EP235 - Amazon Grocery, Walmart+, Holiday Preview
This episode covers the latest Amazon Grocery news, the launch of Walmart+, and our first look at holiday 2020. Upcoming Events
- CommerceLive – Jason September 15, Noon ET.
Panel: Retailer Search Strategies — What’s Working and What’s Worth It?
- Publicis Livestream – Jason & Scot – Thursday, September 17 11:00AM ET
Covid, Holiday 2020, and 2021
- Digital Day North America Jason & Scot Keynote September 23 8:40-9:25am CT
- Channel Advisor Connect – Jason & Scot October 7th
- Texas A&M Retail Summit Jason October 9th 9:50am CT
- ShopTalk Meetup – Jason October 20-22
Measuring Ecommerce Success Against Fast-Changing Benchmarks.
- Amazon Grocery
- Amazon Fresh – 40K “Non-Whole Foods” grocery concept. Dash Carts (Scan & Go). Microfullfilment? Woodland Hills open, two more free-standing coming to LA, one freestanding coming to Chicago, and a shop in shop with Kohls in LA.
- Amazon Go Grocery – 10K store with just-walk-out technology. A second location opens in Redmond. One coming to Washington DC.
- Wholefoods Digital Only – Darkstore opens in Brooklyn.
- JCP acquired from bankruptcy by Simon Property Group (NYSE: SPG) and Brookfield Property Partners.
- Walmart+ launch (and drone test)
- Holiday Preview
Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.
Episode 235 of the Jason & Scot show was recorded live on Thursday, September 10th, 2020.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Transcript
[0:24] Welcome to the Jason and Scott show this is episode 235 being recorded on Thursday September 10th 2020 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.
[0:39] Hey Jason and welcome back Jason Scott sure listeners Jason you and I have been at this retail thing long enough to know that once Labor Day it,
it’s it means we focus all our attention and energy into holiday
so because of that we have we’re going to talk about that a little bit on this show but we also have a bunch of news to cover but before we dig into that let’s talk about some events we have coming up.
[1:05] Yeah Scott I feel like you and I are wildly Overexposed over the next two months.
[1:10] Well the Kardashians show was canceled so I think this is our opportunity to really push and fill that slot.
[1:16] Yeah if you like there’s a dearth of content out there and you and I are rising to the occasion.
[1:22] Absolutely we’re here for you America.
[1:24] So with that in mind I am doing six public events in the next two months so the first one is coming up next week is on Tuesday September 15th.
It’s Commerce alive which is a virtual conference that profiteering launched right after we all started getting.
Locked in for covid so this is the third installment and they’ve been super popular so I’m looking forward to.
To doing this one next week I’ll be moderating a panel on retail our search strategies and we’ll be talking about like what what things have worked and what things have changed as a result of the pandemic so that should be interesting and that’s free too,
anyone that wants to attend I’ll put a link in the show notes but then Thursday of next week September 17.
You and I are doing a show together that’s going to be a free LiveStream on LinkedIn that’s hosted by my employer publicist.
[2:22] Yeah do I have to know French for this one.
[2:24] You do not have to know French but you do have to know that you’ll likely have the potential to get me fired.
[2:31] Yeah I don’t know if that’s a plus or a minus for you but you know if you haven’t thought it through I’m probably living with you if I do get fired.
[2:40] If I wear a beret and talk about French fries is that is that enough to get you fired.
[2:45] Freedom fries yeah that would be really.
[2:47] I just see all bonjour a lot all right I’ll try not to do those things I’ll try not to be fired and I can’t have that pressure on me and I you’re a great,
podcast podcast co-host but not sure having you live here as a long-term solution.
[3:06] Yeah I agree with that and I also feel like wow a lot of things could go wrong exposing you to all my colleagues my work colleagues and customers the one thing that I’m pretty confident isn’t going to happen is when they fire me they’re not going to come looking for you to replace me.
So that that’s next Thursday that’s will put a link in there to you guys are all welcome to jump in on that and that’s going to be live streamed on LinkedIn,
and then the following week Wednesday September 23rd you and I are getting the band back together again we are,
doing a keynote together at digital day North America which is a the North American event that retail Global puts on.
And for folks that follow the event Market carefully you basically single-handedly started this event as I understand.
[4:00] No there’s a guy in Australia that started this and I’ve been actually went to Australia and spoke out at once and it’s a lot of fun so it’s going to be.
It’s always good to get outside of the US and see what’s going on in your Commerce and this has got a global feel to it as in the name so
it’s gonna be interesting and a lot of the other speakers are near and dear to my heart in the marketplace world so we’ll be talking a little bit more about marketplaces than we normally do if that’s at all possible.
[4:30] Nice nice I’ll be relying on you for that content I just meant Phil the founder of the show I didn’t mean to imply you were the founder but I feel like he has told the story that you were one of the first.
Excellent pieces of content in that show that really helped him build the audience.
