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Jason & Scot Show Episode 240 – Amazon Prime Day Recap


A weekly podcast with the latest e-commerce news and events. Episode 240 is a recap of Amazon Prime Day 2020, and a review of the US Census Advanced Monthly Retail Sales data for September.

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Amazon Prime Day

Advanced Retail Sales Data for September

US Census Advanced Monthly Retail Sales for September

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Episode 240 of the Jason & Scot show was recorded live on Friday, October 16th, 2020.

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 240 being recorded on Friday October 16th 2020 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.

Scot:
[0:39] Hey Jason and welcome back Jason Scott show listeners.
Well it has been a very busy week of e-commerce news we had prime day this week earlier Tuesday and Wednesday that was exciting and then also one of your favorite days Jason the US Census Data dropped so,
and we talked about that just way back in episode 239,
so we thought we would put a short show out there really just kind of review the news and make sure everyone was up-to-date because we’re heading into the holiday period.

Jason:
[1:10] That’s awesome and it feels special for me because we’re recording this show on a rarity for us you and I are spending Friday night together so I feel like I’m usually only good enough for a week night with you so I feel special that I got a weekend.

Scot:
[1:24] Yeah I’m going clubbing later so I had time to squeeze you in.

Jason:
[1:27] Nice I appreciate it well before we jump into all the awesome content for this show,
I wanted to remind listeners that if you’ve been enjoying the podcast the best way to reward us for all the hard work we put into it is to jump onto iTunes and give us that five star review,
it’s annoyingly difficult you you actually have to go into the podcast app,
is the only place to write reviews and you can write a review or you can just click on the five-star and be done with it,
but that really helps us with discoverability on the on the various platforms and help us find new listeners so if everyone would take a moment to do that we’d greatly appreciate it.

Scot:
[2:08] Yeah and then also today was kind of exciting you and I were both quoted in the New York Times.

Jason:
[2:16] Yeah yeah I know I feel like we finally made it.

Scot:
[2:19] Yeah we can did your mom see what did you tell your mom what’s that.

Jason:
[2:24] Yeah yeah I did share it with some family but more fun my social network just has a lot of people that read the New York Times regularly and even,
number of people apparently there’s this till this thing where they,
they take all the Articles from the website and they somehow recreate them on Papyrus and I guess mail them to people,
so apparently there’s some kind of physical thing called The New York Times that you can read and I actually had several family members that read the Papyrus reach out and say
I have no idea what you do you seem like a total fraud but you’re in the New York time so you’re legit now.

Scot:
[3:05] Wow good I’m glad that that strengthen your relationship with your family.

Jason:
[3:10] Yeah well they still don’t like me but they were impressed by that one moment I think they all correctly assumed I was riding on your coattails.

Scot:
[3:17] Yeah they’re they’re tiny so it’s good that you can fit on there the.
The will put a link to the article in the show notes but it was really about ship again so,
the this is a Weekly Newsletter our weekday newsletter that they published called on Tech and they were highlighting some of the things we talked a lot about about on the show so we’re excited to be in there.

Jason:
[3:41] Yeah for sure.

Scot:
[3:42] And then speaking of ship again kind of semi-related I guess so Amazon held their Prime day and this was interesting because it’s the first time we’ve had a,
October Prime day they shifted it to the pandemic.
And then Amazon did have a pressure release in a typical Amazon fashion they gave us some tidbits but then left us wanting more.
So what they announced is the first of all the announcement was really interesting and that.
Unlike previous years where they kind of pound their chest and say this was the biggest Prime day ever they did not say that so a lot of people implied from that that it was a terrible day,
but then I think the right read on that came from a lot of Wall Street analysts who said they just really don’t want to be pounding their chest because they’re under scrutiny,
around a lot of Monopoly talk so,
they just really wanted to highlight third parties so that was the Press so they essentially said that sales grew sixty percent year-over-year for third parties and this is when they line up Prime days from last year’s June to this year’s October so it’s not just like,
these random days and October group sixty percent year-over-year and then they said this is the part that was interesting is they said that third party sales drove 3.5 billion in gmv.

