Using Unit Economics to Guide Decisions in Uncertain Times, with Colin Kaster, President of Strategy, Digital Advertising, and Operations at Equity Commerce

Transcript

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Peter Crosby (00:00):

Welcome to unpacking the Digital Shelf where we explore brand manufacturing in the digital age. Hey everyone. Peter Crosby here from The Digital Shelf Institute. Times of Chaos and Uncertainty do have an uncomfortable but necessary side effect of focusing one's mind, both on what is important and what is within one's control. This is certainly true in the Zoom rooms and boardrooms of any company in commerce. For our guest, Colin Castor, president of strategy, digital advertising and operations at Equity Commerce, an e-commerce agency optimizing Amazon and omnichannel sales. Much of these answers lie in understanding the real unit economics of every SKU you sell, and then optimizing your business around where the opportunities for maximum profitability lie. Lauren Livak Gilbert and I peppered him with questions. Welcome to the podcast, Colin. We are so excited to have you on and dig into the today's topic.

Colin Kaster (01:08):

Yeah, really appreciate you having me

Peter Crosby (01:10):

Because tariffs on everyone's minds, the chaos, the uncertainty, the cost, and so I thought with your background in equity commerce, thinking about the unit economics of commerce, it seemed like, and a great opportunity for us to think about e-commerce and digital commerce in the context of tariffs. We're not going to try and make predictions or even talk about what's happening right now because by the time this podcast airs, it probably will be, I don't know what it will look like, but we do know that what best practices are in times of uncertainty, and you particularly I think bring a lot of great knowledge on that. So in order, just to dive right in, could you want to start with, first of all, just give us a little bit of background on equity commerce and what your focus is, and then are the sort of, when you think about tariffs, what's coming down the pike just in terms of how our listeners should be thinking about navigating their way through this over the next six to 12 months?

Colin Kaster (02:23):

Yeah, absolutely. Appreciate it, Peter. And yeah, equity commerce really kind of focus on two primary pillars, one, data and collecting data to leverage strategic decisions. And then two unit economics really understanding profitability. And when we think about the unit economics piece, that's really where the name equity commerce originates from. But yeah, really with equity commerce, looking at data, looking at tech automations and tying it into today's kind of headliner, the tariffs and what that means for navigating things. And I think ultimately when we look at this, there's a couple things that are pretty much guaranteed and there's a lot of things that are kind of debatable as well. So I just want to first and foremost start off as I'm not an economist, and a lot of this is projection and expectations, but as far as price increases in supply chain, I think those are the two main buckets.

(03:26):

So as we look at cogs changing and supply chain established establishments and how different brands are vertically integrated, those are kind of the two pieces that are ultimately being looked at the most and one of the biggest concerns I see, and I think a lot of people are fixating on inflation and just general cogs and what that means for product listings, but I think at the same time in stocks and supply chain need to equally be looked at because regardless if you're dealing with 20 to 25% increases on cogs and what that means for a list price position, if you don't have the inventory on hand, it doesn't really matter. So I think that's kind of a gap right now that needs to be heavily weighed in at the same time.

Lauren Livak Gilbert (04:20):

And just to explain the acronym for anybody listening who doesn't know cost of goods sold, for anybody who doesn't know that one, and the one thing I want to dig in on, Colin, because I've been hearing a lot about cancellations or increase in POS to try to beat the tariffs, are you seeing a lot of people placing more pos to try and make sure that they're getting the products that they need before everything changes, and then some of those are being canceled? Are there any trends that you're seeing around that?

Colin Kaster (04:54):

Yeah, a little bit of both. So there's lots going on with Amazon canceling pos from China, but there's also at the same time, everybody's trying to get their hands in front load on inventory, just kind of knowing what's going on. And tying that back to the supply chain comment I made earlier, when we look at gaps of pos coming through, let's say it's four to eight weeks and you have five to eight weeks of inventory on hand, that's going to deplete and that's going to be a gap where there's inventory not available for purchase in the buy box or on the shelf at your brick and mortar retailers. But definitely a little bit of both. And it's definitely a scramble too when you start to think about third party sellers and FBA when there is this push for everybody to frontload inventory and get their hands on things with the expectation that there's going to be gaps, there's storage capacities that are not endless on Amazon's end, right? So what does that mean for sellers that either have newer products or are just continuing to try to keep the storage capacities open for their full selection? I think there's definitely going to be some repercussions to some of the panic around securing a healthy in-stock position at a much higher week of supply than typical, but definitely a little bit of both on the cancellation side as well as the front load side.

