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4 episodes with Warby
2 episodes with Warby
4 episodes with Warby
2 episodes with Warby
2 episodes with Warby
2 episodes with Warby
2 episodes with Warby
A CMO Confidential Interview with Dr. Peter Fader, Professor of Marketing at The Wharton School of Business. This show is a bookend to "The Rise & Fall of Peloton as Seen Through the Lens of CLTV" with Professor Dan McCarthy.Pete discusses the use of Customer Lifetime Value (CLTV) as key to understanding the true value of the company and explains why it is risky to think "Your company is different." Key topics include: why customer metrics and stock valuations can be temporarily out of synch; why customer metrics eventually win out; how CMO's can use CLTV as a forecasting bridge with Finance; and how Warby Parker's strategic focus did not bend during dramatic stock price fluctuations. Tune in to hear why Warby is the Tortoise and Peloton is The Hare in the classic race.Discover the real story behind Warby Parker's dramatic $6B valuation swing and subsequent recovery through the lens of customer lifetime value analysis. Dr. Peter Fader, Professor at The Wharton School and co-founder of Zodiac (acquired by Nike), reveals how his team accurately predicted Warby Parker's true valuation before its IPO.Get an insider's look at how customer metrics and lifetime value calculations painted a different picture than Wall Street's initial $6B valuation. Learn why Warby Parker's steady approach to growth, unlike Peloton's aggressive expansion, ultimately proved successful. Dr. Fader breaks down the critical customer acquisition costs (CAC) miscalculations in Warby Parker's S-1 filing and explains how proper cohort analysis predicts company value.This episode provides invaluable insights for marketers and business leaders on using customer lifetime value to make strategic decisions, communicate with CFOs, and evaluate company worth beyond stock price fluctuations. Perfect for marketing executives, financial analysts, and anyone interested in the intersection of customer metrics and company valuation.Join Mike Linsing, 5-time CMO, as he explores this fascinating case study that demonstrates why understanding customer economics is crucial for sustainable business growth and accurate company valuation.#growthhacking #performancemarketing #digitalmarketing #marketresearch #warbyparkeripoCHAPTERS:00:00 - Intro02:00 - Using Customer Data and CLTV05:52 - Warby Parker IPO Overview11:29 - Warby Parker's Stock Price Impact15:35 - Analyzing Warby Parker's CAC Error18:18 - Warby Parker's Economic Performance19:36 - Warby Parker: Tortoise vs. Hare Strategy21:36 - Projecting TAM for International Expansion23:17 - Projecting TAM for New Product Lines27:59 - Wrapping Up Warby Parker Insights29:30 - Marketing Advice and Strategies30:16 - Conducting a Customer Base Audit30:56 - Understanding Company Differentiation31:56 - OutroSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
ft. Alonso Duralde, Jacklyn Collier, Patrick Serrano, and Ryan Pappolla When a priceless antique nutcracker, set to be auctioned at the Warby family Christmas charity goes missing in an unfortunate suitcase swap, it is up to exacting event planner, Lottie Morgan and the free-spirited heir to the Warby dynasty, Tristan, to track it down, all while capturing the heart and spirit of Christmas. Watch on Philo! - Philo.tv/DTH
For our second episode that happened before Halloween, Mary and Sarah invite Tedd, the book coach, to join them in this special #redpenrewindrewrite of OPERATION NUTCRACKER. See how they all bring it back to #morepolaha with the balletic precision of a prima ballerina. When an antique nutcracker set to be auctioned at the Warby family Christmas charity goes missing, a demanding event planner and the heir to the Warby dynasty try to track it down. Starring Ashley Newbrough and Christopher Russell.
Moore Street – Rising to our FutureThe campaign to save the 1916 Moore Street Battlefield site and those iconic buildings and streetscape that are forever linked to the most important historic event in modern Irish history has reached another potentially decisive moment.In May, An Taoiseach Simon Harris announced the establishment of “a Taskforce to take a holistic view of the measures required to rejuvenate Dublin City Centre, north and south”. The stated objective is to make Dublin City Centre “a more thriving, attractive, and safe cityscape; and a desirable location to live, work, do business and visit.” The Taskforce is expected to report this month (August).International solidarity needed to end Israel's genocidal warBy the end of this week more than 40,000 people, mostly children and women, will have been slaughtered by Israel in the Gaza Strip. The Strip has been reduced to rubble and hundreds of thousands of Palestinians have been left without shelter, food, clean water and sanitation. This is an Israeli made humanitarian disaster.Day after day courageous journalists living under constant threat from Israeli snipers, drones and bombs continue to report Israel's targeted bombing of refugees; the massacre of families living in tents; and of children starving because Israel is preventing food and medical aid from entering Gaza. In recent days Israeli soldiers deliberately destroyed a water treatment plant in the Tel Sultan neighbourhood of Rafah and an MRI machine at the Turkish hospital in Gaza. This is genocide.Féile ArisIt is Féile An Phobail time again. Well done to Kevin Gamble and all the Féile team for once again bringing us a truly outstanding Féile programme. There was a time, now receding in memory for many people and never in the memory of countless more who weren't born in those troubled times, when August, and the anniversary of Internment, was marked by incursions of British troops and RUC into republican neighbourhoods and days of rioting and deaths and injuries.Féile An Phobail has replaced all that. It started following the killing in Gibraltar of three local people, IRA Volunteers Dan McCann, Seán Savage and Mairead Farrell at the behest of Margaret Thatcher in March 1988 and the deaths of others at their funerals. Our community was demonised in a tsunami of invective by the establishment media and our political opponents. Féile was a communal response to that.
LIVE FROM BRAMBLE FEST 2024! When a priceless antique nutcracker, set to be auctioned at the Warby family Christmas charity goes missing in an unfortunate suitcase swap, it is up to exacting event planner, Lottie Morgan and the free-spirited heir to the Warby dynasty, Tristan, to track it down, all while capturing the heart and spirit of Christmas. Watch on Philo! - Philo.tv/DTH
The world's most-northern piece of real estate just hit the market for $300M — We predict who will buy Svalbard, and what kind of wild polar park it will become.Warby Parker's stock surged 18% last week because of a wild retention stat — 100% of Warby-wearers buy a 2nd pair within 4 years.And General Motors just announced it's killing the Chevrolet Malibu, which was GM's last sedan — turns out, all American sedans are no-more, not just because consumers want huge cars.Plus, Sriracha is pausing sauce production due to green chili peppers — They think it's a problem, but we think it's a missed marketing opportunity.$WRBY $GMSubscribe to the best newsletter yet: tboypod.com/newsletterWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YouTubeSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
The Jason & Scot Show. Podcast about e-commerce and digital shopper marketing. Editor note: We're trying some fun new AI features for this episode. The following show notes were written by ChatGPT. We're also let AI remove all the "stop words" in our audio, and we've switched from Google to OpenAI for our audio transcription. Let us know your feedback. In this episode of the Jason and Scot show, our special guest is Sean D. Nelson, the CEO and founder of Lovesac. He shares his inspiring journey of starting the company as a beanbag business in his basement and growing it into a successful public company. Sean highlights the key moments of his entrepreneurial journey, including winning a million dollars on Richard Branson's reality TV show and navigating the ups and downs of the business. Sean has upcoming book and podcast, both entitled "Let Me Save You 25 Years: Mistakes, Miracles, and Lessons from the Lovesac Story." Sean emphasizes the importance of being a direct-to-consumer brand and how Lovesac has found sustained success by focusing on customer acquisition costs and offering a high-quality product. He discusses the concept of direct-to-consumer and shares his thoughts on its significance. Sean believes that having a differentiated product that provides value to customers is crucial, rather than simply relying on an online sales strategy. The conversation also touches on the topic of innovation and how Lovesac has been able to push the boundaries of what a furniture company can offer. Sean discusses their Stealth Tech innovation, which incorporates surround sound into their couches, as well as their commitment to creating products that are built to last and designed to evolve. Sean acknowledges the challenges of operating in physical retail and highlights the importance of their showrooms in reducing customer acquisition costs and providing a hands-on experience for customers. He also mentions their partnerships with Best Buy and Costco to expand their reach. The discussion expands to the future of retail and e-commerce, with Sean mentioning the transformative role of AI but cautioning that it takes time for movements to fully evolve. He emphasizes the importance of being patient and keeping an eye on developments in the industry. The conversation concludes with Sean expressing his long-term commitment to Lovesac and his desire to build something meaningful rather than focusing solely on personal gain. Listeners are invited to check out Sean's podcast and website, as well as his upcoming book, which will be released in January. Overall, this episode provides insights into the journey and philosophy behind Lovesac's success and offers valuable perspectives on entrepreneurship, innovation, and the future of retail. Chapters 0:00:46 Introduction and Welcome to the Show 0:08:36 The Journey of Love Sack: From Highs to Lows 0:12:05 Love Sack's Traditional IPO and Company Performance 0:15:49 The Importance of Having a Differentiated Product 0:19:49 The Value and Overhype of Market Movements 0:23:18 Sactionals: Built to Last, Designed to Evolve 0:25:56 Driving a Movement for Sustainable Consumerism 0:31:36 Innovation and the Evolution of Lovesac's Product Line 0:37:07 The Strength of Lovesac's Physical Showrooms in the DTC Landscape 0:40:03 Testing and Learning: Mobile Concierge and Shop and Shop 0:41:52 AI's transformative role in the future of technology 0:50:08 Long-Term Vision vs Quick Profit Episode 313 of the Jason & Scot show was recorded on Thursday, November 9th, 2023. Transcript Jason: [0:23] Welcome to the Jason and Scot show. This episode is being recorded on Thursday, November 9th, 2023. I'm your host, Jason "RetailGeek" Goldberg, and as usual, I'm here with your co-host, Scot Wingo. Scot: [0:37] Hey, Jason, and welcome back. Jason and Scot show listeners. Jason, we're very fortunate to have a entrepreneur on the show. I'm the entrepreneur side of our partnership. So I always really enjoy these. Introduction and Welcome to the Show [0:49] We have on the show, Sean D. Nelson. He is the CEO and founder of Lovesack. And a little birdie told me that he recently started a podcast himself. He started Love Sack as a beanbag company in his basement when he was around 18. And now it's a public company and doing relatively large revenues over 600 kind of run rate. If I look at the last quarter, I took a little glance at that. Sean, welcome to the show. Shawn : [1:13] Thank you. Thanks for having me. Great to be with you. Jason: [1:16] We are thrilled to have you, Sean. Listeners always like to kind of get the background. I'm imagining you don't have a deep background before you started Love Sack because you started it so young. But can you, like where were you in life when that brought you to start build your own product? Shawn : [1:34] Yeah, strangely, 25 years in and still running the same company I founded as my side hustle in college, which is exactly what Love Sack was. So 95, all the way back then, I made a giant not bean bag because I thought it would be funny. I literally, 10 days out of high school, got off the couch at my parents' house, having this dumb idea, like, how about a beanbag, like, me to the TV, like, the whole floor, like, huge. Drove down to the fabric store, bought some fabric, brought it home, cut it out, and then began sewing it up, broke my mom's sewing machine, neighbor finished it, took three or four weeks to try and stuff it, originally with beads, but couldn't possibly find enough, so looked around the house, I just found out my parents' camping mattresses chopped up yellow foam, you know, like those yellow slabs of foam you take camping, on a paper cutter in the basement. And eventually, I mean, foam, packing peanuts, old blankets, had this thing stuffed and started using it out and about through university, taking it camping, back of the truck, driving movies. Ended up putting it away for a couple years. And by the way, everywhere I took it, everybody wants one. Like everyone's always like, Oh my gosh, what is that thing? Where'd you get it? I was like, I'll never make another one. It was such a pain in the butt and put it away for a couple of years to go be a missionary for my church. [2:58] And came back to finish up university in 1998. And that's when I founded the company. Cause people kept bugging me to make them one. And it became my side hustle in college. And we tried to sell these things eventually beyond our friends and family and beer fest, May fest, October fest, car shows, boat shows, 10 by 10 booths, how we got started. Tried to sell them to furniture stores and they laughed at us and told us it was a dumb idea. [3:34] Eventually, at a trade show got discovered by the limited to this is like, you would not today as justice like in the malls, like little girls pink and purple fuzzy stuff for their bedrooms and, and clothing. Anyway, they ordered 12,000 little love sacks, not knowing it was me and a buddy and like a woodchipper shredding foam in the back of this furniture place. And, and that forced us to source over in Asia, which is, you know, where I had served my mission. So I speak Mandarin Chinese. There's a whole story there I won't get into it it was just kind of one thing led to another led to another week we built a factory to support that 12,000 sack order we then went out to the furniture stores who again laughed at us didn't want our $500,000. [4:19] Beanbags having completed that order wanting to keep the factory going so we finally opened our own store in a mall that didn't even want us there but finally capitulated let us in because they We had a space to fill for the holiday season, in Salt Lake City, Utah, and it just exploded. We did a good job, carpet paint, neon sign, made it look like a proper mall chain store selling giant beanbags, and it just took off. Like, it worked. People came in, flopped down, music bumpin', big screen TV, playin' movies, had a great time. There was a couch in the corner to look pretty, be part of the decor. People kept asking about the couch, And that led us to eventually, many stores later, many states later, invent Saxionals, which is our modular sofa solution, which now drives almost 90% of our sales today. So we're more a couch company by far today than we are a beanbag company. And there was a whole, listen, I'm skipping over decades of time really, but there was a whole transition where we... We went through after we invented the sectionals and solved all these problems people have with couches not only can you ship it to your house via FedEx which was hyper relevant you know for. [5:32] E-commerce and digital marketing obviously but it's watchable and changeable, and movable and it can be with you the rest of your life that that led us to a whole design philosophy that now. [5:42] Drives are innovation we think is a really cool secret sauce called design for life but. 10, 20, 50, 100, 250 locations now. We came public in 2018 on about 100 million in sales. Right around the time there was just tons of fervor in this direct consumer movement. We had farted around, we'll call it as a furniture store, selling rugs and lamps and bowls and baskets and all the obvious things along the way. And it was really when we purged all that stuff around 2015, seeing the Caspers of the world emerge and Warby Parker's and even Tesla with their showrooms. Could we adopt a more e-commerce-led model with showrooms for people to kick the tires, so to speak? And that transition is really what unlocked the lovesack that you see today and where most of our growth has come since about 2015, 16, when we made that pivot, took the company public, wrapped around that direct consumer story. So we're not a digitally native brand originally, we were actually a retailer that pivoted and became digitally led. And now we don't even operate stores in the traditional sense. We don't, we don't stock things there. You know, you don't walk out of there with your product. They're all really online sales and those showrooms are extremely powerful mechanisms for helping people make up their mind around a five or 10, $15,000. [7:06] Purchase where they want to see the thing and sit on it and, and, and see if it's everything it's cracked, it's cracked up to be online. And so we, we, we believe that we really, uh, through that arc. And then by the way, since coming public, I don't know, six, seven X, the company this year, you know, we'll, we'll be on a run rate to the analysts were a public company. So the analysts show us around, you know, it's called 700 plus in revenue and profitable, very profitable and cash generative. So we think, you know, the direct consumer game, in a lot of respects, Love Sack is one of the unlikely winners of that entire movement. Because I think at that scale, there are very, very few, what I call successful direct to consumer brands. And so we're really proud of that. And it's been a long saga, and we continue to grow and change and adapt and evolve. Jason: [8:01] It's an amazing story. And we definitely want to unpack it. But I want to go all the way back to the beginning for one second. Did that neighbor who helped finish sewing the first prototype get any equity? Shawn : [8:13] No, it was my ex-girlfriend's, mom, so about the time she exited, you know. No, it was just a friendly favor, but the truth is a lot of people helped out along the way, and a lot of people had equity or have equity in Love Sack from along the way, but look, we've been through every high, every low. Somewhere in the middle there, I skipped over it just because of brevity. Not only did I win a million dollars on TV with Richard Branson, The Journey of Love Sack: From Highs to Lows [8:38] his reality TV show on Fox Network back in 2005, if you can believe that, the rebel billionaire. But I also guided the company through a complete chapter 11 reorganization back in 2006, spearheaded by Venture Capital, which was painful and ugly and embarrassing and humiliating. So we've been through every kind of thing over these better than two decades. Scot: [9:01] Yeah, my deep dive question is, when you rented or bought the wood chipper, did you tell them you'd be throwing foam in there, or did they think you were clearing up a tree? Shawn : [9:09] Oh, that's so the original story. Yeah, the original woodchipper actually, you know, if you've ever used one in your backyard or, you know, you shove sticks into these things, that's basically what the original shredder was. And it was in the back room of this furniture factory already. They had used it back in the seventies to shred foam, but it had an electric motor, right? Instead of like, okay. Scot: [9:30] So it's okay to be inside here. Shawn : [9:32] Well, yeah, but I had to rehab it because it hadn't been used in like a decade or two because shredded foam had fallen out of favor in furniture. And then later to do that bigger order, we couldn't afford like a proper German, shredder, so we ended up driving out to farm country to find more of those same kind of shredders and actually found a hay grinder called a hay buster can shred 2000 pounds at a whack. Scot: [9:57] And that's a lot of power. Shawn : [9:59] Yeah, it's powered by a tractor. So we, you know, agricultural loan for tractor and hay grinder. I mean, crazy, crazy story in the beginning. Scot: [10:07] Yeah, as a family, you gotta figure out how to get it done, right? Whatever it takes. Shawn : [10:12] Whatever it takes. Scot: [10:13] I didn't know the Richard Branson thing, so that was interesting. Did he like, was he an active investor, or that's like one of those things where his people kind of take over and you never hear from him again? Shawn : [10:22] No, I mean, it was a weird situation. He had a reality TV show, 2004-5, The Rebel Billionaire, you know, whatever, 16 contestants. It was like The Apprentice, but not for apprentices, for entrepreneurs. So my runner-up on the show was Sarah Blakely of Spanx, gives you an idea. Scot: [10:38] Oh, okay, cool, neat. Shawn : [10:39] Yeah, yeah, so we became great friends, she and I, Richard and I. I ended up also being named President of Virgin Worldwide for a minute as part of the prize, believe it or not. So, worked with Richard, worked with all of his CEOs. Totally weird outcome. And, you know, but huge, huge blessing and a huge piece of story. And he was involved in sort of our VC round that ensued on the tail of that. Scot: [11:06] Okay, and then I think I saw that you guys were on Shark Tank, right? You were like one of those that you know, kind of one of the big success stories. Was that the OG Shark Tank or? Shawn : [11:16] No, we weren't on Shark Tank. A lot of people thought that. There was a Love Sack copycat that's on Shark Tank. Okay, and so they got... Scot: [11:23] I was confused because like Google says you were and then I was like, but then I couldn't find the episode. Jason: [11:28] There's a whole TikTok channel dedicated to Love Sack and Shark Tank and it's super weird. Shawn : [11:36] That's super, yeah, people get confused. Scot: [11:42] Yeah, yeah, super weird. Yeah. And then when you did your IPO, was it a traditional IPO or did you guys get caught up in the SPAC craziness? Shawn : [11:51] No, we did a traditional IPO back in 2018 and you know, our stock has been really volatile for lots of different reasons that, you know, COVID was crazy, but the company performance has been really solid. So we're just trucking. Love Sack's Traditional IPO and Company Performance Scot: [12:06] He, I think, was at Graham that said in the short-term it's an emotional machine, in the long-term it weighs your financials. So you got to, it's very hard, you know, I took a company public, not to the level you have. And yeah, it is, I was like, I'm not going to look at the stock, it's not going to influence me. And then suddenly everyone's like, are we making the quarter? And it's like, okay. And then suddenly it's very hard to get out of that, that short-term mindset. So congrats to you for sticking to it for so long. Shawn : [12:29] Yeah, look, I'm actually a big advocate of it, having lived inside of it now for almost six years. Scot: [12:36] Yeah, the transparency is good, you know, and I like that part of it, I think that's good for, you know, to kind of have to put out everything that you're doing, you know, it's a, the ultimate, yeah, it's like, yeah, transparency tends to be a good thing. Shawn : [12:48] I think it's the right way for companies to be governed and ran. Anyway, we could get into that if you want. Scot: [12:56] Yeah, I like the, you know, and you talked about all the other, we call them digitally native vertical brands, like the Warby's and Bonobos and all that. And yeah, a lot of them have not made it past kind of like that hundred million dollar level. And you guys have obviously, you know, six, seven X that, which is awesome. And then, you know, the big knock on Casper for a long time was as we've actually had this guy, Dan on the show, people were able to pick apart the CAC LTV and they found the average selling price was like, Jason will know these numbers, but it was like 350 and their cost to acquire a customer was 400. And they were like, you know, that obviously wasn't sustainable. So it's pretty neat that you guys have figured that out. Shawn : [13:36] Yeah. I mean, that's at the root of why obviously we've had some sustained success. And I think it's also at the root of why there are almost no other direct consumer brands making any money. End of story, full stop. And it's pretty fascinating to watch the whole thing unfold, because it really has been a movement for almost a decade. Scot: [14:01] Yeah, and I don't want to dig into the information you don't divulge publicly, so this is not a trap or anything but is it because the selection or your products, you've kind of cracked the code on Kakao TV, like what do you, and I don't want to know any methods or anything. and what do you attribute it to? Shawn : [14:18] Look, I think, let's start at the root. I think that many companies, product companies, let's start there, overlook the fact that you need a really good product. I think they pick a category and they say, oh, it could be a direct consumer brand. And the truth is, what does that even mean? Do you mean, because here's the funny thing. When I hear analysts and industry people talk about direct consumer, it has become synonymous over the last decade as it's unfolded today with e-comm. Oh, you mean you're an e-comm company and in many cases you do half of your sales through wholesale. So what does it even mean? I mean, if you want to talk about a direct consumer brand, LoveSack may be the most direct. We don't have any wholesale. I'm talking zero, and we only sell through our own channels, whether it's our website or our showrooms. And we have these partnerships, for instance, where we operate our own showrooms inside of a Best Buy or a Costco. [15:26] But you know, so this whole phrase even, direct-to-consumer, I think is really kind of silly. You mean you're a company that sells stuff online and maybe in showrooms and maybe in wholesale? So you're a company that sells stuff. So let's start with stuff. And you have to make, I think, if you want to be successful in the world, it's not a new concept. You have to have... A great product or or you have to have some other really. Hiller efficiency The Importance of Having a Differentiated Product [15:52] and i think what most have discovered it was a list again over this long decade of direction sumer evolution is that without a really differentiated product. You're just another company with a clever name lots of funding and if you throw lots of money at anything it's gonna grow. But you need to be differentiated. So Love Sack, you know, start with the giant beanbags. They were unique, especially in their day. There's tons of copycats out there now. [16:24] Sactionals are extremely unique. The problem is they photograph just like any other sectional sofa. Like if you took an image of Sactionals and an image of one of, you know, out of any competitor that sells couches, ours looks a lot like theirs. But the difference, the differences are myriad in terms of their washability, changeability, quality, and modularity, and many of those aspects, especially on the modular side, are patented at LoveSac. And so once you dig into it, you find that that's the number one driving factor, is we have a product that's truly differentiated, truly gives more value to the customer, and therefore, we can extract more from the market. It's really that simple, right? And that's at the root of why our CLV to CAC ratio it was so high and sustainable and cash-generative and profitable. And then we could go down all kinds of other paths. We could talk about our website, execution and stuff like that. And all of it needs to be there. Look, running a business is multifaceted and difficult. But at the root of it is that. Jason: [17:27] For sure. One of the things I sort of admire about your company is the original premise was not to have a particular go-to-market strategy. It was to have this great product that people wanted to have in their lives, right? And it feels to me like that, the whole quote unquote D to C movement, like this notion that before you solve any other problem, you're just gonna put a flag in the ground, like this is how you're gonna go to market, that just, it just seems silly because that may not be how the customer wants to acquire your product. Shawn : [18:00] Yeah, I think you're right. And I think that, so I think that whole movement that we're a part of, so I don't mean to like bag on the movement. I'm just an observer as well. Like I've been living in it, right? And we put, and I'm being really transparent, we put on those clothes very intentionally. [18:16] Because people that planted those flags were getting funded. People that planted those flags were being understood at the time. And these movements come. Right now, I could hold up a flag that said AI on it and go out there and raise a bunch of money and do something. And in the end, 99 out of 100 of those, flags are going to fall by the wayside after having tons of money thrown at them and Probably 1% of them will go on to you know be the next Googlers or who knows what right? But these movements come and go and and and I'm and this is what I'm saying You gotta be careful. I'm not bagging on the movement because these movements are useful these movements drive economic activity these movements drive innovation But they're often way overhyped, not as, I think, not as, so, you know, I mean, we could get into AI, you guys are, I'm sure, tracking it just like I am. What does that even mean? Oh, you mean like software? You mean like software that, that does stuff in an automated fashion? Like is that, is that, is it really that new? But it doesn't matter. It's a story that's being heard. It's a story that's being understood and it's where the momentum is. And so if you're able to wield, take advantage of these movements in the marketplace to your end, that's what, and that's exactly what LoveSack did. We put on those clothes, we took a concept that had been around for a long time, our concept. [19:42] And look, in the end, the thinking and the development and even like, let's say the web services and all the things available to that movement that The Value and Overhype of Market Movements [19:49] were spun up because of that movement, we benefited from. The money raising pricing aside, momentum, going public, whatever, all these things aside. So that's why I'm saying I think that there is value in these movements, but fundamentally, you still need to have a great business, a great product, something that's truly differentiated, because anyone with some funding can go out, buy a logo, buy a name, and look like they know what they're doing. Jason: [20:20] And yeah, for sure. And to your point, there's a, there's a funny data by going around in, in our industry this week that like over a hundred million dollars or I'm sorry, Amazon's GMV is, I'm sorry, a hundred billion dollars of Amazon's GMV is from AI. And you hear that and you're like, oh my God, that's huge. And then you find out it's product recommendation tiles that they launched in 1997. Shawn : [20:45] Yeah. Yeah. Yeah. Jason: [20:47] Which, yeah. Yeah, so I do just want to like kind of wrap up this section, but put it in context. When you open that first store in a mall, like the mall competition for furniture stores was like Expressions Furniture, right? Which no one on this call would even remember probably. And then like by the time you really, after your IPO and really caught fire, you were competing directly against all these D to C companies that were expanding in malls. You were probably competing for leases. Shawn : [21:18] Yeah. Jason: [21:19] It's quite the, quite the journey. Now, Scot mentioned at the beginning of the show that you had recently started a podcast and I'm two part question. How the heck did you have time to start a podcast and tell us what the premise behind the podcast is and what you're talking about? Shawn : [21:36] Sure. Yeah. Just to comment first on what you pointed out, there is this whole strip in the malls now out there right now. But by the way, in these shopping malls that I was told were dead, you know, I could read the headlines of shopping malls are dead back in 2001 when I was opening my first shopping mall and I was forwarded those kind of emails by friends and family who were concerned. And here we are in 2023 and while these things change, they take decades to change. Meanwhile, they've evolved and you have all of these direct consumer players now and it It just cycles through, you know? What the players inside of these shopping centers happen to rotate, and I've watched it all evolve, and by the way, they're rotating again, because a lot of those players are not viable. Some of the best ones, biggest ones, you know? Like, concepts like Peloton, who I think is amazing as a concept, you know? They have their struggles, and so we watch these things evolve. In terms of, the podcast is relevant to this. Let me explain why. We had the chicken, I'm going to go, given the nature of what your podcast is, I'll give you a much broader picture than just, hey, why am I recording a podcast on my own and writing a book? [22:55] It works like this. We had the chicken before the egg. Sactionals being the chicken, we discovered, as we observed and had success with it, we believe are so successful because they are are built to last a lifetime and designed to evolve. Like those two attributes in our product are quite unique. And those two attributes underpin what we call our designed for life philosophy. Sactionals: Built to Last, Designed to Evolve [23:21] I did not found Love Sack to make products that are super sustainable, sustain hyphenable. In other words, things that actually sustain. Who's talking about that? I was just trying to survive. I made a big beanbag, people liked it. Made a couch because people were asking about couches. who has solved all these problems, observed the success, and that success was rooted in the fact that things were built to last, designed to evolve. Now that's led us to this whole philosophy that will inform our innovation on every product going forward, and it's why I'm so confident that we can continue to succeed, is because of this design philosophy that I'm sharing with you openly. Because it's one thing to say it, it's another thing to execute to it. That's the hard part. It's the execution that's the hard part, you know? Now, that said... [24:08] I'm trying to drive a movement. I believe that there are many people that are sort of aware now that we have been conned into buying too much crap. New season, new collection, the merchandising hamster wheel, new iPhone, now it's got a titanium band. Really? Everyone knows. No, it's not even hidden. It's not even like a secret. it. This whole hamster wheel called planned obsolescence that was not an accident, it's absolutely an economic strategy to lift us out of the Great Depression and onward. And it has roots all the way back to Louis XIV. What's my point? The world has just, I guess, accidentally, not so accidentally, fallen into all kinds of rhythms that are unhealthy, unsustainable, and not good for anyone, not good for the environment, not good for people, you know, we're frenetically chasing out. Now my jeans are too tight, now they're too loose, now they're too long, now they're short, now I got, now they got to show my ankles, now they got to drape over my, like, this is not an accident. This is a self-propelling machine that we have created. What's my point? I believe we can drive a movement amongst people to reject that. And I believe factionals is one of the embodiments of that. Things built to last a lifetime are designed to evolve. So that movement is actually my long-term strategy. [25:33] In the near term, I need to... One of the ways that we will reach people besides buying advertising and using it to drive a strong CLV to CAC ratio is through... I don't know, even podcasts like this is through people finding our brand, finding out about me, finding out about the company through... Whether it be me, whether it be through the goodwill of our customers, sharing this or that, the other. And so I wrote a book called Let Me Save You 25 Years. It's our clever story Driving a Movement for Sustainable Consumerism [25:59] at Love Sack. It's really great. I think it launches in January. I spun up a podcast called Let Me Save You 25 Years where I share my own entrepreneurial mistakes, miracles, and lessons of the Love Sack story. That's the subtitle of the book. That's the spirit of the podcast. I talk to successful people, some of the world's most successful entrepreneurs and successful people about these concepts. And it's not an interview podcast. We go really deep into some of these concepts. So my long-term goal ultimately, is to write another book that can help drive this consumer movement that I'm describing because I think if we can get a little bit of luck and get people thinking about these things and then eventually seeking out. Products that can do this, and just a lifestyle that is supported in the way that I'm describing. Buy better to buy less. Buy better stuff so you can buy less stuff. Well, obviously, LoveSack will benefit from that as a company that makes better stuff. And so, look, it's a long, long, long, long way around, but you asked the question, and I'm totally serious about that. Scot: [26:58] Yeah. So I'm gonna guess you're not a fan of fast fashion. Shawn : [27:03] No, I mean, that's obviously gonna be I made the topic of the book, you know? Scot: [27:06] And I'm not. Jason's a huge Xi'an fan, so you just really hurt his feelings. No, I'm just kidding. Jason: [27:11] Hey, I wore a Patagonia, a used Patagonia jacket in honor of tonight's show. What are you talking about? Shawn : [27:18] You are speaking my language, man. And look, it's not even about being a tree hugger. I think that people have a brain. And people, I think, are waking up to the idea after the iPhone 15, that holy crap, Apple probably should have been forced to innovate a long, long time ago. Biggest company on planet Earth because they sell us the same thing every year or two. Had we not allowed them to do that, they would have had to use their enormous treasure and enormous skill base to innovate into other categories and and change the world. Instead, we've allowed them to sell us the same thing every year. Scot: [28:06] That's an interesting ethos. Having built a company, about how many people are in your company at this point? Shawn : [28:12] Total about 1,500. It's about 400 at the headquarters and another 1,000 out in the field-ish. Scot: [28:19] Yeah, you're at that phase where there's people at the company that you've never really met before. And it's awkward because they always expect you to know their name and they all know your name. Yeah. Yeah. Yeah. So when you get a company to that scale, how do you keep innovating? And, you know, one of the ones that I really love that you guys have done is the Stealth Tech. I think that's genius because I love AV and like having a really immersive experience. And I'll let you explain what it is, but, you know, my wife hates the big black speakers that I try to put all over the house. So I think it kind of solves like six problems in one. So A, maybe let listeners know a little bit more about what we're talking about. And then be I'd love to hear like how do you guys you know it's really hard to kind of you know ideas are easy and execution is hard on execution. It's really hard to like you know nail what you're doing and you have a lot going on and then like keep innovating. How do you how do you like get the org functional that way? Shawn : [29:16] Yeah. I mean, I think number one is you have to, you have to really want it, you know, not, not just like, Hey, I want to, I want to get, I want to get more business. I want to sell more stuff. Obviously there's that. But this ethos that I just kind of unpacked for you that, that we tripped stumbled into does the design for life ethos animates this organization. Like, it is a lot of, it is very motivating to think about, holy cow, now that we know our purpose, and it's been identified, right? Inspiring humankind to buy better so they can buy, you know, everyone's like, it was purpose, purpose, purpose, and hire some consultant, you know what I mean? But for real, if you have something that's truly unique, and it's meaningful, it's not just like words on the wall, it really is motivating, it's exciting. Scot: [30:11] And you bake baked in the products have to get better too, right? Like you, that's not well, so you have to support it. Shawn : [30:17] That's exactly right. Like, yeah, like we have to make stuff that's built to last a lifetime and design to evolve, which is really hard because if it was easy, everyone would do that. And here I am telling you openly about it. Like that's what we're going to do. And I'm not afraid to tell you because most companies won't do it because it's just freaking hard. Like it's a lot easier. Like why doesn't love sack? You know, you brought up stealth tech. So Stealth Tech is full Harman Kardon surround sound, no quality sound loss audio. Perfect audio emanating from your couch through the phone through the next layer of fabric and through the decorative layer of fabric that's washable, changeable, removable, tuned down to the color of that fabric so that the audio is perfect rear, front, center, subwoofer, invisible, beautiful, because you don't see it, it looks just like a couch, and it has all that packed in there, it's radically successful. It's been, it's now a huge piece of our business. And nobody saw that coming, because what would they expect a couch company to do next? A couch beanbag company. An end table, a coffee table, a rug, a lamp, you know, decorative accessories, get into the bedroom, who knows, right? Like the obvious stuff. Scot: [31:32] Meatballs. Shawn : [31:32] And what, yeah, right? Why did we do that? We anyway, we saw the opportunity and we also invented it. So one is, Innovation and the Evolution of LoveSack's Product Line [31:40] to answer your question, a lot of play. We are constantly at our innovation lab playing. So it's not just consumer-led insights, which is a big piece of what we do, but it's also a lot of inventions. You gotta have teams to invent. You gotta have engineers. You gotta have, so you gotta support that. So there's a cost structure there. And that's why LoveSack is quite profitable, but not as profitable as it could be in the future, because we are investing in innovation. And there's a lot of heads. there's a lot of engineers, there's a lot of designers doing things. Now they're not just all running around playing, they also have a very disciplined approach to executing on innovation, like launching Stealth Tech a couple years ago, and bringing that to market, which is a heavy lift because it's our invention, it's our patents, and it was not easy for this beanbag company to get into home electronics in a real way. [32:29] We've done, I think, more than 100 million in home electronic sales and making us a pretty, a pretty big player in that space, believe it or not. Already, and I don't think most people even, you know, would think that. But we're, you know, totally serious about it. So, innovation, wrapped around an inspiring path to innovation, I think is the key. Do you have an inspiring path, or are you just trying to make more stuff? Because if I wanted all those things I mentioned, like I'm over here in Asia right now, I'm in Hong Kong. And if I wanted a whole line of living room furniture with our logo on it to make myself feel good, I could have it in four weeks. The suppliers will do it for me. They've been doing it for 30 years over here for all the biggest brands you can think of, you know? And we could give them some designs and give them some ideas and let our, I mean, it's so easy to just source stuff. I'm talking about, you know, product land. Now we're talking fashion, talking furniture, talk any category you want, the same is true. But to truly invent stuff's a lot harder. And that's why I think we've had success, that's why I think we will continue to have success. Jason: [33:35] Yeah, you know, so I am interested, I mean, obviously the product has to be the lead in solving that real problem for a customer. But I do think another helpful aspect to your business is that in order for those products to be successful, like, they have to be demonstrated somehow. Like, per your point, the catalog for the StealthTech sectional looks just like the catalog for a generic sectional. And so I'm thinking you having your own showrooms was a big advantage for being able to tell the story. And ironically, I'm not sure you opened that first showroom because you recognize that problem. It sounds like you opened that first showroom because you had no other way to get distribution. Shawn : [34:21] Oh yeah, yeah. And that's why I'm not taking any claim as some kind of marketing genius. We just kind of tried to survive in the beginning. And opening a showroom was actually a reaction to being rejected by the big furniture guys, because they didn't, you know, want our product, they didn't believe in us, whatever. They couldn't see it. And so thankfully, it went that way. And by the way, they weren't showrooms, they were stores. We were a furniture store for a decade and a half. And we did all the furniture store things. And we sold merchandise, and you pulled your car around and we loaded you up, believe it or not, or we shipped to you. And it took us a long, long time to, after copycatting all those furniture stores and hiring merchandisers and window dressers and all those kinds of things from our competition to do that stuff in our stores. [35:14] To make that pivot to the direct consumer model that we operate on today that obviously looks very prescient in today's model. Now, the reason I think we've been so successful at it is because we had those 15, 20 years to get really good at operating now 250 locations across every state, almost in the United States of America, where people are fighting and bickering and hiring and firing and touching each other, whatever it takes. The point is operating physical showrooms is not something you get good at in a day or a week or a year just because that seems like the next thing to do. We have a website, now people need to see our stuff, to your point. And that's the approach I think a lot of the direct consumer brands have taken. And I don't think that they realize how hard it is to be profitable at retail and how many pitfalls there are. Where if I want to get a little better at digital marketing, which I think we're pretty good at now, but I can hire that. I can agency that, I can platform that. And so I think that the physical side of things is really underestimated. And so thankfully, our very long haphazard history has played out in our favor in that realm. And I think it's a huge strength of ours, because by the way, now that the economy's pulling back and this and that, we're 250 locations ahead of most that are just really coming around to the marriage of physical with digital and not realizing that, You know, it's not something you can just turn on and be good at. Jason: [36:44] Yeah. And I think it's you, you rightly pointed out that like the whole landscape of DTC hasn't been particularly successful. There's not a lot of wins, but the, the people that are outperforming the average, even one thing they all have in common is they all have some kind of physical footprint to, to reduce CAC, right? So they're either have their own stores or they, they are white selling through wholesale, or they're, they're in front of customers in some way, The Strength of LoveSack's Physical Showrooms in the DTC Landscape [37:09] other than, than Facebook ads. Yeah, I, I did. I think there's a super interesting new evolution. I thought I read about though. So like Amen stores and showrooms are super complicated. People wildly underestimate how many mistakes you can, you can make owning and operating a retail store. And now, now that you seem to have that clicking, you guys are bringing the retail store to the customer's driveways. Is that true? Like talk to us about the mobile concierge. Shawn : [37:37] Yeah, so just like we're innovating in product, we're also always innovating go to market. So whether it's mobile concierge, which is a lovesack trucks, where you can, you know, from the comfort of your home, have us pull up in the driveway and show you our products, which we've which we've dabbled in, and have tested into. And we'll see, you know, where that goes. I think that that has its own just like retail has its own complications, but also more, I think, more. I guess scalable already is Shop and Shop. So our showrooms right now in shopping malls, they're only like 800 square feet. So obviously the metrics are great, right? We're selling very big ticket items out of very tiny footprints with a small staff. There's just good metrics. And I don't hide from that. That's been a big part of our success, right? So we chose a good category in that way. We chose a terrible category in the sense is that the home category has all kinds of other issues. Jason: [38:38] Not the easiest category to deliver the product. Shawn : [38:41] Yeah, I mean, there's delivery, but there's also just the cyclical nature. You couple that with the idea that, look, we are selling you something that we are intending you to have for decades. My sectionals in my home are 16 years old, some of them, made with brand new pieces, made with Stealth Tech. That's pretty cool. On the other hand, unless we give you Stealth Tech and other reasons to come back, like, you know, you've got your satchels and you've made your investment. And so look, we deal with cover. So we're innovating on product, we're innovating on go to market, shop and shop. So these thousand square foot showrooms have been very useful for us. We have 200 square foot showrooms inside of Best Buy's or Costco's, where our people are basically checking you out and allowing you to kick the tires on the product. And then look, whether you buy there or whether you go back and buy online, we don't care. We built an agnostic platform where we just want you to be in the family. So I think these are things that have evolved over time and you've got to test and learn, whether it's mobile concierge, as you described, whether it's shop and shops. And these tests and learn activities can take years to play out and really take to scale and stuff like that. And so I think in this day and age of, hey, I'm gonna go raise a ton of money and build my company to X revenue and exit for X multiple, which is I think Testing and Learning: Mobile Concierge and Shop and Shop [40:05] what drives a lot of entrepreneurial activity. [40:09] That kind of mentality just doesn't have the staying power necessary. And that's why you see so many of these brands reach a point where they have to be retooled, like some of them are going through now. And look, they've made someone rich. Sometimes these founders find ways to squeeze a bunch of money out of it, or private equity tosses the hot potato to the next guy and they make a ton of money out of it. But in the end, what's left? a brand that is at scale, doesn't make money, and can't go anywhere. So my point is you gotta have the stomach to grind it out, to spend the time, to really slow cook some of these things, and to be flexible when they don't work, and shut them down and move on to the next. And so constantly innovating on go-to-market, constantly innovating on product, and really putting in the time and energy it takes to refine concepts, you know. Scot: [41:03] I know we're running up against time, and you've obviously spent a lot of time thinking about this. I know your goal is to bring this ethos out, but if you think about retail and e-commerce, what do you think the next five years hold? You talked about AI. There's a lot of this stuff that's temporal, but anything you think that you believe is going to change the way we shop and buy, either in-store or online? Shawn : [41:29] Yeah, look, I think that it will just continue to evolve, and so I think AI is real. I think it will play a transformative role, and I think everyone's trying to figure out exactly what that is, and nobody really knows yet. I wish I could just give you a clever answer, but I think I've witnessed, AI's transformative role in the future of technology [41:53] you know, that's What's the benefit of having a 25-year perspective is it's like I was saying about shopping malls. The mall is dead, headline from 2001. TV is dead, headline from 2008. Here we are with both of them still intact. By the way, TV advertising is still a big piece of our marketing spend. I know that's kind of mind-blowing because it seems like everybody's cut the cord or gone to this extreme. And I'm just telling you, these movements take decades. And so while it's great to be ahead of a movement, you don't, unless you are trying to drive that movement, like unless you are trying to take advantage of that AI, boom, to go raise money and wave that flag or whatever. [42:40] I've found it's okay to be a laggard. It's not always beneficial to, unless you're trying to build your concept around that and take advantage of that movement itself, let the movements evolve. So I can't give you a great prediction of exactly what's going to happen. AI is important. But how, where the winners will actually be and what the effects will actually be, I think it's way too early to tell. But I do think it's important to keep your finger and keep watching and eventually, you know, to find the connection and lean into that to affect your business. You have to be a little bit patient, I think. Jason: [43:27] Yeah, well, certainly 25 years in, I think you've earned your patience creds, by the way. Shawn : [43:35] Maybe too much. Jason: [43:37] Yeah, I mean, there's pros and cons to both. Urgency can be useful in certain circumstances, but short time horizons come with a lot of problems, as you have rightly pointed out. That did lead me to one sort of thought question. And you, you referenced some of your, your CAC economics and side note, we've, we've one of the, our favorite guests on the show is this professor Dan McCarthy. Who's, who's a huge advocate for cohort analysis and customer lifetime value based businesses. And so he would be thrilled that you're on, because I know you guys disclose some of your cohort metrics in, in your financial statements, which he loves. And to me, you're in a really interesting category to do that because although your product has invented a reason for customers to come back and you've sort of turned a product into a system, it's not like a fast cycle, right? Like, and so like when you're thinking about like a time horizon for LTV, and you guys have a very good return on your CAC, but compared to most companies, your CAC still is really high, right? Like, you sell a lot of product to compensate for that. Shawn : [44:57] Yeah. Jason: [44:58] So how, like, you know, you're spending five or six hundred bucks to acquire a customer and then you're earning thousands of dollars on each of those customers. Like, was it difficult to sort of have the financial discipline to have a long enough time horizon to see those sorts of high CLVs come back for that initial customer acquisition? Shawn : [45:23] Yeah, I mean, you could call it discipline. In our case, again, it was just survival, being really transparent. You know, we were just trying to find a way to make this business work, and we weren't profitable right out of the gate. It took us many years to get better at retail, to get better at e-commerce, to have a shopping cart experience that was commensurate to the product, because that's really hard with our product. Our product is really weird and complicated. And so that's something that's overlooked with Lovesack. And I think a lot of our copycats and competitors are realizing that. You can't just use a Shopify checkout if you're going to sell something as dynamic as, let's say, factionals where, you know, you can buy a bunch of these and a bunch of those and combine them in a million different ways. How do you, how do you shopping cart that? How do you Amazon that, you know? And so, and so these are superpowers that we've developed over a long time and thankfully given it enough time to become profitable. So to answer your question about, you know, patience, I think part of it is just been our lot in life to, to be, to have patience forced on us. But secondly, real discipline around. [46:32] Our CLV and CAC metrics. So we are, we are, and have been for a long time, carefully monitoring them, tracking them, constantly innovating and refining on the marketing side, these things that I mentioned, whether TV, you know, over the top, linear, nonlinear, digital marketing with its 500 heads, you know, like I'm talking about species of digital marketing, it's such a big word, right? I have to be constantly and tirelessly refined and risk taken and stuff tried and stuff failed and all rolled it and it all rolls up into that CLV to CAC ratio that you can hope you can keep moving and then couple that with innovation so that people can come back and buy more. And so thankfully, look, we chose a category with a high ticket and that drives the lion's share. That first purchase drives the lion's share of that CLV to CAC relationship. But our long-term point of view now is not only to find other ways that we can do more of that, maybe even in other categories and adjacencies. [47:32] But also give like StealthTack, give people a reason to come back and add on. And then by the way, when they do come back, then they face the consequence of, well, what do I do with some of these things that I need to, let's say, I get StealthTack and I got to swap out two of my sides. Well, okay, the obvious answer is I don't want to throw those in the trash. We don't want them throwing them in the trash and they may not need another couch in another room. So it's leading us to services, trade in, trade up, recycle, you know, all kinds of things that will again, give us more reasons to reach out and touch that customer. And so I think that if you relentlessly pursue. [48:13] A good concept with good intentions being driven by good philosophy and purpose like I've described, it's been my experience that the universe kind of unfolds for you, but it doesn't do it overnight. And you can't just have a, at least in my experience, you can't just have a master plan and be like, we're gonna do this and then that and that. You have to iterate to it. You have to observe, you have to live some, like when we launched Stealth Tech, we just, you know, it's easy now to look back in hindsight and be like, well, of course people are gonna want to or trade in their sides or do whatever. But some of those things aren't always so apparent. And you need to plunge yourself into the pool, see what comes of it, and then react to that. And some of those reactions can take years to unfold. Like some of these services that I just described and whatnot, they'll take us years to manifest. [48:59] But the nice thing is, the core business can generate profits that will carry us to that and we'll invest some of those profits in that innovation that I'm describing. But it's like, it's just relentless, man. It's tiring. It's like you have to have the stomach to go the distance. And that's where the time horizon, look, I'm a big advocate of it. Culturally, you know, like when my whole organization knows, like the theme of our manager fest a month ago, this is where we all get together once a year, was 25 and 25 more. And I'm not kidding. Like my personal point of view, if I'm allowed to be here as a public company CEO, if I do good enough to stay in the seat, which is inherent, and that's why I love the structure. It forces you to be awesome, you know? [49:45] If I can do that, but the fact that my organization knows that I'm in for another 25, you know how grounding that is and stabilizing that is, as opposed to, man, when's Sean's gonna sell his stock and bail and go start his next company? That's what I'm supposed to do, isn't it? That's how I become a bazillionaire, isn't it? I'm not interested in that. I'm interested in building something. And I think that that, I don't know, desire is actually kind of rare these days. Long-Term Vision vs Quick Profit [50:14] I think everyone just wants to be a bazillionaire as fast as they can. Jason: [50:17] Oh, for sure. Yeah. Everybody's assuming you're going to cash out and invest in your first rocket. Shawn : [50:24] Yeah, whatever. And I think it's sad. Look, I'd love to make a ton of money, whatever. That's all great. But whatever happened to the ambition of let's build something awesome, no matter how long it takes. And that's where I'm at. Jason: [50:41] Yeah. Well, Sean, it's been an amazing run so far. This is going to be a great spot to leave it because we have used up our allotted time, but I know listeners are going to appreciate you saving them the first 25 years, and we're going to be super excited to watch what happens in the next 25. Shawn : [50:57] Thank you. Thank you. Scot: [50:59] We really appreciate it, Sean. I know you're in Hong Kong, you're in the middle of your day there, and we appreciate you coming on the show. If folks want to check out your podcast, where would you point them to? Shawn : [51:09] Yeah, wherever you love listening to podcasts, Let Me Save You 25 Years is the name. LetMeSaveYou25Years.com. You can find me on social media, Sean of Lovesack. I'm all over that and love to be connected, slide into my DMs. I mean, I love talking to customers, friends, peers, being very accessible and looking forward to building the movement. Of course, Lovesack.com. We're easy to find. Scot: [51:33] Trey Lockerbie 41 Yep. And the book's coming out in January and I assume it's going to be in all the usual places. Shawn : [51:37] Sean O'Toole 41 All the usual places. Yeah. Let Awesome. Jason: [51:45] Thanks again and until next time, happy commercing!
