Episode 67
May 10, 2018

Secondhand is the New New

"Secondhand Commerce" is changing the way that we purchase luxury goods - from watches and handbags to sneakers - secondary markets are finding life after the initial purchase. Plus: Macy's acquires Story in a move to bring experiential retail to big the department store. Special thanks to Ryan MacInnis of Voysis for joining us on this episode of Future Commerce! Apologies for the audio quality in this episode as we encountered a technical issue. Should be fixed going forward! Thanks for listening!

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"Secondhand Commerce" is changing the way that we purchase luxury goods - from watches and handbags to sneakers - secondary markets are finding life after the initial purchase. Plus: Macy's acquires Story in a move to bring experiential retail to the big department store. Special thanks to Ryan MacInnis of Voysis for joining us on this episode of Future Commerce!

Apologies for the audio quality in this episode as we encountered a technical issue. Should be fixed going forward! Thanks for listening!

Main Takeaways:

  • The advent of Voice, AR, and VR is allowing smaller retailers to compete with Amazon and Walmart.
  • Phillip is a hype-beast-in-training.
  • Second-hand and limited-edition may be calls-to-action for consumers.
  • Is Amazon at war with everyone?
  • Mobile-based-commerce may soon overtake desktop.

Ryan (or Brian) And The Rise of Voice in Commerce:

  • Ryan McIness of Voysis is standing in for Brian, and he seems pretty excited about it.
  • Ryan gives some insight into Voysis: "Voysis is a B2B solution that mimics the Alexa experience".
  • "If you have a brand and you want to voice-enable your mobile app, then you come to us, and we make sure its based off your data and your product catalog, the intelligence smart stuff that's related to your brand."
  • Apparently, everyone's going to Vegas to talk about commerce.
  • Voysis puts out an infographic that basically breaks the internet: The shock value may have made this go viral, in it Voysis claims that by 2020 75% of all households will have a voice-enabled device.
  • Phillip points out that a lot of people are really starting to see voice as part of their brands.
  • Also: "It makes you question how your brand voice translates to other mediums and how a brand goes beyond written word or logo."
  • Ryan says that the advent of Voice, as well as AR and VR, has allowed brands to actually compete with Amazon and Walmart.
  • But Amazon does have Alexa.

Old is The New Brand-New: Second-Hand Commerce Edition:

Limited Edition Items Bring All The Consumers to The Yard:

Is Walmart Trying to Challenge Amazon in India?

Amazon Sends Out a Siren's Call to Paypal Users:

Can The Rise of Mobile-Based-Commerce Change Everything?

Phillip: [00:01:12] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Ryan: [00:01:16] And I'm Ryan.

Phillip: [00:01:18] And this is Ryan, not Brian. Ryan MacInnis from Voysis. How are you doing, man?

Ryan: [00:01:23] I'm good, man. How are you?

Phillip: [00:01:24] Pretty good. And glad that you can join us. Bryan, as you all know, is knee deep in traveling the globe. He is in Italy right now for his anniversary. So congratulations to he and his wife. I certainly don't want to pull him away from his Italian vacation and the vistas he's taking in there. He's probably in Venice. There is retail to talk about. There's commerce to talk about. And we'll be darned if we let a week go by without having that happen. So Ryan. Ryan MacInnis. You're among the few and the proud of our alumni in that you are a reappearing guest now on the show. So I don't know if you're as inspired or as honored as you should be, {laughter} but we're glad to have you.

Ryan: [00:02:04] Yeah, I think humbled is the right word. And I also extremely privileged that I share a similar sounding name to Brian, which I've been called for most of my life. It's almost as if this is a seamless transition. And people, regardless, won't really know who's speaking unless they really listen, because it just sounds like "...ian," when you say our names.

Phillip: [00:02:24] If you get really excited and start screaming in the microphone, nobody'll know anything has even changed. I mean, Brian is very excited about commerce, as well he should be. And based on the MPS, you know, whatever comes back from this episode, I don't know, maybe Brian just stays in Venice. That'd be fine. Well, anyway, we've got a lot of interesting stuff coming down the pike here. We're gonna get into a whole lot of that here today. But before we do, we want you never to miss one episode of Future Commerce. The best way to do that is to subscribe. So make sure you head over to wherever you get podcasts, Stitcher or on Spotify or also on Apple Podcasts, Google Play... Wherever podcasts are consumed, we're there. And then also you can listen on any smart speaker device with the phrase "Play Future Commerce podcast." And yeah. OK. Oh my goodness. We have... It's been a little while. I did want to throw a few things out at the top. You were at Shoptalk. That was the last place I saw you. How was that show for you guys?

Ryan: [00:03:22] It was really good. Yeah, that was the first place we physically met, which I feel like is how a lot of conversations go when you actually get to meet someone you're like, "I've known you for X amount of time, and now to actually see your face, you're like taller than I expected." Your voice definitely matches your personality. Your glasses are a lot cooler than mine. Those kinds of conversations... Shoptalk was really cool. I liked it a lot. Out of all the conferences that we've been at and have kind of been involved with, that was probably the one that I think we saw, you know, the best turn out for.

