harm. So I think Hippocratic oath above all else should really drive our decision making and the impetus for why we should care about this. And the other guideline I use is I really want patients and providers both to be looking at social media and healthcare information that they're sharing and really make sure that they're seeking information, not affirmation. So they're seeking to broaden or challenge their pre held assumptions and not just share things, read things and kind of propagates a worldview that just affirms that are already firmly held biases to harm a patient. Karen Litzy:                   05:58                Okay. Yeah, but so you mean we can't cherry pick things to confirm our own biases to make ourselves look better? Is that what you're trying to say here? Jason Falvey:                 06:16                Yeah, that sounds like a terrible polarizing thing to say, but I'm really going to stand by that I think and just say I really don't think we should be cherry picking evidence and just sharing evidence that is fully supporting our world view. We may have a brand to keep, you know, I don't think I would widely share studies that I think are well done that maybe say physical therapy isn't as helpful as other things, but I certainly would acknowledge that they exist. I don't think I would market them heavily, but I certainly wouldn't ignore them or basically say that they're not accurate either. But I think we have to be really careful, especially when we're talking about vulnerable patient populations, thinking about patients with dementia or patients with cancer who are really hanging on hope that there's something medically that can be done that's outside of what's already been offered to them and kind of have a cure. And I think it's really important that we choose our language and we choose what we share, how we share, and the quality of what we share very carefully. Karen Litzy:                   07:29                Well, and you know, that goes back to do no harm. And I think goes back to being an ethical person because when you look at these vulnerable populations, like you said, the elderly people with possibly terminal diseases, people with chronic pain, these are people who are looking for things that they feel they have not gotten that will fix them. Right? And so that's where snake oil salesmen come in. That's where people sort of touting that they have this great flashy thing that isn't supported with evidence, but it sounds really, really good. And so how do we as healthcare professionals combat that without looking combative and turning off those people that we actually want to help? Jason Falvey:                 08:22                Yeah. How do we combat that information without unintentionally propagating it either. I think when we evaluate information, I think one of the things I really encourage is time, take time to think about the information, take time to research the primary source of that information. Take time to recognize if there is potentially both sides of an issue. So outside of things like, you know, vaccinations causing autism, which is a clearly manufactured result. If you follow back the evidence or if you go ahead and follow back evidence about infant chiropractic work. But I guess generally falsified or highly, highly, highly biased to the point where there really isn't a pro side, but a lot of medical things have a potential pro and con side. So I think it's important to recognize the nuance and carefully layout reasons one why you disagree with something and two the rationale methodologically, not just your opinion of kind of how you came to that conclusion. Jason Falvey:                 09:42                But I think you have to do that without validating what you think is a very poor quality or highly biased or dangerous source to share. If, for example, you saw a tweet about the harms of vaccination and it may be, it was for your older adult population getting the chicken pox vaccine and it caused them Alzheimer's, you know, caused them to get dementia. Let's say you just saw a story like that. Which is not true. How do you, you know, how do you combat that? Some people would just retweet it with a really dismissive comment, like this is garbage. Don't listen to them. Well then doing that, and I'm guilty of this in the past as well, we've actually unintentionally propagated that information. Right now I have not very many followers, so 2000 followers all of a sudden see that and potentially one more retweets it and then another 2000 people. So I unintentionally exposed 4,000 people. Even if I'm dismissing that information, I've lent it credibility by sharing yet. Jason Falvey:                 10:51                I think what I have to do is write something about the study, not actually link or validate in some way and not unintentionally spread fake news. And there's not an easy way to do that. So I think you really have to toe the line between not sharing the primary sources, potentially providing that provider of fake news, financial revenue from clicks, which is a lot of times what they want. Or providing a really misguided researcher, a clinician validation that their technique is not loved by the general medical population because they're jealous of his success, you know, something that they can take it the other way to spin it as a positive for their business. Karen Litzy:                   11:39                Right. And because if you're re tweeting this and clicking on it and retweeting it, you're giving it life, which is what they want. That's what we don't want to do. Jason Falvey:                 11:52                Right. And I think that's one of the ways that propaganda is designed right from the early days of using propaganda as a war tool. It was shared not just for people that believed in it heavily. It was shared in outrage and passed along and whispered about which served the exact same purpose. So really it's hard to discipline ourselves in a really, like we see something, we feel like we immediately have to react on social media and immediately have to comment on it. And I've been guilty of sharing articles that are either satire and actually taking them seriously, which has happened once in a fatigue non-caffeinated state. And also information or studies, which I think in hindsight probably weren't high quality or perhaps overstated its conclusions. My own articles have had overstated conclusions written and press releases that weren't by me or interpretation of written press releases that are perhaps more definitive than I would have wanted, you know, not fake news, but certainly unintentionally declarative about the quality and strength of the evidence versus, you know, the hypothesis generating evidence that it was. Karen Litzy:                   13:16                Yeah, absolutely. You sort of alluded to one way as healthcare providers that we can combat the fake news or the medical disinformation and that's taking time to read the source if it's a press release, to read the article, to maybe look at the methodology and to see how would rate this study? So that's one way we can combat it, which takes time. And like you said, on social media, people often react quickly because it's emotional. So maybe we need to take a deep breath and then take a moment and think about what we want to do. Do we want to share this misinformation or do we want to read it and come up with maybe another way to share more positive information? What else can we do as healthcare providers to get around this fake news? Jason Falvey:                 14:14                When we encounter something that we think is fake news or unintentionally or intentionally hyperbolic to the point where we think it's harmful to patients. And I think that's the line I draw. If I think that potentially sharing or engaging with this information in any way which propagate information that's harmful to patients. I generally take a little extra caution. And one of the things I look at, you know, I see in politically or in health care news, if I see a that goes out that has a really high comments or retweet ratio. So there's this term ratioed and it's not scientific and it's not peer reviewed. But I find that the good starting point when you see a tweet from a government official or a healthcare provider, healthcare related source, and there's more than double the amount of comments, then there is retweets and the likes. Jason Falvey:                 15:18                It makes me go and do a little bit more investigation. You know, sometimes those comments are positive and way to go. And sometimes there's a lot of skepticism or criticism of the findings or people really, you know, offering some real insight into some of the problems in methodologically or otherwise. And often a well done methodological study can be completely blown out of the water on Twitter by a very poorly written headlines. Right. We should care about storylines, not just headlines. And one of the ways we do that, looking at comments, retweets, and the likes, looking at that ratio and look at the source, right? Who's retweeting? And so I pay attention to that because most fake news on the Internet is actually propagated by bots. So there's a very high percentage of fake news that was propagated by automated accounts that are automatically set up to capture certain hashtags or certain language and amplify it. Jason Falvey:                 16:23                You know, if you're a political audience would know that that's how the Russians basically designed the misinformation campaign to influence the 2016 election using bots to amplify certain messages. Well, that happens to a lesser extent in health care. There are certain pockets, you know, of health care professionals, and there may be some in our profession that provide certain treatments. There may be some in other alternative medicine professions, there may be some in mainstream medical professions that are physicians or nurses who use their medical expertise and propagate information about medical techniques like abortion or vaccines in a way that makes them seem more credible. So I look at who's retweeting what the population of people are retweeting is, who the person the primary sources coming from. Right. You said if it's a summary of an article from a press release or somebody's blog, like I want to go and find that primary source and then also look at the bias of the person who may be interpreting that information for me if they're a credible source. Karen Litzy:                   17:40                Yeah. And I think you also want to keep in mind those hot button issues may have more misinformation about them. Like you said, vaccines, abortions, these are hot button issues, right? So you have to I think take a more examining eye to some of these hot button issues then with others. That's not to say that other issues in health care do not have as much misinformation surrounding them. But when you're talking about things that are really emotional for people, I think that's when you have to also take a good editing eye to some of this information being put out there. Jason Falvey:                 18:26                Looking at the source of information is one thing you can see. Cleveland clinic has accidentally posted fake news before where they put in like a really positive result from an innovative experimental therapy for cancer. And they put it in a brain scan and said this person had a miraculous results forgetting to mention that they also were receiving the standard care and this additional therapy would, they didn't know if that was the cause or if it was just a normal reaction to the normal care. But then all of a sudden you created a demand for something that is at best maybe ineffective and at worse, we don't know if it's harmful. By having a high visibility site, your responsibility for news is even higher. So I think that's an important piece. Like know who's tweeting it, but then go back and make sure you have the whole story. If it sounds too good to be true. Jason Falvey:                 19:38                This is the humanities education that a lot of PT students have complained that they've had to take history and literature and policy courses throughout their undergraduate degrees and some have suggested streamlining education to really eliminate those things. My counter argument is those skills you learned from critical thinking and critical reading and analysis and understanding of historical context and how to read hyperbole, how to read marketing and different kinds of language really with a critical eye, you tend to develop a radar for when you're suspicious of information and when you want to go and look a little deeper, even if it's from what you view as a pretty credible source. Karen Litzy:                   20:27                Yeah, absolutely. So we've got taking your time really looking at not only the source of the article but who's re tweeting it and that retweet to comment ratio. Is there anything else that we should be doing as healthcare professionals to make sure that we're not propagating this misinformation? Jason Falvey:                 20:54                Another thing I think would be really helpful is crowd sourcing, right? So most of us are networked on social media with a lot of other really knowledgeable professionals. You know, I know that on my Twitter feed alone, half the people are probably smarter than me. Karen Litzy:                   21:10                Oh, I don’t know about that. Jason Falvey:                 21:14                But that's intentional, right? Like I want to be in a community of really intelligent people who think about issues critically, who may have different opinions than me. And I could say, I just read a study about Xyz and the conclusion seems flawed. Who would want to, you know, and maybe I don't name the article, maybe I don't put a link to it. I just put the tweet and throw out a few names and say, Hey, I would love if some of my community would like to take a look at this and tell me what they think. Right. If I'm on the borderline of whether or not I think this is legitimate or I asked somebody in the profession, you know, lean on them to really make sure that I'm taking that extra step to not share information that is influencing medical decisions in a negative way. Jason Falvey:                 22:03                And I teach my patients these same strategies, right when I'm talking to patients and caregivers who are googling information, WebMDing, looking at blogs, and I've had patients with significant neurological illnesses that are terminal. And one of the places I've practiced, and I won't name that place if it's a relatively rare disease, but this person searched the literature and she was very well educated person, searched the literature high and low for a cure for her neurodegenerative disease and found one that was highly controversial. Probably harmful. And she invested thousands of dollars and hundreds of hours of travel over three months for something that was not beneficial while she was askewing typical medical care. So you know, that kind of taught me how to teach patients, not just how to look for information, right? That's part of the problem. But how to evaluate information, how to triangulate information to make sure that the reference that they found is supported by expert opinion and maybe other articles and making sure that there's a critical mass of support for this particular treatment before they really make a major alteration to their course. Jason Falvey:                 23:21                A single article about a vitamin supplement that might help that has little harm. You know, that may be something that I don't intervene on, but somebody who's thinking about making massive changes to their medical routine, whether it has directly to do with Rehab or not. I encourage people to look at the literature critically and I use the word triangulation and I draw it out. I'm just like, you should be able to verify this information should be similar between these three things. Right? And if they tell me that they've done that and they found those three things, I'm more comfortable, even if I disagree, at least I've done my diligence to make sure they looked at the issue in a robust way and not fallen victim to something that was purely a single tweet or Facebook post of medical disinformation. Karen Litzy:                   24:15                That's a shame. And I think it's important that you brought up that as healthcare professionals, we should be talking to our patients about this and we should be teaching them stuff. Glad that you went through that. Yes, we should be teaching them what to look for. If we can have a more educated patient base and a more educated base of health care professionals that high in the sky view. Of course the amount of misinformation may be less. Jason Falvey:                 24:45                Yeah. And I think there are certain countries that have done a lot of work. Norway for example, has done a lot of work from a country perspective on educating citizenry on medical and you know, general disinformation, both political and medical and teaching, how to recognize it. Giving a lot of the same strategies we've talked about of really time and a little bit of additional resource and that solves so many of the problems. If you don't change some of these decision making process and they still are firm believers in the medical information at that point then you go to some of the other strategies, you know, more targeted intervention. But I think as a general population strategy, those are great places to start and really just, I tell patients all the time, I am going to be telling you seek information, not affirmation. Jason Falvey:                 25:45                If you have a friend who told you about this treatment, you need to remember that everybody responds individually, the medications and treatments and you know, cause I think we've all had patients that say my friend got this therapy and their knee got better, really inappropriate for that patient. But it's really hard to walk that back, you know, from just your professional opinion. So teaching them how to look for information and letting them look for it on their own instead of providing it to them I have found is sometimes a helpful strategy because it feels like I'm not forcing my view on them. At the end of the day you can rest knowing that you put tools in people's hands, you know, health care providers or patients teach them how to do these things. I mean, but it does take some effort on their part too. Jason Falvey:                 26:37                You definitely have to want to read these things carefully and you have to have the mindset that you don't want to just look for information that validates what you already believe. And I've seen this, you know, I don't like to pick on dry needling, but I definitely have seen people who are very strong believers in dry needling, just cherry pick evidence that supports their worldview, without recognizing that there's a lot more nuance to that discussion. And I'm not anti or pro dry needling. I'm pro information. Looking carefully and realizing that there are patients who do benefit from it, but it is certainly not a blanket treatment that everybody should be using and it's a tool in your bag, like everything. So, I think it's really important to just have that seek information, not affirmation. If I can say something a few times on this podcast that will be what it is. Karen Litzy:                   27:40                Well, and then my next question would be, after having this great conversation, is there anything we missed and is there anything that you really want people to stick in people's minds, which I think you just said it, but I'll ask the question anyway. Jason Falvey:                 27:55                Yeah. And I think the other thing is like, when you are a healthcare professional, I think investing money in like high quality sources or whatever source. For me, I tend to read a newspaper in New York Times or Washington Post. I have a subscription to it. I try to support that kind of, you know, to provide financial resources to a place that I trust to provide good information because that is positive reinforcement, right? I try not to provide positive financial rewards to places that are providing this information. And you do that by clicking on their articles, right? You read a headline and it's like vaccines cause autism study says, and I clicked on that headline, I’ve unintentionally propagated and supported financially that fake news provider who now is incentivized to create more fake news. So I think it takes a lot of discipline to not fall victim to our need to read everything. Jason Falvey:                 29:02                And you know, sometimes we have to think about the greater good is not clicking on that article. Shutting it down, blocking that news source or whatever, if you really feel like it's egregious enough and not engaging with it. Creating polarization. Polarization is what creates ratings on television. Polarization is what creates ratings on radio, polarization is what gets people to download podcasts and things that are highly controversial. Polarization, you know, sells books, right? The top selling books on New York Times bestseller lists are generally, there's political books that exist, sometimes multiple political books that are on that list from different points of view. So I think it's really important that we don't support agregious, you know, fake news providers or fake healthcare news providers and don't engage with them on Twitter because that's giving them a form of a positive attention. Even if you're criticizing their work, that they can go ahead and leverage to share more. Karen Litzy:                   30:13                Yeah, I thank you for all that great information. And hopefully the listeners can really take this in and understand that what we do on social media has ramifications one to our profession and two to the people we serve. So before we leave, I have a last question and normally I ask people, what advice would you give to yourself as a new Grad? But I'm going to ask you, what advice would you give to yourself as a new Grad physical therapist in light of fake news? Jason Falvey:                 30:50                Oh, that's a great question. Beyond the sentence I said of seek information not affirmation, which I think is helpful for research and beyond, I think one of the things I would tell myself as a new Grad physical therapist in this era is I would be incredibly thankful for my English education, my bachelor's degree in English, all of the humanities and critical thinking classes that I took and all of the writing that I did because trust me, I wrote enough papers as an undergraduate that probably could have qualified this fake news cause I didn't really read the books very carefully and really had some made up opinions about what I thought was happening. So I think I can recognize the difference in that writing now. And I would tell myself, be appreciative of the education in humanities and the historical context that you've gained and use those skills. Don't forget about them. They are valuable parts of your tool bag. They are not direct patient care skills, but there among the most critical soft skills you can obtain to really do a good service to your patients and teaching them how to use those skills and taking healthcare into their own hands. Karen Litzy:                   32:13                Awesome. Well, thank you so much. This was a great discussion. I'm glad we finally got to do this. Where can people find you if they want more info or to ask you questions? Jason Falvey:                 32:26                Yeah, so I am listed on the Yale site, I am not officially representing Yale now just to put that out there, but my email address is on the Yale division of geriatrics site. I'm also on Twitter at @JRayFalvey and I'm sure you'll put that in your show notes. Those are the two things. And hold me accountable. Do you see me sharing something that you think is not a great source of information? Tell me about it. Right. And I think holding each other accountable is part of this process and doing that in a professional way is all the better. Karen Litzy:                   33:07                Thanks again for coming on. And everyone, thanks so much for listening. Have a great couple of days and stay healthy, wealthy and smart.   Thanks for listening and subscribing to the podcast! Make sure to connect with me on twitter, instagram  and facebook to stay updated on all of the latest!  Show your support for the show by leaving a rating and review on iTunes!

Happy Birthday, to Jason's wife, Leila! Scot Wingo is contributing the Forbes Digital Council, and writing about his new Vehicle 2.0 Framework.  Introducing Vehicle 2.0.  Jason Goldberg is also contributing to a regular retail column on Forbes, starting with his first article: What Competitors Are Missing About Amazon's New 4-Star Retail Concept. Scot is appearing in a national TV spot promoting his alma mater, North Carolina State, "Think and Do!" Jason is leading several sessions at GroceryShop October 28-31 in Las Vegas, including a keynote interview with Sam's Club Chief Merchant Ashley Buchanan. Amazon Earnings: Amazon's third-quarter earnings beat Street estimates, but its revenue and fourth-quarter outlook fell short of expectations. Revenue: Revenue increased +29% Y/Y (+30% ex-FX) to $56.58B, 1% below the Street's $57.11B. 29% Revenue growth was below consensus expectations as Int’l revenue disappointed with a ~$1B shortfall. North America revenue (ex-AWS and ex-WF) of $30.10B was up 25%, in line with 2Q18 growth. International revenue of $15.55B was up 13% (+15% ex-FX), a notable deceleration from 27% growth in Q2 (+21% ex-FX). AWS revenue of $6.68B was up 46%, down from +49% growth in Q2 but in line with expectations. Physical Stores revenue of $4.25B was slightly ahead of consensus expectations. Amazon's "other" category, aka advertising, jumped 123% to $2.5 billion in revenue AWS revenue: $6.68 billion vs. $6.71 billion estimated, according to FactSet Net income, meanwhile, grew more than 10-times from the year-ago period, to a record-high $2.8 billion, marking the fourth straight quarter of topping $1 billion in profits. The $3.7 billion in operating income far-exceeded Street estimates of $2.1 billion GAAP Operating Income of $3.72B was higher than the Street's $2.12B. Gross margin of 41.7% came in above the Street's 40.5%. GAAP Operating Income margin of 6.6% was higher than the Street's 3.7%. Profitability, once again, was a positive surprise with Op Inc ~$1.5B ahead of consensus expectations, Other News: Implications of the US pulling out of UPU Treaty Implications of Sears bankruptcy Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 149 of the Jason & Scot show was recorded on Thursday, October 25th, 2018. http://jasonandscot.com Join your hosts Jason "retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Transcript Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 149 being recorded on Monday October 25th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host and television spokesmodel Scott Wingo. Scot: [0:46] Hey Jason welcome back Jason Scott show us nurse yeah yeah yeah. So if you're at the front should I guess we'll will preface it's been a couple weeks but a show out so apologies to everybody we have been just crazy busy and what Jason's referencing there is I did a small video for this NC State thing and then end up being in a promotion that they are nationally a lot of people have seen it so that's been fun we'll put a link to it in the show notes so NC state has the motto which is thinking do, I am and I'm featured in there talking about they can do. Jason: [1:26] And they are airing at like on ESPN during the games. Scot: [1:30] Yeah when the when the college's nobody watch college football UIC usually during halftime they get two spots that they can kind of do a promotional video about University each University gifts and this is one they've been running for. Jason: [1:45] That's it's totally awesome I'm just saying it's my animated screensaver now so just so you know. Scot: [1:50] It's a little creepy but whatever floats your boat Jason. Jason: [1:56] Not even the weirdest thing about me. Scot: [1:58] Another fun fact is we are both contribute to Forbes you had a really good article where you you went through your Amazon go store the force Star Story. Jason: [2:13] Yeah and you are like some fancier CIO contributor if I'm not mistaken. Scot: [2:21] Yeah if you have the tech Advisory board or some such and I am writing about vehicle 2.0 which is a framework we've developed its if he for thinking about the future of cars which seems like it wouldn't have anything to do about e-commerce but it's kind of interesting. The first of all you have a. Perspective on how fast or how slow this vehicle stops going to go in and then second of all there are overlaps there so for example imagine autonomous vehicles delivering packages. Jason: [2:54] Yep for sure and I suspect in the not-too-distant future will be ordering a lot of packages from our vehicles and in many cases getting delivered to our vehicles. Scot: [3:05] Yes sir that's good and then the in exciting car news so Tesla's new operating system came out so that that has been fun to play with and a lot of the folks that are in the same demographic issue and I the most exciting part about the parade this is the Tesla West Nine is they have an Atari simulator in there as one of the new Easter eggs so that you can't do this while you're driving so full disclosure there. Sadly but I guess safely but it is a lot of fun to play on the touch-screen the various old Atari games, most fun one probably is Missile Command because he was always super frustrating to have to deal with that track ball and you can never get faster left right it in your little basis would get destroyed so now you can kind of do a two-finger thing and it makes it a lot easier to save your bases file. Jason: [3:57] I am always jealous when you get a new upgrade because I just think that's the coolest thing that you're you go to bed and wake up in your car has been upgraded it makes me want to like go out and get a fancy new cup holder or something for my car. Scot: [4:10] Yes you could. You could get a Tesla you should. Jason: [4:14] Yep despite the fact that my wife and I have no commute in the car is almost exclusively used by a three-year-old shirt. Scot: [4:21] Call Anna Jason you got a lot of stuff you can be doing here either this week or next week. Jason: [4:31] Yeah the the these next two weeks are super busy for me on the personal front this is the busiest week of the year for me tonight is my wife's birthday, inside of a side-note shout out to you honey happy birthday she most wanted to celebrate it by having me catch up. With the podcast cuz she knew the listeners were frustrated with the, the Gap we've had and her main request for her birthday is she wants to go to the Star Wars experience in Orlando on a joint vacation with the windows so we're going to have to. I think we're gonna have to find a way to make that happen. Scot: [5:13] Absolutely that is one birthday gift I'll be happy to help make happen. Jason: [5:17] Exactly and then it's a crazy fertility week apparently in my family because in addition to my wife's birthday. Tomorrow is like my mother's birthday my mother-in-law's birthday and my father-in-law's birthday. So so we're doing a lot of birthday celebrations this week and then Sunday I shoot out to grocery shop which is this new trade show in Las Vegas this will be the first year. Mainly focused on digital disruption of the grocery category. It's put on by the same folks that started money 20/20 and Shop talk. And I think they were hoping to get like a thousand attendees in this first year and they actually sold out capacity of the venue at 2200 people. So it's it's shaping up to be a really good event and I'm dramatically Overexposed at the event so Sunday night I'll actually be doing the keynote interview with Ashley Buchanan who's the chief Merchant at Sam's Club. So I get to talk to him about digital at Sam's and we'll talk about scan and go and some of their partnership with instacart and some of the other things they're doing hopefully I'll have some. Samara tough questions I'm doing a piano on. [6:36] Brands using product content help build a brand since we got. Folks from the Boston beer company which is like Sam's Sam Adams we've got Chobani what unit or disrupted the the yogurt space and we've got the wonderful company with the almonds and pom wonderful Fiji Water and all that stuff. And then I'm doing a panel on the evolution of the cpg retail relationship we've got constellation Brands which is. A big house of brands in alcohol space I think has Corona amongst others you have a elf Beauty and then a Fairway Market which is a great bespoke grocery retailer in the New York City area so. Some topics that are near and dear to my house heart and I'm looking forward to seeing everyone at grocery shop and the. I do have plan I know you're not going to go to join us so that always makes me sad but I do think we're going to get the opportunity to record a couple shows from there with some of the the grocery industry makers. Scot: [7:38] Next year they're going to Rebrand the sink to Jason talk or something like that cuz it seems like you're just doing everything there. Jason: [7:45] Yeah I think that was actually there original premise and then they found out like that the only for family members I could possibly get to attend we're all celebrating their birthday and so they decided to scrap. Scot: [7:56] Expanded to smother people in the loss of that that looks good I look forward to seeing all the social media that comes out of that and and he ran to the interviews any trip reports. Jason: [8:11] I do so, we've talked about Amazon go on the store on the show we did talk after they open the first go store in Chicago they have open to other go stores in Chicago so now we have a. A fleet of ghost tours and then this week or last Thursday Google opened a pop-up shop shop here in in Chicago for the holidays. So Google has done pop ups for several years but they've always been in New York this is their first year in Chicago so I was eager to see. What that look like and I I went and visited it this week so I'll talk about that in just a minute and then. They have announced their first permanent retail store in the US and that is going to be in Chicago there's no official date on when that's opening yet so we're continuing. To watch for updates on that but I'll be interesting to see what a permanent Google Store looks like but the pop-up is really sort of. [9:12] Very similar to pass Google pop-ups it's it's focused on the Google Hardware products so the pixel 3 phone their new home hub which is there a voice assistant that has a screen built-in so it sort of. Competing with Amazon Alexa show. [9:32] They you don't have a a couple cool accessories I've never really smart a wireless charger for the pixel phone. So you know you go to the pop-up they have all the products they had them on launch day. Which would which is kind of cool as the first place outside of Verizon you can get the pixel 3 phone. And they set up a couple of fun vignettes to sort of demo the capability so they have sort of a. A fake record store you can go into and play music using the the Alexa assistance in there that their new high-end audio Fidelity speaker. You can go into a tree house and do a bunch of home automation stuff so you can you know give commands to Google and you know see the shades in the tree house go up and down or change the lighting in a few different things. And they have a kitchen vignette and in the kitchen vignette you can have a bunch of Easter eggs you can give commands and it'll like pop open a drawer with candy in it and some stuff like that so. Some some fun little vignettes to kind of get you experimenting with a Google product but sorta in typical. [10:44] Pop-up shop fashion you know it it really felt more like some sort of Museum exhibits where you could go in and try products rather than a working retail store. [10:57] And you know the it was very sales assisted experience you know there more Google employees in the store then there were customers. [11:06] You know if if you are specifically looking to get Hands-On a Google product it was great opportunity to do that but I'm not sure as a pure retail store. [11:15] It was all that that interesting or or Works particularly well and in my mind the big change from previous Google pop-ups was just sort of the. The visual treatment so in the past they've done he's really kind of techno treatments with a lot of like. Animated light things and fiber optics and you kind of got a very sort of Tron feel from the the Google pop-ups in this Google pop-up was a much more. Sort of the Vintage organic feel so you know instead of a house they had a tree house and they they don't sell these other they should they they're like merchandising all of the. The the phones and he's cool Google tool boxes that they made for the store and so is very white. Sort of organic store with a fake tree in the middle of it and it was two stories and so if you live in Chicago you're interested in some Google products totally worth we're checking it out there are a couple features in the pixel 3 that I'm super jealous up as a. IPhone user they have dramatically improve new spam telephone spam filters which. I feel like I'm getting a lot more telephone spam so that seem cool and they have a great new visual search built into the the camera and incredible new will light features for the camera that seem to be class weaving. Scot: [12:40] Awesome I don't want to. Get you an agitated but I am ambidextrous and my pixel 3 actually just arrived today and I'm going to crack it open after this podcast so I'll do it boxing next week and tell you about all the awesome teacher missing. Jason: [12:57] Exciting I I probably will add one of the beat to I think it is going to be fun and if you have already gotten one spot I do suggest you get the the Google pixel. Wireless charger. It's really smart and clever like unlike traditional wireless chargers it recognizes each individual phone and you can have different settings for each phone it basically turns the phone into a mini Google home hub when you put the phone on the charger it has a bunch of unique features that I feel like everyone else should have thought of but give always the first ones to implement. Scot: [13:31] Awesome I didn't know about that so I appreciate that cool wall decals caught up on outside and it wouldn't be a Jason and Scott show without. Amazon news your margin is there a opportunity. [13:59] Yes Jason said at the top of the show it's Thursday October 25th and. After the market closes today Amazon announced their third quarter earnings and just kind of position awareness if you listen to podcast setting up for Holiday 18 and I like good stuff going on in a little while kind of shaky here in the last couple weeks the stock market's gyrating a bit tariff kind of stuff is accelerating were to talk about some things there later than the show around China impacts so for me this is a really important set up cuz this is kind of the one the last data points work it going into holiday 18. Add a reminder for everybody we tend to think of e-commerce as Baseline going about 15% 1/5 overall retail tubilee grows low-single-digit so 4% so with that being said Amazon did announce their ornax and it's kind of a mixed bag so he was a little light and and I'll go into why but then profitability exceeded expectations so as of the recording of that show the stock is down a tad and a smoke so. [15:20] When you peel the onion on on the top line revenue came in at. 30% year-over-year growth is 56 billion and that was about 1% will at the street was looking for so that one person. Turns out to be about a billion dollars so what's a billion dollars between friends who was largely on the international side Amazon doesn't really give any details about things but reading the tea leaves their you know it feels like there's there's some stuff going on they did annualize some things like suck exertion of some changes they made in India but then also you know I think a lot of the Wall Street analysts are or feeling like this is Felix of tariffs and packed so when item is sold from China and us that counts as it's where the seller is that that counts is international Judy and Skip Bayless so so that could be Amazon on the little bit of that passes Air Force they're going on Ding and revenue little bit more when you look at North America and you take out just when you just get the retail North America that snow cloud computing. [16:33] Whole Foods is a 25% begin to put this in perspective Amazon overall grew about 30% even that it's amazing you know huge 800 lb scale North America grew at 25% and then International only grew about 15% which is a pretty steep deceleration from last quarter is 27% of us continue to do really well that 46% and a physical stores came in right at expectations one of the stupidest things we like to talk about on the show is the advertising that continues to grow triple digits that grew a hundred 23% and is now 2.5 billion dollars and yeah that that just kind of looking at the trend overtime book with this the show notes so you'll get you one of 18 at 132% U2 under 29% you 323% so little bit of a slow down but really just continues to be white hot that eternity Jason for some other highlights. Jason: [17:42] Yep it's always hard to talk about a Slowdown in growth when it's still over 100%. That's a first world problem for sure but it's it was sort of a bifurcated story you I got the, the revenue was a slight Miss for the quarter but earnings for the quarter were really strong so they were. 2.8 billion for the quarter which is the their highest earnings ever that means that's four straight quarters that they've earned over a billion dollars in profit hopefully that. Scot: [18:18] Jason. Jason: [18:20] I was just going to say I hope I hope that finally puts to bed the the silly myths that they're not profitable. That is wildin more profitable than they were just a short time ago so that is like 10 x their profit from a year ago and that earnings was a pretty solid beat on the market expectation so on the one hand you go man they say we miss Revenue but they blew away earnings that should be a great story but then you know they gave their guidance for Q4 which was a little soft and disappointing to the market and the ramifications of that is this after hours trading their stock took a meaningful dipso their stock was down 9% tonight, if that holds tomorrow it is conceivable that Microsoft which had a good earnings report yesterday well at least briefly pass Amazon is the second most valuable company so I'm not sure that says anything particular negative about Amazon but that's a pretty impressive run for Microsoft will get themselves on the mixer. Scot: [19:31] There's a little bit of overlap so one of the reasons Microsoft doing well is azure which is their competitor to AWS it seems to be really doing well and and kind of sticking out of a definite second position and nudging out IBM in Google that were trying to get that that second position by the Amazon seems like seems like it's pretty quickly becoming a two-horse race between Microsoft and Amazon. Jason: [19:56] An in general Microsoft is still way behind in Cloud but. As a result able to grow much more quickly and of course in our category of retail what are the one category where you know Amazon faces some headwinds and their major retailers that obviously don't want to use AWS and there's some big powerful retailers like Wal-Mart they really discourage their vendors from using AWS so retail is one one particularly lucrative category for Microsoft azure. Scot: [20:26] Yeah on the. On the marketplace side one of the metrics than Amazon does discloses 2% of orders are units that came from Marketplace sellers last quarter it was 53% and it held steady at 53% again. Don't spend picking up about 1% every quarter so stabilize here at 53%. Jason: [20:53] Yeah and then there you know there after their names there's always the Q&A with a couple of the Business Leaders and, I'm always looking for tidbits there and one question that that Amazon got asked is about ads on the Alexa platform and I was. Happy to see there the guy that weaves investor relations for Amazon say that that they have no plans to, put in the ads on the Alexa platform in the day exclusively want to focus on it being a good customer experience so. Not shocking but but good to affirm that that they're not going there. [21:40] The and then you know kind of following up on the analysis of of the quarter I think you know people are definitely looking at that International softness and you called out like that they laugh their suit. Acquisition so that that probably had a material impact on International growth and then there's this big. Indian holiday it's right on the cusp of a shopping holiday that's right on the cusp of Q3 and Q4 so. Last year it was in Q4 this year it's in Q3 and so they're cute their comps. Mirror over a year are challenge cuz the holiday was in in one year and not the other. One piece of speculation is another report out there estimating the size of the Prime Membership. And that they are reporting that that growth in frying is dramatically slowing down which is, not a huge surprise you know the Amazon themselves they said they have over a hundred million Prime households and that's a global number but in North America there's only like 120 or 240 million households depend on how you count so it and it has to be getting harder for Amazon acquire more. Prime households and if it is in fact true that they're requiring us households than that certainly would have an effect on on future quarters growth so that's going to be an interesting thing to what. Scot: [23:09] Yeah yeah once you've kind of have every household on Prime then it becomes a saturation game to see the one thing on the fourth-quarter guides that you mentioned is it was a little soft on Revenue but but about 8% off on the prophet side and Amazon's not being specific about it but one thing they did announce that we haven't heard on the stove is there increasing everyone's wage for warehouse workers to $50 there's a lot of controversy around this so so this was a reaction to a lot of politics going on Bernie Sanders has been kind of lighting them up these ladies kind of but I think as an ox we're kind of silly things where they'll take Jeff bezos's net worth in / 365 and don't say that that's how much he makes a day or so. [24:05] Forgets the 20 years where he you know took tons of building Amazon but whatever I do dress and there is a point there that there is a large disparity between his of the top echelons of Amazon warehouse workers to Amazon straighten that out by $50 an hour doing so they get rid of stock options and some other things that they don't like that I can't win so that in the lot of people trash come over getting rid of those things so that being said it is a prematurely and talk to literally hundreds of thousands of employees so a lot of speculation that. Big head wind on the bottom line going in the fourth quarter is going to be that that wage increase Warehouse her. Jason: [24:52] Yep and I I think they were specifically asked if that it was going to have a material impact and Amazon didn't comment on the exact impact of the wage increase but that that wasn't pretty like from my view a pretty Savvy move you know there's been this trend in retail for a while you don't return a really competing for talent you know unemployment is low so it it's hard to get people and we've seen both Target and Walmart you like dramatically increase there starting wages in an effort to improve the quality of the workforce and then you know Amazon came in and LeapFrog them in and Amazon is competing for four people at this point to fill those Protomen centers in so that like I'm sure there was some political advantage in doing that like that you know I do think in a lot of ways it's the right thing to do I was here for the employees. [25:48] But it also just is a capitalistic thing to do in terms of making sure that you get the input the workforce that you need in this competitive environment so be interesting to see even what economic impact it has but the other question that they got about the financial impact in this going to happen thank you for is the u.s. postal rate increase that is coming and am I was pretty clear that they did not feel that the postal increase was going to materially affect them into me this is another one of these sort of funny ironies where. [26:28] You know that the president that appears to have some animosity towards Jeff Bezos adopts an issue and then some some which situation gets past like the sales tax Supreme Court ruling or now this postal rate and you know that you like him superficially is tweeting that this is going to have some negative impact on Amazon Amazon. [26:52] Has more ways to deliver packages than everyone else they have more of their own package delivery and so the operations folks and Amazon or like no we're just going to be smarter about which of our delivery vehicles we use only think we're going to be able to absorb that rate increase and of course no other retailer has those levers to pull in so like the postal rates going up actually is a competitive Advantage for Amazon versus the rest of the market that doesn't deliver 15% of their own packages like Amazon does. Scot: [27:24] Yeah to that vein couple of tidbits so there's a lot of video surfacing of Amazon order to something like 20 to 40,000 Prime delivery dance these are really nice there these Mercedes sprinters and I don't know about you in Chicago but in the Research Triangle the Raleigh-Durham area I probably see four or five of those a day right now and it started where they were going to large corporations so where were there a lot with my stuffy and your folks are reporting to Neo at Cisco and Citrix and MetLife. All these large employers there seeing the Amazon big ants go there a couple times a day and then now it seems, large Prime neighborhoods deserve this kind of replicating the FedEx Ground model to FedEx ground not realize this but the next error is W-2 employees FedEx Ground as a 1099 network of local stores that are given license to FedEx brand and they operate ground on behalf of their local businesses so, Amazon your kind of started. [28:35] This mix of some fulfillment center employees are driving these things and I talked to several of them and the ones I've talked to her are full on Amazon employees but a lot of them also are these 1099s ramazan will set you up in your own little 1099 delivery to you certain number of packages and effectively a dollar per package so your point pretty fast meeting at Amazon that really wrapping that up. Jason: [29:05] Yep. A couple of other pieces of Amazon news not necessary related to earnings but Amazon did launch a new credit card in partnership with Amex this I think maybe you last week that was targeted at small businesses and it has some interesting features it's a no fee Amex or if the first time you can get a free MX and. They sort of have variable terms for each purchase that you can select at the time of purchase in Amazon so that so there's a unique user interface in Amazon for purchases better. Completed with this credit card and so you can say for example that I want to use my Amazon reward points to pay for this purchase or you can say I'm going to, pay back this credit card charge in the next 30 days and you get 5% back for doing that or you can select these 90-day terms. You know take 90 days to pay for the purchase so kind of an interesting tighter integration between Amazon and Amex. You know what I'm always interested in those kinds of tie-ins because you know payment is such a. A potential competitive advantage in the e-commerce pay so it's interesting to see Amazon doing that. [30:26] I mentioned earlier that we now have 3 ghost tours in Chicago we also had the the first go store open in San Francisco this week so these things are rapidly opening. Side note kudos to the Amazon real estate team they've actually done a phenomenal job of hiding a lot of these stores from the media which is you know. Carefully carefully watching property managers to figure out where all these stores are and I I know it's Amazon's been a pretty good job of surprising us all with some of these openings. I had an interesting little debate with some folks on Twitter this week. [31:01] You know as as it seems clear that they're opening a network of these stores and there is that Bloomberg report that they're going to have it three thousand of these go stores buy. 2022. Doug Stevens a retail author and and subject matter expert me to tweet saying. You know that 7-Eleven is now on the clock. They're going to get dramatically disrupted by Amazon and they're really not ready for it and I sort of made a smart alec or reply. You know while I've never would tell anyone not to worry about Amazon I'm not sure that first and foremost Amazon go is likely to affect 7-Eleven I said that. You know probably print amazed year or hobo pie. Are at much more risk from the Amazon go store then 7-Eleven is and my contention is the ghost or is really a restaurant. You know whose main mission is to get you lunch when you only have a half hour lunch break and that it's it's not really a competitor to a traditional convenience store in so some folks on Twitter jumped in and we had a we had a good healthy debate about that then. Obviously the Ender Wintergreen I'm right. Scot: [32:11] Or they got blocked. Jason: [32:14] Yeah alright I just scream them exactly a side-note top three categories at 7-Eleven. 7-Eleven sells a ton of gas which Amazon go stores don't sell yet 7-Eleven sells a lot of tobacco which Amazon doesn't sell at all and then they sell a lot of alcohol which Amazon go only sells in one store in Seattle so you know where food is in a growing part of 7-Elevens business it's not even a top 3 category and it's it's like 95% of the skews in this this ghost or so that's why I think Joe is much more of a restaurant than a traditional convenience store. Scot: [32:53] When one last reminder is it's been a little over a year since it was on announce their hunt for hq2 so Alaska chelation is that we should be hearing about that here in the fourth quarter. Amazon said it would take about a year now it's firm you this involves a lot of details and local governments and stuff so I. Adders reversing a ramp up of speculation around hq2 stuff I'm kind of interested. You know there's a lot going on in Chicago not pick on Chicago's great City. For all the other stuff they've done the kind of event Seattle York and Chicago but now they're just really pouring it on in Chicago I wonder if that so I could slide indication that maybe Chicago's kind of pulling into one of the top. Possible locations for hq2. Jason: [33:50] Yeah it would be interesting with my wife and I were driving around town today and there's a ton of trains building conda commented like do the the condo developers know something about Amazon that we don't know. That. Why do you think Chicago is a interesting market for Amazon and you know it's a good test Market because it is it does. I have a broad representative demographic I personally would be a little surprised if it's here but that being said I suspect we're all going to know pretty soon. Scot: [34:28] And then you use it surfaced at nursing little spot between Amazon and eBay. Jason: [34:34] Oh yeah so you may actually filed a lawsuit against Amazon and it related to Amazon potentially trying to steal top Marketplace Sellers from eBay and the reason I was a lawsuit is the allegation is that the way Amazon was doing this is they very systematically infiltrated a private chat board for these eBay sellers and created a bunch of fake personas and you know what we're reaching out in Contin privately contacting sellers, through like a pretty sophisticated alleged hacking of this this site eBay communication platform and you like it it seems like they have a fair amount of evidence it is true it's a little surprising to me that there's someone in Amazon's position would do, you know I would certainly presume that wasn't a corporate directed to do this but that you know someone had enough autonomy to do this and can put off of that scale it would be interesting so I don't know what the real story is there but it's going to be fun to watch the lawsuit play out as a an interested Observer. Scot: [35:55] Cool so that that kind of wraps up our Amazon part of the show and then we had a lot of listeners that were sad that we we took a little break there so apologies for that and then two other topics that it looks really wanting this hit on IR Sears and then this really big change to the u p u which is squarely in your. [36:18] Your wheelhouse Jason saw the Sears side there was kind of two buckets of questions we got from listeners one was really you know some folks selling on the Sears Marketplace or are you in this would apply a guest to vendors yo what what should I do to Sears in her chapter 11 bankruptcy what percentage of the time companies come out of bankruptcy other times they don't and when they don't they're they leave creditors sitting there kind of holding the bag and a lot of times adders even a Marketplace seller would be considered under their left holding the bag and then the other thing so I'll tackle that one in the other one Jason was over all kind of Redan what's this really mean for retail my guidance would be you know it's all a risk tolerance question and Anna scale question so if you're you know if if you did have a speed bump and you lost you know usually is inside of trailing 30-day payment type cycle skiers of material enough that you did lose 30 days of that cash because of a bankruptcy if that is you know pretty. [37:32] Material to your business to be getting packs it out of 10 percentage I would start trimming my sales for selling on Sears and reduced to a tryst September set yes it was I think that's the prudent thing from a risk management perspective when a company goes into bankruptcy to start limiting your risk, now if you're someone that that is super risk intolerant and it is going to bother you make me time to phase out that Marketplace because and and see what happens with the chapter 11 you can always come back and it when the risk is diminished so I would kind of you know. Figure out your risk tolerance a spectrum of hey I go bungee jumping off Bridges as a super sweet. Each risk for breakfast all the way to I don't own stocks I keep cash under my mattress and level and then apply that to to your. Your strategy for selling on Sears and also put it through a filter of materiality is is this more than 10% of your business or not. Jason: [38:38] Yeah that seems like totally Sound Advice I can't believe you you gave out my mattress strategy online though. Scot: [38:47] Yeah they will talk about inflation some other time. Jason: [38:51] Okay. Scot: [38:53] It's actually. Jason: [38:55] You know every time one of these is a significant retailer goes under there's always this question like who's going to benefit from them going under or what what's the impact going to be on the rest of retail you know Sears is still like a 10 billion dollar a year retailer in so that you know it today. Assuming they don't emerge from the realreal organization and and retain a significant portion of their. There are 10 million dollar Revenue run rate a bunch of other retailers are going to benefit. [39:31] The thing I like to point out is Sears has already donated most of its market share to the rest of the market so you know. There there was a time when they were 40 billion dollar retailer and they've been slowly a roading since 2006 and they probably have donated. Over a hundred million a billion dollars in in share to other retailers. Over these last 12 years or so and so you know the the bulk of. [40:03] The benefit of them going out of business like has already paid off two other retailers. And you know there's a lot of analysis that goes in a who's going to benefit most from these stores closing and you know who has favorable, merchandising categories that are similar to Sears who has similar geography to Sears to benefit from the. The specific store closures. But in general I think if you look at the macro Trends I I sort of have this premise that were really seeing a bifurcation of retail and where were essentially seeing. A few huge aggregators that focus on selling every product that's available in doing so at a really low price and super efficiently. And if that sounds familiar to you in North America and that's because I just described Amazon. There would be a good argument that Walmart is also one of those aggregators that that's going to continue to do well and in the future we might have a duopoly if he's too big. Big aggregators and then everyone else is in a really focused on selling curated assortments to specific. Target audiences and really selling exclusive products that you can't get from the big aggregators in so those big aggregators are. In the best position to benefit when. [41:24] You know someone else that used to win based on assortment and scale goes away so like obviously Amazon Walmart or. Going to take a significant percent of that share that Sears losses in Sears specific case because of a big portion of the revenue is soft goods at a low price point poles is particularly well positioned to. To get a nice benefit from the Sears stores going away and because appliances what a big chunk. Of Sears Revenue Best Buy is also in a position to get. A nice lift from the the the Sears market share lost so I think those are the retailers. Will see benefit the most but you know. At this point we're not losing the big one of the biggest retailers in America we're losing eyeshadow up there once was one of the biggest retards in North America so I don't think this is going to be a title change in the Retail Landscape by any means I think you know it's more sad because of. The history of Sears and what a dominant position they want had and how important they were to the evolution of retail in North America and frankly in many ways how important they were to the actual development of North America. Scot: [42:41] Anderson so you can take off the mattress all the money from of your mattress and put it. It sounds like. Jason: [42:48] That probably would be far from the worst investment I ever made. Scot: [42:53] What will save that story for a future ship so that's that's good perspective now tell us about this whole Universal Postal Union treaty and what's going on. Jason: [43:07] So this is a very little known thing that suddenly is getting a lot of ink so you know back in 1874 at the treaties burn the world establish this thing called the universal Postal Union later got rolled into the to be sort of a subsidiary of the United Nations and then the idea of this poster 3D was that every country you would agree to uniform rates for postal delivery so when you're in France and you want to mail something to Germany you could know in advance what the cost would be to mail that and the cost ought to be, the same for mailing between every country and each because that mail requires the, cooperation of at least two Postal Services the one that picked up the package from you and hands it to that that foreign country and then that terminal country that the country that gets it and has to deliver it. [44:11] They ate their handling of that package the treaty agreed on how those two postal entities would share the the rates for that shipment and they agreed that that the international shipments would get equal trip treatment with domestic shipment so if the. Is the terminating country you know couldn't for example deliver International Post much slower or less reliably or with West tracking are these kinds of things. [44:44] And so it sort of made it very easy and possible for 4 people all over the world to mail things to each other and know in advance how how much it was going to cost and have pretty good confidence that it was going to get delivered and then overtime this treaty added some other useful things they added some standards like a big stamp should be they added electronic data interchange so that the the Post Oak interchanges could be more efficient and they added some you know things to catch fraud and crime and and share databases and things like that so so we've all had benefited for a long time from the Disposable 3D it's got a hundred and ninety-three member countries in it now. [45:26] So if I feel like that's that's good for the world it's super important in a lot of e-commerce. Pretty good cross-border e-commerce still gets delivered via the post office so there's a lot of artists that make beautiful art here in the US and they sell it to people in Europe in the primary way they deliver that is. They mail it via post a post so the one sort of real challenge is, did there was a clause built into this postal treaty that essentially said developing nations, would get charged less terminal fees. And so what that essentially said is more developing poor or countries would not have to pay as much to have their their post delivered by richer countries and so if you're in one of these more developed countries you are obliged to accept packages at a lower cost from a developing country and if you lost money delivering that the way you would have to make up that money is by charging the people in your home Market. More for postage and like there's probably a good argument that that. [46:43] That mechanism for developing countries was probably fair and had some benefits and made it easier for more countries to participate in the treaty, one of those countries that was flagged as a developing country was China. And the treaty is super slow and it takes a long time to change like I think there's not a good argument that China should still be considered a developing economy for purposes of this treaty but but they were and so what that essentially meant is that a seller in China could sell something on Amazon to it to a buyer in the US and they could very cost-effectively, male that that good via post and frankly it was much cheaper to send something from Shanghai to San Francisco then it was to send something from Chicago to San Francisco and ironically that that seller in Chicago selling the San Francisco was having to pay a higher postal rate to subsidize that cheap delivery from that Chinese seller so treated this really unfair situation where Chinese sellers had a much lower cost of postal delivery for cross-border trade then did for example American companies and so a lot of people felt that was unfair and so now the Trump Administration is threatening to pull out of the treaty, because of that that fundamental unfairness which frankly totally agree is unfair the problem is. [48:13] If we do in fact pull out of the treaty. What that also means is that all those sellers in the US that want to ship via post anywhere else in the world can only do it if the United States negotiates a individual treaty with a country you want to ship your goods to sew. [48:30] That that potentially would mean we need a hundred and ninety-three postal trees that we have to negotiate one and one with each of these countries, many of those countries we don't have an ambassador with right now so I guess it would be a big Challenge and so while I think pulling out of the upu fixes this this. Fairness imbalance with China it's going to create a bunch of new headaches for people in the US that do cross-border trade and so what you know frankly the best out come here and what what I think a lot of his hope is the case is Milli by threatening to pull out of the upu we could put. Pressure on the the governing bodies of the upu to sort of fix this this China Gap to keep us in the treaty and so hopefully this is just some sabre-rattling it causes them to rethink the developing nation clause and we stay in the treaty but if we do pull out that'll be you no good news for some people that are competing with China but it'll be bad news for a bunch of other US base sellers. Scot: [49:32] One of the companies that seems potentially most impacted is wish so Bocas wishes Marketplace are Chinese sellers Supervalu oriented so they're not using FedEx or anything like that they are using the postal system and the wish founder was actually kind of saying to you earlier point about it is kind of ironic that. By raising the postal rates it actually kind of helps Amazon versus other retailers that this is another interesting kind of example actually oddly benefit Amazon because you know now there won't be the goods from wish that you're competing with Amazon isn't the middle sister where they bring products are from China on boats called Dragon Boat so it'll have to get a lot of their goods they skirt this this this just don't understand how that works correctly. Jason: [50:25] Yeah. You're exactly right and this is again the biggest sellers I actually have more options right and so even and I don't know how true this actually is Betty wish claims that hey this isn't going to be you know to join material to us because we are selling enough stuff from China to the US that we can be a cost-effective freight forwarder so we can put all those small packages on our on boats bring containers over here and then dump them in the US Postal System to be delivered domestically and not have international right and because we're a big seller we have enough volume to aggregate to do that where as you know smaller sellers wouldn't wouldn't have that option so remains to be seen whether which will be able to follow through on that if we pull out of the upu treaty but like certainly it's your point Amazon. [51:16] Already doing that and there was a I think Jason Delray did an interview with the CEO of wish and he had a funny comment like when the the Diplomat talk about pulling out of the UVU one of the reasons they say it is it's totally unfair the US Post Office is losing three hundred million dollars on. On postage as a result of this deal and the wish CEO offered to pay it and obviously like that's not the the total cost that's lost from from this this imbalance but it I thought it was a funny snide remark. Scot: [51:57] Hearing you describe it almost could be an eBay proxy on eBay benefits from a lot of this stuff too so it'll be interesting to watch that and then in the world that talk a lot about ePacket do you know what that is and if it's a fact about us. Jason: [52:12] Yep like so that is a specific postal product and it if I'm remembering right it's indexed to the upu rates but it's not actually governed by the upu rate so it would be possible for us to change the ePacket rates without pulling out of upu but it would require the US Post Office to change some of their their pricing policies and I think that might require a vote of Congress if I'm if I'm not mistaken so it's a a slightly special case but it basically is indexed to the rest of this problem. I'm so it's all it's all going to be interesting to watch like I never thought I would get a chance to talk so much about the nuances of international postage systems. I think my my father-in-law the stamp collector would really enjoy it. [53:09] And that's going to be a great place to wrap it because it's happen again we've used up all our a lot of time as always if we got anything wrong or are you have further questions or want to discuss anything from Today Show would love it if you jump on Facebook and leave us a comment will try to reply right away as always if you benefited from the show now would be a great time to jump over to iTunes and give us that 5-star review if you hate it today show Scott's a personal cell phone number will be in the show note so you can give him a call and let him know. Scot: [53:44] Absolutely look forward to hearing from everybody thanks for joining us everyone have a great week. Jason: [53:49] And until next time happy commercing.

Host Ali Nazar interviews Jason Marsh, Editor in Chief of the Greater Good Science Center, on the campus organizations work on quantifying what makes people happy.Transcript:Ali Nazar:You're listening to KALX Berkeley 90.7 FM, University of California and listener supported radio. And this is Method to the Madness coming at you from the Public Affairs Department here at CalX, exploring the innovative spirit of the Bay Area. I'm your host, Ali Nazar. Thanks for joining us today. And with me in studio I have Jason Marsh, the founding editor-in-chief of Greater Good magazine. Hey Jason, how's it going?Jason Marsh:All right, how are you? Thanks for having me.Ali Nazar:I'm good, thanks for coming in. And so, we have lots of founders on of organizations and I always asked the same question to start because you usually create something because you see like a gap. You're trying to fill something. So what's the kind of the problem statement that Greater Good is trying to solve?Jason Marsh:Sure. Well they're really to kind of at the heart of of Greater Good. And one is that there is a whole lot of great research and big ideas generated within universities like Cal, that never really see the light of day, never really make it out into the world and have an impact to improve peoples' quality of life, to improve relationships, to public policy or education. And so, Greater Good was really born to this idea that we should have a more of a bridge between science and practice. There should be ways where the fruits of research, should really make its way out to the public, to really benefit the public, improve public wellbeing really broadly and improve individual wellbeing, improved the way people relate to one another and improve institutions, like schools and workplaces and healthcare systems and and political systems as well. And really, the second animating idea behind Greater Good was that there's this fundamental misconception about human nature.There is, has been a prevailing belief that we're sort of born bad, born aggressive, born antisocial. And yet, there was this emerging body of research over time really pointing to this more positive narrative about human nature. Suggesting that actually there are really deeply rooted propensities for goodness, for altruism, for compassion. And by changing that narrative and changing what people expect humans are capable of, we can really change behavior and really change some of those institutions as well for the better. So there was really this marriage of ideas that there's a real need to get the word out about this research coming out of academia, coming out of social science, to really change people's understanding of who they are, what they're capable of and in effect, provide a huge bridge between what the scientific community was starting to understand and what the rest of the world could really benefit from.Ali Nazar:Wow. It sounds amazing and so needed in these times. And it makes me wonder about kind of the history of the science of happiness. Like that doesn't seem like a science, when you think about sciences. What is the history behind this study?Jason Marsh:Sure. So, backing up, for decades really, for much of the 20th century, a lot of psychology and other behavioral, cognitive, social sciences were really focused on the roots of pathologies. The roots of why is it that people do evil, do bad things, how to institutions become corrupt. But starting, there had been this strain of research that really toward the late nineties started to take off and focusing on, let's look not just at human pathology, let's look not just to what's wrong with people, but really try to understand what can go right and how we can actually help people have a greater sense of thriving and happiness and wellbeing, both to address some of the deficiencies that we experience and also to take certain situations where people might feel like they are just sort of getting by in life and to really infuse a greater sense of thriving, of happiness, of wellbeing, to really create in some ways a more positive ripple effect through society as a whole.And so, that there has been this growing movement, some call positive psychology, in some ways to distinguish it from other strains of psychology. Focusing really on happiness and wellbeing, and our center has in some ways built on some of that research, but we've also really drawn on work, not just on individual happiness and personal wellbeing, but really social relationships. And there's, at the same time, it's been a growing emphasis, not just on personal happiness, but on social relationships, on compassion, on altruism, really what makes people do good and what makes people feel good.Ali Nazar:So that it's a relatively new science is what you're saying.Jason Marsh:Yeah.Ali Nazar:Late nineties, so it's a 21st century type of study.Jason Marsh:Exactly. Yeah.Ali Nazar:Interesting. Okay. So before we dive further into what Greater Good does, can you tell me a little about yourself? Like how did you come to become founding editor of a magazine dedicated to this topic?Jason Marsh:Sure. Yeah. I sometimes think of myself as like the luckiest guy in Berkeley. I came out here in the early 2000s, about 2002, just at the time, the center ... At the time, the center was called the Center for the Development of Peace and Wellbeing. So it was a a real mouthful. And it was a bunch of psychology faculty who kind of knew, really broadly that they had this mission to take this new research of wellbeing, new research of compassion and generosity and help get it out to a wider audience. But they didn't quite know how to do that. They didn't have as much experience on the communication side, on the journalism side.My background's in journalism, I got connected to the faculty. They basically invited me to pitch what I would do with some kind of publication focused on this research, on these topics. I had been doing something sort of coincidentally somewhat similar type of work in Washington, DC had been editing this more political journal on civic engagement and community building. A lot of overlap and so put together kind of my dream job basically for what I would do with a a magazine along these lines that I thought would really be beneficial and really make a big public impact and really help people. And you know the team, liked the idea, we developed the first issue as a pilot and that was published in 2004, and it's kind of taken off from there.Ali Nazar:14 years later.Jason Marsh:Yeah.Ali Nazar:Still publishing, is it a monthly/quarterly, what is it?Jason Marsh:So it started off as a print magazine. It became a quarterly, 2009 we shifted to be entirely online so it's now, Greater Good magazine is now entirely online. And then, since that time as well, we've grown other programs and projects out of Greater Good. So there's still the hub, Greater Good, greatergood.berkeley.edu, is still the hub of all kinds of content, thousands of articles and videos and podcasts. But we have also an events series, a couple of online courses, host of other programs, all basically focused on the same research.Ali Nazar:Cool. Well I want to get more into kind of what you guys do and the breadth of it. Right now we're talking to Jason Marsh, he's the founding editor and chief of Greater Good magazine right here on campus at UC Berkeley. And before we get into the breadth of programs, I did want to get a little bit more into that founding story of the Greater Good center itself, because this show really focuses on this kind of spark of how do things grow from this one idea. So it sounds like you had could walked into an organization that would just kind of beginning, can you give us the history of it?Jason Marsh:Yeah, so it's a really amazing and pretty powerful story. So, there were a couple Tom and Ruth Ann Hornaday, who graduated from Berkeley in the early sixties and then sadly in the nineties lost a daughter to cancer. And they both were trying to honor her memory and spirit and also build on their great love and affinity for Cal, and came to the university and said essentially, we want to do something to foster peace and wellbeing in the world and to honor her memory and honor ... But they knew it was really the great research and great ideas coming out of Cal. And they, together with George Breslauer, who was dean of social sciences at the time, came up with an idea for a center that'd be different than a lot of other centers at Cal or beyond, that it wouldn't just be focused on research. It would really be focused on taking research conducted at Cal and even more broadly and really focusing on getting that work out to the public. So it had a wider impact on families, on schools and society at large.So there was sort of this initial brainstorming committee of a few psychology faculty at Cal. So Dacher Keltner was our founding faculty director, Steve Hinshaw and Phil and Carolyn Callan were all psychology faculty whose research in one way or another, all focused on, how do we not only address sort of what's wrong with people, but help them build really lives, positive relationships. And so, together came up with the idea of ... and I should say as well, Dacher and and Steve and Phil and Carolyn, all were committed in their own work, not just to doing really top tier research, but also really to find innovative ways to get that work out to the public and have it serve a real public benefit.So, together they came up with the idea for a center that would do that, came up with the idea for a Center for the Development of Peace and Wellbeing. Fortunately, I was able to connect with them just at that moment where they're contemplating how to really get the center out to a wider audience, get the research out to a wider audience. And I should say a few years after that, after Greater Good launched as a print magazine, we changed the name of the center to be the Greater Good Science Center, instead of the Center for the Development of Peace and Wellbeing.Ali Nazar:Yeah, Greater Good's a little catchier.Jason Marsh:A little catchier, a lot of confusion about what exactly we did. And it was also really hard and long to say.Ali Nazar:Okay. So you're ... Jason, you're someone who traffics in this knowledge of what makes people happy. So I have to ask you the question, what makes people happy?Jason Marsh:A good question. So the simple answer is strong social connections and positive relationships. There's a line from the research though, sort of with a caveat, is a line from the research saying relationships are necessary but not sufficient to happiness, right? So, if you don't have positive relationships, it's going to be really hard to find true happiness in life. And yet, it's not just about relationships itself. There could be other factors, other extenuating circumstances, other things in play that could still hinder your happiness. But the relationships are often really a foundation and key starting point.So out of that work, there's been a whole host of studies, lots of research looking at the benefits and also how do you then build successful connections? How do you build successful relationships that are so strongly linked to happiness? I should say as well, when we talk about happiness, we're not just talking about fleeting feelings of pleasure, and just feeling good. A definition that we use is, it is partly about positive emotion, but it's also about this deeper sense of purpose and meaning and satisfaction with your life, that goes beyond just moment to moment experiences of pleasure. So that's why our tagline actually for the Center is a science of a meaningful life. Right? This deeper sense of goodness or commitment to something beyond the self.Ali Nazar:It's really interesting that that's the definition as you see it, because it speaks to the interdependence that we all have on each other, as opposed to like, you know, it's a very American, I think concept to be very independent.Jason Marsh:Exactly.Ali Nazar:To not need anybody. So, it's like our society is maybe not set up to be happy in some ways if that's what you guys have found in the science.Jason Marsh:Right. Yeah, exactly. And that's, in some ways, makes the work somewhat challenging, we're running against some pretty big cultural currents. At the same time, that's what gets us up in the morning to feel like there is a need for the work, it isn't just something that people are already completely embracing, and you know that's already, totally dominant beliefs or practices in our culture there are these competing ideas. And don't get me wrong, I think there's a lot to be said obviously, for individualism and for independence, but part of our work and part of the research suggests is that it's really important to find the right balance, right? Between both pursuing your own personal goals and dreams and wellbeing and also recognizing the ways that you are also living in community. Your actions affect others and a lot of your wellbeing is both contingent on and helps to influence the wellbeing and contributions of others.Ali Nazar:So have you ... I would think in the science of happiness, there's been studies of many different cultures and like this is a social science, right?Jason Marsh:Yeah.Ali Nazar:So that's a lot of like looking at long trends and surveys and stuff like that. So what are some of the learnings that have been found from other countries that maybe aren't as individualistic capitalistic as America?Jason Marsh:Yeah, so you know, it's a great question. In the last five, 10 years or so, there's been, as the science of happiness has taken off and really gone global in a lot of ways, there has emerged a broader sense on happiness around the world. There is now a world happiness report, put out sort of in connection with the UN regularly, that often finds that the countries that are ranked the highest on measures of happiness, looking at several different factors, are the ones that have in some ways a a stronger egalitarian spirit, have a stronger sort of social democratic tradition of greater commitment to the common good and less inequality.So, a lot of those values that are more community-minded, more civically-minded, often translate into greater happiness for individuals within the country itself. Which is sort of paradoxical, right? We often think about those two things being somewhat at odd, right? Like having to sacrifice your needs for the greater good. When in fact like actually having that commitment to the greater good, having a commitment to something bigger than yourself. Having a a culture and even on government that tries to foster that greater sense of like, we're all in this together. Actually, the individuals within those societies, do better, feel better individually as well.Ali Nazar:Are there any places in the world, like if you're, you know, looking to be an expat American, you want to become a happy person, where should we go?Jason Marsh:Denmark always ranks really high. Denmark, Norway-Ali Nazar:Scandinavians.Jason Marsh:And other countries. Yeah. Costa Rica does as well actually often in a lot of those surveys.Ali Nazar:Is there a correlation between higher tax rates and happiness?Jason Marsh:That's been looked at a little bit, because [crosstalk]Ali Nazar:A little bit of theoretically that's the go for ... you're giving it to other people, right?Jason Marsh:Right, exactly. Yeah. I mean there's, that the tax rate itself hasn't, I wouldn't say it's been proven as a definite cause or clear determinant of happiness, but certainly there were a lot of other sort of correlational data, a lot of other data suggesting that there is a strong relationship. At the very least, there's evidence suggesting that inequality is bad for happiness, right? And inequality is also bad for pro social behavior as well. Pro social as supposed to antisocial behavior, right? So in situations where there are greater power imbalances, it's not just bad for the person who is on the lower end of the totem pole, but also for someone who is in a higher level of status, there's evidence suggesting that they're actually their skills at connecting with other people being more altruistic, being more compassionate, those skills are actually compromised by their elevated status. So all the kinds of skills that you need really to make the kinds of connections that are linked to happiness are impeded by elevated status.Ali Nazar:Yeah, it's really, really fascinating. We're talking to Jason Marsh, he's the founding editor-in-chief of Greater Good magazine from the Greater Good Science Center right here on campus. You're listening to Method to the Madness on KALX Berkeley 90.7 FM, I'm your host, Ali Nazar.And so, one of the founding principles of this center is to bridge the gap between academia and the real world. And so, I was looking at your guys' website, you have a lot of programs for different types of real world applications. So I'd like to dive-in a little bit about kind of how you guys are delivering on that promise of the mission. So first let's talk about parents and families, it's one of the constituencies you kind of name on your website. And I'm a member of a family and it's hard, with little kids and all that. And so happiness is a thought that comes around a lot, because like you're kind of always yelling at some little kid to do something. So what have you guys found and how do you apply research to that setting?Jason Marsh:Sure. So, I mean, one of the main things we've tried to do, really from day one, is to produce quality research-based materials, resources for parents who are often up at 2:00 AM, I've been in this case with a kid of my own, googling ways, looking for ways to be a better parent, to yell less at your kids, to be more understanding, be more patient. And so, part of our focus has been from day one, to really focus not just on common wisdom, conventional wisdom, but really what the research suggests are really effective ways to foster happiness and wellbeing within families. And also to raise kids with the kinds of skills that lead them to a sort of happy and meaningful lives. So from early-on we had produced, when we had the print magazine, a lot of articles on families and child development.We had for a number of years a really popular parenting blog called Raising Happiness by actually a Berkeley PhD, Christine Carter, who wrote a book of the same name, that also proved to be a really great resource for parents. And more recently we've actually launched a new parenting initiative, we have a great parenting director at the center, Miriam Abdula who runs a program, where she's both writing about the science of wellbeing for parents and families. And also, running a program where we give out grants, sort of modest sized grants to different community-based programs around the country that want their work to serve parents and help their kids, help parents help their kids develop the kinds of skills that we know are linked to happiness and wellbeing and leading sort of positive, meaningful lives. So providing both funding and also helping to connect those programs to researchers who can help ground their work a little bit more deeply in the research to make sure that there's a really strong scientific basis to it.Ali Nazar:Okay, cool. And tell me about some of the other programs. I saw there was a bunch of different people or constituencies that you kind of focus on, but tell me about some of the main programs right now.Jason Marsh:Yeah, so like parents, we've also focused a lot on educators over the years. Really helping people who are trying to help kids, especially both so that they can provide useful resources and tools for kids and also to serve their own wellbeing. Right? I mean, educators, there's huge demands, a lot of stressors, a lot of evidence that there's really great burnout and turnover in the profession. So we've tried to provide resources both so that teachers can better serve their students and also so they can better serve themselves and make sure that they don't burn out.So similarly, we've a whole host of resources on our website for teachers. We also for the last six years, have run a summer institute for educators. We've had teachers come from just about every state in the country, from dozens of countries around the world, to come to Berkeley for a week and get really a crash course in the science of wellbeing and explore together how they can take the science and really apply it meaningfully to their classroom.And now more recently, our education team is developing a new resource coming soon, early in 2019, really to serve as a clearing house, really the best tools, best resources, best practices and strategies, so that to make it even easier for teachers to take all this wisdom from the science and really incorporate it into their classroom, into their school, without having to add yet another thing on their agenda to make it as seamless and hopefully as painless as possible.Ali Nazar:Cool. Well it sounds like there's ... your website has a lot of tools it sounds like, for helping people to access the different programs you have. And then when I was looking through, there's a breadth of things you guys do. There's events, there's content being published and-Jason Marsh:Yep, exactly.Ali Nazar:So I did want to ask about, you talked about what makes people happy, but this science, I would think in the study of this would give you some tips on how to change someone who's not happy to become happy. Like that's the trick, right?Jason Marsh:Yeah.Ali Nazar:There's a lot of people out there who are weighted down by a lot of different stressors of all different types. So what's your recommendation? You guys have all access to all this knowledge. If there's a listener who's not happy, what should they do?Jason Marsh:Yeah, so there are ... it's been a really big question in the field, right? Because early on, focus on happiness was like, let's just figure out if we can take people who are, you know, moderately happy and try to make them happier. More recently, there's been a focus on, let's look at more at risk populations and people even who are having suicidal thoughts are at risk for depression, and see if a lot of these same strategies can be effective for them as well. And fortunately, many of them have been. There are ... should say, like offer the caveat right up front for people dealing with serious depression or serious psychiatric problems, it's still, most important for them to see a mental health professional. The tools that we offer on the site are not supposed to be a substitute for therapy say.But certainly there's a huge number of people who just feel like ... who are kind of unhappy, who are maybe struggling with maybe some symptoms of depression or just feel like they're not as satisfied with their lives they'd like to be. And so that, the research has found, successfully found that there are ways that they can actually benefit over time. One of the big focuses of that work has been on gratitude as a practice. Right? So there's been, for the last 20 years or so, a huge emerging science of gratitude. We focused on a lot, which in some ways is just really simply, recognizing and appreciating the gifts and good things in your life, that you might otherwise take for granted. Right? So they basic idea is, there are lots of positive things that might happen to us over the course of a day that we just kind of ignore or take for granted.And by training our minds over time and focusing a little bit more deliberately on some of those good things, we can gradually kind of change the narrative that we're telling ourselves about our lives and change kind of the emotional tone of our lives, so that it ceases just to be about the ways that people have taken advantage of you or been mean to you. But you start to recognize ways that people have actually gone out of their way to be kind to you and nice things that people have done for you and you see yourself differently in relation to others. You see other people differently and you see sort of human nature differently as well. So, and at the same time, you're creating more of these positive memories, right? By actually noticing and appreciating and savoring more positive experiences, you're then creating these positive memories you can return to over time as well. So it provides both these greater momentary experiences of happiness and also these greater lasting memories and lasting resonating feelings of happiness as well.Ali Nazar:It's so interesting that you say that we're speaking with Jason Marsh is a founding editor of Greater Good magazine. It's interesting that you say that because our society is moving to a place with less time and less and less time. So like you're talking about getting space to recognize positive things and have gratitude for it, but it feels like we have less and less space.Jason Marsh:Yeah, exactly. Yeah. It's a huge issue and I think that's been something we focus on in the last few years, especially is the impact of new technology, especially on wellbeing, on being able to hone a lot of these skills. Because yeah, I mean gratitude, there's also a huge emerging science, which a lot of people have read about on mindfulness. A lot of it places really strong emphasis on taking moments essentially to pause and notice your surroundings. Even savor and appreciate some of the good you might pass by otherwise. And that is really at odds both with the pace of our culture, with our work lives, with technology. And so, in some ways it's a great challenge, but in some ways it's calling for the need for these practices to be as widely spread and embraced or embraced as widely as possible because there are so many other forces that are pushing in the opposite direction.Ali Nazar:Yeah, yeah, well the work is really needed. So I appreciate you coming in and telling us about it. I always end interviews Method to the Madness with the same question. This is an organization founded with a thesis to help bridge the gap between the academic research on happiness and getting it out there in the world. So, if everything went perfect five years from now, like what would the goal of Greater Good Center look like?Jason Marsh:Yeah. So if everything went well five years from now, we've been asking this question of ourselves a lot lately. I think we would see a lot of the tools and ideas we're putting out in the world, embraced not just by more individuals. Like we were really pleased to see the growth in our organization as ... in general. We-Ali Nazar:How many people work there?Jason Marsh:When we are a print magazine, let's see, we have a staff of 14 but other Grad students and faculty who are involved. When we started as a print magazine, we reached 5,000 subscribers. We now have about 600,000 unique visitors to the website each month. We have an online course that's enrolled about 600,000 students as well.Ali Nazar:Anybody can enroll?Jason Marsh:Anybody can roll. It's a free course. Anybody can access the resources on the website, they're all free. So that's all really, really gratifying to see so many individuals really hungering for and based on our own surveys and research, seemingly benefiting from those resources. However, we feel like there's still just really huge needs in organizations and institutions. In our education system, in our healthcare system, in our workplaces. And we're starting more and more to work more directly with schools and districts and companies and leaders in healthcare, and where we'd really like to go and where we'd like to see the work go is to see it embedded even more directly to inform and really influence and shape the policies and best practices within some of those major institutions that just have influence over, millions if not billions of people worldwide.Ali Nazar:Cool. Well, it's a great vision and mission. So thanks for coming in today, Jason.Jason Marsh:Thanks for having me.Ali Nazar:We've been speaking with Jason Marsh, he's a founding editor-in-chief of Greater Good magazine. And Jason, just a quick plug for people want to understand how to get involved and access these resources. Can you tell them how to do it?Jason Marsh:Yeah, thanks Ali. Best place to go is our Greater Good magazine website, that's greatergood.berkeley.edu. And best way to stay on top of what we're doing and stay in touch is to sign-up from that site for our free weekly newsletter.Ali Nazar:Okay, great. Well you heard right here, this is KALX Berkeley. I'm your host Ali Nazar and Methods to the Madness. Thanks for joining everybody, and thanks again for joining us, Jason, and everybody have a great Friday. See acast.com/privacy for privacy and opt-out information.

This is the last episode of the podcast before we hit triple digits—and it’s a good one. Health copywriter Jason Rutkowski joins us for the 99th episode of The Copywriter Club Podcast and we covered a lot of ground, from Jason’s secrets for connecting with both mentors and clients to a look inside his copy mastery process (he sent us a screen capture of his file system so you can see what he’s talking about during the podcast). Here’s a look at what we covered: •  how Jason failed his way to copywriting as a career •  finding his first few clients and figured out his niche •  the “one thing” he tried that resulting in connecting with good clients •  the strategy Jason followed to get A-list copywriters to share their stories with him •  the single most important thing you can do at live marketing events •  what it’s like to be “cubbed” by an A-list copywriter •  why you absolutely need to reverse engineer great copy to get better •  the difference between a copywriter and a master copywriter •  the foundational copywriting reference everyone should study •  Jason’s research process (and how he reverse engineers A-list research) •  how to get started writing in the health industry •  the gmail hack for studying the market you want to write for •  the reason A-list copywriters work with copywriters (an opportunity?) If you’re interested in not just being a copywriter, but becoming a great copywriter, you’re going to want get this one. Click the play button below, or scroll down for a full transcript. And of course, you can find it on iTunes, Stitcher or in your favorite podcast app.   The people and stuff we mentioned on the show: Clayton Makepeace Parris Lampropolous Marcella Allison Paul Martinez John Carlton Gary Halbert Jim Rutz Carline Cole David Deutsch AWAI Barnaby Kalan The Single Best Way to Get Clients Parris’ book list On Writing Well by William Zinsser The Brilliance Breakthrough by Eugene Schwartz Brian Kurtz New Market Health Health Sense Media Dr. Gundry Advanced Bionutritionals Nature City Patriot Health Alliance The Agora JasonRutkowski.com Kira’s website Rob’s website The Copywriter Club Facebook Group Intro: Content (for now) Outro: Gravity Full Transcript: Rob:   What if you could hang out with seriously talented copywriters and other experts, ask them about their successes and failures, their work processes and their habits, then steal an idea or two to inspire your own work? That's what Kira and I do every week at The Copywriter Club Podcast. Kira:   You're invited to join the club for Episode 99 as we chat with freelance copywriter Jason Rutkowski about writing in the health and wellness niche, investing in himself and his expertise, his business and writing processes, and what it took to gain traction as a copywriter when he was just starting out. Rob:   Hey Jason. Kira:   Welcome Jason. Jason:    Hey Kira, hey Rob. Kira:   How's it going? Glad you're here. Jason:    Oh no, I'm excited. I haven't done one of these in a while, so I was excited to do it with you. Rob:   Definitely took a little time to get our schedules aligned. We've been trying to make this happen for a little while, because we know a little bit about you and where you write and we think it'll be a great conversation, so we're glad to have you here. Jason:     Yeah, definitely. Kira:   All right, so let's kick this off. Jason, how did you end up as a copywriter? Jason:     Okay, I'll give you the quick story about this. I was 19. I just finished my freshman year of college. I got an internship at a normal 9-to-5 job. And I realized I hated it. I was like, oh man. I saw all these people who worked in an office, you know, 30, 40 years; I'm like, is this really going to be my life? And also at the same exact time, I was on the internet one day and I found an internet marketing forum. And I was like, what's an internet marketing forum? I don't know.

