EPISODE 056 : 04/07/2022
Jason Goldberg is a fourth generation retailer who has had a front-row seat to the digital disruption of commerce over the course of his successful career. He is currently the Chief Commerce Strategy Officer at Publicis Chicago and the Chief Strategist at Retailgeek Consulting. Jason also co-hosts the popular e-commerce podcast, The Jason & Scot Show.
Host: Ned Hayes and Ashley Coates
Guest: Jason Goldberg
Listen to every episode
Topics discussed in this episode
- Detailed small business insights from Olympia, Washington
- Small business resiliency and adaptation during COVID
- Doubling community outreach during the pandemic
- Opportunities for small business loyalty programs
Watch Spark Loyalty’s Small Business Success Channel
Ned Hayes [00:00:01] Welcome to Spark Plug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe, you’re smarter loyalty leader.
Ashley Coates [00:00:13] Spark Plug is happy to welcome Jason Goldberg to the podcast today. Jason is a fourth generation retailer who has had a front row seat to the digital disruption of commerce over the course of his successful career. He is currently the chief commerce strategy officer at Publicis Chicago and the chief strategist at Retail Gate Consulting. Jason also co-hosts the popular e-commerce podcast The Jason and Scott Show. In 2017, Jason was inducted into the National Retail Federation’s The List of People Shaping the Future of Retail. Welcome, Jason.
Jason Goldberg [00:00:46] Oh my gosh, thanks so much for having me, and thanks for the super nice intro that I think my mom wrote.
Ashley Coates [00:00:51] Well, she did a great job, great setup and actually so on that note, I don’t know maybe Jason we can have you expand a little bit on your history and tell us what led you to become interested in retail? I know you’re a fourth generation retailer.
Jason Goldberg [00:01:03] Yeah, I was sort of born into it. It’s been the family business for a long time. My own path was slightly secured. I had two uncles that ran video stores back in the dark ages before video stores were really a thing, and they sold those video stores to this entrepreneur that was starting a new business like the bad quarterback that gets traded with the NFL team as the player to be named later. My uncles included me in the sale of these two video stores to this guy, Wayne Heising. So those video stores became Blockbuster Entertainment. So I was one of the very early employees of Blockbuster, and we grew that into a pretty big thing many years ago. So that was my first experience with retail, and while I was there, the internet happened, e-commerce started, Amazon was born and we were pretty early players in all of those things. And so when we sold Blockbuster in the early 90s, a lot of other retailers were just trying to figure out their e-commerce strategy. And so I got asked to spend a lot of time in Minneapolis and help folks like Target and Best Buy figure out their web and e-commerce strategies.
Ashley Coates [00:02:01] Wonderful. Well, you may be happy to know that Oregon still has a Blockbuster in Bend, Oregon.
Jason Goldberg [00:02:07] Bend?
Ashley Coates [00:02:08] Yeah, only one in the country at this point. So you worked on both the brand and agency side. Do you have a preference for one or the other? What are the differences of working on each side?
Jason Goldberg [00:02:19] Yeah, they’re both awesome, and I actually encourage people over the course of their career to try to get experiences on both sides. One of the things that I really enjoy about working for a retailer or for a brand that’s directly serving customers is you really get to see projects through to their conclusion and you get the win or the loss and the learnings. I call it actually pushing the button. It’s a very different thing just being your budget to execute some campaign and really feel the sense of accomplishment when something works well and take the heat when something doesn’t work as well as you had hoped. That, to me, is one of the really appealing things about being hands on for a brand or a retailer. When you worked for an agency like I do or a vendor, one of the things that’s fun about that is you get a much bigger diversity of potential clients and problems. So if you’re working on Blockbuster, everything’s video, everything’s about Friday night and new releases and you have to get really deep in that. As a consultant, I work for quick serve restaurants and big mass merchants and grocery stores and sporting goods stores. So I get a much wider variety of problems. And frankly, when one industry isn’t doing really well, I’m not stuck solely in that industry. I get to work with some people that are having a good year and I get to work with some people that are having some real challenges with their year. So that diversity is fun, but you maybe don’t get to go quite as deep and maybe don’t get the same sense of satisfaction at the end of projects. And so to me, having experiences on both sides is really valuable.
Ned Hayes [00:03:42] Right. Well, your current full time gig is a publicist. So can you give us a quick overview of publicists, what this publicist do as an agency and what your role there?
