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Welcome to the Json and Scott show this is episode 325 being recorded on Sunday May 4th I’m your host Jason retail gee Goldberg and as usual I’m here with your co-host Scot Wingo.

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Hey Jason and welcome back Jason Scott showed listenershappy May the 4th Jason.

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Happy Star Wars Day Scott.

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What did you and your family do to celebrate.

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My family is all consumed by fortnite and conveniently this month is a Star Wars themed fortnite so I’ve been playing Dark Sith Jar Jar Binks all all day on fortnite.

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True,

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cool well I think it’s is it the 20th or the 20th and the issue of episode 3 it was recently so I was watching that today just to kind of get my Star Wars on and I’ve really been enjoying the season 2 of Andor so that’s like some of the best adult

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Star Wars,

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drama and the Spy show if I find a lot of people don’t watch it but it’s excellent it’s kind of a slow boil you got to be a little patient it’s not built for today’s Tik Tok Society but the

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the payoffs are very good and the writing solid and yeah I really enjoyed the acting is amazing.

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I agree totally into it I’m behind on season 2 my wife and I made the mistake of starting to binge watch the pit which is impossible to watch in super depressing but we can’t stop now.

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Okay sounds like a a hell of a pitch good use of your time.

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Finnish punishing ourselves we have 1 more episode which we would have watched tonight were it not for my appointment to record this podcast so my wife is angry at me and then I get to start catching up on on season 2 of vandor I’ve only seen the first episode.

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Okay I won’t no spoilers for me but it’s excellent.

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Cool it’s been a while since we recorded because you sir have been burning up the airline miles I thought you said you don’t ever need more miles in here you are just stacking them up.

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Yeah it turns out I didn’t get a vote that I I almost thought I was gonna get to announce a huge milestone on this podcast I think it’s gonna happen sometime before our next episode but I’m,

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I’m a perilously close to passing 2 million miles on United which is I I do not say that as a a badge of Glorynot recommended.

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You get an extra bag of peanuts.

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Exactly the pilot comes and brings you your peanuts that’s the.

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Nice.

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The big benefit and the actual for those.

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For for frequent fire and all we need is the benefits you get from 2 million miles are you get to keep the benefits that you got at 1 million miles that they’re now taking away from all the 1 million milesyeah it’s that kind of Life yeah.

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Controversial stuff loyalty not what it used to beum yeah but so amongst all that.

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Jetting you around what do they want you to talk about where are you going what’s.

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They are they are I I have been on the road pretty much every week and I I am continuing to travel I’m visiting a client at their event in Las Vegas early tomorrow morning,

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but kind of working backwards last week I was in New York a division of pubis is the healthcare division that worked predominantly with all the the health care companies and they have their own Big Show,

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and apparently they could not get any good keynote speakers this year so I got to do,

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1 of the Keynotes and talk about all these disruptions to Commerce that are that are coming to the healthcare industry,

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so that was super fun hey I got to follow Chelsea hand or so it was it was it was great to try to be funny right after someone who’s actually funny.

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Yeah.

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Uh yeah and then and I think she made disparaging remarks about everything I was about to talk about if I’m if I’m I try to Black it out already but uh.

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So that was fun and then mostly what I was telling the healthcare industry is that all the the pharmacies that they’re depending on to deliver their products are all going out of business so that was super fun.

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1 time I got invited to this B2B show and I was like I usually ask like where am I in the agenda and stuff I was like ah it’s a B2B show they put me afterclay Christensen who’s likelike the world you know is like a.

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Yeah were you able to cross the chasm or no.

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I was I was I was like in the bottom of the Casual with a broken arm behind my back I had a knot off.

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Spent a lot of time there and so then earlier in the week was a better boondoggle

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there’s a long-running show that retail insiders will know called the nacds National Association of chain drug stores and despite its name it’s slightly broader than that it’s a

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it’s like a very good 1-on-1 meeting shows for all the big.

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Pharmacies but also Mass merchants and grocery stores and all the big,

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kind of cpg and everyday essential providers and all the over-the-counter companies so I I got to see a lot of uh clients and friends there and it’s all basically on a beach in in West Palm Beach so,

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you know if you’re gonna if you’re gonna have to travel and work it’s fun to do it in uh in resortwear.

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Nice absolutelyalways fun taking a meeting in your bathing suit.

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It is it is I didn’t go quite that bold although some did.

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The the week before that and I’m going to try to work in a a weird humble brag long time listeners of the show will know I I work for a big advertising holding company,

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for a long time 1 of the accounts I look after is where the the agency of record for Walmart so we we’ve been I I worked very closely with the senior leadership at Walmart for.