In this week's episode we answer questions about intuitive eating. Here is the original question sent to us from Abby. Hey Jason and Roz, I listened to your Girls Gone WOD interview, and soon after listened to a recent episode of the Dear Sugars podcast that dealt with body image, dieting and "trusting your body." They had experts in "intuitive eating" on the show.   The Girls Gone WOD hosts had some real concerns with counting macros--one of them developed a kind of eating disorder, right? and needed to stop counting her macros and start listening to her hunger cues to figure out how to be more sane about her eating. By the way, I liked how you responded to them--you didn't tell they they were wrong or whatever--you were good listeners and were supportive, and I hope they came away from the interview with a better understanding of the way you do flexible eating.    Similarly, in the Dear Sugars podcast, they talked about learning to be more compassionate and generous with yourself, --- Support this podcast: https://anchor.fm/ownyoureating/support

In this week's episode we answer questions about intuitive eating. Here is the original question sent to us from Abby. Hey Jason and Roz, I listened to your Girls Gone WOD interview, and soon after listened to a recent episode of the Dear Sugars podcast that dealt with body image, dieting and "trusting your body." They had experts in "intuitive eating" on the show.   The Girls Gone WOD hosts had some real concerns with counting macros--one of them developed a kind of eating disorder, right? and needed to stop counting her macros and start listening to her hunger cues to figure out how to be more sane about her eating. By the way, I liked how you responded to them--you didn't tell they they were wrong or whatever--you were good listeners and were supportive, and I hope they came away from the interview with a better understanding of --- Support this podcast: https://anchor.fm/ownyoureating/support

ShopTalk is an annual trade show held in Las Vegas focused on retail and e-commerce innovation.  In it's third year, it has become the fastest growing can't miss event in our industry.  This year 8,400 industry professionals attended the event (up from 5,400 last year).  The 2018 version took place March 18-21, 2018 at the Venetian in Las Vegas. There is so much content at the show, that we've divided our recap into two parts.  You can get part 1 here, in Part 2 we cover: Grocery Track - Catering to new consumer - Narayan Iyengar, Senior VP of Digital at Albertsons Glossier Keynote - Emily Weiss, CEO+Founder Amazon Keynote - Eric Broussard - VP of International Marketplaces and Retail Coach Keynote - Joshua Schulman Walmart Keynote - Mark Lore and Andy Dunn Houzz Keynote - Alon Cohen president and co-founder Google Keynote - Daniel Alegere, President, Retail and Shopping Code Commerce - Erik Nordstrom  (President of Nordstrom) and  Don Kingsborough (CEO One market) Code Commerce - Doordash - Tony Xu, CEO Code Commerce - Jennifer Hyman, CEO, Rent the Runway eBay Keynote - AI eBay Keynote Jan Pedersen, Chief Scientist and Scott Cutler, SVP, Americas Ascena Keynote - Ascena Keynote - David Jaffe, Chairman & CEO Boxed Keynote - Chieh Huang, CEO We've been honored to be included on a few lists of top e-commerce podcasts this week. DisruptorDaily Top 10 Retail Industry Podcasts BoldCommerce 16 Best E-commerce Podcasts of 2018 Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 122 of the Jason & Scot show was recorded on Thursday, March 22, 2018. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Transcript Jason: [0:25] Welcome to the Jason and Scott show this episode is being recorded on Thursday March 22nd 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo. Scot: [0:38] Hey Jason and welcome back Jason Scott show listeners episode wanted to take a rare pause on the show and Pat ourselves on the back. Jason: [0:52] Let's do it my arm is breaking as I'm doing it. Scot: [0:54] Awesome, T-Rex help Pizza patting himself on the back of fun fun dinosaur fact so we have received a couple accolades on the show much to our surprise so first of all there is a site called disruptor daily and they rank podcast and different, Industries and they put the Jason Scott show on their top 10 retail industry podcast so that was exciting. And then another company called bold Commerce they put out 16 of the top e-commerce podcast books are pretty intense cuz you can tell they actually listen to all the different podcast out there, we can even put forth on that one so our goal next year is to move up the list or real happy to be placed in the top quartile there and they took three of their favorite episodes. And one of them was episode 74 with our good friend Melissa Burdick so thanks to Melissa for helping us make the list next up was. Episode 89 which was our hot take on the Whole Foods Amazon acquisition and last but not least Andrea. Like episode 83 so it's good that we before we even saw this we had have them both back on the show for a second appearance so it's good that we since those were quite popular that we've had those books back on. Jason: [2:13] Yeah you know there's a little inside baseball on the Jason Scott show there's a lot of. Jogging for the first guest to get a third appearance on the show I know it's very competitive and I'm a little worried that some violence could come into play. Scot: [2:30] The knives are out for sure really kind of trying to figure out what's going to happen there so this this is a good. Jason: [2:38] Sorry one of the important side note about the Bold Commerce list number 10 on that list was our friend Eric you didn't at ecommercefuel who's been doing a great podcast for a very long time and what was cool about that is their favorite episode of of of Andrews was an interview with me, so basically I'm the most powerful person on the list. Scot: [2:59] Absolutely I don't think anyone would disagree that. We'd like to thank our listeners for a we could not be receiving these accolades if it weren't for you guys. We always talk about it in the show so I'll put in a plug here, it definitely helps us to continue to get listeners and receive factly it's like this if you subscribe to the show so whatever your favorite podcast listening technology is be at the iTunes iOS podcast app or whatever, please make sure you subscribe that helps us with our podcast SEO rankings and definitely tell your friends. [3:37] Poop so jumping right in here and episode 122 this is so we we continued. We concluded Shock Talk yesterday and while it's still fresh in our minds we wanted update everyone on the highlights from the show so the second part of a two-part series, back and we back in episode 121 we covered the first half is kind of halftime report of what happened at shoptalk so that covered the Sunday and Monday of the four days and then here in episode 122 we're going to cover the back half for the second half of shop talk and really dive into what happened Tuesday and Wednesday. Jason why don't you kick it off with some of the first things that you attended Tuesday morning. Jason: [4:18] So I have to start with some hearsay news we were recording a podcast so I didn't get a chance to attend this, but there was a the grocery track was going on Tuesday morning and at least to me a piece of news broke in the grocery track of the VP of digital at Albertson's announced that, Albertsons would be launching a third-party Marketplace in the grocery space on their site later this year so they were they were soliciting, applications from sellers interested in being on the marketplace. Scot: [4:53] Sprinkle and dumb, I read the news report and it said something like is almost a dig at Amazon Whole Foods at there's something about those guys are some brands are leaving and Albertsons was building this Marketplace almost as a home for this works is that is that kind of. Jason: [5:11] At least partially in again I wasn't at the session so I'm kind of putting some pieces together you know as we've covered on the show little bit like there. There has been some blowback in the Whole Foods acquisition. And it's not clear whether this was driven by Amazon or this was a change that, Whole Foods was in the process of making sort of in parallel with the Amazon acquisition Whole Foods used to have a very sort of local orientation with their suppliers and so individual. [5:42] Stores could buy from suppliers suppliers could have autonomy to do their own merchandise in the store and they're welcome to come into the store and set up their own displays and do sampling and things like that. And coincidental with the Amazon acquisition. Whole Foods has moved to a much more National management of vendors are some of the small vendors have gotten kicked out some of the vendors have less control over their own stuff in the stores and as you can imagine some of the vendor community. Is a little disgruntled with that so I think weather. Weather that's you know actual discontent or whether you know that's just a mild annoyance it it certainly makes sense that a competitor like Albertsons would try to make some hey there and I think they. They mention that's one of the reasons that they that they wanted to offer a a. Marketplace alternative to Amazon in the groceries based I would also say in some ways Albertsons has been one of the more digitally aggressive. Traditional Grocers so that you know that they brought out a lot of the. Expected program GNC like expect to see like curbside pickup but you know they also made the. The hugest acquisition in the traditional grocery space they they even spent over a billion dollars on plated to have their own did you admit native meal kit service since I know you know this is. You. There's a lot of questions in my mind about how a market place for fresh would work but the. [7:15] You know I I will certainly be watching it and will cover it on the show. Scot: [7:19] Grateful I'm just excited to have more marketplaces out there this is going to be a theme of today show Ms is Mo marketplaces so, that's exciting and it'll be interesting to see you know they're what their vision of a grocery market place looks like sometimes we find retailers use the language Marketplace but really what they mean is just kind of Dropship so you know they, they use EDI and curated kind of a thing and kind of old-school mechanisms to expand their selection versus when I think of marketplace it's usually much more you know of an Amazon Marketplace, model or even an eBay where you know any brand could go to Albertsons and say Hey I want to join this Marketplace I've got this cool hip new that are no energy drink or something and want to make it available to your audience so, well I'll be eagerly watching to see what you learn about what it looks like. Jason: [8:08] Yeah yeah and I assume your strength is much deeper than mine in this bed. I suspect you agree it's not uncommon for a retailer to underestimate the complexities of running a Marketplace. Scot: [8:22] Yes absolutely. Jason: [8:23] Yep so then we wrapped up the podcast we were recording and we made it to the first keynote in the morning which was Emily Weiss who's the CEO and founder of glass CA. Garcia is a cool digitally native brand in the beauty space that has been experiencing rapid growth and gets a lot of Buzz and Emily you know strictly talked about is one of the sword. Next Generation female leaders of successful company so it was interesting to hear from her. And she talked a lot about sort of what she called the new definition of a brand. And you know this is a theme that continued with some of the other speakers and that. I've been continuing to have with some folks on Twitter you know right up to Showtime today. But there's that you know this notion of of another company no longer being in charge in the consumer being in charge and so you know Emily describe glassy a as a brand that was really designed. Around listening to the customer instead of talking to the customer until she talked a lot about how traditional. Brands when they when they you know want to be more customer-centric there their real goal is to make the customer feel like they're heard and you know she was making the point that. Making customers feel like their hood is heard is a far cry from actually hearing customers. [9:55] Answer sheet you know she thinks a lot of their you know what their goals are disingenuous and then it's much harder to build a company that's really responsive to things are hearing from customers. And that the way this manifest itself is she's like you know the days when a customer turns to an expert be that a spokesperson or brand. For product Discovery are sort of over in her mind and she thinks that you know today, with the Advent of digital in 1 to 100 and all this transparency that consumers are much more likely to turn to the their peers for product Discovery than they are to, decentralized experts and and her proofpoint for that is the 80% of all of her customers came to Glass EA based on a peer recommendation and so, that was interesting to me because it's a it's a thing that that comes up in a couple of the other presentations on on Wednesday about the role of, a brand and how important brand is in the role of of sort of spokespersons and celebrity endorsers in those sorts of things so so more to come on that. Scot: [11:01] Close confused for most of this one because where I come from we call it glossier and I was like where is the glossier person and never could find them. Jason: [11:12] Yep when you work for a French company you learn to make everything sound a little more pompous. Scot: [11:21] Then I after the glossier keynote we had Amazon and this exciting as they had to Amazon Keynotes at the show which is pretty unusual usually pretty. Turtle wish they didn't like to come to these events and really say much but at if your member in the first half we talked about the Amazon go execs they're talking about that and then here we had Eric Broussard. He is a VP of international, International marketplaces and Retail at Amazon. [11:49] And it's really interesting because you know what what Amazon has done is built over a hundred 75 Global fulfillment centers but they were very country-specific so you could load balance. [12:04] Products made in the USA Fountain Centers let's say you. You were a third party and you're using a PA and you were selling widgets and you would send those widgets in the Amazon list they saw a thousand Amazon what kind of load balance those across is fulfillment centers based on where anticipates the the local points of demand. That's really cool. [12:25] But Amazon historically hasn't had a way for you to really leverage that week we've had several customers really but their heads up against this where they wanted to expand to the UK for example and leverage app, Amazon Local UK people were like well you have to have an entity and you have to have a bank account and you have to have a tax document and you have to have insurance document and you know you have to, do you all these different things so. So really this is a program it was on spin working on for a while and you know I don't know if formally announce it here but they are, they're kind of getting a lot of details so so so see what they can do now is your product can be seamlessly sold globally across the all the hundred seventy-five phone is Interstate that's a great use cases so. [13:13] You could be a u.s. seller and then sound of Europe you can you know as you know they're really big in Indiana they have like 40 performance centers in India that's a huge Battleground for them Japan China are there now in Australia. There's rumor still be in Brazil at some point so you could really use Amazon for your Global infrastructure and. Interesting about this that gives Amazon a huge Edge is Amazon's also invested a ton of money into their catalog and you know so Dave. Unlike a Marketplace like eBay which is more freeform not and where everyone that sells an Xbox or something kind of. Describes it in their own unique way on Amazon they have this kind of golden description of. Every Xbox and whatnot and what's nice about that is it allows them to then as they going to other countries translate that that skew or that a sand once. And then now you as a seller if you match up against that and it's the same products as in like less you say France in the US you get kind of translation for free. I just kind of the punchline they're so so that's a really nice benefit of the Amazon Marketplace solution say really talked about. Kind of a six-step process where they made it, insanely easy to sell globally system as you send your inventory so whatever your country you're in and also this is all cross-country so you could be an idiot seller as well as a UK cell or whatever so whatever you said your inventory into FBA they receive it in storage. [14:44] And then it becomes Prime enabled and then Amazon you can tell Amazon what countries you want to listen to and then they will put the product into this country's and they will load balance across country so number three. The customer orders the product number for Amazon pick packs and ships they handled the front end customer service so if someone has a question about the product, eye of your delivery or anything like that they have their entire force of local folks even handle the reverse Logistics through back to the system so, pretty amazing and a lot of people questioned Amazon's got money. Don't doubt for this performance centers of the powerful things you can do when you do have that ass that you know they have to look at all the other. Companies out there no one has as many assets like this as Amazon so so you can eBay when they're doing cross-border trade. They're using and I think someone like a Pitney Bowes or something to kind of do the freight forwarding which is great and I'm sure that's a very capable thing. But it's not hundred 75 fulfillment centers it's kind of a reshipping, model versus a get it native and sell the ones he too, A2Z efficiently out on stage two examples of this one was exploding kittens if you don't know exploding kittens it's a fun card game that and. [16:06] Kittens do not get hurt in this game is Callicoon oh except the draw for is an exploding kitten that's kind of the short version of it and then. [16:14] They talked about how Amazon enabled them to essentially Go Global with you cut a five-person company that was really focused on creating a card game with witches. Pretty amazing and then they booking did that we just got very untrue real story with Phillips and Phillips talked about how they launch the product and India using the Amazon Global selling offering so what's the one thing that's interesting is. All the big guys were very much in by big eisenmann Google Facebook Amazon eBay all their talks were really geared towards. How do you say wanted Brands to kind of get on their platforms which is pretty interesting cuz you know 3 years ago it was all about Sellers and that kind of thing now. Everyone really excited about more emerging Brands and old-school Brands and how to get them on to these platforms so those are my takeaways from them. Jason: [17:05] Yeah and once I don't own that one there's a show in Las Vegas earlier in March called Prosper which is, show really targeted at Amazon sellers I did not attend but one of the news items out of that was they formally did announce this program in North America and so they like apparently it's at least formally been, announced that anyone can opt-in if you have FBA inventory in the US that they'll now will fill it in Mexico or Canada if you choose. Scot: [17:39] Sprinkle. Jason: [17:40] So it seems like it it's a real thing and I I really like I was super interested in that because it just seems. Where you like we are to be successful. This is all one in 2D versus you know the sort of complicated orchestration and multiple partners like handing off the Box between. Freight forwarders & Custom agents and all those sorts of things. Scot: [18:05] When you do that you lose things like trackability in a little details like that. Jason: [18:10] Exactly and the way the package arrives at the customer may not be the customer experience you want. [18:17] So then the next keynote was the president of coaches Joshua Schulman. And very different than the Amazon presentation is a brand presentation and coached of her listeners is going through a little bit of a change you know the parent company used to be coach when they were a single brand. In the last I think year or two years they've acquired a couple companies so they acquired. Alegria shoe manufacturer Stuart Weitzman and then last year they acquired Kate Spade and so they become sort of a house of luxury Brands and they renamed. The parent company tapestry so Josh was the president of Coach which is you know the biggest of three brands owned by tapestry. And Joshua talked a little bit about this this Big Brand Evolution that coaches just kind of completing. They over a number of years had really kind of moved from, luxury to mid-market so they they had gotten very promotional they were selling throw out of department stores that were very Promotional and a lot of people felt like the equity in the brand have greatly eroded. And so for the last you know I guess I would say 2 years coaches been making this over to effort to. Take themselves out of the discount supply chain as Joshua says is it that you know we are focused on reducing our promotional impressions. And that's it. He's probably a smart thing to do it it's both been reflected in coaches results which which have been much much more favorable this last year. [19:55] But also as we've talked a lot about this show that you know Casey well and Bob would say the retail bifurcation, but there's a lot of Market customers and you can do real well catering in them and there's a lot of Deep Discount customers and you can do really well catering to them but where you really don't want to be is the uncomfortable middle in between those two extremes, and that's kind of where coach at Swift and so they've kind of done a successful job of moving themselves back up market so so Joshua was talking a little bit about that. He did such a dress department stores which I found interesting I'm not I'm not sure that they mentioned it but Joshua is new to Kochi he became the president of coach last year and he was formerly the president of. Bergdorf Goodman which is one of the you know the the. [20:44] Kind of historic famous luxury department store so obviously you know he has a strong affinity for department stores and he shared his POV that you know department stores aren't going away there an important part of the ecosystem. And then he kind of talked about the future of the coach brand. And you know a big part of coaches future he believes is personalization so coaches rolled out a lot of capability to customize handbags on an individual basis so now from their website you can. Personalize a lot of your products and their coach owns a bunch of different stores they're starting to deploy that. Personalization capability in the stores as well so you know instead of getting the same bag as everyone else you can get a bag that's completely unique just for you. Which I do agree that I think is an important part of the evolution of all these Brands and then his last point in. North America which is coach's Home Market that you know where Promontory thought of is a handbag manufacturer and so they're they're investing a lot in. Redefining themselves as a Lifestyle brand and in that sort of a jargon for, where we're going to sell apparel and other items in addition to Handbags and he talked about markets like China where, they've been a Lifestyle brand from the beginning because they had this much broader assortment when they first went into that market and how differently the Chinese customer thinks about Coach then the the North American customer and so that that was sort of his pitch for the evolution of the brand. Scot: [22:16] Recap my favorite part of that one was Courtney Reagan I'm a big CNBC junkie and she didn't really do it here but on TV I've seen her, when you I think what happens is Sony's Executives meet these reporters and they just kind of assumed they're just general business reporters and don't know the industry Courtney has like an MBA in economics and Retail and she's been at this for for a long time and I've seen her just eviscerate Executives before I guess are good she had, Lundgren tied up in knots one time. When you just talk about the Amazon competition so I was kind of really waiting there for her to catch him in the Trap in and I think she went pretty easy on him because the cameras weren't rolling I do think you know why. What are these guys seem like they're in denial about stories it's like they won't admit that. Yeah it's a challenge or something like I got a really weird vibe from him that everything's hunky-dory Pollyanna you know stores are great brands are great and you know. I can talk doses PR or if he was like really believed it also if that was kind of you know a little concerning. Jason: [23:20] Yeah and I think there is a theme you know all of these guys came on and they're they're defending their legacy ass that's right so he's talking a lot about how important the store experience is and in addition to, you know the Wholesale stores that coach yells through coach owns a bunch of their own store so they certainly have a expensive asset there that they want the world to believe is valuable and I would argue, is valuable and it's going to come into play on some of the other teammates were going to talk about later when you know when, the CEOs have to spend a lot of their time justifying why their legacy assets are so valuable like you know it's it's it's fair to question you know if they really were that valuable they probably wouldn't have to spend a lot of their time saying they were valuable. Scot: [24:02] Yap exactly. Jason: [24:03] And by the way I randomly I happen to be sitting for that keynote next to Warren Thomas who's the other retail reporter at CNBC so that was so we were we were watching Courtney together was kind of fun. [24:17] So then the next keynote was a very good get for shoptalk it was Mark Lori that the digital president at Walmart and Andy done the, the founder of bonobos which is now a brand owned by Walmart. Scot: [24:35] Yeah this was a last-minute addition which I thought was interesting it almost kind of felt like maybe they came because they had something to say so I think we were all you really waiting on this one. Jason: [24:46] Yeah. That that probably is true and I would argue that in a way that made it so it be less interest in keynote than it might have otherwise been for me because as we've covered on this show Walmart had a very visible Miss on there, their Ecommerce growth last quarter in their their stock took a pretty significant hit as a result of that and so you know that was the 1st? Was was to, kind of talked about in justify, the the in a fact that they had something like 20 or 25% growth versus the 40% growth that folks were expecting and you know I'm really interested in and hearing him talk about that like it it did take up the bulk of, this particular a keynote and you know I would have been interested to hear a little bit more about about some other aspects but I will say, Mark's answer which seems like it's now that the corporate line there is essentially that Walmart planned, to have slower growth and Q4 and that it was sort of a retooling quarter for them you know after that had had several quarters of, a very fast growth and he kind of pointed out that look we don't give quarterly guidance we gave annual guidance and we hit our annual guidance so we don't understand why everyone was so surprised. [26:12] And I like I I think it's fair to say we're all a little cynical of that that story. Scot: [26:17] Yeah I don't know if it's because of the podcast or what not but I think. Between the two of us if I had 40 people come up and offer that they thought that was totally BS that you know the drill line was that you know nobody in retail plans for the 4th quarter to be a reach 1/4. Jason: [26:33] I think I think the the summary they're like well I think for an update they hit their annual guidance and that's all great if your plan is to have a soft fourth-quarter it's a bad plan. [26:46] So other than that there were some interesting tidbits from that presentation you know Marc reported that they're up to seventy-five million skews for sale which is you know from a couple years ago that they were in the you know couple million skews so that's. Astronomic growth I would assume the bulk of that is Marketplace and there's you know a slight bit of controversy, here in the there is a former Walmart exact it's actually suing Walmart and one of his main claims is that Walmart store to artificially inflates this number bye. By saying how many skus are in the database and not necessarily actively for sale but I think I think directionally. Walmart has added an awful lot of skews and is within an order of magnitude of of Amazon which is pretty impressive. [27:36] Is what I think Amazon's about 400 million skew something in that range. [27:42] So then he did talk about you saying we talked about a lot on the podcast which is Walmart's grocery Grocery progress then I'll have 1200 stores that do grocery pick-up and so what that means is 1200 cities where customers can order groceries. Online and I drive by the store and pick it up and you know except for those 1,200 stores you can't order fresh groceries from Walmart so. That this is this weird thing and I think the analyst had until he picked up on you. When you're talking about store sales you talk a lot about same-store sales cuz you compare apples to apples when you talk online you talk you know General growth. But now you really have this third category which is sort of. Online grocery growth which is a hybrid you can only deliver if you have a store and able to do so so there are 1,200 stores and they they expect open another thousand storms this year. You know you're my mind that has been the primary driver of their they're huge e-commerce growth and so I think they need to open a thousand or 1200 more stores this year to comp well against. Against the last year or they're going to they're going to laugh all those those grocery stores they opened last year and then and that would dramatically swell their comps. He also mentioned that they are now in 100 metros with same day delivery this is this Blended solution where I think they're using to live they're using Uber and they're letting their own employees do deliveries. So that that is interesting we we will hear about that from Target as well and then Andy talked a lot about the did you need a vertical brand which is a term he coined and and how that fits into the Walmart strategy. [29:23] I think it's Mark Lori that always uses this metaphor a bit but they talk about the the. The analogy of Walmart to Netflix and they say you know I got you. Netflix is a super successful model you can go watch a bunch of other people's movies on Netflix but increasingly, the big draw to Netflix are these first-party content that Netflix created exclusively like house of cards or Orange is the New Black and so to Andy and Mark these, did you need a vertical Brands like bonobos ModCloth are. The sort of unique videos in the in the Netflix model I don't know what they meant to but they did make an announcement that I had not. She heard before which is that all of those did you need a Brands will eventually find their way onto the jet sales platform which many of them are not right now so that would be ModCloth for example would be sold through Jets and, Martinez said the high level strategy is look where we're redefining the jet brand we're going to use jet as, the brand to win affluent Urban Millennials and you know which sort of perfectly complements the markets that the Walmart brand is really good at winning. Scot: [30:44] Couple funny things in their answer to the question of the bonobos being on chat was, your Delray Jason had gone out and search and I found like this pictures of monkeys since he couldn't find my notes they kind of lost Jason he was like so going to be a media company I don't think he understood the, metaphor of unique, original content that they were trying to make their butt but it is it's early as you know it's definitely I think it's a very valid strategy it's kind of like Prime exclusives that Amazon is doing the challenge with Walmart is, you know they've got like 8 things going on that that are pretty intense and each of their own and their e-commerce. Peace is not at a scale that Amazon is so sweet hard for them to execute well in all of this. [31:39] The warmers. Jason: [31:44] I think that was the main main adjust of the Andy and Mark show other than. Scot: [31:49] Are you crushing on Andy Dalton. Jason: [31:50] Andy Andy had some really cool slippers on that apparently where the celebrity got married in. Scot: [31:56] Took a picture, I guess my picture that was circling this fine then up next was house in the house Houzz, and houses really cool story so I actually know one of the founders his name is Alana and he was from 2001 to 2010 he ran a bunch of engineering groups at eBay and his wife's name is I'll probably put you this but, Adi tatarko. [32:26] And they are from Israel and they moved to Silicon Valley and by house probably for a bazillion dollars and they were they were working on refurbishing the house I think about. 8 years ago now and you know what they found was there was no. Great Ecommerce experience for Furnishing your house so house is borns they built house is a way it's kind of a it started out as really a place where. Counting is a super vertical Pinterest so. If you did a project where you refurbish your kitchen for example and you wanted and a designer wanted to maybe kind of get involved it was coming designer Marketplace so you could get ideas from other people could have done it and then also designers and an end designers like, because it was a way for them to acquire customers and that's how they were kind of monetizing it. Then what happened is there so many do-it-yourselfers that would say hey I really like how Jason and his wife did their kitchen. I want to and I can see this faucet in there that I really like and this countertop but I want to know exactly what it is and how to go buy it. So there's this disconnect between the, products you would see in these kitchens in other rooms are being refurbished and ability to buy them so they created a product Marketplace on there in full disclosure we've been a partner of there is that channel visor for a very long time, I used to be more of a paid less than kind of moved to a pure market place we can buy them all and house and they've been a great partner verse so it was cool to hear the story I've never heard the story from kind of that. [34:00] That start to where they are now and here they are today they fit 10 million items on the marketplace they've got over 20,000 Sellers and 40 million monthly active users so you know it's pretty pretty neat that they kind of just. Really solve the problem and we're able to build a couple different ways of monetizing that on there he was interviewed by Alfred Lynn who was one of the. Jason: [34:28] Yeah that's a good question yeah I think he was there at the beginning I do not know if he's officially a founder or not. Scot: [34:34] Yep but he left free shortly after the Amazon acquisition and Joint Sequoia which is one of the. List of blue chips are in the Bay Area so a lot of his questions I wasn't sure the retailers were rocking on cuz he's talking about MARC station strategies, yeah he's like going kind of deep into the VC language they're so it's kind of interesting and then, the last thing I thought was interesting was they did talk about you know, they are so this is really big right now in the home category, where you know you can not eat you can use augmented reality to look at a room and being a piece of furniture or a faucet or something like that or maybe in the cabinet you can kind of get a feel for how that's been looking so they have a million skus that are when I call a are enabled and, this was one that will make sure that we caught that, it improves your conversion 11 x when when people are using they are to look at an item, so in my calculus I kind of said well that was conversion rate something like two to three percent so what is that like 33%. [35:39] What your kiss makes sense cuz people going to be pretty far down the funnel if you're going to be like okay I'm going to go home, I'm going to fire up the say our thing and I'm going to drop that widget that piece of furniture whatever it is into my room to see if it's it's so it's so I guess it does kind of like a really big bump to me. [35:57] Does that jive with you. Jason: [35:58] It does and I think YG for the reason you mentioned like I don't think if you just took any random Shopper on that site and force them to to use an AR experience that they would suddenly convert. 11 x better so I don't think they expect you know why these friends probably is better is, I don't think it it's this the magic Silver Bullet to cause everyone to buy. I think you have to already have a much higher buying intense. To be interested in trying they are Peter so you have to already be more attached to the item and you're investing more time and in kind of setting it up on your phone and walking to the environment where you want to use it and so it's it's, it's one step below are on the funnel and in so I think it is a great tactic, they are also that your web urging a something we talked about in the show Google and and, Apple have both rolled out AR kits for their operating system that make it way easier to do this kind of stuff well and so. Pals wizard of the pilot user of those two stacks the what people is usually underestimate when they implement this feature, is you need a source of really good data to have the 3D models of all these items into the fact that they have a million items out of there, their inventory of, you know that they have good 3D models for is is to me pretty impressive and that that now is officially the big barrier for any other retailer that wants to add this feature is just how do you get the good 3D data and I I think in the long run. [37:32] The brands are all you know in the same way that they have to provide a long and short description for a retailer when they want to sell something you know what the brands are going to have to start providing 3D files for for these things as well. Scot: [37:45] Yeah that seems like a very large number to me because you and I know most manufactures is a struggle to get a you know a human readable short description you know so they'll be like. Wooden chair so I kind of was locking the logic I was like wow that's a million is like 10% that's why I would have guessed. Jason: [38:07] Generally these first-generation experiences it's more the retailer created the data themselves. Scot: [38:14] Yeah so they must be like you, getting the products in and scan I know people will shoot videos and practice way there's these houses that get quantity one of these things to do that so I was thinking maybe they picked they have the benefit of knowing the top 10% items get them into a studio and then you can run a scan on them that was did you wrote did you walk to the same process. Jason: [38:34] Yeah and they didn't talk about how they do it that's and I would have love for them to Deep dive into that but that's exactly what I would assume and it does create this interesting thing so, and house where is really weird category cuz a lot of furniture is. It's not really branded Furniture it's like private label furniture that a bunch of different retailers all sell the same thing and call it something wildly different so there is some office case in their butt. [39:03] If you think about it house now has that in owns that 3D data the manufacturer doesn't so when. [39:13] Amazon or Crate & Barrel or some other seller wants to sell that same item you know they they, they're going to eat at to spend the same money has spent or the manufacturers are going to have to go spend the money to do a 3D scan the file or, go back to the designer and get the 3D CAD files from the designer in so it does it does create this new work stream this is how, a lot of new attributes in e-commerce this is how they start the first time someone a retailer wants to use in the retailer has to invent them and once it becomes a best practice it gets put back on the manufacturer and eventually the manufacturer gets couldn't provide that mean the same as it is true a digital images. Scot: [39:52] It also made me wonder you know the wafer ones talked about a lot that made me wonder how many models they have and if they're doing something somewhere. Jason: [39:59] Yeah and if you think about it in this category is even more ugly like a, the hardware the 3D scan these big items is more convoluted than then you know like simple tabletop items and so much of the stuff is drop shipped like if these were shoes that sat in a filming Center you can imagine sitting up shop and seeing a bunch of shoes in the Fulfillment center but a lot of these things. You know you like it in the case of Wayfair they never pass through a Wayfair facility where Wayfair could scan them. Scot: [40:27] F R Anderson cool so after house we had a Google up and the Google one was probably if I was going to pick one that was my highlight of this would have been it and even then I think it was, how what Google announced the show was largely misunderstood so I wanna spend some time on that because I think it's, pretty important so what are the interesting things that's going on is the the guy that used to run retailer Google his name was John a furnace and he was he left to join Pinterest and saw him several times the show he was there with pry like 50 Pinterest people which I thought was interesting because, you know I'm easily sink shoptalk in Pinterest so I just got this vibe that there's something going on there. And I don't know what it is but but he's also like his official title there is SVP of ads okay so that makes sense and commerce it Pinterest so pictures has had when I would call some. Pretty you know man e-commerce things that got rich pins they did a little Marketplace I kind of went about it in a weird way that was not very. Customer friendly was easy to implement but not a great customer experience so I almost kind of like was wondering you know. Why is Pinterest have so many people here why they hire Al Fitness e-commerce have answers but I just thought was interesting to see that so anyway, Daniel is a great addition to the retail team so it's official title is president of retail and shopping at Google I talk to a lot of googlers and they were all really excited because this kind of the folks that are in the Google shopping side and they've been working on retail for a long time. [41:59] I feel like retail is really elevating at Google and. The person they talk about Daniel has been a senior leader Google for quite a while I think his prior title. [42:13] I was stressing yeah he was like Global and strategic Partnerships so you know he he was quite a senior person and, he's also well known a Google you know these companies like a Google or an Amazon aren't really known for their ability to partner with other people wear as you know I think he has led the charge in certain categories were partnering is going to be essential for the wedding so I was really eager to hear what he had to talk about he went through you know. [42:40] I don't think whatever Google people get up there they have to kind of go through the rigmarole of, we have seven properties that were billing users were Google where mazing here's the big trends we see the meat and potatoes of his talk to me was the announcement of I called this Universal shopping cart and I'm not a fan of that I've had these two spirit things at Google, send it. Google Assistant which we know and love on the show they've had Google Express. What started out as a kind of delivery service in a couple of areas and just think of it as kind of one hour type. Product and then they've had product listing ads and so through a the pieles are a. A shopping enabled kind of a not enabled e-commerce ad unit if you will so far. 20 products that has a price and that kind of stuff so they put them all under this umbrella now and they've actually. The cool thing for me is I sent you they built on Marketplace on the park posting ads and that they taking a couple shots at this last time I was called by on Google and. It was just so micro so it was like 5 merchants on Android only Angie had to have Google pay and it had to be enabled it had to have this that in you but time you slice all that stuff you're looking at like you know. 500000 users which which is nothing but in the world of Google with all these billion dollar properties it's like why are you so where she going after these like you know, like slice of a size of a slice of a slice but unfortunately are not doing a great job of describing it I think about it is you can now take any SKU and have it available in a lot of different flavors so so first of all. [44:26] If it's like what I would call an e-commerce Q me you're going to ship it either from a fulfillment center or a store so kind of like a two-day plus kind of a thing you can make that viable in a Google search result. Is that product is near the user and available for delivery same day that's another option Source, these rings of availability. And then also you can make that SKU available to Google assistant so example that they have used a lot is as you know target has a private label cpg brand called up and up. [44:55] So they show this this detergent that has been enabled with this new ad unit that's called shopping action, abled then there's three use cases so you can say OK Google, buy up and up laundry detergent and it will it will know then. Based on where you are if you can get it kind of same day or in an e-commerce kind of a Note 2 day type experience so you it will ask you and if it's available in both It'll ask you which one you want. The baby shopping shipping fees and stuff there and then if you're in the Google Express experience you'll see that product because it is available at a local store and then if you're in a sponsored. Pla you will see it there as well so there. You know we are at Channel advisor we are in early partner on this and it I can say they said on stage, Target and Ultra Ultra are seeing 20% left from that, police unit and I can say there's there's several other people in there and and this is causing really good lift for folks in this is something I think it's been a long time coming, there's certainly some attribution things in there but but I think happens if the desktop metaphor doesn't work on mobile the whole go search for detergent go in to target.com forget your credentials. Get a password reset login put it in your Target card. Then order Denver enter your credit card that's such a drag because up further in the stack the phone already knows who you are and you already have your credit card in the Play Store so why not just use those credentials so so this is another attempt I think at kind of. [46:38] Elevating that transaction higher in this. So I'm excited about it and they went to Great pains not to call the Marketplace but my mind it's Marketplace. [46:48] So so I took this to mean Google is getting a lot more serious about Marketplace and how do they surface this product and make it. Yo and partner with retailers to two. I think the big win here is going to be closing the mobile Gap and what did Al furnace did is he came from the Travel Group. At Google where they did this to an Indus was controversial because some people thought they were kind of going around to Travel Systems and stuff but you can actually buy a hotel room right on, Google mobile and dramatically increase conversion rates versus kind of like that again that desktop metaphor of OK Google says there's a hotel over here, now let me go to that hotel site and then iterate through you can actually go by that room on Google Now I'm so so I think they seen some really interesting things on travel and they want to bring it here they did a 100 of it over the last 2 years that didn't get a lot of success and then this time it's feels like they're taking a much bigger at that swing. Jason: [47:46] For sure like I do think they're taking a bigger swing it's going to be interesting to see how it plays out. Huge difference between travel and most of the sort of product Commerce you know, in travel you're mainly trying to sell a room or a flight and if you can bundle other travel Services into that sell it's great but like the overwhelming majority of the time it's a win the book a room, a lot of individual items that you sell an e-commerce are only profitable if you get the customer to buy more than one thing and so you know that the level of difficulty for Google is is much higher in the Commerce base than the travel space in my mind because, it can't just be. Click to buy button in search results because that that frankly is going to drive everyone a single item purchase is a oviso go down and you know the artiste rest. Profitability in the in the whole ekosistem would get even more stress so it's going to it's going to be interesting to see how all that plays out to. I I get so one funny thing the economic model is different than most other Google ads units in in you know most cases your you're paying for that. That exposure in the ad world and you know Google is charging much more like a Marketplace hear your your you know paying at a crate on the on the stuff that Google help you sell or you know in the. The ad business they call this a rev-share model and when the word got out that they were watching this format. All the traditional SEO guys piano. [49:17] Because they misinterpreted this as Google will now share the profits with you and elevate your listings in organic search so they. They said it was a you know several days of panic on Twitter where it where that was sort of going around I guess one other interesting outcome of this is. It also creates the scenario where you may not have paid to have a pla show up. But Google me decide to place your POA extra times that you didn't pay for and take the rev-share from it and so that that's it in aspect of this program as well as the Google can Canal run Google funded pla. Scot: [49:57] Yeah it's going to be really interesting to see and I know we're going to type for time but let's talk about some of the implications in a future show. Jason: [50:06] For sure we had to run from that Keynote. To another event that that they is sort of an event within an event Jason Del Rey from recode they they host a. A dinner or in the evening at shoptalk they call code Commerce and so you know he he typically gets like about three interesting speakers, you know at at this sort of show within a show and so we. We hooked it from the keynote to join Jason's event and there's some interesting speakers there as well so the 1st guys up there. Was Eric Nordstrom who's one of the three. Nordstrom Brothers running Nordstrom's right now and who does not do a lot of public event so that that is kind of a cool get and he was on stage with. This gentleman Don Kingsborough who's from a company called one market and I'll get into that in just a second so having Eric there. [51:14] Would be cool under any circumstances but news and come out bad day that the board of directors of Nordstrom had sort of turned down the Nordstrom families offer to buy. The company back and take it private and so the the you know according to the reports the deal is dead now. And so you know that was obviously a piece of news that Jason went right at Eric about. And which Eric had very little interest in discussing and probably let you know wasn't at Liberty to discuss it created some sort of. A humorous for us awkward for Eric moments at the beginning of that interview. Scot: [51:54] God knowing you Delray didn't what up it kept coming up he kept on them. Jason: [51:59] Exactly and I kind of a funny line he's like you know I'd like to say I appreciate the question but I really don't. That's what I heard of humorist in so he's he was on stage with this guy Don Kingsborough and Don is the CEO of a company called One Market. And there are there a spin-off out of a incubation lab that's owned by Westfield malls in so I don't think. [52:26] Westfield may still hold an interest in one market but they're separate entity now I think they probably figured out that nobody would want to. Participate with one market if they were exclusively owned by this one mall and one market is kind of an interesting venture. You know personally I'm a little skeptical on it but the the gist of it is that hey, Amazon has walked up a big chunk of the market and then this huge unfair Advantage Amazon has all this data about the consumer, they see way more of the consumers purchase behavior and more the browsing Behavior than anyone else and they're really putting all the traditional retailers at a disadvantage because no one retailer. With the you know possible exception of of Walmart really has the the. Date of his ability to know the customer as well as Amazon does and so what Market is an effort to say let's create a data Coop where all the retailers share everything they know about a consumer, and then we'll make. That data available to any of the retailers in the coop to improve their experience and they have to make that data available in a, a very limited way like they can't share. Personally identifiable information from one retailer to another and they they can't you know give one retailer another retailers customers but essentially if. If you're a customer and you've done a bunch of shopping at coach and so coach knows you really well and then you walk into Michael Kors. [54:02] And you know Michael Kors says Hey I just met this guy Scot wingo and he's in the coop database the the, One Market would be able to share some of the the enhanced data they know about Scott Wingo that they learned from Scott shopping with coach, and so so at at it. I don't know if I explained that very well but at the highest level this is sort of a customer data Co-op to compete with, Amazon. Scot: [54:30] Yeah I have to say I've never met non-don before but he seemed like a really story guy it did like it has a really great since it like PayPal and places so so no doubt he can build with it he says Google but I honestly didn't understand if it about it. I did I guess I didn't get to use case it's like I don't really care if I go to Southpoint mall and then I go to Crabtree mall and didn't know about me like, I just don't understand, but I couldn't really get my head around you space and maybe that's cuz I'm a very transactional Mall person am I going to the Apple store to get my airpods that's it I'm not I'm not like a browser baby but I don't know I kind of missed the use case. Jason: [55:06] So you you are so you are hitting on one of the potential liabilities of this model is none of these retailers are pretty good at using the data they do already have about all of us when we shop and so it's it's hard to say that their biggest problem is they don't know enough about us, but it is fair to say you know the date that they are worried that they know less about us than Amazon does so I can I get that a big problem with this model is is, anytime you explain anything like this model to a consumer they're going to immediately panic and get creeped out and it it just sounds like big brother, and so it's. We'll have to see if it's focused on the Legacy mall guys in a Dina retailers and of course they have a bunch of other headwinds that are unrelated to any of this so, I don't know I'll be honest though I did get the impression, the Don has a personal relationship with Eric and that the deal struck and by the way Nordstrom is one of the retards participating in one market so I suspect the deal struck was, Eric will come onto code Commerce and talk with Jason Delray if he gets to bring down with him and gone gets to make a pitch for one market. Scot: [56:14] Yeah and they didn't talk about it but I kind of got the vibe Nordstrom Ava invested in that that entity. Jason: [56:21] Yeah that well so it's a it's a co-op I think all the retailers that participate are basically investors why do you own a piece of it so it's so absolutely. [56:30] Until Eric had a vested interest in Dawn doing well and you know let me just say like I don't think Jason had a lot of super interesting questions for Don I think he was a lot more focused on what did you get out of there. Scot: [56:43] Absolutely. Jason: [56:45] So I am not sure it was a lot of interesting Nordstrom revelations in in this interview other than. You know the plan at Nordstrom's to do what they've always been doing you know it's the fact that we didn't buy the company back doesn't change anything was kind of Eric's message. I thought it was kind of a just a funny random story Eric telling the story about his dad Bruce Nordstrom that was in a former president of Nordstrom's and how whenever someone would call Nordstrom department store. How Bruce would be really upset and say we're not a department store where specialty store and you know for the. [57:23] You know if I was listening Nordstrom started out as a shoe retailer and they they still like have a lot of that DNA and. Eric said if not you know I would be like whatever Dad where we're big store with a escalator so call it what you want and it just was a funny moment for me thinking of this I store a retail family like having these arguments around the Thanksgiving table about whether there a department store or not. Scot: [57:47] Yeah I'd never met at Nordstrom's that was kind of cool. Jason: [57:51] The other thing that came up a little bit which is interesting I don't think Eric Shirley new information but Nordstrom has the store in Los Angeles called Nordstrom local, and this is a small a small store by Nordstrom's standards I think it still pretty big I think it's like that twenty thousand square foot store which a full Nordstrom might be why. 50000 square feet. [58:14] And there is no inventory for sale in the store so it's kind of like a bona bus guide shop like it's either you know there's personalized customer experiences and shopping concierge and lots of mannequins that you can look at, but then you you order the product in Nordstrom ships at your house and the talking point that Jason was focused on was. I've heard a lot about the store in the fact that it's. It's not profitable and isn't likely to be profitable in the in the near future and so this feels like. Kind of a project or an investment for Nordstrom and you know aren't you worried about not being able to make those kind of Investments going forward since you you know you were unsuccessful in in going private. And I think Eric's point was no we we paid for this without going private then we we do lots of things like this all the time so this is sort of business as usual for us is, and we do some things we expect to be profitable right away and we do some things that we expect to learn from and hope to make a profit in the longer Horizon. Scot: [59:18] Call the sex would really quick so I was excited at shoptalk surely but also could Commerce there was a little bit more, kind of of the different models out there this one I would put kind of squarely in the on-demand economy bucket which is I'm obviously pretty fascinated with, funny company in this is in the food delivery category where there is a battle royale going on so they had the CEO doordash in his name is Tony shoe, oh that's spelled XU and then he was on stage with one of the leaders at the Cheesecake Factory which is a very popular restaurant and they had just announced that they are doing a delivery food delivery for cheesecake through doordash. And I didn't realize it until I saw eBay partnership, from 2009 to 2011 so that was cool to see someone from the world of e-commerce kind of spread his wings and becoming an option or. The one of the. Big news items us and Kara Swisher did the interview here and she couldn't seem to get her head around the fact they just raised over $509 so they're there well beyond the Unicorn. Status which is Sue sought-after in the Bay Area which means you have a valuation over billion I would Hazard a guess or pry a deck of corn which is a 10 billion dollar valuation so there's so there's aislers GrubHub which is actually, public there's the big one that's really gaining popularity is ubereats and then there's many many more of these there. [1:00:48] Pretend food did this is like prepared food delivery companies and if you widen the radius little bit to include ingredient make yourself kinds of things than the category it's even even. Even got more crowded and so she's kind of hammering on like you know why would you waste so much money and that kind of thing. This is I commiserate with the size opportunity and he's right you know this is a multibillion-dollar opportunity if they can get 5% of all restaurants business to be, true you're just in the industry and they capture 30% of that that ends up being a, a really really big number so any talked about I think you said there in 30 markets and they're going to get into 80 so there there's a geographic component of this, yeah when funny question was she asking what are you scared most of these at the telephone and she was like. [1:01:41] What you mean and you know it's just like that's the customer experience they're up against is they kind of have to be better than just calling the restaurant on the phone to do take out with witch and and then you obviously have to go get it but I thought that was kind of interesting. [1:01:55] And then you and I is kind of funny you and I had kind of had this discussion around you know with these with this business isn't good for the restaurants in bad and, there's an argument that the sex it hurts marching, because you're already paying for that kitchen staff and everything and then if they're making meals for this pickup you don't get a lot of that up sell that you get in the restaurant is your same argument that they made with the Google marketplace, when you went to people go to restaurant have a meal there's alcohol involved there's maybe a dessert that you didn't plan to have appetizers and that kind of thing, Raz I think, I would guess the ticket when you're doing takeout or delivery is much less and you obviously don't get alcohol sales which is where there's a lot of margin but they got to ask a question about that and the cheesecake guy I explained that you don't know it's really. Incremental business so they already have the fixed cost of the kitchen and they viewed it as incremental and they therefore you know yes the margin is lower. Then an end in a dine in guest. But it's incremental margin so you going to help the prophet leave the restaurant so I thought that was an interesting argument you a lot of people that I talk to after. Forecast skeptical about that so and then he did talk about at the Cheesecake Factory. Like 2 years ago they had 8% take out and now it's kind of risen to 12%. [1:03:18] Didn't ever say if this was exclusive because one of these guys do is they will actually kind of order as if their customer and then said their drivers so they don't have to have a you know a relationship with the restaurant so I know GrubHub does that for example so. Part of that 12% is not only doordash but probably all the other delivery guys too and then lasalette said that they said that. 25% of doordash volume is from chains and then. I thought they said the rest was for Independence but I think you took a note and tweeted 5% so. Jason: [1:03:51] No no no. That's a typo in your notes you are exactly right 75%. Scot: [1:03:54] He has a deep restaurant background I think. I think he said his parents are restaurant for sure. Jason: [1:04:06] Is Mom still run the restaurant. Scot: [1:04:07] Yeah but then somewhere in there someone said I think he said his grandparents also had a restaurant I I couldn't tell it maybe his mom is taking over the enrichment videos. You can't came back to his roots and, I'm really understood the restaurant business deeply and then final comment when asked you know there's always competitors out there when asked how they're going to win I thought his answer was pretty clever he said you know we're really just focused on this we're not doing self-driving cars were not doing. [1:04:33] You know building a whole delivery Network that separate were really focus on how do we deliver an amazing dining experience and you know how do we in the he said it was very Amazon way of thinking it out we measure every second. Between when the order comes in and it gets delivered and how do we get the food there hot fresh so I left that you know thinking, here's a guy that's really kind of gets it he understands the customer and he's going to Worcester 500 million so so I felt like he had a pretty good shot at winning and I was excited to see where they take it. Jason: [1:05:04] That I would also argue that he already has a considerably better customer experience than a lot of his competitor so I'd like some of that that focus and Care like is already very evident in in their customer experience. Scot: [1:05:20] Yeah one one example of that was even worrying about you when they deliver the cheesecake from the Cheesecake Factory making sure the slice looks perfect and it hasn't like flipped on its side or getting off stuck around in the container, that's those kind of details that I spent a lot of my day on this site I really appreciated that level of detail that they think about. Jason: [1:05:38] Yeah for sure and I think that I would just you know mention that listeners this is an area to pay attention to the whole food consumption industry is going through major disruption right now and it's really unclear. What the future looks like but you know when the friction to get food restaurant food delivered home is way lower suddenly those restaurants are competing with. What used to be grocery trips when you buy ingredients and make your own dinner and th

EP121 - Shoptalk 2018 Recap Part 1 ShopTalk is an annual trade show held in Las Vegas focused on retail and e-commerce innovation.  In it's third year, it has become the fastest growing can't miss event in our industry.  This year 8,400 industry professionals attended the event (up from 5,400 last year).  The 2018 version took place March 18-21, 2018 at the Venetian in Las Vegas. There is so much content at the show, that we've divided our recap into two parts.  In Part 1 we cover: Macy's Keynote Target Keynote Amazon Go Keynote Future of Grocery - Moderated by Jason Goldberg Zia Wigner Keynote (Global Chief Content Officer for ShopTalk) Ulta Keynote Nike Keynote Ocado Keynote Pinterest Keynote Fresh Direct Keynote Facebook Keynot Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 121 of the Jason & Scot show was recorded on Monday, March 19th 2018. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Transcript Jason: [0:25] Welcome to the Jason and Scott show this episode is being recorded on Monday March 19th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo. Scot: [0:38] Hey Jason and welcome back Jason Scott show listeners Jason and rare time when we're together and this is actually the second week in a row so pretty exciting where live live live here from the Venetian in Las Vegas. Jason: [0:53] I know I feel like I have won the lottery getting to hang out with you this much. Scot: [0:56] I know you're you're a very lucky man that's all I can say. Show listeners we are we recording this at the end of the day on Monday consumed 2 out of 4 days of content so I can call this the shoptalk halftime show. And the show this year is really dense and we thought it be important to give you guys, real-time update of what we're learning about the show some of the more interesting ass, so that we can kind of have at least have two updates with me actually put a third depending on what kind of content comes out in the next couple days so. Just a quick overview of the show this year it looks like the attendance is about double I think we decided Jason is that right, so I think they're saying somewhere north of 8400 attendees definitely feels like it the show outgrew the Aria and is now at the Venetian, I'm in I guess it used to be called The Sands conference in your butt and now they caught this fancy Palazzo or whatever it is Conference Center. And another thing that's really interesting this year is they've added a couple of new tracks there's there's a grocery talk track which I know is near and dear to your heart so there's this kind of acknowledgement that groceries undergoing digital change really kind of in a bike. Not only that but actually on the show floor and then there's a whole track around Ai and machine learning which is been one of our favorite topics. The the big me coming from the vendor world the show floor is absolutely huge this year last year there was like these little mini meeting room kind of things and this year they went full show room and they've done it I don't know the square footage of that but it is as big as. [2:32] Shoptalk it's as big as shop.org it's his maybe half the size of a retailer I would say. But for a shows for sure you're having an exhibit floor it's pretty impressive I would say that. You know they've done a really good job with that another thing I really like is it under that they've done is a lot of the food and then to get to the general Keynotes you have to walk through the exhibit floor, I and the vendors are well aware of that and they are lined up and ready for ready for action that's who hugs so that's that's interesting and any other kind of, the macro things you want to talk about that you notice this year before we go into the details. Jason: [3:12] I mean just said the one interesting thing the way they were arranged the the exhibit floor is in these sort of subject-matter Pavilion so there's like. AI Pavilion that you know is largely companies focused on a and a grocery Pavilion so if. If you're looking for a particular type of vendor they've sort of Consolidated those all together which I like I think it makes it easier to find relevant stuff. And then. If you're a retailer you could come to the show for free if you agreed to take a certain number of meetings with vendors so the program that other shows have done that I've never seen it done on the scale they've done here so they. Paid for a bunch of retailers to fly here in the end their hotel rooms they arranged a bunch of meetings with vendors and as big as the trade show floor is there's a whole huge back half of the trade show floor, they just all these meeting tables that are like speed dating between exhibitors and vendors and it's it's a little bit like Tinder, the vendor had to say they wanted to meet with this particular retailer in the retailer had to say they want to meet with this particular vendor. Scot: [4:23] Double opt-in. Jason: [4:25] Exactly. Scot: [4:26] Swipe left swipe right. Jason: [4:27] Yeah and so the the BD people for my company we did several those meetings and felt like they were all all valuable in in favorable so. It's approximately. Scot: [4:38] Does that come with the exhibit space or is it kind of separate. Jason: [4:40] Yeah there's a bunch of bundles you could buy that were like this amount of space in this mini meetings. Scot: [4:45] Is there a popular in Europe I know are European Folks at Channel visor participate in these meetings and always felt weird from the US perspective that you were kind of like. Paying for the vendor to meet with you but I. They've always worked worked out pretty well for your PIN folks it's interesting to see them kind of bring that over date they did just do their European show shoptalk I wonder if that's something a best practice they brought over as part of that. Jason: [5:09] Actually it does appear so they did a Europe shoptalk last year and it and they cancel that show so I didn't get to go I assume it wasn't. Quite as well adopted as the u.s. won and now they're calling this the global show and they're trying to get all their European attendees to come here. But you're you're absolutely right like they could have definitely lifted some of those best practices and I frankly I came here a little skeptical about the meetings because. There there were some logistic hiccups weeding up to it like if a vendor opted-in and we opted in but it didn't fit in one of the time slots they had available. I think we bought more meetings than we got so they had to give us some credits back and and not to sound too vain but where. Better known brand than a lot of vendors on that floor so if they struggled give us the meetings we bought you could imagine some smaller lesser-known vendors. Scot: [6:03] But it seems like the space was constrained not the demand. Jason: [6:07] Exactly yeah and then like once we got here it sounds like it went real well so agree with you like this feels like one of the few shows in our space that's vibrant and growing. Scot: [6:19] Yeah yeah and that's what sticking to some of the content highlights I got in late Sunday night super late and then you were here all day so why don't you could get off and tell us some of the highlights from Sunday. Jason: [6:30] So I am in back taking residency here in Las Vegas I'm here for 16 days. In the hotel room that you and I are sitting in right now so that's a new experience for me and Sunday night had some good key notes that I was looking forward to hearing the first one was Jeff can that who's the CEO of Macy's. And so he was talking about some of their progress they had their first. Favorable quarter and I want to say like 11 consecutive quarters and and so you know he was very optimistic that that they're there. Turn around program that they called the North Star is starting to work since we talked about a couple of the the upcoming initiatives they have a program they're calling growth 50 which is essentially. They selected these 50 Macy's store. The Dare going to. Put all of their best practices and capex investments into in 2018 in the idea is to see which of those things work best and deploy them into all there the rest of the Macy's Fleet in 2019. So it'll be interesting to figure out what those 50 stores are and keep an eye on them. Scot: [7:40] What does 50 stores are and keep an eye on them and it goes Herald Square. Jason: [7:45] Seems to be somewhat shocking of that was not one of them. Scot: [7:48] Does that mean like the giving up on the other 50 is at Macy's shutting stores. Jason: [7:54] Closed a bunch of stores but they're still in business will check me on this but I don't want to say that it's going to be like 2000 store so that it's still a lot of stores and what you don't do is just. Do a bunch of expensive things and I'll mm hope they work so so picking 50 stores as Pilots kind of makes sense. Scot: [8:11] , complex offline av-test. Jason: [8:14] Yeah as we caught a match Panel test actually but that's sort of the original Navy test. So that's interesting they announced that they are deploying mobile scan & go check out to all their stores by the end of 2018 so what that means is. You've installed at Macy's mobile app you you scan the items you want to buy. For it on the mobile app and you walk out without ever having to get in the checkout line if there's loss prevention tags on the apparel which there is on a lot of the apparel. You have to walk by a security desk show on a digital barcode on your on your phone and they'll remove your tags but that potentially eliminate. What date Macy says is the number one complaint about Macy's which is hard to find a cashier or too long a wait in line. So they were they were pretty bullish on that. Scot: [9:13] Surfin you're doing that or that's just like part of their point of sale and stuff. Jason: [9:16] They did not disclose that they were partnering with the vendor to do it it seems like something they built or not ganic Lee you are you are absolutely right there are third-party vendors that you can hire to facilitate that for you but. I somewhat suspect that Macy's is not using a third-party to implement it another one that was interesting to me and I haven't seen the meteor really pick up on this year. But he talked about their desire to clean up their promotional calendar and. Scot: [9:43] Sounds familiar. Jason: [9:44] That's retail code for we want to get away from all of the crazy promotions were doing and he specifically said we want to eliminate the need for a Shoppers to do quote on quote Macy's math. To figure out how to get the best deal. Scot: [10:01] This is longtime listeners will know this is kinda killed JCPenney right. Jason: [10:04] Even more more funny it it absolutely kills Ron Johnson's 10-year JCPenney they were highly promotional he tried to dramatically clean up their promotional calendar and. Just didn't work. A time a lot of us criticize Ron Johnson because we were pointing out that retailers like Macy's had tried this in the past and it didn't work for them so it's even more ironic. That Macy's that has frankly past experience trying to move away from from promotional pricing models is going back to it and we we talked on listener question shows about the fact that. Everyday low prices seems like the future pricing and because of transparency these promotions aren't as appealing as they once were. But it's really hard to shift once you have a customer base that used to promotional pricing. Scot: [10:53] Now so Terry Lundgren so he is transition. His big thing was to add that discount store inside of Macy's but I didn't hear you saying about that is that stole, is that the kind of makes sense if your have this discount like Dollar Store jammed inside of Macy's or TJ Maxx is probably more appropriate analogy then I think it does make sense to then you could have at least kind of a, a way of balancing out the promotional things is that still tragedy but or or is that off the table. Jason: [11:21] I I think that still is a strategy Macy still does have these off-price stores that I think the most Perfect Analogy is that are you notice or to Nordstrom Rack equivalent but they were mentioned it all in the keno. So either you like they didn't double down on it or say they're moving away from it you can interpret moving waste and promotional calendar that you know they're there. Trying to Jack the margins up in the main line Macy's stores but you're exactly right like they could be to differentiate it from the discount concept Moore, so we'll have to see how that plays out the next keynote was Target so this is Brian Cornell is the CEO of Target there another retailer that you could kind of say is in the midst of. Turnaround strategy and he spent he did a couple interesting things about his was a little more. West tactical in the Macy's keno and he talked a lot about. The their migration to digital and how they've embraced digital and he he talked about this he didn't called The innovator's Dilemma. That's essentially what it is he's like you know there's this natural inclination when you have all these stores in the stores are profitable in these new shopping behaviors come in to say you like why would I ever invest things that discourage. Customers from going to the store that that's just your natural instinct. And he claimed that like Target had overcome that instinct and was now short of embracing. [12:55] Digital and they were largely converting the stores in to fulfillment hubs and that they they ship something like 70% of all their eCommerce orders from the store. Brought on stage with in the CEO of shipped which is a logistics company they just bought. You said that they bought them specifically because they wanted to be the first national retailer to offer same-day delivery in all markets. Scot: [13:19] And then just last week they announced they're growing that out and more stores. Jason: [13:24] So I think their intention is to get eventually get it in all stores that are also experimenting with curbside pickup which we've talked a lot about here. So a lot of interesting things there and then he pivoted to another topic that I think is going to be very common this year which is there they're doubling down and reinvestment in owned brands. And this used to be the thing we call private label the the purple an hour when they talk about own brand they're talking about Brands they created offense. That in some cases they even sell it other other channels of distribution I'm so potentially sell on Amazon. And target has been very successful own brand they're also talking about brand exclusives so we'll sell stuff from National Brands but. Excuse that are only available in our store and will sell limited edition stuff so the stuff you know that there's a constrained Supply Target some what famous for that with promotions they've done for people with Lilly Pulitzer in others. So that is one of their big plays that's most retailers big play against Amazon has to sell stuff that Amazon can't sell. So that was kind of his big talking points. Scot: [14:42] So I know they room essentials is there like furniture brand and then what is a jack and. Kids one cat jacket are there any examples where they sold those other places. Jason: [14:59] So I haven't as Machine Target sell their own brands in other places. Scot: [15:04] Costco has. Jason: [15:06] Costco very famous he does there's more Kirkland on on sold on Amazon than on Costco.com I think. Scot: [15:12] Yeah but there are other. Jason: [15:15] I'm trying to remember if Target invested in or owns method but method is sold elsewhere so there's. Scot: [15:20] I swear Dakota velvet with that a designer Michael Graves Sr. Do one of our interns to research them. Jason: [15:28] Yeah yeah yeah let me know how that works out for you so that was an interesting keynote and then. Sort of the perfect transition the third keynote on Sunday night was to VPS from Amazon that are responsible for the Amazon go store so this is Gianna Parini. Responsible for who started the. The business leader for Amazon go and then dilip Kumar who's responsible for all the technology used in the Amazon go store and is also responsible for the Amazon bookstore. So the very first thing they did which was just I thought hysterical after both. Target and Macy's had mentioned kind of Scan & Go. Amazon of course came on and threw shade at what a pain in the neck skin and go is and how we really built the store just because customers don't want to have to scan each item as their. As their shopping. Scot: [16:29] Is that a learning from the book store cuz that's how the bookstore model works. Jason: [16:33] Yeah well I don't know specifically I mean. Scot: [16:35] Typically the kind of throwing shade at the bookstore. Jason: [16:38] Yeah and I would argue the bookstore is in many ways the worst version because you like literally can't find out the price without. Scot: [16:44] Face can't even find a price there's more scanning you would even get it at Macy's. Jason: [16:48] I told you it was not a very hostile interview so let me just say that question was not asked. Either of them but it was a little bit funny this was the keynote I was most looking forward to Amazon Prime now was at the show last year and I felt like. They shared a lot of new information about the prime now program that they least I wasn't previously aware of. It was less through this time so I didn't do was not a lot of like major new disclosures normally trying to figure out his. How to get a roll go out to more stores are you getting to put it in Whole Foods your new announcements like that at this it is Keynote. They did talk about what some of the best sellers in the store was and apparently there's this chicken sandwich that's been there Perpetual number one seller but it is a lot of food stuff so that Amazon makes their own meal kits in that store in the doors are top sellers. Fresh fruit is a top seller there's an odd thing about Amazon and fresh fruit. This store is in the corporate headquarters in this corporate headquarters Amazon has way less employee amenities than almost any other big company. So the rare amenity that that Amazon liked out a lot is. Did they give free bananas to all the employees and apparently this has killed the market for bananas in downtown Seattle. The smoothie shops used to charge to put bananas in the Smoothie now they let you bring your own smoothie your own bananas in to put in a smoothie because everyone in downtown Seattle gets free bananas from Amazon. Scot: [18:22] Does the banana thing so when Prime took on Arrested Development there was a big. What is running jokes I'm not a huge Arrested Development person but there's a banana stand thing in there and I think they started it as kind of like to celebrate that it's kind of kept going is that is that true or did I make that up in my head. What decimal burx Amazonian Institute election. Jason: [18:43] Or just is this odd fruit thing with Amazon so then I found it funny that like this. The store which is largely the employee cafeteria is really what the Amazon go store is the number one seller is fruit so it made me wonder if they're going to stop by the bananas. They can monetize the bananas in the ghost. Scot: [19:00] How we don't sell a lot of bananas in the guest room. Jason: [19:03] No I imagine that it's fresh fruit other than bananas but there were a couple other interesting things so delete was talking about like. The ghost are we talked about a lot it's based on. Very Advanced machine learning around computer vision so this is mostly done with cameras and the interviewer asked why they chose cameras there all these examples in Europe in elsewhere of people trying to do similar concept with RFID tags. And they they felt like aspirationally a store model where they have to constantly apply tags and sensors to all the Shelf some product. Wasn't very interesting to them they felt like that the much more scalable long-term solution was to invent this computer vision model. Scot: [19:49] Now I know you're very passionate about RFID tags how do you feel about that. Jason: [19:52] I think he's right I think RFID tags are item level RFID tags for products in a store. Is a pain in the neck and unless we get to this thing called Source tagging where all the manufacturers put the RFID tag on in the factory it's it's never going to take off. Scot: [20:09] Can you do RF IDs for like a fruit and stuff. Jason: [20:13] Potentially yes so at the moment. Scot: [20:15] Yeah at the moment. Jason: [20:19] Yeah it there's a man. Scot: [20:21] RFID on my app. Jason: [20:22] So there's a sticker on every one of your apples now and that sticker could essentially be an RFID tag. That sounds like a Farfetch'd example like there's an argument in the future of food that you're going to want to know a lot more about that Apple before you buy it like how many, days ago was picked and all these other things and so like you you could imagine them wanting a tag each individual apple for a variety of reasons. All that aside it was just interesting to hear them talk about how they debated tags versus cameras and went with the cameras. Scot: [20:55] Another nice thing with with cameras is once you get on digital then more law should kick in where RFID tags rising to this manual. Process that is not going to change the scale and will always be subject to let you have a robot that can put the tags on her which. Jason: [21:12] What kind of software vs. Hardware really like an unlike General lease offers I have a lot more profitable because as as you scale at the the normal cost is very well. Scot: [21:22] Yeah then you have the the nurse's other acceleration I don't know so Moore's logic we all understand that you don't processing power gets doubled every two years but then, you know I wonder if there's some correlated to that with machine learning like the system get smarter every X things that sees Pride another there's some pretty interesting thing there that also is. Jason: [21:43] Yeah I mean there's a couple examples of that like the the. Accuracy of computer vision which is this specific subset of artificial intelligence this towards using has been improving faster than more as wise as a noun yeah. Scot: [21:56] You think it would yeah and then I hit some kind of like. Jason: [22:00] Resume wait I had some flat toe because it's unlike chips which could always get faster at some point your computer Visions perfect. Scot: [22:09] How do they tell like a chicken sandwich in a tuna sandwich but do they have to put different containers on it to help her. Jason: [22:16] So that was a good question that wasn't asked but there was a similar one that was kind of interesting so because there no sensors on on the items the camera has to recognize every skew in the reporter said like. Do you struggle the tell sugar-free Red Bull from regular red bull. And he's like yes we do it right like that those are the the the really difficult edge cases and I thought about that before they like different flavors or or subtle differences your chicken versus tuna sandwich being up in exacerbated version of that. Would be really hard and then he pointed out of part of the problem I haven't considered before. Not only do we need to tell sugar-free Red Bull from regular red bull the moment when we need to tell them is the exact moment when you picked it up and probably block the word sugar-free with your thumb. And so those sort of obfuscate abused that they get is obstructed views they get in the product is also a pretty tricky problem. Scot: [23:12] No Amazon in kind of the play but they've done with frustration free packaging you can almost see them going back to the manufacturing kind of having you know, air visionfriendly packaging where you make this one purple in this one yellow or something other than a small kind of text word for sugar. Jason: [23:29] And you've hit on one of the reasons like this works for ghost or the potential and other things everyone keeps calling at the ghost or a more accurate turn might be Go restaurant because they're actually is a big kitchen in the majority where they sell is food that is prepared. In that store and search your point they can solve their own problem by using square boxes for the chicken and round boxes for the tuna or whatever whatever they want to do. A minority of the skews in the store are National Brands so for their own Brands they can make the packaging distinctive enough. It does have that problem where has much harder to do a whole food store or something like that. Scot: [24:11] Wonder if they could even do have seen some examples this in retail, I want to take an overlay some kind of a machine readable but not human-readable thing on the packaging to write so the chicken in the tuna come in the same package but the machine can see maybe the UV level or something you know that something that very clearly you know, 2 blinking circles versus a red boxer and things in. Jason: [24:35] They can build cameras that seen in the infrared Spectrum or something like that yeah absolutely not discussed but interesting things to think about. Scot: [24:41] Did they talk about when they first launched we did a deep dive on that the. They had a room right there in the store where people were kind of like both checking the AI and then also you know I'm sure they are kicks out and says does not compute and there's some air right there in a human has to go, like figure it out. Do they talk about that at all but the air raid and. Jason: [25:04] Omelette no only very indirectly so they did not talk about how well the machine learning the Machine Vision is working or the Air Raids they were asked how many employees work in the store for any Dodge that question 2. She talked about. Three big classes of employees that they're like you seen how you been to the store you seen how many people are in the kitchen you seeing how many people on the floor helping and you've seen how many orange shirts there are. An orange shirt is if you been to the store is code for these employees that are working in the back room looking at the video displays and training the AI in so the implication was there still. An army of orange shirts watching a lot of people shopping and refining though I'll grow them. Scot: [25:54] It's a nurse and they don't use Mechanical Turk for that because I'm a janaz be real time so after like you. Jason: [26:00] Videos welcome to the store I bet you that video isn't like it was in real time going I mean it's a lot of cameras so even even Amazon would like love the 8 of us bills for doing that. [26:12] So that was interesting I would have like to hear some. Scot: [26:14] I'd like to hear some way you should have been the interviewer on that one but Amazon negotiates these things very carefully so I imagine there's a reason so that things didn't go to where we would like to see. Jason: [26:27] And then the only other thing that kind of came up with a bit that was interesting to me. Scot: [26:29] I put a bet that was interesting to me as they did talk about. Jason: [26:32] They did talk about the fact that. You have to have an app to be in the store cuz you you have to have the go app to register you so to walk through like a Subway turnstile to get in in one of the. The peripheral benefits of that is did they allow Shopper feedback to be given real time in the. And so unlike almost any other store went to Shoppers in the middle of the shopping experience and something doesn't go how the Shopper wants they can in real time. Give feedback and that feel it feedback is tagged with a contact that Choppers in so that shows she said that that's been a surprisingly valuable. Data stream for them to improve their operations in the store which. Scot: [27:19] You are using beacons they know where you are too or that the machine that visual stuff are knows where you are better than any bacon they don't. Jason: [27:25] Visually light and again it's a tiny store so I you're in front of one of three gondolas so like so it's like probably tagged with with that kind of contact information. Scot: [27:35] Now Jason Delray overtree code that you Commerce reporter he is kind of heard rumors are dug up some some data that indicates there's a plan to open for 5 more the stores and then did they talk about Whole Foods at all. Jason: [27:49] Only in that context that they said they have no intention of deploying this Whole Foods right now and said two ways to introduce. Usually win on Amazon and play emphatically says they have no intention of doing something you should sort of assumed they're going to do it right like because they have no intention of offering a shipping service they have. There's a lot of history of them denying something right up until the moment they do it in this case I think there's a lot of logistical reasons that Amazon go dozen. Legacy Whole Foods Fleet of stores particularly well so I sort of do believe them. Scot: [28:27] Let's talk about this I think it's interesting so why why doesn't it work in a Whole Foods is it just the cost or what. Jason: [28:32] So in this very smart 2000 square foot store there's more than 50 cameras to make sure that they have complete coverage on the store and. What they need to do is from the time you walk through that Subway turnstile they have to maintain line of sight on you at all times and have to maintain line of sight on every skew in that store. I'm so there can't be any blind spots where no camera can see you in there camping spots where every camera in the store loses track of you momentarily because then even when they saw you again. They don't know that you're the same person that had the app when you walked in the store right so this store was designed from the ground up. The perfect lines of sight it's a very boring square store with no displays in the middle of the store in a traditional store you have this thing. And those Donna was in the aisle obstruct your ability to see certain angles you have lots of displays that. You know for fruit and things that like tree blind spots in the store you have vendor provided displays that aren't even provided by Whole Foods that block lines of sight in the store. The amount of cameras you would need to eliminate every blind spot in a 25000 square foot Whole Foods is. Almost mind-boggling and then you still have another problem you can't let a customer go into an elevator where they wouldn't be on a camera you can't let a customer to go to a bathroom there's a whole host of things that you know just taking off. [30:06] The Whole Food stores that are D exist and retrofitting them with this technology doesn't feel very likely to meet could they build new Whole Food stores. They're intended to be more compatible with this yes could they use this technology in The Limited ways in that whole food could they use this technology to make you not have to get your wallet out when you pay and just charge your Amazon account. Scot: [30:29] Or the most popular part of a Whole Foods is the prepared section in a lot people just go and have lunch at Whole Foods so you could see I'm kind of like yeah. Jason: [30:36] Panda Express portion you can have an Amazon go store inside of the the Whole Foods or for sure. Scot: [30:43] I bet that's kind of what he's hitting at because he said he also said something like stay tuned yeah we have no plans to put in Whole Foods but stay tuned with a lot of people took to mean either there an open more stores are there was some plan to do something at Whole Foods it's kind of like different than the question. Jason: [30:57] And to me the most valuable thing that you can do with this computer vision that they could very easily do it at Whole Foods is just putting the camera at forget tracking the customer. Just putting the camera to see the shelf and to accurately track the inventory on the Shelf is hugely valuable. For the store stores are have very poor inventory and they spend a lot of money to maintain that poor inventory and leveraging the computer vision system to have more actor and inventory. That alone could be super valuable to Whole Foods. Scot: [31:32] That's the really bad part of the delivery so I'm a big instacart I've tried I use them all over it regularly now because because it's a maintained DC, so you're having cameras that then watch them and Tori and see the last apples been picked by in-store customer so that me the delivery customer. Or that apple and then get a stock-out you know that you're some really big wins on all side of the equation there I think you're right that's it. Jason: [31:58] Absolutely and I think that's going to come up again and some of the other Keynotes we're going to talk about as well. Scot: [32:03] Cool so that any other highlights from Sunday you don't hit any crazy off the hook parties where you were dancing on the table. Jason: [32:09] None that I'm contractually allowed to talk about. Scot: [32:12] Or that you recall that takes us to Monday and then I got in late late late Sunday night so I was able to hit some stuff Monday, the way it works this morning is you had two tracks in the way they're running these tracks as there's five parallel tracks as a, 20/20 build these events and always frustrate people that that event planners do this but they do it for a reason it's designed so that you'll bring, five people you in for friends from your company so and then they there they're very somatic this year I don't remember being as the Mac last year so they're there was a grocery track for example. I was, I attended the first track it was really interesting it was about Brands as in the grocery track that could have been anywhere and there was a VC there that invest in kind of nascent brands. Consumer Brands 7-Eleven was there and and then another investor of his rule was entirely clear to me but he's really all about subscription kind of products. I think there is when we hit on the show a lot where, you notes create a brand used to be like a PNG level event where you would have to go spend $92 to kind of say here's this idea for a swifter and it can be this or going to watch on TV with a 50 million dollar campaign to do the Super Bowl ad now, the world is swimming in Brands and in fact this panel was there so many Brands out there that, everyone's really struggling to kind of like figure it out one of the more interesting things I thought you would like is you know the interviewer has 7-Eleven is all this digitally need a vertical band saw it bother you that she said no it's great because. [33:50] Those companies you know once they get to certain scale we know they, control like it's when I have to test it in our store and then we can help them because most times if they're doing well digitally against the cpg they're selling cases and large volumes, they can help them a lot with itches and how to how do you single serve package these things and they talked about some they give a case that they wouldn't say the name of the brand, kind of the vibe it was. They are buyer how he said that one that they had a lot of insights Wednesday packaged it at 7-Eleven it did really well because the, the consumer they picked up a whole nother set of consumer because, there's folks that wanted to try it and they also wanted it served cold for their commute back home were or what not so it's really interesting kind of things there of they actually view the digitally native thing very positively because it actually kind of, you know already jumped the hurdle didn't have to build the brand in their stores pre-built and it made it easy for them to cherry-pick it down into the storm, then track two came along and that was your tracking for today I had a meeting and had to miss it but tell us about what you talked about. Jason: [34:56] So you made an excuse not to not to support. Scot: [34:58] Well I figured we would talk on the podcast I don't want to spoil it. Jason: [35:02] Got it okay fair enough so I did one of the the panels in the grocery track in this was called sort of. The future of grocery our grocery Reinventing itself until I had three panelists the first was. Kind bars and so that was a Jared who's the VP of e-commerce there and and this is a very. Interesting traditional case for me that's a traditional. Cpg brand that that mix products and very successfully sells them through wholesale so kind bars are you not very successful there in every Starbucks store and a Whole Foods and Amazon, and they hired Jared and experience e-commerce gaido launch their direct-to-consumer offering. And we talked a lot of brands that are interested in doing that in the big question is always why would a consumer want to buy from you cuz generally. You have the worst with just sticks in you're the worst price for your product and so it's interesting to hear kinds of you about that. The a big component is. Assortment so they're offering exclusive flavors and skews that the wholesale Channel. Doesn't want to carry or is out of our limited editions their heavily relying on a subscription program that a lot of the wholesale Channel doesn't offer and they feel like they have. Unique brand promise and there's a subset of the kind consumers that buy into the be kinder to each other. [36:41] Serta brand ethos in want to buy from the brand even though they're not going to have as good of a Justice or prices Amazon. Scot: [36:50] Yep I think kind is one of these, classic examples of a new newer brand that's really kind of leveraging that assortment packaging everywhere you go it's different from a consumer sometimes it's like frustrating because you want to go to Costco and my wife likes a certain one and then, either can't find it at one of the wholesale clubs are bundled with like some really crappy flavor you're not going to eat so there is very clever on the brand side but but I do think sometimes, be a little too clever on some of that stuff that makes it really hard from a consumer to get what you want. Jason: [37:20] And I feel like there's a bunch of brands that think they have that position with a consumer and they really don't kind I think probably does sit in the next episode. Scot: [37:30] Did they say how much as directed like do they give you any indication is that like 5-10 15% of their business. Jason: [37:35] They didn't but I I suspected the last than that right now it's it's it's it sounds like meaningful Revenue but it's still pretty nascent compared to their wholesale Revenue. So I would imagine it's it's south of 1% of their other two other total sales at the moment. The next company with Chef which that spelled Chef apostrophe D and they are. And some meal kids are at sort of an interesting part of the grocery echo system at the moment. A lot of people that think it's a fat and then it's not really going to be a thing or a lot of people think it's the future shopping whenever you say meal kids Denny when they immediately think of blue apron and Blue Apron famously. Has like apparently no business plan to ever be profitable. Scot: [38:27] But earlier go sits when their top sellers right now so I'm in there Snoop the Timbers like these things. Jason: [38:32] And shut his actual interesting that they do offer their own meal kits but what they mostly are. Form from young cats so they're actually the private label provider for a lot of grocery stores that are now offering their own meal kits and they have a lot of Big Brand Partnerships to offer Brandon meal kit so I, Campbell's is a major investor in Chef for example. Inside there you know there are so so that was interesting he had a lot of. Understanding and familiarity with that market. He talked a lot about the pros and cons of home delivery of meal Kids versus grocery store pick up a meal kits and the two takeaways I I had from his his. That were kind of new to me. She's very anti subscription in meal kits and he thinks that you know he's a fundamental flaw with most of these meal kits and most notably Blue Apron is you cantilever a meal and then reorder which is exactly opposite of how most of us. What are the spines in particular things we like and we repeat those over and over again. And he also believes that we all need a lot more personalization than the mule. Currently allow and so a big part of their platform is an infrastructure that allows highly personalized male cats and he eventually envisions. The distance can be highly personalized even. In the store on demand so you can get the the spaghetti with a lot of garlic or a little garlic and a lot of onions are all those all those sorts of. Scot: [40:09] And deserve their delivery remix. Jason: [40:15] They do have a a chef branded meal kit that they delivered recta home but mostly what they. Scot: [40:21] On demand not subscriptions. Jason: [40:25] Mostly what they do is facilitate a regional grocery store offering their own meal kit or someone else selling a meal kit through grocery store so it sounds like more of their stuff is in store pickup meal kids then home delivery. Scot: [40:39] And my regional it kind of makes it seem like they haven't cracked into the top five or six big guys is not like a Kroger or Harris. Jason: [40:45] So I think there is. I think it is pot like he was not completely transparent about who is Partners were so it's possible that he is white labeling for a big one and that part of their agreement is that they that they don't disclose that. , number of the big ones at this point now own their own meal. Scot: [41:03] So Safeway bought I can't remember who. Jason: [41:06] Albertsons bought placed plated plated thank you. Which is one of the biggest wins in history of Shark Tank by the way fun story there but so some of these guys out on their own Walmart owns their own. For just bought one car for the second largest retailer in the world they just bought one this week so. The market for the really big guys is probably smaller it wouldn't surprise me if they secretly have one but he certainly din-din disclose. Scot: [41:35] I feel like musical chairs and some you don't want me the guy off without a chair and then the meal world have their own meal than his distribution mechanism is like maybe some A&P. Jason: [41:48] Exactly so that was interesting and then the third panelist is this company I was also not familiar with call Daily Harvest and Daily Harvest I decided that milk it sounded too easy so they decided to do something. Scot: [42:03] Getting harder. Jason: [42:05] We're going to do direct-to-consumer home delivery of frozen foods. And so there's a strong. Scot: [42:14] Prison meals are like blueberries so I can make a smoothie. Jason: [42:18] Yeah so smoothie kits I think is the thing the best-known. Scot: [42:21] I think it's the thing the best known for so all the. Jason: [42:23] Show all the frozen fruit you need to make a smoothie but also like not not so much like complete frozen meals but like frozen fruit and produce that you might. I'm using a meal they seem very focused on. A lot of the altruistic we need to solve a lot of the problems in the food chain or we're all going to die of starvation kind of thing they talked about what you'd foodways there is in the world and how Frozen is a great solution to a lot of food ways. Throw away a lot of fruit just because it doesn't look perfect and nobody wants to put it in their fruit bin in the grocery store so what's what the industry calls ugly fruits and apparently when you freeze it and no longer matters that that fruit didn't love. Beautiful so. The bruised Apple tastes exactly like the regular Apple a lot of famous restaurants now try to primarily use ugli fruit. They're trying to turn around this trend of throwing away all this fruit that has cosmetic damage and so is interesting that they're they're trying to leverage ugly fruit as a big part of the next there's also this. Scot: [43:32] Ugly frozen fruit. Jason: [43:36] And another one was this concept that I never heard of called transitional organic. Say you're a traditional farm and you transition to becoming an organic farm you have to adopt a bunch of organic processes but then you can't sell your food as organic until you've been following the those processes for a number of years. Writer so there's a bunch of farmers that are in Linda where they're paying all the expenses of. Producing things in organic way but because they're only two years into their through your program that they're not allowed to call their product Organa. And so so she's buying a lot of this transitional organic. Products so that that was somewhat interesting and then because it's frozen and they've invested a lot in the technology to pack the Frozen stuff in dry ice and ship it through common carriers like FedEx and UPS. They're able to deliver nutritious food to a lot of places in the country that don't have convenient access to grocery store so we have a lot of these. Areas we call Food deserts that they're able to cater to so so that was somewhat interesting but they had to. Scot: [44:50] Ugly frozen food to food desert that's the fish. Jason: [44:56] They were able to raise money on it so. There's a investor for everything. But it was interesting thinking about all these complicated with Justice of the cold chain and. Yeah so hats off. Talk to her and if you think about it if each of these things are popular they just wrapped up portion of the traditional grocery business right so you know she pointed out the the. The Frozen I always the Wiest appealing part of a grocery store and that it discourages interaction with the product and I'll and all of these sorts of problems, and by the way you buy this Frozen stuff and then you throw it in the trunk of your car and it's not frozen by the time you get it home so. So if she's successful in direct-to-consumer with Frozen that potentially takes to rose out of the grocery store the meal kits potentially, take a lot of the individual ingredient shopping that happens today so so some interesting things thinking about how groceries Reinventing itself. Scot: [45:58] Absolutely cool so after that after Jason second track there, then we went into the Keynotes so kicking off the show kind of the the opening keynote if you will, which kind of strange I think they realize that a lot of people come in Monday or Sunday zo winter who puts together all the content for shoptalk kicked it off, I thought I was a pretty good good kind of Esprit shortest like 5 minutes but the summary was you nowhere in The New Normal which is kind of you know, in in 15 and 16 and 17 we had all this disruption going on and when you're in the middle of it you figure it's going to be. You'll go back to the old normal but they have that never happens and then she called The New Normal and abnormal is essentially where, I know you're not really reacting to disruptive innovation it's just you've adopted it and said this is going to be happening going forward so she really kind of had two pieces to it for predictions, where we going to go and Retail and you can tell this that shapes the content obviously, the number one back in technology will create new efficiencies in expectations number to Shoppers will come to expect experiences that are Cutting Edge today I kind of took that to mean yeah once Amazon sets the bar at, today one day just walk out than the customers tend to expect that I called a zero friction it's pretty interesting, human thing I'm Number 3 start up some traditional businesses or more line where I think we're seeing that you know we just talked about several is very very big trending in our industry be a grocery retail where you have kind of the you know the. [47:29] Analog dinosaur acquiring the digital DNA and smashing it together to create a new kind of, no I was using her language a new normal kind of combination. And then a wide range of new consumer product to hit the mainstream in this is kind of what was in the first panel where the cost to build a new consumer product is effectively gone down to zero and now you're going to see this huge swath of new products, your micro products micro kind of tribes that they appeal to and then she said those predictions field 7 trends, I never won the rise of Miss France number to the growth of experiential retail, we had a show in the can where will have some really interesting kind of examples of that and then the next keynote talk a lot about that, store associate will not go away but change what they do there so I can becoming an orange shirt or between prep and so check out and in the go example cashier list check out as a big thing automation to the warehouse, more transparent Supply chains in this goes to there's a lot of concern around food safety in that kind of thing, a lot of people talk about blockchain there I think there's a couple talks around that coming up in an explosion of AI machine learning. So after after yeah we went right into office of the CEO of Ulta was there and I don't know if it even some of these. These Keynotes they seem really interesting but then like there's kind of. People 20 minutes so you can't get into much detail and then the format seems to be show a video about the company. [48:59] Talk about some high-level stuff most people are dino and then talk a little bit about, diversity and maybe the company's culture seems to be the kind of formula you lived up to that expectation couple points that they hit on, and we talked about on the show this kind of your beauty is an area that's doing really well and, then why you know she said they're 90% off Mall property so they were smart to be off ma that three different shaders the real estate location which is off Mall product mix and services, and then talk about the benefit of the Loyalty program they have 28. Million members in that program and it represents 90% of their sales, and the other day it's pretty integrated between online and offline so it's omni-channel loyalty program and then the other day she talked about the consumer changing this is interesting you know she talked about, gender fluidity and now that actually helps them so now you have more and more people wearing makeup regardless of their gender and it used to be all these social things around you then wouldn't wear makeup you and I wear makeup because, podcast but now the so you know it's okay. Jason: [50:08] We're actually thinking about launching our own line of podcast. Scot: [50:10] The Chase, spoiler alert, forward facing cameras at selfies has really helped all these Beauty companies cuz now people take more pictures of themselves and they want to look good for those she didn't mention that those with a freebie that will throw in there. The you know. Today's consumer wants a personalized convenient experience I'm certainly living that with my new company where convenience is everything for folks and then personalized as well. Nothing I thought was interesting to see where she broke the script a little bit she went out on a limb and really said that they know is in her she paid homage and she's talking about we couldn't do this without our Partnerships with Google Google Express Facebook and then Spruce labs, I end up that was interesting that you went to Old diversity thing which was good you know that they have. Have a board that has over 50% women which is great and then officers in the company are over 60% so makes a ton of sense you know you know kind of, older middle-aged white dude song makeup doesn't make a ton of sense and I think this is a great example of both aligning with your customer and then also having really good diverse kind of input in the company to make it better, then how the Nike net was up so would you take from that one. Jason: [51:33] So that this was Adam Sussman who's the chief digital officer at Nike I think he's really tripping you in that really don't think Nikki's had a cheap digital out. Scot: [51:41] He said he was the first. Jason: [51:43] And so the heater is it Nike. When they spend a lot of time talking about was their membership program so they they have a thing they called Nike Plus Membership. And they probably have over a hundred million current members they want that to be 500 million in the next five years those members Ben Forex what non-member spend. And there's a number of specific experiences they have in the membership program that have even more dramatic conversion results so is interesting. I would have said that the general Trend in in Welty was that. The effectiveness of loyalty programs is kind of a roading in here we had to back-to-back key notes that were saying how successful their their membership programs are so I found that interesting. He also talked about their conversational Commerce initiative which is launching so this is called. Hertz on demand and you can use the Nike apps to have a text chat with a Nike brand expert that will give you advice and so you know. You mentioned that you get your running shoe advice from attend time Marathon winner. Probably doesn't want to be giving me advice about running shoes but but that's interesting in a bunch of the the conversational Commerce vendors that. At at the show were thrilled to hear him him supporting that experience personally I think the jury still out on. [53:17] Particular chat base conversational Commerce I'm not sure if Facebook's gotten all that the traction that they were they were hoping to get but but it's still early so we'll see. And then they did talk a lot like his corporate videos. Nikes done some really interesting product launches so that you know Justin Timberlake debuted a new Air Jordan Super Bowl. And they made that available for purchase through their sneaker app like the second he walked off stage and it's sold out instantly a month later the next version of that screw came out and they launched it on Snapchat with a. I really enjoy Innovative kind of want Commerce experience and you know he didn't explicitly call this out but one interesting point. Used to be that they would watch all these products through their wholesale partners and people like Footlocker would sell these and kids with a line up in the mall. And now he's talking about all these Innovative direct-to-consumer experiences that are owned by Nike. And the drink late relationship Nike has with his hundred million users in their Affinity program so to me Nikes really the poster child for someone that's transitioning from. Predominantly wholesale to the majority of their sales but but predominantly direct-to-consumer from experience stand for. Scot: [54:35] Yep sidebar I don't know if you fall or not but the average several Wall Street reports that to the shoe guys are really having a first company of tough, 2018 I don't know if if it's because they're losing a lot of these launches or what's going on but you're trying to see kind of the cause sneaker fatigue with with. That model seems like it would never run out but it looks like. The average Sneakerhead has X number of shoes that really interested in watches yet Brands like Nike moving that away from retail that could be sneakers have been kind of sustaining through them the retail apocalypse mall again so bit interesting to see if maybe the steps over. Jason: [55:09] Yeah yeah I think of the inside tip. The thing that sneakers need to save them now is much wider angle front facing cameras on that smartphone because the moment you can't see your feet in the selfie. Scot: [55:21] Yeah. Jason: [55:25] So the next keynote I think I was the only one that said in on so I think everyone left after Nike but I was really interested in this next keynote this is Tim Stein or who's the founder and CEO of a company that. To her listeners that probably heard of called a Cato Cato is a uk-based. To Consumer grocery store so you order online they have fulfillment centers they they deliver the groceries to your home. And there are quite successful they sell the equivalent of 2 billion dollars a year in groceries direct-to-consumer. Is we talk about an issue and UK 6% of all grocery sales are are digital where is here were less than 1% to. So I was super interested there that the digital pure-play grocery retailer in one of the most successful markets in the world. Scot: [56:16] Scot to be part of the UK but aren't there like I know our folks in UK almost they have like six people they can choose from that and some of her like Marks & Spencer. Jason: [56:26] Grocery stores all out for some Marks & Spencer Tesco as though which is Walmart in the UK car for they they all offer. Scot: [56:34] Is the only Pure Play. Jason: [56:35] Yeah but these this is the Pure Play and these guys are bigger digitally than any of those those other companies so it would be a little bit like what a Peapod sold more groceries then Kroger. Scot: [56:50] Amazon has a big mouth for Walmart. Jason: [56:53] And I don't know what their ownership structure is it if they're in play or not those are interesting questions but he talked a lot about. The benefits of. Being a pure being built from the ground-up to deliver groceries versus being a retailer trying to transition to groceries so, I have talked a lot on the show about how I think curbside pickup is the ultimate winner in this space and largely because it's something that traditional grocery stores can do and so we have this concept in the industry called store pic, and that's what the traditional grocery stores have decided to do is will will pay our employee to pick all the groceries instead of the customer picking it. And then we'll make it convenient for the customer to get those that store picked order and so he like very self-serving lie but with some credibility. Talking about how he doesn't think store pick can work in the long run and how these. From the ground up for filament centers for home delivery are better and he alleges that they've tried curbside pickup. Scot: [57:59] Pick up for their system in the customer always gives. Jason: [58:00] For their system in the customer always gives is always choosing home delivery over herbicide pickup Which flies in the face of my advice by the way. Scot: [58:07] So it's the. Customer experience not the economics of let me take this item put it onto a shelf in a convenient way for a shopper and then at Pea Picker to pick it in an inefficient way. It's not the economic so you saying it's when you give customers a choice they will choose delivery. Jason: [58:25] Exactly at the same price which is a big caveat in this and so so one thing. Is he talks about is he he showed the math and he took all the things that have to happen when you place an order with Tesco and they store pick that order and you do a curbside. Tesco delivers at your house and it a typical order by his math take 75 min. Scot: [58:51] And then. Jason: [58:52] And then he does that same order in his automated grocery fulfillment center that uses Robata. And he picks that same order in 15 min. So hit his fundamental premise is where 5x cheaper in these purpose-built things so store pick you know is really cost disadvantaged. Scot: [59:18] And if it's what the consumer wants regardless. Jason: [59:24] And I I buy that the. Purpose-built fulfillment centers are way more cost-effective than store picking in there other problems with store picking then we'll talk about in that in the next Keynote. I totally buy that where I'm I'm not as confident as him is the curbside pickup versus the the delivery and that you could I believe in that his customers want delivery in the US. We find lots of people aren't home to receive that grocery delivery and one thing he. Very much points out as he says we are at Price parity with all the traditional grocery stores so we scrape all Tesco's prices and our price to deliver it to your house is the same as Tesco's price for you to drive there and pick it yourself. And so no one in the u.s. does that everyone in the US that's trying digital grocery have all kinds of premiums and added cost. Scot: [1:00:21] Service is the dreaded Services yes. Jason: [1:00:24] And it's it's worse than just service fees it service fees and they charge more for the same skus when they pick them for you. So so a big difference between the two markets right now so his presentation was super interesting. Then the afternoon Keynotes there were three more so the first one was was Ben Silverman who's the CEO of Pinterest. And I'm just going to be blunt. That was the most boring keynote to me of the show so far and large he did a great presentation about how important visual Discovery is. Which I agree with him it is there was no unique inside the weight like a very self-serving for you know the business that the Pinterest happens to be in. Scot: [1:01:14] The governor there Rich pins and they also had a lot of marketplace initiative none of that no retail kind of tie on them. Jason: [1:01:17] Talk about any like it was it was purely like people aren't going to discover new products via text they need visual Discovery and where we build a business provisional Discovery and it was literally that abstract. Scot: [1:01:32] Go back on the K2 or however you say it one of the intern just came in they are a public companies are independent and they're listed on the footsie the London Stock Exchange and they're part of the foot C250 and have a market cap of about 3.6 billion. Jason: [1:01:48] So that's a perfect segue to the next keynote is. In some ways the u.s. equivalent which is much more company is Fresh Direct so this is Jason acreman of who's the CEO and founder of Fresh Direct. Resurrect is direct-to-consumer digital grocery exclusively in the Manhattan area. Scot: [1:02:16] I was going to confuse with hello fresh with their meal delivery company. Jason: [1:02:20] FreshDirect is like Aikido a built from the ground-up to deliver groceries to your home. The most thought of is a grocery delivery company which annoys Jason to know in because he thinks of them first and foremost as a food company so so the big thing that happens is. He buy stuff from the farm and gets it to your refrigerator in half the time that Whole Foods does so. Pressure it's going to last much longer they do these promotions like a lobster day when you order Lobster to be delivered to your house in Manhattan. It's been pulled out of the water in Maine less than 12 hours ago so that so the supply chain is super cool. Like Ikeda although I don't think it's quite as automated like they built this. Purpose-built fulfillment center so they're avoiding store pics and Jason jumped on the same bandwagon about why store picking isn't going to work right and. Hey price structure is problem number one. Problem number to none of the stores have accurate inventory something we aren't we aren't we talked about earlier and so they just can't fulfill your order properly like they're missing stuff and they make mistake eggs. Phone number 3 store pic doesn't scale and so his point is is store pick ever got really popular the customers in the store would be. Derogatorily affected as they're competing with all those employee Pickers in the store so then the customers will get irritated that they're losing out on the. [1:04:01] To the to the Picker and staying in line behind too many pictures in the cashier and. Scot: [1:04:06] This happened the other day I went to Harris Teeter Saturday night and there was more employees picking and instacart people picking, then us and daddy's giant things that you have these relatively kind of pallet size cards that you haven't seen him and it is it is cumbersome, I can tell our grocery store is also throttling so they have you know, when I go like a Friday to get started delivery it's already sold out so I think they're really limiting the number of deliveries which is another bad customer experience you're stuck between you know who's going to have the worst customer experience in-store person or the outer person and that's a, that's a tough tough decision to make for the customer. Jason: [1:04:46] For sure so that was all super interesting so this is two guys that were lobbying heavily in favor of dedicated delivery centers versus the the store picking model again there just are so many grocery stores that have all this investment like it's hard. They're going to be the best they can with the model they have but then he had another Insight which I totally haven't thought about it all that's super interesting. FreshDirect is launching a sub brand service call. And foodkick is 1 hour delivery normally FreshDirect is next day delivery. And so what are you wanting out is he said only about 40% of food purchases are planned purchases. So I'm going to do my grocery shop I'm going to shop from the list and it's fine that all those groceries get delivered tomorrow cuz I'm putting it in the fridge

