EP153 - Pre-Thanksgiving Industry News and Listener Questions
Thanksgiving road trips with Jason & Scot have become a tradition in the digital shopper marketing industry. Here is an hour of new and listener questions, to get you ready for the Turkey-5 holiday!
Spiffy announces connected car initiative. The first connected car feature grants limited access to vehicles through OEM (Original Equipment Manufacturer) connected car capabilities. Eliminating the step of handing off keys prior to a service makes Spiffy's on-demand services even easier for customers.
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Episode 153 of the Jason & Scot show was recorded on Sunday, November 18, 2018.
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.
Jason: [0:25] Welcome to the Jason and Scott show this is episode 153 being recorded on Sunday November 18th 2018 I'm your host Jason retailgeek, and as usual I'm here with your co-host. Wingo. Scot: [0:41] Hey Jason and welcome back Jason Scott show listeners. Tonight we are sitting here on the cusp of Thanksgiving which is the official kickoff of holiday 18 we got some great guests on as we get into the thick of that but we thought we'd take this kind of opportunity here before at everything hits to go over some industry news and we I had some listeners that were really dying to ask some questions so we have some listener questions and we have hopefully if our sound engineer is doing his job we should have this out before you do your travel for Thanksgiving so hopefully this gives you something to you get the folks in the car asleep so that you can pick about some e-commerce and get really super hungry as you ride to that, great turkey dinner that you're going to enjoy. Jason: [1:34] That's a lot of pressure you just put on the audio engineer thanks a lot. Scot: [1:38] Well we have a we have a big team and I'm confident they can they can get it done. Before we dig into news and Lester questions Jason you were at something to deal with a bonfire so tell me about this big block party with you. Jason: [1:55] Sorry I did not get to light anything on fire. Loyal listeners will have heard of last week show where we talked a little bit about some joint research that my employer poop assisted with salesforce.com and so we did this. Speak study called The Shopper first study and you can listen to episode 152 if you want to learn more about the study but one of the things we we've done is leverage pieces of that study in various social events around the country so one of these we called the retail retail bonfire was in Manhattan a couple weeks ago we had three or four hundred clients in. To the Dream Hotel put on a cool event and shared some of the research but I also got to, talk a little bit about one of my favorite topics which is personalization and I I got to share this story that I enjoy sharing that I call hashtag United you don't know me and it's essentially this. This tragic story about how I'm United's best customer and I'm in their Secret customer Infinity program and I travel millions of miles with him and I. Do all my spending with a very expensive United credit card and so imprimis they should know everything about me and they should have tons of data. Dramatically reduce friction and make my my experiences with them easy and. [3:23] There's just numerous touchpoint I have with them every day where they missed that opportunity and so. I used that story to sort of underscore the point that at the moment in the industry were talking off a lot about personalization but in reality, nobody's doing a very good job yet and we we have all that the data and insight to treat customers much better than we in fact actually are and so that's kind of. The kind of said my my talk which seems like it was well-received I got some good feedback at the retail bonfire. Scot: [3:57] Yeah there was a video posted in I couldn't hear what you were saying because it was from the audience there and but there was a lot of laughter I thought you were doing your quit this whole e-commerce retail gig and doing stand-up. Jason: [4:09] So you may have busted me I'm a little Overexposed I flew straight from the retail bonfire to the Home Improvement Aerie tail summer in Chicago which was that show for the Home Improvement industry at talking about digital disruption and so I think the video you're referring to is actually a little bit of my my sort of omni-channel presentation at the retail bonfire and I always. Put some jokes in there and occasionally one of them lands. Scot: [4:38] I don't know you're saying but those people were very rolling in the aisles. Jason: [4:43] I got super lucky that they accidentally recorded the one one segment where where they thought it was funny and they didn't record what I said so you will never know that they just don't have a very good sense of humor. Scot: [4:56] I was guessing that maybe you would like you're like the 9 p.m. and then going to dinner and had like 45 drinks or something. Jason: [5:04] Yeah well that for folks that are interest in having me speak to your event you should know I do have a two drink minimum so I only accept it and swear people are likely in that state already. But yeah so I've been traveling a lot since grocery shop doing a bunch of fun events and I've been trying to keep up on stuff, I feel like everytime I open my newsfeed all I see is a big giant picture of Scot Wingo, doing something with speed and I think there was some pretty cool news this week if I'm not mistaken. Scot: [5:35] Yeah it's kind of you know you would think that my car washing world would not intersect with our digital world that much but the increasingly dense and so one of the things we've been working on it's 50 for a long time is a fair number of Manufacturers have connected car initiatives big Tesla do so I've been in Connected car world since 2013 and what would connect the car is essentially is your vehicle has a 3G or 4G or an LTE connection, that essentially connects your car to the cloud and then usually the manufacturer will give you a nap and I'll let you do a lot of cool stuff so for example with the Tesla app you can lock and unlock the car to put it in the valet mode you can now actually. [6:23] It has a mode where will we will come to you that's pretty cool kind of Tony Stark mode and then so various other manufacturers have other features in addition to the app haven't connected car it in the vehicle you will have Wi-Fi and then you can have just like over the air updates you can have better Maps so there's a lot of really great reasons to do this from a consumer Behavior perspective so 2015 people started in it and it was kind of spotty because a lot of them would charge you extra a lot of consumers didn't sign up for it within the last 2 or 3 years OEM zarchive including it in the the first three to five years of the vehicle ownership so we're that ties in with our world is 50 is for doing Car Care car wash and oil changes those kinds