In this episode, we chat with Sarah Warby, Head of Professional Growth at Hills Grammar. Sarah is one of the keynote speakers at Edutech 2023 and this episode will give you some background to her keynote! This episode is brought to you by our partnership with Edutech, and if you use our special code Edleaders30, you'll receive 30% off your tickets! Get your tickets now at edutech.net.au. --- Send in a voice message: https://podcasters.spotify.com/pod/show/edleaders/message
For a customer to have a seamless experience while dealing with grief and trauma requires exceptional service and unbelievable logistics infrastructure. They need care. For the three founders at Titan Casket, Scott Ginsberg, Joshua Siegel, and Liz Siegel, this is core to their story as a brand. Listen now to this episode of Archetypes!Direct to Exhumer{00:01:38} The Caregiver continually supports others, making sacrifices on their behalf. They are honorable, selfless, and loyal. The Caregiver offers unconditional love and has a strong sense of responsibility for others to protect and provide a safe place where others can feel nurtured and cared for.{00:05:36} “You may have seen us talk about being the Warby Parker of Caskets and that's not because we're direct to consumer. It's because what Warby saw was there was one manufacturer that controlled all the supply and they also owned the channels of distribution. And so they thought there was a better way of working outside of that. And it's the same thing in caskets.” - Josh{00:09:56} “These are families right in the middle of it. They want to talk about their loved one. And so we hire very carefully, and the team we put in place has no limitations around how long they can spend with clients.” - Josh{00:10:53} “We have a business. We make money, but at the same time, too, the client is saving 50% or more of what they would ordinarily spend at a funeral home. And we get to help every day.” - ScottAssociated Links: Learn more about Titan CasketCheck out other Future Commerce podcastsSubscribe to Insiders and The Senses to read more of what we are witnessing in the commerce world!Have any questions or comments about the show? Let us know on Futurecommerce.com, or reach out to us on Twitter, Facebook, Instagram, or LinkedIn. We love hearing from our listeners!
Episode 295 is a breakdown of Walmart and Target Q2 earnings, as well as the US Department of Commerce retail sales data for July. Episode 295 of the Jason & Scot show was recorded on Thursday August 18, 2022. Transcript Jason: [0:23] Welcome to the Jason and Scot show, this is episode 295 being recorded on Thursday August 18th 2022 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 showed listeners Jason how you doing how you been traveling a lot lately. Jason: [0:46] I have I have it's been interesting to spend so much time at the airport's they've been quite busy lately. Scot: [0:54] Yeah yep the there's cancellations it's total chaos at airports so hopefully now that we're in back-to-school season that'll slow down a little bit. Jason: [1:03] Knock on Woods October is a busy Commerce trade show month so I'll be on the road almost of October hopefully visiting some listeners but hopefully yeah travels a little smoother hopefully I can get some better seats on the airplane I'm a little bitter at the. Scot: [1:19] Yeah you have like 20 million miles and they're putting your life back in steerage. Jason: [1:24] That's a slightly milder version of that is true. Scot: [1:29] Cool and then I guess the big question is we've got two new series kicking off are you going to do Game of Thrones or Lord of the Rings or both. Jason: [1:39] I'm super excited about both I'm actually some people know I had knee surgery earlier in the year I'm actually contemplating getting the surgery on my other knee so I have an excuse just stay at home for a while a month and watch them both. Scot: [1:55] Yeah and then let's see the well ready to jump into some news. Jason: [2:02] I'm super excited to. Scot: [2:03] Cool well it wouldn't be a Jason Scott show without. Jason: [2:08] Amazon news new your margin is there opportunity. Scot: [2:21] Yes there is some Amazon news I wanted to just chat about with youth the 16th of August Amazon surprised both Wall Street and a bit and third-party sellers a lot with their first-ever peak season surge pricing for fulfillment by Amazon are commonly known as FBA so the way this is going to work is they've put out the dates October 15th through January 14th of 23 third-party sellers that you use fbar going to have a new fee and I hope you're sitting down it is 35 cents per item. [2:57] Now you may be saying to yourself Scott that's pretty small is that going to really move the needle and one of our friends of the show Colin Sebastian he actually did the math on this. So it turns out that last holiday if you look at the third party sell units sold during that period you had two point seven two two point eight billion you have a midpoint of 2.75 billion. He took that approximated in 34 so that went through yeah if ba you multiply that out and you get about 700 million dollars just drops right out of that 35 cents. So that is the power of an Amazon scale is a seemingly tiny little. Surcharge can be a big number so it's going to be interesting and you know that will be pure profit because the Amazon is not doing anything differently really. And then in the press release they basically said our expenses are reaching New Heights and it's making it harder for the company to absorb cost and they have to pass some of those on. But we still love our third-party sellers did you would you think about this video. Jason: [4:01] Yeah well I'm guessing third-party Sellers and investors didn't react exactly the same to that news. Scot: [4:07] Yes investors were happy third-party sellers it's kind of one of those things it's kind of tricky because you can't complain too much because it feels like 35 cents but you know if you're a seller selling couple of thousand items a day through F be a it's going to be material and I think, at the end of the day all this gets passed on to the consumers and that causes inflation which we're going to talk about a good bit on Today Show. Jason: [4:30] Yeah it's a, it's interesting it's kind of a mixed bag because well I feel like it is true that Amazon hasn't charged a true surge charge before the you know they change their terms and conditions all the time and that you know they'll like they'll narrow the window under which you can keep stuff in, in the warehouse before you start getting extra fees they'll make you take more stuff back they'll take less stuff and those all kind of. Have the effect of making F be a more expensive for some sellers. Well the 35 cents probably isn't a deal-breaker it is a good reminder to all these third-party sellers that your your kind of a digital sharecropper in the Amazon Echo System and what you know the two things that I think are most interesting are this kicks in in October, strong rumors that Amazon's going to try a second prime day in October so this could be insult to injury. They could be asking third-party sellers to like, load up the inventory and get ready for a second prime day and be charging them more so this actually could end up being even a little bigger than, was forecasted than Colin forecasted have. [5:44] Prime day ends up being a meaningful thing and then if you also remember earlier in the year Amazon launched check out with prime which was kind of a. First move to making fulfillment by Amazon available to non Amazon sellers or at least sellers off of the Amazon platform and so it's kind of interesting. You know shortly after they they're trying to make F be a more available there they're making it more expensive. Scot: [6:14] Yeah yeah the they've struggled with that because every time they've opened it up to people not selling on Amazon they have a surge of some kind and they have to kind of like pair that program back it's happened like four or five times it's crazy. Jason: [6:28] And the flip side is of course the other carriers you'd be shipping through the other common carriers the holiday search these are quite common so this is not not going to feel like a typical or out of line when you compare it to UPS or FedEx. Scot: [6:43] Yin haven't most of them put on a fuel surcharge already like an even though fuel is going down there. Jason: [6:47] There are there are surcharges on top of surcharges and you know some people feel like they haven't turned off the surge charges for two years. Scot: [6:55] Yeah yeah so it's hard out there in e-commerce land from a cost perspective that's for sure was there any Amazon news you found interesting. Jason: [7:03] Yeah yeah I would actually bundle two pieces of news and column two sides of the coin, the interesting Amazon test was revealed this company that monitors the Amazon App found a new feature, it appears like it's only been deployed to Amazon employees at this point, but it's basically a picture and video stream in the app so this is like the way that this is described as sort of like a tick tock like feature. Inside of the Amazon app which is interesting. Obviously in China a lot of people shop in the Chinese version of Tik-Tok which is called do Hyun. A lot of people get interested in buying products through tick-tocking us they haven't necessarily like. Checked out on Tick Tock in huge quantities yet but it's super interesting the Amazons kind of approach to social commerce, is get content creators and influencers and sellers. To create social content on Amazon's platform so I'm twitch on Amazon live and now this new Tick-Tock feature it's like Amazon's not partnering with Tick-Tock Amazon's trying to be tick-tock. [8:20] And I said two sides of the same coin because I mentioned in earlier tests Amazon did was Amazon live where they tried to take really popular, content creators that are calmer sea and entice them to create content on the Amazon platform and they're they're paying anywhere from like two to nine thousand dollars a month plus the. The affiliate commissions to get people to produce content on Amazon live and it didn't seem like content creators were super happy with those results, they weren't making a lot of money they were there was a lot of churn and now a bunch of this content creators that have moved off the platform are now organizing a boycott of Amazon, because they feel like Amazon's not treating their employees the way they would like so it just reminds everyone that like man there's this really interesting opportunity and you know side of the business around social commerce and kind of you know letting influencers and content creators into your Echo System but then the flip side is they don't always behave in the ways you you like and even more so when they're they're not on the payroll. Scot: [9:30] Yeah yeah the influencers live by the influencer die by the influencer The Tick-Tock things interesting I don't know, I think it is reading a lot into it to call it Tick Tock but you know they're definitely trying to figure out live streaming one thing we haven't talked about on the show in my world of Collectibles this Marketplace is really splashed onto the scene called whatnot and it's a whole live stream for Collectibles and you know the I think they've raised money around a three to four billion dollar valuation which would imply there gmv is pretty substantial I haven't seen any reports but it's pretty pretty interesting it's kind of an entertainment livestream like we see out of China but applied to Collectibles and I feel like that's a pretty good category for for this format because you can do these Pack openings and all these kinds of things and I've experimented with it and it's pretty neat you can, the streamers that can run auctions right in there and they can have kind of a three formats going at once they can kind of have a claim show an auction and then like a little e-commerce slider store over on the side it's a pretty interesting platform that if you're interested in Collectibles go check it out get started with collectible toys like these little Funko pops and then it's moved into it's got a vibrant sports card non-sports card and then and I've seen a lot of activity around the comics category so that's kind of an interesting new approach ahead and seen out there. Jason: [10:59] Yeah you know the whole live streaming thing is super interesting and complicated the quick Reader's Digest version. In China live streaming is super popular and it was born on the e-commerce platform so taobao live which is like kind of the equivalent of Amazon or Ebay. [11:18] Like launched a livestream video platform and they built a huge Commerce business and these influencers, the Alibaba paid like we're starting to sell like huge quantities there's this dude Austin Lee who sells lipstick Who Sold over a billion dollars in a single day, and over time in China the live streaming has moved off of the Retailer's platforms onto the social media platforms like Dao Yuan and WeChat, and so you look at China and you go oh my God live streams huge it's the future it's how all this stuff is getting sold I want to say it's like 15 or 16 percent of all e-commerce sales in China, but then here in the US has been a mixed bag there's a bunch of use cases like you just described where it works really well there's a bunch of Ed C lies streamers there's a bunch of like small retail boutiques that live stream during the pandemic to great effect. They're doing really well you know Tick-Tock which is the same companies do you know. Announced that they were delaying their live streaming feature in the US so they. You know it's not they're not rushing it to Market Instagram had a live streaming Commerce feature which they just retired last week. We've seen Walmart do some experiments in live-streaming we've seen Nordstrom do some experiments in live streaming it's not clear. The. [12:39] There's a a mass-market huge opportunity for live streaming that the Amazon live streaming Pilots haven't worked very well and so they're both like there's a bunch of niches and use cases where consumers really like it and you could see it working. But it doesn't seem like a slam dunk for any of the really big Commerce players that they just need to turn on this feature in the customers will come running so the. Lot of debate amongst my clients at the moment you know is China just ahead of the US and does everybody have to get ready for live streaming or is the u.s. going to evolve differently than China as it often does. Scot: [13:16] Yeah or like is it going to be one of those things where like we call talked about chat Commerce forever and it never really jumped jumped over you know it even though Facebook tried really hard to put Commerce and messenger and they hired the PayPal dude it just never really really translated to the US who next. Jason: [13:34] I know exactly so I yeah I'm not convinced the main way us consumers are shopping is ever likely to be live streaming but I do think it is. An important solution to particular Discovery problems in the US so I think it's part of the mix but I don't think it's that like, magic Panacea that's going to replace traditional e-commerce for example. Scot: [13:55] Yeah well I know you are tingly all over and super excited because the US Department of Commerce data came out and you have done your number crunching and I know I'm eager to hear what you learned. Jason: [14:08] Oh my God this week is like my leap year because you know US Department of Commerce data comes out every month so we always get excited about that but every three months, the e-commerce data comes out so yesterday the the retail data came out and tomorrow the e-commerce data came out and you were like a should we wait till tomorrow and do one show and I might know there's too much goodness here we need to shows one, to talk about the retail data today and then we'll do another one to talk about the e-commerce data after after that comes out. Scot: [14:38] Yeah on Wall Street I think they have a double and a triple jinx this is kind of a triple witching I don't know why they call it with you. Jason: [14:45] I do yeah so July retail sales were up 8.2% versus 2021. So that's very healthy robust growth. We've been talking about such big growth and with all these anomalies going on that like we've gone kind of used to it but just a reminder normal retail growth year over year, for the last 30 years the median growth is 4.5% so 8.2% is almost twice as good as you'd. And even more to the point year-to-date growth so January through June growth retail is up 8.9% so wit early twice what you would normally expect. So that is super exciting the. Wrinkle here is our friend inflation like every time I talk about this huge growth. A bunch of people chime in and go yeah but it's all inflation and for the last two years that we've had this enormous growth because of the pandemic and changes in purchase patterns all the economic stimulus all that stuff. I keep looking at inflation and inflation is a small part of the growth but not a meaningful part and so I have to keep telling people yeah information is in there but it's not a huge deal well that changes this year, so I mentioned year-to-date growth for this year's 8.9% if you adjust for inflation your today growth is 0.5%. [16:13] So that basically means all the growth we're getting in 2022 so far is directly a result of inflation and that's super interesting because, 20:21 was like the biggest year of retail growth in my lifetime and I jokingly told a lot of my friends and clients you know they should think about retiring because comping against that. 20:21 is gonna suck and then so far this year we've been comping quite well but it turns out the reason we're comping well is not because, consumer spending is like super robust and continuing but rather inflation has kind of filled in where that, that consumer momentum is starting to wane so that is a big story that we need to watch for the rest of the year. Again the actual. [17:04] Hyper actor e-commerce. Broad version of e-commerce called non store sales so for July they were up 18 percent versus last year. The year-to-date there up about 12%, I'll be really interested to see what the quarterly number is tomorrow you know in kind of Q4 of last year there was all this exuberant some for spending in retail stores and e-commerce continued to grow, but it's rate of growth slowed down a lot so for one of the you know only times in my lifetime. Brick-and-mortar retail grew faster than e-commerce and I have a feeling that we're going to see Q2 of next year that's Q 2 of this year tomorrow that that's not going to be the case that we're gonna returning to the normal trend of e-commerce growing. Meaningfully faster than brick and mortar. Scot: [18:01] We're not going to no till tomorrow I can't wait all-nighter. Jason: [18:05] I will give you one other thing to tease based on the q1 data which came out three months ago we've seen that q1 data show up in a bunch of earnings calls and the most famous one is Shopify right so Shopify, right before their earnings call they laid off like 10% of their Workforce and they said like. Man you know there was all this e-commerce growth during the pandemic we hired all these people we got ready for all this stuff and then the e-commerce growth regressed to the mean. Which toy surprised us we thought it would be more persistent and so we've got to lay off a bunch of people and cut a bunch of cops and they show this, this famous graph of the quarterly e-commerce data showing this big spike the last couple months and it kind of Dipping back down to the trendline. And I see that graph everywhere and the one thing I like to remind people about is regressing to the mean doesn't mean e-commerce. Didn't grow it meant e-commerce grew as fast as it used to be growing which is quite fast so, well Shopify weight off 10% of their people like I was screaming in the background e-commerce has grown 61% from 2022 2022 and it added four hundred and twelve billion dollars a year in space it's not like it's not like there's not a ton of growth there it's just the growth that we're used to seeing. So it'll be interesting to see what tomorrow brings. Scot: [19:33] Yeah seems like a lot of the the inflation is really starting to Ripple through at this point and we've seen that show up at some retailers but it's interesting to see it can work into the day-to-day with your. Jason: [19:45] I know that that brings up a good point like we have several omni-channel retailers that reported earnings this this week and it's a really mixed bag about. The the. Inflation indicators in their earnings calls and you know probably the biggest one is Walmart reported earnings two days ago and people economists watch Walmart's earnings reports really closely in a challenging economic time because. They're kind of the Bellwether for the American Consumer right like that they have the biggest chunk of consumer spending and they kind of as Walmart goes like the American economy goes so. The as a reminder about a week before their earnings they low they significantly lowered their their earnings guidance for the rest of the year, they said that they expect that that they expected their profitability to be considerably lower than they had previously. [20:40] Giving guidance there earlier guidance was like zero to one percent growth. And they reduced it to they think earnings are going to be 11 to 13 percent lower this year than they were last year. Um so fast forward a week, to their earnings and everyone was kind of braced for it being kind of a brutal quarter and it was a beat beat reiterate like, they beat their earnings Target they beat the revenue Target and they stuck with their guidance that earnings are going to be a lot lower the second half of the year but. Investors actually took that as good news they actually expected that that Walmart might have a miss and so the fact that. Q2 sales and Q2 earnings were reasonably robust at Walmart was kind of positive news and to kind of put that in perspective. U.s. comp retail sales for Walmart last quarter grew 6.5 percent so again normal retail growth is 4.5% so 6.5 is good e-commerce grew 12% and you can compare that with, Amazon e-commerce grew seven percent the same quarter so obviously Walmart's a lot smaller than Amazon but they're the second largest e-commerce site, in the US and they're they're drilling meaningfully faster than Amazon which is impressive they did. You know we made a big deal about Amazon is breaking out their ad sales. [22:04] Walmart didn't quite go that far they said that their ad sales which is called Walmart connect grew 30% which is. [22:12] I'm not faster rate of growth and Amazon's ad sales are growing Amazon's growing about 18% Walmart is growing at 30 but they didn't tell us what the base was and and you know it's certainly a way smaller base than Amazon so I'm not sure. That growth on the much smaller base is huge news but it was interesting to see them talking about it Doug mcmillon and the CFO both John rainy both made. You know a big deal about Walmart connecting being a big part the CFO joked about not being used to businesses with this kind of crazy margins before and. Doug actually talked a lot about how Walmart connect is gaining huge traction internationally so they're they're able to sell the ads in in India and China and some of the other other markets that they plan. Scot: [23:00] They were getting a lot of like why surface it now I don't understand the so Amazon started revealing it because they've had to like the SEC said this has become a material part of your business you have to unpack it a bit but this seems like they, decided to do any Mini. Jason: [23:17] Yeah I think just because it's a good number 30 percent growth sounds like a good number. And it's a yeah when when most of your news is about your earnings really being challenged talking about a super high margin part of your business. Growing really fast I feel like just reflects well right like I'm not I'm not confident we're going to see them report that number every quarter by the way. Yeah so we'll have to see how that goes but like to kind of, summarize why they're saying profits are likely to be much lower for the full 2022 essentially what Walmart is saying is they are seeing consumers change Behavior because of the recession, and one of the big ways is they're seeing consumers still spend a lot with Walmart but they're shifting from. [24:06] Wants to needs so they're buying a lot less clothes and consumer electronics and a lot more food, and the food in the essentials that Walmart sells are much lower margin, then the home and apparel categories that they're selling less of so the mix it Walmart is changing. Um which is hurting their profitability but not necessarily their income, and in fact they called out 11 funny anomaly of the income is in this High inflationary time, a lot more High income consumer start shopping at Walmart so people that make over a hundred thousand dollars a year spend more at Walmart in a tough economy than they do in a, really bullish economy and so they feel like they captured extra customers because of that that would have shop somewhere else but they're buying this alone margin stuff, and John rainy the CFO he specifically talked about how they're seeing consumers make different purchase decisions that there. [25:12] He called it a pronounced customer shift that people are trading down and he gave the specific example that we're selling a lot less deli meats were selling a lot less beef and instead we're selling a lot more hot dogs chicken and tuna, and that you know even vegetable based proteins like beans are starting to sell a lot better in those are all signs of, you know distress consumer that's trying to make their food budget go further every week. [25:39] So I would call that a mixed bag I feel like investors were thrilled that their earnings call wasn't worse but you know. I don't I don't feel like people saw Walmart's earnings and said oh my gosh we're out of the woods on the economy and things are going to be great for the second half of the year. Scot: [25:57] Yeah. Jason: [25:58] So then we move to Target and and Target was kind of a Miss meat, maintain right they miss their earnings pretty meaningfully so they the guy their expectation when 72 cents a share they came in at 39 cents a share so that's a big, drop it's actually 90% less profit than they made this quarter last year, so a huge drop in profitability they exactly hit the revenue Target which was 26 billion and their guidance kind of stayed the same that they're expecting to grow. Kind of in there two to four percent, um growth rate which would be a typical year and they're expecting six percent margins which would be significantly up from the 1.2 percent margins they got this quarter. [26:50] Digital for them was up nine percent which is a lot slower growth rate than than Walmart and slower even than Amazon even though targets a lot smaller than then Amazon. But what is interesting is. Target basically talked about not seeing any inflationary changes to consumer spending they did not talk about their mixed changing dramatically they did not talk about like seeing their customer change a lot, what they talked about is. They had too much of the wrong inventory because of the supply chain disruptions last year and then being forced to deeply discount a lot of product and they took like a 1.5 billion dollar haircut on their inventory. Um which they had warned us they were going to do but so what they're saying is man we're just having to sell a lot of this stuff cheaper and that's it's not necessarily because of inflation but more because. We have the wrong stuff. Scot: [27:51] That yeah got you think they had this supply chain problem and ended up with the stuff they ordered a year ago gosh when I open this door is. Jason: [28:00] That for sure is true like they all ordered like Walmart you know said similar things that Walmart's I think said if we had a magic wand we would make 1.5 billion dollars worth of our inventory just disappear. Um and you know they all like. Beefed up their orders around holiday and they you know they all went to these extraordinary expenses to get inventory they got inventory much more via much more expensive means you know from more expensive suppliers with more expensive Freight. Um a lot of those costs are coming down right now freight costs are coming down shipping costs are coming down, but you know a lot of that inventory rolled in and it you know it was the clothes they hope to sell for Christmas that you know is less appealing now. I would argue people are also just buying less clothes right now like and I do think that's partly because of the economy and inflation. You know Target saying it's not Walmart saying it is it's possible they're both right it's you know Walmart has a lower income customer than Target and so it is possible that the. The typical Walmart customers more affected by inflation and their behavior is changing more dramatically in the more affluent customer that shops at Target and Amazon, um that their behavior is changing less as a result of inflation so I you know it's not outside the realm of possibility that they're both they're both right from their. Scot: [29:26] Nursing did in their warnings they both talked about apparel any more color on that. Jason: [29:33] I mean again the the they're seeing home slow down a lot which is interesting because you know people were overspending on home when they couldn't travel you you've seen this in your business but like. A lot of people are back to travel there's a lot of Revenge travel people are also restaurants are having a moment restaurants are crushing grocery stores at the moment, as you know everybody I'm not sure covid zup officially over but like everybody's mentally of it over covid rushing back to restaurants and fun fact. Inflation for restaurant food is much lower than inflation for grocery store food so it's actually a better deal right. So the food thing is weird the apparel thing is weird consumer electronics are really soft sales right now and they're they're actually. They have this weird counter effect like that's the one category that's having deflation TVs or less expensive this year than they were last year. And yet sales are still really soft I think Best Buy reports earnings tomorrow so that'll probably be a challenge for them. In the discretionary spending categories the one category that everyone has called out as an out performer is beauty. And I think that's this thing that we call affordable luxury that like you know when you're not feeling great about your finances but you want to treat yourself like what you do is you buy the premium whip. Instead of an expensive outfit or something like. Scot: [30:57] Nursing yeah kind of a can still feel good about yourself but you spent a lot less than a whole new. Jason: [31:03] Exactly I would argue that a better affordable luxuries to have someone do an amazing job detailing your car but that's just me. Scot: [31:09] Or a iced vanilla latte at Starbucks or 10. Jason: [31:15] Yeah yeah absolutely that's not that's not an affordable luxury Scott that's a necessity. Scot: [31:22] Were there any other omni-channel you want to cover because I had a. Jason: [31:26] Yeah yeah I think we probably spend enough time the Home Improvement guys did report it was kind of a in between Home Depot is decent their up 5.4% in their their comp sales which is kind of in between what we saw at Target and Walmart they talked about seeing their consumer business has slowed down and seeing their Pro businesses which is the contractors pick up so I do think consumer spending on their homes is slowing down I don't know where that pro-business is coming from at first glance so we'll have to dive into that deeper but the housing market is all topsy-turvy right now. Scot: [32:04] Yes I think that this kind of ties into the, bifurcation of the convenience already consumer in the more affluent and then the value of learning consumer that the pros being busy it was more Renovations are still going on at larger homes. Jason: [32:21] Yep that makes sense. Scot: [32:22] You know that that weird that like segment and maybe what's happening is you maybe you've outgrown your house you thought you get a new one interest rates went up are like well if I put that money into a expansion or something, you know that this may be a better use of proceeds than putting it towards paying the bank larger percentage I think that's probably what's going on there. Jason: [32:44] No that makes total sense I'll buy that yeah so then what's the last tranche of earnings we want to talk about Scott. Scot: [32:52] This was interesting because I was reading a couple articles and I saw you know Casper has a new CEO and and he came in and was basically saying, hey it's time to start stop losing money we need to be a profitable company, so then I started wondering you know he had that cluster of sa cluster in a positive way we had a grouping of companies go public that we talk a lot about that we're kind of in this, some of them were not 100% digitally native vertical Brands but in this kind of cohort over the last 18 months of IPOs, not 18 months calendar but with IPO windows open we had if you remember we had wish thread up Casper glossy a all birds. Warby and purple and a couple others go public. [33:39] So then I started poking around and it's basically a bloodbath out there for that cohort of companies so you know Casper's not doing very well. I'm thredup which you would think would do really well in recession because people would look at more Consignment type type of peril they had to do a pretty big layoff the 15% probably the most hit hard is wished which I've never 100% understood wished but you know far be it for me too to figure that out but you would think they would be doing well because they always had this super inexpensive stuff the trade-off was it took a while to get to you but if you needed like a phone little drone or I think one of their biggest sellers is hair extensions bridal gowns all kinds of stuff you wouldn't really expect for that value or to Consumer you think during recession that would do really well, their revenue is down 80 percent year over year so they are just basically coming unglued they did a Rebrand and their new brand is. Bargains made fund discovery made easy which to be hence that maybe Discovery was a problem and now they're trying to say hey we kind of. [34:47] You came to us before and you couldn't find what you're looking for but now we fix that kind of has that that kind of vibe to the new branding. One that's popular with the ladies in my house is glossy a they had to do a 33% layoffs and I can understand this because we went on a New York trip and that's one of the, places we make a trach tube and the store was closed and this is just like. [35:10] Four weeks ago so definitely post coded so that wasn't good and I think I know what's going on there, Albert's didn't 8% layoffs were be they had a weird mixed message they were doing some layoffs and talking about their losses mounting but then they announced their opening 40 stores and that they think it makes economic sense it's kind of like. Yeah I didn't feel like the best time to be doing that and they didn't really say anything other than we think that this is a good use of capital. We'll see and then you know so Casper is doing pretty poorly and then purple who's kind of a Casper clone if you will need to actually predate Casper's they wouldn't like that being called a butt yet another online mattress company their revenues down over 20% year-over-year I think during covid-19 we got new mattresses and now there's kind of a like a pull forward for that that that's a huge problem so that whole cohort is not doing well and kind of indexing much worse than kind of like what you saw in the data I want to ask you what if you think there's do you have a theory of what's going on with those guys. Jason: [36:14] I do like I think the whole direct-to-consumer model, I'm not saying it can't work but it's way more challenging than a lot of people. Um gave it credit for right like the fundamental problem with the direct-to-consumer model is customer acquisition right like there's 240 million households in the US and getting them to know about you and be aware of you and want to buy your product is, really hard right and if you're a direct-to-consumer company with no organic awareness and no reason for people to discover you the way you get people to find out about you is you buy ads right you buy that awareness and and all these d2c companies were. Using digital ads you know mainly on Facebook 22 by audiences and so one thing we know is customer acquisition costs have gone up because of, the Privacy changes in the less the lower efficacy of a lot of those those digital things. [37:17] You know even on the old pricing every subsequent customer gets more expensive than the last one like the first customers you can buy are the cheapest, but you know increasingly you have to bid higher and higher for an audience that's slightly a lower propensity to buy your stuff and so as you grow as you scale, it gets harder and harder to keep growing and so we've seen a ton of these d2c companies. Grow really fast from zero to something and then hit a plateau and slow way down and we were seeing that before the pandemic we were seeing it during the pandemic, some of these companies like we're partly aided by the pandemic and so maybe it gave them a little extra Runway some of these companies like. A way we're probably hurt by the pandemic and had less less Runway but I think what we're seeing is that. That the pure direct-to-consumer model without some other way of cup of consumers, cheaply making consumers aware of your products, is really challenging so you're seeing a bunch of these dtc's open their own stores that's the war be model you're seeing a bunch of these dtc's pivot to wholesale so glossy is moving into Ulta I think it is or it may be Sephora I apologize if I have it wrong, um but they're a bunch of these guys have moved into wholesale to get awareness. [38:43] And you know that changes the whole margin structure and does all these things I think there's a Warren Buffett quote, they're only when the tide goes out can you find out who's not wearing a bathing suit and I feel like that's that's kind of the situation we're in with these D disease is you know once we've come into a, challenging economic model Market the. The high cost of customer acquisition and the challenges with continuing the scale are really starting to be a parent for all these data see companies you buy that. Scot: [39:15] I do and a lot of them in our you know in our world we think about cackle TV and you kind of get in your head yeah it's you know I'm growing X percent macaque LTD is three or four and you feel like that's going to stay around forever right and then you hit recessionary period which apparently this isn't and hit some headwinds or some chop and suddenly you know that no one's buying that second mattress for that second pair of glasses or you know whatever it is and then, you know your whole economic model is built on this ratio of cacti LTD of three and suddenly it's one and a half and if you don't react quickly to that and if you don't have if all you have is paid mechanisms that are built on that that will ratio then you're in the horns of a dilemma where you're kind of like well I turn that off, the the acquisition spigot I can't grow Revenue but if I keep it on my my earnings are going to, go to heck in a hand basket because I'm effectively my cup my kak My overall economic side business have changed very dramatically and there's no way for me to. To deal with that and because these guys have such a big chunk of their you know their their revenue from Paid media it doesn't they don't have a lot of degrees to Pivot on so another way of saying what you said but I agree is the short route. Jason: [40:38] You know you reminded me one funny thing I think one of both of our favorite guests on the show Dan McCarthy. You know he talks about like every time he gets to look at the finances for one of these d2c companies that they they wildly underestimate their CAC and overestimate their LTV that like the math is also just flawed that like you know most most of these d2c companies feel like they're going to have like incredible retention and keep the these customers re spending every year for a long time that their data doesn't necessarily support so they they overestimate their ltvs because they don't account for enough turn and then you know they all just treat their ad costs as their total kak and you know it's customer acquisition cost it's all the costs to find that customer and get them to buy them and onboard it so all the customer service costs all the onboarding cost there's a lot of extra cost that should be in that cack number that a lot of first-time d2c CFOs don't don't tend to put in there so. I thought that was a funny observation as well. Scot: [41:44] Yeah and then a lot of times you know you'll be like let's say 20 million and you're just driving the business itself Google and you're like well this is amazing and but then Google Google searches are a pretty finite resource and at some point you kind of can get them all right so there's only so many people that are typing in mattress everything and then then you're like okay well I'll do you know I'll do Facebook I'll do this I'll do what not and then as you do you Whittle away Google is always one of the most effective advertising venues because the consumers given you their intent so they're at the bottom of the funnel, so then as you walk up the top of the funnel your cat goes way up and then you can have infinite spin there at the top of the funnel but. It doesn't really change the metrics Downstream so then that's that scaling problem so all these guys get to 100 million and then and it really Falls over because because they can't really get that incremental next dollar and if they do they're kak LTV ratio goes way up because they're spending so much more on, paid media LTD is stable so yeah it's a tough slog so I think reading between the lines when when were be says we want to open up stores that I think they're trying to you know cough ironically go from a pure online to being in foot traffic and getting people there which is you know what they're basically saying I think is that that may be cheaper than that next in Criminal online add-on. Jason: [43:11] 100% I wonder I when we're all retired and we look back on this market like I do think there's going to be a lot more d2c activity than we have today but I actually think most of it is going to look more like Nike it's going to look more like someone that was born as a wholesaler that created huge awareness affinity and love and eventually hit escape velocity where they didn't need that that wholesale model anymore and they were able to then go direct to Consumer and have a low customer acquisition cost and kind of growth hack and I'll bet you a lot more of the d2c brands that are dominant you know sort of 10 to 15 years down the road got there by starting wholesale and transitioning to d2c rather than being born D to C which is just I think a tough value. Scot that's a lot for one show and you know we've already teased people about a subsequent show on e-commerce so I feel like we should try to wrap up is there anything else we didn't cover that you were excited to talk about. Scot: [44:19] Not just want to give you good luck tomorrow I hope all your data flows or columns line up your Tableau is humming and I look forward to hearing your analysis on what comes out of the day tomorrow. Jason: [44:33] Awesome well my in-laws are visiting and they're commuting home tomorrow so they promised they're going to listen to Tonight Show in the car so I just want to give a shout-out sit to and Papa. Um and with that it's happen again we've used up our allotted time as always if this show for you some value if you're going to be a little smarter around the virtual water cooler tomorrow, the way you can repay us for this free show is you can jump on iTunes and leave us that five-star review that we so warmly deserve. [45:08] Happy commercing!
How to cultivate and maintain rich partnerships In 2000, tech giants Microsoft and Accenture came together to found Avanade. The founding partnership has evolved into a global leader that digitally transforms businesses using Microsoft ecosystems. Microsoft alumnus Adam Warby was a founding employee at Avanade and was named CEO in 2008 where he stayed for 11 years. In this episode of our Beyond the Blue Badge podcast, Adam sits down with host Peter Proud to discuss navigating a company with two large corporate parents, crucial decision points to Avanade's success, advice for how to be a good partner and how he's empowering the next generation of business leaders.
Warby Parker is known as one of the OG social impact companies. But how are they reallllly doing? What does their report say? Are they misleading consumers or are they actually a good company. I was actually surprised at the significant amount of data that Warby had and could share. Not only did they share data from 2021 but also over the past five years so you could track progress. There were points where you noticed Warby Parker had to backtrack due to the COVID pandemic but I do think they tried to make up for it in other areas. I would say the biggest learning opportunities for other companies surround people and DEI opportunities. I would be interested in some of their updates in net years report on how some of their people initiatives are working out but all really progressive and designed to invest in the culture of the company. I always quote Cardi B in my presentations to college kids, "Kulture is Expensive". BUt it's so valuable and it can speed up change in the best ways. Or worst. Depending on what a company decides to invest in. Feel free to check it out yourself if you have some free time or a family holiday you want to get out of: https://www.warbyparker.com/assets/img/impact-report/Impact-Report-2020.pdf TEAM: Host: Sara Miltenberger, RSTR Media & Strategy Music: Jake Huffman Creative Artwork: Groove Street Creative --- Send in a voice message: https://anchor.fm/makeclimatecool/message Support this podcast: https://anchor.fm/makeclimatecool/support
Sarah Warby has one of the most impressive CVs in marketing. More than that though, she's a clear thinker and a down to earth human being. Now leading one of the most popular brands in the UK (and increasingly the world) - we asked Sarah to come and speak about her view that happiness breeds success, not the other way round.
