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Episode 53
December 5, 2017

Consumerism is our Religion

"If consumerism is our religion, then malls were our temples. Our temple now is the internet." Episode 53 is all about how Amazon owned Black Friday and while our heads were spinning they decided to take over Augmented Reality as well. Goodbye Black Friday, hello Black November. Also Google Poly and - in case you hadn't heard - Amazon's eating the world.

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"If consumerism is our religion, then malls were our temples. Our temple now is the internet." Episode 53 is all about how Amazon owned Black Friday and while our heads were spinning they decided to take over Augmented Reality as well.

Did You Recover from the Holiday Shopping Blitz?

  • Brian favorite deal: buy a Google Home for $29 and link it up with your Google Express accounts to get a $25 credit for
  • Phillip's favorite: Timbuk2 had a 70% off sale on cyber monday. Brian is unimpressed.

Voice is Big in the News this Week:

"voice is not the future it's the present."
  • Retailer Challenge: go to your top search terms, or your long tail of search from 2 years ago, and compare those results to today. You'll see more verbose and natural language formatted searches because people are speaking into your websites. Check it out, the data will prove it out.
  • has an article called "Giving Brands a Voice," discussing how to modify your brand in a UI-less conversational interface and what the growth of Voice First devices could do to your brand.
  • If you have thought to yourself "why should I, as a brand, care," then read that article.

Market Equilibrium Watch:

  • Data and colo center competition is causing a surplus of space in their centers.
  • Because of that, price points are dropping.
  • So we're seeing price competitive options for people to build out impressive private clouds for very little money, bringing some degree of equilibrium back to the market.

The Most Impressive Thing Brian Has Ever Seen:

  • Amazon Sumerian, "the fastest and easiest way to create AR, VR, and 3D experiences."
  • Lets you create all of the above quickly and easily without any specialized expertise.
  • Did they just win? We think Amazon just won.
  • They're aiming to educate the marketplace on how to create these environments.
  • Brian let's Philip know that he's going to build out a FutureCommerce HQ in VR. Merry Christmas, Philip.
  • Retailers: it's still going to be difficult to create experiences in AR and VR in retail if you don't have accurate models of the products you're selling.
  • You might be able to create spaces for the products to live, but the hardest part is getting your models in there.
  • The amount of data you have to maintain is next level difficult.
  • Check with your brands to see if they have models of their products.

Amazon Sumerian Hosts:

  • You can create a digital narrator to narrate a scene you create.
  • This is a clear use case for their acquisition of body labs.
  • There's a lot a lot of personalized interaction options ahead with this technology.
  • Reminder: it's still in preview, and it's a novel concept, and of course we've seen a lot of things sunset that seemed novel and unique at the time.

Google Poly Program:

  • Google just announced the Google Poly Program.
  • A way to address the difficulty of modeling your products for 3D.
  • Working backwards from the endpoint you can see Google in this space for decades.
  • 3D generation has been part of google's masterplan for a while and follows very similarly their Voice plan.
  • They build on prior success working towards an end goal.
  • They have a vision that helps guide their product roadmap.

Black Friday? Black November.

  • Brian's been a nerd about Black Friday for years.
  • Thanksgiving day sales were up by 18% online.
  • They kicked off their sales the morning of Thanksgiving this year.
  • Philip wonders if it's a response to companies responding to REI and others distancing themselves from Black Friday.
  • Brian thinks it's just about cold hard cash. The businesses looking to capitalize on Black Friday madness will find any angle they can to make more sales.
  • If the numbers say start sales earlier, then start them earlier. And now with online sales, it doesn't even matter if you open your store.
  • Holy Cow! Digital commerce 360 said that early numbers point to more than 46% of revenue coming from mobile sales.
  • Web sales were 18% higher than last year. 61% of visits to retail site were mobile, and 46% of the sales came from mobile
  • Have we solved the gap that we keep hearing about in ecommerce that people don't want to purchase on mobile?
  • Brian's theory: A two year old flagship phone can still do a lot of shopping. Those phones are now in the hands of a broader market of people. So a larger percentage of people are equipped to purchase items easily on mobile.

2 Black Friday Takeaways:

  • The idea that mobile doesn't convert is getting debunked. It doesn't just have to be the small device they don't want to convert on, it seems many people are motivated to purchase.
  • If you look across the brands we manage professionally, the numbers are up for all of November. It's not just black Friday. Black Friday is dispersing throughout the year and creating a lower margin for business.

Brick and Mortar

  • Brick and mortar sales were only down by 1.5%. Last year they were flat.
  • There's a certain person that loves that (Brian! Cough, cough.)
  • There's an excitement and buzz to be a part of a very specific American ritual.
  • If our god is consumerism, then the malls were certainly our temple. Our temple is now the internet.

