Show Notes | S3 Ep7 | Talking Sustainability

Special Guest, Juli Lassow, Founder & Principle of JHL Solutions

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INTRODUCTION

Consumers continue to demand change from retailers and brands. They are shopping their values. But has this become simply a marketing message for brands and retailers today? Or are we making real progress on the sustainability front?

What’s missing today is a simple framework, or a set of principles, that retailers and brands can implement quickly and efficiently.  We discuss 4 pragmatic principles for retailers with our returning friend and special guest, Juli Lassow, Founder & Principal of JHL Solutions.

THE CONVERSATION

Juli started by stating that Sustainability is a massive concept, intimidating and difficult to gain traction on.  How’s that for starting out on a high note?

Juli then shared that like any good consultant, she likes to leverage a framework to tackle a strategic challenge. Within the sustainability space, she is a massive fan of the Circular Economy to help inform her approach. She looks to circularity to outline her priorities for retailers and their brand partners:

  • Reduce waste and pollution – from the food we eat, and the clothes we wear, packaging that all of it arrives in..
  • Extend product life – reduce, reuse, recycle, compost – but importantly – shift the focus to repair, resale, remanufacture -tightening the resource “loop” as much as possible…
  • Rebuild natural systems – there are two sides to the circular approaches – the mechanical and the organic.  Natural systems are most commonly found on the organic side of the circular philosophy.
  • https://ellenmacarthurfoundation.org/circular-economy-diagram

The conversation focused on 4 pragmatic principles:

  1. Products
  2. Production Partners
  3. Packaging
  4. Profitability/Price

This is all grounded in Measurement. What gets measured gets managed. Once defined, you need to socialize internally and externally to stakeholders: customers, shareholders, supplier partners.

LINKS

CONCLUSION

These are pragmatic principles you can implement today.  It’s about action. It’s about moving forward.   Of course, there’s much more to it like the retail ecosystem, logistics, store operations for example.  But the challenge is to start and to make continuous progress on.

HEROES & CHANGE MAKERS | Our New Feature

Our new feature, Heroes and Change Makers, concluded our discussion.

We invited Juli to select our Hero & Change Maker and she selected the leadership team at Kroger.

Juli stated, Kroger has been recognized as one of “America’s Most Responsible Companies” by Newsweek, earning the distinction for the fourth consecutive year. The recognition was in part due to the company’s Zero Hunger | Zero Waste social and environmental impact plan. Over the past 5 years, Kroger has donated 2.3 billion meals to fight hunger.

“This recognition is a testament to the incredible dedication of our associates and our collective commitment to end hunger through Zero Hunger | Zero Waste,” said Rodney McMullen, Kroger’s chairman and CEO. “Kroger plays a critical role in building a more resilient and sustainable food system for all of America.”


Kroger also partners with another notable name in the CPG sustainability front – Terracycle and specifically Loop.  LOOP made its U.S. debut earlier this year through a partnership with The Kroger Co., to provide consumers with a way to go from single-use packaging to one that is reusable.

We agree with Juli – great selection.

This is RETAIL DONE RIGHT. Thank you for listening. And please join our conversation.

Let’s go shopping!

Jeff Fisher & Cristene Gonzalez-Wertz

Connect with Jeff on LinkedIn

Connect with Cristene on LinkedIn

RETAIL DONE RIGHT is produced and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

Show Notes |S3 Ep6 | Resurrecting Retail: An Interview with Doug Stephens

INTRODUCTION

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We welcome Doug Stephens, Founder and CEO of the global advisory firm Retail Prophet to Retail Done Right. Doug is a retail futurist and best-selling author of 3 books, including his newest, “Resurrecting Retail.”  His perspective is grounded in fact, yet far reaching. And we cover a lot of ground in this interview. From people to product, and especially experience, from online lessons that brick-and-mortar retailers need to learn to born-digital ecommerce player’s desire to build physical stores. So much thought-provoking content.