of things and we're having watched Amazon for 20 years yeah I think they think they get right as a musician is being really obsessed with with customers so we. [7:24] I'm thinking how can we make that customer experience better and one of the painful things, drives us crazy is we have to get our customers keys and that can be kind of an arduous process so this allows us for those customers that you have connected cars they can give us permission and then the day of service we can come in and our technician can walk in the black car and get the keys to our service without having them involved. Inet School transparency in mission control of that so that was really well received a lot of good press and thanks for bringing up it's it's it's fun to see how these things overlap. Jason: [8:00] Yeah it's that's kind of cool. It reminds me a lot of sort of it's the carwash equivalent of the Holy Grail of Amazon or Walmart delivering the groceries right through my refrigerator. Scot: [8:12] Yeah Amazon does have a program So within the Amazon key there's two flavors to key there's that home one where they can you can grab them permission with a Wi-Fi lock that come in or out and then you have a camera to watch Lily person I've been else have a car delivery system within tea and they're using a lot of the same technology that we are in the connected car to do that. Jason: [8:33] I will say I know you. Joke about there being a lot of overlap but it's kind of annoying for me because I feel like I'll go to visit a car client and you don't be talking that e-commerce and. You know if you start to feel like you've moved on from e-commerce the car and then they're still out yet we're sick of Jason can we meet Scott. Scot: [8:54] Funny Cooks so it would not be the Jason Scott show without a little bit of. Jason: [9:07] Your margin. Scot: [9:16] Cool well the big amazon news that that has happened since our last news podcast is they they did make the final hq2 decision. Good news is it lined up the rumors reported on so this is kind of like old news in a way but I guess we should say. [9:33] So what Amazon did I is they did kind of did the proverbial the Old Testament splitting of the baby and instead of announcing they decided to split it into two so, New York's and Virginian were the winners so specifically New York City somewhere around Queens called Long Island City which is maybe you can explain this list I don't understand this particular thing. It in Crystal City and they're actually, asking people to kind of create a new names there's a whole new name there that they're going to kind of call where they're going to be, something like National Landing so that's interesting and so there was a lot of controversy after Nelson super small lot of people were upset they split it. I and our cock will this isn't really another headquarters is just two things. You know dr. Holloway was right he had predicted this and so he was indicated in his whole thing about you know it's convener to abduct businesses houses and their political influence. The light people of observed that now Amazon has data from sunlight 240 cities and Metro areas about. [10:50] All this data they had them put together for Amazon is now sitting somewhere in a database I hopes Amazon in the variety of different ways young next time they build a building center or a Dana Center they can kind of go and say well you know for hq2 you said this, certainly give us portion of whatever you promise, and then the other big one is now that it's public the subsidies have been released and it turns out we add up New York in Virginia it's over 2 billion dollars and subsidies, so this creates a lot of consternation from citizens who were like wow why are we paying so much and then company exist, okay we've been here forever when are we going to get our tax credits and it's just really kind of, yeah I probably read 5 articles a date so kind of from the aftershocks this that's been and, you're so that's good be interesting to watch and see where they they plant more flights would you think about it all Jason. Jason: [11:59] I'm a little over at my wife asked me today and I she pointed out that I kind of snapped at her in the answer. Cuz I'm a little tired of talking about it out of course I want to share my myhumboldt pod with our listeners. [12:20] So they're opening a new headquarters in a suburb New York and they're going to 25,000 employees Google already has close to 25,000 employees in New York and there was no year long. Contest or you know this constant drumbeat of news Amazon set. Nothing's up by calling at hq2 and having this kind of formal contest and all of us to follow the industry and in the media. [12:51] I feel like sort of overreacted and bought into it too much because it's in some ways it's it's not a heck of a lot different than. Then the way every other company behaves I mean all all companies you know try to extort these business development funds from cities when they moved new infrastructure there I mean. Towing threatened to move their headquarters from Seattle to Chicago McDonald's and moving their headquarters like they're all these things that happen all the time. And it's it's kind of annoying that the Amazon one stayed in the new cycle for a year and then had this anti-climatic ending right so. They split it up between two City so it clearly isn't that co-equal headquarters like I'm sure the center of gravity for Amazon is going to stay squarely in Seattle so people that like that or going to be happy people that don't like Amazon's presents in Seattle and probably. Going to be disappointed they're going to hire a bunch of people in New York and compete with with Google and the agencies protect tires in New York but that's not. [13:53] I think a game changer you know it's. I feel like it's a little overhyped I will tell you that Steve Carell was the host of Saturday Night Live this week and he played Jeff Bezos. In the opening and he had a bunch of funny lines but one of them he's like we are excited to announce hq2 last week and everyone was really excited with our result. What are the people in one of the cities that we selected as hq2 or any of the people that live in anywhere that is not hq2. Scot: [14:25] Spring Arbor. Jason: [14:30] Pretty funny and summed it up pretty well side note. Anytime a city cut these Economic Development projects with employers one controversial thing is right. How much input you gave the citizenry in this and what you know sort of checking balance process were followed and obviously. Particularly in New York Amazon negotiated for these things and the governing politicians a largely. Agreed to them without any public discourse and so now that they're revealed there's there's a lot of folks on City councils and Andreas capacities that are sort of. Outraged and obviously the Optics to Amazon probably look pretty bad because they're. There you know compared to many companies there they're doing very economically well