[4:46] Yeah happy to help.
[4:49] And so then I will be reciprocating I should have mentioned this when I when I mention that you could get me fired at publicist,
because on Wednesday October 7th so a month from now,
you and I will be doing a joint keynote at the channel advisor connects show so if you embarrass me badly in front of my co-workers I’ll be able to reciprocate.
[5:14] Yeah yeah so we have mutually assured destruction which I think is the best path forward.
[5:21] But I’m looking forward to that I’ve been going to that event for a number of years and that has always been awesome so sad that we won’t see each other in person and get to eat some barbecue or anything but.
I’m sure it’s going to be a good event and then.
It would be hard to do as good a job without you but then I have a couple more events in October on my own so Texas A&M has a retail degree program and they’re hosting a retail Summit.
On October 8th and 9th so this will be right after the channel advisor event and I’m doing the keynote on the second morning on October 9th.
[5:59] Pro tip what they love there is when you start out and you’ll hook them and you do your horns they love it there.
[6:04] Yeah I have I have several clients that would love that but I don’t think that’s the right mascot for Texas A&M.
[6:13] Give it a shot unless you have ins report back.
[6:15] Next you are you are always looking out for my best interest I super appreciate that,
and then our friends at shoptalk are trying a new format event one of the best parts of shop talk has always been the sort of networking and the the peer interactions,
and so on October 20th through the 22nd shoptalk is going to be hosting this interesting new Meetup format where they sort of match.
Subject matter experts together with practitioners and like have a bunch of conversations in,
on specific topic so I’ll be one of the experts that you can match with so.
Please don’t make me feel like the last girl at the dance like sign up for that free shop talk Meetup thing and pick me.
[7:01] Awesome wow Clayton Clayton request.
[7:06] Yeah I’m begging and so that’s that’s a lot of events that’s a lot of chances to hear you and I and just in the interest of getting full sympathy from her audience like everyone should know that for every one of these public events we do.
Um you and I have a lot of private corporate events as well so so a lot of a lot of content a lot of stuff to talk about in the next two months.
[7:26] Yes we’ll have six you’ll between two of us I guess we’ll have six public events then we’ll have some podcasts in there in the next two months so there’s probably literally,
20 hours of Jason and 15 of meat that you can enjoy over the next two months.
[7:43] Which is about the right ratio.
[7:45] Yes absolutely the any other events.
[7:52] No no that feels like quite quite enough in fact I was going to ask is that the end of the podcast did we just do an event podcast.
[8:00] Well another one I’ll throw on there because it wouldn’t be a Jason Scott show if we didn’t talk a little Star Wars is Mandalorian season 2 is coming out October 30th.
So I think I propose we do a binge podcast sigh milosh with every with all three people that would be into that.
Including your son so that.
[8:24] I was going to say I feel like I’m the second most excited person in my house about this I feel like my 5 year old toddler is like completely signed up for it.
[8:34] Okay well I’ll put it out there and we’ll we’ll see who waves a flag on them.
[8:39] Awesome one follow-up question there it’s not going to be bendable right like they’re they’re Disney’s not going to release them all at once that’s going to be a weekly thing right.
[8:48] I don’t know I think they did that the first time to milk sign ups but they’ve done a bunch of other stuff,
they’ve done I think as come out simultaneously so I don’t know that’s a good question I actually have not seen anyone comment on that.
Well maybe we’ll just binge the first ship is it a binge watch one should probably not well do a talk commentary on the first show.
So some of the big news this week I wanted to get your hot take on is there’s been a lot going on around Amazon and groceries,
one of the more interesting ones was there was this larger format store called Fresh and
yeah if listeners already call one of the cool differential differentiators is the – cart
so there is actually one of these is opened with limited availability and a reporter got in there and had a really interesting report nervous we’re talking about it on Twitter but I wanted your
you’re taking here and then also what else you’re hearing around Amazon grocery.
[9:48] Yeah yeah so I mean covid has been a big Boon to digital grocery in general like that,
depending on how you count there was a three percent of grocery was via e-commerce pretty covid and at the moment it’s tracking at about twelve percent and even Amazon which was obviously the most digital of the Grocer’s.
Pre covid has said that they’re their digital grocery business has tripled since covid so not surprising that there are a lot of,
new Concepts emerging in the in the omni-channel and digital grocery space most of these were in progress already at Amazon but it it’s no coincidence that they’re all getting.
Brought to fruition now so as you mentioned.
The biggest news is a new grocery concept so this is Amazon Fresh So it’s a completely separate concept from Whole Foods the it’s a 35,000 square foot store in.
A suburb of Los Angeles.
[10:50] 35,000 square feet is considerably larger than any of the Amazon branded stores that have opened in the past I go or or four star.
And the price point of the food items is going to be lower than whole food so Whole Foods tends to only carry.
