EP305 - Amazon and Shopify Q1 2023 earnings
Amazon and Shopify both reported their Q1 2023 earnings last week.
Amazon had a strong first quarter, slightly over-shadowed by it's slowing AWS growth.
Shopify also had strong Q1 2023 earnings although it did not achieve profitability. Shopify also announced a second reduction of headcount and announced that they were selling all of the recently acquired logistic assets.
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Episode 305 of the Jason & Scot show was recorded on Thursday, May 4th 2023.
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:
[0:23] Welcome to the Jason and Scot show, this is episode 305 being recorded on Thursday May 4th May the 4th be with you I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.
Scot:
[0:39] Hey Jason and welcome back Jason Scott showed listeners Happy Star Wars Day May the 4th be with you hope everyone had a great Star Wars Day Jason people can't see you but you are wearing your Jar Jar Binks cosplay.
Jason:
[0:53] I kind of assumed people just assume I'm always wearing that.
Scot:
[0:57] You should do the whole episode and jar jar speak well said Jason what's a new at the Amazon what.
Jason:
[1:10] I feel like people don't get the jar jar one I did I did do an act during covid-19 doing all this pitch theater online I did a pitch on Halloween in a Darth Vader mask.
And we won the pitch so I feel like I should be doing costumes more.
Scot:
[1:28] Awesome you guys intimidate them and it's called the Darth Vader intimidation closed when you wear the Vader the Vader suit.
Jason:
[1:34] Exactly exactly and it had the voice changing thing and so it is.
Scot:
[1:38] Honest I find your lack of faith yeah there's a lot of death lot of lot of puts you can use in a pitch.
Jason:
[1:48] Yes unfortunately not a large enough chunk of the total addressable Market are Geeks.
If you like is wrong I know how I got in this like funky like creative advertising world with all these I kept custody clients like I totally don't fit in.
Scot:
[2:09] Yeah been a misfit toy my whole life so sir not going to stop anytime soon embrace it Jason.
Jason:
[2:15] Yeah it was announced today that we won a big new client lvmh and so I like went on LinkedIn and joke that like it was largely thanks to my my stature is a luxury influencer.
Scot:
[2:29] Nice congrats your tick-tocks on luxury have one the death.
Jason:
[2:32] I know I know for a long time people were like why are you wasting your time with that and now they know.
Scot:
[2:38] Who will we have it's been a while since we dropped a pod because we both had spring breaks and then you've been traveling a bit so it's great to be back.
Jason:
[2:49] Yeah it's super fun to catch up with you and with the audience.
I feel like the last show we did was right after shoptalk so I did get to see a bunch of folks and now you know it's a treat your season is starting to heat up so I have a bunch of upcoming trips so.
If listeners are going to any of these shows make sure you make a point to catch up with me and you could see the jar jar costume.
In person so I'm actually doing this show from.
The famous Mayflower Hotel in Washington d.c. because I'm in town for the.
Home and Commercial products Association I'm doing the keynote for their annual conference tomorrow morning.
And then I'm going to sap Sapphire which is their big customer show in Orlando in on May 15th if you like.
There's a fair amount of our listeners that go to that show and then to fun ones that are you know core Commerce shows after that we have Commerce next by our friends Scott Silverman is in New York in June so June 20th.
And I'll be doing some fun stuff stuff on stage there and then in RFC you know has their kind of future looking executive digital Summit.
[4:07] On the beach it Tara no in Rancho Palos Verdes it's called the inner F Nexus on July 10 and all both be giving a keynote and I will also be interviewing Kara Swisher so I feel like.
I'm going to spend an hour just making fun of Scott Galloway with her.
Scot:
[4:25] Nice yeah that's good the dog dog is off the porch whoo.
Jason:
[4:30] Exactly I was thinking about like maybe bring a mask I've already you know I have audio collection of a lot of my favorite Scott Galloway predictions meaning which didn't come true.
Scot:
[4:43] Macy's Woodberry Amazon and apparel.
Jason:
[4:47] But I feel like this is.
