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Episode 33
May 24, 2017

What does "Future" Mean, Anyway?

In a special TWO PART EPISODE Jason Goldberg and Scot Wingo of the Jason and Scot Show join us to talk about what "future" really means in retail today in 2017.

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Phillip: [00:01:10:52200] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.Brian: [00:01:16:11700] I'm Brian. And today we have some very special guests.

Phillip: [00:01:20:64800] Very, very special.

Brian: [00:01:21:72900] One of a two part series in a collaboration between the Jason & Scot Show and Future Commerce. Today we have Jason Goldberg, Jason "Retailgeek" Goldberg and Scot Wingo with us. Introduce yourself, guys.

Jason: [00:01:37:8999] Hey, guys. This is Jason Goldberg. I am the SVP of Commerce at Sapient Razorfish and one of the hosts of the Jason & Scot Show. Thrilled to be here.

Scot: [00:01:46:57600] I'm Scot Wingo. I co-founded Chanel Advisor and am currently CEO of Get Spiffy, an on-demand economy carwash and detailing company.

Phillip: [00:01:56:00] That's awesome. Well, welcome to the show, you guys. And I'm a big fan of the Jason & Scot Show, so it's kind of awesome to have you on our show, our humble little podcast. And today we're gonna get into a lot of really cool stuff. But before we do, we want you to give us feedback about today's show, the special two parter. And to do that, you're gonna have to head over to and hit up the Diqus comment box on the episode. And also, you can subscribe. We want you to leave your feedback and give us a five star on both iTunes and Google Play. And remember, you can listen at anytime to Future Commerce on your Amazon Echo from TuneIn radio with the phrase, "Alexa, play Future Commerce podcast." So, Brian, you turned me on to Jason & Scot about a year ago, and I think it was right after Shoptalk last year. And it's interesting because when we started this show, I think I said the words to you, "Why doesn't anyone just make a podcast specifically about retail and digital marketing?" And apparently that was a thing that already existed, because that's just how life works.

Brian: [00:03:07:26100] When we first started listening to you guys, you were probably about 18 episodes in. And I was like, "Phillip, you gonna check this out. This is actually really good."

Phillip: [00:03:16:9900] Oh, yeah. This is literally what we've been wanting to do. So we've basically just been emulating you the whole way through. But maybe we're gonna sort of use you two as analysts because you are  analysts. I mean, you are the voice to thousands and tens of thousands of people that sort of listen to your thought leadership in the industry. And I really love having people like you on the show to sort of give your perspective about a number of things, so we're really delighted to have you.

Jason: [00:03:48:63000] Thanks, guys. Flattery will get you pretty much anywhere you want.

Scot: [00:03:51:87300] Yeah. I spend half my time trying to get Jason's ego smaller, and you guys just ruined like eighty three episodes of work. Thanks.

Jason: [00:03:59:72900] See Scot, I told you I was right about all that stuff.

Brian: [00:04:05:54900] It's actually... We pretty much already paired ourselves up with each of you. And Phillip was like, "Man, I'm like Jason and you're Scot." And I'm like, "Yeah, yeah maybe." And that statement just confirmed everything.

Phillip: [00:04:19:22500] Yeah, it really did. I mean, the amount of therapy that Brian and I have invested in... It's a very fragile relationship. No, I was saying actually it's because I just let Brian sort of handle all the emails and scheduling and all the logistics and I sort of see your relationship that way, too. Tell us a little bit about the show. Just for people who aren't familiar, get people familiar real quick and tell us a little bit about what the Jason & Scot show is all about.

Jason: [00:04:49:42300] Yeah, well, Scot and I met when we were both board members at the, which is the digital arm of the National Retail Federation. And after our board meetings, we would always go out as a group and maybe have a couple of cocktails, and we would talk a lot of trash about what was going on in the industry and what were the sort of hype things that we thought weren't really going to happen. And what were the interesting things that were? And at some point, we just got the idea that other people would be really interested in this conversation. We should be recording these things. And so then that was sort of the the germ of the idea that eventually became the Jason & Scot show. Most of the listener feedback is that the first 18 episodes were great and then it's gone way downhill since then. So we hooked you at exactly the right time.

Phillip: [00:05:41:56700] {laughter} Now, that's really great. Yeah, we tend to ruin things when we get involved or we get turned on to them in sort of hipster fashion. So one of the things we talk about in Future Commerce is, it's right in the name of the show, we like to talk about the future and not necessarily the far future. I think that's one of the misconceptions. We like to talk really about what's next. And so I think that's a great way for us to start as from your guy's perspective, you know, we're almost midway through 2017. What is next? What do you see happening right now?

Scot: [00:06:24:89100] Jason, you want to take that one or, you want me to take a shot at it?

Jason: [00:06:28:88200] Sure. So I feel like we should both answer and mine will be right, and yours will be controversial.