now these these. Subsidies that they're getting our are publicly revealed there was no there was no sort of public comment. [15:33] And it looks a little shady that they promise this whole hq2 thing and then they they split the baby and you know we all assume that the subsidies they got are not half of what was offered because they split the headquarters in half they probably. Got most or all of the the offered subsidies even for the the half the jobs that they promised and as you kind of pointed out. Every single time they open up a filming center from now on they're probably going to remind that municipality what kind of. Program was off and you know the try to get as much as they can and I think they even announced a big new facility in Nashville the same time they announce these two headquarters. I'm not I don't think they're behaving that much different than any other employer but I feel like. Some of the overhyped pr maybe sort of backfiring on them at the moment because there is a big backlash. And it almost even feels like Amazon recognized it again overboard cuz I feel like they they'll eat the announcement on Election Day in that like I assume that was to try to. Can I sneak it in and a busy new Psycho. [16:40] So another interesting one that I was following this week is there's been kind of a fun arms race on what retailers would do for their free shipping program for holiday. So Target. [16:57] Several weeks ago and asked that they would drop all minimum thresholds on their free shipping so you know if you want to shop from Black Friday to Christmas it Target no matter what you buy what volume you get free 2-day shipping. Walmart normally has free 2-day shipping with a $35 threshold so we are all curious to see if Walmart would respond to targets. Offer in Walmart did not respond they announced that they were going to keep their $35 threshold and so at the time I thought that was kind of interesting Walmart didn't feel like they had to chase. Target in this particularly expensive to offer promotion over holidays I thought that was kind of fascinating and that in a way I, I sort of admired Walmart's position there and then the totally unexpected thing happened Amazon came in and said, oh and by the way we're offering free shipping with no threshold whether you're a Prime member or not for the holidays Inn in effect matching targets offer and undercutting Walmart and well haven't been in Walmart was comfortable, not matching Target I suspect they they did not anticipate that that, Amazon would have a significantly more generous shipping offer than they did. Scot: [18:14] Yeah I had some people tweet at me in there like what why I would even pay for Prime and you know I think what those folks are missing is this is the Super Saver quickly a program that used to be you had a minimum car that you have to get to get Super Saver but it's still the Super Saver service-level just Hard series things to say but essentially you know that's kind of the slow boat and it's a 4 5 6 day kind of a shipping window not a not a two-day so Prime Sole is the thing that makes sense in my mind to pay for it because now you're getting free 2-day shipping for pain description so that's the difference in yiay Prime and Super Saver can still co-exist even when Super Saver is free. [18:58] One thing I noticed it was interesting is there's been a lot of kind of friction between Apple and Amazon over the years and then also Facebook their Style lot of drama going on with with all these companies fit specifically between Apple and Amazon you know there's been no love lost there they had, what example is Prime video for the longest time wasn't available on Apple TV devices you know I don't think apple is ever available on Amazon Fire devices and then I'll dig up that resolved and then one of the ones that got resolved that was kind of nursing is is Apple app that apple is going to really increase its listings on Amazon with kind of bring that the main product lines up there with iPhones iPads and that kind of stuff so it was actually Apple selling on Amazon, I thought the timing was interesting it feels like if your Apple you want to do that for the holiday, the water of Wall Street on Judith at the new iPhones aren't selling it, the pace ever thought they should be and suppliers are swimming in inventory so that was interesting you know what is the quid pro quo if I'm if I'm. [20:15] Amazon and I say alright I'll let you somewhere your stuff here you know obviously you're getting it cuz of that, but then you got it feels like there's something else going there and one of the big friction points as a Kindle reader so I use my Kindle app on my iPad is can't really buy from the Kindle app you have to go to the Amazon website you can buy to the Amazon apps Can't Buy Kindle content website order it and then download it and what they're doing is it getting around the 20 to 30% take right at the store level not selling right from the iTunes Store. So I would love to see you know that is a big friction point that with the Amazon ecosystem I'd love to see kind of hopefully as he's guys get along better let's see that go away. Jason: [21:07] I totally agree you know I assume one of the things that that Apple's getting in the short run is that by being on on the. The popcorn formula that they're going to get more brand protection help in more policing with all the the counterfeit product and because am is Apple so popular. You know there's a lot of speculation that there's a ton of counterfeit fit product and I'm I'm thinking mainly like Chargers and cables and things like that that that. Probably part of the quid pro quo of Apple being on their formally is that they'll get more help with their brand protection and so in some ways it felt not too dissimilar from the like the deal Nike cut earlier for example. [21:52] But I will throw one thing out, I share your frustration I can browse for books on the Kindle app but I can't buy them I have to go to the website and prove your point it's because when you buy something through an app you pay a commission to the app store owner right and so. Amazon doesn't want to pay Google and iTunes the big Commission on those. So they make you go to the web there is now a traffic solution for this Amazon should release a Kindle Progressive web app. An answer that that essentially like would be. Functionality that you don't get from the the App Store and therefore don't have to pay a commission and so they could basically have all the same offline capabilities that they have in their app that can let you put an icon on there on on the. The homescreen let you read books offline and all those sorts of things and they could sell you books which without having to pay on iTunes or Google Play. Commissioned so regardless of whether this deal makes apple and Amazon more friendly in that way if you like Amazon needs to get off the dime and embraced pwa. Scot: [23:04] So then how do you it's so I'm going to do