Final Thoughts:

  • We're slowly moving away from aggregate portals for search and starting to become brand loyalists when searching for goods and services.
  • See Episoe 40 and our conversation with Richard Kestenbaum for a in-depth look at this from a passive commerce perspective.
  • All of this is subject to change and nothing is fixed, but this upward trajectory is going to continue in the short term but is ripe for disruption in the future.

Download MP3 (43.5 MB)

Brian: [00:01:03] Welcome to Future Commerce, the podcast about cutting edge and next generation commerce, rated as one of Forbes Top 6 Tech Podcasts Worth Your Time. I'm Brian.

Phillip: [00:01:13] And I'm Phillip.

Brian: [00:01:14] And as always, don't forget to sign up for our FC Insiders weekly newsletter about what's new and what's next in retail and to get exclusive content.

Phillip: [00:01:23] Yes.

Brian: [00:01:23] And all kinds of other great stuff like...

Phillip: [00:01:26] Yes.

Brian: [00:01:26] Free stuff like five Google Mini Homes that we recently gave away already once this airs. {laughter}

Phillip: [00:01:36] {laughter} By time you hear this, it's already happened. But yeah, we are in the midst of our very first giveaway. And we thought we'd throw it out there over the Black Friday/Cyber Monday sort of sprawl. Since you're already getting one emails in your inbox, why not get another one and have an opportunity to win a Google Home Mini? That's kind of cool, right? But there's can be a lot more really cool stuff coming out. And we don't want you to miss anything. So make sure you subscribe to FC Insiders at Woo. Did you recover yet from the crazy holiday weekend?

Brian: [00:02:13] Shopping craziness.

Phillip: [00:02:14] Did you shop?

Brian: [00:02:15] I did not go in store.

Phillip: [00:02:18] You didn't go in store. But did you buy something?

Brian: [00:02:20] I did buy one thing. Actually no, I bought a lot more than one thing. I did. I did a good chunk of Christmas shopping.

Phillip: [00:02:26] You did some shopping. OK, so I was going to say it took us fifty two episodes, but we completely lost an episode. We tried recording this once before and it got broken. So we're going to do it again. We didn't do it the first time around. What was the best offer that you received in your inbox? What was the worst offer that you've got in your inbox?

Brian: [00:02:44] I don't know about inbox, but the offer that caught my eye this particular Cyber Monday was the buy Google Home for $29, and if you link it up with your Google Express accounts, get a $25 credit for Obviously that's a one time thing, but that's like getting a Google Home for $4.

Phillip: [00:03:07] Yeah. That's ridiculous. Unreal.

Brian: [00:03:09] Yeah. So that was insane. There were a few other crazy deals out there.

Phillip: [00:03:15] So I saw a couple that were really crazy. So the one that caught my eye was Timbuk2, the bag company, had a 70% off sale on Cyber Monday.

Brian: [00:03:30] Pretty good.

Phillip: [00:03:30] {laughter} That's insane. 70% off? I haven't seen...

Brian: [00:03:33] Up to 70% or was it 70%?

Phillip: [00:03:37] No. No. I know they're two different things. There was a category of items, including backpacks that were, like their Command backpack, which I already own, so I didn't buy it, but was 70% off. Like 70%.

Brian: [00:03:51] That's pretty good. That's pretty good.

Phillip: [00:03:53] It's a backpack that is usually about a $120 was like, I don't know, 40 bucks or something crazy. It was ridiculous.

Brian: [00:03:58] There were a few other places out there that were doing some pretty steep discounts. I did a little shopping for my wife on Barney's.

Phillip: [00:04:08] Nice.

Brian: [00:04:08] Which was running 60% off on top of already marked down items.

Phillip: [00:04:14] That's impressive.

Brian: [00:04:15] That's crazy.

Phillip: [00:04:16] Well, I'm sure you can get retail news just about anywhere. We don't want to bore you with the Black Friday/Cyber Mondays. We do want to put our own unique spin on it in that sort of anecdotally, it looks like there's a lot of really interesting changes in user behavior. And I thought, Brian, if you will, if you'll indulge me, we're gonna hold that commentary on Black Friday/Cyber Monday until after the break. What do you think of that?

Brian: [00:04:41] I like that. I like that because you know what? If you're not interested in hearing about it on our show, you can just turn this off. Once you get to the break, you'll be like, "Oh, shoot. I don't need to listen to this. I've already read about it."

Phillip: [00:04:54] So, OK, so many things happening.

Brian: [00:04:57] Yes. Let's move past Black Friday for now. Yeah, let's do it.

Phillip: [00:04:59] Yeah. For now. We'll come back to it. My big story for the week was how much news there was around voice. And it made me think back to, if we could go back to, last year's Black Friday/Cyber Monday episode and how Amazon was using the Echo sort of devices to try to promote just like they did with Prime Day, but to try to promote more voice purchasing and get people to interact with voice.

Brian: [00:05:30] Yeah.