Brian: [00:06:38:55800] {laughter}

Jason: [00:06:38:55800] Yeah. I don't know that there's just one thing in the commerce space. I feel like the topic that's having the most conversation right now and that I'm getting the most sort of net new increase from clients about is the whole impact of artificial intelligence on the commerce industry. So that's sort of an interesting topic that we talk a lot about. And of course, we're in the middle of this year in which brick and mortar retail is having a really bad run.

Jason: [00:07:11:900] And there's tons of conversations about retail closing and Mallageddon, which I think is Scot's favorite word. And so a lot of conversation about, you know, is this a minor correction? Is this a major shift in consumer behavior? And what is the structure of online and offline commerce going to look like when we come out of this disruption?

Scot: [00:07:40:900] I think that's right. I don't really have a big opinion on the AI thing. That's more Jason's world. So we've had this kind of environment where eCommerce is growing 15%, normal retail is growing low single digits. And then Amazon's been growing 20 to 30 percent. I think that golf is going to widen. I think we're going to see offline go negative. You know, there'll be some winners and losers in there, but the losers will be big enough that it makes the whole thing go negative. And I just think that eCommerce is going to continue to accelerate. It's gonna be really interesting to see. We're at some tipping point, it feels like, this year. And I think that the outcome of that will be felt this holiday. And we'll look back in Q1 of next year. This holiday, I think that band difference between offline sales and online, there's going to be like a pretty big new gap there that surprises people.

Brian: [00:08:35:3600] That's good. That's good. So one of the things I kind of wanted to get into on the show is I wanted to go through some of this standard, you mentioned sort of digital commerce is the future. And it's where the growth is going to come. And I totally agree with that. So I thought it'd be interesting to kind of walk through different technologies sort of surrounding that the digital stack, if you will. I read a great article recently about what is the digital stack if you're not Amazon, right? And so let's kind of talk through maybe some different technologies where they're at right now, sort of the maturity of the retail industry in general around those particular technologies or techniques or methods. And then maybe give us your hot take on what's next in that particular field. So let's start with payments. How do you feel about where retailers are at in terms of their maturity and the payments field? We've got PayPal and standard gateway type stuff without that net and so on and up and comers like Amazon Pay and Apple Pay and Android Pay. So where is everyone at? How far have they adopted some of these new technologies, and what's next in payments?

Jason: [00:09:59:50399] Yes, great question. So we really are at an inflection point in payments. We have a lot of contenders in North America. None of them have really achieved critical mass, and they all have various downsides attached to them. So you would certainly think of PayPal as being sort of the biggest universal digital wallet in North America, depending on how you count. You might say Amazon is even a bigger digital wallet, but there's baggage attached to all of those. And what's interesting is if you look at a market with more mature digital payments like China, where there's at least two platforms that are almost universal and are really low friction, Alipay and Tencent, it enables all kinds of amazing customer experiences that we're still really struggling with here. So huge trend here, all the users are moving from desktop browsers to mobile browsers. Most of the big retail sites are over 50% mobile. And by the way, eCommerce conversion is one third as high on mobile devices as it is desktop browsers, because that's such a pain in the neck to buy something. In China there is no mobile gap, and it's largely because everyone has these digital wallets. They're low friction and they're universally accepted. And what's particularly cool, the digital wallets are almost universally accepted offline. So it's how you're paying for a taxi. It's how you're paying for your lunch. And you can in a tier one city in China, you can almost tell the Luddite or the tourist, you know, is the person pulling out currency or a credit card to make make a purchase. And so I'm eager for us to get there in the U.S. But we do have some impediments. We have all these up and coming wallets that have the sort of low friction aspects of Tencent and Alipay. And so Samsung Pay, Android Pay, Apple Pay are all sort of in that camp. They're usable online, they're usable off-line, but they all have like extremely low penetration, and they're all because they're tied to a specific platform, none of them are universal. You're only going and use Android Pay in the Android ecosystem. You're only going to use Apple Pay in the Apple ecosystem. You know, Apple doesn't intend to be the universal payment solution for North America. They just want to have the best payment system in the Apple infrastructure. And so as a result, we're not on a good trajectory right now to having a universal payment system like they have in China, which is somewhat disappointing.

Scot: [00:12:57:00] Yes, I agree with Jason. I think the only thing I would add is, you know, there's this where does your identity kind of live? If you look at the numbers, the number one good company is Facebook. So they have 1.4/1.6... Pretty much everyone on the planet, minus a couple people from my hometown are on Facebook.

Jason: [00:13:22:56700] They are, too. They just blocked you.

Scot: [00:13:24:56700] Yeah, I get that a lot. Jason blocked me too. It's so long story. And so that you have the carriers. So that's interesting. You know, Verizon, AT&T. Then you have the operating system guys, Google and Apple. Then you have you know, if you kind of start going down the stack, you kind of hit Google again, just by the number of people that are at the Google web site. So that's kind of interesting. They check two boxes there. Amazon, I think, is in the discussion. So, yeah, I think one of those companies could do something that could be disruptive. I don't think it'll be this year. That's probably a year or two out. And we'll have to kind of wait and see.