Physical stores will stay relevant and become more strategic for retail organizations if they are no longer managed as points of sale. Stores are the most effective tool to acquire and engage customers, becoming more like media networks. They have also been transformed into logistics, service and experience hubs.

Retail organizations need to shift from a product and operations forum into truly customer-centric business models that will demand new KPIs and new ways to measure the contribution of the stores in attracting, retaining and engaging more customers, increasing their lifetime value.

THE CONVERSATION

We explored a variety of topics via a series of questions:

  • Can you tell us about your career trajectory? We’re curious how you got to where you are today.
  • How do you see the health of retail? Are retail balance sheets healthier today?
  • A key idea in your latest book, “Resurrecting Retail,” is introduced in the Forward by Imran Amed, Founder and CEO of The Business of Fashion, “It’s no longer about sales per square foot and cost per click, but rather about experiences per square foot and sales per click.”

Later in the book, you write, “The key to effectively measuring the true productivity of a store is found by focusing on a metric we’re already familiar with from the marketing side of the industry…a value per media impression. In other words, determining the value of a positive brand impression delivered via a physical experience… The point is that physical retail is no longer simply a product distribution strategy – it’s a customer acquisition strategy with an inherent and attributable return of value… The question is, ‘What is the appropriate value to attribute to physical stores? It’s…one that requires two components: 1st, an internally agreed-upon value per customer impression; and 2nd,… a gauge of the quality of the average impression.’”

Would you elaborate a little more?

  • There’s been a tremendous amount of press about the Great Resignation, and more recently Quiet Quitting. Retail and Hospitality are nearly double other industries in terms of defection. But high turnover isn’t necessarily new to these industries. To mix metaphors, how should we manage the front line and the bottom line?
  • You talk about how, for instance, music streaming and virtual concerts are changing the live experience – possibly putting pressure on that live experience. Would you say this is also true of the retail experience? Over time will stores 1) Be able to compete effectively with digital experiences? 2) Will they be able to afford to do so on declining traffic? Feels a bit like a double whammy, no?
  • Is a separate .com structure weighing orgs down? Especially due to the costs of fulfillment and shipping and delivery? In your book, you walk through the economics of this (p 91). Can you share more as the statistics were shocking?
  • Cost of transportation: not just mid and last mile but acquisition of goods… Can we really afford globally produced goods on increased fuel prices and from a sustainability perspective?
  • The Alibaba Freshippo example in your book is a peerless example of a digital and IRL integration. Can you describe this more?
  • Might you also explore CAMP out loud for us? (p139)
  • Where are the core and emerging potential economies of scale?
  • What’s your opinion on what Gary Friedman has done with RH? You talk about their paid membership program, but I’m asking from a broader perspective. (pg191)

CONCLUSION

In summary, we asked Doug, if you were to offer retail executives three areas to evaluate for changes right now, what would they be? Doug summarized:

“…Number 1 is to get back to who are we and why do we, and for whom, and what is the value we create in the world? Number two, how can we ensure that this experiential media that we’re delivering to consumers every day is positive and valuable to our business? And thirdly, how can we redesign supply chains for this new disruptive era that we do business in? And I think if you can do all three of those things in your business, you’re a champion.”

HEROES & CHANGE MAKERS | Our New Feature

Our new feature, Heroes and Change Makers, concluded our discussion.

We invited Doug to select our Hero & Change Maker and his selection did not disappoint.  Yvon Chouinard, founder and CEO of Patagonia.

Doug states, “…the fact of the matter is, since its inception as a business, Yvon Chouinard, who by the way is a true outdoorsman himself, really has always valued the outdoors. The raison d’être of the business has always been to stand on the front lines of environmental destruction and to try and save the planet in any way that they can. To transform the business into a charitable trust, to do just that into perpetuity, I think makes the man a hero.”

We couldn’t agree more.