Peter Crosby (06:15):

Certainly there's been a lot of news around the shipping container market volumes from China dropping between 30 to 40% in April. And it seems like some of the earnings reports from Maersk and others seems to be saying that that seems like that's going to continue. And so it just seems like what we've got is volatility ahead. And so with that environment, what are you thinking about what you are seeing happening? You've talked about the inventory flow, but what's happening to brands on Amazon? Are they sticking around? Are they having trouble? Is their marketplace sort of shrinking at the moment and what's going on with private label, et cetera? What are you seeing there?

Colin Kaster (07:05):

Yeah, absolutely. And good question. I think this is again, one where everybody's kind got their own opinions of what might take place. Me personally, I expect 25% or more of third party sellers to potentially be closing doors altogether as far as their Amazon presence or even extreme rationalization of potentially 75% or more of the selection being removed, which is core products being focused on. But when you look at what we do at equity commerce, the first thing that we dig into is what is your unit economics at the item level and what does that mean as far as your general position and strategy capabilities? And it's an unfortunate thing to say, but more times than not, that initial audit essentially of brands on the three P side in particular, digging in the profitability is in such a slim position as far as margin that when you start to think about, although those we'll call 'em below the line costs or incremental costs in the backend, essentially keep the lights on, cost variables, there's just no way that it's profitable. And so thinking about that and just general experience of hundreds of audits that have been completed in the past, you start to build in some of these cost increases and general fluctuations and volatility, and it just kind of supports my thoughts here as far as how many sellers might be disappearing

Lauren Livak Gilbert (08:41):

Then what are the implications to those unit economics that you're talking about when you're talking about how brands are needing to recover margin, how do they think about that and changing their strategy in this environment?

Colin Kaster (08:55):

Yeah, there's a lot of different ways, and I think it's one of those things where there's a lot of bad, but I think it's going to surface a lot of metrics and opportunities for brands that weren't historically looked at, and a little bit of internal audit too. So I think ultimately there is going to be skew rationalization. There's no lost leader hero products in the mix anymore, and there's going to be cost cutting on the media buy side of things, but to drill that down a little bit, unit margin erosion due to some of the tariff implications, definitely forcing that rationalization. And I believe understanding exactly what your hero products are and leveraging a reduced and more focused media buy and strategy is going to be kind of the general more generic next steps for a lot of brands. But going granular on that, if we think about, okay, we are looking at our marketing funnel and we look at top of funnel versus bottom funnel, we need to ultimately brands want to know, okay, what is our actual return on our spend?

(10:05):

There's a lot of new to brand customer outreach and general casting a wide net essentially top of funnel. And I believe that's going to drill down a lot to more the bottom of the funnel, more specific KPIs that are able to be tied back to conversion and some of those core performance metrics. And then with that understanding, how can we locate wasted ad spend? There's a ton of new cool reports with Amazon today, right? I mean the big hype is SQP, search query performance reporting, understanding really what percentage of your branded search do you own, some of those things. But I think establishing a really strong strategy around where do we have wasted ad spend and also where are we performing really well organically and ensuring that you're not investing in ad spend towards where you have that organic traffic that you're already capturing. So kind of combination of some of those things, but really utilizing the data, understand how to free up cash and keep it focused on results. And with conversion.