Phillip: [00:03:55] For those who are new to the show or don't remember, just give me a quick snapshot of what Voysis is and does and what you do there.

Ryan: [00:04:02] So we're basically in the B2B solution that kind of mirrors the Alexa experience. So if you're a brand and you want a voice enable your website or mobile app, you come to us, and we make sure that it's based off of your data, your product catalog, and all the intelligent, smart stuff that's related to your brand, so that people aren't asking for the weather, they're actually asking for things that are relevant to what makes you money and keep your customers happy.

Phillip: [00:04:27] Shoptalk's an interesting show because there is certainly a wealth of brands there. So on the B2B side, you definitely connect with them, but do you feel like you connect more with the marketing sort of arm of the larger B2B business that has a traditional wholesale sort of avenue or more on the IT side or both? Who are you selling to at Voysis?

Ryan: [00:04:53] Yeah. So it's mainly the people that run brand or digital. So a lot of technologies today will actually go from the bottom up, and they'll be developer based tools or open APIs that we just kind of plug around with where we're trying to build a top down model where we sell the vision and the dream to somebody who's like a Chief Digital Officer taking charge of the future of that brand. And we then assess how this sort of works with their consumers and interacts with the world around them. And then from there they say, OK, can we put this in our roadmap? Is this feasible from an implantation standpoint? That's kind of who we are selling to.

Phillip: [00:05:29] And that makes a lot of sense because I feel like that's like the persona of someone who attends Shoptalk. It's someone who runs brand or digital, who's looking specifically to help build out the brand roadmap. And they go to Shoptalk to get, you know, customer stories of other people who are doing this and doing it well. That's very interesting. Actually speaking of Shoptalk, there is a new conference from the folks at Shoptalk, called Groceryshop. They just announced this, and they've got a call for speakers' open. It's groceryshop.com. I love that they call it Groceryshop, which it just rolls off the tongue. It will be back at the ARIA later this year, October 20 to 31 in Las Vegas. So I thought they were done with the ARIA. They did it there a year or two. They did Shoptalk there a year or two. It sounds like they're back in the ARIA for a Groceryshop conference. You guys ever engage with CPG brands that are in grocery?

Ryan: [00:06:30] Yeah, no, totally. I think that Amazon Whole Foods acquisition has definitely gotten a lot of people's attention to the actual ease of ordering and then obviously the distribution stuff. I think Instacart released some interesting numbers around how many businesses are working with them to sell their groceries because of the fact that they realize that the Amazon Whole Foods relationship is so strong. And that's where you obviously see like Google Express and obviously Target acquiring Shipt. And that's kind of been a race to say, how do we make finding foods really easy, but how do we get it to them in a way that they're used to, i.e. Prime, tomorrow, with their food? So we definitely have seen it a lot from opening my fridge and seeing what kinds of things I'm running out of... And I will just say, interestingly enough, this is like the third conference in the next six months that's going to be in Vegas. Even shop.org moved their conference to Vegas. I just feel that Vegas has become the focal point for everyone who's in the business of making money to then be in a place where most people lose it.

Phillip: [00:07:40] {laughter} Yeah. This is a like the plight of my existence. I was in Vegas five times for conferences in 2017. I've been there three times already in 2018. I'm at least going to hit five again this year with Groceryshop and shop.org. We were just there for Shoptalk. Magento Imagine. And there's another one coming up pretty soon which escapes me, but it's all starting to blend together, but at least they're all at different resorts or else I'd be in real trouble. It's really interesting. So from a sort of brand perspective, I think the last time we spoke you said you're bringing on some folks and you had some interesting sort of case studies that were coming about. Anything new and exciting you want to talk about on that side of things?

Ryan: [00:08:26] Yeah. So we hope to be able to launch some customers in next month or two. We did publish an infographic yesterday that kind of went viral. I don't know what the standards on regarding the virality of these things. But we broke our own Internet, if that gives you a sense of the word. And so basically we do we aggregated a bunch of the most popular...  And that can be related to retail and commerce, but just kind of consumer behavior around the space and how far we've come. We published that yesterday. And it's been amazing. People are reaching out asking if they can you get our take on the fashion industry or your grocery, for example? People are asking if they can be involved in an advisory capacity because what we're doing is really cool. It's definitely put a lot more eyeballs on us. It's interesting because I feel like everybody in the voice space now before they kind of dive in and do stuff is looking for as much information about it as possible. So our approach now is saying, of course, we want a launch a customer, but while we're waiting for that proposal and the ability to do that, let's put some stuff out that is very referenceable and people will find helpful about the space. And people don't realize, you know, it's the fastest technology to reach 50% adoption in the US ever kind of thing. And so it's cool to kind of see that how it stacks up...