Scot:
[4:48] Amazon to be Roadkill.
Jason:
[4:50] Like Freaky Friday like so like Cara is this like super famous interviewer and I am interviewing her and we're doing it at Tara know where she started code conference so it's very topsy-turvy.
Scot:
[5:03] Yeah yeah just bring red tears without her trademark thing.
Jason:
[5:07] I assume she just travels with one of her own yeah that Herman Miller red chair yeah.
Scot:
[5:09] BYO RC okay.
Jason:
[5:15] I actually think she's not with Vox anymore so I don't know you know she may be in withdrawn not she may have said said goodbye to the red chairs will have to ask her.
Scot:
[5:24] Look that's that's question number one.
Jason:
[5:26] Yeah but besides all of that we are just getting started on q1 earnings season and you know of course for most of our listeners one of the most important earnings calls happened last week.
Scot:
[5:39] Yeah it wouldn't be a Jason and Scot show if we didn't have some Amazon news.
So on April 27th which was last Thursday when we're recording this Amazon had their earnings it was what Wall Street would call a clear beat meaning both top and the bottom line where a beat this is welcome news because Amazon's earnings have been kind of like not not mrs. but not amazing.
[6:07] So revenues came in two percent above consensus which is a slight beat but what got Wall Street very excited was operating income came in 57 percent above and longtime listeners will know I usually cover the retail portion of Amazon and Jason covers the cloud or a WS part, we're going to mix it up because I read all the reports and what was most interesting right now in kind of the world of Internet stocks the whole world has been turned upside down by chat GPT which is put out by open AI Sam Altman startup who is partially owned and supported by Microsoft there and investor and the hole, infrastructure runs on Azure their cloud computing, platform this has been a huge win for Microsoft because it's enabled them to add a chat gbt like component to Bing.
[7:02] And you know the buzz is that, search is dead a lot of people are even speculating maybe even apps will be dead you know maybe maybe you don't really need apps on a phone if you could just talk to your phone and say hey book me restaurant reservation as 6:30 at the one of these three restaurants why do you need a nap if an AI can go to that room so there's there's a lot of people in the Wall Street and Tech world are, I would say there's like this wall of worry around this new innovation and this is real so chat GPT was the fastest product to 100 million users what was it Jason like four weeks or something.
[7:42] Like an egg yeah if you see a chart it's like this a vertical wall whereas like Facebook and some of those kinds of things were previous record holders for this and it took, you know years and so-so.
Jason:
[7:54] Two months to a billion or 4 months to a billion users.
Scot:
[7:58] Yeah so it's just this crazy adoption curve unlike anything we've ever seen before so you know there's, this was top of mind when this came out so the so while streets pretty obsessed with what's going on with the cloud also Amazon's Cloud division has been slowing their growth it was the you know the darling of the Amazon portfolio and now it's been slowing because as we head into this recessionary period, also another concern is we cover this a little bit last time but Silicon Valley Bank failed we've had all this kind of startup craziness and a lot of those startups use cloud computing and Amazon so, so that was what all eyes were on and you know what we saw was the growth did slow to 11 and a half percent which was less bad than what people were thinking so is kind of viewed as positive which is always one of these counter, Wall Street all about expectations not like the real absolute numbers but 11.5 percent growth is this is this part we've been covering this for for.
[9:04] Years of this point five years and it's always growing north of 50% but this time it really slowed down and they're even projecting for next quarter or slow 2011 Amazon did Jesse did talk a lot about AI there they've talked about how they're going to do a lot of people the other problem with Chad gbt is it looks the prior to the prior a I think we all spend a lot of time with which was Alexa now feels wildly inferior because you're having these really robust conversations with chat gvt and Alexis can do like, yeah it's not really like at that level of conversational AI you can get some weather maybe play a song and a couple other little things add something it'll talk to you about do you want to reorder your dog food and yeah that's about it right so very, Barry and then you know that used to be cool and now in a world where we're chatty be teeing it feels inferior so Amazon like Google is a little bit on their heels from this and they basically came out and said we're going to do a lot around Alexa here and it will we're dedicated that being by far the best voice assistant, and we'll be adding chats ubt like capabilities but then for AWS they basically said look there's all these language models out there and we're going to be neutral will have all kinds of different flavors kind of thing so whatever you want we'll have.