it for dummies question if they're not in the app store which everyone's been trained as a way to get this stuff how do you do discovery. Jason: [23:15] So that still is the that is the problem with pwa today. [23:21] Never trying to con in Discovery they're not discovered in the App Store but they are much more discoverable in Google then amps are in so. I if I were a Amazon I would certainly still have. My app in the app store for Discovery but I would give them an alternative which is this pwa version so instead of throwing someone to the Amazon website to buy. The book and then having them come back to the app to read it I would throw them to the pwa version of my sight to both by the book and read them going forward and it will see if the App Store. Track down on this pain at the moment there's no restriction against having an app in the app store if you get that app away for free by the way you pay nothing to the App Store have utility in that app. In that app you can totally promote your pwa and even had a direct link for someone to download the PJ pwa version, as having greater capability than the App Store version so. You can kind of use the app store version of the Trojan Horse for your pwa version but at the very least the pwa version would be a good would be a better alternative than. Send him to the website to buy and then having them come back to the Kindle app. [24:46] So we'll see how that all plays out. Scot: [24:48] Search Jeff listens I'm sure he's taking care of since Jeff call Jason if you want details. Jason: [24:53] Or I'll just send an email you can add a? In forward it off to someone to ruin their life on Thanksgiving. We you did not record a show directly adjacent to it but. Of course singles Day November 11th was happened since the last time we did a new show and it's kind of a big milestone it's the 10th anniversary of double eleven day. Did you were you up late buying some stuff from Hong Kong. Scot: [25:29] Wasn't you know I think it's been interesting over the 10-year Ark where you know I feel like the last first nine years there was all this hey this is going to spill into the US and then feels like this year there's finally capitulation and I didn't even get a single email I think from us retailer promoting it like last year I got a couple of your before I got a lot and you before you a lot so it feels like, we kind of given up on the spilling over in the US and then Prime day is kind of become are on the singles day. And now everyone is anchoring on that and offering their own kind of deals around that time for 11:11. Yep. Jason: [26:10] The number of years where singles they grew dramatically and Jack ma would threaten next year. We're coming to the west and mostly what that meant and this has definitely been true. Every year alibaba's done a great job of recruiting more Western Brands to participate in singles day, in Asia and definitely singles day has expanded Beyond China so Alibaba now you don't has a presence in other cities are other countries rather, they have is it was Zada. In Singapore did they extended it too so it's it's definitely become a bigger Regional event and there's a ton of Western Brands I have a ton of clients that are excited about it as an opportunity to sell to. The indigenous populations in those countries but I would agree with you right there was always some type that there might be some play for for us consumers and it most there's like a kind of soft play for. Scot: [27:14] Like a kind of soft play for. Jason: [27:17] But I definitely know I haven't seen any any traction with with Western Choppers. Just what happened they sold 30 billion the equivalent of 30 billion dollars in US 30.8 billion so huge day. Compare do I cut prime day that might be 4 billion or a Black Friday or Cyber Monday they could maybe hit 6030000000 the normous number, that's up from Mike 25.3 billion last year so, in a superficial you look at that and go man this this thing continuing a crank it does seem like the rate of growth is starting to slow down so that represented a 27% growth over last year to put things in perspective last year was a 39% growth over the year before that and I'm pretty sure every year other than those two has been over 50%. [28:14] Feels like the growth rate is decelerating a little bit and. In some ways even though was the 10th anniversary it felt a little bit Mewtwo number one Jack ma who played at the super prominent role in the first nine was was there but had like a much less significant role as he sort of stepping back from the company a little bit. I think Alibaba issued some guidance either right before or right after, singles day that they sort of downgraded their the revenue guidance for the year and there's a lot of talk about how the Chinese economy is slowing down a little bit so. You know it's it's one of those things like objectively. It did really well but against expectations it was a little bit of the year if you will. Scot: [29:06] Yeah absolutely and dumb Alibaba stock is spelled it so even after you know what kind of a crazy number like 31 billion essentially if you around up a tad which is crazy to do in a 24-hour period the stock is trading kind of New Year Of Glow and it's that pressure up lowering the forecast China economy slowing down the tariffs you know everyone is thinking. Is, assuming the worst with this tariff environment that were in so yeah it's going to be a little bit of a rough time there yeah I did see another article that to your point about brands that they had the most semi 200 Western Brands sold pretty considerable amounts on there and it it's funny it's kind of like you know everyone goes to China and tries to set up a.com to give up and they essentially saw Auntie mall to you're looking at, even Amazon who runs their own Chinese store they sell a lot of candles and devices over there which be like let's see if you like Amazon selling on eBay which you would never have so it is interesting to see it even though they're slowing down there quite dominant and huge portion of e-commerce goes to Ali. Jason: [30:24] For sure what one of the thing that seems what is containing attractions every year they make significant progress in trying to turn this into a omni-channel event so Alibaba owns a bunch of stores they only like a hundred of these fancy digital-first grocery stores they don't like 500 convenience stores. Increasingly there their soliciting other retailers that they don't, direct Lyon to participate in double eleven day in so what that usually means is some kind of digital enablement so maybe they have a digital sign in the front of the store with the deals and you can. Activate the deals in the store you might take the goods with you or had the good ship from home but you don't really trying to expand from being a pure e-commerce holiday to being an omni-channel holiday. [31:15] E-commerce is bigger in in China than is in u.s. it still is true that it's like e-commerce is like 15% of the