Phillip: [00:09:50] That's killer. What's really interesting is, is how people are starting to envision voice as part of their brand and their sort of understanding that it's the kind of thing that needs... It makes you sort of question... Or at least what I perceive, it makes you question sort of how your voice or how your brand voice translates into other mediums that's not just written word or words on a page or just a logo... It's something more. And I feel like we're at this really great turning point for brands that are realizing this has to be part of a larger strategy to to give "voice," with air quotes, "voice" to their brand in a new way. And it makes them, you know, makes them take a step back and think more broadly about what the next four or five years are going to look like. And I think that's good in general for everybody, especially the consumer. We see more differentiation. I think we're going to see a lot more differentiation rather than a lot of the me-toos, which I feel like a lot of brands are engaging in these days.

Ryan: [00:10:58] Yeah.

Phillip: [00:11:00] Very, very interesting stuff.

Ryan: [00:11:02] Just quickly on that, I think that the advent of voice and AR and VR is the best way that brands can have the ability interact with and leverage when it comes to competing against Amazon. Because of the fact that Amazon, of course, is pretty big in voice right now. But AR and VR... I don't see anything about what they're doing with that. So a lot of people experiment with, you know, picking out paint for a wall with Sherman Williams... And you're seeing that as well with Lowe's and Home Depot has added voice and some AR experience. It's going to be super interesting now that Oculus has come out with that $199 price tag of people being able to use that from a consumer standpoint. It's gonna be really interesting to see how these emerging technologies maybe blend together in a world where your digital strategy is, "We have an AR experience also," or "We have a VR experience that's powered by voice, as well."

Phillip: [00:12:07] Yeah, that's actually really astute. That's something we hadn't actually covered on the show just yet. The Oculus Go finally shipped. So that's cool. Big write up on The Verge, actually, you know, covering a bunch of stuff from F-8, which I think I'm gonna be speaking with Brian about pretty soon. We're gonna get into a little bit. But Vergecast had a really great in-depth sort of longform Oculus Go review. I'd push you over there for the in-depth on that, but I think it's interesting. Have you had a chance to play with the Go at all?

Ryan: [00:12:41] I know a bunch of the guys on our teams have played a little bit with Oculus stuff in the past. I have to figure out what state of mind I need to be in. Or sitting or standing to experience VR because as somebody who gets motion sickness getting out of a car today...

Phillip: [00:12:56] Oh ok.

Ryan: [00:12:56] I need to find a happy balance between doing something really cool and realizing that, you know, playing a running game in which I need to kind of physically be alright, as well, is probably not where I need to be. But I definitely think you like being courtside at the Celtics game with VR is way more of a powerful experience than watching it on however big TV that you have in your living room.

Phillip: [00:13:18] Oh for sure, for sure. Especially when there're details that you could probably get in VR that you wouldn't get elsewhere. That sort of an experience. You're kind of a seeker head, right?

Ryan: [00:13:29] Yeah.

Phillip: [00:13:30] Yeah. So actually that ties in... It's almost like I know how to podcast. That's going gonna be a great segue. And there was this great story on L2 that actually popped up a few days ago. Simon Birkenhead writing over on the L2 blog. Second hand is the new new. They have this really great overview of the resale market and how resale and consignment and that sort of thing is definitely driving a lot of digital commerce. So I thought I'd pick your brain a little bit about sort of where your head is at, and where you think commerce and second hand, second hand commerce and consignment are sort of heading. For those who don't have a context outside of eBay, and those sorts of marketplace channels, second hand purchase of things like luxury goods, hard to find, limited quantity, limited release items, sneakers come to mind... That is a massive market. In fact, according to Drew Fassett in this blog over an L2, that secondary market took a dramatic turn between Q1 and Q4 2017. It had an astonishing rise according to them and things like brands like Tiffany. I've seen tremendous success and actually a lot of luxury brands are starting to dip into doing authorized resale themselves. Like Rolex and others that are actually helping authenticate and drive some success for larger marketplaces. But do you ever buy secondhand sneakers? Are you in that market?

Ryan: [00:15:19] Yeah so, I don't know if you've ever heard of the app called Goat. So basically I'm a big sneaker head. But obviously I can only buy as much as my small Boston apartment would allow me to. My better half makes sure of that. It's kind of like beers in the fridge. As long as you're able to maintain a certain amount, of course you can buy a little bit more. But once you reach a point where you will have more shoes than you wear, like you gotta cut that off. So right now, I've only used Goat a handful of times to go to buy shoes. But I will tell you that their business model is fantastic. They just merged with Flight Club to be able to have an in-store presence, which is one of the biggest sneaker stores in the country. I think it's really cool what they're doing. Because what they're doing is they're pairing the people who go out there and buy shoes at wholesale value with people that are willing to spend wholesale or secondhand prices for them. It's not like you're going to buy shoes that are ten thousand dollars. But if you want a pair of Nikes that just came out, and they are $200 somewhere, and the same shoes are on Goat for $75... It's kind of like sports equipment. But at the same time, I feel that everybody has kind of moved away from this mindset of I have to have it brand new because I know that inherently it's going to get dirty. I'm going to scuff them. And now what's interesting is that wearability is a very attractive thing in the sneaker community, being like certain shoes look better when they're broken in. And so the world of not creasing them or scuffing them to look good only makes sense if you live in a world without precipitation. Like in Boston, people don't walk around and say, "My shoes aren't creased. There's no scuffs," because I just walked in a puddle on the way over here today. So that second hand market, even companies like Offer Up. I was just at Collision and the Offer Up CEO was on stage talking about basically beating Craigslist to the punch of offering something super local and personalized for buyers and sellers interact and sell what they have in their house. So I think right now, we're in a time where secondhand doesn't have as sour of taste in its mouth as it used to. Because we're like, "Oh, that's somebody else's stuff." Now, it's like, "I don't want to buy it brand new because of the depreciation of it, but I also want to experience a product. I'm OK giving up the fact that I'm not a first buyer of it or I'm not the one who gets open the package myself."