Jason Goldberg [00:03:51] Yeah, publicist is actually a holding company, so it turns out almost every marketing and ad agency that most folks have heard of is owned by one of these three big holding companies. And so in our case, in case, we’re a French company, we’re based in Paris and we own about 240 different agencies and those are famous agencies that you probably saw if you followed Mad Men like Leo Burnett and Saatchi and Saatchi. There are these big media companies that buy Super Bowl ads on behalf of their clients like Starcom and Media Vest and Spark. And then there are digital agencies that really helped invent e-commerce in the internet, and those are firms like Razorfish and Sapient and Digitas. So most people at a holding company work for one of the agencies in the holding company, and that’s certainly where I started out. I started out at Razorfish. But then if you’re familiar with the Peter principle where you keep getting promoted until you finally reach your level of incompetence to minimize my incompetent impact, I now have a group role, so I get to work across all the agencies in the group any time they have a client that’s particularly focused on commerce. So if any of the engagements actually with retailers or with brands that are primarily trying to have good outcomes at retailer. So it’s very fun in that regard.
Ashley Coates [00:05:01] That’s great. Do you also run the site Retail Geek? Can you share with us what kinds of resources you offer on your site and who your audience is?
Jason Goldberg [00:05:10] Yeah, well, gosh. I think Retail Geek was born more than 10 years ago now. It was originally started in the heyday of the blog, and it was an outlet for me to talk about some of the issues that would come up frequently with clients. Share my points of view. And it still is that although the lion’s share of the content today is really focused on the podcast that you mentioned earlier, the Jason and Scott Show, so it’s the Retail Geek blog is the home for that, and I’ll throw some of my own original content in addition to the podcast on there. We’ve been doing podcasts since before it was cool. There used to be a trade organization that was really focused on e-commerce in the U.S. called shop.org, and I was lucky enough to be elected one of the board members at Shop.org and we’d have a couple of meetings a year where all the board members would get together and talk about the big changes and challenges in the industry, and after our meetings, we’d get together at a bar and talk shop more candidly. So one of my fellow board members is this much more successful gentleman named Scott Wingo. He founded Channel Advisor. He took them public. They’re one of the big platforms that brands and retailers use to sell in marketplaces, and he and I would get in friendly debates at the bar after meetings. And one night, Scott say, You know, we should really record this. There might be 10 other people besides us that would be interested in these conversations. So he jokes that I ran out and got three thousand dollars worth of podcasting equipment the next day, which is not true, but maybe a milder version of that is true. And we got 10 or 12 of our friends and family might listen to the show. I did some research, and most podcasts fail in the first eight episodes, so our big goal was to not give up until we got 10 episodes in the can and five years, 300 episodes 400 hours later. It’s been an accidental success. We certainly would have picked a better name if we thought it was going to be a thing.
Ashley Coates [00:06:51] Congratulations, that’s fantastic. And can you also share with us, Jason, about your involvement with the National Retail Federation?
Jason Goldberg [00:06:58] Yeah. Well, I alluded earlier to Shop.org, Shop.org was totally focused on e-commerce. There’s over 100 year old trade organization focused on the cumulative interests and needs of retailers called the National Retail Federation, and about 2015 2016, the National Retail Federation bought Shop.org and merged it into the National Retail Federation. So most people in retail, I’ve certainly been a long time member of NRF. They have this hundred year old trade show called The Big Show. For anyone that likes to go to New York City, you know, blizzard in January. It’s always a fun time. And then Shop.org got rolled in. So today there’s a spiritual successor of Shop.org called the Digital Council, which is a working group focused primarily on digital issues at the NRF that I’m still active in. But I get to do a lot of the various activities at the NRF, helping with content, help them plan their trade show events, I get to mentor some of the students. They have a great scholarship program that’s always really fun, so a lot of good benefits I’ve received in my career from partnering with those guys.
Ned Hayes [00:07:54] Right. So you’ve been part of the NRF team there with Shop.org for a while. How has NRF changed over the past decade, maybe since the Shop.org acquisition or even prior to that?
