EP107- Listener Questions
Q1: Brands selling direct on their own site
Shawn Cheng What do u think about a brand to run their own brand store, not through market place such as eBay, Amazon or Alibaba?
Jamie Dooley Hi Scot & Jason: Have you heard of any brands seeing true success building a D2C E-Comm business through their own websites? (On a path to do 10-20% of sales and/or 8-9 figures in annual sales?). D2C seems like D2C was a big trend a year ago but I am not hearing about success stories where sales justified significant spend.
Scott Silverman Do you think a new brand without an e-commerce site or digital presence could be built by selling on Amazon? Secondarily, should manufacturers selling on their own e-comm sites, shut them down and just sell via retailers?
Q2 Mobile Conversion Gap
Ari Nahmani Mobile conversion rate... retailers are getting more and more of their web traffic from mobile, but those users are half or a third as likely to convert. They don’t seem to be coming back on desktop. So what’s happening? We see across the board where YoY traffic is flat, revenue is down due to the device mix over-indexing on mobile YoY. How do we explain this behavior? Where are those users purchasing if ecommerce growth is up? I’m seeing his trend on several client sites and I recall one of your shows that this trend was discussed.
Q3: Omni-Channel Fulfillment
Alexandro Volakis order sourcing in an omnichannel network. how do you decide where its best to ship from?
Q4: Singles Day in the US
Julia Ptock How do you think about Singles Day (11.11.)? Are there some retailers who take part at this event in the USA? Amazon is focusing on Cyber Week (Cyber Monday & Black Friday) but doesn't show interest in Single Day. Do you have an idea why? Q5: Toys R Us impact on Holiday Promotions
Melissa Burdick How will the bankruptcy of Toys R Us impact Amazon this Holiday? Is it going to be a bloodbath in pricing this Holiday with TRU stores cutting prices and Amazon price matching (and then closing stores shortly after holiday)? https://www.usatoday.com/.../toys-r-us-store.../683762001/
Amazon Private Label articles:
Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
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Episode 107 of the Jason & Scot show was recorded on Thursday November 9, 2017.
New beta feature - Google Automated Transcription of the show
Jason: [0:25] Welcome to the Jason and Scott show this is episode 107 being recorded on Thursday November 9th 2017 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scot Wingo.
Scot: [0:40] Hey Jason and welcome back Jason Scott show listeners Jason how you doing.
Jason: [0:46] I'm doing terrific Scott if you like there's a number of exciting things I've been eager to talk to you about.
Scot: [0:53] Let's talk about the Chicago weather first.
Jason: [0:55] It's sad I feel like we've had a super mild winter so far but this week it turned cold so we've been in the forties and tomorrow it's, can a potentially drop it on the twenties in snow so I've had to visit a portion of my closet I haven't seen in awhile.
[1:15] What about Raleigh is it beautiful and sunny still.
Scot: [1:18] It wasn't beautiful but it is still like in the 50s so I enjoy hearing about your snow stories.
Jason: [1:24] I am always happy to help you feel better about your life by hearing about mine.
Scot: [1:29] Thanks man.
Jason: [1:30] I would imagine that you're feeling some extra warmth because I feel like there's been some exciting Star Wars announcements later that keep you up warm and comfy.
Scot: [1:39] Yes it is a great time to be a Star Wars fan we went through kind of. Salmon there for a long time and I know we have the prequel trilogy which is exciting and then we didn't know what the future would hold and then with the Disney acquisition the announcements coming Fast and Furious so we have first of all we have. 2 Star Wars movies just right in the pipeline right behind each other which is exciting as we record this 35 days until the last Jedi 34 if you go on the. Actual opening on the 14th 196 days for the Solo movie so excited about that little Star Wars story and then the big news is at the. Industrial, conference call at Bob Iger announce to Star Wars things so Ryan Johnson the guy thats directing Last Jedi they loved working with him so much they've given him his own Trilogy so it's going to be some, three part story in the Star Wars universe but not part of the normal Saga and then they're also. I'm sure you seen this but they're doing a streaming, thing at Disney that this is all the rage everyone's unbundling and now will pay, 8 times as much for all the content but anyway they're doing a Disney streaming Channel and they announced a Star Wars live show will be on that so. Lot of great new Star Wars content con.
Jason: [2:56] Yeah yeah yeah the TV show super exciting I'm with you I've been annoyed by all this unbundling like I, I suspect you and I both had to buy the CBS subscription to get Star Trek I probably would have already had to give the Disney one due to my son so maybe like in that case I'm not as upset but.
[3:16] And you and I both been walking around with her iPhone 10s for almost 2 weeks now so what's what's the verdict for you.
Scot: [3:23] It's awesome it is a great phone the.
[3:28] Notches not a big deal the face ID is really cool I really like it it's very handy to buy stuff it is a little unusual to Skylake pick up your phone and look at it, but you get used to it, I have an Android phone that is the same feel as iPhone and everyone will take it out of my pocket and look at it and then I feel really ridiculous cuz it doesn't look back at me.
[3:50] Just kind of like what you think I'm an iPhone and then I would put my phone and it unlocks to the face ID thing is pretty cool how do you like yours.
Jason: [4:00] I can agree on how you're looking your Android phone is how my son looks at everything that isn't like an echo like he expects All Electronics to be able to talk to him.
[4:11] But I have been super happy with the 10 I'm with you everything has worked pretty smooth. Uniden it I have is without the button there's not an obvious way to feel with the right orientation of the phone at so I now fine I put out of my pocket upside down or backwards more than I. I used to.
Scot: [4:33] Get a feel for the camera bump.
Jason: [4:35] Yeah I have.
Scot: [4:37] About should be on your right index finger.
Jason: [4:39] That that I would do you answers part of me that doesn't want to like get a bunch of smudgy fingerprints on the camera now that I'm not OCD.
Scot: [4:48] That's why I put the camera there.
Jason: [4:50] Gotcha I'm think I did put the leather case on it the kid cancer got the phone a lot so I felt like I needed some protection and so now I what I feel for is the.
[5:02] There's no weather in the bottom of the phone so that's how you can tell.
[5:06] Yeah so that's worked out well and what's killing me is I do use an iPad a fair amount and the muscle memory now to go back and forth between I feel like I've gotten used to the all the gestures.
[5:20] Answer that the button still being on my iPad is killing me so I feel like I'm going to have to get a new iPad when they come out just to have them all work the same.
Scot: [5:28] Yeah I like the new gestures I don't like swipe down from upper right to get to the control panel because I frequently hold it. One handed and like that's pretty weird gesture to do single-handed.
[5:41] So I kind of don't like that and I did hear there's a rumor of their members on the. Apple Hardware sides today or I read a rumor they're working on a high-end iPad that will have face ID in a bunch of other cool stuff and then there's a lot of rumors going around about a r Hardware that they're working on which is kind of interesting.
