The Jason & Scot Show - E-Commerce And Retail News
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EP316 - Annual Predictions 2024
Jason visited the Walmart Neighborhood Market in Pea Ridge, Arkansas featuring drone delivery. Here is a video for those interested.
2023 Predictions RecapJason:
Jason Total Score: 3 of 5
Scot:
Scot Total Score: 4 of 5
Trends revert to the mean, and Scot is back on Top!
2024 PredictionsJason:
Bonus: Live-steaming, MetaVerse, Crypto still not a major thing in e-commerce; Management stops blaming performance on retail crime; and Smaller RMN’s fail.
Scot:
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Episode 316 of the Jason & Scot show was recorded on Thursday, January 11th, 2024.
http://jasonandscot.com
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
Transcript
Jason:
[0:23] Welcome to the Jason and Scott show. This is episode 316 being recorded on Thursday, January 11th.
I’m your host, Jason Retail Geek Goldberg. And as usual, I’m here with your co-host, Scott Wingo. go.
Scot:
[0:39] Hey, Jason, and welcome back. Jason and Scott show listeners.
Well, folks, this is one of our most popular shows of the year.
This is our Jason and Scott annual prediction show.
This is where being an audio podcast really works against us.
You can’t see us, but Jason, I normally wear leisure wear when we record the podcast, but tonight we’re wearing tuxedos.
Jason, I really like that cummerbund. It looks really good on you.
Jason:
[1:04] Thanks.
Scot:
[1:04] I feel like you’ve really elevated elevated your game this year the the suede tuxedo really suits you thanks thanks and the extra glitter on the bow tie was my daughter’s influence smart the the 17 year old touch as you can never have enough glitter that is literally what she says half the time so yeah this is the show where we make we kind of self-score last year’s predictions which would have been the predictions we made this time last year early January for 2023 and then we make new ones for this year the 2024 2024 predictions but before we jump into that Jason we’re recording this on the Eve of nrf big show and I know that’s a huge show for you it’s now I think it’s expanded it’s always a fun weekend show which I’ve always appreciated that that was sarcasm and then I think they’ve extended it you know I think it was like what was it Saturday Sunday Monday and now there’s like a Tuesday and then there’s pre-days and post days so it’s like a whole it’s like a whole month of nrf big show are Are you teed up and energized and ready to go?
Jason:
[2:06] Yeah, and I feel like if all those things weren’t exciting enough, you know, it’s like 113 years old, and it’s always over a holiday, Martin Luther King Day, and it always draws a blizzard, like either on the first day or the last day. And so this year, maybe we’ll get both.
Scot:
[2:22] Yeah, yeah, and it’s always fun. And it used to be there was nothing down in that part of New York, and now at least they have, what’s that thing called?
Hudson Yard or whatever.
Jason:
[2:29] Yeah, yeah, yeah. Yeah, I feel like Manhattan has grown up around Javits a little bit. So you are definitely right.
I have clients and partners with offices that are now walking distance from the show. And Hudson Yard is pretty cool.
Scot:
[2:42] Yeah, very cool. Now, are you speaking and also on behalf of the listeners, what are you going there to learn more about?
Jason:
[2:51] Yeah, so in the highly unlikely event, there’s anyone that listens to this show that doesn’t already know what the show is. National Retail Federation’s big trade organization represents retail in the United States. It’s their big event.
30,000-ish people come to New York City. Tons of exhibitors in a wide variety of fields.
The area that’s always fun for me is one area of the show is dedicated to innovation.
So they give like inexpensive booths to small companies that, you know, aren’t ready to invest in a big booth.
And many of these are startups or startups from other countries.
And, you know, so it’s always, there’s always a lot of wacky dubious stuff there.
But in between that, there’s usually some, you know, kind of cool ideas.
And it’s often the first place you’ll see something that a few years down the road becomes, becomes one of the innovative new parts of retail.
So I love walking the innovation center.
Last year, retail media networks were the big thing at this show, and I’m sure they’re going to be a big thing again this year.
People were starting to talk about AI last year, but this year, I think it’s just going to be off the hook.
I think in order to get a booth, you had to say you were an AI company.