EP120 - Negotiating with Amazon with Andrea Leigh Andrea Leigh is the Vice President of Client Services at Ideoclick, Inc., an Amazon managed services agency.  Andrea enjoyed a 10 year career at Amazon where she served in a number of Buying and Category Leadership roles.  We caught up with Andrea at the PathtoPurchase Summit, where she gave a key-note on selling on Amazon.  We covered a variety of topics including: Andrea's new role at Ideoclick. Amazon's presence in grocery and relationship with WholeFoods vendors The language of Amazon metrics Best practices in negotaiting with Amazon Brands selling on Amazon Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 120 of the Jason & Scot show was recorded on Monday, March 12, 2018. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature, Google Transcription: Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 120 being recorded on Monday March 12th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here cuz Scot Wingo. Scot: [0:39] Hey Jason and welcome back Jason Scott show listeners this is continuous are segments here Live From the Path to purchase Summit where we have some beautiful background music from Grouplove one of my favorite bands. Jason: [0:52] Great now I have to pay a royalty. Scot: [0:53] Is there a Panda sounds like. And anyway so we're really excited to have back on the show one of our most popular guest Andrea life Welcome Back. Andrea: [1:07] Thanks for having me glad to be here. Scot: [1:09] It is a quick reminder to fix your ex Amazonian and you are an expert on negotiating with Amazon cuz you were on the other side of the table I'm so this is why it's always such a Hot Topic you know what all the secrets car cards are the Amazon has. Andrea: [1:23] Exactly or at least some of them. Jason: [1:26] Does that mean they don't like you. Andrea: [1:27] Well I mean I like to think that we help clients find a win-win I mean that's the goal right it's defined areas where the brands can Excel and Amazon can continue growing the business. Scot: [1:39] It's been about a year since you're on the show so give us an update on what's new with you career-wise. Andrea: [1:43] Wow it was that long ago it feels like it was yesterday well. Scot: [1:47] Yeah these podcast it's like dog your stress me. Andrea: [1:51] So I think when we last met I was working with Melissa and Lambert Eric and Andre Kaylee Consulting. Working with brands on their Amazon strategy in September actually joined up with my husband that I do click and I'm the vice president of Client Services there. And I do click is a managed services provider so we offer software data analytics reporting Consulting and advisory Services item data management marketing AMS management. And I have been there for about 6 months now and we work with clients across all categories but tend to be a little more focused in the cpg space so Grocery and health and personal care. Scot: [2:31] How's it work with your husband. Andrea: [2:32] It's so much fun we went to grad school together and have sort of had been in the same space for a long time so it's actually like one of the best things about. Scot: [2:40] Does he ever do that joke raise like talk about sleeping with his coworker it's classical today's world is great. Andrea: [2:43] You know he does he really enjoys finding inappropriate jokes and he hasn't thought of. Scot: [2:50] I need to I've got like yeah okay. Jason: [2:52] Why I'm presuming the regular Wisner so now he has. Scot: [2:54] Yeah actually it just that one of our interns just ran up and told me that you were last on the show May 11th last year so it has been about a year. Andrea: [3:01] Wow well thanks for having me. Jason: [3:05] Thanks for being here. You mentioned cpgm grocery in a feels like groceries one of those areas where there's been a lot of progress in the last year and the groceries are thinking a lot more digitally. [3:19] Obviously the Whole Foods announcement amongst others have you seen the grocery space what's going on in grocery. Andrea: [3:25] I think the biggest thing we're seeing is that you know where a few years ago Amazon in particular and the lot of e-commerce players were really just trying to grab customers and growth and sell a lot of grocery products. The focus is really shifted to more about being profitable profitable and sustainable growth which means that for a lot of our clients in a lot of Brands out there. Selling on Amazon has become really difficult because there are a lot of product categories that just aren't super sustainable online you know given delivery economics. So we're starting to see a lot of Science and and then seeing folks in the space really starts in Sebastian capabilities Direction, to Consumer on their own using 3pl focusing on. And so I mean I just seen kind of the most I think the pace of innovation is really set up the last couple of years. As Amazon in other e-commerce players start to push some of those profit concerns back on the brands. Jason: [4:24] Yeah I think I've seen all that as well and I keep beating this drum that everyone seems to think I'm wrong on so I'm going to. Andrea: [4:33] Try me out. Jason: [4:35] Amazon can't be hugely successful in grocery but because of the delivery economics I actually think that the dominant model for digital grocery is actually grocery pickup. Andrea: [4:46] Totally totally agree with you you know I think is going to be is huge. And for a lot of these brands that I think God on the Amazon bandwagon early you know I hope they haven't abandoned some of their wine Amanda live in Bandon but I hope they haven't deprioritized some of their initiatives, with brick-and-mortar because the brick-and-mortar space is heating up around click-and-collect and grocery pick-up and so you know I think that I totally agree with you I do think that sustainable model for e-commerce is something that looks more like Amazon's Pantry model, where you try to get the average ring up. And you're able to spread those delivery and shipping economics across the larger number of items and send it kind of the slowest ship method, not only does it help with the delivery economics but it helps with forecasting when you have more time to be sort of more of a just-in-time inventory model. Jason: [5:38] Yeah yeah and speaking of pantry did you see the news that they've decided we change that model of this month so. Country used to be a paper drink thing so. 599 per box and then you you put as much stuff as you can in the box so they're doing away with the 599 ft and it's now in new service you have to subscribe to for five bucks a month and then you can use Pantry as much as. Andrea: [6:03] That makes sense. Jason: [6:04] Yeah into the theory is as as opposed to having that big friction of taking $6 out of your wallet every time you want to use it that it just gets tacked onto your your Prime membership and you stop thinking about. [6:18] Casper drinking you're more likely to use it more often. Andrea: [6:21] Yeah I mean I think that makes sense Amazon has had like wild success with all of the subscription models you know for fresh and for. Obviously Prime and you know there if they have all these Prime add-ons now across their portfolio so it does really increase the stickiness I think we've all seen the metrics around Prime and how much stickier, those customers are, but I think that's really interesting and I do believe that in the next couple of years we're going to see a really big shift at Amazon from you know the traditional amazon.com grocery category over to Pantry more push to Whole Foods more precious to pick up. To help really help the profitability it's a sizable enough category at Amazon now that it's extraordinarily painful for them. You know to be to be unprofitable on. Jason: [7:06] I wanted to make changes this month is Dave there they're not doing a bunch of pilot cities where they're delivering literally from the Whole Foods until there's even was a funny article about like the instacart guys getting like. Moved out of their office into the hallway to make room for the Amazon employee setting up setting up shop to do delivery they haven't announced it yet but I think it's it's inevitable. The dab. Logistics infrastructure get used for pick up as well and then ultimately a bunch of Whole Foods end up being pick up Depot Amazon Fresh pick up locations. Andrea: [7:39] Yeah I spent a number of years working in the grocery category at Amazon and also working on Amazon Fresh and delivery economics for fresh food are really really challenging. You know density of supercritical you know being able to hit multiple orders in an hour. It's a really it's an extraordinary Lee challenging business and so I think you know it makes sense to focus on a limited sort of version of that I maybe there's an opportunity for Amazon to get scale and then as they are able to grow that they can kind of. Encourage customers to do more pick up. Scot: [8:14] We surprised by the Whole Foods acquisition. Andrea: [8:16] I was actually you know a lot of people ask me about. About it and if I'd heard any Rumblings and no like it was completely silent and and I was really surprised although it makes sense right I mean. That's if you in order to really be I remember Jeff or maybe it was. Jeff Bezos Demetrius Jeff will he saying something in the earlier days about if we really want to be like a true, you know everything store we absolutely have to have strong penetration in grocery and in fashion does R22 normous Industries groceries like the biggest industry so. They've really got to figure out how to get that right and I think they were I mean frankly based on sort of the. At the public sees like all of the projects that are launched in our successful in a scale but there's so many Pilots that happened in Seattle that, where is interesting to everyone and if you look at all the fits and starts of this thing over the years it doesn't surprise me that they went and purchased someone who is doing really well. Scot: [9:17] Then you think so I can sleep at the store footprint one of the things I was surprised how quickly they worked on was getting the private label that was called whole 365 getting that into the other platforms very quickly that seems like almost. Day one that that got you know I saw it in my Prime now and it was featured and then obviously they done a lot in the stores with the lockers and selling Echoes everything. Andrea: [9:38] I mean I'm sure that was one of the I think that was one of the probably if you were list out like 5 or 10 main reasons Amazon bought them access to their private label is a huge one, you know they really dislike private label its assortment they can't usually have on their site, they can use sometimes get it through resellers near we were able to get some of the Costco stuff through resellers on the third-party platform bed. Scot: [9:59] Amazon is the largest seller of Kirkland. Andrea: [10:02] Now there. Scot: [10:05] Costco doesn't sell it. [10:08] It's a little bar but they they jump over it seems like as they integrate Whole Foods lb you know it seems Amazon's very efficient. Right now there's finally a different buyers and things do you think they'll consolidate that what are you hear anything about that. Andrea: [10:23] You know I think it'll be interesting to see what they do with the went looking back at some prior Acquisitions like diapers and Zappos they were really slow to integrate some of those teams, you know what I think I think they're probably a lot of reasons for that I expect this will happen quicker mainly because it's a category they have got to get, you know they've got to get more profitable on. So focusing on those classes and getting transparency there quickly is going to be important I just said something this morning about how. They've reached out to some Brands and I've invited them to some kind of like Summit or meeting next week. Whole Foods has to talk about I think it was to address some of the concerns that have been popping up in the vendor Community probably specifically around cost. But the article is also speculating that. Amazon was going to try to do away with traditional grocery Brokers which I think is a really that's really interesting and potentially like try to recoup some of those that funding for themselves. Desert of cutting out the middle intermediary. Scot: [11:25] Give me the NADA grocery what's the for dummies on grocery brokers. Andrea: [11:29] So it's a lot of Brands work with traditional brick-and-mortar through what are called Brokers so third parties in negotiating, negotiating for Shell space the brands are often like really involved in that process but the broker actually. Stop managers that relationship and for Amazon they work within. You know worked with more grocers in the earlier more brokers in the earlier days but have had really tried to kind of do away with a lot of that, I mean in some ways you could look at it as an aunt pretty Antiquated model like brands are pretty sufficient self-sufficient in their ability to negotiate now and you know and negotiate for shelf space and figure out how to navigate, a brick-and-mortar store it's not like a novelty anymore they know how to get into Costco so. I think that's a model that's kind of ripe for disruption anyway it'll be interesting to see if this encourages it more quickly across the other brick-and-mortar channel. Jason: [12:25] What one. [12:28] I've been trying to figure out we have this overlaps but like so if your craft you know how to sell to grocery stores and you have all those infrastructures and you you probably are already aren't using a broker or you're not getting on a value for the broke his heart. Carried a lot of much smaller nascent Brands often at the local level right and so you can imagine your Amy's Bakery. When you make baked goods in your kitchen and you're selling on through just the Austin Whole Foods a broker could be helpful in an opening that relationship because you don't know the kind of perms you should be doing all those hearts. Andrea: [13:02] Bright. Jason: [13:04] So part of me goes oh that's where they're taking the broker out but I actually think Amazon has already taken a lot of that local buying Authority away from the Whole Food store. Andrea: [13:13] Yeah I mean I think it's a model of those sort of deteriorating anyway and then I mean there's so there's Brokers which sort of like managed the deal but then there's also Distributors which actually procurar the product and then resell it. And that's another Avenue that a lot of those smaller Brands used to kind of get into some of the channels where they couldn't it was in make sense for them. Feels team setup for all of those different channels and so working through like a distributor broker. But you know it's more cost but and it's more profit that can be had by Amazon so I can see why they would want to get rid of that third party. Scot: [13:48] Go to this is Switching gears out of grocery this is the time of year when vendors get their their kind of notice from Amazon that it's time to negotiate which seems like it's probably a. Not exciting notice to get so imagine you get you get a lot of calls on this kind of time and you're giving a talk here today on this and you talk about it on the last show. What to do in in the world of negotiating with Amazon. Andrea: [14:13] Yeah I don't know if it's really new but growing is the concept will obviously always more automation every year there's more automation more and more of our clients even some of the larger ones now or getting through these automated email ask. So more busherts Automation and then the other more recent it all in his hands always had for some categories sort of. Professional negotiating teams and that's that. Arm of Amazon is growing so we have more more clients who are being asked to negotiate with like essentially it's a third party with an Amazon so not the retail buyer. They've traditionally worked with but instead like a professional negotiator which I think is interesting for Brands and some ways they lose. Scot: [14:56] Is it William Shatner. Andrea: [15:00] I think it's really interesting for Brands because in some ways it's a complete disadvantage for them cuz they're dealing with someone who like. Highly skilled highly skilled negotiator but in other ways it's to their advantage because they possess a lot more category knowledge than The Negotiator does and so. Thanks figuring out how to work with that team as that team grows and starts interacting with more Brands is going to be critical. Jason: [15:28] It's I don't know this is a fair amount or not but I in my mind I imagine it's a little like the. The car dealership model where essentially the they they make you negotiate with the individual sales person who very intentionally doesn't have any Authority artonomy inside there intentionally. [15:46] Aggregating you disarm mediating you from the decision maker who's the the the dealership manager in in the same way. [15:56] Professional negotiators are just intermediating the brand from the the merch. Andrea: [16:00] I would imagine that the unprofessional negotiators at least what I know of them from our clients have a very very narrow window of what they can actually approve. And you know agree to and then everything after that Pastor go is probably escalated like is far as we know the category leader is still the ultimate decision-maker so it's important to make sure like your social your large man you got access to that person, but smaller brands that we work with are typically doing a hundred percent of the negotiation over email. Scot: [16:31] How does this go so your Brand X on the go she ate or I start off and I say Brand X you've been a great partner of the Amazons we love you you're awesome we need you to come down 20% does that sound like how it starts just. Andrea: [16:43] Yeah you'll get an algorithm to the brands are given algorithmically Drive-In email that is looking at basically a day to file and saying in order for us to. Be profit positive on frayed for example we need extra sent and Afraid allowance and sometimes the figures I don't make sense to our clients of gotten messages like asking for you know 15 and 20% rate allowances which is not tenable obviously. So it's it it's an algorithmic Lee Drive in email me look like it's coming from your buyer it's probably not. Probably coming from a machine or up and it's in there some machine learning in it so if you're if you send back some responses we kind of had tested and learned on this with some of our clients you know some some responses generated, some responses back in some responses get kicked out into an exception and then typically at that point especially if you're small brand your Kik to an offshore team. But all that will conclude the negotiation. Scot: [17:35] What's the best way to like mess with a I would have your like that's too we would like to offer a bigger discount or can you just like start cussing at it. Andrea: [17:43] So we have found that for some of the critical negotiation components like Freight and marketing accruals continuing to just say no over and over again may result in the brand. Amazon not ordering from the brand anymore so we've seen a couple instances of that happening where the brand took a pretty from line there were like no and then the person wrote back you know it's the auto thing it's like. That is not an acceptable. Like term for us and then no and then that's not expensive and then there was a threat so read the email carefully if there's a threat in there that Amazon will stop ordering it's important to dress like an CERN. The address be asked but you certainly don't have to give Amazon everything they're asking. You don't have to agree to like that exact term you can agree to something more than what you're doing and typically make it through the process. Scot: [18:29] Does it start like real macro like we want 12% and then is it a good strategy to kind of start to just try to get it to be more like at least category askew or down the street level cuz it seems like on the other side you have all these different. Andrea: [18:40] Yeah and we'll talk about this today see you but I think the two things that I would really keep in mind when negotiating with Amazon are. First of all focus on win-win so you want to see if you have to give Amazon more money you want to figure out how to do it in a way that grows the business not in a way that just helps their bottom line so an example of that might be, you know coming forward with investment in a program. If crosstalk is great for you cuz it saves you money should be in if you were for some in centers it might make sense to invest in that program with Amazon because it also helps their economic so it's like a win-win or. Bringing forward a plan for an increase in marketing spending specifically Roi driven marketing like I am a story. You know helps you grow your business also helps Amazon's bottom line by giving more for things like marketing accruals or giving Amazon money for you know merchandising placements on the site that are sort of ended us. Isn't always necessarily a win-win so making sure to choose those battles really carefully and she's those spot. And then I think the other thing I would keep in mind is you know you don't you don't have to give them everything that they're asking for and if they're asking for increases in terms like free or damaged allowances ask for the supporting data that shows why the costume. Right you might not get it but at least it shows that you're your auditing and you're and you and you may be able to drive as a stalemate through that. By saying oh you want an increase in the damage Lance tell me what about my products or what specific products are showing higher damage so I can actually go fix the problem. [20:16] Instead of just giving you a higher approval for that. Scot: [20:19] Is this one Amazon will ask for different packaging or you know just like frustration-free or or or like do a bundle of 2 or any. Andrea: [20:29] This is something that is very frustrating to me in earlier years Amazon would certainly do that and as as when I started in 05 as a senior buyer that was certainly a part of the annual negotiation you would say, these items are profitable let's talk about how we can make a more profitable can we get this to a cheap Pack and change the packet me we would it would be more of a. A coaching exercise but now it's just so much easier for Amazon to ask the brands for money and especially when the negotiation is either automated or handled by a third party there's no vested interest in. And no knowledge really like expertise to help a brandy that so we have more and more clients that we work with it we're doing that with. Playing that role that the buyer used to play in helping them figure some of that out. Scot: [21:12] Doesn't Amazon use so you should be you have your Warehouse pricing and I was over here kind of separate and then I know. This may not be part of negotiation but no Amazon's now looking at that kind of thing while you're selling it on in Costco at you're the equivalent of this many dollars per ounce we want you can either bring that to you over here. Or the turn ski we have we would like to see it at the same dollars per ounce is that is that these negotiations or that's more of just price parody. Andrea: [21:38] Yeah I mean if you're that kind of comes up in like a crap situation or Amazon stream free can't realize any profit where they say William Walmart selling it for this price how are they that look that's below our cost so how are they doing that and I would advise Brands whatever you do do not share, your cost that you have with other retailers with Amazon I mean that's like a big that's a big No-No because you can't ever roll that back right. Amazon's aware of your cost structure to other brands it also makes it so that you can't throw to move the beans around when you need to it's just a level of transparency you don't ever want to go. Jason: [22:13] And I think I mean Scott might be willing to there's like a specific version of the dynamic pricing the brands are really afraid of you know you sell a can of Campbell's soup on on Amazon it's a 12 oz cans to the price per ounce is whatever. Andrea: [22:26] Yes right so. Jason: [22:27] Salad case pack to Costco. Andrea: [22:30] Amazon is getting so much smarter about that I mean it used to be when we watch I went through many Revolutions of Brands divots doesn't like spending a lot of R&D on designing different pack sizes I think the K-Cup Industries a great example of this, where they you know sold at this packsize to Costco in this tax ID Amazon this one to Target and they will never know that it's like all the wrong the same different prices. They will price match each other but Amazon figured that out real quick and started matching perk up and then they started matching per diaper per White. Per ounce a lot of categories have the / something rolled out by now and if they don't have it. You know they will so trying to circumvent price-matching through different pack sizes may buy us some time. But it isn't a long-term solution. Jason: [23:19] You mentioned a couple of terms when we were just talking about the certain negotiating strategies like Freight allowance for example it feels like there's a hole. Different vernacular at Amazon and I know they they said these are. Metrics and they really Drive everything to those metrics can you kind of educated so like what are the high-level Brands need to learn about to work. Andrea: [23:44] Well I think he's kind of two questions like what are the terms you're going to negotiate about and then what are the kpi is to manage your business but the terms are and actually don't I mean I don't know if these are really different from other retailers that don't have knowledge about, you know about brick-and-mortar as much but you know they're typically looking at some kind of marketing. Come up is a high-level term that refers to any money you give Amazon so often Play Straight payments accruals whatever it is all Co-op. I'm better at least that's how Amazon Defiance Co-op it's typically a marketing accrual. Or some kind of basic rule for base allowance there's a damaged allowance and Afraid allowance if Amazon is paying the freight sometimes the client for the vendors paying the freight. Scot: [24:26] These are all expressed as some so if I'm spending. Andrea: [24:29] They're all rappers. Scot: [24:30] Amazon to buy a million and I'm going to do co-op dollars at 10% is 300000 in addition to that and these are all that's kind of how they're all measured. Andrea: [24:38] All percentage of cost of goods sold all off invoice and then there are definitely get subscribe and save allowance depending on the category you're in there may be a mark. There could be like volume incentive rebate. There might be like straight payments you agreed to you throughout the year you might be paying for your talking about your SVS of your strategic vendor services. Representative during this time of year that's like a headcount you can buy at Amazon that just works on your brand. So all of these things going to come together to be the annual terms negotiations and son is when the automated tasks include everything that you're actually doing with Amazon so it's important to use a Tracker like Bill. So that you got it all up you. Scot: [25:25] You have a free one that I've heard you. Andrea: [25:26] I do yeah it's on my website yeah it's on my website Andre Kaylee consulting.com will be adding it to be I do click sites soon too but it just allows you to swear to fill in. Your sales and the last year's turns this year's terms and then it auto calculates all the actual dollars spent printed look at the actual dollars, it's one thing to know that you're giving Amazon a point more this year and it's another thing to actually understand based on your gross right how many more dollars are actually giving Amazon anyway. Because a lot of brands are going really quickly on Amazon and they're doubling their spend with Amazon without actually even changing their coop. Jason: [26:03] And then you mentioned so those are some of the terms you mention like their specific API. Andrea: [26:07] Yeah so some of the key so it's important to speak Amazon when working with them especially if you're sort of pushed one of these automated channels. Jason: [26:15] Side note I was thinking the way to work around that way I haven't tried this myself so you're on your own but is only negotiate in a language that their natural language processor doesn't understand something like Klingon or Jeff Bezos it probably doesn't. [26:30] So I might be Swahili. Andrea: [26:32] About you know if I can get if I can get a willing client with a sense of humor that might be somebody that might be something to try. But there are a set of Casey eyes that are important for understanding and running your business on Amazon if you can get a good command of them and understand them and have some benchmarking available to you, you can run a really successful business on Amazon without ever interacting with a human but it's important to know the kti's sales sales growth obviously, it's really important to look at a lot of clients who work with even big ones tend to look almost exclusively at, orders Amazon places from the brand you really need to be looking at point-of-sale data that is the true indicator of Simeon, that helps you understand how effective your marketing and promotional activities are so that POS state is really critical so shift cogs. Gross gross and units gross revenue again really surprised how a lot of clients will only look at Revenue which you lose a lot of the transactional nature of the Metra. Understanding like how customers are transaction with your units looking at the in stock and inventory rates I think. Time and time again we work with clients where they're like why is my business not growing very fast Amazon you luck in the products are good and they are, getting pretty good search ranking but they're only the brand is only feeling like half of the purchase orders like they're not willing to come and see you, you have to have product in order to sell it so keeping track of some of those metrics getting your handle on your own metrics around this is important Amazon reports on a metric in Vendor Central called Fast Track in stock. [28:02] Its sales waited and glance product may be going to eat there but it's Lance he waited you should just really know of all your items available how many. Haven't been trying have any doubt it's a much simpler metric it gives you a much bigger picture and more complete picture. Scot: [28:17] So the sales rate is it is it does some indexing to get tire sales rank items and how fast are field. Andrea: [28:22] You get a bigger good guy if you're in stock on the top seller and you don't get a bad guy at all if you're out of stuff done something that is like a really low seller. Scot: [28:30] When does so when they come in sizes brands are frustrated Amazon's not buying their buying less and less of their swetman when does that come up in this negotiation or it sounds like it really doesn't sounds like the buyers know if I was going to buy these are the terms. Andrea: [28:45] If you're in a position where you're negotiating with a machine you've got to find another way to sell this product on Amazon through third-party so so it'll be really hard for you to get like. Automated system or the team in Indiana to like respond to a request like that but if you are in a position where you got a live person you certainly should bring that into the negotiation. Why aren't you buying all my products I'll give you this Co-op if you commit sore during my whole assortment and you know a lot of times you can talk to them about how. That is certainly may not be performing very well because it hasn't been in stock it performs very well at other retailers like giving all of that data and information and can help Amazon make decision. Scot: [29:23] But not your custody with other retailers. Andrea: [29:25] But I think everyone knows that but that is important to mention I was surprised when I was a buyer how many Brands would be transparent about that. Scot: [29:34] I've never been offender son learning a ton. Jason: [29:38] You're lucky man last time you went to show we talked a little bit and you wouldn't do it earlier they have this. Unhappy status can't realize a profit. [29:51] AKA crap which great great back back story and all that about how that all came into being. Scot mention vendors that are frustrated that they won't carry the whole line my perception is almost always that at the beginning of the relationship and tell me if I have this wrong. They actually do carry the whole line and then products get crapped out and they start curating what they carry it is that largely true or or is it the case that they might only. Andrea: [30:21] So yeah usually am is it is depends generally speaking Amazon Lori thinks that customers look at so customers don't look at it they probably won't order it. But if you if you just cover your whole assortment isn't available on Amazon there could be a myriad of reasons why that is it could go back to like item setup issues maybe Amazon tried to order from you and you didn't fill it. You know maybe it's just not getting enough product gland to use. Or maybe it's crap and we seen a lot of movement and interesting developments in Amazon's crap program over the last year. The biggest one being that now they're showing the crap out products that are just little margin not negative margin used to be the zero was the floor. Now if they're not hitting some Morgan emergent targets are requirements for the category they're essentially not ordering those products from. Client there from the brands anymore or crapping the products out. And I think that's a new development another new development is Amazon's kind of shifted the conversation from profitability to Pure product margin their PPM. And I think the reason they're doing that is when they start crapping out products and communicating what products does our it allows clients and Brands and their parties to reconstruct Amazon's cost structure. And so focusing on here product margin which is just the different at Pier product margin which is the difference between the cost of the product Celeste any marketing accruals or any Co-op. And the retail selling price really helps them focus on products where they're having to do a lot of price matching and where they want the brand to take some ownership over that issue. [31:55] Which might mean you know going to your other Retail Partners and saying stop selling at these price I mean that's what they want you to do right by you to go back to Walmart and say stop selling online at this price. Which actually some of our clients who died and it has her mixed results with that which is been interesting. Scot: [32:12] Meaning Walmart said no and then there are stuck between a rock and a hard place. Andrea: [32:16] The biggest thing for noticing is that why maricon in Walmart stores have different prices and it's lower online cuz they're trying to drive Amazon low and then get them to Walmart online. Walmart.com in brick and mortar from what we learn from our clients are like completely separate entities so if you go back to the econ team and you say and in typical answering very little business on an walmart.com so we had a few clients go back to Walmart and say. Don't sell it at this price anymore or I will stop shipping it to you and Walmart income. Raise the price so it actually has been effective for a few client that hasn't been effective for everyone but for a few of the players that we've worked with they had sex. Scot: [32:56] I think they're trying to normalize that have one buyer for both but. Andrea: [33:00] Right now there's still a gap you take advantage of it. Jason: [33:02] Yeah and I would imagine there's some flexibility about what you sell to them for online if it when it comes down to having to go to Walmart and raise the price in store I suspect that's not going to go well. Andrea: [33:15] Oh absolutely and I don't I mean clients wouldn't really it wouldn't be in their best interest to do that they're doing so much volume there, but only time it's a different story we've also heard he, walmart.com will take whatever product I can get. I'm there less selective about it and so potentially you know suggesting different products versus what you're selling on Amazon might be a good strategy. Jason: [33:35] Going back to that kind of picking the line that Amazon curious though why. I guess the model and I had is that you're selling apparel right then you go calling Macy's and you bring a bunch of mannequins and you show me all the dresses and some Merchant at Macy's goes. That one's pretty that one's pretty I don't like that one right and it's their subjective expertise around the category. [33:57] My son says there's no Merchant in Amazon is going to subjectively try to pick winners and losers. Andrea: [34:03] I think there's some exceptions to that the biggest ones being the pantry program where they are choosing products you can just put anything in pantry it goes through an approval process now, the people making those decisions might not know might not be as educated as maybe like a a Walmart in-store brick-and-mortar buyer, but they are making assortment decisions and so Brands record making some recommendations there can really help move that process along the other space were seeing that is in fashion, I think Amazon started trying to carry all the assortment and quickly realized I mean first we have a couple, fashion clients that sell Alberta 10,000 skews and you certainly can't carry all that ass for me have to build Smooth Sailing Center so they did they have invested internally in. What they're calling more tastemakers to actually choose assortment and and make those types of decisions. Scot: [34:53] Well I know we're running up against a lunch here so why don't we go ahead and wrap so that you can have some lunch before you have to talk. Jason: [35:01] Yeah so if people do have further questions or welcome to jump on her Facebook page and will continue the conversation if yeah if you enjoy the show we'd love to see you jump on the iTunes and give us that 5-star review but thanks very much for making time for us and the listeners today. Andrea: [35:16] Yeah thanks for having me guys. Jason: [35:18] Until next time happy commencing!

This episode catches up on the latest e-commerce news: Upcoming Industry Events Etail west 2/26 – 3/1 Palm Desert Path to Purchase Summit – March 12-14 – Chicago* IBM Think 3/19-22 Las Vegas ShopTalk 3/18-21 Las Vegas* Adobe 3/25-3/29 Las Vegas NPD Idea 5/15-17 Austin* SAP Sapphire June 5-7, Orlando IRCE, June 5-8 Chicago Shop.org, Sept 12-14, Las Vegas* * Denotes shows Scot and Jason will be attending and broadcasting from. Register for the Jason's Webinar on AI in Commerce, Thursday March 1st. Register to join Jason & Scot at the Path to Purchase Summit in Chicago March 12-14 Amazon News Amazon acquires Ring for $1.1B Funny article about clues to the selected city for Amazon HQ2 Amazon Go to expand to 6 more stores Listener Question:  What happens to Fresh when Amazon delivers from Whole Foods? Walmart News Walmart reports slower than anticipated e-commerce growth Gartner blog on Walmart Pricing Walmart new apparel brands Walmart unveils Allswell home brand of mattresses, bedding Specialty Home redesign Walmart in-store mobile app redesign Other News Target CEO Squak-box interview Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 118 of the Jason & Scot show was recorded on Tuesday, February 17th 2018. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.   Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 118 being recorded on Tuesday February 27th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo. Scot: [0:40] Hey Jason and welcome back Jason and Scott show listeners Jason you have a big webinar coming up this week that I think listeners would love to hear about the also it's live video so listeners will actually get to see you, that's exciting. Jason: [0:55] I know I know I feel like I do have a face for podcast so that you know is not necessarily a good thing but I'm a little disheveled right now I sort of torn apart my office to set up a little, video set up because I'm doing the webinar on artificial intelligence in Commerce, with episerver and I'm doing it on Thursday morning, and the reason we're mentioning it on the show is because the last big webinar that they did I had this author I really like and I am embarrassed to say I don't exactly know how to pronounce his name but I think it's near y'all and he wrote this great book called hooked which is a lot about, how people form habits and and he's a super interesting cognitive psychologist but he did the last webinar and I'm desperate to. Get a better attendance than him so I think I just passed him in pre-registration and you know hopefully I'll bring it home on Thursday morning for the Jason and Scott show. Scot: [1:57] Awesome we're counting on you also it's it's starting to be season here of trade shows and we have I think 3 or 4 we're going to be there together which is pretty exciting going on right now and neither of us were able to attend Izzy tail West so bummer on that one. Jason: [2:12] Yeah but shout out to everyone enjoying the good weather in Palm Springs. Scot: [2:15] Yeah yeah can't can't blame me for one down so once we're going to get together March 12th to 14th in your hometown Chicago we're going to get the path to purchase Summit, and it will be at shop talk in Las Vegas and then in PD ID in Austin March 18th to 21st, and it be the idea is May 15th to 17th so it's going. Jason: [2:37] Exactly and I'm I'm speaking at shoptaw Canton PD but I'm particularly looking forward to Pat the purchase cuz I'm just going to be in the audience heckling you. Scot: [2:45] Yeah yeah I look forward to your heckling it'll be funny usually want to do that no one realizes who you are and it's Robert so it's always good. Jason: [2:53] Even when they know who I am it's generally super awkward. Scot: [2:55] Psych episode of the office but looks stretched out and more painful. So since we're hitting the traits of circuit and we do that we do have a lot of guests lined up we're going to the Sobe we missed last week due to me I was on a little bit of a holiday so this week we're going to catch up on news and then, it'll be a little bit of a news coverage drought so we need to kind of knock this one out and of course when it comes to news it wouldn't be a Jason Scott shows without. Amazon news new your margin is there opportunity. [3:38] Big news today it's been kind of timely that what you were going to do the podcast today which is good we appreciate Amazon working this out for us then else one of their biggest Acquisitions ever they are spending a billion dollars to acquire ring. Rings cool as in October I think Rings kind of classic case study there for other option verse so the CEO the founder went on Shark Tank and was rejected by all the sharks I thought it was, terrible idea admittedly the name wasn't that good was called doorbot. They just kind of her like you know we can't see how or why anyone would use this thing so just goes to show you that sometimes when all these experts and your is reject you that you need to just kind of hang in there then they caught the eye of Richard Branson and he invested some like $38 I guess he really, saw used for the product Amazon was an investor to the Alexa fun and they raised a considerable amount of VC. [4:32] Rivers word that they were out raising Capital at kind of what's called a unicorn valuation or north of a billion dollars and Amazon has picked him up for a billion bucks. What do you think about the new station. Jason: [4:44] Yeah they I really appreciative of Amazon getting all the news in before our go on their deadline I think that's always very considerate of Jeff, number one listener thanks again, and I think it's it it seems like a checks a lot of boxes for Amazon I think Amazon his has had a major push into devices and smart home obviously they have you know this huge put on hold with the, the Alexa but you know they, they bought that camera company not long ago I mean I feel like just as a consumer product space they've been particularly interested in that space and then you add to that that this that ring could be an integral part of, giving Amazon delivery people and Home Service people access to the home like it you know it suddenly is synergistic with their supply chain and reverse Logistics Ambitions and so it seems like. It's pretty it's a pretty clever investment and you know a lot of us were talking about after the big Whole Foods acquisition, then maybe we wouldn't see another big retailer acquisition but that you know didn't necessarily mean that Amazon wasn't going to continue to be aggressive so to me this is. [5:55] Another great example of them. Trying to be in a build or own a consumer brand that has even competitive differentiation in the marketplace. Scot: [6:06] Yeah that really cons pros got let down if you can't think about the other, folks really active in the space you have apple who's really playing catch-up they just kind of came out with their smart speaker and as we discussed on the show it's, not not really clear that's going to be a big hit and it really doesn't do much more than be a speaker and then you have Google and. Google is just kind of frantically also playing catch-up they acquired Nest which gave them the thermostat and they put Dropcam into that cycle of a camera and then they have the Google Home Smart speaker. You pointed out to me that those things actually don't really work well together which is kind of funny you know it's cuz they're all it in the Google House of devices. And then you know they there was talk of Nest coming out with a ring competitor, so no now Amazon has bought the number one doorbell device Irene was working on a cool security camera which I tried the private label ish kind of Amazon home. Cameron is not very good so I'm hoping that the the new ring camera will displace that or or at least have a better offering in that category so it's going to be pretty. [7:14] I agree with you at the cut checks a bunch of boxes for Amazon so you know I get into the. Alexa ecosystem will be great it kind of helps with home automation security which is this huge area that no one's really conquered yet, then you have the delivery you know and and then another area I watch her the clothes that Amazon seems to be encroaching and more and more is home services so imagine some kind of an Amazon either. Either, Marketplace from services with like a cleaning service or Amazon actually does it themselves through employees. You know you could have all this time together and in one seamless experience so you could have it kind of. The Holy Grail experience would be you you order your groceries through you know that your Alexa wish list they are delivered to youth from at Whole Foods. And then you your do all this while you're at work and then you've authorized ring to allow access to your house to certain folks and maybe there's some. [8:11] Maybe they hold up a QR code or some kind of authorization there with the ring device that doesn't even require you to answer your phone and see who it is and they place the items in your house so it really kind of. Thinking through this user experience in connecting the dots and in a really interesting way that is so far ahead of everyone else is getting a little scary to be honest with you. Jason: [8:30] Yeah and you know when when you said I didn't immediately think of but the, you know I think it's another big Synergy for Amazon you know most of these cameras are inside your house right so inside your front door or in your new Nursery or whatever the case is that the primary ring camera is, on your porch and you know of course there's there's this huge problem in e-commerce of porch piracy where where you know bad people are are coming to people's houses and stealing their packages and that that happens frequently enough that it's a it's a major, problem for some consumers that are frayed to buy stuff and have it delivered to their home so it literally is a limiting factor for Amazon and so having a, an army of these devices that you don't have the potential did dissuade porch Pirates you know is even another synergistic thing with Amazon. Scot: [9:20] Yeah you could even do some cool stuff with a I wear a ring on her I don't have one they're telling the there's some neighborhood alert feature and so you can almost see you know if there is a. Porch pirate out there you know a I could, detected and then turn on all the ring cameras within a 3-mile radius and and you sit all the video to the police kind of a little scary there on the Privacy side but you know when you do think about these use cases is pretty interesting Amazon has all the pieces to do something like that, actually relatively easily right so think about all the AI and the face mapping and everything inside of the ghost tour, you're so they could easily apply those out rhythms to detecting hey this package was picked up by someone that's not the owner. [10:01] So it's really interesting to think about all these Lego blocks that they're putting together and all the internet use cases to have. Jason: [10:07] Absolutely. Scot: [10:09] Another kind of kind of more on the Whimsical side hq2 search 220 cities, I'm in is really funny that they kind of went into an in da mood where you know they kind of had this huge hoopla about what's going on in and now all these folks hurt the states there negotiating with her under NDA sermons trying to read the tea leaves and. You know I think some of the funnier ones that you noticed conspiracy theories I guess I would call them that are out there. [10:37] There's one that says that Amazon gave a clue that they're going to Austin and if you remember that Super Bowl spot that you and I both kind of thought really won the Super Bowl you know. It kicks off with the lady asking Alexa what the weather is in Austin so a lot of people have kind of tied into that as a clue and then there's a couple other kind of you know Easter eggs in there that there, Canyon to sellers country music that plays in the in the thing this little bit of a stretch but evidently. Austin is has an affinity with peacocks and at the end Anthony Hopkins is sitting there feeding that peacock so I don't people have kind of used the Super Bowl ad is kind of saying is Amazon sending us a subtle clue. Jason: [11:18] Yeah most of those a lot of people are from Austin for the record but yeah. Scot: [11:26] And then another one I saw it was funny is a lot of people were kind of saying oh they're going to. Los Angeles and what would happen is actually a local reporter here they're able to file an information act kind of thing and they got. At least a cover letter for for how the proposal was sent from of a city in North Carolina and it called it project golden. [11:50] And so then a lot of people said they said there's more evidence was found other other reporters kind of took this q and they were able to file these freedom information act. Request get some information mostly cover letters ricewood was redacted. Okay it's called project golden that's like. The Golden State which is Los Angeles or yeah so then everyone but what happened is the person that's just kind of. Gathering Together The Proposal so their last name is golden, who played around this hq2 so even though it's in super quiet mode and in a way it's actually causing more more kind of strange things going on. Jason: [12:34] Again it's it's evilly brilliant PR and you know they they got all these municipalities to you know, drop their drawers and in demonstrate exactly you know how deep their willing to do in terms of Economic Development incentives to get Amazon there and you know whoever Amazon picks for the hq2 they know how much money is on the table from these other cities and you can imagine they're going to use all that in negotiation when there, opening fulfillment centers are other pieces of infrastructure in those cities do you have a front runner in your mind. Scot: [13:07] For the longest time I thought Austin. [13:11] Is it it for me it has a lot of the the elements are looking for so so I can think of this is Amazon's retail business from a people perspective is really well-built out, so I think hq2 is going to be maybe 5 or 10% what you and I would think of is the retail business and the rest is going to be. AWS mom so that's where you let things growing like 60% year-over-year, maybe you put some add business there but but still it's kind of different footprint than the retail business so and and in the proposal and talk about it being largely engineering, so I think it's going to be kind of these y'all hiring cloud-based engineer types so that really made me think Austin because you have three or four engineering schools right there, I'm cost of living infrastructure all those things get checked and it's close to Whole Foods which you know I think if I'd spent 14 billion dollars being near that would be. Pretty nice wind is well within the one thing that is suede me is Scott Galloway has been meeting up making a pretty. Compelling case for the DC area so three of the 20 are in the DC area Bezos just bought like. Largest residence in the DC area and it goes on the DL and then it leaks somehow. Jason: [14:24] How many owns the Washington Post to. Scot: [14:26] News Washington Post is like a toy project and you know they're if you do think about the only thing I see that could cause any kind of existential crisis for Amazon is the government. And I do think you're having the influence, being there getting some of those key virginia-maryland folks in your pocket is pretty interesting so so. I kind of see it as a race between those two Austin if it's a kind of really leaning towards talent and they don't really worry about the government thing I think Austin wins and if they're at the government thing is kind of looming large with them that I think the DC area makes a lot of sense. Jason: [15:01] Yeah no I am I tend to lead towards the DC area as well like you if you sort of think of them. In many ways like Amazon is the next Generation Walmart you know Walmart said really invest in there a lobbying in there and their government relations and, you know like the guy running the government relations program for Walmart is like Dan Bartlett who's the, with the press secretary for George Bush and you know there was a bunch of political news a couple weeks ago I had the number three person at the Department of Justice resigned and she resigned to take a VP job at Walmart so I Walmart building these, this table is like really credible, Washington folks and if that's important to Walmart like you know odds are it it already is or should be important to Amazon and sew in, the proximity make some sense when they are just from the odds perspective you got you got three sites so that seems logical the one thing that. [15:56] Makes me a little dubious of Professor Galloway's. [16:02] Evaluation is he also throws in New York is the front-runner and is why Jake is because everyone wants to live in New York and I kind of called him out on Twitter he he. Took the high road and then respond that only people that live in New York want to live in New York that's a little it's a little bit of a reality bubble that New Yorkers have. Scot: [16:20] Yeah yeah and you know Newark is on there that's like an no way they. Jason: [16:25] Hey that seems like a non-starter to me. Scot: [16:27] Yeah yeah you just can't get text out and some of the things that I have and then you saw some interesting news around the go store. Jason: [16:35] Yeah I think Jason Del Rey broke this on recode but it appears that they're getting ready to scale that out and open six more of those. Stores in Time Turner member but I think they they even identified or speculated some of the the potential for sites was. Austin one of them if I'm remembering right. Scot: [16:59] Yeah I think that carved out another couple already in the Seattle area at which makes sense that's what they did at the bookstore stay I think they open to in Seattle and then they went like San Diego Chicago New York kind of thing. Jason: [17:10] Yeah if you're really going to Market and try to you know Drive traffic to it it it it's much my door to open multiple sites in the same city because then you can buy. Geographic marketing Vehicles like newspaper ads and radio ads in television ads you know opening one store each in a bunch of different cities is much more expensive for traffic generation. Scot: [17:29] Coon and since this is kind of a clever Segway into the grocery last week in our reader question or listener question segment we did run out of time for one of the ones that came in to Twitter and it was from long-term listener Michelle Grant, and she asked do you think Amazon will close fresh and Charlie what do you think about the moose and so I think what she's referencing there is so Amazon did do a little bit of a layoff a couple hundred folks and I think it was the fresh team you know cuz now Amazon essentially has there's a lot of irons in the fire when it comes to a grocery store they have Prime now, they have even like the what is it Warehouse or the the big box thing they have fresh which was the, jewelry that have go and and the Nets Go curbside thing so it had it in and of course at Whole Foods and now they're doing, same day delivery they're on their own how do you reconcile all those things. Jason: [18:28] So I do think fresh as a standalone fulfillment center, model probably does go waste of you if you think about it like. Amazon Fulfillment centers that they generally ship products from them or do One Day deliveries with their Flex drivers from, they've got these Prime now for filament centers which have a much smaller SKU assortment but you know really optimized for that one and two hour delivery, in the fresh cities they have a separate fulfillment center that has a lot more cold storage and accommodations for perishable in the drivers, deliver out of the limited assortment of the fresh profillment Center which was different than the prime now fulfillment center which is different than a, fulfillment center and now they're announcing that they're going to start delivering inventory straight from Whole Food stores and so what I think is going to happen is that that fresh. Fulfillment center as a standalone entity goes away most of the volume for delivering perishables in groceries is going to come from the, the Whole Foods store the Whole Food store. She has a much larger assortment then then fresh did, and I do think Amazon's continuing to build out there, fulfillment center capabilities for cold and Frozen so you know we wouldn't be surprised if they have cold capabilities, in Prime now fulfillment centers and they continue to fulfill some some. [19:59] Cold items from Prime now but I would imagine that those are mainly items that are synergistic with other, other types of products that people buy from Prime now so maybe you need some like, cables in an emergency router for your office and you can also buy you know a case of soda or water you know it wouldn't surprise me if they had those kind of skews in Prime now that you know if you're going to order bananas and milk, that's more likely going to get fulfilled from a Whole Foods rather than a standalone fresh Depot. Scot: [20:30] On the show you guys talk about curbside wins delivery. Is kind of tougher and probably doesn't win sounds like you just going to reconcile that all down two more like delivery dude do you think Amazon does continue with that curbside I think it's called Amazon go pick up or something. Jason: [20:50] Amazon Fresh curbside is it fresh pick up Amazon Fresh pick up, yeah so there are these two first pick up locations in Seattle I continue to strongly believe, that the majority of digital grocery shopping is going to be pick up right so you're going to order your digital groceries from Walmart or Kroger. Or Amazon and you are going to drive to that store. A surrogate location for that store at a convenient time and have someone to load your groceries in your trunk and that's. The economics of that are just infinitely more favorable than the economics of delivering a fresh and we can get in the all the reasons why we just explore delivering perishables are much uglier than the economics for delivering. [21:41] White goods in general merchandise there are niches we're home delivery of fresh make sense and you know rich people in New York and Chicago and California you know where are certainly going to take advantage of that and you know I think. All of Amazon's offerings at the moment with the exception of those two locations are home delivery in so you know I was kind of answering the Fulfillment question through that lens but I also think I'll be utterly shocked if. After Amazon turns does Whole Foods into home delivery venues they don't also offer a curbside pickup option. For pickup at Whole Foods and what's going to be super interesting to me when they do that is, what and if the pricing difference is between having his groceries delivered and picking them up at the store because at the moment the deliveries free as long as you you know trigger certain thresholds. And you know but the the cost for delivery are much higher than the curbside pickup cost so it seems like. You know there's there's going to be a strong argument for there being some price savings if you're willing to pick him up. Scot: [22:50] Prequel show thanks for the question sorry we couldn't get it to it last episode of a glad we were able to pick it up kind of rolled up inside of this Amazon Go News, I'm just wondering I don't think I wanted to pick your brain on the big news kind of over the last week or so was Walmart really miss their e-commerce growth goals for Q4, I am so I think they came in at a paltry 23% which is kind of fun, because that's not too shabby but you know why she was expecting 50% which is a Dunham Park orders and then it there analyst day which we talked about on the show, they're kind of being in their chest and saying hey in 2018 we're going to get this thing cranked up to 60% of the result of that. Stock have been on quite an upswing since the jet acquisition and a lot of this good e-commerce news and it had a single worst day in history, I'm from up with a percentage in a point bases so that did not go over well with the street then, are there is a flurry of Articles you know is Lori on his way out what's going on what what's your take on what happened there. Jason: [23:58] Yeah so I mean just a brief moment of silence for all that that value that was lost when they announced that they're e-commerce crew at 23% when they're, Industries only growing at 16% and oh by the way, traffic in our stores was up in our stores grew by 3.2% which our store volume is way higher than the, the unlined volume and way more profitable so they actually like reported really good financial news with this this one miss about what, you know economically is kind of a relevant portion of their business and they they got cream for it but of course. You and I are listeners know that that that you know in the long run that that winning e-commerce is is Paramount and so I do think it's fair that investors are. I really nervous about that that Miss. So that being said it's interesting cuz you know Walmart had these three phenomenal quarters where they went 63% growth 60% gross 50% growth, and you know when they are doing those two were a bunch of Acquisitions and everyone's like oh the Acquisitions really paid off. And Walmart really pushed back on that and said no no no the bulk of this growth is organic. You know the boat Boca this girl isn't jet or bonobos or ModCloth are you almost out of those those things and so now year later when they kind of lapped those acquisitions. And the girl that is way down you know people are speculating it's because the the Acquisitions are now. [25:30] You. They've been in there for a year and said the cops are against. Against the business Windows Acquisitions and so that hurt them you know Walmart came out and said that they had some Logistics misses and you know that that holiday really had a different mix and that caused them. Tamisium shipments of missing opportunities but what I haven't seen talked about a lot which to me is really the hidden story of both Walmarts growth and Walmart's Miss. Is the last topic we just talked about which is grocery so what what listeners need to remember. Walmart is first and foremost a grocery store I think between 50 and 60% of the revenue is grocery. And you know a year ago they started rapidly rolling out buy online pickup turn side grocery. Two individual Walmart stores and so about a year ago they announced they had their thousand. Grocery pickup store and you know my contention is a huge part of that e-commerce growth is they went from zero groceries to you know some grocery store sales in a thousand stores. And so now they've lap those thousand stores those those thousand stores are in the comps. Answer now the growth you know doesn't look as spectacular unless you open. Another thousand stores which Walmart actually announced they were going to do, and conspicuously absent in this in these latest announcements was any indication of whether they they hit their goal or didn't hit their goal or they were behind and I really think some of the young to be interested to hear some of the. [27:03] The stock analyst you know you know if if they asked us questions and if they got good answers cuz to me. [27:11] We really need to be thinking about these these e-commerce grocery stores a little bit different than pure e-commerce when when Amazon as a product of their e-commerce catalog it's available in all 50 states simultaneously. The grocery is a store by store basis so you almost need a same-store sales number for e-commerce to really see the true growth. In an Eakin e-commerce Grocery and so I like that that maybe evolution of the retail financial reporting that we we start to see. [27:45] One other thing that caught my eye related to that mess is there was funny to me probably not funny to Walmart. A Blog on gardeners website from a guy Bob head to who's one of the good retail Analyst at Gardner and he was talking about how he seen some substantial price fluctuations at Walmart. In a centrally he tells the story about how I-44 research she tried to get his family to buy all there. Their stuff online from Walmart they were they are Walmart shoppers apparently but he tried to get his wife to use walmart.com and she diligently tried and they actually failed because. [28:23] Walmart online pricing was so much higher than their in-store pricing and so you know Bob speculation is. That you know part up part of this mess is that they have this disparity pricing strategy between e-commerce and in-store, and you know that he seen the shift more recently took two closer to Universal pricing and he thinks that might be something at Walmart suggesting. In response to some of their they're softer e-commerce growth. In that that is potentially interesting there is this you know huge urine everyday low price retail or it's it's part of your. [29:04] All brand proposition knew you'd expect to see the lowest price everywhere and if prices are higher online like you know. [29:11] You can understand why that would alienate the core Walmart Shopper and so that that to me is a interesting part of the story that we haven't heard a lot of Anna's talk about is. Is the pricing part because we have separately seen Walmart make some announcements. That you know I kind of funny announcements to hear a retailer make which is. They're shifting focus of their online inventory to be more profitable and they're actually asking cpgs to make. More expensive bundles and more expensive products for them so they can get the AO Vivo online up to get profitability up and the sort of. You know implication and all of this is, hey we're getting tonight's e-commerce growth e-commerce is going to be meaningful for Walmart but one thing that sucks about it is the economics and you know now Walmart's you know trying to shift to be more more profitable online and so you know when you talk about this growth. You know is it is it profitable growth in his part of the the softness and Walmart's growth because they have shifted. They are trying to shift the next to be more profitable online. You know what I don't know but those are going to be the interesting things to follow. Scot: [30:18] Any other Walmart new phone cover. Jason: [30:24] The couple other interesting things they they they have announced some new brands. So they watch a bunch of new apparel Brands and I think they officially I think we're might have already been out but I think they officially announced them today as well I'm so again props to them for getting on our data Toro schedule but cities are Brands like time and true, Tara and Sky nation and I think I'm one call George, and you know for those that are intimately familiar with Walmart's apparel they've they've had private label apparel for a long time like that you know. [30:58] It doesn't have a particular good reputation for style or quality and yet I think it's a pretty big seller into these new these new brands are. Like we were singing The Marketplace the seems like there's a much bigger effort for them to be real brands that are distinct and not simply private label. And so I think like the shift is yours going to see retailers talk about not their private label but they're owned Brands and so I think Walmart would say the only boats and ModCloth are owned Brands and now time in Fruit owned Branford. For Walmart so it's going to be interesting to see if they're able to kind of move up market and get a better reputation in a peril. You know apparel and everyday will prices haven't historically. You know I've been two things you think I'd together so so I think that's working against them a little bit but they also announced a private label for mattresses that seems like it's directly competing with a Casper's of the world in that that brand is called them. All is well I believe. [32:00] And I think some of the new brands are interesting they also announced a couple of redesign so earlier this month they they did a pretty substantial redesign to their mobile app. And what they did is they put a much more robust what I call in store mode they I think they call it the store system. And so this is the notion that if you have the Walmart app and you run it in your house you get one experience but if you happen to be standing in a Walmart store and you open the Walmart app. You get a very different experience that's tailored to the kinds of things you like to do if you're in the store so when you do a search it. What does the search against that stores local inventory they have maps in the app now for all the stores and they help you find products they connect you with the local customer service and the local service offerings like Walmart pay, and MoneyGrams and all those sorts of things in the in the store and said they're they're making the the in-store experience on the mobile app much more robust which is interesting and then. [32:55] They the automatically redesign the home section and they made it you know much richer and content and you know they have some some new shopping utilities like. Shop for furniture by style for example and things that you know who's more likely Walmart was a pretty straight catalog site so adding this kind of, editorial element to their site was interesting and then they have teased that in the coming months we should expect to see a pretty substantial redesign of the whole walmart.com so I'm, I'm always super interested to follow big retailers when they do design refreshes and and see what some of the new thinking might be there. Scot: [33:32] Yeah when I saw the all's well so an ounce of the witches the mattress and maybe think they probably went and tried to acquire Casper purple there's like six of these things now I can't keep them all straight Lisa, are there several others, and they probably didn't like the prices and then you know that it does seem like they're dime a dozen now so I think they're all coming out of a similar kind of a design studio and tractor in China somewhere and they just kind of said let's just do this ourselves I'm almost in surprise that Amazon hasn't done one hour or maybe Amazon hasn't really realized it. Jason: [34:05] No it wouldn't shock me if we see that in the near future. Scot: [34:08] Quick one. Since we just talked about Casper I did notice they opened a store in New York City which is continue that Trend we talked a lot about on the show with these. Digital native Brands getting a certain scale and then having to open stores are I guess they're more showroom me so the mattress you could understand that we're. You're the only so many people they're going to. Trust in store trial and then home trial in the return policy and it is I've enjoyed seeing them in Target stores and I know you care so much about them and, it is nice to have at least get to see one feel it I lay down on it and see what it's like before you take that did to me it's more the time risk of you know. That's another thing I have to ship it back and all that so that was interesting. Jason: [34:52] Yeah absolutely Anna and as we talked about on the show number times I, brick and mortar stores are a great marketing vehicle for online sales and unlike a lot of other marketing Vehicles which are pure expense you know the store can often pay for itself or be profitable and drive a bunch of traffic. E-commerce business so you know, opening showrooms particularly in high traffic areas like New York City you can make make a lot of sense for bran. Scot: [35:17] Couple quick hits so over on the pier Place side eBay has been pretty quiet on that position front and also in keeping with their timing today they announce who won the first positions in a while another Marketplace and it's pretty interesting so, eBay has a long history of not doing well in Japan they they had their own Japanese offering, end of the exit of Japan in 2000 they also didn't do well in China they really struggled with with Asia and general General, partnership with Yahoo auctions so if you look at the the Japanese Marketplace market today. [35:54] Dominated by rakatan Yahoo auctions in an Amazon does really well in Japan as well and so they actually just acquired a startup called the starts called juices. And the name of the marketplace I don't know how to say it so I'll spell it is qoo. And then one zero I would she so I think you would be cute n. JP that's pretty interesting and I saw a rumor that they paid $700 for that, so you have to kind of thinking a why would you pick 2018 after you've been out of the market for 18 years. And my my reading the tea leaves on this is a really good job on kind of, cross-border trade and enabling people around the world to order from. Order from sellers across the world and then doing some interesting things with reshipping and, Google translate and just make the entire eBay catalog as much of it as possible available in areas where the extra don't have a presence so so I imagine when I read this stairs, there is demand for for you know. Probably cross-border trade product and this gives them a platform to kind of put that on where is before their Pi just doing this kind of localized and I kind of caught up it's kind of a, that's kind of a country page where you'll you'll go to eBay. JP but. The listings are all coming for the US and Europe in and they've been Google translated in that kind of thing so this will I think. [37:21] Their interest must be that they're seeing something in the date of the newest in Russia for example some of the largest countries for them where they do this and Brazil in other countries. [37:30] Another couple quick ones back to omni-channel Macy's was in the news this week because they had an awesome 4th quarter, and I hope you're sitting down Jason but they're same-store sales grew 1.4% year-over-year, so that was a no cause for celebration I think there was a Wall Street expectation that they actually have negative same-store sales for the last three years they have been contracting so it is good to see them having increased it just kind of interesting you know that. [37:57] Walmart gets the snot beating out of them for her for 23% growth and e-commerce Macy's I didn't see what they split it out but you know they grew 1.4% and it's kind of like you know, the through the woods and everything is great. So you know that that is still growing shorter there are smaller than overall retail which I believe was in the high 3% for for offline so that was interesting, what other kind of couple things. take out of that announcement they now say they have a third of their skus are with a call Exclusive which to me means more like private label or if they have work with a brand it's only available at Macy's and that seems to be doing well which is at one of the things you and I buy stale retailers to to focus on. And then they required a beauty product called bluemercury at Sephora. And I'm not an expert on this and it's evidently to doing really really well and you know it is exclusive to them and I think they're starting to really kind of. Push that pretty hard the last one I saw that was pretty interesting kind of in the financial news there's been a lot of rumors are Nordstrom's going private and looks like. Now there's there's all these rumors that that deal is getting done the stock reacted to it so and I noticed that, Jason is added them to code Commerce which will be his little kind of Sideshow that he does array shop talk he added one of the Nordstrom store that so it'll be interesting you know you can imagine. [39:25] Is there something going on that's all Jason's going to ask about so you can imagine hopefully maybe a deal will be done by late March or that you know that they're kind of have some timing setup that they can talk about it then or something maybe read too much into that but I thought that was interesting. Jason: [39:37] Yeah I know for sure because they normally don't do a ton of publicity so far I think it's Eric Nordstrom that's going to the recode dinner it'll be interesting to hear what he has to say and I I'm sure you're right that you would certainly get some questions about the, they going private I would do just just one site week Macy's so bluemercury the Cosmetics company their brand that Macy's bought in it and it's killing it luxury cosmetics in general are doing really well it's one of the fast-growing categories and so I told to and Sephora these, two Standalone Cosmetics retailers are are growing really fast like you're doing much better than then retail in general. For all of our our cosmetic Savvy wesner's I'll point out that Sephora is a retailer that carries a bunch of Brands including some private label so, they're probably not the most direct competitor with bluemercury but you know you can think of like a Revlon or L'Oreal or or those those kind of Brands is competing with blue Mercury but evidently the analyst. I have talked about bluemercury being one of the the crown jewels and one of the great assets assets that Macy's is hat. [40:46] So do you feel more more cosmetic aware now Scott. [40:54] What notes are they both carry a bunch of national Brands they both have their own stuff but the the the real Innovation here is why. Before Sephora. If you are interested in shopping for Cosmetics you probably went to a department store when you are a young girl and you became a certain age your mom probably took you to a department store to get your first cosmetics and, all the Cosmetics were shop and Shop so you had the first and foremost pick a brand with your feet so you walked to the Mac counter or you you walked to the, repair counter or whatever whatever Cosmetics you had an affinity for and you shocked by brand, and so support I had this sort of game-changing notion that like hey people don't want to stop by. Brand necessarily they want to shop I use case so I had to put all the foundations here from all the brands and let's put on the moisturizers over here from all the brands and that, that concept played really well with consumers in and Trigger 2 for on this rapid growth in Ulta is a more recent competitor that is kind of followed in in support his footsteps, and done a really good job of adding Professional Services to the store in a salon and things like that so that's now you really have the whole Cosmetics history. Scot: [42:09] Collective I was thinking we should do a deep that the boom you just did it right in the middle of news awesome the Deep dive delicious nugget inside of some e-commerce news. Jason: [42:18] Exact just wanted to establish my Qualls as knowing more about Cosmetics than any dude should know. Scot: [42:25] You die definitely bouncy. Jason: [42:27] I appreciate it so going back to omni-channel there was also a few interesting news nip it's about Target so one that caught my eye because it validated smart-aleck opinion I had, you know a couple months ago Target acquired this company called shipped and shipped as a. A third-party delivery service that would deliver purchases from a variety of stores to a consumer's home and there. [42:55] Yeah you pay an annual fee of like $99 and then you get free home delivery you know. Over some purchase threshold like 35 bucks or something so Target bought them and at the time I was like Hey that may be a good acquisition that may get Target some good capability for home delivery that they want but. They're likely to have overpaid because. Shipped was this two-sided marketplace where you know they tried to acquire customers that were customers of ship to not Target and they pay $100 to ship to be a member, and the reason that they would get a bunch of customers is that the utility those customers get as they get free home delivery from the bunch of retailers to ship Ted 2, appeal to a bunch of retailers and they had to appeal to a bunch of consumers and when one retailer buys them suddenly it's much less appealing. For for ship to work with all these other retailers in that you know it has this negative Cascade effect on the whole two-sided Marketplace model, and at the time of the announcement that I've no no no we're going to contain around another standing in entity and we're going to continue to. To try to support all those retailers so you know interesting side-note 60 days later shift is no longer delivering goods from Walmart so. [44:12] You may have paid your $99 under the belief that you could get free home delivery from Sam's Club and ship just pulled that that rug out from Target has pulled that rag out from under the ship's customers. You know which in my mind means shipped is at the end of the day going to end up being a convenience delivery tool for Target purchases which. [44:30] Maybe super useful but it's it's a different model than the original ship model so I found that you know interesting or self validating made me feel good about myself. And then there was kind of an interesting interview that we saw with Brian Cornell the CEO of Target I think he was on Squawk Box and you know who's making the point about. [44:52] The value of Target stores and how you know they're very successfully shipping from stores and they're making major investment and remodeling stores and how how important stores are Little Mix, all stuff that I wholeheartedly agree with that I'm glad to see Target doing and if it's I think that the Marquee quote out of this whole thing you know the kind of got the headline was. Brian Cornell says e-commerce is in everything most us Dale Sale still happen in stores. And I have to be honest I don't love quotes like that because in my mind you know half of all Target sales are digitally influenced. And you know dis deciding that a sale is a store sale or an online sale at this point is kind of silly that 70% of all their online orders they ship from the stores and now they have this ship thing to deliver from. From the stores like you know I don't think Brian should be talking about his e-commerce sales versus Is Us sales and the my sort of. Smart aleck metaphor is it's like the old retail Guy saying the only profitable part of our stores the POS because that's where all the sales are driven in the shells don't drive any sale so they're less valuable we should not invest in the shelves. Obviously like it doesn't matter where the sale is consummated like the whole customer experience is super important. Scot: [46:07] Feel like there's a joke in there but I didn't get it some kind of old school retail joke. Jason: [46:14] Yeah I'll put the laugh track in so people will think that everyone else got it even if you didn't. But we are up on time. Because I know we're trying to make the news episodes a bit shorter as a is an amenity to our listeners, I do a reminder when I get in to see some of you in Chicago at the path to purchase Summit Monday March 12th, Scot is going to be part of the Great track on Marketplace in Amazon selling and I I'm going to be. In the audience learning from that one and we'll be podcasting some live shots from there so. Hope to see some of you then as always love to continue the the conversation on Facebook so if you if you have any questions or comments about this episode or 100 out some of the many things. And I got wrong feel free to jump on face. And we'll keep the conversation going and as always if you loved the show we would greatly appreciate that five star review on iTune so this would be a great week. Finally jumped on the website go finder show all you have to do is type e-commerce in the iTunes where the first one they don't show up. Click on that 5-star review and we will be forever indebted to you. Scot: [47:23] Thanks for joining us everyone and also when you're on iTunes hit the Subscribe button to lock people just download each episode which is fine but his subscribe it also helps us on the rankings and we appreciate that. Jason: [47:34] Absolutely so until next time happy commercing.

Content style guides and voice and tone definitions have been a strong asset in content strategists' toolkits for years. They are vital to align stakeholders on content. But Jason Fox believes many content style guides are flawed, just like the principle of the content style guide. We talk with Jason Fox, a UX writer based in Denver, about his grievances with content style guides, and voice and tone definitions in particular and come up with tactics to improve the concept and the implementation. LinksJason's Medium postMailchimp's style guideTranscriptOne of the staples of content strategy is the content style guide. In it, we define the consistent voice of the organisation and the tone we should take in specific situations. They also define how to use different types of content, how elaborate or concise we can be with words and perhaps point out some specific grammar or vocabulary use. We need style guides to align stakeholders on content.I think it’s fair to say that the most famous content styleguide is the one from MailChimp. The online documentation covers guidelines, from how to use alt text to how to write legal copy.The document is beautiful and makes a lot of sense. But it’s also, huge. You can find it on styleguide.mailchimp.com. I’ll also put a link in the shownotes, which can be found on efficientlyeffective.fm.And then, I came across a Medium post by Jason Fox. According to him, voice and tone guides are overrated, a waste of money, useless. Wow!With the examples he references in his post, I do get where he’s coming from. Let me name a few. In content style guides, writers are being told to ‘Have fun’, ‘be authentic’ and ‘be badass baby’. Well yeah, that does feel a bit weird. He also quotes styleguides that propose you ‘Avoid jargon, trendy constructions and buzzwords’ - these pointers are basic knowledge, according to Fox.I was intrigued, perhaps even startled, and I had questions. So here we are, Jason Fox! Please tell us who you are, and maybe also: who do you think you are for writing this?Jason Fox: “Who do I think I am and who am I... Thank you so much for having me, I am a writer based in Denver, Colorado. I have a lot of experience working in the marketing and advertising world and also in the last several years I've had the opportunity to help write words for software.I think that having that experience in the marketing world and in the product world maybe informed the feelings that I had toward voice and tone style guides. Really that article that I wrote I think ... I don't blame you, I guess, for being startled by the article when I was writing it. I was like, "Do I really want to write this? Is this going to be something that's going to stick with me, that I'll have to have conversations with-"”Saskia: “Yes you do.”Jason: “Yes I do. It's one of the first. I've imagined how I would have this conversation with potential clients. They're like, "We read this article where you said that we don't need a voice and tone style guide and that doesn't seem to make much sense."So I don't know if it's maybe doing more harm than good for my career but where I was coming from with that piece is that to go all the way back when I graduated college in 2010 with a degree in writing I thought, "Okay great. Who's going to hire me and what am I going to write?"I didn't necessarily have any ambitions of going into journalism or into even marketing or advertising. I just went out into the world with the ability to write and wanted to see who needed me to write for them. I realized over time that a lot of the projects that you got involved in early on as a writer are those projects where you can convince people that you are able to sound like a subject matter expert." Or that you are able to provide them with a particular writing service that they need. Very early on there was this feeling of not necessarily being a con artist but in a way it's like being a con artist. Like this copywriter con artist where you're selling people these writing services and often times you need to convince yourself that it's something that they need, and you have to convince them that it's something that they need. I think in that process you might arrive at something that is maybe more than what they need.I started to see this in myself, selling voice and tone style guides to brands. These very large, inflated documents that took a significant amount of time to develop. Especially as the field of UX writing became more popular I noticed that developing voice and tone style guides became more of a necessity. But also more of a skillset that professional writers were using to market themselves to potential clients and to jobs. Then there was this reaction to that where it seemed like companies were beginning to become convinced that they needed to hire somebody with the specific skillset of writing a voice and tone style guide. As all that was happening I would be in meetings. We'd have multiple meetings talking about voice and tone style guides. Everybody in the company was involved in different nuances of how to develop it. I remember sitting with my friend at a bar one evening and we just broke down what a style guide actually could be and how much of it is really just bullshit. When I say bullshit, I mean there's a lot I think in some style guides that can be trimmed away. I guess that was the impetus for wanting to write an article like that."Saskia: “So it's a frustration that has been growing inside of you for a while now after having created a few style guides, perhaps also having to have worked with style guides that other people have created you had to follow?”Jason:  “Yeah. I think that sort of dual experience of writing a style guide that is going to be forced upon writers and then being the writer who is having the style guide directed at them, those two feelings. Which I cannot understand to a certain extent. But I kept trying to compare it to, I wouldn't ask, I don't know, a developer to write a document outlining his understanding of ruby syntax. There's just so much that was built into style guides and the notion of style guides, from my experience, that I was experiencing that was just I think common sense. I think that should be left to the abilities of a writer rather than a document. I don't know. Part of me wants to argue that you should hire good writers rather than hire one writer to create a document that will make anybody the writer that you need.”Saskia: “You mentioned that for you it often felt like bullshit. Can you further define ‘bullshit’ for me? What are particular elements or triggers for you to call bullshit on a style guide?Jason:  “My God. Going in that direction I think it's important to say that style guides are about consistency and about consistency within the context of a brand and consistency within the context of multiple collaborators on a product. I will also preface my bullshit by saying that there are many writers that I really admire who are I think ... Would be able to maybe sway me away from some of the things that I think are bullshit. But maybe not, I don't know.Some of the things that I think are just unnecessary would be like telling a writer to have fun and be playful. The statements that you see in style guides where they're giving you these very broad, sweeping, very ridiculous-sounding ways to use language, I put together this collection in the article that you're referencing of guidelines that say things like, "Make friends by talking to your customer in a caring and friendly tone." Or to have fun by engaging customers with playful language. I think that that stuff is just ridiculous. I don't think that any writer should ever be condescended to in that way. If you have a writer that you need to instruct in that way you should maybe consider transitioning then maybe into a training role where they're learning a little bit more rather than drafting a copy that's going to get shipped to a product. Also, I think a lot of the rules around clarity and simplicity I think can be attributed or not attributed, but can be removed from a voice and tone style guide because I think that any writer who has made it to the point where they've been hired by a company to write copy for software should understand the principles of writing clearly and succinctly. In the absence of those skills within a writer there's references that exist already. There's the Strunk and White Elements of Style. There are very well fleshed out style guides, associated press style guides and MLA, Chicago Manual of Style or so many different types of style guides that I think that it's okay to just refer writers to those resources that already exist. And then within your own documentation to have guidelines and rules that are very unique and specific to your brand, to the restrictions of your software and your process.Especially when it comes to UX writing, especially with developing copy for mobile. There are a lot more restrictions where I think there's probably room to have that type of documentation.”Saskia: “Obviously there's a difference between UX copy and for instance marketing copy and newsletter copy. I think that a lot of the examples that you mentioned in your article feel very marketing-y right?”Jason:  “Mm-hmm.”Saskia: “In that sense, maybe for marketing writers it's still quite useful to have those pointers. But you will also need not only to hear like, "You have to write in a caring, friendly tone." But what is that exactly? I think I would personally still find that okay to read in a style guide as long as it was more defined and also had some examples like, "This is what we mean by that and this is on the other side of that. So, this is too much, or this is too little of that." How do you feel about that? Do you think that for some writing roles it's still useful?”Jason:  “Yeah. I think that's a good point and I think it's interesting because in the context of marketing it can very much be used I think as a helpful resource for writers, for managing writers. I think it can also be helpful for writers to manage the marketers around them. Oftentimes as a brand evolves and as their voice evolve marketing wants to exert more influence over all the messaging in every channel that messaging goes out through. That would even be in newsletters and in some of the more marketing-related assets. I think that for a writer to be able to create this touchstone document where you say, "Here's how we have defined having fun with our audience." As long as there are sufficient examples and not a very generic statement of how to have fun I can see some purpose there. But again, I think that it would be very important to support that type of guidance with clear examples.I think that oftentimes those types of guidelines just come from a place of, "We need to tell the writer that we are an easygoing brand or a brand that doesn't insult its customers, or doesn't use stern language with its customers." I think that, I don't know, it should go beyond that because those are things that again I think have been covered in other style guides. Any writer who's made it to the point that they're writing for a brand probably already understands. But yeah, I do think that it can be helpful. And I think like I said there are some very unique use cases for different brand voices that should be documented. So it's unique to your brand. I suppose that the issues that I have are with the very blanket statements and the things that don't need to be said that are often said I just think maybe for the sense of saying them. I don't know why they're said, I don't know.”Saskia: "I think sometimes it could also be to remind the writer who they are working for themselves. As a reminder what the company is like because a brand itself doesn't necessarily always define that outspokenly. And then you have this document that says like, "We treat our customers like friends," - which is also a quite ridiculous statement. But also you would never read that literally in marketing copy. But as a reminder how what the stance is of an organization towards their customers?”Jason:  “I sometimes feel like these documents are trying to take the place of conversations and collaboration rather than having a document handed to me by a designer or by a product owner or something like that. I think it would be much more helpful to have a way for them to integrate their work process with mine so that I'm not stepping on anyone's feet but that I can still have conversations about what it means to write in a particular channel for the brand without someone saying, "Just look at the style guide." I want to have those conversations, I want to be able to work with people and to not rely only on a static document. But to continue to discover new ways to write about a company without I think saying that it's already been defined and just shut up and read the voice and tone style guide.”Saskia: “I really like the sound of that because something that is also some feedback that you sometimes get as a style guide creator is that people don't always read it. So if you create it for your client as a freelancer and then half a year later you come back and then maybe just one person has read it and the other people just maybe glanced at it and never used it. So it's also not very useful. So I like the idea of what you're saying, of making it more like a way of working together.”Jason:  “Yeah. And I think the ability to have some kind of living documentation, whether it's in a Google document or on paper or in some sort of evolving prototype. Like if you're working in InVision where you can have conversations both about interfaces and about copy that's used in the interfaces. I think outside of the context of having those living documents where people can have conversations, one thing I guess I left out would be Slack channels. I think having an understanding of the processes that people who are working on a product adhere to because depending on a particular individual's project or skill set they have a different approach. A UX designer would have a human-centered design process with six or seven different steps. I think having a place where you can outline those steps, I mean they would generally be something like empathize, define, ideate, develop, validate and iterate and then repeating on those last two steps.I think that having that type of process outlined in a document somewhere and maybe being able to annotate where a writer fits within that process and where a designer fits and where a developer fits within that process can be much more helpful than at the beginning of the process giving the writer a style guide and saying, "At the end of the process we expect you to have filled our application with copy that adheres to this." I think that at each stage when you're going through the ideation of building up personas and brainstorming are you doing it in a way that the writer can have input and can have conversations with developers and designers and with the entire team in a way that's not stepping on their feet? It's not like, "Well let me later on jump into sketch and edit your design files in a way that you're not going to understand and that's going to hurt the design."I found that being able to outline those processes and figure out where everybody fits is maybe more helpful. Because then it allows room for the discussions that I think sometimes style guides try to take the place of.”Saskia: “That's super interesting. It seems that you really pulled it from a marketing place to a more UX place with an approach like that. But it makes sense. I feel that when I first came across voice and tone guides it still was more like a content strategy UX thing and it kind of got sucked away towards marketing. And we're kind of reclaiming it with an approach like this so, yay for revolution!”Jason:  “I think the same could be applied to marketing as well. There's different stages of the marketing campaigns depending on what you're working on.“Saskia: “I was thinking that also for ownership it's a much better thing. Because there's more people working on it instead of just someone throwing this document at you and saying, "Follow it." Whilst when you have this thing that you're working on, this process that you're collaborating on then it's also your document in the broad sense of the word. It's also your style guide that way.”Jason:  “Yeah I think you're right. Yeah you're right. That's interesting. Wasn't that the initial purpose of a style guide, was to align your stakeholders, align all the people on a project and get them to agree and to take ownership over the voice and tone? But then what happens is that you produce the document and it's static and it gets old. People leave, new people come and it loses the shared ownership. That makes sense.”Saskia: “In the process we're just redefining this whole thing that maybe does have a place in our world, in good UX and good content after all. As long as we're doing it right right?”Jason:  “I guess in that way I have resold myself on the idea of voice and tone. Style guidance.”Saskia: “Let's say if your boss asks you next Monday, "Hey Jason, we actually need a style guide, a voice and tone guide." What will you say?”Jason:  “I would say let's talk about it. I would say that I think that there are probably some very specific reasons why we might want to document how we write about particular things. It might be really nice to have a glossary with examples and I think that there are some interesting ways that we can supplement a voice and tone style guide or maybe bypass one entirely by working together differently. I would say, let's talk about it. Let's understand why we think we need it, how we might benefit from it. Maybe ways of doing it that become less restrictive and actually help us write better copy rather than feel like we're being handed a document that we ultimately won't use all that much. The feeling that I've had from the style guides that I've written and that have been given to me are that you read it once and then you forget about it.It's a nice thing to look at and to be like, "Oh okay, I guess that makes sense." I think I myself have very rarely needed to use one as a constant resource and I have very rarely given a style guide to someone who said, "I use this every day." Or something along those lines, yeah.”Saskia: “Same. I think I'm not bad at sensing what an organization is about and what their character is like, what their traits are. To be honest with you, I might be the same and I would take this document and say “thank you” and then just browse through it, skim through it really quickly and then just go like, "Yeah I get it." But to really, really go deeply into it, I don't know. At the same time it's also probably for some organizations a fallback mechanism. It still is a good thing to have in whatever way, to have some sort of style guide or style process documentation or whatever. If there's more than one person writing copy, UX copy, marketing copy, whatever. It's always good to have something to point to like, "Yeah but this is what we mean and this is what we are like." That's why I still think it has a place in what we do and… where was I going with this?”Jason:  “I could sense it. While you were talking I was thinking about a conversation that I'd read in this Slack channel. I don't know. Maybe it's related, maybe my mind was wandering but I think it's related to the direction you were going in. Someone was asking about style guides and whether or not he should try to convince his company that they needed one. He just needed some feedback. There was this guy, Val Klump who works at Gusto. He was talking about how at Gusto they have these three different types of style guides. He said there's a copy style guide, a voice guide and a UX writing guide. Then he broke it down even further and he said that the style guide is just grammar and spelling and whatever special copy cases might exist for the company. The voice guide had attributes of the voice and specifically his company uses like four adjectives.Then there were examples of great writing that showcase those. And then within UX, writing it was primarily like screenshots with hyper-specific rules that were only relevant to the product. I was just then directly quoting Val.There certainly is a place for those very specific and purposeful types of documents. Then you need someone talented and committed, somebody like Val to maintain those documents because I think as brands evolve, like I said, marketing will want to have an influence over those documents and different people. Different people across the organization will want to change it or manipulate it or add footnotes to it. So having somebody as a gatekeeper to those types of things is important. This makes me think of the Mailchimp style guides. I don't know if you've had a chance to look at them?”Saskia: “Oh yeah.”Jason:  “You probably have, yeah. They're magnificent. For whatever reason they have two of them and they're massive. I just can't imagine who's in charge of maintenance for those and that's ... You create a style guide and if you're really going to do it well you almost need a person specifically hired just to maintain it.”Saskia: “That's true. They're impressive documents right?”Jason:  “Yeah they can be.”Saskia: “Maybe for a small company that's also just too much. It's just too much overhead, it's too much hassle. Perhaps you can just all fit it on a one pager or so or fit the most important stuff on one page. But then again we needed a process, we needed the communication and the conversation.”Jason:  “The size of an organization dictating their need for a style guide and also the scope of what their style guide will look like. Because I think a lot of the issue that I have with style guides is I see a lot of freelance writers trying to sell smaller brands and agencies use very elaborate style guides, something that would be similar to a Mailchimp or a list apart style guide that would take weeks to develop and thousands of dollars when really it's not the right fit for a smaller brand. Whereas an enormous company like Mailchimp where there's content everywhere in so many different potential areas where copy could fail the user I guess it makes sense to have a much more comprehensive document. But not everybody needs that. It could be like you said just a one-pager for a particular brand. So maybe understanding what you need is helpful.”Saskia: “Absolutely. So to wrap it up what do we want organizations and people who create style guides to remember from this?”Jason:  “I suppose one of the things, one of the issues that really rubbed me the wrong way, that led me to write the article, is at a lot of times I felt like a voice and tone style guide was designed to micro-manage a writer away from actually being involved in some of the more interesting aspects of developing a product or developing a campaign or engaging with people in the company. It felt like it was a way to isolate the writer so that the writer wasn't always tapping somebody on the shoulder. I would say that consider what you need a voice and tone style guide for and what your ultimate objective is for it.”Saskia: “That's also an interesting point by the way that you just made. They use it so that a writer can use independently but then still if you would use it that way still have the danger that they might misinterpret what you wrote in that style guide. It's just not a waterproof document.”Jason:  “I guess that leads to maybe a very broad piece of advice would be don't let the voice and tone style guide replace conversations and look for areas where you can very consistently use the voice and tone style guide to improve basic units of language so that mistakes aren't made so that you don't ... If you have an application that is going to be tracking a user's location you want to be very sensitive toward privacy and anxiety. There's probably a very specific set of language rules that you want to adhere to that are different from an application. That maybe helps, I don't know, I'm going to come up with some insane example. Helps a user find a recipe for dinner or something like that. It's a much different set of considerations. I think identifying what you really need the guide for and not just what you think you need it for and who you think the guide is going to impress. Sometimes I think the guides are sold up to executives and other people or maybe an agency might sell it to a client to say, "Look, we're actually working really hard."”Saskia: “Overall we'd rather have a conversation than a static document. But might I just conclude by saying that that conversation should maybe be ‘caring’, ‘friendly’ and maybe a little ‘badass, baby’?Jason:  “Yes, okay. I will allow it.”Saskia: “Just this once.”Jason:  “Yes.”Saskia: “Thank you so much Jason.”Jason:  “Thank you Saskia. It was wonderful speaking with you!”That’s it for this episode. We’d love to hear your ideas about content styleguides and how we could improve on them. Share your thoughts in the comment section on efficientlyeffective.fm or on Twitter.If you like what we do and want to support us, there’s a few things you can do: you can subscribe to us in your podcast app, review us on itunes or tell a friend that they have to listen to Efficiently Effective.We’re @effectivepod on Twitter and we love seeing your tweets. No really, just letting us know that you’re listening, commenting on the show or sharing it, like some of you already did, really means a lot to us, you have no idea! Thank you so much to everybody who gave us some love on Twitter the last couple of months. We love you!Editing and technical help by Sander Spolspoel. Music by Kevin McLeod at Incompetech.com.Efficiently Effective is a production by the Dutchess  

