Ecommerce Industry SoundBytes features interviews with CEOs in the ecommerce sector, such as eBay CEO Meg Whitman. AuctionBytes Editor Ina Steiner has been covering online-auctions, ecommerce and online-payment services since 1999 and uses her experience to delve into issues of concern to retailers and online-auction sellers. Ina has interviewed executives from eBay, Google, Yahoo and PayPal as well as such experts as marketing guru Seth Godin.
Ecommerce Industry SoundBytes features interviews with CEOs in the ecommerce sector, such as eBay CEO Meg Whitman. AuctionBytes Editor Ina Steiner has been covering online-auctions, ecommerce and online-payment services since 1999 and uses her experience to delve into issues of concern to retailers and online-auction sellers. Ina has interviewed executives from eBay, Google, Yahoo and PayPal as well as such experts as marketing guru Seth Godin.
Listen in as the Practical Ecommerce editorial staff interviews interesting personalities in the ecommerce space.
Rank #1: ICANN to Issue Custom Top-Level Domains, Expert Explains.
The range of possible domain names is about to greatly increase. That’s because ICANN, the authoritative body over Internet domain names, is about to add new top-level domains — the portion to the right of the period — to include brand names and other customized names. To explain these new top level domains to us, we are joined by Gretchen Olive. She’s director of policy and industry affairs for Corporation Service Company, which consults with companies on domain name and trademark matters. She speaks with Practical Ecommerce’s Kerry Murdock.
Rank #2: Dr. BJ Fogg On The Fogg Behavior Model.
Ecommerce merchants want to affect behavior. More specifically, they want consumers to buy from them. Dr. BJ Fogg is a professor at Stanford University who studies how technology can be used to change behaviors in positive ways. He is also the creator of the Fogg Behavior Model, which illustrates the three elements, he believes, must converge for a behavior to occur. Dr. Fogg speaks with Practical Ecommerce’s Kevin Patrick Allen for this “Ecommerce Conversation.”
Interested in starting your own online location-independent business but you lack any real ecommerce experience? Or maybe you’re an entrepreneur already earning money from your laptop but are looking to optimize your Drop Ship, Amazon FBA, Affiliate, Niche site or other online business. Learning what works and what doesn’t use to be very time consuming…but not anymore. Listen in each week as Mike reviews all the weeks leading podcasts and delivers to you the listener only the real actionable tricks and techniques industry leaders are using to win in ecommerce. In addition to saving you massive amounts of time by summarizing all the weeks’ content into one short 60-min podcast, he also does interviews. Not interviewing the massively successful entrepreneurs you admire but really can’t relate to, but the average guy/gal still fighting it out in the ecommerce trenches.
Rank #1: Ep 16: Ultimate E-Commerce Niche Selection Formula.
In this episode we tackle Niche Selection for e-commerce businesses… If you are thinking of selling or drop shipping a product online…this episode is a absolute must listen! Selecting the right product to sell online is absolutely crucial to your success. Pick the wrong one and your site is doomed before you even launch. Mike […]
Rank #2: Ep 36: eBay Drop Shipping – Easiest Online Business in 2018.
In this episode we re-investigate eBay Drop Shipping in 2018… In this weeks episode, Mike talks about eBay Drop Shipping as the best online business of 2018. He also discusses his 16 month hiatus from the podcast how during that time his own online business(s) have grown to a massive level. And lastly, he reveals […]
Trying to work out how to acquire more customers? Need to improve customer retention? Or just looking for some reassurance you’re on the right track? That’s what the eCommerce MasterPlan is here for. Every week we interview an e-Commerce business person (owner, manager or marketer) with a fascinating insight into successful online retailing. Their business might be a UK mail order retailer, an online only store for Australia, or a brick and clicks business from the USA – but every one of them is doing something we can all learn from. Listen for advice on what to do next, reassurance you’re heading in the right direction and all the inspiration you need to grow your eCommerce business without losing your life in the process!
Rank #1: Ex Airbnb Head of SEO Tommy Griffith shares his top SEO tips, plus the power of automation.
Tommy Griffith used to run SEO for big businesses – 4 years at Airbnb, and before that 2 years at PayPal. Then in 2017 he decided to turn his training side business, Clickminded, into his main occupation. With projected 2019 revenue of $490k for 10 hours work per week, spending 2018 working on automating the business has clearly paid off!
Rank #2: 25 eCommerce Marketing Tips from the eCommerce MasterPlan Virtual Summit.
The eCommerce MasterPlan Virtual Summit goes live this week. Sign up now or in the future at eCommerceMasterPlan.com/summit176 In this episode podcast host Chloe Thomas will give us a run down of the top tip from each of the 25 sessions within the summit.
Ecommerce MOMENTUM is a podcast created for you, the Amazon, Ebay, Shopify seller, or the Next Great eCommerce seller! We are here to help you understand how the top successful ecommerce sellers today got where they are, they tell you how they got unstuck, how they were able to outpace the herd and create a true “lifestyle” business. Each episode brings you a top seller with specific actionable steps to help you start, grow or get unstuck. This twice a week podcast will help your Amazon and Ebay Business with selling on Amazon podcast and selling on Ebay podcast episodes.
Rank #1: 238 : Gaye Lisby – Use Online Arbitrage to grow a real Amazon Private Label Business.
I was fortunate enough to have dinner with Gaye and her sister earlier this year. I was captivated by her stories and instantly connected with her. I couldn’t wait to get her on but as we all know, we are busy people! Gaye has been busy building a multi-million dollar Amazon business and now has connected with Andy Slamans and Amazing Freedom to offer a strong buying list. I love the way she explains we also teach fishing not just what to buy and we also help you get ungated! Thats a big deal. Mentioned: Here is the link to get into Gaye’s Million Dollar Arbitage group and list- You get a 7 Day FREE trial with this link! If it fills then you get on a waiting list. Sponsors: Gaye’s Million Dollar Arbitrage List Solutions4ecommerce Scope from Sellerlabs GoDaddy Grasshopper
Rank #2: 248 : Paul Apollonia – Selling on Ebay full time for a long time.
Paul is a great example at 70%. So that’s the answer: 70%. Want to know the question? It’s funny when you think about it. We would applaud a restaurant that made it 10 years. That’s a long time in the restaurant world yet we tend to downplay a real ecommerce business that has made it for well over 10 years because they haven’t sold a million dollars yet. They have not scaled to a power player. Yet, they have built a viable skill set and a model that is sustainable. hmm.. Seems to me they “made” it! Living on your terms has to take over the conversation. Living where you want, how you want and just being there for your family is where it needs to go. Mentioned: Pauls email contact Pauls website Pauls Vimeo Sponsors: Gaye’s Million Dollar Arbitrage List Solutions4ecommerce Scope from Sellerlabs GoDaddy Grasshopper Transcript: (note- this is a new tool I am trying out so it is not perfect- it does seem to be getting better) Stephen: [00:00:00] I’m excited to tell you about galas B’s million dollar arbitrage edge analyst group that’s a lot to say but there’s a lot in it. And guess what. It’s closing it’s closing this week it’ll close for Q4. It will not open up until next year. She started a third group. And so there’s only 50 in it. So you don’t have to worry about deal with hundreds of other people buying the same thing. So you’re going to get daily actionable items delivered to you five days a week. You’re going to get the mentorship of being in the million dollar arbitrage group and you’re going to be able to ask questions ask for help get whatever you need. But again get those opportunities join me in this group because I’m in this group and you’ll see me in there. The only way you’re going to get to join this week is if you click on the link that’s in this episode and also in a Gaye’s interview number two 38 was Episode 2 38 and she explains a lot of what it is and their only chance you’re going to have to get in there. Stephen: [00:00:54] Second I want to make sure Scott from solar labs I was just with Jeff. They are just killing it with this product. It is just not going to dead because you get to see the keywords that are important for your listing. Why go trying to figure it out. You already know an item is selling. So you go and find their keywords and you put them in your listing. It’s a smart move. You already got a proof of concept and scope does that for you. So it’s Sellar labs dot com slash scope. Stephen: [00:01:22] You’re going to use the code word momentum and are going to save 50 bucks. Awesome awesome deal. I was just with Karen Lochore also and we we spent some great time talking about you know what’s going on in her business and it’s just incredible solutions for e-commerce. Great group you’re going to save 50 bucks if you come through my listings. Right. Remember these people pay me so I don’t want to mislead anybody. They pay me. But you’re going to save$50. And she’s still doing that inventory health now says this is the perfect time to get yourself right. Storage expensive member it’s triple triple storage fees. So get your inventory right get it correct. I just had to create 68 variations of a listing if you heard my interview with her at [2:45] you heard that 68 variations. Stephen: [00:02:08] They went live today. Products went in today as day I’m recording this and I am so excited. I just I’m so excited because I’ve got another order of them coming in next week. And so I already have the listings up. They look beautiful. It’s everything that I needed and it’s just such going above and beyond. That’s why I love solutions for e-commerce solutions for e-commerce dot com slash momentum and you’re going to get that benefit are going to save your money at the lowest price say 50 bucks and you get the inventory Health Report Go Daddy dotcom you want to try try. Go Daddy dot com slash momentum and you’re going to save 30 percent on all your. Go Daddy needs. I use them for all my domains that I buy have for a long time now I get to save 30 percent just like you try. Stephen: [00:02:56] Go Daddy dotcom slash momentum. And last but not least is grasshopper I saw somebody just bought it this past week and I can’t wait to hear how it goes for them because it allows you to be the professional that you want to come across as right. You want to have really strong features especially as you’re building customer service. I think a great program for anybody who’s selling a Wal-Mart you need a customer service program. You can use Google Voice it’s free but it’s definitely not as professional and you’re not going to be able to have the flexibility. Imagine one phone your personal phone and that app on there allows you to have all those lines set up you can have it forwarded to other you can you can do custom vanitie numbers you know 880 [6:03] whatever you want. Great program. Try grasshopper dot com slash momentum. Try grasshopper dot com slash momentum. Save 50 bucks there too. All right let’s get into the podcast. Cool voice guy: [00:03:50] Welcome to the e-commerce momentum podcast where we focus on the people the products and the process of e-commerce selling today. Here’s your host Stephen Peterson. Stephen: [00:04:04] Welcome back to the e-commerce momentum podcast. This is episode [2:48]. Paul Apollonia. Now I appreciate this conversation so much because here’s a gentleman who’s a little older than me. Yet for the last 10 years has created a business for himself something that he has figured out that he’s pretty good at and he’s teaching others he’s not the most successful seller. You’re not going to hear millions of dollars in sales. He’s a little humble and yet he’s doing it on his terms. How many of us wish him well let’s say this we get into a discussion about how we describe ourselves when we go to a party. Right. How men define themselves. And now you get to a place where that’s not so important that the older you get the less important that is. And I think we get into a great place I hope people really listen to this. Let’s get into the podcast more. Stephen: [00:04:55] Welcome back to the e-commerce moment podcast excited about today’s guest. I got to meet him face to face and was very impressed with the story but more importantly just the attitude about his business and his life and I just love it. Paul Apollonia Welcome Paul. Say Paul: [00:05:14] Hi Stephen how are you doing today. I Stephen: [00:05:15] am doing awesome. It’s just a great day working on warehouse stuff. Moving between two or three actually look I have three warehouses right now I’m working with trying to figure out what’s the best scenario and that’s really those distraction. I was just talking with somebody about this. When you get one of these distractions it can change your whole day. I had a plan today. I was going to do this and guess what. Now I’m on these these little side gigs you know dealing with this so happened a lot. Paul: [00:05:45] Yes it does. I actually my kids are older now. They’re teenagers and my 17 year old daughter she always up my plans almost on a daily basis. And my wife goes you know we’re serendipitous and I’m like no. Stephen: [00:06:04] But isn’t it awesome that you have that ability. To me that’s a pretty awesome thing. How many other businesses could you be in that you could just pick up and do something different. Paul: [00:06:15] Almost no. Right. Stephen: [00:06:17] All right. All right well let’s get in the story because you have a you’ve been to this a long time. Paul: [00:06:23] Yes I have. I’ve been doing ebay since like feels like forever. I signed on in 1998. Really didn’t do too much just bought a few things obviously. Like we always do and started selling a little bit in the early 2000s. Just goofed around with it left my full time job in 2004 did not do online stuff for another five or six years. I started an automotive e-tailing business mobile did that all about 2008 and 2008 came along and everything came crashing down. I think I was a God thing to be honest with you and I’m moved on to do an online stuff just by accident. Well not really an accident and a friend of mine was telling me I shouldn’t be selling on eBay. It’s a lot easier work and I just ignored them for a couple of years. Stephen: [00:07:12] Well did you ignore him because you had already had that experience in your life. It’s not that he was way back. It really was not easy. I mean it was not easy. You couldn’t do anything with the photos and everything else right. Paul: [00:07:24] Gosh no it was not my gosh I remember going to the post office and waiting in line every single day. So I got somebody from international watched something or when I was another fiasco. Paul: [00:07:36] So I think that’s part of a reason to think you’re correct there that it was at the time it wasn’t as easy as it is now. You Stephen: [00:07:43] know I wonder if that’s a lesson for us to think about. You know I think about. I’ve seen this so many times rates queue for things that we’re selling then all of a sudden the price tanks or last year it was great and then everybody gets in on it right. Stephen: [00:07:56] And then it’s not valuable anymore right so you stop looking for do you stop selling it. And then all of a sudden though you go back and look now I wonder if that’s a story you trying something that was horror or it just whatever happened and then you give it some time and then you can get back into it. I wonder if that’s pretty much everything that we deal with little thought. I Stephen: [00:08:16] don’t know if that’s a good question. It’s interesting. OK so so you decide I’m going to try this. Was this going to be an end all or was this a stopgap till you found another job. Paul: [00:08:30] It was going to be a stopgap until unfortunately I went was planning on going back into full time work. And I know yuck but I was able to make it almost my own. So I didn’t have to go and look for another I.T. job. That was great. Stephen: [00:08:49] So you had a plan right and you say you were going to make you know a hundred dollars a week to make this easy. Stephen: [00:08:55] And the fact that you got to 70 or 80 and you were enjoying it. That Stephen: [00:09:01] was enough. Was it enough for you and your wife or was it just enough for you. Paul: [00:09:07] It was just enough for me. My wife was work and she. She’s been in a nursing field for ever. And now she’s just you know she’s is there is no conflict. But she knew where I was going with that was she on board with you doing 70 percent or whatever she has been supportive in what ever I have done in our 34 years of marriage to be honest. That’s pretty awesome. As for a better woman. Stephen: [00:09:33] Well I think that that’s you know what you just said I think is a powerful message for somebody to hear because I see that question asked a lot. So I’m wondering when I see other people out there so I see these posts and they’re like when can I leave my job when does it make sense. And in your case it was it when you made 100 percent of your income it was when you made say 70 percent. And yet you still enjoyed it. I wonder if that’s the permission point. People need to get to they don’t need to replace it all the way because just just by doing it you get better at it right. I mean I imagine you’re much better today than you were 2005 writer 2000 and 2008. Paul: [00:10:10] Yes yes yes of course. And I’m always trying to find better ways to get better. Stephen: [00:10:15] Right. Right. Right. Because you can then focus. And so I wonder people need to hear that instead of waiting til you replace your income get to 70 percent and then let that be good enough because you’re only going to get better that next 30 percent. While it’s probably harder it’s probably easier when you give it your all. You know when you’re when you’re trying to do this part time right. I mean maybe you can attest to this doing this part time is a very difficult to scale. It’s a very difficult thing to replace a six figure income if you were going to try and do that or whatever it is right. It is. And so I wonder if that’s the place that people need to get to with their head. It just sounds the way you said it it sounded so good like hey that’s good enough. Now I can build something run. Paul: [00:11:01] And also like I said before there’s nothing wrong that in our time. But I think in our time and knowing you have that check coming in two weeks. You know what I mean like oh I don’t have to work that hard today. Yeah. Paul: [00:11:13] You’re going to be two weeks or less I will work this week. You I looked at that chart and you know it’s it’s it’s a lot different doing it part time and doing it on you know it all on your own. You have to really be disciplined and everything else. I’ve Speaker 13: [00:11:29] learned a lot about myself. Wow. We’ll talk about that. So Stephen: [00:11:33] you learned a lot about yourself. Did you like everything you found out. Paul: [00:11:38] You know about myself to be honest with you I’m pretty much an open book. No I didn’t. One of my good friends way back when I first looked my job was OK now the fun begins. You sort to deal with those he quote evens in your head. You know your mom you know your mom you have to get up in the morning you have to make your own schedule. You Paul: [00:11:57] have to you know you have nobody to answer to but you know you can’t call in sick without you know sick of a day is means something different. Right. Paul: [00:12:07] You going to make it up the next day you know like I came from the ICU where you are the manager would hand you something to do with it two deadlines you have to make your own deadlines. Paul: [00:12:18] I mean it’s it’s I wouldn’t change you for the world now. To be honest with you it’s not just the freedom. It’s just I can’t explain what the freedom feels. It’s just awesome. Stephen: [00:12:28] But you didn’t like I mean to me and this is hard for guys to admit and it’s not a you know picking on you or anything like that. I think a lot of people get there in their head and then they think there’s something wrong. I think it’s normal that you start to see the things hey maybe I wasn’t as disciplined as I needed to be right. Or maybe I wasn’t in my job maybe I didn’t give what I said I gave 100 percent. Maybe I didn’t. Paul: [00:12:53] Oh yes of course. Like when I first left in 2004 and lost or that business now I was doing for a time before that for about a year and I thought maybe I quit my job I’m so busy that I’ll be quite honest I wasn’t ready. I should’ve left my job and I should have waited until a year or so before I was really ready to be new. It was just a bad time for me and I’m just I don’t know why was it a bad time. What do you make a decision on of emotion. To leave. I was just. It was a weird thing you know like I loved that industry for my whole life I was in it. And then I just got up one day and was just like I really don’t like this anymore. I look that’s my head for a couple of months and my weight. Well just leave your job if that’s what you want. And I was blown away. I’m Stephen: [00:13:42] like What am. So she she took away. You were like wow I can’t leave you know I don’t want to disappoint my wife. She took that away and now there was nothing stopping you. But you know what. It Paul: [00:13:55] was funny when she said that is it. I’m going to let you think about that for one more day and then get back to me. Yes. Stephen:
eCommerce Uncensored by Fast Forward, Inc is a podcast dedicated to bringing eCommerce entrepreneurs actionable tips and techniques to grow their sales, email list, and traffic. We’ll talk about Email Marketing, Facebook Ads, Social Media Marketing, Shopify, Woocommerce, Sales Funnels, and much more. Fast Forward, Inc is a digital marketing agency in New Jersey.