Phillip: [00:05:30] And they did not disappoint this time around. So they did a giveaway. If you used the new Alexa button that's in the Amazon app, the native app, then you'd be entered into a $5000 giveaway. They had a bunch of category specific deals just for ordering via Alexa. But for me, the thing that sort of struck me was the top selling item across Amazon was again, I think for the second year in a row...

Brian: [00:06:02] Second year in a row. That's correct.

Phillip: [00:06:03] Was Amazon Echo devices. Number one... Or Echo enabled devices, anything with Alexa, which nowadays includes a lot of things. But yeah, the Amazon Echo is the number one product sold on Black Friday/Cyber Monday. And that just kind of keeps promoting voice. Conversational commerce is here.

Brian: [00:06:24] Which, you know, if you consider that 55% of Black Friday shopping was Amazon shopping.

Phillip: [00:06:29] Yeah.

Brian: [00:06:30] That is... It probably makes that the largest sold item in America.

Phillip: [00:06:34] I mean, yeah, the number one item sold at the number one destination I think might have to be the number one. It's the winter spot. Right?

Brian: [00:06:44] It wins again. Yeah. Which is just crazy. I mean I can't wait for the numbers to come back, like my official numbers. But last year, I mean I felt like, you know, by the time we were done, and we should probably go back and look, I think we were like, "Wow, one out of three households is gonna have a voice device in it now." And it's gonna be way higher than that now, between Echo devices and how many of those are and Google Home.

Phillip: [00:07:13] And you'll see that we did... Even our giveaway was a voice device. It's a Google Home Mini, and it's only because the price was so ludicrous. $29. And the ability for us to... And plus it's fundamentally... It's little different, I think from from a retail partnership perspective, the Google Home is winning right now.

Brian: [00:07:36] Right.

Phillip: [00:07:36] But that's just my take on it. I did want to get... So there was a report that came out. So we have not talked about this company on Future Commerce, but someone that you might hear us name drop a couple times...

Brian: [00:07:48] Yes.

Phillip: [00:07:48] ...who I find very, very interesting is a company called Voysis. That's V O Y S I S. If you're familiar with Twilio, there's a public company now. Twilio basically democratized text messaging and phone interaction by providing APIs that developers could use and plug into various parts of their business. This is well before Amazon Web Services had similar capabilities. So Voysis is like Twilio or aspires to be like Twilio, but for voice and AI interaction, not just for voice. They also are providing the same sort of API level conversational bot interaction that you would program through their API that would also then be propagated out to things like chat bots. And anyway, very interesting. So they have a market study that they just released over on their blog We'll link it up in the show, notes that retailers are investing... 50% of retailers are investing in voice. And this is in partnership with the retail touchpoints on a report. And they surveyed the top retailers in space to understand where voice falls in their priorities and how they believe it will impact their business. And so a couple key points... So AD Age reports 75% of all content consumption will happen via mobile by the end of 2017. And by 2020... And so this is so similar to the com score report, which will also report on here in a second. By 2020, 50% of all search will be done via voice or through image search. So it's just crazy.

Brian: [00:09:38] I feel like we have to change our the title of our show now because what we're talking about, you know, we've been talking about voice for a long time now. Now it's mainstream. It's on a hundred percent mainstream. It's the way that people are... It's a main vehicle, a main channel that people are using for interacting with the web and with apps and shopping. And are you know, they're doing all the things that you would do with your phone or with your computer.

Phillip: [00:10:13] And if you want, there's a whole report that Voysis has put out that has data in it. And so you should check it out. Their pull quote is "Voice is not the future. It's the present."

Brian: [00:10:23] Right.

Phillip: [00:10:24] And we have been talking about this for a year. But here's the interesting stats, and I'll just throw a few numbers at you. So 83% of consumers believe that voice technology makes it easier to find products. 89% of consumers say that voice makes searches faster. Retailers say that search, discovery and filtering are voice's top benefits. And more than half of U.S. teens already use voice search daily. And then Gartner is projecting that by the end of 2017, 5% of consumer facing websites will have some sort of an audio interface. And I would argue that 100% of websites that have a search box have a voice search interface. And you just don't know it, because I don't know how many people I see every single day walking around in downtown or on the train or in a cab are on their phone and they're talking into their phone to search on Google. They're talking into their phone. It's not just personal assistant searches. This is like on regular websites. They're using it to compose text messages for crying out loud.

Brian: [00:11:30] I mean, if you think about it, most keyboards allow for voice input now.

Phillip: [00:11:34] Yeah.

Brian: [00:11:34] And so even when you click into a search box on someone's website, you might be inputting your text via voice, even if it's, you know, a native part of your website.

Phillip: [00:11:48] I would almost argue, or challenge you, if you're a retailer, I want you to go to your top search terms or your long tail of search from two years ago and compare that to today. And I guarantee you that searches are more verbose. They're formatted way more in a natural language standpoint. Because people are speaking into your websites. It's just happening. So go check it out. The data will prove it out.