total. Retail spend in China and that's. More true in a lot of the West develop cities so you know it. Yeah you got a really big tier-1 cities there's kind of a premise that they're they're getting saturated with e-commerce and that you know everybody knows about it and use it as much as they want to and that really is driving the. The swelling growth rates in China. There's a huge untapped Market in China which are all these West develop cities that you are more likely to have like real farmers in them and to one of those you get singles day to reach him or them is you. Enable that one physical store that's in that City to sell stuff from. From that singles day in that store and so it seems like there was something like 200,000 stores that participated in singles Day this year so so that to me is is. Kind of interesting and you know frankly that's going to have to be the future of the growth story in China right like you. [32:30] It's already bigger than the US that the addressable Market is even way bigger, but they increasingly have to get these not digital Shoppers to to get in online before they are able to get them to become e-commerce shop. Scot: [32:47] Yeah so pooping so we've covered Amazon Ali Baba and now another large Global retailer is Walmart they announce their quarterly earnings and this was weird once were they that came out in and you exceeded. Expectations and it seems like they raised him in the stock went down and I'm not exactly sure what went on there I bet you made his watch that little bit closer than I did the headline that caught my attention was they announce that e-commerce group 43%, I think that's a pretty good acceleration for these guys and Baseline about kind of 15% growth rate that's the top scorer number and government is a lot of people that anchor on this 15% growth number so it feels like Walmart's e-commerce is growing 3x Amazon's quarterly earnings were more in the mid-20s range so feels like they're growing faster than congratulations to our friends at Walmart there sounds like. Jason: [33:49] And kind of put it in a frame it a little bit if the investor Day last year mark Glory promise 40% annual growth in e-commerce and then the next quarter out they slightly miss that at 39% and, a 1% misses apparently enough that they took a pretty big beating in the in the. Financial press and in their stock market in their in their market cap so the next couple quarter since then they basically hit that, percent exactly in fact it almost seems suspicious cuz I hit that exactly so this quarter getting 43%. With big holiday quarter up is pretty favorable and good news for Walmart, you know I do like to remind people in my mind a big driver that huge number so you know what we're doing a lot of things to grow e-commerce they really turned up the heat on the marketplace and they've dramatically expanded their selection so I think. Not very long ago that they were selling about a million rescues online and today they're more like 40 or 60 million skus online so making huge progress on the assortment. But one of the big drivers of e-commerce at Walmart is. [35:03] Selling groceries online in the way Walmart predominantly sells groceries online is you order them online in there for field from the store so either curbside pickup. Or home delivery and. You know you can add a new skew to your eCommerce site and it instantly available to everyone in the US but to grow grocery sales. [35:26] You have to make more stores available to fulfill that order so Walmart has like 4,000 stores in the US. As of this quarter they had 2100 stores that did curbside pickup and 800 stores that did. Home delivery that's twice as many curbside pickup stores that they had last year so. In a way they've doubled their capacity to sell groceries online in the last year and they're promising another thousand next year and so a lot of this e-commerce growth is be coming from. Like this this significant investment the Walmarts making in grocery. Scot: [36:04] When will that be in every story like when will they laughed that that whole thing. Jason: [36:10] Yeah they haven't said yet but like if you. Last year 2000 stores next to a thousand stores if we if they keep up that linear progression they have two more years before they max out and so then it's another year after that before they really lap the. The 4000 store number so there's there you know could easily be two or three more years of. Benefit from this kind of digital same Source Tails phenomenon that's playing out at Walmart. Scot: [36:39] What's going on with our friends in Bendel. Jason: [36:43] I want a few things but the other one I would have just hit on right now it's kind of fun to Doug mcmillon's the CEO of Walmart impressive guy started out as in internal Walmart work in the stores and is now I think according to Fortune Magazine like the 40th most powerful man in the world which I remind myself every time I've been meeting with him he did an hour-long podcast on the Tim Ferriss show so, like you know he speaks a lot but not really long form like that and so it's kind of fun to hear him and he got to share a little more personal stories then then he's normally known for so if you're interested in Walmart I'd encourage you to listen to that podcast on the Tim Ferriss show and frequently the Tim Ferriss show is kind of a feeder for this show so we watch that show carefully if a guest as well there then we might consider having him on our show so you know maybe that bodes well for Doug's chances of getting on the Jason and Scott show one day soon. Scot: [37:44] Tim doesn't have the reach we do so we try to help me out by by mentioning his podcasr once in awhile. [37:55] So there was a lot of brick-and-mortar stuff announced involving phones and I wanted to pick your brain on that one I saw was 7-Eleven they have this kind of Scan & Go technology what's interesting is kind of pivoting from from Walmart there Walmart had this functionality I think they've actually kind of liked it so you could kind of self checkout at Walmart so now you can't do that but everyone else is trying it so, what the heck's going on with that. Jason: [38:25] So what we kind of genetic I'll scan and go is the ability to pull out your phone scan a product yourself in the store and then pay for it on your phone on and therefore not have to go to a cashier to pay for it and that the expressive been around for a while they weren't the first ones but actually Apple Store is offered this for quite a while so you can walk in and grab your accessories scan them in the Apple app, pay with Apple pay or whatever payment methods you have on file and walk out of the store never have to get help from anyone. [39:00] And we're seeing that increasingly being used Macy's is rolling that out one of the big complaints and these big department stores is that it's hard to find a cashier to check out. So that, potentially attacking the number one complaint at Macy's is you mentioned they rolled