Jason Goldberg [00:08:06] Well, in the early days, it was kind of funny, because if you think when I first started working in Shop.org, they were somewhat adversarial with Shop.org and NRF because if you think about the core member of the National Retail Federation back then, it would have been a giant apparel retailer. And what they most didn’t like is all these UP-AND-COMING digital side selling clothes without charging sales tax, and a lot of what a good trade organization does is government affairs and lobbying for legislation and regulation that’s friendly to the industry. So the National Retail Federation was very focused on getting e-commerce to pay their fair share of sales tax, and most of the members of Shop.org were digital sites that weren’t collecting sales tax and didn’t particularly want to collect sales tax. So there were some issues where we were probably on opposite sides. What made it odd back then is a lot of Shop.org members were big retailers, but their e-commerce efforts were maybe a separate legal entity. So if you are Best Buy or Walmart or Target, your office may have been in Bentonville or Minneapolis. But your e-commerce business was based in California and was a separate legal entity which aids your ability to not collect sales tax online back in the Dark Ages. So back then, it was like e-commerce was this bad thing that retailers didn’t want to happen to them. And of course, now that sounds utterly absurd, and from my way of thinking isn’t such a thing as e-commerce. There’s just commerce, and digital is the front door to almost every retail experience in America. So that’s why it makes less sense to have a separate trade organization today, and the whole business is focused on serving customers wherever they are and however she wants to interact.
Ashley Coates [00:09:38] Speaking of digital, a lot of your career has been focused on the digital disruption of commerce. What fascinates you about this topic?
Jason Goldberg [00:09:46] Working for an ad agency and saying digital disruption, it sounds like a buzz word that some consultant talks about, and there’s a misnomer that I can get paid off a quarter every time I use a buzzword media agency, which is sadly not true. But I like to point out that there really haven’t been that many true disruptions in any industry and certainly not in retail and we like to talk about everything is a disruption when it’s really a very logical progression of what we would expect. And so I kind of did this academic exercise while I went back over the eight thousand year history of retail and I counted up how many things I thought were legitimate disruptions, and I got five. So it is a pretty rare event, but I would argue that we are living through one right now, which is this digital disruption of retail, how we shop, how we discover products, how we make purchase decisions is fundamentally different today because of digital than it was for my parents or grandparents or my great grandfather’s generation. And so the retail playbook that my dad followed that was written by my great grandfather was pretty similar change a lot. That playbook utterly wouldn’t work today because retail is so different. And so to me, that sometimes challenging and frustrating that there’s not a clear playbook and we’re all testing and learning and trying things. But to me, it’s part of the fun of it that we are all having to figure it out, and all of us get a chance to invent things instead of just follow a recipe that someone else wrote. And that’s rewarding to me.
Ned Hayes [00:11:04] Right. So as we think about digital disruption as a word, what kind of disruptions do you think have happened more recently? I think digital disruption. My kids tell me it’s no longer a thing. It’s the water they swim in, right? So what disruptions are happening now?
Jason Goldberg [00:11:19] Yeah, still a lot. It turns out again, there are these cognitive biases we have that we tend to think of things in a certain way and we’re hardwired to get some things wrong. And one of them is whenever we were living through a change. We always have a tendency to feel like all the change already happened. All the change was last year, and I would argue we’re still in the first inning of digital disruption that how people are going to shop and the role digital will play in their shopping journey 10 years from now, it’s still going to be wildly different. The way to think about this is I started my career at Blockbuster. Blockbuster was digitally disrupted 20 years ago. Maybe you’ve heard of Netflix. If your borders bookstore, you were disrupted by digital twenty years ago. If you were Best Buy, you were disrupted by digital 15 years ago and Circuit City was even more disrupted, right? If your Toys R US, you were disrupted 10 years ago. But you know what? The two biggest categories of consumer spending are in retail. The two biggest categories in retail are automobiles and groceries, and in February of 2019, less than one percent of all automobiles were sold online, and less than two percent of all groceries in the U.S. were sold online. So the two biggest categories of consumer spending were still largely untouched by digital and arguably the second biggest retailer in United States of America, Costco would famously say things like Why would we ever encourage someone to come online when it might stop them from visiting our store? That was a quote from the CEO. So despite the fact that we think we’ve been through a lot of the disruption, the overall retail industry is still just going through it. The e-commerce numbers for last year will be out next week, but it likely is going to come in at about a billion dollars of e-commerce spending in the U.S., which will mean that e-commerce is about 16 percent of all retail sales. So I’m not saying that eventually there will not be a role for stores or stores are going away, but I think the ratio is going to be a lot bigger than 16 percent. And today about 65 percent of all sales are digitally influenced, which means you use your phone to help you make a purchase decision. That number, I’m pretty confident, is going to go to 100 percent. We still have a long way to go in this digital disruption, as much as it feels like we’ve already traveled a long ways.