This is RETAIL DONE RIGHT. Thank you for listening. And please join our conversation.

Let’s go shopping!

Jeff Fisher & Cristene Gonzalez-Wertz

Connect with Jeff on LinkedIn

Connect with Cristene on LinkedIn

RETAIL DONE RIGHT is produced and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

 

Show Notes |S3 Ep5 | It’s a Mad Holiday Season

INTRODUCTION

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It’s a mad world when the Holiday season starts so early. We look into the Holiday season – that we’re already in. Woven into the season, which is not just topical but extremely important, we are talking Sustainability – or I should say, the customer is telling us sustainability matters.

THE CONVERSATION

Once one of the retailers starts, they all have to go, because while consumers are saying they are far less influenced by the pandemic this year, they are focused deeply on making smart choices in the path of high inflation.  And they want to make smart sustainable choices too.

Retailers are realizing if it’s a fixed, and smallish pie, those who get their pieces early at least get a piece. They’re getting their sales early, even with a discount.

Do we have Amazon to blame here? They did introduce a 2nd Prime Day on October 11th and 12th. Technically, it wasn’t a 2nd Prime Day. It was officially, “Prime Early Access Sale.”

https://www.forbes.com/sites/forbes-personal-shopper/2022/10/13/amazon-prime-day-2022/?sh=68d11a0c3601

We have Amazon to blame.

IBM INSTITUTE FOR BUSINESS VALUE | 2022 HOLIDAY SHOPPING AND TRAVEL REPORT

In IBM’s 2022 holiday shopping report, holiday spending growth is forecast to be half of what it was last year, coming in at about 7.5% – a number nearly or perhaps entirely negated by inflation, depending on whose yardstick you’re using.

That’s probably why economic concerns are top of mind this holiday season. Here are the stats – while 59% of individuals say they will be less concerned about COVID, two in three say they will be more concerned about the economy. 59% report worrying more about supply chain disruptions that could make holiday shopping harder or more expensive.

Overall, holiday shopping is starting earlier this year, with 58% of consumers planning to begin buying before November. This is up from 44% last year, demonstrating a massive shift away from the traditional Black Friday start of the shopping season.  From black cat to black Friday.

The report lines up four segments, “To better understand the buying behavior of different individuals—and what influences their holiday purchasing decisions—we took a holistic view of consumer household finances. By analyzing changes in income, debt, expenses, and contributions to savings and investments, we identified four groups of consumers with vastly different financial circumstances:

  • The Insulated (41%)
    • On average, individuals in this group have maintained the status quo.
  • The Strained (31%)
    • These consumers are in the most precarious position. Half are from the bottom income brackets, and they’ve seen declining incomes—along with the highest average increase in household expenses.
  • The Secure (18%)
    • Despite the economic downturn, these consumers’ finances appear to be on the upswing. Nearly half of individuals in this group are from the top income brackets.
  • The Frugal (11%)
    • This group is more financially conservative than the others. Most (56%) of these individuals are from the bottom income brackets and have seen the highest average decline in monthly income over the past year.

https://www.ibm.com/downloads/cas/B4PXK9JN

APPLE

How about the ongoing impact of Apple’s privacy-driven changes to iOS 14 and iOS15? I’m talking the impacts to targeted ads.

This is particularly true for DTC and ecommerce brands.  Modern Retail wrote about this with great insights recently. Money quote, “If brands are struggling with paid — or specifically Facebook — through Q3 and now the start of Q4, they are either going to have to be a lot more promotional as we enter the holiday period, or they are going to have to readjust their selling expectations,” Alex Greifeld, an e-commerce growth advisor and founder of the newsletter No Best Practices.

https://www.modernretail.co/marketing/dtc-briefing-dismal-tech-earnings-forecast-a-gloomy-holiday-for-brands-that-havent-adjusted-to-ios-14/

SUSTAINABILITY

The Customer Channel.