Phillip: [00:17:44] So that's interesting. So yeah, actually I'd love to get into a little bit about, you know, what Collision was like. I'd like to hear a little bit more about that. I wasn't at that conference. I found the Goat app. So I'm a hype beast in training. I'm a baby hype beast. I don't know. I don't know anything about the sneaker community. I got into sneakers accidentally in that I wanted to buy a bunch of orange shoes for this conference that I go to. So I go to Magenta Imagine. I was the Master of Ceremonies last year. I wanted to buy a bunch of orange shoes. And I was like, you know, I've been sort of prepping for that. So I got some really cool shoes that I was like really jazzed about it. It's neither here nor there. But then I saw these... So there're these LeBron 15s that sort of like the waffle looking ones that have the orange box. They were in limited release, and they're really hard to find. I was checking them out on eBay. And that's how I found the Goat app. And I realized, you know, just kind of getting into that world... It's a culture and a type of retail that defies all logic in what we usually consider to be best practice or good prescriptive advice in digital commerce. So if you're a retailer, you're like always trying to streamline the path to conversion. So especially when we're talking about voice, like one intent driven, you know, voice command can basically tell someone I went to purchase that, express an intent, and boom it's done. And that's awesome. Unless you have a limited quantity of a product and you have, you know, bots that are trying to purchase that thing in mass and sell it out so they can sell it on a secondary market. And then you want to authenticate the purchaser and you want to know that that person's a real person. And then you have all sorts of business rules and order management that kind of follow that up. You actually want to make it more difficult to purchase. This is really what it comes down to. And you really want to sell it through to your most loyal fans who covet this and they want to keep it in and hype it themselves. So it's an interesting thing. Like there's so many brands that have apps that only engage in commerce on those apps. It defies all logic and what we think the world is moving towards in general broad e-commerce. And I think that that's fascinating. So somebody in the space and I have a mind, my mindset is around digital commerce... The fact that all the things that I think is true that are these truisms for e-commerce are being completely defied by a passionate group of people and the brands that are connecting to them. And they're basically causing me to question, you know, what I think a consumer, or the pain that a consumer will go through and put up with in order to acquire a product that they love. Anyway... I find that fascinating. I'm definitely want to learn more. And that's part of why this blog caught my mind, or caught my eye. I think we're going to see a lot more of this, especially as brands get better about acquiring customers and making their customers passionate about their products.

Ryan: [00:21:07] Yeah. I also think it depends on what kinds of products you're talking about, like even second hand watches for men is an industry that's booming right now because everybody realizes that the days of going to buy a ten thousand plus dollar Rolex is over. But maybe you want one that is from the 60s that reminds you of your grandfather that he used to wear. And you are able to get a lot of verified secondhand watch apps that are like, "We have the 60s Rolex that has the same everything on the back end, and we just kind of replaced the glass in the front." And it's like $2000. And people are willing to pay that because they feel like they're not getting the depreciated value of the ten thousand dollar one. But there's that personal connection and there's some sort of story behind it, which is how I feel about sneakers, too. I just recently became a noisebleed season ticketholder of the Celtics for next season. I definitely want to be able to buy a pair of green and black Jordans, so I could wear them to the games. And obviously that's for my affinity of the team, for the sport.

Phillip: [00:22:11] Wow. Yeah.

Ryan: [00:22:11] The personality of you know what your shoes say about you as a person has become huge. And then obviously pop culture has a ton to do with it. Where obviously when DJ Khaled partnered with Benjamin Kickz, who's the kind of a plug of sneaker shopping with celebrities, he goes and buys the shoes and resells them to the celebrities. When that became more publicized, that's when you started to see people, you know, going and waiting in line for the shoes and reselling them and try to make a living off of it. And it's almost like entrepreneurship in a reseller world. People making a living or a business off of someone else's frugality on a high priced or highly sought after item, which is interesting.

