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A weekly podcast with the latest e-commerce news and events. Episode 174 is an interview with Web Smith, Founder and Editor-in-chief of 2pm, an e-commerce newsletter.

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Web Smith (@web) is the Founder and Editor-in-chief of 2pm, a curated, subscription-based media company.  We cover a wide variety of topics around digitally native vertical brands, including the recent Harry’s acquisition, and Away investment.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 174 of the Jason & Scot show was recorded on Wednesday, May 16th, 2019.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 174 being recorded on Wednesday May 15th 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott window.

Scot:
[0:38] Hey Jason and welcome back Jason Scott show listeners
Jason one of our favorite topics on the podcast is the Mega Trend that has several names that that we talked about our favorite is DMV because it just rolls off the tongue but there’s Brands going direct to Consumer and I’m sure there’s others in there
and tonight we’re excited to have on the show one of the top experts on this Trends both
from being in the trenches but also the Strategic level we have with us tonight web Smith
web is founder of 2PM DTC e-commerce newsletter that is published at wait for it to p.m. everyday
full disclosure for listeners both Jason and I are fans of the letter end of the executive membership enjoy reading.
And prior to starting to peel web was a senior executive investor founder and many well-known DTC Brands and he also as part of his whole portfolio what he does he advises and invest in lots of these Brands as well
welcome to the show web.

Web:
[1:44] It’s my honor guys for having me.

Scot:
[1:48] Call someone one kind of fun topical thing I just saw that the luggage company had no idea they call themselves a travel lifestyle company but I think of them as luggage company away,
just raised over $109 and I think they’re in the the definitely the Unicorn club which is valuation over a billion dollars but I think they’re closing in on a
billion dollars and I hear you have a fun away store.

Web:
[2:13] Oh yes well you know I know that,
one of you guys is a fan of Jen Rubio and she certainly on my good side a long story short I think it was maybe for 4 weeks ago for 5 weeks ago and I was joking about wanting to go to the Masters and everyone wants to go to the Masters but,
but I don’t have a joke that I would want to go one day but I also want to be able to afford my kids college education.

[2:36] DaVinci respond she says you know do you want my tickets and I’m like well.
Yes yes of course I want your tickets she’s like to meet up in you get to Georgia I confirm that I can get to Georgia and in the next,
3 hours is a really interesting sequence of events happens she responded she has one ticket it’s a very special ticket,
but in that time I told my dad who’s always wanted to go that I was going to take him,
buying two regular price ticket regular price tickets for the Masters for Sunday with Tiger In Contention cost $2,400 per,
okay so I buy these tickets which is a huge sacrifice and long story short.
My dad fly so maybe go to Augusta,
and I end up selling those tickets aside all together because Jen got me two of those special tickets,
so I can honestly say that that time gesture is responsible for probably a top 15 or 20 day of my life with my dad it was a bucket list item for him,
and we got to see you know the Masters and style.

Scot:
[3:50] Yep and tiger sounds like you’re a tiger fan is really awesome to watch him kind of make a comeback I thought it was a pretty interesting moment.

Web:
[3:57] On that day every everybody was a tiger fan that was really spectacular to watch.

Scot:
[4:02] Awesome,
Aiken South Carolina and the guy that runs all the concessions at the Masters lives in my neighborhood I don’t live there anymore but my old neighborhood and we all would get jobs at the concession so I worked at the Masters for 6 years.

Web:
[4:17] How many elements are cheese sandwiches have you sold.

Scot:
[4:20] A lot. The
with Aaron Works their way up to the Beer tent because a back 10 beers were like a dollar 75 or something like that and then all these quarters would fight with her so I get tips which is exciting
and second of all are there so many quarters swing around it that you could help make an extra like 5 or 10 bucks from falling quarters.

Jason:
[4:43] I just wanted to an awesome fact about stuff that I didn’t know that.
Spence I don’t where you able to liquidate the the general admission tickets to you invest in in.

Web:
[4:54] So I did not and that was very painful that was a lot of money for me but again it was my dad and he’s no 63 and he’s always wanted to go so I did it,
at the end of the day I still ended up net positive I got two of the most special,
tickets in all sports and I got to watch Tiger In Contention on Sunday and obviously ended up winning for the first time in 14 years so.
I got over that expense for the sake of how wonderful of the time it was my dad.

Scot:
[5:25] If it happens again don’t forget your favorite podcasters.

Web:
[5:29] I will never forget you guys.

Jason:
[5:33] Yeah that is awesome and I’m pretty confident on your hundredth birthday one of the things you’re not going to regret is is your investment in going to that Masters.

Web:
[5:42] I agree with you I’m a piece of it.

Jason:
[5:46] So speaking of things you might regret one of the things we offer to do on the show is is get kind of the,
brief background bio of Our Guest so that was nurse can kind of understand for the how you came into your your current role and knowledge base can you can you come,
walk us through your high level of career progression.

Web:
[6:08] Sure long story short I would say that I got my my first big boy job my real beginning e-commerce back at Rogue,
Rogue is a sporting goods and Equipment Company manufacturer and a consumer brand here in Columbus Ohio I was responsible for auditing and,
running paid search and so on and so forth or time there I learned a lot about you know frankly high tension,
advertising company was still growing at that time it was it was maybe a hundred people if it’s now it’s six hundred people,
it’s one of the most underrated e-commerce companies in America my opinion.

[6:52] I think it’s actually run so I learned a lot from a group shortly after that,
I cook pounded missing the name of Kevin Lavelle that company’s doing really really well now it’s Consolidated in Dallas and the team is strong,
having to step down as CEO himself and a gentleman from Stitch fix is now running the show,
from there I sort of switch gears and went on the publishing side so,
I was at unpaid for a little bit I was there director of gear Patrol director of e-commerce or e-commerce platform on top of the existing publishing structure first,
real ghost experiences are my first real contact Commerce or what I like to call them to your Commerce operations understanding how,
audience & N Supply meet in the middle.

[7:48] I consulted for a little bit and finally I decided to go all-in on 2 p.m. and it’s been almost almost three and a half more years now,
and I’m loving every minute of it.

Jason:
[8:01] That’s awesome and for listeners who might not be familiar with,
the 2 p.m. news that are let’s let’s break that down a little bit so this is a email newsletter is a freemium model right like you have a free subscription and you have some premium content,
that you can pay for do I have that right.

Web:
[8:19] Yes yes so you know I started the letter,
because I wanted a place to go where we could just focus on her industry without any distractions keep in mind this letter came about when every publication Under the Sun found a way to talk about politics,
whether it’s National or recode or whatever they found a way to talk about champagne I just wanted a place to go or like you only focused on.
On the issue at hand how to understand the industry that we are in and how to be able to better operate on that on that intelligence it’s always started for group of a couple dozen Allegiant obviously it expanded and,
but the letter itself fully monetizing the beginning of 2018 and it’s it’s been no looking back ever since it’s,
the structure that business is 3 folds we have,
pay subscription we have a Consulting arm and then we invest in direct to Consumer brands with some of our cash flows.

Jason:
[9:27] Yada interesting and the primary Topic in the newsletter is all things direct-to-consumer native brand is that.

Web:
[9:36] Well I would say it’s a little broader than that it’s it’s e-commerce in general but it’s a combination of,
digital publishing data branding and and traditional Commerce my belief is that you won’t understand one vertical,
unless you understand how they all interact together.
And the executives to understand how all of these articles are interacting with one another are the best computer to operate in this ever-evolving space.

Jason:
[10:05] Awesome in in so like what’s the profile of the ideal subscriber.

Web:
[10:10] Shirk so here’s a great test that I I do maybe once every 6-8 weeks I opened the list to come to my event we I host a dinner it’s fully paid for by my myself and Dory,
sponsor partner.
And I first come first serve we usually hosts 24 people at a round table an amazing dinner always amazing always an amazing time everyone that shows up is always director VP level and above.
So I don’t dig through to figure out how many Executives I have in the executive membership what I’m finding is that it’s heavily skews in that direction,
these are people that are actually making the decisions actually implementing the products and the positioning.
And I like that that’s where the focus is and I’m hoping to never have to expand beyond that.

Jason:
[11:09] Got it got it and Scott mentioned that both he and I are executive members in so short of mine ocean for the kind of content you publish in this will be a good test you can tell me about,
I’m wildly off-base are by have it is is you really have sort of three kinds of content that I’ve found useful,
you do these memories which I kind of news curation and I think you know they say that in the coming couple times a week,
you write a bunch of original content in your own sort of povs which are these sort of weekly reports and then you also have this executive Library which are these really useful,
list like the the jewel need a vertical Brand Power with sore with small that investors in the space or agencies in the space stuff like that Dua,
do I have the sort of content types roughly right.

Web:
[12:02] You do and one of the last,
inside added in the last several weeks is a member research Series where I will pick two companies against one of them
and expect and explain its excuse me explain how these companies are which company is better positioned to take the market,
so the first one was stockx vs goat.
That that research document actually influence a and upcoming investment round that’s all I’ll say about that.
And the most recent one was Peloton versus tunnel.
Pelton’s obviously be on demand cycling Hardware / platform,
and tunnel is the functional fitness,
mirror / digital weight apparatus that you that you attach to your wall so I explained,
based on both empirical data and some anecdotal evidence which which company I feel like to take the majority of the marker moving forward nothing that’s been really interesting for my executive member.

Jason:
[13:12] Awesome and then if I have it right here last.
Weekly report the topic was direct-to-consumer Playbook is a trap maybe you could tell us a little bit about what with your POV was there.

Web:
[13:31] Yes so one of the one of the most frequent questions that I did is from investors at asked me to help build a Playbook.
Or direct to Consumer Brands what to do in the situation which agencies to go with.
Choose a copywriter you know key terms that you want for SEO depending on the industry what song is this,
the notion of that of that particular report is that any company that’s been successful in the DTC space space whether that achieving unicorn status or below or right below it or are you asking me got there.
By being antitetico to what was written before then.
So instead of following what someone else is what another business is doing right write your own path if that’s really what you want if the debt exit is really what you want to achieve That’s the basis of the record.

Jason:
[14:34] Yeah that’s so like I sent you a you like there is no point buck or at least there there’s not one Playbook that works for multiple play brands.

Web:
[14:45] Correct everything that Harry’s did.
Was Waze was antithetical to what was going on in the Market at that time if you remember them going to Target with soft,
you know I thought we saw that you were supposed to be a direct consumer brand why are you giving up why are you giving up Margin for wholesale.
Or were they open their pop-up shop in New York there their Barbershop why would you go into retail that’s a that’s a poor investing why not just invested ads.
So on and so forth are five examples that I mentioned in that document and one thing is clear they they achieve a unique outcome because they were a unique company that was well run by there to Founders.

Scot:
[15:32] So so it sounds like the Playbook is rip up the Playbook.

Web:
[15:37] That’s that’s that’s exactly right.

Scot:
[15:38] If you can be a disruptor Fila disruptor you can’t follow Playbook.

Web:
[15:43] Correct correct I’m going to ask you to put someone on the spot there’s a quote.
There’s a quote in the actual lab report and it says embarrassed it’s hard only the disruptors will survive I will survive,
and it says Anonymous founder that was actually a quote by Kevin LaBelle who co-founded business name with me,
and he made a good point the whole Spirit of the document itself was to remind Founders that they have to continue disrupting if they want to succeed they can’t follow what everyone else is doing and expect that unique outcome.

Scot:
[16:17] Brickell let some so it’s that’s good let’s take out of it this thirty thousand foot level you’re the timing of the show here is really good because you mention Harry’s and they just required for 4 is a record for one of these to join in Africa brands at 1.4 billion by
folks that operate shit and then we just talked to her about even since I’ve
I kind of put our little strip together we had the away investment do you feel like,
taking the Playbook piece of side you feel like we’re kind of super early in this space
or is like this 1.4 billion dollar sale almost like a sign that work on towards the end game.

Web:
[16:56] Oh I definitely think they were early you know I was talking to Alex at Lightspeed earlier today and one thing that he added was that that you know there will be more there will be more stories like what we’ve seen from Harry’s in a way,
it’s just a matter of time and companies are finding out what it takes and they’re they’re finding their stride and they’re moving towards profitability a lot earlier and omni-channel operation.
Omni-channel operational success earlier and it sits and dividends.

Scot:
[17:29] It seems like invest yet these exits typically actually get more and more investors calling in this is that kind of what you’re saying is the investor interest is still on the rise.

Web:
[17:40] Stoner eyes.
However I tend to be biased I believe that companies should take as little money as possible.
So hopefully these companies are being Savvy about who you know they invite to their capital.

Scot:
[18:01] Yeah but if some is the ones that are scaling up or having to do omni-channel and break the Playbook and you mentioned like opening a barber shop that’s all that just kind of feels like.
The need to raise more Capital daddy how you reconcile those two things.

Web:
[18:19] That’s your question I mean listen going back to our days at missing mizzen is in over 700 stores right now I’m not even including the Nordstrom deal so that’s 700 + independent retailers around the country.
We did that because we were hoping for more cash flow and it worked out well.
The team bear did a successful job well beyond my time they’re digging into that model and really developing strong relationships with these retailers,
sometimes these operations are less capital-intensive than you would think it will all depend on the demand for the product.
In the hope that the products the sell of the product will pay off.
That’s that’s what I’m saying from a lot of the companies I mean from all reports Harry’s was profitable.
And I’m hearing that that away was profitable or very very close.

Scot:
[19:20] Yep this is kind of an aside but it kind of came to me that you probably got a really nice portfolio of these things have you ever thought of starting an angel list for people could invest alongside of you.

Web:
[19:34] No I haven’t listened I’m still figuring out.
How to build a strong Media company in 2 p.m.
And until I understand the ins-and-outs of of consistency over time II can’t go all in on the investment side like I would want to.
What is an interesting idea the problem is the more the more opinions that you have at that stage of growth.
From investors the more viewpoints on it so forth I think the more convoluted you’re going to be as a founder.
Nice guys rescue much but one of them one of the more bullheaded Founders that I know is it’s been what he have a recessed you can’t tell that kid anything,
it really believes what he believes and it’s paying dividends for him so my fear was getting a lot of investors involved early on is that the goal often for early-stage investors is to,
I guess in for some influence on the strategy or the model and you know I tend to believe that you’re supposed to listen to your gut and do your own thing and then and operate with a few strings as possible,
so I would actually say that we strapping to a certain point and then seeking investment what you have some social life.
Traction would be your social proof rather would be would be the play.

Scot:
[21:03] Cope with assignment Jason with sign up for mini mini Millions if you heated Angeles thinks I’ll just put him on Spotify.

Jason:
[21:12] You talk about Annoying opinions that investors don’t want mine would go right at the top of that list.

Scot:
[21:19] I was searching on Google for shoe and you did not come up.

Web:
[21:24] Yes please.

Jason:
[21:26] Why are you here yet exactly yeah I’m actually at the other end of of,
that that chain like I’m always getting the call because my client you know just got some goofy request from their investor so.
Yeah I feel like I have great great empathy for the,
the management team in that regards but the interesting thing is,
you mentioned what kind of in the first Inning on the DMV bees it does feel like they’ve done a lot of Buzz and they get a lot of mind sharing our space and a lot of people are talking about,
it seems like the number of entrances really balloon it wasn’t..

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A weekly podcast with the latest e-commerce news and events. Episode 173 is a live presentation from the ChannelAdvisor Connect show in Austin, Texas.

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This is a live presentation from the ChannelAdvisor Connect show in Austin, Texas.  If you’d like to follow along, you can download the deck here:

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 173 of the Jason & Scot show was recorded on Monday, April 8th, 2019.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

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A weekly podcast with the latest e-commerce news and events. Episode 172 is a discussion of the 2018 Amazon Shareholder Letter and Q1 Results.

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Amazon Annual Shareholder Letter

Jeff Bezos released the Amazon 2018 Annual Shareholder Letter, which this year was focused the the phenomenal success and growth of the Amazon Marketplace.  In the process, Amazon disclosed the breakdown of it’s 1P and 3P revenue from 1999 – 2018, as well as giving us the “physical gross merchandise volume (physical GMV)” for the first time.  In 2018 1p = $117B, and 3P = $160B.  For a total GMV of $277B (which means US GMV is approx $161B).   Prior to this disclosure we’ve all had to guess as the the actual size of Amazon’s retail business.  This makes Amazon the second largest retailer in the US, behind Walmarts $318B (excluding Sam’s Club), and ahead of Krogers $116B.

The letter also talks about the importance of companies being allowed to experiment (wondering as Jeff calls it), even if many of those experiments ultimately fail.  No customer ever asked for AWS, but a few success like AWS can fun many failures.  Even failures can be valuable, such as the Fire phone, which ultimately led to the Amazon Alexa.  Jeff argues, that as the scale of a company grows, so much the scope of these failures.

The letter takes a victory lap for some of the improvements in employee pay and benefits that Amazon has put in place and a challenge to other retailers.  A challenge that other retailers like Walmart did not particular appreciate.