Jason: [6:00] Yeah man you know in some ways.
[6:04] There's not new AR Hardware in this device but this is the first device with the horsepower to Sephora support the the new AR software kit and so there are some cool.
[6:16] New AR apps that you can run on this phone that you couldn't run on other phones which is pretty cool we make that make him up in one of the listener question.
Scot: [6:24] Yep and that this is nursing one of these kind of these designers kind of tries to pontificate what the future looks like these things that this interesting observation that the sensors that are in the notch on the 10. Are really everything you need for a r glasses today they took essentially kind of the the look and feel of the 10 and they put that not kind of on bridge of glasses and then they, they made glasses come around them which is kind of an interesting I have never thought of it but it is kind of interesting. Because it's doing the face ID in all the pieces you need to do that is exactly what you need to turn that around and be able look out at the world with with ar glasses so.
[7:03] That could be kind of part of what they're thinking about.
Jason: [7:05] So an interesting thing in this comes into play in some in-store retail environments the Microsoft Kinect has been the the cheapest ubiquitous sort of.
[7:17] 3D camera with.
[7:19] Infrared distance measuring that was out there until there were tons of little Nitch applications that hacked some solution using that.
[7:27] Does Microsoft Kinect camera so there's lots of these like 3D body scanners that you could potentially use for.
[7:35] Uploading your avatar to your favorite e-commerce site or or made to order clothing or measuring rooms for furniture and all all these different things in there a bunch of in-store applications where are these. Is Microsoft Kinect camera got hacked in Microsoft just announced that they're discontinuing the Kinect and so that's going to go away and of course the. Everything that was in that big camera module is now you know there's a better version in this little notch on the on the iPhone and so I think we're going to start to see a bunch of. Interesting apps and use cases where they're essentially using an iPhone just for that that sensor array and in a bunch of. I fixed installations in which I think would be cool you know the bummer at the moment is there going to be hard to Source in there going to be expensive for a while.
[8:27] And I sure wish they had them on the back as well cuz I feel like.
[8:30] Retail uses it would be very handy to have that sense of Ray pointing out so that we could use it for some other uses.
Scot: [8:38] Vehicle in the other exciting gadgets tree portal.
Jason: [8:42] Well I know you got a new one that I'm eager to hear about when we'll get to that in a minute the other thing I'm just over over all excited for this week, is so we recording this Thursday night which is Friday morning in China so it's the day before singles day we'll talk about that like that would be an exciting event on the show just anyway but it's extra exciting because, our very first show was a recap of singles day which tells me that the next should we do will be our our anniversary show.
Scot: [9:14] Yeah if you're coming in on two years who knew.
Jason: [9:17] Exactly I do think you put up with me for that one.
Scot: [9:20] It's been a struggle but I managed to figure it out.
Jason: [9:25] I appreciate it I'm I can't speak for the listeners that II.
Scot: [9:28] Speed of a source of it's been awhile since we did a question episode, way back to episode 96 actually so put put a call out this morning and we actually got a very strong response our listeners have a lot of questions, so let's jump into someone's no questions.
[9:59] Questions first one is not really questions more of a statement it's from Natalie Bowman and she says hello.
Jason: [10:07] Hey Natalie thanks for responding to the questions.
Scot: [10:11] Hi Natalie okay and then next question is kind of interesting three people. Who's similar nuances of the same kind of a topic so the first flavor of this was from Shawn ching and. I said what do you think about a brand to run their own Brand store not to a Marketplace such as eBay Amazon or Alibaba. So you should have ran have their own e-commerce site is kind of the flavor there and then are a good friend of the show Jamie Dooley asked hey Scott Jason have you heard of any brand seeing true success Building address. Consumer e-commerce business through their own website so should you do it and then have we seen anyone that's had success. I in any kind of adds a Nuance you know it seem like it was a big trend of year ago but I'm not hearing about success stories and then another friend of the show Scott's ornament he said what do you think about it there's a new brand.
[11:10] That doesn't have any Commerce site should they just start on Amazon or Marketplace like that. And then should manufacturers be selling all their own e-commerce sites are just shutting down and Salvia retailers so.
[11:23] Interesting flavor kind of in this topic of Brands going direct that we've hit on. Probably at least every other week if not every week but what's your advice when a brand comes to you with with those flavored questions.
Jason: [11:35] Yeah so I agree they're all related to Sean and Scott's to me are almost identical right like the two spins on the exact same thing which is. Do you need to have your own branded site in addition to selling on the marketplaces are you can you get by with just having a presence on the market places in my strong advice to anyone, it's trying to build a long-term sustainable company is I would I would definitely encourage you to have your own. Site in addition to you know whatever efforts make sense for you on Market places in. The reason I say that is a couple in most cases you're not going to do the kind of volume on your own site that you're going to do on the marketplaces I get it in so it you know it maybe. Your first effort might be your presence on the marketplaces and it may not be that appealing to invest a ton in your own site. But the thing is. We are all essentially digital sharecroppers on the the marketplaces platforms right like.
[12:41] They can change their terms and conditions at any time they could be horribly under favorable the. We could intentionally or unintentionally run a fall of any of their their policies or.
[12:56] He perceived to run afoul of them and get cut out of those Marketplace it there all kinds of bad things that can happen on the marketplaces. And it didn't given time you look at it and say hey yeah I know there were some Old Market places that change the rules all the time but Amazon has been much more consistent or. Alibaba is much more consistent or whatever the case is.
[13:16] Overtime that can just shift so it's just really risky to have a hundred percent of your. Brand presence be on this site that you don't own and you don't control and that your landlord can essentially. Raise your lease and change that your terms or kick you out in anytime and so I do think it it absolutely makes sense to have your own destination on the web that you own and you absolutely can. And to the extent that your brand can drive any organic traffic that you can build any of your own falling. It just makes more sense and it's more profitable to send those customers to your own site instead of. To the marketplace you can avoid the take rate you can still in most cases for Phil through you know whatever fulfillment vehicle you're using on the marketplace. And you know as you get to know some of those customers into the relationship with his customers like this gets a little dicey but you know there certainly is a, percentage of your customers you can shift to be direct on your own site and you just you know on those marketplaces you're totally disintermediated from the customer, and so you did you know even if it's only a small percentage of your customer base, you want a direct relationship with some customers if only to get feedback to be able to understand what kind of content is selling and not selling and to build to run a B test and do all sorts of other things so for those reasons, I would say you absolutely have to invest in your own site, and I'll you know I'll give you a caveat that it maybe isn't the first investment you make are the biggest investment you make that that fair to you Scott.