Brian: [00:12:18] I bet you the stats that we're seeing around voice searches don't even include dot form.

Phillip: [00:12:24] Of course not.

Brian: [00:12:25] Yeah.

Phillip: [00:12:26] Yeah.

Brian: [00:12:26] So it is probably significantly higher. Yeah.

Phillip: [00:12:32] Yeah. Without speculating...

Brian: [00:12:33] Great study by Voysis. Absolutely read it. We'll link it up in the show notes. And I think also, you know, as we continue to develop our... Or actually I shouldn't say develop out. Now that the market is using voice as a regular part of their daily search habits and action habits, we've seen a lot of skills for the Alexis store, not even a store, but the Alexa skills library. I would really hope to see you more from Google, as well. I think there's gonna be a big push towards that, and we should see quite a bit more out of that community as well.

Phillip: [00:13:23] Well, they're doing all the right things. So if you look at it, they probably don't have anywhere near the pool of skills. But I have a Google cloud platform developer account. I've had one for ten years for with AWS and Google's doing the things that Amazon was doing a year and a half ago. They're incentivizing developers to learn. They're giving away credits for them to be able to use the services for free. You know, they're bending a lot more towards AI and toward the use of their neural network and deep learning, but they're doing all the right things. You know, right now, Amazon is focused very intently on trying to get developers ramped up for kids skills. And that in and of itself is really intriguing to me. You know, there's gonna be a lot of hurdles to overcome there, but kid-friendly skills that follow compliance but engage children are a really great way of introducing a next generation to what will be the new normal.

Brian: [00:14:28] Yeah my kids already love Alexa... We've talked about this from beginning like the very first episodes. We're talking about how this is actually how our kids are learning and they are growing up with voice first mindset.

Phillip: [00:14:46] Yeah, my kids actually figured out this week home groups on Alexa, like actual like music groups. So I have a group that's like play it upstairs or play it everywhere. And they figured that out for themselves. Like, how did you guys figure that out and why are we listening to rocking around the Christmas tree at 6:30 in the morning throughout the entire house? That's a whole separate question. Oh, one last thing about voice. Because we do need to keep today's episode short. We do have a lot of exclusive content coming to you. But one other article over on Toaster, There's an article called Giving Brands a Voice that talks a lot about basically the interfaces of the future and basically how to modify your brand or how to envision your brand in a UI-less, in a conversational interface and what the growth of voice first devices could do to your brand. And so. If you have thought to yourself, why should I care? Why should I as a brand care about voice, then that's a great article to check out as well. So we'll link that.

Brian: [00:16:02] This reminds friends that stat we saw in augmented reality about how, I think it was like 37% of retailers are mission critical. Yes, it's really similar.

Phillip: [00:16:10] Yeah, I bet you anything that, you know, 50% stat that we're seeing about 2020 voice is achieved in half the time. 50% of searches in 2020 will be voice. I bet you we actually hit a massive adoption curve.

Brian: [00:16:31] Yeah, I think that's true for a lot of these technologies. Like I think we got really ambitious, like overeager about some technologies and people got kind of scared at making big claims about how quickly they would be adopted.

Phillip: [00:16:45] Sure.

Brian: [00:16:46] And so we start putting numbers out there like, for instance, Microsoft had a goal of achieving 20 billion dollars in revenue from their cloud business by 2020. They're already 94% of the way there.

Phillip: [00:16:58] Sure. It was very conservative estimate. But they also didn't anticipate that Amazon would go purchase Whole Foods and scare off a whole range of people who were investing in Amazon's platform. Also, there's another weird market equilibrium that's happening in that the data centers and the Colo centers that had been basically... What's the word? They've basically been a force in the market. They've been artificially keeping the prices high in the market and they have now market competition that's causing them to lower their costs. Now that all their business is going away from dedicated servers, they have all this additional space and capacity and data centers and they have to get rid of it. They have to utilize it. So what does the market do when you have access? When you have zero demand and have excess supply the price comes down. And so now we're seeing price competitive options for people to build out really, really impressive private clouds for very little money.

Brian: [00:18:09] Yeah.

Phillip: [00:18:09] And so it is bringing equilibrium back to the market to some degree. I'm not surprised at Microsoft's success. I was five episodes ago, but it's definitely, definitely settled on me now. Can we keep going? Because I'm super excited about this next piece.

Brian: [00:18:25] Yeah, me too. This is probably the most exciting thing I think I've ever seen.

Phillip: [00:18:32] {laughter} Ok well now you have to introduce it since you're so excited.

Brian: [00:18:35] No, no, no. I was being a little hyperbolic there, but, you know, it is really exciting. So Amazon just announced Amazon's Sumarian, which is as they put it, the fastest and easiest way to create VR, AR, and 3D experiences.