As always, the letter closes with a reminder that the 1997 shareholder letter still accurately reflects the guiding principals of the company.

It’s very likely that this years letter, is in response to an increasing call from thought leaders and politicians to regulate and even break up large tech companies like Amazon.

Q1 Results

Revenue came in at $59.7B, 19% y/y growth ex-F) which was in-line with Wall Street consensus.  Overall operating margin was 7.4% compared to a 5.2% consensus, so that was a clear beat.  There is some concern about unit sales decelerating (a risk as Amazon saturates the market, and Prime membership plateau).

Surprisingly, ad sales growth also plateaued but that was explained as mostly an accounting change.

The big news from the Q1 earnings was that Amazon would be investing over $800M to move from free 2-day shipping for Prime members, to free 1-day shipping for Prime members.  With most retailers already struggling to match Amazon’s 2-day delivery promise, this is a meaningful moving of the goalposts by Amazon. 

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 172 of the Jason & Scot show was recorded on Monday, April 29th, 2019.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 172 being recorded on Monday April 29th 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.

Scot:
[0:38] Jason and welcome back Jason Scott show listeners so Jason did you survive the Epic geek week that we just went through with the featuring.
Avengers and Game of Thrones really big episode / movies come out.

Jason:
[0:56] I did it was soup this is the first time in a I did not get to see Avengers yet so I have tickets for next week so so spoiler-free please and we won’t do any Game of Thrones spoilers either
but I will say is the first time in a long time I was like desperately waiting for the weekend to be over.

[1:15] So that we can watch Game of Thrones so I got her the whole weekend I was just waiting for Sunday night and in that seems like counterintuitive.

Scot:
[1:21] Yeah yeah me too it’s pretty epic the amount of geekdom was was
was off the charts I ended up seeing an in-game twice with a complicated kid Arrangement so it was so I had like seven hours of of intense content.

Jason:
[1:38] You’re the only dude I know that gets to see the movie twice and win father of the year for doing it.

Scot:
[1:44] Yeah we’ll see if my wife agrees but yes I am not coming husband.

Jason:
[1:50] I decided when everything come out.

Scot:
[1:53] Mutually exclusive.

Jason:
[1:54] Apparently so I will say on the a joke about desperately waiting for the weekend to be over with a young kid at home my brother who’s in the same situation and I am taking the saying that like.
Sunday night is the new Friday night because I like entertaining your kid for to haul at the holidays is so much more exhausting than going to work.

Scot:
[2:16] Yes it absolutely is.

Jason:
[2:19] You could have warned me about that earlier.

Scot:
[2:21] Sorry you didn’t ask him.

Jason:
[2:23] So in between all that supersetting get dumb and parental responsibilities I feel like it’s pretty dense Amazon week as well.
Amazon news new your margin is there opportunity.

Scot:
[2:47] It is so Amazon had there since we we we we were at Austin and lay down some shows that we’ve been putting out there so the lot of Amazon music come out so first mr. Bezos Jeff who’s one of our top listeners
he releases annual shareholder letter which is one of my favorite days of the year and then they also had their first quarter results that came out last Thursday
so with all the Amazon news that is going to be our Focus For Today Show
so let’s jump into the shareholder letter this being an Amazon geek I read these like.
Many many times I keep them all and I refer back to the 97 letter L
this is a really interesting shareholder letter first of all because a lot of time so like last year he talked about it always being day one.
I’m and you’ll come
cultural stuff I would say about Amazon and this one was really so very internal thinking, sharing a little bit of how they think about things of Amazon with which I find intriguing the 2018 letter the one that was.

[4:00] Just came out recently it was really different because it was really external so the first thing was there is a really big surprise you and I have talked a ton about mini people
underestimate the size of Amazon because their revenue is a derivative of the GMB that goes the platform
so first-party sales 100% Revenue equals gmv
third party sales they only recognize their take rate of that GMP to Amazon’s a lot bigger than you would think they are on the retail side
and this is been a puzzle that everyone’s been trying to figure out literally for 20 years and just right there in his letter Jeff Bezos revealed
the the DMV for 2018 from third parties so let me pull that up here just kind of go through here
so we’ll talk about why he did this but here’s what he said third-party sales are grown from 3%.
The total of 58% to put it bluntly third-party sellers are kicking our first party but badly
and then he said just got a little long so I was up to it and it’s High party because her first party. From 1.6 billion
1999 2A 117 billion this past year the compound annual growth rate for a first-party business in the same time. Is 25%
but at the same time they’re pretty cells are grown from .1 billion to 160 billion.

[5:25] Compound annual growth rate of 52% so twice the rate so he’s essentially saying 3ps going twice the rate at 1 P we talked about that on the show that’s definitely a thing.
Write an external Benchmark eBay’s GM be in St. Drew a compound rate of 20% from 2.8 billion to 95 billion
so
I want some pack there but he was he’s essentially saying in 2018 first party was 117 third-party 160 you had those up you get 277 billion new surrounding you got about three hundred billion in GMP
so and then you’ll see
yes I didn’t do the revenues during that period were 232 billion so much have to take out AWS and advertising and then you’re left with retail gross it back up to 277 Amazon’s a lot bigger than people think so that was really interesting
and you’re the real question is why why would Amazon do this do you have any speculation on them.

Jason:
[6:29] And why they would they shared the the the gym being focused on the third-party sellers for the first time.

[6:36] Yes I do right now I think there’s been a lot of news recently talking about folks that are interested in regulating Amazon and that you know you have all these.
Candidates for political office I frankly on both sides of the political Spectrum in Amazon has been a easy Target and you have people like a professor Galloway that talks a lot about splitting up all the big
Fan Company in Amazon gets included in that and it’s a complicated issue.
And I feel like there there’s a number of vectors where they like the the sort of simple.
Criticism of Amazon probably isn’t accurate or fair but one of the the best offenses Amazon has that I think they’re really trying to lean into is.

[7:29] We we are not some big company that has these huge revenues where a facilitator of all these small businesses that have these these revenues and you know if you were.
To try to split Amazon up based on antitrust allows you to have to establish that there are monopolies in one of their big defenses against being a monopoly is hey we don’t have 277
billion dollars in sales our partners have.
This hundred and sixty billion dollars in sales those are even our sales so I think
emphasizing the their Marketplace roll.

[8:08] Is is one of their better defenses and I think you know there’s a full-throated version of that in this the shareholder letter but I think there’s some earlier efforts as well where they,
like they really started doing some advertising campaigns promoting the small businesses that sell on Amazon and in hitting those numbers and so to me.
That there was a huge nugget in that letter that it was the first time that he really shared enough data let us back into an accurate gmv and.
Amazon famous for not sharing information like that I think Jeff has a good quote we’re in the information
Gathering business not the information sharing business so she had to have a good reason to share it and and in my mind the obvious good reason is it’s it’s one of the the pillars of of his defense against the
The Break-Up break us up argument.

Scot:
[9:00] Yeah I’m playing up here he even specifically says you know where we’re a very small percentage of overall retail even when you can add one Pea in 3p so so definitely you know kind of.
Trying to get in front of the spani trust talk that that’s out there.

Jason:
[9:17] Yeah they’re making the anti-monopoly argument and I’m frankly based on the way the laws are written right now like I did think it actually is a good argument
the the the argument that comes up a lot.
Protecting Amazon the there’s this related argument and and I think some of the the presidential candidates have gotten really vocal and this one is the whole like hay
they’re using the marketplace data
as an unfair advantage to design their own products so they they look at what what those 3-piece sellers are selling and then they knock it off and sell it themselves and it’s not fair for you to be
one of the teams in the baseball game and the Umpire to use a bad metaphor that Elizabeth Warren tried death
I tried to use at one point and so that’s an argument that I also frankly think is wrong but that argument ironically
like probably get strengthened by buy this argument that the marketplace is the biggest part of our business.

Scot:
[10:23] Yeah he doesn’t really defend against that other one he kind of takes a little bit of a swing out is just reminding how many employees they have and which is
portents and then they have raised The Gauntlet and I think this is actually just came out around the time.
I think it was Bernie Sanders was talking about how they don’t pay a living wage that they upped it to $15 an hour for all their full-time books.

Jason:
[10:47] Yeah. So that way there’s a few funny references right any any so that you mention that he he compare their there
third party DMV that eBay which eBay did not appreciate and and had some pretty prompt responses to online and then Walmart decided
the comments about hourly wage were targeted directly at Walmart despite the fact that Walmart was not named.
In the in the shareholder letter and I think maybe you guys should pay your taxes.
Which also is kind of a.
Amazon doesn’t pay a lot of taxes and I think there’s a legitimate criticism to make their from a from a social justice perspective but.
They do pay all the taxes they required to pay under the US tax code so it’s it’s maybe a little unfair to criticize them for.
Following the rules but it does are interested or interesting sort of public fuse I’m not sure.
That in past decades you saw this kind of like real-time tit-for-tat between
in a bitter Rivals I got I don’t think the car manufacturers took those kinds of over shots at each other that we’re now seeing eBay Walmart and.
And I Amazon shoot in that I think we’re going to have more examples before the show’s over.

Scot:
[12:14] Yeah yeah the the Twitter battles between these guys is pretty fascinating
and then some other interesting thing was kind of everyone was able to now say okay here’s a real datapoint let’s go sharpen our pencils
now one of the things in the letter is it.
Because it’s a letter and not really Financial document this is not what’s called Gap measure meaning that it’s subject to General accounting principles you know everyone Defiance GM be a little different so for example.

[12:47] EBay.

[12:49] They’ve gone back and forth I can’t remember where they are right now of you have this concept of unpaid items so they’re there are some items on eBay that go unpaid and then know should they count in GMT or not they went through a phase where it was in wasn’t sometimes shipping is in
what are the sayings did Amazon did say was this was paid physical items so this would not be things like apps
any of the Kindle e content in the ebooks any of that kind of stuff music digital music digital movies any of those kinds of things were not included in here
so that being said one of the analysts that we put a lot on the show John Blackledge she’s over at Kalen he had 2018 at 314 billion so
off by about 20% Which I feel like could be I’m pretty sure this number I called includes media and digital stuff so and I know he hasn’t text me yet it have a chance to put for the show so pretty close
my model was a good bit higher
so the percentage wise you know was really capturing the 25 in the 50% growth rates as well so I’m going to go find my model never actually have a real datapoint
and then the real variable you say two points is.
What the average selling prices for 1 p.m. three piece suits this really gives us a pretty good way of backing into that now it should be helpful going for.

Jason:
[14:18] Yeah I know I was like a day and a half of my life when that letter came out cuz I quickly started opening spreadsheets and building forecasting models and and trying to like.
Back into the physical DMV in North America and compare that with like Walmart’s physical DMV in North America for example and there’s all kinds of interesting ways to slice it and dice it now that we have.
Slightly less speculative data.

Scot:
[14:47] Yo what you think about the rest of the letter.

Jason:
[14:51] So I liked it you know he hit some
important points that he is he’s talked about in the past as well the the main theme for the the back half of the letter after the gym V stuff.
Was.
The the notion of the importance of curiosity and what he called the power of wandering and this is a section of the letter where he talked about the.

[15:21] The company needing permission to.
Sort of stumble into new products and solutions and not necessarily take a straight line from each each product Innovation to the next and so.
You know he kind of talked a lot about how when you know you have a successful product in your iterating it that you know you want.
Can you achieve a certain scale and you can you can really focus on efficiencies and and try to take the shortest path from each version to the next version as you can.
But when you want to invent something new most often you can’t do that by.
Knowing in advance what you’re going to invent and that you can’t necessarily ask your customers what they want and and you don’t assume that you’re going to get some.
Some you know game-changing new innovation out of a sort of feedback from your customers and so that the huge example for him of that was AWS and that like.

[16:23] You don’t know customer ever came to Amazon and said hey we really need to rent server capacity from you you guys seem pretty good at doing it for your retail store you should sell it to the rest of us.
That that was a a a sort of risky bet that Amazon had to take that like if we offered this to people that they would accept it and.
And I could be a big business and it’s become a huge business obviously and then you know in the letter and Jeff gives examples of.
Of dozens of soda products on top of AWS that got invented in much that same way that like.
No one was necessarily asking for machine learning models from Amazon but they built them and put them on top of AWS.
No one was asking for all these like specific database solutions that Amazon invented but you know many of them have been super successful.
And you know you kind of made the point that.

[17:19] You have to give people permission to sort of explore and fail and then he’s easier to transition into talking about how important it is.
To have failures and he talked about the Fire Phone for example and that that was a you know a billion dollar fail for Amazon.
But you know his argument was that that failure enable the success.
With the the Amazon is I quickly hit mute with the Amazon Alexa and that those products only existed because.
A bunch of Engineers had permission to fail on the on the phone that was sort of the precursor to this product and he pointed out.
As a company gets bigger that their failures have to be bigger as well and so you know he’s going to.
He talks about you know you should expect companies of Amazon size to have some pretty pretty big honkin of failures and that that’s a sign of of Health then so.
I think that that’s an interesting message you know like I’ll be blunt like I walk into a lot of distressed.
Clients and they they talk about like only being able to make a limited number of a bats and I can’t afford for any of those vents not to work.

[18:38] And I Michael those aren’t Betts if you know if you have to know in advance that eat each one’s going to pay off like there’s they’re like by definition you can’t take any risk and they’re not bets and and you know Jeff is talked before about.
Like if you have to know the outcome in advance is not an experiment in until I like this weather seems like a kind of articulation of that Philosophy from Jeff which which.
I do think makes a lot of sense.

Scot:
[19:04] Yeah I was good to you it’s just easy to make billion dollar bets when you know why she doesn’t care about you make me up your GPS and you have a cute voice.

Jason:
[19:16] Yeah I mean I do think that there’s an argument the date they have more leeway and until I do think a lot of companies to wear that are a little sort of jealous of that but.
You know the kind of argument would be the day earn some of that we way with their investors.

Scot:
[19:34] Yeah they’re they’re pretty upfront about it with Wall Street will talk about it and q1 but you know if the know they basically say to Wall Street we’re really focusing on growth and we think this is a big opportunity for that ride.

Jason:
[19:48] And if you
it’s for those that aren’t super friendly are at the end of every single annual shareholder meeting Jeff references the original shareholder meeting letter he wrote in 1997 and includes a..

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A weekly podcast with the latest e-commerce news and events. Episode 171 is a discussion of Direct-To-Consumer brands physical retail experiences, recorded live from The Domain Mall in Austin.

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A discussion of Direct-To-Consumer brands physical retail experiences, recorded live from The Domain mall in Austin.  Jason & Scot were in Austin to speak at the annual ChannelAdvisor Connect conference, and took time out to do store visits at The Domain.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 171 of the Jason & Scot show was recorded on Monday, April 8th, 2019.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded live from Austin Texas on Monday April 8th
2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott Wingo.

Scot:
[0:41] Hey Jason and welcome back Jason and Scott show listeners,
this is the first worst Jason not only are we in the same place together but we’re outside and I know listeners love your trip reports because you are the roving retail trip report.
Ninja but we are actually out at a shopping mall in Austin doing a live Jason and Scott show.

Jason:
[1:03] Yeah this is awesome I feel like we are completely breaking all the usual conventions of podcasting because I am actually,
actively shopping with you here at the Domain at Northside in Austin while we’re doing a podcast I’m really excited to find out if this is going to work at all.

Scot:
[1:21] Yeah yeah so I’m sure their listeners are already hearing some interesting sounds were,
kind of sandwich between a bar some construction and a lot of these noisy birds that live in Austin I’m not exactly sure what they are but hopefully that adds to your Ambiance as you’re listening out there.
So the how we get here so bad a year ago my wife and I went to Austin on a little trip and we discovered the small area,
I have been looking for one of those hot handbags are suitcases I should say called in a way and we were drawn here by the had an Auburn Pop Up and Away so we came out here,
and had the digital native brand experience it just really loved the small I think it’s one of my favorite,
malls in America if you will so we decided since you and I are here for channel advisor connect that we would do a live remote.

Jason:
[2:10] Is an awesome idea.
So this isn’t one of these outdoor lifestyle mall so we’ve we’ve talked about those before like they tended that tends to be the format.
That is thriving more than some of the other formats it has a couple of traditional big anchor tenants like a Neiman Marcus I think the new Big anchor tenant is Nordstrom that might have opened here a couple years ago,
as you mentioned most of the digital native brands that that are in a brick-and-mortar business have a,
a location here so that’s interesting you can see the the Caspar Warby Parker been of us,
Etc all here and Scott what were your sort of initial Impressions the mall you mentioned it’s your favorite Mall why so.

Scot:
[2:58] Gets a little another background thing this mall is owned and operated by Simon Property Group one of the larger Mall operators,
YouTube haven’t come here three or four times now what I was surprised with the day is there’s a lot of clothes stores I wouldn’t say.
I would kind of guessed 10% maybe a size 15 my little surprised by that because it does seem to be a pretty hot Mall area,
now most of them already have a coming soon so we’ve seen the ones that are close are already kind of being back filled so so that was a little bit of a surprise so I don’t think anyone is immune from all getting would be my first impression.