By tailoring offerings accordingly, brands and retailers can provide the products and services consumers are willing to prioritize and pay more for—and help their customers enjoy the holiday season they’ve hoped for all year.

Many consumers have seen their financial situation worsen in the past year—which could impact their holiday plans. Yes, consumers are increasingly demanding sustainability.

They expect retailers to make smarter choices. They expect this and are willing to pay.

We discuss the new IBM Institute for Business Value report titled, “The Heat Is On: 5 Steps to Accelerate Sustainable Transformation.”

https://www.ibm.com/downloads/cas/Q6ZN3LAZ

Highlights:

  • Embrace sustainability as a business opportunity
  • Tap the potential of data and digital technologies
  • Embed sustainability within structures and processes
  • Activate sustainability across the organization
  • Engage ecosystem partners and suppliers to meet sustainability goals

Five years into Walmart’s Project Gigaton, the company’s ambitious program hit 574 million metric tons avoided.

https://www.greenbiz.com/article/walmart-reaches-halfway-project-gigaton

Walmart is notable here because they are doing the work. Five Walmart suppliers teamed up to purchase renewable energy from a Kansas wind farm. The deal is part of the retailer’s plan to reduce 1 billion metric tons worth of emissions throughout its supply chain by 2030.

  • Levi Strauss & Co., J.M. Smucker Co., Great Lakes Cheese, Valvoline and Amy’s Kitchen executed an aggregate purchase for renewable energy from a wind farm in Marion County, Kansas, operated by the Denmark-based energy company Ørsted. Financial terms were not disclosed, and the agreement is expected to create 250,000 megawatt-hours annually of renewable energy.
  • The 12-year power purchase agreement is the first under Walmart and Schneider Electric’s renewable energy accelerator Gigaton PPA. The program expands suppliers’ access to clean energy by allowing vendors to partner and enter into long-term contracts with renewable providers.

https://www.supplychaindive.com/news/walmart-suppliers-renewable-energy-sustainability-ppa-utility/634536/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202022-10-24%20Supply%20Chain%20Dive%20%5Bissue:45482%5D&utm_term=Supply%20Chain%20Dive

To quote from a Seeking Alpha report as published in their Wall Street Breakfast, “Backlash against Coca-Cola (NYSE:KO), one of the planet’s biggest users of plastic, erupted as soon as the multinational announced that it would sponsor the COP27. While the company has pointed to its signing of a global treaty meant to tackle plastic waste through a “holistic, circular economy approach,” as well as plans to collect and recycle a bottle or can for every one it sells by 2030, many say the policies are misleading and fall way short. Coca-Cola currently produces 120B single-use bottles per year, resulting in 3.3M tons of plastic packaging (its plastic use even rose by 8.1% between 2019 and 2021).”

https://seekingalpha.com/market-news/wall-street-breakfast?mailingid=29615100&messageid=wall_street_breakfast&serial=29615100.1004481

CONCLUSION

We’ll keep tracking this Holiday Season. And, of course, sustainability remains an ongoing topic near and dear to us. Much more to come on both topics…

HEROES & CHANGE MAKERS | Our New Feature

Our new feature, Heroes and Change Makers, concluded our discussion.

Cristene selected… Target. They’ve announced their next push toward sustainability, Target Zero. The new initiative communicates to consumers the products and packaging that are designed to be refillable, reusable, or compostable, or are made from either recycled content or materials that reduce the use of plastic.

Jeff selected… Rothy’s. Made from recycled plastic. New 3D knitting technology. A sustainable approach to their business model. Seamless online and offline integration.

https://rothys.com/

This is RETAIL DONE RIGHT. Thank you for listening. And please join our conversation.

Let’s go shopping!