Phillip: [00:18:53] Yep. And from their actual FAQ site, it says it lets you create and run virtual reality and augmented reality and even 3D applications quickly and easily without requiring any specialized programing or 3D graphics expertise. With Sumerian, you can build a highly immersive and interactive scenes that run on popular hardware such as Oculus Rift, HTC Vive and IOS mobile devices and AR Core Android support is coming soon. OK, so then they go into here's all the things that you could do. Here's what's insane. Did they just win? I mean, the fact that you could...

Brian: [00:19:40] {laughter} Did they just win?

Phillip: [00:19:42] They just won.

Brian: [00:19:43] They just won.

Phillip: [00:19:45] The fact that they've built a, and I know that this is probably not going to be... This particular product is not going to change the entire market. It's like saying that Unity is the only way to make video games anymore. It doesn't really work that way. It's good for some things and it's a great way, especially it's a great means of introducing a new market that's not familiar with the technology into creating experiences in that technology. But the fact that the tenant... The very first sentence and the very first bullet point is that no AR and VR expertise are needed. They are aiming specifically to educate a marketplace on how to create these environments.

Brian: [00:20:34] Yep, exactly.

Phillip: [00:20:35] And they've created all the things to do it.

Brian: [00:20:39] You can import, upload assets, you can move them around and like create different rooms and situations and landscapes and backgrounds and whole areas that you can move between and I think... So Philip, I'm going to say it's on the show...

Phillip: [00:21:02] Ok.

Brian: [00:21:02] And then... I haven't talked to you about this beforehand. But let's take this, and once we get into the preview, or whenever we get into this, whatever it is Beta preview. And let's build our little headquarters for ourselves.

Phillip: [00:21:22] Yeah. So, Brian, you've you. I don't think you've said this on the show before, but you've been on about, you know, having a virtual workspace for the two of us for some time.

Brian: [00:21:32] Yep. So this is the way we're gonna do it. So as soon as we get into this, I'm gonna build us out one. And guess what? I can build it out. I'm not a developer, but I can totally do it on my own.

Phillip: [00:21:45] I mean, you're not a video editor, and I've seen what you can do with some with some video tools.

Brian: [00:21:50] Oh get ready for a little video from FC coming up here.

Phillip: [00:21:54] Very, very cool stuff. So Sumerian is part of the free tier for Amazon, so you get started for free. And they basically are charging by the storage size and the number of views. So they are both these storage mechanism, the creation platform and the content serving platform. So there are all three of those. So that's what Sumerian is. And this got me thinking it's still going to be difficult to create experiences in AR and VR as a retailer if you don't have accurate models of the products you're selling.

Brian: [00:22:36] Correct.

Phillip: [00:22:36] So I think that, while you might be able to create spaces for those products to live in a virtual space, the hard part is still there. The hardest part of AR, the hardest part is just getting your models in there. Like the amount of data that you have to maintain. If you thought taking pictures of real world products is hard, you know, and just doing like product photography and on model shots. This is next level difficult.

Brian: [00:23:11] A lot of brands have to have those assets now. So if you're a retailer reseller, you should check...

Phillip: [00:23:19] Large brands.

Brian: [00:23:19] Yeah. Check with your brands to see if they have those for you. And if you are a brand and you don't have this content yet, get ready. It's something you're going to need to have not long from now.

Phillip: [00:23:29] You may not actually need to create 3D assets in a lot of cases. A really good example of not needing that would be Amazon actually revved their app not too long ago, and I didn't realize that this existed. But in the Amazon shopping app you can use augmented reality with a dollar bill, a U.S. dollar bill as registration for you to position a television in your room. So if I'm buying a TV on, I can use AR in their camera app on the Amazon dot com native app and look through my phone as if it's a window into, its AR experience, I'm seeing how big that television is gonna look where I'm trying to put it.

Brian: [00:24:13] Yeah.

Phillip: [00:24:13] I don't know how long it's been around, but they don't 3D model that television. It is a picture of the television that is sized appropriately and cropped. You know, not everything you sell is gonna be a perfect rectangle.

Brian: [00:24:26] You don't need to be. You don't necessarily need to be for most things. There's a lot of things... I mean, there are a lot of things that you do need directional dimensions and maybe even weight, you know, as we get different physics engines in there. But I think, you know, for a table, you're going to just need like length and width, basically. I don't even need to like a 3D model, although would be nice.

Phillip: [00:24:57] If you want to see it, then something that actually has real depth and height. Then, you know, maybe you want to have a crude model, but maybe if it's just dimensions and there's placeholders like a box, maybe that's good enough. I don't know. Maybe that's a different type of experience. But the point that I'm making with Sumerian is that it is the first step to get there. And if you combine this somehow with Google's 3D asset project called Poly, not to be confused with... Like Poly as in Polygon, not Polly as in parrot, which is Amazon's speech recognition and deep learning.

Brian: [00:25:33] That's not confusing.

