x

READY TO BECOME A MEMBER?

Stay up to date on the digital shelf.

x

THANK YOU!

We'll keep you up to date!

Deep Dive

Deep Dive: Amazon Earnings and Takeaways with Melissa Burdick

Melissa Burdick, co-founder and President of advertising platform provider Pacvue, and overall ecommerce and Amazon whisperer, joins Rob and Peter to talk Amazon earnings and to read the tea leaves for brands as to what executive shifts, ad growth, and competitive forces might mean for business with the behemoth in 2021. 

SHOW NOTES

Instacart Webinar

Thrasio Interview

Catch Melissa's Clubhouse events every Thursday, 4 PDT/7 EDT on The Digital Underground.

TRANSCRIPT

Peter:

Welcome to unpacking the digital shelf, where we explore brand manufacturing in the digital age.

Peter:

Hey everyone. Peter Crosby coming to you from the digital shelf institutes, Boston home office. Uh, Rob's back in the Berkshires. You're back in the Northeast.

Rob:

I am back in the Northeast. And, uh, fortunately I think I brought the weather with me. It's beautiful today. It's like 60 degrees windows open. It doesn't feel like it's going to be winter for all time.

Peter:

Uh, I, I think there's hope I'm sensing hope in the air in other places. Yeah. So like mud. Exactly great things grow from mud. So I am up for it. So, uh, Rob, we brought a repeat guest into our conversation today. We have Melissa Burdick, um, who I'm sure everyone listening knows is the co-founder and president of advertising platform, provider pack view, and overall e-commerce and Amazon whisperer. Melissa, thank you so much for joining us today for having me. I know. I think you might be our first repeat visitor.

Peter:

Wow. I know first for everything, right? Yeah. Yeah. We're we're grateful. So, and we're having a back one cause uh, back actually it turned out it was in November. I think we had you on to talk about Amazon earnings and, and we wanted to have that conversation again because, uh, I heard that an executive left. So you might have to tell us a little bit about that. I've forgotten what his name is. Um, there's ad platform results. There's a lot going on. So we were, I was hoping we could get takeaways from all the signals that you saw coming out of the earnings and, and what brands might think about in terms of their upcoming Amazon focus and investments and any trends you, you know, you've got on your brain for 2021. So let's, let's just bounce around through some of these. What do you say? It sounds great. Let's start with that. That, um, the massive Exodus of Jeff's it turns out there wasn't just one Jeff, that left, there were three of them. So I'd love your, your thought on a new CEO. What do you think the impact of the exits are and, and, uh, and, and of the new CEO's sort of point of view on things?

Melissa:

Yeah. Um, well, it's kinda funny because I, uh, I usually go on Bloomberg TV right after earnings results and, um, it's like the earnings result hit for Amazon. And then like 10 minutes later, they usually have me on this show and earnings result hit, and it was all about Jeff pesos stepping down, not what, you know, usually it's about the analysis and, you know, the ad business and all these kind of interesting things. Well, um, all they wanted to talk about for like five minutes was, uh, any Jesse and Jesus leading and the click-bait title after that interview that I had was Amazon vet feels sorry for new CEO.

Peter:

Yeah. Can't trust the press,

Melissa:

Clickbait title. And, um, what I said was, and I think it's true is that, um, Andy Jassy has got a really tough and challenging road ahead. Um, I think this year, like there's just so much, um, that he's going to have to tackle, uh, which is, you know, comping co you know, this COVID year of acceleration, um, all the legal stuff that's happening with Congress. Um, there's this new article that Jason Del Ray wrote about racial, you know, very controversial article that he wrote. Um, you know, there's a lot of competition and pressure around the retail media business. Uh, you know, Amazon's profit is generated a lot of it through AWS and advertising and other retailers are not going to be able to, you know, do AWS, but they can definitely do advertising. So there's just, there's just a lot of, um, a lot of things coming up that I think that are going to be very, uh, interesting and challenging your head.