Jeff Fisher & Cristene Gonzalez-Wertz

Connect with Jeff on LinkedIn

Connect with Cristene on LinkedIn

RETAIL DONE RIGHT is produced and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

Show Notes | S3 Ep4 | Amazon and the Future of Healthcare

INTRODUCTION

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What’s a natural extension to the platform Amazon has built that we discussed in detail during Episode 3? Healthcare. Why? It serves Amazon and their network of employees while also being another service they could offer to their broader network of marketplace members and business partners and possibly directly to their incredibly large customer base.

Amazon has unquestionably changed how we shop. Will they change the way we shop for or manage our health? When you look at industries ripe for disruption, retail was one. Healthcare, being a $4.1T business is clearly another one. But Amazon’s entry into Healthcare has been less than revolutionary. Their take on medication management, telehealth and recent acquisitions gives us indications of what they’re thinking. Though they are shutting down Amazon Care, they are in the process of acquiring One Medical. Let’s explore what Amazon’s platform brings to a retail health experience.

THE CONVERSATION

Cristene started with a quote from a WaPo article on Amazon’s health intentions that helps us understand where they’re headed.

https://www.washingtonpost.com/technology/2022/09/04/amazon-care-health-one-medical/

A SHORT HISTORY OF AMAZON’S VENTURES IN HEALTHCARE

To continue the series trend, Cristene shared a short history of Amazon’s interests in healthcare. Here’s a summary:

In 2018, Amazon, Berkshire Hathaway and JPMorgan Chase formed a joint venture called Haven with the express purpose to lower healthcare costs and provide better outcomes.

https://www.nytimes.com/2018/01/30/technology/amazon-berkshire-hathaway-jpmorgan-health-care.html

It was shuttered in 2021, just 4 years later.

https://www.cnbc.com/2021/01/04/haven-the-amazon-berkshire-jpmorgan-venture-to-disrupt-healthcare-is-disbanding-after-3-years.html

Then there’s Amazon Care, their virtual healthcare offering that started piloting the offering in 2019. This was shuttered recently and will be shut down by the end of this year. The reason Amazon gave was that it wasn’t a complete enough offering.

https://chainstoreage.com/report-amazon-shutter-amazon-care?oly_enc_id=3358I4996623D3X

https://fortune.com/2022/08/25/amazon-healthcare-service-amazon-care-will-shut-down/?tpcc=nldatasheet

https://www.washingtonpost.com/technology/2022/09/04/amazon-care-health-one-medical/

And Amazon entered into an agreement to acquire One Medical in July of this year.

https://www.nytimes.com/2022/07/21/business/amazon-one-medical-deal.html?smid=url-share

PATIENT AS CUSTOMER

We spoke about putting the patient – the customer – first. Jeff quoted from a recent essay by Scott Galloway.

Beyond spotty efficacy, healthcare offers the second-worst retail experience in the country. (Gas stations retain the No. 1 spot.) Imagine walking into a Best Buy to purchase a TV, and a Blue Shirt associate requests you fill out the same 14 pages of paperwork you filled out yesterday, then you wait in a crowded room until they call you, 20 minutes after the scheduled appointment you were asked to arrive early for, to be seen by the one person in the store who can talk to you about televisions, who has only 10 minutes for you.

New York is the wealthiest city in America, yet the average waiting time in an emergency room is 6 hours and 10 minutes.

https://www.profgalloway.com/prime-health/?vgo_ee=vRePHet%2BG1wVEim4mH0tZBwUnRnlmwiuCIJkd9A7F3A%3D

CNBC reported that two-thirds of people who file for bankruptcy cite medical issues as a key contributor to their financial downfall.  Just think about that for a minute.

https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most-americans-file-for-bankruptcy.html

Jeff quoted Christina Farr, an investor in health care with OMERS Ventures. “They want to nail the consumer experience.”

https://www.nytimes.com/2022/07/21/business/amazon-one-medical-deal.html?searchResultPosition=3

COMPETITION

There’s fierce competition here as well.  It’s been reported that CVS is considering buying healthcare provider, Cano Health, who has primary care centers in 8 states.