Scot: [14:54] Yeah and a lot of it depends where you're coming from too so you know there's there's many buckets of Brands these days and it's. It's becoming increasingly easy to create a new brand when we were growing up, new brands had this like huge hurdle to launch them yet to do a TV campaign and all this kind of stuff and now we're just seeing an explosion of brand so so I would use a framework where there's kind of Legacy Brands and then, new kind of born recently kind of Brands and. Do I cycle I see with newly-born Brands is if we take and there's kind of two segments there but let's just take. More Scrappy auction real ones they to Sean's Point Sean ass this year they. They start on marketplaces soap to marketplaces a great place to start a colony e-commerce training wheels because they have these incumbent.
[15:51] Consumers already there so just like riding a bike with training wheels it's hard to steer pedal and balance so training wheels takes balance out of the equation starting a direct-to-consumer business you know it's hard to acquire customers. Gold products can get the products to the consumers and and all that so I Marketplace simply gives you the training wheels by giving you a customer sand, I wanting them to you to your pointer sharecropping of whatever whatever analogy is there and but you know to your point. Next product life cycle needs to be maybe start on Amazon you go multi Marketplace but the sooner you can kind of create your own presents on the internet where you can control the brand at the better, and then there's a lot of tools to Jamie's Point kind of weave that in the companies that have had a substantial kind of was caught materials over 10% of their sales on their website, there's a lot of tricks that utilize to do that and what are the simplest ones is offering something special to your website customers. You could think about special pricing but that actually kind of creates this.
[17:04] The problem so that's usually not what brands do but usually special products so for example Under Armour I don't know if their website is out there. To talk about this publicly I don't know if their websites 10% of their sales I doubt it is cuz they have that huge wholesale component yeah. But you're one of the clever things they do on their site and it did I know is successful is if you're an atheist of their brand that's where they launched a lot of new stuff so that's kind of like the exclusive Channel 4 new stuff and then there's this waterfall maybe the new stuff there for.
[17:38] A month in an account waterfalls into retail and then it waterfalls down into a Marketplace or something like that that's interesting kind of thing a lot people do exclusives on different channels the mattresses and why electronic guys are King. the digitally native vertical Brands what's interesting about kind of those is they start really with a website and then we seen many of them. Going to realize you can only get so far with that approach so it's almost kind of speaks to the store location is the right strategy so they are diversifying into offline a lot of them are exploring Marketplace is a lot of exploring Retail Partners those kinds of think so. So I think the best strategy is a balanced kind of from a risk and a channel perspective is to have a portfolio of channels and that includes having website.
Jason: [18:24] Yeah tonight I would totally agree in like just to tell you more explicitly answer Jamie's question, I bet you hit it like all those digital need a vertical brands, all you know hit the eight or nine figures in in direct e-commerce sales so that's in a bona Bose ModCloth Warby Parker Casper, you know all of those guys certainly do it there's some some pretty big brands that we don't hear about as much for e-commerce but you know I think the surprise people when you see how big they are but like revolve clothing I think is a big one and then of course stitchfix which arguably started out as a multi, vendor retailer but but is Shifting to a branded, to be more of a man with her own products I mean obviously you know got got pretty darn near a billion dollars. Predominantly through their own website so I think I think Jamie's right that the hype, was there before and I absolutely don't think it's one of these things were you build it in your guaranteed success so you know I think, to to Jamie's point there was probably a light-year a couple years ago when I went. I love I just want to website you I called you know I'll be.
[19:41] Entitled to these sort of eight or nine figure, run rates and you know we certainly seen a lot of people fail but they're absolutely have been and continue to be some successful sites sites in that space.
Scot: [19:56] It was talking about just failure for some kind of like what brands do wrong the number one thing I see is, the brands of everyone loves this map pricing concept and many Brands Don't Force It so it will do is still set for website and all, yeah they're their there. I have my pricing so they adhere to that obviously because they believed in the policy and they're selling stuff directly there and then they will have absolutely no kind of understanding of consumer. Expectations around shipping cost and time so they'll have you know a $50 widget for $10 shipping and, you know you can upgrade to 3 days for $40 and you know the $10 shipping is the equivalent of USPS. Yo week. Week plus you 7 to 10 day type of delivery without tracking and then they're shocked when they don't sell a lot because you know why we put up this website and you know we have all this traffic and no one's buying things why is that. Did he have to have that kind of discussion about well you're the single. Most expensive place to buy your products on the Internet is your website your shipping and you know the cost or just way off base with what consumers want and then another funny one is a lot of Brands and you know. To go to the legal department and all the stuff and they end up like not doing the basics like user-generated reviews and things like that because.
[21:27] How to get really wrapped around the axle like what if someone leaves a bad review should we go delete that or what should we do and you know should we should we go after them with a cease-and-desist letter and it's kind of funny to have this discussion because. There are people reviewing their products right there on Amazon but it just shows you're somebody's Legacy companies have such a hard time wrapping your head around this digital world there's some the things I see that happen all the time or these Brands really get off base with her web store.
Jason: [21:56] Yeah I know told you I've had all those conversations. That you another there is just a lot of back of house stuff that people tend to overlook when they're you know I used to wholesale model and they're going direct to Consumer for the first time so it's your point like, they generally wolfley underestimate fulfillment know where they are selling charging too much for 4, crappy level of service but it's probably also a side job for the wholesale fulfillment guys instead of stuff probably sits in the warehouse for 5 days after you place the order, before it even gets into the the the shipper system, answer their those issues and then like you know there's a customer service guy and they that that guy quickly gets overwhelmed with calls so they're all those kinds of things and, if you survive the infant mortality like if you survived all those mistakes the next big steak mistake we see everyone making is that there's, every Branford, whatever the brand attributes are whatever Niche it's in how well it's known there's some certain amount of sort of organic traffic that's relatively easy for each branch require in for some Brands that's. Three significant amount of traffic for some Brands that's not very significant but there always is some threshold where if you do the fundamentals right you get to a certain level and it then you hit a wall and it suddenly becomes much harder to grow inside the.
[23:26] The real test for the sustainable direct-to-consumer business is are, you know what once you get over that that first tranche of easy to get customers can you, still be profitable and successful in growing beyond that original based, or you just met being a cop out and you get stuck there or do you start spending way too much on customer acquisition and I think that's a mistake we see a lot so, so they're there are definitely lots of pitfalls and there's some good examples of of companies that have been able to steer clear of them.
Scot: [23:59] Let's jump in turn next question and then we can kind of Go Lightning round on a couple days maybe we'll see.
Jason: [24:08] Wait that wasn't Lightning Run.
Scot: [24:09] How's Jason Scott lightning room, okay second question this is from RE nahmani he is the CEO of an israel-based digital agency, and he says I'd like to talk about mobile conversion rate retailers are getting more and more of their web traffic from mobile yes but those users are 1/2 or 1/3 is likely to convert, they don't seem to be coming back on desktop so what's happening we see this across-the-board we're year-over-year traffic flat revenues down due to the vice mix over indexing on mobile how do we think about this Behavior. Where are the users buying stuff e-commerce is growing let me see okay so yes.