[10:30] And the one of the concerns is these large language models use a ton of gpus and those are expensive.
Azure is adding a ton of workloads from this and their conference call they went so far as to say.
It's like accelerated growth dramatically at Azure they're getting all these loads that they would have never seen before thanks to their relationship and, they're scaling up this gpus and so it kind of feels early and Aang's like maybe Microsoft has got like this.
Bit of an advantage over both Google and they WS so, so you know it was interesting because I'm saying all that because what happened is they announced their up a little bit that day and then they announced and they were down and they've been kind of sideways since then so and what was clear be quarter with AWS not as bad as you would think it would be you had the numbers would say oh the stock should go up 5 to 10% but they didn't because I don't think everyone really liked, body language around you know what's going on chat gbt and Amazon's response.
[11:40] So that was a that was a long part but that was I thought it was kind of interesting.
The whole world and like the last yeah six months has been turned upside down by this and it's always an option or that always gets my attention because this is where unique opportunities are created for disruption and all kinds of what happens is when my favorite books is the innovators dilemma when something new like this comes along, people that were previously the leaders have a really hard time adapting to it because they get baked into their business model so for example to pick on Google it's very hard for them to offer a chat interface on the core Google search because, every pixel of core Google search is like so highly optimized and them hitting their numbers relies on that that real estate.
[12:28] Basically not changing that to change that real estate and experiment with something that is expensive and not monetized is.
Almost impossible you know it's it will certainly make them lose mountains of Revenue and even worse on ibadah, so it's really kind of fascinating to Think Through the strategy here of what's everyone going to do and how do they adapt to this new world and to some extent Amazon not as bad as Google I would argue but that Amazon is a little bit of a in a pickle.
Um it got even so bad also around the same time Jeff Bezos was at Coachella and he was just out there dancing and wearing this kind of fun butterfly shirt and everyone's kind of like you know it almost felt like fiddling while Rome burned so a lot of people are like and then you know so Disney's CEO has come back and a lot of people are projecting that maybe we'll see a day where like a Larry Page comes back to Google and a Bezos comes back to Amazon to it's going to be interesting to see what happens this next next three to six months are gonna be really fun to watch in the world of large trillion-dollar internet companies to see what's going down.
Jason:
[13:39] Oh for sure and I keep saying this but we're going to have to do another.
Deep dive on AI and chechi because there are so many it's changing so, fast and there's this whole like shift from keywords to prompts and you know like all of you know Google's intrinsic strengths are suddenly becoming weaknesses there's this interesting battle, um between like these AI capabilities as destinations versus these AI capabilities as.
Sort of infrastructure that that you add to any destination right and so you know the interesting thing about Chad gbt you can license the.
The GPT for engine and build it in your own apps or your own website but 1.2 billion consumers a month, are going to chat. Open a i.com so that's now a destination on the web that's bigger than Bing.
[14:40] Like move more people last month went to their website opening eyes website then went to Bing and that's a, Game Changer I get it's feels like a huge missed opportunity side note that there's not ads on that website yet I'm sure I'm sure that that that is coming in Italy but so there are all these like super interesting changes.
I kind of feel like even if all that wasn't playing out like just the the fact that AWS is decelerating a little bit.
[15:10] Would be the news from this earning thing and it's what everyone's talking about and it's almost a shame because it's kind of masking what otherwise like is a pretty remarkable quarter compared to like what most of their peers are likely to do.
Scot:
[15:25] Yeah yeah walk us through some of the highlights that you saw in the non aw site.
Jason:
[15:30] Well so the first thing if you look at North American gmv it grew 13% in q1 so that that is a deceleration from, their Q4 growth but like to put that in comparison.