Straight From The Off welcomes Tommy Boden to the Podcast. Tommy was a commanding centre back who could also play football. He was a two footed player that enjoyed spells at Holy Name, Orry's, Saltbox, The Warby, The View, The John's, JOB and Kennelwood. He tells us about his winner for The Warby in a Cup Final at Burscough, about losing two Premier Cup finals with The View and JOB before finally winning the trophy. His Saturday teams include a spell at Wrexham, then playing for the likes of Bootle, St Helens and Runcorn then finishing off with The Saddle. He talks about his favourite goals, games and all about the lads he shared a pitch with and played against throughout those times. Episode 59 is brought to you by: Absolution Clothing check them out on Instagram: @absolution.clothing
EP274 - Warby Parker and AllBirds IPOs Warby Parker and AllBirds filed their S-1 registrations with the SEC in preparation of making an initial public offering. In this episode we deep dive into all the information revealed in the fillings. Surprising Learnings From Warby Parker And AllBirds IPO Filings (forbes.com) Episode 274 of the Jason & Scot show was recorded on Wednesday September 1st, 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 274 being recorded on Wednesday September first 2021 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 Scot show listeners Jason we have a lot of favorite things on this podcast but you know it's even cooler than some fresh Amazon quarterly results hot new Gadget. Even some exciting Star Wars news. Jason: [0:55] No what's God. Scot: [0:57] A fresh delicious hot out of the oven S1 and you know it's better than S1. Jason: [1:02] I'm guessing to S ones. Scot: [1:04] You are right that is right we have we're very excited this week because not only do we have one s one but we have two s ones so I don't know if that's an S 1 squared or S2 or how we talked about that I guess 2's ones, and what's really exciting is one of our favorite topics on the show is digitally native vertical brands also called dnv B's and we have two of them that filed within a week of each other so that's pretty exciting so the two are Warby Parker and allbirds and before we do a deep dive into those S ones and highlight some of the things that we found that were interesting for listeners I wanted to give everyone just kind of a reminder of a great way to read an s-1, so an s-1 is. [1:52] Haven't haven't done a gone public before it's kind of like a sandwich so you have three parts you have this kind of first part where there's all this introductory stuff and you're kind of like CIA in that part and then you get into the delicious sandwich part of the the meat and potatoes of this one which is commonly called management discussion and Analysis they called em DNA and that's the best part because really management actually writes that now they have a lot of guidance from lawyers and investment bankers and PR firm in all this Jazz but it's really most of the times it is the founders you know putting pen to paper and describing the business and their words then after that you have the lawyers kick in and then you have a pretty good chunk of risk factors and then the accountants kick in and you've got your your your Gap financials and all that stuff and all that's interesting but if you're going to I always start a nest one from the middle out so I like to read that mdna first because it's the best way to hear about the company from the founders. [2:54] Now Warren Buffett and his Charlie Munger they always kind of famously start at the back of this one and they like to start at the audited financials and that's kind of how they look at a business and that's important but especially for these I think it's pretty interesting because you know it tells us why the founders do this dnv be thing how's it going how do they think about their business what are the key metrics they're looking at inside of there and I think that's particularly relevant for listeners of this show because you can learn a lot you know these businesses may be there ahead of you or behind you and your scale but it I always learned a ton about. [3:34] You know what other operators are doing and thinking about their business and you pick up a lot of interesting new tidbits there may be things you like and don't like that you can add to your repertoire. Jason how do you how do you peel into a delicious yummy new S1. Jason: [3:49] Yeah well I mostly take your advice that I guess to two alternative views is just skip the s-1 entirely and wait for the retail Roadshow and so you can kind of watch a movie instead of have to do all this math and read. Scot: [4:02] Yeah I like the retail Roadshow too but sadly it comes weeks after this one so this one is like an appetizer before you get to the movie. Jason: [4:10] Yeah and II may be uniquely odd in this regard but I do find it amusing and humorous to read the risk factors. I know they have nothing to do with the business and weren't written by anyone that has anything to do with the business but I feel like. They're increasingly more creative in the voluminous wig west of apocalypses that could. Could strike the Earth and I want to say like of the hundred seventy one page Warby Parker S1 about a hundred pages of it is the risk factors. Scot: [4:42] Yeah, yeah and I mean it is fun to read but you're taking the right approach at it what drives me crazy is actually went through and looked at a bunch of the headlines for both these companies and I would say about 1/3 to 25 percent of the. Press that covers you things you know to be and I don't know if this is just lack of understanding or clickbait or some combination of those things but they always pull out the risk factors so you'll see you know allbirds is worried about Nike as a competitor and you know and then you're like what did they read about that and they've just pulled out a the competitor list of the risk factors well the lawyers are saying you know if anyone has ever sold a shoe put them in the risk factors you know it's not like it's not like the founders in their own words are staying up late at night worried about Nike but maybe they are but. Most of that stuff is not the founders words it's lawyers kind of saying you know here's a checklist list everyone that you've ever think you thought you've competed with now that's their guidance. Jason: [5:42] Yeah I mean the list of competitors isn't remotely shocking it's more of the zombie apocalypse that makes me chuckle. Scot: [5:48] Yeah and now there's all these, yes every time new legislation comes out you have to add a risk factors know it's like you know GDP our cyber security we use cloud computing that could go down we it's kind of like you have to think of everything that's ever happened and you want to cover it so that if you do get sued you can say well it was a risk factor you should have known we warned you. Cool so we flipped a coin and you are going to kick us off with a deep dive into or be. Jason: [6:21] Yeah yeah so we'll jump right into it and we'll start with some of the financial metrics per your point is pretty interesting because these are. Private companies they don't necessarily disclose a lot of this and so you kind of go from like a pretty vague view of these companies to a pretty detailed View and if you're some other DMV be that still private like there's great benchmarking data in here so Warby Parker. [6:48] 20/20 in this is all complicated because of course 2020 was an anomalous year 2020 revenue for Warby Parker was just under 400 million in sales so 393 million and kind of to give you a progression they were 272 million in 2018 then they jumped up, 370 million in 2019 and then you know a much smaller jump up to three hundred and ninety-three million in 2020. The more eye-popping number is they have six months of data from 20 21 and they're already at 270 million in 2021 so if you kind of compare first six months of this year to first six months of last year. Last year there were 176 million this year there are 270 so they're definitely seeing a nice clip of growth. And obviously as you grow bigger you would hope that that scale would help you with profitability when you're you know small and still you know in growth mode it's sometimes hard to make a profit, and in this case. It doesn't appear like they've achieved that escape velocity where they're starting to turn a profit yet like the gross margins are. [8:00] Are in a reasonable ballpark they're pretty consistent in the kind of 658 to 60% range and so they are generating. Net positive ebit has but they basically have had a net loss every year except 2019 when they broke even. So what's a little worrisome about that is. [8:26] You know you like if you look at 2018 you said hey they sold 270 million and they lost 22 million on it in 2019 they sold 370 million and they broke even. Like that's looking like a pretty good Trend that scale starting to help them with their profitability but then in 2020 where they had a lot of extra costs from covid and as we'll talk about in a bit they're somewhat store. They were even bigger 393 and they had their biggest loss ever 55 million, and they're doing better this year but they're not on a path to profitability this year either so they're the on the 270 million they've sold this year they've lost 7.3 million. Um before I jump further does any of that financial news sort of surprise you at all Scott or does that. Scot: [9:17] Now I have a different opinion but well we're going to do a little kind of analysis again. Jason: [9:22] I like it cliffhanger. Scot: [9:23] Yeah yeah. Jason: [9:24] So one of the interesting things well a all these digital native Brands you start off by like generating some buzz and selling some stuff to people that are already friendly to you and it's super easy sales and and cost to get those sales is very low but then pretty quickly all these companies go into digital advertising mode and they buy ads on Google and buy ads on. [9:47] To grow quickly and the first ads they buy a relatively cheap because, that they can you know Target a very specific audience and there aren't a lot of other people buying that exact same audience so the, the cost per ad is low and so the the customer acquisition cost can be pretty reasonable but as you get bigger. [10:06] You have to buy a bigger chunk of audience from Facebook and more people are competing for that same audience and it's a reverse auction so you have to pay the most to get the ad and so growing purely on this digital ad business. Pretty challenging particularly when Google and Facebook are so good at optimizing the the the maximum cost per ad and so. For almost every DMV be we've ever talked about they they have trouble scaling and they almost always Implement some new tactics later in their evolution to kind of scale beyond the digital ad phase and so in war Beast Partners case they were one of the first retailers to say, the MVPs to say hey we need to open a bunch of stores and stores can be really profitable billboard to help dramatically improve our customer acquisition costs so by 2018 they already had 88 stores, and right now they have a hundred and twenty-six or a hundred forty five stores so so they have a reasonable Fleet of stores that has grown pretty pretty quickly. Obviously there's a lot of extra costs for running those stores and obviously those stores didn't do particularly well in covid. [11:21] So some of the interesting things about the stores is that like in 2018 sixty percent of the revenue came from e-commerce forty percent of the revenue came from retail about the same in 2019 but as they jumped up there store counts and 2020 that. So in 2020 sixty percent of the revenue came from these retail stores 40 percent came from ecom's so the store is really are becoming the primary acquisition Channel. It's super interesting to look at the. [11:54] The unit economics of a customer how expensive it is to acquire a customer how much money they make on each customer has sticky each customer is and different s ones you know give, different granularity in case of Ori Parker they reported a customer acquisition cost so they said that in 2018 they spent $26 per customer to acquire customers. In 2019 they said they spent $27 to acquire customers and in 2020 and the pandemic influenced year they had to spend more they spent $40 per customer to acquire customers now put a big Asterix on that there's some controversy will get to in a minute but. If you take those numbers on face value those are pretty darn good customer acquisition cost for this kind of business other. [12:42] Kind of did you a native vertical brands that have have done it s one have disclosed some kind of eye-watering Lee expensive customer acquisition costs and so famously like Blue Apron was paying $400 a customer to acquire customers so so even $40 a customer it's pretty reasonable to kind of put that in perspective in 2020 they were getting about 218 dollars in sales per customer which is a little over two orders, um so the the the unit economics are potentially viable. Except for that sgna line and all the expensive advertising that they're having to do which is ultimately driving that those those net losses. So those were kind of my big. [13:31] Takeaways and I alluded to a controversy friend of the show and former guests Dan McCarthy who's a assistant professor Emery and one of the true gurus and in clv um he looked at this as one and at first he was like wow that's a really good customer acquisition cost they should be commended and then he like started reading the fine print and they've used a novel definition of customer acquisition costs they've divided all of their expenses by all of their customers and. About sixty percent of their customers are returning customers so in theory. You shouldn't be dividing all of your digital marketing by your total number of active customers you should be dividing it by the new active customers and that's kind of the traditional definition that Dan and most of the rest of the world use we don't know what that number is for Warby but it's probably a lot higher than the. Forty dollars that would be disclosed based on this kind of unique definition of customer acquisition costs. Scot: [14:39] They did they kind of elaborate on that or. Jason: [14:44] No they didn't at all. Scot: [14:45] And easier he just kind of picked it apart and like there was no. Jason: [14:48] Yeah like they like there's not enough data in the s-1 to try to estimate a. Revised customer acquisition cost now what Dan has done in the past is he's gone a hold of credit card panel data. And kind of backed into like customer acquisition cost by looking at the the. The spend from you know the from customers I haven't you know I don't know that he's done that analysis yet for these guys are the even has access to the data to try but. Yeah so at the moment we don't know what their khakis I have to be honest you like even if. You you kind of like double it because you say like oh they should have only been chart you know counting all these costs against the 40% new customers and not against the hundred percent active customers. You're still at like 80 dollars which is expensive you you can't make money spending $80 for a customer that you only sell $180 to. It's still better than a lot of these other companies that we've looked at. Scot: [15:58] The worse is Casper were the cactus a good couple hundred dollars higher than the mattress. Jason: [16:04] Yeah and I would say. Like these guys have about the most mature store model of any of these companies like Casper's up there too but the next company will talk about allbirds has a lot less stores so, you know if the opening your own stores is the way to lower kak then you would expect to see it in Warby Parker's S1. And my my takeaway from this is. Either you have to get to a much bigger and you're going to say something in a minute that potentially disagrees but either where we Partners hypothesis is you have to get to a much bigger number to get profitable. And so maybe you know instead of one or million run rate I need a billion dollar run rate. Or you need an alternative customer acquisition strategy beyond your own stores and digital ads which are the two tools warble uses and I would also argue where B is. About as good as it gets at sort of organic demand generation and they do they do great like social they do gritty like they do all the other guerrilla marketing tactics so like. [17:15] Um I would you know if they're not profitable on 390 million with their type of product it seems hard to imagine that someone else with the same type of product. Is going to do much better because they seem like a externally they seem like a darn good execute. Scot: [17:37] Yeah isn't in the die where category is dominated by the luxacore Oslo Exotica and they own like everything right so they do they have you know they have a licensed almost every frame like. Jason: [17:50] Yeah almost every designer brand you've ever heard of is a is actually like license to Exotica. Scot: [17:58] Yeah then they own the. Jason: [18:00] And they own a bunch of the chains of retail stores. But they also do wholesale so Exotica like both sell all those license frames to the third parties. And they sell through their own stores, and they sell at a way higher price point than Warby Parker so they have way more margin like you know part of the premise of Warby Parker is the eyewear should be affordable so their average per glasses is $95 whereas. Like that the aov firm exotic is going to be much higher. Scot: [18:33] Yeah I do I'm not a customer but I knew I do know people that are and they do tend to buy more I've heard him say is anecdotal but I've heard him say especially women they'll say you know the prices are low enough I can buy a two or three different pairs that kind of they almost become accessories at that just kind of interesting. Jason: [18:48] So that's what I was hoping to see right like you go man I've been part of a frame cost $500 I can't own that many frames but if they cost a hundred dollars I might have different ones for different outfits right or. Right and so yeah like. Could their average order value be much higher but on average they're only selling 2.14 pair of frames per customer. So they're like again frame is $95 their average revenue per orders $184. Um so they're not necessarily like seeing a huge kit I'm sure their customers like you describe but they're not there are apparently are not enough of those customers that that's. [19:28] Change dramatically changing the economics also where we park our his kind of expanded to be a vision care company rather than just eyeglasses so they launched contacts they have optometrist services in all the stores and you might go oh wow I wonder how those things are contributing and at the moment / this one they're not, like the the all the non glasses products cumulatively are about one percent of Revenue and all the Professional Services are one percent of Revenue so these the the eyeglasses are 98% of their business now maybe that means there's a lot more growth there. [20:05] But like my so my overall take away. These numbers did not surprise me in terms of Revenue it was about exactly where I would have expected I wasn't sure they would be profitable by now it wouldn't have surprised me if they were so it's a little concerning to me. That they're that they're not. Again if a ton of this loss in 2020 is because of the pandemic and they really did break even on 370 and if they find a way to end up profitable in 2021. Um I'm their biggest Revenue year ever then you know that that probably looks pretty good but I can tell you a ton of people were shocked by these numbers a ton of people thought Warby Parker was much bigger a lot of people were speculating that they were near or over a billion dollars in annual sales which I did not view is very likely and so I think this is kind of a. [21:01] Glass of cold water in the face of a lot of the DMV be Fanboys and d2c Fanboys that like these guys are, are basically the poster child for that whole segment and they're better than most of the other ones and you know even they do not have. Home run financials and so you know frankly like this this bodes poorly for the financials of a lot of other like apparel DMV bees that we haven't seen yet. Scot: [21:33] Well I guess my seemingly controversial take is when. You know when you talk to these investment bankers there's all of this data that indicates that you should really focus on growth and not profitability if you're if you're if you're in a category like this which you know the pitch is there's this new way to build a brand it's direct-to-consumer it's digitally native yeah we're having some stores so by focusing on ibadah you're essentially saying we were making profit and we, need this we don't have anything to spend it in essentially because it's just going to kind of move over to your balance sheet especially when do an IPO you're in a load of the balance sheet with presumably at least a hundred million maybe more so. When you when you look at the data especially at this scale it's much better to lose money or to not get profitable for years because. You want to pump all that into growth so every dollar you can drive into growth gets a much bigger multiple than a dollar that goes to the bottom line. [22:42] So yeah so that's that's why and then the other challenges once you're profitable. It's kind of hard to undo it the classic example is Amazon in our retail world you know how many times have you and I heard retailers complained that Amazon is a profitable this is when they weren't profitable today they are only say they're not profitable, eventually Amazon got to the point where they just couldn't not be profitable so but you know for a good kind of like, I don't know 20-year run their they weren't profitable so they were the extreme example of this and it gave them much more leverage over like a Walmart who had been printing ibadah never got used to it and got valued off eBay doc then you can't go in and say, there's a new disruptor and hey everyone we're going to we're going to stop being ibadah positive and growing even on we're going to focus on the top line to you know our spend. 500 billion on some fulfillment centers so it yeah I think it's appropriate and I'm sure you know the risk factors that's going to be probably one of the first ones is we. I don't plan to make money and we may never make money so yeah so I think it's actually. I would almost expecting to be losing more you know if I look at kind of 21 so a lot of these. [24:04] S ones they do a six-month view because they don't want to update it every quarter its kind of pain wdesk one while you're in process so they'll do it like a six-month you and I believe their six-month view was 270 million Revenue so that put them in a 540 anyone's is that what it was the okay. Yeah and then loss is 20 that's even a lost that loss of seven so losing 14 on that that's. Jason: [24:31] The well the even has our positive by the way the it's only the net loss that like so like they have they made 20 20 million ibadah on 270 million in sales in the first six months of this year so that's. Scot: [24:43] That must be the way you're some accounting the other thing that's really frustrating is a. Jason: [24:48] They have all sgna below that you badal line which is weird to me at least I don't like. Scot: [24:54] Yeah that is weird. Jason: [24:56] That's that's why you got from this yeah that's why you got get from this positive ebitda to this negative net loss. Scot: [25:06] Yeah this is one of the ways Amazon lost money for so long is they would capitalize the leases on now it's become an SEC rule I think this gets kind of the edge of my accounting knowledge. Jason: [25:16] Yeah and they didn't there was not like detailed disclosure about the real estate so I that is an interesting question how they finance these stores and do they own them and all that stuff but. Scot: [25:25] So I would almost say. As in a potential investor I'd rather get to a billion dollars faster and have a negative ebitda a light you know at a 500 million they had like a hundred million ebitda law side. I actually kind of think that's okay especially if they could grow faster. Jason: [25:44] Yeah and so I'll just say I generally agree with you and I certainly get the argument about profitability the the bigger concern for me is there an 11 year old company that's executed about as well as you can execute done all the things that the talking headset are smart to do and they only got two with a super compelling value proposition and very high MPS scores and they still only got to 390 million so I like my biggest cautionary take away from this whole thing is it's way harder to get to a billion dollars then people realize and none of these companies have done it not one have them have gotten to a billion dollars in run rate unless you call like white cloth digitally native vertical brand. So I do think scaling is hard and if it's hard for these guys it's going to be a heck of a lot harder for these why you know companies that want to be super Capital light and not have stores and and all of those things and I well I. Don't over worry about the profitability I will tell you the unit economics are mildly concerning their making a custom product like they have to you know make those lenses for each customer and if they're having to spend $80 to acquire a customer that only half their customers are buying a second time they're only getting a hundred and or 218 dollars in revenue from each customer and they have to make a custom product in that it just like. [27:13] I'm not saying they can't get to profitability at a billion dollars but it's. It doesn't look like a home run business I could it still could be a good investment right and I mean as long as there's someone that's willing to pay more for your stock after you own it not saying the stock won't do well at all but it doesn't look like. A company that's likely to just you know generate like obscene free cash flow like Amazon does. Scot: [27:40] Yeah I bet if you looked at a kind of store cohort you'd be happier with the profitability and maybe that was something. Jason: [27:49] Yeah I would have loved to see that in this one and obviously they didn't put it in there. Scot: [27:53] Yeah you know and and yes so they must have been advised that the institutional investors aren't going to be that concerned that I think. I think they're actually close enough with the lines are the lines are converging so you know you can kind of see if you just kind of. Plot them out you can see they'll cross no get profitable because they're already been up positive So eventually they'll get to that net loss off when the lines are diverging like Lyft and Uber when they went public they had to spend a lot of time in there s one talking about well we know our lines are diverging but it's because we're if you take our cities that are over a year old they're very profitable and the reason our losses are growing faster than revenue is because we're opening city so fast and that's how investors got comfort in that example. Jason: [28:37] Yeah and their lines are diverging from 19 to 20 now they're going to say well but that's covid-19. Scot: [28:43] Yeah yeah that's project I could see that. Jason: [28:44] No I'm sure does yeah and especially again because stores. So Scott what did you learn from the allbirds S1. Scot: [28:56] Yeah allbirds was it was a good read I enjoyed it it was different you know so I kind of appreciate that having read a lot of these it was less dry of any S1 especially the mdna section was felt like the founders had definitely put their heart and soul into it I don't know if you do you listen to the podcast how I built this they. A really good episode on there and you know the thing another thing I appreciate about allbirds is there's consistency there every time you every time I hear one of the founders I go in a store have an online experience Packaging. They're very purposeful and brand message is very very tight in and until you try to do that it's hard to appreciate how hard it is to execute on that so, so I just really felt like that was interesting that even this one kind of landed on me as if you know the same vibe that I got from the store and the product and everything so that was really cool and kudos to them on that probably the most interesting thing about the allbirds S1 is they try to kind of tilt it and they say look we're not going to do an IPO we're going to do an S peo and what they're essentially doing is saying we want to elevate the discussion and talk a lot about sustainability and so they call it a sustainable public Equity offering and spe now I'll get into more of that but I wanted to go into some of the numbers first. [30:26] So on the number side there 2019 Revenue was a hundred ninety-three million and then in 2020 they did 219 million so so that's 13 percent year-over-year growth. [30:38] So that was interesting to me and then they it has accelerated from 20 22 21 looking at the six month period to 27 percent, they unfortunately there they've got a fair amount of international business you've got this kind of no Financial impact of currency conversion the FX is what they call it so do their 25 or 27 depend on depending on the currency situation but let's call it mid-20s and. So that's interesting so they've got accelerating Revenue growth which Wall Street loves to call that ARG ARG and then they broke out digital and said that it was 89 percent of their business and in 2020 that was a hundred ninety-four did you see that going down because part of their use of proceeds is opening a lot more stores they have 27 stores as of the IPO so June. [31:33] June 20 and then I've been 21 and then they have the pretty much say you know one of the we're going to open a lot more stores and it's gonna be a big push for us they also are losing money they're losing about 40 million a year so kind of twenty percent of Revenue is being lost which kind of feels you're going to lose money you might as well lose you know twenty Thirty forty percent of of Revenue to accelerate so that felt more in line with kind of what I've seen is public-private kind of vc-backed company coming into the public markets couple highlights on the other metrics they talk a lot about how their nudging gross margins up they in 2018 gross margins were at 47% and then moving up to 51% and a good expansion there on the margin side that's pretty typical as you scale and you start to nail down with any kind of manufactured product there's definitely margin benefits of scale right because you're buying more pallets of wool I don't know what we'll comes in sheep's of wool and you're getting more you know your. Paying off your fulfillment centers and you're taking a lot of these fixed costs you just putting more stuff through them so on a unit basis it drives in Crete drives down your unit cost just driving up your gross margins. [33:00] They were they were much more silent on cackle TV than what you saw with Laura B and so some of the data they had was they try to repeat customers and that number has gone up and. 2019 it was 46 percent of their revenues from repeat customers and then that was up in twenty twenty two fifty three percent they last raised a hundred million on 1.7 billion and I'll come back to that and then let's see the biggest thing about their IPO I hinted at the top with this spe oh is there all about sustainability and it's pretty interesting because some people they just kind of throw that in there in the hopes that there's the public markets there are increasingly large number of either, purposely built vehicles for investors that want to focus on this area or. [33:55] There's a big investors that are moving this way one of the biggest public investors is called Black Rock and they run out, huge massive amount of capital most of it in mutual funds but I think they have some hedge funds and whatnot and their CEO is basically put a Line in the Sand and said by can't remember the year but let's call it 20 30 or something like that they are going to shed any investment it doesn't really have kind of a framework around sustainability and you know. What people uses This Acronym ESG so environmental social and governance in essentially everyone wants companies to to self report what they want to do across those three dimensions and even the SEC is started kind of hinting and recommending that companies that they're going to start doing some things here and requiring them in things like us ones and then, the thing that's really interesting in a public company that I didn't learn until I was kind of deep inside of one a lot of these mutual funds so you go public and you have this new set of shareholders that are largely got mutual funds you've got index funds and you've got hedge funds and then retail which would be individual people like buying to their Charles Schwab well the mutual funds in the index funds when you. [35:17] When every year you put out these different things that you want your shareholders to vote on well they they don't like to vote on those things they like to defer that to a third party and there's several of these third parties once called ISS and the other ones called, glass Lewis or something like that and these third parties therefore become very powerful because they aggregate a lot of the, you know because these decisions are referred to them they thus aggregate a lot of power from your shareholders and they are really starting to get where they are they're saying you know even that's going to be kind of the first Domino to fall I think where they're going to say hey the recommendations we make on your board and comp and all these things that they have to opine on to the, to to the shareholders that have Outsource that to them they're going to really focus in on ESG so so it's a big movement and there's a lot of even CNBC runs like a every other day segment on this topic because it's become such a big big deal and you know I actually think it's good I think you know you would as a as you know. [36:24] Public means transparency and I think companies should be transparent about this stuff and if if they say you know I don't know where we're a liquor company and we're not really focused on this that's fine or if they say we're all birds and this is going to be a huge differentiator for us that's fine too it just you know at least let potential shareholders know where you are on the spectrum of things okay so that's the background the. [36:51] So these guys say look we we think this is so important we want to put a stake in the ground and we've come up with 19 criteria that we hope we're going to be the first we're going to kind of self rate ourselves against these criteria and they fall against, cross effectively two categories for each of the es and the D environmental societal and governance so it's things like you know they want to be carbon neutral they're going to like an environmental they're going to favor vendors that that kind of have a similar carbon neutrality and sustainability mindset to them and on the governance side they're going to have more diversity on their board and those kinds of things. [37:31] One of the interesting things they do explicitly State and this caused a lot of noise on Wall Street is they when you go public you get all these people there's kind of this this literal they call it the book so let's say you're going to sell a hundred million worth of shares you do your Roadshow and then you typically end up with maybe a more orders than you have shares she'll get 300 million so one way to you have an allocation problem so one thing you can do is you can just cut everyone back to a third and you can say well you want to 10 million now we're give you three that's how you could Jam 300 million of demand into a hundred million dollar opportunity well these guys have said is we're actually going to your allocation is going to depend on where you are as an investor as it relates to ESG so essentially they're saying if you're like one of these companies like BlackRock that that is really kind of pushing the foundation there we may give you your full allocation but if you're this kind of hedge fund that doesn't really even have a website and no statement on this then you may get no allocation or a smaller size allocation so that was pretty interesting that's the first time that's been done and that that was kind of. [38:37] Pretty interesting on that so encountered an actually mentioned sustainability in the s-1 over 200 times which is it just shows how important it is to them and you know a lot of companies. Tried this out but allbirds was founded with this right the whole idea of allbirds was could you find sustainable products to make a shoe with and they started with the wool even the soul is made from a plant-based material, if it was obvious like she shows her something to remember what it is. Jason: [39:07] I Scot: [39:09] But it's not rubber it you know it's not a you know there's two types of rubber there is a plant-based rubber from a rubber tree but most rubber is obviously from a petroleum-based so the other thing I thought was interesting is the essentially layout they have five pillars essentially and they basically say hey here's our five pillars we're going to be product Innovative platform Purpose Driven brand with an inspired voice. [39:38] Connections with our repeat customers around the globe so so Global and repeat customers are important to them vertical retail distribution strategy robust infrastructure creating a platform for scale the sequence of those is pretty interesting because again the first one is product Innovation and then second one is purpose-driven and that's where they capture a lot of the ESG stuff. [40:00] The I thought for listeners this would be the most interesting one is vertical retail distribution strategies I just wanted to add one will highlight here are digitally LED vertical retail distribution strategy combines our digital offerings with our stores so we can meet customers where they are delivering value and convenience with our store serving as brand begins our company was born online from the outset we developed a direct convenient digital platform for our customers we opened our first store and 2017 have since been expanding yada yada so and then they wrap up and say in 20 as of June 30 we 20:21 we had the ability to reach up to 2.5 billion consumers in 35 countries across our digital and Retail platforms so I thought that was pretty interesting where they're basically saying this D and B, be thing even though we're at a relatively small scale we think it's still important part of our future and stores are really more of a brand, front face to the digital back and so I thought that was interesting, let's see that some data on repeat analysis but you know the. [41:10] Those are the highlights they that is really confusing table where people bought more than their repeat purchase rate went up. [41:19] I kind of get wrapped up in a chicken and egg thing there because like just by buying more haven't you already made your repeat purchase go up like I couldn't unpack that in my head but I need and up figure that one out for me look at a secret credit card data my analysis on this one so that those are the kind of highlights my analysis was this one was shockingly smaller than I would have thought you know I. I kind of backed in this because I had heard that valuation of 1.6 on their last they're kind of in this unicorn status here 1.6 billion in your like okay a lot of these Brands you look at kind of public comps you get 325 x as an e-commerce company so let's give them a generous valuation of 5x so they must be three or four hundred million and then. Turns out they're kind of in this lower 200 or 300 million scale so that was like well they must be growing at a crazy Pace because if you're going at a hundred percent then you can still get a really nice vault. A super-sized multiple like they must be that makes them hopefully even higher right so there like a times multiple but they're really not they were going 25% so it's kind of a bit of a head-scratcher for me and I'm really curious to see how the IPO does because I kind of assumed I'm not smarter than than all these investors have looked at this and put this price tag on it so I must be missing something so you know the things I think I may be missing. [42:43] You know there's there's a lot of talk they've partnered with Adidas and they're definitely going after the running category and so taking on Nike if you can build anything that's, no one 20th of a Nike that's a big brand so that could be people could be looking at this and seeing the optionality of that is this could be you know counter to Nike this ESG piece it could be that there is an supply-demand imbalance I think. [43:15] I think this is definitely the case where there's a lot more ESG aware dollars looking for places to invest than there are places to put them, so that could be a factor maybe there's some bullish bullishness on the store business where people have done models they say well if they're at, 25 stores and they go to 250 that's going to the growth is going to accelerate a tremendous base so you know I kind of swirl all those around and you know it is interesting so I then I kind of put myself and say well if I was going to be with Nike how would you go about them and Nike doesn't have a lot of weaknesses and yeah they're ten years ago you and I would have said while their weaknesses are not going direct to Consumers but they've largely fixed that right and you've got a lot of you've got a whole deck on that that's excellent so that's not a weakness anymore and but you know Nikes weakness is could be there is a, you know and I don't know any facts on this it's just there's a lot of noise out there right that there's these Chinese labor camps that their products are made in and these sweatshops and children making the shoes and then certainly so there's there's kind of that that they're kind of unclean sourcing if you will. [44:32] People claiming it I have no idea what's going on there and then you know there is an argument to be made that Nike to my knowledge hasn't done a lot to say wow our products are sustainable in these ways is just really isn't their thing so so it is a clever way to attack Nike and maybe it's actually a combination of all these things that investors see and they say we think this is a pretty clever way to attack Nike they're going to get some market share because we think it's important to Consumers it's important to us and they kind of scroll all that together and that's why it gets the bigger multiple so I may be curious to see how the IPO does to see if, that multiple holds up or in a there's definitely something going on there or maybe it was just an anomaly in the private Market. Jason: [45:20] Yeah and in both cases like the. The economics of the IPO aren't really revealed yet right like we're a ways away from from like Target prices and like understanding what the valuation is going to be for the IPO. Scot: [45:37] Yeah yeah you know these guys that could have effectively a Down Round where they essentially say hey we want. Jason: [45:42] Both have raised a lot of money at some like reasonably High valuations. Scot: [45:48] Yeah and you know they probably wouldn't be going public if the bankers weren't telling them they're going to get. Yeah I really nice mark up unless there was some desperation reason and I just don't they're not burning enough Capital that I don't think the existing investors couldn't sustain them for years so so mi bat is the bankers think that they're going to do really well and we'll see a big pop so it will say. Jason: [46:18] Yeah well if you think so a I would say like one of the things that encouraging so a one thing a few things to remember that are different between these two companies is allbirds is much younger than Warby Parker so I want to say Orbeez like 11 years old allbirds is like 5 years old so there earlier in their evolution that 27 stores versus a hundred forty five stores and that's a. A huge difference because a big expense in having stores is advertising to get people to your stores and you know. Beyond the digital advertising which is very expensive per customer like traditional advertising is much less expensive but you have to buy traditional advertising. Based on a metro area and when you only have 27 stores it means basically you're buying an ad to that getting amortized for a single store whereas when you have a hundred and forty-five stores you can have six stores in a a big Metro and that same ad is driving customers to six doors so my first thing I would say is. It seems like they're committed to a store strategy but they're early in the face like they could get an ice pop as they open more stores because all of the marketing and advertising that they're already doing spending money on, will work much harder when they get to a little bigger feet of stores and the. There are economies and scale of running a fleet of stores versus at 27 stores they're probably pretty inefficient. Scot: [47:48] Yeah they talked about how they've had they've invested in some distribution centers into the store so they're probably over distribution Centered for you know 25 stores. Jason: [47:58] So I do think the stores thing is encouraging, um I always am uncomfortable on the whole Purpose Driven thing so because I guess I'm going to mines and you didn't mention it but I think one of the novel things about them is they're one of the first companies to go public that's a certified B Corporation. Scot: [48:16] There's several others so there's that brand for girls nothing to you. Jason: [48:28] Okay well it's I mean regardless a hundred percent think as a marketing tactic that you're a hundred percent right like there is a cohort of customers that really care about a variety of these different missions and Nike doesn't particularly appeal to a lot of them right and so. Kind of providing a viable alternative you know is certainly a way to win a segment I do think. They're very credible like they've been talking about this this sustainability purpose since the very beginning they've invested in it the shoe is more expensive to make because of some of the sustainability choices that they've made so it's not just kind of. [49:12] Ecology washing on top of a you know a greedy brand and like I think their claim in their in their last one is that the the shoe has a like 30% less. Less ecological footprint than a traditional shoe and I think traditional she was code named for Nike by the way. So so I do think they are they are credible in their Purpose Driven thing and there's a. At the moment there are all these surveys of consumers that o gen Z is way more purpose-driven and and way more so than older cohorts they say that you know they really care about a brand that aligns with their goals and they care about the ecological issues and ethical issues in all of these different things and it feels like Auburn's is well positioned to cater to those customers so superficially you go oh nice it's a. It's a growing favorable Trend in there a strong executor at it and I think some of that is legitimate. [50:16] But in the back of my head there's this this famous academic paper from like 8 years ago called the myth of the ethical consumer and basically all young consumers have always said in surveys that they care about these various missions but when you look at their spending habits, there their convictions are a lot less strong than their stated preferences are and so I do I worry. [50:43] About completely hanging my hat on consumers doing the right thing when they're there. [50:50] Happily buying a lot of Nikes obviously I did also think it's interesting. Obviously the unit economics are wildly different than Warby Parker because of the nature of the product but they have 3.3 million us consumers worry Parker has two million consumers despite the fact where we Partners got this way bigger Fleet of stores and has been marketing for six more years so, so they are getting decent reach, both companies disclose their MPS scores their net promoter score and and they're both astronomically high and allbirds is even higher than Warby Parker so they. They're making their customers happy. They're doing well the one thing that jumped out at me as a opportunity is for allbirds that would be harder for worry Parker is. Okay you start out purely online and you're growing through digital ads and then you start opening stores and you invest a bunch in opening your own stores what other levers could you pull if you need to get your customer acquisition cost down. And it's not obvious to me what the big ones are for for Warby Parker, a play that some similar companies to allbirds have run is expanding in a wholesale once once they sort of reach a plateau and allbirds absolutely could do that as well and so it again my takeaway from both of these companies is. [52:17] Scaling is way harder than the the Twitter DTC Universe realizes they all want to imagine these companies are much bigger than they are because they've raised a bunch of money. It turns out raising a bunch of money doesn't equal winning a bunch of customers not saying these two companies can't be wildly successful in win a bunch of customers, I'm just saying it's really hard it's a huge competitive advantage to be a big company that already has a bunch of customers. And it's hard to start a new brand from scratch and catch up and these both of these are examples of that and it's going to be really interesting as they keep trying to grow to see what. What new things they try to accelerate that growth. Scot: [52:59] Yeah absolutely and I was curious I just looked it up allbirds is an 86 net promoter score and War B's latest measure is 83. Jason: [53:08] And those are both astronomical and side note there's some controversy about how people measure it in the inventors of the metric. Our kind of annoyed with how everyone's misusing it so it's not guaranteed that that's perfectly Apples to Apples but. That those numbers kind of fit with the consumer sentiment that I've experienced for both brands. Scot: [53:32] Yeah yeah we do a whole show on the purity of net promoter score. Jason: [53:37] That would be awesome. Scot: [53:40] But that in with some attribution man that's a party right there. Go well it wouldn't be a Jason and Scot show if we didn't have a little bit of. Jason: [53:52] Amazon news new your margin is there opportunity. Scot: [54:04] That's right we got a couple in lausanne news items the one I wanted to chat with you Jason is, Amazon announced they are partnering with buy now pay later firm a firm so that was an interesting one did that take you by surprise. Jason: [54:21] It did it totally did not it didn't surprise me at all that they're getting into buy now pay later it's a huge trend. In a way like I knew they didn't have one but it kind of when I heard it read it and I said it to myself out loud I was cut it's kind of shocking. That they're just now adding it now they have dabbled in the past. With with much earlier iterations of these sort of installment plans but what totally took me by surprise is that they chose a firm like a a firm is working with a lot of. Direct Amazon competitors that aren't going to be happy about this I'm thinking of for example Walmart. And so I'll be curious to see how that flushes out and have a firm can successfully keep both of those clients happy that would be impressive and frankly there's just so much money to be made in this space and an Amazon scale I'm somewhat surprised that they didn't do it themselves. Scot: [55:14] Yeah that shocked me to the thing is I've been digging into these being the combi and pills and it's really interesting so if you look at a firm karna and a bunch of these, you know what they're finding is the under 30 year old consumer, doesn't like the way credit card debt Works where you have this pool of you know that you can pull down and then it accumulates they much prefer to match it with a purchase and pay off the purchase and it's really interesting to read about that and then the the both the firms in there s ones they have a lot of data around us and increasingly even after they've gone public there's more data coming out about this trend so I was I was thinking. You know why Amazon has they if you're a seller though and you money you know they've got their own credit card there's got to be like. What is the larger Banks kind of effectively inside of Amazon that doesn't really Market itself as a bank because it doesn't want to be regulated like a bank maybe that's part of what. Triggers them not doing it. Jason: [56:16] Dress fear about yeah Fair. Scot: [56:18] Yeah there's any trust thing but it is funny you know we've been at this long enough I remember. I'm old enough to remember there was this startup called bill me later and they came on the scene and Amazon used it and you know loved it and was actually giving them quotes that conversions were up 20 percent and then eBay bot eBay / PayPal but Bill Me Later and Amazon ripped them off the site the next night it was controversial and we're all like holy cow I can't you know I think we're all shocked how quickly Amazon turned that off after seeing his praises so it is kind of funny to watch now Amazon jump back into it you know probably been 15 years at this point back into it and partner up with the firm so I almost kind of wondered if. Maybe there was an investment phase but also doesn't Shopify own a chunk of a firm like there's an alliance there too which is another it's unlike Amazon to lay down you kind of have connections into. Competitors even one degree away with a firm in the Middle With both Walmart and Shopify it all. Jason: [57:22] And there is Juicy data at play in this service so it is it is interesting. Scot: [57:28] Yeah days was famously he wouldn't ever he really didn't want to buy any Google ads because he didn't want them to see what they're up to. Jason: [57:36] No I mean part of me would almost suspect that Amazon is like trying to learn on a firm and that it wouldn't be a long-term deal but I entirely speculation. Scot: [57:46] I think both of our Spidey senses are tingling on this one and we'll keep an eye on it then there was a battle of press releases where Amazon Walmart said we're hiring 20,000 people and then Amazon du ha ha we're hiring 50,000 so that was that was the other Amazon news I saw. Jason: [58:02] Yeah I saw that too I got to be honest to me those were nothing Burgers it's super complicated both of those companies hire a ton of seasonal Labour way more than that right and. Sidenote like targets hiring a hundred and thirty thousand people for Christmas so those numbers just didn't seem that impressive and if I was if I was Walmart my press release would have said hey we've hired 500,000 people since covid-19 like that seems that's true and that seems a lot more impressive than than the 20,000 I guess what is interesting in both cases is, this is not seasonal labor these are full-time jobs just dedicated to fulfilling e-commerce orders so that's kind of interesting. [58:42] And two other tiny pieces of Walmart news in the the time that we don't have left Walmart did announce. An enhancement to their advertising echo system so they have a thing called the Amazon or Walmart connect and they launched a DSP for that. Demand-side platform it's a way to use Walmart data to Target segments and by ads both. On Walmart so walmart.com and in Walmart stores but also um across the the interweb using Walmart's first-party data and as we talked about in our privacy show as it's harder to use Google and Facebook targeting because of all these privacy concerns. It makes sense that that retailers are trying to maximize The Leverage they have with their 1p data Walmart has the most customers so they have the most wimpy data and so that that's kind of an interesting evolution of their ad platform and a potential competitive Advantage for Walmart. [59:47] And then another one that's just kind of interesting that I didn't necessarily expect Walmart launched a new delivery platform. Which is delivering goods for other retailers. So they call it Walmart Go Local and essentially you can be independent owner operator you know, in a town and sell stuff for home delivery and Walmart will use their network of owned delivery. People in vehicles to pick stuff up from your bakery and drive them to a customer for a fee. Scot: [1:00:19] Yeah we'll see how that goes I don't know if I want my bakery to be delivered by Walmart. Jason: [1:00:27] Yeah I mean there's a number of issues it just to me it's interesting because obviously Walmart used to be a pure retailer you know you're seeing them lean into a lot of services they it was a few weeks ago but they announced this deal with. With Adobe whether they're they're selling software to Adobe and now they're selling delivery services to you know Main Street when you know used to be the narrative was that Walmart was putting Main Street out of business so it just it's interesting to see the evolution of Walmart. Scot: [1:00:57] I've whenever Walmart talks about some of the services they show kind of a low WalMart delivery vehicle that looks a lot like an Amazon Prime van. Jason: [1:01:06] Yeah they have a lot of different they have kind of a patchwork Fleet of delivery services and some of them use different vehicles but you you maybe more expert in the Walmart delivery Fleet than I am. Scot: [1:01:20] I just see this picture and it I think a lot about Vans everyday and it resonates with me. [1:01:32] I appreciate it thanks for looking out for me well we are out of time and one of the topics we wanted to cover but what with all the juicy IPO news didn't get to this time but will dedicate neck so to it is there is a lot coming up we're kind of coming in to wear it the past the halfway point of Q3 and all eyes will turn to Q4 with the holiday season it's going to be really unique this year because we cut the covid thing we've got the Delta variant we've got all kinds of crazy weather going on with hurricanes so as a retailer it's a really wacky time and one of the things we want to talk about next show is ship again so we coined that here on the show last year and turned out to be probably bigger than even we anticipated what's going on with that and 2021 I see a lot of time thinking about Vanagon there's also chip again so which which caused Vanagon so with want to talk about all the geddens that we're seeing out there. And then also you know there's a lot of interesting things going on the supply chain we've been you know the team here at the Jason Scott show and our many analysts have been listening in to the quarterly results and and talking to retailers about this and we have a lot of information to share on that kind of T up what we think the holiday is going to look like from from those angles. Jason: [1:02:55] Wow that sounds like an awesome show I can't wait to hear it. Scot: [1:02:58] I know I cannot wait for us to make it. Jason: [1:03:01] Will Scott it's happen again we've totally used up our allotted time as always if this was valuable we sure would appreciate that five star review on iTunes and only takes a second it's easier than ever before to leave it jump over there give us a review and make sure you're subscribed to get that next podcast Scot teas. Scot: [1:03:21] Absolutely thanks everyone and until next time… Jason: [1:03:24] Happy commercing.