Brian: [00:14:05:82800] That's a good hot take.

Phillip: [00:14:06:57600] Yeah. That is great. And it's interesting. I think we have a challenge, and I am not really too versed in this, but I wonder if our geographic challenges are part of the reason that we're so bifurcated among different carriers. That is something that we've struggled with in the United States for a long time across population centers is infrastructure is hard in the United States in a lot of space. But I think it also creates pockets of culture that make adoption to one platform hard. And that creates a larger opportunity for too many smaller players. Essentially, you're never gonna have one or two payments players that allow these incredibly connected and rich payments experiences. You're going to have some people that are using Venmo and some people that are using, I don't know, PayPal. And what's going to happen is until the Venmos get purchased by the PayPals like they have been in the United States, we're not really seeing it outside of consolidation, I guess is when I say. It's less market penetration and more about just who can survive the longest to gobble up their competition.

Jason: [00:15:29:55800] Yeah. I actually wonder this is gonna be a winner take all market. So normally payments... The normal school of thought is payments do need to be winner take all. And so you only have a few players. They're ubiquitous. They're universally accepted. And when credit cards came in the US, everyone needed to be able to put that Visa logo on the door of their store saying they accepted Visa. In China everyone has that Alipay logo. That was in the analog world that that started where you had to print the sign and stick it on the outside of your door. In a world where so many of these touch points have a digital component, you could imagine that there never is complete consolidation onto a single platform, that lots of users could pick lots of different payment methods based on their own criteria. And what you can't then do is have 60 logos on the door to the store. We call that sort of NASCARng the checkout. Where you put all those logos up.

Phillip: [00:16:29:7200] Yep.

Jason: [00:16:30:6300] And that causes a bunch of problems on its own. But what should be possible is to personalize that experience for every user. If you're standing next to my cash register, and you have an NFC chip in your phone, that you've provisioned a particular type of payment, I should be able to recognize that you provisioned Samsung and not Android and that you're not carrying an Apple phone. And so, I should be able to offer you just the Samsung Pay. And certainly online, I should be able to look at the cookies and see what payment methods your preferences are and just offer you the payment method you prefer.

Brian: [00:17:06:44100] Personalized payments. I love that.

Jason: [00:17:08:36900] Personalized digital could mean that we don't have a single solution in the US.

Brian: [00:17:16:27900] Yeah. And it's like you offer them what they're most often used payment method and then have some way they can opt into some other method. I like that a lot.

Phillip: [00:17:27:68400] Yeah.

Jason: [00:17:30:25200] Yeah. Make the happy path easy.

Phillip: [00:17:31:24300] Yeah. The happy path. I feel like isn't that what we're trying to do now with just Amazon Pay? Amazon's like, "Well, you're already shopping with us anyway, so we'll give you the plebs way below us on the rungs the ability to at least capture some of our business."

Jason: [00:17:46:78300] Yeah. So the challenge there at the moment is none of these payment providers have decided that that's an acceptable view of the world. Like they all had this notion that they're going to conquer the entire world. And when you want to be the winner in payments, what you would do is you'd say to every retailer that wants to accept your payment, "OK, but you have to show my logo to every customer that comes here and it can't be one millimeter smaller than the Visa logo." And so the normal terms of use for all these payment methods are present them that every customer, give them all equal billing in the check out. And, you know, frankly, if most of these payment things have like 10 million users, so they really want to use the retailers to advertise and on board new users, which is, should not be the retailer's job. And so in a world where they're forcing the retailers to always expose them as an option, we won't get there. And interestingly, because Apple is normally on the wrong side of this equation, Apple is one of the few payment methods that give merchants an API to pre validate whether a customer has provision to card or not. And to only show the Apple Pay checkout option to customers that are provisioned, which I think is the way I hope all these guys go. But I think it's going to take some more pain before they get there.

Brian: [00:19:04:56700] That's good.

Scot: [00:19:05:45900] Yeah maybe some startup just has to come up with its Uber wallet. You know, not to use the word Uber, but let's say a meta wallet, like Expedia wallets that does all the things you're talking about. But the problem is, you know, we tend to be balkanized. I don't know if anyone will let them do all that stuff.

Jason: [00:19:19:60300] Yeah. And then, of course, the thing to remember, this is not a new idea. Microsoft launched a product in 1990 called Microsoft Passport, which was essentially intended to solve this problem. And here we are twenty five years later.

Brian: [00:19:32:5400] Poor Microsoft, they always introduce things before their time. {laughter} Phillip, why don't you go ahead and ask the next question? I think a natural flow out of this is personalization.

Phillip: [00:19:47:19800] Yeah. I was gonna go right there anyway.

Brian: [00:19:49:56700] Yeah perfect.