Melissa:

Um, but you know, Andy Jassy is a veteran himself having been at Amazon for so long and really living the leadership principles. Uh, so I think he's a great person to step in Jeff Wilkie kind of signal that he wasn't the guy when he said that he was leaving. Um, and then he stayed on until I think after Q4 and then Blackburn had been on a leave of absence. He also loved, he was my, um, he was my leadership when I was, he was over the ads business when I was at Amazon and really just a great leader. Um, so there's, you know, three holes that are being, you know, left. And so Andy Jassy has his opportunity to kind of fill that S team, uh, with some folks. So be interesting to see who he picks for that.

Rob:

Yeah. I, if I had didn't realize how much of their senior leadership was named Jeff until I was a little creepy, to be honest, we talk about a lack of diversity, right? Like not only same race, but it's the same day we hired. We hired, um, the second time that we hired Rob, the way that they distinguished between me and the other Rob was the nickname. The other guy handsome, Rob one knew which bus was, which I was going to say, the audience is very lucky. This is an audio platform. And so, uh, uh, yeah, it's so funny that the Jeff exit is, I will say I've seen, I've seen Andy, Jassy speak a few times and, uh, read some of the things that he's published in writing and, and know no folks that know him. I mean, it strikes me as that guy is a rare talent. I mean, if anyone is going to step into that seat with all the complexity that you're talking about going forward, I mean, he's, he just seems like he'd be an exceptional choice.

Melissa:

Yeah. I mean, they, and definitely, I think that there, there was, um, the, the leadership principles at Amazon they're solid. They, they really are. Um, there was a clubhouse. I know we were all kind of clubhouse fans here, but there's this clubhouse where they had Maria Renz and a bunch of former Amazon executives talking about, um, post Amazon, how they still use the leadership principles. And that's true. And, and, you know, Andy Jassy has been there from the beginning too. So I, I think that they definitely are in good shape. And then also having been over AWS, which is one of the most profitable, you know, kind of services, he definitely understands how to drive profit. So, um, but I definitely think with him in charge and there's been a lot of, uh, conversations around breaking up, Amazon breaking out AWS. I don't think he wants to do that. So it'll be interesting to see, um, what he does.

Rob:

Yeah. The, you know, the, it's interesting that one of the, one of the big pressures that he has to deal with, and this is pretty typical with tech founders, right? It's um, you look at bill Gates is my favorite tech founder. And he basically stepped down to Microsoft after all the, uh, um, uh, antitrust stuff went on. And it's just, I don't want to deal with this. I, I signed up here to build a company, not to, you know, be hounded by the government and with Google, same sort of thing that Google founders were just as soon as Google starts coming up with antitrust and lawsuits, and they're like, you know what, whatever we don't need to deal with this. And Jeff bays is the same thing. Just steps aside. Doesn't, doesn't want to deal with this. Um, when you get somebody else, who's an operator that comes up and handles it.

Rob:

It's, it's hard for me to see though what the threat is to Amazon from a government perspective, big picture, other than just an annoyance, because it's like, let's dive into the earning results a little bit. You look at the earning results, and then you look at the competitive landscape and Amazon, Amazon had a killer COVID, but they didn't have the best COVID of anybody in the space. And the competition looks like it's going to get a lot fiercer for them, and there's nothing they can do about it. They don't have an exalted position in the marketplace that makes them impossible to compete with on some level, uh, you know, the, the, their moat is great execution as opposed to something that's like, you know, like Google's kind of a monopoly on some level. And so, um, let, let's, let's dive into it. Let's, let's start, let's start from the, uh, from the beginning here, what's, uh, from a, from a performance perspective, what jumped out at you as the most impressive in the latest earnings?