CVS recently closed on their acquisition of Signify Health, which has a network of 10,000 clinicians who make home visits (both virtually and IRL) across all 50 states

https://www.cvshealth.com/news-and-insights/press-releases/cvs-health-to-acquire-signify-health

Let’s not forget CVS’s acquisition of Aetna in 2017.

Walmart recently signed a 10-year agreement with the world’s largest health insurer, UnitedHealth Group.

Jeff quoted from Robert Pearl, M.D, in his recent Forbes article, “The skepticism is understandable, but these negative analyses ignore the credentials of the companies in question. After all, you don’t become the largest pharmacy company (CVS), largest online retailer (Amazon), largest health insurer (UHG) or largest company, period, (Walmart) by chance or luck.”

https://www.forbes.com/sites/robertpearl/2022/10/10/amazon-cvs-walmart-are-playing-healthcares-long-game/?sh=3b91dd2278f6

On the prescription front, Mark Cuban launched an online pharmacy called, creatively, “Mark Cuban Cost Plus Drug Company.”

https://costplusdrugs.com/

https://www.prnewswire.com/news-releases/mark-cuban-cost-plus-drug-companys-online-pharmacy-launches-with-lowest-prices-on-100-lifesaving-prescriptions-301463491.html

ADITTIONAL REFERENCES

CONCLUSION

Why did we take 3 episodes to discuss Amazon? Stating the obvious, their scale and influence in our shopping lives are enormous.  The principles of retail are so fundamental – and transferable to many other industries.

 

Amazon is a remarkable company with remarkable scale. With that scale, growth can be challenging. The flip side of that is the need to keep costs under control, or better to reduce costs.  Where can you find an opportunity that can deliver value on both sides of this coin? Healthcare. Of course.

We’ll keep watching Amazon…

HEROES & CHANGE MAKERS | Our New Feature

Our new feature, Heroes and Change Makers, concluded our discussion.

Cristene selected… Karen S Lynch, CEO of CVS

https://www.cvshealth.com/news-and-insights/press-releases/meet-our-new-ceo-karen-s-lynch

https://fortune.com/2021/10/04/cvs-ceo-karen-lynch-stores-health-care-super-clinics/

Jeff selected… Andy Jasse, CEO of Amazon

This is RETAIL DONE RIGHT. Thank you for listening. And please join our conversation.

Let’s go shopping!

Jeff Fisher & Cristene Gonzalez-Wertz

Connect with Jeff on LinkedIn

Connect with Cristene on LinkedIn

RETAIL DONE RIGHT is produced and hosted by Jeff Fisher & Cristene Gonzalez-Wertz

 

Show Notes | S3 Ep3 | Amazon as a Platform

INTRODUCTION

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Amazon is a platform. Though we are starting to see others following this business model, Amazon offers a scale unrivaled. But if you’ve created a great brand and want to extend your offering, there’s clearly an opportunity to leverage your brand equity and customer base to create a network and ecosystem that supports services or products.  We discuss the real opportunities Amazon has found.

There are 4 types of business models. Asset Builders. Service Providers. Technology Creators. Network Orchestrators. Amazon is the ultimate Network Orchestrator through a platform that allows participants to interact or transact with many other members of the network through content, services and physical goods. Amazon delivers value through connectivity.

THE CONVERSATION

We kicked off the discussion with a short conversation about Amazon’s internal Pan Amazon group.

https://www.theinformation.com/articles/how-amazon-uses-aws-to-drive-business-in-retail-ads-and-shipping?tpcc=nldatasheet

https://fortune.com/2022/09/26/apple-iphone-14-pro-max-sales-deal-wireless-carrier/?tpcc=nldatasheet

HISTORY OF LAUNCHES

Cristene shared a short history of Amazon product and services launches. Here’s a summary:

