Amazon has announced a new initiative, Climate Pledge Friendly, to help customers shop for sustainable products.
Amazon has increasingly been under fire from its own employees for a perceived lack of effort toward addressing climate change. This included a “climate strike” in 2019, when hundreds of employees walked out. The efforts appear to have made an impact, as Jeff Bezos pledged $10 billion to fight climate change in early 2020, and now Amazon has unveiled its new initiative.
Climate Pledge Friendly labels will appear on some 25,000 different products across a host of categories, including grocery, household, personal electronics, fashion and beauty, to name just a few. In order to receive the label, a product will need to have at least one of 19 sustainability certifications. A number of brands have gotten onboard, including Seventh Generation, Burt’s Bees Baby, Mrs. Meyer’s and HP.
“Climate Pledge Friendly is a simple way for customers to discover more sustainable products that help preserve the natural world,” said Jeff Bezos, Amazon founder and CEO. “With 18 external certification programs and our own Compact by Design certification, we’re incentivizing selling partners to create sustainable products that help protect the planet for future generations.”
“Revolve is a whole new species of fashion retail,” says Jesse Timmermans, the CFO at Revolve, in an interview with Entrepreneur Network partner Business Rockstars. “We’ve taken the traditional retail model and evolved that experience to be laser-focused on the largest buying power in the world, the millennial.” (View video below)
Timmermans says that the biggest challenge of being a CFO for him is balancing risk, cost, opportunities and reaching the right decision for the long-term. “There is a vast amount of data available out there, so how do you take all of that data, translate it, find the right indicators, and make the right decision for the long term,” he said.
On Competition: You Have to Offer More
Customer behavior is changing fast and customer expectations are increasing all the time with the larger more transactional based digital retailers making it harder and harder to compete, so you have to go beyond that and offer more. Beyond free shipping, it has to be fast shipping. Beyond free returns, it has to be easy returns.
We at Revolve treat the home as a dressing room, so we allow the customer to return, we encourage the customer to try new things. We offer a lot of emerging brands, so it’s important for that customer to try something on in their home and to be able to return free and easy.
Constantly Monitoring Data to Read Brand Performance
At Revolve we carry a lot of emerging brands, so we need to continually read and react to the performance of these brands. After launching on the site we read within 24 hours how that brand is performing, how that style is performing. We read many many attributes on each piece of clothing and then we make a quick call on do we go deeper or do we cut the brand and the style?
About Revolve
Revolve is an ecommerce startup that was founded in 2003 and is headquartered in Cerritos, California. The company describes itself as the virtual home for an unrivaled collection of over 700 of the world’s most-coveted established and emerging brands in women’s and men’s designer apparel, shoes, and accessories. Based in the Los Angeles area, Revolve’s is deeply rooted in the Southern California lifestyle from which it was founded, where a savvy view of fashion and fun-loving attitude are infused into the entire customer experience.
“The Macy’s Thanksgiving Day Parade is not going to be a live event but it’s all going to be filmed live,” says Macy’s CEO Jeff Gennette. “It’s going to be filmed over a two-day window. It’s got the floats, it’s got the balloons, but the talent is different. We are really excited about having a great Thanksgiving Day Parade for America this year. It’s just going to be different but it will be going without a hitch.”
Jeff Gennette, Chairman and CEO of Macy’s, says that the iconic 2020 Macy’s Thanksgiving Day Parade will be happening over two days but without a live audience:
Macy’s Thanksgiving Day Parade Is Happening
When you think about Macy’s you think about we’re pillars of the communities that we are a part of. We take great pride in that. That’s in our DNA. When you look at what we do to give back and what we’re doing with all of our donations, what we’re doing for meals on wheels with food instability right now, those are things that we’re really proud of. We’re in that with our customers raising millions of dollars for communities in need. If there ever was a time where we need to give thanks it is right now.
For Thanksgiving, we had kind of a dress rehearsal where we did the fireworks. We did the fireworks and we did it in a way that was safe for people who are living in New York City. Expect the same thing with the Macy’s Thanksgiving Day Parade. It’s not going to be a live event but it’s all going to be filmed live. It’s going to be filmed over a two-day window. It’s got the floats, it’s got the balloons, but the talent is different. All the people that were ready to come, the marching bands, the cheer squads that were coming in for 2020, we’ve given them a pass and they’re coming back for 2021. We’re backfilling with other entertainment.
We are really excited about having a great Thanksgiving Day Parade for America this year. It’s just going to be different but it will be going without a hitch.
Being An Omnichannel Retailer Gives Us An Advantage
Is back to school shopping a prequel to how holiday shopping will be? We’re all looking at how’s the traffic going to be between Thanksgiving and Christmas or Hanukkah? How should we expect that? We’re all looking for whatever comes our way. We’ve all got A-B-C. alternatives. We call it the 2020 options because whatever comes our way we have to have flexibility. What I’m expecting is that holiday traffic is going to start much earlier. More than ever, customers want to have a great gift that they either put under the tree or they give in a treasured box.
To make sure that we have that ready for customers no matter when they want to shop we’re pulling the calendar to start addressing those great values at the beginning of November. We’re going to be ready for the customer, for those that want to shop after Thanksgiving. Being an omnichannel retailer, we’re going to have a great advantage to be able to deliver it the day before Christmas by same-day delivery or them coming to a store and through the safety of curbside being able to pick up that great value.
Macy’s Thanksgiving Day Parade For TV Only, Says CEO Jeff Gennette
As technology changes so does the way we interact with each other. Before smartphones and ordering online, popping into a shop to search for a particular item or calling around to find it before heading out were both common things to do. The internet and later smartphones changed all that. Now we have access to whatever information we need right at our fingertips at all times. If we are searching for something hard to find we can simply order it online. If we are planning to go purchase something in person or we want more information about an item before we buy it, we often consult our smartphones for further information rather than asking a store employee for help. In fact, even before the COVID-19 pandemic, 69% of people would rather search for information on their phones instead of asking for help from a store employee, and the pandemic has just made this practice all the more practical.