I’m pretty sure the trash is getting emptied by AI sanitation engineers.
[4:09] I feel like it’s simultaneously going to be wildly overhyped and super important and transformative to the industry.
So that’ll be interesting to see how that all plays out.
I like to talk about food and grocery a lot and InterF has done a lot to expand their coverage of the food industry.
So there’s a whole separate portion of the trade show dedicated to grocery retail vendors and a whole content track.
So that stuff is all interesting.
John Furner, the president of Walmart, will have a keynote. A bunch of other retailers will have keynotes.
Magic Johnson is kind of the outside speaker that they’re hyping this year, which is, I mean, fine, but I don’t go for those paid, not retail speakers that much.
And then I am speaking, I am doing a session on one of the featured stages that is entitled, Coming to America, which is all about what Western brands can and should be learning from the Chinese brands that are now successfully doing business in the US.
And so most notably, Timu, Shein, and probably a little bit of TikTok.
[5:26] Yeah very cool i also saw on linkedin that you had what i would call a close encounter with a.
[5:32] Drone experience what tell us more about that i did so i mean scott i’m sure you remember this but it was like i looked it up it was like 2013 that jeff bezos was on 60 minutes and was like oh and we’re going to deliver all the packages via drone wasn’t it the eve before cyber monday was like that sunday night before yeah cyber money yeah and so he made that announcement and you know that sounded incredibly far-fetched and i don’t know if you remember but i had a session that i was doing an internet big show that year and i dressed up a drone with the amazon air logo and landed it on stage at the javits center or i had someone that was better than me landed on stage at the javits center in the middle of my presentation as a joke and i got in huge trouble for that that’s wildly illegal that’s why they call you retail geek yeah sometimes it’s better to ask forgiveness than permission is my philosophy on that one.
But back then, it was like this kind of silly science fiction.
And since then, we’ve on this show and in the press and media talked about various kind of edge use cases where drone delivery might actually make sense or be economical.
And we’ve talked a lot about some of these pilots that both Amazon Amazon and Walmart are running.
And so I know it’s a real thing and you can really do it.
And maybe in some use cases, it’s even practical at this point.
[6:57] This December, last December, so last month, I did my last trip of the year to Walmart, which is in Bentonville, Arkansas, which side note, downtown Bentonville is beautiful for Christmas. They have a super cool light show.
So if you’ve never visited Walmart, that’s the time to do it.
But there is a small Walmart neighborhood market, which is their grocery store concept, which is in a small community of 5,000 people about about 30 miles away from Bentonville called Pea Ridge.
And so I drove out to Pea Ridge to visit the Walmart neighborhood market.
And behind the neighborhood market is a drone center.
And they are actually delivering packages via drone on an ongoing basis for all the residents of this 5,000 person community.
And so standing in a parking lot and having a bunch of these planes, and the Walmart ones are fixed wing aircraft, launch and like zoom over your head and all the signs in the parking lot, you know, say low flying aircraft beware.
[8:00] And like seeing all these planes like launch, it was more fun and cool than I expected it to be.
And what’s particularly cool is this particular model, the way they recover the planes is the planes all have a hook on the tail and they literally have a a retractable zip line that like two robot arms raise up and it puts the zip line across the drone center, which is elevated.
And the plane flies into the zip line and gets hung up and it just swings like a swing until it loses momentum.
And so, you know, I just sat there for like probably 45 minutes and watched like 10 planes launch and get caught by the zip lines.
And I I made a video and put it on LinkedIn. So I edited it down to like a minute, but I know this is not new news to most people on this show that there’s drone deliveries, but I’m telling you like when you actually see one in person, it’s still kind of cool.
Scot:
[8:58] Neat. Are they, obviously they’re not going to carry like a gallon of milk or something super heavy like that. What’s their payload max on this?
Jason:
[9:06] Yeah, so I am not super well-versed on exactly what, like the one part of the experience I couldn’t see, unfortunately, Unfortunately, you’d have to be pretty lucky to be out of residence when a delivery was happening.
I think it’s like a four-pound payload, and it’s dropped via parachute.