Melissa:

Um, I mean, selfishly, since we're an ad business, um, that's really what, you know, I, every time I look at what's that other bucket and which is advertising and their advertising business grew like 64% or something, it was the highest growth quarter of the whole year. And so the advertising business just continues to accelerate. Um, and so that, that kind of was really interesting to me, uh, just because we saw that, well, they pull prime day from July into October to pull demand forward, um, into the quarters so that they knew, you know, they knew that code was gonna provide some of these issues around the height of the holiday season. And so in order for them to not kind of concentrate all of those deals and kind of outbound shipments going out, they pulled it into October that also pulled advertising dollars, um, earlier into the quarter as well.

Melissa:

And so we saw, you know, no more advertising spend in October, usually it's November, December that you see that so started earlier and kind of maintained throughout the quarter. And then as we head into January, we kind of, we see a lot of seasonality in a drop, um, typically, but we're not seeing that as much as we thought we would. So advertising still continues to be strong. Um, and so at that, that was, that was pretty interesting in terms of the results. Uh, they had a killer quarter, um, you know, lots of sales, the, the stuff that I thought was, you know, I think they're going to have to look at, with a lens is their deals weren't as exciting, uh, this year. Um, and so, you know, it's kind of the same deals every year that we keep seeing. We also had a lot of their own private label in electronics deals. So a lot of it was just, you know, Alexa stuff that they had. Um, so they didn't have as many, you know, different manufacturers coming in with different deals.

Peter:

Do you think part of that, Melissa was just because of the, you know, the Amazon had to turn a lot of their attention to just getting the staples out the door and, and, and just everything going on with COVID that they just didn't have the same kind of both suppliers didn't manufacturers didn't have really the same kind of notice and, and, and who knew what the delivery, the supply chain was going to be like, do you think it was sort of due to lack of effort or, or just maybe just so much going on in so many distractions,

Melissa:

There's a lot going on. I think that, um, you know, people, weren't really sure how to plan the October prime day and the holiday season, and they're a little bit confusing for manufacturers. I think that 2021 is going to be a much, you know, different year in terms of that. I think that prime day moves back into this summer. We're actually hearing, that's going to be like a different date maybe earlier than the usual July date. Amazon's always interested in kind of surprising, um, their competitors cause everyone else piles into create their own event. Uh, so they want to, you know, maybe have a little bit of a surprise factor, um, so that people can plan less on the competitive side. But yeah, I mean, I definitely think for manufacturers, what we were hearing was that they were not really sure how to, to do both prime day and holiday. And there was, you know, a little bit of a planning issue around that, but it'll, it'll be much better this, I think everyone's supply chains are, are on track. What about, what do you guys see?

Rob:

Well, you know, one of the things I I've been noticing this year, isn't, what's happening on Amazon, it's, what's happening off Amazon, and I kind of wonder what the impact that's going to have go forward. So the, you know, you mentioned the Amazon advertising continues to continue to accelerate. Um, I think in 2020, it's clear, at least a lot of that money came from money that would have been spent on TV. You know, people stopped signing up fronts. Um, in late Q1 Q2, they were able to move some of that in larger volume than usual over to digital, spread it across the key digital channels, Amazon benefited disproportionately there. Um, but we've also seen Walmart get their act together with a new ad program. Um, we've seen Instacart launch, a paid ad program, Instacart acquired drizzly, which gives them a whole, a whole new, new type of category.

Rob:

They can, they can, they can go after, you know, with all the complexities of alcoholics. It's not, you can't really do the same model, but, but there are ways, um, we've and, and, and so on and so forth. And so I look at the retail media group from the, from the other major retailers coming online in 2020, but not really early enough to have significant momentum in 2020. Um, I, if you're, if you're a big CPG, your next ad dollar might go to those programs first in 2021, because there's less competition and it's early and, and the volumes are good, um, versus going to Amazon. So, so that that's one of the things I've been watching is, you know, we look forward to 21 at 64% ad growth at Amazon. Is that going to, is that going to face headwinds, um, since the next marginal ad dollar doesn't, so obviously go there in the same way that it did in 2020?