Jason:
[3:34] Yeah and I are going to have to burst one of your bubbles not all signage is truthful.
So if you’re an operator and a tenant leaves the wallpaper you put over the front of that store says coming soon whether you have a tenant soon as a very flexible definition.

Scot:
[3:52] Brands so I assumed that they were like.

Jason:
[3:55] I think that’s actually the way you can tell into this mall feels like it has about a hundred 75 stores and that’s probably a fair estimate that like 15 of them are so seem like they’re vacant and at least half of those deer Point felt like.
They had a named tenant moving in and I would argue.
In the modern era that’s just the.
That’s the sign of a healthy mama like there’s some Concepts people open here that just didn’t work and stuff goes out of business and and stuff opens up we are here on a Monday afternoon in the middle of the workday,
and I would say traffic feels adequate like it definitely is not bustling but there’s a significant number.
A folks here shopping on a three on a Sunday afternoon or Monday afternoon and as with most of these lifestyle malls it is sort of a mixed-use.
Model so there’s a lot of retail here there’s a lot of dining here some of what you know it’s sort of higher in than a food court might be there’s a couple hotels on this property,
because we’re here for channel advisor we’re staying at much fancier hotels downtown but there are cool hotels here and there’s some entertainment venues as well so like some of that traffics probably retail but some of it maybe,
locals coming for lunch or something.

Scot:
[5:21] Yara Uber driver live is live in Austin for about 40 years he kind of called it this domain area we’re in the little subsection called Northside he called it the new Main Street of Austin so it is definitely kind of,
not only a shopping destination but people are kind of moving here and living that go that the the busiest part of the mall today is definitely the food and and kind of services.

Jason:
[5:43] Shout out to Velvet tacos that took care of us.

Scot:
[5:45] Yes delicious.
So let’s do some sort reports to the first store we went into his beta and Jason if you have a superpower I haven’t witnessed it before but your superpower is getting store associates,
to spill their guts about what’s going on in the store so tell us what you learned about me.

Jason:
[6:03] Yeah we talked about bananas on the show before one of the founders of FUBU his has been on an episode so just as a reminder for listeners that maybe didn’t hear that this is sort of a.
A retailer Services mall or another way to say it would be a physical Marketplace so this is a a store,
the brands can buy a shelf slot on and tell their story and so it tends to be,
young up-and-coming Brands and novel product that maybe don’t have huge awareness or distribution yet.
And or product they require like better demonstration or explanation to be,
to be sold and so they they would pay a beta to have a slot in the store data gets a commission on everything they sell and so it is very much is like beta is a Marketplace operator and their individual brand selling their products.

[6:55] In the store fun fact this is my second one I’ve been in this week cuz I was in the Santa Monica store in LA or earlier within the last week.
So the thesaurus get a lot of traffic one of the pros and cons of beta is it’s a great store for,
what I called Discovery like if you don’t know you’re looking for something you walk in your aunt you’re very likely to find something you didn’t know exist that you think is cool and you want to buy.
And so for example I think Scott and I both desperately want although I guess I’m guessing neither of us have it used for,
one of these Neo digital pins which is a physical pain that you write on paper,
and everything you you doodle or right or no to take are stored in the pen you can download them in real time or after the fact as PDF stand iPad.
And it just kind of cool thing that you maybe didn’t know existed before you walked in the store.

Scot:
[7:51] Yeah they have a ton of that D on my first impression this paid I’ve been in the one in in Palo Alto,
first of all this felt like a Google take over so almost entire perimeter of the store was taken over by Google home kind of what I would call Little vignettes vignettes they had a device may be some Associated kind of,
Google device maybe maybe a phone or something but then also they were trying to walk you through some use cases for how to use the Google home devices so there was a recipe than yet,
there was a weather temperature vignette have an ending like a travel kind of a 1000 Rushing look like Google is spending pretty big bucks are there two.
The new used for superpower and got the store so she has to say some the top selling things and this particular beta are the key smart system.
And Shout out we know some of those hooks are listener so.

Jason:
[8:42] Sometimes known as the smart key.

Scot:
[8:45] Bone-conducting headphones are popular,
the Neo smartpen and then there’s a lot of really cool musical instrument stuff so jamstik so you could teach yourself how to play guitar,
is it my favorite thing was because we’re always have to do this company meetings and you always are shouting out in these Open Spaces had this really cool I’ll do it was $900 call the sound box Co KS,
I was just a ginormous Bluetooth speaker that you could either take take to the beaches like a mega Boombox or I would use it for like a PA system at a company meeting.

Jason:
[9:20] And when you say ginormous you mean 30 lb.

Scot:
[9:22] Yeah this guy has like a whole system for carrying it and what not but it looked quite robust like you could stand on it or whatever have some sand get on it and it wouldn’t wouldn’t get destroyed.

Jason:
[9:32] So that again. I think this works great for that kind of thing that you discovered something you didn’t know existed. Point about Google
Google’s a perfect example they don’t have a network of their own stores and they have products that you may not know you need unless you see them used or demonstrated you may not understand,
some of the Google products and so they need physical brick-and-mortar demonstration Apple solve a problem for their products by opening hundreds of their own stores Google hasn’t done that yet and so it makes sense that they would invest in these,
opportunities to create a physical presence the downside of a store like this is you can’t rely on them having any particular product.
Before you walk in the door so it’s not a store you walk into with a mission like it’s unlikely you’d go I need new headphones I’m going to go to bed at like.
That headphones in particular it’s likely there’s going to be several different kinds of headphones in a beta store.
But they may not have the complete breath of Assortment or the brand you’re particularly in.

Scot:
[10:32] They’re not going to have like a Bose QuietComfort they’re not have some any kind of pedestrian thing that that you would go to like a Best Buy for absolutely.

Jason:
[10:38] Exactly so it’s interesting that we were talking to the guy,
and we’re talkin about some of the other good retailers in the in the mall and he mentioned Peloton and Casper and in his POV was that those guys would do great in a beta store.
And that you know that they all have like sort of physical elements that would resonate with a betta customer a we also talked about a way he felt like the away bags would do particularly well in the.
In a beta store and I was kind of.
Going down on that a little bit I actually don’t think a beta store can offer the immersive experience that a Casper store can offer so I would actually argue when you have the opportunity to have a Casper store in the mall.
That’s what you should do is have a Casper store not being beta but if betta is in a mall that Casper isn’t in you can imagine that that.
Peter could be a supplemental experience for sort of expanding the footprint for some of these other brands.

Scot:
[11:40] Yeah yeah I think they could be in or kind of a Thing versus just a you know you have to choose between 1.
So I can pay the we went we walked by Peloton they had kind of a class going on in there and,
yeah it looks like it looked to be quite busy they had many of their their signature devices that’s on the treadmills that’s their newest widget there’s a lot of Buzz out on Wall Street that this company is going to
dummy onesies that goes public as we speaking today lift has filed as done their IPO if someone,
this is been a little bit of a rocky start for tpd on what that was is good for the company not so good for the investors that that bought the IPO,
I’m and then Pinterest is actually starting the road show today so we’re starting to see this IPO Log Jam clear and a lot of chatter out there about Peloton being one,
and a big surprise about Peloton is it’s not really a hardware company it’s a subscription song.

Jason:
[12:35] Yep exactly so it Center.
The hardware is a little bit of the razor in this model and then the the monthly subscription for content is the Razer Blade so you the original product was stationary bike,
with a big screen on it and they have a great group gamification model so you take live classes.
With other remote participants so you can get a very famous instructor if they were teaching at a spinning studio in New York they’d only be able to accommodate 30 bikes but now this instructor can have to get two thousand people in their class,
and you get the instructor on the video screen in front of you you’re competing against all other two thousand people you can see how many watts your making it hard you’re working,
against these other two thousand people and that access to.

[13:24] The the finite commodity of really good instructors and the in the sort of competitive gamification in the fact that.
There’s so many classes that you kind of have you can have a completely flexible schedule.
That those set of factors have caused Peloton to do really well and get a really zealous user base a lot of people think that they’ve taken a big chunk out of the the dedicated,
spinning businesses like SoulCycle in those guys,
so the newest thing for them they were a direct-to-consumer business they only sold the bikes online they did infomercials and so retail is a very new model for them that they’re rapidly opening stores,
probably because they captured all those early easy customers online and now to expand the footprint they’re having to have a brick-and-mortar present.

Scot:
[14:14] Yara are class a mall in Durham has a Peloton pop up so it’s like the slow glass enclosure with two or three in there.
The last I heard I think there they’ve crossed over a million subscribers so you know starts to feel when I talk to a lot of people there, like it’s just like going to be almost like the next Netflix there’s nothing.
You know the that software you could have imagined it on tons of different devices and this whole in-home exercise area is hot with feces so some companies to kind of keep an eye on if this is interesting to you
others mirror and tonal who have all raised substantial Capital to go after this Market they all have different approaches.

Jason:
[14:51] Yeah yeah and there’s you might expect a lot of sort of me choose even on the original equipment like that the cycling bike and Peloton is expanded now to treadmills,
so yeah it’s an interesting hot space and I think I may have mentioned in our seat yet show,
there’s a whole Exhibit Hall at CES dedicated to this sort of connected Fitness face and these guys all had a prominent presence there.

Scot:
[15:14] Cool so then we we wanted around we walked by bonobo Sonora be no need to go in those those are well well treaded for us then we went to the bakery and sampled some some Bakery items and some.

Jason:
[15:28] The seasonal oatmeal cookie really hit the spot.

Scot:
[15:30] Yeah 10 minutes of Gone by since a latte so Jason was was he was she.

Jason:
[15:34] Unless my wife is listening in which case I had the fruit parfait.

Scot:
[15:38] Yes good job having just that one strawberry then we went into the Casper store and it was my first Casper so I’ve seen their little kind of in Target pop-up before but I never been in a Casper store how about you.

Jason:
[15:50] I have been in a number of Casper stores in so this is on the smaller value side of Casper stores.
So they they do a good job and Merchandising their products so they have their primary product is a mattress that can be a direct home delivery that they they sort of.
I want say they invented the product-based they were the first runaway success in the.
Foam mattresses that you can press down small enough to UPS them home,
and so they have a lot of these these sweeping vignettes these little mini houses with their various mattresses in them,
that you can lay down and try and what will get back to the Deep Dives to God did in trying a mattress in a minute that they ought they expand until I bedding and they have a very cool like bedroom lighting system.

Scot:
[16:39] Oh yeah that’s my favorite.

Jason:
[16:41] Serta hypnotized asked for about 15 minutes and we were playing with that.
What’s different about this Casper store that’s kind of weird this Casper start-stop bigger Casper stores have sort of more of a social media component so they might have had like like.
Photography set where you can take a cool Instagram picture of you in a in a Casper vignette and in the Marquis thing that some of the big Casper’s have is this thing called the dreamery.
And the dreamer is kind of the wework of nap.
So you you make a reservation and you pay to go into this isolated soundproof pod with a Casper mattress and premium bedding and you literally can pay to just have an app for,
for half an hour and my understanding is that like you think sell out till like.
Team offsites and team building and things and it’s it’s kind of a cutaway they’re monetizing people trying their product which is pretty clever.

Scot:
[17:38] Michael you should see the associates look on his face when Jason asked if he could take a nap.

Jason:
[17:43] Side note if you’re going to do at a store visit it’s important to have a super cheesy annoying joke as an icebreaker for everyone so thanks man.

Scot:
[17:52] Yes you’re really good at that your dad jokes are off the chart.

Jason:
[17:57] I work hard on I’m so we didn’t mention this in data but I highly encourage our listeners whenever you walk in a beta store and someone comes up and asks you if you need help the first thing you should ask them is when they’re expecting to get out of beta.

Scot:
[18:08] Yes the guy gave.

Jason:
[18:10] He almost fell on the ground laughing.

Scot:
[18:12] Epic Gyros and side eye.

Jason:
[18:15] The @apple what you like to do is go stand by the laptops and when someone comes up and offers to help you which will no longer have an Apple store by the way but I pathetically if it did what you want to do is go yeah,
when did iPod start making computers they love that joke.

Scot:
[18:32] Uncle Joe in Casper the little vignettes for funny Casper always has his good better best mattress system nice get the names they have like the wave and the This Not That,
I’m so you could try those in six or seven will vignettes and then they had to find one that has the,
the self lifting feet and head and like it’s got magic fingers so that what that was I I spent quite a bit on time on that one,
that was fun and all lights were cool so it’s kind of a lightly but next your bed you can just rotate the light it’s it’s a cordless so it sits on what looks like a what are those kind of chargers the conductive charger,
an induction induction charger I’m sitting kind of like turnitin dim series of lights or you just..

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A weekly podcast with the latest e-commerce news and events. Episode 170 is an interview from eTail West with thredUP President Anthony Marino.

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Anthony Marino (@amarino) is the President of thredUp (@thredup), the nation’s leading online marketplace for women’s and kids’? like-new apparel. Over 25,000 brands, ranging from Gap to Gucci, are listed on thredUP.com at prices up to 90 percent off retail. 

In this interview, we cover the basic thredUp value proposition, challenges and opportunities for the re-commerce business model, the dynamics of operating a two-sided marketplace, customer acquisition, reverse logistics, and the dynamics for brands in the re-commerce space.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 170 of the Jason & Scot show was recorded on Friday, February 22, 2019 from the eTail West tradeshow in Palm Desert, CA.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Friday February 22nd 2019 live from the etail West Trade Show here in,
somewhat Sunny Palm Desert.
I’m your host Jason retailgeek Goldberg and unfortunately due to travel issues Scott couldn’t be here today so you’re getting twice the Jason for half the usual cost,
Kira detail one of the big topics of conversation has been new retail Concepts that are blowing up and so we thought.
What better guess to have on the show then one of those Concepts so today we have the president of thredup,
Anthony Marino on the show welcome to the show Anthony.

Anthony:
[1:08] Thank you Jason great to be here.

Jason:
[1:09] We are thrilled to have you long time listener that the show will know we always like to start by getting a little bit of background about the gas so I can you tell us how you you came into your role.

Anthony:
[1:18] Sure so I’ve been at thredup about 6 years.
And I came to thredup it’s it is actually an interesting story I came home from work one day six seven years ago and my wife had a big green polka dot box on our kitchen table.
And that was a threat of box,
and she reached into the box Sycamore have to show you something and she reached into the box and Sheepshead of unfurled this very good-looking cashmere sweater.
And she said I bought this for a box and I was like okay and she said this is a $500 cashmere sweater and I was like.
Okay and she said and it’s used and I was like what and so she then told me the thread up story where she had sent in a bunch of our kids and her clothes to thredup. Credit.
The shop on the site from sending in her stuff.
She could have cashed that money out but she kept it on thredup the shop and she bought this amazing sweater that was used a great deal and she said to me you need to go work for this company.
And then about six months later we moved to California I was renting a house in the East Bay my kids were crying cuz they missed all the friends in New York and a big adventure in an e-commerce marketplaces in retail and second hand started for me.

Jason:
[2:37] Wow so decide note I’d be really focused on your wife’s new interest in shopping habits if they’re going to that directly affect your career.

Anthony:
[2:45] Yeah she’s she’s she’s a smart smart person so I listen to her advice at least that’s what I say publicly.

Jason:
[2:49] I feel like we exactly we all benefit from marrying up so used to it but let’s jump into the threat of story little bit like down and give us the the rundown on the value prop.

Anthony:
[3:03] Yeah well that the the founding story precedes me by a couple years are founder and CEO James Rinehart look into his closet and just saw a closet full of clothing that eat that he didn’t want to wear,
but all the clothing was in was in fantastic shape and I think if you.
A few fast forward to today where Marie kondo is encouraging people to the spark Joy by removing things from their homes that they don’t use or don’t love anymore,
his inside in his closet and on that one day many years ago and in Cambridge Massachusetts turned out to be something that millions and millions of people were experiencing as if they bought a lot of things that they weren’t wearing or enjoying the fact those things,
making them feel guilty or unhappy because they were taking up space and they were reminders of mistakes from purchases past and he said I want to figure out a way to,
I make it easy for people to easily get rid of these things know that they’re not going to be wasting their for destroying the Earth and getting into the hands.
And and that was really the birth of thredup it was how to help people,
clean out and make amazing you so the things are no longer wearing a particular women’s and kid’s clothes and then provide amazing deals for the people on the other side of that equation for whom those fought those were amazing finds there are Treasures.

Jason:
[4:17] That’s awesome so if I like to read repeat to see if I get it right basically you’re a sort of a two-sided Marketplace for Consignment so,
people that have stuff in their closet that they come to regret or in end of usefulness for them they send those to you,
you go through a process on board those keep the ones that are resellable and wisto’s on a e-commerce site that consumers can then shop for
like a high-value products at meaningful prices.