All the information and technology we carry around in our pockets has changed the way we interact with the world. We send text messages and emails more frequently than calling now and if we don’t know something it’s just a matter of knowing how to find it. With the spread of the pandemic accessing information has become even more crucial. We can look up mask policies and procedures before we go to a business, find out if a business has special hours for those with disabilities and the elderly, and look up every-changing hours and services.
Increasingly, stores are giving information to consumers that they have never given out before. One of the things customers can look for online with many businesses is not only where an item is located in a store, but also how many of that item are in stock at any given time. Customers want accurate information and they want it now, as their time is becoming more valuable than ever. What’s more, knowing you will find what you are looking for before you leave the house is actually pretty critical during the age of social distancing.
Mobile Communication In Retail
Communicating with customers is changing thanks to the mobile revolution. Answering phone calls from customers is no longer the main interaction with them. In fact, 85% of those who own smartphones prefer text messages to calls or even emails, which means that businesses that aren’t responsive to this type of communication are likely missing out on customers.
Mobile ordering and messaging has also been a boon to restaurants since the start of the pandemic. In many places restaurants have only been open for takeout orders, so having apps and messaging abilities for taking orders and telling customers when their orders are ready has helped them to run on a skeleton crew while making the changes necessary to function as a takeout only business.
As restaurants begin to reopen with new social distancing guidelines in place, mobile messaging helps to keep communication going for reservations, when tables are ready, and more.
Mobile Communication In Medicine
Accessing medical services has been challenging because of the pandemic, and early on laws were relaxed to allow people to access telehealth services. In order to make the transition easier for medical providers and patients alike, all messaging and video call services were allowed so that doctors could get care to those who needed it via whatever means they were able to use. Teladoc saw a 50% increase in use in the first week alone.
When it comes to customer complaints, nothing makes customers angrier than sitting on hold for hours waiting for their call to be answered, which makes it not the best way to solve customer complaints to begin with.
Chats and mobile messaging give customers the ability to initiate contact and then do other things while they await a response. It’s a much less stressful way to deal with contacting customer service, and it’s a lot more effective than airing out grievances on social media, which can come back around with undesirable consequences later on.
But text messaging has to go both ways. It’s not enough to send marketing messages via SMS, businesses also need to be able to respond to messages they receive. One in three customers report sending a message to a company and never hearing back from them, and in many cases it is simply because the company has not enabled two way messaging.
Customers say that businesses that offer messaging respect their time, which makes them more likely to choose to do business with that company. It also means those happy customers are more likely to recommend that business to friends and family.
As technology changes, the ways that businesses interact with customers have to keep up with the times. The first rule of customer service is to meet customers where they are, and if that means hanging up the phone and sending out a text message that’s how it has to be.
Mobile communication is likely to hinge on SMS messages for some time to come, and businesses that aren’t already using this method are missing out on business. Is your business ready to harness the power of mobile communication?
“We want to make sure that 70 to 80 percent of the volume for pizzerias is digital., says Slice CEO Ilir Sela. “This is very comparable to Domino’s and Papa John’s and other big chains. We’ve got to lead the digital transformation of these small businesses. We bring technology and marketing and we enable the existing operation of the pizzeria. We make them more efficient and we make these Pizzerias really powerful and valuable.”
Ilir Sela, CEO of Slice, discusses how the Slice app is driving the digital transformation of small pizzerias so that they can compete effectively with the national pizza chains:
Leading Digital Transformation Of Pizzerias
We take a merchant friendly approach because we really believe in the power of small business and the American dream. I am third generation in the pizza industry. My family consists of a ton of entrepreneurs who mostly opened up small business pizzerias. The goal for us was to make sure that as digital becomes an important component of their business that it doesn’t cannibalize the physical location.
So we take a digital-first approach in a way that means we want to make sure that 70 to 80 percent of the volume for these pizzerias is digital. This is very comparable to Domino’s and Papa John’s and other big chains. In order to do that you have to take a long-term view and you’ve got to take a merchant friendly view around loyalty and online ordering. Obviously, in order to do that we’ve got to run the playbook. We’ve got to lead the digital transformation of these small businesses.
All Pizzerias Need To Digitize Their Platforms
We are actually an all-in-one platform where we partner with a small business in order to digitize their operation. We are not a logistics company ourselves. We empower small businesses to have what we call first-party delivery. In a way, that’s been done forever. Small business pizzerias have delivered across the entire country for decades and they’ve made it work incredibly well.
The reality is that in the world of COVID and as we go further into the 2020s, all these pizzerias really need to digitize their platforms in order to become more efficient. What we do is we bring technology and marketing and we enable the existing operation of the pizzeria. We make it more efficient and we make it really powerful and valuable.
Slice CEO Ilir Sela Leading Digital Transformation Of Pizzerias
“There’s a real recognition that digitization and transformation are not doing what you used to do in the physical world,” says Publicis Sapient CEO Nigel Vaz. “Digitizing that and translating that is essentially the journey of going from being a caterpillar to a butterfly. Real transformation. How do you reimagine yourself in the context of a world that now is entirely digital? Customers are thinking very actively about how they actually create products and services that essentially create value for customers entirely digitally.”
Nigel Vaz, CEO of Publicis Sapient, discusses how the current pandemic has forced organizations to reimagine their businesses digitally. Nigel works closely with clients such as McDonald’s, Nationwide, and Unilever to deliver transformative experiences and business models:
https://youtu.be/VOKcTLcxHXw
Businesses Being Reimagined In A World That Is Now Entirely Digital
Digitization Has Become Existential For Business
I think Digital has always been important for business. Now more than ever what’s becoming very clear is this has gone from being something that’s important to something that’s existential. How do you support customers to make orders entirely online when your stores are closed? How do you create mashups with other partners to be able to facilitate deliveries when your own deliveries don’t suffice? How do you try to create experiences online through self-service that minimize the impact of people calling your call centers?
All of these things are things clients are facing on a regular basis. Most CEOs I’m in conversation with are acknowledging the fact that this has now got to be a priority, that they have to be ready more so than they’ve ever thought before.