Rank #1: EU004: How and Why You Should Use Social Media Even Before You Start Your Business.
In Episode 4 of eCommerce Uncensored the guys of Fast Forward Unlimited talk about why it’s important to start your social media marketing campaign long before your eCommerce site or storefront is ready to launch. The guys also discuss a variety of tips on how to acquire an audience of captive customers waiting to bring you revenue. A common mistake people make is spending all this time and money preparing to launch a business only to find no one even knows about it or cares. It is imperative to create a following and a visual brand to get people excited for your new venture. Here are some ways the guys suggest creating a following: Get your social media profiles up: not only should you be creating a name for yourself on the different platforms, but start following others. When you follow people, they’re likely to follow you back and in this way you will organically bring attention to your page. Follow other brands similar to yours so you can see what your target audience is responding to. Keep your followers connected by posting: Once you have an audience, keep them engaged and coming back for more. Don’t just post about your own business, but post content that plays to the interests of your target customer. “Listen” to the feedback: your followers can tell you a lot about your market based on their responses (or lack of). This is a great way to learn what will or will not work long before you launch. Build an email list: One of the most important things you can do! This gives you the power to reach your target audience whenever you’re ready. Use the platform to your advantage: work the system to enrich the lives of the platform users. Post relevant content, often, to become more visible. Be authentic: don’t try to crack the algorithm. Post the stuff that interests you, and you will create a following of likeminded consumers ready to invest. Create your social media movement early to get your followers involved and excited about the launch of your product. If you have any questions about this podcast or how to grow your business in any way, we can always be reached at email@example.com or firstname.lastname@example.org. We’d love to chat with you and help you out in any way we can. The post EU004: How and Why You Should Use Social Media Even Before You Start Your Business appeared first on eCommerce Uncensored.
Rank #2: EU030: 5 Keys to Running Successful Facebook Ads.
In Episode 30 of eCommerce Uncensored the guys give you 5 keys to running successful Facebook ads so you can increase your revenue and stop wasting money. #1 Every niche is different, so test your strategy What works for one product may not work for another. You need to consider what your selling, who you are selling to and adjust your approach accordingly. #2 Don’t push a strategy that isn’t working When you post a new ad, you will know within the first 24-48 if it’s working. If you’re not getting clicks, STOP and try something different. Don’t try to force something that is obviously not appealing to your audience. #3 Have realistic expectations This has to do with both money and metrics. First, those clicks are going to cost you money. Customer acquisition should be part of your budget. Some metrics to keep in mind: · Click Through Rate (CTR) should be at least 1% · Cost Per Click (CPC) should be under $1.00 depending on your ad objective. · Relevance score should be between 7-10. #4 Know the objective for your ad Are you looking for: · Clicks – to drive traffic to your site or landing page. · Video Views -to get as many people as possible to watch your video. · Conversions – to get people to complete a task such as sign up for email list or purchase a product. If you’re new, your objective will be clicks or video views to get people interacting with your brand before running a conversion ad. This is an instance where the Facebook Pixel is important. Running broader ads will help teach the Facebook Pixel who your target audience is. Knowing how to use pixel is a must. #5 Start with a broad target audience. Rather than being very specific at first, start with a wider demographic and let the audience’s reaction/interaction with your ad narrow your target. As important as all the tips are, you HAVE to be knowledgeable in Facebook Pixel to get any Facebook ad to do its job. You could be wasting time and money not using Pixel effectively. To learn more about Pixel and how to use it to make $$ click here to take our online course all about it. As always please reach out with any questions you have about your eCommerce needs. The post EU030: 5 Keys to Running Successful Facebook Ads appeared first on eCommerce Uncensored.
Learn ecommerce & Amazon marketplace tactics from Ben Cummings and seven figure seller Traian Turcu. Discover how to earn an excellent living selling by selling private label products and physical products on the world’s most active ecommerce platforms like Amazon, Shopify, Walmart, & eBay. Free apps, bonus downloads, and products here: BenCummings.com
Rank #1: Episode #179 – Where My Big Breakthrough Came in Ecommerce (It’s Not What You Think!).
Ecommerce and Amazon strategies for earning an excellent living and dominating markets with YOUR physical products brand with Ben Cummings.
Rank #2: Episode #170 – #1 Facebook Ecommerce Secret.
Ecommerce and Amazon strategies for earning an excellent living and dominating markets with YOUR physical products brand with Ben Cummings.
Join 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.
Rank #1: EP159 - 2019 Predictions and 2018 Recap.
EP159 - 2019 Predictions and 2018 Recap Our annual predictions episode for 2019 and a recap of our 2018 predictions. 2018 Recap - Predictions made on episode 112 Scot Mallageddon 2.0 - We saw 7000 stores close in 2017, I think this accelerates in 2018 as the 30-40% of weak malls fail closures. YES Amazon will NOT buy another offline retailer, triples down on private label. YES Amazon will squarely get in the last mile business in 2018 and compete with FedEx and UPS. NO Amazon’s ad group will get so large that they have to break out details about it and everyone will be shocked at how large it has gotten so quickly YES Walmart will make a big M+A - top candidates would be Instacart, postmates and eBay. YES Somebody acquires Magento, or they go public. YES 5/6 Bonus - Amazon comes out with Alexa powered wireless earbuds - because I want them. NO Jason Grocery gets disrupted by digital (led by curbside pickup). Digital grocery doubles in US, at least one delivery firm peters out.YES Drug gets disrupted by digital. NO AI Gap - biggest trend of 2018 NO Voice - Huge but not for commerce. YES Payments - Retail digital wallets die (except Starbucks/Walmart/Amazon). Bitcoin tanks. YES 3/5 Bonus - Amazon launches a wearable. NO . Scot crushes Jason! 2019 Predictions Scot At least 5k more store closures in 2019 Amazon - Prof Galloway is big on Amazon having to create a AWS spinoff and has moderated that to tracking stock. I’m going to predict Amazon doesn’t do either of those things. But this WILL be the year they break ads out. eBay/Alibaba - I think this is the year when the both need to do something big and the stars are aligning for a combination there. Shopify gets acquired by one of the big ad-based companies (facebook/google most likely) Walmart stumbles in e-commerce Jason Amazon store count exceeds 1000 stores Walmart buys a last mile firm Another big bankruptcy (going to be a tougher than expected year, JCP, category killers Office, BBBY, Neiman) Mobile commerce revenue passes Desktop - Aided by PWA’s, and payment API’s we see mobile gap narrow Fads (Voice Commerce, Customer facing AI, SocialCommerce, VR BlockChain) Bonus: Amazon breaks out Prime revenue. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 159 of the Jason & Scot show was recorded on Sunday, January 6th, 2019. www.jasonandscot.com Transcript Jason: [0:24] Welcome to the Jason and Scott show this is episode 159 being recorded on Sunday January 6th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your co-host Scott Wingo. Scot: [0:39] Hey Jason and welcome back and happy New Year Jason Scott show listeners Jason am I mistaken or is that some new music we have there at the beginning. Jason: [0:48] Yeah yeah due to overwhelming listener feedback that I finally updated the the intro to the show it is the same song and the the same announcer but you know you and I both both had some career accomplishments in that in the last year until now there are titles are updated and it's you know just kind of refreshed for the year. Scot: [1:13] Yeah and you how is the new gig going for anyone that missed for smashing on you if you missed any of our last couple episodes but Jason has a new gig will see if I can remember this Chief Grand Superior digital retail Commerce officer is that the right now. Jason: [1:31] The for the second time in a row you nailed it exactly right. Scot: [1:35] Awesome my dad sometimes I drop a word in there but I think I got them all. Jason: [1:38] Yep and impacted cuz you mark that title so much in the last episode I had a ton of a client with legitimately fancy titles all making fun of me for the for the entire break so thanks very much for that Scott. Scot: [1:52] Awesome it's maybe that will be everyone's New Year's resolution is to give Jason a hard time about his awesome new title. Jason: [1:58] For for sure. Scot: [2:00] Coldwell we're post holidays here I think everyone's probably on the edge of their seat did you get any cool new gadgets. Jason: [2:12] Ya always tough. Like in general there's an extremely narrow gap between my desires and fulfillment in so. Like if I got some new gadgets for Christmas it's most likely because a new Gadget came out right before Christmas so I will say I did some refresh is I finally got the. The iPad Pro the 10.5% sync you also have I haven't unbent version I've been pretty. Pretty happy with that and because because of the new job I had to trade out laptops and so now I have finally have a in all USB C. Ecosystem with the iPad and the the the laptop so I've getting those new gadgets of course cost me thousands of dollars in new adapters and cables in. And all angles but I guess the one minor little toy I got is a new. A video camera well I got a couple new vision cameras so I got the DJI osmo pocket. Scot: [3:24] Nice. Jason: [3:25] This is a tiny as in fits like in the palm of your hand you could you could hide it in your hand video camera with a a fully-functioning gimbal so it's, pretty cool to have some some. Funny pictures I'm looking forward to taking nap to the several upcoming trade shows that will probably talk about in a minute so that has been cool and I did a little earlier than Christmas get the new Nikon. Mirrorless camera system so a Nikon Zed 6 if you're from your upper or a Z6 if you're in the US. Scot: [4:01] Cool house that is the mirror listen can you tell the difference. Jason: [4:05] Yet yet so Nikon has always had a great reputation for digital still cameras and great image quality in low-light capability in the color rendering they've been extraordinary really horrible at video. And I'm assuming I actually need a camera that's. Okay it Stills and also very good at video so the fact that I've always own Nikon cameras and have Nikon lenses have been. A constant pain point for me because my car's been so far behind on video and so there's some the mirrorless cameras in general are much better at video and this this. Nikon's first mirrorless full-frame camera. Really does a pretty good weed frog for video capabilities in a lot of ways so it's it's definitely the best. Video stills camera I've ever owned. Scot: [5:01] Koba I know you're off to CES next week and we will have a lot more gadget news for us then you and I are both at the NRF Big Show so maybe we'll shoot some video do a live streaming or something fun like that. Jason: [5:12] I will bring all those gadgets why be using them to photograph any cool new gadgets that you got for the holiday stuff. Scot: [5:19] I I said William like you where I think I probably had caught up on my gadgets before the holiday suit so nothing new for me. Oh yeah yeah I do think did you get the keyboard case on your iPad I really enjoyed that. Jason: [5:35] Yeah I did I've enjoyed that it's been it's my first iPad with a pencil so that has been it's been cool yeah. Not permanently I I will concede to have misplaced it but it it does reemerged. Scot: [5:51] That an airpods have this weird like they want to get lots of gaple somehow his program them to is a margin enhancer to get lost as quickly as they possibly can. Jason: [6:02] I'm afraid to even talk about that because my my wife is so much more responsible than me and she's on like her her like 4th or 5th pair and I am still in my originals through some some like and Candy miracle. Scot: [6:15] Goodwill as is our tradition here on the Jason Scott show every year we kick off the new year with a recap of what happened in the last year and then we have our predictions so the predictions are twofold last year about 365 days ago we made a bunch of predictions couldn't remember so it's kind of fun to go back and look at those are super geeky and want to go back that was episode 112. It's a method that means we did 47 shows last year so that's 47 hours roughly of Jason Scott if you if you have a week to burn if you have mono or something like that that you want to recover from and you need something to put you to sleep for 47 hours a week we have your cure so we will be breaking the show into three pieces for going to do kind of a good bad ugly of 2018 and then we can go into recapping our predictions and squirm and then from 2018 and then we're going to put out some 2019 predictions so I think what you'll see from the 28th predictions is we're actually pretty good pretty good at this thing after how long you been at this 3 for years now I think we're getting pretty good on the prediction game. Jason: [7:34] That's easier for you to say than it is for me to say this year but sure. Scot: [7:39] Without further delay let's jump into The Good the Bad and the Ugly Jason what order a couple of your goods from 2018. Jason: [7:46] Yep so I was really excited to see some of the new physical store Concepts and the very end of the year you know Nike open at House of innovation we talked about that in the last show that's super exciting to me I think some of the Amazon Concepts like go and 4-star are are super interesting there's a lot of new physical Marketplace Concepts like we've had beta on the show I've mentioned show failed before and then a lot of these mobile-first stores like the Sam's Club now so I think, the you know we're really starting to see digital Impact Physical stores and drive new store Concepts which is awesome. [8:24] On the platform front I was excited to see Adobe make the big investment in Magento in an e-commerce platform. In many ways I feel like the the commercial platform space in the Enterprise platform space in particular that I play in is kind of. In the worst spot it's been in in 10 years in terms of. You don't really meeting the needs of retailers and clients and there's always been this this conflict between CMS systems that people like Adobe make and commerce platforms that people like. IBM sap in Oracle make in so I'm very optimistic that adobe who who is dominating the CMAs. Essbase then making a significant investment investment in e-commerce you know really could be the way forward for 4. A lot of new new retailers in in Commerce entities that need an enterprise-class system. And I say this with the one caveat Magento as it is is not the solution. [9:33] Adobe's willingness to invest in Magento 2 me is historically a Dobby is always been a. And aggressive acquire that acquired a bunch of stuff and you know it often takes them several years to really integrate the stuff so I'm not expecting Miracles this year per se but in the long run feels like. Adobe deciding that Commerce is an important part of the stack is super exciting and then my my last good for the year. Is kind of specific it was Walmart's investment in Flipkart in the reason I think that is good I think it is super smart for. From Walmart to be aggressively fighting for digital in in the super important Emerging Market in India. Some things happened late last year that make those Investments actually look a little softer is as a Indian regulation on foreign Commerce is has gotten more challenging but the reason I just think it's good overall is. I feel like that investment that huge investment in digital for Walmart you know his is the most. [10:38] Tangible physical manifestation of Walmart's absolute recognition that. Digital is the way forward in the day you know that they have to compete with the Amazon than alibaba's of the world and can't can't abdicate any of that Digital Ground And so seeing them them fight for for that that intellectual property you know I think is a encouraging sign for all of us in the future what about you what would it were you excited about last year Scott. Scot: [11:07] Well I'm always the guy that gets to say it wouldn't be the Jason Scott show without Amazon and Sonos surprised they're my good is crying it out with Amazon so I thought was really interesting than Amazon you mentioned a little bit but they really expanded their store footprint so they had acquired Whole Foods back and 17 which obviously is a big splash into offline and they never really expanded Whole Food stores I mean 2018 was a year of kind of adjusting that that acquisition they announce now they're going to start opening more here in 2019 so that's going to be interesting to see I think the surprise for me in an impossible one was done to go experiments and then just kind of really ramping that up pretty quickly you know I think they built another for 5 is that many more on the way there's rumors of wars and then you're the one thing as I travel around not nearly as much as you but going to various malls and things I would say pretty much every a mall in the US seems to have an Amazon pop-up store and I think about all those people I don't know how many that is it's how many of these are out there but I think if we looked at. [12:23] Your class A malls I think there be three or four hundred of them so I wouldn't be surprised if there was three or four hundred pretty substantial Amazon pop-ups out there so it's I think that's pretty interesting and really is a testament to the Amazon. [12:38] You're expanding into kind of omni-channel world and get their products in front of more people. [12:43] I'm done once asked on the front end of Amazon the back end of Amazon that was really interesting this year was what I would call it start a frenetic expansion of. Delivery capabilities some of this is last mile so they acquire twenty thousand of these Mercedes Sprinter vans I'd be surprised if any listener at least the United States hasn't seen one of these I see you to a date at this point in my area. [13:09] And they built a 1099 Network a very clever way kind of taking a page out of FedEx Grounds Playbook where they were actually kind of put you in the business guarantee you rub you and routes and then boom you're off and running so I think they got those 20,000 sprinters out there delivering packages and something like six months which is just pretty crazy about a lot of soccer capabilities so if you're a third-party now you can use Amazon soccer in your phone at Center and almost be like little extension of FBA Whole Foods we saw them can I ditch instacart and then layer and their their 1099 other 1099 network of Flex for that they've added a ton more jets that got to where are hubs coming and I attractive distribution centers pretty closely so in the USA in 2018 they added 46 more performance center assets and then another 23 in the rest of the world for a total of about 70 I am all in that's an additional 11 million square feet of space that came on line in 2018 and then that adds to the existing 850 or so globally and 250 million square feet so, so it's a lot of people that I always talk to you that the baby not in the industry but on the cusp there always surprise I'll say what how many how many from home as soon as you think Amazon has versus Walmart but they both have 10 and the number I think that's about right with Walmart but Amazon has. [14:34] Tremendous amount of assets they built so it matters it's Amazon a so far ahead of anyone it is going to be interesting to see there. My last surprise was becoming I think the economy did really well last year even the last reported as of December on the job side was really really strong so that we're seeing a strong economy you know as the Fed kind of Titans interest rates in the stock market with a lot of shakiness there but underlying economy. [15:09] Then let's put it in the battle I'll start those so I think the bad was I was so surprised about how kind of negative to Amazon hq2 process turned out, kind of ended in a in a thud you know it wasn't like this kind of I guess unless you're one of the two cities I think they're. Pretty excited but even then there's a lot of protesting going on in the DC New York area that Amazon's coming and then it got these really big incentives so yeah I think that's going to be interesting to watch and see what happens as Amazon is so large now that they can't just fly under the radar and I think they managed the back of that process kind of weirdly not where it seems like everyone that are decided and then and then it's kind of pain a conspiracy theory if you believe that they were just Gathering data from people what I'm concerned about a little bit you and I emailed about this just recently I kind of put it in the bad category in this is holiday 2018. I'm so Adobe came out a couple days ago what their final report they said the holiday came in at 14%. That's e-commerce so Little Debbie disappointing if that's true then you send me some data that showed MasterCard said all in 5.1 I guess you know this better than I do dinner or else was right around there and set right would that be kind of a win or a loss of your. Jason: [16:30] Yet so for all of retail that's that that's probably a win it's a little better than the recent historical averages but I think the. That does averages hide the fact that you know it just was not equal 4 for all retailers and inside I definitely think there are winners and losers. Scot: [16:54] Yeah unfortunately don't think we'll know until Amazon reports there they're kind of the Bellwether I look at and you know, Indus. Where they would have pre-announced if they had missed so they haven't said anything unfortunately Apple did pronounce look like they had a really rough calendar Q4 I believe it's there there theraphysical q1i which is always confusing what companies do it that way but that seems to be isolated to China with some of the tariffs and things in the Chinese economy that that I don't think we'll Amazon has as much exposure to just really interesting to see where holiday 18 and zup and I think we'll know what