Phillip: [00:25:34] That's a completely separate thing. If you combine these two, then really it is VR and AR for the masses.

Brian: [00:27:31] Also, the thing I want to point out earlier is this is just the start. I mean, I think they have this really cool thing called Host, and you can create a digital character who will narrate a scene that you want to create.

Phillip: [00:27:43] Oh yeah, yeah, yeah, yeah.

Brian: [00:27:45] Man, you can choose its appearance and define its speech and behavior. This is a very clear use case for their acquisition of body labs, which will allow people to essentially insert their exact selves into this application or, you know, hire somebody to model for them or whatever it is or acquire their digital body rights.

Phillip: [00:28:19] Their likeness of some kind.

Brian: [00:28:20] Their likeness. Exactly. So, there's a lot ahead with this. And I think there'll be more, you know, personal, personalized interactions and a ways to include our actual selves in this rather than to have some made up character that we use for our hosts.

Phillip: [00:28:43] So it's interesting. I think it's obviously it's still in preview. It's not quite released yet. It's a really novel concept. Of course, we've seen a lot of things in the past, you know, that get announced and then sunset. But Amazon has a really great way of bringing stuff to life. So I trust it. Anyway. I did want to talk for one other second before we jumped to Danny, which we're gonna have to do here in a sec. But I did want to touch on one other thing, which is what I just talked about, which is the hardest part of augmented reality is really the 3D asset generation. And I noticed very recently that, you know, Google announced that the Google Poly program, which is a 3D asset generation program, where they've already modeled a bunch of things in the world and provided them for free as an open-source initiative. But it follows very closely, if you look at Poly as the, you know, broad market provider of assets, if you look at that as the end point and you work backwards, you can see Google in this space for decades. So it started with Poly, then earlier this year there was Google Blocks, which is the ability to create 3D models with a bunch of sort of tools. You can create really primitive stuff, but you actually can create it and submit it to a marketplace with a Vive or an Oculus, which is really interesting. And then prior to that Google was in SketchUp, which is that product that the 3D modeling product that a lot of people still use for a lot of things. They sold that off in 2012. But this has been part, the actual 3D asset generation, has been part of Google's masterplan for a while, and it follows very similarly to Google's voice plan. So in my mind as I'm thinking out loud about this, we today have Google Voice Search and Google Home devices. But before that, we had Google Voice, which transcribed text messages and voicemails for us. Right? And before that, they were building all of that language learning on top of GOOG-411.

Brian: [00:31:07] Right.

Phillip: [00:31:07] And so they have these very long plans to tget into markets and successively build on on prior success and they are working towards an end is the point that I'm making. So if you look at that, it blows my mind because this is where we are today. What else could Google possibly be working on right now that are small projects that could be disruptive?

Brian: [00:31:32] Google Lens. THere's been a huge kind of lead up to that.

Phillip: [00:31:37] What is Google Lens?

Brian: [00:31:39] It's like Bixby vision.

Phillip: [00:31:42] Oh, I see. Machine vision.

Brian: [00:31:44] Yeah, exactly. Machine vision, recognition of the world, and of objects and such. Yeah, I think that there's been a bit of a lead up to that as well. Like Google's been working on machine vision for a while. We should go back and see like what the exact path was. But I agree with you. I think Google's got some pretty distinct visions for how things are going to work and has thought through the implications of certain technologies further out than a lot of us have. And so that really helps to guide the product roadmap for a lot of what they're doing. And it's cool to be able to look back and see how that's manifested itself, kind of through the breadcrumbs, if you will, of their technology revisions and acquisitions. I think you can sort of see that with Amazon, too, although I feel like Amazon comes out with stuff that's like a little bit more... Or a little less iterative and progressive and like see something cool and just decides to do it.

Phillip: [00:32:49] Yeah, that's probably true. And they do a million things.

Brian: [00:32:52] They do a million things. They do everything.

Phillip: [00:32:54] Okay. Black Friday. Here we go.

Brian: [00:32:55] Ok now we can get to Black Friday. We promised you after the break that we'd talk about Black Friday. Here we are. So let's chat about this for a second. I think one of the interesting things that happened this quote/unquote "Black Friday," but let's not just call it Black Friday. Black Friday is just one of the days now. And that's the interesting part. Thanksgiving Day sales were up by 18%, which is significant.

Phillip: [00:33:25] I mean, to say the least.

Brian: [00:33:26] Yes, I think what are the reason why they're up... And I've watched Black Friday for years. I've been kind of a nerd about it. But the reason it's up is because they actually took what usually starts a little bit later, some of their sales that start later, like they're high end doorbuster stuff, they usually start those that like later in the afternoon or late in the evening on Thursday, and I think they kicked them off in the morning this year. Some of the best deals.