3 Key Things Happening With the Transformation
There are three things happening here in terms of transformation. The first is the change in human behavior where I think there’s a recognizable shift now. We’re seeing significant accounts of over-70s, for example, ordering from retail and ramping that up. We’re seeing a big shift in institutions like schools and educational institutions, which historically had not thought about transformation as particularly applicable to them.
We’re also seeing a shift in industries like leisure looking at creating virtual experiences since physical experiences are essentially restricted and people can’t use them. The human behavior shift is translating to big investments in technology and technology platforms that enable this.
Businesses Being Reimagined In A World That Is Now Entirely Digital
Then lastly, new business models. There’s a real recognition that digitization and transformation are not doing what you used to do in the physical world. Digitizing that and translating that is essentially the journey of going from being a caterpillar to a butterfly. Real transformation. How do you reimagine yourself in the context of a world that now is entirely digital?
Customers are thinking very actively about how they actually create products and services that essentially create value for customers entirely digitally. There are plenty of examples in this from telemedicine and from the educational space with new courses coming online which can scale faster than traditional courses limited by a classroom and a professor.
“In the most challenging operating environment I’ve ever seen for this team to deliver the strongest comps in our 50 year history is pretty incredible,” says Target CEO Brian Cornell. “This is in an environment where so many Americans are avoiding shopping in physical stores, our store comps were still up almost 11 percent. The investments we made in our team and in creating a safe shopping environment has built trust with the consumer. Certainly, our digital growth is industry leading at almost 200 percent.”
“Our second quarter comparable sales growth of 24.3 percent is the strongest we have ever reported, which is a true testament to the resilience of our team and the durability of our business model,” said Cornell. “Our stores were the key to this unprecedented growth, with in-store comp sales growing 10.9 percent and stores enabling more than three-quarters of Target’s digital sales, which rose nearly 200 percent.”
“We also generated outstanding profitability in the quarter, even as we made significant investments in pay and benefits for our team,” noted Target’s CEO. “We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year.”
The Company had comparable stores sales growth of 10.9 percent and digital sales growth of 195 percent. Total revenue of $23.0 billion grew 24.7 percent compared with last year, reflecting sales growth of 24.8 percent and a 16.6 percent increase in other revenue. Operating income was $2.3 billion in second quarter 2020, up 73.8 percent from $1.3 billion in 2019.
Target Delivers Strongest Comps In 50 Year History
I’ve been with Target now going on seven years. Obviously, this is a special moment for the team. It is a beautiful morning here in Minnesota. I’ve got to start by really recognizing our team. In the most challenging operating environment I’ve ever seen for this team to deliver the strongest comps in our 50 year history is pretty incredible. Our EPS was also a record high up over 80 percent. So to the 350,000 team members in the U.S. and in offices around the world these results were all about you.
We continue to see strength across our entire portfolio. The strength that we saw in the second quarter, which we will break down in our earnings call later today, the fact that we saw really consistent strength from May into June and July. May was the strongest month with comps over 30 percent. But in both June and July we saw comps over 20 percent. That strength has continued in August and we are seeing low to mid-teen growth.
Being Agile and Flexible Is Key To Our Success
The biggest adjustment is probably the consumer who is still waiting for a signal around back to school. As you might imagine uniforms, backpacks, and school supplies are a little slower than last year. But the overall momentum and growth in market share continues as we go into the third quarter. The key to our success when I think about the second quarter is one, we’ve been true to our strategy, but our team has really focused on being agile and flexible and adjusting to the current operating environment. We’ve been changing the playbook every week.
As we think about back to school as I’m sitting here today there are 56 million K-12 students that are waiting for direction. As of this week 66 percent of students will start remotely. They don’t know if they are going back into a classroom in September, October or if it’s going to happen in January. So we are going to have to extend the back to school season and make sure that we’ve got the items they need throughout the fall. We can adjust by market. We’ve got to be flexible and adaptable. That’s really been the key to our success so far this year in both the first and the second quarter.
Digital Growth Is Industry Leading – Up 200%
If you look at our results in the second quarter overall comps were up 24.3 percent. These are some of the strongest in retail. Our store performance is really for me a standout and probably one of the biggest surprises. This is in an environment where so many Americans are avoiding shopping in physical stores, our store comps were still up almost 11 percent. The investments we made in our team and in creating a safe shopping environment has built trust with the consumer. Certainly, our digital growth is industry leading at almost 200 percent.
We’ve been taking share on a broad based basis from both specialty and department stores but also some of our traditional competitors including club. Category by category we’re gaining share. In categories like food and beverage and household essentials we were up 20 percent during the quarter. As Americans have been working and learning from home we’ve seen categories like electronics grow by 70 percent in the quarter. We’ve picked up significant market share from our electronic competitors. Our business and home categories were up over 30 percent.
We Are Seeing Significant Market Share Gains
Categories like decor, categories like domestics, what we are seeing with kitchen ware, we are continuing to build momentum and market share. We also saw a big rebound in apparel which was down almost 20 percent in the first quarter. It grew in the low teens in the second quarter. We are seeing significant market share gains. Across our business we are picking up share from our competitors whether they are specialty players, department stores, or our traditional retail competitors.
The market share number of $5 billion is the most important number on the print. It just shows the relevance of our brand, the momentum, and the trust we are building with American consumers.
Target CEO Brian Cornell: Digital Growth Is Industry Leading – Up 200%
“Our digital business is up 127 percent,” says Kroger CEO Rodney McMullen. “When you look at what our customers tell us and one of the reasons why our digital business is so strong is things that are personalized. We continue to look at what the customer wants and needs and then how do we serve those. What we find are our store teams, our pickup associates, and delivery is very important.”
“Customers are at the center of everything we do and, as a result, we are growing market share,” noted McMullen in their earnings release. “Kroger’s strong digital business is a key contributor to this growth, as the investments made to expand our digital ecosystem are resonating with customers. Our results continue to show that Kroger is a trusted brand and our customers choose to shop with us because they value the product quality and freshness, convenience, and digital offerings that we provide.”