Melissa:

Well, a couple things on that. I mean, definitely in the grocery space, Instacart is a fierce competitor and, um, not surprisingly, it's a little bit like Amazon B2 over there with Seth. Um, Dillera is the CRO who formerly ran ads at Amazon. And then he's just building out a killer team. Ryan May word is amazing, and he just left the Amazon to join, um, Instacart to lead sales there. Um, the other thing that we have too, is that, so we've just created a integrated retail media dashboard that integrates all the retailers into one place. You can see all the performance metrics. And when I look at, um, you know, performance on Amazon versus Instacart, I mean, Amazon's much more mature, but the CPCs are higher. And so Instacart has this first mover advantage where insane row ads like the performance is really good. Um, CBCs are low.

Melissa:

It's the first mover advantage. Um, you know, we're seeing people really lean into Instacart and having a lot of excitement there. Um, you kind of pointed out alcohol industry, the alcohol has a really, they have really strict rules about advertising, and so they can't advertise on Amazon or Walmart, but they can on, on Instacart in some regions. And so, um, when I look at CPC is cost per clicks of alcohol brands are really high because there's not many options opportunities for them to advertise, but that's a whole segment that they're able to, um, advertise for the first time. And so, um, but just in general, I mean, they, they also have some ideas around sharing data, they think is really interesting and brands are really interested in getting data. Uh, so I think that that Instacart is they've got, you know, really great opportunities there and brands are going to have to be making these decisions and trade-offs as they move their dollars and look at retail media, um, there's more and more platforms that are launching as well. Um, you know, there's citrus, there is Critio, there's, you know, everyone basically is creating a self-serve ad platform. And so that money is gonna have to be distributed. And these are all new, like Instacart literally popped up in the middle of nowhere last year. And so they were able to grab dollars off of planning cycle. Um, but now they're, they're planning for it. So

Rob:

Exactly. Yeah, that's kind of it. And I look at the big advertisers, the big CPGs, um, and others, and it's on Instacart, not only needs her first mover advantage and the realize is really good, but also you're not competing with a bunch of upstarts, like Instacart doesn't have that marketplace model where there's a thousand like little tiny companies that are bidding up every single keyword. And so if you're, if you're on Instacart, you're really only competing with the other products that happen to be on the shelf. So it's, it's, you're competing all on trade space in the same way that you would in the physical shelf. So it's possible that the Roaz is just better for long periods of time versus Amazon just due to just due to competition. Um, so I, I think that the point that you made there is the key one, which is that because the Walmart reboot, the Instacart launch, um, target, uh, you know, EV all of them went live within 2020, the big advertisers couldn't plan for them as part of their profile as part part of their overall market mix, but they could for 21.

Rob:

And, uh, and I don't know that they'll move dollars from Amazon to those, to those sites, but they might move less dollars to Amazon versus those other sites. So you might see a depression about Amazon growth relative to what they've done historically. And then once they, once they see the row as in 21, 22, it's possible that you're actually playing a dollars training game. Uh, so it looks, let's talk, let's talk about other, other things that jumped out in terms of the raw numbers. Um, how did they do in terms of just overall retail sales and, and, uh, first-party and third-party, I think

Melissa:

They had, they had a killer, um, quarter, uh, they had, um, you know, significant sales that they ha they were able to achieve. They did have a lot of costs with COVID costs, um, and they, they did talk about how third party marketplace does continue to grow. And a lot of the growth was from three P and I think that's also, um, that's something that I know Walmart's really focused on as well as growing the marketplace. Um, and then the other really interesting, this wasn't an earnings, obviously, but this whole aggregator market that's kind of popped up overnight with the threats and the perch and the, you know, buying the Amazon sellers, you know, they're on page five and then growing them. Um, I think, uh, through asked you is like a $1.7 billion, they got $1.7 billion of funding or company or whatever. I mean, it's just, it's like insane.