Premium and healthy products that so this Amazon grocery store will carry all the main consumer product so Campbell’s craft Coca-Cola.
Carry stuff at lower prices it will still have the the formerly Whole Foods private label brand 365 so first thing is it’s a.
More affordable grocery concept from Amazon so that alone would be interesting.
It does not have the Go technology so you can’t just load up your cart and walk out but what it has is scanning go so,
the cards have scanners built into them you can scan each item as you put it into the cart and then you don’t have to go to a checkout at the end you can just walk walk right out of the store with all the items that you have scanned,
that’s a more traditional flavor of self-checkout than the fancy go stores.
[12:01] But in Amazon’s case it’s built into the cart which is kind of cool so you don’t have to use your phone there’s there’s a fancier camera built built right into the Amazon Dash car,
as you pointed out to me on Twitter there’s no paper price tags in the store they’re all digital fact tags,
for pricing and product information and live ratings and reviews part of the reason that they’re using digital there’s Amazon changes prices so much and they want to have the same price online that they have in store so they had to use the digital tags.
And so in the aggregate it’s all kind of interesting there’s been some controversy over you know how popular the – cards will be there not huge,
so you you know you they’re not as big as a traditional Kroger car that could carry five or six bags worth of groceries they can only carry like two bags of groceries so.
Some people were sort of surprised at that and the thing that no one has talked about and again we haven’t got a chance to go visit the store ourselves yet.
In looking at the floor plans for this store it looked like the back of the store was reserved for an automated picking system for deliveries so what we would call a micro fulfillment center I’m pretty bullish on these things I think they’re important part of making digital grocery profitable.
[13:14] And so I was curious to see how Amazon would integrate one of these in their first store and nobody is talked about the experience of that yet so I don’t I don’t know if they actually have it or don’t have it,
you certainly can see that products are inventoried on traditional shelves in the store so if they have a micro fulfillment center it means they have cans of soup.
In the Fulfillment center and on the Shelf so they have them into inventory locations which be a little bit surprising so I’ll look forward to.
To getting more first-hand reports from that store.
[13:47] Yeah I think the
dinner the Amazons response on the cart was that this whole store is designed for kind of an urban setting kind of a bodega kind of a thing where you go shopping more frequently and thus you need less bags was kind of their response which was
which is interesting.
[14:05] Yeah and I believe they probably did do some research in January that said for this store in this demographic that that you know the average shop is this big,
um it’s interesting the store is not super adapted to covid right so,
in covid people are shopping less and buying a lot more and buying a lot bigger sizes so that January research that they use to design the store may not be.
The most current so that will be a little interesting,
they have a lot of like Self Service amenities that retailers are mostly moving away from at the moment like salad bars so they went live with a salad bar section and and it’s closed because covid.
You know people were freaking out about the size of the card and oh it’s going to fail because the cards too small you know I think the current might end up being too small but I think that’s an easy thing to fix.
And you know that standard deviation of shop sizes is very large like there will be people that are walking there and buy four items and there will be people that try to buy a hundred and twenty items and will push two carts around.
[15:06] Yeah as a software guy like the cart because it’s got this cool you know it’s good,
either a barcode scanner an image processor or both and then it’s got a scale,
so you know as you’re adding things to the cart in one of these two bags it’s got a little LCD display on there that’s calculating what’s in your literal cart and then you
you can just essentially pay their it looks like in walk out so that’s kind of a clever idea and so I’m intrigued to see what technologies the cart has what it’s loaded with and
you know the pictures we’ve seen show that it has this really big under cart area that’s boxed off so I’m kind of curious what’s inside of there,
that’s a battery it has like a massive battery kind of component to it that seems like overkill for what we can see is in there so
so I’m excited to one day get hands on it and kind of understand more about what’s going on inside there.
[16:00] Yeah and just I mean I don’t we maybe he’s been our too much time on it but scan and goes not a new idea at grocery lots of retailers offer it you can you can go scan and go at Sam’s Club right now but if.
Traditionally use your phone and,
problematic it like the camera isn’t totally optimized for taking pictures of barcodes but also your only likely to look at that phone screen every time you put something in your cart and try to scan it right so,
the cool thing about having the scanning go built into the dash cart is there’s a screen that’s in front of you the whole time and what that lets Amazon do is say,
you’re in the ice cream I’ll I see that you have chocolate fudge and sprinkles in your cart already I can offer you a special promotion for the ice cream I want to sell you or whatever not that anyone needs to promote ice cream but,
but you get the idea they can use that screen to do suggestive selling and make offers and things and and it likely will be much more.
Compelling then it would be to make those same offers on your phone that you’re only going to glance at occasionally so,
the fact that it probably scans better the fact that it can weigh in the fact that it has this marketing screen on it is interesting and then you and I both know.
They haven’t promoted this but it’s collect I guarantee you it’s collecting a heck of a lot of data about how people are shopping and what what they looked at and didn’t buy and all those sorts of things that Amazon will.