Phillip: [00:19:50:33300] Yeah. I think you touched on personalization there a bit. And what we're seeing now is we don't have any superlatives left anymore. Like we went to Omni Channel as a term. And it's like, well, what's more than omni channel? That's the superlative. And I feel like that's where we are with personalization, too, is that it actually means a lot of things, and it can mean quite a few different types of things. But there's a lot of people to say, oh, we need to be doing personalization, but I don't know what people actually mean by that anymore. What do you think that that means? And what do you think is best in class personalization today?

Jason: [00:20:32:27000] Yeah. Well, I would start by saying I think you're a hundred percent right. It's a depreciated word. Right? Every analyst does a survey and personalization is high on the initiatives for 2017. It's one of these boardroom buzz words that I get where the board reads an article about personalization, and they send that article to the SVP of eCommerce and now the SVP of eCommerce needs a personalization initiative to appease the board. And the reality is, I think that's shortsighted. Personalization is not an outcome. It's a tactic. And you should use that tactic to achieve some outcome that's good for you. And so my example is I can offer different purchase options to every customer that comes to my web site. And if those options aren't relevant to you, and they're not the right options for you, being personalized didn't make that experience more successful. Right? But if I have a super popular product, and I offer that to everyone, and I sell 10 billion of them, the non personalized solution can in fact be super relevant and super successful. Right? And superficial personalization, putting the Hello Brian message on the upper right hand corner of my web page, like that checks the box for personalization. But that's not very useful. And so we we like to talk to clients about not making personalization the goal, but making contextual relevancy the goal. Understanding more about what each user, each shopper is trying to do and making the experience more relevant to them is a much more successful outcome and leads directly to higher customer lifetime values and better conversion and all these other things.

Brian: [00:22:24:50400] How do you feel the world of retail right now, where are they at in this?

Jason: [00:22:32:5400] Yeah. So we're at the wrong stage in the maturity. So everyone... The digital immature stage is you don't think you have personalization. Going into the next stage is you have some initiative to have anything you can call personalization. And in retail, most people are sort of past that. They've checked the box. I have a personalization strategy, and that strategy is usually product recommendations on product detail pages and custom offers in email. All right. And so now they're saying, all right, well, what's the next level of personalization? And that step in the maturity curve, I still think is wrong, because what they're still looking at are point solutions that have much richer personalization for a single touchpoint. And the problem with all these point solutions is the data that they rely upon for their personalization is still locked in a silo attached to that personalization solution. So your recommendation vendor has some data about you that it's using for recommendations. That's different data than the email vendor has that's personalizing your email.

Phillip: [00:23:37:87300] Precisely.

Jason: [00:23:39:54900] And so bolting on more of these personalization point solutions that are all based on siloed data is exactly the wrong approach. So where we think the sort of top of that maturity curve is that we need to get to as quickly as possible is more intrinsic in native data integration. It's making that data ubiquitously available across the enterprise. So that I can bring it all to bear at any of these touch points. And when you come to my store, I know everything about your pre shopping online and when you come for the third purchase, I know everything about your first two purchases. And it's not predicated on getting different personalization at different touch points.

Phillip: [00:24:25:58500] Is this where Scot basically says that we shouldn't be doing this at all? It's like a pointless endeavor.

Scot: [00:24:34:83700] I'm not a personalization guru. I leave that to Jason. I I am an Amazon guru. And I think that most folks are missing just the basic stuff Amazon does, like product recommendations and just a variety. Amazon seems to know quite a bit about you which they use at the right point, at the right time. And I think a lot of these things are so focused on this old school metaphor of giving you that right home page experience and this curated whatever. I think Amazon realizes, you know what? People just like to search. Yeah, we'll give some way to look at collections and stuff. But ninety five percent of people are just going to go search for things. So let's make that really great. I think the retailers probably spend the bulk of the time on things that don't matter in the digital world.

Phillip: [00:25:27:79200] Yes.

Jason: [00:25:29:12600] I guess I would tie those two things together, though. I think there's something interesting. Just so people don't lose sight of how relevant personalization is for Amazon, like they don't share a lot of data. But back in 2006, they told us that one third of their total revenue came from those product recommendation tiles. So don't know if that still holds, but that's a huge percentage of all their sales that are flowing through that recommendation engine. So to Scot's point, if you don't have that right, you're probably missing a huge boat. But when I talked about, like, hey, forget personalization point solutions, and start like collecting aggregate data about your customer and having a single more valuable view of your customer. Think about what Amazon's doing in apparel right now. They had no presence in apparel. They wanted to win apparel. They made a huge push to merchandise third party apparel. Now they're super successful, and they're about to pass Macy's. They launched eight private label brands. But think about what they're doing. They launched this new service called Style Check. Hey, take a picture of the two outfits you're thinking about wearing, send them to us and we'll give you feedback about which one we think looks better on you. And what they're doing is they're collecting a bunch more information about the style preferences of all of their customers. And does anyone think for a moment that they're not going to use that data to make better apparel recommendations and make better design choices in their private label apparel? And then later or earlier this month, they launched the Echo Look, which is, hey, let's quantitate the customer's closet and let's collect detailed analytics about the shoppers closet. OK we know she owned this many outfits, but which ones does she actually wear each day? And what actual choices does she make? And we can collect data about all that. And Amazon is very clearly trying to say, hey, I want to know more about how the customer chooses apparel than anyone else. And I'm going to use that to dominate the apparel category. And that's very different than someone that just buys an outfit widget to put on their website that recommends pants when you buy shirts.