it they piloted it in Walmart and Sam's Club and they should have turned off that pilot in Walmart they've doubled down on that pilot in Sam's Club we haven't officially heard from Walmart what what's going on but, my suspicion is in this is kind of a funny side note about anything you do in retail. I'm willing to bet that a bunch of the clerks in Walmart did not love promoting Scan & go because it peten, the potential to reduce the number of shifts they have for cashiers in Walmart so you can imagine this labor force that's responsible for educating customers about this feature. [39:59] It feels like that picture is competing with their livelihood and so, wouldn't surprise me if Walmart is having a retrench How They Roll that out in the Walmart stores but they definitely have embraced it in the Sam's Club stores and in fact Sam's just announced a new. Concept store called Sam's Club now and not only can you scan & Go in Sam's Club now it's the only way to check out so you absolutely have to have a phone and you have to have the Sam's Club app installed before you're even allowed in the store you scan all your items as you put them in your car. And you you self checkout before you leave the store that's a interesting pilot. [40:44] At the same time since they now know every customer is using the phone in the app in the store they've added a bunch of features to the app so they actually have one of my favorite features they've added an augmented reality feature so you can name your phone camera. Add a shelf in the store it recognizes the products on the store and it gives you supplemental information about this product. So you can do the like kind of product comparison where you compare two products and see how the attributes are different than what the pricing is. With why products in the store you can also see ratings and reviews and things that were used to an e-commerce, Sam's is now enabling in the Sam's now store but using the the phone that they're forcing the customer to use and to me that's a big Trend in brick-and-mortar so I'm calling this Tran the future brick-and-mortar is mobile. Because we're increasingly sting same-store Concepts where you literally can't shop the store without using your mobile phone so. We talked a lot about Amazon go and this show can't get in the Amazon go store, without using the mobile app Amazon has book stores in these four star stores in if you want to know the price of any book in the bookstore you need to use the app if you want to pay in the stores are highly encouraged to use the app in those Amazon stores. [42:05] Jd.com that the second biggest e-commerce site in China has just rolled out this new digital grocery format called 7 fresh and they're requiring customers to use their, the phone to get in the store and to do scan and go and have all these features in the store excuse me. And Nike just opened a new, flagship store in on Fifth Avenue in New York it's a cool store for variety of reasons but most of the cool new features are digitally enabled features that require you to have your phone in the store that day, stores geofence the app so when you watch the Nike app near the store the app goes in the in-store mode and it gives you all these unique capabilities. Help you shop the store better so we could eat that in the future episode on any of the specific store formats but to me the big takeaway is. [43:00] 15 to 20% of all e-commerce sales sales happen in e-commerce the rest happen in stores, throw these things people are getting used to online like Dynamic pricing and ratings and reviews in more detailed product information and, the very consistent answer that we're seeing to solve all those problems for brick-and-mortar Shoppers is to have that experience on the phone. Perfect sense because. Customer bring the super expensive phone with a big brilliant screen with him to the store that's a lot more appealing than putting thousands of super expensive screens in the store at the store would have to pay for so I think there's a train we're going to continue to see play out. Scot: [43:41] Yeah and judging from your voice to get pretty you're pretty emotional about the stuff man. Jason: [43:48] I love me some mobile brick and mortar shop. Scot: [43:50] Cool that's the all the News That's fit to chat about any Commerce in retail with that let's move over to listener questions. Jason: [44:08] Question question question question. Scot: [44:14] Our first question comes from, Patrick and he says we're a small retailer with about 30 or 40 employees and we're transitioning from selling other people's stuff. To developing in manufacturing our own brand of products any suggestions on building a team within a retailer that is responsible for manufacturing your own. Brand of products does seems to require a new skill set of employees that we have not traditionally hired for for example Engineers product Developers osetra, Jason had any advice for Patrick on how to counter if swivel maybe not pivot is Right work but too kind of gradually go from selling other people's stuff to developing your own products and sign this. Jason: [44:56] That will sew a congratulations on leaning in that direction I absolutely the dad is a important part of the future of Commerce is more more companies are going to be selling their own stuff it's going to be increasingly harder to make a living selling other people's stuff and I do think you're right like I. You need a lot of different skills to be a product developer manufacturer and marketer, then you do to be a wholesaler or retailer in so I do think you want to think about. Adding those new capabilities via VIA dedicated teams. [45:39] A picture of the things I really want you to think about in the places I would start thinking about investing in in shifting my labor force the most are the successful products that people watch today. Are based on. An intimate understanding of the Target customer and their needs wants and desires and so like all the companies we've seen their been really successful launching new products have a direct relationship in some way or another with a customer, and they use that relationship to test launch new products and quickly iterate and that is Maybe, not best done on platforms like Amazon where's your. Pretty heavily disintermediated from the customer and so you know one of the things I encourage companies to do is they pivot part of their business from from wholesale to to being a brand of manufacture. Is [46:34] Thinking about how you can develop a direct-to-consumer Channel or some way to have meaningful intimacy directly with customers so that you can get. [46:44] Feedback from from customers and so you can more quickly iterate on five development and by all means once you have a great product. Use all those other channels to sell the heck out of it so I have no problem with you selling that new product you invented. On Amazon but I think you need another Channel besides Amazon to test and learn