This week, I catch up with rural mum Clare Warby. With all the talk about the latest season of Farmer Wants a Wife, I thought, who better to chat to than a woman who's been there, done that! Clare found love in Season 4 of the show when she fell for farmer Scott. Over a decade later, they're still together, raising their two kids on his family's farm in NSW. Clare shares why she applied for the show, what filming was really like, the love story, the reality check, and the ups and downs of her motherhood journey! This is her story.SPONSOR: Little Ones is an online shop for babies run by rural mum and farmer Kimmy Falls. She stocks everything from gorgeous teething toys, dummies, bassinet sheets, books and more goodies! Little Ones has also exclusively launched the Ethical Outback Wool brand- The only humane certified wool in Australia. These products include swaddles and blankets made from pure Merino wool grown at Coonong Station in Urana, NSW. With no acids or chemicals added - these products are nothing less that quality. Head to www.littleonesonline.com.au to shop!
This podcast is brought to you by Lattice. Learn more about how Lattice can help your business stay people focused at https://lattice.com/
Unfortunately only 20mins was recorded so the end has been cut off.
Callum and Julian welcome everyone's favourite Australian Maverick streamer to the cast tonight! Dougal 'DougesOnTwitch' Warby is one of the most positive forces in the Legacy community, running a hugely successful stream as well as GreenSunsZenith.com, a website entirely dedicated to the Maverick archetype. For tonight's show, Dougal joins us to not only talk Maverick, but also discuss the merits of different styles of deckbuilding for big events. Should you aim for an overall 50/50 against the field, or is it worth it to take calculated risks - even when you're not guessing correctly? Join us on the Everyday Eternal and find out! 00:08:00 — Drop Bears threatening Callum00:01:45 — Douges' Stream is Fancy!00:16:30 — GreenSunsZenith.com 3y anniversary00:25:30 — Listener Questions00:42:50 — Douges' Questing Beast got stolen00:59:15 — Big Event Deckbuilding - Maverick01:01:40 — Big Event Deckbuilding - Legacy01:09:00 — The Julian School of Deckbuilding01:13:00 — *THE* Deckbuilding Graphic01:24:00 — TRUST YOURSELF01:25:30 — The Best Proactive Decks01:39:40 — Win a Mox Emerald! Douges' recommended GWb Maverick List GreenSunsZenith.com twitter.com/dougesontwitch youtube.com/dougesontwitch twitch.tv/dougesontwitch 7 Point Highlander Event - for a Mox Emerald (free entry!) More Info about the Highlander Event Omg, EVEN more Info about 7 Point Highlander?! You guessed it - 7 Point Highlander Discord Invite Drop Bears in Australia - FEROCIOUS creatures Tobi Henke's superb graphic about calculated risks in deckbuilding Thanks a lot for tuning into today's show!Until next time,Julian
Key Takeaways - Motivated by culture, doing something I am strong at, and learning - Need to kiss frogs to find the "click" - Avoid "I will be happy when" - Happy brains are more successful - 10% circumstances, 90% what you do with it - Had to re-build at Unilever and spend 6 months eating humble pie - Doesn't want her kids being sheep and frightened Who is Sarah Warby? Sarah is a marketeer, a growth officer, a non-exec director, and an amateur painter. She learned the ropes in Unilever, lived in Australia for a while, was Marketing Director at Heineken, CMO at Sainsbury's, helped to launch a FinTech start-up, was CEO of a sex toys business and has moonlighted as a welder in South Wales. She's also a Non-Exec Director at Moneysupermarket plc and Chair of the Marketing Academy Fellowship alumni council. Sarah is a Fellow of the Marketing Academy and Marketing Society and was Marketing Society Leader of the Year in 2013.
If it seems like a new DTC brand is launching every day, that’s because it’s true. In every industry, across every vertical, on every channel, the next “big thing” is competing for your attention, your clicks and your cash. As a consumer, sifting through all that noise and filtering out which companies are worth your time can be a daunting task. And as a brand, it begs the question: how do you set yourself apart from the ever-growing pack?One option is to find a trusted source to vouch for you. Matthew Hayes can be that source, and his new marketplace, The Fascination, is where he wants to lift up some of the most worthy DTC brands coming to market.The Fascination is a product recommendation and reviews publication focused on emerging and purpose-driven direct-to-consumer brands, large and small. Users of the platform have the ability to filter through vetted brands, digest the company’s story, and even transact all in one place.On this episode of Up Next in Commerce, Matthew dives into lessons he learned while building Leesa Sleep, why curation is so important in the rapidly expanding direct to consumer space, and gives his take on why the convergence of media and commerce will be the one thing that impacts ecommerce the most. Plus, I even pull out a few stories from his trip to Richard Branson’s Necker Island.Main Takeaways:Curation Station: The saturation of the market with a new DTC brand every day is creating issues for consumers and brands alike. With so much clutter, it’s hard to stand out. Through measurable metrics, in-depth reviews, and by holding brands up to certain benchmarks, The Fascination created a space that customers can trust, and brands want to be listed. Layers of Use: For a brand to stand out, The Fascination has found that being mission-driven, promoting social good, and leaning into and highlighting the unique aspects of your business will be the most effective strategy. Lessons Learned: While not everyone can pick the brains of the biggest entrepreneurs in the world, when you get the chance, it’s wise to listen. Matthew was able to visit Necker Island and spend time with Daymond John, Marie Forleo, Tim Ferris, Seth Godin, and Richard Branson. Tune in to hear what advice they gave that has been helping him to this day.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey everyone. And welcome back to Up Next in Commerce. This is your host, Stephanie Postles, co-founder at mission.org. Today, I'm chatting with Matthew Hayes, the co-founder at The Fascination and previously on the founding team at Leesa Sleep. Matt, welcome to the show.Matthew:Thanks for having me.Stephanie:Yeah, I'm very glad to have you on. So I was hoping we could start with maybe Leesa Sleep. Because when I saw that I'm like, "Whoa, you were like an OG in the D-to-C space," and I thought they'd be a good jumping off point.Matthew:Yeah. So I was part of the founding team at Leesa. Yeah, we launched it back in 2014 before everything exploded. Right? So we were very early. We were one of the first BedInABox brands to get out there, Tuft & Needle came maybe, I don't know, six months to a year before us. Casper was literally right before us. And then we were out right around Thanksgiving of 2014 and that whole industry just exploded under our feet. We had the wind at our back for most of our tenure, especially our growth years. But things are a lot different now and t's a different ball game in terms of launch and growing a D-to-C brand in 2021.Stephanie:Good. Tell me a bit about the differences. I mean, obviously the world is very different and there's a lot of new trends coming out about what to expect over the next couple of years, but are there any lessons that you took away from Leesa that are still relevant or is the world just like in such a different place now?Matthew:No, I think it's still really relevant. I think a lot of the stuff that we were learning as we grew is incredibly relevant to the way that we launched The Fascination, the way that brand founders are thinking about things now. When we first launched in 2015, cost of acquisition were beautiful. Like all day we could scale the auctions across Facebook and Google, were very, maybe a fifth of what they are now just in terms of competitiveness. Just, I mean the mattress industry specifically there was 180 entrants after we launched, so a huge amount of volume coming into that space and just generally in D-to-C. So the cost of acquiring just pure play digital customers was going up and people were seeing the writing on the wall and starting to diversify into brick and mortar.Matthew:And so I think that was one of the things that we realized, is we've got to have a diverse channel mix. And so we struck the partnership with West Elm, we leaned more into Amazon. We looked more at international and we actually set up our own brick and mortar stores. So I think the combination of that brand awareness and exposure helped our brand tremendously. Whereas a lot of brands stuck it out, stayed pure plays and they learneD-to-Costly less and overspending on acquisition.Stephanie:Yeah, that's definitely the biggest thing that I see from the past couple of years or past decade is like before you could just focus on paid acquisition, like throw a bunch of money at it and one's really, they're going to come to you either way. And then now it seems like a lot of the, I guess the brands that are ahead are more media companies now, and there's a big spectrum between paying for people versus organic or versus starting a community and then launching a product to them. So it does feel like a definitely a different world than just like pay, and grow, and scale up as you go.Matthew:Yeah. I mean, we're seeing that a lot actually. And I think our notion of how to build a profitable business with The Fascination is quite a bit different. No, we're not a pure play own D-to-C brand selling our own products, we're essentially a marketplace, but what we've done is we've seen the success that media companies have had in building an audience that's super loyal whether that's The Hustle, or Morning Brew or The Scam, all of this audience aggregation and demand with these customer demos, there's so much that you can do with it. And so, we saw a bit of an opportunity and the fragmentation that was happening across D-to-C brand for popping up literally every day. And you start to become a little leery of, is this a good brand? Is this is a good product? Does this align with my values and tastes? And we saw this need for curation across all spectrums of D-to-C really. And we saw an opportunity to really create a media platform and a commercial platform around that.Stephanie:So let's dive into The Fascination a bit. So it's a marketplace. You guys are curating D-to-C brands. I saw you have filters focused on the product technical quality, also the soul of the company. Tell me a little bit more about The Fascination. How do you allow brands into the marketplace? Yeah. And any other details around the platform?Matthew:Yeah, so I mean, people are basically referring to it as a marketplace meets magazine, which I think is an accurate description. It's basically at its core, it's a product recommendation and reviews publication specifically focused on emerging and purpose-driven direct to consumer brands. So in much the same way that Wirecutter or the strategists reviews top products and writes those objective third-party reviews and recommendations, as a media publisher we're really doing that, but we're focusing in on a subset of these D-to-C brands that are new and emerging and have purpose driven values.Matthew:And the idea is to create a single platform where people can come and discover new brands, they can read reviews and research those brands and products, and they can shop deals all in one place. So it's a linear play from discovery all the way through to purchase.Stephanie:Yep. So who are some of your favorite brands on the platform right now?Matthew:There's so many good ones.Stephanie:[inaudible].Matthew:Yeah, I know I'm going to get in trouble for this. We've got badges across the site, which are really cool. The badges call out things like women and minority led businesses, or organic, or made in the USA. And so like Girlfriend Collective is one of our women and minority led brands. Haus is another-Stephanie:Even Haus on, yeah.Matthew:... Yeah, they deal the [inaudible] and great products, great brand story.Stephanie:Delicious.Matthew:Delicious. Yeah. I was just chatting with the founders of Huron, which is a men's skincare line. Awesome story. And then we've got the big names that you'd expect. Like we've got Allbirds on the platform. We've got Warby joining soon if they're not up already any day now. We've got UNTUCKit so, those it's a nice mix of the old school D-to-C incumbents with a lot of really cool emerging brands that honestly I'm intimately involved in direct consumer and a lot of these brands I hadn't heard of for the first time.Matthew:So if you think about like, as it broadens out the halo from the bulls-eye of our tightest demos, there's going to be so many people that are discovering these brands for the first time. And that's really what we want. We want some of these big names to attract people into the site, and then we want a lot of our awesome emerging brands and products to be discovered while you're there.Stephanie:Yeah. That's great. So how are you convincing these larger brands to join the platform? Because I'm thinking your space, I think also is very competitive. I mean, the world right now is headed to a place where everyone wants curated collections. I mean, they don't want to spend a bunch of time everywhere. They want it all in one place. We had the CEO of Fast on talking about, you need the one-click checkout and be able to allow people just to check out instantly and not have to bulk it into a cart. It seems like your space is very competitive too. How are you convincing the Warby Parkers? And the older brands who probably are approached by quite a few marketplace platforms to, "Oh, join us." Why are these brands going with you?Matthew:Well, I think we've really a ton on the story and the user experience and just the overall look and feel of our digital product and what we stand for. I think it's also in our favor that we have been D-to-C operators ourselves and we can really empathize to what these founders need. And we've been fortunate to be in the community for several years now. So we had a few close partners that our spring pad, if you will. Not to mention Nick Sharma as an advisor, who's great at pulling in brands.Stephanie:He was on our show too, man, I was just-Matthew:Yeah, I know.Stephanie:... fortunate.Matthew:And so yeah, between that, and we had some really amazing brands reach out the first day that just totally shocked us. We have a type form application that comes through and we had a couple of 100 brands, including some of the biggest names in the space on day one, which it was super exciting. And just a lot of founders getting really excited by seeing their brands mentioned in our round ups, or seeing products being shared. So I think that the validation that we're starting to provide, and really empathizing with what brand founders need is something that they're really clamoring for. And I think word it gets out fast.Stephanie:Yeah. That's great. So is there any trends you're seeing right now around what customers are most excited about? I mean, I'm guessing you have all this data now and you can see, okay, a bunch of people are coming on during quarantine and buying Haus. We need another type of Appertiff or something to offer that's similar because we see so much engagement there, any trends?Matthew:I think that one of the things that we've seen that's really interesting is our roundup pieces on brands that are making an impact and just the social impact stories are really, really resonating with consumers. And the brands are sharing the stories, which is just amplifying the message that much more. So the general consumer sentiment that we're getting from a qualitative perspective is that a platform like this is very much needed and like, thank you for building it. So I don't think it's even halfway to where we want it to be, or it could be in terms of the overall product development evolution, but we're going to get there quickly.Stephanie:Yep. So how, when you're... You just said that certain stories that you're telling around the brands and the social good aspect of it are really resonating. Is that your main play when it comes to acquiring new customers on your platform is by writing good pieces of content, having the brand share it to get in front of their audiences as well, or how do you think about acquiring new customers?Matthew:Yeah, I mean, customer acquisitions, it's always a challenge for a marketplace like this. And that's why from day one, we didn't approach it as a pure play commercial marketplace where you're just aggregating and selling products. From a consumer perspective, that's really not serving the overall need that we're trying to address, which is discovery, research, and shop and convert. And so the research aspect of that is really where we're going to focus a lot of time and attention and work. And what I mean by that is writing really in depth, thorough product reviews that are authentic, that are meaningful, that consumers value and ultimately Google values that content really highly as well. And so, what I'm getting at is the SEO and organic traction and such. It's going to be a big part of how we grow organically, keep our acquisition costs low.Matthew:There's a lot of performance marketing things that we can and will be doing. Brands have had tremendous interest in doing paid marketing partnerships, whether that's white listing on Facebook, or sponsoring newsletters, or any sponsorships. I think there's a tremendous amount of demand for that. And we really are just dipping our toes into the very first test there. And then I think PR and having, as I said, our brands amplify, our content is also, it's just going to be a latent, organic way to continue to build low cost audience. I mean, I think if you think about the way that Leesa scaled and a lot of those 2015 brand scaled, we know that we can't run the same playbook and build a sustainable business.Matthew:And so as we were launching in early days, it's like being a media company is really hard, right. Coming up with really engaging content every single day, pumping it out, like the Morning Brews and Web Smith's of the world, I take my hat off to those guys because it's not easy, but I think you can already start to see the rewards that we're going to reap from that.Stephanie:Yeah. So what channels are you... Well, maybe actually first, let me talk about the content piece, because that's top of mind for me is, a lot of people say you just need to create good content and that's the key to finding great people. How do you go about brainstorming something that will resonate? Are you actually going through maybe search trends and starting there to see what's going on in the industry, and then writing articles around that? Or is it purely, just like, I want to talk about Haus's story and we're going to talk about what they're doing behind the scenes? Like, how do you brainstorm content?Matthew:It's a mix of all of that actually. So we've got a number of things that we're covering at any one time. A lot of it is when we have new brands onboarded, we've got to write the brand story and we've got to review their products. That's phase one. And that's like an ongoing process as we get up and running. But yeah, we're also looking at industry trends, category wide trends, search trends around specific products or competitive products to see how we can write really compelling content that meets that need.Matthew:And then we're thinking about the cultural relevance, things that are happening topically in everyday life. And we've got a couple of different personas that we look at. And so what are our personas caring about, what's their headspace, and then what are the things that are happening in their specific lives at this very moment in mid January? So as we think through those things, you start to surface really relevant content ideas, and that's where our social content, a lot of our editorial content comes from. And that's generally how we do it.Stephanie:Cool. And what are some of the channels that you're most excited about right now, or you think that there's untapped potential? Are you sticking with the Facebook where of course stick the Facebook? How is sticking with-Matthew:Afterthought.Stephanie:I like that. Hey, they used to be though. Right?Matthew:Yeah. Drop that.Stephanie:Yeah. I mean, when? It's still pretty relevant, but yeah. Are you sticking with Facebook? A lot of other brands still say that's the best place to reach customers. Are you trying out a bunch of new channels and experimenting? How are you thinking about that?Matthew:So Facebook isn't a priority for us right now other than to the extent that we use it for paid social advertising. I would say it's there. Of course it's there. But when we're thinking about building audience, Twitter has been a nice surprise for me, I'm really bummed that I didn't get myself on Twitter several years ago, but Sharon, our audience development team's doing an awesome job of engaging that really passionate community.Matthew:I think LinkedIn has sneaky, organic reach and potential. And we found that a lot of our brand founders are sharing our content there and we're getting a lot of engagement.Stephanie:They're more organic then, right, because LinkedIn is super expensive when it comes to advertising.Matthew:Yeah. All organic. And then stuff like TikTok is interesting as we look at really organic product reviews doing things with founders, I think that's something that we're going to be looking at as well as Clubhouse.Stephanie:Yeah. Clubhouse. I think that's where it's at. I'm on there. I listen to people. I think you can connect with a lot of great people on there. I'm still not sure about the unstructured format sometimes where things can go on for hours and hours, but yeah, it seems like there's a lot of potential there to at least connect with new people. I don't know about selling.Matthew:A lot of untapped potential.Stephanie:Yeah. So I saw that you were also an investor in GRIN. Right. And that's the influencer platform, which is... That's the right brand. Right?Matthew:Yup. [inaudible].Stephanie:Okay. So our guest yesterday that we had on was, that's her favorite new tool that she's looking into and I had not heard of it before. And I'm interested to hear a little bit about how are you thinking about influencers? What attracted you to GRIN, where's that market headed over the next couple of years?Matthew:Yeah. I mean, we've been doing influencer marketing since 2012, honestly. And I think there's going to be a lot more regulation around it for one. So you've got to be buttoned up as you execute itMatthew:So I think that's just part of the industry growing up. A lot of these minors are now celebrities in their own right with huge followings and PR teams. And so the days of just engaging with an influencer that way are over. It's really about adopting a micro/nano strategy where you're activating pockets of a couple thousand followers up to 50 to 100,000 followers and doing it more strategically at scale. And that's where I see a lot of brands and agencies having success doing this stuff. So GRIN is just a really awesome tool for managing that entire workflow. Keeping you really on top of things, you can search for look alikes of an influencer. So if you have someone or something that you want to find influencers around, it's great for that.Stephanie:That's awesome. And how did you think about attribution and analytics around utilizing influencers and seeing if you're really getting the most bang for your buck?Matthew:Yeah. I mean, well, especially with iOS 14 and everything that's going on there, it's always been an imperfect science, we never assume that we would have even close to perfect attribution on influencer activations. So we always treated it very top of funnel and you do what you can in terms of attribution. So you give them trackable UTM parameters, you give them a bespoke promo codes with their name. You give them a landing page experience, everything that you can do to cookie the user on your website and get them into what feels like an authentic customized experience for that loyal following. That's going to increase conversion, I think as much as anything.Matthew:And the vast majority of influencer activity is probably happening on mobile anyway. So wherever you're sending them, it's got to be very mobile optimized because if they switch over, your attribution's lost at that point.Stephanie:Yeah. And I think that authentic piece you're saying, I mean, it has to fit your brand. The person has to not just be saying something just to say it. And I think taking that longer-term approach more of like a partnership and someone who is going to be a part of your brand, even if they start out smaller and grow with you, will be way better than just trying to target a big name, because I normally don't really put any weight in products that large celebrities are showcasing, just because I'm like, I just know how much money you're getting paid and I highly doubt you're using that teeth whitener.Matthew:Yeah, I mean to that point and a lot of grants are basically incentivizing on the CPA or per sale basis with, like you're saying a subset of really loyal influencers and affiliates that they can send that influencer their fall collection of bags and apparel or whatever, and they can get 10 or 15 posts out of it if the influencer continues to see performance. And so I think that's the new way of doing things nowadays.Stephanie:Okay. So yeah, viewing it from a content generation perspective of, they're not just posting once trying to get their product off, but they're also creating an article or blog posts that you can repurpose and pull quotes from or whatever it may be.Matthew:Yeah. And more frequency drives more conversion. So the more you get that brand in front of your audience, the more likely it is they'll finally take action.Stephanie:Yep. So I want to talk a bit about mentorship, which I always love asking questions around this. I saw that you went to Necker Island a few days ago... a few years ago [crosstalk], really? Few years ago. And of course Richard Branson's Island. So I want to hear, what did you learn there? What advice did you hear? I saw, I think Damon John was there, Tim Ferriss, Seth Godin, Marie Forleo, a bunch of great people to learn from. And I want to hear about the stories behind going there. What did you learn, all that?Matthew:Yeah, I mean, it was a life changing experience for sure. Damon is still pretty close to us in the business. He got involved with Leesa after we met, especially with their 110 program, and I really just learn from him the hustle, the grind. He told his story about how he came up with FUBU and really built that business from zero. And so, talking about fundraising with him is a different thing.Matthew:Tim was on the Island too. I was fanboying out when I met Tim actually, because I was obsessed with four hour workweek, four our body and here I'm chatting with him in person. We actually started talking about going up against Casper. At the time, we were pushing pretty heavily into podcasts and Casper was buying up literally every podcast that we could find, that we wanted to go after. And funnily enough, he would really push a micro strategy to us. He said, "You need to go after these very small podcasts that aren't affiliated yet, that have nascent, but growing followings." And we did, we found 10 of those, especially in comedy and gaming, and we stayed with them for years and they ended up crushing for us.Stephanie:Oh, that's great. And did you secure long-term partnerships with this company?Matthew:Yeah, I think we're still working with a few of them honestly.Stephanie:Oh, that's great.Matthew:We just completely sapped the audience, an everyone's got a Leesa now. Yeah. And then we talked with Seth. David and I chatted with Seth Godin, who's a marketing genius. He's like the professor of modern day marketing. And at the time, we had done around 30 million in our first year of sales, which was just crazy. And he was talking about making this leap called crossing the chasm. Basically when you're attacking the early adopter market and you're doing quite well, there's a point at which you have to "cross the chasm" and reach the broader demographic of people. And so I don't remember the tactics that he talked about, but he always impressed that idea of our okay, now we've got to broaden our sphere of influence. We still use that phrase today.Matthew:And then Marie Forleo was there and we had a lot of really good, we like chatted one-on-one several times, because I was incredibly anxious. I've always dealt with anxiety issues in my career, in my past. And so we had some frank chats about vulnerability and putting yourself out there. And once you do that, it just eases the tension, eases the anxiety. And I still use that to this day.Stephanie:Yeah. I was going to say, does it help now? Because I mean, I definitely feel that too. I remember when we first sold this podcast, then they're like, "Oh, Stephanie can new host it?" And just being like, oh, I usually always would have our other team members host the shows and yeah, I liked working behind the scenes and it definitely was hard being like, okay, you just have to do it. You have to get yourself out there. Did it help afterwards thinking through about her advice?Matthew:Yeah, it totally did. And I always think of this idea of demonstrated performance, where it's like, you're nervous about something, you're anxious, you step on stage or you sit in the seat, you put yourself out there and you have a really good performance. And then that just gives you one more step, one more piece of confidence and you keep going and building. And now stuff that I do every day without even looking at my calendar is stuff that I would have just freaked out about all day five years ago. So I think it's just about experience.Stephanie:Yeah. Now I agree. I remember even just thinking about doing video meetings, like when I first was starting out in the corporate world and being like, "Oh, my gosh, my first meeting." I was just so scared and sweaty and nervous and then now taking like 10 a day and being like, not even thinking twice. So yeah, I think just doing the work and pushing past and knowing you'll probably fail a couple of times and who cares?Matthew:Exactly.Stephanie:That's great. And did you meet Richard Branson when you were there?Matthew:Yeah. We met briefly. He gave us a talk which was awesome. He talked a lot about Virgin's impact program, and what he's doing there. And so that was really important to us at the time, because we were setting up our Leesa 110 program and that was cool to hear from him.Stephanie:That's great. So where do you see the next couple of years headed for The Fascination? What are you guys building for? What are you doing in stealth mode right now? What are you planning for the world to look like in a couple of years?Matthew:Yeah, I mean, right now we're really heavily focused on getting the digital product where it needs be to really deliver on a full transactional marketplace that's cutting edge for consumers. So in the next couple of years, we want to have a destination that is super engaging. We want to have brand founders engaging with consumers real time in the platform. We want to have people shopping and reading and researching brands and products all seamlessly, and to be able to buy those products in one click, right? Right on The Fascination.com. And so a lot of things have to happen in the background to obviously make that work.Matthew:And then we're always thinking about, how can we acquire the best customers, bring them in most cost-effectively? And it's always on my mind of like, delivering really solid, meaningful content to the audience, not just fluff stuff, but stuff that's really, really valuable. And so that's what I think we're trying to win.Stephanie:Well. Yeah. It also seems like there's such an opportunity to... I mean, when you have all these brands and they have access to a lot of insights on their customers or who's coming to their website to then build lookalike audiences off of those brands, and then all of a sudden you have access to customers and you're coming from a different angle where maybe if Leesa would have already gotten in front of a customer two times and they're like, "Nah," they then see The Fascination comes in and they're like, "Hey, check out this mattress. It's like a third touch point. That's very separated." But it seems like there's a lot of opportunity there to get insights at a much more accelerated rate than you would get just by yourself.Matthew:Yes. That is the goal. Yeah, there's a whole data infrastructure that we really need to put in place to get the most out of it. And honestly, coming from Leesa for so long, I'm still trying to wrap my head around what that all looks like in terms of affiliate click attribution and how we create audiences and how we do product recommendations. So we're only a month old, but we'll get there. And I can tell you that there is such tremendous demand for what you're talking about. Just leveraging lookalike audiences, leveraging audiences across categories that aren't competitive with one another. At the end of the day, everyone that comes to The Fascination as an interested consumer if we do it right, it's always going to have similar demographic profiles, right. Whether they're a man or a woman. So as you aggregate that at scale, there's a ton of value for brands to be able to tap into that.Stephanie:Yeah. It seems like eventually they'll have to be tools for the merchants as well, to be able to interact with all the platforms they're on. Or like, I mean a lot of sales are moving towards the edge. There's a lot of people say and how do you keep track of that? Like, how do these merchants they're selling on The Fascination, they're selling on Fancy, they're selling on not that Fancy is the same, but there are quite a few places popping up where these brands might be like, "Yeah, I want to sell on that platform or over here," but I don't know if enough tools exist right now to keep track of what you're doing and consolidating it all in one place.Matthew:Yeah. I mean, it's got to be a challenge for these fairly young brands. There's product feed software that'll handle some of that, but at the end of the day there's manual stuff that's always needed once you're drop shipping and wholesaling and you have retail partners. So yeah, we're going to be thinking about it from the other side, just the same, how do you manage 100, 200, 300 merchants and keep them happy?Stephanie:Yeah. Crazy. All right. Well, let's shift over to the lightning round. Lightning round is brought to you by Salesforce commerce cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Matt?Matthew:Yes.Stephanie:One minute to answer. All right. Yeah. Prepare, drink your drink, whatever that may be. All right. First thing, what one thing will have the biggest impact on ecommerce in the next year?Matthew:I think the convergence of content and commerce is, is going to have one of the biggest impacts. You've got media companies that are converging in the commerce, they all want to be transactional. They all want a bigger slice of the pie. They all want more lifetime value extraction from their readership. And then I think on the commerce side you see brands and retailers who are obviously seeing the cost rising of customer acquisition in the traditional sense and creating really rich content. It's the only way to do that. So we're diving in right at the intersection with what we're doing at The Fascination and that's where we saw it going. And that's why I think we're bullish on where we're headed.Stephanie:Yeah. Well, it'll also be interesting to do a recap episode on what's happened since some of these brands got into mixing media with commerce. I mean, I'm thinking about NBC, I think did a whole shoppable TV thing. And I remember seeing them launch that maybe in February or April last year, but I don't know what actually happened. So it'd be fun to do a recap of like, here's who launched in 2020 when it came to mixing media and commerce and here is status update.Matthew:Hopefully we will be one of the givers.Stephanie:Yeah. Hopefully. What's one thing from 2020 that you hope sticks around in 2021?Matthew:I think that we've all had to embrace things like this, just getting on video conferences, not having to present ourselves through this façade, in the office I would have never thought about wearing my hat backwards and rolling around in athleisure. And now that's just the norm for everybody. And kids are on work calls and it's just, the whole thing feels a lot more familial. And even if we do go back to offices, I really have loved that work now feels a little bit closer to home because you're in your home, but also because just the interactions, you see more than you would if everyone was in an office environment.Stephanie:Yeah, I agree. And I think it definitely brings a more human perspective too. Like you're saying, working together, knowing someone's kids, seeing them in the background, and then you also have more, I guess, empathy when a mom or dad's like, "Hey, I got to go do this with my kids." It's like, "Oh yeah, I saw your kid connection." Of course you can, whereas I'd say prior to this. Yeah. Not as much of a leniency, I guess for that. Yeah. That's a good one.Stephanie:What is the funniest story or best story you can think of when it comes to either building up Leesa or building up The Fascination where you're like, "Oh, this is a good time or a good story that really sticks in my brain from those years."Matthew:We've done so many like gimmicky things at Leesa. We were growth hacking like crazy and we were throwing stuff against the wall and not all of it stuck. We did a ton of stuff with Barstool Sports. We maybe did a few influencer integrations that wouldn't go over so well today with certain influencers.Stephanie:And with Barstool, I feel like they're so edgy that they can get you in trouble all these days anyways.Matthew:They're very edgy and we purposely like with all of those podcasters and creators, we're like, go be very authentic. And so you can't tell Barstool like, tame it down and not be authentic. But they were a huge converter for Leesa for several years.Stephanie:That's fun.Matthew:So we did a lot of fun stuff. We sponsored Larry at the gambling goldfish, which was a gold fish swimming around in a tank on Barstool sets, they pulled a mattress behind a truck with a Santa Claus riding on it. But we've also done a lot more admirable things, like we did a sleep out for the homeless. We've done a lot of cool things at Leesa just in the experientials side of things that made it fun.Stephanie:Yeah. I mean I have a love for the gambling goldfish. I want to go check that out. That actually sounds pretty funny.Matthew:Yeah. One more thing that we did is I think it was the 2017 NFL Draft, it's shown on ESPN and all the players are interviewed in their homes. And so we sent the players that we knew would be interviewed on TV, on ESPN Leesa mattresses. And we had them put their Leesa mattress boxes behind them and their families. And we got millions of impressions that night because we had Leesa mattresses all over the air on ESPN Draft.Stephanie:Oh, that's fun. See, I love creative stuff like that, where I mean, as long as it actually converts too, I always have the question about TV, does it actually convert or what happened after everyone saw the mattress behind them? Did you guys see a big uptick in sales, or?Matthew:I don't remember if we did or not. I think we saw a bit of an uptick, but I mean, it was such a low cost stunt to do that. It wasn't a swing for the fences, but we also did a ton of TV in heyday at Leesa. And you can really see the brand awareness effects the TV has even though it's insanely hard to track.Stephanie:Yeah. I agree. What is next on your reading list?Matthew:I'm probably going to do Shoe Dog by Phil Knight.Stephanie:Such a good one. I love that book. Yeah. So inspirational. I highly recommend. If you were to have a podcast, what would it be about and who would your first guest be?Matthew:Well, that's an interesting question because we may very well have one soon.Stephanie:Oh, nice.Matthew:Yeah, I don't know in what format it will be. It may be a podcast. It may just be like Instagram TV stories, but we really want to interview, just do flash interviews with our brand founders, asking about their origin story, asking about what makes their products different, fun facts. And I think a groundswell of really interesting stories like that would be fun.Stephanie:Cool. That sounds good. And then the last one, what's the nicest thing anyone's ever done for you?Matthew:Oh, that's tough. I mean, I there's been so many instances of generosity. I think honestly, giving me a chance to make the career switch that I did, and this is a bit of a shout out to David my co-founder, but he really took a chance on me. He's been super supportive of me for years, and it's really gotten me to where I am today in terms of my career and the place that we're at collectively. So him and the people around me that pushed me to make that leap out of the traditional corporate world of consulting. I was really hesitant to do that coming right out of my MBA and looking at a nice salary, and he was one of those people that pushed me over the top to do that. And I'm thankful for it.Stephanie:That's really cool. Great story. All right, Matt. Well, thanks so much for coming on the show. Where can people find out more about you and The Fascination?Matthew:So about me, you can find me on Twitter at MattDHayes, all one word, and then The Fascination.com. Go check it out.Stephanie:Awesome. Thanks for joining us, Matt.Matthew:All right. Thank you.