Phillip: [00:22:53] And it's funny, too, how often those people actually move into sort of the social influencer space, too. I mean, I'm not super clued in, but people like Casey Neistat, for me, are the ones who actually have made me aware of... It's not a subculture. I wouldn't say it's a subculture, but the sneaker subculture. I'm not a skateboarder. I never have been. I don't generally follow people on YouTube. But there are certain people whose personalities poke through often enough. And I watch them or I'm influenced by them often enough that it starts to make me more aware of the world around me. Then I start to... Then I'm checking out other people's Jordans. My whole perspective is being opened up and changed. And for me, you know, it always comes back to commerce. But in general, it's understanding that there's so much more opportunity out there than I think than we realize, especially in retail. I wonder if a retailer like Macy's or, you know, another sort of big box retailer can sort of grab a hold some of these things and make a move. You know, Macy's, I'm sure, moves a lot of shoes and a lot of watches. I wonder if this is something that would be on a retail roadmap for a larger company like a Nordstrom or Macy's is flagging otherwise.

Ryan: [00:24:24] That's interesting you say that because I feel like it's a good transition to Macy's acquiring Story...

Phillip: [00:24:28] Yeah. You know, it's almost like a podcast from time to time. It's like I know how to make these nice little segues. And they're even better when you point them out.

Ryan: [00:24:40] Exactly.

Phillip: [00:24:40]  A segue is only better if you point it out. Actually, that's another story over on Forbes, written actually by one of our Future Commerce alumni, Richard Kestenbaum, who we always love. He's a Forbes contributor, but we always love repping his content here. So this is over on Forbes.com, he has a write up about Macy's acquiring Story, which is interesting because this is one of those examples of a business I had never heard of that nobody has ever talked about. But then everybody went flipping nuts when they made the news. And all of a sudden, everybody's been a huge fan forever. I can't tell if this is people that are jumping on the hype train, but... Wow. It seems like actually a really innovative sort of experiencial commerce that, you know, Macy's is now trying to get down on. And we talk about that. We've actually mentioned... Brian Lange might have mentioned Story once or twice. I probably wasn't listening.  Do you have any thoughts about the sort of M&A type activity?

Ryan: [00:25:45] It's so cool. I think that if you read the article, talking about the fact that new inventory is cycled through every three months... That brings about this level of scarcity and FOMO, where a lot of people when they browse, they say, well, this isn't going anywhere, or I can always come back tomorrow, I can sleep on it. Like that notion of saying, I'm going to go and think about what I'm going to buy or I'm going to do a lot of research before I do. But now there's this ability to say there's a finite amount of time for this sort of kind of like season collections, like spring collections, summer collection. I think that the world is moving towards, "We don't want to have inventory sit out on shelves for a long period of time, and we want to incentivize people or put some urgency behind the products that we're pushing. And I feel like that's super cool kind of going back to your sneakers thing where it's a lot more people now are doing the pop up shops in new areas. So, for example, there's a Boston neighborhood called the Seaport District, and they're doing a lot of pop up shops that rotate with people every few months or so promoting small businesses. So your chance of buying direct from a very specialty kind of business could be only a matter of a month or two if you have exposure to that while you're there as opposed to a store that's around forever, like Lord and Taylor, or whatever it might be. But I think it's going to be cool for them because if you think about even Neiman Marcus doing the experiential store and some world that's going to be inventory-less, or at least fewer and fewer things... This is a great way for them to experiment. So they partner with certain people. They run limited promotional activities. They realize what kinds of things are moving quickly and which aren't. And they have the ability to move fast with this, which I think is going to be really key for them in order to stay alive.

Phillip: [00:29:18] %%Yeah. Again, you know, I'll refer you over to the article... Rachel Shechtman, who is the founder of Story, basically founded this experiential retail on sort of a couple things. One is, yes, they turn over inventory in a big way, but they sort of bring in that new inventory that's under a theme, and every cycle has that theme. So referencing the Kestenbaum's article, a few of the recent themes are "Love," "Home for the Holidays," "Beauty," and "Remember When." And so a lot of the product that's in the store revolves around the theme. And I think that that in and of itself is just super intriguing. But you brought up something which was... I hadn't even thought about. Which is it does, it creates scarcity, which creates value in a certain type of a consumer's mind that I don't have to sleep on, or I can't sleep on a certain thing that I know and I like because that is going away at some point. And I think that, coming back again to sneakers again, there's a good example of a lot of that kind of collaboration. Limited edition, limited colorways, collab... Those things create opportunities for brands who have tentpole products, who have evergreen products, and who have massive penetration or market appeal in a certain few products. But they can be more daring in a certain area by allowing themselves to be experimental because this thing doesn't have to stick around forever, and we're not judged on its lasting success. This is one small, ephemeral expression of our brand, and I freaking love that. That I think really appeals to me as a consumer, and I would love to see more brands do that and especially, not to come back to voices again, but especially with voice. I really feel like that being experimental, especially in that medium, as a new medium, is going to be super important to the success of a brand and finding their voice. And consumers are more flexible than ever today in understanding that the way I engage with you today may not be the way that I engage with you tomorrow, because apps change every day. You know, Kanye has albums that now come out and get remixed every third month. What you experience today with the brand and even things like music is ephemeral. It's always changing. It's going to be different tomorrow. And that's part of the experience.