Anthony:
[4:48] That that’s right about there’s about twenty-five to thirty five thousand Brands listing on thredup at any given moment there’s 2 million plus items on the site.
And they’re up to 70 80 90% off retail and there in like new condition so it’s the things that America has in its closets are.
Beautiful but for the most part of what the vast majority are and we take those things that come to us and we we price them and attribute them and photograph and put them online so it’s super easy with a person who wants to clean out,
and then for the person on the other side who wants to buy great brands at great prices is just as easy as shopping do you want any other e-commerce site.

Jason:
[5:25] Awesome and I have no trouble imagine that there’s a super valuable merchandise and all of our closets that we don’t use I imagine not everything in our closet is super valuable and I feel like there’s some
remorse about what happens to that like I’m guessing you’re going to tell me you have a good story for how you disposition the stuff that maybe isn’t as hell.

Anthony:
[5:46] Yeah where are our goal and our commitment is that you know we have a 100% reuse goal and commitment for the items we receive so there’s a couple things we can do.
With items that people send to us that aren’t high enough quality to be listed on our site or in one of our stores or with one of our Retail Partners so what will we can send those things back to them we can say hey,
after the animatronics app you can you can pay a little bit and shipping and will send them back to you by the way most people.
Do you know they do that only wants they that they don’t want to see it come back again or like wait how’d that happen why did I do that and then there are some things that we can.
I’ll distribute through our partners who can sell those at consignment stores that don’t have the quality standards that we have,
some of those things can be recycled into carpets and and if you’ve ever gone to the car wash those those Rags that they use to dry your car off those fibers can be recycled into into other future fight future Fabrics,
and I’m so yeah that’s that’s how we do it.

Jason:
[6:47] Got you and what are things that seems cool about your model to me.
2 fundamental problems you have with a lot of marketplace models are that you have trouble guaranteeing a service-level so I went eBay matches a buyer to a seller,
they can’t necessarily guarantee how fast that sellers going to ship the goods to the buyer,
and they’re also can be a trust problem the eBay can’t necessarily guarantee the web the sellers selling is authentic in in the condition that the,
the seller promised it’s in so you can send it to me you feel like a two-sided Marketplace except
you handle all the logistics and fulfillment so you basically can guarantee a service level and you also act as a sort of independent trust verifier that gets to see all that merchandise before the consumer buys.

Anthony:
[7:31] That’s exactly right we are the we are the seller of record you know so we take possession of the goods we have for distribution centers throughout the us and we’re increasing our volume of those,
are those items are upcycled did an incredible incredible volume I mean we will,
up until today have a vial cycled over the past couple years over 60 million items this year alone will do another 30 million so.
Yes we take possession of the goods we make sure there in like new condition we photograph them and put them on a hanger and then we can ship them in a beautiful box wrapped in tissue paper and and send them out to our buyers and they are.
Generally Blown Away by the quality of the product.

Jason:
[8:10] And so does all that merchandise that you’ve received an unloaded within a single fulfillment center somewhere in the US or out of the Majestics work.

Anthony:
[8:17] It lives in in for facilities in a distributed across the u.s.
And we do all kinds of interesting things TARTA route inventory and product to different centers depending on supply and demand and how the overall market place is performing but yeah those those four facilities process all those items,
for sale online and offline.

Jason:
[8:38] Got it and is everything in the Fulfillment center available for sale right now or do you try to I can almost imagine you get a lot of new merchandise from Spring cleanings and there could be a lot of fall merchandise in or winter merchandise in that
and in that stops or try to sit on any of that or how does that work.

Anthony:
[8:55] You mean how do I optimize for seasonality.

Jason:
[8:57] That’s a way more elegant way.

Anthony:
[8:58] So so so it’s a great question because it’s a really tricky math problem because think about it from from the consumer’s perspective,
they don’t necessarily want to go into the closet to be like is this fall is this spring is this winter all they see is too much stuff.
And they want open up a bag or open up a box and put it all in it and and move it out so.

[9:23] All of that said you know we’ve been at this a while and we have millions of Sellers and when a seller sends you a box of stuff there’s an incredible amount of data that you know about that seller their sizes their brands.
What they’re what the what the what the what brand items are moving into versus clearing out of as you get multiple bags over time so we found that there are ways.
To influence what the what the seller will put in their clean-out bag to thredup and it has a can have a significant impact so,
we are we are we work with wood sellers in a way that’s this pretty light touch but the people generally want to do the right thing if they feel like,
they can put a few extra more seasonal things in a bag and maybe learn a little bit more because we’ll see faster cell to run an item that’s it’s perfectly in season we want to share those economics and incentives with sellers we’re not heavy-handed about it,
we try to use our data and what we can do on the types of people who you request bags from that helps us,
can we just want to make it as easy as possible for sellers but yes we are everyday getting more and more seasonally relevant I think it’ll actually be.

[10:35] Don’t forget I think if I think ahead and 6-12 months I think you’ll see the the seasonal element of our site really really kick out cuz we’re.
We have so many billions of data points on this now that we’re actually starting to figure it out.

Jason:
[10:48] That’s awesome and I can come and there’s this healthy tension on the one hand
you really like to sanitize that person to only send stuff to you that you know you’re going to be able to sail and is highly monetizable and like frankly that’s going to let you come back to that cellar with the best news hey we got you a bunch of money
I can imagine there’s a subset of your sellers that like.
Appreciate the money but there’s some catharsis bike again for your earlier Point their Marie kondo followers or whatever in there that you aren’t a,
new better way to get everything out of my closet than the Salvation Army was last season or something like that and.
In a way you don’t necessarily want to discourage those people because 10% of what they send you is going to be exactly what you want you’re just going to,
after project lights out in general do you try to get people to just any of the 10% that you’re going to resell or are you happy to take everything because it makes you more seller friendly.

Anthony:
[11:47] This is something that how we treat.
Salaries in how we think about their experience and why they they decide to order a front of clean-out bag has been.
Something that we’ve always wanted to be very very clear about from the beginning cuz you’re exactly right do you want them to only put.
Perfect things in the bag or do you want to shove everything in there and there’s real trade-offs you know them or prescriptive to get with people the more they’ll be like to know what this is a little bit too hard but if you just let him do put anything in there then it then it becomes hard for us and I think what we.
Decided in general is that we want to make it really easy for consumers and let us as a as a business that is built on,
reverse Logistics and data let us figure out and become the most amazing company at figuring out how to make the best use of those goods and monetize them in a way that’s great for suppliers great for our consumers and great for the environment,
so I think that has been our our our challenge you know but I think we’ve come a very long way and look there’s always.
There’s incredible benefits over the long term for making things easy for consumers and if we’re the company they can figure out how to crack those problems.
Then I put you in a very powerful position to build quite a moat around that that volume the quality of the supply that customers are going to send you.

Jason:
[13:07] That’s awesome let’s talk about that reverse logistics for just a sec because it is funny in apparel.
I’ve been in this industry long enough to remember when it was like oh no one will ever buy clothes online like they need to fit everything and feel everything and obviously that.
That.
Could have been disproven but it is the case that the economics of e-commerce prepare alarm or challenged in some other categories largely because
there is such a high return rate right and you could talk to most retailers and it’s like me and the return rates are tripling and those returns are so expensive though it just takes of getting that stuff back and then how that retailer.
Dispositions that can they resell it is new what do they do all of those problems most retailers would say we’re not very good at it and it’s a core fundamental challenge with our economic model and I’m looking you and it’s like,
that’s your business is convincing people
to send stuff to you so I’m curious like a view if you found a Magic Bullet like what what is the experience and how do you how do you tackle that that sticky reverse Logistics challenge.

Anthony:
[14:12] We found the Magic Bullet is to be extremely transparent with your customers so we love to say to our customers when they call customer service or when they write in.
That there’s no such thing as free returns you’re paying for it somewhere you’re paying for it in the product or paying for it in your membership fee you’re paying for it somewhere it will be like to see the customers is our goal was a business,
is to be able to list online.
The greatest volume of high-quality second-hand apparel at the lowest possible prices and we will be explicit with you this is what it cost for us,
to take that item if you send it back to us and put it back online whatever cost $0.50 or $0.99 whatever it is and so if you send those items back to us.

[14:58] It’s going to cost you this but we also say to our customers hey if you are shopping with us and you don’t seem to return a lot.
When it will never charge you a return fee if we then we bought but by equal measure will say to customers who buy 10 things and return 9,
hey we we see you but you been doing this,
we love you but you’re killing us and so what we’re going to do is we’re going to give you a one more free V but if you keep returning 90% things you buy we’re going to have to start the charge you a dollar 99 per item to restock it so,
we just want to be really upfront with people about the reality of the business and.
Is yours a good news about returns they affect everybody equally they’re equally miserable for every e-commerce company so what this forces us to do is just have the best possible product you keep the core proposition
it’s got to be in a bang on as far as the brands we are for the quality of the product the selection daily freshness and pricing so forgetting all that right.
Then we should be able to sustain returns if you can’t then you got to figure out a different business model.

Jason:
[16:03] Got it better in general it sounds like you almost have a dynamic pricing model based on customer Behavior but you’re super transparent about it.

Anthony:
[16:11] Very transferred there’s no mystery maybe call him we call you use your level return policy and.
Looking to maybe some customers who we say you know what you eat we see you’re returning a lot if you want to pay 999 a month.
And you can return as much as you want then then we’ll offer that to you so I think you I think we just got to think about and see where you’re going to meet them where they’re at and left with them about what it takes for us to stay in business if they love the product to be like you know what I get it,
it’s like I don’t know actually returning nine things back to you until we actually created a product called a buying bundle,
we’re and we found a lot of customers were buying lots of things and they were paying shipping from you know from us to get the stuff sent to them and then returning stuff in the way back,
we gave them its ability to,
can I purchase things we didn’t ship it to we have critical mass of their items on the site and then they would they would avoid the the shipping fee until there’s things you can do when you understand a job your customers trying to do,
then you can start to say okay I see what you’re trying to do here is what it what it looks like on our end and hear some here’s some options on ways we can,
we can make it work for you and Mike brought work for us we’re big fans of that we we love experimenting with things like that we think it’s the way he Commerce has to work.
And yeah there’s no such thing as free returns.

Jason:
[17:31] So one of the fundamental challenges usually have with a two-sided marketplaces is you have to win at two things you have to convince a bunch of people to be sellers on your platform and you have to come in too much of people that want to buy goods from your platform on most resided marketplaces
the strategy is usually to be great at one of those which,
facilitates the other if you get a ton of buyers it’s easier to get sellers if you get a ton of great merchandise it’s easier to get buyers like in your case have you found that there’s one side that you absolutely have to win at or what what is the strategy around customer acquisition.

Anthony:
[18:02] There are really two so that the needs and the in the complexities of the..

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A weekly podcast with the latest e-commerce news and events. Episode 169 is an interview from eTail West with GGV Capital Principal, Robin Li.

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Robin Li is a principal at GVV Capital, a global venture capital firm that focuses on seed-to-growth stage investments across Consumer/New Retail, Social/Digital & Internet, Enterprise/Cloud and Frontier Tech sectors. The firm was founded in 2000 and manages $6.2 billion in capital across 13 funds. Past and present portfolio companies include Affirm, Airbnb, Alibaba,  Peloton, Poshmark, Slack, Square, Wish, and many others.

In this interview, we cover a wide range of topics around the hot trends in retail and consumer in North America, and we deep dive in what’s going on with retail, social and e-commerce in China well.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 169 of the Jason & Scot show was recorded on Wednesday, February 20, 2019 from the eTail West tradeshow in Palm Desert, CA.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Wednesday February 20th 2019 live from the etail West Trade Show here in relatively Sunny Palm Desert,
I’m your host Jason retailgeek Goldberg and unfortunately due to travel issues Scott couldn’t be here for this show so we’ll have to try to Soldier on without him.

[0:46] His longtime listeners will know two of the most common questions we get on the Jason and Scott show are what are the hottest Trends in
consumer retail companies and what’s going on with retail social and e-commerce in China so we’re really excited to have on the show one of only a handful of people that can answer both of those questions
please welcome to this week’s show Robin Lee Robbins a principal at ggv Capital welcome to the show Robin.

Robin:
[1:12] Thank you so much for happy having me.

Jason:
[1:14] We are thrilled to have you running really like to start the show by running a little bit about the background of our guests can you tell us a little bit about how you came to the PC World.

Robin:
[1:25] Yeah sure so before I was Adventure I was actually an educator so I spent three years and Teach for America teaching special education at Middle School pretty much all subjects,
then I went on to go into business school I really didn’t have a hundred percent Clear Vision of what I wanted to do,
but I did a lot of volunteer work in the local Chicago Community especially at startup accelerators and Teach for America is entrepreneur program which is why I really learned a lot more around,
answer when I was in business business school I took a chance and apply to this job opportunity to intern at shemane which turned out to be a top PC found in China,
and I actually never lived in China I was born in Hong Kong but I was like hey this is awesome and I’m very curious to learn so I ended up.
Applying and that’s up to me and that’s where I’m at hahnstown managing partner now at UCB Capital little that I know.
He was actually on the Forbes Midas list as one of the top PCS in the entire world and so after meeting Hans might not work really crew he’s an amazing mentor,
I was briefly have Flex has a venture capitalist but then after I finished business school I returned ggv capital and I’ve been here since ever since it’s been almost five years.

Jason:
[2:37] That’s awesome so you are basically followed like Jack Ma’s career trajectory sort of starting as a teacher and then going on a diamond 80.

Robin:
[2:44] He is definitely my role model.

Jason:
[2:45] I think he’s a lot of my real mom so that is awesome and I love the Chicago connection I’m also a chicagoan and until recently I I work right next to 1871 everyday so.

Robin:
[2:57] Well and that is what I want to do.

Jason:
[2:59] Yeah perfect so you probably walked by my office at razorfish all the time.
Back in the day so let’s dig into ggv just a little bit can you tell us a little bit about the firm.

Robin:
[3:11] Of course I’m ggv capital is 6.2 billion dollar of global Venture Capital firm I mean Bastin entrepreneurs globally in the US and Asia and other emerging economies,
it’s always actually been doing this for the past 18 years we have offices across Silicon Valley which is Menlo Park in San Francisco,
we have Beijing Shanghai most recently Singapore and I am based in New York as a team we live by a few Simple Rules great impact the local and then global.
So in terms of stages we’re actually stage agnostic and so we can do anything from investing in a c Stage Company to very late Stage pre-ipo Company so that means we can buy checks as small as a hundred K to 11:50 million dollars,
I would say that we are very sector-specific we focus on four main particles consumer internet and Arbonne Tech which is what I cover,
Enterprise SAS and detect and so we.
Adventure capitalist we are believers behind the Billy verse we look for a very globally-minded entrepreneurs and Founders that are changing the world that we live in.

Jason:
[4:16] That’s awesome and you were smart enough to pick the best of the sectors that GB covers to sew.

Robin:
[4:21] That is very exciting and very relatable.

Jason:
[4:23] I like it and I know it’s a famous whistle I already know the answer to the question I’m going to ask but can you share a couple of the companies that you guys either LED or been involved with.

Robin:
[4:36] Yeah of course in so I mean given that we already tell whether I’m going to focus on some of our e-commerce before you we love and nothing in the sector and e-commerce ecosystem and so we’re actually early investors in Alibaba back in 2003,
which really helped to shape our Global Commerce strategy,
and if you ask me back a lot of companies in Market places such as wish house Poshmark offer up,
do even direct to Consumer Brands like Peloton Lively when key locks function of beauty and even each other’s like boxed wholesale and yammy buy and sell.
We invest a lot in e-commerce enablers and so you could think of these as,
Payment Solutions such a square and a firm to Bigcommerce to power a lot of the merchant shop.

Jason:
[5:22] That is totally awesome and congratulations on all that success I’m going to assume there were some that weren’t as successful that we didn’t answer.

Robin:
[5:34] Thank you we try.

Jason:
[5:36] Yeah and I hope we will get a chance to dive into a few of those but you were here in detail West to talk about a pant to participate in a panel about what’s hot in,
internet in retail so I want to steal all the Thunder from that panel what what are some of the things that you’re you’re singing excited about.

Robin:
[5:57] So in terms of what we’re excited about we we look a lot into these e-commerce enabler is an ecosystem partners,
and so for us we could we could be in a box brands and at Marketplace is and what not but we we do see that there’s been an emerging Global trend,
and so whether it’s next-gen retail
across the world or enabling Global Commerce Solutions weather on the payment side or actually on the cross-border shipping Logistics I that’s something that we’re diving deep into.

Jason:
[6:28] And it is interesting cuz you guys have a big International footprint and obviously a lot of successful North American brands as well.
And you’re one of the three conversations we have here is.
Like us there things that seem like they’re wildly successful for like particular in China like social commerce Arch at Commerce or different things that we.
Maybe haven’t quite gotten his quick adoption in the US when you take a global investment strategy I could imagine that’s even harder because you’re investing in a company that may excel in one market and and.
I have a more difficult time getting Traction in the in some other mark.