  EP115 - Amazon Q4 2017 Earnings Hot Take This episode is a hot take of the Amazon Q4 2017 earnings Amazon Q4 2017 Earnings $60B Revenue =~ $129B GMV ($47B 1P + $82B 3P) New Amazon A+ Content Options Amazon, JPMorgan Chase Health Care Project Supreme Court to hear South Dakota sales tax collection case UPS - Amazon Problem eBay - PayPal breakup Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 115 of the Jason & Scot show was recorded on Thursday, February 1st 2018. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Google Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 115 being recorded on Thursday February 1st 2018 I'm your host Jason retailgeek Goldberg and as usual are you with your co-host Scott Wingo. Scot: [0:40] Hey Jason and welcome back Jason Scott Sugar Sisters. Well Jason her here we are on the first day of February 2018 is zipping by and today was interesting because it's kind of like the Super Bowl of two companies. Well yesterday we had eBay in Facebook announced and then today we have the Three A's Amazon alphabet / Google, and Apple so a lot of news coming out of those results and the all these companies are announcing how their fourth quarter of 2017 went which is. Exciting in the world of retail cuz that's the, the biggest quarter so tonight we're going to really focus in on Amazon on this episode and I were to have a hot take on some of the dialysis of their fourth quarter 2017 results and then at the end we have some time we are going to hit a couple other highlights of some of the other quarterly announcements. So long tail lizards know this but it's always important to refresh Aaron's memory when you look at these different results it's important kind of think about the Baseline out there and as an industry were growing looks like. The holiday Ecommerce came in at 16 dating percent retail came in at like 4% Jason is that kind of what it's been. Jason: [1:54] Yep yep maybe even a little higher like for 4.5%. Scot: [1:57] Go to those are those are kind of the benchmarks and you know I think the the the way I view the world is, if you're going faster than those are gaining sure if you're growing slower you're losing sure if you're not growing you're. You're pretty much toast to the role of e-commerce in retail so let's start outside with some big picture things so Jason I thought for you first we talked a lot about. Conversational Commerce and all. Echo ecosystem and this is this is probably the most strong bases code I've ever seen in any of Amazon's quarterly press releases for the last 20 years, read it in its entirety so Bezos said quote our 2017 projections for Alexa were very optimistic and we far exceeded them, we don't see positive surprises of this magnitude very often expect us to double down so that was pretty interesting and kind of like a, you know if you have to read that while you look at that picture of Jeff Bezos where he was like you seen the me where he was like super geeky on one side now he's all ripped, so you have to you have to imagine the rips of Jeff Bezos list of some kind of saying that one they sold tens of millions of Echoes In the. [3:12] Precious is the issue is not over 50 bullets I would say a good quarter of them were around Echo. [3:21] Anything you want to add around Echo. Jason: [3:23] Yeah it wasn't just funny because I remember it wasn't very long ago maybe even 2 years ago. Echo was just trying to get some traction and I think you mentioned to a reporter that you thought that it potentially could be the next billion-dollar business from Amazon and that was a, shocking surprising prediction that the people were asking you to back up and you know. [3:48] Tens of millions of of a echo devices get you pretty close to there. Scot: [3:54] Yeah yeah yeah yeah if we assume so I guess the lowest you spend is like 40. Four. And then you're the most you can spend is like 150 so I imagine the average is a hundred bucks. Jason: [4:10] That would even sending it a hundred bucks each either so that's that. [4:17] Exactly so as per usual you you were right and then you know I think it's one of the scariest as I keep seeing about this is. What you did now the top two selling products on Amazon. Like are that that Echo. And the fire stick. Scot: [4:33] Yeah and since we're on the topic over on the Google side they were asked when they're going to start monetizing it and they're CR sudar. Which I think is how you say he said that they're really just focused on the user experience and nailing that and monetization is very far away so that was interesting that you know that date. Why do people read that quote is in committing their little bit behind and they can't really worry about monetizing until they catch up with where Alexa / Echo are. [5:03] Cool so continue with the big picture Amazon's total revenue in another footnote is if he heard me say some numbers that may be a little bit out of line with what you read and special leases or are seen in the news. I always take the voice two sets of Amazon numbers there's the ones that are just the wrong numbers and then there's the ones that taken to the consideration, the effects of foreign currencies in Wall Street sign that's XFX set of the excluding the foreign exchange changes so if a British pound oscillates 20 or 30%. That will just your earnings so if you strip that out it kind of is more apples to apples so I was going with the Apples to Apples numbers so that being said Amazon's revenue accelerated in the fourth quarter 36%. [5:48] And that's up from a 34% growth rate in Q3 and they came in with a 60.5 billion dollar Revenue number which is not too shabby and you know every. Every quarter public companies tend to give guidance in this was very much at the top of Amazon's guidance Wall Street was expecting. Let's see. [6:11] Yes so this was also above wall Street's expectations are expecting 59.8 and so does exceeded by it looks like .7 which doesn't feel like a big deal but that's like $709 so. That's that's pretty pretty nice beat the key drivers of the quarter were amazon-web-services Wishes the cloud computing and then they have this, tricky category called other Revenue, and moose while shooting let's agree the biggest Chunk in there is ADS so that business we talked about a lot on the show which would include the AWS and AMS and AMG businesses, That Grew that also accelerated growth and it grew 60% versus 58% the last quarter. Amazon had a very high probability and prove pretty dramatically in the quarter Marjorie gross margin sticked up last quarter they were 35.2 and they took up the 36.4 so that's what you would call a hundred basis points kind of move which is. Pretty substantial at these levels on the conference call to see if I owe attributed it to the North America business and Retail doing really well at scale eight of us contributed to that as did he actually caught the ad business is starting to kind of. News the needle on Gross margins here which which I think is pretty interesting because it's actually pretty small I think it's. [7:32] 6 billion annualized so that would be like. Maybe 2 billion at this point in the fourth quarter so it must be just pure margin feel to move the gross margins of the larger 60 billion dollar business. Not any meaningful way enough for the CFO to call it out so a lot of folks are reading the tea leaves there and saying that it that ad business is really starting to. [7:54] Can I show up in ways it hasn't before. [7:58] And hopefully they'll be a day when it gets to be big enough that they have to carve it out like today w x and they crawl curious is really see what's going on inside of their. [8:06] Let's see about that. [8:10] They also made kind of another one of these kind of things you have to parse where they said more new members joined Prime in 2017 than ever before which I think you know when your growing. [8:19] The rate you're going you would assume that's the case. But then most estimates out there Amazon does not disclose the number of prime memberships out there most folks kind of put it in about 60 million us households out of. 250 us households so it really good penetration there some surveys as you go up into the upper upper income levels you get north of 50% penetration and they did say 5 billion items shipped with prime over the year. [8:47] That puts Amazon and I just put that in perspective not even half of Walmart when you look at it this way, so that's interesting but you know Walmart I don't think they've announced yet but they did typically have been growing kind of you know their eCommerce is growing pretty strongly now overall they've been growing low single-digits I I would be surprised if they don't, youngest Walmart comes in above maybe 5% growth All In. [9:17] Doesn't it was a nice surprise is this is the first quarter we're prophets of come in over a billion no you and I talked a lot to people that the number one thing. That you hear when you talk to Executives about Amazon is, oh well she's giving a pastor unprofitable there a money-losing kind of business the only thing inside of their that makes money is the cloud computing etcetera etcetera know those things are true so if you took cloud computing out the whole interview at Amazon still makes money I even if it took ads out I'm sure now it is true that you carve out the retail business that show you a p&l for North America, and international North America is quite profitable and then International is still losing money but that's because they're building enough they're investing like you know, two billion dollars in India there still investing in China they just watch Australia you know there's something going on down in Latin America Brazil so so, it's just because that investing pretty heavily there so. [10:15] Not only did prophets come topically dollars for the first time in a quarter that came in at 1.9 billion this is really big surprise for Wall Street cuz I think they're expecting more like 500 million now it was so that is one time so Amazon did say that about 800 million of that 1.9 billion, I was from the new tax plan that rolled out so they're decrease in the corporate tax rate in United States helped out Amazon pretty immensely. [10:40] But you know what's interesting is you not talked about this but but it really doesn't care about profits which sounds weird and the reason they don't is when you're public company it it's almost impossible to. [10:52] Grow profits in a way that makes sense because of the way accounting treatment happens, yeah your Revenue gets spread out your cost gets spread out and all these things happen so Amazon believes a better measure of how the business is doing is free cash flow and that was 3.3 billion so a lot of cash getting generated Amazon even though they continue to invest in a torrid pace and fulfillment centers in those kinds of things. So that's the big picture Jason you want to look at the retail side. Jason: [11:22] Yeah and I just one sort of thing that I always chuckle about like there's a number of people that feel like, to some extent Amazon manages their Investments to make sure that they don't have a significant profit, inside like under that Siri you can imagine that they were like mildly annoyed at the the tax savings that kind of came in with this big lump profit at the end of the year. Scot: [11:46] Yeah they didn't say that on the cob but it's possible. Jason: [11:52] Inter on the the retail side of the business and we will break this down when you get into the marketplace but from a pure Revenue side North American revenues we're at 37.3 billion for the quarter which is up 42% year-over-year growth so again, you know you can tear that to the the kind of. Ecommerce industry growth at 16% and you know they're they're continuing to eat up a market share at a, a pretty scary place so I can I really only know of one retailer with meaningful volume that's, potentially going faster than then that's that's Walmart and obviously they're growing a much smaller number and cheer Point International grew slower at 22%, and you know that's that someone interesting like obviously they're still in in the early investment stage in a bunch of these markets but the but they're, they're sharing a lot of those markets is much smaller so you know it it's actually easier to grow much faster and so that, to me that that highlights the fact that they still have their work cut out for them to to win and be a meaningful player in some of those big big International markets particularly India that there, they are in a knife fight in. Scot: [13:04] Yep absolutely and then I will be in the marketplace which is where I spend a lot of my time so the way I think about it is if there is a, the pie chart of Amazon or our kind of a diagram, you have AWS and other if you pull those out your left with the retail business and the retail business has two pieces what we call one p which is the traditional wholesale model in 3p which is the marketplace model Amazon is always historically been pretty. [13:31] Kind of Silent about giving details about the marketplace the one the two things I do talk about our unit growth so overall in the entire retail entity unit growth was 23%. Pretty interesting and it makes you kind of say all right if the retail business if you kind of look at the the midpoint of that 42 and 32 the retail this is probably true kind of mid-30s unit growth, you 23% how did they grow mid-thirties, and that's just selling that's an increase in average order value essentially so you know the value per unit that goes through is gone up so everyone gets a lot of nice multipliers in their model up because the scale they're at so how these to talk about. The number of users that requiring that slow down pretty dramatically and but then Revenue itself accelerated that's another indication that the revenue per active user was really. Growing because of prime the other metric they disclosed is they talked about a unit mix between 1 p + 3 P that is now 51%, that's not a high water mark I think she wanted you to as a 51% and Q3 a dip to 50% because of all the echo, Prime Day Day stuff and it came back here to 51% for the holiday quarter so long was long time ago she was the show know that this is, Marketplace peace is really important because you know to really understand the impact of Amazon there's their associate iceberg, and we really only see the tip of the iceberg and that that big kind of mass underneath the water at Amazon is the marketplace so here's how it works on the canal walk you through the mail so if we round numbers they did $60 in Revenue. [15:10] 5 billion of that was eight of us so you take that out and now you have essentially 55 billion in retail there's like a billion or two of ads in there but let's keep, math simple at 55 billion now. [15:23] Well it says 51% of units were three p that doesn't mean that you take that 55 in / 1/2 because the way Amazon a recognizes revenue for each this, pieces of business is different in the 1p world Revenue equals sales so I saw hundred-dollar widget. My road is $100 easy reptile rooms used to doing it but in the 3p World they County Road SE, when a third-party let's say we have I don't know Jason's audio shop and you know he has all this awesome audio equipment he sells $100 mixer on there a Amazon collect $10 as the commission so now what happens is you have the revenue is actually the $10, and the transaction value of the item sold as what we called gmv or gross merchandise value in the world of Market places so you have this kind of. Weird thing that happens where the actual transaction the volume is not Revenue anymore it's a small percentage that Amazon takes his commission or we used were taking it so. [16:23] If you take that 55 billion for the quarter, and when I do my analysis on this about 47 billion of that is first party so that leaves caught, but that 8 billion for third-party is really just the commission rate and. I argued if you want apples to apples this to other retailers you have to gross that back up. Because when someone bought the audio device from Jason store on Amazon vs Best Buy, Best Buy lost $100 even though Amazon only made $10 if that makes sense to the transactional value is the Zero Sum game out in the world of retail, so if we take that 8 billion that's the revenue for third-party, and we assume just going to keep it easy to take rate of 10% you have to effectively * 10 and you get 80 billion so first party was 47 billion and then third party is about 80 billion, so you're by my math when you had this up the total gmv for the quarter would include 1 p + 3 p is 129 billion. [17:32] This is all a very long way of saying essentially Amazon's Choice as big as people think it is and when you look at that context you know if that's what they're doing it accordingly rate. 20 billion multiply that by four you get 480 billion then an Amazon Apples to Apples is as big if not bigger than Walmart at this point we actually look at the transactional implications. So did the other natural question is so if I'm saying 47 billion first party. 80 billion third party this kind of like 1/3 2/3 out of the total why is that unit number 51%, and do you know the number gets very skewed the the bulk of one p units and Amazon her books and digital items they even include like if you bought a 99-cent app on your, you know you're your fire your Kindle kind of device that counts in there so. It seems have a much lower aov compared to 3p so so. But that's the unit mix is 51% but the GMB mcscuse higher towards third party so usually kind of like how to get the ends up being like 62% this year versus 38 on the other side so. [18:46] Now. Other there's other ways to calculate this an Amazon is is gives when they release their quarterly The Q's which is there SEC document state day damn it. The annual one. [18:57] They'll be some numbers in there that give us another view of that and when you look at while she puts out there in the ballpark might my way of doing it tends to come out a little bit high so I'm kind of in the other 129. And I've seen some of the analyst kind of looking more at like the 1:20 so we'll see you don't no matter how you slice it though. Pretty huge Amazon's bigger than people think it is and this whole entity is growing at in a 38 36% year-over-year and they're really just kind of. [19:30] Destroying Shear I'm sure we'll start to see articles coming out where you know I seen Art summer day where they got half of the e-commerce growth but I think it's probably actually be bigger than that and I think they they definitely took up a lot of the overall retail growth when you looking at the scale these numbers. Another last thing is, you're one of my favorite things every year is the Bezos annual letter that doesn't come out until they do their final SEC documents in this works little Insider baseball on your public company you put out this quarterly reports and you do a very quick audit on that, with Auditors to put them out but then when you do your annual and you have to go back and kind of do a forensic audit of the entire year so that'll go on and then usually in the first week of April is when Amazon publishes, their annual numbers to the SEC which will include an annual report and that will have the business letter so we have to wait in Fortune until April to read that. Jason: [20:25] Yep and that definitely will be worth waiting for I mean great great breakdown I know there's a lot of detail there for folks that are newer, that gmv point Scott makes a super important I just like to think of that as that's how much money consumers gave Amazon in exchange for goods or how much of a consumer's wallet Amazon got and so that's why, when you're comparing any other retailer that the really important thing is what share of the consumer spending did Walmart get versus Amazon versus Target or anyone else and so if you're up, a retailer that doesn't have a Marketplace like Target and you say you you sold 50 billion dollars for the quarter. That's how much of the consumers dollars you got 50 billion bucks and then in Amazon case they said they they got. [21:13] 43 billion in Revenue but that actually equals 82 billion of consumer spending and so obviously. [21:21] There they are out there killing it now Walmart also has a Marketplace it's a much smaller percent of their total revenue but so Walmart is another retailer where did you want to look at him really closely you also would try to back into a. GMB number versus Revenue. [21:39] So moving forward Amazon doesn't think they're slowing down either so they they set their their q1 guidance in that. 47.8 billion to 50.8 billion so that would be somewhere between a 34 and 42% year-over-year growth so. [22:03] You know it so middle that's 38% which again growing much faster than the overall industry. Second biggest player in the industries Walmart they are growing even faster than than Amazon in e-commerce at the moment and so when you. You talk about the 16% average there on a heck of a lot of retailers that are growing at 16% and most other e-commerce sites are actually. Doing much worse than that because the two guys at the very top of the echo system are are growing so fast. [22:34] You know it's it's crazy to see the biggest players in the industry growing this this fast. [22:43] So you know the interesting to see what sort of numbers the Wall Street analyst put out in terms of their projections for the 2018 and 2019 models but I don't think they they do the these disclose to their names cause that writes got. Scot: [22:58] Yeah I saw one guy updated this model and he said 20 18 lb 234 billion and 2019 lb 284 billion so. Still still really big numbers one of the things that was you know making some of the Wall Street guys a little skittish is. The revenue guidance like you said is pretty solid at kind of like a 38% growth point at the midpoint, evidence of used Amazon coming at the height side there was kind of thinking it'll be 40% so we'll see but then their bottom line guidance was pretty light so it's kind of like 300 million to a billion which kind of either is conservatism or Amazon saying. Hey we're going to, we had a great fourth quarter we're going to go to another investment cycle so the Wall Street folks that that Paul Amazon the kind of live in fear of these kind of Amazon ghost these Harvest. Swear they'll Harvest a bunch of investment state made this this year is very much a harvest year so you're really good bottom line. Probably under spent on capex from an entry no overachieved on the bottom line as well and then, Aaron lives in fear that they're going to wake up one day and say alright we're going to best. Three-blade dollars in original content or you know a you know our whole load fulfillment system with trucks and everything or, so that's just kind of things ratchet up there the worry. Turn off the wall of worry gets higher and this is the one kind of negative that I saw everyone call out was you know what. [24:28] What could they be spending that much money on that's like an incremental billion and a half of spend and they're going to Wawa color on that and, they're kind of elusive on the phone call about giving any details what's going on there so it's going to be a wait and see you through the first quarter one thing I always watches the announcements around number of fulfillment centers so that's what we'll keep an eye on that, add to my knowledge I didn't see them announce any in January which is kind of unusual they may have been in a quiet. So maybe we'll see a little bit of a raft of those coming out now they've announced earnings. Jason: [25:01] And there's a whole you know there's there's a big crop of openings that they try to get done before holiday obviously so it it makes little sense it would slow down. Scot: [25:11] Yeah they they I'm sure they need a month just kind of breathe. Jason: [25:16] Yeah so one other piece of interesting Amazon news that's come across my desk this month is not directly related to the earnings but I still think is exciting is it appears a lot of. 1p sellers on Amazon are getting new options for what content they get to put on their product detail pages. I'm so historically there's basic content that you provide to Amazon and Amazon you know puts on that PDP for free and then there are like richer media options that would let you do things like. You know have some product comparison charts are some some animated tutorials explaining your product or videos or things like that. And those are often called a A+ content and they're super important to. The the engagement and conversion rate on those on those pages but they're you know they generally have been a premium thing that Amazon has as charged for. And this quarter we're seeing Amazon start. To give away a bunch of what were the traditional a plus content options so making them free to any seller and they're adding even more exotic. Options that you can pay for it so it's essentially a lot of sellers are getting the option to customize their pdp's to a far greater extent than they. Ever been able to before and you have given an Amazon has become such an important distribution point for so many products. [26:47] That that's really important to a lot of sellers so it's interesting to me that they they continue to evolve that pretty rapidly. Scot: [26:54] Could you know there's always this kind of it's hard to keep track of these things are available to 1 p and summer 3p and summer both do you know. Is this is an on both sides or is it just for brands or is it is it also third-party sellers. Jason: [27:10] Yep so I have primarily seen this exclusively on the one p I can't definitively say that it's not available on the 3p but like one of the things you have to think about it's it's hard for Amazon to sell. Actual like extra product attribute opportunities on the 3p side because all the seller share. The same PDP into essentially. You know one one seller would be paying for that extra content and then all the the other people piggybacking on that listing would be riding along for free. [27:43] So like for the most part I see that these opportunities at the PDP level are exclusively to one piece hours but but Amazon isn't quite frankly they're not very good at life. Publishing open price West and saying hey here's all the programs we have in here's how much they cost and they're the same for everybody you know what it feels like for the most part of the offer everything and negotiate everything on a. Need your account by account basis and so like not not every Star tends to get the same options for the same deal. Scot: [28:22] Cool so that's kind of some good Roundup of Amazon's quarter any other interesting Amazon news before we kind of widen the lens look at other companies. Jason: [28:33] I think I think that's an interesting conflicting rumors out there about Amazon's effort to monetize ads on the Alexa echo system. Scot: [28:46] Gulfport what are you here. Jason: [28:48] So they're there had been some rumors at the beginning of the year that a few big sellers had been offered a. [28:57] Promotional opportunity. 2 baht to be the recommended product via voice Commerce when someone's ordering a product for the first time so so is that sounds more complicated than it is so you say Alexa to order batteries and you bought a bunch of batteries before, Amazon going to use your purchase history to try to predict what batteries are talking about, but if you've never buy batteries before Amazon is going to come back and say I have a Amazon elements 8 pack of double a batteries is that what you want in you, can say yes or no in so there was there was some rumor that like Brands were given the opportunity to be that that Amazon Choice product and then last week Amazon sort of came out publicly and said no no no, you know we we've looked at at adding adds to the the Amazon Echo System and we just don't think that makes sense and we think it's disruptive to the user experience when so they, they sort of explicitly said that they're not doing that so so, the stuff you heard about Google like that could be that we don't see ads from any one invoice which I don't think any of us are going to feel very bad about. Scot: [30:13] Yeah one thing that was interesting that there was a lot of talk about is so a lot of the the business and world leaders were at Davos and I need to use that platform to announce that this kind of interesting contortion of, Amazon Berkshire Hathaway and JPMorgan Chase are going to pull their efforts and work on Healthcare and is very nebulous they're going to start a company, it's not clear who's going to owner run this company and it's kind of going to be dog food in whatever this is they build for their own employees sounds like what they're doing, but you know this causes ripples throughout the world because that we talked on the show there's been Talk of the Amazon opening kind of a pharmacy online and then you start to say. Amazon nursing pieces that kind of think about your Amazon. Using the cloud services to kind of have health services so, yo a nice portal for employees the ability to manage all the healthcare programs and then Berkshire Hathaway has a big division that does insurance so they could kind of provide that. Then you would also need some kind of a you know a financial service piece around that too so that's give me something to really watch but that's good. [31:27] This kind of thing could disrupt the entire insurance industry or you know all the HR systems out there so or it could be a big nothing Burger so I have to kind of see where it goes it's kind of a, free nebulous right now but it was all the Talking Heads could talk about for for quite a while. Jason: [31:44] Yeah yeah and your point like it it you know if it's them trying to aggravate their buying power across those three Enterprises that's, probably not a very meaningful so you know did the three of them together don't employ as many people as Walmart so they're probably not, going to let you know make dramatic changes to healthcare system but if Warren Buffett and Jeff Bezos and Jamie dimon are trying to collaborate and figure out a, a new product or a new a new way to solve the healthcare problem for employees that you know. Is there a free smart guys that have a broken paradigms before so that potentially could be interesting and exciting. [32:20] Another piece of non Amazon news that has has everyone buzzing is. Early in the year I think the first week of this year the Supreme Court announced that they were going to hear a case which is I believe South Carolina versus Overstock. [32:41] Dot-com and so this is a case about sales tax. [32:46] At the moment there's a the Supreme Court has ruled on one sales tack case which is. North Carolina versus quill and in that ruling essentially they said that in order to be required to collect sales tax. You have to have a physical presence or a Nexus in in each state in so if you have no presence in that state you're not obligated to collect text a lot of lawyers were really surprised by that that ruling. Because there are a lot of other occasions where your required to comply with the States laws even though you're not physically in that state. [33:24] But be that as it may that's been a lot of land and e-commerce texting for a long time is. If you have a if you have a physical presence in a state you have to collect tax if you don't have a physical presence in that state you don't. [33:37] So again most of the omni-channel retailers with brick-and-mortar stores in every state. There they've always had to collect tax Amazon has has slowly negotiated into paying taxes in in essentially every state as they've opened more. More of fulfillment centers in distribution centers and so today Amazon Flex tax in every state that has a state tax oh. A couple states don't don't have sales tax like a Portland Oregon and in the maybe Nevada or Florida. But sit there collecting tax everywhere said they're not really affected but if the Supreme Court rules in favor of South Carolina South Dakota in this. This new case the which they could you know here in a I want to say March of this year that suddenly obligates all other online sellers to start collecting tax. [34:30] And there a couple interesting things that happened then. Number one like you potentially have to calculate a different tax to collect for every municipality which potentially could be more than a thousand different tax districts in the US. So that becomes a huge burden for small companies that are selling online to have to figure out all these taxes. It's probably a huge Boom for the commercial tax companies that will sell services to all these guys so you can you can you know that's an extra fee for all those like you know small Shopify sellers. [35:03] And in my mind the biggest entity out there not collecting sales tax. Is actually Amazon 3-piece sellers Sowell Amazon collect tax on other one piece sales they leave it up to the individual 3-piece sellers what whether they have an obligation to collect sales tax or not and overwhelming majority. [35:22] Don't except for in the state they're doing business in and so if the Supreme Court ruling goes against Overstock it could have a very pronounced effect on three-piece selling on Amazon. Scot: [35:35] Yeah and it's pretty complicated to because there's a bunch of scenarios right there's there's a scenario where I'm I'm a seller on Amazon, and I have Nexus in North Carolina which is where my warehouses and I'm shipping all of the country so that's one so what most sellers do there is they say they collect the sales tax for North Carolina and Amazon has settings for this so say it up 7% in North Carolina I will collect that but the other states I don't have a Nexus etcetera, maybe you're more sophisticated Celerity out to our houses so that gives you 2 points in Nexus but and. Amazon doesn't really open on this Amazon says you're responsible for figuring out your own texting. So so Amazon's listen to saying we're not going to your lawyers here we're not going to accept any liability for you collecting you're not collecting that you tell us what you want to do and then they actually give you some, they rolled out some nicer apis that give you kind of that you know this this tax software used to be hundreds of thousands of dollars and now Amazon's rolled out whatever they use sellers can have access to it for you still pay for it but not really at the scale it's it's pretty reasonable, but then it gets complicated right because I'm using FBA. And you don't there's a PA is pretty much in Most states I think like 40 States and you, it's not very easy to get from Amazon where your product is once it gets kind of into that cloud of warehouses it gets distributed out and you also don't. You don't have a lot of control over today selling Amazon hey please don't put my product in Illinois cuz I really don't want to pay state sales tax there that's not really how the. [37:11] The phone network works so. What most sellers do is they just kind of say well you know I'll I'm small business how can I take the risk on that so this this could be you know. Can I kind of clothes McPherson these guys that you know they may I end up having them a relatively complex set of States they need to figure out and, not a lot of great infrastructure for figuring out where their products are the release valve on that would be so perfect Prime and there was a release a press release Amazon's investing more and more around giving sellers that are kind of larger scale the bility to have their products Prime enabled meeting their Prime eligible and are primed as they like to say and, and then using their own warehouses to get them to the consumers and two days that could be, you know it's interesting Amazon's doing a lot more around there obviously I think it's primarily cuz they want more Prime eligible product but you could see it as a, a way of kind of if sellers were freaked out about this and wanted to have more control over Nexus that that's the answer essentially. Jason: [38:10] Yeah yeah I can imagine there that Amazon is it is potentially rooting for South Dakota in this case because, a lot of the 3p sellers feel like one of the reasons they can be competitive in one of the reasons they can they can sell their goods even when Amazon is also selling their saying Goods is because of that tax advantage right and so potentially if they don't have that tax advantage to two good things happen for Amazon. The one that Amazon 1p product wins the buy box more often. [38:41] And number too it's hurting and suddenly forces everyone in the Amazon Echo System 2. Comply completely with with the law and it eliminates all this gray area of who's collecting what tax on FBA. And so that you can imagine in some ways Amazon would say hey in the long run that's cleaner now in the short run that could mean three PCL slow down on Amazon which is you know one of them are profitable elements so. So who knows one thing I would point out. Is the Supreme Court rules in favor of South Dakota so now everyone's obligated to collect tax everywhere it's very likely. The Congress doesn't just sit Pat right so there was a lot of of work on legislation about at what kind of sales tax internet sales company should be collecting. A number of years ago and there was this thing called The Marketplace Fairness Act in. The the main notion in Marketplace Fairness Act is hey every online so I should be collecting tax but which should be a simplified tax so we don't have all this. This complicated math and so instead of having a thousand different tax rates maybe we agree that all online sellers pay one simplified tax rate. And so you can imagine of the Supreme Court rules in South Dakota's favor that might be the impetus. To Congress to pass some sort of like that and. [40:13] Conversely if Overstock wins there's like 8 more cases from other states that that are also in the queue and potentially could get to the Supreme Court later so it's not like. Even if if the Supreme Court rules in favor of Overstock that this is over so it's the interesting thing to follow. [40:31] Moving on to a couple ass little news news Clips UPS also had their earnings call. Yesterday or today and one interesting thing that came up they had a good quarter as well. [40:48] But the. They there they beat their estimates in their stock still took a little hit largely because they announced that they're capex spending for next year was going to be much higher. Then it had been in any previous year and the explanation for that was that they're being forced to invest a lot more in sorting centers and airplanes. To make all the the residential deliveries that they're doing for Amazon more profitable and so you know that the sort of pithy had a headline is that UPS has an Amazon problem. They're having that invest a lot to to deliver what they're already delivering to Amazon and of course. Amazon's needs are only going to grow you know potentially 38% more. Scot: [41:34] Yeah and the other two could be a bit of a trap here where, they're having a grow their infrastructure to support Amazon and Amazon is growing in structure outside of UPS so it's some point you know if your UPS you have to kind of start to wonder how far ahead of your skis can you get on that before it gets kind of risky. Jason: [41:51] Exactly if this was a video podcast we'd be playing Admiral Ackbar saying it's a trap right now. [41:59] Reference I threw in there just for Scott in the last earnings that jumped out at me from this week eBay had their earnings called yesterday, and I I think they the like met or slightly better beat their earnings but the, the big drama was in there called they announced that they're. Mandatory partnership with PayPal whom is a reminder that used to own and and spun off as a separate company when they spend them off, the spin-off included in agreement that eBay we keep using PayPal for a certain period of time so that. Of time is now expiring and eBay has announced that they plan to shift payment providers from PayPal to a big European payment processor called Aiden, and so that, they probably has some implications on eBay but it has potential huge implications on PayPal because I think eBay is something like 18% of PayPal's Revenue. Scot: [43:04] Yeah they the CFO of. PayPal is on CNBC any shows 18% but it was like their slowest growing peace there's little shade there's something going on between those two companies are definitely got to get zika nomics driving it but it seems like there's some more kind of, they are not really getting along very well right now. Jason: [43:22] Yeah and it's like I would like to cenarios I you can totally imagine that this is an actual break up, and if so that is interesting that says something about how competitive in the marketplace PayPal is if eBay really feels like there's a meaningful savings to be had by shifting to this, to another payment processor that, you know potentially said something negative about PayPal's competitiveness but you could also Imagine the eBay and PayPal are negotiating their first, fees agreement since they're they're sort of mandatory partnership expired and all of this could. Potentially be somewhat posturing is there sort of negotiating with each other so you could think of it a little bit like the showtime having a break up with Time Warner or while they you know. [44:08] Weather negotiating how much the cable company should pay for free HBO or Showtime or something. [44:15] And with that we have Perfectly Used up the allotted 45 minutes we had for today as we're trying to get the shows a little bit shorter for our listeners so we greatly appreciate. Your participation in the show today and if you have any questions or thoughts as always we love to hear from you on our Facebook page or on Twitter we we have a couple of good good questions that came through this this weekend fact on Facebook. So I think I have some answers there in fact. And of course if you enjoy the show we would very greatly appreciate you taking just a second jumping over to iTunes and giving us that 5-star review, we don't we don't charge anything we don't run any ads on the show so that way you can you can pay us for all the time we put in that show as right as a nice review on iTunes. Scot: [45:06] Yep thanks Wilson there buddy. Jason: [45:08] Until next time happy you comercing.

EP113 - NRF Preview http://jasonandscot.com Episode 113 is preview of the NRF Big Show 2018. Recap of CES 2018 Preview of NRF Big Show 2018 Retail News Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Episode 113 of the Jason & Scot show was recorded on Sunday, January 15th, 2018. New beta feature - Google Automated Transcription of the show Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 113 being recorded on Sunday January 14th 2018 I'm your host Jason retailgeek Goldberg and as usual I'm here with your host Scot Wingo. Scot: [0:39] Hey Jason and welcome back Jason Scott show listeners Jason this is one of those are very rare times over the course of the Year where we are actually not only in the same town but in the same room at the same time. Jason: [0:53] I know it's awesome we make eye contact while we're talking this is very weird for me. Scot: [0:58] Yeah it's very weird I'm usually just staring deeply into the the computer. Jason: [1:02] I'm staring deeply into a photo of you I have over my computer. Scot: [1:05] Are there candles. Jason: [1:07] We don't need to get in any more specific. Scot: [1:08] Call Sue. Jason: [1:12] Why are we here Together Scott. Scot: [1:13] We are here at Big Beautiful New York City for NRS Big Show. It's that time of year again where were you here making the Trek down to the Javits Center no snow on the ground this year I think that's the thing the last three in RFC I've been trudging through snow but this one's pretty dry. Jason: [1:30] There's no snow yet but the mean in RF weather tradition is the blizzard that comes in during the show and makes it impossible to go home after the show and if I'm if I'm remembering correctly there is it forecast for snow during the show so we'll have to see. Scot: [1:45] We may be doing a lot of podcast from the the podcast you here in New York. Jason: [1:49] Exactly are our misery could be our listeners benefit. Scot: [1:53] And what's up we definitely want to do a little preview of some of the things that were already hearing about it in RF but you are fresh out of Vegas where you were at CES I want to hear all about your CS6 transfer. Exciting things I saw the Tweet about but I'm sure there's more color you can share. Jason: [2:10] Yeah so there's an annual tradition for me is you know you celebrate New Years and then you'll get on a plane and fly to Las Vegas with, 180000 of your closest friends to see the latest, new Innovations in electronics and then you go straight from there to New York for the blizzard and the big interrupt retail shop and I go to CES, almost every year I think this is my 32nd 2-year CES largely to see, new trends that might affect our our clients on our Industries. Scot: [2:48] Now that he's become Dex and CS remember and you probably go if we're talking 32 years they used to be separate shows then it kind of merged and now you can hardly see a computer anywhere at at CVS. Jason: [3:01] Yeah so they were competing shows context was in November CES is in January they both briefly also tried to have second shows in Chicago at another time of year was that that wasn't very successful, condex went out of business some of those exhibitors then moved over to CES and over history at various times they've been industries that. UCS is an important part of their business and then moved on so I can the video games used to all exhibit at CES they outgrew it and launch their own show which is he three computers are not a, super robust part of the Consumer Electronics ecosystem at the moment they're pretty flat. Although there is a big push people are feeling like the Esports and the high-end gaming is. Starting to drive a meaningful niche of these high-performance laptop sales. Scot: [3:53] One category that is CS now is Auto City Autos used to be kind of at their show which is called a Syma and then another part of SEMA Ace. Jason: [4:03] Cosima is the auto parts show that's in Las Vegas there there's a course of the Detroit Auto Show is going on right now in Detroit which is where all the. Karma you typically see car manufacturers in Detroit launching their new Mustangs and those are two things and you'd get the like. Tire guys in the the oil filter guys and all that at SEMA and for many years one of the big pieces of the consumer electronic show was the aftermarket. Car audio industry which is of course almost completely dead. Scot: [4:34] Yeah and then we had GPS is for a while they were big now actually Autumn acres are there in a pretty big way right. Jason: [4:40] Exactly so they have taken over the hall that used to have the car stereo equipment in it and they're largely showing car tech in so you know they're they're typically not launching their new vehicles. It in Las Vegas they're typically showing the new in-dash platform their new automation things the new wireless Services they're offering and what's what's a little funny is you you go to all the car boots and you. You might say you'll see some cars but you see a lot more like. Check components from the cars and then you go to all the other Halls where you see the the major ingredient tech companies like Bosch and Intel and Qualcomm that make alot of the parts in the car. And they are of course have fancy complete cars and they're both so you go to the tech show to see the cars in the car show to see the tech. Scot: [5:31] So what's new in cars is it is there still a big battle for the Smart Car platform already moved on to self driving cuz I know Intel's bigger than that what were some of the big things and Auto. Jason: [5:41] Dazzled by far the big Trend in the the car boots this year is Automation and particular the self-driving Vehicles they have this system. This ranking system from. Animated level 1 through 5 so I go level 1 car has tools that help you drive better like a flashing light that tells you that the car in front of you stops and two can kind of assist you and certain things. Like like a break for you when there's a car in front of you three can let you have your hands off the wheel for tonight you have your eyes off the wheel in five doesn't have a wheel, inside there a lot of now level 3 cars being shown at the at the show and a lot of the, the tech Innovation was around like these these autonomous vehicles and then to a lesser extent. Electric vehicles in new charging Technologies and things like that Qualcomm has a thing called Halo which is wireless charging for your car so you have a plate in your garage and you. You just parked the car over the plate and it charges it overnight free. Scot: [6:51] This may seem Irrelevant for retail but I saw on CNBC Ford, you announced they're very excited about driverless cars but they really kind of they don't believe that they'll be kind of a fleet kind of a thing like an Uber there really more into package delivery so I think that it's going to last mile. Absolution. That was kind of interesting that the others there's a major auto manufacturer that really thinks it's going to be really more for delivery and he specifically talked about new from stores to do consumers. Actually competing with FedEx Amazon ups and all those kind of folks. Jason: [7:26] Yeah yeah I mean there's another time we can talk about from that the show is Robotics and so it's kind of a combination of Robotics and automation there's a lot of interesting potential, new helping that last mile but the Ford booth at CES is kind of interesting they really focused on. Their vision for what a city looks like in a world in which most of the vehicles are autonomous and so one of the big questions that they they were trying to answer in their Booth is. How do pedestrians interact with autonomous vehicles right like to, often when you're crossing a busy street and there's a crosswalk you may go out of your way to make eye contact with a driver before you just make a leap of faith in Jump front of the vehicle so what do passengers expect to do. When an autonomous car is coming up to a crosswalk or those kinds of things, in one of the things that they did to study this is they really did this big research study on future cities but they actually invented a costume that looks like a car seat. And so they say they dress the guy up to make him look like the empty seat of the car and sat him down in the car so it was a fake autonomous vehicle. I'm just thinking that that's a funny job to go home and tell your parents you just got is your portraying a car seat. Scot: [8:41] Or when you have time to go to Starbucks I must look really weird it's like here comes a Walkin car seat. Jason: [8:45] Exactly so they videotaped all these consumer reactions and they have this notion around like we'll probably have to have some Universal standards for like a lighting system in the car that you know as pedestrians know that they're being seen or those kinds of things. Scot: [8:59] When ironic when is the new there's a Netflix series that started in the BBC and then got picked up but it's called Black Mirror and in this they just released season 4 I don't know if you watch it or not I think you're behind on everything. Jason: [9:12] I am kind of on most of the stuff you give me Groupon so that's that's next on my list. Scot: [9:17] No spoilers but one of the episodes it has this kind of plot device where there is a driverless vehicle that delivers pizzas and it kind of. Knock some of this guy and it's not really part of the whole thing but the looking shape of it was really interesting like you just wanted to know a lot of time thinking about how this look and then I saw that CS. Pizza Hut or. Jason: [9:37] Toyota and Pizza Hut add a had a partnership for an autonomous pizza deliver. Scot: [9:40] And it was just like it was exactly like the thing on dark mirror so I was really really very strange and then I saw an article about it and there was no coordination or anything it was just. Jason: [9:51] I wonder who inspired who think they're cleaning independent invention and then. Scot: [9:57] It's kind of has to be because well if the show had known about pizza thing it could have been but the shows literally been out for like that came out December. Like 30th or something so there's no way they could have designed a prototype that fast but it's kind of really Tales from the future kind of a thing to happen there. Okay so that's Autos then as I was sitting watching remotely and not fighting for calves with a hundred and eighty thousand other people I saw, a lot of Twitter traffic in stories were around the the home automation and then also kind of the battle of the smart speakers and intelligent thing so so last year report from cs1, this year it looks like Google is really stepping it up don't give us an update on what you saw there. Jason: [10:41] Jump to that last year we didn't necessarily expect partsmart, speakers to be a big part of CES but you went to the show and Amazon with embedded in like over 400 devices at the show and you know I seem to be ubiquitous in Amazon didn't have a, their own presents at the show yet they were getting on the bus, a big part of why I say yes existed to generate PR to drive future sales and so most people declare the Amazon the winter that show they didn't take a booth and yet they had this great, present so this year we are all curious to see if they would. Double down on that or if any of their competitors would make up any ground and it really clearly has emerged a two-horse race with Amazon and Google so this was probably the death knell for Cortana Cortana was the first born, on the PC is part of the Windows operating system and even all the Windows laptop manufacturers are now shipping laptops that are Alexa enabled, not Cortana enabled. Scot: [11:40] No it's a Samsung when I can't remember its name. Jason: [11:42] Bixby in Samsung is definitely has an interesting strategy overall theme of the show is. The traditional product you expect to see the show we're not very improved from last year it was a very irritable year and what the exhibitors were more focused on was. The platform of how all these products work together rather than their individual features so. LG and Samsung and I'll have Smart refrigerator smart washer smart kitchen is all these different tools and instead of showing you how much better the refrigerator is this year than last year there were more focused on how much better to the house works when all these, devices talk together so that. Scot: [12:21] That's a lot of mocked-up houses in this kind of thing. Jason: [12:24] Yeah I like vignettes and in these use cases like a you just bake lasagna in your Smart Oven your dishwasher knows you just. Bake the pan and so it's setting the dishwasher to the the pan scrubbing mode rather than the echo mode because it's got to get the the big done she's off the pan. Scot: [12:43] Does anyone have a nest camera for looking in my refrigerator so when I'm at work and I can't remember if I have milk or not. Jason: [12:48] Yeah it that's one of the most popular features in a smart refrigerators are these these webcam. Scot: [12:53] The ones on the outside where I can see inside isn't it I need like seeing. Jason: [12:56] Inside so that when you're at work you can at the store you can see if you need eggs or milk or those kinds of things. Scot: [13:02] The fair when I saw her was at sokoler came out with a pretty much any any kind of Plumbing fixture in your house can now be Alexa enabled so. They had the suitcase for the guys holding a baby with both hands. And he says Alexa turn on the sink and then he like takes a hand and he liked holds bottle and put it under and it's kind of like why can't you just take his hand in like turn on the sink and then they have a toilet did you did you get to check out the toy. Jason: [13:27] I did I did not actually test the toilet but I did observe the the Alexa enabled toilet and yeah that was in bed and everything it's not clear. That you want or would benefit from voice embedded in all these products and the what was interesting about the whole voice battle. This year was you know the Google had a much bigger presence than last year they both took a very big boost themselves which will come back to you in a second Amazon actually stepped out the size of their boots so they actually had. Immodest Alexa Echo System booth. Last year they had the treasure truck so they should have had the treasure truck and these examples of all the third-party products that work on the Alexa Echo System Google built this big Booth with they want some new hardware at the show so they have. Through Partners they're making what I would call Echo work type product to a Google home product with the screen. In a very familiar form factor that people that. I have that the echo look and today he wants to Booth to demonstrate all those things unfortunately that the booth is super extravagant and was designed for big parts of it to be outdoors. And for the first time in a hundred 15 days it rained in Las Vegas and so literally the the Google Booth was rained out on the first day which I imagine is a multimillion-dollar mistake. Scot: [14:48] I saw I had a slide did you get a chance to sit down the side. Jason: [14:51] It it did I did not get a chance to sit down inside their Booth was so crowded that they literally had like wait time management for all the various things so you are. It's 15 minutes to go to the roof and go down the slide and I just didn't have the time. Scot: [15:08] Yeah I did back on the color thing I heard that the deluxe integration with the toilet was kind of crappy. Jason: [15:15] I'll add the drum roll and post no no I won't listen. It's ok Google like did everything presents they were embedded in in more products but what they really did as they spent a fortune on Advertising so, so Google bought all the outdoor ads they had as on a ton of the taxis they wrap the Las Vegas Metro in in Google sign in. Scot: [15:38] Stairs I was under the stairs. Jason: [15:40] Yeah they I don't specifically remember some. Scot: [15:42] Escalators are like an escalator. Jason: [15:43] Yeah so they they spent a lot of money on outdoor advertising which is ironic I guess given that they're primarily an advertising platform. Scot: [15:50] Should ask him how they measured the ethics. Jason: [15:52] Yeah I don't think there is one. They definitely got more mindshare as a result of spending all that money and it certainly shows that there Devin Ernest interest in winning the space it feels like. They're still pretty far behind from an integration standpoint there certainly far behind from a skills perspective as well as we've talked about. But it's really emerging as a two-horse race and lots of retailers have a vested interest in Amazon not owning. The the home automation voice space and so you know there's a lot of people that that you know I'm rooting for Google because they're the. Potential foil to Amazon. Scot: [16:34] The Google Talk anything about the business model and how ads are in a work and they're just kind of like charging in and we'll figure it out later. Jason: [16:42] Yeah they really didn't like obviously wasn't they didn't talk a lot about it but there was a big announcement to me last quarter when both Target and Walmart and some other retailers started sharing first-party data with Google so that. If you if you're in the Google echo system in your shop at Walmart and you say order more peanut butter Google has access to your peanut butter purchase history from Walmart's to fulfill their. The the most likely peanut butter better you'd want right in that was historically abused competitive Advantage for Amazon is there artificial intelligence system had all this historical data on consumer purchases and since Google doesn't sell anything. They're pretty disadvantaged in. Scot: [17:21] Just Walmart and Target both share their data with Google and you say or did you just say order more peanut butter will Google know a Jason buys the most. Jeff from Walmart and allergic from Walmart like what use that to discern between retailers. Jason: [17:37] Yeah although it's it's the last that it's deciding like you opt-in so in the Google home Echo System you say I want my fulfillment partner to be Walmart and then that. That Ops you into Walmart sharing your data with Google. And then you're likely to get Jeff if you primarily order Jeff there that is an advertising opportunity so when you're a freaking purchaser of Jeff. They're likely going to sell you the Jeff you frequently purchased but if you say order peanut butter and your not a frequent purchaser of Jeff they need to. Suggest something to you and they typically pick one brand historically that's been this Amazon Choice program on the Amazon platform so they Amazon Choice products, usually ends up being the recommended product in in the Alexa Echo System but we're seeing some strong indications that Amazon is actually selling. The that. First recommended spot for new purchasers to a lot of Brands and so that it's sort of ironic like we've always talked about Google is primarily in a driven business, doesn't have a way to monetize voice Amazon obviously makes money selling stuff and so if voice makes you buy more stuff Amazon food, monetize much better than Google and then irony of ironies it appears that. Amazon is ahead of Google in terms of figuring out good advertising models for voice or at least acceptable ones. Scot: [19:03] Yeah okay a couple more serious than what was the worst or the wackiest thing you saw. Jason: [19:09] Yeah every year there's some goofy products there's that you know the. Bluetooth for car something like that something that jumped out of me is completely wacky there's a ton of new smart Health Tech and particularly a ton of sleep Tech in some of that seems. Somewhat silly right so, aromatherapy and video systems you know help you get 4 hours of sleep in a 20-minute power nap for example so there's a lot of that and then one product we thought there was kind of interesting I think you could both be the wackiest product or the biggest commercial hit. Is this the 3D printing for presumably young girls finger nails so you can. Scot: [19:50] Does chocolate last year too in my room. Jason: [19:52] There their they're definitely in some 3D chocolate printer. Scot: [19:55] I thought you're going to say chocolate. Jason: [19:56] For a while yeah but to me that would not be silly at all. Scot: [19:58] You need to light a printer. Jason: [20:05] Well it's. Scot: [20:07] Did you see that Samsung wall around what there's a lot of Buzz around the Samsung. Jason: [20:10] Yeah so every year there's a big competition around what's the newest most amazing television that could be invented and a lot of these two televisions are ones that never get commercial adoption there there. You know concept televisions that they they build very similar to a concept car. And so they keep getting bigger and bigger or thinner and thinner LG at a television that you would like an 88 inch 8K television that you would literally roll up. Scot: [20:38] I saw that it comes in like a little tube and it kind of rolls up so it could be a very small footprint. Jason: [20:42] Exactly and there is this actual practical problem that a lot of people struggle to self install TVs on the wall so there's a lot of TVs that are damaged shortly after their bought when they fall off the wall and these these you know. LG TVs that are now like 6mm thin like they're literally mounted to the wall with tape so that that is kind of cool and interesting the Samsung. Wall TV is just impressive for its high resolution and enormousness they didn't give us a spec for exactly how many inches it is but it's well over 200 in I'm so that was just a. A very cool piece of glass. There you know there are a couple of the new car manufacturers can't afford to go to Detroit Auto Show that they watched new cars from. Companies that don't have a history in the outer space tender launch at CES and so there's this new electric autonomous vehicle called the Bryant which is science. Which you know it may or may not ever see the light of day but the concept car looked very cool and it had a what they call a pillar to pillar. Digital screen so the the entire Dash it a 4-foot wide Ash is all one big big Monitor and if I own this vehicle I would spend most of my time just sitting in the garage gaming because it's so it would be the best green I own. Scot: [22:00] Okay let's what let's bring it back to retail what was the the most interesting Commerce stuff for our kind of give us a tour of who who was talking Commerce. Jason: [22:14] Yeah so it really isn't a retail show I'm a bunch of retail people go to the show because all the manufacturers are building displays to introduce their products to. Two people at the show very similar to have a retail would merchandise the products in the store so out of the merchandising team for retailers go to look and see how LG and Samsung and Sony are presenting their new products, addition of the show Ali Baba had a big boost that a booth last year, they went even bigger this year but what's interesting it really didn't focus on e-commerce or their Marketplace at all it really focused on. Actual Alibaba branded products that Ali Baba's inventing so they have a smart speaker for example and it was really promoting a lot of there. Services many of which will feel very Amazon alike. To westerners so they have a equivalent to AWS into a big part of the booth was committed to their services they have a meeting chat. Telepresence so I can go to meeting or Zoom or a blue jean depending on what region of the country you're in and those. You know they're there demonstrating those things in the booth they did have a baba has an interest that used to own ant Financial which is all the payment stuff. I'm so they had. Ali pay and pay with a smile so that this voice recognition that pay face recognition that pays when you smile that lockers Dropbox Whoppers that you unlock with your face and things like that. Scot: [23:47] I saw you were in a cabin you can actually pay with Ally pay in your. Jason: [23:49] Most of the Las Vegas cabs take Ali pay and you correctly guessed wise cuz there's a huge amount of Chinese tourism in Las Vegas. I lied to you and said I paid with all you pay like you have to have a Chinese bank account to get a wepay account so it turns out to be non-trivial to get one I tried. Scot: [24:05] I figured figured if you don't have Apple pay there's no you have. Jason: [24:08] I do have Apple pay and if anyone doesn't believe me you like send some cash to Jason Goldberg on Apple pay right now and see if it goes through. The battle is the Chinese search engine that's sort of the Chinese equivalent of Google and they had a big boost they had never been there before they also are getting in there. The Consumer Electronics space with some smart speakers and some some other products they have their own device operating system that they're pushing. I'm there was a retail Tech Pavilion at CES but it was. Yeah I think that retail Tech vendors were all getting ready for this weekend in a rest of the the vendors at CES were you know probably not the Marquee. Vendors there's a kind of typical digital signage vendors that we see everywhere like perched that was in the retail Tech Pavilion. And then in the emerging technology section there are a lot of vendors using computer vision for retail applications so a bunch of these Tech guys that don't know retail really well. Are envisioning that every retailer is going to want to face recognition to track every customer and recognize every customer when they go in so that's a super comment. Use case that these Israeli security companies set up set up boosted to pichai unless convinced that retailers want that. But then what what makes perfect sense that there's a lot of is. Companies with expertise in computer vision using that computer vision to create a Amazon go experience for self checkout or for inventory management so they were a bunch of. Companies talking about that one in particular that got some good Buzz is called a ipoly and they they were demonstrating some. [25:47] Some pretty sophisticated use cases of just using cameras of there being Shoppers to the kid very clearly differentiate which product of Chopper and picked up off a shelf. Scot: [25:56] So they were like sad mock-ups of stores with ever showing this technology. Jason: [26:01] Yeah they would claim that we have a complete amazongo equivalent solution and really like. They have sophisticated computer vision technology that identify what the Shoppers doing but you know there's a bunch of other pieces that are required for go I. [26:20] That I'm not sure of the startup companies have invested in solving for a retailer. Scot: [26:26] So while ago it may even last year there's that there's a really big company in China xiaomi that they were going to launch phones here and I think they've got a whole family of gadgets now that seems to disappear were they there. Jason: [26:39] I didn't see them now this CS is not a huge phone show because in February is a huge is the worldwide phone show in Barcelona the Mobile World Congress, you're right there are some Chinese manufacturers that tried to penetrate the US market and maybe the interesting one and I, I never know how to pronounce their name properly is a Chinese company so I'm not going to try on the podcast, is there a big Chinese consumer electronics manufacturer that makes a lot of Premium smartphones in China and they were making a big splash that they were going to, enter the US market and they actually cut a deal with AT&T to sell their phones, in all the AT&T stores until right before CES that was the big announcement and they had a huge booth at CES well. The US government claims that there you know owned by the Chinese government and that their technology isn't secure, and that apparently they the government rattle their saber enough to AT&T backed out on this. The steel in Ogden not to sell this Chinese Hardware. You know if you if you go super nefarious that the Chinese government could somehow have access to these these camera phones and speakers and all these. A consumer stands in the US. Scot: [27:59] Alright last CS topic anything exciting on the in the world of drones and then they are VR. Jason: [28:06] So there is a ton of drones I would say it was a slow year and evolution DJI really dominates the consumer drone space they wants one last year around Siesta became super popular the mavic pro, they've since launched a smaller one in so what you mostly sides he has his everyone else knocking off the. The mavic pro this year so there was a lot of that what was new at CES this year was it was definitely the first year when the robots were very ubiquitous there robots in. All the big boots and then he really range the Spectrum from some that are like practical and have achieved some consumer 6s like like tomorrow vacuum cleaner. Rumah type stuff to some very absurd robot so there are a lot of LG was showing shopping robots that. Drive to shopping cart to follow you around the store so you don't have to push the cart there a bunch of robots that drag your suitcase through the airport for you so you don't have to do that it was like a $35,000 robot that folds your clothes when they come out of the. Scot: [29:06] Oh I saw that was exciting. Jason: [29:08] So maybe that is an application in a retailer folding clothes at the Gap or something like that but I'm not sure a lot of consumers are just like folding up to. Scot: [29:17] To draw a crowd to come see the the folding robot I saw a CS but a Boeing a released a prototype type of a drone that can carry 500 lb. I'm it was interesting it's not a military application I think they've taken the military stuff in Skillet down but the article suitably talked about it being an interesting way you could like load balance between fulfillment centers with that kind of weight load that's kind of interesting you know. Here's a corner of stuff I don't need in Ohio have the Drone carry it to I don't know how far this thing can go but to to another fulfillment center. Jason: [29:49] They're definitely scaling up the Drone technology so they were at least two passenger drones are three passenger jet drones at the at the show so these are like autonomous vehicles that take, passengers in that notion is that that could be a sky taxi in some cases there's an all electric one that Intel is partnering in we were kind of joking about. Yeah probably not perfect timing to have. Autonomous drone with no pilot in it that carries passenger that's being powered by this Intel chip the now is vulnerable to the Meltdown, I'm back I'm not sure I'd want to be directly under that that that drone but they definitely had some big capacities I think even the Bell the big helicopter manufacturer was there with. With some ground so definitely possible and then a lot of the robots are good at moving that stuff around in the last mile to so Hyundai had a bunch of industrial robots obviously the Kiva is. A robot that than Amazon now owns and you joked about the military uses but I will say just superficially a bunch of these drones did look like they. We're just disarmed right before. Scot: [30:56] Yeah it kind of freaks me out the speaking of Black Mirror episode recommend for listeners. All the episodes are independent so you can just like skip around watch the one called heavy metal that when they gave me some good night nurses pretty, okay that's a cool thanks for that CS review that's awesome let's do it quick in RF preview so, I think the thing we're really excited about it is there's a Apple event that we got invited to and that's me tomorrow and. It's we don't know anything about it we just know your typical Apple format limitation has we have something that says we have something in store for you there's a picture of a bag, so seems like apple is doing something around retail technology what you have any speculation what's going on. Jason: [31:43] Yeah I don't have any real insight I am in the dark as much as you it it definitely seems like apple is poised to launch some retail product or service. They never have a booth at CES they want to see us this year but they have a big meeting space it's heavily apple-branded at interrupt this year which I found interesting and so you can buy in that with, ass getting invited to this secret event that they they wouldn't tell us the nature of. I might like the most likely thing is that they're watching some new thing in the payments ecosystem so maybe like the next version of Apple pay or a POS or a you know everything the Apple OS 4. You know commercial retail tack like you know tablet enable meant that kind of stuff. Scot: [32:31] A lot of retailers use the tablet as a retailing thing so maybe it's just more around that or maybe it's just a set of back that's practices doesn't feel like they would do an event and a meeting room for just like hey here's how people are using our technology seems like there must be more. Jason: [32:44] No eyes I think they're going to want something that's apple-branded that that is targeted at the retail industry so I could be super fun we don't don't that many surprises from Apple these days. Scot: [32:54] I know it's over here and if it's if it's Earth shattering we will put out a quick podcast just to kind of lay down our thoughts after we see whatever the amazing thing is I just hope Tim Cook there I've been dying for attempt. I need a good Tim Cook an emoji selfie and be good to do unicorn or I don't know. Jason: [33:15] You said one of the products I bought at CES this year is a 360 camera and so I feel like. Scot: [33:22] 360 song. Jason: [33:23] 360 selfie. Scot: [33:24] Nice. Nothing that we're excited about is we have Casey from Deloitte on the show so we will be putting out. I left some new research that we're going to be talking to Casey for the first time here on the show we have our digital council meeting so that's good. I saw they have a speaker I did not read the details did you. Jason: [33:47] Yeah I think it is a friend of yours we from Alibaba. Scot: [33:51] Oh yeah I do remember now awesome so we'll get to hear all about singles day so that'll be good and how much better it is then Cyber Monday let's see anything else around interested we want to talk about. Jason: [34:04] So there are a number of, interesting private events that are great networking opportunities and you know hopefully we'll we'll get some people inebriated and get them to inappropriately share with us on the podcast for those of you that don't know Scott and I super well, we are not the guys that get invited to all the private, parties in our in our youth so this is this this weird once-in-a-lifetime opportunity where we get the invites to the the cool parties. Scot: [34:33] Yeah yeah the Geeks shall inherit the earth. Well we have so that's it on shows let's bang out a little bit of Commerce retail news from this last week so it wouldn't be a Jason Scott showed without. [34:58] Not a ton of Amazon news this week despite the lightest Amazon news for a while. And I'm ending this cuz the company is in a quiet. So I will your public company there's this kind of. Of time where you know how your results were and you can't really say much about them and, I'm excited cuz they did announce when they are going to release. The fourth quarter earnings and that will be on February 1st so we will do a special version of the show where we will cover those will cover will put it down the night of the first and then we'll hopefully get it out on the 2nd if her audio team can, jump on that we've been talking a while about all the rumors around Amazon going into the drug business drug stores, I am now there's a loud drum beat about beauty so I don't know exactly what is King it run off of that but, you know it's pretty clear in the retail World Alton's for doing really well so I think Amazon is kind of turning their guns that way so it'll be interesting to see how that's going. And when I've been dying to ask you about Jason is Kohl's there is this kind of news item that Kohl's is really wanting to work closely with grocers that didn't make a lot of sense to me cuz I'm thinking all right, blue jeans and broccoli what's what's the connection film. Jason: [36:15] That one of you eat a lot of broccoli you can buy small are better-looking bridging. Scot: [36:19] Duncan's are in celery when you tell her you you actually. Jason: [36:22] Net positive or negative calorie intake I guess I think that's not true and. Scot: [36:29] Dang it. Jason: [36:31] Yeah sorry to be the one to. Scot: [36:32] All that celery. Jason: [36:33] Exactly so I think what's Happening Here. Is no retailers have a particular footprint and they buy all the real estate around that footprint so you know what Kohl's store I don't know the exact size but I think they're probably like 60 or 70 thousand square foot store. The something in that range and you don't that's based on a certain merchandising assortment in that's in that store, so overtime categories that you were storkland carry become less successful and you move out of categories or you add new categories and there are times when retailers find that they have more square footage than they can. Profitably manage and so a common play particularly when you're not performing as well as you'd like is how can I downsize by handing some of the the rent responsibility to us too. Subway Surf right so, that the example as you like uses Best Buy like you know they used to sell CDs and video games and music and then of the store that's that's all digital delivered but they can't just shrink their leases in their store, I'm so that they rent space to a lot of their manufacturers Samsung Microsoft. I'm we'll all have shopping shops and so I think Kohl's is in a situation where they had excess base for what they think is their Optimum inventory and so you go looking and say. Who can I profitably Reese this pace to and ideally it should be someone that's going to bring extra traffic to my store that might buy stuff. So in the old days that was always the coffee shop you went looking into to add a Starbucks. [38:09] Because of Cole's real estate proximity there in strip malls that could be convenient places to grocery shop and so it sounds like they've just come up with this notion that. Man is if there is someone only wants to expand in our footprint Subway some of our space people shopping grocery much more frequent so it could be a great traffic driver to the stores and they could benefit from that so well. To see if that idea plays out and if they're able to get some some folks to take them up on that but I think that's what's going on. Scot: [38:40] Yeah and that was Ron Johnson's vision of retail right it would be this kind of we had Omar Asad the analyst on and I forget what he called it but it's kind of like you know a bizarre. Jason: [38:51] Yeah we often called a retail bizarre and it's actually the common, merchandising way in a lot of places in the world sew-in in the USA department store owns all the space and they decide what brands are in it and they they merchandise the brands in Europe most of the department stores are. Simply landlords that rent individual shelves in the store to individual brands. Scot: [39:13] Boots. Jason: [39:16] Just another other news that there's a e-commerce your player that focuses on the club. Experiences in those large format box that we've had on the show. The there are rumors that they are a potential acquisition Target and I think a Consortium of grocery stores was mentioned as a potential buyer like Kroger. Scot: [39:39] Yeah the number that stuck out to me was 500 million so fingers crossed for a friend's at box on that one. Jason: [39:44] And that is that that's close to their last round right so that would mean the the early folks will do really well and the the last investors probably won't do so well that if that ends up being the number and it happens. Scot: [39:57] Sometimes it works tops for that cuz the last investors get these really nice preference tax. Jason: [40:03] Gotcha cool see you that's why I have you here to make sure that my. My Angel Investing is fruitful one near and dear to my heart Circuit City is relaunching. So folks some of you young ones on the shelf that is that was a specialty retailer that that kind of grew up and competed with Best Buy they went bankrupt, a number of years ago I want to say formally like 2008, the the brand changed hands in bankruptcy court a few times so they're actually was this company in Florida TigerDirect that bought the the brand and they launched relaunch the Circuit City website for a few years. Scot: [40:49] And at CompUSA. Jason: [40:50] Yeah they wait about CompUSA they. If I'm remembering there's some drama there too I think they're there was some like weird finances and the owner and some. There could be some some interesting backstory their bets of the brand changed hands again and you know frankly when I heard that someone bought the the brand out of bankruptcy unlike someone else's like. Trying to Leverage The Nostalgia and they're going to watch another. Another you know reskinned website and it's actually more than that like that they have a new ownership that there intending to open retail stores. And so this would both be a website and some number of new stores it's it's interesting cuz I'm not sure you would look at the Consumer Electronics base and say what we really need in consumer electronics is. Is more stores and another brand to buy that place but you know we'll have to see what their unique value proposition is they bring to the table. Scot: [41:47] That one you talked about called. Yeah yeah, some Vision like a cool like a smaller footprint showroom thing cuz I use gadgets you want to touch him and feel him and you know her shoes for four people to care about shoes. Best Buy refills at 4 meal at times I'll go look at stuff and then order it on to another retailer. Jason: [42:14] And I I would say you like one of the weather problems with all the trees retail consolidation there used to be this phone to see you could be a geek, and walk into the store and you discover something new every single time you walked in that store that you didn't know exist that you wanted and one of the things that all the digital transparency is created and like all the consolidation of the stores is created you know really, you working on Apple Store and you never see something. You didn't know was available before you walked in the store and you know how I feel like that's going to happen to be the case it at even Best Buy now is well and so it would be interesting to see if there. You know that they're going to provide that sort of fun jolt of discovery. Scot: [42:53] Yeah kind of on the opposite side of the spectrum my wife was shocked she showed me this the other day, she likes this designer named Ella moss and they have some kind of annual sale and she went to the website to check out the annual sale, and announced they're closing their website and it said say goodbye to lmr.com but say hello to us in our stores and they just pointing people to Nordstrom in a variety of other stores where their items are found so I thought that was. Certainly opposite trend of what we've seen out there but they must have. Musta Had A Good Reason baby was too expensive to run the website maybe maybe they get pressure from their Channel partners that kind of said we don't like you offering this track. I don't know what it is just have a really interesting use kids haven't seen. Happen. Jason: [43:38] It's bugging the trend I suspect there is some serious distressed underlines for that but I applaud them putting Silver Lining trying to put it out there favorably. Scot: [43:51] Last topic one hit on we're about 14 days into January so we have about half of the Retailer's the brick and mortar guys, I report monthly same for sale so we're getting up kind of a, early read on holiday and then once we have that Amazon report in early February and then kind of by mid February we should have a pretty good read on how how they came in but did you notice any of the or some interesting holiday things you saw that have come out so far. Jason: [44:18] That's what's interesting like obviously overall it was a very good holiday like probably the best one since, 2010 2011 the most most, retailers like you know either announced that they performed at that sort of average growth or even outperform the industry and there are a few outliers that we saw. Be significantly down and so you know it's about a rising tide raises all boats when you're the boat that sinking in that Rising tide, that's a particularly you know owner assign so we seventies Sears did not benefit from the, renewed spending they were down significantly I think like 16% and I think it announced another round of store closures I mentioned on the I did mention but in the store predictions bet, certainly feels like a year of major retailer. Go away and I think Sears would be unfortunately a good candidate for that. Scot: [45:15] Yeah when it's surprise out of folks this is kind of one of those bury the lede so Walmart had a positive news that they are, because of the the tax act that was passed the raising the minimum wage for employees to $11 an hour I think it was and several other people did this there was only one that's on retail the same time that kind of tucked in they are the closing $0.60 stores, I'm really bummed because the Sam's near my office where we actually got our office enough snacks and stuff is going to close so that's going to be inconvenient and then. I saw a Wall Street analyst kind of did this analysis and the 60 Sam's stores that are closing they are some number of miles from a Costco store so ones are keeping open don't seem to have much competition but the ones, they're closing you know the list the target clickbait title of this was like Costco's crushing Sam's so they went to an analysis so I thought that was. Pretty interesting that you know Walmart's not used to losing so if they are losing to Costco that that's pretty fascinating. Jason: [46:21] Yeah for sure and it I mean. I think Sam's Club stores can do very well but but Costco is almost a unicorn in their retail performance I mean Walmart the largest retailer in the US they have like over 4,000 stores in the US, Costco to the second largest retailer in the US they have like 200 stores. Did that yesterday they really have that model down like and I'm not sure that the average Costco I mean it has ever underperform the average Sam's Club store which doesn't mean Sam's doesn't do well but. But your point like they're probably not doing well in the the head-to-head battles. Scot: [46:59] I don't know enough about the cause for maybe we can have a an analyst on. Kind of Enlighten us on that cuz I wonder how cuz there's BJ's as well right. I think I've seen the same for sales for BJ's are doing pretty well so. I believe in this report said Sam's same-store sales are doing well but it must be kind of A Tale of Two Cities the ones that could be with Costco or doing poorly in the ones that aren't are doing well for them to close these it would close them if they're doing awesome. Jason: [47:23] Yeah but I do think it's part of this way speaker thing we're over stored in the u.s. populations are moving so you open the store. And you know it to cater to a Suburban population and then those folks move in the suburbs back to the city centers and where your store should be should be different so it's it, clothing stores is not on is often a sign of a healthy retailer and I think Walmart's the perfect example like, diprimas clicking on all cylinders checking all the boxes and so it's you know it's it's unpleasant for those employees but it's probably a good time for investors to see someone having a good financial performance and still. Being willing Nicole that hurt and kind of move away from some of the most profitable pieces of the Enterprise, I think another one that. We it was interesting that she was Target in one of the stats we saw their this is been progressively bigger stat. We seen every year but Target is not saying it's 70% of all their online orders are being the film in some way from the store so we talked about this for a long time it's when the best ways are brick-and-mortar retailers can compete with Amazon is, you should from that store you get to ship USPS and get it there in one day for much cheaper rate than you pay UPS or FedEx from. Scot: [48:39] Yeah I think target actually exceeded expectations and raised so that's good at the stocks been doing well. I'm in that same vein we mentioned earlier around that grocery store topic but Kohl's they came out with 7% same-store sales for holiday and is reminder to listeners we had Kevin Manziel on the show year ago now is it wasn't so it must be. Jason: [48:59] What was the shop talk. Scot: [49:00] Shop talk so about 8 months ago and he was talking about their strategy and it looks like it played out pretty well and he's announced his resigning and handing over the reins to a new CEO and. She will start I think in July August time frame so always good to have a really nice hand over there when things are going well. Jason: [49:19] Absolutely I think another one that sort of was not rising in a, in a rising tide is unfortunately Macy so I think they were down in the like two and a half percent and they've announced another big round of store closures so I think they're closing like another hundred stores. Scot: [49:38] In the last one I saw it is Lululemon they were up 13% this interesting cuz everyone is is gunning for these guys to everyone has come out with their own athleisure line, babe copied everything Lululemon's doing and they cannot seem to slow these guys down there they're so. The brand has an affinity with folks especially Millennial females they have that experience with yoga classes in the store and none of the other athletes are guys are really able to keep up with them, and I think this is I'm not an expert on Nike and Under Armour but they're both under pressure, things that Turtle Dave Dave kind of gone all in on some of this athleisure stuff specifically around yoga thinking they could take okasa market share from Lululemon but Lululemon's hanging in there. Interesting example of a david-and-goliath where where David is winning. Jason: [50:30] Exactly and in some ways maybe starting to look more like glass. Yeah so it's going to be an interesting one to watch people have been kind of predicting the end of this athleisure trend for a long time. Never seems to come so it'll be interesting to see whether. Whether you know it is a cycle that gets broken and and is athleisure Trend ever doesn't it'll be super interesting and see if Lululemon can leverage all that. Great customer intimacy they have to pick up on the next train or whether they're there at least you're only, it's got one of my New Year's resolution was to do a little shorter shows and so it is happen again we've used up all our a lot of time we certainly are grateful for her listeners taking the time to listen to the show, if you enjoyed it we really appreciate a 5-star review on iTunes I mention that we're going to be visiting Apple this weekend they could they could be very angry with us so we need to get lots of review so they, saying they're good racist and if you want to have any conversation about any of the topics on today shows we'd love to hear from you on Facebook. Scot: [51:35] Yep thanks I wanted to join us. Jason: [51:37] Until next time happy commercing.

EP111- End of year news. Holiday Recap E-Commerce up approx 18%, total retail up 4.8% UPS Woes Amazon News Amazon Holiday Recap Amazon wins 50% of holiday sales !?!? WPP, Publcis, Omnicom  spend $800M on Amazon ads Other News Home Depot may buy XPO (large item logistics firm) Stitchfix first quarter post-IPO Michelle Gass takes over helm at Kolhs. (Episode 77 of the podcast featured outgoing CEO Kevin Mansell) Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 111 of the Jason & Scot show was recorded on Friday, December 29th 2017.  Last show of 2017, happy new year everyone!  Tune in next week for our much anticipated annual predictions episode. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing New beta feature – Google Automated Transcription of the show Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 111 being recorded on Friday December 29th 2017 I’m your host Jason retailgeek Goldberg and as usual I’m here with your hoes Scot Wingo. Scot: [0:39] Hey Jason and welcome back Jason Scott shirtless after a long Jason Scott holiday decided to have you back. [0:52] Yeah yeah we had to kind of this perfect storm where you had a bunch of travel ahead travel that offset from your travel and it has been 30 days since we laid down a Jason Scott show. [1:06] Yes the first of all the most important question have you seen Star Wars yet. Jason: [1:09] I have I have made good use of our time off and I feel I got caught up on all the media that you’ve been frustrated that you haven’t been able to talk to me about so I got to see the Star Wars probably a week after you but. Totally enjoyed it and I’ll see what I can do any spoilers but I feel like I was I was pleased and enjoyed it. Scot: [1:32] Yep yeah I loved it there there’s a pretty good second a fan of that hates it though so it’s been I know Chris. Over at he was previously at Puma now at Izod is very upset about Star Wars we have to get him on the shoulder after more people have seen it took to hear his thoughts on it. Jason: [1:50] Yeah although we might have to reserve that for the e-commerce Star Wars fan spin off podcast. Scot: [1:56] Yeah yeah. Jason: [1:58] Slightly more nutrients. Scot: [2:01] But for hours. Jason: [2:03] But I feel like this is useful information only to you and not to any of our listeners that I have done some hard work in this month I’ve totally caught up on mr. robot and I was like over a season behind you on that. And I feel like I’m almost completely caught up on all the The Avengers Netflix series so I’m I’m excited. Chat in the in our pre-show prep sometime. Scot: [2:28] The content is really coming out rapidly though so have you seen you got to watch Discovery so Star Trek Discovery is good and then the new Will Smith movie on Netflix is really good I think you’d like it. Jason: [2:38] Not so I am cut up on Discovery and I agree I’ve been telling joining it other than the irritation of having to subscribe to. [2:47] The yet another service for one show that’s the CBS Show Network. [2:54] So I’m also watching the good fight just because we used to watch The Good Wife and we weren’t interested in striving just to watch the spin-off series but since we bought it for Star Wars we’ve been watching that as well. Yeah lots of lots of good content and it is sort of merging with the Commerce world as many of our our friends than that, space it become the major content Publishers in the New World. Scot: [3:17] Yeah I guess pretty wild. So weed since it’s been a month since we had a show we have a lot to cover and let’s jump into it so first we’re going to do some trip reports and then we’ll cover some news, and the Scooby the last show 2017 so, in next week’s episode what should be the first show of 2018 we that would be our annual prediction show where will review those predictions we made was it Jason episode 64 I think. [3:45] Summer back then we made some bold predictions and we’re going to ask ourselves on those and then lay down our 2018 bold predictions for what’s going to happen in all things Commerce, so that why don’t you could have told me you tell me about some of the nursing retail you saw as you were traveling around in December. Jason: [4:04] Yeah so I did do a bunch of trips in December I think ironically you may have gone to visit more new stores then I had but I did. Mention and I hope a lot of people see it now I would I got to visit one of the very first Amazon pop ups in Whole Foods so there’s now a bunch of Whole Food stores that have these dedicated Amazon pop ups and they. Have all the the Amazon branded gadgets and a few third-party Gadgets in the store so my local Whole Foods has one. Nothing super surprising their inventory is really good though so like they had the the security cameras when they first came out I was able to get some of the. The echo buttons for my Ferrari Alexis here at the house so we can play Jeopardy and do that sort of stuff. And you course heard heard my device in the background responding to to our podcast cuz I forgot to hit mute. [5:08] What interesting thing about the Amazon pop-up store it was interesting to me the point-of-sale that they’re running in the pop-up store is clover which is a super popular. Small-business POS system I find it humorous because. If you go into an actual Amazon bookstore it’s kind of painted check out because they make you use the Amazon app and they don’t accept cash. And so somewhat ironic that these Amazon owned pop-ups inside of Whole Foods which is owned by Amazon. Take credit cards through the clover but won’t let you pay with your Amazon account. [5:44] So very very different retail philosophy than the Apple the Amazon book stores where they don’t show prices and. Make use the Amazon app and all that sort of stuff but I have a feeling that has more to do with a expedience than any particular strategy. Scot: [6:01] Yeah I’m sure someone in the bowels of Amazon is working on it PLS for a Kindle what kind of a tablet I’m sure that’s in the works. Jason: [6:09] Yeah absolutely. I also got to visit the Google pop-up store so this is an annual pop-up they do in New York it was in. Tribeca last year and I think it’s in the Flatiron District which is just a little further north. [6:25] This year and I would say was a little disappointing last year it was a net new retail concept that used it to give live demos of all the new Amazon Google Hardware. And you know last year the home had just launched that is your first can see that the pixel it just launched they were showing the first VR headset since there’s a lot of like. New hardware and it was kind of a cool experience in retail environment in this year. Everything’s very incremental like it’s it’s basically the same retail environment as last year but with the newer Hardware in it and. You know Google doesn’t have a lot of net new hardware this year it’s mostly. Evolutions of the hardware they showed last year so you know Google home is better than a couple permeations now that the pixel 2 which is course better to have more apps on the Google VR but like there really wasn’t any. [7:16] Marquee thing to see your experience in the the store this year that you would have done last year so I guess. [7:26] If you looked at it on its own it was probably a good showroom by the way you can’t buy anything that’s inside of their showroom but if you compared it to last year it was it was pretty darn incremental. And then I did last month have a trip to Amsterdam. There’s not a ton of super interesting retail that would be relevant to this audience. But one of the Novelties they have a very large Apple Store it was one of the European Flagship stores. It’s now about 5 years old but it still has the distinction of being the the world’s largest Genius bar so it has this huge Genius Bar and the only reason I bring it up is its. It’s kind of shocking to walk in the store to huge two-story store in addition to the Super One Genius Bar. They have tons of project tables for various services that they provide and it’s it’s really a stark contrast to the fact that like. [8:26] 75% of the of the floor space of this Apple Store is really dedicated to Services verses. [8:34] Selling Apple retail products and I do feel this is a large evolution of the Apple stores that you know they have. They’ve done produced that their party products that they carry you know they’re there more focus on Apple products than ever before but that the real role of the store has shifted from. Introducing Apple products and selling Apple product to providing service for Apple products. Scot: [9:01] Yara are local Apple Store upgraded to that new kind of what are they call it Town Hall. [9:07] Jars the growth and yeah I was surprised the number of skews they carry went way down on the third-party side like the whole speaker display went away in a bunch of that stuff and it is very much more of a service kind of an orientation which is which is very interesting. Jason: [9:21] Yeah and of course is Apple’s bottom or third-party unit products and made them first party products it makes it less appealing for them to carry the competitors. Products of that that’s the only part of it but it it you know there is it gyro when you would have gone, anytime you went by the Apple Store you pop in because you be likely to see something new if it wasn’t a new Apple product it would be some new accessories and you know now like, you know if you’re very techy it’s not very likely you’re going to walk into an Apple store and and you know. Have the excitement of discovering something new thing you haven’t heard of. Scot: [9:55] Yeah, cool so I was in New York for a personal trip and we went up to see the tree in a couple shows and whatnot and hit a lot of retail and as we were kind of wandering around the city I had a list of things to check off for SUP was the Amazon store down by Empire State Building I had not been in that one yet so I wanted to see that and were the first people I see there is Jason Del Rey one of our friends the Jason Scott shows that was kind of a, funny coincidence in the city of what is an 8 to 10 million people I run into Jason at the Amazon store. Jason: [10:27] No way was he working there is that his night job or was he. Scot: [10:30] No he was actually he in a fellow colleague had actually done at or behind that store is the prime now hub for I guess South Manhattan and they have done a tour of that as kind of precedent and your this was. December 19th or 20th now that’s. Yeah yeah somewhere in there so it’s going to peak season I guess they did got a tour during peak season is of President and he was exiting through the store just kind of have a look and ran into. Jason: [11:00] Yeah and I knew that wasn’t his side hustle I just want to make fun of them. Scot: [11:06] And then. The it’s been about 18 months since I’ve been an Amazon store and I felt like the adenta lot of cool new stuff about having to act better integrated and the checkout was you could chuck check out anywhere which is kind of neat you didn’t have to go to check out a lot of cool things they’ve done there. Jason: [11:22] Yep and is there a coffee shop in that one that’s a little bit on the smaller side right ok Google. Scot: [11:26] It has a coffee shop yeah yeah I couldn’t tell we didn’t have time to stop by I could tell if they actually operate or if it’s a third-party it wasn’t Brandon Starbucks or any other brand or anything so it’s kind of Nursing. Jason: [11:39] And that is, that’s on 34th Street in New York which is one of the more stories retail streets in the world that’s the largest Macy’s and a ton of retail flagships open up on that store so it’s pretty important retail real estate. Scot: [11:56] Yeah that’s what yeah we literally walk from there to Macy’s in like dinner a box or something wasn’t bad at all. That was cool and it’s good to see Jason and then I stopped a lot of brand stores know we talk a lot on the the show about digitally native vertical Brands opening the store so I wanted to see some of them went to everlane which was in her everything’s kind of, unisex Basics and the store was jam-packed that was does interesting he can actually buy stuff out of that stores there’s a lot going on there. My favorite when I stumbled on it hadn’t planned to go is I read a lot about these sneakers called All Birds and, there’s always described his slippers plus sneakers equals all birds and look at this really kind of wool soft kind of thing in the upper and then have a soft Rubber Sole. I answered went there try those on those really fast and because that place was humming I mean it was like. 6 people deep try on shoes or when was walking out with boxes so you could tell there was a lot of energy around that store. The most crowded one is a Skate brand called Supreme I’ve never had all these articles about this place where people wait overnight and. Part of the whole thing is they only let like 15 people in this world of time cuz it’s really small so so went there sure enough there was a line literally around a New York City Block and it’s kind of funny the line breaks because. Passes of all these other stores they get angry when that line go so you see the light you know she’s breaks in the line so. People that don’t know how the line works all these International people trying to get in line they’ll just kind of hop in the line. [13:26] They have all these bouncers to the line and they’re very Surly in this part of the whole experience for there, like you know this is not the end of the line go over here that’s in the line of their kind of mean to you so it’s funny to watch that. Repeating the Supreme store and it’s literally like 60 skews in there and people were buying as much as they can get their hands on it also read that it’s. Demand-supply so tightly most people that shop in there take all that stuff and sell it on eBay and Amazon so it’s really kind of a become a. [13:54] People just got to camp out and get the stuff and sell it online to firstfield with looks so that was interesting. [14:01] Yep then if you’re in the retail world you getting your gift run by story so I went by there they were quite busy and then there’s a couple new down in SoHo Adidas and Nike have some cool new stuff so I got to experience that. All very good and then the one that was kind of thing is a e American Eagle I guess it is they have the say eStudio where is this whole concept that’s in Union Square. Say it’s a denim shop in a laundromat and it’s kind of funny the laundromat was really more of a prop like no one was there using it, looks like there are six machines that it almost never been choose there like these giant dustrial stainless steel machines this is I read several articles this is going to be kind of, how to get Millennials back into the store with this this. [14:47] Going to come get your laundry they’re going to shop while they do it the Millennials I was with can I give it a thumbs down they didn’t like that store the other things that you would have appreciated is every. Every pair of denim had a tablet there they were too high and iPads. But they were just sitting there plant looping a video there is no kind of integration with reviews and it’s got to start having been to the Amazon store where they pull everything from online into the store and then this one which is just like this. Kind of looping video and spend all this money on these tablets for they were interactive at all I thought was kind of a big mess for those guys so good to experience a lot of retail on my truck which was fun. Jason: [15:23] Yeah it’s perfect that you were you got a chance to do that I was you went pretty fast. Is the everlane store did you see anything digital in that store because unlike a lot of those other brands everlane really is the one that like, started off as a digital Brandon and added retail and of course online they’re really well known for having Rich product information on there, on their website and are super transparent like they showed up building materials for all the the products you know the real pricing for everything today have any of that in the store. Scot: [15:56] Not that I saw it felt like. [15:59] It felt like a small Gap you know kind of the same kind of just Basics or like yours a sweater in four colors here is pants and five colors on a table there weren’t any I didn’t see any digital displays or any of that kind of stuff in the store. Jason: [16:13] Yeah that was my impression from earlier as well so it it’s interesting and disappointing a little bit that even when it’s an important part of your brand online that that. A lot of these guys that are opening it just a few stores aren’t figuring out how to carry that through to their physical presence as well. Scot: [16:30] Yeah yeah, you need to walk over to the Amazon store and see how it’s done. Jason: [16:35] Exactly although Apple Amazon probably has some room to improve there too so hopefully next year will be talking about some of them cooler retailers that that are getting it right maybe that that should be a prediction for next year. Scot: [16:49] Yep yep you can always aren’t you so that’s the truth before it’s let’s start it, mac review of news how do you. How do you feel the the holiday it’s too early to call it but we we should have a pretty good read here since we’re doing this after Christmas how do you think holiday went for 2017. Jason: [17:09] Yeah I am pleasantly surprised I’ll even go so far as to say that my slightly pessimistic Outlook going into holiday. It has not proven to be the case so you know there were lots of Rosy predictions going in the holiday ever are almost every year by the way. And I had mentioned on the earlier show that often times when you have a better than average year in sales it’s because you got. Super Promotional and you know very marginal rosian so you. You see all these great articles in December about have a good holiday sales were and then you’d see all these badass quarterly reports in January from all these companies that talked about how they didn’t make any money. And so that still could happen but the. Early indications are that we had pretty rough but better than usual growth in e-commerce we definitely had better than usual growth in brick-and-mortar Commerce and that it wasn’t. A hyper promotional holiday where where you know we just got there by by dramatically cutting costs and starting some crazy. Arms race so so that all looks pretty encourage. Scot: [18:22] Yeah yeah I’m seeing the same things I’m really interested in hearing how Amazon did so I’m on pins and needles until their fourth quarter of you because. If if e-commerce accelerated kind of the 18 maybe 20% level and I think we could see a. Amazon 30% Q4 which day did Jeremy slow down in the 4th quarter state. Because it’s just such a big order for them it’s it’s hard comp to do well on so if they did High twenties R30 that that just means he just soaked up an amazing amount of of share so I’m curious to see what they were. Jason: [18:58] And that I mean we’ve already seen some predictions I think there’s a Barron’s article that that. Said they like 50% of all holiday sale sales work was Amazon so that that would certainly boutwell of that proves to be true. You know what one of the data sources we follow pretty close to use the MasterCard data and they’re they’re calling it a 18% growth in December for e-commerce and 4.8% for retail which is. A big jump that would be the biggest growth since 2011 for a brick-and-mortar retail so that super exciting and then one cautionary Tale. Maybe with a slight astrix there’s a couple firms that track. UPS and FedEx on time shipping and it does appear that we ran into some capacity problems particularly with UPS. So they’re reporting that UPS had a 89% on-time shipping over cyber 5 that’s obviously like. You know one of the the biggest Peaks. UPS is of course trying to be ready for that Peak but you know 89% on time is is pretty low that’s that’s what is lower than historic. And then even in the first week in December they were 91% on time and that you know computers pretty unfavorably was like last year where they were at 97%. On time for that same week FedEx which is used a lot less in the overall scheme of things for e-commerce is it like 99% on time. [20:33] But these numbers are accurate which UPS dispute you might imagine the. [20:42] It is a signal you know that that’s totally in line with this trend we’ve been talking about about these carriers just aren’t growing as fast as e-commerce and so we were perpetually having a bigger capacity problem every year. For these Peaks and so you know UPS grew about. 8% capacity this year but we just said that the e-commerce might have been around 18 or 20% and that the result is that they’re having to put all kinds of extra strength and construction zone retailers about, what does ship Win 4 for retailers in it you know you could predict project this trend out a couple years and it certainly seems that whatever retailer Zone, their own last-mile capacity. There’s only one are going to have a pretty big advantage over over the the rest of the industry as, you know the industry continues to grow faster than then the UPS can can fulfill. Scot: [21:43] Yeah yeah the good news though is we didn’t have a debacle like was a 2015 and a 2015 is that one year we’re like 3 million packages gutensohn the system and it couldn’t keep up so. Jason: [21:55] And a lot of it just miss Christmas shipment which is the course the worst. Scot: [21:58] Yeah yes a lot of stress on the system but it did kind of held up it looks like you know what kind of mentioned Amazon in there but let’s make it official it wouldn’t be a Jason Scott show without talking about. [22:27] So first let’s talk about Amazon does it come in manual pressure release the week after Christmas and I will put a link to it in the show notes but. This is about me massive it’s like. Literally 120 bullets of of highlights I pulled out a couple that I thought listeners would find interesting the most specific one is they actually said 4 million people. Child Prime during the holidays which decimal specific number they’ve ever used about Prime, and it’s a big number so you know most people kind of Peg Prime at maybe 60 million, but if you have 4 million people just come in trial for the holiday that’s pretty amazing. [23:13] You know if if if half of those stick that’s like a 5% bump right there and just Prime books they said the top selling item was the Echo. And then. Add Amazon Alexa has been the top. Download in the IOS app store which I’m sure Apple loves to see which is kind of nursing they also said tens of millions of Alexa enabled devices were sold. [23:35] So I guess is range of 10 to 99 million devices what do you use to lower that range 10 in a lot of people have talked about. These things aren’t that saturated there’s not many people using these devices you know that’s that’s it with 300 million consumers 10 million is. Pretty much cereal I think that’s probably Global number too so interesting to see they’re pushing a lot of Alexa enabled devices out there. There’s some tidbits around the marketplace they said a billion items were sold over the holiday season didn’t know Define the holiday season I’m going to guess they probably call it November one forward and I think they’re talking about. [24:14] Thanksgiving for it at cuz they take a coffee run promotions earlier, three-way abdulian items were sold in the Dover the Cyber 5 which is Thanksgiving the Cyber Monday they said third-party sold 140 million items on the Fulfillment side they highlighted the 10 performance centers had a million item days, that’s a lot of items shipping out of the film It Center in this is kind of an interesting kind of flexing of their data science muscles I thought, I thought you would appreciate they said these Coast has more holiday spirit than the West Coast because Alexa was asked play holiday music 2 and 1/2 times as frequently on the East Coast vs West Coast, I really weird tidbit for them to pull out and it just kind of showed you know how these trends that are able to see through all the devices and machine learning capability that they have. Jason: [25:03] Yeah it’s it’s almost scary to think about like some of the insights they can get in human behavior was from all of that data. Scot: [25:11] Yeah they said like the most requested recipe was chocolate chip cookies the most requested song was Jingle Bells today I got a couple interesting things there. When Amazon article I wanted to ask you about it said that these ad agencies and image of wpp Omnicom and pupusas. Did they are spending 800 million in 2018 for ads on Amazon which is a 40 to 50% increase year-over-year I thought that was. Interesting that the ad agencies are really waking up to Amazon as a an advertising video but then also I’m curious like we’re who’s losing the, you know the the 400 million or whatever that Delta is in there is a coming from TVs coming from Google what what do you think about that. Jason: [26:04] Yeah it is super interesting that I mean Amazon is a great advertising platform for a variety of reasons and so I think we’re going to. Continue to see them get more relevant at the moment you know what these are, wildly rough estimates of third parties so I can’t get into talking exactly about what what pupusas suspend is with Amazon for example. Directionally what I think you’re seeing at the moment is a ton of spending, from brands on Amazon but it’s pending it’s coming out of the Brand’s trade budgets versus their marketing budget so when you you think about a. A Big Brand a cpg like Procter & Gamble or an apparel brand or whatever like they’re likely is a CMO that has a marketing budget to build brand Affinity in his his KP eyes are things like unassisted brand recall. He’s the one buying the Super Bowl ads and those guys I don’t think are spending a big trance are not shifting a lot of spin to Amazon yet. But in addition to those guys there’s the sales person that owns. All the sales that happened with Walmart or Target or Costco and those guys that have a budget, to buy ads or promotional opportunities with those retailers to help sell products for that particular retail so traditionally. [27:35] That could be coupons that they they co-published with that retailer order could be in-store advertising it could be an incap to make the product more visible order or these kinds of things and so now. Amazon has become a major retailer for all these Brands and so it has an account team just like all these other brands, and it has a trade budget just like all those other brands but instead of buying in store point-of-purchase displays or coupons, they’re they’re spending that those dollars with a am at G and and you know most often AMS, on Amazon platform and so if anything that those dollars are really shifting, from other retailers that are getting smaller as Amazon’s getting bigger and the trade budget goes along with the sales, on Amazon so you know that those dollars are probably coming out of Target more than they are coming out of network television advertising at this point. Scot: [28:36] Yeah I haven’t seen a circular in a long time but I’ve stopped getting the paper long time ago too so I imagine there’s there’s not a lot of opportunities to spend money on the circulars in those kinds of things. Jason: [28:46] OSHA disappointingly most retailers still have those programs and you absolutely can spend money on them and you know there’s a lot of sacred cows there so shifting dollars off of those things, probably harder than it logically should be but but it’s certainly starting to happen and once those dogs get shifted to Amazon they become. Way more measurable and. Frankly most cases more effective in so you know once once that Ship Happens that becomes a great case study and I suspect a lot of seeing those are looking at those things. You know I won’t be surprised if we see the the Big Marketing budget start to follow some of those trade budgets onto Amazon. [29:28] Another Super interesting thing to me in this last month that we didn’t get a chance to talk about. Is there have been a number of interesting signs about Amazon entering the. The prescription drug market so that they actually got Pharmacy licenses in about 13 states. And there are various kinds of Pharmacy licenses and this is not a license to dispense medications it’s a license to. Dispense medical equipment so that could be the stuff you use for getting oxygen in your home or Walkers are all this this various medical equipment that Amazon that has a license to sell in like 12 or 13 states. But when those licenses were disclosed you know that it became news Amazon’s looking at the the pharmacy business and you know whether it was coincidental or not. We we saw CVS make a big announcement about a potential merger acquisition with Aetna, that would sort of be emphasized CVS’s retail business, of course Walgreens in the middle of a merger we’re seeing the big Pharmacy companies kind of, try to diversify themselves and not be as as focused on retail at the same time that we’re seeing a number of interesting indications that Amazon might be getting into the the pharmacy business. Scot: [30:58] Yeah yeah the CVS setting the stuff was quite popular on CNBC is a way to kind of have an Integrated Health platform and should be interesting to see you. [31:10] What stops Amazon from doing the same thing you know they could open up their own health insurance armor something there’s there’s no business I don’t think he was on would get into so to be a nurse in the seat. Jason: [31:20] Yeah I normally. Scot: [31:21] How that how it plays out. Jason: [31:22] When when you know Amazon gets in any new business like their quickly are people that run up and go well here’s why that business is different than other ones Amazon’s been successful and here’s why Amazon won’t be able to be successful here right like in in general, all those barriers proved to not be very big barriers in Pharmacy one of those big barriers is that, you know you really have to have a partnership in agreement with the insurance companies, to enable the the folks that are insured by those companies to get their prescription meds from you and since that the traditional pharmacies of locked up a lot of those deals, you know people have speculated it would be hard for Amazon to answer without a a insurance partnership. And what’s what’s interesting is there’s a huge chunk of people that are now buying, their prescription meds out of pocket and not using Insurance either because they’re underinsured or don’t have insurance or because they’re they’re finding that you can in many cases, get better rates on the prescriptions than the negotiated race that the insurance company has locked them into in so you know one one piece of speculation is the Amazon could really be focusing on, Pharmacy products for people that are paying out-of-pocket versus, you know being a big part of the the insurance industry and of course it’s not outside the realm of possibility Amazon could buy a big insurance company pretty easily in the same way they bought Whole Foods. Scot: [32:54] Yeah yeah absolutely another kind of kind of. [32:59] It’s going a little bit outside of Amazon but are our friends at recode. Jason had a interesting scoop where, hi he had heard this kind of the cowboy rumors that Home Depot was looking at acquiring there are Logistics partner which is XPO XPO Logistics is. A company that focuses on The Last Mile logistics for heavy items so if you’ve ever gotten something delivered from a Home Depot like Appliance or a set of cabinets or, I furniture and that kind of thing XTO is well known for that and you know what what he was reporting is that. Amazon’s looked at the company and if amp it as part of their Furniture efforts to Amazon’s doing a pretty big push into Furniture I’m sure Wayfair use XPO also but that I haven’t seen anything specific to that, but if you have a pretty good lock on this kind of heavy stuff being delivered so you know what. What’s interesting is Amazon sniff somewhere and other retailers really wake up and are starting to make pretty big news this would be like a 9 billion dollar acquisition so this isn’t just kind of a small, defensive plays on these things that are happening here based on what Amazon’s doing so it’ll be interesting to keep an eye on that one to see what happens. Jason: [34:10] Yeah but you can you can easy to imagine you know you’re in one of these businesses that predominately deliver big heavy stuff like Home Depot or Furniture Company in Hugo hey what would happen to us if Amazon bought our fulfillment. Scot: [34:23] Yeah yeah seems like the best antidote for that is to start building up that kind of capability like like Amazon is doing so interested to see if, retailers do that and what it would cost him, Cheryl or she will be on board with that when I could dine ask you about that was announced during our break there was Target acquired shipt s h i p t there’s all these companies name, Chris plays on the word ship this is D grocery delivery company I think they’re out of Alabama are some somewhere unusual they’re not a Bay Area delivery company, Target acquired before between 500 and 600 million depending on how they’re not works and stuff so kind of furthering this kind of grocery delivery battle with what do you think about that. Jason: [35:05] Yeah it was so for clarification this is not the company that Kmart uses to ship your pants right so that’s an old e-commerce. [35:17] For those of you that used to watch that the Kmart original e-commerce ads that were pretty funny will put a link to those in the show but yeah that was a big acquisition and and actually, Target 2nd and condition this year in the Fulfillment Channel. [35:35] And it’s interesting to for folks that aren’t familiar with shipped you can kind of think of them as like an instacart they they have a big network of. 1099 employees. That they send to the store to pick up goods and deliver them same day to Consumers and so they they do some fresh grocery deliveries and they do a lot of General Merchant deliveries. I need the have been doing some work for Target but they also do Kroger and Costco I think and so if you’re Target. You’re buying this company that that a bunch of your competitors are using right now for same-day delivery and that’s a little bit dicey like target has said in the short run we’re not going to change them at all we’re going to. Continue to use them and. It’s a little tricky you you pay shipping $99 membership fee to be able to get deliveries from them and then you get deliveries from any of the retailers in their Network, and obviously the more retailers they have in their Network the more valuable they are in the more likely they are to be able to get people to pay. These $99 membership fees so if Target was investing in shipped hoping shipped would just grow as a separate entity. It’s a scary investment because if your Costco. You might not want to use shift anymore now that they’re owned by one of your competitors Target right and so. [37:08] Potentially the company becomes West valuable when one of their customers buys it you know especially when they’re banking on this networking effective. Of having more retailers in getting more customers. The the other side of this would be to say hey Target just needs more capacity for doing same day delivery themselves and they’re buying ship for that that capability in there eventually going to, ship them away from the separate business model towards just being a resource for Target. And you know that would make a lot more sense but then they probably overpaid for it right because they probably paid a valuation based on. On this growth projection that ship has it as a separate entity so it’s a little bit of a catch-22 how how Target will use them. But it certainly makes sense that that retailers need to be thinking and investing in, their own last-mile capabilities like particular you’re going to be in the fresh category you want to think about how you’re going to do home fulfillment on Fresh which is point to point. So I think there’s some interesting things I’m glad to see Target making investments in here like this is potentially a risky investment. Given that that you know Target’s claiming that they’re going to let them run as a standalone company in there there you know now potentially tainted as a standalone company given the throne by Target. Scot: [38:37] Yes they have to think the value is if we roll out same delivery to ask Target stores we generate y sales and it’s worth $500 to get why sales so I sales must be like in the billions of dollars which makes sense to me. Jason: [38:51] Yeah and Target you know which is doing well at e-commerce over 50% of all Targets e-commerce is fulfill from spores in so this is really, Expediting that that’s for fulfillment and since target has a store close to someone that many consumers, same day can be you know potentially cheaper than shipping and in many cases so you know it it is leveraging Target strength which is this this big network of stores that are close to Consumer so big picture I like it you know I hard to say whether they pay the right price for it or not. Scot: [39:29] We’ll save it for the prediction show but I’m curious if you think this causes Postmates an instacart to kind of if those pens fall as well from this acquisition so we’ll save it for next year. [39:42] I want to report on is Stitch fix we talked about when they’re S1 was filed we spent a fair amount of time going through that and explain that model will since that show they went public and, that is kind of a lukewarm reception so when you go public you put this range out there. There ain’t nothing was 16 to $18 the price a little bit below that range at 15 which is an indicator that you know if people were concerned a bad the. Have a negative backdrop blue apron had missed a quarterly number as. Stitch fix was out on the road which is terrible timing these things happen so so they could do it you know that. Google subscription models even though once food and wants apparel and we know on the show that’s vastly different problems to solve it but I think investors kind of said. This is this is a challenging segment let’s punish but let’s let’s. Not punishment put on more risk around the stitches thing get 15 but then was really interesting is, there’s I want to go public there’s a about a six-month of three to six-month window before you announce your earnings, so they didn’t have any news or anything. People as they got familiar with the model I don’t know exactly what happened but it got up as high as 28-29 then they announced their quarter in December 19th and, you know there there’s kind of Tale of Two Cities there I think they did really well on the quarterly results compared. [41:13] Going forward they did talk about there should be some pressure on margins and having to spend a fair amount on sales and marketing to acquire customers some folks reacted negatively and then it came back from them so I would say it’s been a successful IPO there, last I looked there in a market cap of about two and a half billion which is, pretty good and you know so I think there are there out there doing really well and you know I think this investment is going to be with people watch to see can they really turn that into active. Subscriber system. Jason: [41:44] Yeah and it’s not automatically a bit I know the higher price you get in that IPO you know the more money that is for the company in the short run but in the long run, it’s not necessarily a horrible thing that you you have some room post-ipo for that kind of bump right in that bike, certainly you know create some advantages in terms of equity for employees and and all that sort of thing right. Scot: [42:12] Yeah yeah there’s. [42:15] Target also depends on who’s selling IPO so do you have primary source and secondary shares so if your investors are selling in diepio and they get a low price that’s going too bad because they are looking for a high return, what is the company selling shares you know there is an argument to be made kind of Goldilocks it be somewhat conservative other people tell you no. Did Equity you’re selling you should maximize the value of that and do what you can so I think it’s a. Nothing and I was just one mile marker on this very long road and it’s really kind of start of a New Journey so so I think it’s good that they’ve done well and and people are following them and there’s been some turning there still there. Base of shareholders but it seems to have gotten sticky and people that are believing it or are there now know there are a lot of naysayers that kind of talk about it. [43:07] They don’t believe that it’s kind of an algorithm company and it is it is hard when they also say they have something like 3,000 stylus them company with 3000 stylish set up so people are still trying to figure that out. Jason: [43:22] Yeah and that you know they truly are an interesting company that they’re certainly claiming a lot of interesting successes or an artificial intelligence and you know both, gopher merchandising for for you know deciding what goes in that that fix that box and, you know how sticky those products are two customers how many they keep but also they’re starting to use that artificial intelligence to Define new products and and sticks Stitch fix his kind of shifted from, predominantly being a reseller of other people’s apparel tub to producing their own products based on this artificial intelligence data now that they have. This big critical mass I think it’s we’ve talked about on the show before the chief data scientist there is that Chief data scientist from Netflix so, pretty credible team on the artificial intelligence stuff and in many ways these guys are the poster child for artificial intelligence research retail so if. It’s cool that they’re public in there. You know disclosing more information and we’re getting a c under the under the covers a little bit more so certainly someone to to follow closely. For that also interesting that you know it’s a female run company and I say that because the the next piece of news we have is about another new weed female run company which is Colts. Scot: [44:41] Yes yes a Kohl’s promoted their Chief digital officer to CEO so we actually had Kevin on the show Kevin Manziel and, this is this is really not official yet I mean they’ve announced it but it doesn’t happen until I think May of next year but there’s been a lot of Articles kind of talking about how she’s going to save the company. Jason: [45:01] Yeah I’m always excited about this because Michelle is the latest in a sort of class of the. Digital Executives becoming the chief executive of the company and you know that we’re really just starting to see the first wave of those so am I mean like one of the very first ones. Was Art Peck who’s now who is the VP of e-commerce at Gap and is not running Gap. Billy Mays been on the show Huey Ren e-commerce for Abercrombie & Fitch she’s now the CEO at surlatable. How often is is a guy we know well in the industry that ran digital it at Home Depot and then became a senior executive at eBay and he’s not the president at Macy’s. And so you know Michelle is is the latest in in this class and I’ll be really interesting to see what she does at Kohl’s which is. Particularly interesting Lee position so it’ll be another in some ways there like the department stores that are. Really struggling right now and are looking for some reinvention and in some ways they have some. Unique advantages around pricing and treasure hunting and you know things that have traditionally been hard to do digitally so it’s certainly going to be interesting to follow. Scot: [46:20] Did you see that article about so Walmart has this incubator called store number 8 and they’re working on some pretty cool stuff I figured you’d be work to speed on it than I am. Jason: [46:29] Yeah they they’ve name this incubator store 8 which is a based off of a Walmart store 8 which was the Prototype store and they are. Like both have a bunch of internal projects and are investing another projects. The they’ve announced a couple projects recently one that that is potentially a competitor to the Amazon go which. Will probably be talking soon as I have done a deep dive in the past will probably be talking about again the future because I I strongly suspect pretty soon that Amazon go stores going to open to the public. [47:05] Walmart store 8 his has announced a bunch a bunch of initiatives around VR so this one Katie Flanagan who runs that the incubator for Walmart. And she’s very bullish on the future of VR Commerce and so they they recently had a big guy with the Huffington Post and they should a bunch of. Of tech startups that are doing. You know there is interesting things with VR increasing when you with Walmart brand so they showed I got a mod clown cloth be our concept in. A bona bus VR concept and I have to say there’s a ton of interesting stuff coming out of the incubator I have great respect for the. The team at Walmart but I am not personally as a bullish on VR Commerce in the next couple years as it feels like they are I think it’s. You know it’s an interesting technology but like in many ways it’s it’s it’s to sort of awkward and intrusive. To really be a convenient shopping experience and you know most cases you know the shopping experiences that are winning are the ones that are lower friction than anything before. And you know throwing on all this awkward VR equipment to go shopping. Doesn’t feel super super exciting to me like if anything I’m I’m more optimistic on the sort of a our experiences than the VR experiences. [48:34] Why does minor people than me at Walmart so it’ll be interesting to see how that all plays out. [48:39] But you know predicting the future is exactly what we’re going to do on our next show so assertively TuneIn. 2 2 episode 1 12 or we’ll recap the Bold predictions we made from last year, Anna Scott and I will both share what we think are some of the surprising things that are going to happen in 2018. And with that I’m happy to report that it’s happening again we’ve used all our a lot of time. So we certainly appreciate all of our listeners sticking with us if you enjoy the show we’d love to get that 5 star review on iTunes weed encourage you to leave feedback on our Facebook page and continue the dialogue. Scot: [49:20] Thanks everyone for joining us and have a Happy New Year. Jason: [49:23] Until next time happy commercing!