Ryan: [00:32:02] Yeah, no, totally. I think that how do you get people in the door is what a lot of brands are trying to figure out today. It means to say we do this really interesting thing with limited edition apparel, partnerships, whatever it might be. And then there's some sort of ability to track who came in and purchased experimental things. They then went to the home section and picked up whatever. Being able to extend your footprint in a sense. To be able to get more people into the door. To give them the impression that you're always pushing the boundaries as a brand. I think it's really smart in a world that everybody kind of has this instantaneous feel of what it's like to get things online. But it's interesting we're talking about M&As because... I don't know if you want to jump into this now...

Phillip: [00:32:49] Yeah. Yeah.

Ryan: [00:32:50] With Walmart. Walmart just acquired, I think it's 70%... I'll have to go and double check this real quick. But looks like Walmart has acquired 75% of Flipkart for 15 billion dollars.

Phillip: [00:33:06] Oh, my gosh.

Ryan: [00:33:08] This is amazing because Walmart is the distribution platform in India. And in a world where it's Amazon versus Walmart on a quest for global commerce domination in terms of buying items for a low price and getting it to people quick, how do you get those items that people all around the world? And obviously Amazon has become commonplace for getting things quickly here in the US. But if you can get to be the number one player in India, I think that opens a huge opportunity for Walmart, and it puts some pressure on Amazon to figure out what their...

Phillip: [00:33:43] tAnd it's certainly going to be the growth channel. Asian markets, in general, have been a major growth channel. But to take such a dominant play in one of the number one distribution platforms there, I think also sort of again, reframing how I think of Walmart in a big way. I think this just reeks of Walmart's strategy. Well, aside from there, their earnings and e-commerce outcomes in Q4 last year. It speaks to how... It's reframing how people like me think about Walmart and that they're actually really smart. And they're really smart, and they have a long term vision. And this one sort of blows me away. Have you played around or have you shopped on Flipkart at all or have you done any e-commerce in India? What's your take? What's your experience there?

Ryan: [00:34:46] I haven't. But I will say that from our strategic standpoint, it reminds me a lot of Uber's venture into China and being there that they wanted to, you know, basically bring Uber to China and then kind of just sold a part of their business to the number one player in Asia for ride sharing. And so what's really interesting is that Flipkart is the number one distribution platform in India. Second is Walmart. And so if they can continue to be dominant and Amazon realizes that it's costing them to compete in India versus not... This is interesting because Amazon's brand is a lot stronger than Walmart. Amazon is getting into different parts of your home and how consumers interact with things around you. And so is the brand going to supersede the worth of, you know, kind of being in more places? So if you have a startup that is number one in Hungary, but then, you know, the number two player has a stronger brand, who wins? Who has, even though something's more popular versus something that becomes almost like a noun. Almost like a verb. Like you'll say, "I'll Venmo you."

Phillip: [00:35:56] Right.

Ryan: [00:35:57] %And when that becomes such a part of your life, does it really matter that Flipkart is number one in India? Because of the fact that if the brand is just as strong in India, will that acquisition... I think it'll basically put them on the same level as Amazon in India, which they haven't gone to. We can talk about the site redesign. But I was at Collision, and the Walmart CTO seems like their big push now is hyper local and personalized stuff. So they want to really focus on what's trending and what's happening around you. And then based on what your order history is, your order status and your recommendations, that's very, very hyper personalized to what you're interested in. So it's kind of like a much deeper relationship than Amazon just kind of saying, "Hey, you bought this. You might like this." And then just general things on sale. Where Walmart is, "Here are four things you're going to care about based on where you are and what you've ordered. And then here's your current order status, your groceries, or here's a way for you to quickly reorder the eggs you just ran out of." So it's interesting.

Phillip: [00:36:59] Yeah, it is interesting. And actually, it kind of gets me super excited. I mean, there're so many other stories that we could probably bring out here that, you know, are tangential. You know while Walmart is battling Amazon tooth and nail to sort of own entire swaths of direct commerce engagement, Amazon's, and this isn't in our doc, but it's off the top of my head... Amazon's out saying, "We're going to pick another strategy. We're going to compete with PayPal. We're gonna go out there. We're gonna own payments." Right? "And not only are we going to own payments that don't happen on our website or on our properties, it's that people that want to pay with Amazon that are shopping at other retailers... Not only we're gonna do that, but we're gonna do it in the same way that we do everything else in that we're going to not only are we gonna give you a ridiculous onboarding..." It's something to the effect of like a crazy discount, something like... Like industry standard is something to the effect of like 1.9 or 2% for gateway transaction fees. They're basically saying we'll cover you 60 days for free. Whatever you can cram in in 60 days we'll give it to you. And then they're also, you know, trying to push down the per cart transaction fee, again, because it's happening through Amazon, and they're already doing those types of payments with their Amazon customers today. So they're trying to basically just eliminate that altogether. And they're basically saying, "Hey, Alipay, we're headed for you."  You know, they're saying, "WePay, we're heading for you. PayPal, we're headed for you." They're thinking bigger. So while Walmart beat out Flipkart in this one particular deal, Amazon takes a more global approach and says, "We want to own all of your payments." And the market's reacting to that. You see something like 3 or 4% dip in PayPal stock after the announcement. Super interesting. A different type of a strategy.