And I know the way it works is you register in advance to be a drone delivery site, and then you’re given a little foldable circle target that you put in your backyard, and the drone drops the packages right on this target.
And so, you know, Walmart neighborhood market is…
Scot:
[9:42] It’s a grocery store with like you know dry goods and pharmacy and stuff like that so i i think it’s a lot of like bottles of advil and things like that that are likely getting delivered there, very cool so head over to linkedin and look up jason and it’s it’s the post that starts you know x years ago on 60 minutes and it’s in there yeah i’ll put a link in the show notes if you if you want to find it quick cool one last topic we wanted to cover before we get into the meat of of the prediction show, Jason and I have been getting a lot of questions from listeners and it concerns a slowdown in our frequency.
Well, no one can pull the wool over our listeners’ eyes. You guys caught us.
We have slowed down our frequency.
And that’s because starting with the next episode, 317, we’re going to rebrand and it’s going to be the Jason Bott and Scott Bott show.
And nothing’s going to really change. We are going to increase the frequency.
It’s going going to be daily. You guys wanted more shows. So next year, we’re not going to do 365.
That would be too much, but like 355, something like that.
And you probably guessed by the rebranding that it’s going to be Jason and I writing the outline of the show.
But Jason, being the geek he is, has created a Gen AI version of himself that’s been trained on 800 hours of Jason content. and he produces a lot more content than I do. So about 300 hours a month.
So congrats, Jason, on this technological breakthrough.
Jason:
[11:09] Yeah. I’m super excited about that. You’ve disclosed one of the secrets to our success is that every episode is about a three to one ratio of Jason and Scott.
Scot:
[11:22] Since you do the audio editing, I try to go easy on you and you’re self-inflicting your own pain. Yeah.
Jason:
[11:27] The truth, and that may be the norm, but the truth is we have two kinds of shows.
There are shows where you are much more dominant than I am.
And then there’s shows where I I contribute more than you. It’s kind of funny to see the flip-flop.
If you get an interesting entrepreneur or you get a deep dive in a really arcane portion of Amazon’s business, you get a lot of Scott.
Scot:
[11:48] Yeah. Yeah, that’s where I thrive in the darkest corners of the interwebs.
Yeah. Seriously, though.
Jason:
[11:55] I was just going to say one side note on that. That LLM we trained, you can now buy on the OpenAI GPT store that went live tonight.
Scot:
[12:03] Yeah, and you can have your own personalized. We get a lot of requests for personalized shows, so you can just write your own.
Jason:
[12:09] There you go.
Scot:
[12:09] Yeah. We’ll talk to you in a three-to-one ratio of Jason to Scott.
But seriously, though, we do not have an LLM. We wouldn’t do that to you, but our frequency has decreased.
We looked this up, and our first show was on November 14, 2015, if you believe it or not.
So that’s over eight years ago we started. This will be our ninth year.
And yeah, so that’s a lot of content. And when we started, I had just, I was one year into my current company Spiffy, and now we’ll be celebrating our 10 years this year at Spiffy.
And we had five employees and now we have about 500.
Jason worked for Razorfish and he only had two words in his title.
And now he works for the biggest or one of the biggest ad agencies with a fancy French name called Publicis.
[12:59] And he has 16 words in his title. So there in his world, you measure your success by the size of your title. And he has done awesome.
So both of those endeavors have kept us a little bit busier than we were nine to 10 years ago. So that is the root cause of our slowdown.
We did the math and we actually did 15 shows last year. So it was like monthly plus a couple extras, plus three, if you will.
We used to do around 50 a year. So you’re all right. We have reduced the frequency.
Apologies for that. this is a passion project for us so our revenue good news our revenue has not gone down which is which is good because we don’t make any revenue we just love talking about this stuff and hanging out together and that was the whole genesis of this show and still is true even though we have less time to do it anything you want to add there jason yeah no i i think i mean obviously i feel like we’ve both gone a tremendous amount out of the show and we we love it and want to want to keep it going we want to make sure when we do shows that that they’re interesting and valuable for folks.
Jason:
[13:57] And so one of the things that I’ve gotten a lot of feedback on is we, you know, every year we’ve always done a handful of these deep dives on particular topics.