EP110 - Holiday 17 Hot Take with Rob Garf of Salesforce.com Rob Garf (@retailrobgarf), is the VP of Industry Strategy and insights at Salesforce Commerce Cloud.  His team has access to insights from all the Salesforce Commerce Cloud clients (formerly Demandware).  We have a broad ranging conversation about what he's seeing this holiday season and trends he expects for next year. You can read more about his teams insights here: Salesforce Reveals Black Friday Was the Busiest Digital Shopping Day of the Holiday Season Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 110 of the Jason & Scot show was recorded on November 30th 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Google Automated Transcription of the show Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 110 being recorded on Thursday November 30th 2017 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo. Scot & Rob: [0:40] Hey Jason and a welcome back Jason and Scott show listeners. Jason R series that is a hot take on holiday 17 continues here in episode 110 we're excited to have the first time to the show someone you and I've known both for a long time and I've been trying to get on the show and we finally made it work, Rob Garf rub is the VP of Industry strategy and insights at Salesforce Commerce Cloud welcome to the show Rob. [1:06] Thanks gentlemen it's great to be here I feel honored to be amongst digital Commerce loyalty I feel like I'm obliged to say first time long time. Jason: [1:17] Appreciate it you know one thing we always like to do on this show is give listeners a little bit of context about how you came into your your control, I'm in what what the scope of the current role is so I know, like ourselves I know you've been kicking around the industry for a little while can you you talk to us about your career matriculation and what you're doing at Salesforce today. Scot & Rob: [1:44] Yeah yeah absolutely literally retail is in my blood my father actually was at a supply chain a bunch of different retailers around the country when I was growing up and I didn't have any, prettiest aspirations of getting into retail but I did grow up working in his distribution centers and working in some stores at. Ricky work for in retailers that he worked for and really really cut my teeth in a genuine way in headquarters, right around 99 2004 Lids the specialty hat retailer, where I live Ecommerce and at the time we're doing some really fun things like buy online pickup store we had an endless aisle app we didn't know, really what we're doing and put it together you know I shoestring budget but it worked and it was a lot of fun, and tell you guys probably are the only ones on the show that will remember that we ran into world back almost 20 years ago of course they're long gone as a, e-commerce platform but anyways from there. Certainly continue to kick around was industry analysts at AMR research leaving retail practice moved to lead retail strategy to IBM when I was in fortunate to land at demandware. Which took me about 5 years in when we got Acquired and summer 2016 by Salesforce, what is known as the Commerce cloud my role it's really fun I get to kind of put all the hats on that I've worn over the last 20 25 years and I lead a team called Industries for insights and really. [3:22] In short it's it's our job to stay in the market, understand where the industry's going would you that primarily through research and then we turn that back over to the industry, our customers and we use that to better understand where we should bring our company products so it's been a lot of fun over last coming up on 7 years for the last year-and-a-half as part of Salesforce. [3:44] Very cool and then another one of the reasons you wanted to get you into this series is you guys have been releasing some holiday data and I don't I don't recall you doing much of that, demandware tell us about what's going on there and for listeners that don't know let's let's kind of help them understand the scope of the day that you guys would have and kind of where it comes from. [4:06] Sure yeah I think that's going to start some good contacts on the conversation I'm sure we're about to have so even wear a cloud platform that enables retailers and Brands to connect, to their consumers across the Myriad of different channels whether that's personally online or through mobile store. Social even the increasingly iot invoice devices we collect a lot of data in fact on a monthly basis we have 500 million Shoppers Traverse City. Rousey ultimately buying, AR platform across around 3000 sites and not representing retailers in 53 country so we take that information we aggregated up and very thoughtful and secure way and it really helps us, gauge meter Digital Trends and then again we as part of our perky turn that back over or consumers help them Benchmark I'm sorry. Back over to our customers retail Brands and allows them to better Benchmark the business and then broadly it allows us to see you know where where the industry's going what are some of the major Trends and we've been doing, what are we reporting for some time but we really double down on the holiday this year to turn it into some interesting insights as to what we predict and then be what we're seeing. [5:27] Cool so if we if we kind of start at 30,000 ft view did you have any forecast for holiday or you're not in the forecast visiting just kind of looking at insights. Yeah so week we had some predictions based on the data from the platform, what we see in the past quarter past years and we also did some primary research as well, so yes and I get right into it tell him which I talk to you about kind of what we saw a little bit and get back yeah, you know like how did you guys did you think holiday would be 15% that came in at 20 and then you have any other kind of macro stuff and we'll get into some of the individual days in a minute but the the big picture what do you think. [6:09] The big picture yeah so you know back in September October we release them prediction information or three key points that we among many others that we hold in on and in one piece was, cigarettes, wow discounts were going to be abundance as they normally are creeping earlier and earlier in the year we felt like the holiday season would smooth out, a bit in terms of actual demand and that's in fact what we saw by the end of. Monday Cyber Monday only 35% of digital shopping was completely, and so there's still a lot of Runway to go there the second piece that we saw is that 40% of. Statically Millennials will be doing a lot of research and Discovery through voice assistance in. Alexis in the world in the Google homes and Sirius of the world and we don't have data yet to back it up. Quantitatively button talking to our customers there they're definitely testing and. Playing with poison in Lexington circular craving some skills around shipping notifications and, order status which I think is a nice step forward on the convenience play of the of the three. Last one was in this really started last year. [7:38] Black Friday becoming more and more of a digital day you know we score screw up all of us here Scott Jason you know with. Black Friday more of a store based way doorbusters and getting out of the, Thanksgiving craziness at family and getting some the stores and works we're seeing a real uptick both and we predicted and we in fact saw it as a really big, really big digital day as well so I can dive in all of this in particular but those are some of the variations Rahsaan and how they kind of played out over the last. 789 days I would say. Jason: [8:15] Awesome but just want to get an idea of how Granny or the data use you see is your the the actual platform that that all these retailers are are using for their, so I'm assuming you get, pretty granular data so you you mentioned for example discounting like are you are you able to to see the actual sort of. [8:35] Is was pricing that that is offered by your customers and are you guys sharing any data about like how promotional this holiday. [8:44] Season has been versus past holiday season. Scot & Rob: [8:47] Yeah yeah absolutely so you know one of the things we saw as I mentioned discounts starting earlier and earlier we're calling it. You know game of discount chicken right it's like the retailers are moving it more and more, towards the beginning of November opening hoping that the consumers will by and by the way though we all know, what happened but in terms of the rates and yeah we're seeing across the, the Cyber week starting on the Tuesday 2 days before American Thanksgiving and then going through through Cyber Monday, we saw an average at 28%. Discount rate so there's some really nice discounts really teaching on Cyber Monday will see a little bit of a wall and then once again we anticipate another Spike, around December 11th and for few days further when, consumers are starting to feel the crunch of the shipping window starting to close and retailers taking advantage of that kind of emotional oh gosh I need to get it now or I'm not going to be able to get that deliver to my doorstep. I'll put the other interesting part if I could be on just discounts is what we saw a round free shipping. And so across the week as I defined a moment ago we saw 84% of orders, that were free shipping in fact on Cyber Monday alone it actually spiked up and was the highest 89% so in what was seen as a really nice to have in past years really the expectations the consumer is. [10:30] We want it free or not at all and so as a consumer if you're on and listening, definitely look for those free shipping and if your retailer you got to get the game if you're not already. Jason: [10:44] Yeah yeah and I did just maybe put that in a little bit of context comes Gore would say that that year-round about 65% of all e-commerce sales are with free shipping so when you see a spike up to 85 to almost 90% that's, a version of a promotion that retailers are running and it just turns out free shipping is the most effective promotion you can run if you if you don't already offer it because, it seems like consumers are really weary to make any purchases that that where they have to pay for shipping. Scot & Rob: [11:16] Yeah that's right and that's why I talked about in the context of. Discount since you know a lot of our customers are in the luxury and apparel space where they want to try to us from Apperception perspective hold onto price Integrity but free shipping is a nice way as you mention to essentially give, it total cost of ownership if you will discounts on getting that a product you on. Jason: [11:39] For sure you also mentioned Black Friday becoming a little bit more of a digital holiday and that that's only seems like a trend that we've seen as well, are you starting to see you mention that a lot of deals are peaking on Cyber Monday are you starting to see a spike of. Online deals on Black Friday as well or do you feel like like as a consumer you're going to get better deals on Monday then you can get on Friday. Scot & Rob: [12:03] Yeah I mean it's it's just to get really deep we saw a 27% discount rates on Black Friday compared to 29% on Cyber Monday. [12:16] Negative Outlets closed right but generally speaking when I step back we're seeing that, deals have really in demand in fact has been smooth over across, the seven days of cyber week where in the past it was for consumers got to get the deal on Friday in the store or Monday. I'm online and I'm finding both based on a research and helping a sample size of one and doing a bit of shopping myself is that retailers are becoming a lot more transparent about the length. [12:53] In the duration of their promotions and there's not as much of a. Gosh I got to get it on Friday or I'm going to lose out so yeah I know that's my roundabout way of saying there's a spike Cyber Monday at 29%. We see 27% but overall we're seeing deal smooth out through the entire week. Jason: [13:17] Yeah that that is interesting that is that's one of the challenges with promotions right is that the promotions are going to be most effective, if there's almost some scarcity to them like if consumers believe that that deal is going to end on Friday and that's the best deal I'm ever going to get if. It we're promoting stuff on Friday and all the consumers have a a real belief that there's going to be an even better deal on Monday then the. Promotions tendon not have the desired effect into your point in the old world the consumer attended the only know what we tell them right so we said hey big sale on Friday that's the only information the consumer has not had but today. The consumer knows everything and they have. Perfect transparency and oh by the way there's probably 50 websites that are designed to telling them what what deals are the best each day and what did the historical, best time to buy all these products are so it's hard to hard to get away with any of those those promotional games anymore. Scot & Rob: [14:13] It's really good point I think it's a really good point in the fact that. Retail for finally listening you know what I mean in terms of their acknowledging that consumers have a lot more control in Access than ever before and why not be a little bit more, transparent around the pricing in motion so that while you are giving a little bit away on the scarcity side you're giving a little bit more away saying I don't. Each go to another retailer cuz I think I missed that window right. [14:44] Put it makes me I know Salesforce is really big on the AI in it you guys call York or a Einstein if you guys do any exploration of kind of could you plug that in there and try to have the AI out smart smart the consumers on this whole, pricing game of chicken thing, yes and we are doing that in fact we actually have some interesting data around artificial intelligence and how that has actually influenced a lot of the, the sales when it comes down to it so what we found across again these sample set that we have is that. [15:21] And I'll pick on Black Friday so on Black Friday 6%, Shoppers engage or clicked on a product recommendation that was powered by artificial intelligence so that recommendation was based on the shopping Behavior. Either a known consumer in the various digital profile and preferences that have been accumulated or an unknown based on the clicks that. They did either on-site or off-site and while it was only 6% its Rove 32%, of the revenue so huge impact when retailers can turn this data into intelligence and get it in front of the consumers in a meaningful way throughout the journey. Jason: [16:14] That that's fascinating I'm always curious like how how are you defining artificial intelligence for the recommendation and in that case cuz it you know obviously you know there's there's multiple definitions of artificial intelligence but I have a feeling all the the vendors that are in the the Salesforce Commerce Cloud link exchange that have been doing, recommendations for for 5 or 10 years would probably call their engines artificial intelligence wouldn't they are. Scot & Rob: [16:40] Yeah they likely will and so yeah we're at the very core it's. From machine learning that is taking in all of the data that's, being generated on the platform by that retailer and allowing the algorithm to continually learn and in an automated way. Dr. Relevant interaction LG interesting part is that, artificial intelligence Einstein is both making the merchant in marketer the retailer smarter so they're just getting more fishing around planning, their pricing in there but then it's also Autumn eating a lot of manual rules-based type of Assortment, that the consumer will interact with on the site cool, yes it's need to see you and you're always Acquisitions talk about synergies sounds like there's already a rich set of capabilities over on the sales for side that you guys are tapping into. [17:41] For sure yeah I mean particularly on the Einstein front given the fact that salesforce.com on this across across the entire company so yet while we have a date, with in Commerce Cloud we are we are definitely leveraging, all of the Innovation that's happening back at San Francisco from machine learning to visual, intelligence to voice intelligence to natural language processing so it's it is really exciting where as we came, India the Acquisitions with some pretty cool. [18:20] Artificial intelligence were able to now look to our colleagues and really amp it up quite a bit and again. The fun part about this is It's really baked into the plan. So it snow in the same console that a marching will do their promotions in their assortments and figuring out the promotional calendar so they don't have to talk between different screen so you know going back to data. It's really showing while you know small, portion of consumers are coming across these product recommendations and stay clicking on then it's driving a lot of Revenue and I assume at some point we'll talk about mobile but, in a very small form factor world that we're living in now making sure where you might have one if two products that are made available getting those right ones, in front of the consumer makes all the difference in the world yeah real estate is definitely the premium, just want to talk about mobile one quick thing that you just kind of made me think about so early are you talking about skills being kind of a prediction you guys as part of the platform can you just kind of turn on for a new beer Merchants an Alexa skill or or. [19:36] You know you're watching what's happening there before you do something like that. [19:40] Yeah so you know Boyce in general is something we're looking at our customers given our open platform already testing some out there finding it just the way they're not necessarily seeing. Today. You're clicking the bottle like it's not really clicking or tapping are you but you know having to buy happen but it's more on some of the purple, research Discovery or on the other side service but that's more happening for your partners or independently given again are open platform our customers are able to innovate and extend vrep eyes, Darius didn't ask Dex like order and customer and price and, so on and so forth I figured I would keep your interest though given I know it's a Hot Topic around these parts so obviously what you're seeing on The Voice side it's typically around this holiday anything. Pop up for you and your discussions, I always check the specials that the Amazon has there and just interesting to see what they're choosing to push that way I think. Retailers that are doing it our way out on the Edge at this point we haven't heard a ton Jason have you heard anything. Jason: [20:53] In general I think even though the most dominant voice players would say nobody really expects voice to be a primary interface for Commerce I mean there's there's just a bunch of. Deficiencies like most things you buy have a bunch of variance you pick a color and a size and potentially a brand and like, getting interrogated for all of those details to place a a Commerce order via voice. [21:16] Actually isn't a super elegant experience so while they're there certain products that lend themselves to voice Commerce and there certainly are people that are engaging in voice Commerce. [21:26] It's not like oh man that's the better user interface in the whole world is going to shift to voice. For Commerce I think it's really obvious that voice is going to be a major you user interface overall and I think we're going to see voice being used a lot too. Manage and modify order so you know once you start buying all your groceries online for example and you have an auto replenishment order. You probably using voice to say hey I'm going to Grandma's for Thanksgiving you know let's cancel this week's grocery order or hey I need to make a pumpkin pie for Thanksgiving, let's let's add these ingredients to my. [22:04] My normal list but I really think that's going to be the the primary role of a voice in Commerce more so than it is. [22:15] Product Discovery or you know first time order types. Scot & Rob: [22:19] So it's super interesting to me is incorporating voice for on-site search right so you're still looking at, the screen but you're able to search using voice and then layering on top artificial intelligence or putting artificial it's on the bottom whichever way you want to look at it architectural e in any case but being able to really help. Again really cut down the time between inspiration and ultimately getting to the product that. The customer wants but I hear what you're saying in terms of perhaps you know on site to eat navigation versus doing it by. Talking to a device saying I want this product that I've never seen before. Jason: [23:02] And I think the use case you mentioned makes all the sense in the world in particularly on mobile we already see you like that voice as a user interface in Mobile has huge adoption in China are ready and so I think that's inevitable. Here and in there are some fascinating nuances that happened there right because when customers type into our search box with a keyboard. We've taught them all how to type to how to do keyword searches right so two people type the words that they think. [23:34] Are are most likely to come up with that results but when people speak to a voice interface they tend to speak in full sentences and so what's what's interesting is. There's voice search as we get 10 to have a lot more contacts. Then that type searches and that actually enables us to give more relevant results. Which is which is interesting but you do have to think about your indexing and your your if your you know a content creator on this product detail Pages you need to think about your SEO strategies and things differently when a meaningful percentage of your. [24:08] Your customers are are searching via voice so I would certainly agree with that and I think. [24:13] I'm not sure that that's a huge piece of the market this year but I would suspect by next year. [24:19] It's a much bigger part I guess weather thing that slightly interesting is to the extent that you are going to shop via voice obviously Alexis the dominant voice platform out there. And you know they predominantly want you to buy from from Amazon although you know they recently made an announcement of a partnership with. [24:36] Best Buy to enable you to do Commerce through Best Buy. [24:41] You know that you have to add a few extra words to that search but what's interesting is so everyone that wants to compete with Amazon has the problem of not having a product catalog like Amazon has and not having all the sales data that Amazon has to help. [24:54] Sort of determine what what brand you probably want when you ask for batteries and so we're seeing like Google in particular. Go out and start to do these Partnerships with retailers where the retailers are sharing their first party data with Google to make search more more context really relevant on. Google home with those retailers and it occurs to me that they'd be really smart to partner with a platform like you to enable that for all of your clients not. [25:25] How to give away any future product strategy but yeah. Scot & Rob: [25:27] Your way into much but I can say that certainly you know we're always looking at ways to extend our platform and I'm realizing that. [25:38] More and more Commerce is happening off property right and so you know our whole business model from the beginning of time was. Consumers go to a Retailer's website and buy and the reality is more and more of that happening off property so. Retail RC to push their brand or the consumers are we want to help them we want to help them do that and if that's you know again partner in to make that happen. Definitely looking at those Avenues Cooper Ford Jason continues to, can you know an uncontrolled Corner about future product releases this pivot to mobile, so I remember the early days of demand where you guys were in this wacky thing called the cloud and and some of the earliest successes were convincing people to let you run their mobile site because you guys were really good at responsive and all that and then, pretty quickly earned the entire site so you guys have been kind of mobile Pioneers from from as early as I can remember I've seen a lot of your. Quotes of been around mobile give us what what do you see in as far as mobile Trends and and how did that meet your expectations. [26:50] Yeah so. Willie we think the headline or one of the key headlines for the holiday this year so far is Mobile in the continued adoption. [27:04] By consumers not just to browse but to actually buy and if you remember mention one of the three predictions was Thanksgiving being a really big digital. Holiday and we take the major driver to that is mobile. You know cuz really in the past it was consumers had to wait either well going to the way back time machine to 2005 one day to get to a high speed internet connection but even at home. On Thanksgiving or Black Friday oh gosh I got to open my computer I got to put in my username and password I got to bring up a browser I got up, yeah there are a lot of steps there's a lot of friction and really it do the day the mobile phone is the remote control of our daily lives right it's tether to us so, it's really just creating instant access like it does any time of the year. During Thanksgiving during Black Friday through the entire cyber week for consumers just to take out their phone. And in brows but what's happened you know the last couple years is. Most retailers have really stub their toes around their their mobile strategy didn't really make it easier so why you kept on seeing traffic creep up. They were still that friction Aaron consumers ultimately like either wait until they get to a computer or weighted went to the store to buy but again. [28:38] Consumers are pulling out their phone on Thanksgiving on Black Friday and actually buying so just some of that we think are some, mind blowing status is. Some I guess I'll give it to you for the Cyber week we saw Mobile Share, traffic at 61% to 61% of the traffic was coming from Mobile by the way we to find Mobile as home, .. Tablets are a separate category there but what I think is even more interesting is that, mobile Sheriff orders for the week was 41% and that was up by the way from 34% for the week. [29:21] Your prior so the idea. And we can talk about and I love your perspectives on this like what are retail can talk about what a retailers doing to make it easier but that's that's the bottom line they're really breaking down the friction between inspiration and purchase and not. Part of what's contributed again to Black Friday being a big digital day in the smoothing out in general of demand across the entire 7 Days of cyber week so it's really, if I could say inflection points a big shift that we've been seeing for quite some time and it's actually coming through to fruition. Jason: [29:59] Yeah I I think it's it's really fascinating we talked about it it'll a lot on the show we called the mobile Gap and essentially that's that. That you know the fact that. [30:11] Increasingly traffic is all shifting to mobile but the conversion rate on mobile tends to be a lot lower than desktop and so on these big holiday days when. It's in a mobile traffic by Stephen Moore. Like you know there's there's a potential catastrophe of 61% of my my traffic is on mobile in that unit converts it you know 1/3 or 1/4 the desktop traffic used to convert I'm actually going to lose money on the site and Zoe. That the fact that you're seeing that mobile Gap Nero like obviously. Is 61% of traffic and only 41% of the sales are happening there still is a gap but that you know that's a lot better than when it's 60% of the traffic and only 25% of the sales. [30:53] So interesting to think about the series y that Gap is near Owings I certainly have some I'd be curious to hear if you have any thoughts but. It is equally interesting question is. [31:09] Whitney Rose is it just narrowing because of something that you need to Holiday. And so once we get through holiday. We're going to revert back to that you know same old nasty mobile Gap we've been living with for the last couple years or have we systemically figure you know improve the mobile experience enough that we're actually starting to see a permanent shift, tomorrow mobile purchases. Scot & Rob: [31:31] Yeah so I think the flywheel has started and it's not going to slow down and so one other interesting data point and then I'll give you a couple of my. Hypotheses as to why no. Why this is happening but I hate this part of the conversation by the way so if we do the mask on Thanksgiving. For the first time mobile order share bypass computer order share so that's like. Big deal right so 46% of orders on Thanksgiving were Mobile in 45 we're on computer now actually reverted back for the rest of the week but it just shows you like. Okay computer is continue to. Creep down and finally mobilize that Stout I think that's going to continue to a degree you know going to the point around why you no like I contributed it. [32:31] Put it on two things one we talked about a bit or more than a bit which is a I so applying to buy to the small form factor. That's huge benefits cuz they get that you mention it so little real estate figuring out what that it goes back to the what has no right product Right Price Right Time there it is, and then the other one that were tracking is around the check out because it was not terrible was an awesome but it wasn't terrible and so I was terrible. We all missed the rookie still are in terms of okay now I can put my name okay now I send put my address and credit card and whatever else the. [33:15] Adoption of integrated payments like Apple pay and Android pay in PayPal for that matter. We should not really helping in fact we anticipate nearly 10% of iOS orders will be by Apple pay and so that's just making it. Easy and so I think it will go higher as more and more consumers use Apple pay, and I'm part of the reason why isn't hires because more more people are using it yet but it's on again one of these things so that you know I'm a man and I do think it's one of these things work, consumers kids are getting this experience they're going to have more confidence where they didn't before that it will then. [34:01] Come make its way into the other 360 ish whatever many days you want to say year. Jason: [34:07] Yeah for sure and I'm going to. Drill down into those in just a sec but I do want to ask one of the data point if you happen to have it so, you're one of the problems we always have with mobile as is conversion rates lower right so that's what we've been talking about but another typical problem with mobile is, people tend to use mobile to buy fewer items per cart so you know the average order items per cart you know is a lot closer to 1 on a mobile device than it is on a desktop so I'd be curious when using these like nice bikes in Mobile / holiday. Are you tracking the items per order and are you seeing that Spike up as well. Scot & Rob: [34:48] So we track it I don't work all of that data is, and the next episode or we can sweat it out at some point right let's do that because that stuff ice we definitely track it and we know what it is generally but I don't know what it is comparatively for this time of year between mobile, shopping cart so let's let's get that with W nice cheese or let's get that out today. Jason: [35:10] Perfect. [35:12] If I do surgery with you like I tend to think that there's kind of a systemic thing that's improving about mobile that hopefully makes for a permanent change in Mobile Gap and then there is a. Kind of tertiary thing that improves mobile around holiday right like to this system a thing to me I totally agree with you it's improving the checkout experience and reducing friction in the checkout experience. And integrated payments is the easiest way to do that there also are just. [35:41] Better best practices in user experience there's things like using you know the Google Maps API or someone's Alice's API to enter. [35:50] Addresses with waywest clicks then the traditional Fifield thing the the Apple pay. [35:59] Those things are interesting but for example this year Google launched this thing called the payment request API. Which is a 8 method built into their browsers in their mobile browsers that makes it way easier to store payment information on your phone. Once and auto and security auto fill all those forms from from every retailer that supports it and so once retailers start supporting that that pin request API. Check out becomes much lower friction there and we're starting to see see some pretty significant deployment so I think they're a bunch of things working in favor of. Reducing checkout friction and I I suspected hope that that's going to. Eagle a permanent reduction in the mobile Gap and that's super important to me because Scott and I actually had a debate about whether that mobile Gap was going to go away or not last year and I think I said it was so if it doesn't I'm going to I'm going to lose that fat. Scot & Rob: [37:00] What happens when it goes away. What are you talking about well I guess you got plenty of topics. Jason: [37:04] Yeah yeah I mean by quick weave shortage of topics has never been Scott and eyes problems. [37:12] The but the other thing that I do think just works in Mobile favor over holiday is what I'll call buying intent right that. [37:22] There's a lot of reasons a consumer would go to a Retailer's website. [37:26] So you know I used to use the phone book to get the phone number and find out if there's a product in stock. [37:33] Today I'll go to the website and look up online whether the product in stock before I drive to the store. I used to use the newspaper circular to see if the store has a sale today I'll go to the website and look and see if they're having a sale. I used to use the Yellow Pages to see where the store nearest me was today I'll go to the store locator on the site to see where that the store was all all so they're all these. [37:56] Visits that happened to a retailer site where no one ever intended to buy anything they intended to get information off and that they're going to use to visit a store. [38:07] And so all of those things are actually happy things that you unscrewed that consumers are doing but they have the unintended consequence of making conversion rate look lower. [38:16] Inside out during holiday when a higher percentage of the overall traffic are coming to the site with the specific intent to buy something. [38:26] That that affects gets diluted and so I think it's. It it's just a natural thing that as traffic goes up on these on these days when people are mostly trying to buy online. That we're going to see the mobile Gap near a little bit but I do also think that the the the longer-term happier reason is. It is just getting easier and easier to, to check out and send Chopper stuff into your point as artificial intelligence gets better so the right product show up in front of you quicker and as we know it. Things like boys interfaces that are easier and faster than, typing you know complicated searches and a search engine that I got that just all going to work in mobiles paper. Scot & Rob: [39:09] For sure I'd like to find you some we actually track that throughout the year and that's a that's a nice leading indicator as to what consumers are thinking so I'd like that like that apply to the mobile in Holiday. [39:22] Any talk about some of the key days hear anything else on mobile that that you want to. [39:32] Again I think the key piece of it is it's it's helping to a bit smooth out the the demand because the consumers have that access and control in Tazewell. Reference before that transparency and and it's in it showed. As as consumers just continue to go to that as their mechanism to connect with the retailers. [39:57] About a Multi-Device because you guys are running, go towards the side against after you logged in effectively but anything anything interesting their arguments people I say as well people are on their phone and they're doing research and they throw something in the cart and then they go to the desktop and check out now, I've never been a big believer of that but haven't had enough data to either agree or dispute. [40:23] Yeah for sure I mean that is happening and we're seeing the data because we're able to give an arm. Persistent cart were able to see that consumer through most of the digital if not all of the digital Journey right and we are seeing fact that there are multiple digital touch points before. The buy button which is of course just driving retailers absolutely Baddie because most of them can't attribute know where the demand is coming from and where else only they're buying and kind of needing it all together but we're finding that. For sure to be the case and that we're seeing it even, more so during the holiday time when if you can believe it or not, consumers are even more time starved and distracted so they are starting their shopping journey in one stage for One Touch point and then. Consummating in another so yeah that's it that's a big Dynamic that's happening and also they're using in many cases the, you know the shopping cart if you will as a registry or a wish list and allowing them to also do a lot of research for not only, gifting to others but self-gifting is well will self-gifting on, the start digging into so many ski days and you hit on some of them is as we, been going over the broader topics but what was pick November kind of first which is I guess the kickoff there through Thanksgiving but not including Thanksgiving. [41:54] Anything have you guys been watching that. And as I feel like it is accelerated compared to last year a lot of retailers are kind of now calling it you know a month of black Friday's and they're trying to get consumers to ACT earlier or any anything by that kind of. Early holiday. Talk about. [42:11] Yeah for sure I mean it goes back to this game of discount chicken and it's not only between the retailer and a consumer it but it's between or among all. The retailers and there were some that just went out of the gate really strong right on November 1st and if retailers didn't. Already planned for that we saw that there were several that actually scramble to to make it happen but. Are TV shows that wow the discounts continue to. He brought forward the consumer is still in control and it might have helped with. Brand recognition and certainly to get a jump on the preference of the shop where and when but. Only 35% and I say only cuz it still needs a lot of Runway will occur of digital shopping by. [43:09] This month is not Monday what we also stopped by the way just to kind of give you a broader sense of When shopping will be complete we anticipate we, predict that 50% of the digital shopping will be complete by December 3rd so that's right up on us and then 80% by December 15th right again right around. [43:28] That what I would say nautical shipping windoware. People even though they might be promise to get the product in a certain amount of time or it's starting to get a little worried about that but that's my long way of saying yeah we're definitely tracking this the discount keys. [43:45] And other promotional activities what we started to see to I don't know if it was purposely plan for. This time of year or not but more more subscriptions. That are being launched a subscription Services right so stance as an example just launching their there. [44:09] Their subscription for socks or Fruit of the Loom so I wonder if that has a little to do with hey this is an interesting gift to get this time of year that last throughout the entire year. Jason: [44:21] That is totally interested I haven't noticed that transfer I will redouble my Maya observations and follow that, as we move from that kind of pre pre Thanksgiving. And start looking at it's a big 5 days what what are you guys seeing in terms of Thanksgiving Black Friday, that the weekend and then Cyber Monday. Scot & Rob: [44:43] Yeah absolutely yes sir we saw just actually across the seven days to. Throw it out there we saw a 26% / All Digital growth and we saw. Really high spike in Black Friday and it actually based on our data was the biggest digital shopping day. Of the holiday season but we also saw Thanksgiving being. Significant growth as well so people aren't again aren't waiting and so you know across the board we're seeing some really really nice growth as we anticipated because of the strong digital growth that we saw. In our shopping index in Q3 we anticipated it but it was really really interesting to see you again particularly on Black Friday. Jason: [45:36] Very interesting in just a clarification some vendors like see a subset of all the the. E-commerce traction transactions and they they use a statistical model to try to extrapolate that and say. And here's you know here's what we think happened in a hundred percent of the industry in your case. I think you're being a little more straightforward right like when you say 26% grilled you're talking about like all the Salesforce Cloud customers I sent you a saw 26% growth in so that that may or may not perfectly mirror the entire. E-commerce industry or the entire internet 500 or something like that do I do I have that right or are you trying to do a. Scot & Rob: [46:19] That is. [46:21] That is totally fair and so we do have a great cross-section of retailers and branded manufacturers of every size, but that is in fact the case we do not apply Cisco model on top of we have here we just used the R3000 sites across 53 countries as as the sample set, and that's another important the 6th and I think is ours is global we can and do subsequently slice it by. Size and by geography and by segments phenotype. A retailer but in this case we are providing Global numbers across all of the segments. Awesome so we're running up against time and appreciate you recording this in the evening preciate you taking time out of your end of your busy day here I was going to get out of holiday mode towards the end here and, you've already been super helpful with some of the voice Commerce stuff that we left talk about in an AI, any interesting non-holiday trends that that you can share as you look kind of towards the next year or even three to five years out. [47:33] Yeah you don't want friend where fracking really closely and it's I would say in the context of AI is. Actually putting the consumer or. The consumer data back in the consumer experience near a hypothesis is that we've been talking about putting the customer incentive everything you do for the last 10 15 20 years I remember. Writing reports on it as an analyst but with. The increasing importance of AI there's increasing importance on actually figuring out how to better manage and. Operationalize your consumer data physically because it's just scattered in many cases all across the difference operational systems and so, really interesting Theory Focus over the next 12 months on the data which isn't that, sexy honestly but it's something we need to do so we think there's going to be a lot of investment there were looking at that closely from the my team and a research perspective and what that's going to look like. [48:37] We also you know given. [48:41] Now part of Salesforce for the last year-and-a-half certainly looking at what does a platform look like. That helps manage the journey from all the way up the final at you know as you know, Discovery research coming through Commerce and fulfillment and service and advocacy and that's what's really getting us excited as you know with the densities coming together. Salesforce applying artificial intelligence to it we think there's this great value to be had by by retailers Brands to and rethink their front end systems, animal holistic of unified way. Jason: [49:30] I do think that's an interesting opportunity I actually think there's two Trends are somewhat related in that like one of the problems we had start they have a data is that there's a ton of of. Data within an Enterprise but it's all trapped into these you know the spirit silos so there's like. The personalization engine on top of your eCommerce engine that knows something in your analytics for e-commerce know something else and your customer service guys know something else and you know that to that consumer that doesn't look at those two separate Services they're like. Man I sure did all this information about myself and they should go to use that to have way more relevant interactions with me and reduced you know a lot of friction and they shouldn't be asking me all these questions they already know about me. But for the retailer to solve those. They got to break down all those silos and integrate all that that data so I actually think the leveraging AI to get better experiences and kind of you know. Doing a better job of integrating all of your systems are are closely related. Scot & Rob: [50:32] Yeah for sure no I think you articulated that really well if they all kind of playoff each other I guess the other point to is what can send you to see, your Brand's going Direct on and become even more vertically integrated in retailers, certainly going back for this life-changing and creating unique differentiated through products and services and so forth but you know really where you'll become interesting is. How Brands and retailers as a reference before moves Beyond just their property which is, really uncomfortable for many of these organizations because since the beginning of time it was about pulling the consumer to their property and owning them and not sharing them and now needs to be more of, pushing their brands where the consumers are and that might be in various Partners or third parties that you know, that's where the demand is being created so be asking to see I'm more of whatever you call it distributed Commerce or conversational Commerce property, Daiquiris retailers outside your comfort zone from a technical perspective much as you know operational perspective as well to go where the consumers are. Jason: [51:53] I totally agree and in fact I'll even give a little Club to your architecture that's sort of beneficial for all those those things. [52:03] The challenges you know that all of these new opportunities are launched it's hard to know which ones are going to be huge successes and which ones are are just kind of. [52:14] Buzzy and there's potentially a significant amount of effort to implement the technology to try these things so Pinterest launches shoppable pins. Hey is that going to be a huge thing or is that a novelty Apple pay makes itself available through a web browser is that you know the most important thing I could do my inside or not and if you're. [52:36] If you're a site with a non-friend Connor solution that you sort of own. And you got a bunch of developers that have to implement each of these things you have to make big strategic bets about which ones you're going to chase and which ones you're going to try to be a fast or follower on. But when one of the awesome things about your cloud-based solution is. [52:59] You guys tend to do those implementations and then you know the customers wake up to the new version of the platform and it and just all of those those things are available and often like super easy and low friction to turn on and try. And you know I do think. That your your customers you know tend to be in a better position to implement and try some some of those new features and learn which ones are going to work and which ones aren't much quicker then. Then maybe some of the the more Legacy on-prem Solutions. Scot & Rob: [53:32] Yeah well I appreciate that and certainly the consumers are moving really quickly in, stating the terms to a large degree and so yeah I mean gone are the days of 12 months implementations to get a mobile site up or even you know a month to get Apple pay going it's Let's test the stuff if it works awesome, it doesn't let's move on but let's not invest too much time and energy and put too much risk on the business oh yeah I'm in the cloud model continual innovation. Certainly agility we're seeing our customers take advantage that weather we're putting. The innovation in the platform of their innovating but themselves or third-party say I appreciate it specially coming from you the recognition of that and you know Cloud certainly as a key enabler. Jason: [54:20] Well Rob that's why she can be a great place to leave it because it does happen again, we have burn through our a lot of time but definitely one thank you for taking time out during what I know is a super busy season for you and sharing what the Salesforce. Scot & Rob: [54:38] Thanks so much helmets absolute pleasure and happy holidays to everybody thanks Rob. Jason: [54:43] Until next time happy commercing.

EP095- Listener Questions and Amazon Earnings http://jasonandscot.com Amazon Q2 2017 Earnings Summary (PDF from Amazon) Amazon reported a beat on revenue but a miss on earnings Revenue came in at $37.96 billion, beating street estimates of $37.18 billion. EPS was only 40 cents per share, missing street estimates of $1.42 per share. Listener Questions Kiri Masters: I'd love to hear Jason and Scot talk about their global e-commerce outlook. Amazon in particular seems keen to expand aggressively in international markets. Does the growth opportunities match the regulatory / operational complexity for brands? Interested to get your take. Josh Tarasoff: Hi Jason and Scot--What is your take on Amazon's strategy behind buying products at full retail price from marketplace sellers? Here is an article: http://www.cnbc.com/.../amazon-new-fba-program-buys.... Thank you. I love the show. Anup Gosavi Hey guys... love your show. Would love to see your take on when/ if brands will be active on messaging platforms like Messenger, Kik. etc. Is it actually a better channel than email? Is there a signal in all that noise? Opportunities/ risks etc. Thanks! Lauren Quaile Tonkin: I'd love your thoughts on autoreplenishment. Why have other retailers not adopted this tactic broadly (beyond Amazon and Target)? Do autoreplenishment models differ globally? What non-intuitive products/categories do you think can benefit from an autoreplenishment strategy? Thank you! Keep up the great work. Ben Kates: off-price retail offline and online Gareth Hanes (in uk): Hi Jason & Scott, enjoying your podcasts from "the other side of the pond" in the UK. I would be interested in your take on the recent (in the UK anyway) growth of products sold on Amazon by Chinese 3P merchants (presumably manufacturers) using FBA. I have noticed transformational changes in some product groups where new SKUs and brands have gained strong traction very quickly (propelled forward by a combination of agressive pricing, AMS & FBA). There's been a lot of talk on your podcasts about Amazon "own label", but this "manufacturer to consumer" model would appear to be a much more of a imminent threat to incumbent domestic brand owners. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 95 of the Jason & Scot show was recorded on Thursday July 27, 2017. Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Google Automated Transcription of the show Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 95 being recorded on Thursday July 27th. 2017 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo. Scot: [0:40] Hey Jason and welcome back Jason and Scott show listeners Jason imma. I haven't been traveling a lot lately but I think you have been zipping around for you you've kind of been hanging around the coast update listeners on your many travels. Jason: [0:56] Yeah I have been bicoastal this week's. I spent most of the week in my ancestral hometown of San Diego California, I was there for interact Tech which is a great smaller event that the internet puts on every year so that's some. Originally designed for CTO that sort of expanded to include the CMO Council and the digital Council so we had a. A fun couple days of a networking and content there and I got to lead to Workshop which was fun. It was for me probably not for any of the attendees and then flew to New York today to do a workshop with a card tomorrow. Scot: [1:37] Awesome yet so just racking up the miles going to join the eight million Mile Club Pearson. Jason: [1:43] I'm happy to report I hope to never achieve 8 million miles but I do have quite a few and I did get to visit I got to check off another Amazon bookstore on my West cuz there's one in University Town Center in San Diego. Scot: [1:58] Cool so give us a quick update on that and then what was the buzz it in RF take anything that listener should know about. Jason: [2:05] Usher so the the Amazon bookstore like. [2:09] Is not very interesting it was the second one they opened and it's a smaller footprint so it's basically. [2:18] Today in equivalents at our offerings to the. [2:21] The Seattle won that bet in West base so you not if you've been to another Amazon bookstore you don't need to go out of your way to see this one is that mentioned before the. The one in my hometown in Chicago appears to be, the most advanced with the with the coffee shop and a broader assortment of products than any of the other which is sort of interesting. Scot: [2:42] Did you try to return a random Amazon product like you're like you're freaking leader. Jason: [2:47] Because I was traveling for 8 days in a two-day overnight bag I did not have room to bring any test returns with me. [2:56] Yeah that's my shoes and I'm sticking to it but the check was good there was a lot of interesting speakers. [3:06] I definitely would say the theme of the show was preparing for the future and particularly overcoming risk aversion and not being afraid to fail and failing faster with sort of the. A recurring theme throughout the day. Scot: [3:23] So, gelatin and how do some of these 5200 or organizations crank up the the speed. Jason: [3:30] Exactly and I you don't I I think sometimes explicitly stated and sometimes kind of just implied, but you know I'll just leave the boogeyman for most of these these folks as Amazon and and they're particularly good at moving fast and innovating despite the fact that there. A large twenty-year-old company in so you know I feel like the the realization is hit a lot of folks that they have to find ways to be more. More agile and more forward-leaning than than the the innovator's dilemma with typically dictate. Scot: [4:03] And then what was your talk on. Jason: [4:05] So I actually did a workshop on that theme so I am. Presented sort of seven trends that I felt were sort of exponential growth Trends in the industry that would likely affect all of the. The attendees businesses and then I gave them some brainstorming tools that we use to be more forward-looking and sort of divorce ourselves from some of the, the Legacy thinking so I introduced them to a structure that was designed by a guy named Eddie to Bono called six hat thinking and so we went through a six hat thinking brainstorming exercise where we fired everyone from their current companies and had them all work for a new grocery retailer trying to invent a new customer experience in the US, to compete with Amazon Whole Foods. Scot: [4:52] Cool we should do a deep dive on the so don't say too much let's leave listeners just kind of guessing my my big question is did you really wear 6 haven't set a time. Jason: [5:01] Note that when we talk on the thing what you want is you only get to wear one handed a time that's that's the beauty of the the system. Scot: [5:11] So we won't tell listeners why it's called six hats so leave that is as I'm sure they're on the edge of their seat right now. Jason: [5:18] Cliffhanger. Scot: [5:19] What we have a jam-packed show tonight so let's jump into it so the two big topics number one is earlier today Amazon release their earnings for the second quarter and hot take on that and then we have listened or questions it's been quite a while since we did listen to questions we put the call out, and I'm excited report we we have a lot of listen to questions I'm not sure we're going to be able to get to them so let's kick it off with Amazon news which is our hot take on earnings. [6:04] Yeah so today. [6:07] Amazon came out with their Q2 earnings they're usually one of the later companies to report in our world so we already heard from eBay already heard from Google and Facebook and Twitter just kind of summarize those guys eBay was Steady As She Goes. Google did did relatively well the stock was off a little bit. They paid clicks were up but they face somatization challenges that that people kind of scratching her head about a lot of people worried maybe they're just getting a lot of klicks from YouTube that aren't monetizing very well-off out loud concerns over mobile and then, let's see Facebook crushed earnings on every measurable kind of thing they hit some new all-time highs Twitter's results for kind of man you know they're really struggling to add new users so that's kind of the setup is kind of you know. Mixed bad coming into Amazon so let's go through that so. The Top Line got to looking at Revenue that I came in at 38 billion and that topped Wall Street expectations pretty handily and represents 26% year-over-year growth and just remind listeners e-commerce is growing at 15%, and here you have Amazon just kind of pretty easily doubling that. [7:19] Nothing that I was have to remind myself with this quarter is it does not include Prime Dave so Prime day will actually fall into the Q3 results so. So this is this is pretty nice that represents a bit of an acceleration kind of from last quarter so you know Amazon would what amazes me is. [7:38] They seem to defy the rule of large numbers and what kind of talk what about Wyatt a minute that you have to be 38 billion and still posting these kinds of growth numbers is is. Pretty impressive. As you peel the onion on the revenue side North America Revenue was the cause of the reacceleration in that grew 27%. [7:59] There were some concerns about the cloud computing which is AWS because Microsoft had reported a strong quarter there a dubious has been lowering their prices as they kind of compete out in the world with with kind of the commodity storage and things, and AWS topped expectations so people are excited about that International had some currency headwinds but when you take those out it also had a nice showing. Things I watch closely are some of the non-gaap measures so third-party seller Services which is its own Revenue line item now. Groove 40%. [8:33] I should say little footnote for those of you that have followed my Amazon analysis for a while that used to break out media egm and other and they stop doing that unfortunately so. I can no longer kind of see how that egm pieces doing that's always going to want things I really enjoyed I do think this third-party seller service metric now is probably a proxy for that because most third-party sellers are in a GM. So that grew 40% so again you know almost three times the pace of e-commerce which is pretty amazing, third-party as a percentage of units hit a new high water mark of 51% that's the highest that's ever been so the third party Marketplace I know we have a lot of listeners that are either brands that do hybrid or are there are third-party sellers, retailers very healthy growth there. [9:22] The another new segment that Amazon introduced this year in the first quarter that we're now starting to see some Trends on is called retail subscription services, and that's essentially revenue from Prime and Dad grew 53% which the Wall Street notes will come out tomorrow I think we're going to see. People against before Prime day which I think had you know they said record signups I think we're going to see people touch up their number of prime subscribers based on this I think I think. [9:49] Egg while she may have underestimated how many prime subscribers kind of added in the quarter so so that'll be interesting to watch and will report on that, another area I look at is paid unit growth so this is just took kind of a, measure of volume that was up 27% year-over-year and that's its highest level since Q3 of 16 so it's really interesting reacceleration at Amazon going on and that's you know I think if you kind of. [10:16] You think about how Wall Street thinks about that was all super positive the one thing that kind of freak Wall Street out a little bit and this happens. Every cycle with Amazon is they start to show some profit and they reinvest and then a certain set of investors freak out about that. So that's on the bottom line on the expense side so while she was looking for just over billion dollar in in gap profit, and it actually came out to be 600 million so kind of half of what folks are looking for earnings per share that translates into earnings per share of $0.40 while she was expecting like a buck 40 so you'll see this headline to know that. Amazon misses bottom line by you know 77% that kind of thing that's certainly true. But you know when you when you beat revenue and Miss on earnings usually kind of implies some level investment inside of their and. [11:10] We'll see that we'll talk about that in a second and then the thing we. You know yo big public is very much of what have you done for me lately kind of thing it's really, maybe 20% about the quarterly reporting 80% about the next quarter what they're talking about so at Amazon updated their guidance for Q3 and the projected revenues between 39 and about 42 billion which implies, a bracket of 20 to 28% year-over-year growth 24% at the midpoint Amazon has a pretty good history at kind of beating that just like they did this quarter or coming in right at the top of that guy that's so that. That was as kind of that exceeded wall Street's kind of previous thinking about Q3 but where they did not exceed are they contact. Missed where while she was thinking is when they projected the bottom line into next quarter Wall Street was thinking about 950 million and Amazon said no it's me arrange of - 400 million - 300. [12:09] So this is going to raise those questions you and I hear a lot about in Amazon's not profitable it's not fair we just have to kind of wait for them to wash it to wake up. [12:19] And you again. Stock after hours was down 30 or $40 which feels like a lot but you have to remember Amazon is an $1,000 stock Club so that's only a couple points. And I think what we'll see tomorrow it'll be interesting you know it's hard to guess how lost react but I think we'll actually see. [12:40] The set of investors that care about growth and market-share what kind of overcome the industrious that are focused on profitability. [12:48] Last point on profitability Amazon really does not optimized for any of those things I just talked about they optimized for Revenue growth in market share and then. Cash flow and what happens is always accounting rules kind of. Bend that as you report this thing's so just kind of give you some numbers for the quarter Amazon had 17.8 billion dollars of operating cash flow and then 8.2 billion of that goes property equipment in R&D, so that's kind of what's Happening Here is the way I think about it is. [13:22] Amazon where to stop investing for the future and so let's just come. Play that off they wouldn't be making these kinds of Investments and you would have seen no a big chunk of the 17 billion flow to the bottom line. What they're doing is they're investing in R&D they're building fulfillment centers in her building data centers does does your kind of the three biggest legs of investment so for example another four billion went to pay for Lisa's so that's fulfillment centers and then invested another four billion in, new releases in equipment so so you know. [13:58] The losses that you see the way I would argue it and I think a retailer should think about this Wall Street it's kind of Ena. Don't think Howard I think these losses actually are not from the current business is kind of his F you know they're they're making. [14:14] Good investment for an Indies levels you think about the levels I just talked about that's the level of their investing in so so pretty crazy levels investment. Jason: [14:23] Yeah absolutely and you know I tend to think of it pretty simply if they if their profits were going down because their cost of goods were going up or some, some operating expense that was directly related to their sales this quarter were dramatically going up like shipping went way up as a percentage of sales or something like that like then. That would be indicative of a problem in their business model but when they're their profit isn't High because they're investing in, things that are likely to have a much higher future value like capacity or subscribers. [14:59] Like that that's that that's a whole different equation in my mind. Scot: [15:04] Yeah absolutely into that point I didn't talk about it but gross margins were real. About that been relatively the same for the last year or so you know the cost of goods are pretty are very stable and then, this is kind of like in the weed so I'll just kind of leave it as something if listeners are interested Amazon does report kind of segments in then that gives you a little bit better view of how profitable is each business unit if you strip some of this investment out they call it, CSI which I think stands for I know it's segment operating income I forget what the C is for, but they kind of report on retail AWS and that customer segment operating income I think it is that's a really interesting metric if you if you're if you want to get super geeky on this stuff and you have to really dig into their SEC documents their q and in her case can I get that, but it is a Consolidated segment operating income at the kiddos said look for CSI and I think. [16:05] I always find that is a really interesting few that strips out a lot of the things like you know RS use and non-cash pieces and a lot of the accounting stuff that kind of gives you a hard makes it hard to see what's going on inside of their. Jason: [16:19] Yeah I'm I still run into it all the time that you know I hear from some particular from retailers but you know others that oh man Amazon has good at growing Revenue but they but they're not profitable and of course. That just factually untrue and. It was even on Truth escort or even though it was a somewhat down quarter versus Wall Street expectations and then the one of here even more commonly is. [16:44] Only AWS is profitable so were you to take out AWS they they wouldn't be a viable business. Scot: [16:50] Yeah and the CSO actually proves that wrong so it does show AWS is profitable but it also talks about, not combines retail and 3p and it I believe it does a, domestic non-domestic in both of those domestics profitable Internationals losing a little bit on but you can see it's on a path to get there and it's kind of been chewing away at it over time so yeah you know that that's those are just kind of factually wrong Sue. Yeah I guess and NF. Amazon secretly loves it when people think that because they did you know that is not true and they they love misinformation kind of things like that that people are not watching the right. Part of them the ball here to to keep up with it when one thing is happened and we called it here on the Jason Scott show, as the stock has kind of held over $1,000 is kind of in the, thousand $10,020 range so things have happened out there and with Berkshire Hathaway and Microsoft stock and whatnot and the end result is by at least I've read into sources now CNBC in Fortune Bezos is the most rich person in the world at 90 billion dollars so so congrats Jeff whenever you're a big listener so, big pat on the back for that and yeah we know congratulations. Jason: [18:10] Pour yourself a drink with that top shelf a beverage of your choice. Scot: [18:14] Boom get a Diet Coke go crazy. Jason: [18:16] Exactly other I do things gotta actually read that that he hit that Peak based on the stock having a nice little uptick before the earnings were now it's because the, that anticipation was that it was going to be a good quarter, and then I think after the announcement that the stock actually corrected a little bit and I think you might have slipped back under Bill Gates for the time being. Scot: [18:38] Yes it gets it like 10:20 to 10:25 somewhere in there so I'm sure he probably doesn't care what's another. Jason: [18:46] I think if you really cared you would have skipped a year of space exploration and you'd be there. Scot: [18:53] Cool so that's our hot take on Amazon's earnings for Q2 and and if the way I would summarize it is. I think it was really strong and they are just pouring more money into Investments and they're very profitable lots of free cash flow that they are just spending as rapidly as they can into. Things that I think are pretty. Conservative that are going to pay off for them another fulfillment center Prime now launching in Australia launching in Singapore all these things are our kind of no-brainers. [19:28] Soup that is Amazon news and now it is time for. [19:43] Question question question. [19:50] Who's the first wanted to thank all our listeners to most of these come from our Facebook page so as reminder if you just go to Facebook and the search for Jason and Scott show you will be taking there, or if you go to Jason and Scott. we have links to Facebook page there and it's Scott with 1T so our first question Jason comes from Curie Masters so it's also say a blanket statement of I apologize if I say Jason right I say your name wrong, security says I'd love to hear Jason Scott talk about their Global e-commerce out, Amazon in particular seems Keen to expand aggressively in international markets does the growth opportunities matched regulatory operational complexity for Brands interested on your take. Jason: [20:34] Yeah so that that's a great question carry like at a high-level like you know I think certainly we're all bullish about. International e-commerce growth so just kind of. The level set this is a milestone year in 2017 globally e-commerce will surpass 10% of all retail sales across the globe so, we can I hit that inflection point worldwide and Global e-commerce growth is about 23% so even Scott mentioned earlier, we're in one of the more developed markets here in North America and its about 15% so so the worldwide growth prospects are certainly higher. [21:12] But your your question sort of implies the real trick to all of this is you know in those markets where there is considerable growth. [21:23] Is it cost-effective to see that growth either because of the. The individual complexities of those markets it because of language and Logistics in in those sorts of things and in particularly is the growth opportunity constrained. [21:37] That because of rigor Tori issues right and so you know that's the. The sort of equation you have to apply but certainly I think the the conventional wisdom is you know that the super exciting market for most. [21:51] Folks at the moment is India and you know to kind of put that in perspective. In North America about 75% of all the consumers that have access to the internet or online Shoppers in fact I think it's like 76% in Asia. [22:09] It's closer to 2:50 or 60% of of all users. That have internet access are shopping online but where it gets interesting is in North America the overwhelming majority of all users have internet access in Asia only about half of all users have internet access so when you look at. [22:31] The percentage of the total population that are shopping online you don't in in North America where about 65% in Asia were at 25%, so India in particular is even a little lower than that and has a huge population so you have a huge population you have an emerging middle class. And you have very low penetration at the moment so those are certainly. You know all the the favorable characteristics that have caused a lot of big International companies to come in and make big bets in it in India which is why it's. Kind of the the global e-commerce Battleground right now and as you've directly pointed out there some, challenging Logistics and Regulatory environment that make it difficult for for businesses Amazon in particular to sort of. Completely replicate their their North American model in India so so that's that's the barrier. Scot: [23:27] Yeah and um. So I'll specifically can't talk to Amazon a little bit I'm not an expert on regulatory issues but you know so Amazon is growth strategy has been, is it interesting so they start in the US and then they did Europe and then they, the only time Amazon has not kind of. [23:50] Really focused and become number one is China and if anything in China I think they're like number four or five which is pretty interesting and I think they've learned a lot from that experience I think they they realize that. [24:05] They have to really adaptive local market and build a team and maybe acquire a company and, just kind of be more Nimble than they had been since the China was a real big learning and and ever since then you know they have when they going on Market they go guns blazing and, to Jason's Point India seems to be that's really interesting Battle Ground right now between all the big. Global e-commerce companies so so Amazon got a bit of a late start because there is some some regulatory things they had to cross over and India and they. They can only open the third party Marketplace are they Amazon still does not retail so there's some kind of protectionist law that you can't afford company can't be a retailer and India so so you had. [24:50] Flipkart and Snapdeal as kind of the incumbents local companies and then Amazon dinner and they started taking sure then what's happened is Alibaba and eBay of each continent. Southside Bank in so he's really big players have kind of bolstered those anti Amazon companies so Amazon is is, pretty publicly said they can spend billions of dollars in India there's something like I tracked us pretty close 15 to 20 fulfillment centers they're building Justin India so there. Derp derp pretty much betting that the Playbook of getting product close to Consumers can be really important India because it is a very large country. No what is a six billion people in the Diaz Harrison. Jason: [25:34] Yeah I think that sounds about right no maybe like 3 billion. Scot: [25:39] Maybe China sex so. So you have a very populous country spread out lots of cities lots of different ways not a really great career system or delivery system, like a FedEx UPS USPS so I think Amazon is really investing in that so it's been interesting to kind of watch in and they know they've been way more aggressive there than they, did when we went to China I think day and when I read the tea leaves I think they kind of regret not being more aggressive in China and Android building that out better and they got kind of beat by JD with a 1p model and Alibaba other 3p model. [26:12] What kind of stick to Asia pack there they that's been where they've been investing for last 3 years they haven't been, expanding much but now we're starting to hear they're definitely opening Singapore and then Australia and so it's interesting to see them kind of pick up those countries, then just a reminder they did a choir a the top Marketplace in the Middle East called souq souq. Jason: [26:42] Yep exactly. Scot: [26:44] And that's a pretty big market place I think it was like 2 to 5 billion and GMP which is pretty sizable and, that's going to pick up you know Saudi Arabia Qatar Kuwait some of the Middle East countries there and it's a lot like mercadolibre we've had on the show or it's kind of a family of little local marketplaces it's not kind of. Homogeneous Marketplace it's kind of every country has its own rules and regulations and language and currency and careers so they kind of like have built that in each country in the Middle East and then they. Did you have some glue that kind of combines it together so some cross-border trade kind of things payment platform that I think is is kind of somewhere across there and that kind of a thing so so for that gives you a flavor for Amazon is and then the last one I'll talk about is, kind of something America so, so Amazon so South America for long time was one of the fastest growing e-commerce markets yes you would have China so Jason was talking about, Jason did you say Global at 23 or 25. Jason: [27:53] 25 Scot: [27:54] Cuz I didn't you used to see Brazil kind of this 35-40 and China kind of like maybe it 2830 Brazil has come down pretty considerably because just politically rest in the country also have right next door is Venezuela is kind of Hit the skids, do the some currency devaluation things going on there so loud political and currency things in the South American countries have caused the Slowdown I believe in we had mercadolibre, on the show they were talking about kind of 25 28% growth that they were seeing so that used to be like the fastest grower and I think China has kind of supplanted that that kind of what your data shows Jason. Jason: [28:36] Yeah and I I would say like so. Latam is kind of right in between Asia and North America in terms of digital Shopper penetration so there is a lot of Headroom there but is you you rightly pointed out it, it's actually a lot more fragmented so while you can kind of you know list ones q and and reach all in India. You know you you are what you really need to do is West as you know a separate skew and in each country in Latin America are the Middle East which make the the logistics a lot more challenging. Scot: [29:08] Yeah and I've never had the pleasure of meeting Carrie but I see from her LinkedIn that she she always Brands sell on Amazon and other places and you know when when I talked to brands in the US about this. [29:22] It's interesting so. [29:24] Two years ago plus they were they were obsessed with China and like what's our China strategy and I've seen the last 18 months that has cooled down and it's very much. What's my direct consumer strategy what's my Amazon us strategy, so I think I think that people have pulled back a lot on this kind of global international thing because they are feeling the heat in their home market and there's this is us Brands I'm talking about, so You know for those brands that aren't concerned about that you know where where we see a typical road map is let's see it to us brand they starting to us the natural place to go is the UK because you don't typically have a language in Madera, it's a very kind of us feeling kind of a country obviously and then you'll see some expansion into Europe usually Germany and France being kind of the next biggest e-commerce markets. [30:15] We have a lot of customers a challenge to do really well in Australia Australia is kind of an easy box to take off its English-speaking and is very friendly to Imports and, there is a lot of infrastructure out there for supporting these countries so there's a lot of lot of the marketplace provider so eBay has a really excellent program around this so does Amazon, around global Shipping say allow you to they'll take care of lot of this operational kind of complexity you talk about where you can have a crawl walk run metaphor so, eBay brand program for example you start out like let's say you're a US company and you want to start selling into eBay Germany, you can just kind of set a flag that says I want my part to show up on eBay Germany they'll actually translate it for you using a Google translate consumers there can see it the order it and then you'll get an order that just shipped to the US and does it reshipping, that's that's nice because you can kind of test the waters without having to make huge Investments Santa Crawl part then is what we say to folks is as you see that volume take up it's not the best customer experience so really kind of go to that next level of customer experience you need to start kind of shipping pallets over to, the destination country and selling in more of a localized way that's the walk and then run is when you, you know you actually kind of maybe create a store footprint or a fulfillment footprint actually put bodies over there answering questions of that kind of thing and that's the run so we sit up that model work really well for both small and medium-sized retailers as well as Brands and. [31:46] I think we'll see more and more of those kind of solutions that come out to really help everyone kind of, peel this cross-border trade peace and understand how you selling these International markets. Jason: [31:57] And I'll just head one one points and Scott and I both won't geography China has about like 1.35 billion people in India has about 1.3 billion so there, they're the two most populous countries in together they're almost three billion which is. Scot: [32:13] Yeah there's like eight billion people on the planet. Jason: [32:15] Exactly. [32:18] But so yes I think that that that's a great answer to carries question the next question came from Josh tarasoff and Josh wanted to know what our take is on Amazon strategy, behind buying products at full retail price for Marketplace Sellers and he gave us a link to CNBC article talking about this this new deal. Scot: [32:43] Yeah and this is kind of a little bit of a head-scratcher and as I've talked to a lot of sellers are concerned about this because, the way it was announced was just kind of like Amazon didn't exactly say why this kind of said hey you know you have some product and FBA and you may see. Amazon.com is the buyer which kind of people like what what's that mean so what I think's Happening Here is. Yo again these global Shipping program let me kind of explain how eBay does this so a seller on eBay. [33:18] If you don't opt out of it they will actually. Up to your default opted into that global Shipping program I was talking about I think that's what Amazon is doing because what they want to do is when they pick a new country but this is true for any country but when they ruined Australia. They want to show as broad assortment as possible and people and I'll show you love Western Goods so this this program will allow Amazon to say to people in Australia. Look we have you know 30 million products that that are available to come into your country, versus if they did do that then maybe it's a million or two million that they would kind of host, so they would still have a million to 2 million local and then like another 28 million that are kind of cross-border trade that could be shipped from the US, that gives that gives them this kind of I would call the backfill strategy so it gives them this perception of lots of selection. Using cross-border trade as a back film then let's do it lead you do is so imagine people start buying from. The cotton country in the outer country product they can very quickly learn from that and say oh. [34:23] These widgets are very popular in Australia let's kind of source them local or let's get pallets instead of each is from the u.s. FBA let's work with Our Brands and sellers to kind of say hey. Hey mister customer your widgets are really popular in Australia that was kind of wrap this up so that's what I believe is going on it's easy to kind of make it seem more nefarious and Jason turn over to you for that Park. Jason: [34:52] Yeah though I have to say I have a slightly dishonor different understanding of what's happening so be interesting maybe there's a little both happening but I've talked to a few 3-piece Sellers and it was less than automatic. To the program that you had to opt out of and more it was an offer to opt into a one-time transaction. [35:14] And so like what these sellers were told as hey you have an inventory that you're selling 3p in North America. We want to buy that inventory from you one time so that those listings will go away in North America cuz you'll no longer have the product to sell and we're going to take ownership of that inventory and sell it in another country and so it was basically an offer. [35:38] From Amazon to the seller to buy their inventory so that Amazon could resell it and they were offering to buy at at at. [35:46] Full ask price from the seller and how I interpreted that is. That they were looking to buy inventory to fill in brands or products that they were missing in some of the new markets that they're entering like Australia for example. [36:04] Interview if you think back to the early days of toys and Amazon you remember they originally had a deal with Toys R Us Toys R Us to the famous we pulled out of the deal. Right before holiday would you have to Amazon in a bad spot and Amazon actually sent a bunch of employees to go in the retail stores. Buy toys at full pop and put them on the market place so that the customers would be able to buy toys from Amazon and that really kicked off Amazon's. [36:32] Foray into the toy space in so I look at this this 3p thing and I said hey Amazons. Doing the same thing in new markets today only they now have a convenience they didn't have back then they don't have to walk in the stores and buy products, have a bunch of sellers in their own Echo systems that are they have products in their warehouses so they just go to those guys and say hey do you want to sell me your inventory if you do great I'll buy it. [36:56] I'll sell them in another Market you know in the long run I'm certainly going to look to get them more efficient supply chain but but as a way to get started I will do that. There's nothing wrong or nefarious about doing that but what what does happen is there a few brands that three-piece Cellars. Are selling on the marketplace the do not want Amazon to be able to sell them in and most famously, these days that would be Birkenstock and so Birkenstock had a number of, of authorized resellers that were selling their products on Amazon is 3p and they got letters from Amazon saying he will buy your inventory and resell it. And the Birkenstock CEO reacted very badly to that he sent out a very dire letter saying you know any retailer that sells even one pair of shoes to Amazon to allow them to resell will never sell Birkenstock again and he, he called it Amazon's attempted modern-day piracy and and you know there's a pretty pretty lengthy article about it in Washington Post, which is I guess somewhat ironic since it's paper owned by Jeff Bezos and will put a link to that in the show notes. Scot: [38:10] So our next question comes from a nuke goes off in a noob says hey guys I love your show so Anup obviously has, impeccable taste and yeah where was he says we would love to see your take on when if Brands will be active on messaging platforms like Facebook messenger Kik Etc is it a better Channel than email is there any kind of signal in the noise where do the opportunities risk thanks. Jason: [38:39] Great question on oops so it it depends a little bit on the parameters of what you're asking so when you know you mentioned, Brands being active which is different than brand selling stuff on these platforms and you predominately named platforms that are. They're pretty prevalent in North America although kick kick has a more Global footprint. [39:06] The answer varies widely depending on your geography so obviously we talk a lot about we chat, in China being you don't Super Active platform for brands, there are millions of sponsored accounts on on WeChat kakow chat and other parts of Asia like Korea is very popular and a ton of brands or have are active on that here in North America although messenger has a billion users you know we only see about 30,000 Brands active on it right now which like compared to Lee isn't a lot, and that's really because the the platforms that are most prevalent in North America like, messenger Snapchat Instagram historically haven't had the best tools for Brands so the advertising tools have been kind of poor and those are rapidly improving which. Makes me think we'll see Brands using those platforms more as an advertising vehicle and then the Commerce tools are still very poor and what we what we just painfully lack in North America is a. Universally adopted digital wallet that enables you no friction full free transaction on all these platforms so when you look at what the big difference between WeChat is and Facebook Messenger, it's really, that we chat has 10 since digital wallet built into it and it makes it really easy to do a transaction right in the platform and we don't we don't have that on Facebook Messenger today. [40:35] And so I do I guess you know roll all that up we are starting to see brands use those platforms more, more degree brands that are very Visual and that are using like Snapchat and Instagram as a discovery platform, all the platforms are rolling out better advertising tools they're rolling up better self-service tools and their ruling out visual search tools like the Pinterest new lands feature for example and those all lend themselves to do. The platform's Becoming better product Discovery platforms so I do think we're going to see progress but I don't think we're going to see anything like, the adoption of WeChat in China unless and until we get a universally-accepted digital wallet. [41:21] So I would just add one more thing, these could all be good tools for your mix but at the moment none of them are going to give you an Roi anything close to email which is you know still a great bang for the buck. Scot: [41:32] Yeah I totally agree and we talked about it a lot and our annual predictions and you know I think. Everyone every us company wants that China mild work here in an in it just hasn't kind of. Taking it I don't know if it's even if we had a lot I'm just not sure consumer behaviour the same so it's going to be really interesting to watch that play out I wouldn't count it out yet because you know you have some really serious multi-billion-dollar companies kind of playing this it is interesting, kind of a dark horse in this is Amazon so they we mentioned this in summer Amazon news last episode so they've got theirs a lot of rumors that they have a messaging platform in the works. I have to believe that would enough. If I think of what would Amazon do to make their messaging platform different I think buying stuff would be the one thing that other thing I would think would be kind of unified Echo, and text chat kind of you know, kind of hook up maybe pretty resting so let's kind of see what they come out with and then also as a reminder they came out with I want to call it. Sprint's but Sparks I guess is there a kind of. Pinterest e instagrami product oriented kind of think so so Amazon is the first e-commerce company to take a shot of this so that could be a different take but I do think there's a lot of headwinds there. Nothing I would draw your attention to that's an interesting case study is, the the retailer everlane came out and they were kind of the poster child for this and they've been lockstep with Facebook the integrated everything they did the transaction notifications they did the wallet they've done all that stuff and then in March of this year they actually announced they were just going to end a life that so I think you know. [43:15] I think that we went to a hype cycle there and we're definitely in the trough of disillusionment kind of phase I don't know if we going to make it out of that truck or not. Jason: [43:24] Yeah it's going to be interesting to watch I tend to be bullish but I think you it could be really risky to overestimate the timing so, you know what remains to be seen like how quickly it's adopted, and I guess I would add just one of the point I have seen some interesting new pilots including one by I think Adidas with a really trying to. [43:48] Use SMS as that that sort of transactional platform, and add the ability to do auto reorders and things like that using SMS witches sort of interesting cuz that can be well or friction than some of these other platforms. [44:05] So let's go to the next question which is from Lauren Tonkin and Lauren right side love your thoughts on auto replenishment, why have other retailers not adopted this tactic probably Beyond Amazon at Target. Do auto replenishment models differ globally what non-intuitive product categories do you think him venefit from the NADA replenishment strategy thank you keep up the great work Jason the sky. Scot: [44:33] Fix another person with a great taste I have to say Jason let me let me kind of. Paying this off of you so we make sure to talk about the same thing so when I think about Auto replenishment it is. There's kind of nuance here so Amazon free sample has subscribe and Save which is a hard I want to subscribe to this Auto replenishment to me means the platform saying to you, hey Jason you ordered toothpaste 30 days ago is this a good time do you want to go ahead and order more is that kind of how you think about it or do you want them all together. Jason: [45:06] No I think about exactly how you do I think there's two tears and implied in Laurens question is when she says Auto replenishment I think she's actually, initially talking about subscriptions because she references Amazon and Target and you know Target does support subscriptions but not through Auto replenishment, and and your point like you know I think the Step Beyond subscriptions is this entirely implicit process where the stuff just shows up. Scot: [45:34] Yeah and it's too kind of background things to answer this question in number 1 full disclosure I'm on the board of a company here in Research Triangle Park called Windows Circle and their whole thing is applying data science machine learning to transactional data retailers to cut a fine replenishable products so it's actually know a fair amount of this and then I would also Point folks to, the excellent Deep dive Jason let us onto machine learning this is a great way the other, to leverage machine learning so this is obvious right so. Dog food any replenishable kind of a consumable product is going to have a certain period of time and it's done. Other ones are harder to tell so it's harder to tell the duration like even dog food you know I you know I may have a dog that only eats one cup versus Jason's dog eats two cups we all know MacGyver loves to stuff it and. And then also another good example is maybe batteries because maybe person a has six kids and they just. Turn two batteries like crazy person be being doesn't burn two batteries that much of This Is War Machine learning is, nursing because it can look at that transactional data at a very personalized level and say you know this. This customer is seems to be replenishing on this product on this level let's automate that for them. Or maybe even surfacing it up to that that top to your of subscribe and save I do think it is very interesting. [47:04] I think Why are retailers not really kind of attacking it I think when retailers list the things they're going to move the needle for them, they are stuck at night number one into which typically and Jason you're more of an expert on this but whenever I talk to retailers they're obsessed with 3 platforming, so they spent a lot of time I just like choosing the platforms Andrey platforming and kind of doing that kind of stuff. And then there are spending a ton of time around omni-channel Integrations and these kinds of things and then you know like. Replenishment subscribe and save is like number four and five personalization maybe this number three so so my view is it just kind of like it's hard for your average top. 200 retailer to get to this to spend time on it so I'm curious to hear your thoughts Jason. Jason: [47:51] Yeah I do think one of the challenges is just the band with challenge that you know and he's big roadmaps if if it doesn't pencil out as that you know. First or second most valuable initiative it just hard to get bandwidth to get to it, but I do think there are some nuances I think the majority of subscription programs at the moment are pretty brain dead and tendon not work very well, so you know you think about a lot of these subscription services. Like a blue apron or Dollar Shave Club and after awhile you get behind you didn't cook all the food the Blue Apron sent you or you have an excess supply of razors and you get subscription fatigue and you turn it off and so we're left in North America with this irony there all these subscription-based businesses, Stitch fix Trunk Club. It started out as a recurring subscription in and they all have had to shift their model to not be automatic subscription because customers. In general just don't like receiving the product when they don't need them and so just sending stuff on a fixed schedule hasn't worked very well you know I do think. [49:00] An exception to that rule is the Prime Pantry and I think boxed is probably an exception to that rule in that regard but what we really. Like close to and just haven't seen enough good examples yet is the artificial intelligence based, replenishment witches I think more what's Scott's talking about an interested in and you know they're there certainly are some good examples of that we're doing a lot of work with Sephora which has a huge data set and, you can imagine you know everyone's use case for a Cosmetics as wildly different, and so it's not a matter of just figuring out that people need mascara on a monthly basis it's a matter of figuring out you know the individual usage patterns for for a particular consumer. And and predictively shipping for that consumers use case and so I do think that's going to be successful we're going to see more of that and then I would also say. Did to me the big the big picture here is instrumented Auto replenishment in you know and said this. Amazon has a little bit of this and what they called their Dash replenishment program but your you know your Canon. Inkjet printer that automatically orders ink when it knows it's running low or The Brita water filter that orders a new filter cartridge when it knows you should change the cartridge. Those are the today examples but you don't have to go too far in the future before I can virtually assure you that the, your toilet paper holder is going to count how many squares of toilet paper to use and know when you need more toilet paper in your house and you know you can imagine that Amazon Go technology that they're using in the store to see what products you put in the cart you can imagine that same technology being in your kitchen to know when you're running low on milk and you know so I think. [50:39] In the not-too-distant future the internet of things will be the trigger for a lot of these Auto replenishment orders in and when that happens we're projecting that about 40% of the skew used in the center of a grocery store, you know the people go shopping for the day and drive trips and causes serendipitous Discovery and all these other things are going to go away because about 40% of those goods you're just going to have magically show up at your house when you need them. Scot: [51:06] Yeah and there's kind of a news item here just recently Walmart filed a patent that would it was kind of like dash button but the products would order things themselves so there's there's a lot Innovation going around that area to be interesting to see that. Play out and see you know. Is consumers adopt that or not it's kind of like creepy when the milk kind of self their nose is empty and orders it for you I'm not really sure if if how folks are reactive. Next question is from Ben Cates and been really wanted to just kind of talk about our point of view of off-price retail both online and offline. Jason: [51:45] Yeah and that it's a tricky topic right now cuz it's, in North America off-price retailers in one of the few bright spots in brick-and-mortar retail so you look at the dollar stores you look at TJ Maxx and and there you know really one of the. The few growth areas in brick-and-mortar retail. You know obviously consumers are getting more price-sensitive and and that's become a super popular format in the challenge has been how to manifest that off price format, online Frank and you have sort of two problems when you get to these really you know inexpensive low-cost items like the things in a dollar store. The shipping becomes really challenging for e-commerce so that that's a you know the Majestics cost become a big impediment in Amazon parlance you know most of those items are crap items items you can't realize a profit and e-commerce on in the even bigger problem is, a big part of the shopping experience in these off-price stores is the treasure hunt it's that you don't know what you're going to find when you walk into the TJ Maxx and your you know hopefully going to find something that there's only one that's a great deal and it's really. Cost inefficient to, create a product detail page for that SKU you only have one of them and it sells super quickly and in many cases it just makes more sense to put that coat in a store then it does to. Put it online and so I would say the moment that the best off-price retailers are really struggling to figure out what the Digital model is I mean you know that. [53:17] TJ Max is in the Nordstrom Rack I'll have e-commerce sites but the. Assortment of product they sell in their e-commerce site is very different than the assortment they sell in the stores and the percentage of their sales that are online are much lower than a traditional apparel retailer for example. Scot: [53:36] Yeah I think I don't have a ton dad there there's a there's a chart maybe we can put it in the show notes that this kind of shows this disparity that that you have been kind of talks about here where, if you look at it just kind of physical retail the only things that are growing from a same-store sales are the dollar stores and the the warehouse clubs and, it's ironic because those actually don't translate to unlined very well no one is figure it out we've had boxed on the show I kind of put brandless in this bucket. Amazon Pantry figured out how do you bring that that Wholesale Club kind of an experience, bolt products and end up getting the unit volume unit cost down and butt by having you buy, large assortment some things no one's figured out how to bring that online and at the same time the guys that are really struggling offline are the the non off-price retail so if you're not a value-oriented or kind of a convenience oriented play right now that seems to be there studies that show this will have time to go into it but there's this kind of, bifurcation in the US by our Market where a pretty big segment loves value and they'll go to the TJ Maxx and they'll sort through every. Apparel item in there looking for a great deal so they have at Skyway I think about it as they're willing to spend a fair amount of time to save save money and they like that hunt and other side is convenience wanted so so I think's happening is the guys that are really struggling offline you know the ones we've reported on the Sports Authorities to Macy's the Sears guys closing stores. [55:06] Then really have value and they also don't have convenience so they kind of in this no man land where consumer behaviour changed and and I think the off-price guys have been very fortunate that they they are squarely in that value bucket. Jason: [55:21] Yeah I think that's absolutely right and I think there's there's one outlier there which we won't get into on the show but the affordable luxury is is one other bright spot and that's, mostly cosmetics in the form of Sephora and Ulta in North America but those guys are killing it, so if you need to make an investment right now that might be a place to walk. The moving on Gareth Haynes from the UK from across the pond sent us a great question enjoying your podcast from the other side of the pond I would be interested in your take on the recent in the UK anyway growth the product sold on Amazon, buy Chinese 3p Merchants which are presumably the manufacturers, using FBA and Garrett says I've noticed transformational changes and some product groups where new skus and brands of being strong traction very quickly, is propelled forward by a combination of aggressive pricing and supported by AMS NFPA. Scot: [56:19] Yeah this is this is very much in my wheelhouse and, this is huge said this is a massive Trend Amazon it's in Orson cuz you think Alibaba would solve this cuz all these guys are all about as customers but all he bothers so focused on, new Chinese manufacturer selling to Chinese consumer they've kind of dropped the ball on this they do have a platform caught AliExpress but it really hasn't gotten Traction in our Market or Europe it's very popular in in a couple other areas where e-commerce is underrepresented like Russia and what not, so when Amazon is done is. Yeah I would say two to three years ago they realize there's demand people like this product direct from China manufacturers what they don't like is the stuff takes you know when it gets shipped from the Chinese manufacturer. Honeycomb Core slow boat from China it literally is a slow boat from China it takes kind of four weeks to get here if you've ever bought anything from the marketplace wish you've experienced this. That's a fun Marketplace and have been all kinds it's the closest thing to a dollar store if you will kind of that his kind of nail dad and you know it's a great company they're growing but the. The downside is you order these things for three to five six bucks and they take 6 weeks to get here cuz they're coming from mainland China so so. In a world war addicted to Prime that feels like it takes a thousand years so it would Amazon cleverly did as they saw demand for the stuff on the platform. But it was being shipped directly so they have built a whole entire infrastructure call Dragon Boat that essentially uses Predictive Analytics and looks at these folk song on the platform that are shipping Direct. [57:53] And says to them look at instead of doing this direct we think your volume would increase this much if you did pallets and they'll actually then work with them too. Pallets on containers onto an Amazon boat they're cut off all the middle men they see six of middlemen in this exchange so all draft right from Amazon Amazon has part of Amazon China is all. Set up for this to get them into the u.s. in FBI and then now they're Prime eligible. [58:18] And the same is true for the UK this is been extremely disruptive especially for non-branded kind of things so. Yo electronic accessories was the first category now we're seeing it in apparel so you're the same Factory that's making the Vera Wang. Wedding dress is now selling a wedding dress for $200 versus the. The 20K kind of thing so yeah it's been hugely disruptive and what's interesting is you start to see this trend now where. Let's see what can I pick on I was buying some shorts other day and I bought a Columbia pair of shorts for like $80 so that was the name brand, and then amazonbasics had a pair of shorts so then Amazon has worked probably with a China Factory too kind of say here's what we want it to look like in the quality and is not half price so is $40 and then I could actually buy a comprable products direct from a, and you find these guys using AMS to your point using a Chinese manufacturing never heard of and, yeah that one was $20 so what you start to see is this differentiated price we're branded is attacks Amazon Prime as half of X and, Chinese seller is 80 to 90% of X and I think what Amazon is saying is let's give consumers the trade-off and if they whatever they choose they choose and they they understand the trade-offs there and we'll make it very transparent. And so is very interesting and it's extremely disruptive. Jason: [59:49] And I would totally agree and I do think that three-tier, model is going to become more common I mean you even think about like you know Gillette razor blades cost $7 each Dollar Shave gun, Club disrupted the market by you know selling blades at a dollar each and now the Chinese manufacturer the dollar was using as is selling directed $0.20 each and disrupting Dollar Shave Club. And I think that is common. I will give Scott Galloway credit which I hate doing that he has a funny quote about how you know people that have way over estimated 3D printers we already have the world's greatest 3D printer it's called China Anne and I think these marketplaces are really just a sort of facilitating, us using China as sort of a 3D printer that can you know really quickly manufacture these products and get them in the market. Can I guess I would say the one cautionary tale is there have been two huge hits, in in North America that were direct from Chinese Factory products with no brains right and said I was to holidays ago we had all the hoverboards the the stabilized skateboard stuff and you know those were all like designed by Chinese factories and sent over here and they were you know, all also direct from Factory and right now we're in the middle of this silly affair with all the fidget Spinners and most of those are our direct from Chinese factories and in both cases their electronic products were the battery and we're having some scary. [1:01:20] Consumer malfunctions and so I do think there is there's a potential risk, that that these these products are going to get a bad rap for safety concerns and therefore it's going to scare consumers away and so you know, I think we have to make sure we steer clear of that you know for this trend to continue. Scot: [1:01:42] Yeah and the time and puts it in Gareth question. quickly is what's a brand to do so so you're a brand or a retailer you're in category X and suddenly there's a Chinese seller and I think this is really this is the world going forward and to your at the top of the show you talked about how are you more agile I think the answer is. Brands and retailers have to partner to be much more agile there's some things you can do around you know what's interesting is a lot of these things are coming out of the same Factory so they'll do a run for the brand and then we'll do it run stuff, and so if I'm a brand I think I would go back to my Factory in negotiate that they're not allowed to do that in some way you know there's certain constraints that that you can put on there especially with your Electro property, there's some stuff you can do there but it is a day there's so many use factories that you know just shutting down the one there's one next door, so I think its Innovation so you know. And if that's what your brand has to kind of stand for just just kind of these lifestyle Brands and things, those days are are are going to be hard to stay on top of if you're not doing something Innovative around the fabric the technology, all these kinds of things to differentiate your product as a brand and that that treadmill a lot of Brands I talk to you kind of say we've had private label in grocery whatever for years and it doesn't matter I think this is way different than Ethan they face before and it's a new world and. The only solution is in a bit. Jason: [1:03:10] That absolutely and I think it comes down to being close to your consumer if your brand that they can really stay close to your consumer know them you can innovate products that. Particular meet their needs or fit their life and it best that the Chinese factories are going to be fast followers and so I think in the New World, those. Does he know great Innovations you come up with their going to have a shorter lifespan because you know you are you are going to have the Chinese competitors coming in and and challenging your price point so you need to be ready to move on to the next product little faster than we used to do. [1:03:46] And with that I'm sorry to report that it is happen again we've wasted a perfectly good hour of our listeners time, and I'm even sad and report we didn't get to all the listener questions so we're definitely going to have to do another one, so if you have any thoughts about the questions we covered on this show we'd certainly encourage you to hop on Facebook, let your thoughts be known and if you have some other questions we'd love you to leave those on Facebook as well and will get them in the next episode and they've you did enjoy the day show we would certainly appreciate a 5-star review on iTunes. Scot: [1:04:20] Yeah thanks for when we really appreciate the questions and hopefully even enjoyed the hot take on Amazon's quarterly earnings and listener questions. Jason: [1:04:31] Until next time happy commercing.