Lauren Livak Gilbert (11:09):

I really like the skew rationalization piece, and I think that that's an exercise I always tell brands to go through no matter what economic times you're going through, but 80%, or excuse me, 20% of your product drive 80% of your profit. So what is that magic quadrant where it's profitable and it's high growth, or where are the high growth skews that maybe you can help drive to more profitability? And then what are the skews that shouldn't even be selling online if brands listening haven't done that skew rationalization piece. I think I agree, Colin. I think that's a really, really important tactic. And then I'm also curious around fees and fines. So from a content perspective, from a shipping, there's a lot of fines that brands just kind of accept, right? It's just a line item on the budget, whether something exploded, there's returns, it's inaccurate packaging information, it's millions and millions of dollars. But have you seen brands really hone in on or build dashboards or metrics around like, Hey, where are we getting the most fees and fines and can we change the way this product is shipped? Or can we rethink our content or our packaging? Is that a priority or are you seeing brands shift to that at all?

Colin Kaster (12:25):

Yeah, absolutely. So to kind of start off with your first question, so with skew rationalization, I think there's a lot of metrics that in general aren't looked at in depth enough. And just saying this because I see it a lot, but if you look at your A to 20 rule or what are those top performing items to focus on? I think those are already relatively established for brands. And when you start to think about, okay, where can we trim the fat a little bit and clean things up given some of the p and l focal points that we've come to with what's going on today? And if we look at just general reports of what is overall traffic that we have at the item skew level and what does conversion rates look like on that traffic? And I think when you kind of complete this assortment audit and vet through your catalog, it often surfaces a lot of products that perform extremely well and that have a lot of intent and opportunity where there's just not the right traffic being driven.

(13:28):

And with that, I think it really needs to be taken into consideration as far as what can we do that isn't going to drive additional investment that's going to drive a return as far as our top line performance goes, and just kind of pinpointing some of those, we'll call 'em sleeper items in a way. I think that's going to be some serious low hanging fruit when it comes to rationalizing. And then ultimately, if you think about just the basics, going back to the core of things, how is the content? Are we fully optimized on the S-E-O-G-E-O side of things now, but going through and making sure that we're looking at products and the basics to flywheel essentially, and we're not missing the mark anywhere again, just the low hanging fruit and then they're moving into item level profitability and overall conversion to slim things down.

Peter Crosby (14:24):

Colin, when you engage with your clients, are they already thinking about unit economics and thinking about from that perspective or are you introducing a new rigor around it? I'd love to know where your conversations usually start. What's the problem case that is bringing people to you and where you're able to introduce value? Yeah,

Colin Kaster (14:52):

So the way we look at it is at the item level, so item level unit economics tied back to typically pretty fragmented p and ls on the brand side, so tying that together. But when we look at unit economics at the item level, we're also tying in actualized ad spend and real time cost variables. So we track everything. We automate that process so we know, okay, here is the actual net profitability with last 30 day ad spend all Amazon fees. It's a true p and l rather than just kind of pulling in some placeholders. And then we're actually able to plug that into how we optimize our ad spend. So we'll know exactly based on actualized unit economics at the item level here is performance, we need to see, let's use PPC ad campaigns on Amazon as an example. Here's the exact target performance benchmarks for multiple different metrics to know that we are meeting a margin requirement. So let's just say our margin requirement on Amazon is 10% for a given item, we can track specifically against that and know exactly what ACOs, tacos, roas, some of those key metrics on the ad side need to be so that we're continuing to meet those margin requirements.

Peter Crosby (16:10):

That's fascinating. Thank you. So sort of tamping down our tariff panic or concerns for a moment, no matter what. If you were offering two to three things that brands can do to focus on keeping their business healthy and remain relevant and valuable in a time like this, what are the things at the top of your list that you would advise?

Colin Kaster (16:38):

Yeah, generically said, make smart decisions.

Peter Crosby (16:42):

Oh, thanks for the tip in life and business. Well, and that's your podcast folks.

Colin Kaster (16:50):

Great to connect and best of luck. Yes, exactly. No, I think right now just kind of going off that general statement when it comes to ski rationalization, a core assortment in stocks, knowing your supply chain, contingency planning, kind of everything that goes into the basic brand management side of things, given where things are at in the changes, it'll only take a few different strategic shift and decisions for brands in the small to mid-size category, I think to drive some pretty large negative repercussions and potentially even push them out of the marketplace altogether as far as being able to maintain profitable and competitive. So I think it's right now any major changes in primary growth objectives could be detrimental if everything isn't measured in the right way. And I know that's again, very generic, but ultimately I think with what's going on right now, major shifts in growth objectives and general strategies that are in place, obviously these need to be fine tuned as a result of the changes that are taking and you need to be flexible with things that are taking course. But anything too rash and farfetched is definitely something that I think I'd pull back on a little bit right now depending on what it is.