And I feel like the shows we get the most compliments on are when we do these deep dives or when we do really detailed breakdowns on the Amazon earning shows.
And so, you know, certainly we’ll still keep the Amazon earning shows on the schedule, but like, I’d like to lean into if, you know, if we are going to, you know do sort of one to two shows a month uh lean into some of those like more prep higher production deep dives as well so that is one of my new year’s resolutions is to drink a lot more ice coffee and the other one is going to be to make sure we get get some relevant deep dives into the show schedule every year yeah there’s got to be on the topic of ice coffee there has to be some limit to what the human body can endure there so it’s going to be interesting too you’re kind of a tim Tim Ferriss body experiment mode with the level of coffee you’re reaching.
Scot:
[14:58] So I look forward to seeing how this goes.
Jason:
[15:00] Hack myself.
Scot:
[15:03] Okay. With that housekeeping out of the way, let’s jump into the meat and potatoes of the show.
As mentioned, this is our annual prediction show. Way back in episode 301, recorded on January 20th, 2023, we made five predictions each about what would happen in the upcoming year, which was 2023. 23.
Let’s go through and review our performance because jason is first in our title he always gets to go first decision i greatly regret from eight years ago just kidding my memory from eight years ago is you did name the show yeah scott and jason just doesn’t it doesn’t sound right obviously so here we are so jason go ahead i’ll read your prediction and then you self-score All right, Jason, prediction number one, insert drum roll sound effect.
You predicted, prediction number one, at least two retail bankruptcies besides Party City would occur. How’d you do on that one, Jason?
Jason:
[16:03] Yeah, well, Mr. Debbie Downer was right. The Party City reference was because Party City had already declared bankruptcy by mid-January of that year.
But unfortunately, there were a number of other bankruptcies last year.
So the marquee one was probably Bed Bath & Beyond, although they have a new life as the brand for Overstock.
Talk david’s bridal right aid but the one that i’m personally maybe the most sad about and i know you were a customer if not a fan was boxy yeah yeah very sad yeah so i’m giving myself credit for that that first one although i feel like a bad person for making negative predictions, it’s kind of part of your personality i used to be the malageddon guy and now you flipped lived through the bankruptcy guy.
Scot:
[16:49] So I appreciate you carrying the banner on that one.
Jason:
[16:52] I’m here for you, man.
Scot:
[16:53] Okay. So that’s so far one out of five is what we’re scoring you.
So one right, zero wrong.
And number two, buy now, pay later consolidation.
Klarna, Affirm, Afterpay, excuse me, Afterbuy is another one, et cetera.
At least one of these will emerge or exit the US or BNPL altogether.
Jason:
[17:15] Yeah, and I failed.
Those companies, for the most part, continued to gain traction.
I want to say Sezzle had some valuation problems, although it started to recover in Q4 this year, but they’re all viable, independent entities still going. So that is a miss.
Scot:
[17:34] Okay, cool. So we’re now tied one and one, one right, one wrong out of the first two. So batting 50, which is pretty good for a batting average.
Above my my career average i’m pretty sure yeah yeah we we i have i will self-admit we’ve done a terrible job of track tracking this over the years because you know it’s really fun and it’s just trying to it’s good exercise and i recommend you do it too listeners because it makes you think, in a little bit longer term way and when you make a prediction and you don’t have to put yours out there but when you put it out there it makes you think a little bit a little bit deeper about it Your third prediction, prediction number three, was in 2023, Shopify will launch an ad product such as a retail media network.
You were banging the RMN drum back then.
Jason:
[18:22] Oh, for sure. So this is a complicated one.
I feel like I kind of got it right, but full disclosure, not in the way I expected.
So when I wrote that, I really thought, gosh, Shopify’s got, you know, all these independent stores that are probably too small to have retail media networks.
That, you know, one of the interesting products Shopify could launch is a sort of a confederate network where, you know, all these individual sellers opt into a shared advertising product that Shopify could administer and help all these sites to monetize their traffic. And that did not happen.
But what I wrote was launch an ad product such as a retail media network.