Rodney McMullen, CEO of Kroger, discusses how their digital business has been particularly key to powering their massive growth amid the COVID pandemic:
Digital Business Is Up 127 Percent
Customers are continuing to shop in our stores. When they shop in our stores, the count is down but the amount they spend per visit is up significantly. Also, our digital business is up 127 percent. Customers continue to engage in that. What we’re finding is that in markets where COVID is having a lower incident rate or where it is having a higher incident rate, it really doesn’t have that much of a difference. The thing that’s exciting is that people are finding they enjoy cooking and they enjoy eating as a family. It’s really all those things together that gave us the confidence to go out with the (earnings) guidance that we did.
We’re really looking at this for the long term, what’s right for the customer today and what’s right for the customer two or three years out. The increased volume has allowed us to leverage some costs. What we’re doing is taking some of that and sharing it with the customer by waiving our pickup fee. Also, we’ve continued to do promotions throughout the pandemic and we continue to share some of that with the customer. We really do fundamentally just believe the customers will reward us once we get out of the pandemic as well. It’s just the right thing to do and it’s the right thing to do to help a customer’s budget go a little further.
Digital Business Is Strong Because Of Personalization
For us, it’s the whole total experience. When you look at what our customers tell us and one of the reasons why our digital business is so strong is things that are personalized. We also do incredibly well on fresh. Customers tell us and they expect that our fresh is really good and good relative to our competition. It’s really all of those things together. We’ve had a membership program for a long time and you didn’t have to pay for it. It’s fuel rewards and we do loyal customer mailings and all those things.
We continue to look at what the customer wants and needs and then how do we serve those. What we find are our store teams, our pickup associates, and delivery is very important. We are making sure we have that total balance of the experience both from a people standpoint, a price standpoint promotion, and then kind of sealing the deal with fresh products as well.
Digital Business Is Up 127 Percent Says Kroger CEO Rodney McMullen
“We had to learn to work in different ways to become more digital and to put data to work in different ways,” says Walmart CEO Doug McMillon as he reflected on the release of their blowout financial results. “Basically, to create a seamless experience for customers. We don’t want them to sense any difference as it relates to our brand whether they are shopping inside a store, picking it up, or having it delivered. All of those differences and channels that we might have thought about in the past need to be erased and taken away.”
Doug McMillon, CEO of Walmart, discusses how the company has changed to become more digital over the last couple of quarters in response to the pandemic:
Ecommerce Was Very Strong
I would like to say thank you to all of our associates around the world and here in the US. They did a great job. You can imagine how challenging it is in this environment to go to work everyday and serve customers and keep the supply chain moving. Whether it’s in our stores, our Sam’s Club’s, or our distribution centers they have done a great job.
Customers have been responding in waves as we’ve gone through the first and second quarters. Not surprisingly, they got really focused on things they needed to stock up to be at home for a long time at first. Over time, as we got through the second quarter and stimulus checks came in to play and people were at home, we certainly saw them buy things like laptops and tablets and fishing equipment and bicycles. Things that were related to home decor as they were at home thinking about their environment inside and outside the house we certainly saw them respond with what they were buying. Ecommerce, in particular, was very strong.
Technology Phenomena Happening Around the World
I’ve been in retail for almost 30 years and it’s really exciting when so many things can be done using technology. We can save customers time and expose them to so much more choice than we could previously. Our ecommerce assortments are broader as retailers and that’s certainly true at Walmart. We sell first-party owned inventory as well as through our marketplace. Now they can pick up their phone or be at home and open up their laptop and shop in so many different ways and have access to so many different things. It’s a lot of fun to be able to try and serve them in that way. That phenomena is happening around the world.
You can use your app to do pickup and our stores. You can use your app to have the product brought straight to your house. Obviously, you can come in the store and we are learning how to use technology inside the stores in different ways to save you time. It boils down to access to assortment and an ease of shopping here in the US and around the world that people haven’t experienced before. That’s happening in Mexico, Canada, China, India, and all over the world.
We Had To Become More Digital
There have been a lot of changes inside the company. We had to learn to work in different ways to become more digital and to put data to work in different ways. Basically, to create a seamless experience for customers. We don’t want them to sense any difference as it relates to our brand whether they are shopping inside a store, picking it up, or having it delivered. All of those differences and channels that we might have thought about in the past need to be erased and taken away. Our teams have been doing a great job doing that.
The outcome of that is this ease of shopping that’s unique and different. In our case, we’ve got so many stores so close to customers around the country it gives us a big advantage especially in being able to deliver quickly. We’ve got an express delivery system here in the United States that commits to delivering orders from our stores in less than two hours. That’s now in more than 2,000 stores and coming to stores all over the country. We are actually delivering a lot faster than two hours so far. That’s a great experience.
We believe that this is something that we can build on along with having great stores where you want to come in from time to time, stock up, and experience what’s new. Really, we think that this omni world of retail is what will end up being the winning strategy over time.
Scale Can Sometimes Be A Disadvantage
Scale can sometimes be an advantage and sometimes it’s a disadvantage. Speed also matters a lot. Creativity matters a lot. What I’m proud of is how our team is responding to create new solutions for customers. Ultimately, whether Walmart grows or not is all up to them. We are serving families, moms and dads, and customers that have a lot of different choices. Even during the pandemic period with ecommerce and all the chains that were open there was still a lot of choice.
We’ve got to compete to earn their business everyday and that’s the approach we take. Our team has really stepped up during this period and even before the pandemic to drive change and to create more solutions for customers.
Walmart CEO Doug McMillon: We Had To Become More Digital
Everything you do in the company drives you toward the vision and the mission of the brand and the company itself, says Jan Bednar, Founder & CEO of ShipMonk. “Something we have learned in the last few years is that once you communicate those values and what the brand really means to your employees and to your customers, it kind of does the job itself,” he says. “You don’t really have to spend a lot of time maintaining it.”
Bednar adds: “Everything you do at that point is the brand.”
The one important thing in the way we look at our products and our brand is we try to figure out who are users are and what does our brand mean. We have a certain set of values that are associated with our brand. It’s not just a bunch of text that we put on a whiteboard three years ago and we never look at it. We have them everywhere and everyone knows them. They basically become the pillars of the organization. It’s something that everybody looks up to. You know what they are.