Robin:
[7:09] Yeah that’s right I’m but we actually looked at both markets for a lot of inspiration I mean,
you know before China Look to You a signed copy. A lot of the models they’re right but now the US looks to China and so we actually take a lot of lessons learned and help each size scale,
we also see this happen a lot in Emerging Markets which actually look very similar to China on so we recently made some investments in Latin America as well as Southeast Asia.

Jason:
[7:37] Nice.
I sometimes have an iPod hypothesis that there are experiences and consumer value products that get launched in China sooner.
Eventually get Traction in the Uso it’s white and sometimes sometimes I feel like you can use China as a little bit of a time machine sometime to predict things that may may come to pass year if you like are you able to do that at all or.

Robin:
[8:04] Yeah for sure and so we we see a lot of Trends in China particularly because China have leapfrogged and many different Industries and so you could say you know what,
China has LeapFrog in the mobile side of leapfrogging a payment side and so that’s really exciting for us to take a while to look into and next-generation Retail from offline to all mine is a,
very fake friend in China that we take a lot of inspiration from.

Jason:
[8:32] Yeah for sure and it’s like.
The thing that comes up by for me obviously there’s great Mobile payment Solutions in China and I feel like that’s a foundational thing that enables a bunch of great customer experience as they are,
in people go ho maybe American consumers don’t want to do social commerce or something like that and my premises that they probably do we just don’t have the great Universal.
Digital wallets to enable those transactions like we like they do in China and so in my mind,
we may see more of those does Asian experiences come here once some of the enabling foundational things like like mobile payments are in place.

Robin:
[9:13] Yeah actually you know Instagram has doing a lot of these interesting selling features and it hides a lot into social commerce in the lessons that we see,
I in China and so this has been like a huge area and opportunity for us and we started investing in this in this a couple years back,
we made an investment call Little Red Book or red for sure,
it was founded in late 2013 now it’s growing to about a hundred sixty million users in China and is the number one lifestyle sharing community in China,
and if you want to think about read it a try to like an Instagram memes Pinterest me to Amazon,
nothing is that users there are on the platform are young predominantly female Urban I’m very trendy and so they not work with each other through a lot of this content on the platform.

[10:01] And so we see this as,
a chance that are in China right and they shape a lot of the Next Generation consumption behaviors and what we call like social commerce and so what they do is they buy something whether it’s in China or overseas come back post about it,
how do you know if your show off to your friends but also collect items right and see what’s trending in a which category and so,
I’m making a career trip next week I want to know what’s the best selling beauty products,
what are the top snacks in Japan that I should bring home and so they actually have about a hundred thousand years are generated content post per day amassing billions,
Impressions I so given that they know a shiny at any given time,
they actually can Source by while I’m building Marketplace and this is exactly what they’ve done so they now have this incredible e-commerce business and a Marketplace on that platform,
how to cut a tire back to the us a few months ago they even started helping Brands like kkw Kim Kardashian’s Beauty brand launch in China.
And so we definitely see that you don’t answer damn is definitely Berry global,
and are starting to take a lot of lessons and enables social commerce to work and I’m very excited to see what what what.

Jason:
[11:15] That for sure in so going back earlier Point could you see that becoming popular in the US as well like,
obviously you know you mentioned the Instagram’s new shopping features I feel like a lot of their predecessors have tried shopping features and didn’t get good adoption until you could go.
You know poo poo that but you against your for your point you got to China and like man the level of Engagement with,
the social Platforms in WeChat and pick a dude in red and all these platforms you go man if if so many consumers are doing that there it’s hard to imagine that they don’t want to do that here as well.

Robin:
[11:51] Yeah I definitely think that you know if anyone can make it work it’s probably going to be Instagram I think it’s a little too late for for Pinterest to make that type of pivot but,
yeah I definitely think that especially with Logistics getting easier or payments becoming faster and I’m working at 4.
Consumers estate it’s definitely possible.

Jason:
[12:12] A bunch of the companies in your portfolio are direct to Consumer Brands and we’ve been spending a ton of time talking about sort of the evolution of the market and it’s interesting.
I frequently point out to my like water just have us retail clients that there.
They’re really only has been one new wholesaler launched in the last 10 years and nobody can name them by the way they’re your company it’s boxed but in general like all the new companies aren’t.
Traditional wholesale retailers there direct to Consumer brands that make their own stuff.
The challenge has been it seems like they all get to some threshold level of sales and then like seemingly plateau and so you know once you hit that plateau.
We see them sell themselves to bigger establish brands or making huge investments in customer acquisition that maybe,
seem crazy and unsustainable and I’m thinking about Jad or blue apron or some of those those bad examples examples.
Or they start to look at other channels to grow like partnering with traditional wholesale retailers are opening their own stores are those kinds of things is is that just growing pains of the Sea Market and are you confident that these Adidas e companies.
Are are going to be able to like hit the kind of scales that give you a good return on investment or is that a challenge in that space.

Robin:
[13:40] Yeah I mean that as you can imagine this is a Hot Topic Mojave sees the decency and Landscape is changing faster than ever and I think that.
What we seen is that there’s just been honest and amazing increasing amount of new players launching pretty much every day
I want these Innovative strategies that can reach customers that have never been,
been able to be done before writing and in the US and this has really been powered by Facebook and Instagram has made it possible it and in China like you said it’s really WeChat WeChat mini programs right,
just to give some perspective we’ve now seen 820,000 merchants on Shopify alone that sell pretty much decency.
Most of which aren’t even venture-backed but have built huge businesses,
Amazon has 136 private label Brands and Amazon’s pretty much start to Consumer and these are what to taking over what traditional.
Department stores and grocery stores have done 383 exclusive Ranch House on the Amazon platform alone and I think that
you know if he’s he’s going to play in the space I think we have to take a look at hey
it’s been so easy to start these Brands what is it that I can really distinguish up from the other is it a very unique supply chain we look for a Founder that has an incredible story ambition and and something that can give them a very tough and competitive.
Definitely somebody who wants to go global.

[15:08] Because I think today if you only create a brand just for certain group of audience you actually missing out on billions of other smartphone users around the world and we’re very bullish on cross-border e-commerce.

Jason:
[15:19] Yeah and that that feels like another interesting evolution of me is like you go back in time traditionally brick-and-mortar retail has not.
Expanded geographically very well like there’s a few examples but like you look at some of the most successful retailers in the world and they kill it in their home market and they really struggle to get.
Global adoption in other markets in this this new DLC model.
You know seems like it thrives globally and jumps borders much much easier in with lower risk frankly.
Without all those costs I’mma start a big believer in the DTC Market to talk a lot about how like I feel like the future is.
You know one or more big aggregator marketplaces in every market and then every other retailer will essentially be d2c and the.
All those retailers in the middle that are mainly trying to sell other people’s stuff are the ones that are most at risk and what’s interesting is people. We’ve met so you think Walmart and Target are going away because they’re wholesalers.
And what’s interesting is there.
They’re becoming DTC companies too and you look at Target in Hugo man they’ve launched five new brands like things I can and Jack.
Are selling two billion dollars a year in some ways those are the most successful new consumer brands that have been launched in the mark.

Robin:
[16:40] I mean Walmart and Target have always had private label right and it’s only been kind of resurfaced lately and I would packaged in a different way.

Jason:
[16:48] Yeah and I think I think the difference is now they’re treating it like a brand instead of a.
A cheaper value proposition to a national thing they’re putting marketing behind it and said to me that.
A hugely interesting trend is like Kroger has this wildly successful private label brand called Simple Truth.
They’re selling simple truth on tmall in China by Kroger is in a retailer in China.
And I feel like that that’s an interesting Trend that you guys are sort of on the,
the right side of it the moment Scott would be very angry at me and I didn’t ask about on demand Services as you may know he he’s started up another one of those as we speak.
So he’s obviously bullish that is that like you see a good future for the on-demand type Services as well.

Robin:
[17:37] Oh yeah this is a segment that we love to invest in especially because it is a crossover between both e-commerce and orbitec and so you know we we actually started to see this take off and then you ask me for China,
but what China is done is another Emerging Markets is is that it’s taken off because it’s driven off by them by micro Mobility I saw when you look at on demand services in the US you can always remember.
All the different silos that is touch like GrubHub doordash ubereats really just go after food.

[18:10] And then you have instacart going at the grocery and your Postmates going on these various goods and,
and then you have some very select on demand for massages or what not.
But I think that you know that the issue or kind of the challenges that this can provide is that.
You have to acquire users again and again and it say it gets really expensive and maintaining even operational fleets on your own is something that requires a lot of capital and it’s very very intense of an illusion all four,
Founders as of what we’ve seen in China emerge I need mega platforms are so-called super apps so very sample maid swan.

[18:50] It’s a rising super app in China it’s kind of like an Amazon for services,
that’s all you have fresh. Reviews Yelp delivery local Services booking,
movie tickets groceries even you can’t even book travel and vacations on there and let alone ride-hailing and I’m bike sharing is so it’s pretty much everything,
and they leverage the micro Mobility solutions that they have to power all the deliveries and every category that you can find an you know that actually last year they are. And it’s now 40 billion dollar market cap company,
we actually,
take this lesson..

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A weekly podcast with the latest e-commerce news and events. Episode 168 is an interview from eTail West with Bombas  CEO and co-founder David Heath.

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David Heath is the CEO and Co-Founder of Bombas (@bombas), a fast growing, energetic e-commerce apparel company, focused on making the most comfortable socks in the history of feet, while helping those in need. Founded because socks are the number one most requested clothing item at homeless shelters, for every pair they sell, they donate a pair to someone in need.

In this interview, we cover a wide range of topics including the Bombas founding story, their SharkTank experience, the DTC business model and growth challenges, social marketing, innovation, the brick and mortar.

If you’re inspired by the Bombas story, they are hiring!  FREE SOCKS included. https://boards.greenhouse.io/bombas

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 168 of the Jason & Scot show was recorded on Friday, February 22, 2019 from the eTail West tradeshow in Palm Desert, CA.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Friday February 22nd 2019 live from the etail West trade show,
here in semi Sunny Palm Desert
I’m your host Jason retailgeek Goldberg and unfortunately Scott is trapped on a plane so we’re going to talk about him and assign him a bunch of action items.
One of the top trends we always cover on the show is direct to Consumer Brands and so we’re excited to have on the show one of the top DTC companies in the apparel industry,
so joining us from bombas we have the CEO and co-founder Dave he.

David:
[1:01] Thank you.

Jason:
[1:02] Hey Dave thanks very much for being on the show a long time listeners will know we always like to get things started by getting a little bit of the background about how you came to your current role can you tell us a little bit about your bio.

David:
[1:13] Yasso born and raised in New York and I don’t think we need to go back that far,
but I so actually my dad’s not to renew are so very early on it I knew that entrepreneurship was something that I wanted to do was very inspired by him and watching him build a business from,
the basement of our house to you know something that I think we’re all very proud of I need to go to school for entrepreneurship at Babson College and then upon graduation.
I always found that every job I had I can end up working for a smaller and smaller and smaller and smaller company ultimately landed at a media company where I was the seventh employee Rana clean up where I ended up meeting one of my co-founders Randy Goldberg,
it’s been 6 years there we developed our relationship and kind of always shared his mutual passion for wanting to start a business together one day.
We developed business plans for numerous ideas ranging from services to pack the product,
ultimately it was kind of one of these moments of Fate that I think let us to where we are today I have Andre scrolling on Facebook back in 2011 I came across a quote that said that socks with the number one most requested clothing item at homeless shelters in.
I immediately wasn’t like oh my God there’s some business to be had here I just kind of stopped me in my tracks and I was like what you said something that.

[2:38] I’ve never spent more than a second of my life or day thinking about is perceived as a luxury item for somebody else,
so I remember walking over to Randy’s desk and I remember sharing the quote with him and then over the next couple weeks we both found that we just couldn’t shake this idea,
obviously followed entrepreneurship and the other Trends were happening in the startup World in,
Tom’s was in there 50 or business and growing incredibly fast where we park her just announced that they had launched about six months prior and kind of bug and reinvigorated the conversation around the one for one business model cuz when more be first launched.
They were one for one I wear that was kind of their remains take they’ve more position to be a fashion brand these days babe.
That’s some kind of the light bulb went off and we were like, what if we created a company where we donated a pair of socks for every pair of socks that we sold to help him solve this problem in homelessness.
Remember like okay well what type of socket we integrate how are we going to create,
no carve out our place in the in the market and so we spend the next two years looking at your doing research and development trying every pair of sock on in the market and ultimately landed on was.

[3:55] I’m much more comfortable and Innovative kind of everyday casual
athletic sock so at the time Brands like happy socks and Paul Smith we’re coming out with these brightly colored dress socks and your funky dress socks for men wear a trend
Randy and Iraq start of guys we were jeans and sneakers to work everyday.

Jason:
[4:14] And you are tube socks up till then right.

David:
[4:16] Oh yeah totally totally you know Walmart all packed everything,
and so what we ended up realizing was that there was this large gap in the athletic Market where you guys are.
12 pack from Walmart or you buy these individual premium price products that were really aimed towards the runners and cyclists and basketball players and hikers that were costing 15 1820 $38 a pair
and so I was like what did Linnaeus a $38 pair of socks from a $2 pair of socks.
So all of this technology and Innovation seamless toe arch support comfort footbed you know high-quality fabric new articulation in the heel.
Amounted actually a lot more Comfort just an everyday wear but I was realizing that all of these sock companies are marketing all of these Innovations just towards the enthusiast.

[5:04] I’m kind of waiting our light bulb moment our our our our our moment way so what if we took all those Innovations and marketed towards the mass Market consumer and,
pitched in a while seamless toe is better for standing on your feet every day as a nurse or a firefighter or a baker or you know,
mom chasing after her kids or a school teacher.
And that’s bombas was born and we launched the company back in August of 2013 and here we are five and a half years later we’ve just donated I believe our 15 million pair of socks.
Team has grown significantly we continue to double your over here and sales yeah it’s been a wild ride.

Jason:
[5:47] That’s awesome I put your key like there’s some pesky details that might have stopped some people from pursuing that like expertise in like design or Manufacturing,
Jane or a bunch of stuff I didn’t hear you mention having a having a rich background in.

David:
[6:04] Did not did not at all.

Jason:
[6:06] Yes I’m sort of curious was bombas able to happen because,
those things are now easier to Outsource in your able to leverage that or did you guys just jump in and learn how to do stuff and make some mistakes and kind of grow the expertise organically.

David:
[6:20] Yeah I think it was I think it was a mix of luck and the fact that we didn’t have any expertise that allowed us to create a product that was I think far superior than anything that we had,
ever experienced it say the lock portion of it was so when I sat down.

[6:36] Early early days of the idea I sat down with my dad and I was like I got this idea for a sock company,
yeah expecting him to be like that’s one of the worst ideas you’ve ever had but do you think I’m leaving your godfather was in the sock business for 40 years and I know that you did really well by himself can’t go talk to him,
so I called him up and it turns out that in the late eighties and early nineties use presidency of Gold Toe,
I’ve been left Gold Toe to start a private label stock manufacturing company which ended up being one of the largest private label stock manufacturing companies in the world so.
Falling into kind of expertise and somebody who literally knows every single supplier of socks in the world and knows how to manufacture any type of sock in the world,
was a massive advantage and something that I totally totally a tribute to lock,
the component that wasn’t luck that I think once we started the R&D and design phase,
with the fact that we had no bias and no snow we weren’t skewed by any preconceived notions in manufacturing and I remember.
Very vividly talking with one of our manufacturing Partners I said to them I said I want to put a seamless toe on this athletic sock.
They’re like why would you want to do that like that’s wildly expensive you only find seamless toes,
ano Italian made dress socks because they’re so thin you can actually feel the same they’re like on athletic socks you can’t feel the same cuz they’re cushiony was like I can feel the same like I want to go to see what’s the weather like.

[8:06] Do you know how expensive that is on a per pair of socks be so it’s like I don’t know you know how much and they’re like $0.10 a pair and I was like.

[8:13] 10 senses like I can makeup 10 said that my godmother was like no I used to make socks for less than a penny a pair whose like this is why they’re pushing back on this but I think the fact that we were.
Truly designing this coming at it from a consumer’s perspective,
and not coming out of her manufacturing or you know resellers perspective of oh well we need to create a product that has this much margins that weekend we didn’t think about it we were just like let’s create the best product possible,
and see if people like it and so that’s how we came to me.

Jason:
[8:42] That’s awesome and I feel like in some ways that’s not an uncommon story that the disruptors one of their their core advantages as they don’t have the bias of all these preconceived notion of the the people that did them before in some ways II,
I feel like I’ve heard similar iterations of that story from like the Tommy John guys or you know a bunch of other even Dollar Shave Club like where,
if you would come from Joe at it probably would have been harder to imagine Reinventing the.
Product like that exactly so early on the model was that we’re going to put the socks on a website and sell them direct-to-consumer and was that,
the the idea why did you guys ever kick around being a wholesale supplier of socks or.