Will will monetize at some.
[17:29] The cart path.
[17:30] Exactly so just to kind of close the loop on this Amazon Fresh concept which is super interesting,
this is the first store that opened in La Woodland Hills two more stores in La coming Irvine and North Hollywood so there’s going to be three of these 35,000 square-foot stores in LA.
They also are opening one right now in Chicago in a suburb near me called Schaumburg and that’s going to be a little bigger store that’s a 43k store so that’s,
a good-sized grocery store,
there are get to visit in person you know even though I can’t get on a plane interestingly the original plans for this store called for a dining restaurant inside of the store so.
Restaurants are somewhat problematic in covid it’ll be interesting like if it opens in the next month or two maybe it opens without the restaurant will have to wait and see.
[18:20] So then so the so we’ve got three stores freestanding stores in La one freestanding store in Chicago V store is maybe the most interesting,
another store in La in Laverne Hills California is going to be co-located with a cold store,
so this is a 88,000 square foot cold store and 38,000 of those square feet will be dedicated to an Amazon fresh grocery store.
That basically will be like sharing a wall and a door with Cole’s so this is Cole’s downsizing from an 80,000 square foot store just for coals to a 50,000 square feet for coals,
and having a new Amazon grocery store inside of the coals which.
You know potentially drives a lot more traffic because you you know you might shop at Kohl’s.
You know three to eight times a year but you go grocery shopping 52 times a.
[19:16] Yeah you get some carrots and blue jeans.
[19:18] Exactly so so that will certainly be interesting and then there’s some other grocery stuff going on,
Amazon has had these go stores which are convenience stores or I would even say they’re kind of grab and go restaurants for a number of years now those stores tend to be really small like.
The smallest one I think is like 500 square feet but they’re normally like 1,300 square feet two thousand square feet or 2,300 square feet,
so they they’ve opened a grocery store that does use go so this is a Amazon grocery go,
and it’s in Capitol Hill which is near Amazon’s corporate headquarters it’s a 13,000 square foot store or 10,000 square foot store so it’s the biggest go implementation out there and it’s been open for a while.
They just this week opened a second go grocery store in Redmond which funnily enough is Microsoft’s backyard,
so potentially a bunch of Microsoft employees will now be shopping at this just walk out technology,
13,000 square foot grocery store so these stores are creeping up there still way smaller than the,
Amazon Fresh concept that that doesn’t have go but you know we’re starting to see go in bigger use cases with more skews which is interesting and they have announced.
That they’re going to open a go grocery store in Washington DC as well.
[20:43] So that a second new grocery store concept from from Amazon and then a third concept open last week.
Under the Whole Foods brand they opened a Whole Foods online only store in Brooklyn.
So there’s a whole food store that you can’t go in and Shop you can only order for curbside pickup or home delivery of your Whole Foods if you live in Brooklyn.
[21:09] So this was funny when they made this announcement I saw someone on Twitter that’s like wait a grocery store you can’t go into so Amazon’s opening a website.
Which I thought was pretty funny but at the rest of the world would call this a dark store and so it’ll be interesting to see if that’s a,
a trend that that Whole Foods does more of his well that’s so that’s a lot of grocery stuff happening in Amazon,
and you know their competitors aren’t sitting still either so this is a hot space to watch it’s a hot space to get in if you’re if you’re thinking about your next career in digital Commerce.
[21:44] Yeah I forget who said it but they kind of characterize this all this is Amazon thrashing around Grocery and not really getting traction,
and my point was this is how I am as on invent stuff right you and I both have a Amazon fire phone and you know they they will,
keep trying at something until they get it right I guess the phone they stopped it at V1 they realized that that was that wasn’t going to work but then that’s what became if they hadn’t done that they would have had echo which was essentially the two of the whole idea so.
I feel like Dave,
they’ve put a really big Target on this and there or a bull’s-eye I guess I should say and they’re really focused on figuring out grocery and it’s it must be super strategic because they’re investing a ton here.
[22:30] No I hundred percent agree like wagons interesting that they haven’t won and and super succeeded are ready,
but they’re you know they’re certainly in the fight their competitors are well armed as well so that’s part of why it’s fun like some of these other fights you know when you’ve got.
You know a billion square feet of fulfillment space more than everyone else it’s almost not that interesting of a competition.
You know this groceries kind of a Level Playing Field and so it’s fun to see what like Kroger Walmart and Amazon are all doing to figure it out.
[23:01] Yeah and we’re definitely going to talk a little bit about Walmart but before we go a saw today
that JC P JC Penny finally found a home and the I was watching the stock market perspective Wall Street was not happy because I guess whatever price they sold out
did not result in any shareholders getting anything at all went to debt so what’s your take on that.
[23:26] Yeah so the the eventual buyer there were a lot of rumors there are a lot of silly rumors I thought were stupid that Amazon would buy them for the property.