[24:53] And then I'll take that over to you cuz you have a clever name for it.
Jason: [24:56] So we've talked about that on a couple episodes I call it the mobile Gap and it it's it's very real you know most sides are seeing, their Mobile Traffic grow much faster than their desktop traffic so they often would characterize that as, there traffic is shifting from desktop to mobile and the conversion rate on that mobile traffic is much lower than it was on desktop and so you go gosh, that's. Potentially not a very favorable Trend and we we for sure talk with that with the are friends from Adobe around the holiday episode but I think I think it's coming up on a couple shows and I was actually surprised to find out that we haven't done a deep dive so maybe that something will. Will do it at future show but I know you and I have done a number of live presentations were weave weave debated the Mobil gas.
[25:44] And I guess what I would say to Arya a couple of things.
[25:52] Most clients if you looked you mentally at your desktop and your Mobile Traffic your traffic probably supposed to go inside look up there traffic isn't flat there traffic is actually increasing. It's a one of the things that's happening is some of those mobile visits that don't convert well are incremental visits. And of course there's a because it's so much harder to buy something on a mobile device there's a lot more friction to check out. There's way you know West support for plugins in your browser so your payment information is less likely to be. Be stored in there and we joke a lot about a taking three hands to check out on a mobile device right one told the phone one that tap the virtual keyboard and 1/3 to hold your credit card.
[26:36] The that that friction you know makes it less likely that people check out people also on mobile devices are are generally in a more micro moment context. They might be at the red light in the light turns green or they might be in line at the bank and get to the front of the bank or you know they might be doing something. Weather going to get interrupted in the much shorter. Of time so all that friction leads to too much more abandonment and so. We are seeing things where we're at experiences that reduce the friction improve the mobile Gap they don't make it go away but they you know if you look at the best mobile checkouts they have our mobile free mobile apps then. Then the traditional bad mobile checkouts have also a percentage of that is.
[27:25] Not real inserted incorrectly measuring conversion so so most sides you know. Back to the simple formula conversion how many people bought versus how many people visited the site and of course mobile gives people a bunch of new reasons to visit your site so a bunch of mobile customers are coming to find out your store hours or if you have something in stock. Or what store is near than those are all things that used to do with the Yellow Pages in the in the analog phone. And with the newspaper in those visits are not coming to your site that customer had no intention to buy online they're ultimately going to go to your store. It does look like non-converting Mobile customer so so some of its an attribution problem and then the last thing we talked about is this Multi-Device attribution problem where. Because it is harder to check out on a mobile phone a lot of people will build their list do their pulmonary shopping on mobile. And then they'll ultimately consummate the purchased on their they're desktop browser where they you know are more likely to have payment information stored or or use a keyboard.
[29:59] Well no sides have a very low percentage of authenticated users Amazon has a very high percentage of authenticated users, and by all accounts has a very healthy mobile conversion rate right and so you have some of those sites at the top of the echo system that have a disproportionate Cent percent of the traffic and sales also way outperform the industry averages in Mobile and that is driving a lot of the e-commerce growth.
Scot: [30:27] Yeah yeah we could probably do a whole show on this so I'll just kick it the next question before I get into a controversial topic that we have to go back.
Jason: [30:36] So are you saying that was not a good lightning round answer.
Scot: [30:39] That was very good and I'm not going to ruin it by it by adding on third question is from Alexandra volakis. I said it's about omni-channel so this is another one that squarely in your Wheelhouse in a centrally. And I'm kind of tripping this little bit how do you decide where it's best to ship from so I think what what L Alexander Andrew is kind of thinking about is you get an online order you've got ship from store or you've got a moment Center.
[31:10] You probably have some complexity there you probably have you know Boosie's on each other guys have hundreds if not thousands of stores that could ship the product and then you have like let's say you have 5 phone at centers.
[31:21] What's the what's the logic you would kind of work with a retailer to think about that do you just kind of go. Product is closer to the consumer here or ship from there or do you kind of is it cheaper to ship from the store or is it more expensive and how should people think about that.
Jason: [31:37] Yep that's a great question and most retailers that have gotten successful with pretty complicated, fulfillment channels where they have a lot of different choices, either because they're feeling from store have a lot of different fulfillment centers there they're all using pretty sophisticated software sometimes that even uses machine learning to build a model for deciding how to do for filma and so normally we we call those the solutions of order Management Systems, the big Enterprise ones all have like very robust logic in them, but at the end of the day that the way you're implementing that logic for most cases is you're actually thinking about three big factors you're thinking about the cost of a fill so you want to optimize the lowest cost to fulfill, you're optimizing for the customer experience in the customer experiences is generally two big factors one is how fast you can get it to that customer so you want to get to him as quickly as possible obviously and another is, you want to get multi-item orders to the customer together so you'd rather ship everything in one box, not only is that more economical many cases but it's also just a better customer experience then split shipping from multiple fulfillment centers and the third is this this notion of inventory potential. And that that can get a little more complicated but essentially what it amounts to is.
[33:12] Whatever fulfillment vehicle you fulfill for this order is going to leave inventory in the other for film of vehicles and what is the likelihood of there being further demand for, that next piece of inventory so when you're getting really sophisticated you you may. Choose a film that vehicle that isn't your cheapest because, it's likely to be the only demand in that particular fulfillment set of vehicle and there's likely to be other demand in the other fulfillment channels that's even lower cost for the rest of your goods, so I'm not sure I explain that super clearly, but like at at one level or another you basically are are putting together an analogue Rhythm that that optimizes for that customer experience that potential the cell and that that cost of fulfillment and, you know there are both a number of Enterprise off-the-shelf tools that do that in there a lot of the custom software that a lot of retards have, built over time to do it.
Scot: [34:16] I will kind of dispute one thing so I actually like it when when Amazon since we split orders and they send them to me that when the stress available at I think that's a better customer experience I don't think it's a better. It's cheaper, for the retailer but you kind of implied it's better customer experience get all your stuff together that assumes that all would come together but I think most times you're having to choose you know do your hold up so it's one of the least common denominator problem.
Jason: [34:42] So great potential Nuance like I would certainly agree, that to a certain extent like if if I'm an option to get two things faster than the other things and I and then option is overtly presented to me and I choose to get them as fast as possible I agree with you I'm a shopper that appreciates that and so, best customer experience for each customer is probably defined differently one problem with that experience is it can get very complicated right, and until I always use the Amazon versus Jet analogy and Amazon tends to make all those decisions for you but they tell you what they are and Jet you know is, is it sort of in the middle of giving you the choice of all those decisions and letting you choose for yourself as it split shipping actually both companies kind of let you choose for yourself but, what that the more friction that's in that choice like you actually see conversion go down, but the bigger issue is you and I are the least typically e-commerce Shoppers in the world and so for the overwhelming majority of people that buy stuff online they don't understand any of the nuances of fulfillment they don't understand that there are multiple fulfillment center that have some of these goods and so for most users they simply believe that when they order three things that they're using together in a project, that that those three things are all coming from the same source and so when the the the seller chooses to split ship or even just drop ship from one of the items from a manufacturer and it arrives on a different day what we see is.
