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