Everything you do in the company drives you toward the vision and the mission of the brand and the company itself. Something we have learned in the last few years is that once you communicate those values and what the brand really means to your employees and to your customers, it kind of does the job itself. You don’t really have to spend a lot of time maintaining it.
ShipMonk Values
Everything You Do is The Brand
Everything you do at that point is the brand. It’s how you answer the phone. It’s how you decorate your office. It’s how you go to work. It’s what you wear to work. Every single detail, as long as you have those values in the back of your mind and you know what the brand really means, it’s almost like a self-sustaining organism at that point.
That’s been really important for us. We really see with our customers that once they like our brand and they see what we are doing they become part of it. It’s one of the most rewarding things. They love coming to our office. They love sharing their thoughts and improving the product. It becomes this one big ShipMonk family in a way. Everything we do from a branding and marketing standpoint surrounds those values and the proposition of the brand.
From their inception in 2014, ShipMonk has operated with a singular guiding principle: to help small and medium-sized businesses scale by offering technology-driven fulfillment solutions that enable business founders to devote more time to the things that matter most in their businesses. Put simply, ShipMonk helps eCommerce companies stress less and grow more.
The coronavirus pandemic has led to a stellar quarter for Zillow, as potential homebuyers looked online.
The pandemic has forced many individuals to take a second look at their housing situation. With people spending unprecedented amounts of time at home during lockdown and quarantine orders, many are looking to upgrade their homes with more room and features conducive to telecommuting. Others are looking to take advantage of work from home trends, and move out of expensive neighborhoods or cities to more scenic and affordable locales.
These factors led to a stellar quarter for the company, reporting that revenue grew 28% year over year to $768 million. This was up from industry estimates of $618 million.
“Zillow’s second quarter results are even better than we had hoped, and firm up our belief that powerful tailwinds in both real estate and technology are rapidly converging, with Zillow at the nexus,” said Zillow Group co-founder and CEO Rich Barton. “I believe we are at the dawn of a Great Reshuffling, as COVID and work-from-home policies are inspiring people to rethink their homes and consider moving. In addition, real estate, like other industries, is experiencing an acceleration in technology adoption, as people move their shopping habits from offline to online. We’re lucky to be in a position to serve our customers no matter how they want to move, whether through a seamless Zillow Offers transaction or in partnership with our best-in-class Premier Agents.
“Even more important than the business results is the way our team has responded over the past several months, as we all grapple with fear, loss, protest, and anger through a health crisis and social reckoning. We’ve managed through all of this with a strong commitment that we can and will do more to support our communities and address systemic barriers in real estate.”
Barton’s comments that he believes this is the beginning of a “Great Reshuffling” are significant and should give many industry leaders pause.
Doordash has announced that they have partnered with Walgreens to ultimately bring the entire Walgreens store to the door of 100 million Americans.
Doordash COO Christopher Payne discusses their new Walgreens delivery collaboration and explains how this deal is part of their customer-centric focus which has driven the company’s growth from its founding:
We Are Bringing The Entire Walgreens Store To Your Door
Our new partnership with Walgreens is going to be fabulous. We have 2,300 items that will be available to the Doordash customer base. We cover about 100 million Americans. This will bring for the first time Walgreens products in over the counter medicine, grocery, and household items and other categories that are totally appropriate for this COVID crisis that we are in.
While we are starting with 2,300 items we are going to rapidly grow that to 5,000 items, essentially bring the entire Walgreens store to your door on demand. That’s the key thing.
With COVID We Shifted Into Going Beyond Restaurants
One of the things we did with COVID is we shifted into going beyond restaurants and focused on empowering local economies by bringing other things that people want to be delivered into their home. Walgreens is a perfect example of that. We are going to ramp up to cover all of their stores over the coming months.
That will touch 100 million Americans. That’s a huge announcement today and we are thrilled to be in a collaboration with Walgreens.
Core To Us Is Listening To Our Customers
One thing that is true of this space is that it has been competitive since day one. What sets Doordash apart is we are not focused on our competitors. We have been focused on our customers. That is one of the core values of Doordash and is one of the key reasons we have a market share lead in food delivery in the United States. We are going to continue to focus on that. Core to us is listening to our customers and being merchant first.
Our original vision was to empower local economies. The idea is that we want to connect every local business to every local consumer. That’s a very different strategy than just broad ecommerce. That is making these businesses successful that are around you and me. That’s what sets Doordash apart and what will continue to set Doordash apart.
We Are In The Early Days Of This Category
We are in the early days of this category. We are not focused on what our competitors are doing. That is the right strategy for us. However, we won’t rule out potential acquisitions. We did a Caviar acquisition last last year that has gone incredibly well. Our focus has been on helping our merchants thrive. A great example of that is what has happened with COVID-19.
We swung into action back in March and April and designed a program called Main Street Strong. This exemplifies what I mean by merchant first. We built a program that generated $120 million in relief for merchants to keep them on their feet.
Doordash Restaurants 4-Times More Likely To Survive COVID
One stat that I love to share is restaurants that were on Doordash during this crisis were four times more likely to make it through the first wave by being on the platform. That $120 million in relief took the form of commission and promotion to drive sales to small businesses. We will continue to focus on our customers, our merchants, and our Dashers and that is what is key right now. We are not going to be bothered by what other companies are doing.
Used car sales have defied the dire COVID related expectations, says Carvana CEO Ernest Garcia. “When it first hit there was no doubt that there was a huge hit to demand,” says Garcia. “We saw car sales drop 30, 40, 50, and even 60 percent very early on. They started to recover very quickly by late April and they have continued to recover. That was definitely not the baseline expectation heading in”
Ernest Garcia, CEO of automotive ecommerce retailer Carvana, discusses how COVID has surprisingly been a boon to the used car market over the last several months:
Used Car Sales Up Significantly Year Over Year
When COVID first hit there was no doubt that there was a huge hit to demand. We saw car sales drop 30, 40, 50, and even 60 percent very early on. They started to recover very quickly by late April and they have continued to recover. Many retailers including ourselves are actually up year over year, significantly in our case. It has definitely recovered very quickly and that was definitely not the baseline expectation heading in.