David:
[9:30] I mean so rainy and I came out of the online media business so the online space was I think what we knew and I think we were the most comfortable I believe we also thought that you know early days we,
United States early days when 2013 doesn’t exactly feel like early days of the internet when you think about it it’s only e-commerce is only been around for you
20 + years or so yo it’s still relatively early days I think we thought that you know.
For building a brand around another wise commoditized product like a pair of socks we we need the,
the unlimited landscape and palette by which the internet affords to tell deep and enriching stories and produce really great content which is ultimately what builds great brands are at least we believe build brick builds great brands,
and similar let you know it’s like the Dollar Shave comes over all that you know I think having.
The ability to use things like video and deeply Rich photographic content and copy in a way to talk about a really small product that on a store shelf,
would only got you know what to in of packaging space to tell a really how do you tell a deep story like that and so I think.

[10:48] Are whole thesis early on was,
let’s see let’s put our content in a brand that’s why we launched an Indiegogo we created a 3-minute video about the socks
I only like I don’t know if you’re going to sit through a 3-minute video about Sox ultimately they did and I think the product in and our brand resonated,
with the customer base and I think that’s kind of sad our path and I think we always talked about.

[11:14] Wholesale at some point we just launched a small wholesale Partnerships last year with Nordstrom’s Dick’s and QVC.
But I think it wasn’t I think we felt like there was so much room and still believe they’re still so much room to grow,
online where you kind of really got to have that one-on-one relationship with the customer around and otherwise.
Forgotten or not thought about product like a pair of socks.

Jason:
[11:41] Yeah and Sumter is one of the things a lot of DTC companies talk about as one of them obviously,
is your name higher margins when you’re selling direct to Consumer but a big thing is customer intimacy and you get like the immediate feedback what what’s tough customers like what they didn’t like you hear directly from the voice of customer inside there’s always this hypothesis
we can iterate our product faster we can make our product better because we’re directly connected to the customer as opposed to just turn feedback from the Walmart by or something
curious if that’s marketing speaker that’s true why are your sock the same as they were the day they want or have you have they evolved in integrated based on customer feedback.

David:
[12:21] I mean I think for us I mean it’s it’s not marketing-speak I think a lot of the.
The ways that the company is involved and you know I wouldn’t say that we we changed our core product in a whole lot of ways.
I mean without without any sort of you guys think we’ve nailed it I think we got it pretty right but things like.

Jason:
[12:44] He’s doing a little dance while he’s saying that just so you know.

David:
[12:46] I remember one one very distinct moment through customer service we kept getting a lot of Outreach from people saying why don’t you make socks that are size 13 to 15.
Or like extra large that’s got to be a small market for us you know who’s really going to buy them.
And we were like now is put it on hold us but I’ll hold it like customer service to be like we keep getting request for extra large socks when I okay fine will produce a small number of extra large socks,
in kind of summer are course I also,
and it ended up representing 10% of our overall business I mean in the in the industry on a whole I think it represents someone like three to 4%.
But I didn’t because we were there listening to the market and then serving that market where owning a much larger share of that because we’re producing a product.
Foreign otherwise probably over over seen part of the demographic it’s that was one instance and then another one in the incense is wise we,
earlier cuz I’m sure you hear from a lot of other d2c brands or Scrappy so like all of our photo shoots for basically like.
Me and my other co-founders we happen to be for white males and we got a lot of feedback from from customers of color being like.
Yeah why don’t you give him.

Jason:
[14:07] Why can we get a good looking feet in that yeah yeah.

David:
[14:09] Baphomet why don’t you representing African-American feed or or or more people of color and we were like you’re absolutely right we should you know it wasn’t something that.
We had really thought about but we took that feedback and then immediately our next photo shoot we have wide range of diversity and and now it still continues to be one of the pillars
of all of our photo shoots and content going for is it we we always learned from an eye of inclusive inclusive and diversity
which I don’t leave our socks around ass or shelf I don’t know if we would ever,
if we ever would have gotten that feedback all the way back to us but listen to our customers and having that relationship with them we can react and say like yeah.
We talked up on that one we oversaw it like shame on us will fix it but we can’t we have the ability to fix it pretty rapidly going forward,
and the response we get back from those customers is like,
the extra large like I can’t believe you listen to me you were going to buy a ton and then you know the people who are proactive on the photo shoot stuff,
they wrote back at me and be like wow thanks for listening to me and and implementing change.

Jason:
[15:13] Yeah you know it that’s interesting cuz again I feel like I’ve heard that similar story for my Andy Dunn bonobos and it’s like the exciting take away from that for me is.
The because we never had the relationship with that brand that was sitting on the shelf to even care.
And said they tasted like that a better connection with you give you feedback might have started off as a negative that it turned into this this positive opportunity to get closer to the customer.
So first place I can buy this oxygen to go go I’m guessing you’re going to tell me you were oversubscribed and that was a wildly successful launch.
And so the back in 2013 you got all right now I got to stand up a website to sell these things and in 2013 it might not have been totally obvious what the best way to do that was so I’m just I know you’re not the CTO but I’m just curious.
Did you guys decide to build your own site from scratch did you find Shopify back then and you remember what you did.

David:
[16:09] Yeah so I actually had the fortunate nature of two of my co-founders were former creative agency guys so.

Jason:
[16:17] Hold that against him as a creative agency guy.

David:
[16:20] It’s been a it’s been a massive massive advantage that have them on our team so they both built design number of websites for clients in the past so it wasn’t.
It wasn’t that foreign to us and I think that having worked at this Media company we put a lot of microsites and kind of manage that aspect for four different clients as well,
so at the time we were like well we want to be an Enterprise company one day so you know obviously going to go with Magento because Magento runs out of the enterprise software and they had Magento community in Shopify was,
not I mean they didn’t have + when we started and it’s amazing to see how how much they’ve grown over the years but.
Probably one of the worst mistakes we made was not launching on Shopify to begin with you have a Gen 2 ended up being a bear super resource-intensive you know,
from all of this..

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A weekly podcast with the latest e-commerce news and events. Episode 167 is a hot take on the new Checkout on Instagram feature.

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This episode is a hot take on Checkout on Instagram feature.  We cover the main features, details about the closed beta, potential pros and cons, and a recommendation for brands thinking about selling on Instagram.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 167 of the Jason & Scot show was recorded on Wednesday, March 20th, 2019.

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer and Scot Wingo, CEO of GetSpiffy and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

New beta feature – Google Automated Transcription of the show:

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode 167 is being recorded on
Wednesday March 20th 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott Wingo.

Scot:
[0:40] Jason and welcome back Jason Scott show listeners
yesterday Facebook announced an exciting new feature for Instagram called checkout on Instagram those marketing Geniuses over there so today we wanted to give you our hot take on that.

Jason:
[0:58] I am excited to talk about that Scott but before we jump into it you are officially podcast cheating on me now.

Scot:
[1:07] I am I am you know we need full disclosure I told Jason I was going to do a podcast use very supportive
so we have an open podcast relationship if Jason wants to do a podcast that’s fine but I really know he doesn’t have time to
so when your Chief Commerce retail e-commerce strategy officer don’t have time for one podcast baby
new podcast is really kind of a spiffy thing so it’s the future Vehicles so I was framework called vehicle 2.0 where we talked about
what’s eclectic are changing car ownership electrification an autonomous vehicles so if any of those things are interesting to you at over the vehicle to. Get spooky., and you can find a new podcast would love to bring some Jason Scott show folks over there
another funny thing is we got a call a couple weeks ago from Lyft they’re having a big event in Houston it’s a rodeo to Sunday your.

[2:10] Find out your first review and 30 Day Rodeo can you imagine a lot of people that go to the
just a lot of radio and
so we didn’t experiment which is pretty interesting we did a kind of driver rewards thing where we set up right near this rodeo and lift would send messages out
two drivers that were doing a lot of work on their Network and giving free car washes so that was fun we wash over 400 vehicles in a pretty short 3-day.
It was three days around but it’s really time or in the evenings so
does a lot of car washing soap not it’s exciting to partner with companies like Lyft there are also in their IPO process if people are interested in IPOs the lift.

[2:57] Roadshow is available it’s really cool by 30 minute video I think it’s well worth your time
you go to Retail Road show.com the SEC makes companies now publish their Roadshow
and it’s a little known fact that they do that so I can go out there and do that it is only up there for about a week so we’re recording this on the 20th and I think I’ll probably be down by the
3rd or 24th so rachaelrayshow.com to watch Lyft IPO it’s a really cool another aspect of what looks spelling
so that’s what’s going on in my room.

Jason:
[3:30] That is very cool you in one of your first podcast episodes for vehicle 2.0 you broke down the Lyft s-1 filing which was also very informative and interesting.

Scot:
[3:43] Yeah yeah and unkind of swing that back over here diepio pipeline is is just bursting with with all kinds of
convenience really goodness so we could lift in there Ubers rumored to be in the pipeline instacart Postmates are also candidates and then
as he sings come out we’ll be covering all the distance cop show if they’re little more relevant than this was.

Jason:
[4:09] Yeah in sign up for a long time listener G of course to know that I used to be a rodeo clown and I can tell you those 30-day rodeos are exhausting you are super sore by the 30th date.

Scot:
[4:21] Your Barrel by the end of your Barrel your rubber Barrel this is all dented.

Jason:
[4:25] Exactly fun but yeah there’s actually a lottery for which Clown goes in the barrel every day so you’re not generally in the barrel all 30 days.

Scot:
[4:33] Wow what to do a whole episode Deep dive on Jason’s rodeo clown.

Jason:
[4:38] Exactly
that one that would be super interesting and I did get a chance to listen to several your podcast they were super informative I’m right up to the point where you have gas so I’m I’ve done a full dose of Scott wingo and I’m excited to
to hear from I think the CEO of smart car.

Scot:
[4:56] It’s exhausting God doing it on you cuz I’m not used to talking so much.
I usually get like 5 minutes out of 50 and now I have to like there’s a lot of a lot of space to fill I miss you.

Jason:
[5:09] I bet you I got to we having a cute version of that problem
and then the last thing before we we jump into it I am too busy to do another podcast but to be clear it’s what makes me too busy to do another podcast is my job as the audio engineer for this podcast.

Scot:
[5:26] Yeah I learn from that we have we have a ghetto person for that.

Jason:
[5:34] Thank you for not saying like confident person.

Scot:
[5:38] Not nearly as good as you are but they have a lot more time to work on.

Jason:
[5:42] I was I was a little jealous about that aspect that I’m excited and I’m a subscriber.

Scot:
[5:48] Cool let’s talk about Instagram so if you’ve been living under a rock Instagram is a very popular social media Network driven by pictures of the kids in my family have a rule
when we get we’re at a restaurant
this doesn’t apply to Applebee’s or anyone basic but if we’re at a fanciest restaurant no one touches her food until we instead because
instant or it didn’t happen so that’s what I’m talkin about tonight so Instagram is very popular as a refresher it was acquired by Facebook
for a huge at the time record-breaking billion dollars in 2012 looking back from 2019 most people feel like that was quite a seal and other stuff so
show history there was a reminder that that Facebook owns Instagram.
Ceaseless jump into the announcement I know as the chief Commerce strategy officer you probably about this for a while what were the highlights.

Jason:
[6:55] Yep before I jump in that we always like to have useful tidbits on the show and so I feel like the the valuable one for this show is going to be that there are actual,
psychological studies that have proven that when you take pictures of your food before you eat it you actually enjoy the food West.
I’m super sorry.
To share that with you but I feel like the Wingo family could actually be enjoying your meals a little bit more if you weren’t interested in them. I’ll put a note to those studies in the show notes and you can decide.

Scot:
[7:25] I’ll try that with my kids but I think it’s actually more correlated to the number of likes your free picture gets sick.

Jason:
[7:31] Yeah Isis I suspect that that is true and who cares if you enjoy your food if you get new new follower,
yeah so this is obviously a feature for Instagram that for a while Instagram has had the ability to pin products to organic content.

[7:52] So you you can have some hot spots on photos and click that hotspot and there’s been a vehicle where you could sort of Click through
2 e Commerce site that had that product so it would take you out of Instagram to the mobile version of the,
the Brand’s website to look at a product detail page in in most cases and so what the what they’ve done here is they’ve eliminated the need to leave the Instagram app and go to the e-commerce site so you now get a
a native product detail page in Instagram
can let you do attribute so you could like selected their shoes you could select a color and a size and then you can add it to carts
and then there’s not really not add to cart they’re sort of just a checkout button because you’re only allowed to buy one thing at a time and when you check out you enter,
your your name and address and your payment information and they will ship you the product,
so essentially Instagram is becoming your favorite thing on Marketplace wedding letting,
primary Brands and in most cases at the moment did you need a Brands sell stuff natively on the platform they’re paying undisclosed.

[9:10] Take radar feature to Instagram and the Hope from Facebook Sandpoint is,
we have people like in this visual platform that are doing a lot of product Discovery and had a lot of high buying intent and now we’re dramatically reducing the friction to convert that buying intent into
purchases.

Scot:
[9:32] I have I’ve been busy washing cars and haven’t had a chance to look at experience I know I looked at the launch Partners a lot of them were in the fashion category that in fashion we have the age-old problem of of styles and colors
I have they saw that or do they just kind of plan on that neat have a different PDP for each.

Jason:
[9:52] No no they do they have a dream you drop down so you so you can select a size and color
they a little bit about it’s a closed beta at this point so there’s 22 Grande selling
if you’re a brand interest in selling the you can’t apply or sell right now
yeah but you can have up to five products in one piece of Instagram content this is only organic content so this is not an ad format so you can.
Certify visibility for this content you have to be publishing content that that a lot of viewers are already consuming and they say that the way they selected these 22 initial.
Partners are folks that were already heavy users of the Instagram platform and we’re getting a lot of Engagement and we’re already tagging their content with product and so
you know that apparel and Beauty category did it heavily skewed towards apparel and Beauty it’s mostly digital-native Brands you know some of the.
You know so it’s it’s the Warby Parker’s and the Unicorn clothes.
There’s some laundry stuff like Prada Nike and Adidas to me are the big mainstream manufacturers,
there on the platform but there’s also like Burberry and in the oscardelarenta and revolve clothing some folks like that.

[11:21] Yeah so they do let you do those attributes. General question what they there are some from my perspectives,
limitations to what they do let you do on the product detail page and I’m actually going to hold off on.
Hitting those now cuz it we are going to come in and walk through some of the.
The the pros and the cons at least as you and I see them but you know we’ll put a link to their actual announcement and I’ll try to find,
a product what are the limitations is this only works in the Instagram mobile app so it’s only on a mobile it’s only a nap but I’ll try to list a product so that you can click through it yourself
they do have a video demonstration on their on their blog announcing it so you can kind of watch a video of someone checking out.

Scot:
[12:10] Call is it IOS and Android or did they just pun.

Jason:
[12:13] Yeah it’s all the platforms that other mobile platforms that are Instagram supports it is also only in North America right now.

Scot:
[12:19] Okay yeah and then
I should actually know this but do you know so let’s go back so there’s been a long history of social networks trying to kind of Mary e-commerce and frankly a lot of success what are some of the historical highlights of
biscuits have been tried that you recall.

Jason:
[12:41] Yes it is it it’s an interesting conundrum there’s been a lot of efforts at what I’ll call the social commerce in the US,
like a particular bunch of iterations and sort of social by buttons and none of them have really been very successful and yet there are Platforms in particularly China by throughout Asia
where this this Paradigm is super popular in heavily adopted and so for a long time we’ve always wondered are.

[13:12] Eastern consumers just fundamentally different than Western consumers are they even more digitally native and Savvy in China and therefore ahead of the US consumers and so this will eventually catch on or you know it is the,
are the experiences that the Pinterest and Facebook have tried.
Fundamentally inferior to the experiences that that we chat and and others have done in China like.
Don’t know the answer but I can tell you that Facebook launched e-commerce on the platform in 2010 and there was actually a pamper store where you can buy your diapers on Facebook back in 2010.
That really didn’t go anywhere and in the subsequent 9 years.
They’ve they’ve dropped a lot of Commerce capability some that wasn’t adopted and it’s been sort of abandoned and others that are that are still utilize but aren’t you don’t fall short of actually letting you do the transaction.

[14:14] And so you know I think like 2014 that they wants to Facebook buy button.
Which is you know not not in service today but they also wants things like collection ad formats which were like a,
Commerce oriented ad format that let you have multiple products in a single ad,
in 2014 and that that so is used today if you know it doesn’t let you go all the way to the by,
in some non us markets Facebook actually lets small sellers host or friends on Facebook and they’re they’re powered by Shopify.
So that’s interesting in some markets.
Course in 2016 they made a big push to doing Commerce in the Facebook Messenger platform and there’s some.
Some examples of that being useful but that certainly doesn’t you know have.
Have brought engagement and you know their competitors have had similar challenges to Pinterest as as.