Phillip: [00:34:04] Why do you think that is? And I'm going to speculate a little bit, because my... I see so many retailers going the opposite direction. Like REI decided, "We're not even opening. Not only are we not opening on Thursday, but like we're not doing Black Friday either. We're completely anti that. Go outside." {laughter} That's what they said, you know, and that's my take is that, you know, there was a big pushback against businesses that opened on Thursday, so do you think that this is them pushing sales earlier in the day or even stretching them out to the prior weekend is a response to that pushback?

Brian: [00:34:53] No, I don't think it's a response. I think it's just hard cold money, like cash. Despite pushback from companies like REI, which, by the way, I love. It attracts me through their brand. These businesses that are are looking to capitalize on the Black Friday madness are going to find every possible angle they can to make more sales, and so if the numbers say start them earlier on Thursday, it doesn't matter if you even open your store because everyone shops on their phone now anyway.

Phillip: [00:35:31] True. It's true. One thing I thought was interesting about that is the 1% number, we don't see a breakdown of how much of that 18% was mobile. It's probably all of it.

Brian: [00:35:43] A lot of it.

Phillip: [00:35:44] Yeah. The Digital Commerce 360 blog had a figure that said early numbers pointing to more than 46% of revenue being driven from mobile sales.

Brian: [00:35:58] That is crazy. I wonder how much...

Phillip: [00:36:01] 61% of traffic.

Brian: [00:36:01] Yeah.

Phillip: [00:36:02] Holy cow.

Brian: [00:36:03] Yeah. Yeah, that's crazy. I wonder how much of that was on the Amazon app versus other apps.

Phillip: [00:36:09] Yeah, I don't know about that. So this is coming... The data is coming. Admittedly, this is early data, but it's coming from Adobe Analytics. And so I don't know how much insight that Adobe would even have into Amazon's platform.

Brian: [00:36:24] Probably very little.

Phillip: [00:36:26] So my gut tells me, so there're a bunch of numbers here. But the first 10 hours of Black Friday, there were 640 million dollars spent in online purchases. By 10 am web spending is 18% higher than last year. And a good portion of that, it says 61% of visits to retail sites were mobile. And of that, 46% of revenue came from mobile. So where's this gap that we keep hearing about in eCommerce that people don't want to check out on mobile? Has that just been solved? It certainly isn't all happening on Apple Pay. I know that for sure.

Brian: [00:37:05] Yeah, yeah, I think so. I think our phones, like our flagship phones, have gotten incrementally better over the past few years. I mean, the difference between an S6 and an S8 is significant, but it's not like that significant. Right? I'd say it's a much more beautiful phone, and it's got cooler features. But from a shopping perspective, it's actually not all that different.

Phillip: [00:37:36] I mean, unless PayPal comes out, says that we were solely responsible for it.

Brian: [00:37:42] Here's my point. I think that it's taken time for some of those phones to filter their way down because pre a couple years ago, I think a lot of the population still had phones that presented pretty bad shopping experiences. I think, so I guess what I'm driving at is, this is the first year I feel like the difference between like an S6 and an S8 is not that big. And so, you know, S6s are affordable for most Americans at this point.

Phillip: [00:38:13] So even if you had a two year old flagship phone, you can get plenty done on that phone, including a lot of shopping.

Brian: [00:38:19] Right. Exactly.

Phillip: [00:38:19] And you don't need fancy experiences. And you certainly don't need native apps to make it happen anymore. I did have a couple experiences with, not on Black Friday/Cyber Monday, but I've told stories in the past about, you know, Amazon Pay, PayPal One Touch. Both of those experiences, you know, have definitely made it easier. But again, those are third party payments providers. You know, even if you admittedly go to Shopify, go to any Shopify site, and while they might have Apple Pay, most of them aren't really... What you're getting in the Shopify experiences, well maybe you've saved your credit card from shopping with a Shopify site prior, but they're not offering the... It's not the same experience. You're still going through a checkout is the point that I'm making.

Brian: [00:39:09] Ok. OK.

Phillip: [00:39:10] Consumer training. That's what I'm coming back to.

Brian: [00:39:10] Think about this. Because I think we did kind of call it out earlier. I'm going to re-emphasize this. If mobile shopping was 46% of revenue and 55% of Black Friday revenue was from Amazon, I'm willing to bet that a good chunk of that mobile shopping was done via that Amazon app. And it's honestly that Amazon site is super hard to use on mobile. I do it sometimes. I don't know why. Just, you know, I'm on my Chrome browser, so I go to Amazon, but the the experience on the app is significantly better on mobile. And I'm going to guess that most people are using Amazon app to purchase on their mobile phone.

Phillip: [00:39:54] Ok. So what does this all lead back to? So two things that are really important to take away here. The first is this whole idea that mobile doesn't convert is definitely being bucked.

Brian: [00:40:13] Yes.