In 2008, the economy had tanked and John McDonald was left at a crossroads. Rather than withdraw into comfort, he took the opportunity to do something a bit crazy. John was a woodworker who spent time at trade shows, and someone once suggested that he make cabinet doors that fit with IKEA cabinets. With nothing to lose, John launched Semihandmade to do just that. Now, a decade later, Semihandmade has seen consistent double-digit growth year over year and has been featured in countless blogs, interior design social posts, on the feeds of influencers worldwide, and in the homes of tens of thousands of people. On this episode of Up Next in Commerce, John tells the story from start to finish, including how he built a successful ecommerce custom cabinet model on the backs of the IKEA brand, and how he’s now launching into the DTC space with the first US-made custom cabinet DTC offering, BOXI. From finding the right partners, to building an omnichannel approach that doesn’t handcuff your resources, to challenging yourself to strive for more, you’ll learn something from John and his story that just might help you level up your ecommerce business, too. Main Takeaways:Perfect Partners: For ecommerce brands taking on an omnichannel approach, there is no reason to tie up a lot of your resources into retail spaces and showrooms. Instead, exploring partnership opportunities with other brands in a similar category might be a mutually beneficial way to expand your brand, the brand you partner with, and offer an in-store experience to customers who seek one.Meeting the Moment: The world of home furnishings and interior design is changing rapidly, especially as A.I. and VR technology enter the marketplace. With that tech, users are gaining more flexibility to design their own spaces without leaving home, which means there is an opening for DTC companies that are tech-first. Step Up or Step Out: You can’t let competition scare you, let it inspire you to raise your game. By surrounding yourself with the best and forcing yourself to compete against them, you have to level up to simply survive, and succeed expectations to grow your business in a meaningful way.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce---Transcript:Stephanie:Hey, everyone. Welcome back to Up Next In Commerce. This is your host, Stephanie Postles, Cofounder at Mission.org. Today, I had the pleasure of chatting with John McDonald, the Founder and CEO at Semihandmade and also Boxi. John, welcome.John:Thanks for having me. It's great to be here.Stephanie:I'm really excited to have you on. Before we get started, I was hoping you could give me a little background, and for anyone who doesn't know what Semihandmade is and also Boxi, how did you start it? What is it? How do I think about it?John:Sure. Semihandmade is a company that's been around, I guess, just over 10 years now. We're based in Southern California. We make doors that fit IKEA cabinets. What that means is, if you want to buy a kitchen, bathroom, closet media system, IKEA, for the most part, gives you the amazing flexibility of not buying their doors. For a kitchen, you'd buy the cabinets, you'd buy the interior components. Then we have over 40 different options from entry level doors to some really high-end, one-of-a-kind offerings.Stephanie:I love that. Do I think of it like white labeling? You take IKEA's [inaudible] and then you can add like rose gold fixtures on it, yeah?John:Yeah, absolutely. Yeah. The credit, obviously, goes back to IKEA. This is an ever expanding ecosystem that's been around probably for 15 years now. People that make amazing slipcovers that you can put on their sofas. People that make furniture legs, companies like us that make fantastic cabinet doors. It's a way to get a really high-end look for a really mid-level price.Stephanie:Cool.John:I'm even fortunate to grow quite a bit with that.Stephanie:That's great. How did you come to this idea?John:I'm always honest and clear that this was ... It's a spectacular idea that somebody gave to me.Stephanie:Who gave it to you?John:I think his name is David Stewart. I think he's a photographer. Look, I'm 53. I don't know if I'm older than a lot of the people you talk to.Stephanie:A little.John:I came to things a little bit later. I had moved to California from the East Coast when I was 21. Well, wanted to get rich and famous, work in the film business, didn't really have any kind of plan, bounced around with that, was writing, not making any money like everybody else I knew waiting tables. Then I woke up in my early 30s and said, I got to do something with my life. It was post 9/11, which is a wake-up call for a lot of people. I tried a bunch of different things. Then I somehow landed in woodworking and furniture making at first and cabinetry. I got good at it.John:Through the late '90s and early 2000s, that's what I was doing, Southern California based custom furniture and cabinetry company called Handmade. I worked hard. I approached it like a business into my late 30s, which was different than a lot of other people I knew, the craftspeople, spectacular artists, but just no head for business, no interest in business. I always looked at it like as a business like any other. That's what I was doing through, again, the early 2000s. I was networking and blogs just started to happen. I was doing a lot of woodworking shows but also design shows. At one of those design shows in 2008, I think somebody came up to me, this guy randomly and said, "Have you ever thought about making doors for IKEA cabinets?"Stephanie:Was that something that others were doing? Why did he have that idea? Then was like, I'm going to tell John to do that.John:It's interesting. Again, I always want to give credit where credit is due. On top of him, there was a company called Scherr's based in North Dakota that has been making doors for IKEA cabinets just a little bit prior to that. People are always making their own doors as well. It is because IKEA lets you not buy doors when you buy their kitchens. I don't know why he mentioned it. I think part of it was because when I did those shows, it was a show called Whelan Design, which is a great show in Southern California at the time and back when Dwell magazine was really in its heyday and just an iconic brand.John:I was always like the one off independent company. It was me and all the big brands. It would be like Kohler and Caesarstone and Sub-Zero. I was there alongside them with my little custom furniture setup. I don't know if he took a liking to me, but we just spent that day, the Friday and then the following day just talking about it. I had no idea what he was talking about at first.Stephanie:That's awesome. Then for people listening, I know when I first heard of your brand and was looking through it. I'm like, oh, it's just like a small thing, a big thing. Then I was looking through some of the stats and you've been named like the fastest growing private company every year by Inc. magazine [inaudible].John:Well, yeah, one of. Yeah, one of many. Inc. 500 originally, we've been on that list, I think, six or seven years now.Stephanie:You've had double digit growth for almost a decade, year every year.John:Yeah. It's exciting. It's, again, one of many things. I try to be candid and clear, but I never expected this. I never thought in a million years I'd be doing this. Every year that we were fortunate to grow, even my ambition or dreams, it got bigger. It's like get to a million, get to two million, get to five million. It's been exciting. Believe me, I don't take it for granted. That's why I enjoy doing things like this, because I always ... At 40, I was newly divorced. I didn't have any kids at the time. I have a son now. He was nine. I lived in my shop for a year, because I got divorced.John:I didn't have anywhere to live. I had options, but I wanted to hide. I lived in my woodworking shop. I lived on my sofa with my dog. I just said, I got to do something else. It was a huge wakeup call. Then that's when the conversation I had, I think, six to nine months prior. It was like, maybe I should try this. Again, in terms of the second acts in life, whatever, I was 40 and had no clue. 10 years later, more than 10 years later, it's different.Stephanie:Yeah, that's very inspirational. Cool to hear about and cool to see where you can start and where it can grow to. How did you grow the company? From starting out where you're woodworking, you're building stuff, and then you're like, okay, I'm going to buy IKEA stuff and make it better. How did you get in front of people and be found in general?John:Like anything, Stephanie, it's like you look back on it and as much as it was, a long journey at times were so challenging, whatever. You get through it, and you gloss over it. It's only when conversations like this that I do get an opportunity to look back. The reality was, again, I had a nice custom furniture cabinetry business. I had some really good clients. I work with some good architects and designers. Then in 2008, the market tanked. Everybody went in the dumpster. I had to do something else. Things had slowed down.John:I started saying to a couple designers and architects, "What if we try to do integrate some IKEA cabinetry into the custom project." Because at the end of the day, a box is a box, and you're just going to see the outside of the beautiful panels and the doors. There were a few people that took a chance on that. That's how it ... It's like anything. I was 100% custom in 2009. Then it's like, okay, you can start mixing it in and starting to organically ... I don't even know what kind of ... I wasn't doing advertising. Blogs had just taken off.John:Apartment therapy had seen see me at a design show and written about me, which was amazing. That was a really big deal. L.A. Times did a story on me, which is incredible. Yet it was always organic. Through 2010 and 2011, it became, okay, now we're doing half custom, half IKEA. Then every year, it's a little bit more headed towards full IKEA. The truth is, I don't know when it was, maybe 2013, when it was fully just making doors for IKEA. It was fun. It was always a steady progression, always growing every year.Stephanie:Yeah, sustainably growing, which is a lot different than a lot of the brand.John:Yeah, profitable every year. Beginning, doubling every year, which, again, was not what I expected. Part of that, what's funny too is I have a lot of incredibly supportive family, but also friends, guys that I grew up with. When I was in California at 21, or 22, or 29, or whatever, they were amazing. They love me. They were supportive, but they probably had no clue where I was headed. I didn't either. Now, it's fun. I gave them a hard time constantly about the fact that they probably gave up on me.John:Not in a bad way, but it's just ... I mean, I do think that there is a time to cash in your chips. It's great to have dreams. There was an interesting like Scott Galloway kind of thing recently about if you should follow your dream. His overly simplistic thing is definitely do not follow your dream. Because unless you're willing to pay your bills to start because following just exclusively your dream can be incredibly impractical. The people that you admire, suddenly, the people that I admire weren't these head up in the clouds kind of people. They worked really hard. I geek out on founder stories, things, podcasts like this. I'm fascinated by that. It's never an overnight thing, or at least it's rarely. Again, I'm 53 now. This is all house money.Stephanie:Wow, that's awesome. When you started, getting more money, you're doubling growth, more revenue, obviously. Where did you invest? How did you think about investing that? Because I'm sure you're like, woo-hoo! I'm going to go have fun now.John:No.Stephanie:No?John:It was never like that, no. It's interesting. I would say I like nice things like some people do. I'm pretty frugal. In terms of the business, everything lives inside the business. I had a partner at that point. Up until three years ago, we made everything in-house. I was the original guy making the doors and packing them up and then shipping them in New York or different places. Then my partner at the time, Ivan, came on board. He was the guy cutting the doors. Now, we were fortunate to grow.John:Eventually, we had close to 35, I think 35 or 40 people that were working in production. Up until three years ago, we topped out at 75 people and half of them were making products. Now I'm proud to say we don't make anything in-house. Everything, it's made around the US, some at the top manufacturers in the country. That was a huge shift. To answer your question, everything is in the business. That's why you see revenue numbers are different than other things.Stephanie:Yeah. What were some mistakes maybe that you remember where you're like, ooh, I would have avoided this if I were to do it again, or especially in the more maybe the past five years or something. Not early on when you're just ...John:Right. If we're going to say 10 years ago, the mistakes that I made were unavoidable in the sense that I was creating this out of thin air. Ivan and I were just making stuff up as we went along. We were two guys. He's a little bit younger than me. He came out from Boston. I came out from Philadelphia to be writers. In some ways, no business starting this kind of business. In the last five years, it's probably the mistakes that I've made are ... I don't know, maybe waiting too long to really build up the team, which is not to say that we didn't have good people, we did.John:Part of my job now is just looking at the next 12 months and 18 months and say, hopefully, where are we going to be? Where do we think we're going to be? What are we going to need then? As someone who is ... Again, I think pretty honest about their limitations or whatever, we only thrive with people that are smarter, better, or more experienced than me. That's one of the biggest changes in the last at least six months, where we really just hit the gas and brought in some really amazing complementary pieces.Stephanie:Yeah, cool. How do you think about building on top of another company? What if IKEA changes their cabinet line or does something different, did that ever worry you, building a business that's ... I mean, a lot of businesses are built on another businesses, obviously. How did you think about that?John:We've always been after market. With IKEA, it's pretty well documented. We've gone up and down with them. I think in most ways, they appreciate what we do. Certainly, it's undeniable that we sell kitchens that people wouldn't normally buy if we weren't available. They also, I think, hate a little bit that we're there. I don't know this is arrogant or anything to say. They're not going to change their model because of us. They're never going to not sell doors. Even if they did, I would say to people like, "Then just buy the doors that literally cost $2."John:Then we'll pay for them and recycle. Their model is that a la carte wide range of pricing. We've always been respectful. Again, I have immense respect for them and what they built. It's extraordinary. Even when my fiancé and I moved into a new house and it's like going there, buying the basics for the house, it's just nobody can beat it [inaudible].Stephanie:Yup. I'm doing that now as well. I think, like you said, you're opening up a market that they probably wouldn't have access, otherwise. When I'm about finishing this house now, I honestly would not have thought to go to IKEA to get cabinets. I don't know. Then when I saw you guys, I'm like, oh, well then you can have the finishings and the colors and the things that I actually want. I don't actually care what a cabinet is like inside or behind the scenes, but I care about how it looks. A lot of the IKEA stuff does look like you know sometimes.John:Yeah, it's understandable. Because at that scale, you can't get that fancy and creative. This is the part where I drop names, just in the sense that what I do love is we work with some really cool people that do make IKEA more accessible. It is people like Karlie Kloss and Coco Rocha and all kinds of celebrities and high end designers and influencers. They, more so than us, have normalized IKEA. That's good for everybody. If design is supposed to be democratic and accessible to everybody, there's nothing more accessible than IKEA. Obviously, Amazon, Wayfair, and things like that.Stephanie:Walmart? Walmart is coming back. I have bought rugs now, a little egg wicker chair. It's from following influencers. I'm like, Walmart is coming back.John:You're right. It's funny, because the same thing with my fiancé, Stephanie. Yesterday, she was looking at different coffee tables. She said, "This is ... " She showed me a thing. I was like, "That's awesome." She said, "Oh, it's like the Kelly Clarkson line." I was like, "This is great." It's true. Look, certainly, you can make the argument that some of that stuff is more disposable and it's going to go into a landfill and less sustainable. I understand that. The reality is, not everyone has the same access to disposable. If you can get cool stuff, it's reasonably priced and it lasts for a few years. I don't know. It's hard to turn that down.Stephanie:You mentioned that you partner with influencers and celebrities. How does that relationship work?John:Yeah. I think that's always been a huge differentiator for us, one of several things. From the start, I always felt no self-consciousness about reaching out to people. Whether it was blogs, I would say, "This is what we're doing. Here are some photos. I'd love for you to write about us." Or even influencers. The biggest one and the one that we worked with the most is Sarah Sherman Samuel. We've had a door line with Sarah for three years. That's a situation where, god, I think 2014 or 2015, she reached out and said, "Hey, I bought a bungalow in Venice. I love IKEA cabinets.John:I wonder if we could partner on some doors." We did a small collaboration, gave her a tiny discount. She painted the doors. She styled everything. She took photography. The kitchen went completely viral. It's one of those kitchens that is everywhere. I think a really cool Farrow & Ball paints, brass and mixture of this light green and white. That just opened the door to all these other relationships. People saw that and started reaching out to us. It's been an amazing thing. The truth is, we've gotten to a point where we've had to pull back on that because it's just a different way to market the brand. It can be expensive. It's definitely grown us, there's no doubt about it.Stephanie:Have you thought about Netflix series? I'm just thinking, wow, they should be on a home remodel type of show. How perfect is that? People always trying to do amazing things on a budget on like the HGTV [inaudible].John:Yeah. We've talked about that stuff in the past. I like that stuff. Again, I don't know. I do think it's interesting our growth. That's how I always look at things, behind the scenes of how businesses grow, especially within that. I do like someone we haven't worked with in a while, the Studio McGee, the Netflix series, which is great. That's really interesting, especially after listening to another podcast like our friends at Business of Home, where ... I left the podcast with so much more respect.John:Because my interaction with them was a long time ago, and then I just see the photos and the beautiful stuff. Just the growth that they've had and the behind the scenes, and again, hearing their story is really extraordinary. I enjoy watching that stuff. I don't know if I want to watch this. I get sick of hearing myself talk. Maybe if it's everybody else, that might work.Stephanie:Yeah. I was just thinking like, wow, that'd be a really good partnership strategy. I always bring up the Container Store partnership that they had on the Netflix series and just how much Container Store sales went up after that series.John:[inaudible]Stephanie:I can see why, same thing with cabinets and stuff.John:Yeah, it's interesting. Because even that, again, I'm a lot older than you, but in the early '90s, whenever Trading Spaces came on and that was huge like ...Stephanie:I watch Trading Spaces, just to be clear.John:I mean, even in the '80s, the godfather of that is like Bob Vila in this old house. That's definitely before your time. That was restoring amazing New England homes and stuff. It was master carpenter, Norm. I think Norm Abram is absolute craftsman. That was the start. Then you had Trading Spaces. Even now, you would have thought, after 10 years, that goes away, and it hasn't. That's the thing. Is it the ladies like Home Edit and stuff like that? I don't know. It hasn't evaded, it just only grown. Obviously, Chip and Joanna Gaines and the dynasty that they have built. It doesn't show any sign of stopping.Stephanie:Yeah. It seems like the world is now just moving to a more curated collections like I'm going to look for someone who knows my style, so I don't have to waste time looking at everything. Whereas before, it's like, oh, I'm going to go to Target to get this, and then I'm going to go to Dollar Tree to get this. I make it up. I think, 10 years ago is very much about DIY, but all over the place. Now, it's like, okay, I'm going to follow Chip and Joanna Gaines, their line at Target, whatever that is, and follow the people that I know are my style and be ready to immerge myself in that brand.John:Yeah. The interesting, whether it's the 180 to that is the amount of growth that Restoration Hardware has had, where it's just almost like meteoric, being a complete luxury brand and selling the whole experience. It is like the Ralph Lauren of today, and now as they move towards hospitality restaurants and sounds like hotels. Part of your brain thinks, man, you can't sustain that. How do you keep growing? There is a market for that. Even when you watch the Studio McGee, their services are not expensive. Amber Interiors, who we work with, people like that, incredibly talented, at the really high end of the market. They keep growing.Stephanie:Yup. Tell me a bit about your omnichannel approach. I saw that you had showrooms around the country. Then you're, obviously, online as well. Now you're moving into DTC. How do you think about keeping a cohesive story of your brand but also expanding and reaching a lot of people on different channels?John:I guess the biggest challenge, if it is the biggest, it's just the fact that what we're selling comes at a higher price point than the average online purchase. We sell certainly, if you're doing a GODMORGON bathroom vanity, that then may cost $150, $300, $400. We're selling cabinet doors and panels and complementary trim and things like that that can cost $3,000, $5,000, $20,000. Again, it's not buying a pair of Warby's or an Olay bag for a couple hundred bucks. There's a lot to it, a lot of back and forth. Excuse me.John:Showrooms we're always a part of we've got to show people our product, especially when we're asking them to spend that much. The benefit of IKEA is, even though they're still a privately held company, there are only, I think, less than 60 around the US. What I could say to people to say to you, Stephanie, or wherever, like you're in New York, go to one of the five local IKEAs. Then come into our mini ... I never want to call it a showroom, because it could be 200 square feet. It's got some cabinetry in it. It's got door samples, things like that. There would be a whole experience.John:I would always say, if you want to see a kitchen, go to IKEA and you can see 15 kitchens or see 20 kitchens. Want to see the doors? Come see us. We've had that in New York, in Brooklyn, in Chicago, obviously, in LA, Minneapolis, a bunch of different places. Again, trying to be reasonable about that. I don't want the overhead of signing leases if I don't have to. What we've typically done and we will continue to do even more so is partner with other great brands. It is like a multi-brand approach.John:With our lighting friends, with hardware companies like Rejuvenation, Fireclay Tile, upcoming collaboration with Caesarstone, it's partnering with Cambria in the past. It's just saying, let's do this collectively. Because the kitchen is, as someone said to me, "The base purchase, if you're fortunate to have him as a house, there's a car, and then maybe there's your kitchen." We're trying to grow the company that way. We started what I think is an amazing ... I got to [inaudible] blog anymore. It's that. [inaudible] stories that launched last summer.John:That was the idea that I wanted to bring together all these great writers, great content to help promote the brand, of course, but also expand us, again, to make that cliché to becoming a lifestyle brand. On the one hand, it would be enough to have a really successful cabinet door company. I just think we have the opportunity to do so much more. That's what something else we can talk about, is this brand Boxi, which is going to launch at the beginning of March. That really is direct to consumer. That's our own product, no IKEA. That's a whole different thing for us.Stephanie:Alright. Let's move there next after my one thought. I've many ideas when talking to you now.John:Awesome.Stephanie:What about having like partnering with IKEA on their AR app or developing your own AR app, instead of having to have a showroom, being going to IKEA, pull up your phone, and then you can swipe through the designs of ours, and you can see exactly what that trim would look like, what that doorknob or whatever, so then you eliminate showroom.John:It is interesting. Look, the thing with IKEA, they have partnered with people in the past. Obviously, places like Target have done an amazing job of that completely. As you said, Walmart too.. It always seem like the natural fit with us. If you were going to do it with anybody, it would be us. In terms of AI, yeah. IKEA has been slow and is put a huge push in the last couple years of their online presence and their economy. They have an app they launched last month. What we are doing with the new brand is working with a 3D AI company called Skip. It's going to launch in the next few months. That lets you basically not go in showrooms.John:There are ways to order this new line of cabinets, and one of them is to make an appointment and someone comes to your house and 3D scans your room. Then you design remotely. With 80 hours of AI and machine learning and everything else, it's compressing that and then presenting you with design options.Stephanie:That's cool.John:That's where we're headed. All has changed dramatically in the last year. COVID or not, it was headed towards that. The new iPhones have the camera technology where you can almost do that. Maybe in 12 to 15 months, you don't even need a guy to come to your house. You can do it with your iPhone. They're already pretty close.Stephanie:Yeah, I think it's fair. I have a little tape measure app on my phone and it says, okay, scan the whole room. You do that and then you can measure everything. The placeholders all around the room for you and [inaudible].John:Yeah, it's fascinating. Even brands like Primer that launched last year, which do the work with other brand partners, and you want to click on like the Hygge and West Wallpaper, you can hold it up to your wall. They'll show you different swatches and things like that. It's interesting. For us, yeah, that is part of what we think is a differentiator. IKEA is always going to have massive brick and mortar. Even though they move in some cities towards smaller footprints, it's still footprints that are 20,000 to 150,000, as opposed to 300,000. There's another cabinet line that's launching.John:It just launched, it's got a 30,000 square foot showroom on the East Coast and 100 kitchens. You go in and wear the AR or the VR goggles. That's completely different because you're looking at some space that has nothing to do with yours. It's kind of what you're saying. The point is, things are changing so fast. With Boxi, it is saying, can you make this as DTC as possible? The caveat being, it could cost $10,000 to $15,000, to $20,000. It's not like ...Stephanie:Okay. Tell me what is Boxi then since we [crosstalk].John:Boxi is the first American direct to consumer cabinet brand. It's a cabinet system for the entire home. It's basically taking the last 10, 11 years of everything we've learned from IKEA and saying, let's try and offer something. I don't know, if it's ... I don't want to say better than IKEA. Because again, I've huge respect for them. It's a more complete package. Certainly, the quality is there. The accessibility is there. One of many things that we're going to improve on is the fact that Semihandmade customers have to go to IKEA first.John:It's a two-part process where you've got to go to IKEA. You've got to order the cabinets and hardware. Then you've got to order the doors from us. Thank God that they do, but especially in the last year, IKEA, like a lot of people, has suffered horribly with supply chain issues. We have customers now, unfortunately, it's January, they're hearing, cabinet boxes might not be available for three, four, or five months because ...Stephanie:I ordered a couch from Pottery Barn and four months out. [crosstalk] order, I just didn't look, I guess.John:As a business, on a personal level, that annoys me because I want ... That's a whole thing. We have such ridiculous expectations because they're easily met or they have been up until now. Not to blame Amazon because that's too easy. I'm a hypocrite about Amazon too. With Boxi, we're saying, no big box stores. Somebody can come to you, things ship, leave the factory in a week. Part of what we're doing, you're from Palo Alto, I don't know if you're born there, but it's almost like an In-N-Out Burger West Coast approach. Meaning we're going to do a limited number of items, and we're going to do it great. If you want ...John:What they do is they're great. What's interesting about that is they ... I think just little background on burgers. I think the founder was best friends with Carl Karcher who started Carl's Jr., another big West Coast place. In the '50s, they open hamburger stands right next to each other. The In-N-Out guy's thing was always, I'm not worried about competition. You're welcome to open across the street from me, next door, or whatever, because I'm just going to bury you. I'll just be that much better. Not like in an obnoxious, overly competitive way. Just like, this is going to raise our game. With us, with Boxi, yeah, limited selection, fast turnaround ships in a week, never need to go to a big box store. It's built in the US at a really competitive price point. That's the idea.Stephanie:I love that it's built in the US. I think that a lot of companies right now are bringing things back into the US and some are struggling seeing how expensive things can be and what was happening overseas and maybe how it's just different here. What did you guys learn from IKEA that you're taking with you? Then what are you discarding where you're like, we're going to do this different though?John:Again, in some ways, I learned everything from IKEA. Look, I learned a couple things. One of them is you can't compete with them in terms of pricing. That's the most basic thing. I always say like, with Amazon, the same thing, you can't ... I mean, then the turnaround lead time. Up until recently, with COVID, you could buy a kitchen today and bring it home today. Nobody else could do that at a crazy price. Best of all, really high quality. IKEA, to their credit, pretty much every year, as long as I can remember, the last 10 years, is right at the top of like J.D. Power customer satisfaction in terms of quality, customer service, things like that.John:You could complain about certain products from IKEA and their quality, but their kitchens, I think, are inarguable. As much as I'm not affiliated with them directly, I always get defensive when people would slag them. Because it's also understanding that the product that they offer, and this blows some Americans minds, but it's a particleboard core with a melamine skin, a three-quarter melamine box. That standard in the entire world for kitchen cabinets. The most expensive cabinet brands in the world are constructed the same way.John:In the US, that's less the case because 70% of the market wants a frame around their cabinet. It's literally a face frame cabinet. The European style that IKEA is called frameless 32 millimeter. Again, I've learned everything. We're deeply indebted to them.Stephanie:Well, is there anything that you're changing though now that you are exploring DTC that's [crosstalk]?John:Yeah. We'll always have the ability. With Semihandmade, one of the differentiators were ... You'll always have this when you're smaller, we're microscopic compared to them. It's just being able to be nimble, to be able to get more custom, to be able to offer certain versatility that they could never do. Limited run doors, ability to do appliance panels for really anything. The Semihandmade, we could always do that. We can do upgrades with matching ... We used to do open cabinets that match your doors and things like that. We do less of that now.John:With Boxi, what will be interesting is because the hope is anybody to scale and to have short lead times, quick turnaround, we're not going to offer as much customization. We've learned like what ... In terms of people's taste. We have eight doors, which are basically the biggest sellers for Semihandmade. It's basic white, gray, black, and some wood tones. It's not saying like we have at Semihandmade of 45 choices. That's fun to me. Because if anything, you can have too many options and that is paralyzing.Stephanie:Yup. Just going to say that I appreciate when things are curated or you showed me something cute and I'm just like, "I'll have that." Whatever that is, the white, the gold, and the brown, perfect. That's what I want. Not choose every single piece of it. Which I think is for a lot of ecommerce, that's what I've heard throughout many interviews, is don't give so many choices, show people what you think or know that they're going to want based off of preferences or how they're interacting with your site or whatever it may be.John:That's part of if there'd been multiple challenges with getting Boxi off the ground understandably. I think the biggest one is like you said, with even a call today, there was seven of us on the screen and I said, "If the seven of us were the typical technology guys or girls that knew nothing about socks, but we're launching a socks brand, we wouldn't bring all this baggage to it about what we thought we knew." With Semihandmade, we have all this great knowledge, but some of it can get in the way with the new brand.John:Because the new brand, for it to really work, you can't do all the customization. There are certain things that Semihandmade where we'll make exceptions and we'll do things. Of course, you always want to service the customer, first and foremost. It's just recognizing that if the goal is for this really to take off and grow, which I think it will, we have to be a little stricter, a little more brand fidelity, like say, this is who we are, this is how we get to where we want to go, and then stick to that.Stephanie:Yeah, that seems tricky. Having two different hats where you and your team are like, we know what works, this is what works, we build a company that does this. Then having a slow creep where you turn the other brand into the same thing. Like you said, you have to really be strict about creating a whole new company with a new vision and making sure everyone's on board and not just let the old company creep in and [crosstalk].John:I think in some ways too, whether in a good way or a bad way, the fact that we've been fortunate to have growth and success for Semihandmade, it's either made it easier or harder to get the new venture off. Because it buys you certain time. If we were a startup, we raised funding. We've got 18 months to runway all these different things that will be different. Probably, things have taken longer. On the other hand, we wouldn't have been able to do it. When this launches, what we leverage is, yeah, it's 10 years of Semihandmade. It's 25,000 projects. It's incredible.John:We have 2,000 semipro designers around the country that are champing at the bit to offer this. It's relationships we've got with Rejuvination and Kaff appliances and Caesarstone that are going to be partners. I continue to remind people and even myself like if we were a startup, we'd never have this stuff. We wouldn't have five, six amazing influencer projects that you're going to roll out in the next six weeks with the new launch. You'd be launching and then keeping your fingers crossed.Stephanie:Yeah, yeah. Okay, cool. Alright, so let's move over to the lightning round. The lightning round is brought to you by Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have one minute or less, prepare, get your water, [inaudible], shake it out, do what you got to do. Alright, are you ready, John?John:Yup.Stephanie:Alright. What one thing will have the biggest impact on ecommerce in the next year?John:That's great question. Do I have a minute for this?Stephanie:Yeah, a minute.John:I think it depends. I'm cynical about the fact that in some ways, yeah, a lot of companies have taken off, Instacart and things like that, but even like Wayfair. I was reading Bed Bath & Beyond today. I think the question is whether or not that'll be sustained. When life comes back to normal, which hopefully, inevitably will, certainly, people will be more inclined to shop online. There's no doubt about that. The world is changing. It's not going to go back. There are companies that have gotten a little frothier or whatever that I think that artificial is going to wear off. It's normalized.John:It's great. There's stuff I would have never done. Even with not ecomm, but with Zoom, we hired a new president, Beth and Molly, who runs marketing and stuff. I hired three of our highest people remotely. They're based in New York. I would have never done that. I would never trusted people or trusted myself. Now, it's normal.Stephanie:Yeah. I was slow with grocery delivery and curbside pickup. It forced me to do that because I was the one who always want to go to the grocery store, look around with my friends, whatever it maybe. Now, I'm like, oh, I don't really want to go there anymore. There's no point. I'll save my time and do other things.John:It is amazing. To me, it's more interesting to see how those people make money. That's the part where it's one thing to do great revenue. Obviously, profitability is a thing, unless it's not your money, unless you have a thing too. When it is your money, it's much more of a focus.Stephanie:Yeah. We just had someone from Intel on who was saying that they work with a hardware store and they're struggling because contractors were coming in and placing 40, 50 item orders for curbside pickup.John:All of it?Stephanie:Because they're like, why would I send in my contractor and paid him to be there for two to three hours when I could just have you all do it. They're struggling with trying to figure out the program because they weren't really expecting them.John:Yeah, that's interesting.Stephanie:I'm like, that's scary. What's the nicest thing anyone's ever done for you?John:Business wise or otherwise?Stephanie:Anything, whatever comes to mind.John:I guess the biggest cliché was my son's mom having my son. That's probably ...Stephanie:That's a good one. Having three kids, I appreciate that answer.John:I mean that from heart.Stephanie:Yeah, that's a good one. What's up next on your reading list?John:I constantly have five or six books I'm reading. That's interesting too, whether it's because I pursued writing for a long time. I haven't made the jump to eBooks. There are few writers that I correspond with on Twitter. Twitter is another thing that I didn't use that much before this. I've asked them like, "Well, what's the feeling on eBooks? Is it like cheating or whatever?" Of course, these guys and girls want to sell books. They're not considered cheating if you buy their eBook. The response I got from a bunch of them was, it's best in some ways for nonfiction.John:I read tons of nonfiction. I'm reading Say Nothing, which is a story about the troubles in Ireland. I'm finishing a great book on ecommerce called the Billion Dollar Brands book, something like that. That's spectacular. I've got so many. I'm reading a book on Chinatown, the making of the movie. I love a lot of different things. It is mainly. It's less fiction now. It is more nonfiction.Stephanie:Very cool. What is your favorite cabinet design? What's in your house?John:My house, it's interesting. Because in my house that I share with my son who I split custody with, we have a more contemporary kitchen. It's walnut. It's unique. We sell a fair amount of walnut and it is one of a kind. Every kitchen is different. That's a little more contemporary, even though it's wood. It's contemporary. In the house with my fiancé, where she lives, that's a more traditional. It's a shaker kitchen. It's got some really pretty hardware. I guess I'm very particular about what I like. In general, even when we she and I have arguments about furniture, I just say like, "Buy something quality and it'll fit with everything else." I know it's a copout, but that's where I'm landed. I love eclectic as long as it's nice quality.Stephanie:Yeah, cool. Alright and then the last one, if you were to have a podcast, what would it be about? Who would your first guest be?John:That's a great question. I like a lot of probably IKEA. I like a lot of different things. Even podcasts, same thing. I didn't listen to before, frankly, a year ago. I listened to one the other day. Marc Maron was really talented, funny guy who've been doing podcast for about 10 years. He had this guy, Daniel Lanois, who's a big time record producer, did U2 and all kinds of amazing people. I was amazed at the depth of Maron's knowledge of music. I don't have that. I don't know. I like diverse things. I don't know if I could do it.John:Because I like to think I'm a good listener, but I'm probably not because I'm always ready to say something. Obviously, like in your spot or whatever, to do it well, you should be listening to people. Again, I love screenwriting podcasts. I like anything. I like news, podcasts.Stephanie:Okay, so it'd be a little bit of everything. I like that. That's cool.John:I could do this kind of thing. If we're talking about remodeling, if anything, would always have an edge to it. If I were going to do a show, that's the thing. I gravitate less, maybe not towards Gordon Ramsay, but like Anthony Bourdain. There would be an edge to it. It wouldn't be ... Even when I was inside people's houses, I don't know if I was combative. I had very strong opinions about with architects and designers and homeowners and what I thought they should want. The one thing I don't like is when it's all sweet and sacristy and artificial. Totally with an edge.Stephanie:I like that. That sounds good. Alright, John, well, this has been a pleasure having you on. Where can people find out more about you and your work?John:Sure. Semihandmade, we can do semihandmade.com. Then Boxi, which launches March 1st, is at boxiliving, B-O-X-I-L-I-V-I-N-G.com.Stephanie:Okay, thanks.John:I appreciate the time. This has been great.Stephanie:Yeah. Thanks so much for coming on. It was fun.John:Thanks for having me, Stephanie.
This week, Max’s yuppy-tacular shopping trip sparks a conversation about modern brands like Allbirds and Warby Parker that have expanded from online-only businesses into brick-and-mortar retail. What are these brands selling you (apart from shoes and glasses, obviously), and how is it different from what, say, L.L. Bean is selling you?MUSIC: “Heat of the Moment” - Asia
Warby Parker co-founder and co-CEO Neil Blumenthal and VisionSpring CEO Ella Gudwin discuss the “buy a pair, give a pair” partnership that transformed the glasses industry and the widespread impact the organizations have had around the world. Diving into how the organizations work together, the duo pull back the curtain on how Warby’s glasses sales support VisionSpring’s efforts to bring glasses and vision education to emerging regions. Coming up with the idea for Warby Parker with some friends while at Wharton, Neil discusses how social impact is baked into the fabric of the company and why being a digital-native company allowed for a seamless pivot following the onset of COVID-19. Coming from a public health background, Ella offers her perspective on fighting misconceptions about glasses around the world and shares insight on how VisionSpring pivoted to providing PPE during the pandemic, thanks to the consistent support of partners like Warby. Listen in to hear their thoughts on leading during times of crisis, and learn more at warbyparker.com and visionspring.org. Note: Due to technical difficulties, this episode was recorded in multiple parts in November and December 2020. Production Credits: Aaron Kwittken, Jeff Maldonado, Dara Cothran, Lindsay Hand, Julie Strickland, Nina Valdes, and Mathew Passy Learn more about your ad choices. Visit megaphone.fm/adchoices
Een uitzending die ik maak met mild knikkende knieën. Want naast mij staat Ed Warby, een van Nederlands beste metaldrummers, bekend van onder meer Gorefest, Ayreon, Hail of Bullets, Vuur en Orphanage. En ik ben verdikkeme opgegroeid met Gorefest! Erase, uit 1994, was mijn eerste échte zware metalplaat die ik goed vond, en The Glorious Dead staat nog altijd in mijn top-10 beste metalnummers ooit. In dit uur van Dood & Verderf hoor je alles over Ed Warby, zijn muzikale invloeden én het werk dat hij vroeger en nu maakt.
The year is almost over and there are some choices to make. Even though 2020 was the unexpected year, there’s still time for a personal win. We’ve got a few chores that we’ve been thinking about but really want to dig into how we are going into 2021 with a big middle finger back at 2020! Big or small, how can we inspire you to get that item off your list? It’s time to get accountable! Topics covered: goal-setting, to-do lists, checking the box, self-regulation, goals, being an adult Links mentioned:Teux duex - https://teuxdeux.com Smile direct club - https://smiledirectclub.com Warby parker - https://www.warbyparker.com Costco Photo Center - https://www.costcophotocenter.com Announcements: Thanks so much for listening and don’t forget to subscribe and rate/leave us a review!Where to find us: Instagram: @ohforsurepodcastFacebook: @ohforsurepodcast Email: ohforsurepodcast@gmail.comWebsite: ohforsurepodcast.com
This episode was actually the PILOT episode for the Podcast! David Jones is one of my best friends, all round good guy and a fantastic footballer to boot. Mr Reliable in every sense of the word. Davey played for Holy Name, Dickie Lewis's, The Warby, JOB, Bootle, Formby, BRNESC, East Villa, Canada and the list goes on. You could say he has had more clubs than Tiger Woods! Davey is one of the few players to win league titles in various Sunday leagues including Liverpool Business houses Prem, Ormskirk Prem and Crosby Prem. Davey tells us all about the lads he played with and against over the years and attempts to build the perfect amateur footballer.
Danielle Warby is a loud advocate for women in sport who has been working to promote women’s sport since 2006. Dan has been editor, social strategist and content creator for numerous websites for women’s sport, including The Womens’ Game, Sport For Women Australia, Women Onside, Zela (SBS’s short-lived website devoted to women in sport), and most recently, Siren Sport. Dan is a former board director of Womensport and Recreation NSW, and our very own Women Sport Australia. She is also a life member of the Flying Bats, the oldest and largest lesbian football club. Dan is currently undergoing a research masters on the intersection of gender and sexuality in leadership in sports.Duration: 28 minsHosts: Ella Smith & Georgina Mallon.A co-production with Women Sport AustraliaFor complete shows notes and more information, links and resources as well as other conversations from the world of women’s sport including articles, blogs, videos and podcasts visit wispsports.com. WiSP Sports is the World’s First and Only Podcast Network for Women’s Sport with more than 60 hosts, 1300+ episodes across 50 shows and over 7 million downloads. WiSP Sports is on all major podcast players. Follow WiSP Sports on social media @WiSPsports. Contact us at info@wispsports.com.
What comes to mind when you think about the relationship with your manufacturers? Chances are you have the same picture in your head as so many other brands. You see a series of events that starts with opening a purchase order, and goes down the line of tasks including paying for your items, getting them shipped and then starting the process all over again. It’s a transactional relationship that has seen very little disruption through the years. But the times are changing, and a company called Italic is leading the charge when it comes to developing a new framework around partnering with manufacturers. Italic is a membership-based brand that gives customers access to products produced by the same manufacturers of the top brands in the world. Jeremy Cai is the CEO of Italic, and he likes to say that Italic is a marketplace-inspired supply chain. On this episode of Up Next in Commerce, he explains exactly what that means. Jeremy describes new and different kinds of partnerships with manufacturers that, for the first time, makes them true partners in business. Plus, he explains why that partnership is leading to a better end product and happier customers. He also dives into new ways you can leverage manufacturers that many aren’t aware of, and details the metrics and strategies that subscription companies need to be focused on to rise above the competition.Main Takeaways:Getting in on the Action – Traditionally, manufacturers have not had to put much at stake financially when working with brands. But, with a company like Italic, the manufacturers take on a financial risk. In doing so, they also become more involved partners which leads to a better end product.It’s Deeper Than You Think – There is now a partnership opportunity between manufacturers and brands when it comes to designs and in-house pattern design capabilities t In the past, much of the design and pattern work was done solely by brands. But today, many manufacturers have high-quality design and R&D talent inhouse and create showrooms of products that brands can tap into.Meaty Membership Metrics – For membership-based companies, there needs to be less value placed on the traditional metrics that have so often defined ecommerce companies. Tune in to hear which ones are crucial to pay attention to.For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.---Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce--- Transcript:Stephanie:Welcome to another episode of Up Next in Commerce. This is your host, Stephanie Postles, cofounder of mission.org. Today, we have Jeremy Cai on the show, the CEO of Italic. Jeremy, welcome.Jeremy:Thanks so much for having me.Stephanie:I'm excited to have you on the show. I was mentioning earlier, but I've read quite a bit about you guys. I see you in a lot of the eCommerce newsletters that I follow, so it seems like you're growing in popularity at least when it comes to people writing about you right now.Jeremy:I don't know if that's a good success metric, but we're doing I think a good job on media coverage right now.Stephanie:There you go. I think it's a pretty good one. Tell me a bit about Italic for anyone who hasn't heard about it, doesn't know what it is. I would love you to give a brief overview of what it is.Jeremy:Sure, so Italic is an annual membership that costs $100 a year and our members get access to hundreds of products that we design and develop inhouse, ranging from cookware to bedding to towels to apparel and accessory, footwear and many more coming soon, but the difference is we sell them at prices where Italic it doesn't actually make a profit. This actually results in pricing that is dramatically lower than both direct-to-consumer companies as well as traditional incumbents, oftentimes in the 40% to 50% to sometimes 70% to 80% range. We've been around for about two and a half years, but we've only launched the membership about a month and a half ago, and so far, it's been a pretty good start.Stephanie:Very cool. You have membership and you're not making money on the actual products. Tell me more about what would be an example of something you're selling and how are you encouraging people to sign up for a membership to get access to everything that you just mentioned.Jeremy:Sure. One example of the product that we sell, and this applies to all their products, is let's just take our slumber cotton sheet set, for example. The sheet set sells anywhere from I think ... Actually, I might have to actually look at this for cross reference, but I think it's like anywhere from $80 to $120. Those are prices where we're not actually making money. Those prices do include things like freight and warehousing and fulfillment fees, but generally it still comes out substantially lower than the prices that our competitors would set. Then in terms of how we're actually attracting new members, really I'd say it's from two general ways.Jeremy:One is I think the goal is for our members to be saving money on their first purchase. This oftentimes comes through the lens of product marketing. If we would do a great job of really letting the products tell their own story of saying how great quality they are, the same manufacturers of so and so brands are, which certifications these manufacturers have, what specific details of the products really sell the product itself, I think that actually helps sell the membership for us because we don't really have to say like, "Hey, with this membership, you're saving all this money." instead it's like, "Hey, this product is obviously really great and it's really high quality."Jeremy:Then once you look at the price point, the perceived value is like, "Oh, I'm going to save pretty much the entirety of my membership fee in one or two purchases," which we see in the vast majority of cases. Typically, 93% of our new members will break even on their $100 fee in one order, but on the flipside on the membership, this is different than the standard transactional model in which you have to be a paying member in order to purchase anything. I think we do have do a fair amount of education in terms of showing to our members or showing to our audience who might become members, "Hey, this product, you can only buy it if it's a membership. This is how the platform works. This is why it's different than a brand. I think we have to put out a lot of content in terms of actually sharing like, this is how we were able to put together this offering that doesn't really exist elsewhere."Jeremy:We do a little bit of both, but I would say right now we lean a little bit heavier towards product marketing since we have a lot of new exciting launches coming up.Stephanie:That's awesome. Talk to me through a bit about what was your thinking behind creating a membership program for because I think I saw you started out with it and then maybe you stopped doing it and they started again and feel free to correct me if that's not right, but tell me about what was that journey like.Jeremy:It was not easy. I would say the way I like to view it is the first two and a half years of our business, we've really been focused on the supply side of operations, building out that product assortment, and exactly like you said, we did launch in 2018 with a membership product. Within basically a month or two, we decided very, very early on like, "Hey, we had three manufacturers in three categories at the time, handbags, scarves and eyewear. As you can imagine, those are not necessarily high frequency purchases to substantiate a membership value proposition.Jeremy:We actually never actually charged anyone for the membership. It was always a test to see how the response would be. Overwhelmingly, we saw that the product response was great, the quality was great, but I think the offering was too limited at the time. Instead for the following two years, we ran a transactional model in which we made money through marking up our products, albeit not as much as a brand would. Our products might be marked up two to two and a half times, whereas our competitors will mark them up five, 10, 15 times sometimes. That's how we made our money.Jeremy:Really the incentive was, "How do we build a product assortment that's large enough, so I guess wide enough and deep enough to attract the member to actually convert?" Around, I would say, Q4 of 2019, to be totally honest, I think we saw two things happen. One was the structural, I guess, implosion of the venture direct-to-consumer model in which a lot of brands, I think, who had been raising money and then going out with this one playbook that hadn't been set maybe back in 2013 to 2017, I think suddenly realized, like, "Hey, we are not technology companies. We are a brand and we make money through transactional volume." Basically, I'm just trying to say we saw the writing on the wall if we were to continue that model.Jeremy:Then in Q1, we also took a hard look in terms of our user behavior. We saw frequencies of purchases, our lifetime values get to a place, our product reviews, our NPS scores all get to a place where we felt confident in our product assortment to date. When we first started, we might have had maybe 30 or so skews. Now, we have over 1,000 skews. It finally got to a point where the product assortment felt mature enough to launch a membership product. We tested that, and then basically right when we started testing it, that's also when COVID hit.Jeremy:We figured there's either two options. One was we just pull that and just focus on building the transactional model again and getting it into a sustainable place which is still the goal, right? We don't want to build an unsustainable growth model or alternatively stress test the model in the peak of, I think, consumer uncertainty in which we would see like, "Hey, does this value proposition of saving money resonate in the time when it would matter the most. Thankfully, it did and I think from April to May, June and July, we monitored our cohorts and user behavior really closely and wanted to make sure that the membership was something that we had conviction in.Jeremy:Eventually, we got to a point where we realized like, "Hey, this is ..." I guess the way I like to put it is our customers always liked us, but our members absolutely loved us. We decided to go all in and then finally released the public version of the product in July.Stephanie:That's great. That's good seeing quick pivots and seeing like, "What is the market telling us? Where are things headed?" and trying out different models. How are you going about building out maybe a financial model because I'm thinking if you have only a membership subscription-type model, there's probably only a limited market? You can't scale indefinitely. There's only a certain people who will be on that versus making profits off of each product. I'm sure those are two very different models. How to do think about it financially when trying the two different ones out?Jeremy:That's a very valid point and I think we knew going into it that there is a lot of subscriptions out there and a lot of subscription fatigue and at least the states in the US in which everyone has a Prime membership or a Spotify subscription or Netflix and to add one more to that is always asking a lot. I think we knew going into it like, "Hey, this is all or nothing in which you can't launch a half-baked type of membership product." I think to the financial level, I think two things are worth noting before we decided to do this. One was the fact that we are capping our upside to $100 very literally for pretty much the extent of the year and the incentive in that case is, one, can we launch products and provide a service that our members love so much that they'll stay for years to come in which our LTV or lifetime value in that case would become quite substantial and hopefully our churn would be low and retention would be high and so on and so forth?Jeremy:I guess that's one area is we really were aware of the fact that if we cap our financial upside that the immediate short term would be that we're limited to $100 for the year, but the amount of utility and value that we could provide to a member would be so great that they hopefully stay for years to come in which our LTV would grow to a point where we would actually outperform our transactional type of behavior. Then the second point, exactly like you said, memberships aren't for everyone. We're very well aware of that, but I think something that has been exciting for us to see is if we're able to build this type of product, I think it is genuinely massively different than anything close to us.Jeremy:Whereas most of these direct-to-consumer brands, they're basically providing products and a story to a customer which is an incredibly, incredibly competitive market. We have a product where it's like, "Hey, for $100, you get access to all the products we sell at a price where we don't make money. I think that's a genuinely differentiated product in which we know it's not for everyone, but we think value-driven commerce, it's not sexy per se, but it is something that is very attractive to a very large segment of the American consumer base. I think we were willing to take that bet.Jeremy:Of course, we wanted to monitor really closely so that we weren't losing money on transactions at least and at least that we were breakeven and we were able to accomplish that within the months of the pilot, so we felt confident in rolling it out more broadly, but I think to answer that more directly, if we didn't see user traction, if we didn't see members using the platform or membership or if we saw our NPS or product reviews drop or if we saw an increase complaint rate, increase return rate, etcetera, then I think we would have actually probably returned back to the transactional model, but it was something that we felt confident enough in just off of a couple months of data that we've decided to go all in.Stephanie:That's awesome. I think that's so great, because it really shows a longer term vision and commitment to be around where I think actually a lot of B2C companies right now are missing that. I don't know if it's because of the VC stage where it was like grow really quickly, but it seems like a lot of people are more ready to just quickly make as much money as possible, maybe sell the company off, see what happens afterwards, but I really like the idea of actually telling your customers, "Hey, we're only going to make $100 profit for the year off you that essentially cover some of our costs." I could see that really helping a customer want to also support you guys along with just wanting it because maybe it's a very good service and some platform they use.Jeremy:Thanks. That was pretty much the bat. The reality of the business right now is if you're a direct-to-consumer brand and you're starting out nowadays, you might raise one round of financing, let's say anywhere from $500,000 all the way to like $3.5 million or something of the sort if you want to pursue that route. That's pretty much all you're going to be able to raise or at least assume that's the last capital you're going to raise, and then subsequently, you're going to try to sell. Nowadays, what I've seen whether it's a PE firm or a conglomerate or a larger direct-to-consumer brand that might be interested in acquiring one of these assets, it's now valued off of EBITDA, as opposed to revenues or run rates which is what we saw in between 2014, let's say in 2019.Jeremy:I think the reality is nowadays if you're trying to build a venture scale business in this model, it's really, really tough. I think the actual advantage of doing so is doing so sustainably with growing off the business off of cash flow as opposed to equity raises and going that route. Then, I think for the companies that have already raised that are in this tricky spot where we were for sure, we had to look ourselves in the mirror and just say like, "Hey, what is something that would be significantly differentiated in the market that has technology scale outcomes that would be potentially accessible if we were to do everything perfectly right.Jeremy:I think that's the only reality where we can actually like continue as a venture scale business. I think that's what we had to really just operate with the mentality of. I think in terms of like the customer empathy too, we always knew that our prices were good, that we always came maybe 15% to 20% lower than the next direct-to-consumer brand, but truth be told, if you were to compare our products which were objectively great products next to a brand's products that built all of their community messaging, advertising, copy, etcetera off of that single category, 15% to 20% off might not be enough to sway one of their customers to decide to purchase the value option, whereas nowadays to go much, much lower into the 60% to 70% range, that's a lot more powerful sway.Jeremy:I think for us we knew that it was a risky bet, but I think the customer would ultimately like it a lot more and so would the investors and I guess, business community at large. I know the brands don't like us, but that's another story.Stephanie:Well, that's actually a good segue. I wanted to hear some of the behind the scenes of partnering with these manufacturers and thinking about the psychology behind, "This is also bought," or let's see, "It's manufactured at a factory that also produces Prada." I saw that on your website mentioning like, "It also manufacturers this, this and this," and I was curious to figure out like, "What was the process to partner with these manufacturers and then also be allowed to say, 'These brands are also built or manufactured at this factory as well'?" It seems like that'd be a tricky area to play in.Jeremy:I can't deny that. I think we have a unique value proposition in that case. That's really what drove I think, a lot of our early interest in the brand over the first two years. In full transparency early on, I was personally quite nervous about it since it is a pretty radical statement, especially since like we position ourselves not so much as an individual brand, so much as, say, a platform or a marketplace or a retailer. I think in the early days we were very careful. All these things, it's not to say that we've loosened up on this. We're still very, very careful about auditing all of our partners, making sure that we're working with the best of the best in each category, regardless of where they are in the world.Jeremy:Oftentimes, that comes along with saying, "Hey, this product is made in the same manufacturer as X, Y and Z brands." That's part of the selling points of the product. I think in terms of the tricky part was obviously on the manufacturer side. We have an interesting relationship with our manufacturers in which it's not like a normal brand in which they're a vendor and we're a client, where we just place a PO and then we'll mark up their products and then that's how we profit. The best we can do in that case is like get letters of credit or Net30, Net90, etcetera.Jeremy:Instead we actually have a financial relationship with our manufacturers in which they actually are taking on inventory risk and we're taking on the marketing risk of this inventory in which their incentive is to take inventory risk for a higher yield or higher rate of return on the inventory that they're producing and owning. Then our risk, of course, is making sure that we can sell that to our members at a price point that is still radically lower than the competition, but at a place where they'd be happy with the profits. I think that was actually the tricky part because manufacturing, and this is actually my personal like family background is a really hard business and margins are already razor thin.Jeremy:On a final sale, a DTC brand might take like 80% of the margin and cost might be like 20% and the manufacturer might actually take like 5% of that cost. That's honestly how it works. It doesn't matter if you're like a legacy brand or a direct-to-consumer brand. Manufacturers treat them all the same because it is the same for them. I think on the flip side for the manufacturer, they are not oriented to take capital risk. They have predictable revenue. If you place a PO, we expect payment certain date, whereas on Italic, there is no legitimate end date for a certain PO to be paid.Jeremy:It's a little bit nuanced and that was actually the hardest part I would say of convincing these manufacturers to join. It really wasn't the brand piece. The brand piece we're always very careful of ... We always do very careful audits to make sure that they're factual claims. We always do audits with our general counsel as well to make sure that we're making claims that are factual. On the trademark side and then on the copyright side, we have a development system when we're merchandising that there's at least a number of differentiating points on the product, but we've actually never really run into major issues on this.Jeremy:Perhaps that's because we're a smaller brand right now. As we grow, the issues might pile up, but at least for now, it hasn't really been, that the legal side hasn't been a big issue. I would say it's actually more so convincing the manufacturers to take on this new type of model, but I think now that we've been around, we have over 50 manufacturers we work with. I think we've had a really good relationship with all them thus far. Yeah, I think other brands always come into question, but it's never actually been like a point of contention.Stephanie:I could see that being really beneficial for you having the background in manufacturing for those manufacturers to also feel like, "Hey, this guy gets me he understands. He knows that we don't have big margins." I want to talk a little bit more about that piece. I could see a lot of the manufacturers really liking that you have a background in manufacturing because you understand that tight margins and you're not trying to maybe push them too far. I was wondering, one, had they ever done this model before where they're taking on inventory risk? Then two, were any of them scared to work with you because they didn't want to make the brands that they work with upset?Jeremy:I can answer the second one first, which I think it's actually pretty straightforward. That has never been a reason why a manufacturer wouldn't work with us. I thought it would be, I guess in actual practice, I think it hasn't been. The reality is most of these manufacturers have a number of clients and I think they will readily offer new clients the current client list and say like, "Hey, this is who we work with. You should trust us," as part of the vetting process. What we're doing is bringing that information that all the brands already know and offering that to a customer as well, so one more layer of information that a normal brand would never offer.Jeremy:The bigger issue with the manufacturer is actually more so just capital. It's like, "Hey, you got to fund hundreds of thousands of dollars for this first run and you're not going to see a payback until we start selling it, and depending on when we decide to launch it or decide to really invest in growing that category or product offering, the return might not be immediate." I think that was actually the biggest problem. Every so often what we'll hear that'd come up is like, "Hey, we prefer that not to happen," but with regards to the brand names being mentioned, it's never been a reason as to why a manufacturer wouldn't work with us. It's always been capital related.Jeremy:Then I think to the point of the model itself, I think people have tried different approaches to this over the years. In the States, at least, there is really no one doing anything like us right now because it is an extremely ... I would say like you really have to be aware of how manufacturing works, how to communicate with them, how to work with them, also how to partner with them. That's not something that like the vast majority of American brands will ever understand and for good reason. They really have no reason to because the entire business model of commerce is built on markups, as opposed to us where you can basically just treat them as a vendor. If it's not working out, if you need better pricing, you can always counter source and so on and so forth.Jeremy:The relationship there was always rather fragile, whereas for us it's very strong from day one because we have to be in which we become basically financial partners immediately. I think they haven't necessarily ... We work with manufacturers in Asia predominantly, in Europe, in the US and for the majority of them, these are not small mom and pop merchants or artisanal shops. They are pretty professional large scale production houses for very large runs. We work with like five different public listed manufacturers. I think for them, this model is, I like to call it like a private label as a service in which they can experiment very rapidly if it works.Jeremy:We do all the design and development in house, so we take care of pretty much all the heavy lifting on the stuff that they don't have, but if it works, great. If it doesn't, the downside is basically the capital that they put into it. We haven't had that happen yet. I think it's a new ... We like to think of it as like a marketplace inspired supply chain which none of these manufacturers have encountered before, but it is something that I think has promise.Stephanie:It's so interesting thinking about everything that's going on behind the scenes and I honestly have not even gone deep into the world of manufacturing, so I have so many questions, but one that comes to mind which is probably maybe a more basic one, but how did you even go about finding out who manufactured what products? If I owned Prada, which I do not, I definitely don't, but if I did, and I was like, "Hey, who makes this? This is really nice," I want to find out what factory it's coming from or who's actually behind the scenes making it, how did you even start that process of finding that out and then finding the next one, the next one and maybe getting referrals?Jeremy:Well, you just named it. Sourcing is a weird business in which it's still and this ... Not just sourcing, but a lot of the supply chain is still heavily relationships based in which it's like, "Who do you know? Who do you know? Who do you know?" and that's who you're able to work with. In the early days, I personally met and lived between China and Italy for the first year of the business and I met with hundreds of manufacturers, many of whom are now our partners, but in the beginning, were very skeptical, "Who is this guy? Who is this company?" I think the best way to put it, it's like in terms of sourcing, the best way to do it is through referrals.Jeremy:We've tried everything from digital platforms to sourcing companies to even trading companies just to see what type of quality and price point we can achieve, but ultimately, we've always found the best option would be to do direct sourcing ourselves. We actually have an internal team coming from the likes of Patagonia, Arc'teryx, Zulily and Amazon, really focused on sourcing the world's best manufacturers in each given category. Each time we want to enter a new category, we will always ask for referrals from our existing manufacturers. There's digital products that help you find manufacturers through other sources but generally we found the best have always come through referral.Stephanie:I think I've looked online before looking into, maybe this is a 3PL that I was looking at. Either way, that whole world seems pretty behind the times when it comes to trying to find things online and get details about it. It does seem like referrals would be the best bet in that industry.Stephanie:I was going to ask when it comes to inventory risk, you were mentioning that the manufacturers take on the inventory risk, do they also have a say when it comes to the pricing of the product?Jeremy:Yup, they definitely do. We are hand in hand with their manufacturers at every single point in the development journey, from material selection, color dyes and sample reviews and so on and so forth in which if we are talking about cost structures and cost payments, or sorry, sample reviews, we're always thinking about price and we're always very transparent with our manufacturers in terms of what our research tells us. If we believe a certain price threshold is too high, we'll tell them, and vice versa, they'll tell us like, "Hey, this is getting expensive. Do you think your customers or members will still want that?"Jeremy:Ultimately, the incentive for manufacturers to earn a higher than normal profit margin on Italic sales because they're taking on the inventory risk, so there, we're able to pay them out substantially more than they would ordinarily make. I think they're very in tune with our orders, sometimes even more than we are in terms of the performance. We've also built a lot of internal dashboards that we'll share with all of our manufacturing partners for them to log into, review the performance. Sometimes, we'll need to set price points that are lower, so that will encourage a product to move faster and they're able to cut down on their margin, but still again, it's at price points that are pretty much close to cost.Jeremy:It doesn't really moving the needle too much nowadays that we're past the transactional model. It's easier to do that on the development side when we're actually developing these products, or on the flip side, if a product is actually performing way too well, they might actually ask for us to develop a more premium version or a version that uses a high quality or a more expensive material, not necessarily higher quality, just a different material. For example, we started with cotton sheets. It was sateen. Now we offer percale and we're looking into linen. Then we also offer eucalyptus lyocell sheet set as well. Those were examples of where we saw their consumer demand really expand what our manufacturers want to develop and as a result their price points were able to change quite a bit depending on the product.Stephanie:I was thinking about that these manufacturers probably have a ton of insights into what's selling with their other brands, what consumers are interested in. I'm wondering, are they even allowed to share that and help influence your guys product designs and say like, "Hey, we see this plain shirt with like a lion on it and selling really well with Anine Bing," which we just had on the show?Jeremy:I guess there's two ways to look at it. One way really is from the lens of like, "Hey, the manufacturer has what I call like extraordinarily delayed insights into performance," in which the only time the manufacturer actually knows about how well a certain skew or style is doing. We're primarily talking about fashion and apparel and other soft goods and home for example. It's a little less seasonal or trend driven, but in apparel for example, a manufacturer will only know the performance of the line after the season or after the client comes back and places the reorder in which their insight is already delayed by a whole, let's say six to nine months.Jeremy:By then, it could already be out of stock or out of favor with the client. The second point is actually much more interesting in which this is the dirty secret of a lot of these brands is the manufacturers nowadays have significantly improved and really, really sophisticated design and development inhouse capabilities. Historically, let's say 30-40 years ago, a lot of the design and development and pattern making and so on and so forth was always done on the brand side. Nowadays, I really call it more of a partnership in which the design and R&D talent inhouse at a manufacturer is so great that sometimes, and this is like extraordinarily ...Jeremy:This is not just like startups. This is like huge multinational brands, all the way to brands just starting out in which their buyers and merchandisers or product developers or designers will walk into a showroom that a manufacturer has made for a season. They'll pick like four or five styles from the manufacturer's design books or pattern books and then say like, "Okay, let's make some small tweaks, but pretty much, it's the manufacturer's design that we're iterating on."Stephanie:Oh, wow. I definitely would never have thought that.Jeremy:It saves a lot of time if you think about it because developing patterns from scratch is really time intensive. You have to ship samples back and forth all the time, whereas if a manufacturer already had a lot of these samples ready to go for you and you just had to tweak, let's say, the material or stitching or whatever it is on apparel specifically that it cuts down development time significantly. It happens pretty much everywhere and really the designers at that point in time are not really designers, but they're just iterating on the final versions of products. I think-Stephanie:That's a good secret that I never knew about.Jeremy:[crosstalk 00:33:15].Stephanie:When you're thinking about getting maybe inspiration though and you're looking around at some of the more luxury brands, how much of that can you actually take and use? Because when I'm thinking about, there's certain things that without a logo on it, you probably be like, "Is that from Walmart?" Sometimes the logo makes it where if it didn't have that, I don't know, personally, why anyone would ever buy it. I sometimes don't know why they would buy it either way have you ever had an experiment like that where you've been trying to maybe let a brand or popular brand influence products where then you're like, "Oh, actually, the logo kind of made that one."Jeremy:I think the way I would respond, one thing we really care about a lot at Italic is having a data-driven sense of merchandising in which we're using our customer insights to really drive the product decisions that we're making, both on the technology front as well as the product development front for our physical products. I think what we realized is, to your point of, "Does a logo make a product or does the product make the logo?" which is actually maybe a good way to think about it, is the fact that logos matter to some people and it doesn't matter to other people, but everyone has a specific category in their lives in which they care about having a logo and then vice versa like that same person might not care about having logos on other products that other people might.Jeremy:I guess a better way to put it is let's say you really care about having a logo on your handbag, but you actually, and I don't know if this is true or not, but let's say you don't actually care about having like the top of the line logo on your bedding or all-clad cookware or Le Creuset Dutch ovens or what have you, right? Let's say that's actually the mentality. On the flipside, I think there's a lot of people out there who would actually have the alternative approach which is like, "I don't care if I have a big fancy handbag, but I am really into cooking and I want the fanciest cookware and I need to have like X, Y, Z brands cookware in order to feel good about my purchase.Jeremy:What we found through a lot of our, I guess, our surveying is, one, the main reason why people buy from us is quality in terms of the product and the second is design and overarching, I guess, the main reason why you sign up is because you're getting quality at cost. The price point and the value you're getting out of your products is really, really high relative to pretty much any other option out there because we're not making money on the products that we sell. I think what we found is the people who sign up, if you're a fashionista for example, you're probably not going to buy our fashion products, but you might actually sign up for your home goods and then vice versa, someone who really cares about that specific type of bedding or having really great towels or candles or what have you, but doesn't really care about having a logo or the next trendy thing.Jeremy:The way we look at merchandising is really anti-seasonal in which we're trying to find products that are always evergreen. They might not be always in style or in vogue, but we know that they're consistent things that people will always want to buy. That's why we try not to fall too hard into having a specific branded look on our products. The product should be able to stand for their own.Stephanie:I like that. I'm just going to say quality always matters, I would think and I'm definitely your person because I'm a logo-less person. I don't care about the brand or where they come from. If the quality is good, it doesn't matter to me who makes it as long as the quality is good and something lasts. I like that. When we're thinking about metrics for subscription business, yours is very unique, of course, because right now, you're like, "We're not going to need more than $100 per person," but how are you guys tracking things? What metrics are you looking at right now to see if things are going well?Jeremy:We've changed our metrics a lot as we transition from a transactional model into a subscription basis as you can imagine, but what was interesting for me is because we run this type of membership in which it's not a ... I guess before I get there, in my mind, there's three types of consumer subscription products. One is you get something in a box every month and it's on a set frequency that you can customize. Secondly is you're paying a subscription for a discount. Then thirdly, as you're paying subscription for access to a certain product, whether it's digital or offline or whatever it is. I think we fall into the latter two in which you're paying for Italic because you want a discount on your products, but you're also paying for access to even shop those products in the first place.Jeremy:I think when we actually transitioned into this model, we realized like, "Hey, all this transactional revenue, metrics that we're tracking are actually great indicators of engagement. Now, those are our leading indicators of, "Are these members happy? Are they getting the most out of their membership? Are they unhappy because they're not using it? Are they logging back in? Is the conversion rate high for members? Is our average order value growing as we add new products or is that actually shrinking in which the products we're adding are actually lower price points?" so and so forth. It's a pretty sophisticated, I think, model that we've had to build in order to actually price these products at a price where we're not losing money on each sale but also not making money.Jeremy:It's on the engagement side all the things that historically eComm companies would track, your conversion rate, your LTV, your frequency of purchase, your contribution margins. These are all things that have now become like performance indicators on a membership basis as a cohort of how we track a certain cohort doing overtime, but now what matters on the company side is actually, "Are we adding new annual subscribers happily? Are they staying? What's our opt out rate? We offer like a 30-day period in which if you sign up and you decide not to place an order and you want to get a refund, we'll provide that, no questions asked. Right now, it's 5%.Jeremy:I think like those questions or metrics that we've done a pretty deep dive in terms of like what we actually want to see. Now really that the core metrics are like, "What's our new annual recurring revenue because it's an annual plan?" and then secondly what is ... We don't have retention yet since our first cohort is still seven months out from renewing. The second indicator of that is like, "What are all the engagement metrics telling us? Does that suggest that they're likely to churn or stay?" I think those are like the metrics that we've transitioned towards. There's a lot more that I could dig in there, but that's at a high level how we think about it.Stephanie:That's great. Are there any methods right now that you're experimenting with and seeing success around when it comes to keeping your users engaged or staying top of mind to them or even like different things that you're changing for the website that's connecting more with the customer when they're coming there? Any tests overall?Jeremy:I think we aren't great about testing and I'll be really forthright about that. We don't have much testing infrastructure built in. We don't have the ability to test their pricing. AB test for us are really just like, I think, very, very incremental changes. I think the biggest [inaudible] which is the transition from the transactional model and I guess the best way to really put this is like for example, during our pilot, we saw behaviors and frequency and lifetime value that we would expect on a transactional customer at month 12. We saw that on a membership level between weeks four to six. It was a literal 10x increase in utility activity for that member versus a customer who would otherwise purchase the product as a standalone.Jeremy:I think that's what I meant going back to the point of customers liked us, members really love us. That was something that we really saw. Then I think in terms of metrics that we're looking to test or at least improve with our customer that can improve the experience for them or at least hopefully it will increase our retention rates, I think that really comes in the form of, "What are the products that ..." The main four reasons why people opt out just for full transparency, one is it's international and we only serve the US, so they actually sign up through eagerly and they're like, "Hey, I didn't know that it's US only." That's actually the number one reason.Jeremy:Number two is financial. It's like, "Hey, I got furloughed or I was laid off," which happened a lot in the early days in April and May. Nowadays, it's less common, but the last two are ones that we can directly address. One is, "The product offering is currently not broad enough. You don't have a product that I want to see or a category that I wants to see." Lastly, "The products that I want are out of stock." This are directly in our control. For example, we'll show now in the coming soon page like what products are coming next for our members and that keeps them excited.Jeremy:Secondly is what products are being restocked. We're placing much, much larger orders, so that hopefully we don't have these out of stock issues. Really the reason was like our members just purchase at a substantially higher frequency than the nonmembers did. We actually underordered prior to the membership, because we didn't know what to expect. I think those are things that ... There are certain features like that that we developed for that use case, but really the only thing that we can solve for in a long-term basis is just develop more products, order more deeply, and hopefully as a result, acquire more members.Stephanie:I love that. I think that's a really good point too about how to keep people engaged and coming back to see like, "Okay, what's coming next? What's the new t-shirt that's coming out that I can get really excited about?" because I could see a lot of members maybe, at least in my head, I would think like if I am in a subscription or a membership, I would probably frontload a lot of purchases right away to get that value and then I might forget. I think that's really smart to find ways to keep someone like me engaged coming back maybe a couple months later if I forget, so that I will renew after the year.Jeremy:Exactly. I think for us really, the goal isn't necessarily to make you buy more stuff if you don't need it. The goal is to hopefully show that, "Hey, you're going to get enough value out of this membership, so that you're going to stay another year, or two or three or four or five in which there's a constant drop of new or a constant allure of new products that will be down the line such as products in travel. For example, we just launched our jewelry line last month and that sold out in a week's time. Now we know, "Hey, there's a lot of demand for that. We should order much deeper in it" I think constantly testing on the product side is something that we do a lot, but now that we're not making money on the transactions, we're not trying to force you to use it unless you want to.Stephanie:Very cool. I saw that you guys had a signup list. I think originally it was over 100,000 or something along those lines. I was wondering, how are you going about acquiring new customers? What kind of channels are working well for you right now? What are you finding success in?Jeremy:The hardest question for anyone in eCommerce nowadays. In 2018, we had a strong waitlist going into the membership, and then once we launched, we were like, "Hey, the membership is not going to work. We dropped it in, and instead all those people on the waitlist became our email subscribers and we were ... Fortunately, they eventually became customers as well. That was where a lot of that 100,000 original list went to. Then more recently, we actually had another waitlist. This time, it wasn't for marketing purposes, but it was actually like a legitimate operational waitlist in which we simply didn't have enough inventory to serve all of our members to a great experience in which if you've logged on in the third of all the products were sold out, that's not something you want to see as a first time experience.Jeremy:We have the waitlist up for a while, up until we can restock more deeply to address those issues which we've recently done. In terms of the new customer acquisition, I'll be like totally honest. It's a mix of performance marketing and brand marketing. We internally separate our marketing team into two. One is brand which is everything nonpixel-based or nonattributable to a pixel. Everything growth is pixel-based in which it's pixel through Google and the intention of growth is to grow the membership base. The intention of brand is to keep our cost per acquisition on the growth side low, so that hopefully it's not the first time that you're seeing, let's say, an ad from us, but instead it's actually a recall.Jeremy:Examples of that would be like influencer would be in brand. TV would be in brand even though I know there's pretty good models for tracking nowadays and attributing podcasts we still put in brand. All these things ... I guess I'm being hypocritical because those do have pixels nowadays, but really the intention of those is to get in front of you first, so that by the time that you see a Facebook ad or a Google ad, that you're already aware of where we are, so your interest is already piqued.Stephanie:Cool. All right. We have a lightning round coming up. Before I move on, is there anything that you were excited to cover that I forgot to ask?Jeremy:Well, our basics are dropping tomorrow-Stephanie:All right. Well, tell me more about the basics.Jeremy:We've had a line of recycled t-shirts for a while and those were really, really popular through a lot of quarantine. The number one requested kind of products for us for years has been a line of just great Ts, plain really high-quality t-shirts. It's finally coming out. I've been waiting literally a year for this. I'm super excited, but that's all. That's it.Stephanie:That's great. I love a good t-shirt. Actually, maybe it's always been a trend and I just haven't paid attention, but now it feels like it's really coming back to just wear a normal plain t-shirt or just something like simple on it. It feels like it's coming back strong, but maybe it's always been here.Jeremy:That's not surprising. I feel like a lot of people nowadays ... I'm sure there's a lot more people out there who could speak much more eloquently on why basics are great, but basics are always in vogue and our members have been requesting it very actively, so I'm excited to finally get that out.Stephanie:I will definitely have to check into that when it drops. All right, let's move on to the lightning round brought to you by our friends at Salesforce Commerce Cloud. This is where I'm going to ask you a question and you have a minute or less to answer. Are you ready, Jeremy?Jeremy:Yes.Stephanie:All right. What's up next on your reading list?Jeremy:Well, I actually just got a copy ... This is going to put me in a bad light, but I don't always read business books, but I just got a copy of Reed Hastings new book. I'm excited to begin. I literally just got it right before this interview. That will be next.Stephanie:Cool. What's the title of it? I don't know if I know which one that is.Jeremy:No Rules Rules.Stephanie:I'll go check that out. You have to let me know if you like it.Jeremy:Yeah, will do.Stephanie:All right, what's up next on your Netflix queue?Jeremy:I've been actually watching The Legend of Avatar which is-Stephanie:I don't know if I've actually seen that one.Jeremy:It's an anime, cartoon that used to run on Nickelodeon as a kid and I forgot how good it was, so I just watched that again.Stephanie:That's great. Netflix probably knows not to advertise that to me. They're like, "You just probably won't like that one." All right, if you were to have a podcast, what would the podcast be about and who would your first guest be?Jeremy:I've actually been thinking about doing one.Stephanie:You should.Jeremy:It's been on the list. That's actually why I have this fancy bike here.Stephanie:You do sound great, though.Jeremy:I think I wanted to do like a podcast show where ... I live in Park City, Utah. There's a lot of great ... I took up fishing during quarantine. I haven't really caught anything, but it's really relaxing. I thought it'd be fun to go out and go fishing and then do an interview at the same time. I think guests-wise, there's so many people out there. One brand I've admired for a long time is the, and I like loosely know them, but I've really liked the Buffy team for a long time. I feel like they're pretty unique. They have a lot of success, but they've still been humble about it and low to the ground. I think it'd be really cool to have them. My background isn't just like eCommerce and retail. I think it'd be a mixture, but yeah, that'd be a cool one.Stephanie:I like it. I can only imagine you catching a fish while trying to interview and how that was found. Interesting. All right, what is the favorite piece of tech that is making you more efficient right now or that you're enjoying?Jeremy:Oh, man, that is a tough one. I use a lot and the whole Italic team makes fun of me for it because I always add something new every week. I think the one that stuck with me for years is this company called Missive. It's a collaborative email inbox that allows the entire team to work in conjunction on emails. Let's say it's an email with a vendor or an email with a YouTuber who we want to advertise with, we can collaborate in line without having to go to Slack or take it to another email thread in the same place. Missive and Front in the same vein does the same thing. I think those two products are ones that I really couldn't live without.Stephanie:That actually sounds really good. Can you send it out? If I was one of your employees, could I say, "Send this out under Jeremy's email because he gets better responses as the CEO than I will"? Personal question. This is something I actually want to know for myself.Jeremy:There's actually a setting to do that in which you can share an address and other people, like let's say an assistant can send it for you, so yes.Stephanie:I like that. I'll check that out. Awesome. The last, slightly more difficult question, what one thing will have the biggest impact on eCommerce in the next year?Jeremy:I'm not going to give you the cliche answer and say COVID changed everything, which it did, but-Stephanie:We all know that now.Jeremy:I actually think it happened last year and then I already alluded to this earlier, but I think the biggest change will be the transition from ... People have been talking about these like DTC waves. The first wave was like the Bonobos, Warby, Everland 2008 to 2012 era, and then, the second wave was like everything thereafter. A lot of the direct-to-consumer brands you see nowadays, it's the category leaders per se, but I think now people ... Let's say from, I don't know, 2014 to 2018-2019. I think there's been a big change in the operating mentality of these newer brands in which if you're a new brand starting out, you can't go out and raise these massive rounds that these companies used to off of revenue growth because people have realized now, this is not technology revenue growth. This isn't like an 80%, 90%, north of gross margin product.Jeremy:There is a saturation level to performance marketing. I know I'm sounding like quite cynical here, but I mean that actually in an interesting opportunity in which you can actually raise that money, but I think if you're creative about cashflow and you're creative about how you grow the business, you can build a huge business. I guess Gymshark would be a great example of this in which you can bootstrap to a really large volume without having to raise equity financing. I think you can do it through focusing on cash conversion cycle which is what Gymshark has with its founders or you can have in any case of owned supply chain like House or Buffy does.Jeremy:I think there's different ways that you can frame the direct-to-consumer model that allows you to still grow, but I think the era of venture-backed DTC, getting into the series, A, B, C and onwards is probably over. I think that's already happened and I think that will probably be the biggest impact on the ecosystem.Stephanie:I completely agree with that. If you sound cynical, then I think cynical too, because I completely agree with that. That's a really good point. All right, Jeremy, this has been such a fun interview. Where can people find out more about you and Italic?Jeremy:Italic is on italic.com and I am @jjeremycai, J-J-E-R-E-M-Y, C-A-I on Twitter. I think that's the easiest way, but we'd love to have anyone as a member.Stephanie:Awesome. Yeah. Thanks so much for coming on the show.Jeremy:Thank you.
Sunny Warby is one of the Pioneers of the Highway, with a unique twist. In his early 20's he made a decision to invest in a brand new truck, a B Model Mack. His Father had to convince the Salesman that Sunny could pay it back before the deal was done. And he still owns the Mack today, making him the last surviving Original B Model owner in Australia. This is his story!!!
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96 – Welcome Topics - The problem with cancel culture, John and the Supremes, Emmett Sullivan & Mike Flynn, Steele Case provides more evidence Mueller abused process. 866-988-8311 info@republickeeper.com The problem with cancel culture AOC - https://thepoliticalinsider.com/ocasio-cortez-has-no-sympathy-for-people-who-get-cancelled-says-they-are-just-entitled-and-unliked/?utm_source=rss&utm_medium=rss&utm_campaign=ocasio-cortez-has-no-sympathy-for-people-who-get-cancelled-says-they-are-just-entitled-and-unliked It’s the antithesis of graciousness It makes 3 strikes look generous It offers no redemption It offers no grace We all need to cancel our misdeeds Slavery Mistreatment of Indians Women’s suffrage Partnered with Stalin to defeat Hitler We all have the right and responsibility to be a better version of ourselves. Denying people the opportunity to re-assess and re-approach things is evil. Denying the possibility of change is evil. Denying hope is evil Redemptive stories are central to America Support request Pray Subscribe & Share Donate Supremes John Roberts – he’s #17. Joining the liberals – why? He gets to assign the opinion. Subpeonas can they be issued to a sitting president? Local Prosecutors Congress Both 7-2, both with Roberts writing the opinion “The arguments presented here and in the Court of Appeals were limited to absolute immunity and heightened need. The Court of Appeals, however, has directed that the case be returned to the District Court, where the President may raise further arguments as appropriate.” If Chief is with the majority, he assigns the opinion, even to himself If chief is with minority, then the sr most justice of the majority assigns it. The “sex discrimination case” was going to be 5-4 , he joined and made is 6-3 or Ginsburg would have written it. Louisiana Abortion clinics case. He joined out of stare decisis, but offered a concurring opinion that showed he was open to overturning PP vs Casey that created a constitutional standard for state regulation https://www.redstate.com/shipwreckedcrew/2020/07/09/the-supreme-court-gives-pres-trump-two-wins-in-subpoena-cases/ Judge Sullivan has asked for an en banc review of the whole court to kick the can down the road British court rules against Christopher Steele, orders damages paid to businessmen named in dossier Justice Mark Warby of the High Court of England and Wales ordered Steele’s firm, Orbis Business Intelligence, to pay a modest 18,000 English pounds – about $22,596 in American currency – each to Petr Aven and Mikhail Fridman as compensation for a violation of Britain’s Data Protection Act 1998 . The ruling involves a long-discredited claim in Steele’s dossier – repeatedly used by U.S. news media – that Russia’s Alfa Bank, connected to Aven and Fridman, was transmitting secret messages between Moscow and the Trump campaign during the 2016 election. The FBI concluded the computer pings were not nefarious messages but rather routine behavior most likely connected to email spam. Special Counsel Robert Mueller told Congress last year he did not believe the allegations. Warby’s lengthy ruling unearthed a gem of new evidence to answer the question: Steele kept his own notes of what he told FBI agents the first time he met them on July 5, 2016 in London to discuss his anti-Trump Russia research. And, Warby revealed, the notes make clear that Steele told his FBI handlers from the get-go that the dossier’s “ultimate client were (sic) the leadership of the Clinton presidential campaign.” So the FBI knew immediately that the dossier it used to justify a FISA warrant targeting the Trump campaign was a political opposition research product designed to help Clinton defeat her Republican opponent and did not divulge the connection. That’s not all that Warby’s decision provided to American investigators. The ruling discloses that officials at the State Department where Hillary Clinton had served as secretary of state were uniquely involved in Steele’s efforts to bring the dossier to attention, including Mrs. Clinton’s former Russia expert Assistant Secretary Victoria Nuland, Clinton's successor as secretary of state John Kerry and Joe Biden’s former national security adviser Tony Blinken. Durham delay, partisan? No matter what.
Your brand is so much more than a logo. It's your story, what you stand for and how you want to be seen. In this episode I'm pleased to be introducing you to Dugald Warby. Duge is one of the partners at Hall Chadwick Qld, a firm that was founded 40 years ago with deep roots back to Western Queensland. In this episode, Duge and I discuss their pride for their history, how they have managed to maintain their small firm mentality and what it takes to make it 40years in business. With a client base that spans from inner city to loyal 3rd generation rural clientele we explore how these relationships have stood the test of time and the impact that Hall Chadwick's strong country values have played in this. Having the pleasure of looking deeper into their organisation several years ago when designing their new workplace, I had the opportunity to look under the façade and get to the heart of their business, to truly understand their culture and how their country heritage infused their business. Duge and I discuss how they started the journey of “we need more space, we need a new office” to how the design of their workplace has enabled their team and the feeling that it gives to people before they have even met someone, and how the space reflects who they are really are. Hall Chadwick | https://www.hallchadwick.com.au/ Hall Chadwick Case Study Hall Chadwick Breakfast Seminar Melissamarsden.com.au
The alcohol industry is worth more than $250 billion in the United States, but the bulk of that money is being raked in by the biggest corporations and distributors with very little room for independents to break in. But Haus has found a way to be a disruptor. On this episode of Up Next in Commerce, Haus founder Helena Price Hambrecht hopped into her recording studio (AKA her car outside the Haus warehouse) to explain how her small aperitif company has taken advantage of deep industry knowledge, organic growth, and the complete ownership of the supply chain to build an Ecommerce-based alcohol experience that the younger generation is embracing. 3 Takeaways: Adding educational elements to every touchpoint is key to helping customers get the most out of products Now is the time to invest heavily in the product because it is only with a good product that you can have truly excellent organic growth There are risks involved with being a fully vertical company, but the reward is the ability to be nimble, have a laser-focus on product development, and allow the ability to adjust to supply chain curveballs with ease For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length. --- Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce --- Stephanie: Welcome everyone to another episode of Up Next in Commerce. This is Stephanie Postles. And today we're joined by Helena Price Hambrecht founder at Haus. Helena, should we call this a happy hour episode even though it's only 11:00 AM. Helena: Every hour it can be a happy hour. Stephanie: I think so too. So tell us a little bit about Haus. I was looking into it and it looks like a really fun brand and it already was getting me excited with some of the new products you were launching. I think one of them was called Lemon Lavender that, like I said, I was ready to order at 11:00 AM. So I'd love for you to detail a bit about your company, and your background, and how you started it. Helena: Yeah, so Haus is an alcohol company. We launched with me and my husband. We co-founded it together. His name's Woody. We live on a farm in Sonoma County and we joke that it's very much the product of a techie marrying a wine maker. And our goal is to create the next portfolio of alcohol products that reflect how our generation drinks and what they care about in food and beverage. Stephanie: Very cool. And how is Haus different from other spirits brands or liquor brands or wine? Helena: Oh God, where do I begin? I think it's interesting because most people don't realize that alcohol can be better than it is. Right? I think alcohol has gotten a pass for a long time because it's a vice. And I think people can just assume, "Well, it's bad for me. So doesn't ultimately matter what's in it because it's just bad." And corporate alcohol has kind of run with that for a long time. So a lot of the products that you're drinking are worse than you think. You're feeling bad, you're feeling hung over when you drink and you think it's just because it's alcohol, but alcohol is only a tiny piece of that puzzle. Helena: In reality, corporate alcohol is made with things that you just wouldn't believe, take wine for instance. You can intervene in your wine production with milk, and eggs, and clay, and fish bladders, and artificial flavors, and tubs of processed sugar. You can engineer it to taste good, but it's going to make you feel horrible. It can be made with grapes that are full of pesticides. Your favorite whiskey might be full of petroleum-based, caramel coloring. It's kind of a racket. And we're a generation that's cared about where our food comes from, where our beauty products come from, is it organic? Is it locally processed? Is it responsibly made? For some reason, alcohol has gotten a pass and we wanted to raise the bar. So we approach things very, very differently. Stephanie: Very cool. So it seems it'd be very difficult getting into the alcohol industry. I was reading a little bit about the three tier system where distributors and bartenders are the gatekeepers and they tell you what to drink. How did you have the courage to get into that industry? And then how were you actually able to become the only direct consumer spirits brand? Helena: Yeah, so I mean, it's really Woody, right? I used to work in alcohol industry, but as a bartender. I wasn't really deep in the production side of it until I met Woody. And Woody is a great farmer. He's been running the family's grape farm for the last decade and he also makes wine, and was making aperitifs when I met him before Haus. And he was doing everything right as a independent wine and spirits guy. His products were in the best bars and restaurants in America. They were in the best cocktails in America. Helena: But because of the three tier system, which is pretty much controlled by corporations, you don't have a lot of leverage as an independent brand. So you don't really have control over how your product is used and Woody would just find that he was a little sprinkle in a fancy 10 ingredient cocktail. So while he could name drop his full accounts, he wasn't moving any product, the drinker had no idea who he was. I was observing this and thinking, "Man, this is not a great way to build an independent brand." And the more and more I got to know the industry, the more I got to know the three tier system, which it's a hundred year old prohibition era laws. Helena: For those who don't know the tiers, which I would assume you don't, it's just distributors, producers, and retailers. So if you're a producer, you have to go through a distributor to get your product into bars and restaurants. And then bars, and restaurants, and retailers then sell to the drinker. Unfortunately, the way the laws have been designed, it's actually allowed corporations to just be in cahoots with distributors. So corporations ultimately decide what you're drinking and it's why you're still drinking Jack Daniels, and Gregger's, and Absolut and you've not really heard of any other brands that are playing in the liquor space. Helena: So for us, we didn't know that there was a way to go around the system. And I started doing research because I was curious about just how our generation was drinking, what were we looking for out of alcohol? Because I was certainly looking for a better alcohol experience. And I saw a huge opportunity. Like I said earlier, millennials are looking for better made products. They care about their health, and their image, and authenticity, and transparency, and convenience. And when you looked at what alcohol was doing, it was almost nothing. So I was really complaining to Woody about this, saying, "Gosh, what a shame that you can't build independent brand, like a Glossier or an Everlane of alcohol because of the three tier system and you have to go through the distributors." And that's when I said, "Actually, there's a loophole that I never thought about until this moment." Stephanie: Dun, dun, dnn. Helena: Yeah. If you're an aperitif, you're typically in the liquor category. You're federally regulated like a liquor. You can't sell direct to consumer. You can't go online, but if you're under 24% alcohol and you're made mostly of grapes, which is a loophole you would only know about if you're a great farmer who makes great base aperitifs, you can go around the loss, you can go direct to consumer, you can sell online. And it just had never occurred to anyone to use that loophole to build a direct to consumer alcohol company. Stephanie: So no one else in the industry found that out until you guys did and you're the first ones to actually be able to sell to consumers directly because you leveraged that loophole? Helena: Yeah. And you know what? We thought that we'd stumbled upon a treasure and that, "Oh my gosh, when other people find out about this loophole, we're going to have competition, which would be fine." But when we were pitching it to folks in the alcohol industry, they thought it was a stupid idea. They could not understand why we would want to go direct and why we would sell online. People are so used to doing things the way that they've been done forever and they just couldn't process that we thought that we could just go on the internet and create a brand and sell something to the drinker because it had never been done before. Over and over and over again people were just like, "Why would you do that? That's stupid." Stephanie: Yeah. That's awesome. And this loophole also lets you guys have a brick and mortar store, right? Whereas you would never see a Jack Daniels store on the streets of New York. But you all could open one if you wanted it to, correct? Helena: Exactly. Yeah. We could open two different brick and mortars in California today. It's state by state. Every state has different laws and it's still kind of a nightmare to navigate. But yeah, we can do so many things that other brands and liquor space can't do. We can be sold without a liquor license. We can sell online, we can do a wine club style subscription service. There's just this whole world that opens up to us. And we were the only people that decided to try it. Stephanie: That's amazing. So what was the first steps looking like when you started Haus and you were thinking about building the website and the experience, like the buyer experience? How do you think through designing that process for consumers who have never done that before? Helena: Yeah, and that was the challenge, right? It's like as a brand, one thing we had going for us was we weren't just two people in class who had an idea and had to create a backstory. The backstory was there, right? We were people trying to solve our own problem and a problem that everyone we knew was having and that was great. And we live on the farm and we make it ourselves, and all of that's hopeful as a brand. But the real challenge that we had was how do we take this type of liquor aperitifs, which has been in Europe for over a century ... it's a style of drinking that's very common in other parts of the world, but is relatively unknown in America. How do we take this type of liquor and make it mainstream? Without having to pitch people in person just through the internet, how do we very quickly educate people on what this is, the problem it's solving, convince them to buy it, get them to get their friends together and drink it together? So that was a challenge. Helena: But for us, our goal was to just approach it as education, right? And bake education into as many touch points as possible, not just through copy on the website, but through photography, through editorial, through different touch points