covered on the show as we always do I think we'll know by that first week in February however all the all the leaves fell and and what happened. Jason: [17:41] Yeah I'm looking forward to seeing how that all plays out so some of my bads. Didn't get a ton of Buzz last year but I've been pretty disappointed in the outcome of the Supreme Court ruling regarding a internet sales tax and so you know, basically the Supreme Court rule made a ruling in favor of a state that was suing to collect sales tax on. An internet sales in Oxy like I'm okay with. People having to pay sales tax for other online purchases I'm I actually think in general rather be Universal pricing and in. You know you buy from the same retail online or in the store you want to see the same price and and that's a lot to be taxed in a similar way the reason I say that the ruling was bad is. Because a bunch of the ramifications of the way this particular ruling plays out it just creates a lot of uncertainty in friction in the e-commerce space and so. Which states you actually need to collect sales tax in which they tax you definitely don't need to collect sales tax in and which states. You may or may not get sued by a state if you don't collect sales tax in right now is kind of. [19:02] Thrown up in the air and it creates a lot of inconsistency and just a lot of. A sort of effort and friction that isn't helping anyone and so I feel like there was opportunity for for Congress to solve this problem before dumping in the lap of the Supreme Court's and. You know maybe that was overly optimistic so didn't happen until we're going to have to let this play out for now a number of years and. Just like the unfortunate the other sort of bad one to me this year is we had some kind of ugly CEO exit so you know what we forgot about that this far end up but we had. You know the very ugly exit at Lululemon. [19:44] Early in the year I want to see February he was he was the CEO and chairman and got kind of forced out and he's now been. In an irritant for them on an ongoing basis you know Mickey Drexler was. Lasted less than a year of J.Crew and you know maybe not CEO of all but you know I see you judge executive term for some bad reasons it Nike. And so you know that certainly to me as one of the the the bad blemishes on on 2018 from a Commerce perspective. [20:19] And then my my ugly if we give it to the the really bad stuff for 2018 I just think it what I mean you're always going to have churning in retail stores are always going to have, bankruptcies Doug mcmillon famous what he carries around this west of the top 10. [20:36] Can retailers from my 1980 and there aren't a lot of those names that are that are still in business today so bankruptcies are in a shock but I feel like. 2018 hits is particularly hard with Toys R Us and Sears and then you know below them you had all these other guys David's Bridal Mattress Firm Brookstone Nine West Claire's Gymboree bonds. Etc and so you know as a lover of Commerce and Retail and sorry to see some of those stories brands. [21:07] You don't go away or get greatly diminished so that's only felt ugly and then right towards the end of the year, we had a IBM sell their big Enterprise e-commerce platform Webster Commerce to US service provider HCL, that to me is a probably super ugly for IBM clients that are relying on that platform and. You know now it's fragmented from the rest of the IBM stacked and there's going to be a bunch of challenges there there's a bunch of clients that own the or just moving to the. The cloud version of Webster Commerce which they didn't sell so that seems ugly I just feel like the the Enterprise Commerce platform space. In general is in a bad space and it's most manifested by by IBM which was you know one of the top three platforms are arguably the top platform getting kind of dumped by IBM this year. Scot: [22:08] Call yeah I'm going to plus one or as my kids would say retweet on the bankruptcies that tear you when was painfully know is that it is a kid that grew up Star Wars fan I spent many a midnight madness so you know. Jedi Friday or whatever the column hanging out in t r u so that was disappointing then you. Add insult to injury one of the shopping center if we go to a lot had a combined Tru Babies R Us like a huge one it just sitting there empty for the last last three or four months is kind of sad. Yeah I kind of say you know in this top of the mall Denton, so interesting stat here that came out towards the end of the year. I mentioned it, he did pretty well but malls were there emptiest in six years from a tenancy standpoint no foot traffic is also down at malls this company RI sorry is I had a report that said that they're at an 8.6% vacancy. [23:05] Again that's the highest it's been in 6 years and that represents 4 million square foot is the most available square footage in malls and then strip malls have been hit chick really bad because you know I think Toys R Us is really kind of one of those strip-mall type stores that it was an anchor for a lot of strip malls and and as we see in the enclosed malls when she loosened his anchors you get up into this death spiral kind of situation so I would also Echo that on the ugly side cool so so that was kind of the what was sawed in 2018 let's put it to our predictions in and see if how Clairvoyant we were on condos so I went back to Good Ol episode 112 and service predictions I'll go to mine and then you go to yours and then what kind of see how he did sue her quickly I had five predictions and a bonus so number one Mulligan 2.0 in 2017 we saw 7,000 stores closed and I said it's going to accelerate into 2018. [24:05] I ended up with 9,000 closures then my second prediction was that Amazon will not buy another retailer this doesn't seem like people may think well why would you say that it's kind of obvious but back then we were on the heels of the Whole Foods acquisition in a lot of Wall Street analyst for like issuing those reports you know Costco's Definitely Maybe the next company know it's Nordstrom's know its Target so that's that was kind of the backdrop. Predictions is really say these guys are off base I just don't think Amazon's could do anything big again in 2018, in the corollary to that was that they would instead of doing that they would triple down on private label. [24:44] Third prediction I ripped my prediction on Amazon Logistics they would be competing more squarely with FedEx ups and then number for this one turned out, pretty good I said Walmart will make big m&a instacart Postmates and eBay so, playing on Marketplace and last-mile their number 5 and said somebody would acquire magenta or they would go. And then my bonus was the Amazon would come out with Alexa powered, your butt's so I mentioned airpods the topless show I love my airpods but I am not a huge Siri fan and I everyday I wish Alexa what would hang out on my airpods instead of Siri so that was the Genesis of that production Warrior 2018 predictions. Jason: [25:30] Yep so I also had five in the bonus the first one was the grocery would get heavily disrupted by digital I think I called out specifically that would be wed by curbside pickup. Number two was the drug would get the heavily disrupted by digital, number three I said the biggest train would be talking about in 2018 was what I called that AI gap which was kind of, the difference between the big players that could take full advantage of AI in the smaller players that couldn't necessarily afford to do it as quickly, predictions for was voice I said it's going to continue to be huge and grow quickly but not for Commerce. And then my V prediction was mobile payments was digital wallets I said a bunch of them with. I said Starbucks Walmart and Amazon when continue to thrive but a bunch of the other ones women's and, snarky side note I mentioned that I expected Bitcoin to tank and then my bonus was. Close to the same as yours I I said that I thought the Amazon would come out with a wearable in 28. Scot: [26:42] What did you what you mean by Rebel. Jason: [26:45] Army night. Your paws were the most likely scenario but I just felt like they would find some way to get Alexa on on your body and especially because they lack the phone that seems like. You don't like it could be some kind of widget that you you clip to your clothing or or carry with you but but or I wear something like that but I guess my biggest expectation was that it would be your pot. And we will talk about the results of that moment early but I want to start off by breaking down how well you did so now that we reminded everyone what we thought 2018 would look like in the beginning of 2018 let's see how we actually did so your first prediction was the store Mulligan what do you think. Scot: [27:38] Yeah I'm going to because I put a specific number in there of 9,000 I I I missed that one turns out it took me a while to find the state looks like there was 6235 closures in hindsight what I should have done and there's no good data set for this is looked at the square footage of so you know when I don't know when a mattress firm closes that's different than a Sears or JCPenney are Toys R Us closing right is this really the square footage we care about so I would argue I would throw myself at the feet of the judges and say look at miss the number of stores but I think if you look at kind of what did clothes and yours juices rundown of store closures in 2018 Toys R Us 735, Walgreens 600 n Taylor Loft Dress Barn 500 Teavana 379 Best Buy 250 Mattress Firm 200 Gap 200 Children's Place 144 Footlocker 110 Kmart 109 Gymboree 102 and then let's goes It goes from there another kind of big square footage when Sam's Club 63 how big is a Sam's Club like two hundred thousand. Jason: [28:49] 100 weeks but yeah. Scot: [28:50] Honored yet so there's enough so it's all right I think if we looked as square footage I bet and I don't have a source for this unfortunately I have heard that the there was way more square footage in 2018 so. Who does if you want to hold it till I rely on the stop. Jason: [29:08] Yeah I'm actually giving you that one because I would, went out do I call the sources we do have the track store closures none of them claim or try to be comprehensive so they're they're tracking stores in a particular category or that made a particular criteria and saying they close that many but none of them for example are trying to keep track of. Potentially how many mom-and-pop closed or those sorts of things and even there are a couple of sources of square footage in your right the square footage is more dramatic because we had closure is it a lot of big stores but even the square footage tend to be like. People that are attacking mob a square footage in what the closures are so I just I don't think there is a definitive number but I think the spirit of your prediction came to pass and I think was the. The biggest shrinkage of a store for stores in in recent memory. Scot: [29:59] Colton so we'll call that one in the sky cam. Jason: [30:05] For sure so your second prediction Amazon will not buy another offline retailer and you said they'd triple down on private label so pretty with B, and I prediction but but I actually. I liked it so how do you think you did. Scot: [30:24] Predictions so obviously I didn't make another big acquisition of an offline retailer in it you know the trouble down on private label I think maybe they even quadruple down that it's hard to get data on the cell to does a good job and then we had some other data folks 10:10 to concentrate on the show and you know I think if you could attract our conversations on the show or the squeeze 7 episodes the second half of 18 we were spending a lot of time talking about Amazon 3rd party because it's probably the number one thing on retailers and Brands mines you know so so so I would call this definitely something that happened there. Jason: [31:12] That for sure, annoyingly totally giving it to you so 242 so far your third prediction which I touch you like is your annual protection, is the Amazon Logistics. Scot: [31:30] Yeah and this one's kind of squishy so I'm going to kind of say this was a zero so my mind we won't cross this one until I can ship a product on Amazon like I would FedEx from point A to point B. So I think it's become insanely cleared everyone that this is what they're building now so I think everyone is kind of, in fact if you if you go look at a FedEx stock chart and you'll see they had a number of issues with the terrorist it help them it would not, listen to their conference call their CEO and founder Fred Smith, you got a little agitated by a kind of the fifth or sixth Amazon question that he got so I think it's become pretty apparent everyone would Amazon's doing here and the the ball is no longer hidden the cards are on the table and who knows maybe 2019 will be that year when we can ship a product Coast to Coast for $3 on Amazon. Jason: [32:31] Yeah for sure so I'm sort of with you I feel like they made a lot of progress in that direction seems like you need to be something that will happen but but you don't get full credit for this year so if only because I need to keep the predictions competitive, so your fourth prediction was the Amazon the ad group we get so large that they would have to break out there the revenue separately and that people would be totally shocked how how big they got so quickly. Scot: [33:04] Yeah and so did this is a win they didn't have to break it out like they do AWS work so I could separate kind of reporting piano but they have had to break it out because it has been so large they created this they when they announced the quarter last year they said going forward they would change the way they recorded stuff. Unfortunately they stopped recording a lot of my favorite stuff which was kind of sad so they used to have this interesting breakdown between him and some things that have gone away now but when they did that they did start to break out category called other and everyone knows that that's like 99% and so and it has gotten quite large so you'll hear me talk a little bit more about that in 2019 president. Jason: [33:50] Yeah and you don't even though you're bad at reading predictions and you put that highly specific thing in there that didn't happen I'm totally giving this one to you like for people that haven't lived through the industry in last year people are not talking about Amazon's ad Revenue in January of last year in you don't even like the Scott Galloway's of the world that like make a living. Making predictions and then you know reminding everyone when they're right he wrote a book that you don't Amazon with 1/4 of the book and he barely mentioned advertising in that book in like, July and so for you back in January to have said hey there ads is going to be this big thing and it was going to be shocked when they find out how big it was and then you know last June and then again in October when they you know, showed how fast that was growing and everyone's exactly talking about that I feel like you you basically put the words right in there was a mouth so I'm totally giving you credit for that but you still ain't get one point for it so so you're three or four running into to your V prediction which was that. Annoying Walmart will make a big MMA and you mentioned some some last-mile candidates. Scot: [35:08] Yeah. Jason: [35:09] How you did Scott. Scot: [35:10] I'll give you sixteen Billy syneresis flag, Walmart acquired what card it was not one of the ones that predicted but. You know I probably should have so it was my my set up on this one going back then was, it's not like Walmart had all this pressure you know that they had to get in the game with with Amazon more and I was thinking Last Mile but it totally makes sense on their National side as well so that was, clearly a good call to kind of read the tea leaves on that one. Jason: [35:48] Yeah that was totally good and then annoyingly even though they were only supposed to be 5 predictions you did 1/6 prediction and you know to be annoyingly for me cuz I I'm I have this one-sided rivalry when I'm trying to compete with you I believe your 6 prediction was that a Dobby would acquire Magento for 1.6 billion dollars. Scot: [36:07] It wasn't that accept fake but it was that someone would acquire Majin to or they would go public so so there you know so having been on the other side of this when when you get to a certain scale as a startup in the magenta got through some complicated things but they're effectively a start up again right there an independent entity they had a private equity the clock starts ticking was what I was thinking and what that clock means is that investor wants their money back and he's private Equity guys BC's want a 10-year Horizon private equities like two or three that was kind of feeding into that prediction and then you know it's also on the other side it's. Musical chairs you know so so everyone every big cloud he's going to want to have a great platform and it just felt like there was. One chair left in and kind of two Cloud companies that wanted to sit in that chair so so that's what it said in the so happy that I read those tea leaves right as well. Jason: [37:07] What congratulations so recap five out of six right and then you did do the bonus one and that was the Amazon would have an airpod like headphones they and what it what do you want to say about that stuff. Scot: [37:23] So my strategy here is it's easy to call this when the wind because you had the same one so your Prime. So Amazon specifically didn't get released this but this is actually my son was looking for some new headphones so we went to, I would assume next to the derelict Toys'R'Us I mentioned earlier and I was surprised I'm a big I'm listening I'm on the show right now with some qc35 from Bose and I looked and it said now featuring Alexa and I was like what the heck, this is awesome now Alexa is in the Bose headphones then I went over to the job or display and it said now featuring Alexa then I went over to like two other kind of you know generic style things and literally as I backed up and looked at the row of headphones every single pair suddenly I had Alexa so what's happened is Amazon has issued an API or some kind of capability in a very strategically work with a lot of these manufacturers and unbeknownst to me until now literally like January 2nd when we were born in some. [38:29] Best Buy gift cards they are there are a lot of airpod like Technologies and and you have every configuration headphone you can imagine with Alexa now and I play with it it's actually exactly how I want it to be so on my Gadget which list is I am hoping that somehow these Bose headphones I have break and that I can. Get a new pair with Alexa or maybe I need to go check and see if I can retro them to have Alexa probably not try some kind of I'm sure there's some. Gizmo this to make me buy a new car. Jason: [39:02] Yea though I can certainly help you with the accidental breakage problem when I see you in in New York in a couple weeks but yeah yeah same boat I I'm not giving it either this credit for this cuz the Amazon didn't didn't actually, come out with an Amazon branded product but what did happen I can't remember the exact date like August or September they did finally release exactly as you suggested an API that made it totally possible for OEM to build Alexa into the headphones and you can imagine folks are doing it right then but then even a bigger deal one of the big chip manufacturers in November started shipping a new Bluetooth chipset the included that capability and access to that API in the chips at so you're already seeing a bunch of announcements that's before. Brands had the opportunity to build new products with this new Bluetooth chipset my expectation is I'm going to show up in Las Vegas tomorrow and there are going to be Bluetooth products with an Alexa embedded in them coming out of my ears with early. So I think we yeah we may have missed The Branding on that one but the floodgates are about to open up and not one of my predictions but sidenote like I think everyone's noticed that. [40:24] Airpods have been Apple's most successful product in The Last 5 Years and you know the. The Amazon Alexa family's been the most successful Consumer Electronic it in The Last 5 Years, I'll be shocked if we don't see apple Google and Amazon directly battling it out with smart smart earbuds this year. Scot: [40:44] Cool one of the one of the many Jason Scott show interns just handed me a note it looks like I can upgrade my headphones with firmware so we're going to stop a show right now. Jason: [40:58] We're not going to stop at but you may not hear Scott anymore cuz he's going to like drop by the audio. Scot: [41:03] I'm going to be upgrading my firmware while Jason finishes the wrestler show speaking of Jason let's go through your predictions so what was my score so was it 5 out of 7. Jason: [41:13] I forgot I forgot what it was I'm giving you five out of six we're not counting the bone. Scot: [41:18] Okay but I think that helps you but I'm okay with. Jason: [41:21] Well but we're also the setting it was the same bonus oh. Scot: [41:24] Okay so your first one was grocery gets disrupted by digital led by curbside pickup listeners will longtime listeners will know that is your favorite. Grocery solution digital grocery doubles in the US at least one delivery firm Peters out. Jason: [41:41] Yep so, I'm calling out a window side note I have come to realize that I hate my predictions from last year and because I just, put them badly like they're too subjective and in many cases like hard to measure so at one of my New Year's resolution is to write better predictions and we'll find out how very shortly. Scot: [42:05] It's easy to say you hate them in January of 2019. Jason: [42:08] Yeah for sure for sure but but I do think the sentiment of this when like was wildly true Walmart ruled after I pick up to 2,000 stores that over 40% e-commerce growth every quarter this year which is wildly faster than last year is faster than Amazon Kroger get a bunch of their own curbside pickup called quick list but a bigger deal they did an exclusive partnership with Arcado the biggest digital Grocer in UK Albertsons made a bunch of big Investments they both announced that they were going to watch the first digital grocery Marketplace and they also announced that they were going to build dedicated micro fulfillment centers out of the backs of a bunch of the Albertsons stores our friends at shoptalk launched a dedicated digital grocery show called grocery talk and it's sold out with 3,000 attendees in the first year you know you go internationally and the the Ali Baba concept hammer and the JD concept 7 fresh are going nuts I think it's it's a safe and fair to say digital grocery blew up even even though. You know I mean I have perfectly nailed the specifics and again there's no perfect metric but it does appear that digital grocery more than doubled in the US. Scot: [43:28] Wood shed delivery from Peter. Jason: [43:30] Yeah that's the part where I sort of depends on how you count right like you could argue that