(18:17):

But I think another thing, and again, this goes back to the rationalization side a lot brands often have assortment of products, and a lot of those skews are major distractions. I mean, you start to think about tracking unit economics and strategy and ad media, buy everything behind individual items and taking those lower performing items completely out of the mix. It truly does free up a lot of time for account managers and e-commerce teams to really hone in on top performing item performance metrics, looking at the data and continuing to optimize and grow incremental top and bottom line for those items just given that it's all the distraction items are out of the way. Does that make sense?

Peter Crosby (19:06):

Yeah, yeah, for sure. And when you think about the maybe even going more fundamental opportunities, which might be more strategic, if you think about the manufacturing, where do you manufacture and where imports, what are the opportunities for import brands maybe that can work? Are there thoughts that you would have around that focus?

Colin Kaster (19:37):

Yeah, I think in general, any way you can avoid these import tariffs, you're going to be moving in the right direction, right? The biggest issue here is prices will go up. Those margins aren't just going to come out of pocket on the backend within a company's cashflow. So if there's domestic manufacturing capabilities, and I think overall the diversification of sourcing and supply chains just in general, I think in the long term is a good thing. But I think fundamentally, if there is domestic capabilities, what other options from a sourcing perspective, do you have best case scenario? Those are already in place and you can kind of pivot accordingly. But I think on top of that, the incrementality of what is available today and are we leveraging it? So I'll use Amazon B2B as an example. Obviously Amazon's been investing really heavily in that side of things.

(20:44):

You continue to see different things roll out as far as programs for custom pricing with certain industry verticals and different programs that you can participate in for custom pricing quotes and even advertising specific to B2B customers and audiences. Now, I think that's a really large area, and it is another area where if you think about what is the optimized B2B case pack or size of product, you can really look at that as a opportunity to optimize how you're shipping products, right? If you're able to ship case packs of 12 and you look at the per unit discounts, you can apply for shipping in those quantities. The per unit cost is not a one for one for the increased caseback size that you're shipping in, you're going to be building margin, having those higher quantity offers and just shipping in those original case packs that are typically broken down and shipped individually to customers. So I think B2B is a really good opportunity where you can kind of build some of those increased costs into the additional margin that you're going to be receiving on some of those bulk offers. And again, the data that Amazon's providing on the B2B side is pretty cool now. So it gives you some good context on where the opportunities are.

Peter Crosby (22:00):

That's interesting. So you think that perhaps so often people are thinking about their business by channel and by B2C versus B2B, but they keep them separate. But if you're thinking about now where are my overall companies most potentially lucrative opportunities, potentially profitable opportunities, it may be that in this period, if I'm reading you correctly, that some of those opportunities may shift from consumer over to your B2B business and look for opportunities across the business and put efforts into those places where your unit economics can get better in this time. Am I interpreting what you were saying correctly?

Colin Kaster (22:44):

Yeah, yeah, exactly. I mean it's really just understanding that that intent and an opportunity is there. A lot of brands kind of probe that initial question of what is your current B2B sales percentage to total? And there might be some, usually you don't really get a firm answer and it's not really something that's prioritized. And by simply going in and understanding what levers can be pulled today on the B2B side, you'll immediately start gaining some of that traffic and opportunity and start to see that B2B attributed sales lift pretty quickly. So it's more just understanding there's low overhead costs associated with taking advantage of different programs that historically have just not been prioritized. So again, thinking about where we can make up some of these gaps and where the opportunities lie, I really do see B2B being one of the core ones for a lot of brands. Obviously it's contingent on products and category nodes, but there's definitely a lot of low hanging fruit there for a lot of brands.