The biggest change has been with the decrease in gas prices. There has been a lot of demand for SUVs and a lot of demand for trucks. But there has been a lot of demand across the board. There has been a lot of demand for off-lease vehicles right now as new production starts to spin back up. There is also a lot of demand for older cars that are a little less expensive. I think across the board we are seeing a lot of demand in all of automotive retail.
There Is Both A Pull Toward Used And A Push Away From New
To some degree, it is pulling from new car sales because used cars are a little less expensive. To some extent, there is a push away from new car sales because production has slowed down and incentives are being pulled back as a result. That is likely to continue for the immediately foreseeable future. There is both a pull toward used and a push away from new as well.
Automotive retail is a very interesting market. On the used side there are 40 million transactions per year. On the new side there are 15 million give or take transactions per year. There are about 40,000 dealers out there. This has always been a market that is enormously competitive and enormously fragmented. Dealers have found a way to persevere and have pretty decent margins over the last 75 years.
We Represent A New Kind Of Business Model
What we represent is a new kind of business model. It’s an ecommerce-centric model where a customer goes to our website, they select a car, they go through the purchase process, and we deliver it to their door using first-party logistics. Then they get a seven-day return policy. That business model has a pretty different cost structure than the traditional automotive resale model. As a result of that, we have additional opportunities above and beyond most automotive retailers.
Used car prices have also been an incredibly interesting and volatile place to watch over the last three and a half months. In April, we’ve had the biggest decrease we’ve ever seen in the Manheim Used Vehicle Value Index, which is one of the measures of used car prices that are broadly used. In May and June, we saw sequentially probably one of the biggest increases we have ever seen in used car prices. They are now at the highest prices they have ever been.
Future Demand Is Very Difficult To Forecast
That market has spun around quite bit, just like the stock market and other gauges of economic activity. It has been very difficult to forecast and I would not want to forecast where it is going to go from here. On the new side, there are likely to be supply shortages. There is a lot of demand today. Trying to figure out what demand is going to look like over the next six months with increased unemployment (payments) potentially expiring and with less stimulus in the economy is very hard.
Used Car Sales Way Up – Defy Dire Expectations, Says Carvana CEO Ernest Garcia
Amazon released its first quarter results, beating analysts revenue estimates while falling short of their earnings-per-share estimates.
Amazon has been at the center of the coronavirus pandemic, as the e-commerce giant has become a lifeline for many consumers sheltering in place. At the same time, Amazon has struggled to keep up with demand, initially hiring 100,000 extra warehouse workers, only to announce they would hire another 75,000 after that. The company also cut back fulfillment on non-essential items in an effort to keep up.
“From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never “before, but it’s also the hardest time we’ve ever faced,” said Jeff Bezos, Amazon founder and CEO.
With their earnings report, the dichotomy of Amazon’s position was made clear. The company reported $75.5 billion in revenue, up from analysts’ expectations of $73.61 billion. However, earnings-per-share were only $5.01, instead of the $6.25 analysts expected.
Even more significantly, the company expects to spend all of the operating profit it will earn next quarter in an effort to deal with the challenges it’s facing as a result of the pandemic.
“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,” Bezos continued. “But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe. This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities.”
Many tech companies have expressed concern about the next quarter, in spite of doing reasonably well this quarter, and it appears Amazon is no exception, despite how important it has become during these times.
They’ve become a familiar sight in shopping malls, but Microsoft has announced it is permanently closing its retail shops.
The company’s announcement reflects the changing retail landscape in the wake of COVID-19. Like most industries, the pandemic forced Microsoft’s retail employees to work remotely, where they focused on helping customers do the same. As a result, and thanks to the success of that initiative, the company will continue to focus on remote sales teams, providing assistance to customers all over the world.
“Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location,” said Microsoft Corporate Vice President David Porter. “We are grateful to our Microsoft Store customers and we look forward to continuing to serve them online and with our retail sales team at Microsoft corporate locations.
“We deliberately built teams with unique backgrounds and skills that could serve customers from anywhere. The evolution of our workforce ensured we could continue to serve customers of all sizes when they needed us most, working remotely these last months,” continued Porter. “Speaking over 120 languages, their diversity reflects the many communities we serve. Our commitment to growing and developing careers from this talent pool is stronger than ever.”
This is a significant change in the company’s operations and it’s unlikely Microsoft will be the last company to reimagine its retail operations.
Walmart has announced it is rolling out its Express Delivery service in nearly 1,000 stores.
Walmart has been piloting Express Delivery in 100 stores since mid-April, but has accelerated the development of the program in an effort to meet customers’ needs in the midst of the pandemic. Express Delivery will let customers order some 160,000 items from stores and have them delivered to their doorstep within two hours.
“We know our customers’ lives have changed during this pandemic, and so has the way they shop,” said Janey Whiteside, chief customer officer, Walmart. “We also know when we come out of this, customers will be busier than ever, and sometimes that will call for needing supplies in a hurry. COVID-19 has prompted us to launch Express Delivery even faster so that we’re here for our customers today and in the future.”
The service will debut in nearly 1,000 stores in early May, reaching nearly 2,000 stores in the coming weeks. This is good news for shoppers around the country, as they endeavor to stay safe during the pandemic.
“Nobody was using machine learning to point at the underlying consumer data to help make sense of it and bring it together,” says Matthew Biboud-Lubeck of Amperity. “We put together cloud computing that was scalable with better economics alongside a machine learning algorithm that we were pointing at the data to help make sense of it. We realized that what we had was a pretty scalable solution to help brands get to that nirvana of a single view of the customer.”
Helping Brands Create a Single View of Their Customers
We are a CDP (customer data platform) based in Seattle that is helping brands create a single view of their customers and to unlock personalized experiences from that data. If you look back to the founding of Amperity about three years ago our founders were canvassing the marketplace. What you saw was a marketplace using a lot of buzzwords but having a lot of trouble executing them. You heard about personalization, customer 360, and a 360 view of the customer. Marketers across major consumer brands were super frustrated.