Us retail sales grew four percent in the first quarter so so you know this is kind of back to pre-pandemic levels where Amazon's growing.
Despite being you know the largest or second largest retailer in the US depending on how you count growing quite a bit of water faster than the industry, you don't normally we would we compare Amazon's growth to all retailers growth but also to all of e-commerce has growth, so the US Department of Commerce comes out with their Q2 growth numbers in a couple weeks so May 18th I think if you want to mark your calendars will do a show and talk about that but.
Just kind of interpreting the data and extrapolating.
[16:31] U.s. e-commerce and q1's likely to grow about 10% which is kind of a recovery for e-commerce but still, that means Amazon the largest e-commerce player out there is growing faster than the industry as a whole which is.
You know typical for Amazon but you know not very typical in the rest of the world so the retail story was, was really strong and it was driven almost exclusively by your favorite part of the retail Echo System the marketplace right it was almost all.
[17:00] 3p sales which I want to say grew 16 percent.
Or fifteen percent for the quarter so so 3p continues to be a super important part, and you know I always like to talk about the ad business ads were up 21% which is a, a deceleration of the ads business as well just like AWS but a couple interesting things, there's a ton of headwinds, for traditional dip digital ads right now as the economy is getting a little more challenging you know a lot of brands are cutting back on their spinned because the privacy issues they're cutting back on a lot of the traditional digital channels, um so you look at like metas ad business in q1 it grew three percent Google's ad business grew to percent.
[17:55] Pinterest was the leader of those kind of traditional platforms their ad business grew five percent, and Amazon which is has a bigger ad business than Pinterest Amazon grew 21% so that that growth you know continues to be remarkable, um I did a quick back of the napkin estimate and I, I know AWS generated about 5 billion dollars in earn income for the quarter the ad unit probably generated 7.1 billion dollars in earning come for the quarter so quite a bit more, profit to the bottom line coming from that ad business then coming from from AWS, and then you know Amazon you know as they always do they kind of pepper and some favorable stats so they talked about how.
They they had 26 million customers for same-day delivery in q1 which is fifty percent growth year over year so you know you.
You kind of you've seen a lot of other retailers that as the economy has gotten kind of tough they've kind of.
[18:58] Ratcheted back their service level a little bit like you're seeing a lot of people starting to charge more for returns you're starting to see delivery promises get stretched out a little bit and you know Amazon is kind of.
Adjusting their returns policy as well but like they're they're all in on that fast same day delivery.
And it seems like consumers are continuing to embrace that.
Um there's this kind of big strategic shift that they talked about Scott that I know you've been falling which is kind of the shift from a national fulfillment model to a regional fulfillment model.
And this is all about getting more efficiency so the idea is you know in the old model you placed an order and you know they ship from whatever Warehouse fulfillment center had the goods in stock so often that.
Are shipping things from pretty far away, and mold you know in a you know your your multicart order could have Goods coming from a lot of different fulfillment centers and you know this quarter the focus is really on redesigning the whole fulfillment center to optimize.
[20:06] How many trips they have to make to your house and how many, how much of the goods can all come from the same fulfillment center so there's a laser focus on kind of getting the inventory in each fulfillment center right for the market that it's serving, um and the you know in their investor call the CFO was talking about how like they're starting to they're already starting to unlock.
Um significant improvements in their operating margins as a result of cutting down on the amount of trips in order to serve the same amount of gmv and they think there's a lot of Headroom to continue improving math if you've been following that kind of, Regional shift it almost feels like the Reinventing the you know kind of against innovators dilemma they're Reinventing their whole fulfillment model despite the fact that they have the.
The world's largest fulfillment model.
Scot:
[21:00] Yeah yeah I think this is really interesting and in some ways maybe the go Puffs the world kind of showed him how to do this ironically enough and you know and this surge of same-day delivery I think they're having.
I think you know in the early days the same day delivery I remember Sebastian going ham he was SVP saying yes he was at our conference and he said something like we just put out there to see and we were surprised by how many people use it and then you know they had data that indicated this is like five years ago that it was addictive because you.