Phillip: [00:40:14] And it doesn't have to just do with, you know, all of us know that your shopper isn't always just on a larger and larger and larger device. So it doesn't have to just be that small device they don't want to pay on or they don't want to actually convert or check out on. It seems like many people are motivated to do it. And maybe it is the sale that drives up, you know, their conversion, their propensity to convert. But I see it happening sooner and sooner and sooner in the week. It's not just Thanksgiving or Black Friday. It's all of November. If you look across the brands that we manage professionally, Brian and I, you take a look. And most of November is up. Traffic's up. Year over year conversions are up. Year over year mobile's converting higher all year long. It's not just Black Friday.

Brian: [00:41:10] I think the week we call out Deborah Weinswig on our bonus episode leading up to Episode 52 and she said in her prep for Black Friday perhaps Black Friday, while it does matter, it's still significant, it's dispersing out among the whole holiday season and really throughout the year.

Phillip: [00:41:40] Sure.

Brian: [00:41:40] In terms of the types of offers that retailers are making to their customers. And I can only imagine it's creating lower margin business for a lot of these retailers.

Phillip: [00:41:53] Oh it has to, right?

Brian: [00:41:56] The rise of passive shopping gives way to the types of things that we're seeing now. Although I also want to point out that the types of behaviors we're seeing from retailers to be more competitive, I think also has given rise to passive shopping because it used to be that you could go shopping on Black Friday and you pretty much knew you were going to get the craziest deal that you could think of on something.

Phillip: [00:42:24] It's true.

Brian: [00:42:24] That's why people would go line up for days or whatever it was, you know, at least overnight and camp out because it was worth it. But now, you know, you look at these deals and they're great deals, they're good prices. But it's a lot more spread out. It's hard to know when you're gonna get the best deal. And a lot of people are just waiting for Cyber Monday because they don't want to get stuck in a situation where they're paying a higher price and sat in line overnight to pay that price or got up really early the day after Thanksgiving to pay that price when all they had to do is sit around and wait and and, you know, pick it up on Cyber Monday. That said, foot traffic, brick and mortar sales were only down by 1.5%. You know, last year they were flat. I have observed something recently and I used to and I sometimes still do go out into the mayhem of Black Friday and go shopping. And I did it back in its heyday. And people whenever I said that I did that, people would say, "Oh, wow, you're crazy." And what I realized was that actually, there's a certain kind of person that loves that.

Phillip: [00:43:50] Sure. Oh yeah.

Brian: [00:43:50] So occassionally I'd bump into someone who'd they'd asked me if I went shopping on Black Friday and I'd be like, "Yeah," they'd be like, "Oh, yeah, me too. I do it every year. It's really fun to me."

Phillip: [00:44:00] You're just a masochist. {laughter}  

Brian: [00:44:02] Right. Exactly. That's what it comes down to. No. My point is that there is a certain amount of like excitement and crowd and "We're gonna go shopping the day after Thanksgiving and get out there and be a part of something that is very specific to America." I will say this, if our god is consumerism,  the malls or certainly our temples.

Phillip: [00:44:36] {laughter}

Brian: [00:44:36] It's interesting. Our religion is changing where our temple is now the Internet.

Phillip: [00:44:43] Oh, gosh. Is that not true? Oh, my word. That is so true. Gosh, that might be the last word.

Brian: [00:44:51] There's more to say about this, but... Oh, my gosh. Yes. That may be the last word.

Phillip: [00:44:56] Yeah, I think that's what it comes down to, is we're seeing more of this trend. But I cringe at what voice is gonna do to this trend, because everything that we know is slowly changing. And we're moving away from those aggregate portals for things like search. And we're starting to become more brand loyalists when it comes to searching for goods and services. So instead of going to Google or using a Google assistant, we're going straight to Amazon for products. And so this is where the we talked about early in the year and the Viant study that we did with Richard Kestenbaum, that episode, if you'd take a look back at it, it talked about how, you know, CPG and consumers are able to be persuaded away from brand loyalty and CPG with what we called passive commerce. But I'm seeing it, you know, an opportunity there in voice because you don't have the visual brand recognition, you don't have the pretty font and the package. So all of this is subject to change. I mean, nothing is fixed. But this upward trajectory, I sense is going to continue in the short term, but is ripe for disruption.

Brian: [00:46:19] I agree.

Phillip: [00:46:20] OK. Take us home.

Brian: [00:46:22] Thanks for listening to Future Commerce. As always, we want you to give us your feedback about today's show, so please leave us some feedback in our Disqus comments box on our site. Or if you want to hit us up on LinkedIn or Twitter or wherever, feel free to do so. We love your feedback. If you're subscribed on Apple podcasts, leave us a five star review. You can also subscribe to listen to Future Commerce on Apple podcast, Stitcher, Google Play or wherever you get your podcasts or listen right from your Amazon Echo device with the phrase, "Alexa play Future Commerce podcast." And with that I will say retail tech is moving fast...

Phillip: [00:46:59] But we're moving faster.

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