like one that got acquired like shipped for example. Scot: [43:42] Oh that's like tripled. Jason: [43:44] Not with any retailer besides Target. And I think I mean you know there's there's something there on the ropes a little bit but yeah that was a dumb part of the prediction so you can you're going to trust me anyway so don't you don't need a whole night. Scot: [44:00] Oh when writing predictions don't don't like a daisy chain hands together because. Jason: [44:06] When specifics yeah yeah. 2 + 1 is that is that I'm one-for-one right now feel free to stop listening to schoenauer. Scot: [44:17] Okay the judges give you that one okay because we're going to flip your aunt's to Anor and give you one there alright your second prediction was drugs get disrupted by digital. Jason: [44:30] Yeah and I mean a few things did happen that are interesting Amazon invested a billion dollars in pillpack they wash their first over-the-counter brand basic care they partnered to do that like at home medical devices under the choice brand of course there's this big joint health care venture between Amazon Berkshire Hathaway and JP Morgan but to me none of that adds up to a true disruption yet and I I mean I think there's some is there a lot of interesting tea leaves to read this year but I'm I'm not going to argue that I should get a point there. Scot: [45:12] All right and then your third prediction was the biggest trend of 2018 will be the AI Gap. Jason: [45:21] So once again a stupid prediction how do you argue something is or isn't the biggest Trend but I think it's safe to say this wasn't so I kind of miss this one like you know I do think. Aai was one of the hype things that got a lot of chatter in 2018 and there was one IPO that you could argue with sort of AI Commerce which is Stitch fix realistically like I didn't I don't think we saw a i dramatically transformed any retailers and so my my way more specific prediction that. Did the it would open a gap between the big retailers in the little retailers why I just don't think it's fair to say that happened so that was a dumb prediction and I'm I'm not one for 3. Scot: [46:06] Okay I'll see how you did a number for you said his voice is going to be huge but not for Commerce. Jason: [46:14] Yeah so again based on my fragile ego I feel like this one is climbing out of the hole a little bit I do think of voice was huge I think Amazon alone has said they sold over a hundred million devices now it's their best-selling device on all their big days that there's some by some metrics Google is actually. Selling more devices in the last couple quarters than Amazon I'm not sure I totally believe that but but I do believe they're selling a bunch of devices as well until for sure, voice over all was huge and I think even more clearly voice commerce was not there was some some data that came out in the third quarter that said that less than 2% of people that own smart speakers that ever tried to do Commerce with it feel like the only only even moderate volume, Commerce type applications were things like a Starbucks in the Uber for sure people are not ordering things with. Complicated attributes and in promo codes via there their voice devices self. Again I'm going to take the win there and which would put me at 2 for 4. Scot: [47:32] Does that hundred million devices suppression. Jason: [47:36] No because I mean some very low-cost devices we haven't talked that an issue I don't think that they now even have like and you can frequently get devices free and as part of bundles but they never liked him $19 device that you can plug into any speaker. And so they they just have all the price points in there you know there, is you highlighted there a huge advertising platform than one of that biggest biggest media platforms on the on the planet and they generally dedicate about half of all their pixels to selling this stuff so I mean. Today I am not shocked they sold that many devices if you if you ask me in a 3 years ago when they started this stuff if they would get there this past I probably would have said that shot. Scot: [48:21] So just like one way I think about this is probably 80% domestic 20% International I don't think they push the Alexa stuff is hard International so then to the pilot 89 us net, that article is totally undermined right is global High thing. Jason: [48:40] Yeah I think that was a global number. Scot: [48:42] There's three hundred and fifty people are in the US 250 households 200 million households. Jason: [48:51] Little north of 200. Scot: [48:52] Yes it was just going to round numbers 200 million households 80 million devices there's going to be some like your house that has 30 devices but that's like we on this Edge Neo so you know call it's approaching half us households have an Alexa device that's pretty amazing. Jason: [49:13] Yeah for sure but it is I feel like it is pres been on them like they're lots of devices that get to that. That 50% market share eventually and it depends on the technology took a long time but I do think one of the ramifications of the like modern digital era is. That all of this happens much faster so you know it. Adoption of new things just happens much more quickly than it did in the ear of radio or TV and so you know smart speakers, you know followed a similar trajectory to a lot of those other media technologies that they just did it in a way I can press time. Scot: [49:47] God I wish I could give you two on this one but it's been our custom to just give one point prediction so sorry. Jason: [49:53] Yeah totally totally fair. Scot: [49:56] Then your payments so you said retail die. And Bitcoin tanks so you didn't and in there. Jason: [50:11] So like you got him like me for my poor Boolean logic and again stupidly written like I call that some specific digital wallets that were the exceptions and those exceptions large we did really well Starbucks did very well on there some evidence that Walmart did well Amazon you know his continuing to thrive is a digital wallet I didn't spell out the digital wallets that wouldn't do well but in my mind there were two families of those there's Apple and Google which, like all indications are are pretty flat so there are people using them in liking them but it but it does not appear that they're growing particularly fast and it doesn't appear that they're getting as much reuse as, I'm sure they would hope so so our friends over it payments that that track this like it kind of found ample in Google to be flat and then there was this whole genre of digital wallets from financial institutions so specific Banks like Chase and Citibank and the card issuers like MasterCard and visa and. [51:13] Yeah none of those digital wallets are used by anyone that's not a family member of the company so I do feel like that that is fair and then stupidly put a hand in there 4 Bitcoin that had nothing to do with digital wallet so I have no idea why I did that but that is arguably, my best prediction of the entire thing because I think Bitcoin was at $16,000 a coin and in that is the beginning of January that you wanted me to prediction and today it's at about 3:36 hundred bucks so it's basically a quarter of its its former value so if you if you wanted to invest in any prediction in this entire, in N last year's entire show the most money you could have made was to take my advice and short bed. Scot: [51:59] Unless you were a Magento investor. Are Flipkart okay and then finally you said Amazon will come out in the wearable and I think you have already dismissed. Jason: [52:14] Yeah yeah thank you you are to cover that one so so I think you add all that up I'm I'm three out of five you're for it at 5 but with a like a much richer more impressive for. Scot: [52:26] Cool thank you I appreciate the kikuta sir I think you did a good job but hopefully you learned some some important lessons about writing your predictions and let's let's jump into that you want to go first you want me to go first. Jason: [52:39] I want to go first, before you jump in and in case we have any that overlap. Scot: [52:45] Are you good for. Jason: [52:46] So my first prediction is that Eddie Lampert is not going to launch a space exploration company. Wait wait that's all right so cheating just making fun of your negative predictions but I do like that one if anyone wants to keep it as my bonus my first one I guess I'm trying to have more measurable objective things I think continuing the the evolution of Amazon's brick-and-mortar I think Amazon is going to have more than a thousand brick-and-mortar stores by the end of this year, combination of goes Whole Foods in some other expansion of bookstore Concepts but a thousand stores is a very meaningful brick-and-mortar retailers so if you go to like the the NRF top list of retailers and you sort it by number of stores a thousand stores makes you about the the 67th, largest retailer in the US by number of stores and so in addition to all the other areas where Amazon's excelling in. And dominating I feel like eating that thousands door threshold like definitely makes you as usually credible brick-and-mortar retailer and I think they're going to get there this year. Scot: [54:04] Do you want to throw and and in there about. Jason: [54:07] And Eddie Lampert is not going to want to space exploration. Scot: [54:10] Okay alright I almost got that in here. Jason: [54:14] So then my new strategy is just to take your predictions that didn't happen from the year before and doubled down on them. So you last year said Walmart was going to make a big acquisition and you highlighted some of the last mile companies and you got credit for the making the big acquisition but it wasn't the last mile company, I think they're going to fulfill the other half of your prediction this year and actually buy a Last Mile company. And that's potentially potentially instacart Postmates taskrabbit but I also think something like that. Adda live wood would totally toy fit in there so I'm I'm sure we'll see Walmart both organically grow and acquire. Let more last-mile capability this year. [55:07] Number 3 I am sad to say based on our previous conversations but I I think we are going to see another big beloved brand go bankrupt this year so I actually think. In any way I do I told you I think that it was an unexpectedly good economy this year. I am not as confident that we're going to sustain that for all of 2019 and there are you know it again I think that the the booming economy hasn't been. Equally generous to all retailer so I do think there's some retards have had a tough going and I think as both get tightened a little bit that potential will be the last. The last straw so you know I certainly think the department stores. You know is a vulnerable category United by JCPenney certainly is vulnerable I think any of the category killers that used to win based on assortment you know aren't winning an assortment anymore do the online so you know that could be one of the. The Office Products companies are Bed Bath & Beyond or some of those guys and you know when we talk about department stores. You don't one super story brand in the US that you like I think is has a bunch of money a bunch of. Debt due in 2019 and seemed to be having some some substantial disagreements with her creditors at the moment is Neiman Marcus so I would be sad to see them go but it seems like. [56:35] Like they're going to have to do pretty well tough to forestall that so I'm afraid we'll see another another big bankruptcy this year. Scot: [56:43] How many demons are there are they only like four big cities room. Jason: [56:47] So it's not a huge footprint unless it's 40 spores and they own a couple other Concepts as well but yeah. Scot: [56:57] Predictions for 4. Jason: [56:59] I feel like I might have made a similar version of this before but the. I'm bringing it back so mobile the mobile Gap getting narrower is my is my official predictions I think aided by a progressive web apps and payment API we are going to see. Mobile really catch up to desktop in terms of conversion rate and also total sale so I guess I'll see you in my dreams specific prediction is. That we have more mobile Commerce than desktop Commerce in if you take out tablets in 29th. Scot: [57:40] And then last but not least. Jason: [57:42] Yeah I'm taking you or negative predictions to the extreme and I'm just saying there's a bunch of pads that I don't think will will. Be significant and in 2019 the first one is still going to be hyped this year and still going to be a fad. I actually don't think there's going to be a ton of like customer-facing AI experiences or are frankly even way better personalization experiences in 2019. I think we will see more more chatter around social commerce but it's still not going to catch on. I don't think going to see any meaningful Traction in in VR for Commerce. And I certainly don't think blockchain is going to be a very important element for most of Commerce so that you know there's the ones you you all of those Technologies are ones you hear people talk about a lot and. Like I frequently intended rough drafts of retail Trends decks with all these things in a minute I just don't think any of them are going to be very Signet. Scot: [58:44] Any any bonuses you want to put on there. Jason: [58:47] I do the you talk about Amazon being forced to break out their ad Revenue do I actually think they're going to get forced to break out the revenue related to Prime Membership. And I hope that happens cuz I think it would be super interesting to see what percentage of. Of their their sales come from Prime and and you don't total total Prime Revenue in those sorts of things would be fascinating to know. Scot: [59:15] Did you include, like a whole p&l there or just really Prime revenue and sales around Prime. Jason: [59:22] Yeah I don't know how specific I want to get on bonus I don't think I official purposes I won't say piano but I hope that they have to get as granny or as. Using Prime members as a segment for reporting Revenue. So that's what I got hopefully it's better than last year hopefully I am I'm not getting. I hope I am enjoying next year's version of the show more than I did this year's but the time we're finally to the part that I'm really looking forward to which is what Nostradamus thinks is going to happen for next year so Scott what do we got. Scot: [1:00:00] Yeah it's always hard to follow up on him set up pretty good predictions and if you like last year the, the chessboard was more clearly laid out for me than it is this year and and the the tilt of the board is really hard so you know we're coming off a year where the economy was smoking and wages are going up but then we have a lot of changes in the political scene there's lots of talk of impeachment there's like all kinds of craziness the garments closes record this really hard to know which way the economy is going. But you know whenever I'm on kind of the fence on these things I tend to be an optimist so it's my heart for real blood so I'm going to lean towards the positive side of things I think you know hopefully we navigate to all that I know, Tailwind of a good economy in 2019 as an industry which I think we all agree would be good so. My first prediction so following on that optimystix thing by first one's kind of negative so like you I agree we haven't seen you know. [1:01:06] The end of this kind of I think it's a Dominos that are falling and I don't think a lot of people even kind of put that together yet so like you seen Sears file Chapter 11 I don't think many stores come out of that I think we're down to a handful of Sears that's going to put pressure on malls I think that puts more pressure on JCPenney. If you look there stocks already down from for $2. The other two are heading into a delisting scenario below a dollar I don't know what's going on with their creditors but all these old-school guys Leverage. So you get into the stuff spiral it sure does feel like JCPenney's stuck into that. Spiral they have 860 stores. [1:01:45] Macy's is Macy's is doing really well today, but once you get stuck into this kind of swirling drain of mall-based retail it's really hard to get out of there and I do worry that they kind of there a domino that falls in there. [1:02:01] I've already closed some stores to trim their footprint and their 660 more so I don't think they would do bankruptcy everything but I think they may have to sell some of those stores are closing so I'm going to say at least 5,000 more stores and if we can ever find the square footage I think it'll be, about as bad as 2019 so I think 2017-18 was a huge step up 8 1617 and 17 18 wheeler big steps up I think we'll go sideways which is still going to be pretty bad though because that step up Rick kind of this 5000 larger stores whatever the equivalent Sopranos that I do believe was larger than 2017 just my first pregnancy second one is you know your your buddy Scott Galway also known as Professor go away he is really big on TV telling everyone that the government's Crackdown on Amazon and for some spin-off AWS he's backed off that a little bit and now he's talking about well maybe they'll have to have tracking stock I'm going to predict this is one of my anti production so you can Amazon doesn't do those things but this will be the year that they know that adds does get broken out and I'll be specific here as its own p&l kind of line out of the bath report because when I kind of build a spreadsheet and it got to take. Cloud stuff which is AWS and how I think adds is growing and I think. [1:03:30] Off the record I think you for ads will probably do as much as the rest of 2018 which is going to blow people's minds but it makes total sense, me and probably you cuz that's what you would do if you were brand new grass is so when I put in a spreadsheet and track them I believe it's going to be about the same size as AWS by like 20 22 or 23 1 and I've seen a couple of Reports say the same thing, that is my second prediction and just to recap it again they're going to have to break out they won't and I put an end in here in tribute to. To Jason they're not going to spin or tracking stock AWS but they will have to break out ads. What's your prediction is I think too kind of the companies out there and I've talked about Amazon and it's in the ones that are struggling on Mosside you have kind of eBay and Alibaba they had come like what I would call up computer in 2018 it is kind of you know it wasn't a great year it wasn't a bad year but they both had they have type beat up over the last year at least companies both have leaders that they want to grow and be aggressive, I feel like something's going to happen there and when I kind of think about it I've always thought this would be a perfect kind of combination so these these two companies just feel like they belong together to me so I'm going to call that there is going to be a combination there. [1:04:52] Number for and I know she didn't really make platform prediction the last platform that last chair kind of out there is Shopify now all the cloud and infection on this all all the cloud guys seem to have kind of bed on their platform rent and I will get them all but I think, so then you may be single who's left by like a Shopify and then another footnote is shopify's really expensive assets oh yeah honest AC it's like for 5 billion dollars but it has to be small revenue is going to use super high valuation so whoever buys this that really kind of limits the number of companies that buy it has to be super my prediction here is you have the ad platforms and specifically I'm thinking Google and Facebook, they're just getting pummeled right now on the ad side from data collection and and you know all the things about Russia hacking and all this in front of Congress just getting beat up I think if I had 100% of my revenue from ads and I was one of those two companies I would be willing to spend a very large sum to diversify That rumney Base because I do think that business model is going to be under external pressures for a while to mow predictions I think that last seat is taken by either fat Facebook or Google. [1:06:14] To be an ally bother someone so I'm not to be super specific there but I do think Shopify gets taken out this year and my sis production is kind of an opposite one of you so we're going to misaligned on this one I think Walmart has made a couple a lot of big bets over the last year and it's just really hard to get all this right so so spending that much on Flipkart I think Amazon shareholder base is in Amazon Walmart shoulder base isn't Amazon shareholder base and I think they look at that and they're kind of like scratching their head and thinking wow I could open a lot more stores I could then X Y and Z you could have written a dividend check so that they have a much different old school master bass been Amazon does and I think that's going to put pressure on them this year so it's a, prediction is that they're going to stumble so I think their growth rates going too slow I think they got a lot of early wins from Anna digitalizing the groceries I think a lot of those are one-time pops and, they are going to get stuck in that to keep that growth up at that and I'm north of what they said 30 40%. [1:07:18] They have to do some big m&a Flipkart has to go right zlata has to go right there and I don't think we have that flexibility to navigate to that I think they're going to have a run, I don't want that to happen so let me be clear I don't want that to happen I just think it's the natural progression of these things when you have a year where you put a bunch of bats on the table, your tab another year we're not all those bets are going to go well and truly they they're probably brace for that I think. [1:07:46] It's not going to be there nothing about a business or anything but it is going to be a tough year for them I think I'll do a cover set. Jason: [1:07:53] Interesting well I think that's a terrific sort of spectrum of predictions between the two of us and that is going to be a perfect place to leave it in the reason I say that is because we always right these show outline that we intend to be 30 45 minutes and I believe I predicted this show would be 70 minutes and right now we're at 67 minutes so I'm calling it I can be right about one thing it's how long the show is but if you are disappointed that we could have shortened you there was something you wanted to discuss that we didn't get to or you have any questions about the show or ideas for future shows feel free to keep the dialogue going on Facebook you can jump on their pop a question will be happy to chat with you as always we greatly appreciate those five star reviews on iTunes that's a wonderful belated Christmas present to Scott or I so feel free to the jump on there and we would greatly appreciate it. Scot: [1:08:52] Thanks everyone for joining so hope you enjoyed the first show 2019 happy New Year and we look forward to spending 2019 with you talking about what's going on in e-commerce retail and the rest of e-commerce insurance. Jason: [1:09:08] Absolutely and so until next time happy commercing.