[21:37] We have forget which of us going this is your zero friction addiction so once you have one of these low-friction experiences you're like yeah yeah you know of course I would like it yeah, I'm running this morning all like it the same day but that's making them for deploying a lot more of the product to be able to satisfy that demand but they have the data to do it the key is it's a you know there's, there's this you know something like 300 million skus out there in the cloud that you can buy a small portion of those percentage-wise large sales wise is in the network of FCS and then the system learned what to, put at the edge near you and that same day thing there's a set of skus and it's probably down to 10,000 at that point, that they know those are the most frequently Asked seemed a things it's going to be things like toilet replenishable toiletries, dog food for me all those types personal items Healthcare Beauty and you know it's not the it's not the Xbox or something that can kind of weight well I guess some of that could be but you know there's plenty of stuff people are happy to wait for so, that that edge Network allows them to Ford deploy 5 to 10,000 excuse and get them to you really fast.
Jason:
[22:56] Yeah and I think what's interesting is that it turns out that the.
The those skews that are needed for same-day delivery in Raleigh are not the same as the skills that are needed in Chicago and AI is really helping them sort of optimize.
Those fulfillment centers and the numbers are actually a little bigger than your you're saying there are now like 300,000 same day skus in the system and in some markets there they have over 100,000 skus available for same-day so it y you know there.
[23:26] They're kind of expanding from the head in skews to you know at least the chunky middle scuze.
On that same day delivery and it and it seems like that's continuing to work for them.
I just think it's you know again a lot of people that had you know the huge infrastructure lead the Amazon had him fulfillment centers you know would.
But I find it hard to disrupt that model and pivot to a new model and it seems like you know Tim zones credit they're they're not afraid to disrupt themselves and it feels like that's kind of what they're doing here.
And it seems like it least pull narrowly it's working you know they're also.
Over the covid time there have been some capacity constraints and they rolled out a lot of technology to help help third-party sellers better manage their own.
Capacity and you know I'm hearing from third-party sellers that that is going better that they have you know are better able.
[24:29] Predict the cost and the capacity that will be available for them and they're not getting as many unpleasant surprises as they as they kind of had had in the past of that that stuff is all interesting, I also think Amazon's big enough that they're they're you know kind of a.
A good surrogate for for the actual consumer economies at this point and so is interesting you know they talked about the Americans can consumer and you know the North America was where a lot of Amazon's growth was.
Um They they had a statement that they're continuing to see the US consumer is being conscious that she's definitely moderated her spending on discretionary categories, she's trading down to more value oriented eizan's.
[25:16] You know there continues to be healthy demand for Staples and you know I think we heard similar things from other big retailers like Wal-Mart and Target so that kind of felt in line but what was interesting was Europe.
The growth is much slower but it was a significantly higher beat versus expectations than North America was and they had kind of an interesting editorial on Europe they said that, European demand while cautious came in better than expected, we see customer confidence increasing with inflation tickling down in the EU and that's kind of at odds with a bunch of other retailers that that are competing in Europe that are still you know kind of talking about, the consumer Demand Being really repressed in Europe and the European consumer really struggling due to even higher inflation then then what consumers are experiencing here in North America so, um it either sounds like Amazon's having a better go of it than a lot of other retailers in Europe, or Amazon is being the first one to sort of see the economy turning a little more favorable in Europe so.
I kind of found that interesting.
[26:42] Yeah well again you know the.
Historically like Europe is smaller than North America for Amazon but it you know because it's smaller it was growing faster but you know there have been more.
Challenges supply chain disruptions there's more uncertainty in a lot of the European economies and so you know it's like for global companies I'm particularly brands that do business everywhere.
Um that European softness has been a challenge the one outlier of all that is luxury so it does feel.
Like kind of a bifurcated economy that like luxury can you know is actually kind of bounce back in Europe and is continuing to do pretty pretty well worldwide while.
High inflation is hurting a lot more of the kind of staple Industries a lot more.