Lauren Livak Gilbert (23:55):

Yeah, I feel like for a lot of larger organizations too, it's easy for data and just analysis and connection points of looking at the full picture and the unit economics. It can fall through the cracks. And I'm air quoting here, it was okay for a while because they saw growth and they were profitable and post covid there was a huge increase, but now they don't have the luxury of skipping some of those more detailed pieces that they need to focus on. And understanding all their data points, how it hits the p and l, what the unit economics are like being brilliant at the basics, all of those things need to be in place in order for you to be successful and you can't really skip anything anymore or overlook it. And I think that's going to be challenging because I don't know, Colin, when you work with organizations, you're probably talking to multiple people in multiple different functions trying to figure all of this out, not just one person. So it's going to take a lot of collaboration to really do what you're talking about effectively. Would you agree?

Colin Kaster (24:58):

Yep, a hundred percent correct. Absolutely.

Peter Crosby (25:02):

Lauren, from your experience, where does that level of, in order for those practices to be instituted to start doing that kind of higher level review? Is it the chief revenue? Where would the

Lauren Livak Gilbert (25:23):

Good question

Peter Crosby (25:24):

Executive propulsion come for that?

Lauren Livak Gilbert (25:27):

I mean, it's usually between sales and marketing or if you have a chief commercial officer or something. But if you have a revenue birth management team, an RGM team, a lot of this usually lives unit economics and really understanding skew rationalization. They have a perfect seat to be able to understand that, and they can look at price and they can look at competition, and they're a really great place to start if you haven't engaged with them. But if you don't have an RGM team, it usually sits within sales and with each direct retail team, so like the Walmart team or the Amazon team. But the problem is, to Colin's point, how is it reported on your p and l? Every organization is different, and it might be really hard to understand how this one tactic or how e-commerce is hitting the overall p and l if you're not accounting for it.

(26:14):

So I think that's where it becomes really challenging, and that's where you see a lot of organizations have shadow P and Ls to better understand how what they're doing online is really impacting their business. But one of the themes from an upcoming research projects around omnichannel organizations is having a unified p and l, because you can't just look at channels separately anymore. It's a collective approach around how you're getting to the consumer. And I think this is even a bigger call out that you need to look at your p and l as one because these tactics have to work. You can't just be throwing spaghetti at a wall anymore. There's no luxury there. You have to really know, am I doing this? Am I getting the ROI? How is it impacting my business? And have a really clear line of sight to that. So Colin, oh, go ahead.

Colin Kaster (27:04):

I was just say, and just to add to that, and there's sometimes a hierarchy to that as well. You have your total p and l, and then you have more of your really just use Amazon specifically as a marketplace that sub p and l that can be drilled down to the item level, which I think there's definitely the need and there's some really cool tools out there, and I don't know if I can name drop any in particular how that works, but being able to tie that in and have somebody that, and even again, just tying in this general conversation, more important than ever, I mean, it's daily, weekly reviews of what does the item level p and l look like based on some of the different initiatives that are in place and some of the different levers that are being pulled and using that information to roll back up to that total p and l.

(27:51):

Because a lot of times you see these more high level, larger corporate p and ls and has a branch back to Amazon and understanding what can actually be executed on the backend, on the e-commerce side that will influence some of those line items on the p and l directly. So again, there's a lot of really cool tools out there today where you can plug into your three P accounts and it attracts everything real time, and you can just set your benchmarks and track things really quickly and easily. But again, having that data available and having that tracked, it's pretty monumental as far as having a grasp on how to influence some of those different metrics.

Peter Crosby (28:32):

Colin, if somebody listening did want to get that list from you, is LinkedIn a good place to reach out or where might they extract that from your head?

Colin Kaster (28:42):

Yeah, LinkedIn's great, and again, with equity commerce, we focus on automation. So my history goes back to another agency just very general as far as roles, responsibilities, and with equity commerce, we focus on how do we automate different tech solutions and have the data flowing together to where we can essentially look at a dashboard and make strategic decisions based off data immediately. But that as a result, we've talked and learned about a ton of different tech and automation tools out there. So pretty much every spoke on the flywheel, we've got some pretty cool tools available, so I'm always open to talk through that.

Peter Crosby (29:27):

That's great. That's very generous. Thank you.

Lauren Livak Gilbert (29:29):

Awesome. So Colin, how should brands be positioning themselves for success at this point, other than what you shared, what do they do now? What should they have done differently to prepare for this? Where would you have them center their focus?