Rank #2: EP106 - Amazon's Q3 Results Hot Take.
EP106 - Amazon's Q3 Results Hot Take This episode is a hot take of the Amazon Q3 Results as well as a few misc pieces of news Apple opened it's new midwest flagship "town square" store in Chicago Amazon opened a new "Pickup and Return" retail concept in Chicago For those interested in todays update who want more, we have deep dive episodes on three topics: EP024 – Amazon Deep Dive EP089 – Amazon Acquires Whole Foods Hot Take EP093 - Prime Day Hot Take Breakdown of Q3 Results Core commerce/marketplace Forecast going forward International Prime membership Whole Foods Ad revenue Amazon Alexa/Echo Headcount AWS Amazon received licenses to distribute pharmaceutical equipment in 12 states, which could be a precursor to Amazon entering the pharmacy business. The news immediately drove down stock prices of traditional pharmacy companies. In coincidental news, CVS announced a bid to acquire Aetna for $66B. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 106 of the Jason & Scot show was recorded on Sunday, October 29th 2017. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, SVP Commerce & Content at Razorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. New beta feature - Google Automated Transcription of the show: Transcript Jason: [0:25] Welcome to the Jason and Scott show this is episode 106 being recorded on Sunday October 29th 2017 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 wow what an interesting week it was in the world of retail and e-commerce. It really showed this tale two cities that we've been talking about Jason you had JCPenney pronounce a miss and their stock took a 15% haircut. And put pressure on all the other department store stocks. Not news you want to have heading into the critical fourth-quarter then over in this that's the analog side of the story so does that say. One of our cities in another cities which I called digital City it had we had Google Microsoft and Amazon and it's really weird but this. This quarter they lined up their announcements all on Thursday, and each one of them really handle a blue away expectations so Friday Amazon Spike $228 and its about $1,000 stock before then and now its about 8. $1,200 stock that's a 13% jump in one day which is the most of that group of folks that that announce Google. In Microsoft and Amazon. You know what happens is there was an acceleration in the third quarter of both growth and margins that stunned many Amazon Watchers. But for our listeners it probably wasn't a surprise because we have really been seeing some bold moves from Amazon especially since Prime day at this quarter. So in fact Amazon usually Falls within this guidance that they accept the quarter before and they really blew that away by about 5% this time in this episode we are going to do a quick take in. [2:13] Dig into the reasons why. [2:29] So today we're going to spend the bulk of the show digging into Amazon's 3rd quarter cuz I think it's really important for everyone in the industry to understand the Dynamics that are setting up in both the online and offline world as we head into the fourth quarter. Jason how are you doing. Jason: [2:45] I am doing it was exciting week with all these announcements going on and I'm a little sleep-deprived cuz I had to get up at 3 a.m. in New York to get my iPhone orders in. Scot: [2:57] I did the same thing how did it. I know about half the people I know they did the that within the set of people that did 3 a.m. only about a half got an order off were you able to get an order in. Jason: [3:08] I did I would give it a I was 142 so I I was intending to order a phone for myself and my wife and I should mention. In my wife's case it's kind of part of her birthday package so it was somewhat more critical and my wife and I are both in there. Annual upgrade program which like frankly the main reason we're in that program is because you're supposed to get priority. For that the new phones so we have both pre-qualified for the next phone earlier in the week so we did like half the the ordering process. [3:44] How you do a week in advance got up at 3, was not able to order my wife's because it turns out you have to do it through the store and the app did not like me changing Apple IDs on my phone to her Apple ID to place her order so, kind of suckly I had to use my Apple ID and place my order which went super smooth and I have my phone coming out on Friday. [4:12] And then I had to call my wife who is sound asleep and wake her up and talk her through placing the order on her phone and she was also successful but she got like 2 to 3 weeks to every window so now I'm I'm dreading the fact that. [4:27] My phone's going to come on Friday and her birthday phone is like going to come a week or two after that. Scot: [4:33] Yeah it's interesting I was able to get I had to order for so I've got all of my phones have been waiting for the 10 so, I got to off on Verizon pretty quickly and then to on Apple I'll be interesting they all say Friday so we'll see who can live up to those expectations, it's funny I'm not in that program and those two people I know that are in that Apple program had a trouble with or treating her so excited before he let me put it in my car and it's already I just have to press a button. Jason: [5:03] Yeah to their credit I will say in past bones it actually has worked out in our vanity but I I would 10 degrees right now it did not feel like it was expedited deal this time around. Scot: [5:14] It seems like usually using the store work better cuz they would bring up the API is that the stories is fast and then the website was second with the seems like this time they switch those for some reason another weird observation there. Jason: [5:27] Yes I tend to be hitting Refresh on both just too Archie had two iOS devices when logged in with my wife when I logged in as me and then and then the web browser and it we ended up using the store app in both cases. Scot: [5:42] Yeah I need the cloud guy. The iCloud is so yeah it's tricky weak weaker sit daily. [5:48] Speaking of Apple before we jump in the Amazon you did I saw on the twitterverse you did a really cool visit to the the new flagship store there in Chicago. Jason: [5:58] Yeah just just last week they open their their new store in Chicago they've always had a big store on Michigan Avenue and so they move the store few blocks and opened. The new the new Apple Store concept was it called the Town Square concept so they're there been a few of these I want to say. The first one might have been in Memphis there definitely is one in San Francisco and all the new stores that are open or are based on this. This this New Concept but this is the first one in the Midwest and it supposed to be there Midwest Flagship and that it is it is very impressive store the differences between the traditional Apple store in East Town Square stores, I'm going to call it subtle. You know this is largely the reimagining of the Apple Store under Angela Earnhardt who used to be the CEO of Burberry. She came over to Apple. And this is why Julie her concept and so the big thing is hey we're not just a retail store where at ounce where where where like the center space where people come to meet there's some controversy about them trying to own that. That positioning a lot of City centers don't don't particularly agree that apple is the center of their towns. Dave made the stores more organic so the genius bars go away and they literally have trees green trees in the store and it's called the Genius grow and so you know. You used to hang out under the trees and meet your Genius who then takes you to a to a table to to help resolve your issue in the wet. [7:36] You and I might have called shelves they not called The Avenues and have upgraded the displays for some of the the Apple products. So I can the old days they wouldn't have a very elegant display for headphones and how to have these like beautiful white. Wooden mannequin heads in the headphones are on mannequins they have wood grain modeled. [8:00] IPhones that the cases are mounted to so you can see them the actual cases mounted on the on the shape of the phone you know stuff like that. The the biggest new thing they've done those they have a big seating area in every store this kind of meant for just ad hoc meeting. It has some interesting like saw sitting there like bean bags that are under stools. And they have a a giant beautiful large format display and it's actually 6K resolution so super high resolution. And they have community events and stuff there so so in this. This new Apple Store what they did is they moved it from the middle of Michigan Avenue to sort of the the end of the shopping strip in Michigan Avenue right on the the river in Chicago. And so they now the whole front of the store is a glass window facing the river at super beautiful they had concerts going all all weekend for the grand opening. I'm in there you know doing graphics on the big screen and they had a band in front of the screen. And tell Buzz there's actual wait to get in the store most of the weekend as people are coming to check it out and. [9:10] When humorous but potentially sad unintended consequence. Is these giant glass windows right on the river apparently were confusing the birds and so they started finding. [9:22] Dead or injured birds that had tried to fly into the Apple Store and so now they're apparently. [9:27] Making some adjustments to the lighting to try to help the birds figure out that they shouldn't try to fly into the store. Scot: [9:34] Ouch that it was Town Square but not for the birds I guess. Jason: [9:39] Exactly yeah so so. You know you will get all this stuff and it's the merchandising is a little better again they they do spend a fortune on some premium materials there's like actual Limestone and there's. There's a marble that comes from a single query in Italy and the amazing glass architecture that they do for all these stores. [10:07] Interesting that's all part of the the brand experience which is a super important part of why Apple has the stores. I have not seen any announcements about how the this model store compared to the previous model store and they actually. Make any substantial changes in the financial metrics of the store. It's not obvious that there's like dramatically higher converting experiences like it's a very incremental upgrade in in most cases and. Specific to the Chicago store the Michigan Avenue store was never convenient right it's a huge tourist destination it's a huge shopping street but if you. You know it's a really difficult or to drive to and certainly there's no parking there and now they moved it to a place where do I go there literally is almost no Road access so it's a very pedestrian access door. If your interest in your walking Michigan Avenue it's easy to get to but like. If you are a resident that would be the store you would most avoid because it's the logistics are super complicated and normally in retail. You would you would you know desperately try to avoid those. Does transportation Logistics problems but I think Annapolis case that that store is just really designed for the out-of-town visitors that are on Michigan Avenue and it is a it is a cool historic site that used to be at. A young Courthouse vet but more importantly it was it was the site of the first settlers in Chicago so the first kind of cabin that got set up for it by a permanent resident of Chicago. [11:38] Is now this this big guy Apple Town Square store. Scot: [11:42] Can I get a smartphone. Jason: [11:44] Exactly push me over the edge I ordered a bunch of iPhone tens although I Kyle met in my head I keep saying iPhone x. Scot: [11:53] I have a problem that to you have this Xbox to do that and think over the years. And then this is a nice Segway into our Amazon coverage you we were talking about this podcast to go where you were, doing something on Amazon and it kept hitting you in saying don't you want to come to this pickup store you explored that further and tell us what you discovered. Jason: [12:16] Yeah so I've been at this a literally happened while recording a show that I was you were explaining something and I was falling along on the Amazon website and I put something in my cart and it offered me this new. Pick up an Amazon location option that I had never seen before. [12:33] And that's because Amazon had his just opens to Dedicated pick up locations in Chicago and so. Tired of these locations they had something very similar on a lot of college campuses they had these college pickup locations. And these these stores are very clearly a close cousin of those locations and effect. [12:56] If you look at some of the URL patterns that's it seems like they're kind of the exact same URL pattern as the the campus pickup locations but. You don't need a school ID on these and then they tend to not be on campus so one of them is just in a high-traffic area in Chicago that happens to be. [13:13] A little less than a mile from me and the other is right outside of DePaul University so accessible to the public but presumably also useful to DePaul student. And I sent you the value property or is this is a Amanda location. So it has specific hours with a bunch of lockers in side the location and so you can place an order on Amazon and have anything delivered to the lockers as opposed to. Your home and you can also take your returns to that location and so you might be saying hey Jason Amazon already has a lockers all over the place including this whole food stores. [13:49] How is it different to open a new a new location with Lockers in side in the big answer is most of the Amazon lockers that are unattended. Will only hold your package for 3 days so you have to pick it up within 3 days of delivery or they take it back that's obviously cuz they have a finite number of lockers and they don't want stuff just sitting in them for a month. I'm so at this pickup location near your. Items can stay in the locker for for a little more than two weeks for 15 days and the reason they do that is because the items aren't actually in the lockers the lockers. [14:23] Don't have backs. And behind all of the lockers is a Amazon little mini Amazon storage fulfillment center so all your order is it shipped there held in this fulfillment center and when you walk in the store and scan your barcode saying that you want to pick up your order. A human picture order from that that little storage area and put it in one of these lockers so your products tend to live in that Locker for 2 minutes. Before the front opens and went in the front opens you can actually see through the locker to all the the storage stuff. So in that way they don't tie up on the lockers they can accommodate a lot more packages a lot more different size packages but it does require labor. And said to me that's a a little bit of a trade-off the unattended lockers you generally have 24/7 access to them. These Walker's you can only get two in the stores open the stores open like 9 and 9 during the week and noon to 9 on the weekends. So I actually did try my first pick up at like 10 a.m. on a Saturday and couldn't get it but it is it is interesting that the pickup. [15:27] Is a significant part of the e-commerce experience it's become a big Battleground and we've seen lots of other Innovations around pick up. Amazon's also rolling out these lockers that they call Hub lockers which they're providing two buildings. [15:44] To allow package deliveries in the buildings and you know the Hub lockers don't just take Amazon packages they also take us in UPS and FedEx so they're kind of a utility for the building machine Amazon Footlocker's in all their Whole Foods. Some sort of interesting side note on that a lot of the whole foods are in malls and a lot of the other stores in malls have contracts with them all that. [16:07] Only certain that certain kind of product can't be sold by other retailer so. [16:11] There now ain't like Target is enforcing those small contracts to not allow Whole Foods to have lockers that would receive products that are restricted from other sellers in the in the mall so that's been kind of a. [16:24] A funny little thing we're seeing fly fight out and then of course this last week we've seen Amazon launch Amazon key which is. Amazon having access to a Smart Lock that they provide so that a delivery person can actually come into your home and drop off your package and you can monitor them over an Amazon Cloud cam which is kind of their version of Amazon Nest cam. And interesting Lee Walmart had announced about a week before that they had a partnership with August smart locks and they were doing. Doing service similar programs or seeing all these guys make a bunch of new plays in new pickup models too kind of you know accommodate all the edge cases for people that don't have coming in. [17:04] At their home or office and at least pickup location certainly seem like one of those and then of course the pickup locations also provide. Four very easy returns so when you have a return you can bring the product in an open box or a no box. You you can log into terminal in the store see your history order history so you want to return something. And just throw the box in the print you a code right in that that store you throw your return into a poly bag you put your label on top of the polybag. Drop it in the slot and generally within 10 minutes they'll have received that return you'll get a credit right away instead of you know waiting. To mail it back to a fulfillment center you don't have to do any shipping or packing or any of those sorts of things. Until the return Logistics feels like another area where we're starting to see a big e-commerce Battle Ground and once again the course Walmart announce these this mobile Express returns. Which is sort of a similar experience you don't need a box you don't need to wait in line to return anything at a Walmart store so this seems like the the the new areas for fighting or are pick up an anniversary Justice. Scot: [18:17] About how big was the Amazon pickup store. Jason: [18:20] It's not a huge door I'd say it's about 1500 square feet. I haven't been to both in Chicago yet so I've only I've only been to the one and you know there's definitely some like a couple motivated employees in there that are like trying to spread the word and I brought home a bunch of. Amazon swag that was custom labeled with the address of this this location. Scot: [18:43] Do they sell Echoes or anything like that I was just just lockers and drop off. Jason: [18:48] Yeah I know no said no product merchandising whatsoever they weren't selling anything that none of the terminals in the store could be used to like browse the inventory or purchase anything so it's purely a post-purchase experience either pick up or return. Scot: [19:01] Russia. Jason: [19:02] At least for now I would say they a service they were heavily promoting and they actually had, sidewalk signs and all these things is in Chicago we have a somewhat of a unique offering that I think Amazon starting to roll out to more places but we have same day delivery that is not Amazon Prime now. [19:20] I'm still at work close enough to a number of fulfillment centers that a lot of items in Chicago you can order by noon and have delivered by 9 p.m. and the sets actually delivered by a fleet of WW2 Amazon employee so it's not the w. It's not the Amazon Flex delivery people it's not UPS it's guys that work for the Fulfillment center driving stuff up from Indiana fulfillment center did it to deliver it to customers in Chicago, and so they're kind of leveraging that same day service with these lockers to say same day pick-up in the locker right so you can, you know order something before noon so like the locker for delivery and then 3:00 picking up that same day I actually found that to be a little bit annoying would actually like 5 hours from the main fulfillment center that most most goods come from from. From Amazon and said that, you know most same-day deliveries do end up getting delivered right around 9 sometimes 10 and the store closes at 9 so in my case, I ordered a I did a test order at like 10 a.m. promise for same-day delivery and I got a notification at 10:15 p.m. that I could pick it up same day if the locker but of course the locker have been closed for now. Scot: [20:35] We found a bug. Jason: [20:37] Yeah yeah yeah so I Growing Pains. Scot: [20:42] I wonder if they're working on stopping that 24/7 there's kind of working up to work to it. Jason: [20:47] You would think it would certainly like you can imagine them adjusting those hours as they see demand and there are newer fulfillment centers that have open closer to Chicago so I'm somewhat curious if, there is a plan in Works to shift some of that same day delivery volume to the the light closer Wisconsin fulfillment centers. Scot: [21:08] They must love you guys cuz they're trying so much the stuff there so I'm sure they'll figure it out. Jason: [21:12] Yeah or there's some senior Logistics exact that has an apartment here or something. Scot: [21:18] We are just such a big Prime user they're doing it all for you. Jason: [21:21] They're just trying to get off early mentions on the Jason and Scott show that's why they did. Scot: [21:25] Just just listens and priming the pump. Jason: [21:30] Masters of PR. Scot: [21:32] Cool. Thanks for those those reports from the field always interesting to see what's going on there in the big city is shy town. Jason: [21:39] Yeah hey I know we have a lot to cover but I did mention the Amazon key would you ever trust Amazon to have access to your front door. Scot: [21:46] Don't think so I like the ones that give you access to your card like that doesn't really bother me at all like people putting stuff in my trunk but you know access to the house is just a whole nother thing. Jason: [21:58] Yeah. I think that's that's been an interesting conversation is you know you know the trust issue has come up a lot and in many metrics Amazon is one of the most trusted, companies out there and yet that still feels a little scary to folks and it'll it'll be interesting I actually saw me because, just wave as people are using it but I actually saw the less blowback when Walmart announced it than I did when I was on an esta. Scot: [22:24] Yeah yeah I don't know if the Walmart thing was as widely distributed. Jason: [22:30] Know that I mean. Scot: [22:31] May have been part of it. Jason: [22:32] But even that being the case you got to give Walmart some credit like you know, I feel like it's a moral Victory these days when you're launching customer experiences ahead of Amazon I mean it like Amazon may have gotten much more buzzed but they did have to announce a week after Walmart. Scot: [22:51] Glory is. I think he's really good at reading these tea leaves and getting in front of them I do want to try the Walmart quick return experience because it felt like an oxymoron when I was reading it cuz I've never had a quick return I've never had a quick customer service anything at Walmart. It's getting worse like I got on my Walmart and I swear they've cut the number of cash registers down by half there's this like 56 Bank of cash registers and there's two people working at I don't know if it's just when I go to Walmart or something but it's crazy. Jason: [23:19] Interstate yeah I can speak to that I know I was Eliza Express Returns part of the solution you do have to get to a person in so they have an express lane. In customer service dedicated just to the end in my experience that can be super helpful but that can also have. Unintended consequences right to my analogy is if you think of them TSA Pre at the airport so when it first launched in only a few insiders had TSA Pre. You can fly through pre and it was awesome now you got two most airports and us and it's not uncommon to see the pre line being much longer than the regular line because everybody. Is in the know right and so you know it'll it'll be interesting of if that Walmart Express return is heavily leveraged. Well Walmart scale the lanes to support that or will it eventually get gummed up. I will tell you just simple things amuse me but when they launched the service they had a bunch of videos showing the experience, and in all the videos like a different Shopper you know gets in this fast line skips all the people standing in the slow lane and get their service, and I I watch those videos and I'm laughing cuz I'm like wait all those annoyed customers in the slow lane or Walmart customers to and it's almost like 100 making fun of their their customers and best of all they, they hired different actors to be the stars of each of these videos but the, annoyed customer in the slow lane is the same customer in all four videos so I'm thinking that's the most crude Walmart customer of all time. Scot: [24:52] And you know what's going to happen is when people see people he's not lying they're going to get in it and argue and be like well why can't I be in the Express on I don't know if it's not clear who gets to you. Jason: [25:04] I'm the guy standing in the back of the line at Starbucks that then pulls out his phone and does mobile order and pay cuz I realize it would be faster than thought you could you can imagine some of that in Walmart too. Scot: [25:14] Yep you and I. Cool well we definitely want to save a big chunk of the show for Amazon's third quarter results and there's so much to cover we can probably go for three hours so I thought the best way to carve this up would look at some of our favorite. Platforms if you will. Amazon has yours five areas we want to cover, Court Commerce which includes the