And last year, Shopify did launch, they already had a product called Shopify Audiences, which is buy data on anonymous data on people that use ShopPay to help target ads.
And last year, they added automated integrations with Snap, Criteo, which Criteo is a multi-platform advertising platform, and TikTok.
So as a Shopify seller, you could now say, hey, I want to go buy an ad using Shopify customer data to define your market it and have it automatically placed on all these different digital media platforms.
So I don’t know. I feel like I kind of lucked into it because it didn’t happen the way I thought, but it kind of did happen. Yeah.
Scot:
[19:49] Okay. We will give you, so at this point we’re on number three and you’ve got two right, one wrong.
Heading into the fourth prediction. And this one was in 2023, Meta, Google, TikTok are going to lose ad share to new social media platforms and retail media networks. How did you do on that one?
Jason:
[20:10] The real answer is I don’t know. So I expected it to be much more prominent.
And the tail of the tape is kind of mixed.
Using eMarketer data, Google lost share across all their properties.
So they went from 28% to 26%. Meta was kind of flat at 20%. They They lost share in Facebook but gained a little share in Instagram.
And then TikTok actually grew a little share, so from 2% to 2.4%.
And then the retail media networks obviously did gain share, but they’re smaller.
So Amazon went from like 11% to 13%. Walmart went from like less than 1% to 1.2%.
So it kind of happened, but it happened.
Scot:
[20:56] To a tenth of a percent instead of what i i sort of felt would happen which was multiple percentages so i’m gonna not give myself credit for that one okay that’s very generous of you, we uh this is the trick of writing these in hindsight you’re always you wish you’d put like a clear number there so you’d be easier to score 100 100 they’re kind of being squishy all right so here on number four you’re at you’re back to 50 50 so two right and two wrong and then one One quick clarification was this share of digital ads, like not all ads, right?
Like not TV and stuff in the DOM denominator. All right.
Number five prediction for Jason Retail Geek.
For 2023, live streaming commerce, still not meaningful in the US.
It will be less than 5% of social commerce in the United States of America. How’d you do on that one?
Jason:
[21:50] Also, the real answer is don’t know because it turns out there’s no good data source for truly measuring live streaming commerce.
The estimates, which are based on these kind of thousand person surveys, are that all video commerce in the US is like 32 billion to 50 billion.
And so how much of that like really happened live?
Even if all of that was live, it’s still not 5% of total e-commerce, but like what what percentage of e-commerce is social commerce.
I just, I ended up feeling like I wrote a bad, squishy forecast, but there is part of me that wants to say, hey, the spirit of this was people aren’t gonna be shopping for products live on video and it’s not gonna be very meaningful.
And I think that that is absolutely the case, that it’s not meaningful.
Scot:
[22:39] Yeah, one thing that’s interesting about, kind of like thinking back on 2023 with streaming, There’s a couple of things I’m kind of just pontificating here.
I don’t I don’t have an I’m not scoring you.
Yeah, I kind of want to use this opportunity to pick your brain.
So, you know, we have TikTok shops.
I’m going to guess you don’t think that’s live streaming, right?
Because it’s like a recorded video and you’re selling an ad next to it. Is that exactly?
Jason:
[23:04] And when you say I don’t think it’s live streaming, it’s because it’s it’s not.
Scot:
[23:07] It’s not. You’re not putting it in your definition of live streaming. Yeah.
Jason:
[23:11] And that’s something different to you.
Scot:
[23:13] But it’s like a static streaming revenue or something. I don’t know.
Jason:
[23:17] Yeah, I think there is video commerce, right? And even video commerce is not a very big thing.
But most of TikTok shops and YouTube native checkout and these other experiences are what we would call video commerce.
And there are now a couple vendors that have decent size revenue helping enable video commerce. So I think of someone like a fireworks, for example, that, that adds, adds video commerce to a lot of e-commerce sites and ad platforms.
Scot:
[23:45] And then how about, so there was a really interesting experiment and I don’t think we talked about it because we were deep into the holiday data stream, but you know, Amazon had Thursday night prime video football.