The buyer ended up being to mall operator Simon Property Group and Brookfield property partners.
So you know the mall operators Bob JCPenney there’s a play we’ve seen several times lately.
You know one of the the vested interest them all operators have is that if these guys liquidate then the malls lose.
A ping tenant,
which would be a bummer but even worse if it’s an anchor tenant like a JC Penney typically is that triggers a lot of code tenancy Clauses and so suddenly there’d be a lot of other retailers in those malls that would be entitled to,
renegotiate or even get out of their leases and the mall operators really don’t want that so they had a,
I’m sure they’d like the economics of buying JCPenney and hope to make it profitable but on top of all that they had this these.
Additional incentives to.
To not let JC Penney fall into liquidation and and so I like what’s been interesting to me is I feel like the internet is lost its mind over this like they’re all talking about how like.
Wait is this you know if the mall operator owns all the retailers is that fair competition in the mall and what is this you know what you know what is this mean for for monopolies and malls and all the you know and it’s it’s a.
[24:53] I’d I mean I don’t think it’s that big a deal.
I don’t you know again we’ve seen this with a bunch of apparel retailers this is the biggest retailer that these guys are.
Are biting off but I it doesn’t feel like a game changer to me I’m grateful that all those employees at JCPenney you know their jobs are safe for at least for a little while.
[25:24] No no it I mean it’s over a billion dollar deal the thing that makes this appeal like.
These are real value Acquisitions for Simon right like so I don’t know if JCPenney pencil that exactly like this but all the other acquisitions.
Simon and and their Partners In this case Brookfield sometimes it’s been authentic brand sometimes it’s been all three of them in the fake case of Forever 21 the price they paid for this retailer was less than the value of the inventory that they acquired.
Right so in a way it’s a no-lose I give you if you know you can liquidate the inventory for the value you paid.
Then everything on top of that gravy the rent you save if you know if you are able to save the retailer and get them back to profitability like those are all gravies but the downside is pretty low if you know you could liquidate the inventory and get your money back.
[26:15] Yeah and then pivoting back to grocery Walmart announced walmart+ what was your take on that.
[26:23] The jury’s out you know people have been talking about this forever Jason Del Rey like broke a story that this was coming along time ago and then every month he had to write how it got delayed,
and so I’m sure he was grateful that it finally went live so there’s a membership program from Walmart Janey White.
Janie said who is our guest on episode 200 who’s the chief customer officer there this is in horror portfolio so she’s done a bunch of interviews about this
and she starts out every interview saying like this is not prime like you don’t need to compare it to a prime we’re not trying to compete with.
But of course anyone that looks at this is instantly going to.
[27:04] Compare it to Prime right and that’s the way all the journalists are talking about it so it’s basically a hundred dollars a year membership 98 dollars a year or 13 bucks a month,
and you get unlimited free deliveries,
you get a couple other benefits you get fuel discounts a bunch of Walmart stores have gas stations in depending on the configuration you get up to five percent off on your gas,
and then they’re activating some unique in-store tools for you that aren’t available to the general shopping public and so the first tool,
that they’re enabling is scan and go in Walmart so what this means is if you’re walmart+ customer,
you can walk in with Walmart fire up the Walmart app on your phone you can scan a couple items and walk out of the store without having to get in line or go through checkout so very similar to what we just talked about with the – cart only you do it on your phone.
[27:56] Interesting fact here,
Walmart piloted this before in Walmart for the general Shopper and then they turned it off and so we don’t know why they turned it off now they’re just making it available to walmart+ users.
This amenity is already mentioned is available in all the Sam’s Club stores to any Sam’s Club member so so three benefits but it’s not,
at the moment the benefits aren’t a heck of a lot different from an earlier sort of shipping program that Walmart had so it feels very incremental and I’m saying the jury is out,
like in the long term.
[28:35] What are the exact delivery benefits you get how many products are available for delivery how fast are they available for delivery like that’s the great unknown with Walmart’s delivery service,
how meaning for the fuel discounts and what you know tools do you get in the Walmart store and have and how valuable are are those to you.
To me it’s neither a game changer at the moment or or Dead on Arrival it is.
The future of retail is you know creating this this sticky recurring revenue and kind of transitioning from being a retailer to a platform so it certainly makes sense to me that Walmart’s trying it,
you know we’ll see how much adoption they get but to me this is mostly about.
Keeping the Walmart customer in protecting the wallet share of the best customers more so than it is Conquest in new customers to.
[29:27] Yeah I’ll through a shout out to the fuel discount we.
So I have an electric cars to this doesn’t apply to me but to my wife and the rest of the family the Wii shop it Harris Teeter which is a Kroger brand and
they have a fuel point system there and you know you can save 32 cents 50 cents a gallon
and can either go to their branded gas or their partner with some BP’s and other stations and there’s there’s this
it actually works really well I mean it’s built you know loyalty kind of a thing there that I was a little surprised about the people love to save money on gas.