marketplace is the big one there's some interesting Wholefoods updates would be the second one, wilted bits around the ad platform we want to cover that which is number 3 in the number for would-be Alexa and conversational Commerce some really interesting topics there and then fits his little bit of a catch-all just been resting other. Nuggets that we kind of got out of the release so to be able to cover this and not have to go. Define everything over and over again we do point you to a couple of our other episodes if you want to if we say anything in this. Part of the show that doesn't make any sense to you then I would recommend going back to episode 24 which was our Amazon Deep dive we recovered a lot of these these topics and then. [26:18] Episode 89 we did a deep dive on the Whole Foods acquisition and what we thought was going on there. And then also Prime day when I talk a little bit about that today but you can get Fuller coverage by going to episode 93. So that at the high-level Amazon's revenues came in at 43.7 billion that's be billion which is 34% year-over-year growth and that beat the top end of Wall Street estimates by 2%. Jason way this works is companies come out and whenever they release a quarter they tell you what they think the next quarter is going to look like that's called guidance they usually give arranged historically I think like 9 out of 11 times in the last cut off, of those quarters Amazon is coming within the range sent you to give a renter Q3, and historically there's like almost a 90% chance they'll fall in there this time that they actually came in way above their own guidance so, Wall Street loves it when this happens that's called a beat and then with the company then gives forward guidance for that next quarter if that exceeds what everyone's thinking that's called a beat in a Race So This is a classic, beating raised you know it's kind of a You Know Not only was it a beaten raise but it would kind of trounce both numbers top-line and bottom-line forward current all that stuff. [27:33] You and I talked about this a lot there's a common misperception that Amazon is not profitable operating income beat expectations at 347 million Amazon doesn't really focus on the operating income is a metric they look at free cash flow and in that, performed very well during the quarter as well as we look at it as we drill into the core Commerce peace. Commerce retail grew 28% year-over-year growth, so just kind of a line folks e-commerce is reported by Consular that's my favorite metric at about 15 to 17% year-over-year growth so Amazon the retail part of Amazon is growing twice the rate of e-commerce which is pretty impressive. What. Books on Wall Street loved is in the second quarter a crew 23% see how this kind of 5% quarter-on-quarter acceleration so you know if we were charging this out there would be one. At 23%, YouTube and another died at 28% for Q3 so a pretty material acceleration of the business from second quarter to the third quarter. [28:36] So as you and I talk a lot that's the revenue for the core Commerce peace and that hides the underlying gmv so. GMB is when he's confusing things let me give kind of a little background before I go into some specifics, the the way it works is think about Amazon is to businesses you have the first party business which is a typical retail piano they get things from manufacturers mark them up. That's cause what they pay the manufacturer and then sales is what they saw them to the consumer so $50 which is marked up $200 revenue is $100. Easy peasy what complicates things is Amazon has this thing called The Marketplace or what we slang and Industry call the 3p and what happens there is I take that exact same widget at $100 and now because the accounting rules this is not. I get a lot of people to think Amazon's doing something 2 Furious it's just the the Gap accounting rules would Amazon sells $100 widgets through a third party. The they can only recognize their commission which is about 10% or an issue call this their take rate so that same widget that if it moves from one penis 3p now Amazon only gets $10 worth of Revenue. Just has the unintended consequence of hiding a lot of the impact of Amazon. It would call that transactional value of that third-party that hundred dollars not the $10 commission which is revenue we call that gross merchandise value in the world of marketplaces all of eBay. Got revenue is derived from transactional gmv a portion of Amazon's comes from 1p which where are GM vehicles Revenue in a portion comes from the third-party marketplace where Revenue equals. [30:18] 10% of gmv because that take red so with that being said the. What's frustrates people on this is Amazon doesn't really sees numbers and historically all Amazon would tell you was the percentage of units that come from third-party last quarter for example that was 51% that went down to 50% this quarter because you had one p got all the Whole Foods, first-party sales in there so it cut it for the first time you saw things kind of go from 3p to 1 P from a growth rate but it's cuz of that acquisition. [30:51] So starting in 2012 at Channel advisor we came up with estimates on GMB because we wanted to help retailers really understand this and and at least put a number out there that we thought was an educated guess. So we go to the calculus of figuring all that out. [31:08] What were you would end up with for example last year our estimate was about 277 billion just kind of put a number out there for for a rough estimate. Then at the end of 2016 Amazon change their financial disclosures and finally started to release. Did something called 3-piece seller service revenues and. The trick there though is that includes revenue from the marketplace but it also includes all third-party revenues from performing. And didn't really tell you how to split that up so there's this really wide range of gases that come out of there so so Wall Street now kind of takes that number and backs into it, and they come up with an estimate of 200 250 billion for that same time. So. The my way of doing it ends up at 277 they end up at 200 to 250 so you see these varying numbers to make it even more complicated. In that metric Amazon doesn't count books as one p they move them to 3p if the publisher counts it that way so it has this weird. Dynamic of of I I would not count that one of the reasons were off is they put a lot of the books over in. 3p and I think they should be over one paper anyways for the purpose of the discussion what was just think of it as you. Between 200 around 250 billion last year just kind of put a number out there that the agrees with both systems of doing this so. [32:37] That being said when you when you look at this what's interesting is historically first party has grown about 20% and third party has grown twice that pace at 43% maybe think about that for a second, to me that's the part that really competes with both retailers so so you have. Amazon's overall is growing 34% if you take out AWS it's growing at. [32:58] The Commerce peace is growing at about 30% but then when you look at the. The marketplace is growing at 43% so so really kind of interesting and something that retailers need to be aware of. [33:11] But what's happening is it's kind of an iceberg situation so what we see in Amazon's quarterly numbers is the tip of the iceberg which is their revenue you have to unpack that to get to the third party DMV. Add it to the first party DMV to get the total gmv and I think that's what matters because when Amazon third-party sells $100 widget. Walmart loses $100 didn't lose $10 on in the same is true for grocery and everything like that so so the total gmv is what really matters isn't how we should be sizing Amazon. So if we if we now look at the third quarter by my calculations of that 43.7 billion in the quarter, about 4.6 was from AWS so we take that out so it's clearly not in this bucket and that gives us there's some other Revenue but it's really relatively small and doesn't change the calculation so essentially 39 billion dollars on this from the retail part of the business. Of that 33 and a half is the first party which Lee's 5.6 billion dollars front for the third party so. So when you look at it that way third-party is actually a pretty small percent of revenues you about 20%. But then you have to take the 5.6 billion from third-party and x 10. Because of the the 10% thing so now you have 56 billion in GMD from third-party 33 billion ish from first-party you had those together and you effectively get 89 and a half billion in GMB for the third quarter so. By my calculations Amazon is effectively add in 90 billion dollar quarterly run rate from DMV that represents about a 360 billion-dollar average. [34:51] Annual run-rate. The u.s. is the United States 60% of Amazon so if you just want to look at to you as soon as I'm out of that 360 billion it's about 55 billion for the us and that gives the u.s. business a 215 billion run. So so just let me kind of put that in terms that. That makes sense so last year if you look at the third quarter on you end up with about 13 and 1/2 billion in June be so effectively Amazon Grew From 13 billion. [35:27] You make sure I get this right you should have JC Penney who I mentioned at the top of the show there at 12 and a half billion dollar retailer with with. 1100 stores so Amazon affectively grew your ear if you look at the DMV between Q3 last year and this year at JCPenney plus an extra billion dollars. The entire JCPenney not just online sales. [35:51] And then what's interesting at the Q3 2014 billion run rate it's going to be effectively a 50% growth so. [36:01] Joe Young Thug what it means is that Amazon will have if you look at the u.s. revenue. E-commerce which I want to look at a couple of the numbers like for sure they have 400 billion in the US at this kind of run rate Amazon will take him about half of the. Total online sales when you want to unpack the DMV and it's good because we're starting to see emarketer had some date out that started include the TMV a lot of people have if not really. Done this the right way I think in the now more than where you're starting to see people unpack that which is good. So going forward on Amazon put out fourth-quarter guidance. Between 56 and 60.5 billion again that really kind of was way above what Wall Street was asking for the fourth quarter this implies that the low range a 28% growth rate in the high range 38% growth range, 32 at the midpoint. You take that midpoint and you seem something similar to three metrics you're effectively get to gmv of about 110 hundred twenty billion, 45 of that comes from first-party 75 from third-party so. You look at that you're of your growth what happens in fourth quarter for Amazon as they just really search and, start to just take mass of share in the fourth quarter and then it kind of sustains going in the next year so effectively if you look at Q4, last year verses where they're projecting just a midpoint of next year it's effectively two and a half JCPenney is that the effect. [37:33] Gobble up in market share so and that's just at the midpoint if they come into the top range it's like three or four JCPenney's so I know I went to a lot of math, the punchline is Amazon is growing is about. Now it's more than twice as big as people think it is because of this hidden DMV under the surface. Jason: [37:53] And it's important like I can't overemphasize half the media that covers Amazon. Still get this wrong right and they still just the use Amazon's reported revenue and talk about Amazon size and it's like just fundamentally wrong. Scot: [38:11] Yeah I wish Amazon would just give it to him being number but the interesting thing haven't watched Amazon for 20 years now. Is one of Jeff Bezos his favorite classes was game theory in Game Theory you never want. Anyone really know what you're up to and until you absolutely have to tell them, there's a lot of case studies over the history of Amazon where they don't disclose things and they always play kind of funny games with math where they'll say so so for example we don't know how many prime subscribers there are they don't disclose the DMV should go back and do things but they got rid of some of my favorite ones that used to break down, the difference between media and electronics and General Merchandise so we had an idea for how those two categories are going as a switch some of these new metrics they got rid of those so, it's always this game of of kind of, why people think it's in the Furious but what Amazon's doing is in my experience when they when they think they have a strategic Advantage then they try not to tell people what's going on in that part of the business stuff because they want to protect, The Secret of that strategic management and I'll definitely put this market place as one of the top ones that they. 3 purposely do not disclose what's going on here because they don't want people to know how big this is. Jason: [39:24] Yep and is it you sort of implied it but it may be as worth also stating that well it's possible to be profitable or not profitable in one piece else it's almost impossible to not be profitable in 3-piece house. Scot: [39:39] Yeah if you the best proxy is Alibaba and eBay which are pure kind of marketplaces and those companies have like, 85 to 90% gross margins and then like 30 40% kind of net margins so you know a very profitable business of posited that the marketplace has been kind of cash cow that's really fueled started in 2006 all the way for the last 12 years that's what's fueled all the build-out in, Prime wellness centers all that because it's a hugely profitable kind of a line that the Amazon his pets humble down. Jason: [40:14] Yep and your point because they don't have to break it out they don't show The Profit just from the marketplace and so you you get a lot of the this narrative where they they have to share the profits from from AWS in there they're fabulous and so you get a lot of people talking about well, AWS is the, the the profitable component that carries Amazon and in reality this this Marketplace is almost certainly a much bigger and more equivalently profitable. Business that that just say they don't have to disclose his ass as overtly. Scot: [40:48] Yeah one of the one of the folks that really gets this is Mark Lori so he don't know the whole reason I started yet was effectually to go after this cash cow and then obviously Walmart has bought into that night, after imagine he spends a lot of time internally kind of helping educate folks there that this is going on because if you're a traditional retailer in my experience there are even more kind of. Blind but have a harder time getting their head around it because there's no offline analogy you know you can't point to something and say We'll look over there that's how that works cuz it's such a weird anomaly of the online business Amazon. Jason: [41:23] Yep yep me you mentioned Prime members anything else we should cover on the the marketplace before we jumped. Scot: [41:33] Quicken International really accelerated so it grew. [41:38] North America grew 35% International Group 29 International a couple points due to the impact of currency exchange of so everything I say takes that out, but I think the last quarter grew 26% so nice kind of quarter-on-quarter 26 to 29 per cent in the management team, I specifically called out International AWS and Prime / Prime day is as the the key reasons that they beat their expectations so I'll kick it over you do for some prime coverage. Jason: [42:11] Yep and that you did trigger I guess it one last piece of editorial on the on the growth of the marketplace so if you add up that hole general merchandise value and I think you said that that you got that. Empire growth is somewhere between 28 and 38% so we call it let's call it 32% growth the. [42:33] The second largest e-commerce site which is way smaller than Amazon in the u.s. is Walmart they last cup of quarters have grown even. Much faster than that on iMac or so much more bass in so you think about, man Amazon which is arguably half of e-commerce are ready and they're growing at 32% and yet the industry average for growth is about 15% and so the reality is. There has not been a heck of a lot of growth for the rest of the e-commerce industry outside of Amazon. Scot: [43:05] Yeah yeah I think small folks really struggle you seem eBay announce the results we didn't cover it specifically I think they're GMB grew five or six percent you know I think some folks had a surge kind of as they they played catch up but I think a lot of them are really starting to slow down as they they run into the Amazon buzzsaw. Jason: [43:26] Yeah for sure and so as we talk about besides let's talk about prime prime is another one of those things that Amazon does not disclose as you mentioned in so it's left a lot of third parties to sort of, estimate what the prime memberships are in there was a lot of Buzz and a lot of articles, earlier this month I want to see around October 18th of the consumer intelligence research Partners released their updated estimate they've been doing an annual estimate for I think, two or three years now and this year they're estimating that there are 90 million Prime subscribers, which is up 25 million from their previous estimate right so they were, what was that 65 Million last year and 90 million now answer that that generated a ton of buzz but I think you and I have taken that with a grain of salt because, I'm not sure 90 million Prime subscribers really passes the smell test to me what about you. Scot: [44:26] Yeah an enhanced again to it that's a u.s. number and there's the Census Bureau says there's 125 million households so that that would be like you know 60 to 70% coverage which feel tie, now there's not I've seen studies that show that kind of coverage at the high-end so you don't, got more affluent homes over index on Prime and they get up into the 67% but I think that's pretty aggressive to look at the whole us when, what I read the Wall Street research things were Amazon Street clever and they say we have tens of millions of subscribers and then they always everything is always relative like. It was our biggest day or we saw a 2X increase in sign on state they never give you a number when I, there's a fair number Wall Street folks that run surveys Witcher are always tricky but they're going into the you have tens of thousands of people in the survey sand, they they effectively kind of get to 60 million in the US and then another 30 internationally Prime hasn't been out in as many countries they're just really rolling it out to India for example most people. The metric size C say 90 million total 60 us and 13 on us so that would make this number pretty aggressive because I think you would have to have another. 30 on to that that 94 International so you it would be like 120 million all in so I think it's it's an over. Overstatement no one of the other things is. [45:58] All the Wall Street people are looking at paid Prime there are some free Prime program so there is prime for students and Prime for moms so maybe that adds another 5 or 10 unpaid Prime members and their but he and I have a hard time getting that 90 million in the u.s. number. Jason: [46:12] Prime for government assistance as well not to. [46:16] Yeah and I I-10 and greet like just a couple of kind of benchmarks you can use to to just sort of check this, which tell you that 90 million is potentially possible but highly optimistic so so one thing to know is the analog equivalent of prime memberships is probably Costco membership so I think it was by far the most successful, membership base retailer out there and they have been phenomenally financially successful for a long time predicated almost exclusively on the revenue they generate from their memberships and Costco has 90 million, members so, you say hey if Costco could do it Amazon certainly could get there but it's doubtful there are ready there a particular you reconsider what, percentage of the u.s. population have embraced digital shopping versus the the percent that have have shopped in brick-and-mortar right and that brings me to, the second metric I like to look at the these Prime studies are not very big like this eirp thing I want to say was it a few thousand. Respondents in my memory might like what's even say generously 10,000 there's a much bigger studies that study, retail buyer penetration into the the the retailer in America that has seen the most us consumers is Walmart 95% of the u.s. Coshocton Walmart, 89% of the USA shop in McDonalds. You drop down to like 85% at Target and then you get to some of these these retards that are ubiquitous but Target more fluent Shoppers like Starbucks has reached only 48% of the US. [48:00] Despite how many Starbucks we see out there and those Studies have an Amazon is about 42 to 45% of the US have shopped Amazon so, there's a good news bad news thing there if your Amazon you go man we're performing terrifically and we've only reached 45% of us so we have a lot of growth left but if they only reach 45% of the US there's no way they could have 90 million Prime subscribers. Scot: [48:24] Yeah and they're so there's two metrics there's 300 people in the US and then 125 million households so I think it's the one you just said would be against the 300, 45 yet should be like a hundred fifty million people have shocked Amazon see what expect you to be hard for. More than half of those two really be primary I'd be shocked so. Jason: [48:45] Yeah nevertheless it was a interesting in the the Q&A after the, the announcement that the CFO had to answer a number of questions and you don't want it one of the questions is, hey how come you guys like see the guidance like what went better than expected and interesting Lee the cfo's answer was largely that Prime memberships, outperform their expectations expectations and specifically that Prime day, was driving a lot more Prime subscribers than expected and that, that that was having a carryover effect throughout the the corners so that Dad is super interesting wheat of course in our Prime Day episode we've talked a lot about the real gold Prime day being to get more Prime subscribers and here we have some some evidence from the horse's mouth that that's, exactly what it's what it's a exceed succeeding and doing. Scot: [49:45] Yet even tired that International acceleration to Prime day being strong globally and getting a lot of global signups on Prime so the flywheel is Prime and Prime day is a way to remind people that it's out there, getting pulled in that flywheel in and get the flywheel going even faster. Jason: [50:04] Yeah and I might take away from that that's terrifying is just, you'd expect that you know is Amazon girls they get more Prime subscribers at some point you hit this equilibrium where you've captured all the easy, Prime subscribers and it becomes much harder to acquire new ones and here's the CFO saying hey we've had pretty consistent Prime growth, and now we're seeing it accelerate and beat our expectations that that tells you that there's a lot of gas still left in this this growth tank. Scot: [50:33] Yeah the other clue in the financials around us and again it's a little squishy but there is a line item called subscriber Revenue, and this is another way Wall Street kind of takes that in in the inside subscriber you have the revenue that comes from Prime. Which comes in many flavors now you have people prepaying annual you at like 99 bucks and you have monthlies go through here but then they have a number of other subscriber program so you have Amazon Prime music you have. The book program I think audible kind of falls into hear some parts of Ottawa so it's a little again it's so hard to pick a part. But what they said is the expression Revenue grew 59%. Not your rear and that was an acceleration it was I think 53% in the last quarter so again that kind of correlates to what's going on there and then they talked also about. [51:30] The echo so they said let's see. Within subscription Services music especially is working really well with Echo we're seeing a lot of growth in that area as we increase the number of Echoes so you and I are both examples of this where you have to pay a little bit of an upcharge you get, you get Prime music for free that were with your Prime subscription but to access it to your Echo you have to pay that $5 extra month this is one of those things you just kind of forget. Jason: [51:58] A couple programs yeah you can pay 5 bucks a month to get it on a single Echo and they call this. Prime music unlimited so it's a bigger category library and you can have it available in a single Echo for five bucks a month or they have a family plan which makes it available to, on the mobile phones are five of your family members and to all the Echoes you own in in one household for 9 bucks a month, so I suspect you and I are paying nine bucks a month. Scot: [52:27] I suspect that's true yes I remember I started with the first one and then like everyone want to listen to different music and it would specifically tell her she can't do that and then I was annoying so we upgrade it is very effective. Jason: [52:39] In the in the last quarter they also added a feature to to the echo that enables multi-room music for the first time so now you can, you can email that same song to a bunch of different echoes in the same time or different music in each room it is become. [52:55] Pretty cool in terms of music playing device. Scot: [52:59] You're very so no seeing that capability to shoot music to where we want to but at a fraction of