Melissa:

Uh, it's a $3 billion, you know, marketplace, basically, that, that popped up overnight. And to me, they're kind of the new resellers. Like Amazon used to have this reseller market where everyone was kind of reselling the same product, and those have like, kind of dropped off. And it was kind of being replaced by this aggregator market with these companies that are kind of aggregating all these sellers. And I heard, uh, Jason and Scott show podcast with the purchase CEO, and he kind of likened it to wanting to create like the next Proctor and gamble of all these brands. And so that's kind of a really interesting new business model and there's, there's like 40 of them. I mean, there's, there's so many of these companies that have popped up overnight and they're, they're heavily VC funded to go buy brands. Um, and I think Amazon has like a unique kind of hold on that marketplace because they really are Amazon sellers. Um, but the purchase that you also talked about how he did have an interest in going into brick and mortar to expand these brands, um, and to targets and things like that. So that's another whole kind of interesting area that is really an Amazon thing right now.

Rob:

Well, I don't know that it's just going to be an Amazon thing. So we had Carlos the CEO founder, um, from thrive SEO on our podcast recently and okay.

Peter:

First of all, an awesome guy, like he was so great to talk to. Uh, I'll, I'll put the link to the, to that podcast episode in the show notes, um, just cause it's definitely worth a listen. Um, he's a wonderful person and I, sorry, Rob. I interrupted just because it was so great to talk to him. He's just like an awesome human being, but also with the really aggressive strategy.

Peter:

Yeah. The, the so three ICO is the biggest of these guys. Um, as you mentioned, you know, the one, I think it was $1.8 billion, but you know, at that point what's a hundred million dollars between friends. You know what I mean? It's just crazy, crazy dollars anyway. And so what he was saying is the origin of their business was they were looking to originally aggregate, um, Shopify sellers. So people that were going direct to consumer and just in experimentation, they realized that actually you can, you can scale a little more effectively with the Amazon marketplace sellers. Um, especially, you know, if you get these million dollar Amazon mom and pop businesses that are in the middle of Ohio that are page two, um, you can apply a bunch of best practices and get a nice pop on results. And if you do it enough times, eventually you'll get an anchor.

Rob:

You know, anchor went public two years ago. There were, you know, over $10 billion right now. And, um, and they were, they were an Amazon seller to begin with. And what w what Carlos was saying is that the, the, the key operational moat for them, like, you know, big picture is that they're going to be channel agnostic. So they're putting a lot of effort right now, and to, they've got, they've got 20,000 acents and of those 20,000 agents, they've moved only less than a thousand over to walmart.com already. But, um, and the Walmart volumes are lower, but you get a player as big as [inaudible] with 20008 cents. And then you get perch and you get the other guys and they start cross listing and they start cross listing effectively. Then all of a sudden walmart.com becomes a viable place to go for long tail stuff. Like they're not a viable place to go for long tail stuff.

Rob:

Their marketplace is just not vibrant, but if it's seeded by these big aggregators, like you're talking about, then it's possible that Amazon marketplace actually gets competition has never had competition, but it actually will get competition. And then the other things that they do is they invest in the direct to consumer strategy, uh, with a, with a Shopify angle, and then they invest in international expansion and you go to Europe, um, Amazon is not dominant in Europe. And so what they'll do is they'll, they'll, they'll take advantage of the fragmentation of the European landscape have really good distribution strategies within the key year, know European countries, themselves, you know, sign all the trade agreements they need to, and all this type of stuff. So you can take a million dollar mom and pop em, you know, three P seller. And then all of a sudden you're going on the, in the U S you're going across marketplaces in the U S and you go in international. And, um, and, um, in some level it makes the Amazon marketplace less of the center of the universe. Should they hit scale? Uh, so I, I look at those things I can't tell, I can't tell if, I mean, in the short term, they're obviously good for Amazon marketplaces VAT is a vibrant community, big picture. I can't tell if they're similar, similar to the ad spend conversation. I can't tell if they're going to be competitive or not.