And then on Thanksgiving, the Friday after Thanksgiving, they bumped the game and did it on Friday. And part of that was if you watched the thing that’s fascinating about the Amazon live stream is there’s like three or four sub streams in there.
And one of them had basically QR codes and you could buy right from the ad.
Yeah. Is that live streaming or it was like an ad next to a football live stream in your view? Yeah.
Jason:
[24:23] So I do think that would meet the definition of live streaming because most people watch that game live. live, and they didn’t disclose any data on how those were done.
I could tell you in talking to several people that bought those ads, there was not meaningful engagement with the QR codes.
[24:43] And so, yeah, you know, I think there’s still lots of experiments.
I think there’s use cases where native checkout in video makes a lot of sense.
There’s even a few use cases where live video make sense, but they’re edge cases.
They’re not, it’s not the main thing.
And again, there’s a big difference between China and the US.
There is a ton of content that is streamed only live and allows you to buy stuff in China, but it’s mostly deals stuff. It’s kind of like the next generation of guilt.com, if you will.
And it’s mostly like very scarce items.
So it’s farmers in tier three cities in China selling their produce for the week. And when they’re out, they’re out.
And so they don’t store the video and have people watch it later in order because they sell all their apples during the live stream.
And that’s a meaningful way people sell stuff in China.
It’s just it’s just not I mean like the vast majority of video can be time shifted in the US and then it’s not live streaming and you know we still for the most part don’t have people buying a lot of stuff even you know through through video that’s not live so I feel like because of the success in China it gets a little overhyped in the US and I feel like it hasn’t lived up to the hype a.
[26:02] Year ago though I would argue there are a bunch of vendors telling us that this is the next thing and we’re all going to be out of business if we don’t jump on the bandwagon and i can assure you if you did not jump on that bandwagon you you potentially are still in business.
[26:14] Got it i know how amazon’s going to solve this so hear me out this is this is an unofficial prediction and i know andy jassy listens to this show so andy here’s how to solve this i’m going to share my entrepreneurial insights number one you have to keep travis and taylor together number Number two, you’ve got to get the Kansas City game next Friday after 2024 is Thanksgiving.
Scot:
[26:36] And then you have to sell exclusive Taylor merchandise on that game.
So that’s how you’re going to get the engagement you want. You got to tap into the Swifties.
Jason:
[26:45] Yeah, I feel like the Swifty economy is a way to solve any business problem.
I’ll totally agree with that.
I will throw out Amazon, you know, did lean into live streaming and they had a product called Talk Shop Live.
And you know by all accounts it wasn’t very successful the people they they bribed influencers with extra bonuses to produce content and as soon as they stopped offering those bonuses all those influencers moved off the platform and now it there’s a a version of it that still exists but once again it’s not live yeah yeah uh okay so what does that give me three out of three uh Uh, three out of five.
Scot:
[27:25] Yeah. So you, so three, correct. Two wrong. So that’s good. You have a winning average. That’s very similar to my college career.
Jason:
[27:32] Yeah.
Scot:
[27:32] There you go. Yeah. Gentleman’s a D minus. Yeah.
Jason:
[27:40] So now let’s get to Mr. Sparty Pants, who I suspect and fear did much better than me.
So Scott, you’ll remember your first prediction.
It’ll come as a shock to no one involves Amazon, right?
Amazon uses this 2022 setback slash slowdown slash reversion to the mean for a public resetting of expectations.
But behind the scenes, they take share and raise the bar on shipping.
Scot:
[28:09] Yeah. I, um, the shipping part was surprisingly clairvoyant there because, you know, what they did in 2023 is one of the things Jassy dug into this and they did these, what do they call it? Nodes regional.
Yeah. These regional nodes. And they, they started zoning out at a tight level.
They were moving too much product too far unnecessarily. And they, they really tightened that up and it allowed them to cut costs pretty dramatically on shipping and get a lot of leverage that that everyone was surprised about but also and this is nice they similarly you know have really cranked up to delivery speed and delighted customers so so you know very rarely in a business do you find something that that both saves money and delight usually you’re having to make a choice you’re like well i could save money but customers are going to hate this this was what very aligned with their, you know, their corporate goals of being like wildly efficient and automated, but at the same time, getting products to customers faster.