the cost. Jason: [53:04] Absolutely and I'm sure it was not Material in these reporting but there's actually one news source of what I assume is going to go into the subscription revenue for the first time they have added a. In-app purchase option for one of the echo skills. [53:23] See you now can pay a premium if you're using the Jeopardy skills to get access to more jeopardy games. [53:32] So I am not a big Jeopardy player on Echo apparently that's a big thing that I've totally missed, but I guess by default on the free app you can play 6 rounds are Jeopardy a day and you can only play that days Jeopardy so, now they blunch the service where you can pay extra, to get access to as many games of Jeopardy as you want every day and that in and of itself may or may not be interesting to you but to me what's interesting about that is, that means they put the mechanism in there to have, in-app purchase revenue for Echo skills and when you look at the other app ecosystems out there like at the iTunes Store the Google Play Store all the big money is in these. Free to download and an in-app. Purchase options in so that that potentially is a whole new economic ecosystem that's getting added to the Amazon juggernaut. Scot: [54:26] Yeah it's interesting there there's a big tie in when you're watching Jeopardy and always fast forward to the commercial said it, makes you stop because it looks like you're back on Jeopardy but then it's an, a 30-second Amazon Echo Jeopardy tie and Commercial and then a big fan of mr. robot and they're doing a really big, think they're where you can the robots about this this devastating thing that happens on 59 so you can say Alexa what's the five nine news and it kind of like gives you news from the dystopian future so I don't know if there's any in-app purchase there but they're doing some really clever tie-ins with TV and then NFL and all that stuff's all tied together with the streaming part of what they do is just really getting to be pretty interested in an integrated with what they're doing there. Jason: [55:12] And in The Coincidence Department it this week is actually the seven year anniversary of Watson winning that Jeopardy tournament and it it's funny to think, back then they had to rent the building next to the Jeopardy Studio because the IBM Watson computer that that, played in that that tournament was the size of the house and now of course there's a similar amount of processing power in the the new Google home Mini. Scot: [55:41] Cool about Switching gears to your favorite topic grocery would what did you pick out early surround Grocery and Whole Foods. Jason: [55:49] Yeah so a couple interesting takeaways it was only mentioned in the earnings. [55:56] They eat a lot of people are asking questions and we're interested in the future plans and Amazon did not disclose very much about the their future plans for Whole Foods. [56:07] Which going back to your point I think they like to play their cards close to their best when they can what was super exciting for the omni-channel nerds in the room is. Did they did add a new line item to the revenue reporting so for the first time they have offline Revenue line. And that the revenue in there for this first quarter was 1.3 billion. Which is a predominantly their Whole Foods revenue and that's from a partial quarter so I think that's only about 30 days of the quarter that the Whole Foods was in the Amazon number in so I assume that's. That's a new flavor of one Pier Avenue that shows up on this this separate line for physical stores the book store revenue is in that number I assume. Amazon has some kiosks and pop-ups and other things I assume all those things are in that number as well but I think they essentially said that all those things combined are somewhat in material. [57:03] In that number and sort of dwarfed by the the Whole Foods number so. Let you know this this first quarter that's not a particularly interesting number but I think it's going to be interesting to watch it grow and. I think enough quarters where Amazon makes big investments in growing the book stores which there are a lot of bookstore scheduled to open and maybe where we don't see a lot of growth that Whole Foods it'll be interesting to see whether that number moves at all. [57:28] You know if it's exciting for me that that number is going to be in there in the future. I didn't necessarily learn anything from this one it is interesting they are defining. [57:41] Physical stores as when the customer selects the item in the store so if you. Purchase something pick something out online and you schedule it for delivery to A Whole Foods. Locker for example or to one of those pick up locations that I talked about earlier. [57:59] That would that would still be considered an online purchase and that someone interesting because there is some variation in terms of different retailers, omni-channel reporting what what order do they consider an in-store purchase versus an online purchase so Amazon is clearly said. Brass it depends on where you select the item not words for Phil. Scot: [58:21] The same day they always called the revenue net sales and now they call it online sale so so for the e-commerce people that's kind of exciting so now they have online sales and physical sales so pretty. What is a Wall Street analyst kind of said well you know what what else can you tell us now you've had Whole Foods on your belt for a Whole 30 days about the future. You're the CFO. Again plays a pretty close to that said nothing to announce but I think over time you'll see more cooperation and working together between fresh Prime now at Whole Foods and, we certainly seen that with the private label and it'll be interesting to see if if they leverage your for example we we speculated that that Prime now ability to do same-day delivery would be really nice, you know Whole Foods has partnered with instacart it doesn't make sense for Amazon to. Your fuel competitor they're effectively and use the prime now Network just called Flex to do same-day delivery so that was my read on that one I may be reading too much into it but. But interesting to see what they're going to do now that had the integrated for 30 days. [59:31] Another one that was too quick when I know we're Up Against Time the Amazon doesn't break out the ad business and we have talked a lot on the show about when we talked to brands, especially especially manufacturers removing dollars from Google advertising over to Amazon and. You'll see if I did give a little hint there so this lives inside of the quote on quote other line Amazon is specifically historically said advertising is the largest component of that there's a lot of dogs and cats in there I think there's some. I'm so the audible stuff that's not a subscription ends up in there and you know what you actually look Amazon doing like 80 different businesses and a bunch of them kind of live inside of here if it doesn't kind of the revenue. [1:00:15] IPhone to the previous categories. [1:00:19] But this line grew 58% in the CFO explicitly said advertising grew faster than other itself which means greater than 58%. [1:00:30] I'd be shocked if advertising wasn't growing north of 100% year-over-year based on annual anecdotally when I talk to folks this is the one area that. Everyone is really excited and seeing really good efficacy and then inside of Amazon everyone's moving over to these teams which is always an indicator the hot teams to be on it Amazon are Echo, private label and ads so you know I'd be surprised if it's not going well north of 100% so. I look forward to the day when it grows so big that Amazon has to break it out, see how big it is I think it's going to shock people I think this is going to be this kind of you know next multibillion-dollar business in this could be, really really really really bad for for definitely Google maybe in Facebook as Facebook gets to be a certain size. Yeah there's going to be a fight for one of the largest groups that spends money in and that's Brands and Retail and it's going interesting to see who wins this advertising Dollar Battle. Jason: [1:01:28] Yeah I will say it's I have a feeling in the short run is going to be a mixed bag because that the estimates I've seen our kind of already in that 1 billion to 2 billion size business and in, I'm I'm sure you're right that that Google and Facebook, hate seeing a third player have a meaningful presents there but in some small way like again let's go let's be generous and caught two billion that that's still pretty small compared to Google's 90 billion, so for now it's not a hugely material competitor and I have a feeling with some of the antitrust conversations that are likely to come up in the the next couple years at Google and Facebook, don't be surprised if that the people making the strongest case for how big amazon are are Google and Facebook as they tried to demonstrate that they aren't monopolies. Scot: [1:02:20] Absolutely. Jason: [1:02:24] So this next one I know you have a lot of passion about because I feel like I saw you fighting about it on Twitter how many Echoes are out there. Scot: [1:02:34] Yesu sisters interesting so the specific comment on the call was this was actually in the Jeff Bezos quote so if you're interested in the Amazon I definitely recommend either reading the transcript or listen to these calls out but also Amazon puts out a very lengthy press release, and, a lot of its kind of far away it's bullet points of everything they've announced in the last quarter which you know if you listen to show you already are well-versed in of course but I will skip right to the Jeff Bezos quotes kind of gives you an idea of what they want to focus on, I'm in the second piece of that quote I think the first piece was about prime day and. AWS and how awesome they were this is the quote so. Customers of purchase tens of millions of Alexa enabled devices so that was kind of interesting choice of words given Echo devices. Over 100,000 5 Star reviews and active customers are at more than 5 x since the same time last year and they talked about another explosion of skills and that kind of thing. So [1:03:38] So I was thinking so I put a tweet out there that said wow 5x is pretty impressive and I was thinking they probably went from 6 million to 30 million maybe 7 240 million. I don't think Echo would be half of prime at the fields aggressive so I was thinking somewhere in that range, and a guy John Wilson I think he's a listener he kind of said what I said. [1:04:07] I think it was actually smaller I think, yeah I read it was 20 million I was like that's really weird because they didn't disclose that what happened to someone took this the kind of felony Amazon strap that took this tens of millions Nate their logic was well they wouldn't say tens of millions and lessons at the very bottom of that range so let's say, you effectively 20 so I kind of came out with the number 20 because that's kind of how they read that math and then they said well, it must have been four million to 20 million so I just kind of thought it was interesting that. [1:04:37] Someone in his point was at Lex has a lot of hype and now lot of reality if it's just barely getting to 20 million users so I think it's kind of funny that you know when people fall into these Amazon traps that they've set. I read these things and I kind of think who would they say tens of millions is actually probably towards the higher and higher into that there, they're definitely the first thing I think is something big is here and they're hiding something and then the second thing I I tend to lean towards more of the middle of the range towards the height of those kind of a fun kind of argument to get in with John there and he agreed at the end that, this article kind of took a lot of Liberty with that quote. Jason: [1:05:13] Yep that's a tricky you got to get into the Amazon mindset and not the the traditional mindset that a lot of folks are used to one slight tangent I totally apologize cuz I know where it was, going to be way over time for this this episode but you mentioned the Highlight section of the press release my favorite antidote is there this long list of highlights one of the Highlight bullets is, completed the 13 billion dollar acquisition of Whole Foods and another one of the Highlight bullets is that they successfully had bring your daughter to work day. Scot: [1:05:43] Yeah it's really of a potpourri of what happened last quarter. Jason: [1:05:46] Exactly so pretty pretty broad range of accomplishments is all. Scot: [1:05:49] Yep yeah they don't really order them anyway I have a musty chronological order so we have never understood how they're ordered in there that's kind of random. Jason: [1:05:59] But I'm guessing that bring your daughter to work day has to be a lot more daughters because there's some interesting information about how the the headcount is grown in Amazon. Scot: [1:06:09] Yes sir one one analyst said hey if I do the math your head count is up 77% year-over-year and it doesn't take a rocket scientist to say alright if your revenues are going 34% in your head counts episode 87 percent that's. That's a lot of. That's a lot of expensive added on not as much revenue Sony unpack it actually a big chunk of that came from the two Acquisitions so they now include the entire Whole Foods employee base and then, acquired that Marketplace out of the Middle East called souk I think I'm saying that right souq and if you take those out then it was 47% year-over-year and what. The reason that is higher than Revenue growth is they've already started to. Kind of get in front of the seasonal hiring so they previously announced there are hiring 120000 seasonal workers for fulfillment centers primarily so they kind of intimated that they've made a fair amount of progress on that. But it's pretty crazy so as as someone who the biggest company I've dealt has about 700 people in it and that's a lot of people to connect. Understand and manage and keep your head around what it was doing Amazon has 542000 people. So I was kind of Blown Away by that that's like over half a million people working for Amazon, so then I got checked in to see if we'll how many does Walmart have Walmart has shoot point 1 million people in the US alone so that 500 Cash number is global in Walmart's at 2.1 million so. [1:07:43] I guess I I didn't feel so bad about Amazon's headcount after I looked that number. Jason: [1:07:48] Yeah although it is interesting to see those those men trucks that are growing faster than Revenue I know another one you and I briefly talked about is shipping costs which are, we're up by 39% this quarter and that's a huge line item that keeps rapidly going up faster than. The net revenue in most cases. Scot: [1:08:09] Yeah and all these Wall Street reports allege red 15 to 20 of them is kind of do pros and cons and cons the number one thing they have all picked out this fulfillment cost are rising now it's hard to pick that apart because. Amazon has two buckets in their constant moving around what's in these buckets again kind of makes you wonder what's going on. They're building so many fulfillment centers United you and I talked about it and you know when we go to the news I always kind of rattle off three or four new fulfillment centers there's some sleep building out 30% growth in square footage of fulfillment centers in. Do that a lot of that's fronted loaded and they have to Door County rules make him take some of it up front and so it spread out sir. [1:08:50] Some of that does get distorted by the county rules around building where things but at the end of the day they're just shipping a massive amount of free product in and that's getting more more expensive so I do think they have that's another reason I kind of continue to think they'll. [1:09:04] Continue to. Chabot at that by doing Direct Delivery I think a lot of that goes into the pockets of UPS I think they're like 3/4 ups a quarter. Other which is FedEx and USPS I think they chip away at that overtime pretty aggressive. Jason: [1:09:20] Yes but for sure and that that's going to be an interesting one to continue to follow again expenses are going up at their Investments are just. Huge and nobody's keeping Pace there and you can assume everyone else that's growing their costs are going up to but they they may have less of a long-term solution than Amazon does with all those Investments. Scot: [1:09:44] Two two cookies and then turned over you for the last, who wanted to hit on so quickly and cloud services which is called AWS so first of all but Google and Microsoft are doing really well on cloud it's turned into a three-horse race I don't hear IBM come a lot and cloud computing so I think. They're getting kind of left in the dust you may have a different opinion of that. Curious to hear it by Amazon web services grew 41% year-over-year and is now as an 18 billion dollar business the margins on this Roi like this Marketplace. [1:10:16] Pure. Very high gross margins very high net margins it was impressive is this is a kind of way subscription kind of business is the annual run rate kind of scales up and doesn't have seasonality like we do and in a retail business last quarter it was a 16 billion dollars a year, and you'll run right now this quarter it grew so much is an 18 billion dollar in your room so this is this is wildly successful, and part of the margin beat was thanks to AWS. Another kind of update a couple things we've talked about on the show number one is Jeff Bezos being the richest man and as I've mentioned before that kind of hits this point he crosses. Gates at $1,000 so whenever Amazon. Goes above that it happens so it is search now up to kind of this 1100 and. Aside from Sun unforeseen thing happening I think it'll stay about there for a while and and therefore he is the richest. Person again said congrats Jeff on that so hopefully we can buy more rockets and stuff like that, the thing is really there's this interesting kind of race to the first train dollar market cap company so after the announcement here's kind of the current order as of the recording of the show, I'll do it in reverse order David Letterman style number 5 we have Facebook at a 516 billion dollar market cap so little over halfway there to the trillion number for we have Amazon which was the last and is now left, in front of Facebook at 530 billion. [1:11:45] Next you have Microsoft is 646 billion the third largest market cap company and then number to you have Google which is now called alphabet at 715 billion and then number one drum roll. People at 842 million apples. Entire chances of getting there really rely on the iPhone 10 so I'm glad you were able to get your orders in because. If they have this is kind of been called a monster upgrade quarter for them and if it comes in the way everyone thinks it will then they may actually get there before Amazon will see it, it would take about a 20% jump in their stock to get them to train dollars so it all hinges on how this new iPhone does the, the counter argument to that is they remember they only made three or four million of which is why everyone had a hard time getting him in those first 15 minutes so and, and there's components there are that are hard to get too so we'll see it's going to be interesting we'll update you on this race to a trillion dollars and and how it goes and then. Did the last thing you wanted to cover was it really tied to the third quarter came out right before then it was some shocking news around something new that Amazon. Jason: [1:12:54] Yeah at a reporter uncovered that Amazon had been issued a. Mail-order prescription license in at least 12 States in so that's some pretty strong evidence that Amazon is getting into the prescription pharmaceutical business in, quick side note prescription Pharmaceuticals includes both drugs but also there's a lot of them. Prescription medical equipment that that potential is in that market as well and so as we've seen in a bunch of other Industries lately where when you get that first indication, the Amazons entering the category we saw all the traditional player stocks take a quick dump. I'm so they are down like four to six percent for Walmart Rite Aid CVS and serendipitously we saw CBS. Announce this potential acquisition of Aetna. And we thought we talked about like Whole Foods is a big acquisition this and the acquisition would be something on the order of magnitude of 60 billion dollars but there's. There's something very interesting about so it in the same week seeing. [1:14:06] Amazon become a potential Pharmacy and that same week seeing CVS try to get out of the pharmacy business and become an insurance company. That that could go down as one of the smarter moves of the the the decade we will have to see but then. I really think this this retail drug industry is at a huge inflection point in potentially in great Jeopardy cuz these. All these doors are our stores that primarily sell merchandise out of convenience they selling that generally the highest price points and the way they're able to do that is 60% of the traffic and all their stores. Are coming in to pick up that that prescription in the back of the store, and while they're in there they serendipitous we discover other items and buy them for convenience or whatever else so if, Amazon or anyone else is able to take a meaningful chunk out of that walk in prescription business via digital ordering an in home delivery of prescriptions, it's very hard to imagine how any of those drug stores continue to operate or at least I operate looking anything like the way they look today, and I would just add you know Amazon's the scariest competitor you could possibly have in your space, but they're already are a bunch of digital startups in these other states that maybe only have a license in one state but I think of the company like capsule in New York which is doing a terrific job of disrupting the the experience for prescription drugs in New York and you go man of the Amazon can scale that out to all states. [1:15:40] I'm I'm not sure what that looks like for the the future of of your Corner Drug Store. Scot: [1:15:46] Yeah and another, news story in that vein at Walgreens and Rite Aid or merging and as part of that the identified 600 stores are going to close, I think all those Ruby Rite Aids and interest 2000 Rite Aid so, that's like you know I want me to come out there at 6:20 to 3:10 30% of the stores are going to close so I can see a lot of stores closing is that as these guys kind of consolidate and get ready for for the oncoming Amazon Onslaught so we'll see, do you are we over drugstore does there I know you talk a lot about being over over retailed is there are we over drug stores at to the same degree. Jason: [1:16:26] That's a good question I have not seen any stats on the like drugs or density per capita relative, two other geography so I I don't know I I'm going to go to a search right after the show and see if there's any data sets out there, but it is you know to the extent that the drug stores, overlap outside of prescriptions they overlap a lot of other store types right like you you can get your your toothpaste at a drugstore or, grocery store or a super store they certainly fall into that you know that that big bucket of being over stored and you know in the same way you can think about. When a bunch of the Sporting Goods specialty retailers in the u.s. closed that that had a particularly profound effect on vendors like Under Armour that didn't have a lot of direct-to-consumer distribution. There's a ton of products that are primarily distributed through these drug stores and your point like a bunch of the stores throat. Closed because of consolidation or because of consolidation and Amazon competition or any of these things, you know there there's a ton of private providers that are suddenly going to be left without the level of distribution that they're used to and that's going to dramatically affect their financial fortunes as well. Scot: [1:17:45] Yes Sue another industry potentially being disrupted by Amazon want to see how it plays out. [1:17:53] Cool thanks for joining us for this quick take on Amazon's third-quarter results if we were going to summarize it I would say this is what we would call a clean beat and race so this really sets up Amazon for a huge 4th quarter, I mention to the updated guidance there that has a 32% growth rate at the midpoint, I'm just coming after Amazon blew away the previous guidance so you could even see getting north of 36% if if they repeat that Amazon cited. The growth and Prime subscribers do the prime day, International acceleration and then some of the growth in other areas like ads and amazon-web-services and then they really highlighted what's going on with Echo / Alexa and the whole conversation. I'll Commerce to these are some of our favorite topics and we will continue to keep you updated on them at the Jason Scott show. Jason: [1:18:41] Absolutely and because Amazon blew away their guidance so much we felt empowered, to blow away our our budget as well so I apologize for the slightly extended edition of the show but we think it's all super interesting and hopefully potentially useful to you in your day job so if you like to continue the conversation we had, let me to join us on Facebook and of course, as always if you enjoy Today Show we really appreciate you jumping on the iTunes and giving us that five star review if you didn't Love Today Show you we certainly encourage you to send a private email to Scott and with that we want to thank everyone very much for listening. [1:19:20] Until next time happy commercing.