Brian: [00:27:43:27000] Totally, totally agree. I mean, you touched on several things there, like personal inventory. And also one thing you didn't mention that I think is an additional data point they're collecting, and I think this is something that's actually going to be very accessible for retailers to collect soon, sooner than they think, is also body data. I mean, Amazon is going to have photos of thousands and thousands of customers. And now there's technology where you can actually create a body bottle based off of a 2D, full body shot. And that data can be used to create better fitting clothing. So you can use it in aggregate. And then eventually I mean, this is probably a few years away, but bespoke, personalized clothing. But in the meantime, certainly they're going to be using that data to help create clothing that's going to people better in general. Sizing is certainly going to change.

Phillip: [00:30:46:29700] I would suggest that... I'm high on all of this stuff, and I think it's great. Kind of getting back to the personalization metric and getting away from Amazon, my feeling is that there's a lot of things being done in the realm of personalization on people's web sites. And I have to call into question and say, what are you doing in personalization that's taking you...and maybe this is just bad advice because I'm a curmudgeon. But, you know, how much time are you investing in personalization on your site that could be better invested in things like just sending more creative email and having better email campaigns that have better drivers drive more traffic to site, build better return, basis of customer and repeat customer business segment, or even just analyzing your data better? Like you said there, Jason, about getting a better visibility of your customer and segmenting your conversion rate by traffic source or traffic acquisition strategies. Those are all things that I think have infinitely more value than just let's plug in a something to make product recommendations when everybody thinks they have this gigantic undiscoverable catalog when really they have 250 products and seven colorways.

Brian: [00:32:13:27000] Sorry I cut you off there.

Phillip: [00:32:14:45900] No, no, I'm just ranting at this point.

Brian: [00:32:16:78300] Do you have a company in mind when you talk about a more holistic view of the customer? Do you have a company in mind that sort of helps provide that level of data aggregation or collection?

Jason: [00:32:29:23400] I do. In general, like we look at like the companies that are good at this. And the thing they have all in common is they were all digitally native companies that were born online and then later opened brick and mortar stores. And the reason is pretty obvious why that's true. When you have a big digital infrastructure and you then open two stores or six doors or 10 stores, what you don't do is buy a siloed solution for those stores. You figure out a way to extend the digital infrastructure you already had to those stores. So one of my favorite examples just recently got acquired by by Walmart. It's Moosejaw Mountaineering, and they're a significant online retailer of outdoor apparel. They have six stores, but the cash register in those six stores is a customized web browser that's connected to the same eCommerce engine that drives their stores.

Brian: [00:33:23:3600] Beautiful.

Jason: [00:33:23:3600] So there's one CRM system of record. There's one promotion system, the record. They have an amazing loyalty program called Moosejaw Madness, and there's one system of record. So when you buy ski boots one season online and they fit perfectly, and you go to the store in the next year and you need new ski boots, that person in the store knows exactly what size you bought online because she's using the same system that you bought those from. And when you earn loyalty points across any touchpoint, they have visibility to all of those in the loyalty system is so ingrained there that they have like a 90% capture rate. They know who the customer is 90% of the time even when they spend cash in the store. So they're a great example of just not having a gimmick personalization, but just intrinsically having everything they know about the customer available at every touchpoint.

Brian: [00:34:23:64800] That's amazing. So this is going to kind of flip a little bit, but let's move on to content management and content strategies, because I feel like personalization and content kind of go hand in hand to some degree. And we could get a discussion about what even is content. But give me your takes on retailer's strategies around content right now. Are they devising real strategies? Where are we at in the maturity around that? And then what kinds of technologies are they using to push those strategies out? And then what's ahead?

Jason: [00:35:08:63000] Yeah. So this is another one that the sentiment is super important, but the execution probably sucks, right? So content is super important to the customer experience. And great customer experiences drive a lot more customer engagement and sales and all those sorts of things. And very superficially, you can go look on Amazon, and you can look at that crappy product detail pages. And those products don't tend to sell well. And you can look at product detail pages that have rich A+ content and have deep storytelling in and create a true why to buy. And they sell much better. And it's since Amazon has gone into private label, it's been fun. They have to create a lot of their own content. So a fun experiment is to go compare the product detail page for Amazon Elements baby wipes, against the product detail page for Procter & Gamble baby wipes. And for Pampers. And what you're going to see is Amazon is producing a lot richer content for that product than the traditional CPGs. And what a shock these digital brands are outselling the traditional brands online. So I do think content is super important. The frustration is we've now for about six years been talking about, oh, man, content is super important in eCommerce. We've got to figure out the blend of content and commerce. And it's still this tragedy today. I go to those specialty retailers and the top of their hierarchy and their menus on their web site is do you want to shop or do you want to read?