[4:58] So that was good and then then this is interesting because some Wall Street folks kind of implied okay,
well typically half the units Amazon reports this on a quarterly basis about half the units come from first party have from third,
therefore if you did three and a half over on the third producer party side you probably did three and a half on the first party therefore it was a 7 billion dollar Prime day.
But then other folks said well if we kind of dig into the numbers a little bit.
The first party just because it’s 50% across a quarter doesn’t mean it was over Prime day,
and then you and I know that the top sellers are always Amazon’s own devices and they ran some ridiculous deals online,
there’s an echo dot for I think the lowest it’s ever been and a couple other things on there and then when you look at the best sellers they typically had something like 18 of the top 20 slots,
so then folks can look at that and say well what if.
What if that’s that three and a half billion from third-party actually is on the maybe that’s about 1/3 so then you get this bracket of on the low-end about 7 billion in GMB for the prime day-to-day events,
and then on the high end around 10 billion do you have a pinion of where that landed.

Jason:
[6:13] Yeah I imagine that it was on the lower end.
Part II think all the regulation aside if it if it was.
A huge blowout day I still think they would have trumpeted that more and the fact that they were focusing on on the three-piece hours and emphasizing the small business is I’m sure it was a huge day but I just find the
the kind of seven billion numbers are probably more credible.

Scot:
[6:49] Cope and then.
Couple other interesting things I think the theme of this one so there were some of the third-party data providers out there one of them were active ones on Twitter was this lady called kala Schwartz.
I think she’s relatively new at Salesforce they’ve been hiring a lot of people in there their retail strategy group.
And she was really reporting I live data and so so my understanding of this data and we should have her on the show so this is this is my unofficial understanding of this data,
is essentially the demandware data and maybe some other stuff in there but largely the old platform known as demand where which is now,
Salesforce retail cloud or something so it doesn’t include Amazon,
which is which is interesting so what they saw is in that data set they saw over fifty percent increase in traffic to non Amazon stores on the first day and then,
that continued so they saw a pretty robust I think overall they saw 71 percent more,
compared to when it was in the June July timeframe.
So so I think the theory there is more and more retailers glommed onto Prime day and benefited from it so it feels like.
The non Amazon folks were probably the winner this Prime day which is kind of an interesting turn of events.

Jason:
[8:13] Yeah for sure and I think you’re right I think the the web.
Traffic data from Salesforce comes from Salesforce Commerce Cloud which is formally demandware but they actually do have another cool data set that she also used in that article they also have exact target right so they have a bunch of people
that do outbound marketing and she was actually able to do some analytics on other retailers,
and found in found that like on average retailer sent 20% more emails on Prime day,
then they typically do in that day and that a significant portion of them I want to say eighteen percent of all the emails that got sent out on Tuesday and Wednesday reference the word prime or holiday in them.

[9:04] So
right you know her premise from that was that a ton of other retailers are were promoting sale either holiday sales or you know specific counter Prime,
programming in their outbound email and then just sort of reinforce that another cool report that I’ll put a link to in the show notes,
came from one of the Forester analyst so she took the top 50 e-commerce sites in the US and visited them all on Prime day and screenshot of them all so she put together this,
the school PDF showing you know what everyone’s primary messaging was on Prime day and.
You’re you’ll see a theme like almost everybody had a holiday sale running on on October 10th which is you know much earlier than you would ordinarily expect to see.

Scot:
[10:00] Any other interesting things you saw in Prime day.

Jason:
[10:03] Um I think you you hit on all the big ones there I always just get a chuckle so.
Amazon a they did say that it was the largest to sales days ever for third-party sales.
Which is which is interesting you know even though a lot of people estimate that third-party sales were much more part of the mix on Prime day than.
They usually are but Amazon always tells us what the top-selling products are and every market and and from past years we know those are predominantly,
Alexa products this year they didn’t,
include that on any of their list so it’s all the non Amazon products and it just occurred to me that when covid over and we can take a vacation
I feel like the people in Netherlands turn out to be much more fun than the people in Spain because the best selling product and the Netherlands was a Lego Star Wars stormtrooper helmet.
Which I feel like you and I could both relate to and the best-selling product in Spain was like a dish detergent.