and really develop those those product quickly. The other thing I would remind you is when you're selling someone else's stuff someone else is invested a lot of money in creating awareness and demand for that product when you're making your own product. You really need to have a marketing strategy around how you're going to treat that awareness and brand and usually the, different skills the dirty secret is when you're selling someone else's stuff the Big Marketing skill you need is actually B2B marketing skills, you build a relationship with those retailers but when you start making products that you want consumers to buy, because they recognize that your unique value proposition you really need true b2c marketing skills and said yeah you need to start thinking about, having the right people with the right skills and the the appropriate budgets to do that and so you know those are all some of the things I would. I think about as I made that transition Scott any important stuff I miss. Scot: [48:04] Yeah we're going to have a question in a little bit about anchor spoiler alert and so listen. Don't stop listening. Here at this point Patrick Patrick didn't tell us the categories in so sometimes this works or doesn't but one what area is kind of July feedback like you talked about is Kickstarter or Indiegogo and a lot of the biggest campaign to see on there already pretty well put together so but there's this kind of, level down or maybe two levels down if you kind of Explorer to there and companies are using those platforms to do a lot of experimentation around features so let's say you're going to come up with a widget and I kind of want to find out if people want feature 1 2 3 or some combination of those use those platforms for that what you do is you put the basic product out there then as you date they have different terminology for this but it's actually there's these different levels that that people can commit to. I'm going to vote with their dollars so let's say your base product is $30 and then you can add these features and. You can use that that feature set on those platforms to kind of let people vote with their wallet for different features that you may or may not want associated with your widget. So if you still a little time poking around there you'll see what I mean but that's kind of a cool way of of kind of. [49:29] Killing three birds with one stone so you're getting dressed feedback from consumers you're getting people to pay for YouTube product which is always nice, I did the third one is your building that direct channel so that those platforms can be really useful way that I don't think a lot of Amazon sellers may think about leveraging those platforms for for for doing that. Okay our next question is from Street, and we'll do kind of lightning round here so his first question Jason is is the Amazon business in consumables really growing. [50:06] All right. Jason: [50:08] But clearly there's categories like the Amazon basic battery famously has. 31 market share which is 10% bigger market share than Duracell tons of brands are seeing huge growth on Amazon subscribe and Save. I think it's fair to say that like Dash replenishment well super interesting and potentially the future. Isn't huge yet but absolutely Amazon's having I think very meaningful success in in consumable type product. Scot: [50:39] Are there any consumables that aren't doing well. Like maybe razors like me up Dollar Shave Club and doesn't seem like Amazon's really directly address to that that market that seems to be where razors are going just going to rain in my pickle. Jason: [50:55] That so you know we're going to do is we have to invite one of our data friends like 10 10 data onto maybe share that but I would not be shocked if Amazon sells more razors than Dollar Shave Club or Harry's. So I haven't I'm guessing I haven't specifically seeing the data on razors obviously there are a lot of people buying razors as a single order from Amazon. What's the mixture make a note and we will find out from from some folks that might know in the future shop. I think one of the other questions that tree ask got was why are we not embracing Alibaba in the US. Scot: [51:37] Yeah we kind of talked a little bit about this on the singles day coverage and there's just kind of an interesting little history lesson here, not a lot of people may know so Alibaba acquired a eBay selling platform full disclosure this is a kind of small competitor of Channel advisors called Activa in August of 2010 and then one of the things that Activa team did it and I'm good friends this guy's name is Jeff they pitched Ali Baba on building a Marketplace so essentially aggregating the products from those eBay sellers that now we're kind of also buying a lot of products from Alibaba to sell in the US and they came up the little Marketplace called 11 mean that never got traction a lot of people kind of a room you'll see felt like that was Ali Baba's bet on the US and that's not true and it was just kind of experiment Within that ended up getting caught wound down in 2015. Combined with a bunch of other marketplaces and then. [52:47] Alibaba you know where they're investing heavily is so special to have a very large US presence in New York and their they seem to be expanding that AliExpress is, have a B2B site where you can buy in bulk you know products and then resell them so lot of these Marketplace sellers Source from AliExpress I don't think Alibaba disclose exactly how big that is in the US but I I know it to be quite large so that's a big Market Place a lot of people don't know about because it's kind of weird B2B and then the other kind of technical of Alibaba that reaches into the u.s. today is they invest in a lot of companies. So let's see I always get some of this mixed up with Racket and who's the other company that kind of comes in and buys a lot of our companies so alibaba's a big investor in ShopRunner and then they see today by some The Flash show cat is or was that. Jason: [53:48] I know for fact rocket on about a few but it wouldn't shock me a volume also has. Scot: [53:55] So it seems like most of their their plays in the US have been to really kind of, invest in things and keep an eye on it where you know where I think they're they're doing a lot of the US is more China in so we mentioned earlier the show getting large Brands sell into China that have done some experiments we're trying to get Chinese Francis on the US yep that hasn't really play doubt busiek Park is flowing through Amazon right now or through AliExpress or from Alibaba which you know back to the first question how do you start building questions how do you your seller of other people stuff how do you start the Liam one thing we didn't talk about is finding a Chinese manufacturer alibaba.com is great for that so you can go on there and literally find a factory to make you any. [54:45] So those are the ways that there is some connective tissue between kind of the the China