Ashley Coates [00:13:22] What about changes in technology, especially over the past two years with the pandemic? Where do you think we saw the biggest accelerations in technology in retail over the past two years?
Jason Goldberg [00:13:33] To go vertical and horizontal, the verticals, I kind of already alluded to those categories that were the least disrupted before the pandemic got the most accelerated, so video didn’t get accelerated a lot. It already was near 100 percent, and there was a lot more consumption of digital video during the pandemic, but it remained similar to before in terms of a ratio. Grocery got wildly accelerated. We went from two percent to depending on how you count, nine or 10 percent of our grocery sales are online, and that was maybe three or four years faster progress than we would have expected. So that’s game changing. And it’s particularly game changing when you realize that grocery is a super low margin business, and digital grocery is almost exclusively a negative margin business. So now two percent of our sales are online and we’re losing money on that 10 percent of sales. What are we going to do to fix that, right? What does the future look like in that industry? We’re all trying to figure that out right now. The automobile industry is a three tiered model in the U.S. General Motors sells a car to a dealership who sells a car to you, and there’s a lot of impediments to selling that online. That industry was utterly convinced no one wanted to buy a car online and that they all wanted to do three test drives before they bought it. Well, maybe you’ve heard of Tesla. It turns out people do want to buy cars online, and the guys that are going gangbusters right now are either used car dealerships like Autonation and CarMax and Carvana that predominantly sell cars online. So those categories got the most disrupted. But then horizontal that I would call out is we used to have this religious war about in-store pickup in the US, we call it BOPIS, buy online pickup in-store. There’s cool names all over the world, so it’s O2O in China or click and collect in the UK. It was a big debate if we wanted to encourage that or not. There were pros and cons to encouraging it, and if you did encourage that as a retailer, how did you want to fulfill it? A lot of brick and mortar retailers would say, let’s put the pickup window in the back of our store so that the customer has to walk through the whole store, discover all these products on their way, and then it will be a more profitable sale for us, right? And retailers like Macy’s highlighted that that we sell 20 percent more stock when we drag the customer through our store to pick up an order and others are like, No, then we’re going to be less convenient. And if someone else puts the pickup in the front of the store, the customer is going to prefer the convenience of that experience. And no one wanted to do pick ups in the curb, right? Because you won’t discover any other products if you go to the curb and the loss prevention people had an aneurysm. When you said, we’re going to wheel out all this product to the curb to put it in a customer’s car. I probably sat in the curbside pick up meeting at Best Buy every week for three years. Then we would discuss the merits and never do anything. Then the pandemic happened, and Best Buy rolled out curbside pickup to 800 stores in 48 hours. So that was remarkable. The fastest growing category of e-commerce sales was curbside pickup and grew 130 percent. It’s very clear it’s going to be permanent. Online pickup for grocery is the highest NPS score ever at Walmart and Kroger. You discover stuff online and then pick it up at the front of the store is a technical innovation that I think got answered and rapidly accelerated because of the pandemic.
Ned Hayes [00:16:31] Speaking of rapid acceleration, there’s a lot of really interesting technology is coming down the pike. There’s A.I., there’s computer vision there’s augmented reality. Do any of these excite you?