post-purchase, in the packaging. It was really about how can we make the most of every single touch point that this customer has with our product so that by the time that they receive it, they deeply understand it and where it lives in their life. Stephanie: Yeah. I could definitely see the difference from your photography versus a lot of other e-commerce companies. I could see that you were teaching the buyer how to enjoy Haus. I think one thing I saw was as you went from page to page, you had a couple images flash showing how it's being enjoyed at the table, sitting on the table with a bunch of friends. It was very different than the typical product images with the white background and no one really having a good time with it. How did you know to utilize that imagery to encourage that buyer behavior to then hopefully spread the word about Haus? Helena: Yeah, that was a very conscious decision. So my background's in brand. Before Haus, I had a production company that did everything from visual brand strategy to producing commercial campaigns including photography. So when we thought about photography for Haus, first things first, I didn't want to do what every other direct to consumer company at the time was doing, which was product on a plain colored backdrop, very simple, very polished, very digital looking. It didn't feel right for us because there was no context, right? Haus isn't supposed to live on a seamless backdrop in a photo studio, Haus is supposed to live at your dinner table. And it just felt like a missed opportunity to show the customer where Haus belongs. Helena: And that type of photography of the product on a plain backdrop, that exists for a reason, right? It performs well in paid. It's very straightforward. People can physically see what they're buying. And, in an era prior to now where paid drove most direct to consumer growth, it makes sense that people use what performs well. But for us wanting to grow organically as much as possible, we didn't care so much about that sort of metric and for us the priority was way more about how can we use this opportunity to just show people exactly what they should be doing with the product. And that's really how we approached it. Stephanie: That's awesome. And are there certain metrics or data and analytics that you look at to see what's performing well and what's not or how do you think about success when it comes to utilizing a different kind of buyer experience? Helena: Yeah, I mean, in the beginning up until December we were 100% growth. And that's hard to measure, right? There's no real way to examine where those customers are coming from. There's not a whole lot you can do with that data, which makes it very daunting for most companies to pursue. Right? Stephanie: And you said a 100% organic growth, right? You cut out there for a second. Helena: Yes. Stephanie: Okay. Got it. Helena: And now we're experimenting with paid and now about 20% of our customers come from paid. But for us, we're still a primarily organic company. So I think for us it was more of a philosophy and some hypothesis around our product and how it could spread, right? Our product is something that is inherently shared, right? If you're having a drink, you're very likely having it with another person, you may be having it with a group of people and that's certainly the customer that we were going before. So for us, we wanted to make sure that the product and the customer experience was so stellar, which sounds common sense, but it's not necessarily, especially when you have limited resources that you have to put into certain buckets. We put everything into product and everything in the customer experience so that when people received that product, they gathered their friends together, they shared it with their friends, they all had an amazing experience together, and then all of those friends went to buy a Haus. So that was this organic flywheel that started taking off. And our growth was through word of mouth. Helena: We also prioritized press quite a bit. My first career was in PR, running comms for startups. So I'm a big fan of working with press to tell your story because, you can tell people what to do all day, but people are going to really listen when someone else tells them to go buy your product and that it's great. And press is also hard to quantify, right? A lot of press doesn't actually tie to purchases. It's more of a long game of having this validation and the customer being able to come to your website and see that the New York Times, or GQ, or Vogue said that you were good. So it's one of those things where a lot of what we pursued in the beginning birthwise was really hard to quantify and it was also kind of long game. So I think it rests outside of the comfort zone of a lot of founders and a lot of growth managers because of that. But it worked so well for us and it continues to work well for us. Stephanie: Yeah, it definitely sounds like it. How do you think about leveraging press? Because when I think about that, it seems like there's a lot of agencies and companies who are ready to do a PR release and tell you that they're going to get you press. But then afterwards you're like, "Oh, what did it really get me?" And a lot of people maybe can't get on the Vogues and the bigger name brand sites like that. How did you pick out strategic places to be seen and found? And how did you even get those relationships to get that press? Helena: Yeah, I mean, it takes time, right? There's plenty of people that I wish were writing about us and they still haven't. But for us, my philosophy since my early '20s when I was doing comms is like you can't expect anything from anybody immediately, right? Because even if the person writes about your beat, even if it's obvious that they would find your product interesting. You just don't know what they're going to be writing about for the next year. And maybe they're not going to be writing about anything where you're particularly relevant and maybe they don't break news, maybe they're writing trend pieces. A lot of the media relationship building that I've done over the last decade and that we continue to do with Haus is about just getting on people's radar and not wanting anything upfront, not being so transactional about it, and just saying hello, sending them some information about Haus or your company, sending them samples of it, any new products as you release them. Helena: There's a lot of parallels I think between media relations, and fundraising for those who have fundraised where building relationships with investors is similar, where a lot of times it's just reaching out over and over, being like, "Hey, hope you're well, remember that thing that we said we were going to do, we did it. Check it out. It's pretty cool." And not expecting anyone to immediately do something about it, whether it's write you a check or write a piece about you. If you have news to share, you can always pitch it and formally ask if they're interested in writing about it. Helena: But I think approaching it more casually and again, really thinking about the long game, helps forge a more authentic relationship as well, where they are people and if they're interested in your space, you probably actually have a lot in common, you could probably be friends. And if you just treat them as a person who's interested in a space that's similar to you, then it's just going to be a much healthier relationship versus only reaching out last minute when you want them to write about you right now. It's just not going to happen. Stephanie: Yeah, that's such great advice. Be persistent, but don't be annoying. So how do you think about selling something on a website that a lot of people want to experience? I know you just mentioned samples. Do you see samples working well to get people to come back and buy? Because I've heard mixed experiences with that from a few of the guests we've had on the show. Some people completely took samples away because it wasn't working. Other people said it worked well. What's your experience with having the buyer be able to try before they go too deep into the buying experience? Helena: Yeah, well, we don't actually do samples for our customers. We have a starter kit that are two smaller bottles of two of our flavors that people can buy. And that's definitely a popular first purchase. I think for us there was a risk to selling smaller form factors direct to consumer, right? Like the margin is lower, it's just not a productive purchase from a business standpoint. But we released those smaller sizes because we saw a behavior where when people would buy even one larger bottle of Haus, they would come back and they'd buy more. Their next purchase would be two bottles or six bottles. So for us, there was that confidence because we had the data that showed that people that bought that first smaller size, they would come back and they would buy something bigger. So that's worked for us. I think if we were losing money on it, we wouldn't do it. But we still make a decent margin on our small sizes. So for us, really the challenge was how can we give people the best idea of what they're going to experience? Helena: And part of that was us being really thorough on the site, just explaining the kind of flavor components, what they can expect, showing the ingredient list, showing the nutrition facts. And then reviews have also been really useful for us where we work with Yoko. And for that it's been great for someone who's on the fence to go and read from 50 people who tried the product and liked it and talk a little bit about their experience. But ultimately, it's still a challenge for us. We're exclusively an online company. This is kind of a great problem to have. It's a problem that most companies want. But when we last looked at our newsletter, 70% of our newsletter subscribers who open our emails, and read our emails, and love the brand, they haven't bought yet a Haus yet. So it's an interesting phenomenon where people like the brand, and they're interested in it, and they're thinking about trying it one day, but they just haven't pulled the trigger. Though what we've seen with COVID, a lot of those people are starting to pull the trigger. Stephanie: Got it. And what are you including in your newsletter because that's unheard of to have a newsletter for a brand where people love the newsletter, but maybe haven't tried it yet. What kind of content are you putting out there that's pulling people in so much and how are you thinking about converting them in the future? Helena: Yeah, I mean, it's nothing crazy, right? It's not like we've built some robust editorial platform. But we share recipes, we share behind the scenes, we share occasionally elaborations that we do with other brands or people in the food and beverage space. It's nothing that's too robust. We haven't put a ton of resources into the editorial side of our business yet, but we are very careful to not be too promotional or too self serving and really make it something that people are going to enjoy looking at and enjoy reading even if they aren't actually drinking Haus right now. Stephanie: Got it. That's awesome. Are there other brands in the e-commerce space that you look to, to either learn from? I know I read that you've described Haus like the Warby Parker of booze, so are there people that you are inspired by, that you test out maybe different website models or AB tests or what are your content that you're releasing that helps iterate that? Helena: Yeah. Oh my gosh, it's so many, right? Like the Warby Parker analogy came from Luxottica outright who Warby ultimately disrupted and Luxottica feels very similar structurally to what you see in the alcohol industry. I mean, Away is one of the kind of OG brand branded did such an incredible job of building a movement and building a community around something that wasn't considered very sexy prior to Away. And they did such a great job with curating content and working with their community on photography and they did such an incredible job. Glossier does an incredible job. I love that they started editorial first and they really focused on building a community that was very, very different than what you saw in the beauty community. And they utilize channels in a very different way than other beauty brands did. And that really came to help them. I think the bottom line is really focusing on creating content that serves the customer and makes them really excited to participate with your brand. And for every brand, that's different. But it's finding that thing that gets your customers really, really energized and engaged. Stephanie: Yeah, I completely agree. Are you focused on a certain demographic or are you trying to pull maybe a demographic who's always been used to going after the name brands, are you trying to also pull them away and try something new? Helena: Yeah, I mean, our initial demographic was a hunch based on us, on our own personal use case and how we came up with Haus. We made it for people who drink quite a bit, and they're out and about, and they're building their careers, and they're networking, and they're at events, and they're catching up with friends, and they're going on dates, and they're around alcohol a lot. Right? Like we're not going for the kiddo person. We're not going for the super, super health nut, we're not going for sugar-free people, we're not going for people who are trying to get sober. We're going for people who love to drink, but they have certain values that they apply to other industries like food, and beauty, and their clothes and they just didn't know that they could have those same standards for alcohol. Right? Helena: And those people, our hunch was that they lived in urban areas, large and midsize cities, they were career focused, they were probably millennial though the age range extends beyond that. Gen Z also exhibits the same kind of behavioral demographics and they're starting to turn 21, definitely early adopter types have some sort of aesthetic sensibility. And we had a hunch that there would be overlaps between us and other direct to consumer brands. And so far that seems to be correct. Stephanie: Yeah, completely agree. So something else that's really interesting about your company is that you guys are a fully vertical company, so you own everything from the production to the distribution. Can you speak a little bit towards how that gives you an advantage when it comes to launching new products and how you even came about thinking like, "I'm going to do everything." Instead of going with a more traditional model of sourcing things. And I mean, you said stuff came from your farm, like the ingredients and whatnot. That's insane from thinking about how other alcohol companies do things. So I'd love to hear a little bit about that. Helena: Yeah. It's not normal for alcohol and it's not normal for direct to consumer, right? Take Warby Parker for instance, who's like the OG in the direct to consumer space. I mean, take most direct to consumer companies. The advantage to being direct to consumer in the beginning was not owning your supply chain and being able to go and work with vendors that you own the brand experience and the purchasing experience and you're able to take a brand and make it a thing. And, and so for us, we wanted to take a very different approach for the most part because we knew how to do it, right? Like we're good at it. We make aperitifs already, we have the warehouse, we have the farm, we have the infrastructure. So we didn't want to outsource that to anybody else. Helena: But we also had a hunch that being fully vertical would give us a huge advantage from a product development standpoint. We could super nimble, we could iterate every day if we wanted to based on customer feedback. We could launch new products quickly, we can kill them quickly. We had a lot of abilities that other companies wouldn't have. And then we would also be prepared for any sort of supply chain curveball that comes our way. Right? The only thing that we don't personally own is making physical bottles. So we always have to make sure that we're prepared and have inventory for an inflection point. But everything else we do ourselves, right? We make it, we bottle it, we ship it. Helena: And so for us, we of course never expected a pandemic sized curve ball, but it was the ultimate test, right? And we're one of the few companies that haven't been impacted at all by the pandemic and we were even able to release a ton of new products during the pandemic. So it's one of these moments where we made some philosophical bets early and we didn't know how exactly it would benefit us, but we had a feeling that it would longterm and it's benefited us in a massive way now. Stephanie: Yeah, that's great. It seems like it's very opposite from what a lot of brands and companies and e-commerce companies are doing right now where everything's about outsource that and only take care of the front end part of it. So it's really nice hearing about someone jumping in and doing the whole process. Are there any learnings, or best practices, or failures you've experienced when setting that up? Helena: Yeah, for sure. I mean we've definitely made some mistakes on the production side, but the beauty of it is if you accidentally leave a hose open and the product pours out all over the floor, you just start over and you make it again. I think for us, the biggest learning curve was the one part of our supply chain that we didn't own, which was bottles. And again, this industry has its own politics. It's pay-to-play, it helps to be owned by a corporation. And so it took us some effort to be taken seriously by a bottle vendor because we were a new brand. We didn't have the backing of Diageo or Pernod. What were they to expect us to do? Right? Even if we were like, "We're going to be big." How are they supposed to believe us? Helena: So we were sold out for most of the first two months of our existence because we just couldn't get bottles. They just wouldn't take us that seriously. And it got to a point where we had to say, "How big of a check do we have to write for you to believe us?" So the downside of that is you have to buy more bottles upfront than you may have wanted to. But again, in a time like this, during a pandemic, we're really happy to have made that. Stephanie: That's great. So when it comes to the pandemic, I saw that you were able to quickly shift where I think your profits were going. Do you want to speak a bit about the initiative that you have going on and how you were able to quickly pivot because you own the entire process and supply chain? Helena: Yeah, the pandemic has been a roller coaster for everybody, us included. In February, we saw that it was calming and potentially already here, which it was. So we had to do worst case scenario planning, right? Like, "Okay, what if the economy bottoms out? What if nobody's buying anything? What if like every direct to consumer company burns to the ground?" So we did a deep dive in our P&L and we cut a lot of costs that kind of felt more like nice to have versus must haves. We luckily didn't have to fire anybody, but we wanted to just make our business very core, very nimble and that ended up being a good decision regardless. Helena: But pretty soon after, our business started growing and that's due in a large part to e-commerce growing, it's due in a large part to alcohol growing. We happened to be the one alcohol company that directly delivers to your door and the press started writing about us because of that. So there were a lot of domino effects from being in this space. And we were also starting to see a lot of efficiencies around paid, so we were putting more money into that. There are a lot of things factoring in, but long story short, we were growing, like our business right now it's up more than 500% than it was in January. Stephanie: Congratulations. It's amazing. Helena: It's crazy. And so for us, obviously that was a huge relief knowing that we didn't have to let anybody go. We could continue building the business. But there was definitely a question of this pandemic is way bigger than us, right? It's something that we're all going through as a society and it feels a little strange to be wholly focused on yourself, especially if you're doing well. And so for us it was really thinking about the rest of our industry, right? We're in food and beverage and not everybody is faring as well. Restaurants in particular, they are in huge trouble. They're a very low margin business. They're a labor of love. They are a beautiful industry, but largely they're traditional, right? And they don't have alternative revenue streams. They're serving only local walk-in patrons, so they're in huge trouble. Helena: And we took a step back to really think about like, "Okay, we could just launch a campaign or something like that." But that didn't feel right. There was too many of those already out in the world and it just felt overwhelming. So we thought like, "We have infrastructure, we have a warehouse, we have a production facility, we have resources, physical resources. How could we use the tools that we have to help others in our industry?" And pretty quickly we realized if we ... obviously we had to test it with them and see if they were into it, but if we made a product for restaurants, like if we made booze with these restaurants, use the chef's vision, the chef could direct it because that's very important to a restaurant. They don't want to promote someone else's group product. Helena: We could make and ship booze for them that's their recipe and we could donate the profits to the restaurant, which is a healthy margin. We could make a significant impact on their business. So we tried it and we got signed on from a bunch of the best chefs in the country, partially because of our connections and connections of our investors and our friends. And now we're making 13 new products this month. And we're sending a lot of money to restaurants. I think at this point, we've probably sent like $80,000 to restaurants and we're still in the preorder phase. So it feels good. Stephanie: That's great. Is this the first time that you've had someone help influence the ingredients to create a new product? Like you're mentioning how the chefs are creating their own. Is this the first time you're trying out this model or have you always had help from the industry when it comes to new products? Helena: No, Woody's done everything himself. So what is this magical man who is such an artist and he has a vision and he's really, really good at making wine and aperitifs. So all the products were his vision and then this is still very much a collaboration, right? It's like these chefs don't have experience making alcohol, so they talk to Woody, they share their vision, right? Like what they would love for it to taste like and ingredients that they would like to feature. It's a very similar collaboration between a chef and their kitchen, right? They give the vision, the kitchen executes it, and it's similar here where Woody can take that vision and then he can play around with the recipe and different combinations of ingredients to get somewhere that he thinks is up to par. Then he sends those samples to the chefs, the chefs give some feedback, whether that's like, "Oh, it could use some more acid." Or, "Maybe a little sweeter." Or, "I'd like to taste more of this particular fruit." And then and then it's done. Stephanie: That's great. Do you see that kind of partnership continuing even after the pandemics done? Because it seems like a really nice way to have like UGC content or alcohol created for you and then creating those partnerships could only help scale all the different products that you have with the help of other people who have a specific idea in mind. And then you have a buyer from the start. Helena: Oh yeah. It's a win-win for everybody, right? It's like these restaurants have a new form of revenue, which is great. It allows them to monetize their audience, which is for the most part national or international. They're just collect revenue from a much, much bigger group than they could four. And we've made these products, they're so good. These are incredible aperitifs. It feels like a new frontier for alcohol in America. It's really exciting. And so for us it's great that we can collaborate with these chefs to make these really unique recipes. So I wouldn't be surprised if we added most of them to our permanent store after the project is over because they're just awesome and this makes sense. It's a win-win. Stephanie: That's really fun. So to zoom out a little bit, go a little higher level, what kind of trends do you see coming to the e-commerce industry or what are you most excited about right now? Helena: Yeah, I mean, I have a feeling that there's going to be a new level of scrutiny applied to direct to consumer, right? This is a real moment of reckoning for a lot of companies where if you can't do business for a month, you have to shut down or you have to lay off a majority of your workforce. It's probably not great that supply chain is so fragmented right now. And I think there's also at the same time a bit of brand fatigue that was already happening prior to the pandemic where there's so many direct to consumer companies being made right now where the founders don't actually have much expertise in the space. Right? They just had the idea, they were able to get venture capital because they're connected in that world, and they were able to launch a company. And they can put all that money into pay it, and they can acquire a bunch of customers. Helena: But the problem with not knowing your space is that you're not able to iterate quickly. And it seems like we're about to enter a world where we just don't know what curve balls we're going to see. Right? Like international trade is a bit testy right now. We may see people become a little bit more nationalistic in terms of supply chain. We don't know. So I think at the very least we're going to see more money going to founder teams that have at least one founder with deep, deep industry experience, whether that's a generational family heritage or whether it's a decade plus of experience in the industry because you at the very least need the connections on that side of things to have leverage, right? You may not have to own it all yourself, but if you don't have any real leverage in that world, then you're toast. So I think that's going to impact a lot of what brands, not just survive right now, but what brands get funded in the future. Stephanie: Yeah, completely agree. It definitely feels like we have been in an environment where it's like just try and create a quick MVP and see if it works and if not, go on to the next one and keep trying until you find one that maybe works. And I think that's a really great point of you should probably have some kind of deep expertise in whatever you're going into. Because one, you have to love it for a long time if you're going to actually follow through with it and being good at something probably means you're going to have a good business as well. Helena: Totally. Yeah. I mean, it's like, of course it goes good when it's good, right? But at the end of the day, it's not just about product market fit. If you don't have real control over your life business and how your product is made, then as soon as a curve ball hits, you realize you're just as fragile as any other business. Stephanie: Got it. Yeah, completely agree. When it comes to someone either launching a new product or building a whole new business, what's one thing that you would suggest for them to try out based on the success that you've had from your store? Helena: I mean, again, it sounds like obvious, but it's not, I would put so much more effort into product than you may feel comfortable with. It's riskier. It takes more resources. But in consumer, I just don't think that MVP is going to cut it anymore. So in a time where paid right now is performing well, but ultimately we're in a postpaid world. We're in a post soft bank high growth venture capital world. People have to start taking organic growth more seriously. And the easiest way to do that is to have a product that's good, and tastes good, and feels good, and looks good. It's one of those things where it feels easy to cut corners up front, but you really only have one chance to make a first impression. And those first impressions, they carry the weight of viral growth. So I would really put more resources into that than you're comfortable with and it'll pay off. Stephanie: Yeah, completely agree. And I saw you all doing that in your unboxing experience. Do you want to talk a little bit about that buying experience and how you thought about creating something that would ... you would make something that would be socially shared potentially, like a pretty box, a pretty bottle? I think you were putting different pamphlets and stuff inside that people actually wanted to share. How did you think about creating an experience that would go viral like that? Helena: Yeah, I mean, it's pretty amazing to watch how much the bottle and the box is shared because we haven't asked anyone to share it ever, and it just keeps getting shared. But again, I think for us it was about like, "Okay, all of these touch points are important to the person." Right? Like they're not just buying an aperitif, they're buying an experience. They're buying even a good website experience. They're buying a good post purchase flow. They're buying a good unboxing experience. They're buying a good bottle. All of those things are just as important in direct to consumer as the actual liquid in the bottle. So for us, we put a lot of effort into the glass bottle. We wanted it to look beautiful in your home. We wanted it to feel good. We wanted it to look really tight. Helena: And we wanted the same with the box, right? Woody has a great relationship with a box maker from his many years in the industry. And we were able to do custom boxes really easily with him. And we just wanted to make something that was very simple that fit into as many homes as possible. And just the point where it was looking beautiful, right? The point wasn't to sell the product because they already bought the product, [inaudible] doesn't need to do that. It really was about looking good and making the customer feel good. Helena: And then with every package there's an editorial that comes in and that's more of that educational component that I was talking about where that's another opportunity. Yes, it costs money to make an editorial pamphlet, but in that pamphlet, the customer can learn about me and Woody, they can learn about the farm, they can learn about what appetites are, the history of them, where they belong in the world, why they exist, they can learn a few ways to make a cocktail with Haus. It's this kind of deep wham bam education right in their face. They didn't have to pursue it. It's just there for them. And by the time that they're done reading it, they have a deep understanding of how to use the product and they feel like they know me and Woody, they feel like they deeply understand where it comes from, and we didn't have to do anything. Right? We just did all the work upfront. Stephanie: Yep. Do you personalize that experience after the first time they buy they might get one type of editorial and then when they come back, do you send a different one and do you keep track of how they're doing like how each editorial or unboxing is performing? Helena: Well, we've started only sending editorials with the first order that people make. But we've found that actually people like, "Oh wait, no, I was going to give this as a gift. I want the editorial." So we're still trying to figure that out. Because there's so many people that gift Haus to other people that we've realized that the first order or the second word doesn't necessarily mean that it's that person's second bottle. It might be someone else's first bottle. Stephanie: Yeah. That's a really good point not to make assumptions like that and also just really great developing that relationship. I mean, if I were to see a picture of you and Woody, and the whole background and history, I would feel like I have a personal connection with you where I would want to come back and buy from you all instead of going to a liquor store to buy something from someone that I don't know. So yeah, that all sounds really smart. Helena: Yeah. I mean, it's me and Woody like Haus is me and Woody and it's a competitive advantage, right? There's very few companies where the founders are physically making the product. So we want you to know us because this is our life's work and we're really proud of what we made. And we want you to know where it comes from because that's important to us, so it works out. Stephanie: Completely agree. All right, and these last few minutes, we do something called a lightning round where you answer the question in a minute or less. Let me know if you're ready and I will start firing them off. Helena: Ready. All right. Stephanie: What's up next for the next product that you're going to be enjoying from Haus? Helena: A summer flavor that was around last year and it's coming back for this year. Stephanie: Ooh. Any hints to the ingredients or what that could be? Helena: It's Rose Rosé. People know. Stephanie: Yeah. I didn't know that sounds delicious. Helena: It's amazing. Stephanie: All right. What's up next on your Netflix queue? Helena: Ooh, probably more cooking documentaries. I can't watch a lot of TV. It stresses me out, but I love cooking shows. Stephanie: Yeah, those are very relaxing. What's up next on your Workday? We heard Woody outside your recording studio, AKA your car that's outside the warehouse. So what's he doing today? Why was he trying to get you to move your car? Helena: Woody is trying to move a bunch of pallets of product. They're making a new batch of Ginger Yuzu right now and they're finishing up some prototypes for the restaurant project. I am going to get off this podcast, answer like a hundred more emails and write a bunch of gift cards for people gifting Haus, and then I'm going to do another interview this afternoon. Stephanie: Very cool. All right. In a slightly harder one, what's up next for e-commerce pros? Helena: Ooh. I think it's taking a big step back and reflecting. That is the most important thing you can do right now. Stephanie: Completely agree. All right, Helena this has been a blast. I can't wait to try Haus. Where can we find you and buy some of your amazing beverages? Helena: You can buy them online at drink.haus. And you can follow along with us on the internet @drinkhaus on Twitter and Instagram. And yeah, we hope to send you some booze soon. It's great for breastfeeding, by the way. Stephanie: Yum, I will have to indulge in that. It sounds perfect for me right now. Helena: Yep. Stephanie: All right. Thanks so much for coming on the show. It's been a blast. Helena: Thank you again. Talk soon.
This episode is with returning guest, Liz Tran. As a refresher, Liz is the founder of RESET which up until now has been a physical space in New York that bridges the connection between personal and professional growth where she combines the best of modern, executive career coaching with ancient practices like sound meditation, breath-work, and astrology. Before starting Reset, Liz was a venture capitalist and worked with brands that we all know and love like Instagram, Glossier and Warby parker. Liz has had to completely pivot her business due to the coronavirus pandemic and has done so with such grace and trust in the universe. She has a physical space in New York -specifically in Nolita which is one of the most expensive areas in the city- that she had to close and her main form of revenue was doing off-site in-person executive training sessions which were also put to a complete halt. Not only has she remained calm and patient throughout all of this, she has adapted quickly and has reframed her mindset in a way that is expanding reset in ways she never thought possible and is optimistic about what this will mean for us all. On today's episode we are getting specific on how the world is coping with grief, making sure we are giving ourselves time to process, we get into Maslow's hierarchy of needs and how there is an opportunity for all of us to ensure our foundation is solid, how smart brands are reacting in this time of crisis and showing compassion and empathy, how to use this time to think about what your priorities are and if the life you were leading before this pandemic aligns with those priorities and for those listening who have lost jobs or are currently in uncertain or unstable industries, we get into best practices of how to best approach your internal search first.
This week I’m joined by someone who has put a huge amount into the sport, opening one of the first UK bike parks, supporting the creation of many others, and offering a forward thinking coaching... The post An Operating System For Going Fast – Ian Warby of Firecrest MTB appeared first on Downtime Podcast.
Marketing School - Digital Marketing and Online Marketing Tips
In episode #1250, we go over all the latest business trends to guide your marketing in the new year. There are a lot of things going on in the business world that we do want to call out because these trends will certainly affect how you do your marketing. We cover important trends such as understanding the pitfalls of raising capital, why a strong brand is so effective for your business, the concept of purchasing web properties, and which marketing strategies to use as everything starts getting more expensive. TIME-STAMPED SHOW NOTES: [00:25] Today’s topic: The Latest Business Trends That Will Guide Your Marketing. [00:48] Understanding the good and bad of raising capital for your business. [02:11] Building a strong brand: leveraging influencers and the omnichannel approach. [03:41] Capitalizing on under-utilized web properties, arbitraging your way to better results. [04:52] How to stay competitive as marketing prices skyrocket: AB testing and conversation optimization. [05:51] That’s it for today! [06:02] To stay updated with events and learn more about our mastermind, go to the Marketing School site for more information. Links Mentioned in Today’s Episode: SoftBank WeWork Wag Away Warby Parker Attention Capital Girl Boss Leave Some Feedback: What should we talk about next? Please let us know in the comments below Did you enjoy this episode? If so, please leave a short review. Connect with Us: Neilpatel.com Quick Sprout Growth Everywhere Single Grain Twitter @neilpatel Twitter @ericosiu
Marketing School - Digital Marketing and Online Marketing Tips
In episode #1250, we go over all the latest business trends to guide your marketing in the new year. There are a lot of things going on in the business world that we do want to call out because these trends will certainly affect how you do your marketing. We cover important trends such as understanding the pitfalls of raising capital, why a strong brand is so effective for your business, the concept of purchasing web properties, and which marketing strategies to use as everything starts getting more expensive. TIME-STAMPED SHOW NOTES: [00:25] Today's topic: The Latest Business Trends That Will Guide Your Marketing. [00:48] Understanding the good and bad of raising capital for your business. [02:11] Building a strong brand: leveraging influencers and the omnichannel approach. [03:41] Capitalizing on under-utilized web properties, arbitraging your way to better results. [04:52] How to stay competitive as marketing prices skyrocket: AB testing and conversation optimization. [05:51] That's it for today! [06:02] To stay updated with events and learn more about our mastermind, go to the Marketing School site for more information. Links Mentioned in Today's Episode: SoftBank WeWork Wag Away Warby Parker Attention Capital Girl Boss Leave Some Feedback: What should we talk about next? Please let us know in the comments below Did you enjoy this episode? If so, please leave a short review. Connect with Us: Neilpatel.com Quick Sprout Growth Everywhere Single Grain Twitter @neilpatel Twitter @ericosiu
Bek, Charlotte and Ash talk with Dr Tammra Warby who was pivotal in helping the RACGP create a position statement about climate change. Recorded (with sorry some background air con noise) at GP19 we discuss 'Planetary Health' and what doctors can do to create change and stimulate action on planetary health. Resources: The Lancet Journal of Planetary Health https://www.thelancet.com/journals/lanplh/home The Lancet 2019 Report on Health and Climate Change https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)32596-6/fulltext RACGP Position Statement on Climate Change & Climate Emergency Statement https://www.racgp.org.au/FSDEDEV/media/documents/RACGP/Position%20statements/Climate-change-and-human-health.pdf https://www1.racgp.org.au/newsgp/racgp/climate-change-is-a-health-emergency-racgp-declare WONCA Declaration on Planetary Health https://www.globalfamilydoctor.com/News/InmyViewDeclarationonPlanetaryHealth.aspx Green your clinic assistance with 'My Green Doctor' http://www.mygreendoctor.org/ Literature Review on Evidence of Built Environment on Human Health https://cityfutures.be.unsw.edu.au/research/city-wellbeing/city-wellbeing-resources/literature-review/ Assistance Going Solar https://www.repowerhealth.org.au/ Where to buy native bees https://www.aussiebee.com.au/buy-stingless-bees.html Climate Change in Australia https://www.climatechangeinaustralia.gov.au/en/ The Intergovernmental Panel on Climate Change (United Nations body for assessing the science related to climate change.) https://www.ipcc.ch/ https://www.ipcc.ch/site/assets/uploads/sites/4/2019/11/03_Technical-Summary-TS.pdf
The Gordon Magazine podcast speaks with Mohamed Haouache, CEO of TheStorefront.com, to discuss the interactions between online and offline in modern retail, some tips for creating successful pop-ups, and how an oversupply of retail real estate inventory is creating opportunities for firms like his.
Bob Phibbs, The Retail Doctor, is a consultant, retail expert, and a motivational speaker in the brick-and-mortar retail space. Bob joins the Gordon podcast to prescribe a more human approach to growing sales and building in brick-and-mortar retail, centered around better staff with better retail training.
In this podcast, Craig Elbert and Mayra Ceja discuss how his experience at Bonobos shaped his leadership style, why his commitment to the lean startup methodology led him to launch a fake company and how he turned plain old vitamins into an instagrammable DTC brand. Care/of raised over $40m from Goodwater, Tusk Ventures, RRE Ventures, and Juxtaposed. -----This episode is sponsored by eToro, the smartest crypto trading platform, and one of the largest in the world. Join myself and 11 million other traders and create an account at eToro.com and build your crypto portfolio the smart way. ------This episode is sponsored by Qtum, the first proof-of-stake smart contracts blockchain. If you're tired of paying high fees on other smart contracts platforms, head on over to http://Qtum.org and start building today your own low fee, solidity smart contract today! -----If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe.This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io
EP175 - Hudson Yards and retail earning news Review of Hudson Yards mixed used shopping development in NYC (thye don’t like to call it a mall). Upcoming Shows: Code 6/10 RetailX 6/25 NRF NXT 7/22 Etail East 8/19 Grocery Shop 9/15 Walmart, Macy’s, Kohls earning reports. Direct to Consumer Valuations (Harry’s, Away, and more) Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 175 of the Jason & Scot show was recorded on Tuesday, May 21st, 2019. http://jasonandscot.com Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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: [0:24] Welcome to the Jason and Scott show this is episode 175 being recorded on Tuesday May 21st 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo. Scot: [0:39] Hey Jason welcome back Jason Scott show listeners. Jason this is one of those rare occurrences which I think is actually not rare this year that we are in the same city so I am up in Chicago you and I just gave an amazing talk to Retail Group about innovation. I’m Wichita that do a deep dive sometime I think I would drop some serious knowledge of their want to thank them for having us up and then we were able to lay down a podcast since I’m up here. Jason: [1:06] Yeah I feel like it’s super distracting to actually get to look at you while I’m talking to you usually it’s just the the picture that I have hanging in front of my desk. Scot: [1:14] Yeah your hair is amazing today I think we referenced in the taco or that you had a Brazilian blowout so it’s looking good. Jason: [1:21] Yeah I’m not going there but I’m glad it worked for you. Scot: [1:23] It’s also chilly here in Chicago I was in nice 90 degree weather down in North Carolina and flu up in my shorts I made that Strategic Air and it’s like 52 and rainy here in Chicago. Jason: [1:35] Exactly but I I would like the record to show that I’m still not ashamed of you because I have brought you to my office in your goofy shorts and Jack. Scot: [1:47] Yeah the other thing I’ve learned is when your Chief Commerce retail strategy digital officer you get Swanky Office Space. Jason: [1:55] Yeah I don’t know I don’t know about that they just don’t know that I’m here so that’s like until they discover me I’m going to. Scot: [2:01] It’s like we work but in Wedding Crashers all together. Jason: [2:05] Exactly exactly show us to talk about this week Scott. Scot: [2:10] Yeah we have some trip reports of you and I have both been to New York recently and went to the Hudson yard new set up there which was pretty cool how did you get to walk around the structure there called I caught the structure I think they’re going to rename it it’s the vessel did you get to walk around and. Jason: [2:32] I did and this is going to be a big problem for me if the new attraction in all malls is hundred and fifty-four staircase structures I’m in a lot of trouble I might have to change my my field because my fitness level is not appropriate for climbing. Scot: [2:47] Yep sadly when we went the line was like 45 minutes to get into the vessel so we pass on the vessel but I did get to go into the I don’t know we’re supposed to call I know they are violently against calling it a mall so we went. Jason: [3:02] Next you shopping space. Scot: [3:04] Yeah I went into the mixed-use shopping space that was good so they have a beta store they’re obviously that you’re on the show, first answer my family down there they really enjoyed the show and then I went with my younger daughter and they had this whole thing called a smart Park, news this whole combination. Art installation space and kind of amusement area, I’m in when we went there they had this really interesting kind of amazed so there’s imagine these sheets hanging from the wall in about a 3000 square foot area you navigate through these things and you kind of confined a lot of little interesting. Art displays inside of there and then there’s a fun mirrored area we can watch everyone kind of getting lost inside of the maze that we enjoyed that. Jason: [3:51] And is it purely to experience or is it also one of these places it set up to take like unique Instagram photos and. Scot: [3:59] There was some of that yes so some of the art installation she likes it in so imagine a column that’s hollowed-out with a seed in it and then a mirror kind of a disco ball mirror on the inside so yes there’s a lot of lot of selfies taken lot of Instagram exciting. Jason: [4:15] Yeah so it’s like taking me I have to be back as. With most malls apologies these days that’s it’s sort of intended to be a mixed-use space so there’s, luxury condos there’s a bunch of retail space, there’s a bunch of Premium food and then there are these sort of experiential spaces inside the vessel is this free one which is this really interesting structure with all these staircases outside there’s one you just mentioned and then it’s not open yet but they’re going to have, it’s very tall tower and they’re going to have I think the highest outdoor deck in the in the in Manhattan. Scot: [4:57] Yeah it’s called The Edge not to be confused with, one of the members of U2 but it’s cool yes cantilever doubt and I believe it’s like 70 or 80 stories up. So it looks like it’s going to be fun and it has an area there so he’s in Las Vegas on if you’ve been to them we’re going to glass bottom to it so not only are you you know I made some behind it in the air but it seems like. Jason: [5:24] Charter member of the ghost bar in Las Vegas. Scot: [5:26] I’ve also been there how about that. Jason: [5:32] Boiler word that means that place is no longer cool when Jason and sky. Scot: [5:36] We’re all in for table service and were the only people there so that’s going to be kind of fun to see what that’s like unless you’re scared of heights than that will not be fun. Jason: [5:47] Into what was your overall impression this development a little controversial. Scot: [5:53] Yes oh my I always go to my wife on this she felt like everything there was crazy expensive so so there’s as you know there’s an anchor stores a band I like to find things that can go on sale and there was like nothing on sale at this entire mixed-use environment so the betta shop was a power favorite another one there is a direct consumer sock company called stance and they were there so that was kind of interesting. Jason: [6:25] I have an inkling why you like them. Scot: [6:26] Yep they have Star Wars socks sadly they did not have them at the location, you know as a operator I just kind of couldn’t get my head wrapped around how many socks should have to sell to pay for the rent so I felt like something like 10,000 pairs a day so I’m not sure you allow these things, I lost four companies and they’re really more of the flagship branding kind of on the p&l versus like a real money maker. Jason: [6:52] Yes what it is going to be interesting to watch the. Anita manhattanites have been a little negative on this base you know they all tend to be tribal and stay in their own neighborhoods and there’s some well-established shopping district either close to where they work or where they habitually shop instead of Hudson yards is in a new, area that doesn’t have a lot of residential so it’s right next to Javits Center it’s coming on the water on the 33rd and 34th, and when you talk to about a manhattanites there like who’s going to go down there. Scot: [7:25] I’m so far away. Jason: [7:26] To go shopping and I always remind them like. Retail here isn’t probably first and foremost for them like it’s meant to be another tourist destination some of the traditional shopping centers for like luxury shopping like Fifth Avenue are actually starting to dying and brands are moving, away from there because their rent has just gotten so crazy, and so these kinds of places are are potentially alternative so I I don’t rule out Hudson you are being successful because of that like all mixed-use properties. What’s really going to make it successful or not is how successful they are at the mixed-use part like if they sell out all the the residential there and they. [8:06] Build a big community of potential customers and the the food is attractive enough to draw people there for date night and stuff. It’ll probably go well if those things end up being a facade and the only reason you’d go there is to shop the beta store or the stand store. There are other beta and stand stores in Manhattan so like I don’t feel like their store assortment is really differentiated like in fact. It’s mostly the assortment you see it at any other sort of a or even being Mall, in the US at this point and we’ll maybe talk about that in a minute the one really Unique Piece of retail there is the Neiman Marcus I’m in the reason I say That’s Unique is because Neiman Marcus is a texas-based, luxury retailer would like 40 stores open the new store and sometime and they haven’t been in the new New York market and so it’s kind of interesting. They’ve been relatively successful in the markets there in but. Opening a new luxury department store in New York is very ambitious because there’s a lot of pretty well-established luxury department stores inside this. You know it’s the newest in there for probably the nicest Neiman Marcus but it’s you know very high-risk high-reward whether they’ll be able to win over manhattanites with their ton of the Dallas Vibe if you will. Scot: [9:29] Yes several New Yorkers I know pointed out the a bit of hypocrisy about it because I think the the state and city gave a lot of development funds to this group I’m actually more than were proposed for Amazon so it’s kind of funny that this was allowed to continue but then you’re bringing Amazon which would actually I have more jobs than a bunch of living and retail space would have to be very interesting to see the the politics of Play-Doh. Jason: [9:54] I mean these kind of Economic Development incentive programs are super dominant in retail and in development and obviously. Why do you think there’s some hypocrisy there I also think it’s somewhat of a self-inflicted wound I mean Amazon dramatically raise the. The the the public awareness and therefore like made themselves as a Target so I maybe don’t have total empathy for them. But that this does dovetail to that the other thing I did in my New York trip is I went to another mall that’s south of Hudson yard called Brookfield Place and the reason I went to. The place is that’s that’s a downtown that’s very near the new World Trade Center. And it’s a similar mall with a very similar assortment of stores and actually I would argue while the food is is much more. New indistinct at Hudson yard the retail mix between Brookfield Place and in Hudson yard is very similar and therefore not differentiated. [10:58] What place has a lot of businesses already in it and they just open the first Amazon go store in Manhattan so for the, all the retail price that’s based in New York and I want to say Bloomberg might even be based in Brookfield Place, this became news because it was their first chance to experience Amazon go in their local market and so I want to see if they did anything different than they’ve done in the other nine Amazon go store. Scot: [11:26] Today was a similar footprint cuz it got like a sassy that got alcohol in some now there’s some big ones and some small ones but they all tend to have prepared meals and kind of more of a convenience store type selection. Jason: [11:39] Yeah I think if you drop those people in the store they wouldn’t be able to differentiate it from any of the other ones it’s definitely on the small end of the footprint. And it does not have alcohol and the one differentiating characteristic you would you would really struggle to noticed so, Manhattan is one of several municipalities that have this local ordinance that retail stores must accept cash. And so big that’s a big controversy for Amazon go stores because they they were not designed to accept cash and so, when Amazon open this store in Manhattan part of the pr round it was oh this is the first go store. That would accept cash so I went there you know amongst other things to see how they they plan to handle that in the answer is badly. Scot: [12:30] What kind of ruins the experience right the whole experience supposed to be totally digital. Jason: [12:33] So again the whole point is like you use the app to show barcode to scan your way into the store you just grab whatever you want and walk out in the cameras automatically charge you for everything and it’s just walk out technology. The pay with cash this time you can’t get through the turnstiles so you have to flag down an associate when you’re outside the store and get them to launch their app and cashew in meaning scan you in as a cash customer. And then when you’re done shopping you have to flag down another employee who’s going to wheel out a portable. Cash register with a cash box to accept your cash and then they’re going to have to walk you out of the car and it just. It’s a very light. Obviously they put a process in place to comply with the ordinance but if people really wanted to pay with cash this is an extraordinary High friction and experience and of course. I like to joke it with Amazon go stores they invented just walk out but they broke just walk in. Because there’s always a line in front of the store people trying to download the app to get in and now there’s people like, turn the flag employees to get cashed in it’s it’s an awkward situation for them I don’t think any of their customers want to use cash I think it’s just an order in this thing. Scot: [13:51] I bet they’re like a podcaster that wants to talk about our turbocash. Jason: [13:57] Exactly I like to pretend that I’m such an irritant that there’s a picture of me in the in the employee room that there probably isn’t. Scot: [14:06] Just a quick note we’re coming up on trade show season I am not going to a lot of trade shows but Jason is so code recode is coming up June 10th and that’s in York. Jason: [14:18] That this year so historically has been in Southern California is the first year they’ve moved it to The Phoenician in Scottsdale Arizona. Scot: [14:26] Should be nice and hot by them the show previously known as Internet retailer Conference & exhibition is now called retail X and that is June 25th I don’t think either of us are you going. Jason: [14:38] If I’m in so that’s in here in Chicago if I if I’m in town I will at 10 but I haven’t. Scot: [14:46] Poops then NRF has a new show called NXT or next and that’s going to be July 22nd etail East is in August 19th Jason speaking at grocery shop which is from the shop talk folks and that is September 15th what he’s thinking about. Jason: [15:04] Back in Vegas I’m moderating a couple of panels and you’ve totally busted me because as I sit here right now I can’t yeah it’s a. Scot: [15:11] I said grocery stuff from side delivery. Jason: [15:15] Transformation of a digital grocery is going to be super exciting don’t miss it. Scot: [15:19] Well it wouldn’t be a Jason Scott show if we didn’t talk about some Amazon news. Jason: [15:24] Amazon news new your margin is there opportunity. Scot: [15:38] A quiet couple of weeks at Amazon couple things we wanted to hit on so one thing I thought was interesting is in India Amazon is testing a travel program this is kind of like what I would look at liked Expedia business model were there, instead of just being a a better site there actually looks like they’re taking inventory so imagine imagine that goes well Amazon Alexa test these things a lot different markets imagine that goes well and in the next couple years imagine you could book your travel through Amazon and you know what can you tell me about that cuz imagines part of prime, I’m the beer that starts your travel habits Amazon so good at all this data processing they can do and they could give them an edge on going out and buying inventory so that the secret of the travel industry is a lot of times it’ll use this data and I’ll go by rooms Expedia will go take inventory risk, and then because they can go and say I was in Chicago’s when he busy and they go buy a bunch of rooms they can solve them and then they can you make a bigger profit or give a bigger discount so you can see Amazon doing some really