Ecommerce Influence is a podcast for the ecommerce business owner and online marketing executive. We have candid conversations with masters of ecommerce marketing and branding, and provide training and strategies to that help you convert more of your visitors to paying customers. Topics include lead capture, email marketing, shopping cart abandonment, conversion rate optimization, business automation, analytics and more.
Rank #1: 027: Boosting Conversion By 300% With Qualitative And Voice Of Customer Data - Sean Ellis, Qualaroo.
While Analytics packages tell you what people are doing on your website, Qualaroo can tell you why they are doing it by capturing qualitative and voice of customer data. Or even more important, why they aren't doing something. Sean Ellis’ is the CEO and co-founder of Qualaroo Insights, a qualitative insights solution triggered by onsite user behavior to collect visitor intelligence for driving faster conversion rate optimization. Qualaroo is used by major companies like Shopify, Yahoo, Vimeo, Groupon, and intuit to help them gain better “voice of the customer” (VOC) intelligence that they can’t get from their analytics tool. Additionally, Sean has been a marketing executive for huge companies like Dropbox, Eventbrite, and LogMeIn, he’s currently an advisor to Kissmetrics, and he runs a very popular marketing blog and community for startups called Growth Hackers. In this episode Sean talks to us about how you can use qualitative insights to convert more of your visitors into paying customers, and how one of his experiments resulted in a 300% boost thanks to VOC. Topics Discussed Throughout This Interview: What qualitative and voice of customer data means to ecommerce companies. Test 10 different ideas for one answer, but can get that answer via voice of customer. What is Growth Hacking and why does it matter? Growth hacking for physical product businesses. Sean’s experience as the first marketing hire at Dropbox (and why they grew so quickly). Effective referral marketing and how to translate it to ecommerce. 300% increase in conversion thanks to voice of customer/qualitative. Links/Resources: Sean On Twitter Qualaroo Growth Hackers Kissmetrics Thank You For Listening & A Simple Request To get more awesome Ecommerce Influence content sent directly to your device and into your ears as they become available, you can subscribe on iTunes or Stitcher! Also, ratings and reviews on iTunes (hopefully 5-stars!) help us tremendously a we’re very grateful for them. We do read all of the reviews and we’ll answer your questions or comments on future episodes. Cheers, Austin & Chad! Follow on Twitter: Follow @chadvanags Follow @a_brawn
Rank #2: 029: Thinking Small Won't Buy Jet Fuel: Contrarian Ecommerce Strategies From The Queen Of Conversion - Amy Africa, EightbyEight.com.
Amy Africa is the CEO of EightByEight Marketing has been in the forefront of web usability studies, web design improvement, and successful e-commerce for over 15 years. She is one of the best web marketers today because she combines incredible direct marketing skills with proven web techniques and some contrarian ecommerce strategies, getting her hired by 92% of fortune 500 companies. Amy has been widely published in industry magazines and e-zines. She’s an engaging, entertaining speaker, and has been featured at web conferences around the globe. Her depth of knowledge, backed by intensive field-testing and web user studies, has earned her the reputation of "a voice to be heard" on Internet topics ranging from site improvement, traffic building and SEO to analytics and email marketing. Amy has pioneered many successful web marketing initiatives in navigation, email marketing, shopping carts and abandoned carts that are making her clients much more profitable. The best part? She chats with us while on her private plane from the east coast to California. Topics Discussed Throughout This Interview: Start focusing on adoption to cart NOT cart abandonment. Why you need to stop focusing on selling only online, start incorporating the phone to help online sales. It’s all about finding the easiest ways to create the largest profit. Sell where people want to be sold. Understand why and begin to implement the mobile to desktop shopping cart transfer. The importance of navigation. Why you can't treat mobile and tablets as the same thing when analyzing your business and customers. The "buy or die" abandon cart email strategy. The biggest ecommerce problem to avoid in 2014. Why conversion rate is an overrated metric and what metrics you should be focusing on. The type of emails that are working best for Amy’s clients. The 4 types of triggered email sequences to implement for the best results. How to find the "rat stuck in your snake". Using search on your site to help you sell more - "search is indicative of propensity to buy". Be willing to "sell your soul to the devil" to capture emails. Why you need to email more and ride out the "unsubscribe wave". Work your navigation like crazy. Creating a shopping cart that is user-based, not one-size fits all. Focus on evolutionary, not revolutionary when it comes to your site. Links/Resources: AmyAfrica.com EightbyEight.com info [at] amyafrica.com Thank You For Listening & A Simple Request To get more awesome Ecommerce Influence content sent directly to your device and into your ears as they become available, you can subscribe on iTunes or Stitcher! Also, ratings and reviews on iTunes (hopefully 5-stars!) help us tremendously a we’re very grateful for them. We do read all of the reviews and we’ll answer your questions or comments on future episodes. Cheers, Austin & Chad! Follow on Twitter: Follow @chadvanags Follow @a_brawn
Looking for detailed information from top experts on researching, launching and growing your online eCommerce business? Look no further. Join your host Andrew Youderian, an experienced eCommerce entrepreneur, each week as he pulls aside some of the industry's top experts to give you down to earth, actionable advice served up with a side of comic relief. Learn from the masters how to turn your 'make money online' attempt into a profitable, growing online store. Get show notes, in-depth eCommerce Fuel posts and your free copy of Andrew's highly reviewed 55-page eCommerce guide at eCommercefuel.com.
Rank #1: How to Build an Audience from Scratch.
Building an audience can be tough, especially when you’re starting from scratch. So today, I thought it’d be fun to share the mic with Michael Jackness of EcomCrew so we can both give our perspectives on the subject, including what worked for us and what mistakes we made along the way. Michael has done such an incredible job building up EcomCrew.com over the last couple years, and today you’ll get a behind-the-scenes look into exactly how he did it. You can find show notes and more information by clicking here: http://bit.ly/2GO35k5
Rank #2: Facebook, Amazon, Investing & More with Andy Bedell.
Andy Bedell joins us to share some inside knowledge and tips for using Facebook, Amazon, and other resellers to sell and market products effectively. He also shares his own captivating copywriting process and some investment ideas and inspiration. We also talk about CRAP products, Amazon leakage, how Facebook ads work, how to properly vet a reseller, and plenty more. You can find show notes and more information by clicking here: http://bit.ly/2sMarv5
Start An Ecommerce Business, Become Your Own Boss And Spend More Time With Your Loved Ones
Rank #1: 089: How To Make $47,000 In 90 Days Selling On Amazon FBA With Scott Voelker.
Today I’m happy to have Scott Voelker on the show. Scott has been an entrepreneur for a quite a while now. He runs a successful portrait studio. And he also teaches course on online photography. But the reason I brought him on the show is to talk about his Amazon success. Scott runs the popular podcast The Amazing Seller and the website of the same name. And his claim to fame is that he went from 0 to 47K in 90 days selling on Amazon. Today we’re going to to break down his process of finding products to sell on Amazon, and his process for making money on the platform. Enjoy! What You’ll Learn How many products Scott has listed and how many it took to hit 47K Scott’s criteria for selecting a product to sell Where Scott sources his products from. How Scott finds vendors His ... The post 089: How To Make $47,000 In 90 Days Selling On Amazon FBA With Scott Voelker appeared first on MyWifeQuitHerJob.com.
Rank #2: 236: The Fastest Way To Make 5K/Month From Scratch With Greg Mercer, Mike Jackness And Scott Voelker.
Today I’ve got my buddies Greg Mercer, Scott Voelker and Mike Jackness back on the show. If you listened to last week’s episode, we were all together in San Diego to film the 5 Minute Pitch and while we were together, we recorded a couple of podcasts. Anyway, today we’re going to collectively answer a question that I get asked all the time. If we were to start all over again, what would be our fastest way to make $5000/month. You’ll be surprised at some of the answers. Enjoy! What You’ll Learn How to make $5K/month with only $5k in starting capital How I personally would make $5K with no money at all How to build an audience Is ecommerce the best way to go? Other Resources And Books 5MinutePitch.com – Sign Up Now! Sponsors Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created ... The post 236: The Fastest Way To Make 5K/Month From Scratch With Greg Mercer, Mike Jackness And Scott Voelker appeared first on MyWifeQuitHerJob.com.
Shopify Masters is a podcast brought to you by Shopify where successful ecommerce entrepreneurs and experts share their business experience and inspirational stories.Each week, our host Felix Thea invites successful entrepreneurs to share their experience and practical advice for growing an online business on Shopify. Guests on the show come from a wide range of backgrounds and share insight into topics such as creating viral Facebook ads, outsourcing parts of your business, creating licensed products, running a newsworthy pop-up shop, optimizing your social media marketing, content marketing for SEO, and tons more. These are seasoned entrepreneurs that come from diverse backgrounds who are willing to pull back the curtain and share their best practical advice. Subscribe to the show and leave us a review to let us know what you think!
Rank #1: Pulling off a $10k Instagram Launch (Without Any Automation or Ad Spend).
On this episode of Shopify Masters, find out how The Content Planner grew a 4-figure Instagram following just large enough for a successful 5-figure launch without spending any money on ads or relying on social media automation. Show Notes: http://www.shopify.com/blogs/blog/content-planner-instagram-launch
Rank #2: How PrideDesignz.com uses Facebook Fan Pages To Average $30K/Month In Sales.
On this week’s episode you'll learn from an entrepreneur that followed her passions and created a Facebook fan page that drives the majority of her traffic. In this episode you'll learn: How you can tell if you’re just interested or if you’re truly passionate about a niche. How to transition from building an audience to monetizing that audience. 3. And the kinds of content to post on your Facebook fan page to get the most engagement with actual examples.
The Side Hustle Show is the podcast for part-time entrepreneurs who are looking for business ideas, actionable tips to start a business, and killer strategies on how to turn their side hustle dreams into a growing business. We cover all aspects of starting a business and making money (online and offline), including small business marketing, sales, websites, social media marketing, blogging, time management, and more. Our topics include passive income ideas, niche sites, self-publishing, software and app development, coaching and consulting, freelancing, affiliate marketing, Amazon FBA, and much more. Learn how to turn your business idea into your own thriving small business. Starting your own business gives you the freedom and opportunity to quit your job. It doesn't take a high-flying start-up to make money or create an awesome lifestyle business. Guests include Jon Acuff, Chris Ducker, Brian Clark, John Lee Dumas, Pat Flynn, and many Tim Ferriss and Gary Vaynerchuk proteges. Because your 9 to 5 may make you a living, but your 5-9 makes you alive. Hosted by Nick Loper, Chief Side-Hustler at Side Hustle Nation (.com).
Rank #1: 142: $5k per Month Blogging Case Study: How to Drive Massive Traffic with Pinterest, with Rosemarie Groner.
Rosemarie Groner is a former state trooper turned blogger and stay at home mom. In the last 12 months, her site The Busy Budgeter has grown from zero to 400,000 page views per month. More importantly, Rosemarie earned $5000 from the site last month while working on it part-time. Note: Click here to download Rosemarie’s top blogging and Pinterest traffic tips. Want to start a blog of your own? My free video course shows you how. (For the sake of comparison, SHN was around 73,000 pageviews for the last 30 days at the time of recording.) I met Rosemarie (and several other members of her mastermind group) at FinCon in September, where she shared a surprising secret weapon to her success: Pinterest. st.
Rank #2: 294: How to Start an Online Store with No Ideas and No Inventory (and still sell $300k in your first year).
Rene Delgado started an online drop shipping store with no ideas and no inventory and went from $0-300k in his first year in business. It was the search for an extra stream of income that led Rene Delgado to consider e-commerce; selling physical products online. “Drop shipping” is a form of e-commerce where your suppliers ship products directly to customers on your behalf. Note: Click here to download Rene’s top tips for starting and running a drop shipping business from this episode. Your role is to drive traffic to your storefront, forward the purchase order details to your supplier when a visitor makes a purchase, collecting the retail price and buying the goods at wholesale. Rene went through a very specific product research process and ended up starting BounceHouseStore.com, where he sells bounce houses and other products related to bounce houses. He’s already started scaling his business on the success of his bounce house store. Rene has now outsourced the day-to-day operations of this store and started a new drop shipping store that has already turned over double what his bounce house did in its first year. There’s no luck here. “It’s hard work,” Rene said. That and some careful planning and execution. Tune in to hear why Rene was attracted to drop shipping, the criteria he used to find the bounce house niche, and how he generated $300k of sales in his first year in business.
Entrepreneurs on Fire is an award winning podcast (Best of iTunes) where John Lee Dumas interviews Entrepreneurs who are truly ON FIRE. Are YOU ready to learn from the best and achieve financial and location freedom? With over 2000 episodes, JLD will get you there!
Rank #1: Getting to “Yes And”: The Art of Business Improv with Bob Kulhan.
Bob is Founder and CEO of Business Improv®. Based in NYC, Chicago and LA, Business Improv is a world-class leader in training programs for corporations and serves an incredible roster of blue-chip firms. Sponsors: StitchFix: Get your own personal stylist AND clothes delivered straight to your front door. Visit Stitchfix.com/eof and you'll get 25% off when you keep all 5 items in your box! Videoblocks: Go to VideoBlocks.com/fire to get all the stock video you can imagine for $149 a year!
Rank #2: Develop a concept, create a plan, and become profitable from DAY 1 with Colin Morgan.
Colin is a professional golfer turned successful Entrepreneur who now runs the company Plan2Profit with his father Paul Morgan. He is an expert at teaching Entrepreneurs how to start their own businesses successfully. Sponsors: Billy Gene: Join Billy Gene on his free training where he’s going to show you the same process he’s used working with some of the world’s largest franchises to get ROI on Facebook ads. Claim your spot today at INeedThisTraining.com! DesignCrowd: Post your design project on DesignCrowd today and get a special $100 VIP offer! Visit DesignCrowd.com/fire and enter the discount code FIRE when posting your project!