Jason Goldberg [00:16:42] They all excite me. Some of them, my eyes roll a little bit. I’m a big fan of this construct that Gardner invented called the Gartner hype cycle, and I feel like all of these technologies very closely follow that model. So the idea is something new gets invented VR, the metaverse, and it gets super hyped, and all the media wants to talk about it and all the talking heads want to do podcasts about it. So it gets all this buzz. Everyone hears about it all the time, but you know, what it doesn’t do is solve any real problems or add any real value while everyone’s talking about it. So almost inevitably, in the early days, while these things are being so hyped, they fall short of the hype in terms of true deliverables. And so then people get disillusioned with them and then they start making jokes about them. I’ll give you an example. Two years ago, the laughing stock of our industry was this humble thing called the QR code. Right? Oh, you remember five or six years ago, everything was going to be QR codes? And then it turns out no one wants to use the QR code. Hahaha. That was funny when we used to talk about that, right? Well, have you been to a restaurant or a retailer in the last year? It turns out QR codes are super useful and we all use them all the time. It just took longer than the buzz for them to reach that point where they added that value. So I think all these technologies hit this peak of the hype cycle, which is what Gartner calls it. And then they fall down what Gartner hysterically calls the trough of disillusionment. So QR codes were in that trough of disillusionment, and then eventually they hit this plateau of productivity. So all those things you mentioned are somewhere on that hype cycle. The metaverse is at the top of the peak, or maybe it’s still climbing up the peak. VR, I think, is already falling into that trough of disillusionment. AR, I think is further along. I think we’re all going to start using more and more AR on our phones in a store to help supplement the product information printed on the package. And so I think that’s getting closer to that plateau. So I’m excited about all of them, but there’s some I would invest in for the short term more than others.
Ned Hayes [00:18:34] Right? Well, we’ve actually been living through a version of that story because I think five or six years ago SnowShoe, our parent company, invented this. What we felt was a game changing stamp, this capacitive stamp and it didn’t go anywhere. And then just this year during the pandemic, it took off in retail loyalty in a big way. So we’re finally at the plateau of productivity. That product market fit engage. The good flywheel is spinning, but I agree with you that almost every technology goes through that trough and hopefully it comes out the other side, but not everything does.
Jason Goldberg [00:19:06] No, this is true, but I would totally agree with you. I think there’s a whole genre of these contact with amenities that we’re going through there, and many got accelerated some news this week. Merchants are going to be able to accept contactless payments on an iPhone. So now that NFC technology in the phone that Apple did not unlock for retailers, they’re now unlocking for retailers. So it’s kind of exciting.
Ashley Coates [00:19:28] Very exciting! Well, so Jason, which brands do you think are really getting it right right now in terms of using technology to create an enjoyable, exciting and cohesive omnichannel experience for their customers?
Jason Goldberg [00:19:40] Now a fun question. The wrinkle here is everyone has a different definition of good and successful. The obvious answer to your question is Amazon. Certainly, they’re born digital and they’re doing a phenomenal job and they’re winning. I sometimes joke that my job is to help people unsuccessfully compete against Amazon, but I don’t think they are the best at creating engaging, enjoyable. Experiences, as you mentioned, but what they proved is it doesn’t have to be enjoyable to win that convenience and trust are super important and those are the dimensions that Amazon plays on and win. So if you’re anyone other than Amazon, you better think long and hard before you try it out Amazon Amazon by trying to be more convenient than them. I’m not saying it’s impossible. That’s going to be an uphill slog. I really admire some of the brands that are saying, Well, I’m going to go to that white space. I am going to be more engaging. I am going to be more experiential. So to me, one of the brands that really is leading in that regard is Nike, a traditional wholesale company that sell their shoes to Foot Locker, Macy’s and DSW. And the experience gets invented by Foot Locker, not by Nike. And you fast forward 30 years today. Nike’s exclusively focused on selling their own shoes and creating their own experiences, and they’ve invented some of the best retail shopping experiences out there right now, which is the Nike House of Innovation, and they have other concepts like Nike Local and Nike Rise. They’ve redefined loyalty with the Nike Plus program, which I know is near and dear to the SnowShoe folks. So there are lots of innovation there for digital, beauty, and health and apparel are industries where some of the newer techniques tend to work faster, and so there’s a little more innovation there than there is in grocery categories at the moment, right?
Ned Hayes [00:21:13] Well, you mentioned Nike and loyalty, and as you mentioned, loyalty is near to our hearts. So can you speak a little bit to the state of loyalty and customer engagement? What changes have you saying? Where’s loyalty going?