Scot:
[11:06] Come on Spaniards got it up your Prime Day game.

Jason:
[11:09] Their rap is like totally cool and hip but apparently they’re not as in the Star Wars Legos is than as the the Dutch would that be.

Scot:
[11:21] There there Maslow’s pyramid is inverted got have Star Wars at the top versus cleanliness.

Jason:
[11:26] Yeah or maybe the Spanish are just so hip that everyone already have a Lego Star Wars stormtrooper helmet and therefore they didn’t need one for Prime day.

Scot:
[11:33] Could be could be we’ll have to have someone on the show to to dig into this Burning issue.

Jason:
[11:39] Yeah.

Scot:
[11:39] Cope well let’s I know you love to talk data let’s dig into the retail sales that came up I’m still
I’m still kind of in the Fanboy glow from having the guys on the show so it was exciting to see the data come out days after we had talked to them.

Jason:
[11:56] Yeah so we talked to him last week that was last week’s episode they sort of explained how they did all this data and they reference in the show that on the 16th we get next month’s Advance retail data so I came out first thing this morning
and kind of the very top line was retail sales were up 1.9 percent from last month.
So that’s encouraging like there’s some argument that there’s been a Resurgence of covid so there might have been some fear that there was less spending so two percent is,
is Meaningful growth and and they’re like top-line everything they measure was up 5.4% from.

[12:40] September of 2019 so as we talked about in last week’s show.
I’m not very interested in a month over month eight I don’t think it’s all that relevant for retail so I quickly stripped out the,
then the kind of non-retail e category so I took out Autos which side note for people in the Auto industry like you new and used auto sales are actually significantly up.
But I also took out gas which gas sales are significantly down,
and so I and then I compared it to last year’s number not seasonally adjusted because we’re comparing the same month from two years,
and so court so I’ll call that core retail core retail was up 7.5 percent from last year,
so when you know further Evidence when we talk about that that V shape.
Recovery in general it’s absolutely true that that the overall industry is comping significantly above last year which is remarkable given what we’ve been through.

[13:44] But I did then break down the individual categories and what’s what’s really happening here is there are two big pools of money that consumers traditionally spend money on that is not retailgeek.
And covid is as cause people to not spend money on those categories and instead that money is flowing into retailgeek,
so basically you have about 8 billion dollars in spending a month that used to go to restaurants and and is now going to grocery stores instead because restaurant sales are so diminished.
And then you have about eight billion dollars in spending that used to go on vacations,
that’s now going into people improving their homes and items for their home so so you’ve got kind of Sixteen billion dollars in incremental spending that flows into retail from that,
and then we saw the non-store sales.
Category which we talked about in detail in the show asked last week but basically that’s mostly e-commerce will call that 75% e-commerce and then some catalogs,
and that’s the fastest growing category of all that 17 billion in spending so,
you add that 17 billion to the other two eight billion numbers and that basically was accounts for the entire 7.5 percent growth.

Scot:
[15:06] Wrinkle so at a 30,000 foot level in Q2 we saw e-commerce grow at 45%
that makes sense to me because the Census Data really lines up with Amazon which feels right and then what this is telling us is we’ve come down to sub 30 percent growth in Q3.

Jason:
[15:26] First September yeah this is not yet yeah so we don’t we don’t know Q3 and,
and a reminder we get this monthly data which is the least perfect measurement of e-commerce it’s this non-store number and there’s a bunch of challenges
there’s a better e-commerce number that comes out once a quarter and so there we will get a better Q3 number,
but it’s going to be interesting that like from from the September data you would infer that it’s going to be down from the what was it last quarter like 44 and a half percent or something from memory.

Scot:
[15:56] Yeah and even like a Forester had and Goldman had 30% and maybe emarketer so so that would be you know during the course of the quarter maybe it slipped yeah.

Jason:
[16:07] I failed to mention it but the actual official increase was 27% for non store sales so 20 you know.
There are there are several other indexes out there of e-commerce like Adobe and Salesforce and I won’t be surprised at all if they report a bigger number than 2727 sounds feels light to me.
Um if that is.
Completely accurate then what that would mean was that e-commerce was about twenty percent of retail sales in September.