So I think they had a pretty good year. So they’ve, you know, everyone was in the doldrums about Amazon.
Everyone was like, oh, this Jassy guy is really messing things up.
And I think he went kind of back to basics and said, let’s squeeze some nickels and dimes out of this shipping thing and get it a little faster.
And the customers have reacted to it. So I would score that one correct.
Jason:
[29:32] Yeah, 100%. I feel like Tim cooked it, and it was a good call on your part.
Scot:
[29:36] Yeah, absolutely.
Jason:
[29:38] So your second prediction, and I’d like to harp on this one a while if possible, is that Shopify would get acquired.
Remind me, did that happen?
Scot:
[29:49] It did not, but you have to put this in context. Shopify dropped, what was it, like from $60 billion to $10 billion?
They had a precipitous fall, and they had a lot of missteps.
So they, you know, when this happened, you and I, I think jointly predicted that them getting into fulfillment was not only a bad idea, but a terrible idea.
So this is the year they had to unwind all that, which I thought it would be.
[30:18] I didn’t think they would do that, but kudos to them. You know, so I 100% give them this is very hard to make a mistake and fix it out in the public world. It is a very humbling thing, but they sure did.
So they got rid of the shipping part.
They turned that into a little bit of lemonade where they ended up having a good partnership with a company that acquired Flexport, I believe it is.
And then they have made a series of moves that have rebounded not all the way back to where they were, but they have done very well and they are not going to be acquired or they’re not in any kind of existential problems.
I do still think there’s a world where meta, I think the natural require for them is meta.
And at some point, those companies kind of have to go together.
I also, if I recall my thesis on this, it was around the first party, the third party data going away.
And I felt like they’d have to go on to a first party network.
I still think that’s true. I think they can survive independently. independently but i think to unlock a lot of value they need to be married into a first party entity more tightly so yeah yeah and of course the stock has rebounded a bit so it’s it’s it’s a bigger swing now yeah i don’t you know i you will spoil alert i did not repeat this.
[31:42] This prediction i was gonna say you technically only missed that prediction by one word had you had you written shopify with fulfillment is acquired you you kind of would have been right, yeah long time listeners will know i have a long history of repeating predictions and then it never works out for me so i’ve learned my lesson the hard way my my big one was like for what have we we’ve been doing this for like eight times i guess or maybe this is the ninth and you know literally for like five years i predicted amazon would compete with them with fedex and i gave up and then like two years later they announced they’re gonna compete as soon as you stop repeating it that’s when you know it’s gonna happen yeah so maybe i am predicting shopping there you go Oh, head explode emoji.
Jason:
[32:21] Yeah. So one out of two. So then let’s move on to number three.
And innovation in e-commerce powered by AI, such as GPT-4, surprises us by how fast it’s adopted and how cool it is.
Scot:
[32:36] Yeah, I would say there’s no one innovation that you can kind of say, wow, everyone added X to their site and it was amazing.
But I would say it’s pretty amazing how many retailers are using and getting a lot of value out of AGI. So, you know, the one you read a lot about is the helping of writing product description pages and tightening those up.
A lot of people are using it for customer service and really improving that.
A lot of people are using it for, you know, one of the things that’s a total pain in the e-commerce world is many times you want to take a product image and it’s, you know, it’s in a scene and you want to isolate it.
And then you want to spin it around and do a video and inject that thing in another templated video. you know, that was always very hard.
And you would send these images to, you know, a, you know, another country where someone would, you know, for $5 an hour, sit there and meticulously isolate the item out of the background and pixel by pixel do that.
Now they have, you know, pretty awesome AI systems for doing all those things.
And, you know, retailers are using those pretty heavily. So I would say.
[33:48] It’s a little hard to score this one. I’ll defer to you. I feel like I’ve been surprised by how much of it was useful.
I think a lot of people were kind of saying this is going to be another blockchain, another live stream, another social chat commerce kind of a thing.
AI is going to be a flash in the pan.
And I would say, you know, companies are really using this. It’s real.