[36:17] A huge influx in customer service calls so customer service calls on switch shipments are way higher because customers just think. Something got left off the order they ordered, shoes and running shorts and a running shirt and they're using all three to go for a run and only to arrive you must have forgotten to ship me the 3rd and they don't understand that the third is coming direct from the manufacturer or from a different Warehouse or from the store and so, you know for those customers it's a bad customer experience to split ship but for sure, I'll totally agree with you and there's an elegant way to offer that to the customer make them understand then the best customer experience reach customers whatever they choose.
Scot: [36:57] Yeah and then another thing all Throne of this is I think the omni-channel dirty secret is this ship from store and buy online pickup in-store, usually kind of sucks because I don't think stores know what's in the store like past half the time so so you know. Show me my worst online shopping experiences have been shipped from store and buy online pickup in-store and you know the ship from store stuff goes wrong because they're stock-outs where they thought they had the widget that happens you know. Lot more than a fulfillment center they also have you know they always say well just walking around the store in someone's cart we don't know where it is but I think their inventory is just really really bad at in stores and then the other thing is wrong kind of having.
[37:45] Stuff cuz you got this salesperson there and they're trying to you know. Imagine you're in the shoe department at one of these retailers and you have to know about the shoes and then some on my order comes in and there's got to be part of your day where now you're.
[38:00] Pick Pack ship person so we get a fair I would say the things we actually get that are in stock. You know a pretty material 5 10% there's usually some kind of error like we've been sent someone else's stuff or they did leave something out or you know if that kind of thing so. I know there's this kind of glassy omni-channel all your problems are solved but I found that most people really just don't do this for a while what are there any industry stats that you see her on that or.
Jason: [38:31] Oh yeah so you're for sure right then did most people when they first do it totally suck at it in the one thing I would say is that there is a maturity curve there and when people get over that curve and get good at it, the customer satisfaction with the experiences very high so I would say like the. The benefit of being excellent at both of those experiences at at ship from store or buy online pickup in-store. But the potential upside is is true and very high, it's. It's easy to do it poorly and most people start out doing poorly so first actor. You're you nail that in-store inventory is a huge problem industry-wide and retailers never. Like the primary impetus to have super accurate inventory was. Was really your balance sheet for the most part like people don't even like purchase based on their inventory levels in in many retail stores in the old days. Inside like these experiences are the first ones to really put pressure on inventory accuracy in the store.
[39:37] Inventory accuracy is getting way better there's both both machine learning and newer inventory systems have made it much. Easier for stores to get better at store inventory most of the big retailers now both Target and Walmart have robots running around the store taking pictures of shelves. And they're taking inventory based on this picture so they've actually taking people out of the equation, we're starting to see some new store concept that have intelligent shells so they can actually the shells take their own inventory and no right when there's out of stocks and things like that so the future of inventory accuracy is getting better, but at the end of the day almost every retailer I've ever worked with it started as a ship from store program started out with horrific metrics and so you know usually you have this, this error code item not found and you have this you don't sort of, percentage fulfillment like of all the orders I sent to a store what what percentage got filled and it's, totally common to see 50% of in-store orders be item not found or you know only be able to have a 50% fill rate when you first start shipping from store for, because of the inventory issues in the Employee Staffing and incompetency issues and I'll and the customers having the inventory and their Card issues all those things you can have huge failure rates in there and that creates a hideous customer experience, I've seen 90% item not found or 10% fill rates in some customers when they first want ship from store.
[41:09] But if you many of the same customers I worked with it started out at 50% fill rates are now it like 94 96% fill rates, so over time they're able to put systems in places and process in place and be smarter about when they send the order to the store and trying not to fulfill when they have really thin inventory and only one in stock, and by implementing all those things the fill rate goes way up and you can today absolutely look at a Target and Best Buy and see that they're generating a meaningful economic advantage against Amazon, by being able to ship at a significant portion of their e-commerce but business from the store one zone get it to customers fast and cheap.
Scot: [41:54] I'm learning a lot from this we should get that list of questions for Julia. Guitar chorus is the P silent or talk how do you think about singles day are there some retailers who take part of the vent in the US Amazon focuses more on Cyber week, and doesn't really do anything on single stay why is that.
Jason: [42:20] So great question will be talking more about this I am not bullish on Singles day becoming a global holiday that's. Heavily the big factor here in the US and then there's a variety of reasons for that it already is a holiday in the u.s. is Veterans Day which is, somewhat problematic for turning it into a high-volume shopping day Alibaba just doesn't have a significant presence here at the moment, you know said they were they were years when when, Alibaba was having huge success in China and they're making noise about next year is going to be a much bigger Western holiday and. What that's morphed into in my mind and perhaps we'll have them on the show here in the near future to defend themselves is, they're they're making it a much bigger deal for us Brands largely to sell to, Eastern consume customers that are celebrating singles day so I think it's because singles to become a huge event for a lot of my clients for example, but it's because they're selling to customers in other markets it's not because they're selling in the US, all that being said you know I think it is possible to to create a new holiday here certainly Prime day is it is, a great example in the in the west but you know another interesting one is, Cyber Monday has become a very big holiday in Europe and as most of our listeners are probably aware.
[43:57] They're not celebrating Thanksgiving in Europe so it is possible to create these shopping holidays I just think the dynamic of trying to create a holiday on Veterans Day a couple weeks before a very traditional shopping. you know for non-income and Company is is a rolling a rock up a pretty big hill.
Scot: [44:21] And I will be a little facetious and Amazon does participate in. I'm single stamp but they do it in China so Amazon runs T-Mobile store in China and they saw other devices there and it just shows. China's interesting to me we talked about Amazon all on the show cuz it's the one area where Amazon has not been dominant then you argue with either the number three or four player in China. And it's because Alibaba has really kind of dominated with a. Different local way of doing things that that Amazon I wasn't able to replicate so because of that you have some really weird things that must be kind of painful for Amazon tap to do but example as they do sell Auntie mall now and then, they do accept Ali pay so this is the one. Region where you know Amazon doesn't control the entire payment world so I can the US they don't take Paypal because they have the power to kind of say no we want all that to flow through our system so. Little car fun fact for you if you didn't know that.
Jason: [45:23] I did not know that the only part that's pretty funny.
Scot: [45:28] And then the last question so Melissa Burdick another kind of friend of the show. How is the bankruptcy of Toys R Us going to impact Amazon this holiday is it going to be a bloodbath and pricing with, Toys R Us cutting prices at the stores because the bankruptcy in an Amazon matching and then this kind of Race To The Bottom.