[15:17] You know incrementally added shopping features like Rich pins and shoppable pins and Shop the look but hasn’t really you know been able to do transactions on the platform.
Twitter had the the buy button for a little while and killed it Google has some shopping for mass that had buy buttons in it then aren’t aren’t.
You know hugely successful and Broadway deployed so there’s a checkered past here and it’s,
going to be interesting to see if now is the time that works if Instagram is resolved some of the fundamental
challenges or you know the timing is just right I have my own Theory which I I promise to reveal by the the end of the podcast.
The you know,
one of the things that most of these efforts have in common and I I think I did notice this about the the Instagram one is if they do get successful one of the Whitney in ways they envision
brand being able to publish their content to the platform is through this company I I think I’m familiar with Kyle Channel advisor.

Scot:
[16:26] Yeah yeah yeah so I was
as surprised as you are to see jamas are there so I’m not involved in the day-to-day but you know the usually when someone needs a Marketplace integration Channel that’s what it’s called
and then Spirit of of kind of.

[16:46] Open the other partners that were announced where Shopify and Bigcommerce which are more kind of SMB e-commerce platforms so there it’s not like an option where you say hey if you want this widget to show up on your website you can also make it shoppable on,
Instagram and then more of a competitor to channel advisor is called Commerce Hub there more
XML you Dropship e but a lot of similar kind of connections that we have them so they announced kind of the for lunch partner Sarah
Channel visor was excited to to the apartment I actually don’t know so I was going to ask you earlier I’ll swing back that,
when Twitter first came out the buy button we got in this really big argument with them because
they just wanted a retailer to put the Spy button up there and tell them inventory one time and then they would keep track of it going forward I said well
that’s okay but you see these retailers have all these pools of inventory so,
it’s very easy for you to get in an oversold situation because you know on on Tuesday March 1st when the retailer said they had a hundred of these widgets.

[17:52] Then here on the 20th and they have zero days do it listen to us and turn off it end up being kind of a
Calamity and they had to go back and figure it out you know how the inventory kind of checks are done on the sir they kind of,
get the better systems will do you can either sink inventory I’ve been kind of constantly update it,
I or you can do kind of call back when something’s about to be out of the car is she going to say hold on one second let me go back and verify I still have this widget in stock do you have any idea on how that’s working.

Jason:
[18:21] Yeah it’s a great question I don’t have super detailed.

[18:31] Sort of architecture understanding of the solution I can tell you that all of these 22 vendors have bespoke Integrations and they specifically mentioned that they did Integrations with,
customer service and with OMS in so what that means is.
Like they say they do have some sort of robust automated way to talk to the order management system of those individual sellers.
And it in the one thing that’s interesting to me very often went a platform like this watch as a service.
By the way they they they do an integration with like one or a few popular platforms and then they pick beta partners that are only using those platforms.
That does not appear to be with what Instagram did they pick 22 brands that were popular on Instagram and figured out how to integrate with all of them and so my suspicion is.
Some of that these Integrations are likely more robust than others and so.
You know it wouldn’t surprise me if the higher volume sites is like the Nike and Adidas there’s probably a real-time Perpetual inventory system in there with her it’s pull or push I don’t know.
But it’s not going to surprise me if.
A few of these Brands you know are doing that integration via you know file sharing and in nightly uploads or something like that and and could have some some real disparity on availability of they ever,
ever had a product go viral or something.

Scot:
[20:00] I know I’m speaking for listeners when I told us out here what would be really helpful Jason is if you could do some experiments for a so you can go order between one and three hundred items from let’s say I’ll pick a random on here
Prada and then let us know what your your your rate of receiving goes in and out of stocks I think they’ll be super useful.

Jason:
[20:24] I would totally do that but I’m afraid that that that this purchases would come out of my Star Wars budget which would be tragic.

Scot:
[20:30] You have a very large Starbucks Star Wars budget.

Jason:
[20:34] I think the parts going to be expensive.

Scot:
[20:38] So do you think this is going to kind of finally bring that Chinese level of of Engagement and activity to the marriage of Social and e-commerce.

Jason:
[20:51] I don’t so so to be clear like I actually think this is,
probably a good step forward I think Facebook and Instagram were smart to do this and I think in certain circumstances that makes
sense for the brands to take advantage of it so I I think I could have some adoption I think it could be more successful than any of those.
Serta previous efforts that we that we highlighted earlier in the show but at the same time I don’t think this solution as is hits the sort of.
WeChat level of of a shopping engagement.
I don’t think this is going to end up being a primary selling platform for any Brands and I would certainly argue.
It should not be a primary selling platform for any of these Brands it ought to be.
A smart sort of secondary platform the brands leverage but not the primary way that there.
That they’re looking at getting their product in the hands of consumers..

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A weekly podcast with the latest e-commerce news and events. Episode 166 is an interview from eTail West with Shipsi CEO and Co-Founder, Chelsie Lee.

Subscribe:

Chelsie Lee (@ChelsieAnnLee) is the CEO and Co-Founder of Shipsi, a software solution for aggregating and managing last mile delivery services.

In this interview, we cover a wide range of topics including last mile solutions, curbside pickup versus delivery, changing customer behaviors, and the Amazon effect.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 166 of the Jason & Scot show was recorded on Wednesday, February 20, 2019 from the eTail West tradeshow in Palm Desert, CA.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Wednesday February 20th 2019 live from the etail West Trade Show here in sunny Palm Desert,
I’m your host Jason retailgeek Goldberg and unfortunately due to travel issues Scott didn’t make it to the show so you get twice the Jason for half the usual cost,
but to make up for that we have a great guest listening to the show will know that one of the topics we spent a lot of time talking about his last mile delivery so we’re particularly excited to have on the show Chelsea Lee and co-founder and CEO of shipsi,
a company that helps retailers saw that exact challenge Chelsea who welcome to the show.

Chelsie:
[1:04] Thank you so much happy to be here.

Jason:
[1:08] Chelsie as a long time listener of the show you’ll know we always like to think that getting started by having to listen to get a little bit of background about how you came to your world so can you tell us a little bit about your background.

Chelsie:
[1:19] Absolutely I am a proud Minnesota native.
I grew up hunting and fishing with five uncle’s which is probably not as common as most founders.
Spend some time in Europe New York now reside in LA,
and spend a lot of time in corporate retail and then working in technology and Technology Consulting anyting EDI Erp and VI point-of-sale analytics was.
Was my passion for a long time and then,
I think it all started though actually my grandfather’s gun shop supply and demand and the fact that you can negotiate anything he wanted during gun season was was also really entertaining for me.

Jason:
[2:01] That’s awesome I’m a big family of a big fan of a family retail business as I can from a retail family as well I’m sorry I forgot that he missed you because he died r p e p o s are some of his favorite acronyms,
and his listeners will know I sort of think of Minnesota as their retail capital of the us having.
And a lot of time at Target in Best Buy a lot of lot of great retail in a lot of great retail people come from that region,
so what’s taking the ship see a little bit can you tell us how you came up with the idea.

Chelsie:
[2:37] So it originated because I was getting really frustrated that any brand that I was working with from Bob’s Bait shop and Nike everything in between they always have his big big Dark Cloud of Amazon.
So maybe not New York recently but yeah yeah.
It really stem from this frustration so I wanted to figure out how I could solve for it so I considered working for a private Equity Firm.
So I called my friend and a mentor of mine been who is now my co-founder and said what do you think you think I would like it.
And he’s a Serial entrepreneur angel investor and said,
I think you would like it fine but I think you should look at the side project I’m working on and it’s it’s called the shipsi and I said it sounds like Logistics I’m not into that you don’t want me and,
a solution that was originally made for traditional Logistics I looked at it and,
the Ben what are you doing this is the front of a nanny cam so we flipped it inside out and upside down and that’s Gypsy today.

Jason:
[3:46] Very cool give us a like what is the bullet like how does shipsi work.

Chelsie:
[3:52] Yeah so when I was speaking with Ben originally and we started toying around with this idea Banda Manatee cam,
I called every friends and old client in my retail networking and said,
if you could deliver within a couple of hours without changing any of your existing business systems and not pay for shipping,
is that something that you would find Value in would you invest in something like that would not fall in line with your priorities this year,
and it was really hard to find someone who said no.

Jason:
[4:27] It’s always a good problem for incubating a good thing to happen when you’re getting a new idea and so in my mind.
Unlocking all this inventory that a retailer had an individual store that can only serve visitors of that store and essentially turning that inventory into e-commerce in the far is it can be.

Chelsie:
[4:49] So we’re in a great an additional shipping option or add an additional option at checkout in any existing e-comm website,
and then we aggregate multiple last mile delivery networks on the back end so that the consumer is completely dazzled and gets the best price for it,
and then we also utilize existing infrastructure as you mentioned of stores warehouses distribution centers to basically open up an instant shipping option in whatever City those things are in.

Jason:
[5:19] Great and so I’m going to dive into the details in just a second but before I do I mention we’re etail West you were just on a panel that you tell West calls a tech tank and it was kind of like
you each got the picture businesses in the audience voted on the the business they would most likely want to adopt,
and how did you do.

Chelsie:
[5:42] Well it was an amazing thank you for all of my voters I swept it I would say so that the question or the what they were judging and I believe it was something like.
Which of these companies would you invest in within the next 12 to 24 months or seriously Implement within your business and I had over half of the votes in the entire room out of the the panels.
It’s definitely top-of-mind as you know we come in last my alarms are only a Hot Topic.

Jason:
[6:10] For sure for sure tank so congratulations on that wear with the inaugural Tech tank.

Chelsie:
[6:15] Yes thank you thank you.

Jason:
[6:17] Very exciting.

Chelsie:
[6:18] I plan to that so that I we could finish that before coming on here.

Jason:
[6:21] Yeah I didn’t want to spoil it but like I would have only invited you on the show because I knew for a fact that you are going to win.

Chelsie:
[6:27] I knew it yeah so where’s my tiara do I get a tiara crown or some kind of trucker hat Maybe.

Jason:
[6:34] So you know it said I was going to bring it to Yara and some of your people said that you just ordinarily wear a tiara and so it seemed like it would be redundant.

Chelsie:
[6:43] Depends on the day multiple hats yes.

Jason:
[6:46] That is that the job of a Founder rarely is one of those hats that Tiara but yeah.
So let’s dive into it a little bit so you’re solving Last Mile I think.
You know what I just heard that I would imagine you either hiring a bunch of people to deliver packages or maybe you’re on demand system where you’re using like gig workers to deliver packages is that what you’re doing.

Chelsie:
[7:10] No so we have the beauty of learning from a lot of other mistakes that last mile networks who are very successful now have already made,
so because they figured out a lot of heavy lifting I think for us in the beginning we partner with last mile delivery Network so a big piece of it is,
we don’t own the car is the warehouse is the merchandise nor employee kind of anyone within that,
we just you know basically are the master aggregator Wrangler coordinator.
And a really critical piece in that is that we set up different business rules are parameters to make the option up here or not appear so we don’t touch the traditional Logistics,
but let’s say a driver isn’t available or the merchandise isn’t available we build all of these profile and business rules or what we call a PBR,
behind the scenes so that the consumer sees the option and we can ensure that they get what they need.

Jason:
[8:04] God you you have to be careful cuz there’s a lot of hunting stores a PBR mean something totally different.

Chelsie:
[8:07] Yes.

Jason:
[8:10] So so let me make sure I have this right so I’m I’m a hunting dog, I have a website and I ship stuff out of my warehouse via UPS or the mail and maybe I have a store then my loyal customers come in and Shop.
You add the option to my website to say deliver same-day and then the customer pics that and then.

Chelsie:
[8:32] I’m going to make a slight correction on that it’s generally within an hour or two hours at most.

Jason:
[8:38] Even better okay so deliver in an hour as I’m about to go on a hunting trip and you’ve got that new training collar I need for my hunting dog,
so I clicked on that one hour delivery and then your software is deciding who the best,
Last Mile fulfillment partner is in you’re going to send that order to that fulfillment partner,
they’re going to fill that order you’re going to collect all the data about about delivery and all that stuff and feed that back into the Retailer’s.

Chelsie:
[9:06] Exactly and that’s a big piece of it that often.
You know it’s cool that we can ship something within an hour from point A to point B but the real value that I see especially in a couple years is having that,
Predictive Analytics on the on-demand market and to be able to feed that back to our Retail Partners so that they can in turn feed that into the rest of their supply chain.

Jason:
[9:29] So you’re sort of the middle layer between the last mile companies in the retailer and are there any particular last-mile companies that you tend to partner with other that westerners would be familiar with.

Chelsie:
[9:40] Oh yeah you know it ranges some of them are small Courier Services some of them are the Postmates of the world and it’s it’s just been amazing to see
us fueling every party involved with with more Revenue we will be making a big announcement in the upcoming months about another,
why is my old partner on major one as well today we’ve accessed over 500 cities across the US and by the end of the year we anticipate having,
over a million drivers through those driver networks to be available for shipsi deliveries.

Jason:
[10:12] That’s awesome so so pretty much a national reach at this point the are there any particular categories that you’re finding our are lending themselves to one hour delivery like what kind of retailer is best suited for the service.

Chelsie:
[10:25] Haha that’s a good question I wish the data skewed one way or the other would help our sales team know what to go after a little bit more but.
It’s really diverse I would say the younger women demographic.
Works a little bit is very slightly skewed some of the luxuries skewed but then there’s also things like a phone charger and birthday candles which has been really interesting to see there’s not a clearly defined,
category or vertical,
I should I’m not surprised anymore by our new customers because our first time customers were a men’s clothing women’s clothing footwear apparel accessories a sex toy company I mean.
Everything so to answer your question no we haven’t seen as a friend or vertical yet.

Jason:
[11:21] Awesome. You can’t go wrong with a vices I feel like everyone you know once devices delivered more quickly in.

Chelsie:
[11:27] Absolutely.

Jason:
[11:28] So chocolate in in alcohol might be good although there’s some complexities in the alcohol one.
So one of the topic categories we talked a lot and last mile delivery lately is around grocery are you doing anything in grocery or is that something you’re you’re thinking about.

Chelsie:
[11:46] So we have a little bit and grocery some more specialty gift food items such as edible which is a delicious edible cookie dough if you haven’t tried it,
and we.

Jason:
[11:56] Speaking of vices.

Chelsie:
[11:57] Yes he has absolutely so we are really focused on retail we’re actually really.
Making it a point to stick away from grocery but if you look at some of the trends that’s happening in grocery right now it is,
is amazing I think something like a Business Insider just recently published a report on 35% growth in grocery and that,
consumers wanted you know 69% of them wanted home delivery versus 31 or curbside and pick up.
So I see those Trends and Retail is is trying to catch up but we need to go fast.

Jason:
[12:38] Yeah I know for sure I should have asked you a question earlier but this will open up to my next set of questions,
so you’re you’re helping collect that order in your you’re getting that last mile person to show up in the store in in your model is the the retailer most responsible for picking the order in the store and having it ready for the,
the delivery person or the delivery person like going into the store and picking stuff off the shelf.

Chelsie:
[13:04] I have a delivery person is not picking things off of the Shelf,
the retailer either picks it up or there’s a dedicated place for shipsi delivery is just like there would be for a 7 to 10 day or two to four day whatever might be in the warehouse,
and then with some of our larger Brands we have a shipsi person that we have hired to say,
we will get you guys set up if it’s if the demand is so high or maybe in the first couple months will send someone from the ships that you to go work with your team in the store Warehouse to get them familiar and then we also have a,
customer service layer that is absolutely critical so that we can be one point of contact for the consumer for the retailer for the warehouse for the driver so that.
The retailer doesn’t have to deal with some of those things in the consumer gets what they need and feel confident about it.
Someone last week actually referred to us as The Wizard of Oz because they didn’t even know is a retail customer of ours and.
So many things that we do the retailer doesn’t know about it so every 10 seconds word checking in order to make sure that everything is okay and when it’s not we catch it.
99.5% of the time before the retailer or the consumer even know.

Jason:
[14:18] Got an internet metaphor they didn’t want to even know what’s behind the curtain they just wanted to see the magic so.
The whole curbside versus delivery thing like I feel like there is in the abstract there’s a consumer preference.
But I do like price also comes into play in that so like presumably the more you have to charge for home delivery,
the more likely a customer is to opt for the convenience of curbside pickup versus delivery so I would assume if you can get the price low enough or at least the price as perceived by the consumer,
then do every it heavily skewed towards delivery but in places where the unit economics don’t work for that like it might for a real grocery store,
side becomes more popular.

Chelsie:
[15:05] Absolutely there’s actually two points for our business and why that matters one is because we’re aggregating multiple Last Mile networks and Courier Services,
we’ve seen really drastic scenarios where maybe one specific last-mile Network says that it’s going to be $51 and then another one picks it up for maybe $6 is a really really bad,
differences in that so one piece of it is the aggregation and the our ability to do that II is that,
the retailer is no longer responsible to pay 12 bucks to drop it off to FedEx or USPS because the consumer sees exactly how much it is,
so we have a couple of retailers right now that we’re playing with the pricing and they say well I already have $12 allocated in my p&l for FedEx,
what if I throw 10 to the consumer well in many cases it ends up to be a dollar for the consumer to get it now and obviously there he comes sales skyrocketed,
they’re doing silly Facebook videos and so that’s been really really exciting and we’re finding out a lot about,
really what the consumer is willing to pay for but especially when the brand allocates a couple bucks towards it a lot of times it’s a dollar or dollar is $5 you know ten bucks and we’re just been really exciting to see him.