interesting thing for Prime users wear you can effectively married with data you can effectively you know part of your Prime benefit would be really good hotel room kind of pricing I thought that was interesting. Jason: [17:01] That further expanding the definition of the everything store. And went winning is mounting interesting to me about that is wow they’re pursuing that business model in India that model in the US has become somewhat controversial because you know who is really. Threatening the traditional travel portals here is the Google so you know very hot you you do what you Google. Hotel or flight information and now the incident answer box pops up and you can actually book your travel through that, is answer box a lot of the traffic that would normally flow from Google the Expedia or Travelocity or those sites Google’s now. Started stealing and monetizing and that’s like you know obviously that the traditional travel portals are not in love with it. So that’s an interesting watch another part of the world Amazon acquired a delivery company in the UK called delivery. The main reason I want to bring that up is because it’s really fun to say deliver roof. But this is another one of those businesses that they’re not. As big and in the u.s. delivery was sort of the doordash in the UK there are a meal delivery service in so that that was interesting acquisition as Amazon continues to bolster their. Their breath of offering and their global. Scot: [18:25] Speaking of delivery in Amazon so we talked about on the last show day Amazon in their q1 earnings, announce that they are going to move Prime from two to one day now a lot of that is being driven by this program called the delivery service providers and that’s where they have these really fancy Mercedes sprinters out there they’re kind of like this gray with the orange Amazon smile. I see you like 20 a day in my area I think they, Danish about 20,000 of those next day delivery they talk about an 800 billion dollar investment I think that’s going to be a lot into that program and I think they’re having enough challenge getting people there then now that any Amazon employee that want to set up their own DSP business Amazon will, set them up the game guarantee volumes and then they’ll actually pay their there previous job out three or four months so you know if they’re getting very creative on how they get more people to start these kind of 1099 delivery businesses for. Jason: [19:28] And the way I think that’s got like it’s it’s not a 1099 individual employee delivering stuff from Amazon it it’s essentially. Amazon hiring a franchise business to do deliveries and I think they’re their preferred version of that business has more than one van. Scot: [19:46] Absolutely yeah they want they want employees to go and set up you know a business and hire 10 people and manage the whole thing and, 10 20 30 40 50 people, the first company that did this is FedEx Ground so ground is effectively uses if you go to the dance closely every fax van has kind of been the corner operated by, Jason Chicago delivery company FedEx air is completely owned and operated this broad category there’s a lot of legislation around this, out there the labor market just the labor department actually just opined and said individuals as 1099-r can still be 1099 now we’ll see how long that stays there because it’s in the political world and there’s been a lot of FedEx has done a lot of litigation around the way they do the businesses and that’s that’s pretty. I’m pretty well litigated and if there is a business a true business then it can be kind of 1099 relationship. Jason: [20:46] And this is not so uncommon like obviously a lot of other kinds of businesses are are actually a network or franchisees like a lot of fast food restaurant chains for example and often, when you when you’re in growth mode one of the ways you if your Burger King or McDonald’s that you might grow your franchise footprint is you, you looking at an employee base and go to all those good assistant managers and offer them financing to buy their own, franchise in so I think of this Amazon program is someone on the same one. Scot: [21:18] Yeah where it could bite you is I say you have you know this engineer working on AWS who gets a wild hair and wants to be on. That made a harsh Street place I don’t know how many people I don’t know who they’re actually offering this to my my guess is probably kind of like supervisor enough time in the Fulfillment center so so they didn’t cover that in the Presley’s but I bet there’s a certain type in that yeah if you are a senior developer this probably isn’t available to you. Jason: [21:48] I would say if you were a conspiracy theorist. Amazon is sort of rejiggering they’re the real estate and they’re moving a lot of employees around and one of the things that happens as you have. Sojourn. And so potentially this is also a way to mitigate mitigate some of that turn that some of those employees that maybe wouldn’t have relocated to the new facility that you’re moving their team to stays in the family with one of these business. [22:19] In tow, you sort of wrapping up our Amazon delivery news Amazon of course I made a Big Splash in the US they announced that they were primarily going to, one day delivery and we we’ve talked about this in a previous episode of the show Because of Winn Amazon on their earnings call announce, did they were moving from 2-day delivery free with prime to one day delivery free with prime there was kind of a snarky tweet from Walmart. Saying at that doesn’t sound like you do News free one-day delivery with no Prime Membership would be a much bigger deal. And we all took that to imply that that was something Walmart was working on with but wasn’t prepared to announce. And so now of course they have announced it and, I would say it’s kind of mixed it was not exactly what I expected so they’ve they’ve announced that they’re Walmart has announced that they’re going to provide free one day delivery on orders over $35 which is their usual shipping threshold. In initially in three marker. [23:27] What’s it isn’t that big a deal but they sound like they’re they’re intending it to scale at rapidly so they they intend to reach 75% of the US population by the end of the year. And so you know they I’m calling this the one day Shipping Wars as as both these companies are sort of escalating the. The shipping promise. As we talked about in the previous episode Amazon has a lot of infrastructure to leverage to do this and it’s probably kind of a incremental thing for Amazon, it’s probably going to take a much bigger investment from Walmart and arguably Walmart eCommerce already isn’t profitable so this is probably like, a pretty painful move for Walmart to further a road margins to keep up the service level that that Amazon has offered, are you a Walmart can afford to do that what’s going to be interesting as the rest of the the market right at Walmart and Amazon are both offering one day delivery that’s going to set a new expectation level that all the rest of retailers are going to really struggle to me. Scot: [24:32] Yeah I saw an interview with Mark Lori and another reporter said you must be doing this from the stores and they said no it’s going to be from the warehouses and so it’s interesting so there’s like a whole different set of inventory that will be available for that I’m going to be kind of play this out you know the next kind of domino fall is Target and noble fir Target talk about more than 50% of their stuff is so from the store so what are Target can almost get there faster on the smaller selection of store items by cranking up the ship from store kind of capability. Jason: [25:05] Yeah I think that’s exactly the the trade-off that they each have to make Amazon’s got. North of 400 million skus that they sell now. Several million of those are available for this too and that one day shipping likes them millions of skus in there one day shipping program Target. [25:29] Primarily sells the assortment that they have in the stores now they do have a broader assortment online and and they recently made no news because they’re adding their own Marketplace but all that ship from store, is the store inventory so the overwhelming majority of Target sales are the 60,000 skus that are in a Target store side note. Those those popular shoes are generally the hardest ones to be profitable. And then Walmart has been kind of in-between they have a hundred thousand skews in a typical Walmart store and I assumed that’s what they were going to offer one day on because that would be a pretty painless thing to do is ship from store. And they actually didn’t do that they’re they’re saying that they’re assortment for one day shipping is going to be about 200,000 skews so that’s twice the assortment of a store. They’re shipping from the Fulfillment center it sounds like least initially they’re shipping from existing fulfillment centers but they’re going to have to dramatically expand those performance centers cuz traditionally. Walmart is spread their inventory around there 8 for filament centers in when you order 10 things you may well get three boxes and so what they’re now saying is you’re going to get everything from one for the moment Center and it’s going to be up to. 200000 items that we can promise one day and so essentially what Walmart is really doing is. Adding a bunch of capacity to their existing Adidas e fulfillment centers to offer this new service. Scot: [26:51] There’s a beauty that means just bigger or more robots or more people. Jason: [26:55] So don’t know they haven’t said but I suspect the answer is going to be Automation and the not so much because the automation is more efficient that’s a benefit but. One of the cool things about these automated systems is they stack up higher in so you can get inventory all the way to the ceiling as opposed to just inventory that a person. Marker 02 [27:14] Speaking of Walmart we are entering a peak earnings reporting season for retailers and so Walmart did report their earnings and, is generally pretty good. Their earnings were slightly above expectations of Revenue was slightly below expectations same-store sales were up 3.4% which is right about, we’re the analyst expected them to be and then the big number I always like to watch at Walmart was there eCommerce sales were again up 37% for the quarter so they’ve been in that, 40% range last year they promised 40% for the year and they basically hit it I think they said that that for the year that the growth will still be big this year but slightly lower and so starting off with 37% is probably pretty good. Scot: [28:02] Yeah an Amazon this slow down so Amazon’s kind of in the low 20s now and you Walmart Ecommerce going twice the size of Amazon which will help him catch up now you pointed out on the show a lot that’s coming from grocery so what can I have to see you at some point every store has curbside grocery then it becomes a game to see if you know can you drive more general merchandise and grocery sales do that that e-commerce pipe. Jason: [28:27] Yeah I think Walmart has basically laughed all of their big Acquisitions and so the company against those now but they still only halfway to plug with groceries so they’re still comping against stores that have you just called her the didn’t that goes to ask. Scot: [28:42] Yep and they always do more Acquisitions that always helps with the inorganic I’m so set up going into the earnings was interesting cuz Macy’s surprised books in a positive way same-store sales grew .6% which you know you may say wow that doesn’t sound great but you know I think while she was looking for a flat down and then they you know the the stock reacted positively I visited I actually here in Chicago I visited Macy’s and we went to the one in York is really interesting to see story so in Chicago is pretty start there’s other renovating it so there’s like all these gray sheets hanging around and then, talk to you in theirs is colorful section of the store so it almost felt like story was taking over Macy’s in the signage everywhere and even the one in New York the story really like you. So interesting to see a lot of innovative things are doing at Macy’s. Jason: [29:37] For sure the next one really surprised me is Kohl’s and Kohl’s has been sort of an outlier in the his department store stories they’ve been the one, department store that isn’t completely value-oriented that like has been generally conferring comping pretty favorably, and in particular their same-store sales have comp favorably every quarter for I think the last two years they made a lot of news around their partnership with Amazon and letting you return Amazon packages in the store which they, have said drives a lot of incremental traffic to the stores so they’re a little bit of a earnings darling and they just had their earnings call this morning and. Surprisingly pretty severely down so same-store sales were down 3.4% I think the the initial reaction on the market is the stock really took a hit the management team, talked about my favorite excuse they bring the weather, which to me is always a warning sign and they you know they talked about the risk from tariffs. Potential warning sign at Kohl’s at first first sort of chink we’ve seen in their armor in a while. Scot: [30:49] Yeah I also heard and we’ll talk about JCPenney I heard Kohl’s and JCPenney are trying to dial down promotions in the consumer is not reacting well to that they’re kind of like I’m not coming to your store unless you’re going to give me some kind of a promotion of some kind. Jason: [31:02] Yeah and so I think Kohl’s answer in his earning call is so we’re going to go back to the promotions and if that’s of course a one-way door that you you basically can’t reverse once you educate customers to only shop for the deal your car stuck with that for the rest of your life. Scot: [31:17] Yeah it does so JCPenney also announced today and it was kind of a worse-than-expected situation so they’re the same store sales were down 5.5% revenues down 4.1% I’m so you may ask yourself why is that different will there be the closing stores quickly which which kind of helps and then the bad news is why all this is happening there they’re spending more than expected so they missed on DPS as well Macy’s telephone Tale of Two Cities with Macy’s and Wal-Mart so far really kind of coming out ahead and then Kohl’s and JCPenney I’m coming down behind, I also was announced today in a we try Molly getting here on the show Dress Barn announcer closing 650 stores we’ve had I think we have had more store closures and now started this year than all of last year, so so this kind of in a mulligan is worsening it kind of went was flat from 17 and 18 you’re 19 feels like it’s definitely kind of the snowball is gaining momentum so I think there’s white like 5,000 stores that have been announced and that’s what we did last year. Jason: [32:25] Potentially even a little more now. Scot: [32:27] Yeah so that’s that’s. I kind of used his good news I think we need to kind of clear out this dead underbrush and then build a new retail experiences so we’ll see how that goes. Another we want to spend time on today we kind of touched on it while the whole episode with web episode 174 was about direct-to-consumer digital native vertical Brands but really there’s been a lot of news they’re so we so Perry’s was acquired for 1.6 billion what is interesting things about that acquisition is that we’ve seen this too so I kind of called this analog company buys digital DNA and then what it what do they do with that digital DNA so some of the early ones were PetSmart bought chewy Walmart by jet and they took the leadership of Jet and put him in charge of a lot of things mostly e-commerce and then we saw it with Dollar Shave Club, I think they founder of Dollar Shave Club is now running a pretty big piece of the car and Company there so it was interesting about this announcement is the Harry’s team is going to be running the whole us operations of the clearing company which is shiksa substantially. Jason: [33:45] That’s kind of a pun for the shipping industry. Scot: [33:48] Edgewell Cooks so you know this this is and of course 1.6 billion is nothing to sneeze at so it’s really heating up in this space also a way to raise capital. Jason: [34:03] Yeah where is the another hundred million dollars, I think we talked the last year mid-year they raise about 50 million dollars but what got people’s attention was they raised it a 1.4 billion dollar valuation so I think it was Wellington Capital Management LED this particular round but one of the things they said they’re going to do with this cash is open 50 new stores in a bunch of new markets and potentially introducing new product. Scot: [34:30] Yeah in love and one of the things in the world of venture capital that we look at is this whole unicorn Club so once a company gets up to a billion dollar valuation it’s called The Unicorn there’s not that many of them that’s why I’m so now we’ve got. Between 6 and 8 depending on how you’re counting companies in that club so I’ll just go quickly through it Warby has a 1.75 billion valuation is raised about 300 million allbirds is at 1.4 has raised 77 million weigh at 1.4 billion and has raised a total of 156 Harry’s which was acquired their previous valuation was 1.4 and they raced 250 million eyeglasses at 1.2 billion valuation 187 million raise Casper 1 billion valuation at 340 million raised Dollar Shave Club 1 billion at 163.3 million and finally hymns in kind of the direct-to-consumer pharmaceutical space a billion dollar valuation on about 200 million dollar wrist so. [35:34] You know those are interesting numbers you can kind of look at the multiples there you made a point that was interesting can I sell you on the show you guys should get such a big valuation why would a way not raise more capital and I think you know. Couple things are sometimes these sometimes I sugars are choosing to get in this billion club and then the capital E raised have a lot of negative aspects to it it’s effectively almost like alone so so the people in the investors at that scale will say all right I’ll give you this evaluation but I got all these protections there’s several. Jason: [36:10] Ratchets in the. Scot: [36:11] Yeah there’s there’s they can double dip on participation so there’s like there’s all these things that you can bake in there took the really kind of take their us-20 could be part of it is there is no you don’t want to. Pull down a lot of that kind of capital another thing that could be in there is. Also you could have things that commit to going public so some of this is called mezzanine Capital has kind of a trigger in there that says in 3 years if you don’t come go public or have an exit this thing kind of like explodes on you or it turns into start paying it back. So the other one that I’m seeing is if we pick on a way the big fan of the brand they’re I think they’re actually profitable so when they’re going in and raised in this Capital it’s usually for a very specific purpose that says, Iowa krapfl right now but we want to own we want to open 40 stores that’s going to take 30 million to open those doors so then we’re going to go ahead and kind of little cushion on that and draw down a hundred so you know so is that that could be another reason why there’s not a lot of capital being pulled down. Jason: [37:17] That meant that makes total sense. Scot: [37:20] Another thing I wanted to talk about that that I’m watching really closely is the IPO windows open so we had you know you could argue if it’s successful or not but we had IPOs from lifting, if someone else in our space that is filed to go public is chewy so when you file go public the document you file with the SEC is called the s-1, is pie crust dry reading everywhere it’s kind of a poop sandwich I like to talk about it so so what you know the because of the way the laws are set up, you almost have to discourage people from investing in your company I haven’t gone through this process before so what you do is the bread you have to have kind of like the SEC is in 3 sections the first part is you know All These Warnings you know. And it’s kind of funny that the the buses to financial press boost the Press I’ve noticed retail they kind of focus on those things and they’re like oh my God they could be exposed to all this competition and but you purposely have to make that negative so you avoid lawsuits from someone saying chewy didn’t tell me PetSmart was a competitor blah blah then the delicious middle part is called the management discussion and then you have a bunch of the end so I encourage listeners to kind of open up the two S1 go right to the management discussion and then this really interesting things there I wanted to share. Jason: [38:38] Answer a question for me about the wrist part. You read those sections and it’s super Armageddon the and I sort of imagine that there’s somewhere there’s this really funny we go boilerplate of all the bad things that could happen to a business and so you I suspect you’re not inventing this way from scratch every. Scot: [38:57] Yeah what you do is you look here, so you go out there and you look at all the other risk factors every public company update some annually typically when they do so you have to accuse and then your cat when they do their K they will update the risk factors so I’m sure I’m sure you know what the lawyers did is they went out they looked at all the public retailers and they kind of whittled it down to the most Salient ones her for 2. Jason: [39:19] I’m talking like the population could catch SARS and not go outside and stuff. Scot: [39:25] Yeah yeah you know how lawyers are they want you to just kind of put everything in there. [39:31] Dep so nothing ever comes out of the risk section I can definitely play that easy to add stuff nothing ever comes out. So just some highlights there in just a refresher so so chewy sells obviously pet in the pet category they were acquired by PetSmart in Q2 of 2017 so it was actually kind of a spin out that way and they were founded back in 2011 in the second quarter. [39:58] It was impressive to me was the scale so so chewy is now a 3.5 billion annual revenue company, that was a 2018 Revenue compared to 2.1 billion in 2017 so that’s a 67% year-over-year growth rate, which is pretty impressive now the losses were pretty sizable so I filled it this thing called adjusted ebitda they lost 268 million on that three and a half billion, I’m set that equates to kind of a minus 6.5% margin so snarky folks would say sure anyone could build a business with this going that fast if it’s losing money but the way you think about this, you know this business is trying to get into a very high orbit and when you try to get more of it you have to burn some some people to get there since essentially what they’re doing and if I think if you looked at other companies you don’t like as a post or you know any of these other kind of companies that I’ve got to the scale I think they’ve actually done it in a pretty efficient way. What do you peel the onion on a wire that is another aspect I will also point out is. [41:05] Justin Bieber dies in Oxford or tend not to look at that because you don’t have a lot of control over it there’s all these County roles you can’t control, right so a lot of the stuff that comes out you run your business you think you’re doing a great job is in your adjusted ebitda got worse on there so why would sound of your control so what most companies do as they look at free cash flow which is as an operator while you have more control over and I can’t I can’t control what you’re going to do to my Revenue when it runs in the counting rule that I can control you’re selling more and spending less so there are actually free cash flow was -57 Million so I would argue with a 3.5 billion top-line you’re effectively, cash or break even. Is that that’s a good indicator that that you know this is a really well-run business and those lines that I would imagine unless they accelerate further at that same growth rate they would be free cash flow positive so why is that what was kinda secret while they were the things I love about this management discussion is you get kind of inside the head of the operators and they spend a lot of time in there. [42:07] Talking about subscription spend their version of that is auto-ship so 65.7% of their revenue is on auto-ship which is amazing you may know better than I do what the typical industry averages but I think most retailers that have a subscribe function and it’s probably like in the 10 to 20% range but of course obviously not stitch fix or something like that the whole model I think it’s really impressive for a general merchandise kind of retailer in the category to have so much on auto-ship, they have 10585 active customers another thing will try to put the show notices. A lot of these as ones do really interesting job looking at Kotor analysis so get as an operator I like to look at this because I like to kind of think about how I think about my business and compared to how they think about their business Uber and Lyft had really interesting examples of this. [42:58] What things they show is in their cohort analysis is they’ve been able to take the average sales per customer from 2016 at about $297 today at $334 so it’s nice about that is in addition to acquiring new customers in there, kind of increase the sales from existing customers more than 20% Which is pretty impressive a lot of times that goes down over time so they’ve done a really good job of. Building loyalty from a wallet standpoint and part of it probably is related to this auto-ship program. Jason: [43:35] To me it’s it’s the interesting thing here is they they were acquired a couple years ago by brick-and-mortar retailers and now that retailers spinning them off again as a separate public company in it it seems obvious. There really an outlier in terms of how well they’re performing as a pure play e-commerce site in many ways by, the profitable are not very few. Play companies have gone to that two to three billion dollars in Revenue in almost all Pure Play retailers struggle with the repeat purchases and so, repeat purchases and such a valuable spent per customer and have so much of that locked in Via Auto replenishment. Is terrific, oh, because they’re still not making a lot of money I feel like they’re they’re not getting a lot of credit for all those good things so I’m assuming they’re going public because they feel like. The the stock market will better reward them for their scale even if they haven’t achieved profitability. Scot: [44:35] Yeah could be of value unlock play it could also be you know I don’t think integrated the websites did they so so he’ll be really weird if I’m running petsmart.com I’m probably I’m going to go out on a limb and guess I’m getting my butt kicked by chewy I I can’t imagine that is growing 67% and that 3.5 billion dollars may have seemed like a good idea and then they may actually be good kind of moved to an arm’s length relationship. Spend it out I’m kind of thing that could be part of it as well. Jason: [45:08] So that’s going to be interesting to watch we’re coming up on time but there were a couple of interesting grocery tidbits I wanted to at least. Briefly acknowledged there was an interesting partnership that was announced this week between Lidl and boxed and is a reminder for our listeners Lidl is a highly successful German grocer that’s really focused on low high quality with low cost of goods and they they famously tried to enter the US market a couple years ago and, your your hometown is one of their initial markets, and they weren’t super successful so they kind of slowed down retooled and now they’re getting ready for a second big push in the US, wheedle in a very similar company them all the historically they really focused on No Frills, barebones price in so they therefore completely ignore digital so one of the interesting things to me is as we don’t rely on Chaz in the US they’ve done this interesting partnership with, text in there they’re essentially renting, the Fulfillment of hardware and software the Box built for their own business to do. What to use for grocery fulfillment as part of a digital offering so I’m excited to see, what sort of digital experience Weedle is going to offer when they they relaunch here in the US and it’s going to be fueled by box. Scot: [46:35] Shelby Nursing I get smart on the box side to have differentiated Revenue so they can sell direct to Consumers and also be a technology provider into the grocery. Jason: [46:45] Yeah I was disappointed digital didn’t play any part in their initial launch so I’m pleased to see that they’ve seen the air in their ways there, Kroger announced a new investment arm to invest in these, direct-to-consumer cpg brands that they’re launching into it we talked before. Maybe the most successful venue for launching new branches is inside of a retail store instead of seems like Kroger’s way of getting unlocking some extra value for helping some of these Brands become successful, and then a funny when I saw is Bed Bath & Beyond just launched a new commercial. Which is intended to be humorous. Sort of that commercial where they’re explaining brick-and-mortar shopping to a millennial. Scot: [47:40] Yes it is only a couple is kind of like sitting in bed online shopping and then they’re like trying to encourage them to come to a store so so I thought it was quite interesting to me is somebody like some kind of sign of the apocalypse and realizing that it is nigh in a pond. Jason: [47:54] Yeah I feel I feel like there’s some infection point we used to have the funny commercials where these well-established brick-and-mortar Brands were trying to convince people to buy online so you know, it was the ice shipped my pants campaigns and things like that in the in the early days of e-commerce and now the fact that we’re having to do funny commercials to remind people you can still go to a store and buy something, definitely definitely said something about where we are. And that’s probably why you’re all listening to the show and therefore it’s not going to surprise you that it’s happened again we’ve run out of our, a lot of time so if there’s something you had a question about a want to continue the dialogue we’d encourage you to hit us up on Twitter or jump on her Facebook page and as always if you got bad you out of this episode we sure would appreciate it if you had. 30 seconds jump over to iTunes and give us that five star review we desperately crave. Scot: [48:44] Thanks everyone we appreciate your five star reviews and we will be back next week. Jason: [48:49] And until then happy commercing.
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PJ Bruno sits down with Enterprise AE Patrick Forquer and VP of Growth Spencer Burke to discuss online grocery shopping, Reddit raising a huge Series D round with a near $3 billion valuation, and Warby Parker's new augmented reality shopping tool. TRANSCRIPT: [0:00:18] P.J: Hi everyone and welcome to Braze for Impact. Your weekly tech industry discuss digest. So this is a place where we get together each week and just talk about what's happening in tech. This week I'm lucky to have with me my pal Patrick Forquer who is on the sales organization here at Braze. Next week we'll hear from someone from a different department, probably Customer Success, something like that and then the following week maybe someone from product and then so on and so forth. So we can get multiple different angles at what's happening in the tech industry. Like I said today, I'm lucky to have Patrick Forquer and also Spencer Burke. I'll have them introduce themselves. [0:00:51] Patrick: Hey, I'm Patrick [inaudible]. I'm a strategic account exec here at Braze. [0:00:55] Spencer: Thanks PJ. I'm Spencer Burke, the VP of growth. [0:00:58] P.J: How are you guys doing? How's the week trucking on? [0:01:01] Patrick: It's going okay. No, it's going great. It's great to be here with you P.J. Looking great in your Heather Gray shirt and as always. [0:01:09] P.J: It's a good color. Spence, how are we doing? [0:01:11] Spencer: Going well. Got a ski trip planned for this weekend driving up to Vermont, so can't complain. [0:01:16] P.J: Always at the skiing Spencer Burke. [0:01:19] Spencer: It's a winter. I got to get it in. [0:01:20] P.J: Got to get it in guys. You know what, without further ado, why don't we jump on to what's happening this week? This first article, 'Why people still don't buy groceries online'. This is a very interesting thing to me. Actually, let me set up the story because I think they did a really good way of setting this up in the article. Nearly 30 years ago when just 15% of Americans had a computer and even fewer had Internet access, Thomas Parkinson set up a rack of modems on a crate and barrel wine rack and started accepting orders for the Internet's first grocery delivery company, Peapod, which he founded with his brother Andrew. Back then, ordering groceries online was complicated. Most customers had dial-up still and Peapod's web graphics were so rudimentary that customers couldn't even see image of what images of what they were buying. Delivery was complicated too. So the Parkinson's drove to grocery stores in the Chicago area. They actually did this and bought what customers had ordered and then delivered the goods from the backseat of their beat up Honda Civic. When people wanted to stock up on certain goods, strawberry yogurt or bottles of diet coke, the Parkinson's would deplete whole sections of grocery stores. This is, this is wild. I mean it's interesting because we were all constantly talking about convenience and delivery of all sorts of things. Why not groceries? What's the deal? [0:02:41] Patrick: Yeah. So when I was reading this article, the first thing that came to mind was if, if we rewind 10 years from today and we took a poll of everyone at braise about, which would be more successful grocery delivery or an app on your phone where you tap on one button and a stranger in a Honda Civic pulls up and drives you somewhere. I think we all would have bet on the grocery delivery piece of that. Right? [0:03:07] Spencer: Every time. [0:03:08] Patrick: So it is crazy to me and the numbers are super low. I mean 3% of people getting grocery delivery. Spencer, what was your initial take? [0:03:18] Spencer: I'm curious, have you guys used the grocery delivery service? [0:03:22] Patrick: So I have, I had a really bad experience actually, so I haven't done it since. And I think that's part of the challenge in this article where- [0:03:31] Spencer: Can you get into that bad experience or is that... [0:03:35] Patrick: So we tried to use the grocery ordering off of Amazon Alexa and my wife ordered paper towels and- [0:03:46] Spencer: Just paper towels? [0:03:47] Patrick: Yes. And a couple of other things, but I kid you not, they delivered us what must have been the majority of the warehouses paper towels to the point where- [0:03:58] P.J: Jesus! [0:03:59] Patrick: ...for two and a half years, we were using paper towels off of that one order. So obviously that's an outlier. But yeah. [0:04:08] P.J: It seems like it's also, apparently America is really not adopting it as much as other countries like it seems like in Europe. Also in Asia it's like up to 20% or something like that of consumers are using online and it's only 3% here in America. Does that speak to anything that we're doing or what do you guys think? [0:04:27] Spencer: Well, I mean I think part of it is most people... Most people have cars. Most people live in an area where they have some kind of large grocery store chain and so if you're driving to work, stopping at the grocery store on the way home, it's not changing the convenience kind of function for everyone in the same way that like Lyft or Postmates or Seamless might for your average consumer. Personally, I've tried it here in New York. I recently moved to somewhere that just doesn't have as many large stores as close to me. I just thought, sure, why not? Let's try Amazon Prime. Amazon just bought whole foods recently and let's see how it goes. I think there's a lot of challenges with it. You don't see exactly what you're getting. If something's out of stock, you're relying on them making replacement or not providing it at all. So, if you're planning on using one of these services to plan a dinner you might not actually be able to cook what you intended to or you might not be able to put that meal together because the delivery service wasn't 100% versus if you're in the store, you can kind of course correct as you go. [0:05:32] P.J: Right. I feel like a lot of us order all sorts of things through the Internet. I'm sure that list goes on, but as far as grocery shopping something that...it's ordering Seamless as one thing, right? It's prepared and sent right over to you as opposed to groceries. People probably a little concerned like you want to feel your fruit, you want to see your meat, you got all these things. I feel like there's a little fear around that probably. For me anyways. [0:05:59] Patrick: Well definitely. And then you know, they talk about the challenges that these companies have. It's a lot more complex and it would look to me that on the surface with things like some items you have to keep warm. Some items you have to keep cool, you have to do it all really quickly. And so the people put, you know, preparing the packaging, have to know where everything is and then there's delivery and it's mostly in urban areas. So then there's parking challenges and all these things that I didn't necessarily. [0:06:25] P.J: There's tons of complications that go along with it. Apparently surveys have shown that shoppers are still concerned that they're being charged higher prices when it comes to online delivery and also complain about delivery drivers being late. Those are the two biggest complaints apparently. [0:06:39] Patrick: Yeah. And the last thing I noticed was in the second article that we were looking at on grocery delivery, there's the casual drop of Google in partnership with Bain, with Bain commissioned a research study, which as we know working in tech means that Google paid Bain to run this survey for them likely with a hypothesis that grocery delivery was about to explode. [0:07:03] P.J: I feel like they had an a hypothesis in mind. Yes. Something tells me, yeah. [0:07:07] Spencer: So I don't know if this was entirely altruistic on behalf of a like, yeah, let's do it. Let's go for it. We'd like you guys. [0:07:13] Patrick: And you know, I noticed Walmart recently pulled their products from Google Express, which is Google's grocery delivery service. So I think there's increasing competition around this for an incredibly small market at the moment. And I guess we'll see where it goes. [0:07:31] Spencer: Yeah. Before we move on. I, despite our skepticism, I think there clearly is something here and you know, whether it's Instacart or Postmates or Amazon or anything Walmart or Jet tries to do, there's clearly value to having a hall. You're grocery shopping, just show up at your door essentially. And I think like a lot of things on the Internet, whether it was a couple of years ago when everyone's like no one's going to put their credit card into their phone to buy something online. It's like there's all these articles about how many people abandon their carts because it's on mobile and they need to go back to their desktop. No one talks about that anymore. You just do it. I think we're not that far from whole foods being a warehouse of food for Amazon delivery rather than a grocery store. Right. [0:08:18] Patrick: Delivered by robots. [0:08:20] Spencer: Yeah, exactly. [0:08:21] P.J: And that's what the future looks like. Groceries delivered by robots. [0:08:24] Spencer: You heard it here first. [0:08:25] P.J: Yeah, we'll leave it to you guys. Next article of the day. Reddit is raising a huge round near $3 billion valuation. So Reddit is raising one. Sorry, $150 million to $300 million to keep the front page of the Internet running. Multiple sources tell TechCrunch. The forthcoming series D round is said to be led by Chinese tech giant, Tencent at a $2.7 billion pre-money valuation. And now depending on how much follow on cash Reddit drums up from Silicon Valley investors and beyond, it's post money valuation could reach an epic $3 billion. Yikes. And now my first concern that comes up immediately for this, and I feel like maybe you guys felt the same way. Censorship, right? I mean, maybe it doesn't matter, but Reddit remains a relatively safe space for trailers and conspiracy theorists alike. The currently banned apps and websites in China though, like massive lists just to shortlist as Google, Netflix, Facebook, Twitter, Snap, Insta, Youtube, flickr, Tinder, and Reddit of course. And that doesn't even include news publications, cloud storage products and email. So I don't know, there's something feels weird about this, right? Also like Tencent is also one of the most important architects of the great firewall of China. This is serious. There's a lot going on. There's a lot of meat here. [0:09:53] Spencer: It's like this is a different than I expected. [0:09:54] P.J: Oh really? It just seems like there's strange things at play. [0:10:00] Patrick: Spencer, I know you had some hot takes on this. [0:10:02] Spencer: No, go ahead. [0:10:03] Patrick: Well, yeah, I think it's interesting that Reddit has had a lot of challenges over the past couple of years. And PJ, you alluded to some of that where they've had some really bad homophobic, misogynistic, racist, threads that have propagated conspiracy theories and hate speech and they've dealt with it in different ways. Some of the ways that they've dealt with it has been good. Some of it's been not so good. I know their CEO was editing comments and specific threads to make them look a certain way. And then he got caught doing that and had to apologize. If they had been a bigger company, can you imagine if Facebook did something like that? He'd be hauled in front of Congress immediately. So, and I was thinking about the valuation piece of this too, where if you took all the bad stuff out, and you're looking at their monetization model, it's through ads, right? Like most companies. They're like most social companies but they've really only recently started monetizing through ads and their real strength has been a very supportive and loyal community of Reddit users. I don't use Reddit, but I know people who do and the people that use Reddit, love Reddit. They love it. They're like in the community, they're posting and commenting and all that stuff. And the challenge as we know scaling a business model where ads are the primary revenue driver is that you can lose some of that early days, communal feel when you start layering in promoted posts and different types of advertisements and it kind of loses its initial bespoke early day feeling those. [0:11:54] Spencer: Yeah. I think the flip side of the darker elements of Reddit is that Reddit, can be a place for really specific groups of people and that can be people in a city, someone with a certain medical condition, people who play a sport. Like recently I've been looking and there's a subreddit for woodworking and it's like, oh, this is maybe a hobby that I'd be interested in. And there's just a ton of resources and people who are helpful. So for everyone who's out there trying to make a joke, well, if there's a lot more of these people, but for everyone out there who's, who's kind of trolling and you're trying to be a little bit silly, there's a lot of people who are just passionate about something and go to Reddit to share it. And I think it's kind of inspiring actually, that those communities exist on the Internet in a place that it's not just a website for those people. It's a website that can serve any community and it happens to be Reddit for a lot of people. [0:12:50] Patrick: Right? Do you think that this changes anything for Reddit potentially down the road? [0:12:58] Spencer: Well, they stay in business for a little bit longer. I don't think so. I think you're probably reading too much into the the Chinese[crosstalk] [0:13:07] Patrick: have you been spending some time on Reddit recently PJ? [0:13:09] P.J: Actually, I've only been on Reddit maybe once in my whole life. I'm not a big ... My roommate is like obsessed. Anytime we're doing anything like watching a movie, he just is looking at his phone the whole time and he's in Reddit constantly living in the comments. Right? [0:13:23] Patrick: Nba Reddit as a really good, yeah. Community. Right. Community. [0:13:27] Spencer: I feel singled out now because I actually do spend a decent amount of time on Reddit [0:13:32] Patrick: That's all we need to hear from somebody. [0:13:32] Spencer: Don't use Facebook, don't use Twitter. Casually though love reading Reddit. The comments can be hilarious. But like I said, just moved recently. So looking for cool areas, restaurants, bars in my neighborhood and there's a subreddit for it. So just reading through it on a couple of times a week can pick out spots, find somewhere to go check out, and it's actually really interesting to see and it's like having a good neighbor or a friend recommend some places to you. You just there and it's a different feel than just going on Yelp and looking at aggregate and total summation. [0:14:08] Patrick: Are you getting into woodworking? Is that what this is? [0:14:11] P.J: Yeah. What do you, tell me more about that. [0:14:13] Spencer: I won't go down the rabbit hole of the hobbies that Reddit has inspired or there's some really, I'll just ... There's some really specifics. I'll read it. That's all. That's all I'll say. [0:14:23] Patrick: I mean, but what you're describing though, Spencer, is the kind of dual nature of all of these social media sites. On one hand, they can connect people who feel lonely or who are passionate about a certain topic that maybe others around them aren't passionate about and find that community that they'd been looking for. On the other hand, there's Jonses with hate speech and things like that and who knows, maybe Reddit Will start handling this really well and it'd be a success story, so I'll be interested to what they do with all this capital and it's a huge inflection point for their business and kind of their all or nothing shot I feel like so. [0:15:00] Spencer: Just as an example, they're on the weeds podcast of ox podcasts. They're talking about a study of where they paid people to give up Facebook who are on the platform. They weren't planning to give it up. And those people who are basically just happier, they socialize more, they watch a little more TV, which is maybe the one question one thing. [0:15:19] Patrick: And they have some money now, which is nice. [0:15:22] Spencer: But they were less politically divisive. They were a little less informed on some things, but just like genuinely happier. I think one of the interesting things that happens in Reddit versus Facebook, that the communities are moderated by people from the community. So there are subreddits to help people quit smoking, to quit drinking. And when those people will talk about their success, there's so much positive in encouragement and positive feedback and the negative elements of that. Unlike Facebook where anyone from high school that you don't really know anymore can come in and comment and make you feel pretty bad about something or give you that kind of fomo feeling. There's a community of people supporting you trying to do whatever it is. Whether it's something you know, trying to get rid of some addiction or learn some new hobby, which I think so that moderating the fact is it makes it a little bit different than other types of social networks. [0:16:14] P.J: A little more like true democracy going on over there. [0:16:18] Spencer: Or a benevolent dictatorship. In the case of moderation. [0:16:22] Patrick: If Reddit is the front page of the Internet, does that make Facebook like the national enquirer? Who's to say, hi, [0:16:33] P.J: Let's move on. We got a little of time left. Last article of the day. Warby Parker's new shopping tool lets you try on and buy glasses virtually using your iPhone's camera. So now this article is Warby Parker announced new shopping tool and it's more convenient for iPhone owners, Virtual Try-on. The tool, which lives inside the glasses by mail companies app is available on February 4th. So this Monday it just launched. The caveat is you'll need an iPhone X, iPhone XR or iPhone XS to take advantage. So not just for iPhone users. If you have an old school iPhone, you're not going to be able to use this thing either. Spencer, you wear glasses sometimes, right? [0:17:13] Spencer: Yep. You got me. [0:17:15] P.J: You guys can't see. But sometimes he wears glasses. Do you have feelings on this? Do you get ex ... Does this get you excited? [0:17:22] Spencer: [inaudible]radio? Yeah. Not really. I'm pretty straight forward. When I went to go buy my most recent pair of glasses, went to a store in New York, asked the guy for some help. He picked out two pairs, tried them on, chose one, locked out. And I might be an anomaly there, but I think from- [0:17:41] P.J: Boom! I love that. [0:17:42] Spencer: But I think this is really interesting to me because it sort of solves two problems. One is it's helping people try glasses. It's lowering friction to make a purchase. The second is it's giving people a better sense of what they're going to look like without going in the store. So it's going to reduce the likelihood that they need to go in and make a return or [inaudible] me back in, which of course has a cost to Warby. So hopefully for for them the business outcome is it's increasing revenue, making the purchase easier and they're reducing their operating costs by reducing the number of returns. [0:18:16] Patrick: Yeah. To me, reading the article and there was a lot of buzz about this. This story appeared multiple of the new sources that I read on a regular basis and while it's cool and definitely the benefits that Spencer's talking about are real. I also didn't understand necessarily the getting as much buzz as it did because to me it just feels like they took Snapchat filters and turn them into [crosstalk] Whoa, we can do now what Snapchat could do two years ago and it's just Warby Parker glasses instead of like Elton John glasses. I mean it's cool, but I want the Elton John one. [0:18:55] Spencer: Yeah. [0:18:56] Patrick: So it's just definitely cool and I think there's obviously a business case to be made from a technology perspective. It wasn't super exciting. I think there's other use cases for AR for things like the way that Wayfair and other furniture stores are doing it where you can see, you can overlay a couch in a living room type of thing that would be more valuable than, productize smart Snapchat filter. [0:19:21] Spencer: So you don't wear glasses do you? [0:19:22] Patrick: I do not. [0:19:29] P.J: 20-20 vision. I honestly just don't trust that augmented reality fit. I don't think it'll necessarily match real life. And I guess it's for two reasons. One, I just don't trust that just looking at yourself with this augmented pair of glasses on will necessarily look the way to look in real life. Also, we're not even considering the feel. the feel of a pair of glasses has to feel right. You know, so until they have augmented feeling technology out, I'm not buying. [0:19:57] Patrick: Well, the other thing I was thinking about too, along those lines, PJ is 97% of Americans won't freaking order groceries, but there's going to be some huge wave of people putting something on their face every day that they saw on an app. [0:20:11] P.J: That's what I'm talking about. [0:20:13] Patrick: Hot tech Spencer. I don't know. [0:20:14] P.J: There it is. It's called augmented reality. It's inherently different. It's like if you think about catching a charter as art in Pokemon go is so different from trying to catch on in real life. Have you ever tried, it's entirely different. Wait, one more question for you guys. What I want to hear, what's an augmented reality app that you're just hankering for that you just really want? And I'll give you a second to think. Well, I'll tell you mine and you know, growing up I was very into a Tamagotchi if you guys remember those little pet on your key chain, but just like a cool little Tamagotchi that only I can see my pet. No one can see them. I look around where is he? Okay. There he is on the ground. You've got to feed them. You got to take care of them. And then you know when it comes to having to really take care of him, like you just close the app, close the phone. I don't need to worry about buying pet food or any of that stuff. Something that makes me feel like I have a little buddy. [0:21:08] Patrick: So an AR Tamagotchi [0:21:09] P.J: An AR Tamagotchi you heard it here first. [0:21:12] Patrick: Wow. Here's all my money. [inaudible] [0:21:17] Spencer: You don't use Reddit. You don't order groceries online, you don't think that trying glasses on with your phone is a good idea. But they are Tamagotchi. [0:21:26] P.J: I am on Facebook so you can find just about out of time here. You guys, thanks so much for being on here with me. This is PJ Bruno. [0:21:35] Patrick: Patrick [inaudible] [0:21:36] Spencer: And Spencer Burke. [0:21:37] P.J: signing off. You guys take care. [0:21:39]
In this episode Phil covers one of his favourite metal drummers and talented multi-instrumentalist Ed Warby. From Death Metal to Prog Metal operas! Tracks played; The Mass Insanity – Gorefest – False (1992) Operation Z - Hail of Bullets -On Divine Winds (2010) In the Silent Grave - The 11th Hour - Burden of Grief (2009) From Laughter to Retching – Demiurg - Slakthus Gamleby (2010) Day Eleven: Love – Ayreon - The Human Equation (2004) Day Twelve: Trauma– Ayreon - The Human Equation (2004) Day Sixteen: Loser– Ayreon - The Human Equation (2004) Revolt – Gorefest - Rise To Ruin (2007) Host; Phil Wadey Contact us at philsbreakfastmetal@gmail.com Facebook page; www.facebook.com/Philsbreakfastmetal/?fref=ts Twitter; @BreakfastMetal
So today topic is something very close to me. It is about this article by Inc titled: Over 400 Startups Are Trying to Become the Next Warby Parker. You see Warby Parker is an ecommerce business operating under the Direct to Consumer model. They build up a brand, removed the middleman and sell direct. Some very successful ones include, Warby itself, Dollar Shave Club, Casper, Away. This article talks about how some 400 startups are trying to bring down every consumer category. There is this particular category that I am super interested and it is the TCM category. --- Send in a voice message: https://anchor.fm/bossleetech/message
What do Warby Parker and STORY have in common? Entrepreneurs with a keen eye for innovation. Warby Parker’s Neil Blumenthal and STORY’s Rachel Shechtman come from different backgrounds, but they both built brands with a fresh take on retail. In this episode, the two friends chat about building a brand around a crazy idea, and how retailers can evolve with the changing retail landscape.
Business Radio Special: Dollars and Change is LIVE from the CEO Connection Mid-Market Convention 2017 at the Wharton School, where CEOs across a wide variety of industries connect to discuss pertinent business issues. Hosts Sherryl Kuhlman and Sandi Hunt talk with Adam Warby, CEO of Avanade, and Raj Mamodia, Founder and CEO of Brillio, about their social impact strategies on this special episode of Dollars and Change. See acast.com/privacy for privacy and opt-out information.
The one where we discuss Facebook killing Skynet, updates to Messenger, How Warby Parker and Fabletics fuse retail locations with e-commerce and cool kids clothes that grow along with the kids.
The one where we discuss Facebook killing Skynet, updates to Messenger, How Warby Parker and Fabletics fuse retail locations with e-commerce and cool kids clothes that grow along with the kids.
In this episode of the Tony Robbins Podcast, we are bringing you back to Business Mastery, where Tony recently led a panel discussion with the business leaders behind some of today’s fastest growing companies. And this time, you’re going to hear from one of the founders of a company that changed the eyewear business forever. If you have ever worn eyeglasses, then you know that the traditional process is expensive and inconvenient. On average, a pair of glasses costs nearly $300. And the trips you have to make to the retailer to sift through the pairs, try them on, and order your final choice can really stack up. It’s a real pain point for a lot of people. But that is exactly why four friends at Wharton Business School decided to start a business that did something about it. Neil Blumenthal, Dave Gilboa, Andy Hunt and Jeff Raider launched Warby Parker in 2010. The premise was simple - offer customers high-quality eyewear at affordable prices, and establish a convenient, direct-to-consumer model so that customers could get eyeglasses anytime and anywhere. But what made this company so special was how focused they were on perfecting the customer experience and the massive amounts of research and experimentation they did to find that sweet spot. In this episode, you are going to hear from Neil Blumenthal on the vision behind Warby Parker, why it was so critical for them to optimize every single dollar they put into the company and the tools and strategies that helped them build Warby Parker into a billion dollar business.
Olympic fever hits Ladies who League this week and we become Ladies who Zela as we are joined by Danielle Warby (editor of SBS Zela) and Amanda Shalala from Fox Sports. We preview our amazing female athletes that are heading to the Olympics in both an individual and team capacity and have a chat with former basketball player Hanna Zaveckz about her career and the Opals chances in Rio.
(Bloomberg) -- Taking Stock with Kathleen Hays and Pimm Fox. GUEST: Neil Blumenthal, Co-Founder and Co-CEO of Warby Parker, on the company, the transition from online to physical stores, and outlook for profitability. Broadcasting LIVE at Pershing's INSITE 2016 conference in Orlando.
A busy show today as Mary K is joined by Erin Riley, Danielle Warby, Megan Hustwaite and Naomi Stalenberg from the Thunder WBBL team to talk NRL, AFL, T20 and WNBL. We also spend some time gushing over David Pocock and wonder if he would like to be a 'Ladies who League' ambassador.
Aileen Bennett, John Postel, Warby Parker, Autozone, Joel Comm, Pinterest trademark, 29 million dollar kickstarter, 3d printing, GlowForge, Art.sy, Google's Rank Brain, Starbucks, 1912 Pike Pub. All the tech, social media and blog headlines that Bloggers love, need and use everyday.
Inc. editor James Ledbetter and Inc. staff member Jon Fine, Christine Lagorio-Chafkin and Will Yakowicz have their first guest on the air -- Warby Parker CEO Neil Blumenthal. The group dives into the finer points of an effective interview, how the TV show Mr. Robot explores the dichotomy of the hacker as a superhero/villain archetype, and how an old wine maker took to crowd funding to back his creation of 10,000 new grapes strands. This week’s episode is sponsored by T-Mobile. Switch your business today at www.TMobile.com/Business. Learn more about your ad choices. Visit megaphone.fm/adchoices
Consumerism in healthcare, myths about what customers really want and more
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