Jason Goldberg [00:21:25] I hesitate to answer this question in front of you guys because you all know if I’m wrong, but I think of the Facebook relationship status. It’s complicated. That’s my one sentence answer to where loyalty is going. I do think it’s changing a lot. Traditionally, when I say loyalty to a retailer, they’re like, Oh, you mean a points for spend program where the more you spend, the more points you get. You redeem the points for something and that will engender loyalty. Right. And there are examples of that kind of program working phenomenally well. Like obviously, the airline industry is very strong there. But in retail, I would point to a Sephora or an Ulta where an extremely high percentage of their customers are exclusive to one brand, i.e. they exclusively shop Ulta or they exclusively shop Sephora in a very high percentage are members of the points for spend programs from both of those companies, so it works really well. For many other retailers, those kinds of programs are having diminishing returns, right? And caveat here, I tend to work with big retailers so that things may be a little different in the smaller, independent retailers, but there is such a thing as loyalty fatigue. And when you go interview customers and you borrow their wallet, you find 14 loyalty programs in their wallet. And if you’re a member of 14 programs, you’re not loyal to them. And so then you have to have this hard conversation with the retailer. Well, what do you mean by loyalty? How do you measure loyalty? Loyalty doesn’t mean how many people are carrying your card in their wallet. Loyalty is what share of their spending do you get? That’s wallet share or how frequently do they buy from you? That’s frequency. It turns out some retailers can really win by improving their frequency, and there are specific types of loyalty programs. We can use that word particularly well in certain categories to drive frequency, and other retailers can only win through that wallet share and that true loyalty. And there’s different mechanisms that you might use to engender that kind of loyalty. Modern loyalty has to be solved much more specifically on a case by case basis. It doesn’t look the same for all, but for my big giant retailers. The big trend is to move away from points for spend programs and toward paid membership programs. So they actually don’t call them loyalty programs. They call them their platform strategy or their ecosystem strategy. And it’s really looking at the Amazons and Costcos of the world and saying they have this almost insurmountable advantage that they’ve locked in through their great execution of these paid membership programs. And how are we going to generate recurring revenue like that? You’re seeing a lot more of the Walmart+’s of the world and less of the Kroger rewards programs of the world.
Ned Hayes [00:23:50] Yeah. Well, speaking of paid membership programs like Costco and Amazon Prime, where does loyalty go in that world? Is there a place where you can have somebody who is an intermittent purchaser rather than a paid member? Does loyalty actually exist without that full buy in?
Jason Goldberg [00:24:06] It may obviously paid membership. You have the most skin in the game, so it’s the most extreme version. I would argue that for any retailer, even Amazon, and certainly true for everyone other than Amazon, paid membership is really an affinity program through your highest value customers. It still isn’t something that’s going to win for every customer, and there’s more money to be made in that long tail of those less frequent, more intermittent customers. So you need an answer for everyone. And I would argue that the long tail answer is less another program and more about relevant marketing. And it just turns out that you may want some flavor of a loyalty program in order to generate more relevant marketing. So if I can collect better first party data about customer preferences, about customer behaviors, I can be smarter about what offers I made to them, what products I remind them of, how I assort my stores, how I merchandise my stores. To me, the most important aspect of loyalty programs is the customer insight that I gather and how I act on that. So the biggest mistake is go buy a loyalty program from some vendor that siloed in its own campaign. And so it’s like, Oh, well, we send loyalty emails to our loyalty campaign and we send regular emails to our customers and the two systems never meet. That’s a big mistake. You should have a CRM or a CDP or some 360 degree view of the customer, and you should be enriching that view of the customer through these various kinds of loyalty and frequency campaigns and then acting on them.
Ashley Coates [00:25:34] What about loyalty to brick and mortar locations? Costco really succeeds here. Can other brick and mortar succeed?