Colin Kaster (29:45):

Yeah, I would say brands that have kind of utilized the Amazon exclusive assortment strategy historically definitely I think is starting to pay its dividends with things that are going on. When you think about the price matching other resellers popping up and just the flexibility of having that Amazon unique assortment, I think it's really, really going to be pat on the back type of situation for a lot of brands out there today. And you think about Amazon, go back to buy box and price matching, there's going to be a lot of different terms in place for different retail channels. If you start to look at some of your top performing products, if those are the same top performing products across retail channels and price increases are being approved, if some and not others, there's definitely going to be some risk that brands see where there's suppressions, vendor managers are asking for funding based on CP margin being negative for a duration of time, and ultimately products crapping out at the end of the day.

(30:54):

CRIP can't realize a profit. Again, let's go into that acronym, but yeah, I think that's one of the biggest ones. And then brands that have really focused on item level organic rank and specific item market share initiatives, essentially just looking at added attributed sales percentage to total. I think there's definitely a lot of brands that are 50, 60, 70% plus added attributed sales to total, and they're fully reliant on that, where products that really have strong organic presence and are able to continue driving that or organic top line attributed revenue, those will definitely be, again, another pat in the back type of situation where those types of focal points, bestseller, rank owning, top of search, impression share for high volume, relevant search terms, owned owning brand share, all of those is some specific examples.

Lauren Livak Gilbert (31:57):

And organic in conjunction with paid, I think that gets missed, right? Paid media should not be your full focus. Paid and organic are working off of each other. If you have organic, why are you paying for all of this paid media? It can be a collaborative kind of tactic, but oftentimes those teams sit in different functions and they don't talk to each other. But that's a really good call out for brands too, used organic and paid together as one fundamental strategy rather than separate. Would you agree?

Colin Kaster (32:31):

Yep, definitely. Yeah. Just knowing what your, we'll go to search term rank, knowing what you are organically ranking on and having a grasp on that and having that be clearly communicated back to the PPC management team and optimizing accordingly. I see it so often where you'll look up a high search volume relevant search term for a specific product, top of search impression share, you have your sponsored placement, scroll down maybe 10, 15 line items at most, and there's that product organically ranking as well. So understanding to your point, how are those strategized and monitored in conjunction?

Lauren Livak Gilbert (33:12):

That's why I think, and Colleen, where do, oh, go ahead, Peter, go ahead.

Peter Crosby (33:15):

No, I was just going to say that's why I think your unit economics audit is such an interesting process because I think it does kind of takes the gut out of it and really probably exposes those cross-functional considerations that need to be brought to the surface, but it's brought through data, which is helpful to everyone I think. So that's what really grabs me about what you're describing here.

Colin Kaster (33:44):

Yep, absolutely, Peter. And with that being said, I mean if you start to look at even a lot of ad campaign structures, right? You've got similar products that are grouped together in ad campaign strategies and just general campaigns. And in general, Amazon at the end of the day still has the power to say, okay, this item is going to earn that sponsor placement specific ASIN level. And generally it's a top performing product, whether it's the best color or an ideal size of a product within a variation. And not being able to understand that that item is owning 80% plus of total impression share for that sponsored placement, not being able to tie that back to the item level ad spend as a cost variable in your unit. Economics really kind of blinds you to what is the true net profitability of that item find when you do some of these audits.

(34:45):

There's a more holistic approach to, okay, total ad spend versus total sales. Well, when you start drilling that down to item level, you'll see that ad investment is primarily being attributed to a specific item. And from a net profitability possession, that item is actually not profitable because it's absorbing way more ad spend than you intended it for. And it kind of gives you some of those insights as far as, okay, we need to pull this specific SKU out, create its own ad campaigns and its own budget, and keep other products separate so that there's not over allocation of budget towards certain items that you're unaware of.