Scot:
[27:35] Having Survived the Great Recession of 08 and 09 at Chow buzzer the weird thing about the data was the luxury segment accelerated you have to have the the wealthy folks do find during economic downturns turns out.
Jason:
[27:50] Yeah this was a weird one in that like that's for that was for sure true where the demand was shifted in unusual ways because often you have a lot of.
Really wealthy consumers are also tend to be really mobile consumer so you have, historical you'd have a lot of really wealthy people from China that would go to France and buy a lot of luxury goods and in covid of course nobody was going anywhere so there was this huge, spike in luxury goods in China so like the overall worldwide demand for luxury was very high but there were these weird mismatches where the demand was not coming from the markets that it typically came from and now it feels like it's.
Reverting more it's starting to revert to more traditional.
[28:37] So there was a another interesting earnings call this morning.
Scot:
[28:41] Yeah so Shopify came out with their earnings and they've had just kind of set the stage.
In the during covid they were Off to the Races and they've had a really hard time in the last year kind of in that post covid era as they invested so much and then covid the e-commerce growth reverted to the mean as you've been, so good at pointing out and they thought it would just continue up into the right and so they did about a ten percent reduction in force I think is a year ago maybe a little longer, and so then this morning they came out and they beat Lowered Expectations to put this in perspective of their growth has slowed to 25% and they were consistently growing well north of 50% so they're they're definitely, this was good for a while there were kind of Contracting but now at least they're back to growth they are losing money but they should get back to profitability here in a quarter or two but the big surprise was you know if you recall they were going to take on Amazon and they started really building out some fulfillment and they bought a couple companies to do that and started building out this whole infrastructure called Shopify fulfillment Network or sfm.
[30:00] So they announced on the call today that they're just basically abandoning that whole strategy and the assets they previously bought an aggregate for over two billion dollars they sold to a company called Flex port for a billion so that had to hurt so basically a billion dollar loss on the strategy and they basically said you know the future is AI and that's where we're going to put our effort, and then when they sell this unit there also some people go with that but they're also announced they're doing at 23% that would include some of those people it's not it's not entirely clear.
[30:36] How many will be core Shopify versus the people leaving with the sfn I think it's.
Relatively small you know I don't think that's happened was like this huge.
People operation like you have an Amazon anyway so they're going to reduce headcount by 11,000 people 29k so from 11,000 29k, so about 23% reduction these things are always kind of.
[31:06] Little tricky emotionally because you feel for those people that are losing their jobs and found out this morning that's going to be no fun, but then Wall Street loves a good reduction for us because that means more profits oh, the stock this is a huge win for the stock because Wall Street has hated hated hated this idea if you take this super high margin software business and you layer in a super low margin fulfillment business, so you know Wall Street this is part of the innovators dilemma, once you've baked your margins in at 85% or whatever you can't then go to Wall Street and say we're going to bring that down 15% 270 because we're going to be fulfillment and that's a, yeah 30% margin business your blend that in with our 85 you get us to 70 or whatever it is, so so Wall Street was very happy to see them abandoned us, it does raise the question one of the reasons they got in this is you and I talked a lot about Shopify versus Amazon and you know the same time.
Amazon is raising the bar on e-commerce we just talked about this two same day, Shopify was going to arm the rebels so that they could at least keep up with two day now they're abandoning that you know there's gonna continue to be, yeah this could be a big moment in history where Shopify messes up and you know.
[32:29] What's a I going to solve if you have this great product recommendation or something that doesn't show up for five days in Amazon eats the Shopify Merchants lunch because they just are better at Logistics so this is this is a big decision throwing in the towel and it's going to be interesting to see, if this is wise or not I obviously lean towards I don't think this is going to be a great in decision for him.
Jason:
[32:57] Yeah it is tricky.
The you know I would also mention there's this so I you know scary service from Amazon looming on the Shopify Horizon that it's not clear Shopify his really declared what they want they're going to do with yet which is the.
The by with prime service which is you know in in effect to use that really solid Amazon Fulfillment Network even when you sell stuff on Shopify.