Jason: [45:49] So interesting question unless confident in my answer here but I think there's two, two issues is this holiday. Going to be a bloodbath of discount pricing number like regardless of Toys R Us like are a bunch of retards going to start you know early and aggressive discounts and is that going to drive. Pricing down for the whole holiday. I think it's an open question and frankly I'm very nervous about that like all of the the early forecast for Holiday are for, for pretty significant growth and robust sales and the unspoken truth in a lot of those is most years we have that kind of growth it's because, we sold stuff really cheap and discounted really deeply and potentially because we had too high of an inventory position and then you don't have to Discount more deeply, so I think the fact that there been a bunch of bankruptcies and More Store closures than usual this year and more distressed inventory his, has flooded the market and that that's cause more inventory full price inventory to get abandon on the shelves so I do think we're going to go into this holiday season with retailers in a little bigger inventory position than they'd like. And so I'm just frankly concerned overall, that then it's going to be heavily promotional holiday. What we already seen some early indication that it was going to start their sales super early, so all of those things could just turn it into a bloodbath not because of Toys R Us current current bankruptcy status.
[47:19] Actually think. The Toys R Us in the current status has a disincentive to aggressively promote like the stores have to operate profitably over a holiday, and so I think they're not going to be the first one to drop their drawers on price like I think if they become really aggressive and promotions it's going to be later in the season, as they see how the the holiday is is shaking up but I think the. At this point they're not looking to liquidate inventory or those kinds of things like I think that's, you know if they decide they have to close 300 stores and they hire Gordon Brothers 2 to come in and liquidate inventory like that that potentially create a bloodbath but I don't think that's going to happen until 2018, so I kind of suspect toys is not going to be the the fuse that lights the. The the discounting fuse but I'm not sure that we we aren't going to see a bloodbath nonetheless.
Scot: [48:24] Yeah. I would just add I'm an e-commerce software guy and I've learned a lot about retail over the years that I didn't know and I know Melissa used to work at Amazon so she. Definitely got kind of a similar kind of DNA on the digital side. And does really good Bloomberg article that will link to in the show notes that talks about how all these retailers these traditional retailers have really loaded up on debt, and you know what what happens is they get acquired by private Equity Firm and part of their model is to take the Assets in leverage them pretty highly meaning piling on a fair amount of debt. And what does this done is left. The entire segment pretty exposed to a Destructor like Amazon because in in Toys R Us has a good case study that you brought up, so Toys R Us has something like four or five billion dollars in debt and this debt comes in these tranches so you have all that dead out there and I'll have maturity dates and, Toys R Us couldn't actually deal with about 400 million of that which is what pushed him into bankruptcy so what happens is when you yo so Amazon has no debt and you a lot of retailers argue that she doesn't even care they don't make a profit. Talk about down the show but what what happens if you have a competitor like that. Come in and make a pretty small impact on you so maybe you'd lose five or 10% of sales doesn't feel like that would really. Australia upside down. What's Insidious is Amazon it knows everyone's margin because they have all this data and you may lose 5 or 10% of sales but that's probably your most profitable stuff and maybe lose 15 or 20% of a profit.
[50:02] Are Eva. And that's what this debt is all priced against is.
[50:07] 1015 years ago when this debt was piled on everyone assumed that your profit margin would be the same.
[50:14] And then you have a new competitor, long. And they're able to Chisel a enough profit that it really tips you over so this article doesn't really good job of kind of, because really in-depth and looks at at that which is pretty interesting and has a whole map that shows kind of the hot areas and the whole point of the article. Apocalypse is just getting started to date when will you get from a debt perspective it looks like we're just at the beginning of a bloodbath the thing I've learned in this was too I guess we had on the show is. These at the mall level Aldi's anchor tenants effectively don't pay much in rent and there are because the word anchor they're there to draw other people in, what happens if so let's say you're a small mob a store and one of the anchors goes out of business usually is written in the lease that. Because you were drawn there by an anchor if an anchor leaves you. You are now free from your lease so these balls are unwinding at a pretty incredible pace and. There is a I don't follow it that closely but there's a lot of rumors that some of them are going to be sold and the mall for large Mall reach because they are in such a stress situation so. So so this kind of gets Amplified didn't did these things are not mutually exclusive so now you have stores at malls that are anchors and have huge debt and if it's caused this kind of death spiral that's happening there. At the mall level is kind of what I called Mulligan so interesting things that I wouldn't have learned about until the podcasting and try to understand what is going on out there.
Jason: [51:47] That's why everyone should start a podcast.
Scot: [51:49] Absolutely or listeners last question so this is from James lecourt how do you see augmented reality playing a role in e-commerce and when do you think it will be mainstream and accessible to the smaller retailers.
Jason: [52:04] Another interesting question James we've done aviare are deep dive and I think Scott and I are sort of an alignment like VR is, truly interesting for some other reasons but I actually don't think it's it in the near-term very relevant to e-commerce I think augmented reality is potentially. Way more relevant but it's I think most of the use cases in Commerce are actually digital in-store use cases.
[52:33] So warning more about getting more of the digital content to learn about products when you're in a physical store augmented reality in e-commerce the big use cases you think about are things like. How will that art look in my house will that furniture fit in my house what. You know what would this clothes look like on a a virtual representation of me or me and this me or these kinds of things. And what's interesting the. Rudimentary version of that technology is all out there oh I should mention the like virtual makeup stuff when beauty stuff which is has become quite good. So that the technology is all out there it's involving very quickly and so both Google and apple have really robust. New AR kits building in the latest version of their operating systems. And you look at the kind of experiences you can have on those those devices these latest devices that are using these they are kids. And you go man that's really compelling so if you have an iPhone 8 or an iPhone 10 I'd highly recommend you download this app called House craft. And how scrap uses AR to place Furniture in your house and it's it's amazing it's much better than some of the rudimentary stuff you've seen from. Some of the retailers Warby Parker has already leverage the AR kit in their app.
[54:07] For virtual try-on of sunglasses and so you think about the face recognition technology that's in the iPhone 10 and the hundreds of measurements it's taking your face. Warby Parker take out of the AR kid all of those measurements put them into a deep Learning System, in recommend sunglass frames to you that are best suited to your face, and it creates an amazing AR experience and so you look at those things and you go man that is the future that that really is going to become mainstream, but then there's a big Debbie Downer in terms of how fast it's all going to happen, does AR kids only work on a small percentage of the hardware that real people own right so it it only runs on the the latest and greatest Hardware, so we have to wait for a couple upgrade Cycles to everyone, I want to get up to that that hardware and then at the moment those best experiences are really only deliverable through apps, and we've talked about this a lot on the show as well but for most retailers in for sure for small shops, it's next to impossible to get a a meaningful volume of customers to download and use your Mobile app and so what we really need is this robust AR capability to to be available in the web browser, not in the app and it is coming it's just still probably a couple years away so I think right now we're at the point where.