Ryan: [00:39:11] Yeah I mean, the only other thing I'll say on that is it just came out, I believe yesterday, that Amazon is now paying merchants to use Amazon Pay. And then I feel like in a world in which it's actually affordable... I feel like right now their credit card is actually kind of expensive to have. But in a world or they can drive that down, having a credit card to use while people are shopping via Amazon Pay, using Amazon.com, having it in their home. It gets real pretty quick.

Phillip: [00:39:42] &It does. Yeah. And of course, I like that we're talking about this here because Brian Lange can't talk about it at all. So that's great. He actually works for Amazon Pay proper. And his thoughts and opinions are not those of his employer. Copyright. Trademark. 2018 Brian Lange. Amazon.com. Gosh, this is so good already. You had a couple other stories here I want to make sure that you get to. What was this mobile commerce growth story that you...

Ryan: [00:40:11] Yeah I saw this article the other day on ZDNet. And it sounds like according to Adobe, we're finally going to be at a point where mobile takes over desktop in terms of e-commerce search. I think this is big because we've all kind of had anecdotal stories about like mobile is going to take over our desktop.

Phillip: [00:40:34] Sure.

Ryan: [00:40:34] And then even retailers are saying 70% of my shopping is coming from mobile. But I don't think until this point there was like an overwhelming opinion saying like, yes, it's clear now, mobile first. This needs to be such a big part of your strategy. So I wanted to put it in here just because of the fact that I think it's really interesting that A) It's taken us this long. And B) that even with this new data, it shouldn't be a surprise. It shouldn't be something... I wanted to bring it up, because I feel like so many people are struggling right now with mobile and trying to say... Like Macy's, for example. I think one of the biggest things we did at Shoptalk, they came out and said, "We realize how big mobile is going to be for our business. So not only are we going to be working on AR/VR, but we're also going to be making improvements to the mobile app to scan items, so you can pay for them, and then you can leave the store. And not having to talk to other human being is great for some people. That's why they ride in Ubers. It's why some people like to get haircuts where nobody speaks to them, and they can just sit there and look at themselves. It's very interesting to see how people now... And I actually have a very counterintuitive take on voice on this. Of course, like our approach is that voice right now from a brand perspective is going to be massive on mobile because of how much stuff you're trying to sell in such a limited screen real estate space. But I will also say that I've been pretty bullish recently on how I think voice is going to, not "save" because that sounds like the second coming, but almost revitalize brick and mortar because in a world... Earlier we were talking about experiential shopping and whatnot. You have smart mirrors, and you have kind of these digital shopping assistants while you're in the store. These are not only for seeing how things look on you, but being able to quickly refine and go through that process without talking to somebody, without having to really make a big, big deal about it, I think that's going to be huge as well. I kind of go back to the Tesla example again, but if a big hologram Tesla comes up in front of you and you say, "Show me this in black. OK, don't show me the model 3. I want to just look at the model S. OK. What are the specs on this?" Kind of having that conversation of what you're most interested in. And that's why I think the mobile conversation is important, because then it starts to get people thinking about how now this has become such a big part of my business. How can I cover my bases with everything else that consumers try to interact with?

Phillip: [00:42:58] Yeah, for sure. I think the antithesis of this argument though is that mobile doesn't convert. It doesn't have a direct path to conversion in the way that desktop has. My take on that is that is the omni channel take, which is that there are many types of conversion. It's not always just a direct path to purchase. Also, we have a customer acquisition attribution issue nowadays because there are so many channels that we can acquire a customer in, and we all have different means. It's like cost of goods sold. We all have different means of attributing like whatever way we attribute our customer acquisition is probably wrong. But it's what we've always used,  and it's left to someone else to figure out. However, I do think it's interesting in that some of the places where people are making purchase decisions that then they have to follow up the purchase intent somewhere else... So again, we've mentioned this on the show before, but a lot of businesses were reporting a 2017 organic traffic or organic search volume decline. And I'm seeing that for certain retailers that we're doing consulting work for. Also dipping now through well into Q2 and in 2018.And we're theorizing that a good portion of that is that the dominance of players like Amazon mean that people are going directly to Amazon and searching directly on Amazon when they're in the mindset of making a purchase decision now. So it only makes sense that in order to salvage or in order to have better purchase experiences and salvage those types of customers who are otherwise lost to other channels, we need to give them the opportunity to purchase when they're at the moment of purchase, when they've made that decision to purchase. And this is that notion of passive commerce that we had, you know, that we've talked about in the past is that you can be in front of a customer daily on social. But when they're ready to purchase, they're ready right there. Why do we... Acquiring them to our direct consumer channels is difficult and expensive. And we have to own their inbox. We have to pay for such a lead back ads to get them there... Anyway, all that to say, companies like Instagram or Facebook now with Instagram enabling in-app purchases is the path that we're on. It is going to be the shortest path to purchase from a brand acquiring a customer on social to actually completing that sale and delivering them a product. And so I would surmise that we'll see, yes, mobile overtaking desktop. Absolutely. I agree with Adobe's assessment. Unfortunately for a lot of us that are investing in direct consumer channels, a good portion of that customer acquisition is still going to happen in channels outside of our direct control, the likes of which are like Facebook and Amazon, et cetera. So, yeah, Instagram enables in-app purchases big write up on it over on TechCrunch...