Alibaba world and the US so yep there's always been speculation to sew on eBay and PayPal split up there's rules around this I think we're past the time frame around these rules there's a lot of speculation that it was being done so that the eBay asset could be sold off mom and the number one company admission does find that would be Ali Papa so that would become an interesting way for Alibaba to really get serious about the US market is by eBay retool it and kind of what's worked in China which is splitting the people kind of oriented auctions from any of the B2B sotol Ballentine mall and and then taking a run at the US with some combination of putting a lot of Chinese sellers in the mix so so we'll see the jury still out on that I think it's definitely something Ali Baba has it keeps an eye on and want to the kind of in a weekend position right now like we mentioned earlier so out so I don't think it's you know if I was there I would do that right now, but you know it is something to keep an eye on and we will report any news there on the Jason Scott show. Jason: [55:56] Nice. We're starting stats for Tom little bit that you dirty tease this question so I want to make sure we get it in I think it came from an anonymous listener but it sent you the question was anchor which is a nktr which is the. The accessory mobile and PC accessories manufacturer anchor Rose to be a power a power house on Amazon business can you analyze their changes to highlight the overall Marketplace transition to differentiated product development. Scot: [56:28] Yeah and so my knowledge I've never works directly with these guys but I've read a lot of articles about him and I know people that have worked with him so it's all second-hand knowledge so Jason you may have more knowledge but urban legend at least on this is Anchor started as just kind of in one of these companies that sells a lot of accessories and then they started to see a hole in the market not and I think one of their. As they started to get their know their customer a lot of them are Travelers like like you and I and the one of the first things they noticed or heard from their customers was, hey you know I want, more USB ports on my power supply so that I don't have to buy as many of the Scituate of the bricks so one of their first products that came out with was a multi USB plug-in kind of power supply that was wildly popular and now they've taken that and really run with it and you know they have a whole, Kohl Mansion whole group that that innovates around these kinds of things talks to people and understands you know what what is their next gadgets need look like, I'm I'm sitting here and. [57:43] I got 30 or 40 different anchor thinks I have a thousand Jason and it's one of my favorite things to buy on Prime day because they are pretty aggressive song and to my knowledge they pivoted from Simply a Marketplace seller all the way to a top manufacturer I've read articles that kind of put their sales well north of of several hundred million dollars would surprise me I bet they're probably three to five hundred billion dollar company at this point so, back to that first question this is a really good example of how they do it but I also know, it's been a lot of time looking at Amazon search results there's various services that give you Amazon searches and the results, so for example we have a customer channelizer that spoke at a conference so I don't feel bad saying this they you know there's just this classic Han Solo in carbonite image there in the Star Wars world shockingly so I know a lot about them and they kept seeing people look for that in different ways and they came out with a beach towel that had it on it so it looks really funny the beach towel is just like. [58:50] The exact Han Solo in carbonite so it looks kind of funny when she was sitting there on the beach and they discovered that two looking at Search terms so people are actually looking in towels for Han Solo Carbonite not finding it and they saw the no search results there and decide, and I've heard danger guys talk about they spent a lot of time looking at the Amazon Marketplace in these inequities between Supply and man and then they figure out how to be the supply that meets that again. Jason: [59:18] Yeah it's an awesome tactic if your own e-commerce site it's one of the most valuable, places to mine are those zero results found on your own site but for sure using tools to get disability in the like what's happening on Amazon searches super valuable the other area that they they tend to farm a lot for good Insight is the reviews on the. Amazon so you you can actually learn a lot about the attributes people are looking for and products by reading the reviews of people that actually bought the. The previous versions of products which is another good tactic, and you did correctly surmise I feel like I am a little bit of an anchor hoarder I have some weird wait in fear that someone's going to come to my house with a weird device that they need charged and I'm going to be a bad host, and not have the right the right stuff so I feel like I I buy way too much of that stuff and every new Gadget that comes out open the door to replace it all right so. Now are our latest iPhones can be charged by 18 watt Chargers and they charge a little faster so I had to replace all the the the older usb chargers with USB C Chargers and one of the things you'll find from a company like anchors they have now moved in a differentiated products is. [1:00:36] Actually have competitive advantages over the ocean of of generic products that are there on the market so you can find, 18 watt USB C charger from anchor that are much smaller, that have like nice usability features like folding plugs and all these things then almost in the other sellers on Amazon so it it it are a little tip of my hat. It's always surprising to me when you can offer a differentiated product on Amazon where they now have like 600 million. Million skews and so that's going to be a great way to leave it hopefully you're listening to this show, in your car on the way to. Your relatives for for Thanksgiving and when you jump on your phone to look for some of those Black Friday deals make sure you check out some cool new usb chargers, from our friends and anchor and so, if I'm wrong or you have another paper product or there's anything else you want to discuss from the show we did encourage you to jump on a Facebook and leave us a question we do try to get to all of them we can. What is a good enjoy the show we sure would appreciate it if you would jump on to iTunes and give us that 5-star review. Scot: [1:01:48] Thanks for listening when we hope you have a great Thanksgiving and we're thankful here at the Jason and Scott show for you listening to these crazy ramblings through over a hundred 50 episodes we have no idea why you do it but we really appreciate it. Jason: [1:02:05] Absolutely and so until next time happy turkeying and happy commercing.