[30:04] For sure I would say they disproportionately seek seek deals on gas and it’s not going to surprise anyone Walmart’s a super competitive gas retailer anyway and so this discount like is pretty meaningful to people that want that deal,
as we’re recording the show it’s the first NFL game of the year and Walmart’s running a big ad during the game promoting walmart+ so that’s kind of interesting.
[30:27] I’m keeping you from your your Walmart at.
[30:29] I’m okay I’ve seen it and then the you know small but exciting news is that Walmart is now delivering e-commerce orders via drones and I feel like,
your backyard is their first test Market do I have that right Scott.
[30:46] Yeah they’re in a little city here called Fayetteville I don’t know why they would have chosen that one but yeah and they’re using an Israeli drone
format which is called the fly tracks and it goes six miles and can carry six point six pounds unfortunately that is outside of my range that’s it he’s about 45 minute drive so maybe you miles away from here.
So unfortunately I’m not gonna be able to test that for listeners right now but I’ll have to dream up a trip to Fayetteville to an address where I can receive a drone delivery and see how it works.
[31:21] Yeah well I just remind you a lot of Walmart’s have a McDonald’s in them and 6.6 pounds would be about eight Big Macs so just.
[31:32] Bring my son he likes looks couple big mix.
[31:35] There you go.
[31:37] Cool one of the news items that I was excited to see and I’ll kind of bucket this into a,
eBay CEO starting to have a new impact and just as backstory first of all I’ve been a huge fan of eBay for a long time I’m a big collector and love The Collector origins of eBay,
it’s been a little sad to see the stewardship of eBay and it’s gone sideways you know over the last.
Certainly in the last leadership and then at the end of the last leaders tenure there was a lot of controversy and,
we’ve talked about a little bit on the show some really weird stuff went on there but you know so Jamie is the new CEOs name I would say his last name but I’m going to butcher it so I’ll just call him Jamie,
he was an eBay for eight years kind of early in his career and then left and then went Barnes and Noble and then had a long career at Walmart where he started out in Sam’s worked his way up bleeding Sam’s so you’ve probably met him in that context I would imagine you know.
[32:36] Jamie in a way.
[32:37] Okay there you go I knew you’d know better than I would I always want to say one at the end in that message me.
Then he got promoted from the Sam’s Focus to be CEO for all of e-commerce and then he joined got recruited by eBay to be the new CEO in April of this year,
so we’re just starting to.
You know he’s kind of got his sea legs and starting to make some changes first of all they’ve been running a Content campaign that’s been really good kind of back to the roots kind of thing.
And then one of the things that’s been a little sad to see is some of these niche market places picking off areas of eBay that was there they’re kind of bread and butter one of those was collectible luxury goods like,
Louis Vuitton bags not my personal category but definitely there’s a lot of collectors that love that stuff.
And the real real came out and really kind of among some other players but I think real real is by far the biggest one there now public.
[33:36] Took that category away from eBay and and kind of wrapped it in authenticity and more guarantees and a more high-touch guaranteed model which obviously resonated with the luxury space.
So this week eBay announced an authenticity guarantee program not a lot of details out yet but essentially I kind of took it as a net positive that they’re you know they’re kind of waking up and saying hey,
this was ours to lose we lost it now how are we going to kind of either stop the bleeding and or get back some of this.
Product that has leaked to a competitor at this point so.
So I’m watching eBay closely I think it’s going to take a while but I really like what I’m seeing from from Janie’s Jamie’s tenure so far.
[34:18] Nice nice yeah that’s going to be interesting to watch I feel like the
the transition to digital because of covid is God you know some renewed attention on eBay as well so they you know are probably in a good Scituate good position to launch some new services.
[34:36] And then we wanted to use the last little bit of the show talk a little bit about holiday and what we’re kind of.
What we’re feeling and hearing out there we don’t have any of the formal forecast out yet so those tend to come more towards the Halloween side of things,
correct me if I’m wrong in RF kicks it off and then you have like a comscore Forester and a bunch of others kind of coming out it’s gonna this is gonna be the hardest year to call
so part of it ties into this discussion that we won’t get back into is the shape of the covid recovery right so that’s obviously the overlying kind of factor
but what have you what are your either personal thoughts or what are you hearing about holiday externally.
[35:21] So very frequent conversation amongst my retail clients everyone is on,
I would characterize it as everyone is on pins and needles like there’s there’s a lot of hypothesis has that it could be.
E decent holiday.