Scot:
[16:39] Yeah so that would be down to because we’re usually at this 30 we caught search that thirty percent right.

Jason:
[16:45] Yeah I love how you call it usually but yeah at the moment we’ve been we’ve been trending in the high 20s or low 30s pre covid we were in the teens so so yeah possible that that,
you know as retailers opening up a little bit people were starting to move more back to stores but I have to tell you all of the the.
Databases that track store traffic are also I would
characterize them as wildly imperfect and not agreeing with each other so take them with a grain of salt but most of the best store traffic data still says that we’re down about 25% overall in terms of foot traffic.

Scot:
[17:26] Yeah.

Jason:
[17:27] So like yeah you would assume then that that that should drive a bigger e-commerce number even than 27 percent.

Scot:
[17:35] Yeah well Amazon announces Q3 on October 29th I had erroneously thought it was going to be next week,
but it’s the week after so we’ll be doing a show on that and it’s going to be interesting to see how that compares do you know when the quarterly data will come out will that be before or after the 28th.

Jason:
[17:54] That is a great question and it is knowable so we just have to stall while we’re talking the e-commerce quarterly data is going to come out on November 19th.

Scot:
[18:05] Okay so we’ll get Amazon first and then the data so that’ll be interesting we can kind of see how those line up.

Jason:
[18:10] Yeah I will say though so the on November 17th so two days before that we’ll get the the September or I’m sorry the October Advance sales and.
Expect that e-commerce number to be ginormous because there is all this Prime day activity and every competitor digital activity so I would expect the growth in e-commerce and in,
October to be wildly larger than it was in September.

Scot:
[18:40] Yeah I know we’re jumping around here but I’ll connect these dots the one of the theories from the Salesforce folks was that this is going to Prime day in October is going to shave a pretty material amount off of,
what I call the Cyber five do you share that or you think that there’s enough Gap in there that it’ll it’ll be different.

Jason:
[18:59] It’s Tricky so I in general I do share that I think.
If you look at the turkey five and you’ll get total retail sales for those five days brick and mortar and e-commerce,
it’s going to be for sure,
right year because retailers are desperate to pull sales in earlier their everybody’s worried about their inventory so they’re worried about running out of product because the supply chains were disrupted,
and you know per our discussion about ship again and they’re really worried about getting a bunch of orders right so retailers are desperate,
to not have all the sales happen on that turkey 5 and then,
nobody wants Black Friday to be a big in person day right like they don’t want the big crowds because it’s not very covid friendly and they have limited capacity so.

[19:48] Paradoxically retailers are hoping that the Cyber five is a lighter now because they’re discouraging people from going in the stores that’s going to shift more sales from those five days online so so you’re going to you know have kind of.
The whole tie the lowering and then a little wave raising for e-commerce but I have a feeling net-net that that.
Retards are going to successfully pull some November sales into October and therefore the November sales will look a little more modest but I also suspect,
the consumers don’t totally trust retailers when they say the best deals are now and so I don’t think retailers are going to pull as much sales into October as they’re hoping to.

Scot:
[20:32] Okay.

Jason:
[20:33] Well Scott I feel like in a huge Rarity we have succeeded in producing a short show,
so I’m calling that a win,
again if you enjoyed this show and you thought you were going to get a really long workout and instead you just got a really short workout you’re welcome,
and we totally appreciate everyone listening and look forward to talking to you next week we got a bunch of exciting shows and guess on tap.

Scot:
[21:03] Yeah after you leave that awesome five star review over on your favorite podcast listening technology head on over to Facebook and like us over there we also have a LinkedIn group
then you can follow us on Twitter I’m Scot Wingo with one t and Jason is retailgeek with 1K.
Correct well there’s a tea.

Jason:
[21:28] Oh jeez the recycle yeah the world’s worst Power I feel like that’s how you know my tweets are authentic and then I’m not paying someone to write them is although spelling errors, and I on that note I am going to wish everyone a great and happy weekend and until next time happy Commercing!





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