  1. Ecommerce bookstore – launched July 16, 1995
  2. Marketplace – 2000
    1. https://www.history.com/this-day-in-history/amazon-opens-for-business
  3. Advertising – 2003 with the launch of A9.com, a search and advertising technology
  4. AWS, 2006 – with the launch of Simple Storage Service, S3
    1. https://en.wikipedia.org/wiki/Timeline_of_Amazon_Web_Services
  5. FBA – 2006
  6. Amazon prime video – Launched Sept 7, 2006, in its early incarnation known as unbox
  7. The Kindle – 2007
  8. Amazon agreed to buy Audible in 2008.
    1. https://www.nytimes.com/2008/02/01/technology/01amazon.html
  9. Amazon Locker – 2011
  10. Echo and dot devices – with Alexa – 2014, 2015
  11. The fire phone – Launched 2014, RIP 2015
    1. https://www.cnet.com/tech/mobile/fire-phone-one-year-later-why-amazons-smartphone-flamed-out/
  12. Whole Foods – Acquired June 15, 2017
  13. Just Walk Out – 2018, with the opening of the first Amazon Go store

https://www.businessinsider.com/jeff-bezos-amazon-history-facts-2017-4

https://en.wikipedia.org/wiki/History_of_Amazon#cite_note-MyUser_Phx.corporate-ir.net_January_17_2016c-98

FBA – FULFILLMENT BY AMAZON

FBA helps power the marketplace. FBA offers access to Amazon’s shipping and fulfillment centers, packing and shipping logistics, and customer service programs.

We compared this offering with Ebay and Etsy.

https://www.shipcalm.com/blog/fulfilled-by-amazon-worth-it/

https://www.junglescout.com/blog/what-is-amazon-fba/

https://www.nextsmartship.com/blog/ebay-fulfillment

https://www.shipbob.com/blog/etsy-fulfillment/

https://www.junglescout.com/blog/is-amazon-fba-worth-it/

We also compared profit margins across Amazon, Walmart, Target, Lowes and Macy’s.

MARKETPLACE

Cristene spoke about the shift to a marketplace and how it extended their offering to deliver on their desire to be “The Everything Store.”  In 2021 Amazon stated there were nearly 2 million third-party sellers in Amazon—mostly small and midsize businesses (SMBs)

https://www.aboutamazon.com/news/small-business/economic-impact-for-small-businesses-powered-by-partnership-with-amazon

Jeff shared a couple comparisons…

Cristene concluded this topic by asking the question, Amazon has been called The Everything Store. Is this still true based on Etsy and Ebay? Has The Everything Store arrived? There’s no doubt that Amazon’s marketplace has made a huge impact to Amazon’s business. According to Statisa, 57% of paid units were sold by third-party sellers in the 2nd quarter of 2022.

https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/

AWS – AMAZON WEB SERVICES

AWS provides on-demand cloud computing platforms and APIs to individuals, companies, and governments, on a metered pay-as-you-go basis. These cloud computing web services provide distributed computing processing capacity and software tools via AWS server farms

https://en.wikipedia.org/wiki/Amazon_Web_Services

ADVERTISING

Cristene spoke about how Amazon’s heavy move into media has allowed them the opportunity to extend beyond the website into ads – well – nearly everywhere on their estate.

Amazon Ads offers a range of options to help you achieve your advertising goals to registered sellers, vendors, book vendors, Kindle Direct Publishing (KDP) authors, app developers, and/or agencies. Products include Sponsored Products, Sponsored Brands, Sponsored Display, and Stores. Display ads, video ads, and ads run through the Amazon DSP (Demand Side Platform) can be managed independently or with an Amazon Ads account executive.

Cristene also referenced an AP article which stated, Amazon’s Echo devices, which house the voice assistant Alexa, have dominated the US smart speaker market, accounting for roughly 70% of sales.

https://apnews.com/article/technology-whole-foods-market-inc-amazoncom-f715bd73590cd9e19951e4ca77c75e2e

JUST WALK OUT

Jeff mentioned that we spoke about this technology in our Season 2, Episode 3 podcast, “Fixing the Broken Checkout Experience.”  Amazon developed this in-house and has implemented it in their Amazon Go!  And some Amazon Fresh stores.