There you know there’s some some reasons for optimism’s but there’s also some reasons for concern and it’s less predictable holiday season than,
we’ve ever had in my lifetime so so folks her are really nervous,
and the sort of unofficial beginning of the holiday season is this back to school season that we’re in right now and I can tell you that the early indications from back-to-school are not super encouraging so a lot of the retailers that,
traditionally have a big back-to-school,
have said that things have been a little slow so far I’m not sure that that’s indicative of how people are going to spend for True holiday because there’s a variety of reasons back to school is different than say Christmas,
obviously a lot of schools didn’t open this year apparel is a big chunk of back to school sales and apparel is,
particularly impacted by covid so the back-to-school feedback is a bummer but I don’t think it’s conclusive.
[36:38] What is going to be interesting to me is the normal Cadence of Hollywood of Hollywood of holiday is likely to be disrupted like normally we have this big in person Day on on Black Friday which is.
[36:52] If you don’t care about channels and you just look at total sales we sell the most stuff on Friday and then we sell the most stuff online that following Monday,
and you know we sell twenty percent of the stuff we sell for the whole year over these two months,
but those you know there’s two days or I think you were one of the first people that kind of coin the Cyber five talking about that Thursday through Monday period,
you know that that used to be a huge spike in sales,
and this year I don’t think it’s going to be quite as prominent because a few things have changed number one a bunch of retards have decided to close on Thanksgiving so,
in my you know opinion sort of bravely announced that they would close on Thanksgiving let all their employees stay home with their families and then a bunch of other big retailers immediately followed suit so Target Best Buy,
Dick’s calls all announced they had closed before this year there was kind of an arms race the other way like everyone would announce their opening an hour earlier and they kept you know,
they crept from Friday to Thursday and there they were opening more stores earlier making more employees work over over Thanksgiving,
so this is a nice Trend ordinarily that would mean that Friday sales would be even bigger because you’d be shifting all these Thursday sales to Friday.
[38:15] The traditional sales we have on Friday I don’t think are going to happen this year like normally you have all these doorbusters in your what you’re trying to do is get a bunch of people to stand in line and st. Stampede their way into the store,
as soon as it opens Friday morning this year those stores are only allowed 25% of the occupancy,
that they’ve had in past years and so there’s very little incentive to have crazy deals to get people queued up to have to wait to get in the store all day some of my clients have said like probably don’t need to water the grass if it’s raining,
and so I don’t think we’re going to see these big doorbuster deals I think that’s going to slow down Friday sales,
Home Depot is actually making an ad campaign around it and so they’ve announced black Friday’s canceled and what they mean by that is they’re not having a bunch of sales on that specific day and they’re going to spread their holiday promotions out over two months,
starting in October Target is also starting its promotions in October,
Prime day which is normally a summer holiday is pushed to sometime in October and so that’s probably going to start the holiday promotion season for Amazon,
and so I just feel like the combination of all these things there,
there’s good Arguments for and against how much total spending will have over a holiday but I have a feeling it’s going to be spread out a lot more evenly around this whole two-month period than it is those five days what do you.
[39:36] Yes so I’m on record that we’re having this v-shaped recovery I think it’s going to line up to be,
in the holiday I do think stores will have limited capacity everyone’s already pre announced they’ll close Black Friday.
I think it’s going to push it all online and the retailer is going to try to spread it out but it’s probably not going to work because Human Nature.
And then I think it’s going to coalesce around Cyber Monday because so I think I think.
Yeah the store days of Thanksgiving and Black Friday which have had increased online sales but but pale in comparison to Cyber Monday I think.
I think they’re going to go online and be way way up online but then Cyber Monday is just going to be,
yes huge day because it’s going to effectively replace the Black Friday excitement that we have I think they’re going to hold their promotions for that day they’re really juicy ones and consumers there’s going to be this game of chicken between consumers and retailers,
and the consumers are going to win and and they’re going to try to start early,
you know we’ve even seen I think it was Costco that’s famously already got Christmas out right after Labor Day,
that’s not going to work but I think you know the that Cyber Monday is going to be really really big.
[40:56] And I think I think we’ll see a lot of sites go down because I don’t think they’re going to be ready for all that to we always do but I think it’s going to be like orders you know I think we’re gonna see like a really big problem there.
[41:06] Yeah I mean one of the things people are legitimately concerned about is the traffic we’re seeing every day right now is very similar to what we normally would see on Cyber Monday so the magic question is if Cyber Monday is.
Incrementally as much larger from the Baseline this year as typical then nobody site has ever prepared for that before and the holiday Readiness prep that people did last February,
to get ready for this is not going to be adequate and so you for sure a bunch of sites would fold.
I don’t know what’s going to happen I think there’s enough uncertainty that you know it would be dangerous to assume that anyone knows but the.
I would argue it was already a trend that a lot of cyber monday sales was shifting earlier in that week why you know as mobile became a thing,
people were shopping online on Thanksgiving their shopping over the weekend and this year when weigh less people are going to get on a plane and be spending Thanksgiving with their extended family,
I think a lot of online shopping is going to start even earlier and with stores not open and people not going for doorbusters,
I just think a lot of the traditional Monday spike is going to get pulled back and prove your point the only thing that would really change that is if.