They spent a fortune trying to cobble some view of their customer. They invested in technology to help them send better emails, to make their media more targeted, and to unveil better analytics. All of those tools that they have invested in talked about the notion of a single view of the customer because they fundamentally needed that to operate. The reality was that nobody was getting to the solution. We came in to say maybe there is a better way.
Machine Learning Helps Brands Get To Nirvana
There were two things that changed in the marketplace that we capitalized on. First of all, it was that cloud computing got a lot cheaper. It used to be that if you were a big brand and got hundreds of millions of customer interactions, it’s just a lot of data. Part of the reason that no one was able to create an easy solution to putting that all together was because it was cost prohibitive.
The second really interesting evolution in the market is that machine learning has become much more mature. What we found was that everyone in the marketplace was using machine learning to make that last mile to the marketer a little bit better. It was used to decide which products to show a customer or to decide which offer to show a customer or to create a customer care solution that’s automated. You go online and type toward a solution and some bot talks back to you. Nobody was using machine learning to point at the underlying consumer data to help make sense of it and bring it together.
We put together cloud computing that was scalable with better economics alongside a machine learning algorithm that we were pointing at the data to help make sense of it. We realized that what we had was a pretty scalable solution to help brands get to that nirvana of a single view of the customer. That’s how we were born. What’s interesting is that the customer data platform space is a little bit confusing. You have a lot of companies that started as something else that rebranded as a CDP. We were purpose-built from the ground up as a customer data platform designed to bring all of a brands data, reconcile that data to create a notion of identity on it and then to unleash that data back to the brand anywhere that they want to use that data.
“How do we shorten the space between a signal that we get, say in behavioral data that we see show up either in an app or on a website, and then churn through all of the possibilities of what we could present, apply algorithms to determine what is the next best offer and next best experience?” asks Adam Justis, Director of Marketing at Adobe Experience Cloud. “Then how do we present that in a way that actually feels if not real-time pretty close to it? That would not be possible without artificial intelligence.”
Role of AI in Offering a Personalized Shopping Experience is Core
You definitely have the data piece and then the content piece. I would also add how the complexity of all that has certainly exceeded the capacity to manage this in a singular sort of engagement with a customer, let alone at scale millions of times a day. So the role of artificial intelligence and machine learning now is so core. It’s sort of the gearbox that’s turning at the center of the data on one hand and the content and elements, the assets, the offers, on the other that allows for ultimately the coalescing of those things and then the delivery of an experience worth having.
That’s the component pieces that we’re seeing at play and Adobe’s motivation in going into that space. At Adobe when we announced our intent to acquire Magento, we were talking about how does Adobe facilitate or help every experience become shoppable and every moment personal? Really that was a claim we couldn’t make without the Magento piece. It is absolutely a hand in glove relationship especially as we’ve all evolved as consumers.
Advancements in AI Are Going From the Absurd to the Very Real
To imagine that we would be subscribing to socks or that we could one-click purchase just about anything, you need the technology that can keep pace with the expectations. That’s what it’s all about. So many of those experiences that Adobe is intent on enabling our customers to present culminate in a transaction of some sort. Magento is absolutely not only the icing on the cake but it’s also so integral. It’s becoming a fundamental or elemental part of what we’re trying to accomplish.
That (personalized experience) is one of the things that I absolutely love about customer experience management or CXM. In a way I kind of love the absurdity of it. When you think of the scale, to say something like we’re going to make every experience shoppable and every moment personal, to imagine that that’s possible is almost absurd. But when you introduce the advancements that we’re seeing in artificial intelligence and machine learning now it’s literally going from the absurd or the realm of science fiction into very real. That’s what Adobe is looking at.
Without AI Real-Time Personalization Would Not Be Possible
How can we literally take some sort of statement like we’re going to personalize experiences across the customer journey and we’re going to do it at scale and in real-time? Really, unless you’re considering how we’re going to meet the needs of the customer in the moment that they’re expressing that need then it’s really moot. It is absolutely artificial intelligence and machine learning that we’re seeing expressed now across the Adobe Experience Cloud that is making that happen in multiple ways. One of the ways would be simply by shortening that span between the latent genius that marketers are walking around in their heads and actual execution. How can we take some of the friction out of the workflows that allow them to translate their ideas into offers?
How do we shorten the space between a signal that we get, say in behavioral data that we see show up either in an app or on a website, and then churn through all of the possibilities of what we could present, apply algorithms to determine what is the next best offer and next best experience? Then how do we present that in a way that actually feels if not real-time pretty close to it? That would not be possible without artificial intelligence. At Adobe we do that through a product called Adobe Sensei.
Adobe: Without AI Real-Time Personalization Would Not Be Possible
Expedia and IAC Chairman Barry Diller said that the economic and business landscape caused by the coronavirus and the political actions to fight it have been cataclysmic. Diller does not see a return to normal anytime soon. He believes that people will first have get over being scared and that won’t be easy.
Barry Diller, Chairman of Expedia and IAC discusses our current “cataclysmic landscape in an interview on CNBC:
I See the Landscape As Cataclysmic
I see the landscape as cataclysmic,” says Diller. “We’re in something that it’s very hard to be objective about because we’re in the eye of it and we’re inside of it. We can’t really see it for what it is. Everybody says the same thing there’s been nothing like it before and while we know some things we really know nothing. We know nothing about what happened and when we’re going to get out of it. “
What will we be doing and will our habits change? Will this result in some really profound difference in people’s lives in the future? So I see it as everybody is scared. The fact that we have so much media and so much information with all it telling us that we’ve got to be quite scared about cohabitating with anyone. That ain’t good.
A Quick Return To Normalcy Will Not Happen
No, (I don’t believe that we will go back to normal on the other side of this as we did after 9/11). What I said then was that if there’s life there’s travel. I still do believe that but this is not going to be what happened then which was a very very quick return to normalcy. That is not going to happen. At best, we’ll have kind of a rolling way out.
As far as travel is concerned, while I’m absolutely optimistic that it will happen at some point, I don’t think it will be soon. It will probably be September, October, November, or December to really get life back. And in order to travel, you have got to have that. So they’re totally different conditions. This is not analogous. I don’t think this is analogous to anything and is certainly not analogous to 9/11 and to the financial crisis in 2008.