It offers convenience, ease, simplicity. The technology isn’t just about a simplified checkout, although that alone is very beneficial.  But this technology also offers insights into store and shelf performance, labor efficiencies, planogram optimization and more…

ADDITIONAL SERVICES

Cristene mentioned these additional services:

CONCLUSION

Amazon will account for nearly 40% of ecommerce sales in 2022

  • Amazon will account for nearly $2 in $5 spent online in 2022, making up 39.5% of all US retail ecommerce sales. Altogether, the next 14 biggest digital retailers will make up just 31%, with the remaining 29.5% of the ecommerce pie going to everybody else.
  • That’s $400 billion out of the forecasted $1 trillion in sales revenue, which is five times more than its closest rival, Walmart.

Amazon is the most visited online marketplace in the US

More than half of US consumers start their product searches on Amazon

  • When searching the internet for products, most consumers start on Amazon. Amazon is the most popular search destination for consumers (63%), above search engines (46%), Walmart (31%), Facebook (26%), and YouTube (24%).
  • What is more interesting is that 88% of consumers who last shopped at Amazon started their next purchase journey at the Amazon website, instead of starting with search engines. This is highly indicative that most Amazon buyers don’t look anywhere else.

Nearly 50% of consumers shop on Amazon at least once a week

  • In the Jungle Scout report, 48% of shoppers purchase something from Amazon at least once a week, and they tend to spend more, too. In fact, 57% of consumers say they will spend over $50 on Amazon by the end of the first quarter of 2022, and 51% would pay over $100 for a single item from Amazon.

In 2020, Amazon invested $18 billion in selling partner success, including in logistics and tools like Brand Follow and Stores that allow sellers to directly connect to millions of customers.

https://www.aboutamazon.com/news/small-business/economic-impact-for-small-businesses-powered-by-partnership-with-amazon

With Amazon absorbing the increased costs (surcharge and fee changes) brought about the pandemic, roughly 3,700 sellers were still added daily to its roster in 2021.

https://www.businessinsider.com/amazon-pulls-in-thousands-new-independent-sellers-a-day-2021-3

Most Amazon 3P sellers are profitable

According to Jungle Scout, more than 90% of Amazon SMB sellers are profitable, with some 65% earning profit margins higher than 10% and a third earning profit margins above 20%.

https://www.junglescout.com/amazon-seller-report/?_ga=2.173189091.190745793.1651856173-1271891644.1651763714

During the pandemic, 44% of Amazon sellers claim that their businesses performed better than expected.

https://www.junglescout.com/wp-content/uploads/2021/02/State-of-the-Amazon-Seller-2021-Jungle-Scout.pdf

3P sellers account for 54% of Amazon’s revenue.

https://www.aboutamazon.com/news/small-business/economic-impact-for-small-businesses-powered-by-partnership-with-amazon

HEROES & CHANGE MAKERS | Our New Feature

Our new feature, Heroes and Change Makers, concluded our discussion.

We selected… Yvon Chouinard, Founder and CEO of Patagonia who stated, “instead of going public, we are going purpose.”

100% of the company’s voting stock transfers to the Patagonia Purpose Trust, created to protect the company’s values; and 100% of the nonvoting stock had been given to the Holdfast Collective, a nonprofit dedicated to fighting the environmental crisis and defending nature.

He wrote, “The funding will come from Patagonia: Each year, the money we make after reinvesting in the business will be distributed as a dividend to help fight the crisis.”

https://www.patagonia.com/ownership/

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Jeff Fisher & Cristene Gonzalez-Wertz

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RETAIL DONE RIGHT is produced and hosted by Jeff Fisher & Cristene Gonzalez-Wertz