Phillip: [00:36:53:34200] Yup.

Jason: [00:36:53:34200] Come over here for content, but you're not allowed to buy anything. Come over here to shop for stuff, but you're not allowed to see any rich content that would make you like us. And there are very few examples of customers doing a great job of blending those two. And that's partly because they're different siloed disciplines that haven't figured out how to integrate themselves. It's partly because they're siloed tools that are better at one than the other. And so you tend to have an underlying eCommerce engine or CMS engine or some unholy blend of the two. And so this is another one where there is like a lot of unrealized potential at the moment.

Brian: [00:37:32:14400] Mm hmm. And what about you? What do you think, Scot?

Scot: [00:37:36:61200] Yeah, I think if you're broad based, you really got to put that content muscle down at the product level and get those reviews from consumers, that user generated content and social content. But then as you go into some of these specialty retailers, they do do a pretty good job of, you know, there still are people that want you to help them along their journey and putting together outfits or here's how you do this kind of thing. It's just that none of them have really gotten up to scale. So it is kind of interesting to see. Some people use products as the content. So some of these subscription boxes is kind of interesting where it's almost like the box you get is its own content and that's the curation level, which is kind of interesting.

Brian: [00:38:21:72000] Yeah that's good. Where do you think things are headed? What's next?

Jason: [00:38:29:24300] Well, I think for a long time merchants have struggled with what the systems of record should be. Should I be using Adobe or Sitecore, or Episerver, or something like that from my content? And should I be using Magento or Hybris or something for my commerce? And every iteration of the commerce platforms, you can see they're adding richer content features. And frankly, a lot of the SMSes are all trying to figure out how to add native commerce features. And so, you know, I do think part of the enablement here is that the next generation of tools are going to be much more capable of weaving these two things together in a more seamless way. I do think that that all of this content stuff favors what Scot and I often call vertical brands. So if you're a wholesaler and you buy someone else's stuff and you sell it to consumers, it's hard and expensive to produce a bunch of unique content for that stuff you're selling because you don't make it. And you can produce that content. And that producer could then change that product a week later and obsolete all your content. So we don't see a lot of wholesalers investing in really rich content. But when you are the manufacturer of the product, you have an opportunity to do much richer, deeper storytelling about that product and why you should use it and what the authentic origin story is and all this other stuff. And the problem historically is those manufacturers didn't get to touch the consumer because they didn't have a relationship with the consumer. So the clear solution here is as more and more of those manufacturers are selling direct to consumer, you're starting to see this this new need get fulfilled to produce richer content directly for the consumer. And you can see that in the Warby Parkers and the Caspars and the Bonobos and Modcloths of the world.

Scot: [00:40:39:9900] Yeah. One other interesting trend on content is people that create content are really struggling to monetize it. So the ad networks are getting pretty stretched. Google and Facebook are absorbing something like 90% of the ad dollars out there. So you have all these people that are investing in this content trying to monetize it. And a lot of them are trying experimenting in our world of commerce. So one of the first words that was really successful in this model was Haus where they had this content engine for let's say you were going to redo your kitchen. You could go and do a 3D model and that kind of thing. But then it was hard to monetize with advertising because you don't want just like a generic Home Depot kind of message because the person is already signed everything. It's kind of off topic. So they plugged a marketplace in the back of that. And now they could essentially say, go design your kitchen, and then hit this button, and it prints out a shopping list and loads up a cart for you. So that's kind of this really interesting marriage of content and commerce that we'd never seen before. Just recently, BuzzFeed announced that they're adding a marketplace. I'm just looking at it and it's kind of just a bunch of T-shirts and stuff. So it's not exactly earth shattering. But, you know, I think what they're doing is they're trying to find these intersections where if they write about a celebrity, I don't know, a Kardashian was wearing this kind of a thing, then they can start tying all that in to commerce where you could kind of buy the looks and some of that kind of stuff. So it is interesting the content people are starting to kind of edge into our world a little bit.

Phillip: [00:42:06:6300] And I'm curious if how like that's been done on a number of occasions and maybe it's just not been done well or maybe it was too early. But I remember Refinery29, which is sort of in that same world, and obviously not as to the level of success as BuzzFeed, but Refinery29 tried to do something very similar and they married content and commerce together. And they sort of languished and they pivoted away from it. They're sort of a famous New York content startup. And I find it interesting that they weren't seeing success there. And instead of iterating, they just kind of pivoted away from it. So maybe just take sticking it out, I suppose.

Jason: [00:42:50:79200] I think a lot of those guys that started as editorial content like and just bolted on a commerce experience, which is how I'd characterize Refinery29's effort.

Phillip: [00:43:00:23400] Right.