Melissa:

Yeah. I'm, it's, it's a great kind of space to be watching right now, which, which we have are our eyes watching them. We're actually working with several of them, um, right now. Uh, and so they're, they're great groups to work with a lot of former Amazonians on seen some bunnies. And so, um, lots of e-commerce experts that are growing these brands. Uh, so yeah, it's interesting, but you mentioned Shopify, which I think is also another interesting competitor and competitive threat to Amazon. Uh, it seems like, and it, the interesting thing that Amazon just did, uh, most recently, I think that they removed the name and address of, uh, FBA sellers so that you can't access. It seems like that move. Like it's like you, you know, that data is so critical to, to, to sellers that, um, you might push them further into that Shopify DTC, um, kind of framework. And then you see people like Adidas and Nike really going hard into their DTC sites saying, I think it either, I can't remember who it was, but they said, um, uh, I think it was Adidas. Yeah, 50% of theirs, the one going through direct to consumer. So that, that also is, is somewhat of a threat to the business model. And especially as Amazon looks at their sellers of, you know, we're really controlling the data. That's, that's going to be a challenge too. What do you think

Rob:

It's, it's interesting to think about, I mean, the, on what it's like almost comparing a horse to a Buffalo or something. I don't know. I don't know. They're there, it's totally different models and both probably have to exist. Um, like the, one of the wonderful things about, uh, the internet is you can have YouTube and you can have Tik TOK and you could have clubhouse and you could have podcasting generally speaking, and they're all like so different and they all, but they all have a place. Right. And so it's hard for me, it feels like brands going direct to consumer is a thing. It's obviously a thing, you know, Shopify did what a quarter of Amazon's total GMV, something like that. Um, in, in 2020, it's a big deal, but it's not really that it's not really competitive. Like you don't go to Amazon to interact with a brand.

Rob:

You go to Amazon to just like transact frictionlessly, um, versus versus you go to a D to C site to interact with the brand. And like, I look at my own spending. My own spending is more heavily on the direct to consumer brands, but, you know, only just, and it sort of varies month by month, depending on what's going on with my kids and whatnot. Um, and so I don't know that they're competitive. I just, I think the direct to consumer stuff is more, uh, is more competitive with just the generic brands that you get from, um, major big box retailer. I think it's just the direct to consumer strategy represents more market fragmentation, more brand fragmentation, less power of, you know, big box retailers to sort of determine winners and, and be King makers and, and up and coming brands and challenger brands. That's more what I think it represents.

Peter:

Yeah. Rob, when you were mentioning kind of why people go to Amazon, there is a certain feel, and maybe this is just my view, but the, the lowest common denominator experience, but very convenient. I can find what I need. I one shop, you know, it is convenience and, and sort of known quantity, but you look at something like what Target's doing with their new favorite day, you know, private label brand, um, in grocery that's so experienced. So brand forward, which is Target's thing. Right. But do you feel like that the Amazon experience is going to have to step up in some way, um, to get those higher margin dollars to really offer brands more rich experiences on their site, um, to, to start driving towards some of these, these certainly to, to drive their own private label business, but also to, to get some of these sort of higher margin and loyal consumers.

Rob:

Yeah. Well, I mean the big picture eight challenge for Amazon is that if you're Nike or your ID does, or, you know, there's a, there's a bunch of them like that that just decide to opt out of Amazon. Um, you know, if enough people opt out of enough major brands opt out of Amazon, then you know, like Amazon's not the everything store. Right. Um, and, and so, I don't know for me, there's this tension. Like I don't, I don't go, um, you know, if I'm thinking of buying jewelry for my wife, I don't think about Amazon. It's not where I, it's not where I go for, like high-end purchases. Right. Um, if I've, if I've got like a specific, uh, real specific brand that I'm loyal to, I'm not going to go to Amazon and buy their product unless their own website is, is out of stock.