Retailers are way more promotional on Monday than they are on Friday for example so that’s going to be interesting I mean it is like.
[42:33] There are new products coming out so you know as you well know that the video game platforms have a new format where this year so you’ve got this Sony PS5 and the Microsoft Xbox series X,
um so you know in some ways like that could Goose holiday that iPhone you know is going to get released late and there’s some you know it’s the 5G version so.
You could see way more of a super cycle of those sales which could be interesting,
I will tell you retailers are nervous a lot of the sort of covid subsidy dollars are wearing off you know the doesn’t look like there’s going to be a second stimulus check,
the a lot of unemployment benefits could actually expire for a lot of people in a lot of states and so there’s there’s some,
anxiety over what the consumers status and you know will be for Holiday Inn at the moment while spending is high consumer confidence is not high so,
it’s anybody’s guess what happens in terms of you know how that that confidence impacts holiday spending so it’s,
it’s a very uncertain it’s we’re gonna have to watch it closely and I’m going to be way more interested in the,
the sort of interim data sources we get like when Adobe starts reporting actual sales that they see on websites more so than the than the surveys that like in RF and comscore are going to put out.
[44:03] Yeah and then an upgrade cycle I don’t think you mentioned that that we’re excited about is the iPhone 12 so I’ve been reading on our reports about this,
and I know you’re less excited about the functionality but I’m super excited about it and,
the analyst reports have been reading they’ll do this really interesting analysis of existing installed base and you can look at different traffic and see what who has,
I don’t know what’s the oldest living iPhone I think it’s a for I think there’s still some fours out there.
[44:36] So their analysis is there’s more old iPhones than ever before and use and then we have covid so you know a lot of people are spending more time on their phone,
and then the other one is there’s these carrier Cycles where,
you know if you aren’t on the fancy iPhone upgrade program like you are where you get a new one every year,
you’re on more of a two-year cycle with your your carrier and then they look at that and there’s a big alignment that happens here where you’ve got covid somewhere usage more people probably interested in upgrading their phone,
The oldest iPhone base ever and then some alignment of the carrier upgrade cycle and they’re calling it an iPhone 12 supercycle so,
September 15th is the day they’re going to allegedly roll out the phones and then they’ve also announced that or it’s leaked that,
unlike previous years where you could kind of order and get them very quickly due to covid the supply chain did delay when they’re gonna be available so that’s going to push them into the October time frame so a lot of stuff going to be going on around holiday this year.
[45:44] Yeah yeah it’s totally going to be interesting I’ve also heard interesting things about you mentioned the supply chain for Apple all the supply chain issues are going to be interesting to write so there’s one school of thought,
oh man there’s a bunch of inventory that we didn’t get to sell all year there’s a bunch of unsold apparel it’s going to be the mother of all clearance sales TJ Max is gonna have to you know open tents for all the cheap clothes that’s going to be heavily discounted,
but I’ve also heard from a lot of retailers that know the supply chain guys,
reacted super quick and cut off their supply chains to try to protect themselves and so there’s going to be constrained inventory in there there might not you know be enough product to meet demand and a lot of categories and so I like.
Hard to say how all that Nets out.
[46:29] Yeah yeah so then what’s your bottom line is it going to be.
Overall retail down compared to last year flat do you agree e-commerce will be a pretty big surge it’ll be think we’ll that 45% kind of trend that that we’ve been seeing.
[46:47] I do I so I think when you look at the will call it q 4 or the holiday quarter,
the I think that the top line numbers are going to be pretty good like I think overall spending on holiday will be pretty good I’d it’ll shift heavily to digital,
so you’re you know I think you it’s totally reasonable to expect another 45% e-commerce year-over-year growth,
for the whole industry but I think that Top Line number is going to mask the fact that there are just going to be a clear bifurcation of winners and losers and and,
you know I think games and electronics and home is going to do really well I think apparel and department stores,
are really gonna gonna struggle so well you know I I think.
Net net good holiday but that man you know I think they’re going to be some categories where it’s going to be really tough what about you.
[47:48] I’m going to say.
E-commerce accelerates from the 45% so I think we get up to the 60s because a lot of that brick and mortars just got to come online if the stores are going to be closed during the ski days.
Don’t think they’re going to get people in the stores to get excited if they don’t have some promotional stuff and it’s going to back it up to you Cyber Monday so yeah.
[48:17] Totally reasonable guess you are putting a lot of faith in the it guys to keep their systems running to get get 65 percent year-over-year growth but I hope it happens.
[48:25] Yeah thinking this for the cloud.
[48:27] Exactly and Scott that’s going to be a good place to leave it because we’ve used up a lot of time as always we’d sure appreciate it if you’d finally jump over to iTunes and give us that five star review we’ve been begging for.
We’re looking forward to seeing the bunch of you live on all these events coming up this month until next time happy commercing.