Jason:
[16:21] Yeah it is you know pricing consumer pricing is one of the interesting things here because,
because we’ve sort of overwhelming data that in general consumer don’t like paying for shipping right inside you know the the Dirty Little Secret is something like 68% of all e-commerce.
Is sold with free shipping like that in that free shipping is of course never free to the retailer.
Readers are being forced to pass to absorb those costs rather than pass them on so I’ll call it a premium delivery service it’s doing 1 hour.
Like it’s interesting like our consumers more willing to pay for shipping for that one hour premium and they perceived that that’s that’s okay or do they have sort of the same attitude that they do with regular shipping they feel like they shouldn’t have to pay for it.

Chelsie:
[17:10] I cannot wait until a more data behind it I will say we have a brand right now that 68% of their consumers last month pick the ships the option when it was available to them which is,
phenomenal right I was thinking well if we have 10% 20% growth that’s amazing you know who knows what we’ll find,
what does to have one that 68% of their consumers are picking the ships the option and,
as a Founder it is so exciting to have this I want to color a team camaraderie with a lot of our retail clients because I’ll get a call that says child’s we just broke a record this week,
and I said quiet so did we because we just seen a consistent growth every single retailer has had,
higher shopping cart more dollars in the every in their shopping cart collectively and also Maury come orders so it’s just so exciting to see that that growth with those brands.

Jason:
[18:08] That that’s..

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A weekly podcast with the latest e-commerce news and events. Episode 165 is an interview from eTail West with Chief Evangelist, Alexa at Amazon, David Isbitski.

Subscribe:

David Isbitski (@thedavedev)is the Chief Evangelist for Alexa at Amazon.

In this interview, we cover a wide range of topics including the growth of the Alexa platform, the evolution of the developer community, the future of voice, and voice commerce specifically.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 165 of the Jason & Scot show was recorded on Friday, February 22, 2019 from the eTail West tradeshow in Palm Desert, CA.

http://jasonandscot.com

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and 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.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episode is being recorded on Friday February 22nd 2019 live from the etail West Trade Show here in not completely Sunny Palm Desert
I’m your host Jason retailgeek Goldberg
and unfortunately Scott is trapped on an airplane so we are going to make a lot of fun of him and hopefully assign him some action items for after the show,
long-time listen to the show will know that if we were to make a word cloud of everything that we’ve said in the hundred and seventy something episodes.
Amazon would be the biggest word on that word cloud and Alexa would probably be third I think Star Wars might so I can let you be.

David:
[1:02] Well that’s good to hear.

Jason:
[1:03] Be ahead of Alexa,
but obviously we talked about a lot on the show so I guess we’re super happy to have on this week’s show is Dave a bitsky who’s the chief of Vangelis for Alexa at Amazon welcome to the show.

David:
[1:17] Thanks for having me super happy to be here.

Jason:
[1:19] Yeah so I record a lot of these for my home studio and the first thing I have to do is mute all of my Alexa devices.

David:
[1:28] Oh yeah I’m the same way yeah in fact even when I’m on stage if I’m Kino to hear something when I say her name there’s still that thread that goes through my head waiting for a response.

Jason:
[1:42] Oh no it’s something going wrong.

David:
[1:43] Yeah yeah.

Jason:
[1:45] So David for a long time with some of the show we always like to start by getting just a little background about the the guests can you tell us a little bit about your backup.

David:
[1:52] Yeah sure I guess it depends on how far you want to go back.

Jason:
[1:57] I have your high school records of.

David:
[1:59] Yeah yeah exactly so I grew up in the 80s in Commodore and this this vision of how,
science fiction and Technology was a future rights what do you mention Star Wars growing up on Star Wars and things like,
the black hole right and Star Trek and all of that and I just,
man I want to be a part of it and I remember speech technology TTS text-to-speech back then be able to do stuff like that I had to do that and.

[2:29] I just I was like man when is this going to happen right and I started out any e-commerce 96-97 building.
Commerce pipelines actually competing against Amazon was just getting started the time at this company called microwarehouse macwarehouse and then I did web whole rise of the web did want you to. Com Consulting did I,
Enterprise gig in a large pharmaceutical company,
and that was my me trying management and realized it wasn’t my cup of tea I just I love that I love being,
I love traveling talking to people and using new technology which is right and around 2007,
October to a Microsoft December roll to I have now there a lot of stuff around games and mobile and worked on Windows phone and Xbox Kinect,
and then I joined Amazon,
oh gosh 2013 help out with the we are kicking off the Android App Store that we have with the new Kindle Fire tablets did that watch Fire TV is Saint with fire phone and then.
I am super fortunate I was Employee one for Alexa skill marketing team around 2014,
and now it’s crazy where everything is now in 2019.

Jason:
[3:45] That’s awesome so I don’t listen to the show will know that Scott and I are two of the four Alexa fire owners so you.

David:
[3:51] But thank you I still have mine.

Jason:
[3:52] We sometimes we have our suit we sometimes predict it shall rise again I’m not asking you to.

David:
[3:59] The dynamic perspective stuff still awesome.

Jason:
[4:01] Yeah there’s that there’s some cool features so that’s going to be interesting to see if you have a rear job and Amazon you mentioned liking to talk to people I would argue the majority of Amazon employees are not encouraged to talk to her.

David:
[4:13] Yeah I’m just I’m one of those rare birds where I approved,
Alexa’s spokesperson Amazon spokesperson,
I’ve been doing it for a long time though I’ve been in very much these Community Building public-facing you know kind of marketing PR working with marketing and PR roles,
and there’s always a need for that because you know.
I have this belief like large companies we all have processes and there’s so many things that if it falls out of that process gets lost,
and I’ve always looked at my job to be the person that’s finding all those anecdotes cuz they’re so important cuz a lot of times there’s signs for things that need to change or that we missed and that we need to do better,
and I’ve always I left startup mentality and unfortunate Amazon is just as Perpetual startup mentality it’s not for everyone but it’s it’s Scrappy man it is like and that’s,
I love that I love where things aren’t to find you got to figure him out there tough problems you’re constantly inventing things you have to think about the customer problem and dive deep in the stuffing,
I’ve just been able to make a job out of that you know it’s it’s funny because funny you ask that I’ve gone on a couple podcast,
the past few months cuz that seems to be the big thing is like.

Jason:
[5:30] I guess to warm up with a couple of those farm system podcast before they come here so that’s all.

David:
[5:34] Yeah it’s like you got to start thinking about cuz you cuz it’s so all over the place there’s no defined like I went through this. Where I was like,
I’m old enough that all of my friends now are turning into CIO CTO xorbee peas and I’m like I’m doing this thing,
what is this thing exact but I love it and I would talk to him if you like crazy but we do sucks I would love to do what you do. So it’s like just Embrace what you’re passionate about and get down there and if I like to look at it like if I saw 12 year old me,
and he was asking me when all this Tech was going to happen I make it happen for him and keep him happy.

Jason:
[6:13] I like it I like it I also like your Amiga Roots I actually work for, nor in the.

David:
[6:17] Oh man we got to talk.

Jason:
[6:18] Yeah that that text-to-speech engine was called Sam so Sam was the person.

David:
[6:22] Yeah yeah well I still have it I have I have been working Amiga fully 1000 or 2000 I’ve 600 1200 I still Google Talk.

Jason:
[6:30] That’s why I sent my nigga 1000 predates, door and it’s actually in the The Tech Museum in San Francisco.

David:
[6:34] I have never been but I’ve always wanted to go.

Jason:
[6:39] They’re a couple of those key Engineers one of them is a Google Now RJ Michael.
And one of them Jim Mayer Who did all the hardware chips is actually the the Chief Architect behind the Roku.

David:
[6:53] Yeah yeah.

Jason:
[6:54] Fancy Nails guys continued.

David:
[6:56] And Dave Haney is I’ve seen him out in so where I am cuz I’m near Philly there still it’s like in,
in like Wall jersey there’s this Tech thing and he comes out there and people talk about forgetting his name but he helped build Amiga 3000 and 4000 and a couple of things like that he’s out there,
but a lot of people stayed in the area after Valley Forge after a little.

Jason:
[7:22] The the USA quarters for, nor was in West Chester Pennsylvania I was based in San Diego and so my boss never trusted that I was working cuz if you’re in Westchester in winter.
That you don’t think the young kids in San Diego doing anything years later I visited a client in Westchester and I’m getting at the address to their thing it’s the old commodore.

Marker 01

David:
[7:42] Yeah well that’s on its QVC or Home Shopping Network is one of those owns that whole campus map.

Marker 02

Jason:
[7:50] Jumping back to today stopping at appreciate the reminiscing.

David:
[7:55] We can look forward without looking back.

Jason:
[7:57] Absolutely you talk a little bit about your role love to hear just a little bit more about your turn trolling as it is it mainly like developer poking focusing is it mainly like consumer adoption.

David:
[8:06] No we hire teams that are on that now I would say you can think of me as helping incubate new Alexa businesses,
so I worked a lot with Alexa for business helping them get started a lot of what I do is helping Brands nowadays to what does it mean in this boy’s first world how do you connect with your customers.
How do you build better quality conversations things like that so it’s it’s new areas yeah it’s,
the nice thing about having such large teams is once I’ve done something and I can operationalize it it’s not something that I never need to do again and I burnout least called isbitski burn out when I was growing up where,
I’m always it’s funny if you look at personality test like if you know anything about the five core traits I have super high in enthusiasm and.
Open to new experiences and assertiveness which basically means that even when I was a kid,
I would get super excited about something I make all my friends go and follow me and do that thing and then six months later I’d be excited about something else and I feel like we all need to try this now right now Amazon with all the different things that we’re doing now,
to be able to do that.

Jason:
[9:20] That’s awesome couple quick things we want to get out of the way like what’s your personal wake word at home for your Alexa devices.

David:
[9:26] So it’s always been Alexa I mess around with computer when it was out but by then we already had a relationship with Alexa and it’s interesting here’s a little anecdote Cell 2014 when I would talk about it,
and I would talk to press and think everybody would say the Amazon Echo,
and then I noticed about six months in people would say Alexa and that wasn’t like anything from that people just started saying Alexa cuz you hadn’t you could say Amazon you can do it was a smart speaker.
Now when I talk to people they say our Alexa I don’t know if you picked up on that which is super interesting because it’s become part of the family it’s our Alexa right it’s not Alexa that’s hard Alexa she has her own way of knowing what we like.

Jason:
[10:05] Indeed she does and I know we we love all our children but do you have a personal favorite Alexa device.

David:
[10:13] Oh boy well I love the new show at home I would say there’s three I had love the new show Thomas cuz super big screen,
and that’s the main one on my desk if anyone is curious I really loved the spots and that’s my kids have enough and I also have one in the den cuz it looks like a clock,
you know it’s just a perfect little little size and my third favorite is I have a head for years are Garmin speak which looks like a little tiny Echo dot in my car,
and that’s why I listen to podcasts because I have a Honda and so I have Android auto and I have carplay Nike all that but what I find is just saying with voice to go ahead and without having to hold down a button or doing anything and just pause,
play the latest episode of and then I mentioned this in the keynote today but you know if you do a lot of trouble and you listen to podcast news in the audio books are sometimes where you’re like,
especially stuff I was sometimes it gets deep and you’re like my brain shutting off I just want to play a game,
so I play games I played like Westworld and it played Skyrim and I put Jeopardy and a car I think this,
I’m a I’m a huge gamer so right by my own gaming rig at home and I have consoles I have Xbox One X and PS4 Pro.

[11:31] When I’m in a car and there’s an Alexa skill available I’m surprised how much I’m engaging with that stuff so I think there’s you know it’s it’s,
it’s about the situation you’re in right and in continued conversation as fun my kids doing and yeah.

Jason:
[11:46] I like it I like all those devices I have to say my new favorite though is the Billy Bass.

David:
[11:51] Yes but I if you look if you go to my Twitter there’s a link to a dead reinvent so that team they weren’t they were going to watch that,
and so a Tremont I did a talk and I did the actual unveiling,
of the twerking Santa and Bear,
I think about like a even a little man with a flag if you need to take your medication use and that’s just a visual for somebody in the home like my parents are old to be able to see that they walk in and they see it you can’t have light but there’s all sorts of things you could do it right,
somebody can make that maybe you’re delivering a package again little guy carrying a package or something like that right it’s just it’s integration with his of objects I think it’s pretty neat for notifications that way.

Jason:
[12:36] The old digital physical things going to continue to be an amazing at Lowe’s,
you alerted your talk today so your topic was how to talk to your customers in a voice person world can you give us a little bit of a recap about like what the what the topic was there and what you got.

David:
[12:52] Yeah you know it’s a sew-in audience like this and with the 25-minute keynote it’s like what do you talk about right and so for me a lot of it ctas and so I always break this down into three things,
is there going to be people never heard this they’re going to be people that have a relationship with Alexa already and so.
And then maybe people getting gas how do they do this until I always start it off with what does the future look like cuz I’m constantly thinking about that what does it look like 5 years,
you know head and why we we look back right so we start off with that kind of paint with a futures.

[13:27] Make sure people know that this is Amazon is just part of that,
but this whole voice first is huge you need to think of it like the internet even even bigger right it’s it it’s the interface for everything it’s the human technology relationship moving forward,
and it makes everything accessible and simple and so
I make sure people understand that and then explain some of the Core Concepts because I think even for me when I start my shift same for me cuz I’m stupid
everybody should just assume for me the first time I use this is I use voice control before the stuff doesn’t really work right and that’s not what this is this is understanding intention,
something called natural language understanding is not TTS it’s not looking at phonemes and actually translating them into the letters right it’s different so getting people to understand that and ways that doesn’t get to computer science he and,
try to make myself look smart or anything like that right side motor stand in terms like that and then,
third party that is okay well what can I do today and what have you learned.

[14:30] Because I get to you lot I have this unique view of the field when I talk to somebody customers I have access to so many teams at Amazon I’m always thinking in this space A lot of times when I meet with people they just,
used to freak me out was like what what can I have to offer and they’re like
Dave your view the field this you meant just share with us something so you know and so that’s what I try and do as I learn new things and I talked to customers and we’ve released new features based on that feedback I includes those in the Kia Soul a lot of it is
this is what customers are saying this is how people are using it today they could be using it differently a year from now and this is what you need to be thinking about and,
starting to focus on.

Jason:
[15:08] Fair enough and so most of the listeners of this show are our brands are retailers like.
4 Brands like how should they be thinking about like is it a no-brainer that they should be building a branded skill is there a different more nuanced way they should be thinking about it.

David:
[15:23] That’s funny.
I always feel like I’m in a Morpheus in The Matrix and they might my Syfy should write my what if I told you what if I told you and you could talk to your customer,
everyday in the moment where they are on their own terms.
That’s an Alexa skill or Flash briefing or in any pain but that’s what this is doesn’t exist is always been a barrier and so if that interests you it’s about what I like to call meeting your customer in the moment,
and it’s your tongue got really like I was growing up in Jersey I had it you know I work two jobs since I was,
gosh like 10 with a paper out but I remember one of my favorite jobs work in a movie theater.
I can still tell you I would have to say to people would you like to upgrade that to a large popcorn and a large soda for only $0.25 more the big combo special right but it was that up sale in brick and mortar
right there and it’s in the moment and that is,
completely different than it did not purchase react hit the side button or use your fingerprint or any of that kind of stuff right you’ve already enabled it knows your voice you can set up a pin but it’s seamless and nothing beats time,
right and that’s what that’s for Brands is something they just think about is customer in the moment having a conversation with them every day and.

[16:48] What would they say if they could talk to you today what brands don’t know other than the help desk tickets right and I’ve seen companies now.
Where they are now looking at the Amazon skill reviews as part of their entire ux cycle to know what new features they need to be releasing because it’s the easiest thing that people can just talk you know and so you need to be thinking about those things and then,
lastly what I tell them is what is your brand sound like Miami for us you know podcasters and listen to felt like for me I just,
I loved one for me audio I love conversation I’m always thinking in those terms but I find most brands it’s still very visual social is visual so it was a bunch of images and video and so what does it mean.

[17:34] Do I use Alexis voice do I use my own voice do I have create a new voice of the company,
write like Jeopardy skills Alex Trebek that you here right and then we you know based on feedback we provide more and more voices so you can generate through what we have a service and Amazon web services closed poly so I can
generate all sorts of voices if I need to do that but that’s another thing that they need to start thinking about in the moment,
what do I sound like one of my customers asking for where they want to have an early day so it’s,
Newcastle new customer acquisition is not going to be like what you think in Mobile and wet right it’s early like early mobile web days but man if you have an existing customer and they have a device,
and I’ve ordered something from you and I can just say reorder,
or when..

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