Rob:

They're right. Um, but you know, most, most things are, I'm not like that. Most of my purchases are more transactional or I just kind of don't care which brand. And I just want one, something that works if I just like don't care about the brand. And I want something that works for me anyway, for my purchase behavior. Amazon's fine. And I think where the interact is, and this is, this is, I mean, Melissa, you're, you're in the, in the ad space, you're in the discovery business. They were, the interact is a consumer that goes to Amazon, that isn't sure what they want. And it's a chance for a brand to make a first impression and build that relationship. And ultimately every single brand in the world wants that, that shopper to go the next time to their own site, if at all possible. Is that mean, what do you think was that, is that about right?

Melissa:

You brought up a really good point around private label and that's something that Amazon has not done. It, Target's done an amazing job that cat and Jack and the new one that they just launched. I mean, these are like amazing private label brands. Amazon's private label brands have not like, I think they're battery brands good, but they haven't done a good job even launched like a Kickstarter, like, um, thing to see, to kind of crowdsource what products should they be creating. Right. And if you guys saw that, no, I didn't. So they it's like a clock or I don't, I can remember the three things that you can vote on to see what's the next innovation they should create, but they haven't done well in private label. They haven't done well in fashion apparel, obviously it's, COVID cause it's kind of hard to do well in that.

Melissa:

But, um, you know, athleisure is doing really well. They haven't done well with like this whole social kind of commerce, um, aspect of it. So there's some things that they haven't done well at all. Um, they've done well in the fact that just whenever you want to go buy something, you go to the Amazon app and you hit toilet paper and you can, you know, whatever it is that you're looking for on branded terms, whatever you can get it. Um, and so that's where these Instacarts and Walmarts that are encroaching into that business model that, you know, I can go get Sony headphones at Amazon or Walmart and sustain price. So what's, you know, where am I going to go? Um, maybe through time that's because Walmart has the color that I want, you know, so it's just, there's some threats there. Um, and some things they haven't innovated on, but right now they have like all this mind share and people going there, they do have a lot of threats coming there.

Melissa:

And then they've got, you know, the whole Amazon prime video is streaming and Amazon movies. They got a lot of things going for them that, um, will continue. And the other one too is, um, and I know it, didn't totally, didn't answer your question at all, but, um, just talking about like their, their results and kind of their opportunities and their misses, but healthcare is another big one that I think is, um, I think they mentioned it in their results, but Amazon care is their app that, um, is amazing. You can hit, you know, talk to a doctor right away on the app and they come to your house and they give you a COVID shot. Like they have, you know, really great opportunities around some of these things to do beyond the retail business.

Peter:

That sounds exciting. I would be up for that at any moment. I still don't have my vaccine and my husband does so that it's irritating me and that needs to be resolved. I'll get the app.

Rob:

I'm actually, I'm actually a user of PillPack, which is an Amazon Amazon company. There, there is something interesting though, if you, if you look at, I mean, their, their earnings results are just shiny all over the place. And, um, but the earnings results of a lot of people are shining all over the place. And if you look at just e-commerce growth, starting from smaller numbers, but, you know, folks like a best buy or a target on a, on a percentage basis really, really outperformed Amazon. And in 2020, um, Shopify really outperformed Amazon in 2020, um, from a, from an, an ad growth perspective, Instacart absolutely crushed it. And so I'm starting to see like really legitimate competition in e-commerce in a way that just really that, that we seen in a few, you know, really, I don't know, the last five years or, I mean, Amazon's just run away with it.

Rob:

Who's been really competing with them. Um, but now, now there seems to be viable competition. And I wonder how much of their continued growth at their scale for the core retail business, you know, leaving aside AWS, right. For the core retail business. I wonder how much of it is dependent upon continuing to be a default, just like, you know, you're, you're, you're a prime member. You just, the apps on your phone, maybe it's on the home screen. You just, you know, Walmart fighting its way to that spot or Instacart fighting its way to that spot and target finding the way to that spot. I just wonder how much of, how much continued growth is based on that.