Jason Goldberg [00:25:41] I hesitate to say they should try. It’s a mistake for us to count our revenue based on these channels. I had the world’s worst metaphors, but I use them all the time. Half the cashiers at Best Buy are left hand and half are right hand. Should Best Buy in their earnings report tell you how much revenue they rang up with left handed people and how much they rang up with right handed people. Is that a segmentation that matters odd numbered point of sale systems? Even no point of sale systems? It’s not. It’s a matter of what the customer wants to do to fulfill her needs. Frequently counting up wins at the store versus wins online is foolhardy, and we’re not good at it anyway. Ninety five percent of all Target’s e-commerce sales get fulfilled from the store. So is that a store sale or is that an e-commerce sale? Increasingly, when I come to pick up that order, a curbside pickup person is going to entice me to buy something else. There’s going to be a cold can of coke I can buy from my drive home. Is that an e-commerce sale? Because I drove to the store to pick up my e-commerce order, but I got impulse so this can of coke at the curb. So there’s all these nuances. I don’t think it makes sense to count, and I certainly don’t think it makes sense to have a KPI around that. What I would say is stores are very valuable, but the role that stores play, how stores help fulfill those customer wants and needs is changing. By some metrics, the most successful brick and mortar retail in the world is Apple. They have the highest revenue per square foot of any retailer in history, and here’s a dirty little secret for you. Apple retail stores are not retail stores. If you go in the store and you take a picture and you color all the people that are getting help from the Genius Bar Green and all the people that are buying something from an Apple associate red, what you’re going to find is that’s a customer service location that occasionally sells some stuff. A lot of the role of that store in Apple’s case is post-purchase. In the case of Target, a lot of it is around the last mile fulfillment and staging inventory close to that customer demand. E-commerce is really good at selling stuff. It’s not so good at discovering stuff. It’s not good at browsing. The treasure hunt at IKEA is super valuable, so I think more about solving those kinds of problems convenience, post-purchase support, discovery and less about whether they do it on their phone or their laptop or their store.
Ned Hayes [00:27:49] Great, well, I think that really sums up loyalty in a nutshell. Thank you for all of that. I did have a question for you that looks out five 10 years from now. If we can ask you to look into your crystal ball where is retail going in 10 years, I don’t think any of us would have seen COVID coming. But what if things keep accelerating in a positive direction? What’s going to happen?
Jason Goldberg [00:28:07] I hesitate to answer because I’m almost certainly wrong on our podcast. We do a prediction show every year and it’s everyone’s favorite show, mostly because we make fun of how wrong our predictions were last year. So predicting 10 years out when we’re still in the first inning of this 10 inning battle, pretty dicey. Asking people to predict what the world would be like if the iPhone gets invented in nine years is pretty dicey. But that being said, if I did have to bet, one of the things that I’m really seeing is the collision between brands and retailers. You look at all the most successful brands in the world, and what they secretly most want to do is have a direct relationship with the customer and sell their own stuff. Nike’s, I mentioned, has been super overt about it. They fired DSW. Is the number one brand of DSW. DSW can’t sell Nike shoes anymore because Nike would rather sell them direct to the customer. A lot of other brands are doing more mild versions of that. They’re being a little more secretive about it, but they’re all launching direct to consumer initiatives that are upping their game for collecting first party data. And all the privacy changes in the ad ecosystem are making it even more incentive for them to collect first party data. And conversely, every retailer’s number one strategy for competing against Amazon is to sell stuff that Amazon can’t sell, and mostly what that is is exclusive products that the retailer invents. And if you look at the last 10 years in retail, the most successful product development company of our generation is Target. Target’s invented 11 brands in the last five years that all sell over a billion dollars. Procter and Gamble hasn’t invented what you think about all these retailers. What’s their biggest initiative? It’s to become a brand. It’s to build our own stuff and sell our own stuff. And what’s every brand strategy? It’s to become a retailer and have a direct customer relationship? I strongly suspect that if we fast forward 10 years, there’s going to be a lot less people selling other people’s stuff, and most brands and retailers will have met in the middle and be doing a good job selling their own stuff. And maybe there’s one aggregator in every market, so maybe that’s amazon and Alibaba.
Ashley Coates [00:29:59] Really fascinating, thank you so much, Jason. We’re so glad to have you on the podcast today. We do have one last question for you, which is what do you want your legacy to be? What would you like to be remembered for?
Jason Goldberg [00:30:11] That he was less wrong than Scott Galloway. Inside joke! I don’t know. In various points in my career, I felt like, Oh, I did something that’s made a big deal. Like we invented how people shop for videos on Friday night. That seemed like a big deal thirty years ago, it doesn’t seem like a very big deal today. So I suspect when I look back on my career, the thing I already am most proud of and I hope I’ll continue to be most proud of are all the great coworkers I got to work with and that I hopefully helped along the way that are inventing the future of retail long after I’ve lost my mental faculties, if I haven’t already.
Ashley Coates [00:30:43] Well, thank you so much for being here. It’s really been a wonderful conversation.
Jason Goldberg [00:30:47] Entirely my pleasure. Thanks so much for having me.
Ned Hayes [00:30:52] Spark Plug is a wholly owned property of SnowShoe all content and copyright 2021 Spark Plug Media.