Lauren Livak Gilbert (35:27):

That's awesome. No, I think every brand should go through that exercise. And Colin, I was just going to end by asking where do you stay up to date on everything that's happening with Amazon happening with tariffs happening with how it's affecting manufacturers and such? Do you have any place that is your go-to to gather all that information

Colin Kaster (35:50):

All over the place? Honestly, I found it LinkedIn, obviously, there's always tons of stuff rolling through and oftentimes there's links and different articles that click through on that. But one thing I've been kind of playing around with lately is if you utilize some of the different AI tools out there, perplexity chat, GPT, whatever it might be, everybody kind of has their preference. You can actually see where they're sourcing some of the things that you might prompt and you can go back and click in and look at those direct links. So I found myself a lot going in prompting specifics around things that have changed how brands and manufacturers are diversifying supply chain, just relevant topics, and then I'll see how it scrapes for articles and I'll kind of do back research through that way, which I've found, which is pretty cool. And I know both of you obviously have been keeping up to date on things too, so I would actually like to reflect that back your way and see where you guys are keeping up on things. And it's pretty relevant.

Peter Crosby (36:52):

I just ask Lauren.

Colin Kaster (36:57):

No, I'm kidding. Everybody listening is Lauren, is LinkedIn the best

Lauren Livak Gilbert (37:01):

Place? Great job, Coen, great job. You should be a host. No, I love that idea about Chad GBT, but I mean, I use LinkedIn if I'm being honest. I actually schedule time to go through and just following the people in the industry that are talking about this, right? Like Russ Inger from Strata League, Curie Masters on retail media. I follow a bunch of people that are just, I think, thought lead Andrew Lipman for retail media, a lot of people that are just thought leaders in the space. And I get so much more from my LinkedIn feed than anywhere else. So I know a lot of people don't like LinkedIn. It's another social media network, but it is a great way to get information and to stay up to date on stuff in a more condensed format than reading a 20 page article because who has actually time for that? But I like your idea, Colin, of asking Chad GBT and then looking at the sources because it's interesting.

Peter Crosby (37:58):

Yeah, I've been doing that recently with Gemini, with their deep research version and going in sort of a topic that I'm interested in. I sort of pitch it, I put a prompt in for it really just to see what it comes back with because its search is so everywhere. It's just sourcing from everywhere. And then even if I don't use the research to Collin's points, the citations lead me to places, and sometimes they're sad little citations from weird places that I don't really want to rely on. And that's sort of where the hallus, the hallucinations or just what does it have, but sometimes I uncover core sources that become very reliable. And so yeah, it's great.

Colin Kaster (38:46):

Yeah, I've been finding myself digging in and even just reaching out to different individuals in my network just to get a gauge on, just start to look at what's taking place here and I'll call it panic buying, but there's definitely on the consumer side, some frontloading taking place as well with the expectation that whether it's expensive, kind of big ticket items or even everyday essentials, there's kind of that expectation that prices will go up. And so essentially getting your hands on some bulk purchase today will save you some money long term. And so if we think about quarterly earnings reports, Amazon specifically use that as an example right now, being able to use those details and take some of those things into consideration when we look at forecasting Q3 and Q4, right? Because I think there's going to be definitely some variables to keep top of mind as you start to look at some of the data points that come out on what's taking place right now and how those can be potentially skewed a little bit with just some of the changes in purchase behavior and general consumer expectations. But I feel for all of the large more legacy brand inventory analysts that are put in the position of projecting what exactly that's going to look like in Q3, Q4, even into next year, definitely a pretty tricky job to have

Peter Crosby (40:16):

To be trying to manage the holiday season right now. I feel for everyone on this podcast and in the world for all the uncertainty that's sort of been foisted upon us through various actors in the world. And so hopefully your advice today helps a little bit in helping folks focus on the areas that we do have some control over and how to get more and more diligent on finding those places where your unit economics need to change or where you should be doubling down. And so Colin, we really appreciate you coming on and giving us this mindset and your expertise on the way forward in these uncertain times.

Colin Kaster (41:02):

Absolutely. Well, again, I really appreciate you having me on, and hopefully that was helpful.

Peter Crosby (41:07):

Thanks so much, Colin. Thanks to Colin for bringing some clarity and focus to a noisy time. More insights always to be had at digitalshelfinstitute.org. Swing on over and become a member. Thanks for being part of our community.