Melissa:

Yeah. Well, the one thing I know is competition is good for innovation. And so, you know, I think that Amazon's had a good spot for so long, but they are, they're amazing. Executor's um, and they are really great at innovation too. Uh, and I think the pressure of the Instacarts the Walmarts, you know, it, it's going to be good for consumers and it'll be good for these retailers to innovate. So we will, we will see the results will come in

Peter:

And Melissa, to, to close, I feel like we do have to talk Instacart. Cause the other day you afforded me a LinkedIn post from e-commerce consultant, Rick Watson, where he listed out the top management team at Instacart. And he said, does this look like a typical grocery business to you? Me neither, what they are building is one of the largest advertising and consumer data businesses online. What do you, do you agree? Um, and what does it mean to the brands who are doing business with them and, and the retailers are trying to figure out the front of me situation with Instacart.

Melissa:

Yeah. I mean, if you look at their executive leadership, I thought that post was, was super insightful. But, you know, as you know, obviously Seth CRO came, came from advertising background, um, uh, you know, people from Google ads from Facebook ads. So, you know, not a lot of like grocery, you know, supply chain experience. And so, and they, they do have this like huge vision around being, you know, collecting all this data and providing data back to the brands, which is really, really important to them because their businesses. So it, you know, they've got a really great strategy, uh, really interested to see what they do, but they do have quite a lot of advertising. And the other thing about Instacart is it's kind of expensive. Um, and so those, you know, when people start going back to shopping regularly, like those costs are going to need to come down for people to keep using it.

Melissa:

And what helps that is advertising revenue. And so that advertising revenue is going to need to grow and to be able to offset a lot of these costs that right now it is pretty expensive. Like I use it, um, because it's super convenient, but it is a lot more expensive than I just, if I just went to Costco. Um, so I think that those costs will need to come down and can be offset greatly by advertising. And I think their CEO couple of weeks ago, when was publicly talking about the importance of the ad business to Instacart. So that, that is going to be a big strategy for them to grow profit.

Rob:

Maybe we should do a man. I wish Instacart was public already. So we can do an Instacart earnings call like this. Cause I mean, you know, Instacart, Shopify, Amazon, I mean, they, they are, they're really interesting set of companies to watch. They're all so different and they matter so much to bump up against each other.

Peter:

Yeah. Then I have to throw in a plug because, um, we actually have on March 18th at two, at 12:00 PM Eastern, I'll be grilling Carrie masters friend of all of us, the founder of digital marketing agency, bobsled marketing. And she wrote a new book called Instacart for CMOs. And so she's actually coming on to talk about that she has this view of them as a four-sided marketplace and what that means for brands and the book is great. We, we, I got an early read of it and, um, and I think, uh, it's going to be a lot of great information for planning your 21 strategies, uh, with, with Instacart. So, uh, we'll put a link to that in the show notes as well. Melissa, thanks for coming back twice. Uh, you know, coming back again, that's, that's a lot of courage on your part. I have, I feel like we need to, we need to keep doing this. So thank you so much for, for a, for just being such a great, um, uh, contributor to just the discussion in the community. I think tonight we're recording this on a Thursday. I think you have your clubhouse events. So anyone on clubhouse on Thursday nights at what time?

Melissa:

Seven Eastern. And we, we, we ha uh, I think tonight we have, um, Brian Goldenberg and, um, I think Brian might be leading tonight's session.

Peter:

Well, by the time they hear this, uh, that will be over, put it on a calendar and be there if you're okay.

Melissa:

At seven Eastern four Pacific, we always have thought leadership, um, on the clubhouse under digital underground.

Peter:

And I think I have still maybe a few clubhouse invitations. So if anyone out there wants one, uh, Peter, uh, digital shelf institute.org, maybe I can rankly you something. Um, and Melissa, I think you should invite Rob on because that's the only way he will ever be on clubhouse. He might even say, no.

Rob:

Nope, Nope. Peter, get off my lawn, not doing those new social media things.

Peter:

Angry, man. Angry, man. So Melissa, thank you so much. And as always to our audience, thanks to all of you for being part of our community.