EP086 - Dorel Juvenile Group Bob Land and Jamie Dooley   An interview with Bob Land is the VP Consumer Engagement and Jamie Dooley is the Head of E-Commerce at Dorel Juvenile Group.  Dorel Juvenile is the world’s leading juvenile product company and has over 11k employees globally. They have a portfolio of 11 brands include Cosco and Safety 1st. In this interview, we discuss Dorel's to to market strategy, including: Wholesale Direct to Consumer Marketplaces Physical/Popup DTC B2B In particular Dorel is a hybrid seller (1p and 3p) on both Walmart and Amazon's marketplaces. Jamie will be one of the speakers at "Amazon & Me" an all day workshop on Tuesday June 6th at IRCE, hosted by Scot Wingo. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 86 of the Jason & Scot show was recorded on Wednesday May 24, 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Amazon Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scott show this episode is being recorded live on Wednesday May 24th 2017 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo. Scot, Jamie, Bob: [0:40] Hey Jason and welcome back Jason Scott show listeners you know Jason some of the feedback we get says that some of our jokes especially yours are juvenile so we have perfect guest for the show tonight. Jason: [0:52] Internist that that feedback is mostly from my family. Scot, Jamie, Bob: [0:57] Guy cuz they get to live with them all the time so tonight we're really excited to have two members of the door old juvenile group e-commerce team dorel juvenile is the world's leading juvenile Product Company and has over 11,000 employees globally they have a portfolio of 11 Brands including Costco and safety first, we're excited to have on the show Bob land who is the VP of consumer engagement and Jamie Dooley who is the head of eCommerce welcome Bob and Jamie hello. Alright cool so what what part of the world I'm in Raleigh Jason is back home in Sunny Chicago where you guys at. [1:36] I am in the Backwoods of Southern New Hampshire and put our company is actually headquartered in the u.s. in Foxboro Massachusetts probably about 15 minutes away from the. [1:51] And I'm in the back words of Boston okay so the first Speaker there was Jamie and II was Bob for those either don't recognize their voices. Jason: [2:01] We always like to start the show by getting a rundown on your background and how you got to your current rolls and maybe a little bit about what the the scope of your role is now so Bob can we start with you. Scot, Jamie, Bob: [2:14] Sure sure I'm I'm kind of the the old man of eCommerce it seems I started off in eCommerce in 1995. Not sure how often you you hear that but I work a Polaroid and I was a product manager on it, try to call to make a print you know those machines that you going to a CVS or Walgreens and you can't hear photo, we did that 95 and we use the internet to you know send some photos to the Internet so it was. Kind of an early beginning I went to Rensselaer which is a little College in Upstate New York engineering school lunch lids.com and 1999 and if you know those guys. Happy tailor. And then cvs.com for CVS Pharmacy in around 2001 when I got into the affiliate space know if you guys are the affiliate world like I do but I started. And a Commission Junction. And then it starts from 2006 all the way to 2011 where we got bought by rapper 10 which is a pretty large e-commerce player out of Japan. That's why I stayed for a while on their leadership team and then found dorel that's our video ad from our new CEO recruiting people for a digital transformation so I've been there been here ever since. Jason: [3:44] End and how long is ever since when did you get to dorel. Scot, Jamie, Bob: [3:47] The three and a half years but then e-commerce terms is talking about sweat 7 is that the multiplier. Jason: [3:54] I think so so you're off probation then. Scot, Jamie, Bob: [3:59] Double secret probation. Jason: [4:02] Awesome in Jamie what about yourself. Scot, Jamie, Bob: [4:06] Well I'm just tangentially my probation officer I need to call him after this process will that I'm a giraffe. Jason: [4:14] That was one of the conditions of your parole if I'm not mistaken. Scot, Jamie, Bob: [4:18] And absolutely was so so I went to MIT for graduate school. Jason: [4:24] That's like a liberal arts college in the in the Northeast. Scot, Jamie, Bob: [4:29] Yes yeah it's a little small school and I actually I was one of the only people in my graduating class but actually went into retail so I would I got recruited out of. Alabama teacher to go work at the Bayern brick-and-mortar for target with snow very traditional Japanese e-commerce go go to MIT and then go into rock music. Has the buyer of rock CDs for for Target. And then what is a brick-and-mortar bar Provo Target in and Staples and then ultimately ended up back here in New England working for Wayfair where I was. The director category management for a number of categories including the baby categories that I was really my first entree into the baby space as well as toys and game rooms. And ultimately went to Dunkin brands or Dunkin Donuts headquarters where I where I live retail merchandising in eCommerce and then more recently was the, director of e-commerce merchandising strategy for Toys R us.com and babiesrus.com. Most recently I've been at the route for about a year-and-a-half now and I'm head of e-commerce where. I actually came to the company name because Bob and the leadership team and painted a really exciting vision for. Transforming what was already a very well-known company in the baby's face into more e-commerce focused and digital organization. [5:59] Very excited to a part of that change over the last year we made him take the Kool-Aid right off the bat. I was keeping track and I think between the two of you we've got 480 of the IR 500 so congratulations on that careers. Pretty robust set of companies to work for thank you. [6:23] So what's up let's kind of started a high-level and kind of work our way in peel the onion is at work so, you know you guys were at retailers before and a vendor there and now you're at Brand so tell us a little bit how do you guys think about channels and then just just, macro online offline in and how, no important that is for you guys dabs about you in so that they must be pretty important and then as we know and then within the channels within online I'll pry have a follow-up so just start there. [6:58] Sure so we saw into a number of different channels and just high-level so you guys are so of the listeners and everyone understand. We were the largest manufacturer in the US of baby products that everything from strollers car seats to infant Health Products like thermometers. Safety monitors and probably the product. People probably with his the Baby on Board sign in a lot of cars that that is so when we when we think about Channel there's obviously we went to the traditional brick-and-mortar retailers. We we silent appear quite online retailers as well. We also have a very strong and growing DTC Channel weather and I can talk a little bit more about you what comprises Rd to see Channel marketplaces. Start with kind of don't think of Market places around my marketplaces as part of Vita C. But if so that's probably another Channel we looking at and then we have we we have done physical stores and pop-up stores so Wickham orders is kind of our own channel. And then we have some B2B channels list. [8:18] Cool so Mom. What your summary of the scope of of online and is this kind of guys or Ground Zero or is there been some progress. [8:29] Yeah I think we've had some Dennis progress over the last probably the last year-and-a-half and in terms of not over not only just a digital transformation in the mentality of probably approach, e-commerce but from a sales perspective as well so the industry. Depending on the category were and we Runnin so many different categories and babies.com Rd Commerce penetration ranges anywhere from 10 to 50% off, 30% and we're certainly not work with a lot of our competitors haven't been at babiesrus.com and wait there to know that we're certainly at the high end of. About scale in terms of. Penetration relative to the rest of the industry and we're obviously a really big company were bitching about a billion dollars a year. E-commerce business is certainly one of our fastest growing parts of the business that work cited about that so we feel like. But you were going to really embraced the change and we continue to see things coming out of the hangout e-commerce. It's kind of nice I was allowed to go as broad as we have. In that you know we didn't when I you know only doing gay to see or only the e-commerce group, where in the space we're going to be call a consumer engagement but really it's we have the the brand marketing budget as well. We have call center we have to see via Parker places with several different groups under kind of One Umbrella. [10:06] So we from our perspective if we you know we feel that we should start selling, Autoflower call center upselling services or things like that we're absolutely he was in our Charter to do something like that so it's it's a nice bit of freedom, inside of a relatively large company do you guys operate at so we had Greg, poster on from VF Corp and they they're kind of like a sinner for e-commerce and then the brands kind of feed off of that in other places other, other kind of houses brands with talk to there's almost like independent groups that kind of run things how are you guys set up at a macro Essence macro level. [10:49] We're a core team so each one of the brands. So the five really that we operate out of out of Foxboro and. The week of the group the go-to-market team on once the NPD process the new product development process goes to a certain point we do all the launch planning for the company, read we really don't get into Channel management is probably what we draw the line with the sales team but it's really a core group. That that. Works to really extend the the brand marketing so the brand teams really only get to work on product development. And core brand development and then we really do the activation now part of the brand. Jason: [11:38] Got interesting you know, I'm always fascinated I have some clients that are brands that very robust direct-to-consumer business is and then I also have some some brands that are super early in their DTC journey and those guys are always terrified about the channel conflict issues, I'm sort of assuming by how robust your your channels are that that that if there were any concerns those concerns of sort of played out in the past is that the fair characterization or is that still something you have to Grapple with. Scot, Jamie, Bob: [12:15] I think we still we absolutely grapple with it everyday I wouldn't say. It's it's a huge obstacle for trying to run eCommerce but we're certainly mindful of. Are we evolve our Retail Partners as we're managing to the Sea, and I think we've approached it where we we don't we don't want to actively compete with our major Retail Partners uncertainly in my career taking Amazon honest is never a good idea. Walmart or any of the other. Major retailers video into our goal is to provide regardless of the channel to customer purchased directly. Rr1 PV terrorism cell, on the marketplace is and then our call centers in P2P our goal is ultimately to have all those channels work worth in Harmony and not trying to shoot against each other first. Jason: [13:17] Ghana and I'm assuming you're sort of Court digital team isn't just a supporting the DTC so you're probably also providing content and assets and stuff for your for your 1p partners for their own e-commerce efforts is that. Is that true. Scot, Jamie, Bob: [13:32] Yeah that's absolutely true I think that's part of how we tried to, just saw the vision to our Retail Partners and throughout the organization is that what we do from a contract perspective or everything that we're doing to enhance the customer experience online is certain Morrison. Healthy overall company attorney just to this point it's taking awhile No 3 or 4 years now. It's like a data Liberation movement had 7 or 8 products, catalogs you can spread all over the world all these different databases and recently called salsify a kind of bring it all together. And really once we took moves like that and really didn't rely on Legacy systems anymore of your completely rebuilt the marketing technology Stacks we we train the prods managers to develop, content in in you know the way that it should be developed for online so it was kind of it's getting to a point where it's a lot easier than it used to be. Wow the barriers have been really knocked down at not to say that we don't find new barriers kind of every week I'll place in front of us but I think the systems that the kind of the level of. Availity. Citizens have a really empowers everybody we would taking a lot of cost out of the business to you nobody not by giving off of these Legacy systems cell. What a nice Pivot Point here. Jason: [15:05] Yeah I find that. [15:09] Often is a cost savings for brands that you know in the old world you under nose to you or treating the same content multiple times for multiple touch points and when you're when you get those more robot systems you get better content reuse often. Scot, Jamie, Bob: [15:24] Yeah I agree absolutely we also we're spending money in the wrong places, so you don't know gone are the days we have to do $30,000 photo shoots for a single product launch as far as I'm concerned for dorel anyway. You know we do social, social photoshoot we invite you know parents who live within 30 miles of the office to bring their cute baby in for the day and we shower them with gifts and you get amazing photos out of a session like that, and you're doing consumer engagement so it's kind of my fault now. Jason: [15:56] Place very interesting we might want makes for that more but I do want to touch on something you you introduced a little earlier so Amazon is one of your Retail Partners you're selling to them 1p you're also selling on marketplaces and I'm presuming one of those marketplaces as is Amazon so you're sort of sailing, food through two methods and we often call that sort of a hybrid model is that do I have that right and if so can you can you talk our listeners through how that's work for you. Scot, Jamie, Bob: [16:31] Sure yeah and that's absolutely right yeah we are hybrid we we've sold by 1p for over a decade. 1 times and then we launched on Amazon Marketplace about a little over a year ago and it just took off and fantastic and. I think we have a really good partnership with our vendor managers on a one piece side and we're we're fortunate enough to have the Rangers for top managers on the marketplace side so I think so. Yeah meet me at some pretty wacky goals to his phone e-commerce perspective. Last year and we beat them pretty and within certainly the marketplaces were a big part of that in addition to the overall eCommerce performance. Water brands I talk to you they get really confused by this that kind of say. [17:24] Alright so I get the whole sale thing why would you have 3 piano, an answer to this. Like from from your perspective you know what was it that led you to kind of explorer that and and what are some of the levers that gives you to pull in the in the Amazon side effects. I think for us when I got hired I was hired to talidi to see and I don't think we really knew how we wanted. Focus mostly on transfer store on marketplaces physical store. [17:59] What is strong physical store on sales revenue stream in Europe. So I looked at it from a wax way and I think from from traffic perspective certainly it was it would be easiest to go after online marketplaces that was one of the. The major factors that. I thought about when we were. Trying to decide which do we focus on first focus on all them now but you only have so much resources in the beginning. I love that we have the safety net that you've done your podcast the parking lot about craft items and then we can go. A safety net for when or if Amazon decides to send to crop out items we can put them on the marketplace pretty easily and then. Our products kind of engine in six pockets and I talked about this in the session I do, and I are coming out where we will get it from A New Perspective an existing catalog perception online on one exclusives or what would call Alexander's. Accessories and then exit 17 closed. So it gives us the flexibility to. To go in and decide how we're going to approach each one of those product buckets for each one of our friends in our portfolio and gives us a lot of options for how we want to we want to drive sales for each of those. [19:31] Graco so in the early days how much skew overlap is there between 1 p and 3p a lot of the folks I've talked to they the first explorer 3p because you know they presented, 10000 skews the Amazon Amazon spot 1000, and if you would initially is a way to get the rest of their product line up there is that the case with you guys it sounds like there's a little overlap there cuz you do that safety-net kind of do listing approach. So there's absolutely no overlap on the Amazon side Amazon actually doesn't allow that so if anyone from Amazon is going to kill the lamp. Butter. What we and other and other Mark of places that does allow us and a little bit of a safety net so if the one piece side goes out of stock already. The house of a three-piece. Jason: [20:27] In just a clarifying question on the overlap. [20:33] So does that include out of stocks so if if Amazon carries ask you and they go out of stock can you sell it as 3p until they come until they make another by or or do you just stay away from those cubes entirely. Scot, Jamie, Bob: [20:48] Why I think this. If you're if you're sticking to the letter of Amazon's policy is that if Amazon carries an item or merchandise is an item on the one piece I'd you can't set that I'm up, on the three people and their algorithms actually flag, you and tell you that you don't know what to do that if it if it's a text if you have an overlapping you on the marketplace. There is any one of the other. The oversight that a lot of people have is that it's not just really one p vs 3T there's three different types of freaky and three different types of One Piece One of the types of one piece is from where. You're you're not the seller record it's not a Marketplace relationship with one. Amazon is still the seller record but it's very much like what you talked about Jason if Amazon goes out of stock it automatically defaults to a Dropship order within our warehouse. That's almost like a Marketplace you can take advantage of his laundry feeding the SI weight. Jason: [21:55] Got to and have you experimented with any vendor the field FBA stuff in your portfolio. Scot, Jamie, Bob: [22:03] Yes absolutely we actively use a PA now and we continue to work out any but the cost of shipping is one of our biggest challenges and seven e-commerce. E-commerce player and certainly you as a friend so FDA is certainly getting more expensive so we need to make sure we're watching that obviously is a very. Very powerful traffic drivers. Jason: [22:33] Yep. [22:34] And then on the one being three-peat one of the the complaints I often hear or one of the obstacles to being a hybrid seller is obviously Amazon has tools for One Piece settlers in Vendor Central and they have this Seller Central 4, for three-piece hours do you use those tools and just use them separately, play for both sides of your business or if you look at any of the sort of third-party systems that try to agregate those two tools. Scot, Jamie, Bob: [23:04] Yeah yeah so we are we both we do use both systems vendor Central and Seller Central. Anyone who is both knows that the day that you have available to you on that much more robust. Been trying to figure out how to drive more cell weather looking stop at the conversion or just all the metrics the jobs available. And was your business even on the one piece side even if you have one with the skull premium Ara. You don't have access to that kind of data so to answer your question yeah we looked at a number of third-party Data Solutions, some of them I think some of your other around previous speakers on the podcast like Lisa or Andrea, or one foot retail or friend you those are the solutions we've looked at more about the more we're about to sign a contract actually this week with one of them as you mentioned between, what size of the business in concert, cool um I know you guys are real active on Amazon advertising and we've touched on that with some pass gas but would love to hear how you guys think about it and maybe just for listeners you could recap, the I think people get kind of I know I do get confused there's all these kind of alphabet soup that gets thrown around and since your hybrid you have every, every tool available to you so maybe give a quick rundown of the tools available that's one p and 3p and then which ones you use and then would love to hear. [24:40] Any thoughts on the efficacy of those programs. [24:45] Sure so at a very high level I'm just so many different programs that Amazon has but I mean I think the paper forms from. [24:55] Formed if you were wild about nine months ago. There was just a much more defined difference between what you have available is a one piece and what you have available to speak also AMS has three different types of. Advertising on there is lots of products there's others headlines and then there is, but you only as a 3p so are you only had access to sponsor products on the MSI where is One Piece a drive axle. So from that perspective on the one beside you I talked about this even a couple of months ago and today is a one-piece so are you have just much more. Options available to you from a marketing perspective advertising perspective available. What we're hearing is that all three types of of a nice advertising are going to be available, Sellers as well so I think you're starting to see Last of Us and certainly is not about your podcast Amazon is going after the digital advertising. I wouldn't be surprised to see all options offered to post 137. On the AMG side. It's more of a branding experience if I necessarily something that's going to be easy you usually try to sell so we can use both but though. [26:32] We found that at least in the past AMG is is not have the tire off an artist is a mess with. [26:42] Contra listeners OMG is, more like banners and it kind of brand oriented advertising so CPM style advertising in AMS is more search CPC type advertising and there's there's several flavors of it with an Amazon of where things show up but that's kind of the the broad distinction there. Right and I am hearing about a lot of different beta program that there's the testing on the AMD side 30 when I getting much better be targeted. Open up advertising office again so. I think it'll be interesting to see what I am to get better I would have said, did this kind of a question and what's what's take this out of dorel just for a second cuz you guys are, you have been around that at retailers and all so do you guys think there's risk to some of the other AD companies out there you know so pretend you or at Toys R Us made as bags ample and you know I'm sure they have a huge, Google about didn't you know, seems like Amazon lose a lot more your there's the stat that always comes out that 55% of products are just started Amazon think that's a bloomreach stat but then there's also a Forester head supporting data on that up till about 2 years ago so, you know it it's kind of interesting to think you could this really be a challenge to, Google and and we're seeing broadly people really, they experimented year ago and now they're shifting budget directly out of Google Wallet over towards that side how do you guys think that's that's. [28:20] Something that could happen I do yeah I have p.m. [28:28] I'll defer to Bob with a bob has a much deeper background and digital advertising sign on them yeah I think you know. [28:39] Even just thinking about Darrell and what we've done we've really it's almost like you're shutting down our brand advertising. You know I'm pushing the money really over into Amazon just because it's almost becoming. Some of the weirdest as well. So if I say it well I'm going to do this launch a new product all that effort goes into launching that new product on Amazon with AMS. And if I'm looking sumur all the time I don't know how much they're still going, to know bloggers who have been paid to do a review on a product I think it's almost like letting the people vote so if I want a product I'm going to go to Amazon going to trust that whatever I type in, it's going to be if it's a bestseller with great reviews, how much more convincing do I need to buy that product so even some of the more considered buys I think if there's going to be a shift if it's already not know happening now. [29:44] Yeah what do you think about so I've also heard from Brands and about this common affiliate thing so what they're saying is you know, I advertise on Amazon and I thought I would get lift on Amazon and I can measure that but I'm also single lift off Amazon yeah what's your reaction to that. Oh yeah absolutely it's relatively well known about the kind of $1 for. I'll spend on Amazon equal $7 outside it varies by category so you know when baby like our products receive more like an $8 left and I was out of Amazon that's the tricky part is is. It's not that straightforward to measure you know it we're not seeing exactly those numbers so I think it takes it takes time. Jason: [30:32] Very cool so does it feel to you like that's a trend that's unique to Amazon in North America and they're just becoming a great ad platform or is it a shift to reach Arizona like we are you guys also investing in like, Walmart's equivalent which would be w/imax or or any of those sorts of things. Scot, Jamie, Bob: [30:53] That's a good question Walmart. Even even for a mess we don't use the reporting that I am s at all really we really kind of built our own reports and will do the same with W Max. And really have concentrated a lot of the other dollars right there because with guys like Triad and hooklogic can come your other choices on the on the other retailers website they've always. Kind of obscured the Bry. To some degree so it's been it's been tough I'm hoping that those systems evolve a little bit more in their little bit less opaque I think they're going to have to to stay competitive. Jason: [31:46] Dangerous a wino there's a bunch of wmx salespeople listening right now so I'm sure you'll be hearing from them from the. [31:53] What will will will be that point home that that transparency and access to data is one literally one of the impediment with folks spending money with you. [32:04] So Scot, Jamie, Bob: [32:06] I think you're pointing that out that's one of them I think she was the thing through the the challenges with. Madison mdfl now it's won the data for the day is just not easy to come by and it's not a Preposterous some of the more that was advertising Channel. Second is mobile mobile experience and desktop experience of War. I don't know that anyone including Amazon it's real practical. Mobile experience. Jason: [32:44] Yeah which is interesting because you would you would certainly think like it is hard to believe there's a technical or skills and pediment keeping someone like Amazon from building. [32:54] A great advertising platform and great report and a great mobile experiences. [33:02] Just feels like they haven't got around to it yet but hopefully I don't know if you know this but Jeff is a big listener the show so you know this could be triggering an email as we speak. Scot, Jamie, Bob: [33:12] Does a Jeff email happening right now. Jason: [33:18] Should be on the advertising are there any other considerations that you guys think about it in terms of maximizing your your results on Amazon, I noticed I and I should have mentioned this up front I've got a 20 month old in the house so I'm the big user of your products. [33:36] You've dramatically slowed down my midnight snacking because like all the the safety first products in my kitchen make it much harder to get food out in the dark. Scot, Jamie, Bob: [33:46] But thankfully that's pressure machine isn't protected. Jason: [33:52] Exactly just just a product idea for you is some LED lighting and some of that stuff might be helpful. Scot, Jamie, Bob: [33:58] Will cost us a penny more to make them glow in the dark. Jason: [34:02] Exactly. [34:04] But I have noticed you guys are well represented in all the different Amazon programs and so you know you have a lot of add-on products I also noticed you guys have some Amazon Choice status, product so you know I guess I'd be, pictures do you overly like try to achieve those things with how are you managing your portfolio of all those those sorts of things. Scot, Jamie, Bob: [34:29] Where are the where walkie to have it I wouldn't say that we we were able to. Tell you exactly how we go out I mean certainly bourbon is a profitability quotient. Turn on internet with your private label Amazon. All I got for those were going to answer your initial question as we look at managing the business there's just. What I've been talking about the last year-and-a-half if we break eCommerce and Jeff's into seven centers of excellence in, Amazon a particular kind of fall into one of those centers of excellence be we live and breathe it's almost like a religion where. One of them is marketing and another is information technology Partnerships and people. So each one of those are you looking at and we break it down from quarter-to-quarter. From year to year and suddenly we have a now next future plan for all of them. Respective definition. Which one of the bed say from Amazon perspective we talked about the marketing operations is probably just fine. [36:00] All the all the other ways and everything dipped Amazon train their customers to a second term to find shipping Apartments. Jason: [36:09] Got it in, what you don't want to do things that we haven't talked about that scares a lot of people per ticket on the one piece side of Amazon his pricing like do you hit is that been an issue for you do you have a strategy or any any pricing tips for, for folks that are going to put their products on Amazon's platform. Scot, Jamie, Bob: [36:32] Bob's Bob's advice to me in the beginning with don't lose money so I try to price my products while products not to lose money before 1. Jason: [36:45] Can you make it up in volume if you do. Scot, Jamie, Bob: [36:47] Exactly. My kids are starting to do the new math so maybe you can but I'm old school so I don't know how to turn it negative. [37:03] We know one of the things we talked about a lot and you mentioned it earlier when you talked about third-party data switch. Is the we say the date is more important and we're crossing with your friends as much data systemically to make the decision we have map policies for a number of our friends that certainly helps. I mean it's the Wild Wild West when you don't have enough policies so the constant challenge to take a look at and what's going on dynamically in the forecast. Pricing stand for in where would possibly looking at ways to differentiate. I think we're going to see a boom in brands that traditionally may have not looked at map policies. Just because of what you know Walmart continues to be priced leader you know Amazon will continue to follow but now you got Target saying they want to be a price leader to and in others. So in that kind of environment as a manufacturer brand gear you know it's like maybe I would have traditionally had a map policy on my premium products only but that's going to change use my. Roll out of my policy for my mqp in Opp lines as well just took for protection. Jason: [38:23] Wow yeah that is interesting I could totally see that there are a bunch of other 3p sellers that sell your products on Amazon I'm assuming most of those are authorized sellers is that. Scot, Jamie, Bob: [38:38] I would say it's a mix so. That's not the challenge is simply word been a lot of great partners that you sell in the marketplace and then there are some that. Yeah we're not exactly sure how they so I think we're starting to see and evolution are not just Amazon Marketplace but, I'm Walmart's and others where it's harder to be that Arbitrage type of cell are in I think we're hoping that'll help with, look at Channel management we're constantly looking at how to make sure that we have a clean Channel well only authorized stores and food in. Jason: [39:19] Yep you having to invest some significant resources in that. Scot, Jamie, Bob: [39:25] Yeah I think we are, we have already and I think we always keep trying to go for the very top. [39:36] It's much as we'd like to spend as much as we could on each of those centers of excellence and one of them is more Channel Management telephone number. Jason: [39:49] Not totally get it so another topic that comes up. Is the you know those rare occasions win you you fall out of compliance with Amazon and one way or another and the obviously the big Spector looming over everyone's head is suspensions is that. Is that coming to play for you guys at all like are there any common mistakes or tips you give to folks to avoid getting in the Amazon Penalty Box. Scot, Jamie, Bob: [40:18] Yeah I think for us we had the fear of god guitar organization did not want to. Ever end up getting suspended and no fortune. We've had just an amazing operation to approach every yes I weigh very aggressively so the shipping. 99.7%. [40:42] I need this more than just on time shipping at that way but others is a number of them that we've been fortunate to have a great class functional approach with my advice would be certainly have. A good set of. Watch all team members who are Partners in the business to understand what you're trying to do set the vision and then and check in on a very regularly. We were trying to brick-and-mortar First organization so that was a lot of the time we spent at least in the first 69 wants was just educating. A lot of people within the organization of Argo how we Commerce works and specifically how Amazon work. And I think the more communication we were able to have and then. Huge amounts of visibility to every part of the company Bob's a big believer in that class is really Champion Joe having everything. Are white dashboard in every department so they can so that we can really track you know are we are we tracking to be with shipping so how are we doing this today so I think are the Penalty Box as Bend. Great team effort and I think it starts with setting the vision for everything. That's why one of our favorite the software platforms is geckoboard. Which is Wheel of software that does one particular purpose but doesn't really really well and I want just allows you to push up. [42:16] It just allows you to creep dashboards on a monitor so I think what we did or invest heavily in the operations and consumer support. Those are two big pillars for us so even if the point where we had to sacrifice and maybe you know advertising dollars marketing dollars to really get that those two pieces of the business really humming along, and are the call center just wanted you know national award for for excellence which is really really cool in it but we had to ramp up. You know social support Amazon answers answer programs on other retailers it's really we had to, where do expand the team and be in more touch points with consumers so we think that's really going to pay off long-term. [43:08] And just one last point about suspension beyond the SOS from operational perspective there are dozens of ways you can get yourself suspended in the cellar whether it be, Aaron products at all the wild with 1p or any reviews or seller ratings or selling counterfeit products oh, I think what we had was a couple of subject matter experts. Or through all the different essays and rules and everything that Amazon foot. On on the portal to allow showers to know how to optimize a business intro we communicated that very clear with ravioli, cool so that that's been super helpful to hear, some some real world stories from you guys about how you manage Amazon and let's put a little bit and talk a little bit about Walmart so imagine you guys have a long history of selling wholesale to Walmart are you participating in the marketplace and and, I guess I would make you one of the very rare hybrid Amazon and Walmart so so curious what your doing on Walmart. [44:16] Yeah we are we are hybrid for Walmart as well we launched, probably the best possible time to launch on Walmart marketplace was in November 4th. Trey doesn't want to watch anything. But it's as if they really had fantastic resolved even before last year so really out of the cave you were very fortunate to see. Well and I think I would a little bit last year e-commerce as a team we exceeded our sales goal. But your dog and 16 by 70% and certainly Walmart marketplace was with a big part of getting us a star sailboat certainly crushing that pool. Cook any other channels marketplaces or you know anything you think that's kind of interesting that you think other brands would find kind of fascinating. [45:17] I will wear on eBay as well and we're on chat we watched on chat about a month before they got bought out so he might feel like this that had something to do. I think we're always looking at different opportunities to find what are products in front of many customers are too small. Yeah for eBay some people kind of view it as an outlet kind of a thing or other people just kind of put their main line on there and do you guys have a kind of certain part of your hot how eBay fits into the strategy. [45:53] I wouldn't say it if it will you we've completely solidified or crystallized on her arm how how how we approach eBay. I think we do have a healthy mix of a farm products as well as what we call Mike SSM ignoring clothes on eBay. Again you brought it up about Channel. Certainly there's some good extermination candy Bays doing a lot to try and improve the merchandising especially the baby category so we're we are happy to part with them and help help. Apart of that the improvement in our categories. Yeah found eBay is very good brand religion so they're there being a lot more friendly DeBrands lately and I think a lot of that has to do with how Who Came From Home Depot he can understand that Dynamic better than them folks hit that maybe didn't have that experience. [46:53] Yeah I'm a big fan of how a lot and having watched him what he did at Home Depot was when she was really impressive so I'm hoping they can do the same. What we don't want to do is just go on to any Marketplace for the sake of being there so I say that we have a crystallized our strategy but we do think very closely about know what Ridge Marketplace. What is Protonix Place Mall. It's easy to launch a new Marketplace you know as we see fit. Know if we want to try something else we can easily be up and you know I matter with no days or weeks so that it's not really a huge investment if we want to play with something which interesting is watching at Walmart marketplace evolve. Just month after Mom very interesting focused as a company and we're going to benefit from it and other reports and dashboards going to get better, it's it's an interesting year to be on Walmart marketplace that's for sure. Yes seems to be a big big area and Lori's in there swinging the bat like crazy so we'll see what kind of comes up, requires and he's an amazing guy I mean we were we were riveted. So while he certainly has a captive audience so we're definitely big fans. [48:24] So yeah funny funny story between Mark and me I interviewed with Mark at Quincy. Where do a month before they close the deal with Amazon and then we visited with Market Chad about a month before Walmart plaza Sol. I feel like I got to start taking more meetings your guy you should get out of stock options I don't know if that's, that may violate some ethics thing but that's not my problem that's your problem, what questions do you guys are in a lot of places in earlier you mentioned you have kind of six categories of products is there I know some some, brands have kind of a good they look at these channels and there's some mapping that happens where they'll say alright, Channel B I'm going to put this type of product there but not this type of product and you guys have any how do you think about that, but everything everywhere that's another valid strategy as well no I think we definitely. Where were careful when in will have a specific kind of game plan for. Access Imaging Closeouts versus completely different strategy for how we're going to approach this. Anything for my Walmart exclusive so yeah it's none of that spray and pray kind of approaches to the TV. Jason: [49:54] Got it you guys are. [49:57] I'm going to characterize you as very digitally mature for a branded manufacturer in the in the digital Spectrum in interesting Lee a lot of clients that are, very large wholesale businesses that are really just getting started on the digital side of the fence and you don't. [50:17] One of the big challenges you always run into is. [50:21] Getting an organization to change its all this institutional inertia and all these antibodies that are in the organization that fight all of these kind of new initiatives, it sounds like you got to go through that in your you're beginning and Darrell like do you have any advice for for folks that are just getting started on their Journey. Scot, Jamie, Bob: [50:45] Go ahead because I've never heard that before. I'll say that one of the reasons I came to dorel was because. And our CEO told me on a vision where they already started down that kind of mentality show. And made the investments in just a lot of the out-of-the-box thinking in terms of Technology Investments. And resources were a lot different than most of the other cpg companies and other vendor partners that I work with another retailers. Even being your 2016 at the bottom bathing how many still just trying to figure out e-commerce oh. I arrived having seen a vision that was already somewhat said I was just sort of evangelizing that Vision but I think that's the big that was the really important part of our successes. Evangelizing that Vision in getting people excited and I think in many cases this kind of Captain Obvious with a lot of people. It's almost a threat to their job so number one you have people who will get and say am I going to be out of a job in six months because of his e-commerce. Or this is 20% extra work for what it was already a very hard job so I think. I've been walkie I think we had a cross-functional team for 100 people that really jumped on board but I think we also had a really strong Vision that was able to get people energized with from the top down. [52:24] Bob Probert already established. It was a very difficult have a full head of hair too but now not so much but I think you know what we're trying to do is digital transformation from the inside, which, what is the most difficult in my opinion and in my experience and I don't recommend it it's it's just it's the long path but because you do have to you know evangelize quite a bit and you know I understand it's going to slow you down a little bit, what are the things that I'm trying to do is build a startup type of culture we're just the sense of time is is very different. So you know instead of people communicating in the email they're there now communicating and giora. Is it just a complete shift and in first I would say just get the the early adopters like you need a ring of people that get it, are we have a dining kaybern on our team that is a web Technologies guy that we just we know that we can throw anything at this guy and he's just amazing. And he can quickly integrated system or develop a database or so I think having kind of a crappy team to start with. Yeah the Band of Brothers kind of thing helps a lot but then you have to just keep converting the people who want to be converted and then kind of work your way down the curve to the people who you know they're going to be really resistant. Where I'd say we're Midway down that Journey right now. Jason: [53:54] Then cool it sounds like I don't to put words in your mouth it sounds like you had a blend of evangelizing some of the Legacy employees that were most susceptible to become part of the digital solution and then you brought in some some outside digital disruptors, is well I eat Jamie does that do I have that right and does that seem like the right approach to. Scot, Jamie, Bob: [54:21] Yeah I do I really think that one of the big mistakes is to go kind of Whole Hog you know out of the gate what one is to do almost nothing and just talk about transformation and that that's just seen companies I've been at companies that are done that. Jason: [54:36] But just to be clear that's fine as long as you're paying a consultant like sapientrazorfish while you're doing that. Scot, Jamie, Bob: [54:41] Exactly that's exactly what I say but no you know what's funny is it's almost like if I took a step back for a second the the the key. To to Our Success so far has been lots of quick wins and constant wins, so not just sitting this massive gold in a way out there but really understanding let's let's just a few small goal let's let's get all of our product data in one place so we can actually use it okay, let's go with salsify salsify not very expensive so I can put it on a credit card so it kind of scrap a system together, and then build kind of agile process ease around that and then people gravitate toward the money, now you can just follow the money if we're making the you know massive Headway and there's dollars and the dollars keep adding up people tend to say, you know I want that maybe I haven't had that in my team and I want to go on that team I want to be on the successful team so you just kind of read this internal inertia and guys like Jamie it's easy carries that flag, and people just want to follow him. Jason: [55:56] Very very cool by the way this is going to sound super cheesy I call that stair step approach The Stairway to awesomeness. Scot, Jamie, Bob: [56:04] That's exactly what it is. Jason: [56:06] Yeah they like you know you you paint that aspirational picture of where you want to get and you just can't do it in one giant big bang project so the stairway to awesomeness is the way to go. Scot, Jamie, Bob: [56:16] And if you give Jason six beers I think is the number somewhere in there 4 to 6 he will sing Stairway to Heaven but it's Stairway to awesomeness and it's it it's a thing to behold another time, yeah yeah yeah no no beer is here on the podcast this is definitely a dry podcast. Jason: [56:35] Either did I. Scot, Jamie, Bob: [56:39] So we have about five minutes for one last question and I wanted to get super high level you guys have both had great careers and in retail and Brands and digital, where do you see the future of e-commerce is it going to be no Celexa after smartphones or you feel free to kind of go, two years outer are 10 years out so just would love to hear your thoughts seven haven't seen kind of the the play out so far. [57:10] Bronco versus Bob's is probably better than mine so I don't so I think your two two things I see one or. I would have to it a little bit earlier is that I think so. [57:24] What what's available for a one piece and what's available for three people I think it's going to start to quote the gas going to start. Obviously the growth Amazon enjoying a large part of that is I think he's going to start more more. More of that consumer experience I've become more consistent on orthopedic in one piece. In particular I think about advertising and one of the gaps that I see that I think expect is probably going to happen and I hit just. You say it with artificial intelligence but I think ribbon Predictive Analytics to help. To help cpg brands in to help anyone who wants to use digital advertising or to use it for, projector for casting I think that needs to happen and I think I just it still seems really Nathan I think I see a lot of solutions out there. Don't take into account all the dozens of of sales drivers and forecast in the theaters that are need to be followers and I think they're supposed to Lucien to still feels on in the brick-and-mortar world. You're not taking into account estimated ship windows or find a drink or the dozens of things that can help to drive, sales on e-commerce side that's just don't doubt it don't get back turd in then I don't think this is any human being to make those decisions. [58:58] As they're using them to the forecast there the sales or Churchill Drive their advertising can I think it has to be any item, that's a prediction I'd see Captain someone diacetyl. [59:16] Yeah Predictive Analytics it's definitely going to be pervasive in all everything that we that we do. I worked at a company where we built our own real-time bidding engine and it's it's very complex but as computing power power gets better and this more people working on projects like that, a lot of the manual activity 72 will just gravitate toward that kind of naturally taking over I see a lot of near-term stuff. Nothing that's important where I really think that retailers will start understanding that no Prime is not a shipping program. You don't like I really do think that once other big retailers develop Prime like programs and it you know the full breath and power of a program like that fell under the sun understanding the the game. And I really I don't like I haven't seen. Seems kind of small attempts at a prime like program but nothing nothing even close to it if if it's not a shipping program what is it. [1:00:24] It's I mean it's like it's a massive loyalty program it's it's the stickiness that the. That you just can't get out of it it has unbelievable unmistakable value. I think they've gone well past the you know the yearly the annual fee for the program in terms of value at this point. I really do think that that is a massive way to build loyalty. [1:00:54] Go to know you guys are both. Deep in the world of Amazon do you think it's game over or do you think that you know just like we saw in. Bob you're old enough to remember this used to be that you know no one could be the IBM there you would just like it, people just call him up to get mainframes installed and then suddenly Microsoft took over and then it was Google and now it's Amazon you know what do you any votes on like the next Dark Horse you know is it going to be a company we've already heard of it is it some company that's like, two dudes in the garage right now that's a good one Jamie want to go first for that one. So I yeah I mean history tells us no one no company remains thought when I first Are we more than more than 50 years even if it's still around and I think she's somewhere. They're fucking a trance of Walmart's probably one where they're starting to come around they made been made my friend information. [1:01:55] I think one of the things I think about is on demand that you fart a lot of them. Disruptor obviously Amazon going after 2 but. Medium different different category next Amazon. Jason: [1:02:20] Oh that's crushing I've spent like 85 episodes trying to to get Scott's ego down and you just told him that he's the future of e-commerce crate. Scot, Jamie, Bob: [1:02:28] You're going to pay me in cash my check, what's what's amazing to me it almost seems like Amazon is is Bucking that the you know the old trend of you know IBM companies like that just kind of, really having to Pivot hard and and swallow hard to and now it major inflection points is the scale that's the thing that gets me, it's no looking at you no announcements from Target sing over going to spend a billion dollars and, supply chain up when Amazon spending well 18 billion, yeah it's just the scale is is something to really think about it how do you how does a disruptor in a two guys in that garage. Really really break into that no no I'm not saying Amazon perfect I've noticed a lotta, a lot of Kinks on a on a daily basis in the armor or chinks in the armor where they're even like my guaranteed shipping package didn't arrive in 2 days. Several times now so you know there's definitely some Growing Pains there. But I got to think it's only another giant it's got to be like a Walmart that really really can can keep up with those guys. I also since I worked at racquet and I would not discount all these guys that are overseas currently that have just been watching the market patiently. Rakuten Alibaba out there they're just massive groups that certainly have the power to and they're not known to be first movers remember. [1:04:08] They they watch and they're perfectly fine to be the second or third yeah they're the only guys that have kind of beat, Amazon Kenosha Amazon didn't do well in China and continues to be kind of like number three or four there and I don't know about Japan Amazon's done pretty well in Japan but yeah they're they're definitely rocked Anna's is still a major factor there, oh yeah oh absolutely I think probably going to the guarantee for me is the. You can check back thirty years from now I think when Bezos decides to retire a walk away that's definitely rest I mean you work at Target and, dominant really when Bob all that stuff down on that was I was really when started, start to struggle Walmart Walton and I can see the same thing no one ever gave us has to step down no disrespect to the rest of the leadership team but it's a pretty big dr. Phil. Jason: [1:05:07] I think your point that no no Empire was forever Jeff is made that point and said but what you really want to do is just make sure that your Empire outlives you. [1:05:19] Repeat the same strategy there because it has happen again we've wasted a perfectly good outside I really want to thank you guys for spending an hour with us and sharing the knowledge. Scot, Jamie, Bob: [1:05:38] Thank you thank you. Yep Bob and Jamie thanks for joining us and low plug here for Jamie and I Jamie is going to be one of my speakers at the internet retailer Conference & exhibition also known as IRC on June 6th I do a day there that's called Amazon and me where, we go pretty darn deep about these kinds of topics in a, 12 hour Extravaganza so if you're interested in that topic join us then and Jamie will be there, what's the just went through 18 decks on this whole thing so you're talking about hybrid is that right Jamie is that the topic. Yeah I'm talking about how to manage your Amazon strategy whether you're one p3p or Hut. Yep so overall strategy yes and your presentation is awesome so people are going to love it thanks guys and hope to see Jamie I'll see you there and I hope to see some listeners there. Thanks looking for toys. Jason: [1:06:36] Until next time happy commercing.

EP085 - FutureCommerce Joint Podcast Part 2 Brian Lange (@brianjlangeand) Phillip Jackson (@philwinkle) are the hosts of futurecommerce podcast.  In this first of it's kind, Co-Podcast Jason & Scot team up with Phil & Brian to record a two-part podcast.  Part 1 can be heard on futurecommerce.  This is part 2. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 85 of the Jason & Scot show was recorded on Thursday May 11, 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Amazon Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 85 being recorded on Thursday May 11th 2017.  I'm your host Jason retailgeek Goldberg and as usual I'm here with your Co Scot Wingo. Scot, Brian, Philip: [0:38] Hey Jason are welcome Jason Scott show listeners tonight we're doing something really Innovative in the world of podcasting I don't know if this phrases ever been used or not but if it has it, its trademark Jason Scott it's a cross podcast that's right or maybe we'll go at the Omni podcast, pull in the flavor of e-commerce this is part 2 of a cross podcast episode, and we are Co casting with Brian and Philip over at futurecommerce so before we jump in you need to go to your favorite podcast app right now and add futurecommerce And subscribe and then go listen to the first part over there, in the come back over here or if you're a fan of Back to the Future you can listen to this one first, I did feel like you're doing time travel back into the past listened episode 1 real flexible here at the Jason Scott show so which ever one of those floats your boat we will courage to go do that, will pause for a second while you figure it out okay welcome back Jason let's bring Brian and Philip in as we continue, they're episode guys do you name your episodes what what was our episode going to be over on your side. 3433 I don't know somewhere in there. 436 that's the that's the name you have to get a team meeting with your audio Engineers over there to figure out, how to how to do it to get a consensus built and then this is our episode 84 so welcome to the show guys. Thank you thanks happy to be on this is quite an honor actually. Jason: [2:13] We we are happy to have you let's let our audience get to know you just a little bit so maybe Brian you want to start by giving us your background. Scot, Brian, Philip: [2:23] Usher Yeah so I'm born and raised in the Seattle area and I got into a little start-up out here that did, basically Payment Processing both across physical and digital, and so they actually processed like checks and so they also they also had it online payments to all and that sort of wet my appetite, 4 for Hardline Commerce in Hartford for Commerce I should say in general and and then made my way over to digital agency called classy llama, and they're there a specifically Magento agency really long time ago until agency and got to help build up that agency and I've been in a couple different agencies right now I'm at an agency called, something digital with Philip we're primarily a Magento Focus agency but when we're dead across the board, and in parking with another platform as well and. [3:28] We we are I've really enjoyed getting to know everything you know kind of, the entire education of what it means to be in Commerce through this process. Certainly there's a lot that I still don't know but really excited to to be talking about digital Commerce and I've been able to work with some really cool Brands to bring their digital Commerce experiences to to life. And I. Instagram started futurecommerce with Philip we were working at can basically competitors at the time in. Kind of got to know each other through different conferences we live in the same world and. There was this this one one late night we had we restarted really really kind of getting down deeper into the. Into the details and and and, I think was actually had irce in Chicago 3 years ago or something like that and we started a friendship and in really a series of conversations that, led to and us being like man these aren't these are really interesting topics for talking about we should record this and so. That's how I up in podcasting Phillips kind of got a little bit earlier story of getting into podcasting so let him get into that but yeah that's me. [4:57] Your thoughts about your career and how you got into to be the podcast Ninja, yeah thanks I so I actually I took a left turn at Albuquerque if you will I got. I dropped out of Theological Seminary after two years and I joined a band. And I did that for 7 years and you know we were like touring around it was super cool and you know you like recording and doing all these really cool really neat things and, but it's interesting you know like the one thing that was sort of a Mainstay that held over from my high-school days was that you know it's really good with computers and. In 03 so it's more of a long series of events you know you kind of look back on your life in your like one of these things is making me money in one's not and, and so why don't we stop the one that doesn't make me any money in focus on the thing that does and found a lot of good fortune there and Ben been truly fortunate to, to have the you know nearly at 18-year career now in in eCommerce digital Commerce and so you know it's great kind of growing up in the industry from the late 90s, where people were in on the dock, just figure out how we were even supposed to do this stuff online and then sort of watching things mature and best, actresses emerge and I yeah so kind of growing up and and working directly for a bunch of merchants and then you know doing a lot of. [6:29] Direct Consulting and then you know finally finding my way into. You know actually being a subject matter expert an e-commerce so then and now and heading up the digital Commerce team at something digital which is. The best named digital agency ever and. Jason: [6:51] Although I do also like classy llama. Scot, Brian, Philip: [6:53] Classy llama yes. Something to drill actually it contains its own origin story right in its name which is skids funny but you know just kind of getting to know, Brian and the people in our industry and and you know having some success in podcasting you know I have another. Podcast called Mage talk which is a magenta Focus podcast that. Has about 70,000 listeners a month of this point and you know that's really taken us to a new place worldwide kind of talking about Magento talking about you know the future of that platform. I really also wanting to tell other stories and so you know in the last year-and-a-half we launched two other, properties futurecommerce to really talk about retail and general and talk about the the transformation that retail is undergoing right now and the challenges to you know not everything is so exciting in the future you know there's some there's probably some dark, days ahead and there's there's definitely dark side and we touched on that someone the show so the show's been not quite a year yet and 35 or 34 episodes we're not really sure at this point we've lost count but you know we're we're trying to really, you know do I think what a lot of people struggle with witches remain consistent. We want to have consistent content and I think that's something you guys can appreciate so yeah so futurecommerce we also launched another podcast property this year. I called Merchants to Merchants which is stories Merchants telling their own stories and it's for merchants. [8:26] I specifically in stories of merchants talking about their own experience you know among themselves so we'll get a panel if you know 3 or 4. Retailers together and ask them to improv them to talk about you know what's easy and what's hard. And you wouldn't believe that the kind of feedback that comes out of that and it's real honest content where it's not just someone like me who thinks they know everything. Just kind of telling you what to do which is usually what you get in these sort of mediums right you get a couple white guys that just pontificate on the podcast and that's not an uncommon thing in our space but to get people from diverse backgrounds in to get people that are, that have very different two stories to you and have different aspirations and different struggles and get them to actually tell their story it's really thick. Stories there so it's kind of cool I think we run this really interesting journey and for me it's it's really about storytelling and it's really about. [9:28] You know shared experience so but yeah delighted to be here I'm a big fan of guy show so pardon me being a little Starstruck. Thanks thanks it is awesome you're building a whole network we can Jason I struggle just to kind of get this puppy out once a week so I'm I'm amazed at folks that can to do that, the key is to just neglect everything in your life and your job. And then you can really be successful to let us know how that works out for you. [10:03] Okay well listeners if you're listening to this two-parter in the chronological sequence when we last left you in this cross podcast episode we just finished talking about some future Trends and we thought we'd bring it back to the Here and Now, now if you're listening to it out of sequence if you're one of those original trilogy people, let me just say Darth Vader and Luke are not related at all there's nothing to see here these are not the droids you're looking for Jason you on that kick it out with us some some news. Jason: [10:31] I do but before we jump in the news I do want to take advantage of the fact that we have some Magento gurus in the house so for listeners on this podcast. I have been slightly negative on Magento and I'm I'm prepared to be schooled but I want at least get my POV out there and and you guys can help me see the light we actually had Mark Lavelle and Peter Sheldon on episode 50, and. [11:03] Magento is is arguably the most important platform in the eCommerce Echo System I think there's probably more sites on that platform than anything else in my company we we do play a lot of that platform in Asia. We don't personally do as much here in North America book what has been a concern for me is you know. [11:26] Did that for a long time there's been this version 1 of magenta that had all these blood features that had had all these users. And you don't have this rich rich community of developers and plugins and in all the all these sorts of things. [11:41] And what you tended to run into is. [11:45] You know these these kind of whether they're true or not like hey yeah and magenta was great for the long tail it doesn't really scale for the Enterprise clients and in full disclosure. [11:56] Like Magento did struggle to. [11:59] To sort of list a bunch of Enterprise clients like they would often list Enterprise clients and you'd go talk to those clients and they'd be like yeah we're using it for a small project in the corner it's not our. [12:09] Armed army in platform and so you know that was kind of my first red flag at magenta was on magenta one while it was super popular. [12:16] It didn't seem to catch the top of the echo system and then after years of waiting and promising and changing hands a couple times and I think they probably got screwed by by being acquired by eBay for a few years there they finally launched version 2. [12:31] And what's scary to me and what what what you know sort of came to light in this conversation with Mark and episode 50 is. [12:39] There are not a lot of sites that have migrated from version 1 to version 2. [12:44] And so you know arguably there's there's some improvements and and fixes inversion to butt. [12:50] No you can't you can no longer say Magento is the most popular platform in the world because there's you know a relatively small user base on the current version of Magento, so it seems like the majority of those users got left behind and frankly some of the most beloved features like the the rich ecosystem of third party plugins. [13:09] You know is is. [13:10] Dramatically different in a magenta to today so so my kind of talking point to people has been magenta to probably has a lot less momentum that then magenta one did and it's a day. And I'm unprepared for you to tell me why I'm completely off base. Scot, Brian, Philip: [13:26] So you've caught up on 80 plus episodes of Fire, inventory all that you had for the magenta platform and I actually applied that you were able to do that in two minutes that's kind of impressive skill. You know I'll I'll start out here because I don't believe that Brian can be succinct I'll say. If it's fair, if if Mark and Peter who are the CEO and I think the VP of strategy at Magento respectively if they can't change your mind on, and qual your fears on Magento then I don't know that I'm going to do any good but I will say this listen I can only speak from my own personal experience. As somebody who is admittedly a fan boy and his hung a good portion of my there the latter part of this. In a career that I have the last 8 years I'm Magento and I'm pretty well decorating the magenta space. Jason: [14:30] You have actual decorations by the way don't you are you like a black belt. Scot, Brian, Philip: [14:33] Yeah I might like, I'm a two-time magenta Master which is a a sort of a notable Community Spotlight award that they give out so I'm one of like 7 people that have, received it twice and I'm a four-time Magento certified developer and I've spent a lot of time in the trenches doing a lot of magenta work and specifically Yuna rescue for. Rescue work for large builds which is you know something that no other platform can tell is the number of rescues that happened what I would like to say is that. [15:04] I think with the with the I don't know with the ubiquity of the platform, Imogen - once were the success of the platform magenta one I think, any shift of years that represented a rer connector that that sort of leaves no quitiquit leaves people behind, I is going to be a painful one I don't think there's any way, just to get around that I think we've seen that in major in in any major software Rev, you know Windows 10 most notably recently has had some major I had some major hiccups you know moving people across from platforms and sort of forcibly doing it at the end of the day and I think, I think it's a it's not an easy thing in software. I think what's what's really complicated is e-commerce and digital Commerce in and of itself, is a difficult problem space to solve and everybody wants. You know everybody wants open architecture easy to build on an open ecosystem so some of the sort of. [16:10] Little points that you mention are are things that I think are are being currently rectified I think the last check. You know 70% of the people are 70% of all technology Partners had Magento 2, compatible Integrations at the first of this year and it's growing, you know we we do a tremendous amount of magenta work it's not all that we do we are we are also Shopify plus Partners but our deal pipeline is full. We're we're seeing a tremendous demand for Magento so we going to speak for ourselves seeing a tremendous demand for magenta to and specifically magenta one clients looking to come over to Magento 2 now I do think that some of that could be under duress. [16:58] So I wanted this count that but I do think that magenta has a lot of promise and if. If you want to continue to sort of get the benefit of what a platform like Magento has to offer which is a freely available piece of software that is enterprise-grade. Were you can you know download it and start your business and then grow into an Enterprise platform it's sort of. Ready and the promise of Magento is that it grows with you right you have something it's available freely at the low tier and you can grow up into you know, billion dollar business is running on Magento but I think, there are challenges along the way and we have to be very honest about them and we can't glaze over them I think the the internet retailer 300 the B2B 300 which is a new segment for for the IRA Ting Magento owns the the btb 300, I don't know that they're going to stay there forever and Magento sort of. Found their way into it kind of like mr. Bean finds his way into good situations because because because Magento isn't a B2B platform it's not capable of doing B2B out of the box, people adapt Magento, to do it and I think that's what you're saying is that magenta is extremely adaptable and so the success of Magento has nothing to do with Magento I mean I think anybody will tell you that I think Mark Lavelle would tell you that the success of Magento is the community. Is excessive Magento is the, the sort of dedication of a lot of hard-working and brilliant people in the International Community especially, that contribute to this platform to make it a better thing and you're not going to get that on hybris and you're not going to get that on demandware. [18:34] Now I mean you might get scalability and speed that's another conversation but you're you're not going to you know you're also not going to get sort of that promise of what. [18:44] Magento offers which is a you know this this Rich ecosystem of makers but I anyway now also not been to sync, yeah I was going to bring that up Philip just to add on a little bit to what you're saying I think this is Ben actually, how you mentioned pain but also opportunity because while the gento had a very broad ecosystem that you can system wasn't very difficult to navigate, before and you know sort of modernizing the platform has now allowed Magento 2 in in bringing a new Marketplace into in the play has allowed Magento 2, I do a much better job of curating their ecosystem, which is been very good for it and yeah while it's taking a little bit of time for some of these module developers to 2 rerelease, they're extensions for the platform. I think the great thing is which it is rejected a whole bunch of them in for good reason sure and ends you know I think now we're getting you know I'm not going to say it's either the cream-of-the-crop but we're getting. We're getting a much better picture of what actually works and doesn't work in so when it when whenever you tell her comes into the Magento world it's it's not quite as scary, as it used to be it's not quite as wild west does it used to be it's a lot easier to to to be successful, in the new paradigm and I think that's what scares you mentioned customers. [20:20] I think that's what scared some of them away before cuz it just felt it felt it felt down market and you know it felt like there was a lot of weird stuff available to you and yang. And so now now magenta is really tailoring itself to be Enterprise, Enterprise reading and I know what they released their Commerce platform they're about to order their Cloud platform they're about to release a beating e-commerce Cloud this this summer the functionality this container that platform is is, make the total cost. Of of implementing Magento for me to be quite a bit lower and I don't think that anyone else is going to be able to touch that total cost of ownership from the BV perspective here coming out. And soap, there's a lot of things to really like about where Magento is headed was a lot of positive Memon in there also, necessarily add a ton of features in Magento one on a regular basis and what we're seeing with Vicenta to is there were insane amount of. [21:30] Product announcements that just happened here in Imagine, are they added social that you know how speed to be you know they they had it as a CMS which magenta one was definitely lacking adjust a ton of tools a ton of innovation a ton of movement that's happening in, directions to reinvigorated and you know I think. Part of the other the other gripe with Magento at least you know at least one of those sort of inside baseball grapes for people like me is that yeah magenta was sort of slow and and and you know. Adopting were worth keeping up with the times I think it started to show its age after some time and and they they say it in a nice way now it's like we have the youngest platform of anybody. Which I think you know rightly so like it still has the name Magento on it and I would say you know it is Magento ask but it is a different platform. It is not a simple upgrade to get from 1 to 2 I think that's a problem. So yeah I think that there's I think there are there's still a lot of challenges ahead I think we're we're going to see. We're going to see continued uptake through 2017 I'm interested to see what happens through the end of the year but you know Magento did just actually Place into the the leader. A quadrant for me the new Gartner magic. Quadrant survey so you know they are showing some promise there but a good portion of their ability to compete in the areas that matter is because the the platform is extendable. [23:09] And I and N because there's Community enablement for those features magenta doesn't kill an improved and personalization. In a magenta doesn't have native B2B right now it's coming but it's not there. And so there are other platforms that I think are nice players that are better suited for different types of business I think you know but from a broad Market perspective Magento is. Now I'm jective Lee owning it right now you know I think they have to continue to push hard to stay ahead. They're not going to let you know they won somehow to this point but they're going to have to work harder to to keep that lead, what do you think Scott and Jason does you guys seem to be real quiet over there. I'm not as negative on Magento as Jason is but one thing I've noticed over kind of like the last five years is 5 years ago. Every SMB I talk to you it was like I'm going Magento and then there were some I think you called and rescue Sanuk that was good I have some people calling refugees so I don't know the right one, you know what would happen is these SMB is they got into these projects they didn't realize all right I got to go to developer designer and a host and that's like a. That's pretty serious project for a 20-person company to handle that I can finally eCommerce business they can, you can't just stop shipping product in the middle of all that either so a lot of them have abandoned it and gone to the either the Bigcommerce for the Shopify the SAS platforms at that SMB level. [24:43] Nice I like magenta really miss an opportunity there they had that go thing but I think it was just so down size that it was kind of useless and I have to, admit I haven't kept up with all the announcements but it sounds like you just talk about a cloud, tussle bit more about that do you think they're kind of that parody with the Shopify Zappa Converses and I realize you guys talk about all the platforms so, Brian I wouldn't put this in the same category it's not it's not what I would consider as you know software-as-a-service this is mine I know they're kind of migrate away from the terminology but it's more like platform-as-a-service so you actually still have, it's more like a stack of of hosting and monitoring tools with support, and you still have all the flexibility that you did with magenta before it's not like you don't have access to source code into the code and and the ability to make changes soap. I wouldn't put it in the same category as big Commerce or Shopify I would still I would actually. In the say that that their Crock Pot Farm is more competitive with like a demandware or or I should say Salesforce Commerce cloud or hybris then then with Shopify is not they're not they're not very similar at all. [26:00] Do you think they need to do that. [26:03] No I don't think they do I mean I think it would be a shift in direction for them right now honestly the the Magento brand I think it's built on you know sort of, I don't know there's there's some complexity to Magento just inherently and and so you're never going to get the. The fuggin playability that you would get from someone that you know has from other players that are. You know specifically keeping you away from the internals and focusing you only on you know a a Walled Garden of of really good intuitive user experience you know for the merchant features to publish producten, spell magenta also has a different strategy right so it's it's better probably fit for a retailer that sees there. Their digital Commerce platform as one part of a larger piece of a young as part of their Ani channel strategy they see it as a property right this is an asset or this is an acid on their books as much as any, in a brick-and-mortar store with with the frontage would would be considered a. An asset and you know if you own that asset if it's a if it's an actual you know if it's ones and zeros that you've developed and you put. Time in money into developing on and you own the platform and you on the hosting and noon you own all this relationship sandwich ento could go away tomorrow. [27:30] And and that thinking can continue to still run well then great like that's it that's a real asset and accountants sure kind of like that I supposed and that's one way to think about it, you know I think there's a devaluation that's happening right now in in digital Commerce where we're just looking it's sort of like commoditized. Web property, enablement and so we're kind of buying into the shop of eyes of the world and we do Shopify some demeaning it by any means but you know you buy into these sort of all in ones where they they on the hosting they own the code, they give you a very select few areas where you can make sort of customizations and also by the way they own payments to. And and and while that gives for some really great you know they rolled Apple pay out to 250,000 Merchants like overnight that's cool, but if Shopify goes away or Shopify changes something on you your your kind of going along for that ride it's not an asset that you own outright and you have no say in it. And I think for some it's it's an ideology I think as a business that you just have to buy into that you're okay with that. What we're saying on the rescue side of things not to continue to beat this but but what we're seeing is that. [28:49] You know it's it's what I like into like you know once you have your first like. [28:55] Can you come out of a break-up right you you have this great relationship with you know a significant other and then maybe you get hurt in that relationship and you break up and you realize you kind of look back and you do a post-mortem you're like there's a lot of things that I expected that were just unreasonable expectations. Right this isn't her fault it's probably my fault too like it's both of our faults. But it's not entirely just her right it's also meeting and I think what we're seeing is that there's a class of a merchant, who is becoming more who's coming to the understanding that. Maybe the problems with Magento also also have to do with their expectations of what digital Commerce should be and their expectations of what, you know they're there unreasonable expectations of how something should work and behave and and and so does temperate those those are becoming tempered does expectations becoming tempered and there now better, yeah they're going to go into the next relationship with with a little bit more open mind and and maybe a little more grace for when they you know get through the hard stuff I don't know it's a bad analogy but I think you understand, I'll try to go. Jason: [30:01] Know for sure I'd get a and I should say you like my general POV is all of these platforms tank right like I. [30:12] This is way harder than it should be and compared frankly to other platforms and other parts of the business like it's shocking how much work we have to do and how much risk and how many rescues there are because you know of all those issues and and I would certainly agree, that those issues are on client side and the platform side and the integrator side. I think I think my favorite client ever is a big retailer CEO he calls me and he's like hey you know we've hired three svp's of e-commerce here none of them did a good job we fired them all and they all went on to be wildly successful at their next companies. [30:50] And he's like it's come to my attention that it might be us not them. [30:55] Sci-fi like that that that level of self-realization is rare but it was enjoyable. I feel like you guys made some great points like you have underscored what I think is still one of the the marketing challenges of the new Magento and that's like. [31:12] They used to be good at certain things the new platform is much better at other things but. Nobody seems to want to really like say hey. This is our new Focus this is what we're really good at and you know they want to talk about how good they were at the old magenta one and at the same time talk about why that you know. Hey that was the Wild West in the plugins were super dangerous now now I'm enchanted to in the plugins are much better vetted but we don't have as many. So I wouldn't I chuckle the great irony here is that that Peter Shelton used to do the Forrester wave. Son and his whole job was to say hey here all the platforms and here's the here's the use cases that each platform fits in the best right here's the box that you put a shoes Platforms in and it. It's hard for purchasers because Magento is fighting so much to get put in a box like are you know are they in our right is their goal to being on from solution that just competes with with SI p and IBM is it to be, a cloud offering like like Salesforce is it to be a long tail like. Shopify like like they're absolutely is a strong place in the Echo System for them I have no doubt about that it's it's confusing because they won't help buyers by saying. This is where we fit in and you underscored like one of the. [32:33] That the great ones there they're really prevalent on the B2B top 300 West even though they don't have native B2B features. [32:42] They're not prevalent on the IR 300 the top 300 retailers you know which is like the native feature said that they they more support and so it just it's it's hard to figure out exactly what they want to be when they grow up right now is kind of my. Might my gripe. Scot, Brian, Philip: [32:58] Sure yeah yeah I do think that they sort of on the top 1000 to do so I do think I agree with you totally I think. There's going to be a challenge with Magento philosophically going forward it's interesting to watch of how much of their. How much of their Community are they going to start to usurp by putting by replacing their communities enable met with core features so that they can play in the larger spaces, because nobody you know what you know I've seen deals actively lost. Because Magento didn't have personalization out-of-the-box and you had to go to certona like that lost a deal you know and that's. That's a silly thing to me to get upset over but at that level people don't want it have multiple. You know relationships with multiple vendors they want one relationship with one vendor that does everything sort of poorly but they do everything, but that's just my take to everything kind of suck, but I don't think I want to mention about Magento and this is this is not something that's been talked about enough and it is I think it's really important point which into I think over a year ago now actually released. And all of this and what are the things that I have. Jason: [34:21] First got that to order management system. Scot, Brian, Philip: [34:23] Yes. Yeah nothing to call um I'm calm that's the that's the nickname and one thing I love about him, is that. You're right now in the order management World in and it was talk about futurecommerce for a minute order management is is is probably yeah, what are the most important plays going forward, I think if you're going to if it going to look at what you know what technology holds the glass going forward order management is probably that technology, the thing that I love about him, is that for again total cost of ownership perspective. You know that the competition is is IBM and Manhattan. [35:15] And those are very expensive Hot forms right now that I take a lot to implementing and yes they are very powerful they're great platforms. But emcon is also really powerful and can be implemented for about a tenth of the cost. [35:32] And so that is that. All on its own I think it's going to start to shape how Magento enters the market, it's going to take some time still going to be a year or two I think before it really starts to take hold but this is this is something where it's it's not sexy. But it is the future it's the least sexy thing actually ever my my my take is is right you're right on, I've been calling the death of the shopping cart for the last two years and I know I'm late to the game because a lot of really smart people have called that before but you know that the paradigm, that we're currently operating underneath. Is still a real world Paradigm being modeled in the digital space the idea that we go to a branded location to put. [36:21] You know items in a basket and then push it to a check out and then give some payment information this is a dead. Paradigm and it's it's one that's being challenged in that metaphor is being challenged on every single device that we interact with it's not a desktop computer today and so once, we get more towards the one click sand and ambient Commerce with anticipated anticipated purchase, behaviors and we sort of let more of our life go on autopilot and more things are on demand one click. We don't need shopping carts anymore and Magento has no place anymore in fact most of us won't be interacting with Commerce in the same way 10 years from now that we are today. And so what does a company like magenta do to future-proof itself it has to get into a different to a different every different area from area. [37:12] I think we're management is the Crux of that and there are too many businesses today and don't realize it but they're building order management into Magento. Yeah an order management is its own specific Challenge and nice and it says it is a very nice software market right now. [37:30] And one that I think does need to struction. But it's not one that's going to get a lot of people to temperature tension and I think magenta will be there to capture a lot of that business for the people that are trying to do the Alexa purchases that are also trying to do buy online pickup in-store they're also trying to do, purchase is in, yeah God forbid a rnvr purchases like whatever the heck that looks like so you know yeah it's an interesting thing that as business moves, news away from Brandon portals, Starman and branded direct consumer portals on the internet they were trying to drive people to I think instead of shopping being a destination shopping is now at our destination wherever we are and and that is the transformation, so I think. You're right Brian order Management's the Crux of that and so you know Magento digital Commerce as a shopping cart is probably a dead or dying platform in the next 10 years anyway, how long for all the other ones along with everything else. Jason: [38:30] Except Blue Martini Blue Martini is going to survive. Scot, Brian, Philip: [38:33] The fabric. Jason: [38:37] So I totally get it and I do agree LMS is as. [38:42] Definitely an opportunity to differentiate and most of the OMS Solutions out there right now or sort of design for how people fulfilled orders five years ago not orders are. [38:52] Yo what we need today much as what we're likely to need in the next couple days couple years so that's going to be an interesting space totally disagree that OMS isn't sexy I would say cpq is way less sexy than illness. [39:05] But I do want to change topics a good stuff on the platforms we did mention a couple times during the platform conversation the internet retailer B2B 300 list and. The the the beat of C 500 or 1000 list in that reminded me of my pet peeve of the week. [39:24] So those lips are super valuable to our industry there a list of the. [39:28] The top companies in different sectors and how much revenue they do and what platforms they use in all these sorts of things so so when you're talking inside baseball you want to have that list so you know how many of the. [39:40] Top 500 B2B companies are using Magento for example so they just released this year's list. [39:48] For the the IR 500 which is the original list of retailers and they become the most annoying salesman in the planet like I get more spam. [39:58] For this Westin anything. [40:00] And I need that list so I click on all that spam and I go to the site to buy the list and it's impossible to buy they have like so many different plans. [40:08] That you can't figure out like which is the plan you actually need and when you click on the price for any of those plans it takes you to a contact us form where. [40:18] You know someone someone has to have to communicate with the salesperson that goes I don't know how much can you afford. [40:25] I hate that whole experience I fought my way through all of it I got the list which is way more expensive this year than it's ever been before and. Wouldn't you know it they've totally nerfed it like in the past they they gave you their estimate of actual revenue for every company on the list and now unless you pay literally tens of thousands of dollars for the list you get these like. Really course estimates like they do over a billion dollars or they do. [40:53] 500 million to a billion or they do 250 million to 500 million so I don't have any action here but I'm just saying I Feel Like These Guys Brewing that product like that it was the Super Value. [41:06] For that the industry in the fact that they make it so hard to buy and then they're their diminishing. [41:12] The the level of a product you get just seems like he's actually the wrong wrong Trend these days. Scot, Brian, Philip: [41:19] I'm just to get back at him you should just go ahead and torrent that that report it doesn't. [41:26] Santa really show him. That's the thing is that I know both of you sort of have a vested interest there again in those that comes that particular company my my my guess we'll be like can't anybody just sort of crazies lists and create their own, could there be a competing product at some point is closed. Jason: [41:51] If only there was like some industry Trade Organization that Evan was members of and they they somehow like either gave it all that day. Scot, Brian, Philip: [41:57] Philip II nice. Jason: [42:00] We should find some board members are. Scot, Brian, Philip: [42:05] Will Jason it wouldn't be a Jason Scott show without some Amazon news so it's been a bit of pretty busy week on the Amazon front and futurecommerce guys would love to hear your your hot take on, the latest entry to the echo family the Echo Show what do you guys think about it. [42:24] I mean it's it's it's been a huge complaint that there's been no. Screen for the Echo and so this isn't a very natural step in the progression of no voice first interactions. And so I mean I applied at Amazon for releasing it obviously. I'm I'm excited it's finally here I'm really excited to see how people start applying it I think there's a lot of application maybe even in a business level for the Echo Show, I mean I think it's it's it's great I can't wait to start using it. Next step for the product and probably an obvious next step for the product I'm more excited about the features not necessarily that the show. Enables but the butt that the all of the echo devices have received which is calling and messaging. I'll let you seem like a natural progression for the product so you don't need the show to do it it's landed on most Echo devices today already but you can you know call somebody and have a voice conversation with them, if they happen to have a an echo in there in your customer in your inventory in your contact list or you can leave them a voicemail or are you can just, play old text messages back and forth which I think is the natural progression and I do think that there's a place for it but. [43:57] You know I was wrong about the original Echo so no longer allowed to be you no crusty about anything that Amazon does. Yeah definitely big time and now I have like 4 of them in the house so it's you know. Jason: [44:15] And your podcast is available on it which I'm totally Joseph. Scot, Brian, Philip: [44:18] To be the first time. [44:23] Actually I will I so I am way more excited about the echo look which is the camera device which I'm sure you guys were recovered but we. You know we we covered it on episode 33 of Commerce we we like you know in general I think we're both high on the product I like the idea of. Personalized recommendations that are for my body type where as you know I just have you know what's just say it I have a ghetto booty I have this I have a weird body shape. And it's hard. For me I have I have very wild range of sizes that fit across many Brands and I think if if Amazon can solve that for me I'm I'm definitely looking video I don't know if I need the fashion advice so much. From a body data and a even mention Magento in the brain Amazon is a branded manufacturer actually making their own clothes and they can sell me clothes that fit I'm I'm kind of all in on that I like that idea. Google what's a what's a ghetto booty. [45:29] A light sides of the very large Terrier. Jason: [45:38] I have a booty design for podcast. Scot, Brian, Philip: [45:41] This is kind of a good Segway into the overall Amazon topic, no you guys talked to a lot of retailers you know it's usually one of the first things that Jason I get what you guys, you know when people ask you should we worry about Amazon how do we compete with them what's your general kind of framework you you work from do you think they're going to dominate the future or their kind of going to be 25%. I feel like you you just set the tee up for me so I'll set it up and Brian you knock it down I don't think that Amazon is your competition I don't. You may think Amazon is your competition and you may hear every podcast and every you know I think piece on medium that says Amazon is your competition but Amazon's out your competition it's, your customers heightened expectations of you as determined by their great interactions with Amazon that is your new competition and so Amazon setting the new Norm, but that doesn't mean that we can't compete with Amazon if it means that we have to give the customers a reason to come. And I think Amazon has to be part of your strategy I think they are owning everything. No I'm quite literally I mean I think I just got a recommendation for someone to come wash my windows from Amazon's Professional Services like thing which like they're doing Angie's List now I didn't even know that, it's crazy they're doing everything but I do think that Amazon needs to be part of your strategy and I think. You know there are any able to platforms field do that side because one part of the pie. [47:14] And I'm setting it up so Brian you knock it down AKA Channel advisor. [47:24] I think you know if you're if you're. Certain retailers Amazon definitely competes with you. [47:38] If if you're if you are a brand who makes shoes shirt Amazon isn't competing with you buying your own shoes from. No I completely goes out until we start to get to the basics conversation, but I guess that's not any different than you know selling at at Costco that has their Kirkland brand right or anyone else does generic Branch button rings to two larger retailers, in general but obviously I think you know we're seeing the effects of that right now it's not just Amazon but. You know we talked about Macy's briefly on part one of very briefly but you know I think they're definitely feeling the effects of competition with Amazon and so you know. Yes I think if you're talking so Philip if you're talking about. Sort of that that small the medium and even large sided large medium Brands and retailers out there that's. Yep you're right they're not really competing but we start to talk, you know a Tattler trying to press level I think there is some some competition and I think that's where you going to the question is is it is it going to be all Amazon in the future, now if Mark Laura has anything to do with it I would say probably not definitely some. Big opportunity Unison and I just love his mindset and strategy around what he's dealing right now with Walmart I think he's changing actually he's actually changing the Walmart brand right now. [49:18] With his with his the moves that he's making in the stigma around Walmart is going to have to shift. In order for them to remain competitive and in a certain sense they do have one competitive advantage and that is they've got. A very large set of retail stores scattered throughout the country and so there's there's going to be there's going to be a fight it's not just it's not just going to be all lamps on all the time that's said. I mean We've joked that our show is the Amazon show because it was on his doing so much cool stuff all the time and you know it's it's it's actually mind-boggling how much. [50:05] Innovation is happening in an Amazon right now I may live in Seattle so I can be around at all the time. [50:13] Like they're going and doing things that that everyone's been talking about doing or when like man you know futurecommerce you know a couple if we had started a couple years ago. We would have been like oh yeah the whole walking to a store pick stuff up and walk out thing that's that's pretty find a future well Amazon just released a store that does exactly that, you know they're taking risks and they're making moves that no one else's is making, it's so yeah they're going to dominate in certain ways they're going to be in the Forefront and then they're going to their going to they're going to actually, lead Arc are retail to its new future. [50:58] I mean the concept is one thing right like I don't want to hijack your your your very. A very poignant sort of soliloquy they're my my what I'm trying to but I was coming back to was. What their Notions in the things that they're doing aren't necessarily. Things that can't be replicated by other companies that already have. Retail square footage to do it like if if if Walmart made a decision to do you know to do. [51:32] Walk out of store you know they have they at least have the. They actually have stores they don't have to go build them you know they actually have they have some of them got a leg up there and you know while the the notion is nice wasn't the the actual public. Beta push back from Amazon already I think that you know it's not trying you know I'm just. Thanks for sharing that the other news we definitely want to get to is, you know today a lot of retailers release their same-store sales in and kind of a preview of earnings Macy's does both kind of together, so Macy's has kicked the day off with a really sour note and the Saints were sales for the first quarter were down 5.2% year-over-year yeah I think Wall Street was looking at three down three so is almost, twice as bad as folks. There's a number you'll see out there 4.6 and that's kind of this piece of Macy's that's called license to known I'm not an expert on that duh nursed and what's different but that was only down 4.6, then you have Kohl's was down 2.7 Dillard's down for sacks down 4.8 and then Nordstrom's, all in was down .8% but then you can actually Nordstrom's is to business there is the off-price and full price the full price was down 2.3%, so you know. I talked about in the show it's usually from the context of these malls closing but not all these guys are Mall retailers but it's pretty brutal out there you know it. [53:06] It says it is a really rough time in in retail I've listened to you guys talked about it a little bit on your show, any what what is your insight into that what's causing it without the what's causing it I think if you know. If from a political perspective about the ability to you know create jobs and and and make an and keep the growth factor happening in our economy, if you needed a distraction from retail crisis you know firing the head of the FBI was one way to do it. Because nobody's talking about what you're talking about right now Macy's down 17% on the day after after that that report there after the that forecast come out today and I think we're. This is what we all should be talking about ostensibly is that we're in a crisis and it's not just one that the Wall Street Journal had a heaven headline on but what's causing it I mean I think I think part you know. [54:06] Part of it is you know changing and consumer expectations and demands and. The the old end of the stalwarts can't keep up anymore and and so and especially because. Malls of the destination I think is is an Antiquated idea. So I mean I'm not going to say anything new about that subject that has already been said but I think the the idea that we're going to transform the retail experience into a different experience by layering digital on top of it. Is is as is is the I don't know it's the retail equivalent of, in a Weekend at Bernie's let's just prop up the Dead Guy and pretend like he's still alive for a little while, yeah what one angle you guys may have on it that I wanted to ask about is when Shopify does their numbers they talk about a gmv number and, it was a pretty robust I can't remember the exact number it was like north of 10% which which is kind of interesting so if your theory is Amazon's running away with it and taking share, it seems like the SMB online would just be getting pummeled right but, does she almost a bell curve where it's the omni-channel retail guys are getting pummeled they're not doing great online or offline Amazon's doing well and then there seems to be this kind of group of some bees that you know have, you have to somehow figured it out what can you guys talk to all those folks would what is it they're doing that that's kind of causing him to Bakken and do you see that in your businesses. [55:36] Good question I think that S&B is have done a good ass and bees have done is really do what we've already talked about a little bit which is there not competing with Amazon there there, creating experiences for their customers that really cater their customers well and so they've gotten really specific and really honed and intuned into what their customers. Are interested in in need and want and you know created product differentiation in and then you know and you know maybe they're selling through Amazon so you know Amazon, Amazon's profiting from that but they're also profiting from that and so it's. [56:16] It's you know I mean it Philip I'll let you speak to that to some degree as well but I think. [56:24] The beautiful thing about being small is that you have the ability to to really focus, and so do you start of mid-tier Amnesia and retailers I think that their strategy in terms of of early like that their Market was the same as Amazon's market and so they're getting killed because. They're getting beat at their own game and so that's some BS that's not ever been their Market there their they're targeted. [56:55] I have nothing more to add to that that's another thing is. I will have a few points. One thing is first of all you've got a generation that's now, sat coming into purchasing power and this generation has been through one of the worst recessions in history in American history. Mom we're a lot more careful with our money and so and on top of that. You've had insane amount of competition online and you've had sites come up like Retail Me Not in these passive Commerce sites like dealnews and Slickdeals and others ends. They've created expectations about pricing and purchasing that that are more widespread than, then what we used to think of us is crazy extreme couponers Extreme Couponing is not a thing that that a few people do now is something that everyone does. And so were our expectations around what we pay for things. Are are just completely different now and so even even Neiman Marcus is we talked about this on the show but they're saying price sensitivity is a big deal right now. And so I think that's playing a big partner so not only are we are we coming out of the Great Recession never but now we have ways that we can save money and so I know I fall into an extreme category here but I would I would probably be. [58:32] Categorized as an exploitive Shopper where I can I'm I'm buying things that I probably lower in lower than it took for a retailer to buy them, because I know that I can wait I can wait around with my passive tools and way for price alerts and pick up that pair of Clark's 420 box. And you know instead of the the retail price of of 120 or whatever it is. I do have actually something to add which is I think that we're. And III want myself into it even though I'm a gen-xer which by the way gen-xers have it worse than anyone because we're caught between two you know I'm jective Lee awful Generations, my my take is that we are moving into a generation of people that are. [59:22] That want to experience things for themselves and. And so smbs who are offering lifestyle and who are offering you know a sort of way of life and connection with their brand and whether that's outdoor. You know Outdoors or Source you know the Forever Summer sort of idea whatever that might be it's their goods and services that are around experience and I think that that sells pretty easily because it's the inexperienced as me being somewhere. Living and maybe sharing it on Snapchat but I'm I'm going and I'm doing and I'm experiencing interesting things and these are the things that I bring with me. Instead of you know the traditional you know hardgoods and soft goods that used to just outfit our homes, you know where we spent most of our time and then take you no one vacation here I think we're we're kind of living life differently now and so maybe this is the new normal. And we talked about this on futurecommerce we have it a retail analyst by the name of soccer pond at the Rodney and she shoots formerly of Andreessen Horowitz and done a lot of work in the VR space Butchy she has this theory that. [1:00:35] You know you know maybe retail needs to rethink its model and operate more like Silicon Valley which have have a much longer investment curves and venture capital, sort of 2 to back and have investment that gets you through they need to just generate profits and instead focus on the need to actually expand the, the ubiquity of of you or your brand which I think is interesting take. Jason: [1:01:03] No it definitely is an that's actually going to be a great place to leave it for this week because it is happen again we have wasted a complete our of our listeners time so. [1:01:14] Brian Philip we certainly appreciate you coming on the show and helping us to do so. Scot, Brian, Philip: [1:01:19] Yeah thanks guys we really enjoyed opportunity meet your audience and experiment with this whole cross podcast concept, if you guys liked it be sure to let us know on Facebook or Twitter or wherever it is you like to leave feedback if you leave feedback in iTunes we always appreciate, the five-star kind of feedback thanks guys thanks for having son straight. Jason: [1:01:43] Yep until next time happy commercing.  