It’s impacting the customer experience and improving retailers margins because they can be wildly more efficient.
Jason:
[34:15] Yeah, no. So I’m for sure giving it to you. I feel like part of the art here is you have to go back in time to last January and put yourself in the context that this was made.
And I think there’s a lot of things that are being routinely done today and are pretty darn cool that we would not have believed happened last January.
And I think all that text on product detail page is one.
The images is for sure one. there used to be whole sections of these trade shows dedicated to companies that were doing image manipulation and image masking and all that stuff.
And they’re all gone because the AI is so good.
And I would also say they’re now like it’s starting to be pretty meaningful in search. Like Instacart has had generative AI search engine for a while.
Walmart just launched generative AI in their search engine.
So, you know, there is a lot of flavors of AI that are overhyped and it, But, you know, it is like, I mean, there are a lot of AI snow jobs out there, but also there’s a lot of legitimate stuff.
And so I think I definitely have to give you that one. So I think you’re two out of three at the moment.
Scot:
[35:22] Awesome.
Jason:
[35:23] And so then we move on to number four. E-commerce accelerates back to the mean in the second half after a mean regression in the first half.
E-commerce returns to 10 to 15 percent growth rate.
Scot:
[35:36] Yeah, I will. The bulk of my e-commerce data comes from Amazon.
And I would say Amazon kind of checked this box.
But you, the ultimate consumer and gesture and recool charter of all the data, do you agree that I got this one?
Jason:
[35:53] I do, especially because you were prescient enough to list the growth rate as a range from 10 to 15.
So I’d say there was this weird regression where there was even a stage where retail was growing faster than e-commerce.
And for sure, by the second half of last year, we were back to sort of normal trends with retail growing at 3% to 4%.
And kind of pre-pandemic, e-commerce might have been growing at like 14% or 15%. And it returned to sort of 10% growth.
So I think you definitely hit the spirit of this that we’re kind of back to normal.
And I think you also hit the technical letter of your prediction because I think we surpassed 10% growth for e-commerce.
Scot:
[36:40] Cool. So that puts us at three right now.
Jason:
[36:44] Three for four, which basically means you have to miss this last one for us to tie.
Um, and I, I think I’m in trouble because your last one was Sephora and or Ulta moved to a subscription model for new product discovery.
Scot:
[37:02] Yeah, I, you know, I have to tip my hat to my daughter who previously mentioned is now 17 and was 16.
Thanks to her. I spend an inordinate amount of time and money in both Sephora and Ulta.
So this one was inspired by her. And yeah, I do have to admit before the show, I didn’t know how I did on this one, but I was looking and I see Sephora has this thing called play exclamation mark.
And it’s the beauty inside community community announcing our new monthly beauty subscription box. Play on players.
I don’t know if you subscribe to that, Jason, but it sounds like your kind of thing.
Jason:
[37:39] You said oh yeah i was i was a pilot user you can’t get this kind of camera ready look for the podcast without being totally totally plugged into all those products yeah no i think
EP239 - Retail Sales Data with US Census Bureau
EP238 - Holiday Shipageddon
EP237 - Always Day One author Alex Kantrowitz
EP236 - DNVBs w/ Nate Poulin
EP235 - Amazon Grocery, Walmart+, Holiday Preview
EP234 - Listener Questions Live
EP234 Preview - Listener Question Show Coming Soon
EP233 - Q2 2020 Retail Earnings and News
EP232 - rue21 CEO John Fleming
EP231 - The Forever Transaction author Robbie Kellman Baxter
EP230 - Amazon Q2 2020 Earnings
EP229 - NRF NXT, Google Commerce, Big Commerce S-1
EP228 - Bonus Edition: Verizon Panel - The 5G Future of Retail Post-COVID
EP227 - Amazon Dash Cart and Other News
EP226 - Blue Cape Ventures founder Hendrik Laubscher
EP225 - Jonah Berger author of The Catalyst
EP224 - Cohort Analysis and CLV with Daniel McCarthy
EP223 - Covid-19 Deep Dive
EP222 - RBC Mark Mahaney on Amazon
EP221 - E-Commerce Logistics Crunch
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