OTT is increasingly being tested by advertisers as more inventory becomes available, says Nicole Whitesel, SVP of Enterprise Strategy at Publicis Media. “In the past, OTT was seen as a nascent channel with limited reach,” said Whitesel. “I think now you’re seeing a lot more inventory there available to them to buy. I think their willingness to test things where they’re unsure of outcomes has been increased more than ever before.”
Nicole Whitesel, SVP of Enterprise Strategy at Publicis Media recently discussed the increased experimentation with OTT by agencies and their clients in an interview with BeetTV:
OTT is the Next Step in the Digital Revolution for Ad Buyers
One of the things we’re seeing is clients appetites being larger than ever before to explore. In the past, OTT was seen as a nascent channel with limited reach. I think now you’re seeing a lot more inventory there available to them to buy. I think their willingness to test things where they’re unsure of outcomes has been increased more than ever before.
We’re really talking about kind of the next step, the digital revolution maybe seven years ago and people were early movers in that space and they had an advantage.
We’re thinking about the space in a similar way. There’s an opportunity to get in early and test things, build operational muscle between teams that maybe haven’t worked together as closely before. We really see that as an opportunity this year to do a lot of that work.
Agency Teams Working Together to Buy OTT Inventory
You have teams where historically broadcast teams and national teams have bought broadcast. Then you have teams that are more precision or audience driven that buy programmatic. You’re seeing a lot of work between those teams now to think about the way we’re buying connected TV, inventory if you will, or OTT.
You have a broadcast team that might be negotiating as part of an upfront and then you have an activation team who’s actually activating within a quarter against a specific audience, buying that inventory in-quarter.
Those are teams that historically don’t work as closely together on an ongoing basis outside of upfront. We’re seeing that that’s an opportunity to bring those teams closer together and working more closely with clients who learn these new channels and understand that. That goes as well to analytics and measurement. How are we measuring them? What’s the contribution when compared to historically traditional channels like linear TV?
Opportunity for Direct to Consumer Companies
I think there’s an opportunity for direct to consumer companies (DTC) to enter the space through these new channels that didn’t exist before from a linear broadcast perspective. A lot of inventory was sold in the upfront and there was limited inventory available on an ongoing basis. That’s changing with these new channels in inventory that’s available through connected TV or FEP inventory.
They have an opportunity to buy that in a way that benefits their business model and works with the way that their business has set up to run with retail quarters, seasonality, the things that make sense for them. They don’t have to make a commitment a year in advance. They can do it when it makes sense for their business.
Getting Smarter With Broadcast Partners
I think there’s an opportunity for us to get smarter about the way we partner with our broadcast partners. Historically we’ve gone in and we say we want this CPM and this flexibility and this is the programming or dayparts we want to buy.
I think there’s an opportunity for us to say, hey, we want to buy this from an upfront perspective, but here’s all the other inventory that you manage that we also want to think about buying. We can collectively leverage dollars and get things that are valuable for our brands and our clients that allows them the flexibility to test these new channels.
TV Attribution – A Big Next Step for Ad Buyers
I think TV attribution is one of the big next steps for our industry. Being able to understand a contribution of a specific channel and its cost and associated with an outcome the brand’s care about is I think the next big opportunity for us. Then we’ll understand investment in media mix across those different video channels.
OTT is the Next Step in the Digital Revolution for Ad Buyers
“There’s been a lot of advances in machine learning that take things that would have been literally impossible ten years ago and made those things much more possible today,” says Etsy CEO Josh Silverman. “With 62 million products for sale, picking for any given buyer the 20 or 30 that should be on page one of search results is a pretty interesting and pretty challenging task. The key is understanding what an item is with relatively little data and then being able to determine for each individual person how to personalize search results.”
Josh Silverman, CEO of Etsy, discusses how Etsy has increased growth by standing out in a world of sameness and by employing machine learning technology to personalize the Etsy experience for their customers. Silverman talks about his strategy for success in an interview with Fortune:
We Started Doing Much Fewer Things Much Better
Etsy has never been more relevant. In a world where so many of our products are being commoditized and we’re surrounded by a sea of sameness, Etsy stands for something really different. I think it’s really important that we stand out in the world and I’m proud of what the team has done to achieve that. The definition of success was really clear. I think from day one it’s about growing the size of the pie for everyone. The actual tactics that it was going to take to do that we’ve learned together as a team over time.
When I arrived, there were maybe eight or ten different metrics of success that we all held relatively equally. I said there’s one metric that matters much more than every other, which is what we call gross merchandise sales. In other words, the total sales of our sellers. When we stopped saying what’s a good idea, what moves any one of these 10 metrics and started saying, what are the fewest things we need to do to really accelerate gross merchandise sales, we came to a very different answer. We started doing much fewer things much better. That’s really been the key to our success.
There’s Been a Lot of Advances In Machine Learning
Change is hard. When running a marketplace we have access to a lot of data and insights that each individual seller won’t necessarily have. Our job is to really look after the good of the whole and be willing to make some decisions that sometimes, in the moment, may not feel obvious to every seller but really do lift all boats and make our sellers as a whole much better off. We’ve really focused at a high level on doing two things really well. One, make it much easier for people to find great products on Etsy. And two, once they’ve found those products to actually buy them.
With 62 million products for sale, picking for any given buyer the 20 or 30 that should be on page one of search results is a pretty interesting and pretty challenging task. There’s been a lot of advances in machine learning that take things that would have been literally impossible ten years ago and made those things much more possible today. The key is understanding what an item is with relatively little data and then being able to determine for each individual person how to personalize search results. We’ve made leaps and bounds in the science of search and machine learning. That’s more relevant at Etsy than almost anywhere else.
The mission of Etsy is incredible. As the nature of work changes creativity can’t be automated. The role we play for creators and makers being able to harness their creative passions and power and turn that into a way to earn a living for their families is a mission that I think is ever more important in this fast-changing economy.
There’s Been a Lot of Advances In Machine Learning, Says Etsy CEO Josh Silverman