EP084 - Amazon News, Walmart Earnings, RumorsAmazon News Prime day - 30 hours long, sometime the week of July 10t Amazon market cap crossed 2X Walmart 20yr anniversary of Amazon IPO - A $10K investment then would be worth $6,410,000 today 1 click patent expiring Amazon expanding into Pharmacy and Furniture Amazon B2B impacts Grainger (Now predict that 80% of the sales by 2021 will be online) Brands moving ad dollars from Google to Amazon Walmart Strong Q1 earnings- Ecommerce up 63% (40% organic), GMV up 69% Same Store Sales up 1.4% Went from 10m SKUs a year ago to 50m SKUs today (Amazon has 355m) ThisIsStory opens Jet.com Fresh themed story Walmart files IOT Patents Other News As earning season wraps up, discount retailers, dollar stores, and warehouses are up, while department stores are down. Samsonite purchases Ebags  for $105m  Google IO - Google is all in on artificial intelligence Target tried to buy Caspar and settled for an investment Target may be trying to buy Boxed Scot will be hosting "Amazon & Me" an all day workshop on Tuesday June 6th at IRCE, he can be found in the Channel Advisor booth #607 for some of the show. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 84 of the Jason & Scot show was recorded on on Friday May 19, 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Amazon Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 84 being recorded on Friday May 19th 2017 I'm your host recent retailgeek Goldberg and as usual I'm Scot Wingo. Scot: [0:39] Hey Jason and welcome back Jason Scott show listeners Jason spend a little over maybe a week week and a half since we have chatted how have things been if you've been how many cities have you had since we last caught up. Jason: [0:55] This may be the first time I've been able to see this all year but I have hit zero City since we last chatted I meant home in Chicago for almost two straight weeks. [1:07] She is she's at she has helpfully packed my suitcase and is eagerly awaiting my departure to the West Coast on Monday morning. Scot: [1:16] Put it right by the door there. Jason: [1:17] Exam. Scot: [1:19] Cool so I guess we can't talk about any trip reports any other things going on you want to highlight before we jump into it. Jason: [1:29] I do you know where you like to talk about the fan mail we get on the show but I got some angry fan mail this week. [1:39] Well it's always the same angry fans Jason Delray of recode. Scot: [1:47] What did we do to engage mr. Del Rey. Jason: [1:52] Yes what's the argument sorry about don't get an argument with people that buy their ink by the Barrel in there. Scot: [1:59] DigiLink. Jason: [2:00] The digital anchor pixels by the barrel. So if you recall last week we had a great conversation about Amazon with Andrea and the. Topic came up of jets and I did mention that the Jason Del Rey. I had written the article that sort of implied that that perhaps jet. Close I'm sorry that the Amazon closed Quincy. Out of spite for Mark Lori you know who's not competing with them at Walmart. So we had a little conversation about that and Jason me actually very kind note to clarify that I had I had soda misrepresented his position and then. He's really doesn't think that, did Amazon close Quincy because of Mark Glory but he does think that some animosity for Mark Lori might have played into, the communication around the closing of Quincy in the fact that they said like what we closed it because it was too difficult or not possible to make it profitable and so so Jason series more of that like the communication may have been a little more of, negative as a result of the of the. The Jeff Mark animosity then then the actual business case then I suspect that he's probably right like that certainly does make a lot more sense. Scot: [3:28] Yes it's almost like you know Amazon kind of crap that if you will. Jason: [3:35] Exact exactly that I quickly showed up on a crap report and they in the shutter shutter down. Scot: [3:43] Google that's said there's been a ton of news in industry and as I always like to say it wouldn't be a Jason and Scott show without some Amazon news. Jason: [4:07] Yeah Scot it feels like there's another interesting stuff going on and Amazon this week I think we finally got the announcement about, Prime day for this year and I'm I'm struggling to even call it Prime day because I think it's now Prime days plural. Scot: [4:27] Prime day is prime day 30. Yeah Dave it's weird because there's several news reports picked up and said they're hearing from Amazon that it's going to be the week of July 10th through 14th, betting person was in 11th that's kind of where I'm going to put my money and then it's going this year it's going to be 30 hours were just kind of interesting which is like kind of random it's a, day in 6 hours so I guess they're trying to pick up another nice 18 hour window and then. The six-hour window when when most folks are asleep and then pick up a morning would be my guess. Jason: [5:09] Yeah you could you not yours you could imagine they're just creeping it ever every year and that eventually it will be like in always on promotion. [5:22] Or cynical person might say that they're making sure that they dramatically beat last year sales numbers. Scot: [5:28] That is now it should by its nature since the six hours longer to see that's going to be one sick so the 18% more juice from hours assuming a linear distribution. Jason: [5:42] Thanks for doing public math on the show that's always impressive to me. Scot: [5:46] Yeah yeah this is why we have to delete the other two shows. Jason: [5:50] I was just going to point out no editing involve folks. [5:54] I think also someone exciting we had talked about the the likelihood that this was going to happen but Amazon had a nice little uptick in their stock in their valuation is now officially twice that of Walmart. Scot: [6:12] Yeah yeah and I haven't seen anyone else who visited the word perilously close to that point that I've calculated again in real time on a show probably around midnight a caveat there, that's a basis would be, close to the number one richest person with over a thousand in the stock is kind of hovering around the 965 970 so we're not too far away from when I think that too so, let's see I think I have some kind of a strong showing in Q2 or some kind of catalyst gets it over $1,000 I think we'll kind of see some articles about the. Jason: [6:50] Yeah that that is going to be fun to watch regardless that's a really high tax income tax neighborhood with with Jeff and a Bill Gates end up there. [7:04] And I will one doesn't even that same neighborhood does I meant within a mile and a half you got two guys paying a lot of income tax. Scot: [7:11] I thought you meant the neighborhood of the top five on The Fortune 500 not the physical neighborhood. Jason: [7:14] No I'm just saying that that police force in Seattle is well-funded is what I'm. Scot: [7:21] Absolutely. Jason: [7:22] The PTA is is the coppers are overflowing. Scot: [7:27] Yet another nursing one is this week was the 20th year anniversary of Amazon's IPO and you know when that happens with these accessories is he always interesting data points and if you put a dollar in your every dollar you invested in the IPO 20 years ago it would, each of those dollars would be worth a $641 today so if you done a thousand that would have been worth 641000 and if you done, you can continue the math 10,000 will get you up to 6 million and that's why Jeff Bezos is at the heading towards the top of that list because he owns a lot of Amazon. Jason: [8:05] He invested about $2 in in that original IPO. I think that's mostly true but when you say when you invested or you might get that I would point out that back then you probably get a paper stock certificate and I would have lost the certificate so I wouldn't of came the money but. Scot: [8:24] Even 20 years ago the paper was really just about sibo and you're registered and it's okay if you lose the pay. Jason: [8:30] Oh thank God I was losing a lot of sleep over that. Scot: [8:33] So you should actually check there's every state has a place to go look to see if there are someone looking for you to deliver that lost share of Amazon stock. Jason: [8:44] Luckily right after the Libyan Prince they're usually calling me so I don't I don't have to look it up. [8:50] It's odd anniversary year for Amazon it is also the the. Anniversary of the Amazon one-click patent and the reason that's interesting is it's the the final year of the Amazon one-click patent so that expires this year. Scot: [9:09] Who do you think will see a rush of people kind of coming out with one click now that they can't. Jason: [9:17] I suspect that we will like I feel like you'd only on Amazon like. [9:24] Exercise the pageant really aggressively and I think that you know they got a licensing fee from eBay if I'm. If I'm remembering right but I feel like people had been skirting the line on that patent more and more in recent years and so you know maybe it won't be a, a watershed moment but I think it in certain sites it's certainly going to make sense and so I do think we'll see more of that. Scot: [9:47] Nothing eBay doesn't license that's why I have this weird kind of two-phase commit it's kind of like you know, buy and then you can go to the PayPal flu and even unit they try to integrate those things are there still a two-faced but apple is one of the biggest licensees of one click. Jason: [10:05] Okay so I may have remembered it wrong I thought eBay was the company that the Apple actually prosecuted the pastor that Amazon prosecuted the Pats and again and there was some settlement or something but I'm a. Scot: [10:17] This will be a fun thing for Lester's to help us research Sean I definitely do Apple license is a very large licensee I don't know who Amazon tutor. Jason: [10:27] Answer those guys I'm certain are looking forward to that patent expiring if nothing else. [10:33] And then there was also some news that it looks like Amazon is getting more serious about a couple new categories, Furniture in potentially most interesting the the Pharma industry the Pharmaceuticals. Scot: [10:48] Yeah. You know what's what's fasting about these rumors are Amazon announcements I think they a lot of them come out of job postings so the two I read kind of hit read between the lines of job posting this and then talk to me Amazon source, but each of these days so CVS was down pretty materially the day the farm and news came out and then Wayfair and a couple other Furniture companies for down pretty substantially the days the furniture. Sucking out so. Yeah it's kinda it's really interesting your last 20 years to see this work like 20 years ago I run laughed at Amazon and if they announced we're going to come out for my run be like or if they even if they acquire drugstore.com NC, I care too much about it oh no sorry the other guys did but they weren't investor drugstore.com and. We're playing in that area and everyone scoffed and now when they're just so with that they're getting there they put a job putting out stocks go down to 20% so pretty amazing. How much to move the needle here in the last 20 years. Jason: [11:48] That alone is a very powerful in both these categories are interesting cuz to your point. Superficial like there'd be a reason that both of these categories are. Difficult and obviously there's a reason that neither one was the first category that Amazon went after and there you know there's only going to be reasons that the Legacy in that the incumbents in those two segments, are saying here's why we don't think Amazon will be as successful in our segment as they have been in all these other segments and and that of course, you know I gets the hashtag Famous Last Words Furniture is interesting because it's not likely that the. The enormous of fulfillment center infrastructure that Amazon has is very well suited to Furniture in so that you know there are some third parties that have built these these Furniture distribution Networks. And they often require like white glove deliveries and you know very regular size stuff and even though. Amazon has built a couple of distribution centers or Phillips centers for a regular sized items but the really design for things like big screen TV's not necessary sofas. Inside of Amazon where to get really serious about furniture. It would be interesting to see if they would build a new fulfillment center infrastructure or how they would it would handle that that whole part of the thing because it doesn't seem that could leverage all the existing FC's. Scot: [13:16] Yeah and that's that's one of the keys they report so some of the job postings are 444 falmont centers that are going to be designated specifically furniture and Appliance so so but they never been contact with that. Name an end to point and never to my knowledge I know they got a pair of them at centers that have kind of steaming and ironing and kind of some very apparel they have a grocery footprint, they have a small item that return footprint that have a large item that's largely is for large Electronics this is the first time I've kind of seen, any Donuts Center tag with furniture and Appliance in and then certainly it sounds like they're building for sale that's. Pretty interesting and going to be a whole new new them footprint to see what they're doing. Jason: [14:04] Yep and that that is a category that you look at and say has not been very digitally mature a lot of the the. The traditional Furniture retailers would say like oh gosh people aren't going to be able to aren't going to buy furniture they can't come in and see it and so they hid them under invested in. In digital in e-commerce there's certainly some exceptions out there so that's an interesting category and then potentially even more interesting is Pharmacy again bunch of unique challenges about. The distribution Network for that and in that case particularly the delivery and dispensing has a lot of regulations attached to it. But you talk about disruptions you know you have three very large chains in in the u.s. Walgreens Rite Aid CVS. And the something like 60% of the revenue from all three of those chains is Pharmacy. I said that literally is their reason for being that drives all the trips to the stores and then they hope to sell all that all that stuff on the Shelf as a, serendipitous Discovery when you're coming in the store to fill your prescription so so it won't have Amazon was able to disrupt. Pharmacy in and you know really really own direct-to-consumer. Fulfillment for pharmacy that that would be those those chains could not survive without walk-in Pharmacy. Scot: [15:31] Yeah do you think the whole prescription thing in management of that is insurmountable or you think there's actually a better customer experience to be had in there. Jason: [15:40] Yeah I know I think it's exactly the opposite I think it's inevitable that the majority of prescriptions that people are going to want home delivery like it just is a better experience it's a chore to have to go. Pick that stuff up like there's a subset of that industry that you need kind of on-demand fulfillment so you just had a medical procedure and you need to stop on your way home and. And get some pain meds or something like that but the overwhelming majority of Pharmacy are these. The stuff that the majority of Americans now take for for chronic conditions and so you're just. Virginia if your whole life and it's a heck of a lot easier to have that stuff, show up at your door there's some really Innovative companies that are tackling individual markets like I think of capsule and in New York for example and you know Amazon certainly has the resources to. To go after that and saw that on the national basis and you know if and when they do that that's going to be a scary moment for other traditional drugstores. Scot: [16:44] Another category that's interesting we talked a lot about on the show and I know it's kind of a hobby for both of us to follow this one and it's kind of the B2B industrial category, and I'm just kind of the brief history here on this a deep dive cuz this is definitely out, that we should go deep run but that the Amazon piece of this is what she back in. April I think it was April of 2015 Amazon launch time. [17:14] Amazon business they used to have the thing that preceded it was Amazon Supply and it really signaled. [17:21] That Amazon is getting pretty serious about B2B and you know it's funny a lot of the B2B players really kind of laughed and said you know we have this network of. A thousand stores we have same day delivery there's no way you'll be able to counteract that and I would maybe think of this is Granger I was just one of the big players in this kind of B2B category and Industrial. Lovegood's has had a really rough first quarter so it started out they they. The mr. numbers worse than they ever have and then it took awhile for them to kind of come out and explain what was going on and they really just a simply said they've seen a seismic shift over Ecommerce and dinner. They called out specifically but reading between the lines it sounds like Amazon strategy is really taken root and it is causing them a world of hurt, one of the things I thought was interesting is when they came out and said kind of readjusted expectations they said they now predict that. Over 80% of sales by 2021 will be online and that cause analyst to take because they're so. Built out in the stores and all their margin is kind of. The accounts on people coming in the store analyst came out and cut their whole long-term margin Outlook by more than half. [18:36] So there's definitely see changes going on in that part of the market we haven't had a ton of time to talk about it and I think it warrants a deep dive. Jason: [18:45] That we should talk I've been to that one either, Factor there that seems really scary for Granger a lot of these B2B companies have contract pricing or negotiated pricing with each individual customer so there's, their tents and not be a public price and, you know they rely on price application you not knowing how much anyone else is paying for the goods and so Granger's had an e-commerce site for a while, but they they charge like the highest possible price on that e-commerce site so today, you know that the customers are buying online we're paying the highest price and one of the other things that they announces that they've had to dramatically. At as all shoppers are shifting the purchasing online they're their price sensitive online and so you know how to say Amazon, has the exact opposite pricing philosophy so they had to dramatically lower their prices and so it's a double whammy you say like wait a minute all your stores are so your sales are shifting online away from this huge investment in brick-and-mortar that you have, and you're having good to dramatically reduce the margins you get for online sales you know that doesn't give us a lot of confidence in your future. Scot: [19:53] Yep that's when I want to talk about it really news but it's kind of trend I just wanted to bounce off you and see if you're seeing the same thing so so it's my talk to. Brands all the time. And yeah I don't really causality but because I think we talked a lot about Amazon comes up for really interesting conversations over the years used to be. [20:19] What should I trade you be in that kind of thing, now what I'm finding is in Pride like the last 10 to 15 conversations I've had with Brands there they're really getting very serious about advertising on Amazon and I don't really see this out in the press three much but no. I now hear that stat come a come back to me that that I use all the time and that you no more searches are done on Amazon then for products than other sites like Google and it for she was the first service this like for five years ago and now there's several sources for the data, so Answer the conversation goes you know what we're doing is restarting it's been a lot more on Amazon ad Platforms Night if I have to that AMS Nama and we can go into that on. If I do Deep dive on this too and certainly you know it had gas like Andrea and most break talk about it on the periphery. What you interesting is what I'm seeing is this very quick lifecycle where brands are starting to the test and then it is a brand that you know. There their name brand so they have a lot of marketing dollars already in all kinds of different buckets, and at least we're starting to see them slash those at dollars it towards Amazon rapidly, also some folks have moved north of 30-40 50% of their previously mostly Google ad dollars over to Amazon and it's because of that so they can measure very. [21:50] Easily how it is moving the needle on Amazon itself but they're also seeing a very powerful spillover effect off Amazon. [22:00] It's hard to quantify that and I've talked to some of the other doing and its proprietary nothing. I don't want to go into it now cuz though I think it would reveal who they are but it's really fascinating to see this and I would not have guessed this would happen this quickly and I just kind of wondering are you are using the same thing in the hearing the same discussions. Jason: [22:19] Yeah absolutely. In it it it feels like for a couple reasons like certainly one is there is this like shift 2 more miserable, forms of media and more more sort of green eyeshade evaluations of marketing spend and your point when you advertise on Amazon you can it's Noah believe that that had resulted in the cell whereas a lot of other advertising Vehicles it's not been so the KP eyes have to be more, more wishy-washy and frankly like there's a lot of ugliness in the whole digital advertising space about like when you measure things like impressions. How accurate those measurements even are and is it about that sing that are person as that below the, the the full the never invisible to the human eye on all these sorts of things come into play into the the ads on the Retailer's site, you know certainly have an advantage and measurability but I actually think it's it's two other factors that are really driving it like that. The top on when you mention like hey if Google is been a traditionally effective way for me to advertise in particular. I've been really effective and then you start to hear that weight 55% of all. Search traffic starts on Amazon not Google you say man my portfolio of of pieles should. In 55% of those dollars should be going to Amazon not to Google in so you're starting to see Brands want to make that shift. [23:51] And then you have this third problem for the account teams that are particularly responsible for selling their own products on Amazon. There's a Amazon has this great virtuous cycle for Amazon which is when you launch a new product on Amazon the only way to find it is inserts right like unlike a lot of other e-commerce sites where. We're about 90% of the users are using the nav and maybe 10% are using search Amazon is almost exclusively a search based. Experience and the only way to show up in search is to have a high velocity of quick through on your product. And when you're a new product you don't have a high velocity of quick through so. You literally have to see the system by buying ads to improve your visibility so people could through to your product detail page so that you can get some volume so that you can start organically showing up in search. [24:44] So it almost necessitates that you make that that investment and what's what's been interesting to me is. [24:52] You know a brand of spending money on marketing like these tennis spend money out of a couple budgets and so usually. The first thing you see is that there's a sales team at you know Procter & Gamble or if you know you pick any brand. And they're responsible for selling the family care products through Amazon and they have a sales budget to invest in promotions on amateur Amazon that help himself just like that. Promotion budget to invest in in-store Shopper marketing at Walmart tell them so. And into those are the guys that originally are investing in these these AMS services to have their products show up so that they can start getting that search visibility. But there's a much bigger marketing budget that's owned by the CMO and that's the sort of brand building General awareness budget, I'm in that usually the budget that's invested digitally and things like like Google and so the interesting trim we're seeing is a lot of brands have always had a presence on AMS, MN other retailers advertising platforms. From those account teams but now it's becoming much more common that you're seeing the CMO allocate part of the brand building budget to showing up on these retail or sites and well. Amazon's the by far the largest Network in the US the Walmart advertising that work W an ex is very big target has a meeting full of network, Best Buy has a meaningful Network like almost every big sight there there's a separate team that's called the site monetization team and they're focused on on selling these marketing products brands that that died. [26:31] You don't want visibility on the sites. Scot: [26:33] Young I'm kind of curious if this going to start to show up in a lot of the ad tectonic companies. Results on specially Google because it does seem to be this, the kind of destroyed the Google milkshake so it'll be interesting to see if if we start to see him it back or maybe you could just big and diversified enough it doesn't it's not Material or something that we should if you're interested in this maybe, Too Deep dive ideas maybe we could get some Worcester feedback on you know which one of these is most interesting so we've got a Amazon marketing platforms and entrance and then we've got the B2B DS2 topics there. Jason: [27:15] Yeah good stuff and I guess one of the thing I would say there, one thing holding Amazon back a little bit at the moment is there ad platforms are not nearly as advertiser-friendly as, since somebody that their Core Business Like Google right so there's lots of friendly api's that all the Aztec guys can build products that talk to on things like like Google and the. Technology you can use to interface and execute your ads on on Amazon and and you don't even greater or stand on all the other retailers sites his is. Relative William in church so that feels like with the one area that needs to change for it really to catch fire. Scot: [27:53] Yeah and we've had several guests on the show say that they're pretty big kind of aspirations there so I think they'll get there. Jason: [28:00] There's their zero doubt that they could solve that problem and likely will. Scot: [28:04] Cool exit on Amazon you think anyone's going to slow those guys down. Jason: [28:13] Well I guess it depends on what you mean by slow them down III I certainly think that they're going to continue to grow and capture more market share in so if you're if you're picking a winner it's it's clearly got to be there, but I don't think it is a one-horse race and so I do think there's some other retailers that you know of, in a position to carve a pretty big pies for themselves and the one you think of the most in the one that you know frankly at the moment has a much bigger than Amazon is our friends at Walmart. Scot: [28:46] Yes yes oh Walmart had their first quarter earnings out and I think. Most of the reaction I've seen has been really positive some some folks are saying you're out of the woods and others are calling and green shoot so kind of, yeah different levels enthusiasm but mostly enthusiasm the one metric everyone's really excited about and I thought was. Pretty awesome is Ecommerce was up 63% year-over-year to you as a reminder e-commerce cornichons going about 15% maybe at 2 gets 14 desktop in two or three said that night maybe. Natural north of that but called 15 to surrounding and, Amazon consistently as a company grows in the mid-twenties and then if you take out a bunch of pieces the egm part of Amazon instead of the marketplace are growing, to clear around 30% so twice the rate of e-commerce so here you have something growing for X rated eCommerce witches witches great now Walmart hasn't been consistently doing that they've been all over the map here, so you're one skeptic one skeptical think people could say as well. The last year they didn't have a jet so is this all inorganic growth into the Wall Street analysts have taken some of Walmart's comments but I gave him enough data to back into it and, no the ones I've said have estimated that the organic growth was 40% your beer so still a really good showing ahead of Amazon's growth rate and then when you later in the jet would she have the Dell 23% or you get took up. [30:21] Pretty significant growth number so you have it too early to call that the strategy is working but there is definitely this is better than - 5%. Jason: [30:30] Absolutely and you know it, a huge warning sign for everyone else in the industry Let's Pretend analysts are for sure right in his 40% organic growth so the whole e-commerce Industries growing at 15%. By far the largest player in the Commerce industry that alone is is like 30 or 40% of the industry, is growing at 30%, and this and like most likely the second largest player in the Commerce industry is growing right now at 40% so that actually does not leave a heck of a lot of growth, for everyone else to get to that 15%. Scot: [31:10] Yeah there's there's two kind of outcomes if if the industry keeps going at 15 then. Online people to share will what I actually thinks going to happen if I grinning kind of a golden HD Connor Square I think if you don't just ties into the mall again theme I think we're going to actually see the, Tire e-commerce sea rise and we're ghosts are too. Bump up from that 15% we've had for years and start to get up towards the 20% that that's kind of yeah I think that's what's going to happen because and then the, and what that'll do is the percentage of sales that are online is going to start accelerating it's been kind of if you look at the comscore data in the Census Bureau data, it's in the sky like straight line for a while and it. I feels like the elbow the curve so I think this between q1 and Q4 I think it be a attic will start to see the really interesting inflection point there. Jason: [32:01] I think that's totally possible I like to think of it is, the really isn't an e-commerce industry like they're a bunch of product categories that are each a different places in there, certain maturity or adoption curve in in general across all the segments we see you once they get about 20% of their their Sales Online like it becomes a major disruption for the the incumbent model in so I think they're just, a heck of a lot more retail segments that are that are rapidly approaching that that 20% threshold in so like I do think that you can, that you could imagine a bunch of those crossing over that threshold then driving up the overall industry average. Scot: [32:46] Coupler just two bits of so if the first time they just close the DMV number in that was up 69% so when, when Revenue grows slower than gmv that mean to take rate is going down at I don't think that's enough of a Delta to be concerned it usually that can be explained and mix so all these marketplaces have. No a different mix a different take rate for electronics let's say is usually some 10% and then some of that jewelry is north of 15%, what is a nursing kind of trend watch over time which could indicate that there's some price pressure there or something like that, I'm Sims 4 sales improved 1.4% in the physical stores so that's good and. Jason: [33:29] And that beat analyst estimates. Scot: [33:32] Yes that was an improvement and you know it. [33:37] Walmart's been on about a year Journey may be teaching months where they've been investing in stores in hiring people and raising their, wages and cleaning up the stores really focusing on you have the day today blocking and tackling at the store level and that's an indication that that seems to be working and as we know later than other same-store sales numbers out there and 1.4% is, printable right now it's going to got a plus sign in front of it which I think many retailers would, really like to have on their teams for sales the quality of earnings growth improves which is good and then what the guys always measure on the sun and this is I've been being this drum for. Pearl every 15 years is at this point in time Amazon has you know, over 3 and 55 million skews so when it comes to selection no one comes close to Amazon it's that marriage of the one p and 3p model that does it Walmart seems I've got religion around this and it's widely reported, that they went from 10 million skis a year ago to now that 50 months can still drop in the bucket kind of 1/7 of Amazon but you have to go up 5x in a years is pretty impressive when for you know. What was yes 15 years and be a Walmart has been kind of in single-digit millions in here the last couple years they've they've really started to get very serious about adding selection. Jason: [34:59] Yeah absolutely in it it seems to me I mean when Amazon or when Walmart first wants to Marketplace like you know they didn't get immediate Traction in there you know they were kind of, judicious about who they let on to the marketplace and I know the sellers like really complained about. The platform in the the the tools and how many schools you can on more than all these sorts of things when you see that jump from 10 million to 50 million my section is that they fix the bunch of those problems in the third, they're much more seller friendly than they then they were originally. [35:39] Couple other little things in the Walmart world there's a great store concept that I can't remember we never talked about on the show, call the story or or formal name this is story which is a retail space in New York City and it's kind of an interesting concept they they. Are a great mix of Commerce and content, they come up with a theme every month or two and they redesigned the retail space. Based on that thing so the theme could be. A category product like health or you know measured self or innovation or something like that, and you know they design a complete retail space around that theme in so, when you go there from month to month you you wouldn't expect to find the same product you'd expect a completely different sort of Rich immersive experience, from the original concept they have been able to sponsor a number these stories so they had Brands come in and say hey we want you to develop a whole store concept around, are our particular brand and this month's story debuted a new A New Concept in the space and it's it's jet.com fresh. Scot: [36:58] You and I have been to several shopping at work meetings at at that store it's really cool it's kind of. Antiques curation to the the Instagram think because the store is the simply just wipe and replace every wish you do every 2 or 3 months is it courtly. Every month with what's that site. Jason: [37:17] I think it tends to be about every 2 months but I don't think it did so I got to fix schedule. Scot: [37:20] Come on Sia yeah yeah so are you going to go I think you're going to be in York City going to go stop by. Jason: [37:28] Yeah I haven't been to this concept yet it just open I think my next trip to New York is maybe end of next week or two weeks from now and so I will, definitely look forward to checking it out and hopefully we'll be able to tell our non New York westerners about it after that. [37:45] And then no one other piece of interesting new Walmart news this week is that Walmart's I filed for a number of Internet of Things past tense, in the, space so like everyone's really familiar with Dash buttons and dash Auto replenishment Walmart has patented and number of sensors. Detect when a consumer is likely in need of replenishment so it sort of, implicit is a replenishment instead of explicit so you don't maybe it's a toothpaste holder that can tell you when you're out of toothpaste, but other interesting play with some of these sensors are designed to tell you when the product you bought the perishable product you bought is about to expire so I could warn you that your. Your milk is expired or your cheese or something like that I don't know she's never expires now that I think about it but you get the. Scot: [38:44] Cheese expire this green stuff on it. Jason: [38:48] That green stuff in cheese I'm just getting I think it's penicillin no that would be bred never mind. But in any case interesting that the Walmart is investing in that in that ipspace we talked about. The internet of things and Auto replenishment on the show a couple times and it is very likely that five or ten years down the road sort of 40% of the goods that you. You buy in the grocery store today are likely items that magically show up at your door because your house knows you needed him so, I think that the retailers that are investing in returns and brands that are investing in that technology now are are wise to do so. Scot: [39:32] Yeah yeah one news item to kind of break out of the Walmart side that we were remiss and covering and so we had this flurry of activity there were Walmart bottom of Oaks in between shows of one of our gas company was acquired so Samsonite acquire D-backs was cofounders Peter Cobb is good on your end we've also had John Norma, two of the three or four Sounders on on the show. Jason: [39:59] Acquire. Scot: [40:01] Yeah yeah I'd say so. I don't think it's a huge stretch to say that we basically put this deal together but anyway so it was acquired 405 million, that's great outcome for everyone in and you know this trend of, brands of accelerating their digital footprint by buying e-commerce players is as fascinating in its. A shout-out to our friends at ebags and congratulations on that one. Jason: [40:27] Yeah absolutely it's going to be interesting to see I got his bags has a lot of that digital expertise Samsonite now also owns to me so it'll be interesting to see how they're able to leverage all those those new digital chops, across like you know both of the stores brands. Scot: [40:47] And then I'm also in news so we're, Walmart usually one of the last folks reports or kind of heading towards the end of the q1 reporting cycle and I saw a really cool chart where well one of our joint Twitter friends Ryan Craver has been tracking the sand, what is he shows kind of graphically same-store sales Trends and you know this was fast about this chart is. Yeah he has what he has kind of groups without call value-oriented retailers or their counterparts so things like Burlington Coat Factory which is a discount on Nordstrom Rack. The Nordstrom Rack piece of Nordstrom Rack shoes TJ Maxx, Dollar Generals in the dollar stores then there's a grouping for department stores and there's a grouping for wholesale clubs and it is a tale of three cities so wholesale clubs in generally the discount guys are doing well with positive same-store sales results and. Department stores are doing really really poorly with with severely negative same-store sales. So we'll put this in the show notes or check either my handle or Jason's on Twitter and by the way both retweeted this so you can see it there but it's really, interesting graphical display out of this where consumers are spending their money is actually an end the feast and famine that's going on and offline retail right now. Jason: [42:15] For sure I mean it plays perfectly into the, the retail Armageddon that we talked about that but you know protect those department stores are super distressed as consumers are making different decisions about where to shop been increasingly it's at those those more value-oriented retailers. Scot: [42:33] Yeah and one of the young, no one of the folks that did not make it out here in the last week or so as a retailer or rented towards team some all based retailer oriented towards teams called rue21 the file for bankruptcy so remains to be seen if they'll be closing all their stores or what's going to happen to the bankruptcy but usually it does mean store closures. Jason: [42:57] Yeah in it. I mean then we talked about the number the earlier bankruptcies a doing some interesting buzz on Twitter one of the bankruptcies was Gander Mountain and what kind of interesting, that Gaynor was bought out of bankruptcy by Camping World in the reason Camping World might be interesting to some listeners is the CEO of camping world is the star of retail Park a profit show on CNBC if you ever watch this. Scot: [43:30] Leon's Marcus Leon saskia. Jason: [43:35] Exactly and so Marcus has been Super Active on Twitter and he's been super transparent a gander had a. If memory serves like 60 stores and campers world is going to reopen like, 20 of those stores in so you know he's been like sharing real-time data on Twitter as they make the decision as to which stores they can reopen versus which ones they they. Scot: [44:02] So that is really confusing because, the stores all say the stores closing and we're liquidating everything then he is saying no no no no the store yes or selling all the stuff but the stores going to stay open so I guess they're going to, no they have their own supplier relationships and Logo replenish the stores and then they're also rebranding them the brand is like. Cinnamon Big Gander Mountain it's just Gander outdoor but he wanted to create a bunch of distance between the brand but it's like the same essential name side, Nas represent tracking. Jason: [44:36] No I think you got it, exactly right I think he did not buy the inventory the distressed inventory in the stores so the Liquidator the did has the right to sell all the stuff out of all of those stores and then the stories he reopens he's going to have to replenish your point prison while using the campers world supply chain that he already has. Scot: [44:56] Yeah that's commuter Sting If you can make that work because it's certainly very confusing consumers I forgot it's pretty in the weeds try to explain that to him. Jason: [45:05] Not for sure I just found the thing interesting you know if this had this this kind of thing plays out all the time when returns go bankrupt and I'm played out you know 15 years ago or 10 years ago when when Circuit City closed. They give you work in a Circuit City store you have no idea if you had any potential for a new job or what was going to happen and you know you'd be waiting until you read something in the newspaper and now you've got like. All this this real-time information you jump on Twitter and the you know Marcus is out there tweeting list of stores and saying like Hey we're going to hire people in that store so I did. I think that's another interesting ramification of the of digital disruption. Scot: [45:47] Yeah that's good point I think it is super helpful for the employees to have some some in real-time information what's going on. Jason: [45:53] Absolutely So speaking of digital disruption another big guy digital event this year or this week is Google IO. Scot: [46:05] You would what you think about that I was not able to watch it real time I read several the summaries and, yeah it sounds like Google went from in the early days being kind of search for Sony search to than mobile first and now everyone's saying there AI first so the AI Buzz was a Google IO and you have to get excited you're going to be in it's like, you know, this thing you can hold up your camera and it'll decode something in the real world and Google's had several iterations of this and they've all been kind of you know nice demos but not like, game-changing cell I don't know I felt like a real use cases so interesting to see if something was like changing for you. Jason: [46:50] Yeah we'll see nothing I would call life-changing but I do think it's interesting, why is one of these double-edged swords and we we for sure need to do a deep dive in there if you turn on on AI for Commerce because it is over hyped Buzz thing right in and so you know all the big, Big Rita a big big guy technology companies are talking about becoming a I first in and innocently that was the big play from from Google in, you know my argument is no one should be excited or buy something because it is or isn't it, bike was not an outcome and you don't people like I need some of that good at so so we'll we'll talk about that a little bit on the Deep dive, but I do think it is true that the AI is enabling a bunch of, much more interesting user experiences and much broader a digital user experiences then have been possible here to for so so I do think that is on the cusp of enabling, huge of systemic changes to how we shop across a bunch of categories and I am excited about that and you know that, but I would, I would encourage people to get much more excited about this specific use cases that are likely to affect them and why they're going to be a better experience than that it has the AI label or doesn't have the a highway. [48:21] So I think it be fun to do a show where we talked about what some of those near tournament fart termed use cases are but I know one person that's in my camp on this is our our number one listener Jeff Bezos. Scot: [48:33] So she possible Deep dive so if you want to let us know your thoughts, tweet at us or I'm Scott Wingo Scot Wingo in Jason his retailgeek. [48:49] Or go on her Facebook page and let us know which of these deep-dive topics is most interesting for you so to recap we have business kind of with an flavor of Amazon business what's going on we have. [49:03] Artificial intelligence and then we have Amazon advertising and and that platform so let us know what's interesting to you. Jason one big retailer that's been pretty active here in the last week's news that we haven't talked about his Target have you been tracking all the I don't know it's news I think it's more like, gossip at this point now have you been tracking what's coming out at Target and interesting macro things going on there I'd love to hear your take on. Jason: [49:32] Yeah so I think there's some gossip and some news I think they also did have their earnings call this week, and I did not write it down in the note so we're going from memory so don't hold me to these numbers I think they basically beat the analyst expectations but they definitely had negative same-store sales so, in my head I want to say that that the animals were pretty thing that be down like 3.7% and they would only down like 3.4% or something like that so. Definitely not the you guys want to beat analyst expectations but definitely not the kind of thing you claim victory on and and pound your chest about. When you're just just the shrinking a little more slowly than an analyst. Yes. They also did an ounce pretty good e-commerce growth I think also above that average so again from memory I want to say. Then I was like 20% eCommerce growth. [50:33] But it's interesting like all of those things at Target are in this backdrop of news we talked about in the last several months that the target is really curtail the lot of there. Forward-looking initiatives in program so they. You know they have these stores of the future that we're half built then they they announced that they were closing they had this big goldfish initiative. And now this this Innovation officer westering feel that you know they're working on all these Innovative things and they hired a bunch of people to build them. And they they abruptly pulled the plug on all those things and parted ways with Wes. Their Chief digital officer you know they left the company. Maybe 4-5 months ago they're cheap Innovation officer Casey car of the company this month so it really feels like. Target is investing all of their chips in their near-term fundamentals like they're they're trying to improve the guest experience in the stores, and they're all in on the winning in these five signature categories that they're focused on in store. At the expense of a lot of these these other initiatives then like obviously there. Their results or to belittle why that you know they don't have an unlimited amount of money to invest in all these initiatives. [51:56] So it's going to be interesting to see how that played out but in that context we we got some some rumors from her friend Jason Del Rey that he wrote an article about today. And that was all that they announced that they are selling Casper inside of Target stores, and that's that's not rumor that that's news they're not actually they're selling the mattresses on the line but they're selling a lot of the accessories in the store so so the Casper have a footprint in the store, and if you want to buy a mattress you can buy it direct from Casper but you can also now buy it from target.com and the ship it direct to your home, for people that aren't for my red Casper you know that that is clever combination spring foam mattress that they're able to. Compressed down enough that they can actually ship it in a UPS box in so this, this is kind of in line with a lot of other moves we seen Target they like to surprise and Delight their guests by having these popular brands that you wouldn't necessarily expect, Cabot Target in so regionally that was like designers that were too high in for that you might have thought were too high in for Target but more recently it's been some of these digitally native brands that are showing up in Target so it was Harry's razors and now Casper. And what Jason's article says is the target tried to go a lot further than just caring that they actually tried to acquire Casper and then when that was unsuccessful that they've taken some sort of investment and Casper. [53:33] So that's interesting. Scot: [53:34] Yeah and I think the number that was been thrown around as a billion do you have you heard what Casper is revenue run rate is how I remember when they crossed like a hundred million me was 2 years ago I heard an update on that. Jason: [53:48] Yeah I don't have a number in my head. Like for sure that they got to like a hundred million in like their second year of existence so I know there's a lot of talk about that but I don't know. Where they're at right now and it's interesting for Target to take an investment in them right so. If if I don't know that makes Target a majority shareholder or a minority shareholder or what sort of you know board seats and all those sorts of issues but you could imagine. Why does Casper sell on Amazon today and will they continue to sell on Amazon with with Target as a majority board member, would any other retailer B12 Kay Casper with Target as a board member and might see, sales velocity on those on those in those other retailer stuff like that like it can get messy for a retailer to have an investment in a brand that they're not exclusive to. Scot: [54:51] Channel X the thinking goes if I'm going to make these guys are Rockstar. And I can't own it then I want to participate in that Rockstar creation cycle that's probably what's going on from Target side. And they probably wouldn't do the deal without investment and then there's also stuff the offense part of it in their defense that kind of says. And so you things can come with your pretty real needy right of first refusal kind of things so that you keeps one else from buying it are you have at least two by two that so I wouldn't be surprised some of that was in there and in, Casper. Must have really wanted the distribution or her felt like it was worth it to accept the investment in any kind of other entanglements that came along with it. Jason: [55:35] Yeah and that does it mirrors Casper's a prototypical did you need a brand. You think about someone like both of those right like very similar, they cut a deal to get distribution although their primary Channel distribution is direct they cut a deal to get distribution in Nordstrom and they'll at Nordstrom to take an investment in them and so, in that way this this deal doesn't look so different from that and of course none of us as a sort of aggressively open guide shops at showrooms Casper has some some guide shops or not shops Casper has some showrooms. So it feels like it's falling on a pretty common playbook for these kinds of companies at this point. Scot: [56:20] Yeah and I don't say it feels like I'm outside I don't have any inside information on this it feels like a game of Music chairs is accelerating so, now we saw Walmart scoop up a couple of these really quickly and the Rumor persistent rumor is bonobos is going to Walmart so then if your target your kind of like. You know why I need to get in the chair here and we also have heard rumors that they were going to pick up boxed up which is more that Amazon Pantry style kind of competitor so so I think what you're seeing is you know you start to look at the digital I need a vertical brands that are out there at scale, your dollar shave club's been picked up so now you have Harry's in the Casper, there's it does to the three largest wins mod causes a lot of times mention of that discussion and bonobos those two are off the table so you're really left with. Pretty small number of scale over hundred-million-dollar companies there and I am I leaving any off. Which puts two chicks in there I don't know if that counts. Jason: [57:23] Yeah they're slightly different animal but they're like even you know probably larger in scale at this point I think there was some they publicly announced and you know we we have I can only take their word for it at this point but they clean a satellite. 760 or 780 million in annual sales so that's that's a pretty good size company of that church. Scot: [57:45] Yeah feels like a four five billion kind of a swing it back there so it's pretty serious to me. Jason: [57:52] Exactly some of these might be a little more digestible then than Stitch fix at this point I do think you're right like there's no. Diminishing number of these I think there is another interesting play where these guys are playing some defense. Another piece of innovation is so fast now that all these companies that have disrupted Industries, are not getting very long honeymoon before they themselves are getting disrupted so you think of Dollar Shave Club as disrupting Gillette and Shake. And you know you could talk about the cool video in the subscription service in all that the real reason Dollar Shave Club disrupted. Gillette is because you at sell $7 razor blades in Dollar Shave Club sells one dollar razor blades but now you've got dorco who's the. Razor blade supplier to Dollar Shave Club launching their own subscription service and selling $0.20 razor blades. You're like hey wait a minute like I was that young fun disrupter with the shockingly low priced and now I've got guys below me in the same thing as happened Warby Parker they're a bunch of direct-to-consumer, frame manufacturers that are even coming in and even let you lower price points than Warby Parker and the this mattress industry is, particular competitive so either at the Casper wasn't even the first they were really I would argue the first one to get sort of mainstream awareness. [59:24] But there are five or six a significant players in this new digital direct-to-consumer mattress space and if you're you're Casper you know you would have had a big incentive to get, eat a dick the kind of visibility in distribution you get through through Target to differentiate themselves from that competition. Scot: [59:45] Yeah there is a, an interesting data source CB insights had shown when the rumors about Casper came out that there's three or four other mattress companies that are actually in the neighborhood of sales is caspersen Target must be really enamored with Brandon and think that there's some absurd you there with their there. Fire door password. Jason: [1:00:07] Yeah yeah absolutely so it's a it's a fun spectator sport to watch all the stuff planned out right now. So Scot we're coming close to time but I know you have a pretty cool event coming up do you want to remind the listeners about it. Scot: [1:00:24] You know one of the biggest shows the year for e-commerce, internet retailer Conference & exhibition which is commonly abbreviated IRC and last five years I've been doing a Amazon Workshop they're called Amazon and meet so I'll be at internet retailer love to meet up with any letters that happened to be there Channel have a booth and I'll try to spend some time there, I'm a bad founder and don't know the booth number but I'm sure it will be in the guide there so I'll be at the booth and look for to see you there and then I'm also speaking at a venture capital friends about, what's going on in Destin DC and that's June 7th so look forward to seeing everyone as I'm starting to hit the road here in the early summer. Jason: [1:01:12] Graco I love it that you are potentially traveling more than me. Scot: [1:01:16] Yes I may have to I may be able to a trip report so it's going to be pretty darn exciting. Jason: [1:01:21] I tried to be a cool and find the booth number for you while you were talking and I sent you exhibited in too many hours to eat. Scot: [1:01:28] Yeah her for quite a while. Jason: [1:01:31] Exact, I still have to put that on the show notes and with that it has happened again we've wasted a perfectly good hour of our listeners time so we certainly want to thank everyone for listening and encourage you to write us a review on iTunes of you enjoyed the show and we would love it if you'd come to our Facebook page and give us some feedback about which of those deep guys would be interesting to you. [1:01:58] Until next time happy commercing.  

EP083 - Andrea Leigh, selling on and negotiating with Amazon   Andrea Leigh is the owner at Andrea K. Leigh Consulting, which helps clients sell on and negotiate with Amazon.  Andrea enjoyed a 10 year career at Amazon where she served in a number of Buying and Category Leadership roles.  Andrea is a recognized expert on Amazon, who has written a number of helpful articles about Amazon on linkedin: Amazon's New End Game is Likely Third Party Sellers. What Retail Brands Should Do About it Why Your Brand Should Sell Hybrid (1P + 2P + 3P) on Amazon - Demystifying the Hybrid Selling Model Hype Why Your Brand Should Care About Amazon’s Item-Level Economics (i.e, CRaP) We spoke with Andrea about her background and experiences at Amazon, the digital grocery market and Amazon's efforts in the segment, and the best practices and common pitfalls in working with Amazon. Andrea will be one of the speakers at "Amazon & Me" an all day workshop on Tuesday June 6th at IRCE, hosted by Scot Wingo. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 83 of the Jason & Scot show was recorded on Thursday May 11, 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Amazon Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 82 being recorded on Wednesday May 10th 2017 I am your host Jason retailgeek Goldberg and as usual I know Scot Wingo. Scot & Andrea: [0:39] Hey Jason and welcome Jason Scott show lister's let me first apologize it is peak, pollen season here in sunny Raleigh North Carolina and my allergies is amitab attacked me and I have a sore throat so I apologize for the the lowness of my voice however I will be doing some Darth Vader quotes later so it will come in handy, Jason before we dive in it's been about a week and a half before we chatted any road trips you want a report on. Jason: [1:08] I do have a couple of days or so very sorry to hear you're feeling under the weather it's sort of Harkens me back to our famous shop talk shows where I didn't have much of a voice. [1:19] And our live listeners are totally on it that I've got a bunch of my text messages since I just did the intro in this is actually episode 83 so I want to apologize. For the falls. Boss intro a minute ago but thank you to all those folks that are listening in the show Live this week I was I got to do a trade show in town in Chicago in my hometown which is a rare treat for me. Mwb research does a show every year for the B2B in this week I'll be to be online so I. I just got to go do a presentation there yesterday and talk to some folks about B2B e-commerce which is her that interesting contrast to the the retail stuff that we talked about. Scot & Andrea: [2:02] Yeah did you get a lot of questions about Amazon business that's whatever you ask me. Jason: [2:06] Not as many as I would hope I would take it as a better sign of people were a little more concerned in that space about Amazon business, perhaps a parallel the sum of things we'll talk about today. There's some really Advanced B2B e-commerce companies but the general level is pretty digitally immature and so, you know you tend to be talking to people in that industry that you were talking to retailers about maybe four or five years ago, and I have a theory that that a lot of the cpg space are also somewhat digitally immature and a rapidly trying to catch up and so we we we make it to hit upon that in today's episode. Scot & Andrea: [2:45] Coolest part of your talk to call the audience to Julie immature. Jason: [2:48] The love I do talk about the digital maturity curve and I let them judge for themselves where where they're on but my talk. Is ironic cuz I I was mainly talking. To stakeholders they were really interested in watching B2B initiatives inside e-commerce initiatives inside their company about how to get c-suite buyin and since I've been kicked out of some easy sweets I thought maybe that was. And ironic choice for me. Scot & Andrea: [3:16] Old Town ironic if your c-suite the immature. Jason: [3:19] Exactly I've been in a lot of sweets just for a brief period of time. Scot & Andrea: [3:22] You're mature getting kicked out of six weeks. Jason: [3:25] Exactly how I'm high on the kick after blow on the maturity curve. [3:31] Just got one of my favorite thing, the show is you know from time to time we get some nice listeners that right in and say nice things about the show and had told her to reorder top and something and I always enjoy that, but I thought you liked this week I may have gotten my favorite piece of fan mail. Scot & Andrea: [3:49] Go to zip front and what they say. Jason: [3:51] Yeah so it is from a listener and Marie who runs the e-commerce site called dog quality.com and she's a regular listener and. Had a recent occasion to go to our website where the show notes are and. There there's an about me tab there with a picture of me and my dog MacGyver and so Emery who obviously is in the dog industry so I'm a guy her and wrote MacGyver a piece of fan mail. Scot & Andrea: [4:17] What are you going to read it first. Jason: [4:19] Well I won't read the whole letter as she's right kind of currently Doug quality focuses on. Elder dog quality of life in and products that the older dog specifically need and she was nice enough to say that in the Guyver looked like a spring chicken and probably didn't need any of her products, but she is she certainly offered hook MacGyver up should should the need ever arise and I was laughing because she doesn't know this but the MacGyver is a frequent guest on the show MacGyver is Jenner sitting on my lap for the show and so he was, very pleased to find out that he finally got some of the recognition that he he well deserved. Scot & Andrea: [4:56] GoFundMe you wear at shoptalk it sounded like he was he was doing your part. Jason: [5:00] Actually he is a man of few words but he's much more insightful than I am and I don't know this but I think you have a couple dogs that have at least made a cameo appearance on the show as well don't you. Scot & Andrea: [5:13] Yes sometimes in my podcast recording studio here which is also my home office ad my 10 year old Border Collie kit sits on the floor and that we have A1 year old, Cavalier named Lulu and she usually sits on my lap but tonight they are elsewhere hanging out with the kids. Jason: [5:31] Nice. Scot & Andrea: [5:33] We'll just before the podcast goes to the dogs we have an exciting guest for listeners tonight. As you listeners are well aware I'm a little bit obsessed with all things Amazon and every time I talk to tonight's guest I learned a ton about that what makes Amazon tick, and really spent a decade and Amazon from 05 to 15 and now runs a consulting firm called Andrea Kaley consulting or she helps Brands and sellers with their Amazon strategies as well as other e-commerce growth in it, I'm hosting a workshop that internet retailer Conference & exhibition which is commonly abbreviated IRC. And Angie is one of our speakers talking about Advanced strategies for Brands and wanted to go she ate with Amazon and you're welcome to the show thanks for having me. Cool and so we got Central covered with Jason in Chicago on East in assume you're in Seattle in 7 days. How's the weather is it is it typical Seattle are you guys getting your sunny days. Know where we got a little bit of fun but you know it's still we still have to get to the Fourth of July before summer really starts here cool so um. We really want to jump into it so one background statement before we jump in. Sometimes be a few back for listeners will jump right into Sonny's topics and I neglect to cover some of the basic so tonight when you use phrases like one p3p hybrid, we see one PSP specifically in the Amazon context that usually that someone has a wholesale relationship or a first-party relationship with Amazon third-party usually refers to more of a Marketplace kind of relationship. [7:07] Are the hybrid is a lot water brands now that exploring kind of a dual approach so a wholesale Ana Marketplace approach just wanted to let her listeners kind of have that that little glossary there at the top of the show before we do it. And I'll turn it over to Jason who is dying to kick off. Jason: [7:24] Thanks, let me highlight for a listeners that are not driving weather listening to podcast that the whole one p3p hybrid thing also makes for an excellent drinking game. [7:39] So it's winter before we we get into that and III. [7:43] One p3p question for you where I think there may be some Andrea Scott controversy early I hope there is but before we go there. Maybe we can start with a little bit of background about you and sort of you can walk us through how you got into this industry and what some of your experiences. Scot & Andrea: [8:02] The absolutely so I said you know probably the majority of my career at Amazon that was there for 10 years from 2005 to 2015 and I was on I worked in the retail group for the entire time, I'm in different roles as actually started as one of the founding original buyers for the amazon.com grocery category and you kind of, migrated my way to the company and number of different roles, including divisional manager for the baby category and working on getting the Amazon, baby registry can I prevent in and then good good order with customers as well as a leading category teams for Amazon Fresh, and, Rawhide most recently before I left and for the longest actually for a little over three years was a category leader for a hard-line soft lines. And consumables for Amazon Canada where and we watch consumables and softlines on while I was there I also ran the prime program and Canada and Italy Avon with it with the transportation team, in addition I've worked on the, crab process for Canada help develop that and get that thing running up there if that some of the term that everyone is familiar with that's Amazon's term for can't realize any profit. [9:32] Which is through their way of identifying items that are unprofitable for them. And I left Amazon two years ago to start my own Consulting practice where I work now with Brands a lot of them that I worked with while I was at Amazon, you know to help them achieve their goals on Amazon whatever those might be gross profit you know I saw him planning. Etc and in the category leadership relate Amazon if you're not familiar with that sort of structure at Allegan General Manager and you're responsible for all of, a buyer vendor management planning in the stock management marketing product management sometimes the technology teams as well so that's a little bit about that rule the last years I have been working. And Consulting can I have them working directly with Brands doing some speaking and doing some writing. And a man actually really partner with Melissa Burdick the kind of team up for Consulting practice and so that's, that's kind of what I've what I've been up to. Jason: [10:41] Questions about that you went from being the evil buyer to helping Bray. [10:51] Kind of like going from the federal government to becoming a lobbyist is there a man. Scot & Andrea: [10:54] You know it feels like there should be, the Empire is not but I mean I really feel like for the most part the work that I do is really Amazon's best interest I mean when it's actually one of the reasons I wanted to start my order form I mean in the early days of the Amazon Vendor Manager spent a lot of time with her and I spend time with my brand I'll be in them figure out how to grow how to use the platform head understand it to be successful and kind of coaching them and teaching, and you as Amazon, skilled and crew become more automated and that's my role grew and I took on my two teams I just found that I was sending you know very little time talking with brands, an Amazon in Genoa spending very little time kind of in that teaching capacity, and so you know that was kind of one of the reasons that I wanted to do this, I think would just like a small amount of Education about the Amazon platform, no Brands can see some really amazing success by applying some really basic principles and it's not hard you know it's it's I think it can be pretty straightforward once you understand how Amazon is different from other retailers. Quarter certain types of Brands you properly work with her show cpg seems to be a real house kind of area for you or your little bit all of them. You know I've been all over the map where's and small and end in any number of different categories but I will say that this species tend to have kind of the biggest challenges on Amazon pretty early because they were you know they're they're off and doing a pretty sizable businesses. [12:34] In addition to I'm just having a lot of products that are really difficult for Amazon to ship profitably so I think they kind of think they they have the most challenges, I'm as it relates to Krista voorhis with the with the, a platformer a business model where products are shipped directly to customers often in the single units but I've but I work with all kinds of brands. Across all categories. Jason: [12:59] Nice and you mentioned um baby for a while and if I have the time line right the Quincy acquisition happened right in the middle of your tenure. Scot & Andrea: [13:08] Right in the millimeter exactly and it's funny because I remember when they first got on our radar and we were and we were really thinking about like they're getting some really great friends on the site and how are they doing that and I remember thinking like we should go for this we should do we should go get them, we should call them but I'm and it's it's really interesting but I mean you know you know how all acquisitions go it's pretty it's pretty hush-hush internal lake cinemas that stuff happening. Jason: [13:37] Yeah but so did you literally go from hating them and they were an amethyst to like becoming a partner. Scot & Andrea: [13:45] You know I had moved on to another category by the time we actually started integrated integrating with them but you know I was there I was definitely there for the acquisition piece and you know they were doing. Three steps hi I'm just doing a really nice job pretty Leanne diapers.com, Beano getting new customers and as we all know that time when the consumer becomes a parent is just such a pivotal point in terms of brand loyalty and brand switching is really high at that point and they were really they were seeing a lot of success with some of their marketing tactics, in an option that consumer as well as you know getting a lot of kind of more perceived higher-end baby Brands to to partner with them. Jason: [14:31] Nice and I don't know we've talked about this on the show and I will surely understand if you don't want to share an opinion but you know there's been a little controversy is his Wizards probably do know. Scot & Andrea: [14:42] Fish. Jason: [14:43] They spend down Quincy Quincy this year and there's at least one of our friends in the media Jason Delray that that. So it has this hypothesis that it literally was out of spite for markquart who's who's competing with them Amazon it at Walmart and I'll just pay for the. I personally don't believe I don't know what the real logic was behind spinning a down I can imagine there's a story that we don't know but I have a hard time. [15:14] You know potentially several hundred people are getting laid off space. Out of some competitive spy on the part of of Jeff. Scot & Andrea: [15:23] Yeah I read Jason's article about that. Yeah I read that article that I mean I think that's possible and obviously I don't know I don't work there anymore but I, email Amazon just serve god with a needed out of that relationship, and there wasn't a lot of sense in keeping up separate websites me over the years Amazon had tried to spin out other web sites and it's just really challenging it's really challenging to drive traffic to a new site I mean as hell with the endless launch and then take down they got so mad it is so much traffic through going to their native site so kind of continuing to some, pour it into additional websites just seems really. Really tough and I'm not really sure why that would be a great strategy for them and you know if you think about like they sort of got what they needed that of that Arrangement they were able to you know take out app, who is Fab a fast-growing and competitor that was getting a lot of traction you know this is going back like 10 years ago. And then them from sort of like, becoming you know a real material competitor and then in addition to that you know they were able you know to integrate some of that inventory or those Brands under their own site no maybe some of the brands or harder for them to. Dino to acquire so I still feel like they got what they needed and it's really expensive. Having a Second Sight means possible there was some slight there it is truly when you look at that whole it's Story I mean it's like a soap opera. [16:58] Terms of the level of drama. I mean it's just fascinating but I think Amazon is a company with more Integrity than. You know that one that might you know I have all that and you know I just have a lot of people suffer. Jason: [17:18] No I think the URL consolidation makes a lot of sense and there are just good business reasons for. Amazon ultimately to go there at the one I I guess ironic thing is they thought they were making an acquisition to take out a competitor and all that money that used in the acquisition ultimately was used to create a new competitor so I guess. Scot & Andrea: [17:37] Flatbush feel like soap opera or irony I'm not really sure that's why I need that's the real twist in it. Jason: [17:46] The irony of me is that I use the word irony wrong all the time. [17:52] So changing topics you mention the crap program in Canada and we we talked about a crap a little bit on one of the other shows. But maybe you're in a good position to confirm or deny. The rumor is that that was started as an internal term that was not intended to be. Scot & Andrea: [18:13] Yeah. Exactly what I read in one of my articles he was not intended to be public-facing it all it was a term that was developed by the finance team like I'm very clearly recall this and I don't know I can't imagine they share this room just funny, and you know I remember seeing in the fruit one of the first meetings where the finance team brought us this program and the program itself makes sense you look at stuff is unprofitable and figure out how to get it more profitable, I put the acronym Chris is really terrible and I member we all kind of looked at each other like this or go it's like really and you know I don't think it was ever meant to be other two vendors but now it's out there and now it's like an industry term. Jason: [19:01] It's it's really awkward cuz they a category that's particularly vulnerable to crap is of course toilet paper in so when you're, to a cpg manufacturer that's talking about their total, trapped out it's really on the potty humor goes goes downhill really fast. Scot & Andrea: [19:19] Yeah and I mean I don't think that I don't think the procedure of that was lost on them right I mean diapers and toilet paper or two of the kind of like really on really difficult items to ship, take us to Harris profitably and so I'm pretty sure that was so, Davidson strategy around the name but the funny part is like by the time I left we were just tossing it around in meetings and like it was the term has lost all of its like conversations, and I think it's funny now and I talked with Brands and I and I talked about crab and, really quiet like Amazon came up with it hasn't explained it so disgusting. Jason: [20:02] So the shocking part to me is not that any of that happened the shocking part to me is when you move to Canada that you didn't find a nicer friendlier term for Canada because it's Canada just say is nicer. Scot & Andrea: [20:10] You know that's a really good point like at that point it didn't even occur to me that when we started the program in Canada we could have called it something else but you know it's too late now. Jason: [20:25] So one one last topic before I let Scot get a word in edgewise, at the beginning the show you talked about or Scott introduced the concept of one p and 3p and we talked a lot about 1p and 3p. And when a 3p seller is using FBA as their distribution strategy. Scot and the show generally talked about them being a 3p seller that uses NFPA and I've noticed in some of your writing that you call. FBA sellers to pee so I'm just curious if you and Scott and have our are aligned on that vernacular or of or. Scot & Andrea: [21:05] I mean I think I think I think it's 3 PS1 of encompassing both Merchant sold as well as, social Diana son so you know where Amazon a store in the inventory shipping on your behalf they are still there that's to pay the sizzle by Amazon program, mn3 can include that but I usually it's referring to Merchants that ship out of their own warehouses. Jason: [21:29] Got it so what do you call a vendor for field FBA. Scot & Andrea: [21:34] I would call that she pee. Jason: [21:36] Gotta and Scott are you are you okay with that. Scot & Andrea: [21:40] I try to keep it simpler so I think that would maybe confuse people, chicken official Amazon me cancers that just no actually never heard these turns until I left. And they're sort of what a lot of my clients used to describe the different business models and with some of the folks in this kind of like ancillary Amazon industry send you so that's it those are the ones I've adopted but you know there's a really simple version is one piece retail, is Amazon buying product from Brands and reselling it and then 3p is where, the brand or the other retailers uses Amazon's platformer services. Who is one thing I wanted to jump into before we get to nerdy on e-commerce side is is on your bio you are part of the Amazon or raise our program of study that a lot as a internet I'm kind of obsessed with Amazon's culture in and how they, such a large company she needs Innovative and doesn't seem to have a lot of bureaucracy and it seems like the bar razor program is kind of, last couple years decided as a really kind of key contributor that four letters that aren't following that is close to as I am maybe give us a quick background a bar razor and, tell us about your experience being in that program. Yeah absolutely I'm in if you really interested in Amazon's culture and how they say Innovative actually you love my next article I got one coming out another week that's just the really just phones and on that specific topic. [23:13] I would love that actually if I could really use some other program, and I think this is some Polish so I don't think there's anything like confidential here but it's essentially her Amazon where there's a set of interviewers that are meant to, teach other interviewers how to interview so this is like so the more experienced said of interviewers go through specific training to teach others had a interview and then you know you need to have. I need to have someone in this from this program at least you did when I was there on every interview Loop scissors or busy, and you know that the idea is not that that's like the tough interview or whatever I think that's been written before actually not true it's it's the person that facilitates the conversation and really drive out all of the insights from the interview from all of the people who interviewed the candidate, and really make sure that you're having a cohesive discussion and that you're applying kind of them. Does cats a consistent set of principles to hiring decisions across the company and so it's not your consistency, and for maintaining the culture not true, being like a really particularly tough interviewer although probably some of them are really tough interviewers so I was in that program most of my time there I mean cuz I was, I know I started there you know kind of it before they started some of their real significant growth. [24:50] And I got into it early and I think by the time I left I have done almost a thousand interviews and you know, mayilada hires connect during that time. Cool so you're in the interview and then you also delete a post interview kind of debrief is that I would have her. Exactly exactly any ideas just really for consistency and for us I think the same is true in any organization where you've got some time so it's on interview Loops it University experience or. [25:23] I'm in after struggling a little more to apply some of the principles, you know the leadership principles are still learning the leadership principles and so is their kind of someone in the room that's got some experience with that and can help guide the conversation. Clannad articles I've read say it, cuz of this book number one usually by razor is in a different apartment and so you would be the Barbies are for like engineering or something and some other person would bar raise for fire, a person like that I mean it's like I couldn't I couldn't facilitate a conversation about someone who's going to, be on my team you know you want certain external perspective but I think that's just a general in your dream practice Amazon anyway regardless of whether it's a bar raise or not it's just a lot of perspectives on a Candida think the weirdest interview I've ever participated in was for it was, like a mad scientist like an economist, I remember prepping for That interview and just thinking like what am I going to ask him if I did try to get this person some Economist questions I would be hard-pressed to judge the quality of the answer and I remember though it's sitting in the defense I didn't know anything about the contents of this person's work but it was room market like the process of, determining if they work a candidate was like, damn I mean was really it really didn't change so do you have a go to question like why are manhole covers round how do you do the mountains. [27:01] You know I think one of my favorite ones someone who asked I heard someone else asked in an interview as part of our thing is like you to train people you Shadow and you, we go along and someone it's something that like your job is to lunch the houseplants categor live houseplants category on Amazon like what we did see how would you approach this, is this at lunch or something and I remember just thinking like, that's a tough one it's just kind of shocking anyway. Jason: [27:30] I think that's where you go to selling seeds. Scot & Andrea: [27:33] Exactly exactly. Jason: [27:37] A in it it occurs to me that like in addition that Consulting with brands on how to do a Amazon you could also do interview Consulting for a candidates have you helped anyone interview since you up. Scot & Andrea: [27:49] I'm in a little bit here and there I can do some projects on it and I had a Consulting project recently where there was a component of it where they were looking for some some guidance in their organizational structure, and had it had a sort of resource this business and what skill sets and things like that are critical to a little bit but you know the core of it has been, if people don't want people just tend to want to talk to me about her half and one piece EP 3 p and headed to go see it with Amazon Amino seem to be a bit, the topics that are the biggest draw. Jason: [28:28] I asked questions I always like to ask XM is zonians I've never work for Amazon but. I have great admiration for the company in the caliber of former employees I've met all the reading I do it frankly comes off as a totally unappealing place to work. [28:50] Talk to ex amazonians that sort of Concur and I talked to ones that wildly disagree and so I guess I'm just curious. Scot & Andrea: [28:57] Most of the ones that don't agree probably still work there no I thought it was an amazing, inspiring place to work I mean I have. I just had a really incredible experience there I feel really fortunate to have worked with the high-quality caliber of people that I was but I interacted with you know I wasn't working with more and more on Clans and other organizations and just realizing how remarkable that was, I want a time I mean I feel like I had some pretty nice career trajectory there that you might not see it, another types of organizations I mean I thought it was an amazing place I think you know when you think about like that, I'm bossy Channel article of it was like, it was right when I was leaving that that article was published about how terrible it is to work at the corporate headquarters and the people cry at their desks and you know that article everything except probably some of that I feel like some of the past employee like the people who'd been fired sort of testimonials sounded off like they didn't sound consistent with the company that I knew, the rest of the day that was like pretty true I mean if I'm really hurt it's really hard hard to make history and you work you working with some of the smartest people, I think around but the article was just really um. And it will be amazing there any Amazon. [30:28] Top 5 Business Schools all those people we have a choice we have to work there and they have lots of options there for a reason and it's because it's super inspiring and you can be Innovative and build your own business, you should hire a nanny is taking a lot of responsibility, I'm here if you have an idea and it's a good one and you can put together a good business case for it it still even though it's a big company now it's still the type of place where you can, you can see that through and so I mean I think it's I think it's an incredible place or I didn't see it it's a it's a. It's like running a marathon you know you can't do it has to look at has to stop at some point I think it's hard to it would be hard to work there your whole life. There's no free snacks. Jason: [31:19] Bananas free banana. Scot & Andrea: [31:20] There's no reason I give you the Sheep pens you know just don't know books are like that you know the $0.50 ones there's no there's no curse reality leadership principles you can use PowerPoint Jason I make a living on power, Point sucks really dense white papers, I think I think I got some of the best writing training. Bear in just being a headache ran the most about and data into like the shortest way if you possible. Jason: [31:58] Yeah so that brings up one of my biggest garage with X amazonians I'm I'm always super excited when I hired one because I'm thinking like I'm going to get these really insightful well-written long-form deliverables. And then I keep getting these crappy power points from them. Scot & Andrea: [32:14] They're just so excited he's her. Jason: [32:15] Exact exact. Scot & Andrea: [32:16] That's just for so many years and now all I can I cancel team does a star play for almost everything I'm one of those people I totally am. Jason: [32:26] Yeah so that was a little bit disappointing for me I have to be honest. You don't want of the categories that I am super interested in at the moment it's been a lot of time and is grocery in and you use us and gray. Experience in the impression Amazon might my premise is in North America. [32:48] Wholesale e-commerce like the battles basically already already been one right like you don't frequent frequent statement in my practices you're not going to Amazon Amazon and so you're looking for Winchester or you know. Little place around the edges but like you nor anyone else is necessary going to just build. 400 million skier general merchandise catalog in and capture majority market share from Amazon but I do believe that grocery is a huge category potentially larger than general merchandise. Did just now is coming into play for for digital Commerce City. [33:30] We deliver that in so I do feel like it's a white space and I think we're seeing sort of Walmart Amazon and you know to a lesser extent the. The pure plays in Kroger and stuff all all battling it out is that it are you following that category at all still in. Scot & Andrea: [33:48] Oh absolutely absolutely both Serta professionally and also personally my husband has a firm idea quickly build, Play click and collect software so I follow it. Religiously and he mentioned the consumables categories are there in Norma semi dwarf, the other general merchandise categories but I think the beauty of them for e-commerce is that they uh they drive frequency in traffic, and you know I think once, once Amazon in one Southern retailers can I caught on to this they realized how important it is to make this work online because you know when you think about it like you only buy coffee maker like every couple of years I need a picture in TV is like those don't those types of products, don't drive frequency and visit people like every week, so you know these categories I mean this forever or the trip drivers and they called them truck drivers. They got people in the store we sell them for their stuff I mean the same model those two Outta mind, you got customers traffic through the consumable categories and then in a while they're there hopefully they buy other things. Jason: [35:04] Yeah until 8 and I was here in Seattle so you get to see a lot of the first iteration of concepts of I assume you've walked by the ghost or if you haven't snuck in with an old age anything in. [35:18] Don't get in trouble on the show don't get in trouble on the show. Scot & Andrea: [35:21] And we also because we can never even rolled out, wake me to tell Gram here for a while where I think that was only in like two or three markets we're in this I think this is the precursor to Prime now where, or they would deliver your stuff and like a bag on your porch with no over boxing or anything, I mean I'm sure it was really expensive to get all the stuff that was pretty cool and you can sign up for like a tote day was like a regular schedule day so we get all kinds of Pilots here which is kind of funny to see experimentation with Amazon so yeah I've been by the ghost or I haven't gone in, and I think it's really I think it's. One of the more remarkable technology that Amazon has Philip Justin just walk out technology. Jason: [36:12] #JY. Scot & Andrea: [36:14] Is she literally just walked out of the store was actually sounds kind of awful if I'm shopping with my kids but I'm sure Amazon for your at the above. Jason: [36:23] As we pointed out early on when they want that concept that they're claiming it's his big new revolutionary thing and myself and one of my peers we're using that technology in high school so. [36:34] Not sure it's quite as impressive if you got a chance to go by the the fresh pickup location yet. Scot & Andrea: [36:43] No I haven't but that's the second lunch of those in Seattle we had another pilot years ago to pick up points so CA, I'm seeing the model and I know where the spot is in fact I was thinking maybe next week I don't think it's up and running yet but I was going to go do a drive by and just check it out to pick up stations in Seattle I mean like it it looks like I'm driving through it looks like a drive-in burger joint with like all the ankle parking, pretty is pretty cool and then another just bring it all out and put it in your in your car but I mean this figuring out pickup, I mean it's super expensive to ship dog food to customers dog food to Prime customer and you're totally upside down economics, and you know in order to be competitive and figure out how to make money in the space you have to figure out how to get people to come to you and sell them a bunch of stuff at once. Jason: [37:41] Yeah for sure and it I do think that's going to be the dominant model for grocery like I think you know it and you use only strings this with. Fresh but like you know most of the Amazon Goods get delivered on a route and you can bundle a bunch of deliveries and I can be really efficient but when you deliver fresh in the person has to be home to receive it because they have to put it in the refrigerator, settling you're not doing routes accepting in a few really high Denso occasions you're doing individual deliveries and that, that's super expensive in for most of the country the economics just don't work and so it seems like saving all that shopping time and having that pick up. I it was my. That's going to be the the mainstream digital grocery experience and I have literally nothing. Thousands of consumer interviews where they just talk about it being life-changing when they start using that that feature from whomever they use it from. Scot & Andrea: [38:35] Witches, which is really funny because like this isn't a new feature like I used to when I was a kid we used to call the grocery store and we tell him what we wanted and we drive by and pick it up there's not a new model, scale is probably a new model I mean I just grew up in a small town but I think what's really interesting is the whole evolution of this thing like I remember going to trade shows and like 2006 going to like that candy and confectionery and. And talking with Brands and saying, sell on Amazon and they were like that's crazy like why would you sell food on Amazon and then there was like they all signed up. NN and now it's like a race It Was a Race for a long time you know who would get there first two and half capture all the market share who can work most strategically with Amazon and other in Walmart and can whomever else and then everyone knows everyone knows grocery had a great day, now it's like it's kale and now he's calories are in a small anymore for these retailers and now they're just like a. I'm probably suck and so how do you figure out how to make it work and that's I mean that's where I think a lot of experimentation comes into play through a lot of these players it was trying models to see what might work, you know in Seattle we have fresh we have Prime now we have pickup points we have a, Amazon go store anything for a different model for the Amazons experimenting with an S with Amazon and then you're seeing really the rise of cook and cut which I totally agree with you I think I can collect is the next, that's the next thing because I'm already fatiguing I mean I've been shopping for my groceries online since you lunch freshman 2007 here and I'm sitting at the pricing you know it's just it's just cheaper like you just it is because the economics are different and they don't have to ship it to me and another driver. [40:21] And I'm sure Amazon's figured out you know how to make all that stuff work, and the reality is it's just worse than even the prime now and even instacart and I were to costco.com and safeway.com you like all the different models and even has to offer higher prices on some of it in store specials online and so I mean as a consumer and fatiguing, of the pricing I'm Slicker she's just as much like and it's tempting to go back to the store and horrible so I see. Jason: [40:53] Scot would be horrified if you did that. Scot & Andrea: [40:55] You're so right for the next model, and I believe it's click and collect and I believe in you profitable and I believe whatever groceries get on board with this the fastest are the ones that are going to, you know they really going to kill all the share. Jason: [41:11] Yeah I think that Title Wave is is coming it's going to be fun to watch you're certainly right it's not a new model there used to be this thing in the world called the milkman. Scot & Andrea: [41:20] Totally we actually the mailbox I mean we know when delivered anything to it but it still existed in her house. Jason: [41:27] Yeah absolutely so at the end of the day do you think there's a chance that someone other than Amazon wins that space so I could you foresee a Walmart or a Kroger someone else. Scot & Andrea: [41:40] Will depend on how fast we can both I mean that's really what it comes down to it's not a complicated model you ordered online you know you pick it out your stores and you know you let customers come pick it up we've got it here at Fred Meyer local in Seattle, I'm so it's not I don't think it's a challenging model that I think a lot of these larger groceries or kind of, I don't want to say freaking out but their head of flummoxed by the concept of like setting up a retailer website what does that mean how do you up so customers how you do it right how do you let Brandon getting on it because you're basically recreating like an Amazon, .com grocery store online and let you know that feels really overwhelming, and so I don't think they're moving real fast and I think it's just going to be like humuhumu fast but I do think it will be hard to compete with Amazon's Automation and personalization as it relates to marketing. They're just they're just so good at it and so far you don't haven't seen any other retailers that have even touched it and that's either really where you get like that, if you're able to drive customers to larger basket sizes online and help them discover products and be productive about like when they're about to run out of things and that kind of thing. It's funny I said the big fan of this show Silicon Valley and that this is not a spoiler but in last week's episode they, the two the characters went to the grocery store and they were the only non tasker's in the grocery store there's like 80 people in the grocery store. Jason: [43:11] That is a great point like I the one you're at your hair percent right about the price fatigue the one loophole is it can be really cheap to deliver groceries to your home when you get a venture capitalist to pay the delivery fee. Scot & Andrea: [43:22] For Google. Jason: [43:25] I feel like at the moment there's this the short window of opportunity I encourage everyone to use all that good Andreessen Horowitz money to deliver their groceries. Scot & Andrea: [43:37] I'm just change topics little bit so then your Consulting gig you can spend a lot of time with Brands you talked about the things they want to talk about which is crap and pricing going to go see a Ting one piece of p3p. What are some of the pitfalls you see them falling into an ear do they they come to you and they say oh my gosh I've got, does problem with her your what are some of the pitfalls that you wish things would have oil for they come to. What are the three things like people they were staying for a bit but a consistent being that I'm seeing is that a lot of them in the CPC space are only thinking like one or two years ahead and it's kind of a reactive model, a reaction way of thinking to Amazon's kind of, anyways have a crap program but I think they're getting a little stricter about it and kind of the last one to two years and so a lot of his friends are going items crapped out, they're trying to keep up with like how to, how to leverage Amazon's new marketing platforms and they're just really focused on the here and now and not I don't think thinking too much about where's the where's this thing go into yours me Amazon's never going to make money shipping dog food and cat litter across the United States alike what is the future of this look like and I don't think a lot of them are spending. Enough time thinking about that because this is when you want to plant your seeds for that so you know if it's the next big model is me nice I might. My opinion is on Amazon they're really going to figure out the pantry program I mean the way to economically ship products to customers. You know that that is secreted that is. [45:07] Freshly unprofitable in a direct-to-customer at least should be model is to put in a box of the whole bunch of other stuff so it perfectly fits and charge the customer like a nominal fee that they're not going to really. And I worry too much about and then ship them a whole bunch of stuff at once and that's basically what the pantry program is and that program seems to be doing pretty well for them. Iskra. Really fast cording to some of the brands that I work with that are participating in it so I mean I think you thinking about like where the future is and Pantry still kinda challenging it's hard to hear item set up an assault like an automated thing yet, and so in thinking about like where where is the next gen of this thing going, because I mean in the writing on the wall is it like Amazon is not going to keep seeing all these products to lose money in this in the consumable space or they're just going to get really refined assortment. And so programs like Pantry Paramus Lake you know Prime now or the pickup points or whatever those are the Amazon ones but then like what we're talking about click and collect like. I think that you know expanding their, nearest Thinking Outside those kind of the current challenges you're having with your Amazon retail businesses is critical and the brands that are doing that are the ones they're going to be set up for Success because they planted seeds and cut it started that smell, this is nursing one side so let's step outside consumables and take out a category that's like maybe more mature like up. [46:39] Electronics repair or something the one that I keep hearing is when the Randall say when I think 5 or 10 years down the line. Amazon tonight exclusive retailer and that scares me because it's a race to zero so that's why a lot of brands are on the doubt that's that's one of the reasons you did they have map pricing in controlling the 3p Marketplace, do you think that's that you know you're obviously have drunk a little bit of Amazon Kool-Aid over the last 10 years but no. Is that what we're going to be facing his is this kind of you know it brings have a logical argument to not be on Amazon because they're kind of feeding their own destruction. But I don't think I mean it would be difficult to not be on the phone because of the opportunity that presents to Branzino just from League of Revenue prospective, and sometimes from profit perspective too but I think it's I don't think it's a wise choice, anti depends on a lot of factors but it's not a wise choice to like think of Amazon is your exclusive e-commerce player me the brands that I see that have healthier businesses. With Amazon are ones that sell to multiple e-commerce players and are investing in other ones not investing like investors but you know investing time and energy into getting their business up and running and marketing and things like that on some of the other players and so that's where, I think that some of your business model is feeling more Diversified but if you thinking that you're going to be exclusive on Amazon I mean they change the game there every 6 months, and you know it only takes kind of like one change that's in congress with your business model to be out. [48:17] And here maybe that's private label or meet you maybe they want your private label of your product or maybe they either come to you with terms like negotiation terms that are unacceptable to you or that you can't you can't actually if you can accommodate, can I still run a business and if they're your only Taylor you're kind of in a really tough spot, yeah I don't think they're setting up Amazon to be exclusive I think they see Amazon becoming a de-facto exclusive because when they look at the online players, Amazon so much bigger than everyone else to. That it's hard to build that diversity that you're talking about that that's not what they worry about that kind of say my brain is priced wrong is right now so maybe there is a strategy right now. I don't help Amazon be the the 800-pound gorilla well and I think that's where it's important, that's what's important to look on Amazon at some of your third party Partners I need your address with Amazon you've presumably all are presumably also selling to other people that are reselling on Amazon it is important to look at their ass and selling across multiple platforms, Samsung, and so you know they're giving you any not might be still small but they're giving you some distribution also they're also giving you an alternative if you don't want to sell directly to Amazon anymore but you still and have a presence there and have a good brand experience and help you have sales, Anthem anything that's kind of like a another diversification strategy you look so, so is private label it was kind of jump into that a little bit what are you tell Brands when they say hey I'm really concerned that you know Amazon just opened up a private label in my category. [49:50] How do you explain that I mean I think they should be concerned but it's not. Eminem retailer tender copying top selling products it's not too similar differences you know how they're able to manipulate the digital shelf to be able to savor products. Over others, and you know we don't have any like confirmation that they're doing that but it sure seems like they are when you look at the site and I know you're searching for backpacks and you know the one that looks just like the other one, private label comes up before it in the search results really totally it's something really scared about for sure but if you're also kind of going back to the concept of diversification if you've been, yeah totally. If your business is so driven by one or two skews you know you're a right candidate for it for Amazon taking on serve a private label. Copy had approached and so you know figure out how to grow other sections of your business so that you're not completely dependent on laptops Q, because Amazon Michael private label it I think it's probably a good idea and it you know I've seen them give like favoring some of the marketing and and obviously all the marketing is free for them so there, those are going to be really high origin ID on this but they look like they're just going after pretty much every category now which means I mean that makes sense for them to do. Jason: [51:26] I think you may have inadvertently given this the secret sauce away earlier I just get into the live plants category. Scot & Andrea: [51:33] Really difficult for Amazon to copy must be because they kept asking it as an interview question and they never launched it so there you go. Jason: [51:41] Exactly which is odd because I feel like that's one of the first categories than invented cologne. Scot & Andrea: [51:46] Actually I think that I actually might be irony I'm not sure. Jason: [51:52] Yes Neil thank you for that. [51:57] So I know you're going to be at IRC in a couple weeks and I understand it right that topic is tips for negotiating with Amazon can you totally ruin the irce panel. Giving our listener some of the high-level pitfalls and tips. Scot & Andrea: [52:14] Yeah yeah. Blue am so I mean the presentations really just going to talk about it I think it's another one of those areas where a little bit of Education will really help Brands be successful in their negotiations and the biggest. And the bastard of a feeling or pitfalls that I saw when I was out in the sun because she with friends is just friends not preparing for the negotiation not coming with with data me with questions you know not being prepared, I'm not really thinking through, the Amazons perspective and being kind of blindsided by some of the ass and granite Amazon desert huge so it makes sense to be helpless by the numbers, and so I will talk a little bit about that in the presentation will talk about how to prepare, you know what information to request from Amazon if you have an opportunity to do so I mean I think, an important thing is he knows the lot of times, especially some of the mid-tier the smaller hands are not actually negotiate with a live person and so how do you navigate that right like you probably negotiate with a robot doesn't look like a robot in the email comes to you but looks like a. Can a person that it's you know it's definitely an automated it's going automated process so we'll talk about how to. How to prepare am had to actually execute and then you know what kind of go through some of the typical ass from Amazon and and talk about like when he's made me sense for you like. [53:47] Who who who doesn't make sense for it to think about like the cross. Program or when would it make sense for you to invest in some of the, the larger marketing programs or or Crap allow answer you know we'll kind of talk a little bit about that. One of the things you introduce me to his this house get this wrong but like driving the car really fast with your. Foot on the gas your hands off the wheel tell tell us more about that Provisions growing quickly and scaling and it's really critical more and more automated. And so you know I'm seeing with my clients and also one of the forums like the Lincoln Group and things like that that a lot of brands are just really at the end. At the receiving end of more automation than ever before and they're hearing from their buyers you know how critical it is that they continue automated and you know not Place manual. Borders and let the system do its thing can have their hands off the wheel that's the hands off the wheel concept so you know and that's definitely you always been kind of a push it Amazon but I feel like it's getting, my friends are seeing more of it and I'm in recent here. An interest Amazon's interesting automation when you negotiate with the with that machine doesn't sound like Alexa. I mean if you get on the phone you're talking to a real person. Jason: [55:20] For now for now. Scot & Andrea: [55:21] I'm sorry Jason we're going to cut your crap allowance. Jason: [55:26] Here's the tip you're not talking to a real person when it's Sign May Day that's always. Scot & Andrea: [55:31] Chicken area. Jason: [55:34] Come on you guys don't get Amazon Fire jokes. Scot & Andrea: [55:36] No I guess I totally get it. Jason: [55:40] Scot snoody the lack of systems we have to go somewhere for him although annoyingly Scott's car can drive really fast with a hands off the wheel which I'm a little jealous. Scot & Andrea: [55:51] Do you have a self-driving car have a tablet doesn't have that that future though I got I was too early in the doctor its equivalent of having an iPhone 1 right now. Jason: [56:04] You can still drive really fast with your hands off the wheel once. Scot & Andrea: [56:07] Yeah just let me know. Jason: [56:11] Exactly and any big mistakes you see people making in negotiations. Scot & Andrea: [56:18] Yeah I mean I think this one is just giving like a specially for the platform or have experience I have significant growth and so it's like one of the first time actually talking to someone like a live person they just give too much away in the first year, that you know they don't hold back enough funding for themselves, Cindy has Amazon ever use an annual negotiation process that you every year and they're going to want more and you know you don't want to give it all away, in the in there for a couple years of Amazon you've got a kind of pre the reserves at or or just kind of the other it's just kind of, signing up for the most you can possibly do for that year from a from a Amazon funding perspective and that doesn't give you any kind of slush fund for the stuff they're going to come to you with. Fourth root beer like participation in certain marketing programs that you know they didn't know about the weekend because you know they're. A plan a little bit more in a three to six months in advance or are you know price-matching error or some chargeback store. I don't want to be in a position all year we're all of those little things are extraordinary painful cuz you already gave them like the most you could give them that you're so I always recommend a can of creating a reserved sign for yourself, you know don't like some leftover money is there be no room in your budget to pay for some of the things throughout the year. Jason: [57:43] That Prime days only two months away don't don't touch. Scot & Andrea: [57:49] So I never been a Brandon or works for me but I meant it would be really weird because there's probably this old school believing believe that you reformulation ships and I know I've been a bit more couple times and. You just see the brand raps just kind of going through there and you know it's almost like the airports Gear Drive for them there's a whole infrastructure and there's this whole, pilgrimage to Walmart meet that guy try to build a relationship drugs drinks the Dan Draper Martini lunch and all that stuff and then you probably do all that then you try to. If I go try to beats when Amazon that I won't meet with you unless you're like. Super Dee duper Top Gear brand so then now you're kind of talking to this AI machine and these brands that kind of holiday how they feel. Yeah yeah especially some of the larger more established ones that are really accustomed to working with brick-and-mortar there they believe that they will be able to see crater 6s on Amazon to forming a relationship with their buyers, and I will tell you like the last thing those buyers wanted to do it for him, bladder relationships because it's extremely time-consuming it doesn't help them execute on their initiatives might get them like that anymore Co-op, they can also get that by sending out like a hundred automated emails and so you know I still remember kind of, the concept of like Thursday Amazon buying team they're in their jeans and occasionally flip flops, I'm at the brand comes to visit and they're all wearing their suits and they want to do a line review and like that concept it's just totally lost. [59:30] Play baby and they're not going to make it they're not going to make selection choices they're going to list everything on the side so it doesn't. The best interest to learn a whole lot about the products and which ones are different from one another. So yeah I mean I definitely see a lot of her and still trying to formulation ships but I'm also seeing a lot of emerges getting like Savvy about that, he has already had a couple of turnovers and their Vendor Manager and they're realizing that like actually the best thing they can do is educate them so. About the, Phat Farm and how it works because of no sex that's really understand how the form works that I work with it and keep keep up with the changes to it I think it you know, the Amazon I think just there was a Jeff quote once and he said we're not in the business of selling things were in the business of helping people buy things and they just, Amazon believes they are a platform for selling things they don't believe they're retailer wish I think kind of speaks to you know why they don't think the relationship development super important. That's an important Point Jason spends more time with the offline guys than I do but up but I'm always. Stricken by there's the still believe there's still this belief and I'm a computer engineering guy but there's just believe that there's this Merchant King, Merchant Prince water be called Jason and you know they can predict what people are going to do and they go and they buy that hot thing in the ghetto, the create fashion themselves and that I'm console surprised how much that still exists and I think you know this this Amazon model of. [1:01:02] Why should she choose like put everything up and let the customer he just seems so obvious to me. But it really is so counter to hell all these other companies are built that that. It's the step to get even closer to that existential dilemma than they are right now which is hard to believe but just console amazing to me in the retail world that that no one else really gets that. Universal some elements of that and that's really like in my opinion when I was a fire that was like the most exciting thing about being a buyer what if you find the next big thing, like what is it what if you're the one that brought it on the side and I'm ever going to trade shows in finding like weird and scary products reticulate like the Expos and, Ambien like maybe this is like the new coconut water like we don't know what is going to be so I think there's still some elements of that but I mean definitely a lot less than than traditional retailers, stop and come from a line review I guess. Jason: [1:01:59] Well it has happened again we've used up our allotted hour Andrea thank you very much for us spending time in the educating all of us and especially for educating Scot. Scot & Andrea: [1:02:13] But thank you for having me on the show and it was really great to be here. Yeah right I said at the top of you everytime I talk to you I learned a hundred things I think I have checks at least that many boxes that is good take me awhile to counter but we're in that that neighborhood, it is reminder to listener see if you enjoyed Andrews view on Amazon brand strategy and then and other topics she's one of the speakers at internet retailer conference in exhibitions Amazon and me Workshop, which is right around the corner it'll be June 6th in Chicago, and Andrea is folks want to follow you your writing online you mentioned you got some articles coming out where's the best place that can find is that a Twitter handle or a, that chatter where where do you hang out online I am mostly on LinkedIn so you can find me on LinkedIn and it's Andrea Leigh Leigh. [1:03:05] Possible thanks again really appreciate it. Jason: [1:03:07] Yeah and we'll make sure to get that in the show now so until next time happy commercing.