And so you know maybe they're they're dumping on the Shopify fulfillment Network stuff in there just gonna see the Fulfillment Amazon we'll have to see.
Um I do I've decided to correct one thing you said like Shopify is huge on talking about e-commerce regress to the mean.
That's actually not true right get when they talk about that they're talking about the ratio of e-commerce sales to retail sales and it's partly true for that.
That you know we kind of went from 14 or 15 percent of all sales being online to 17 or 18 percent and we bounced back down to 15%.
Um you know that that shape varied while we you know depending on the category so image digitally immature categories like Grocery and Automotive had kind of a permanent Spike whereas, like apparel you know had kind of a temporary bump.
[34:23] In absolute dollars e-commerce is way bigger than before the pandemic e-commerce is 90% up from from 2019 and so when when they kind of use that.
As an excuse for the layoffs I would say like don't buy it right like that.
[34:41] There's a lot more demand for digital Goods than there were in 2019 and Shopify isn't laying people off because that demand has receded like throwing people off because they haven't perfectly figured out what the right business model is and from my standpoint.
They're still a little dyslexic on who they're even trying to serve they still have all this language around you know serving the small Independent Business the mom-and-pop and arming the rebels and all that but like you know when you listen all the success stories in their earnings calls.
It's it's Staples it's why it's it's you know it's it's bigger or midsize specialty retailers that are moving to the platform, it's not the rebels I, Kendall Jackson and Kendall Jenner and Staples are not the rebels and so I don't know like I think they like that that narrative but like I'm not sure they've come a perfectly aligned their product offering to the.
The companies that are like driving the bulk of their gmv growth and when they you know do focus on the long tail Mom and Pops.
It really makes that gmv number kind of office gated because there's so much churn over there right and they go or gmv went up 25%.
Was that because like all your customers are thriving and they're all growing or is it because you just added way more companies that will have a nine-month mortality rate than you then you did the quarter before.
[36:09] So I think it's like I definitely like there's a lot of strong, sort of advantages and and experiences still in the Shopify ecosystem and.
Feel like shot pay is getting some traction the shop app has got a lot more traction than I originally predicted and now there are some legitimate.
Marketplace features in there there's a lots of things going for them I certainly would not write them off but I do think.
Like in the next couple of quarters we need to see some more clarity about like what they want to be and where their growth is really going to come.
Scot:
[36:46] Yeah yeah it's going to be we'll be tracking it closely on the show as we have them so it's going to be interesting to see I don't think either of us had this in our predictions though sadly.
Jason:
[36:57] Yeah no I mean I was definitely caught by I never thought this Acquisitions made sense but I certainly thought that you know they would hold on to him longer so I don't know I guess if you're an investor like.
Like once you realize it was the wrong decision like there's probably something good about like cutting bait quickly instead of trying to.
Drag it around drag it out longer just because you you don't want to own up to the mistake.
So anyway that feels like a pretty good recap of the two big earnings there's a you know a bunch of the traditional retailers will be record reporting over the next four weeks and of course we'll have US Department of Commerce data, including q1 e-commerce.
Later this month so lots of reasons to have another new show and I still do think we got to get that.
That large language Model A I show on the on the books.
Scot:
[37:52] Yeah yeah we will we're through our vacation period and we should have some time to lay that down and Jason you've got a keynote tomorrow and you got some slides to work on buddy so we're going to make this a short one in the pantheon of Jason and Scot show lengthy episodes.
Jason:
[38:09] Yeah yeah we'll give it a few minutes back to our listeners and I will go write a keynote for tomorrow.
Scot:
[38:15] Awesome it's always good when you're up against deadlines so you're going to crush it.
Jason:
[38:20] I feel like the one thing I have going for me is the present the content will be very Timely.
Scot:
[38:26] Good yep fresh like.
Jason:
[38:30] Awesome Scott thinks every very much everyone for listening as always enjoyed the show we sure would love it if you jump on iTunes and give us that five star review and until next time happy commercing!