[55:40] On the Best Hardware in an app customers are seeing experiences that really can drive conversion and sell more stuff and I think we're going to see more examples like the Warby Parker app that are going to be very very persuasive but it's probably another 3 years before, the majority of consumers have that capability in a web browser and that's when it becomes really meaningful for those medium and small size shops.
Scot: [56:03] Yeah and I would add another challenge for a small size shop is the 3D models so, to put your products into this 3D World you have to have models of them and this is not a trivial skill set for folks to have and there's not a great solution for just kind of imagine you ran I don't know, sports store and you wanted to put everything into a virtual world there's no really good off-the-shelf solution for kind of scanning that stuff that, a mere mortal can handle and build the models so that's another one is like how do you partner with this assume your retailer multi-brand retailer you're going to partner with your Brands and they're going to have to have a level of sophistication where you call and say hey I really need 3D models for all your stuff they're going to have to know what you're talking about how many brand struggle just to get you the. Current tenant to the digital assets so that that's going to be an interesting challenge to see who solves that because you could end up in this scenario, because worst laws applying all these other things that pretty quickly we get the hardware as Jason mentioned all that stuff solved and it's pretty easy for you to have a platform but you just don't have the assets.
Jason: [57:11] Yep and although I would point out just got you take that the that iPhone 10 sensor array in the Notch and you put it on the turntable and you suddenly have a pretty darn good cheap 3D scanner in so, you know, you you could imagine that the ability to to 3D scan and very high-quality at very well cost is something that Moore's Law is also going to deliver to us over the next two or three years.
Scot: [57:38] Cooper we really appreciate it when asking the questions there and we have about 5 or 10 minutes to catch up on news and it wouldn't be a Jason Scott show without Amazon news.
[58:03] Jason you had let's kick it off of you you walked into your Whole Foods was that today or yesterday and you had an interesting situation tell us about it.
Jason: [58:15] Yeah that was today so there's a nice, two-story Whole Foods in my neighborhood downstairs is a very fancy coffee shop upstairs at the store and when I walked in the store today a big chunk of the coffee shop has been taken up by these. Temporary walls with all this Amazon signage and it looked like they were implying some kind of shopping experience was coming and that I got a chance to talk to some of the, the employees that we're doing it and it turns out they are this is a permanent installation. It's going into a bunch of Amazon stores in Chicago and it it basically is a Amazon device store, it's going into Whole Foods so another you know men's staffed place where you can go and get a echo demo or a Kindle demo or a fire. Demo and it sounds like they're going to have inventory for sale in the store and in ready to go.
Scot: [59:14] Cool Sorry Amazon bookstore has that like little apple like section so you're kind of fishing it'll be like that couple tables.
Jason: [59:21] Yeah and in fact I got to see the pictures and they look like they're straight out of the Amazon store.
Scot: [59:26] And then there's also a nursing news where I forget who broke this but, Amazon is doing the nursing thing so if your third-party seller and Amazon to text that your price is a competitive what they'll do is they'll actually discount it and it says, sold by the third party seller but then discount provided by Amazon so, you know Amazon is pretty well known in history that they monitor prices across the internet in near real-time so I think what's happening there is they probably realize they were expensive in a couple areas especially that, part of the curve where they rely on third parties to sell things someone exclusively and they decided they. Wanted to not be disadvantaged there so they're actually funding that and it's a nursing so you had on average are going to pay as a third-party seller you pay Amazon 10% but then they kind of are selectively say you're effectively In-N-Out. The ones I've seen have been under 10% but they couldn't hear you actually go beyond that and say that we want to be competitive enough here that will fund even pass what the third-party is selling to us.
[1:00:37] Actually figure out how to do a Google Search and Google Nexus Amazon. Pretty much real time and I found about 3000 items that that had this set so this is out of Amazon's like four or five hundred million this is not a huge thing at this point but the thing I thought you would find interesting is. Everyone I can I did look at all three thousand but I page through pretty quick they were all in the beauty category.
Jason: [1:01:01] Yeah it it was super interesting and clever so obviously is as most of the regulars that showed no Amazon has a pretty sophisticated pricing I'll grab them on their 1p product, and you know when they sense a competitive situation they're they're very likely to be a fast follower, and they they see a lot of advantage in overall customer lifetime value even if they have to sell something at very narrow margins or even negative margins in the short term and you know the liability traditionally of the marketplaces you, Amazon doesn't have control over the pricing of that 3p product and so then you think about hey what are some categories that Amazon doesn't compete in in 1 p, but would really like to control prices in the 3p and you know there's certain kinds of products that that are tougher Amazon, and one of them would be like private label Cosmetics that have no interest in selling on Amazon but they want a third parties and gray marketers will by and and list on the Amazon market so that could actually be like, Ulta products. That should be exclusive to Ulta that's on the Amazon Channel and this tool gives them an opportunity to gives Amazon an opportunity to get really price competitive on that and, you know and in many cases that grey market product. Like the sellers are relying on selling because of convenience and so they often aren't super price competitive so this is a way for for Amazon to offer a competitive price in those categories were.
[1:02:32] It wants to compete in the long run so that that's pretty clever but was interesting is there's a bunch of.
[1:02:39] Not obvious unintended consequences of this program and it it's going to be funny to watch them all play out so there's all these things you wouldn't think of that initially but I'm sure Amazon stock through. When is something like returns so you know the seller offered offered a cosmetic 450 bucks Amazon discounted at 2:40 bucks. The consumer only paid 40 when you return it. You know Amazon has to refund part of your money and that seller has to refund its at all that stuff has to work out. But another big one is some of those sellers. Either have the other authorized sellers of a product they very likely have you know are complying with some some pricing requirements from. From their supplier so they they might have agreed to offer prices. Only at map price minimum advertised price in Amazon potentially could be discounting below that minimum advertised price so even though the seller is complying with their their pricing agreements. They're involuntarily out of compliance with that agreement because of this Amazon discount and I think another scenario is. Sellers that a promise to offer the same price to multiple marketplaces and then Amazon discounts at so effectively they're no longer complying with that agreement and so. You know those are all going to be some some that potentially sticky situations it's going to be interesting to see if any manufacturers come go after their sellers.
[1:04:16] As a result of Amazon's price Judo.
Scot: [1:04:21] Yeah yes, interesting to see how this plays out their solutions to these things so if you know you can imagine that if you don't want Amazon to do this there could be a knocked-out kind of thing and they've done that with a bunch of other programs, all the things are solvable but it is pretty interesting to see Amazon do this and you're there must have been some pressure in the beauty category that cause them to think about doing this.
Jason: [1:04:45] What other things maybe is an opportunity for someone out there like maybe Channel advisor should do it but if you were a seller that used to be selling that good at, 50 bucks and you were competing against guys that were selling it at 60 and you suddenly see that Amazon is dropping their price 245, there there's a strategy of optimizing, your price in order to entice Amazon to discount it as opposed to trying to compete for the buy box yourself.