Ryan: [00:46:20] I will say it's interesting... Phil, I don't know if you use Apple Pay.

Phillip: [00:46:24] I do. Yes. And Google Pay. And all the other...

Ryan: [00:46:27] I will tell you that even going to like Subway, for example... I'm called here the king of chain food restaurants. But they have a sign that just says "Apple Pay... So much faster than credit cards," like please use Apple Pay if you can because like, it's going to be an easier way to get through the line and hold less people up. And so even buying SeatGeek tickets, Ticketmaster, whatever, going through the process of just saying, "Do you want to use the card that's on your Apple Pay?" Yes. Boom. Alright, it's all set. I watched somebody last night trying to upgrade their tickets on these Celtics Mobile app and have to put in their credit card information on the back even though they had Apple Pay. And I totally agree with you in a world that... I keep saying "in a world that..." I need to stop watching movie trailers. Instagram and Facebook, and obviously your point is absolutely right, where if you're a direct consumer brand, that's where the majority of eyeballs and money is being spent. And now we're seeing a pair of sunglasses on there, clicking into it, wanting to buy it, pulls up your Apple Pay stuff, pay, what your addressing is, boom. Shipped at the end of the day. But that's, again, kind of going back to the mobile thing. That's all happening on a mobile devices. And I think a bigger point of it is, is that there's no right strategy. It's all about your customer where they want to pay. People who shop for sneakers, a lot of them are cool with using the GOAT app, but a lot of them still like to go and touch the shoes and try them on. And it's all a matter of preference. There's no right or wrong way to do it. I think it's going to be really interesting to see is now that we have all of these options of voice, AR, VR, in store, IoT connected devices... How do brands differentiate themselves, not only of saying "We do or follow what everybody else is doing in the industry," but saying, "We decided to do this, and it was very much kind of away from the norm. But because we knew that our customers really wanted to shop this way, or we knew that our customers looked like this, that we wanted to then say, "We're going to take a big bet, and we're gonna build this experience that's very different in anybody else. But for us, it's the smartest thing we did because because of it, it was a unique experience that nobody had anywhere else. And then also it was something that customers actually wanted. We didn't push anything down their throats because we said we also wanted to have a VR experience.""

Phillip: [00:48:48] I don't know that we could possibly end on a better note. I'm going to stop us right there, because that is what it's all about. That is exactly what it's all about. I think when it comes back to if we're making those types of decisions, technology adoption decisions or customer experience and interaction decisions, and it puts the customer at the center. And we've made those decisions not because we're trying to keep up with the pace of technology adoption, but because our customers are either asking for it from us or we know it gives them a better engagement with our brand, then we're doing what we should be doing as far as merchants and retailers. When it's technology for technology's sake and Sucharita Kodali's method in her parlance, when we're doing technology for technology's sake, it's probably bound to fail. It won't hold up. The truth, the actual voice doesn't come through in the end. But I love that. Ryan, where can people find you on the internet?

Ryan: [00:49:49] So on Twitter @RKMac? R K M A C. And then, of course, I'm going to send you, Phil, the link to our infographic, so we can continue competing with the Internet. And also, if you're kind of trying to get your feet gently wet in the water to learn more about voice, you can kind of see what the lay of the land is. There is no plug for our company, aside from obviously the credits at the end. But you got a voysis.com and learn more about us and what we do, and of course, that infographic I think is really cool.

Phillip: [00:50:21] Yeah. voysis.com and we love your guys' technology. Great. Awesome having you on. Thank you for joining us and filling in. Brian, I hope you weren't listening to this on your anniversary trip. Well, Brian will be back soon. But we appreciate it. Make sure to go over and subscribe. Get on the FC Insiders newsletter. That's your first touch, first look into all things that are happening here on the show. We're gonna be at a couple events pretty soon. I will be doing a live podcast event with Mailchimp in Atlanta. When this drops, it'll be later in the week, next week on the 10th of May. And that'll be in the Atlanta area. That'll be going out on our FC Insiders newsletter. We will also be at B2B Next. And B2B Online is next week as well. If we're in the Chicago area, we're gonna trip us together around that B2B Next in September. So a lot of opportunities for us to take the show on the road, if you will. So the best way to find out about all of those in-person appearances where Future Commerce will be is to subscribe over at FutureCommerce.fm and hit up the FC Insiders newsletter. All right.Well, I'm going gonna try to do what Brian always does, and that's to say that retail tech is moving fast, but Future Commerce is moving faster. Thank you for listening. And we'll catch you next time.Thanks, Ryan.

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