EP082 - Amazon Earnings, Walmart and Other News Amazon News Amazon earnings call was a clean "beat and raise" exceeding analyst estimates for revenue and earned income.  That drove the stock up 4% (approx 960), putting Amazon in striking distance of the $1000 price (which would also make Jeff Bezos the most wealthy man in the world. Jeff Bezos comments were primarily focused on progress in India. Jeff Bezos 2016 Shareholder letter is another can't miss (and don't forget to reread the 1997 letter posted at the end if you haven't seen it before) Amazon has been profitable for 8 consecutive quarter 3P Marketplace is over 50% of Amazon sales, putting total GMV for the Quarter around $60B AWS continues to grow (47% this quarter) but rate of growth has continued to slow as they get larger Prime estimates are now as high as 80M members Amazon launched the new Echo Look device Walmart News Walmart has a new startup incubator "store 8" and Rent the Runway Founder Jenny Fleiss is the first project with a new personalized shopping concept Walmart is offer new "Jet Style" discounts when you buy online and ship to store (vs. ship to home) Walmart acquired Shoes.com url for $9M Rumors that Walmart is in talks to acquire Bonobos  Petsmart buys Chewy.com for $3.35M (largest e-commerce acquisition ever) Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 82 of the Jason & Scot show was recorded on Thursday April 6, 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Amazon Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 82 being recorded on Thursday April 6th 2017 I'm your host Jason "Retailgeek" Goldberg and as usual I'm here Scot Wingo. Scot: [0:40] Hey Jason and hey Jason Scott show listeners Jason think it's been about 2 weeks since we set down to record a podcast and you've been. I've been to Orlando and you've been to Paris New York in Las Vegas Indian nursing the retail visits you can report on or trade shows. Jason: [0:59] Treasures of first I'd like to highlight I got to see both Eiffel towers and both empire state buildings so I feel like that I should get some sort of special badge on Swarm if nothing else for that. Scot: [1:11] Appointment by Venice in between there. Jason: [1:14] I avoided Menace in this particular Las Vegas trip I was over the end of the strip at Mandalay Bay. [1:21] So that that was this weekend that was for oracles modern user experience conference so I got a chance to, to do a keynote for their Commerce track there and that was fun I got to see a lot of colleagues and talk to some customers and see some of the new. New Direction that the Oracle Commerce Tech is going in which is interesting. [1:45] I think the week before that I was in Paris with and clients and we did some store visits. Maybe not the kind of stores that most of the e-commerce folks are interested in we went to a bunch of unique specialty stores in Paris and so. Drive for example El Royale which is like the the world's most famous Taxidermy store and got to check out some of the unique merchandising and unique Merchant. Dice it was available we didn't mention shopping in the Paris Flea Market which is kind of a. When the longer running flea markets are out there and some school stuff so that was fun but maybe not super e-commerce related. [2:29] And then I did not see any new stores in New York although I feel like they're a few under construction that I'm I'm here to check out when they open. [2:40] Abbott used cobbler in Orlando for something much more fun. Scot: [2:46] Yeah this was a spring break and, regular listeners will know I'm a big Star Wars fan so I drugged one of my children to a Star Wars celebration which is the 40th Year big anniversary did lucasfilm put on down in Orlando, it's good to be with $70,000 Starburst answer there's a lot of Star Wars and going on I got my fill for the year. Jason: [3:08] Nice and what percentage of the time when you say you were in costume. Scot: [3:11] I am not a cosplayer but no fair large percent of people are so it's always fun to see all the different costumes things people get pretty into it as you can imagine. Jason: [3:22] Oh yeah I'll bet it's annoying at the airport when everyone tries to go through security in the Stormtrooper outfits. Scot: [3:28] The bestest one year they had they always do like a stormtrooper March and they had that someone was doing like a marathon and they cross each other it was really funny watching the runners like run by a big blind of Stormtroopers. Jason: [3:44] Nice and the the daughter that went with you was she the winter or the loser in the Family Pool. Scot: [3:50] Other she's young enough to believe she was the winner so it was it was good. Jason: [3:54] I just wish she was the winner too but I think what we've been talking about all these trips as an Amazon been reporting earnings today. Scot: [4:04] Yeah just came out tonight so this is hot off the presses so. One pro tip for everyone to is 2 Pro tips every year a must-read for any retailer or person even. Remotely near industry is the Jeff Bezos shareholder letter I don't want to spoil that at all but I will put a link to it in the show notes to go look at that, the one of my favorite thing is to read as you go back to the 97 letter right one Amazon with public which they're celebrating 20 years of going public this year. [4:38] I include this in every years letter so chances are you probably seen this before but it's another thing to go read and it's pretty amazing cuz in that letter. Basically says we believe these three things aren't going to change control of low prices. Fast free shipping in selection and that's were going to focus on for the future it's pretty amazing though. [5:05] Italy nail all that 20 years later that that's a reading it it's almost as if it could be written today so I definitely meant that and then and this year shareholder letter. Luther departure some advice for auctioneers and things that I found really just really. Awesome so that's one pro tip partagas two and then the third would be when Amazon does there police they. I was clueless quote and I was looking to that because that I think you a pretty clear signal what's really important to them. Also there they have highlights there's 90 bullets these days cuz he does something effectively at least two Presley's a day at the space but that. What is always interesting and I'll just give you a little bit of it. R&D team is moving fast and delivering for customers and sellers the teams increase Prime selection by 70 / 75% since launching the program 9 months ago, increase lung capacity resellers by 26% already just this year announced 18 original TV series in India and last week introduced a Fire TV stick. I'm such a Jeff Bezos quote and then he finishes by saying Amazon. It's still day one for e-commerce today and I assure you they will keep investing in technology infrastructure, set that's so you know that. It's reassuring to me that they chose to really focus on India in the Presley's given all the exciting things that going on so that was interesting. Jason: [6:34] Yeah and I India's a hot e-commerce Topic at the moment, I think in the last night you know traditionally there been those kind to indigenous player Snapdeal and flip card and then of course the Amazon has been trying enter the market and even others have had some presents. [6:54] That's I think and last month eBay which she had previously invested in Snapdeal. Sold eBay. I am to Flipkart and made a big investment in Flipkart and I think the Google and maybe Alibaba had already invested in Flipkart so it, it's really starting to feel like, all the Indian players that aren't Amazon or trying to consolidate in the Flipkart and I think there's even rumors that foot card and snap the all-night emerge at some point in the idea being to create a super competitor to try to, fight Amazon for the Indian market so that that really seems like the the epicenter of the e-commerce Battleground in the world right now. Scot: [7:36] So the flip cart razor earlier in April was a 1.4 billion which is not chump change and then, Amazon up to two billion dollars in India and I think he knows we're looking for fullment Center build-out. You're probably already there so this feels like a. Teenage commitment that this is a super important region to them that they want I want to win and to get enough tools reactionary to that. That raise that just came out kind of given the timing and things that it's was hard to tell but they're really big on India which was is coming interesting thing from this earning release. Jason: [8:12] Yep in a super high level that's. White second most populous country in the world next to China they may be a little further along in education of the citizens and better internet access than China in so it's a huge e-commerce market and of course Amazon. Like basically this point already lost China so it's the largest market in the world it's that sort of open to competition. Scot: [8:38] Yeah I agree and I think Dave Dave yeah there's a lot of lessons to be learned from China of not going aggressive enough there and really kind of. Getting in front of the the local competitor so that they seem to be all in on India so if we if we kind of pill the. Onion on the quarter it it when you wake up measured against Wall Street expectations it's what you would call a beat and Rays quarter so exceeded expectations on the top and bottom line and then leave. Forecast for 2 2 came out slightly ahead of Wall Street consensus so that's kind of where that raise and be kind of nerve being raised. Language comes from that 35.7 billion and revenue for the quarter after hours the stock is a. Pretty substantially if so about 5% which ramazan it is a very large cap stocks and that moved it from the effective Lee like. 910 bucks to 954 n last time on the show we talked about. Jeff Bezos became number two richest person after a big move in this. If it gets around $1,000 by my napkin math that would put him over the top which is which is interesting it just, another interesting data point is it looks like it if these numbers hold, it looks like Amazon will have a market cap of about 450 billion and Google will be at 610 so there is this interesting talk about. Facebook salsa in the conversation will one of these tech companies get to other be the first trillion dollar market cap stock so that's kind of where we are positioning Google's a fair amount ahead by 50% ahead. [10:17] Abdul also announced of a pretty strong quarter what do you dig in. [10:24] Every component of Amazon beat Wall Street expectations to the retail business which is their traditional. Retail business which includes the marketplace this new line on them they just recently broke out called retail subs and we will dig into that Amazon web services which is cloud computing and then the other category Now isn't just the ad. Business it did very well at all so it was kind of a little bit. Yep not exceed expectations was International growth a lot of that was due to pre substantial currency. Teachers going on and we take those out and look at a constant currency International itself did pretty well. So with us International through 24% in his Baseline and I was like to remind listeners e-commerce is growing at 15%. To hear you have the largest e-commerce player growing it out easily. Not quite double at this point but you can certainly faster than the Baseline those they're taking sure I had a pretty tremendous clip so it's 9% higher and. [11:24] Equate 20 x the 35 billion no that's like 4 billion that just got sucked out of the other pockets of anyone selling online just in one quarter is one way to think of. So Sienna when is I used to like to look. And I stress treats people that Amazon doesn't get really clear category data but they. Always gave media an egm in EDM is electronics Jerome or should I stop doing that this year they provided a bunch of new disclosures annually and then, going forward it looks like they've stopped with media and AGM set to a bit of a bummer before Shelly I know enough to back into that so I was like to do that because it actually makes the number speaker, Amazon grew 24% looks like media grew at 7% media's books music video video games any digital books those kinds of things an egm is. Inside your obvious Electronics but any general merchandise so Sporting Goods cpg all that stuff has lumped into that category and it grew 26% so getting. Broccoli close to that 30% doubling of e-commerce unit growth was 24%. [12:35] And what reason is the stock is up is why she was expecting a book 13 earnings per share and it came in at a buck 48 so literally 33%. Beats by my math coupler components I like to look at Marketplace this is obviously a big thing I follow the number the. [12:53] Amazon reports is the percent of units that come from third-party and then tipped a little bit it always been taking up literally. Prime last 20 quarters I think and then I'll ask you for a last quarter it went from 50 to 49% units from third-party. Wizard we never seen it take down this quarter stick back up to 50% so that was good to see imagine going forward that will see it take up, car seems to be how it's going inside my bed is too you'll see 51 and then we get up kind of 253 ocean and q42, just the first part of business really get on fire during that timeframe. [13:35] We think we talk show if you tore Amazon deep dive there's this this kind of Amazons. Total sales revenue of 35.7 billion actually mask quite a bit of what's going on in there and what you have to do is take out the Amazon web services and ads and you're left with 24 billion thank you to the first party business, you would think well okay if 50% is units then it will be another 24 for third-party. Actually it's a little bit more because average order value of third-party is substantially higher than first party and. So when you kind of look at gmv versus units by Maya Matthew get about 36 billion for third-party when you had those up Amazon. About twice as big as it seems to be 60 billion for this quarter so you know that that's kind of clothes going on a 250 billion dollar run rate for DMV across 1p and 2p with witches pretty interesting if they, give him a solid Q4 you may start to that I don't think they could crush 304 the year but you will Q4 would be the first hundred billion dollar quarter I think they could do that this year pretty easily unless things really slow down. Jason: [14:51] And but you definitely think of their annual DMV is bigger than than the 60 times for right cuz the Q4 would be so much bigger. Scot: [14:57] Absolute other kind of 260 is coming out pencil and if you just kind of assumed the same mix as last year. Jason: [15:11] Which is a pretty big retailer. Scot: [15:13] Yes that's a very large retailer that's a global number I always get asked that AWS cloud computing grew 47%, I was she was actually expecting a lot bigger so down there's a lot of pricing battles going on here between Google Microsoft and Amazon so that was good and margins held up nicely and that was one of the big treaters to. Earnings beat people expecting the cloud computing margins to be under pressure the biggest surprise in the quarter is. Amazon in their annual report started to break out the revenue from Prime, no some other stuff in there so it's a bit of a noisy number but essentially you can kind of make some assumptions and get close to a nun Amazon prime number so the big surprise they call that retail subscription. And I did that run you jumped 52% year over year, now what's interesting is about a year ago is when they introduce the ability to buy Prime on a monthly basis and then a little bit later they broke out the video so you can just do a video subscription, So currently with this report. Just yesterday consumer intelligence which is the surveying company and you and I are a little skeptical on surveys I think this is directionally interesting they estimated there's no 80 million Prime users and that that number, is up to ex from 2 years ago which would imply 2015 was 40 million and a lot of washing hands when they pick the. Pick through this retail subscription or they get to about the same numbers and it's about 60% us 40% International so that would imply about 45 million homes in the US which is. [16:52] Pretty darn impressive other things that this report highlighted was that they sales that they. Amazon gets from a non Prime user is about $700 a year and Prime user spend about twice that it 14 or 1300 year also interesting Lee the survey picked up that now about 25% of users. I use that new monthly program which is 1099 and I think most of those we knew because if you were in the annual you probably wouldn't downgrade to the monthly useful to Auto renew setting Prime by the fire is. Prime has surged by. Coming out this monthly program generating at least half of that 55% growth I imagine his come from you folks that are joining the program and gets washed you excited is there was some concern that. The way the Census Bureau breaks up. Household incomes you're the stop here that's over a hundred and twenty K and it would have felt like that was it like 80 or 90% saturation so I think what gets people excited is this 1099 monthly plans seems to, pulling people down kind of more towards that Walmart consumer which I think is more of a 67 TK kind of household income so that was pretty interesting. Jason: [18:04] Yeah it's it's fascinating the. I think I was another report earlier in the month that was kind of interesting that was looking at the habits of Prime members and I think there been this assumption, the Prime members were super loyal in the ones you got locked into that $99 that you wanted to get as much value from it as you could so you. Aggregated all your shopping on on Amazon and what this study showed was. They know that Prime customers are more voracious e-commerce Shoppers overall and that well they have a much bigger spin on on Amazon the nun Prime members. They still use multiple other retailers and spend more money over all men so I don't know if that's how accurate that is again like. You know somebody surveys are not very big numbers of consumers that they're making big inferences from. But if that's true that's pretty interesting cuz I feel like a lot of people have felt like the prime is a true walking program. [19:09] You'll just have to take my word for it or read the show notes yeah the. So Scott like one of the things whenever we talk about Amazon picture go to a retailer they like you see their eyes roll in the back of their head and they go yeah yeah yeah but you know Amazon doesn't have to be profitable so it's not fair for us to compete with them because we do. Scot: [19:31] Yeah. [19:34] You and I both work hard to dispel this one so so just kind of put it to bed that's truly faults to Amazon's been profitable, as an entity for the last quarter so that's two years and that you would for Amazon is a preconcerted number, kick some ass kind of conservative accounting treatment that you look at and actually at Amazon if if you start 3D space your letters we don't have time to go into it that's right and what they really look at is free cash flow generated by the business. So another thing that they break apart is this is kind of unique it's their own measure. [20:12] Tom is call CSI and its operating income for a business you could essentially so. So it's call Consolidated segment operating income and she's actually where they say it looked the retail business did this and the non-retail visited that so it's wait for them to come out with a little. Give you some idea of what component is your profit so. You're a lot of folks say well okay yeah sure their probable but it must be Amazon web services this doing it all eight eight of us is quite probable. But the North America retail businesses profitable to it. The generated 1.84 billion in cash this quarter just can't put a number on it now the one thing you can't peel apart from there as the marketplace so you could argue with the marketplaces hearing all that profit I would probably actually, but I don't think it's. [21:04] You can't unfollow the marketplace in retail at this point just say well what's the 1p business making but you know that already we get it its profit the retail part of Amazon's business is Prague. [21:17] Cloud computing possible and you get free cash flow. On a trailing 12-month basis which is what they like to look at they generated 10 billion dollars in free cash flow so so I think these numbers are at a scale that. It's hard Reef you that Amazon's prov1 and doing quite well on the bottom line. Jason: [21:37] Yeah which is crazy of one of the things on the earnings that is that they're there shipping cost went up by a billion dollars so they spent 4.7 billion Justin shipping and to think like. There their profitable and potentially getting more profitable with that come investment is amazing. Scot: [21:56] Yeah and then um. Returning service internet number and with that number you saw is like just the cause it doesn't have the offsetting revenue from Prime that goes against. Set an and fees from sellers actually knocked down by about how this is the actual true net cost. Jason: [22:17] Interesting okay the other thing I heard a lot of a sort of squawking about it. How well a wso doing versus its competitors so obviously it is the 800-pound gorilla in cloud and certainly. Oracle and Google and Microsoft have an IBM of really. Shirt of targeted they're much smaller but at the moment they're growing faster than AWS is because there's so much smaller and I I know. Earlier in the month the Oracle team was like kind of taking some shots at 8 of us and talking about how much it was. It was its growth was slowing down. And I wire you know they thought that they had a better cheaper solution than Amazon and then that I noticed the Amazon sort of took the bait and refuted a lot of that in the. This weekend I think I saw the president of AWS coming out with some quotes talking about how. The the old Oracle model of walking you in the mediocre Services doesn't work anymore and that you talking about enough. An unhappy a lot of Oracle customers probably where that they were locked into this database for all this sort of time. So I always have a good trash talk but it is interesting it does feel like. [23:42] Not only is Amazon winning at 8 of us but they're starting to add more Enterprise type software and kind of higher higher level software to the stack that feels like it's. It's more writing oracles kitchen so let you know they have a very credible database offering news that could help you avoid you having to pay Oracle for a database for example. Scot: [24:01] Yeah one of the things that makes a whole apples and oranges is I know Microsoft. They switched everyone in office over to that Office 365 and they count that is cloud Revenue so it's kind of a little apples oranges where Amazon's cloud is really. The pieces of. Buy at the Lego blocks of cloud in other people putting applications in the bucket so either way so just put a number on it came in 6 billion I'm 16 billion, in a world of software that is a big business and as we mentioned his growing in north of 40% which is not too shabby and it has. [24:45] Amazing margins which is nice. Jason: [24:48] Yeah it's a it's a certainly impressive to have these two huge huge growth engines in one company makes you wonder what which which one of those the investors are investing in. Scot: [25:04] People ask me if I think they'll split it out in and I really don't because eight of us is the operating system Amazon runs on and a lot of. Cool new features they're coming out with have been. Computer Bates internally through it for for Amazon's retail business and they would have come up with those ideas if there were two separate companies so I actually am concerned on that part I think they love having other because, the surgery would not having separate. Other big Amazon used iPad I'd ask you about is the echo look so I want to just grab that for folks that may have missed announced it and I'm curious to hear your thoughts on them. Jason: [25:45] Yeah yeah today announced a new piece of Hardware today which is called the echo book and then start the next Generation Echo it's it's $200 that has all the features of the traditional Echo but it also has a camera in it, inside the the use case that they're touting is that you would put this in your closet or in your bedroom or wherever you get dressed and in addition all the traditional Echo features, you can instructed to take a picture or a video of you and so what this would let you do as I get dressed in the morning try on an outfit. I have Echo take a picture of you and then you can leverage this other service that Amazon launched about a month ago that I think we briefly talked about on the show called style check which is. Where you upload a picture to Amazon and a human stylus that works for Amazon looks it. That picture and give you advice about like give you sent pictures of two outfits will tell you which outfit they think looks better though give you fashion advice like human curated fashion advice and so you know now it seems like, they're making it much easier to use this style check by by putting this camera in your in your closet or in your bedroom. I personally think this is a super interesting Trojan Horse so. [27:07] The more information you have about consumers fashion habits and what they actually use versus Buy, the better recommendations you can make for a close in the better close you can actually design for those customers you know fashion is such a trend based business and so many apparel companies have lived or died by missing trends. If you're a fashion company which Amazon aspires to be and you have a camera in the closet of potentially millions of consumers. [27:39] You're guaranteed to be the the most on Trend you're guaranteed to spot the changes and behaviors and more exciting. You're not getting the stated behaviour you're not getting these like. Like a sort of artificial new trends that that the designers make when they when they go to Fashion Week every year, you're you're seeing the actual clothes that consumers where and that's a big deal because a lot of consumers buy clothes put in their closet and never where I'm so knowing what the real preferences are. A potentially give you a huge leg up in selling and designing fashion and frankly it also potentially has some really utility for consumers to help steer them two words. The gaps in their wardrobe or the things that they gravitate to and you know maybe I buy a lot of colorful shirts that I never wear them in and so you know Amazon could potentially. Remind me of the shirts that I'm more likely to really wear for example so it's it's potentially very interesting and it potentially is a super valuable new data source for Amazon if they get a lot of people that use this. Scot: [28:44] Yes reaction to it is really fascinating because every dude I know. Doesn't get it off then like I thought it was April Fool joke this is crazy why would a man uses every woman. Pirate in women I chatted with about it they're like that's pretty out that work what kind of recommendations would they make you know that's handy I don't have a full length mirror. The factor could do a video of you turning around and see that outfit kind of a let you know the 360 view of Elf it kind of reminds me, when I watch the little promotional video reminds me the magic mirrors you talk a lot about you know where you know they're more touch screens and things with the gym I do the magic mirror is to. [29:29] You see how an outfit looks and then say Oh I drive another top and then your interactive leave by that actually even better in some ways cuz you get the stylus component and the Machine. Jason: [29:40] Absolutely in the magic mirror like that's a really expensive technology and you put it in this dressing room in in a fashion apparel store and it's. It's a real challenge because. You know of a hundred people that walk in that store only 25 of them are going to walk in the dressing room and only five of those are going to actually use the magic mirror so you bought this really expensive piece of Capital Equipment that only touches a small percentage of the consumers in your store whereas, this Amazon solution is 200 bucks in it potentially touches that customer 365 times a year so. Like I think it's it's a similar use case but dramatically more valuable than the in-store stuff that you see people experimenting with. It's funny you mention that the gender divide like you know certainly when you see this you think about things like Stitch fix which is largely focused on women and and you know, that they've always doubted that they have this Advantage from seeing all these women's preferences and their reaction to the outfits that the stylist curate in that they use that data to design their new clothes, well like this is sort of that model on steroids so you know you could have Amazon collecting much more data, I was a much better bigger data science team leveraging that day though so that's super interesting. An agenda divider was funny I think I had a debate on Twitter with our mutual friend David and he was taking the under on this he's not super excited but you heard it here first I've already you know. [31:15] Put in my request to be. To be able to buy one and you know if I do buy one will see if a year from now if if I'm more fashionable than David cuz right now I feel like he has a pretty commanding lead over me. Scot: [31:28] Is going to race to the bottom there I don't know. Jason: [31:31] Yeah it's it's important if it's a reasonable goal post. Scot: [31:36] When I when I first saw just the device and before I saw the video I thought wow that could be really dope. [31:44] I thought it'd be more like a Dropcam competitor are they called the nest camera now because, are the nest cameras nice and I used one but then the thing it's a consoling you learning it I like, some ocean looking like a tree wiggle and is totally useless to the image recognition and the Machine morning on its not very good so when I saw it I thought it came with a voice interface and the motion-capture to be really amazing so I actually have multiple uses for the thing because having it is kind of a monitoring camera, it's also like an actual to me. Jason: [32:18] Yeah and another use case we've heard a lot of talk and chatter about is a. Speaker phone or video conferencing phone so you know this this Hardware you could certainly do either those purposes so you can imagine. You get that same Hardware can be used for a bunch of different uses use cases and they could just add new skills and add new features, to Hardware all the time as as they already do when the echo one thing it was interesting to me about the hardware. And they say has the same feature set as the echo, you know our listeners will remember there's at least there's there's more than two but there to sort of ac-powered Echoes there's the Echo and the echo dot in the big difference between those two is the, the high-fidelity speaker in the Echo and I think the echo was a hundred and eighty bucks when it first launched as that. Am I am I remembering right now. Scot: [33:12] It's still one of the other goes 199 and bumped. Jason: [33:15] Solange the 200 is done a 180 so this device if it has the same audio in it that the echo has in it then they squeeze the camera in there are basically the same price. So I'll be curious if they. If they did any concert options to the audio to help before the camera or or how that all that all worked out what is of Interest. Scot: [33:39] Did you see they did a over the air update for Taps and now you don't have to, press the button for to work so they will somehow saw the battery problem that originally, originally the use case was you'd hold down this button and you had to do that because it was battery operated and because it's listening to the lot of battery that that's kind of what that would do this, weaker so they run out an update to that to be a basic enhance that device so that that's no longer necessary about that was pretty nursing at its Eli news about that. Jason: [34:13] No I didn't hear a lot about it and what was passing it means there's a. That is played out in the phone world right and in so they're there are on it it does take a lot of battery to listen all the time and so for example that the Apple iPhone you can activate Siri without pushing a button that only when you're plugged into AC. [34:34] So like when you're in your doc at night for example there are some Android phones that listen all the time and take up very little battery but the way they do that is they actually have a dedicated ship that's a. In a single purpose chip is designed to be very little power and listen for that activation work and so you go I thought makes perfect sense that they could build a new that I can. [34:59] Can listen all the time because I had a new chip in it but the fact that they were able to add that feature just in software is pretty interesting. [35:08] Exactly and then the other thing and that you know haven't talked about how long they been working on this or any of those things but the one thing that done on me. Almost every apparel manufacturer I've ever worked with we've talked about closet closet analytics and we talked about the benefits of putting a camera in the closet and understanding more about half consumers are using the product in you talk to him about. Like having those devices for focus groups and test markets and panels and things are making it, a widely available consumer product and I probably didn't talking about that idea with a pro manufacturers for 3 or 4 years and it's, it's frankly probably on a lot of the pro manufacturers road maps but I'm guessing that the Amazon decided this was a good idea. In a much shorter cycle and while everyone else just talked about it and kind of put it on the back burner, these guys very quickly just did it and they're putting it out in the market and you know maybe it'll be successful and it'll be a big story we're talking about any year maybe it won't be so it'll be the next fire phone and David will be right and now they'll quickly learn from it and. Did it before they wasted too much money. A sport that's kind of the theme of Jeff Bezos shareholder letter but I do think the fact that they just put something out like this when so many other people have thought about it and talked about and not taking action is, one of the you need to find any characteristics of Amazon to me. Scot: [36:33] No use case I wanted to ask you out cuz I don't know a lot about it is fitment because it seems like if you've got a camera there you should be able to do some body measurements and say to someone, you know since imagine this thing's been watching you try on 10 outfits and then now you say hey order me a small t-shirt that says, hey you know just so you're aware I check the measurements and I don't think this is going to fit you don't you think that they could get smart enough to do measurements. Jason: [36:59] Absolutely interpointe like that apparel returns are very high and returns are super expensive returns are super expensive even for Amazon so anything you can do to, reduce returns by getting that are fitment is is hugely valuable there a couple of vendors out there the try to do fitment with a 2d camera and you know that they can do it but I expect that it's. Pretty and perfect there's really interesting fitment you can do with a 3D cameras and, from and we don't know yet what's really in this this new Echo device but it sounds like it's halfway between a 2D and 3D camera so what it sounds like is it only has a single in single camera but then it has a separate infrared. Rangefinder so that it can measure the distance you are from the camera and that that allows it to get more accurate sizing information about you. [37:58] I'm so potentially it it it absolutely could have a use case in fitment. Scot: [38:02] Yes winterson to see what direction to take this thing. Jason: [38:05] Yep again you know that was a super interesting product. You know I don't think much of people are using it as a high-volume e-commerce ordering machine and so you don't have anything you don't look at that and say hey is, are these kind of cancer my tracks going to be a third a third big business for Amazon in the long run but when they start moving those those things from your kitchen, to your closet that they may have found some real use cases where where this kind of artificial intelligence can really even potentially Drive. Actual e-commerce revenue for Amazon then I think a couple other little news things in the Amazon world. I was actually just sit in a bee last this week in Las Vegas and Amazon had a huge booth at NAB. And the enemy is the National Association of broadcasters so big video production show all the news guys and it reminded me that Amazon had bought this video Processing Company called Elemental in Portland Oregon. I'm inside the booth at NAB is a Elemental AWS and they essentially have him put this this Elemental service on AWS and I sell at the broadcasters to to storm process all their video. And so to me that was just another interesting example of kind of you know Amazon AWS moving from Pure infrastructure to applications or services. [39:39] They also released the The Lex api's this month which are like all the underlying speech and natural language processing. Libraries from the echo or from Alexa you can now use in an Amazon in your own applications. [40:00] And that directly has been competing with like IBM bluemix with the Watson api's and M2 new api's that Google has as well so that was super fascinating. I think we saw this new subscription service from Amazon probably confused most of us subscribe with Amazon it's the. [40:24] Did you read about that at all. Scot: [40:25] Yeah I was I thought it was going to be famous on has subscribe and save wear for loosely, symbols you can buy A110 or need shower you could subscribe and get it coming on a regular basis parties of wanted to be involved in that for a long time so, you say I'm I don't know I'm a, biscuits I want a third-party way of doing that that's not available so I thought that's what it would be but it ended up being really more of an app store kind of things so the bility to manage subscription apps to come like Dropbox or Evernote things that nature so it was underwhelming It's All Digital subscriptions not physical and they're opening up. Jason: [41:09] Accident that's that's potentially a competitor to PayPal I'm in part of. The pay with Amazon Echo System because it turns out one of The Unsung used cases of PayPal is that in our new digital lives we all have these, these digital subscriptions and recurring costs and you know there's a fair amount of what we call breakage in their search subscriptions we subscribe to something forget you subscribe to it and they just keep charging your credit card. On end when consumers to discover that that's super annoying and that you know that they want to save money and be able to manage what they're paying for so what a lot of people do as they use PayPal for all those, does recurring costs so they can go to One dashboard and PayPal and see all the services that they permission for recurring charges, which is something PayPal let you do credit cards don't let you do and then from PayPal you can turn on or off those various subscriptions and so that this this new service from Amazon feels like, a direct competitor with with that PayPal service it feels like it's sort of a centralized portal, for managing all your returning digital subscriptions will hate that's why you have me man. [42:26] I think it was also a new Amazon patent which is pretty interesting and particularly in light of The Deco style we're talking about earlier, are the echo look we're talking about earlier rather they have a new patent on for on demand apparel Manufacturing and. You know that's a technology that the apparel manufacturers are all super interested in Adidas has some pop-up stores where they make your sweater in the store there's a, a store in Boston called Supply Depot that make the light high-performance will Blazers on the man in the store with ease. Today on demand weaving machines and now you know it looks like Amazon is investing some IP in being a leader in that space as well so it just seems like. Another Vector where Amazon is very clearly investing in fashion before the private labels in the Echo look in the photo studios that they've been building and and Union hours to see some interesting patterns in the space as well. Scot: [43:30] The song Come Along the seam I saw that there's rumors that they're going to be coming out with an office competitor so, hosted, young sweet, thing I don't have any idea if that's real or not but sorry about that thinking that was pretty nice it would sit on top of AWS, it's interesting in that. Could you maybe I could so down that. Microsoft cloud growth in your Google's invested really heavily in their their G Suites so maybe it's a meter guy shoot a shot at the by there and then the last piece of Amazon news that is interesting is. Channel measures had an office in Australia for a really long time very active e-commerce Market there there's really no competitor to eBay so you Bay pops up in in Australia they do really well there, and I just rumors that Amazon is going to be there for 3 years, and it looks like it's official there was a newspaper interview with an Amazon head of Australia and he said yeah we're going to become, coming out in the summer so that's exciting for the people down under that they're looking to get involved in the Amazon ecosystem imagine they'll be a third-party offering and that kind of thing so competitive waves going to hit their pretty hard. Jason: [44:45] Yeah it happens that may be a great opportunity for the channel advisor to host a Jason and Scott show in Australia. Scot: [44:54] Yet you say that I've been there and that flight is really really really long so I'm not any love to fly but that wouldn't break you I don't know if it's like a 24-hour flight it's it's brutal. Jason: [45:05] At those lights are the only reason I ever get to the bottom of my inbox. Scot: [45:09] Yeah it's different in boxing her flight and then if you've watched every movie you haven't seen in the last 3 years and then you walked up and down the aisle 80 times and you're looking you're still got another 10 hours. Jason: [45:20] Yeah usually causes Strife with my wife as well because it's all and never to be forced to watch some movies that we had intended to watch together. Scot: [45:29] Yes. Jason: [45:39] So some other exciting news and e-commerce outside of the Amazon Echo System there was an enormous acquisition this month than I think in fact is the largest acquisition ever in the e-commerce space. Scot: [45:54] You can have in the theme of jet Walmart and where. [45:58] Where the incumbents are saying hey we got to acquire something was really going to get dramatic change in the pet category PetSmart acquired chewy.com, that's not shoebacca it's more a chewy for 3.35 billion dollars making it the largest e-commerce acquisition today, interesting there is a lot of these e-commerce Acquisitions of gone for kind of 1 x Revenue so the rumors are that she was closing in on a billion-dollar and rate it so this would put it in over three, Exxon Road him so this is a really good outcome for the industry to have, AOA really quality exit equality buyer and hopefully denigration will work in and this could I'm not familiar with the know what's going on with the pet guys as far as their e-commerce things but it is friends easily zombie Channel guys have been struggling so for this whole your help, the accelerator e-commerce efforts as well. Jason: [46:57] Yeah and you know that we've talked on the show before about this this theoretical Tipping Point in every category where when you get to about, 20% of category sales being on e-commerce that it becomes hugely disruptive to the the Legacy businesses and I haven't seen recent data on the pet category but I have a suspicion that might be one of those categories that the, you know has recently crossed over that 20% threshold in so that, you know that may have made it more of an imperative for one of the big brick-and-mortar players touch to invest in a solid e-commerce offering you know even fact. That that category is really getting disrupted by e-commerce. Scot: [47:40] How about them so we talked a lot about Walmart on the last show they have gone on a kind of acquisition spree any other Walmart news you want you've noticed. Jason: [47:51] Yeah so I think the Acquisitions have continued or at least potentially are continuing the they purchased at URL they purchase shoes.com, and I don't as I sit here I don't remember what the price was I think it was a couple million bucks was it three million bucks so that. [48:10] I will put it in the show notes I apologize for, for not having on the top of my head but that was a pure URL that they purchased and you know one of the first Acquisitions they made in Marco where is here it was this shoe company shoe by and so they they bought shoes.com and they redirect it all the traffic to shoot by, so you know that that was the only true acquisition we've seen, other than we did read on recode a rumor that they are looking at both of us as well and so that that would be a super interesting acquisition of that proves to be true. Scot: [48:48] Yeah be a great brand kind of have an exclusive on and so a lot of interesting things there we have the side benefit of housing Nordstrom doesn't Nordstrom carry bonobos. Jason: [48:59] They do I think it could be one of those good news-bad news things for Nordstrom I believe Nordstrom is a significant investor in bonobos. [49:07] So if the valuation was good you know nor some can make some cash out that acquisition on the one hand and potentially lose the product line on the other hand but not necessarily right like. I don't know what Walmart with Julie about going to go see if they would let Nordstrom keep keep selling it or not yeah. Into speaking Walmart or a couple other interesting things going on at Walmart. Walmart launched this new innovation incubator that they call story which was kind of the original test or for Walmart that Sam Walton ran, what store number 8 in San in San Bruno they're open this new lab and they've called it story. And the big news was that they got a Jenny Flies who was the founder of Rent the Runway to be the 1st. New startup in the incubator and it sounds like she's developing some New Concept around personalized shopping and doing it for Walmart. Scot: [50:10] And then that's what it is it's a Super C. Jason: [50:14] Only the very kind of something focused on personalized shopping in announced a ton of detail about exactly how the incubator will work so is, is it an incubator that Walmart is investing in and they own a piece of the startups and the startups aren't. Exclusive Walmart so it was Walmart just investing in this and, James lunch and company that might not sell through Walmart or is it Building Technology exclusively for Walmart unite I don't think we got we have that level of detail but I will say. It's just kind of an interesting diversion at the moment you see Walmart investing in new innovation capabilities and doing things like, like the store and you know frankly getting a big-name entrepreneur like Jenny involved I'm is all pretty credible and at the same time, you know we're reading about a lot of other retailers and most notably Target like walking away from a lot of their Innovation investments in a day, they have these Concepts stores that they cancelled they had this project goldfish that we were super excited to figure out what that was and that you know they cancelled that and let the. The The Innovation fellow that the that was involved in that project leave and then I think this week we read that, OKC car all who was their Chief Innovation officer is leaving, so you know on the one hand you have had some retailers that are struggling and look like they're really you're tailing their Investments and Innovation and on the other hand it seems like Walmart's really Double Down. Scot: [51:42] Other interesting Walmart stories was just had Mark Lori written all over it that if you for select items if you. Order them online and have them delivered to the store for pickup you actually say if you know somewhere between 5 and $20 so that makes a ton of sense as it's cheaper for them they save on the shipping cost so they should pass that on to the consumer that was one of the Hallmarks of the jet system sale, that'll be interesting doing that's a little weird about it is if the. Is the imagery you're buying online is also in the store then you don't get a disc if it's already in the store that you don't get a discount so that they just feel weird. Is consumer to kind of be like well why are you just coming the stuff that's not in the store at United just to see how it plays out. We'll see how that goes. Jason: [52:31] Yeah I am in very mixed emotions about that offering which I'll get to in a minute but I was also just sort of interested in the industry reaction to this announcement so it was sort of very binary I saw a bunch of Articles from people that are like man this is super smart and Walmart celebrity you know they're there advantages to try to compete with Amazon and and Mark Glory super smart and this is a good aggressive move and then I saw a bunch of other articles that are like, you know this this is rearranging chairs on the deck of the Titanic and you know this is a silly thing that isn't going to move the needle, and you don't why it why are they doing things like this when they need to reinvent the customer experience to compete with Amazon did you, do you like you come down on one side of that other. Scot: [53:19] I can come back to the user experience in just kind of you know how do you explain to people that you're going to save money on this thing cuz it's not in the store but this one it's in the store you're not going to see me on I'm really curious to see how they figure it out. [53:34] Is it from consumer protective it's not too. Jason: [53:36] That's exactly my problem right like you're balancing two things customers want to save money for sure and you want to, it if there are efficiencies in encouraging the customer to one Behavior versus another you you certainly want to encourage them to the more efficient behavior and pass the savings onto that customer right like so I certainly agree with that sentiment and I think that's the, the underlying principle behind jet and I agree with the sentiment on jet as well but the, the user experience that gets manifested as a result of this is. Complicated and I think another big Trend in adoption is consumers are looking for simpler lower friction interfaces, and you know a bunch of the most successful products on the market right now we're out our successful. Largely just because they were a better simpler interface for a service that consumers were already used to so it like I would argue that, you know Hoover's Prime right now he probably the taxi was it's a better user experience for the same same sort of service in lower friction and Shear point. When in every product you put in your shopping cart has a different value prop and a different in a preferred delivery mechanism based on the cost to Walmart and whether or not it happens to be on the Shelf in which, which up for filming Center in happens to be in an all those sorts of things like I think exposing all that complication to The Shopper is potentially problematic and I would argue it was problematic on jet as well and so. [55:09] You know the magic question is. Is there a way to to greatly simplify that not expose all that complication and supply chain ugliness to The Shopper but still like in Courage The Shopper to do what's in the best interest and save money. [55:28] And so I guess time time will tell on that one I think that they had exactly I sent them it but I think there's enough potential to improve the user experience to do it. [55:42] Good deal and Scott with that it is happen again we've we've wasted a perfectly good hour of our listeners time, so I want to thank everyone for tuning in it's been great to catch up with you after a couple weeks and I'll remind everyone to. Subscribe and write a review on iTunes. Scot: [56:04] Yep that's one person that's all the news we have this week. Jason: [56:07] Until next time happy commercing.  

EP078 - Amazon News http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. In Episode 78, we catch up on a lot of the new Amazon news including: Amazon Bookstore opens in Chicago (very near Jason's home) A number of analyst raise their guidance on Amazon stock, which is now almost double Walmart's market cap Amazon hosting a summit to help brands sell direct Amazon Private Label update Amazon Go store delayed Amazon gets NFL Thursday night football Amazon hiring work from home customer service people New Product - Amazon Connect, AWS cloud SaaS callcenter application New Product - Amazon Chime, AWS cloud SaaS video conferencing application  Amazon Opening 1m sq-ft FC facility in VA Amazon acquired Souq.com - middle east marketplace - Dubai, Abu Dabi, UAE, Egypt, Saudi Arabia, Kuwait, Bahrain  Amazon shuts down Quidsi Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 79 of the Jason & Scot show was recorded on Thursday April 6, 2017. New beta feature - Amazon Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scot show this is episode 78 being recorded on Thursday April 6th 2017 I'm your host Jason retailgeek Goldberg and as usual I'm here with your Scot Wingo. Scot: [0:40] Hey Jason and hey Jason Scot show listeners Jason was looking at our logs out on iTunes and we've been so busy interviewing retail luminaries that we you and I have a report on since early March so I have a ton to catch people up on. Jason: [0:56] That I told you I'm super excited and I'm equally excited to be talking to you with my full voice. Scot: [1:05] Yeah yeah it's good to have normal Jason back and put froggy Jason kind of into the, into the catalog there on time hopefully listeners went to put off by it I hear that Mr lister's listen to a set 2X anyway so you were still at Chipmunks on I'm sure it's fine. [1:22] Just kick off you I have been quite the world traveler I haven't done anything since shop talks up and kind of boring but tells about you any interesting World travels through portal. Jason: [1:33] I have been on the road quite a bit since shop talk mostly customer visits but I did get to do an event I like to do every year in New York City. Did may not be super for me or do a lot of our listeners so it's called the path to purchase Institute and they put on this annual show called The Shopper marketing Summit and it has stork Lee is not been a very digital Summit it's a long time event, targeted at Shopper marketers that focus on on marketing inside of brick-and-mortar retailers in what was in. Scot: [2:06] Circulars or like a circular makers work. Jason: [2:10] Other. There's a little bit of that it yeah but it's a it's a lot more like product displays like temporary point-of-purchase materials like promotions and in-store promotions products samples. I'm all all the sort of the traditional tools are retail or would use to promote products and more so Brands than retail or so the show is really focused on. Like what it what is the best tactics for Mondelez are Procter & Gamble to use to help their their product get disproportionate attention on the Shelf. [2:49] Yes I would I just found interesting is you know that, how much digital had permeated the conversation there so they were first they asked me to speak so we actually did, I was on my co-workers from this we did for our workshop on digital disruption and talking about all the ways that the. The we filled the whole discipline a shopper marketing has been fun and I disrupted by by digital and then you don't evolve impact of purchase, but they were a lot of other another you like speakers from Kimberly-Clark talking about digital merchandising and then frankly a lot more presentations that you would have extradition Alee expected to see at Academy show your now starting to see if some of these traditional shows in their ways to go though. If you like the sessions that were most popular with the audience where we would probably be pretty rudimentary touch are average listener but it is interesting that these traditional disciplines are now you know really starting to focus on our space. Scot: [3:52] Digital is eating World As We predicted. Jason: [3:55] It is indeed in while I was there are our friends at Amazon open the new book store 2 blocks from my house. [4:21] As I said Amazon open their Chicago bookstore and I presume because Jeff is such a loyal listener that he carefully selected a location only a few blocks from my house. Scot: [4:32] Tell Sam to you've been just to refresh listeners in case they shame on them missed the episode when last you were travelling Amazon book stores you went to the Seattle and right. Jason: [4:43] Yeah yeah we've been in Seattle want a couple times now but I was there. Scot: [4:47] The New York. Jason: [4:48] Recently didn't I don't think the New York one is open yet. Scot: [4:52] I think that one Telus about Chicago and I'll do some research. Jason: [5:00] Yes I have been the two personally I've been in the Seattle won in the San Diego one which are very similar and they have evolved over the times I visited them until then, looking at Chicago Chicago is a little different than the last two in a couple of regards the most notable difference is that it has a coffee shop at. So he has an expresso bar they're serving Stumptown Coffee which is a favorite. Coffee brewer from my old Hometown to Portland Oregon. [5:31] Omen none of the other Amazon site been to have a cafe or any food I'm so so you know. That was certainly an interesting evolution. [5:43] Also had a few new categories in it so one of the things that I hadn't seen before is there was a popular kitchen accessories Gondola in the store. [5:57] And that is a little interesting like traditionally another merchandise books in the store physical books and. Quick refresher for pubs that will talk to you before then listen to some the other shows it's not. [6:11] Designed a traditional bookstore would be design right see a couple thousand square feet you want to get as many books as you can into that that's 2000 square feet so normally most of the books are. Merchandise down their spine and only a few promotional books are merchandise facing you this Amazon store has very few books in it because all the books on merchandise facing you so that it's a much more attractive presentation the print. Paper price tags next to every book in that price tag. Orwell fact tag has the reviews from Amazon on its what has the star rating in in a couple select customer reviews reviews play an important part in merchandise in the store and no actually have gondolas. For merchandising books by rating like these are all books that are rated over 4.8 stars who are the top rated books for the city of Chicago things like that that you know it's a real clever social merchandising, pricing is really weird any stores they charge list price if you're not an Amazon Prime member. I'm in if you are an Amazon Prime member you get the online price, but because as we all know the online price changes so often they don't print the online price in the store so you literally have to use the Amazon app on your phone to scan the fact tags, to see what the current prices of the book you're going to buy or use one of the scanners that they have built into the store. Scot: [7:34] Cool so you were right I was wrong I think this is a Jason and Scot first the that have not opened the first location in your cat's Columbus Circle and its opening in the spring so I think they have like. William another month here and then the second one they announce is going to be across from Empire State Building so they announced to open none in New York but opening one soon. So Columbus Circle will be first and empire state will be second tell me more about the the kitchen section of the store. Jason: [8:04] Yep so as I was saying like you know you have that kind of book presentation and then the book of all the Amazon stores is really that Amazon branded. Electronics rights of the stores really about Kindle and Echo and you know I would call it a consumer electronics store dressed as a bookstore. And so on certain they're happy to sell books in that store but it really feels like the job of the stores to educate customers about the the candles and The Echoes In The Fire tablets. [8:34] And so the center of the store is around that they have their sort of equivalent of a Genius Bar where you can get Live help they do you know scheduled live demos and tutorials a lot of those kinds of things and so you know traditionally. Those are the two kinds of things that are in the store that Electronics including accessories and third-party products that work in the. In the Amazon Alexa echo system in the inbox inside this Chicago store with the first story I have seen that had other, hard Goods in addition to Amazon products and the books and so they would have had a gondola that's like best selling kitchen appliances on Amazon and it's showing things like. Immersion blender smoothie machines KitchenAid mixers think things like that and so they would really like. The bed you know 10 of the best selling products in another category and put them in the front of the store. Scot: [9:31] Did you see I'm a some tweets that and I visited the Amazon store and December of 62, been a while Minnesota and the baby with the tweets of Sean a lot more of the Amazon basic showing up in the store did you see evidence of some of the private label stuff kind of creeping. Jason: [9:50] Yes in categories that are related to electronics right so that they get a lot of the Amazon basic bike cables and batteries are our merchandise but they're really merchandise as accessories for. The fire tablets and things like that. There's not a display that's like I sorted based on being Amazon basics for sample there just interspersed on the on the displays where they would be most appropriate. Scot: [10:16] Yeah we're going to talk about a little bit later but they've got enough private label and apparel I wonder in those New York stories if we can't magically see a little infection section open up and be kind of nurse in to see how that progresses. Jason: [10:27] Yeah it it's only well-liked into Italy the stores they design so far are lacking some amenities you'd normally expect in a Apparel Store like dressing rooms and things like that but like. Could easily be retrofitted or or more to your point like the next door could easily Adam. Scot: [10:43] Anything else from from the roof. Jason: [10:46] Nope I think given all the other exciting stuff we have to talk about that it should probably cover it on the Jason trip reports for this week. Scot: [10:55] Cooper Center in the Amazon new section I wanted to go back to shop talk and that was kind of late March. They had Amazon had two speakers at shoptalk this year which is interesting bit been notoriously shy about going to conferences but, they were pretty bold today had Stephanie Landry in this was her second year at shot talk and she talked about prime now I didn't really get much knew from that other than that continues the area where they are aggressively expanding, I'm in one of the things I like two references you know they sent really once they decided to put. Pedal to the metal on Prime now they opened up in 4245 markets in the span of two two and a half years so a lot of people, talk about these experiments are doing in the coffin so it's just an experiment but I always caution people that, Amazon decides this out of the experiment they can scale it really quickly so it was good reminder, program and what they can do and you're one of the guy thats decided to build a consumer-oriented business one of the most interesting quotes from that was it when someone looks good. Question from the audience about, the profitability of it and she said well it Amazon know we really focus on the customer first and then we can we saw for profit II, and that in the cooler that was the interesting part and she said, it's much harder to sell the customer problem then a customer experience problem kind of meeting you this whatever they're building isn't lighting customers versus a profit problem. [12:31] That's really kind of an interesting talks about putting the customer first but Amazon really really does it and, the donut since day one when they could afford to now they obviously have the luxury of being able to do that but you know they really don't care about the probability this thing they want to really don't know that customer experience and then they'll kind of get there on the profit side and that's how it started when Prime launch never thought they were crazy and it could never, make any money and I. [12:58] When I heard from Amazon and sit there is a lot of controversy as a launch that the basis was really into it and a lot of people could you do the math on Prime you can kind of say. Our best people aren't going to pay for shipping and are worse people are going to get free shipping and there's no way this economic make sense but I think they didn't those people didn't count on was. It was such a delightful program for customers their volume when up connects and then it going to match Pace herself so it was kind of interesting it was, but I like that one comment. The second speaker was the first to stop talking it's Peter Pharisee and Peter for a while and he works for Sebastian gunningham and runs the marketplace part of, Amazon and the surprise from me is when I've seen him speak at our conferences and and I think it's been an internet retailer wants it's usually about the other sellers on the marketplace. Did this talk at shoptalk was 100% about brands, talking it essentially the whole thing was targeted to Brands how they're an important constituent Amazon and then he talked about, for reasons why they should saw on the platform they're all pretty obvious no shipping we have the scale we're friendly DeBrands these kinds of things it was a real surprise because I've never seen Amazon talk that way about Brandon Sac to know if. If one of the questions I get a lot is what does Amazon have any chinks in their armor that kind of thing. And the relationship with brands has been strained and you know some some Brands I talked about it in my panel where you know a lot of Brands we talk to you. [14:31] Go with the nuclear option I call it where they essentially say look we're going to yank our stuff Nike is kind of most famous or they've decided not to work with Amazon and a 1st or 3rd party relationship and they prohibit people from selling any authorized resellers from Sun their stuff on Amazon, so so I think Amazon realizes that's a challenge and they kind of had a softer messaged for Brands than I've ever heard. [14:52] Did you a catch either this. Jason: [14:55] Yeah I got both of them and I would totally agree with you on the Amazon Prime now you know both how fast they were able to scale that and 18 months getting to them when they have to us but also you know the shocking thing is, it was like a hundred and eleven days from the first meeting where they discussed doing one hour delivery opening that first. 1 hour delivery concept ride in so that that level of agility is super impressive and terrifying. And I just like to quote someone was asking when she describes Amazon Prime now the think the picture of when has in their mind is that's the service you use to deliver the cold medicine when you're sick because you physically can't go out of the house, and you need to quickly, and she was pointing out that those kind of emergencies are are part of the service but that the overwhelming majority of the service is not for those things that need to be delivered in an hour but rather for things that consumers just wanted an hour and so it's it's less about. You know it only gets used as a necessity and more than it's a delightful customer experience that people appreciate I also. So that you know that sort of reminded me of another Super recent Jeff Bezos Square where he was talking about how they had lots of great Innovations over the years that they loved inventions that Amazon loved. Consumers didn't really care about and he is talking about the fact that like I can assure you that no no invention that consumers don't adopt has ever been disruptive in so just sort of. [16:27] Focusing on the fact that like the hardest part of this whole equation is is figuring out an experience that that's magic to Consumers and that they want to do. Scot: [16:36] Yeah you just reminded me to that I think some breaking news Stephanie put out there is that occasionally if possible on Echo orders they will if it's in pruritus that and Delight customers by delivering it in an hour, did you did you catch that Amazon. Jason: [16:54] I think you're exactly right I think she said that like if if you order from from Echo and it's available in Prime now they'll deliver in an hour that sort of surprise and Delight you. Scot: [17:06] Cool and then another thing that's been really interesting is so so since October unrelated but what happens is that kind of screwed into the corner of Wall Street and kind of, you know that check their channels and they update their models and, right towards the end of March and early April everyone started doing that and several analysts came out and said you know we we actually think Amazon underpriced here and a, the time Amazon was out about a hundred $800 the stock price and some analysts came out and, for that I follow are there kind of called what's the axe on Wall Street which is kind of the leading analysts they really but that price Target up to over $1,000 so one went to, 1025 and even kind of sad you know we think. The Amazon probably will be the first trillion-dollar market cap stock so then a couple other in-laws followed suit and then the stock took off and as of this recording it's about $900 so that's. Pretty big run from 800 to 900 what is that, yeah I'm about 15% and yeah when you're dealing with a company decides a Amazon that that is a material change so Amazon is worth about twice the market cap of. Not now market cap for one thing and revenues are different you know Walmart has more Revenue than Amazon all these kinds of things we're just talking about the what Wall Street thinks the two companies are valued at, I'm in if you do those notes so that's a good headline right now to lead our company thousand 25 on the stock in the stock reacts but. [18:43] I make a habit of reading these things and it is pretty nice thing you know they talk about different colors that that Amazon has now the one that it's been pretty crazy about is the cloud computing Amazon web services. That it continues grow faster than people have thought and be more profitable the prime business with Amazon is having to disclose more about prime than they ever have and in their annual report, they gave some new disclosures that essentially let people back into that there's between you can get a range it's not exactly have to kind of make some assumptions, between 50 and 70 million Prime users so it's kind of putting it about 65 million Prime users show, that's bigger than some people thought it's smaller than others but it puts a real number there with people are pretty excited about and then the other thing that the new disclosures did is a. Put some boundaries on the ad business I just kind of two parts to the Amazon advertising business there's. [19:39] ICBC peace and that's broken out in their financials one way and then there's a banner key switch is broken out another way up and it's a pretty material business it's it's you know it. [19:50] Any projected growth forward it'll be the number three as business behind Facebook and Google next year so it's already bigger than Twitter. For example show. People get pretty excited by that now scale wise it's in the single-digit billions and Facebook and Google or in the very high double-digit billions so it's going to take a long time to catch them and I don't know if it ever will be I think. It was pretty excited by that because it's also extremely high margin business along with AWS season. [20:23] In kind of another color. Is it that's interesting is and yeah we talked about it here on the Jason Scot show first is this kind of Alexa and when Wall Street talks with Alexa their kind of wrapping a lot in their there. [20:36] Not only talking about the personal assistant but all the things behind it the semantic engine the machine learning the all all the natural language processing in those kinds of things, and what about analyst Mark mahaney he's kind of said that. 10 billion dollar business in when you report it is not just the sales of Alexa devices but all the ancillary things around the same time Amazon also announced Alexa for the iPhone which is. [21:03] To boxing I want to talk about I'm just talk is. You know that Wall Street is also waking up to the fact that at the same time where these analysts upgraded Amazon they downgraded Google which I thought was interesting and I specifically in the Google Beyond grade called out and said, we believe the Goodwills on a crash course with Amazon and decided the study of United Site a lot that shows that products arches really switch from Googled Amazon but they also talked about that business and they did make a pretty compelling argument that a, you know in a world where Amazon news whatever the buying that ad. Business could be more valuable than Google for Google has some search intent but Amazon has a product intense that was kind of interesting take and you and I have talked about early on. Is it go to this voice is just your voice, so we're going to call it kind of world Amazon monetizes by selling stuff and Google they announce recently too then. Montage by ads and there now putting ads into you know some of the different things you do on the Google home assistant which is pretty cheesy to be honest with you show. [22:07] Really interesting. Example of of Amazon having someone's back against the wall in a funny way and no Google trying desperately like let's forget the customer experience through some ads right in here when you ask. Does the home assistance for the weather kind of thing it's this really really terrible so I thought show, I know we have some Wall Street folks listening but I thought it was really interesting to hear a lot of what we talked about really summarize really well as it's kind of you know the pillars behind this this upgrade, and then when you we look at that the result of that Amazon is now worth a Walmart at Target a Costco BestBuy and CBS all together so that's another kind of interesting thing the other result of that. Is that Jeff Bezos rocketed up the Forbes 500 list two number two jumped over Warren Buffett and a second only to Bill Gates so. To put that in perspective and haven't seen when do this this is a Jason Scot exclusive show, Bill G is at 84 billion and Bezos is now at 76 billion as of recording this so I did the math and if they Amazon stock gets over a thousand, assuming that there's no big change and let me a Bill Gates is doing then he will be the richest person so there you go. Jason: [23:29] That is crazy I asked you for the Jason Scot show and I'm I believe that those two guys live like a mile apart so that's a pretty affluent square mile in Seattle. Scot: [23:41] Yeah yeah on if they like check each other's mail in their gun and stuff. Jason: [23:46] If they are I would hope that people that do that. Scot: [23:48] Yeah you never know hey Bill could you check my did you watch the dog one at a time. Jason: [23:56] Exactly I think Jeff would have a robotic dog. There's a bunch of other Amazon stuff going on as well as one that. Got a lot of attention in my world is there some leaked invites the Amazon has invited a bunch of the, the brands and protect the consumer packaged Goods Brands to West Summit at Amazon where Amazon wants to talk to them about getting more serious and selling direct and give them some advice about what they need to do to, successfully sell Direct. Scot: [24:38] What's what's the buzzer you heard any some scoop on that whole thing. Jason: [24:42] Yeah well so the. The sort of clickbait headlines then because you know Amazon wants to partner with Procter & Gamble to bypass the Walmart and Kroger and all those those things and well. I think that's certainly true, I actually think that Amazon is is less worried about like stealing those customers from Amazon or from from the traditional brick-and-mortar retailers and Amazon some more interested in, setting those those Brands up to be more successful on Amazon in the digital era so I think this this is a lot more about. Kid convincing and controlling these companies to change their product configurations to be more e-commerce friendly so, think about the bundling sizes think about how they package their products you know in a lot of other product categories Amazon very successfully was able to get manufacturers to change how they package their goods to make them more, consumer-friendly on Amazon so they had this whole frustration free packaging program for example and, consumer consumer packaged goods are predominately designed to Market to customers on a store shelf and so their package really isn't very friendly too. A shipping in that Amazon cardboard box and I think Amazon interested in convincing them to fix that. Scot: [26:11] Yeah yeah yeah and then no Jason Del Rey who's been on the show had some interesting kind of reaction from the brands that felt like. Another too caught up in this Amazon vs Walmart war and everyone wants lower prices so that's certainly not a not a pleasant place to be what would you advise to brands that are kind of. I'm sure you guys get a lot question about this one how do you tell folks to avoid that. Jason: [26:36] Yeah well I mean to twofold I got I do think of you a brand that that's in that space that you you do want to be on Amazon at this point right. Like more than half the growth in that category over the next three years is coming from digital and Amazon is today more than 50%, of that that digital pie so pretty expensive mistake to, not be where all that customer demand is on the Amazon platform obviously we did we did show a couple weeks ago with Melissa talking about the a lot of the fundamentals of being a. On the Amazon platform and Jason does article really sort of. Emphasize one of the points from that show right and that's that there's this this really real negative cycle at the moment where. [27:30] You sell products on Amazon and so you don't party yourself to dream with Amazon is that that you'll give Amazon the best pricing and you won't sell it less than them and they have all these algorithms that watch your price and react to them, so so did when you give a different bundle to Costco and Costco selling a case of Campbell's Soup and the price per ounce in that case is very low. Amazon sees that and drip drop the price on quantity one of that that can of soup to that super low price and then they're selling a super low and then Walmart emergence kick in, and start beating you up for selling the product much lower on Amazon then you're offering the quantity one price to Walmart, so that the challenge at the moment is. Is that you when you think about these products of you really think about reconfiguring the products for. E-commerce you probably want to think about more than packaging like you you probably want to create. Different skews that are different enough that they don't trigger that that's where the pricing cycle. [28:42] And so that potentially even means like you know different formulations are different flavors or or you don't. [28:50] Different sized squares of Swiffer on Amazon than the squares at Swiffer that you buy. In Walmart so that those aren't the same skew and they don't they don't get caught in that pricing cycle. Scot: [29:03] Any definitely wanna make sure your Warehouse bundle isn't comfortable feeling so good that stuff. Jason: [29:09] Exactly and I do it in the long run that's just not sustainable like that you know the both Amazon and Walmart or someone. Benefiting from that at the moment and then warm in the margins just aren't there for the manufacturers to get squeezed between those two guys and so you know either. The manufacturers will have to find some other way to survive by selling direct without those guys and those guys are both launch private labels and you know I think we're seeing the Collision Course between these product manufacturers in these in these products resellers. Scot: [29:43] Another Hot Topic kind of in this vein is Amazon truly ramping up private label as we talked about at the top of the show so suppose folks are familiar with Amazon basic switches things like HDMI cables and whatnot, another Washington lest I follow has done a lot of research and it's fascinating start some usually the trademark, the bowels of the trademark database and Amazon this is hard because Amazon uses a lot of shell corporations. [30:13] Misdirection let's just very legal misdirection to try to hide what they're doing so these folks kind of trying to get down and they know that. This agent to really works and Amazon and there's ways they can get back into it then they searched on Amazon and they kind of, figure out that if these things they find our exclusive on Amazon to prime or or there's a certain you can kind of tell how the age of the pages are written the. It's actually private label so they've identified a good kind of. [30:42] 15 to 20 private labels that a lot of people don't know about one we talked about on the show is Amazon elements um and you know. We we talked about that but the area where there's the most growth is in apparel so there's things like. All of moon is a woman's Bohemian inspired casual clothing it was hurting both of these are prime exclusive which means that if you're not on Prime you you see them but you can't buy them and there's a lot of worry, and the way the way I seen it now is. So Amazon has you have the name brand so let's see all pick on one I don't know a good Bohemian brand but let's say dress shoes show. Men's dress shoes so they'll have. Cole Haan or someone like that and that'll be the name brand and let's say that's like $125 then we'll be a Chinese kind of just no no straight from the manufacturer and it will have a brand but it's brand you ever heard of, I'm in it is clearly in a clearly a Chinese brand so it'll be Brand X and it'll be. $30 Lynnwood Amazon will do as that's a big Golf Mill kind of split the middle so somewhere in that 60 to $70 is were there and check their private label. And it will it will have a much more kind of now it feels Amazon it feels like it's backed up by Amazon Prime exclusive, doesn't exactly say Amazon all the time so like to have one Franklin and Tremont some kind of sounds like was at Johnson and Murphy so that Franklin and treatment which is men's dress shoes and that that will be in that 60 to $80 great show. [32:18] And asked me to hell, why how do they decide where to do this and what I've heard from folks is its data driven so they can actually know their database gotten smart enough where it will go identify, and balances between supply and demand so they'll see there's demand in men's dress shoes for an $80 shoe and they will go. Godin work with manufacturers and create what they think is a missing by looking at the data and put it out there so that's really you know. [32:49] Everyone in cpg in grocery stores does private label but I think the way Amazon is doing it is is pretty unique by for a couple reasons the way the way they're laying it in with the Chinese manufacturers going directly to Prime and those kinds of things. Jason: [33:03] Yeah and I think what's interesting is even you talk to release a few people and they they have you know they want to talk about Amazon private label strategy and I like to point out no no no no. Private label strategy it's a label strategy. [33:19] That way you know a lot of the traditional private label it's about like in all the same feature set at an alternate a price point. And you know a lot of these products like their they're targeting alternative price points not necessarily lower by the way in and they're they're optimizing features for that price point so you know these are. These are not just knock-off products of a national brand and Mini cases. And so you know and many of them they're putting marketing behind trying to build the brand and the most notable today of course this is Alexis is a total credible, billionaire brand that that Amazon has built and so. I wouldn't necessarily say there a great brand Building Company yet but they're getting consistently better and they're iterating and so I don't rule out the day that that's some of these apparel brands. You know how are legitimate brands on their own that that stand out and have customers that are interested in buying them. [34:22] I think I'm pretty interesting one you mentioned. [34:27] Amazon elements day I just got an email they have launched a vitamin D products so this is entering the nutrition space which is. Another space that I think. Their data has shown then there's an opportunity and right now it's an exclusive invite only products you have to apply to buy it which I did and I just got accepted and one of the novel features. Is it that they have sort of the Amazon Firefly x-ray technology built into their product packaging in so I haven't received the bottle yet but like when you ain't Amazon app. With your camera at these new bottles you get a ton of supplemental information about the product so it sort of. Enhanced virtual packaging for a for these products. Scot: [35:20] Yeah that's kind of a page out of the on this Playbook right but they. It's hard to put that all in a little vitamin bottles eyemagine that's kind of part of it is bye bye running out of real estate they can and it can be dynamic too I guess if they can. Jason: [35:35] Yeah and change it all the time and again it goes back to this in the old world where you printed the label on the package and that was your marketing and then that label lived on a Walmart show, that you know there was one approach but in this new world where it's coming in a cardboard box that that packaging plays a different role right like it's it's not the zero the first Moment of Truth for you anymore it's a post ownership experience that's most important on that bottle and so you know it's pretty interesting that Amazon is is obviously the first move there but I think a lot of what they do talk to the cpg companies about in their Summit, is a sort of moving in that direction. Scot: [36:16] And then the big news since shop talk I'll let you jump into that one. Jason: [36:22] Yep so we've been talking about this for a little while that that Amazon had another store concept it was under construction and they unveiled it last week. And it is called Amazon Fresh pick up. [36:35] Inside this is a extension of Amazon Fresh do you build a cart of products in in your app. [36:44] On Amazon Fresh and instead of having them delivered to your home. They are available at this Amazon fresh pickup location and you drive through what amounts to sort of a drive-through stall. [36:57] I'm at this location and someone comes out and puts the groceries that you ordered in the trunk of your car so you never have to get out of your car. You don't have to perfectly synchronized being home when the Amazon Fresh guy comes to your house so that you can get the milk and put in the refrigerator you go and pick it up from Amazon when you want. But it is a lot more convenient than having to shop and bag for all your groceries yourself. So we we talked in this show a lot that buy online pickup in-store is probably going to be the dominant model for digital Grocery and you know that that's one area where the traditional grocery stores have a big advantage over Amazon because they have a bunch of stores. Amazon doesn't I think what we're seeing here is Amazon's first generation answer to that problem. [37:43] I'm delayed open a store and the most notable thing I think we expected all of that we were curious whether you be able to walk in the store and buy anything which at the moment you can. But the big sword of fire across the customer experience is that they are implying a 15-minute guarantee. So 15 minutes after you quick check out on your mobile app your groceries can be ready to put in your trunk and so what that means is. You're just leaving your friend's house from dinner and you realize you need some stuff for breakfast in the morning, you know you can order it and likely swing by that the Amazon Fresh pick up location on your way home or you can remember at the end of soccer practice that you need some stuff. Order it on the soccer field and pick it up on your way home none of the other grocery pick-up have anything like a 15-minute guarantee like most of them don't have a guarantee, some of the best service levels are you have your groceries ready in an hour and much more typical is will have your groceries ready in like 4 or 5 hours and so. You know once again this is kind of like you know the industry shipped everything in one to two weeks and Amazon comes out and says will ship everything in 2 days. You know they're saying will do buy online pickup in-store but we'll do it in 15 minutes. Scot: [39:00] Yes the grocery I had like 3 questions for you so the first one of watch the video like 50 times the, it seems like it's very shoppable the store do you feel like actually go in and Shop or will it be restricted to just pick up area. Jason: [39:16] So I expected before they announced it that there would be some limited use cases of going into the storm shopping but might take from the video in the folks I've talked to is than this first generation that's not the intent that the that the inter the store is exclusively for, the merchandisers to do product picking and take the product out to your store, car so there is no get out of your car experience in the store at the moment is my understanding. Scot: [39:45] Looks like there's this kind of bank it's almost like a Sonic drive-thru where there's like, these Banks of places drive-through rights instead of this linear model that my grocery stores to have you going to parallel model and it looks like there's two 15 Lanes but that's interesting, that makes the scheduling kind of thing make more sense right because you get this window you go up there and that your understanding and. Jason: [40:13] Yeah are you want to serve customers and parallel Nazi really red so, the more of those pick up Windows like they're not windows but if you know you saw that the more of those Lanes you have the more simultaneous customers you can serve, oh I would suspect that there's not a fixed number of those lines I would suspect that that the number of lanes they offer is going to totally depend on the. The footprint of the site they have for the store and and you know that. Demand density in that in that go I would say that a bunch of the other grocery guys that have gotten serious about grocery pickup, do something similar so you go to the market where Walmart is doing grocery pick-up you will see like a big Bank of drive-thru stalls, that frankly was very similar to the the Amazon model but the big difference at the moment would be that that 15-minute guarantee. Scot: [41:08] Got it and then so no one else is close to that because my frustration is our local Harris Teeter offers it and, you know what you go through you carefully pick all your groceries and then it says oh I'm sorry this is like Friday and I'm getting my weekend groceries in it'll say we're sorry there's no slots open for the weekend your kids your Tuesday hot. Jason: [41:29] Yes so you've hit on a super sore subject most of the grocery pick-up have like two flies right like the window is too long so you you didn't. Do a big advance planning thing and you want to pick that up pretty soon after you ordered any Mini cases and so in very few of the grocery stores have a guarantee they have service levels they shoot for right like so. The shoot for that hour but they don't guarantee that our, I mean that's a problem but then the bigger usability problem that you just highlighted it is almost all of them won't tell you what the pickup window is until after you build the list and check out and so you don't find out that they can't meet your needs and till after you've invested a bunch of work with him which really, frustrated customers and makes customers mad. Scot: [42:16] How does Sohail how does Amazon get around that by just kind of saying I feel like the grocery store must they must want to know how much is in the car to know how much time so Amazon something. Jason: [42:29] Yeah I mean my assumption and it again it's not. 4 slice of the video implies that they can do it in 15 minutes it does not explicitly say they have a guarantee. And so at the moment it's for employees only somewhere to go store so we haven't actually gonna try it or even yet talk to someone that's been through it all I'll be back out in Seattle in a couple weeks an alternate logo, go stock the site and see what I can work but. If it's a true 15-minute guarantee then you know that puts all the onus on Amazon and it takes all the burden off of the customer right like you don't. You don't need to worry about if you know you're never going to get have to wait longer than 15 minutes so you just you just jump in order the stuff to do it. But we'll have to see to your point like if you can't know your pick up time until after you build your list then that really limits that utility. Scot: [43:26] Yeah so who do you think the main company is going to step up and kind of this are using people just aren't worried about it cuz he's just an experiment. Jason: [43:35] No I so I think the two people that are most worried about it have already been countering it before they want to store right like so I think I mean. That Walmart sells the most groceries of anyone in the country and they have. [43:52] Probably three or four hundred of these pickups tours and you know they do have quite a few that dedicated pickup locations, similar to the store that aren't even Walmart store and you know frankly if I showed you a picture of it and took the branding off you'd be hard-pressed to tell the Walmart pickup store apart from this Amazon Fresh pick up store so so you don't Walmart is certainly doing the play from their side, Kroger has now rolled out pick up in store to 400 stores Kroger's the largest. [44:23] Actual grocery retailer in the US and for Tampa Bay on your Harris Teeter Teeter is what is one of their brands. I think they were actually the first ones to do pick up I think they did pick up before trigger bottom but the. Both of those companies understand that that's going to this is going to be a huge use case they have to get it right in there both investing a lot of money along with Amazon you don't I think. Before Amazon watches store they wouldn't you know you would have said hey hear the things where Amazon has a huge advantage and and we have some huge advantages to we have 4000 stores are we have 2000 stores we have much bigger parking lots in all all of these sorts of things, you know I think the big the big fear here is. The Amazon recognizes the pickup is a significant opportunity in their opening a couple stores and. You going back to RR Prime now conversation. If these stores work well for Amazon and they they demonstrate customer demand that this is delightful experience for customers and frankly like I've seen a lot of evidence that customers really do like grocery pickup. [45:33] I think they could scale those store super quick right like I think they could either buy a retail and convert all that the that retail footprint into these pickup stores. Or you I think like they did with Amazon Prime now they could easily open $2,000 things in 12 months of if they decided that the market supported. Scot: [45:55] Yeah speaking of Amazon go there was some news there what's up what's going on with you. Jason: [46:00] Yep so you know they watched it last year in 2016 and it was for employees only and just supercoat reminder this is, the convenience store will you grab the items in you you walked out of the store and you don't have to check out or pay or do anything and artificial intelligence in the cameras in the store. Figure out what you took with you and charge you for it so it's just walk out technology hashtag jwalk. [46:24] So that was supposed to be for employees only last year and was supposed to open to the public early this year and as of now it's still hasn't opened and there is a lot of internal rumors that it's not going to open to the public for a while and the reason is, but they are struggling to support some of the edge cases and one of the biggest cases they're struggling as support, is apparently when they get more than about 20 people in that store the time they lose the capacity to accurately track all those people and their purchases. And so like you have a few people in that store and that the technology seems to work very well and you know again I can neither confirm or deny that I have myself been in the store and tried it and it worked quite well. But it's easy to imagine that that there's not an unlimited capacity to track people and so you know. Scaling could be one of the problem then so you know that the rumor is hey this is super interesting technology but it may be further away from. Being totally commercialized because they need to sell some of these these ads cases in this capability problems. Scot: [47:30] To get some computer problem or you think that 20 people the chances of being able to date they can't tell them apart if you think it's more. Jason: [47:38] I think it's both of those things I got like the number of people is just one of the edge cases they talk about other education as wife. I got it takes off his jacket when he's in the store or guy puts on a hat when he's in the store. And you know all of all of those things can be hard like as I pointed out in the fact this is kind of a mock store it's only three gondolas there's no blind spots in the store you're not allowed to use the restroom in the store you know how all these other things. I'm inside you don't from day one I looked at this and said hey this is totally cool technology. But I don't think we're going to see a fleet of these stores competing with 7-Eleven in the near term because it. [48:16] Even if you nail the experience in this little prototype with the three walls of Prada. [48:22] You're still a long way from being able to do it in a 7-Eleven and you're much for the way from doing it in a 200,000 square-foot Walmart store. So it's cool technology is you think we might see parts of that technology before we ever see the whole store so one thing is. Does cameras take perfect inventory and every retailer struggles to know what their inventory is every retail loses a ton of money because they have out of, they have soup in the back of the store in the store room but they're out of stuff on the shelf and customers are shopping for soup, and it takes 6 hours for a quick to notice that they're out of soup and they have to go get more and bring it out but with this technology you know exactly what your inventory is so it makes it better for buy online pickup in-store it makes it better for, showing your inventory to people that are pre shopping and don't want to drive to the store until they know you have it in stock and it makes it better for all these out of stocks and all these sort of other use cases so I think was on commercial that piece of the technology before they completely. Commercial ice JJ Watt. Scot: [49:25] Cool I'm picturing all these Amazon guys watching the security tapes and they're like who is this guy taking off his jacket look at this hat and like to juggling apples and I have a feeling that guy looks a lot like our very own retailgeek. Jason: [49:39] You you you do you don't even have to pick her if you go to the store in the far corner of the store like this the stores all windows and so you can actually see the back room with all the guys dressed in Orange, they're watching tablets and frankly that's that's exactly what they're doing they're helping, teach the machine the edge cases so it's not like they're the computer can follow you in there and it and they're replacing the computer with humans but what happens is when the machine gets it wrong a human. Audited and tells the computer what's right so the computer can get it right next time in and you you could watch those guys work if you stand in that corner. Scot: [50:17] Call Lisa friend told you. Jason: [50:21] You can see that from outside the store so. Scot: [50:23] Okay good. Jason: [50:27] Couple other little things I know we were burning on time but Amazon was pretty interesting new influencer program so that they've always had an affiliate program, where you know you can you can blog about stuff or put stuff on your social network and put a link in it and you'll get a commission on the sales on Amazon. And you know if anything they're tightening up that affiliate program and I think you know if you months ago that they will wear their commissions on a lot of stuff but they Now launch this bespoke influencer program which is targeted at. High-volume influencers and it gives them custom vanity urls, I think it rewards than more generously for sales and it's just it's an interesting invite-only program and the reason I say it's interesting is. The news influencers are really becoming the new product marketing vehicle so like in the old world what you generate product for demand for a product is you buy Super Bowl ad are you run a TV ad and you, you reached 30 million people in one shot now the way you generate demand for a product is, you know through these micro influencers in and finding the woman that that talks about the particular makeup style, that suits your product and getting her to blog about your product and put links in it and Amazon appears to really recognize that Trend in is building better tools to support that trend. Scot: [51:51] Yeah we've we've talked about them and if folks had a chance to listen to the coast program for example we talked about kind of the death of the the merchant King of the merchant Prince and forget all we got, and I. [52:03] Merchant Prince so this is this is you read about these influencers replacing and it's kind of Amazon saying yeah this is this is a thing. Jason: [52:13] Yep yep so that's interesting Amazon did the first drone delivery in the US last month so I thought that Mars space conference the Jeff Bezos was that, date they do it hurt some sunscreen and then I thought the first time they got FAA approval to do a commercial delivery in the US I think one that got a bunch of bugs this week is, did they stole the NFL deal from Twitter. Scot: [52:38] Yeah so the scoop there is last year Twitter bought the streaming rights for the Thursday night games I think there's four or five of these games the kind of itsfunneh, they didn't play out but there's notoriously that the running joke is the Thursday night games and up being like. The worst games out there because it's usually like the worst two teams in the league kind of think so. Jason: [53:02] I know you're talking about my team is on every Thursday night away. Scot: [53:05] Yes the Chargers and the I don't know all the Cleveland Browns. Jason: [53:13] Cleveland Browns we play the LA Chargers play the Cleveland Browns every Thursday. Scot: [53:17] Will guess what and now it's going to be on Amazon Prime and the Twitter deal never made sense to me and there was there some interesting scuttlebutt that you know to Twitter paid 10 million. And when they pay that a lot of news folks reported that folks are scratching your head, they knew any of the other people that been on this would be like Google with YouTube Amazon bit on that last year imagine with Facebook is now in the running for these things that you have a bit more and there was scratching your head why did Windows, Twitter didn't do much with it and now Amazon has won it this year and they're paying 50 million so 5x with Twitter page, obviously that's a lot of money and you know the people are kind of saying we'll why would they do that. And what's interesting is if you think about Amazon prime number one that Amazon has already announced it's going to be prime exclusive content. They have a lot of data on this so you know they've done another number of programs that driving program his name I can't remember you pray noticed. [54:19] And you know they've picked it up for these things and it brings in enough subscribers that have more than paid for itself so to do the math of this if you kind of think of, hundred dollars for Prime which is where Prime is right now you really only need about 50,000 new Prime members to come in and justify that $59 price tag, those are big numbers but when you have 65 million Prime people get another 50k actually isn't that. [54:45] Doesn't seem like that hurdle and I would imagine there's if you're an NFL fan you're sitting on the fence and, this is as you get access to your games and you get free shipping and all the other things that come along with prime so I imagine it'll actually be pretty lucrative for them and and possible so that's kind of a call I guess. The other thing I saw just quickly Amazon is really hurting a lot of customer service folks they announce they're going to hire 30,000 customer service reps, and they're doing a lot of customer service reps working from home, this is interesting we're hiring a customer service rep at my company spiffy actually interview the lady that had done this before, show you what Amazon does this they essentially they train you that give you an online training program on how to be a good front line customer service, person and then they just have some basic requirements for you to do this at home usually its high-speed internet desktop, or laptop that's higher end and then you need to get a mic with a headphone and a mic cept they actually tell you the ones that they recommend, and then, they actually will turn you on you know you you've been kind of run this program you check in and you're getting a customer service calls and then you log out and you get paid on kind of an hourly and ratings and and performance bases 3 inputs I found that fascinating and kind of funny, right after I talk to this lady Amazon announced that they were productize in this so anyone can use this functioning functionality now it's part of AWS. [56:20] And it's that this call center that lives in the cloud and it's called Amazon connect, and then before that they took another internal to over they have there and videoconferencing Build-Off AWS called Amazon Prime so Amazon is now kind of putting out these things and then release him to AWS which is which is itself. [56:41] A TBI system it is really kind of small Lego blocks to couldn't do anything with unless your developer and now they're actually kind of releasing these pretty robust applications on top of AWS, another quick one is the announcer opening yet another for Film It Center this was a million square feet in Virginia. And finally they made what's one of their bigger Acquisitions in a while and it's this Marketplace from the Middle East called so I think I'm saying that right Sou. Tube.com that started in the UAE and then, Calibre where it has like lots of countries in the Middle East that a cover so it covers Dubai Abu Dhabi Egypt Saudi Arabia Kuwait and Bahrain, there's it's rumored that this was a $659 acquisition of the company had raised, money at kind of north of a billion so she could have a bit of a Down Round but I think a good outcome for those folks there is some other really big Marketplace that's launching out of Saudi Arabia that has in a billions of dollars of investment, think it's this is kind of Amazon playing a little bit of defense and suit kind of thing on this is a good time to find a safe. Courtney storm I looked can't find the DMV for that but the Middle East is it your 50 million people, lots of opportunity there so so but interesting play on Amazon Amazon news day. [58:05] They also shut down I'm sure you saw this some Curious we think they should down Quincy.com the whole not just good you.com but the diapers and all the subs, things are weird news about this so they they shut it down because it wasn't profitable and but then several people, Channel each to the press that well we just had Amazon zigzag here at the annual kickoff which I imagine would be like, January I'm saying that you know where this path to profitability and we've had a profit month so a lot of people scratching their heads and so people reading the tea leaves there that this is some kind of a, Bezos messed around with Mark Lori who's over the founder of jet that's not Walmart not really sure I buy that but any thoughts from you on that. Jason: [58:51] Yeah I know I have the same thought as you I got I just don't think that. Did Jeff Bezos is going to screw around with a bunch of people's Alive's just to play a game and Mark Laurie right and you know there are people that are losing their jobs at Quincy. And I think there has to be a sound or business reason that they're moving away from it and I've heard the same rumors you that they haven't been profitable but that there, Basie profitability in 2017 so that that makes you scratch your head why they closed it and the ones out that occurs to me is. Did the Dave they vacillated back and forth on this idea of having all these separate URLs and. Distributor sort of Distributing there traffic across all those other URLs versus aggregating it all in the. Amazon property and I do think it's possible that in the early days they felt like Amazon wasn't a credible source for some of these these specific product niches and so having a dedicated. URL on a dedicated site made sense in there you know where moms that would want to join the. The diapers.com program that wouldn't want to be Amazon moms and you know that back then there was the SEO advantages to having diapers in the URL and all these sorts of things and I think I think of Donna way I think. I think. The Amazon bran is much bigger and stronger today and I just think Amazon may have decided that makes more sense to aggregate all the Shoppers on the Amazon platform and have him get access to all. [1:00:24] 400 million products and then it's just it's just not worth continuing to work hard to get quizzy to profitability when the core platform is going so well. Scot: [1:00:34] Yeah and I'm not sure they Consolidated the back in like some of the other things like they definitely have Zappos but I've never heard that they - Consolidated that I think it was still running out of a warehouse New Jersey and stuff so. Jason: [1:00:45] No I need all the employees for sure where New Jersey so I don't I don't I'm not certain about the tech. But I think that's true and the other thing I would just went out as I think all the employees that Mark Lord knows the web from Quincy he took from them long ago and they were to check which was also it would New Jersey show. Scot: [1:01:01] And they're all at Walmart now. Jason: [1:01:02] Yeah it just doesn't make sense that that that that Jeff is doing that for out of any malice for Mark. Scot: [1:01:09] Couple that was a heck of a lot Amazon news they've been busy busy little guys up there in Seattle any non Amazon news you want to hit here at the bottom of show. Jason: [1:01:19] Given time I think just a couple of things there continues to be that this mall again and talk like this, this is shaping up to be a really rough time to be in retail so, there are lots of early indicators that q1 sales for retail just going to be horrible across the board and that's really scary and we're just seeing announcement after announcement about you know retail orders that are. Taking these austerity measures and cutting stores and things like that and so you know, Payless's bankruptcy announcement you you add up all the announced clothes stores and it's over 2,500 stores that already been announced to close this year and we're only in April, last year the major retailers closed 1600 store so where. We're way ahead of last year's store closing and I'm sure we haven't seen the last of that I have a feeling after all the q1 earning reports that we're going to see a lot more negative news before it starts to turn around. Scot: [1:02:26] Yeah couple quick ones from me on the marketplace at so eBay was also shop talking that they had their see you again and when again I had, the head of advertising on my panel and you don't it's going to see eBay is not out of swinging pretty hard he made some political statements there was really excited about but they in the world e-commerce their big announcement was, and then but no you know I think the shop talk trucks I have done a really good job of getting people to announce things at the show that that's kind of. Makes it extra special worth going to so they announced at the show, two things essentially that you don't number one they have a new program where they're going to guarantee 3 day delivery on about 20 million items on eBay and they had a program called Fast and free, I was kind of like a loose kind of promised United it wasn't like. Primate you stuff in two days I was kind of this thing kinda gets to you usually on three days we think it will. Jason: [1:03:26] I get to you faster than other stuff. Scot: [1:03:28] Yes me that you kind of fast this is like, it into a launch and hasn't launched yet but you know at least the verbage from the executives is we're going to guarantee 3 day delivery on 29 items.. So that's good you know it's not 2 days but also you don't have to do it so it's free 3-day show, so that's interesting and then use the rest of his time to really talk a lot about machine learning and you're talking about how. If you were seller and you wanted to sell a widget you could take a picture that widget in the email recognize it and kind of say, hey Jason are you selling this podcast microphone and it looks like a roadie 200 and and no do you want to is that right and you want to spend list it for some pretty interesting things you know they're around morning and he pretty much said. You're not going to do machine learning now you're going to be if actually dead and three years when this is kind of the table Stakes so I agree with that, yeah he talked to some skeptical kind of long-term eBay kind of folks and you know the the Starkey kind of answer to that as well you know you go to eBay and search for something you can't find it why don't they put the machine on that part of the site so, yeah that that it is honeybaked continues to cut under invest in that part of the shopping experience so, they had some of the dishes they haven't really known as best I can tell taken root yet but they are working on it but it does feel like, some of the stuff they're doing is nibbling at the edges if you, if I'm what you're looking for so I'm a huge fan so I thought they came out swinging in an aggressive I just I just worry that they really need to prove that customer experience it Scot several iterations. [1:05:08] Not only Amazon but you know how many channel in and all the other players out, the last thing is so Amazon is been investing at this is kind of a backdoor more Amazon news I guess, I've been Amazon really know that they don't break out the numbers but, from all the data that's available like from comscore and things it seems like they're really true that market up there Bill, tennis centers of invested billions of dollars there they were to start up there that they were unicorns mean that over a billion dollar valuation Snapdeal and Flipkart, not news lot of rumors that those two guys are considering merging two kind of have a viable alternative Amazon so it's pretty interesting in in in of the only Market that Amazon is lost in his chinaware Alibaba, had a bit of a head start and Amazon couldn't you know it's a good country for Amazon but it's the one area where they're like number two or I could argue number 3 or 4 actually behind, attention JD show. [1:06:07] Amazon didn't like that and I think they've decided they're going to win an Indian this is a really ended Good indication that they they are. Even though there's some bureaucratic things where they can't do first party there they can only do third-party but they've they've launched FBA so it's a weird country it's it's, spa and third party but no first party but that model seems to be work

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