Scot: [1:05:15] Yeah I don't even know if you as a third-party seller know when this is going on I don't think you get notified other than by seeing it on the site.
Jason: [1:05:22] I think you have to have a side scraper that would do that for you so I'd it's a complicated sonar.
Scot: [1:05:27] Yeah and Amazon to really good at shutting this down or so I've been told the so. In one of the biggest things in the news this week that was really interesting was Amazon private label and on episode 103 we did a deep dive in Amazon private label and what's exciting this week is the Deep dive. 1 things that inspired us to do it was there was some rumors that they were going to be competing with Nike and UnderArmour in the kind of athleisure and apparel. Sports apparel segment. True Amazon fashion some of those actually watch this week so it's kind of funny I think these things hit the Press like either Amazon just incredibly fast or are they only get wind of it right as it's at the end of its cycle. So so this week there's these things get discovered too so you can actually go watch when Amazon files the. The trademarks for one of these in the news somewhere lawyers and a lot of investigative reporters that dig into this so the two Brands and will put links to these in the show notes can we do that. Jason are these two wacky to put insurance.
Jason: [1:06:37] No I can't I put them in the show notes.
Scot: [1:06:39] So so the first one is so there's three in the Sporting Goods category Rebel Canyon.
[1:06:46] Two words Peak velocity two words and good sport one word and I mentioned it in the show. How do you how do you know and when you consider these to be officially a private label and when it has its own kind of logo and a fair number skews I do it all these meet that criteria, ceramic Canyon is a mix of prime exclusive and it has some nine Prime exclusive, divide 131 items and it's mostly men so it's men's sweatpants shorts and sweatshirts and these are on the inexpensive side so these are kind of like, $30 kind of competing with that champion level of sportswear and then Amazon describes it as a way of life in a stallion, we're on the regular.
Jason: [1:07:31] Or Scott and I call them work clothes.
Scot: [1:07:33] I called Misses catch.
[1:07:38] So it has a little bit of women's to velocity is. You can touch more experiment is prime exclusive there's only 7 skews and then this is kind of higher in sweat. Scot stuff so there's like an $80 hooded fleece jacket so I have some more fleece in higher in kind of quality. And then it also has moisture wicking in breathability who does that sound like.
Jason: [1:08:04] Yeah that those keys are exactly in Under Armour wheelhouse.
Scot: [1:08:09] I've seen people kind of actually find the corresponding Under Armour and Nike shoes and the similarity is Eerie another one is called good sport and this is the one that's all together one word goodsports does have humpback. Capitalization these are prime exclusive there's 32 screws out there as of this recording this is quote-unquote men's and women's moisture wicking your athletic wear so very interesting and. You know some of these folks on Wall Street a pretty interesting they actually can kind of figure out the supply chain and what. I read an article that said that these are coming from Taiwan and they're using a manufacturer called make a lot industrial and. Eclat textile and these are two of the largest producers for Nike and UnderArmour so. Yeah this kind of Outsourcing things to China in a way as is kind of.
[1:09:05] Backfiring a lot of Brands because the same factories are working directly with the Amazon cutting out. The middleman which in this example are the brands themselves in selling these things with an Amazon brand on them. Two quick other ones so another thing that was interesting is and I didn't know about this when I saw Wayfarer stock go down like 5% one day and I was kind of like that why. What's going on there and what happened is people found that Amazon also has launched to Furniture private label brands of the first ones called rivet and this one is. Pretty robust so has over 800 skews and it's called stylish and versatile mid-century modern furniture and decor this is very much out of my wheelhouse so I don't, I don't know I'm not an extra on this at wear sweatpants is very much in my wheelhouse these are the kind of talk about being exclusive on Amazon free 30-day returns in a one year warranty so that's pretty interesting just called rivet. It has an interesting little logo Amazon usually just use the word and kind of an interesting way it's called Stone and beam this is furniture for comfort and durability let's see the. When will she analyst talk about you know the the compared sofas rivethead kind of $700 sofa and Stony being was more like $1,000 so far is kind of way to compare those installing a beam has A3 year warranty wears rabbit has one so. Interesting as I was poking around on these things I was I was actually trying to replicate that finding the same. S'mores kind of skew with Nike and UnderArmour so I was searching a fair amount for Nike you know how I Amazon they have the whole.
[1:10:45] Frequently searched people that search for this brand frequently search for these so I was searching for Nike and they said people that search for Nike Free going to look for pink philosophy Rebel Canyon and good sport has come like a man that's kind of scary.
Jason: [1:10:58] And especially since it's impossible that people are frequently.
Scot: [1:11:01] Yeah I have a feeling they're not. And then last little piece on this I guess two little things so Amazon puts out a little bit of a holiday gift guide and, very high especially at the Fashion section of that gift guide are all the private label Brands so you flip through there and there's a lark and Ro which is the women's fashion lovely tote which is their handbag to fix witches shoes and accessories in an Amazon essentials on the basics are really highlighted in there, and in the Fashion World this is got Brands pretty much all twisted up I I don't. All the second hand from some articles but it seems like it's really got people agitated. The last one in the private label stack is cpg you and I have covered this Amazon put a diaper out there and then they yanked it off the market, quickly they weren't happy with the quality and got some bad reviews there now put the relaunch diapers and, the article I read actually went and said it kind of names the old manufacturer I don't remember and then the new one is like Kimberly-Clark which is evidently a manufacturer a lot of these these diapers so, inner ear shows Amazon is really focusing on this private label area and they're willing to be patient and grind it out and find the right products and keep just kind of chewing with this. Seems to be pretty strategic form.
Jason: [1:12:25] Exactly and baby geek is wearing MamaBear diapers right now so we'll be looking for the the full review of that in a week or two.
Scot: [1:12:32] You're fast on that man.
Jason: [1:12:36] I think you can't just order them yet I think you have to it's a prime exclusive and you have to request it and my wife was nice enough to do that for a test market so we have a box of them here now.
Scot: [1:12:48] Cool.
Jason: [1:12:50] Well Scott it has happened again we've used up slightly more than are a lot of time but great conversations I particularly like all the questions from listeners and we'd love to keep a dialogue going on her Facebook page so if you have any, thoughts are follow-up questions about today show or questions you'd like answered on the future show we'd love to, meet you on Facebook and and let us know what you're thinking of course if you enjoyed Today Show we greatly appreciate you taking that couple minutes to jump over to iTunes and give us that 5-star review if you didn't enjoy Today Show you're welcome to call Scott and give him your opinion in person.
Scot: [1:13:29] Thanks everyone we really appreciate this questions and I look forward to keeping the conversation going.
Jason: [1:13:35] And until next time happy commercing.