Jason: [00:43:01:13500] That hasn't worked. And the poster child in that space is like Miss Reporter and Net-a-Porter, which is about the most successful version of that. And it even that isn't a huge, large scale success. I think Scot gave an example of what I usually point to as the biggest success of blending content and commerce, which is the sort of Haus experience, but Haus didn't come from that same curated editorial perspective that these magazine publishers came from. They came from a social curation standpoint and so they thought about how to integrate commerce a little differently. Again, you know, Refinery29 was very much a read or shop hierarchy.

Brian: [00:43:47:63000] I think this is an interesting discussion right now because we're also seeing new content channels open up with augmented reality and virtual reality. There's going to be a whole new set of content that is going to have to be produced for those mediums, and it is its own... I mean, how you tell a story in augmented reality or in virtual reality is completely different. Luckily, like with augmented reality, some of these initial implementations of this, like with the company Augment, are not necessarily all that difficult to implement. But as we get deeper into these new pieces of tech, there's going to be just yet another thing that you have to produce. And so it's going to be really important for someone to sort of take control of content, whether that is the manufacturer or some sort of outside vendor. It's going to be important to, I think, for there further be a strong origin for the content as opposed to trying to sort of bolt it on afterwards. I think that's going to be even more important in upcoming years.

Phillip: [00:45:02:36000] Just as like a free thought here, I find it interesting that a lot of these editorial outlets, like a BuzzFeed, which basically effectively make their money through advertising. We stay away from things that draw attention away from conversion path in our commerce centric worlds. And essentially, really you have two different revenue models that are at odds with each other, sort of fundamentally. So when you talk about AR/VR, it makes me think, well, gosh, I mean, we've already got so many things, especially in this one particular aspect of digital commerce vying for our attention. I mean, how much worse can it possibly get when we have immersive experiences with things trying to vie for our attention? Anyway, free thought.

Jason: [00:46:06:900] That's exactly what I'll pay for. {laughter}

Scot: [00:46:08:38700] I think the use case has to make the customer experience better. Right? So some of the AR/VR stuff is like... So Alibaba has one where you can just look at a couple things, like you're in a Macy's or something. It is very like 2D sitting in 3D, and it is not a huge win. But the ones where you can see where a piece of furniture would fit or you get kind of an experience that's not available in the store or online. I think that's where that will work specifically to AR/VR.

Phillip: [00:46:39:29700] Yeah. I honestly think that AR and VR are such new paradigms that we're years away from seeing anything that would make sense. And even if you tried to explain to us what commerce looks like in those contexts, if you tried to explain that to us in 2017, we wouldn't necessarily get it much the same way that you wouldn't understand Facebook if you explained twenty years ago. We don't have a real understanding of that context yet. So I think it's still to come. But I do think it's interesting and people are asking about it. I think that's kind of the other problem is that everybody sort of went all in in 2016 and 2017 at conferences. And they all we're talking about, you know, future of commerce and crikey, we even named our stupid podcast Future Commerce. And now we're kind of locked into this thing. It's like everyone using...

Jason: [00:47:35:54900] You could have named it Jason & Scot, so be a grateful.

Phillip: [00:47:38:45900] There're so many things that we could have named it. Jason & Scot is just one of them. Yeah. My gut tells me that, again, we went to the superlative and we're thinking about this crazy, you know, futuristic idea. And in reality, I think the future for a lot of pure play eCommerce retailers who are just starting out is like, I just want onsite search to work. Like, I'd just really like to get rid of my duplicate content issues on Google.

Brian: [00:48:10:36900] I think you're being a little bit of a curmudgeon right now. That's what I think. I've seen augment. It is the really cool tool. I would definitely, if the retailers that I like to shop at had that tool on their site, I would totally use it, and I would buy more stuff as a result. I'm going to say your we're actually just a couple steps away from being able to use augmented reality on our phone in our browsers, actually no less.

Phillip: [00:48:40:34200] There are retailers doing it today.

Brian: [00:48:43:80100] Yeah.

Phillip: [00:48:43:80100] I think that makes sense especially in applications where they're wearables like sunglasses or something. And it's becoming more commonplace. I'll admit that, because things like Snapchat sort of make that everyday interactions, one that's more normalized and not so geeky.

Brian: [00:49:07:60300] Snapchat is investing even more in this.

Phillip: [00:49:09:63900] For sure. For sure.

Brian: [00:49:11:78300] And actually from a commerce perspective, I mean, they bought out Cimagine, which is based in Israel. And I think they're going to... Obviously they've released their...

Phillip: [00:49:24:13500] Yeah. World view or whatever.

Brian: [00:49:24:82800] And so they're planning for it. I mean, they need to find a way to make money. So I think things are going to happen soon.

Phillip: [00:49:32:37800] But if we have to hang the future of commerce on SNAP, I think we're in for a rough ride.

Jason: [00:49:40:49500] {laughter} In my mind, I do split the baby here, though. I don't think you can talk about AR/VR. I think VR is a total further out technology. Commerce isn't going to be the driver of VR. Maybe there is a future 10 years down the road when six billion people are consuming VR. And when that's the case, we'll need to figure out commerce experiences in it. But nobody wants to put on that VR headset to imagine being in Macy's instead of actually being in Macy's.

Phillip: [00:50:10:49500] Nobody wants to be in Macy's.

Jason: [00:50:11:64800] Nobody wants to be in the real Macy's either, but that's a separate problem. {laughter}

Brian: [00:50:15:50400] That's the next show.

Jason: [00:50:16:46800] Yeah. Whereas a AR has some real practical application for some very short term problems in retail. And mostly it's physical retail. So you think about all the attributes that are now available for products that we expect to have before we make a purchase decision. And the most valuable one, ratings and reviews. Right? Amazon has taught us to read the ratings reviews before we make a purchase decision. Well, there's no ratings or reviews in a Walmart store. There're 60 attributes on that product detail page. There're three attributes on the fact tag in the store. And so augmented reality is one of the best ways to add all of those digital attributes to those physical products in the store. And you can already see that with the new Amazon Elements packaging. When you buy the vitamin D from Amazon, the jar is very plain, but you can get all the origin information about the ingredients by looking at it through the AR camera. And, you know, one of Scot's favorite pastimes, Pokemon Go, has proven that a lot of people are willing to use AR right now. So I do think, AR has some short term practical uses, and that VR is kind of a gimmick in the commerce space at the moment.

Phillip: [00:51:38:18000] Do you honestly see people like basically geo caching for promotions in the store? Looking through their phone, trying to find the promotion on the sales floor? I understand using it to get more information, but there has to be an upside aside from just information gathering for the customer. There has to be a financial outcome.

Brian: [00:52:01:19800] They're going to be searching Retail Me Not in the store. I'm just kidding.

Phillip: [00:52:06:9000] They do.

Jason: [00:52:06:9000] I mean, all of those things are gonna happen. But, yes, like you already see a ton of customers head down on their phone in the store. AR helps them get a little more heads up with that phone, which has a bunch of peripheral benefits for the retailer. I deployed AR games in retail stores for entertaining kids in Target and had millions of users leverage those to find the Minions hiding in the cereal boxes and in the Target aisle. And I do think that you're likely to see AR. Is every customer going to walk into the store with their phone in front of their face as they walk through the store? No. But when you narrow down that decision, and you're thinking about two different purchases and your holding on both in your hands, you're likely going to use that phone and in some flavor of AR to get the final information you need to make a final decision between those two products.

Phillip: [00:53:08:37800] All right.

Brian: [00:53:09:50400] That sounds like a great way to end our Future Commerce segment.

Phillip: [00:53:14:40500] Precisely.

Brian: [00:53:14:40500] That's about as future commerce as it gets.

Phillip: [00:53:24:52200] Thankful to have had you guys on. And if you wanted to listen, I think we are making this a two parter. I think this is part two. So if you've listen to this, you've already listened to Jason and Scot. But if you're listening to Future Commerce for the first time, and you haven't checked out a Jason & Scot show, you need to go do that. Where can we point people to on the inter webs?

Brian: [00:53:42:28800] I think this is part one, man.

Phillip: [00:53:44:14400] No, it's not. It's not what we talking about, Brian. Come on. You screwing up the show. Stop screwing up the show.

Jason: [00:53:52:9000] I thought that was you guys were gonna be part one, too. But I could be wrong also.

Phillip: [00:53:55:46800] Well, I guess then... Wow. Well, Chris, you just need to fix all this. I mean, this is on you, bro.

Brian: [00:54:02:32400] Head over to the other podcast. Get over to Jason & Scot and listen to part one or part two.

Phillip: [00:54:09:72900] {laughter}

Brian: [00:54:10:26100] Great content.

Phillip: [00:54:11:29700] Appreciate it. Thank you guys for coming on. Where can we point people on the Internet to go check you out?

Jason: [00:54:17:68400] The easiest place to find us is Scot is so good, he only needed one T.

Phillip: [00:54:31:46800] That's nice. Love that. And we appreciate you coming on. Thank you, Jason and Scot. And thanks for listening to Future Commerce. And we do want your feedback about today's show. Maybe you have some thoughts about these areas, these sort of fundamentals of digital commerce. We'd love to get your feedback about that. And remember, you can do that at And come be part of our conversation on the episode feedback box right there at the bottom of the page. And also make sure you subscribe on iTunes and on Google Play. And leave us a five star review and make sure to listen and subscribe to the Jason & Scot Show, where you can stay up to date on all the stuff. They've got some really great content over there. But until next time...

Brian: [00:55:13:88200] Keep looking towards the future.

Phillip: [00:55:15:21600] There you go. That's what you do. Appreciate it. Thank you, guys.

Scot: [00:55:19:9900] Thank you.

Jason: [00:55:20:27900] Thanks for having us, guys.

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