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8 plus years in this current engagement,

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and last month we got named agency of record for Sam’s Club and came out in the news and everyone’s like well duh they’re already there it’s no big deal,

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and I just want to say like this is the hardest account I ever won and it specifically it was so difficult because they absolutely did not want to hire Walmart’s agency,

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um which is,

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understandable they’re the eighth largest retailer in the United States they’re they’re you know doing great in a in a bunch of dimensions and they don’t want to be anyone’s redheaded stepchild so super honored that they,

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they picked us and wanted to work with us so spent a bunch of time kicking that off and adding that to my portfolio.

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Let’s give them a little wholesale bundle.

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There’s a there’s a lot of uh bundling yeah and wholesale was in the original Sams Sams name in fact um.

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When it was first launched I also got to visit India and travel around with the flip cart team and kind of share some some learnings and best practices there which is a super interesting and not not.

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Completely analogous Market to to the to North America.

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But I was very jealous of some of the like it’s funny they’re they’re lacking a lot of infrastructure in some ways but like digital payments are super awesome in India um.

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And so there there’s some things that are easy to do there that are hard here and vice versa so that was cool,

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it was my favorite shop talk ever and I say that no offense to all my beloved friends at shop talk but it’s because I didn’t go to shop talk and I went to Hawaii with my family instead.

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So no shop talk update here but but Hawaii was awesome and then I did do the 2 kind of typical e-com shows we always do right before shop talk I did a GDs Boston and eel West which you know both were kind of.

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Typical continuations of of how those shows usually are but they’re they’re both fun for me because I get to run into a lot of old friends and and have dinners and and talk Shop with a bunch of people and of course.

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This year the shop we talk has has.

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Changed from week to week more than any year I remember and I was actually in India when the The Liberation day when the terrorists were announced and so it suddenly became my job to explain to a billion people in India.

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What are what are strategy was with tariffs which.

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Yes I do now.

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Yeahis that what’s top of mind with your clients is it.

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So yes and no like a lot of people want to talk about it like I joke that the Yuki on my keyboard’s broken because I’ve typed uncertainty so many times this quarter.

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And people do want to talk about it I’ll be honest like the big retailers that I spend the most time with.

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Aren’t that focused on I mean obviously there are a lot of people in those organizations that are but they’ve all they all feel like they’ve.

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Lived through economic ups and downs and that there’s there’s you know multiple cycles and they all you know are kind of advantaged in,

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in these economic down Cycles which I think everyone kind of thinks we’re we’re going into now.

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And so to be honest they’re all more focused on their kind of medium and longer term strategies than they are kind of week to week planning on terrorists it’s it’s all the.

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The smallersellers that you know maybe I don’t work with as a client but that I I you know get to talk to independently that are,

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you know super focused and you know super concerned that you know any of these changes to their normal Paradigm you know are potentially ruin some to them so it’s,

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it’s very serious for them.

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Yeah searching the Amazon USB sellers I know are almost giddy over it because they felt like they’ve been crushed by the

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you know Amazon’s love of Chinese sellers for a while so it’ll be interesting but it feels like most of the goods all the goods are made in China anyway so I don’t 100% understand that.

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Yeah and I think that came up in the in their earnings call a little bit too right is there like yeah.

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Yeah so I think I think that’s a little short-sighted to celebrate that we’ll see how it plays out.

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Yeah for sure so that was kind of some of my recent travels but I feel like you’ve had the way more interesting and awesome news lately what what’s going on with you Scott.

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Yeah I’m back in the e-commerce game full throttle.

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Woohoo.

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Yeah yeah so let’s see the short story is last

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August I think we covered this on the Pod but I parted ways with spiffy everything’s chugging away had a co-founder that was wanting to be CEO and I’d been at it 10 years and there was the siren song of AI,

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so

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took some time read up on a bunch of AI stuff retrieval augmented generation and agentic agentic is 1 of those catch-all phrases but the,

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the agents I’m talking about are a bit further along than kind of like the early versions of those things and it struck me that there’s a couple problems we encountered at Channel advisor not you know that we could never solve because of their non-deterministic kind of

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aspects so started poking around in that and did a prototype that we got to a certain point where we felt like,

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okay there’s something here.

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Started a company and then came out of stealth it’s all the rage do you start in stealth and then once you’ve raised you you kind of raise under stealth it’s kind of like a uha.

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Confidential filing for an IPO but wait not not the same thing but you know definitely you kind of raise under this kind of stealth banner and then we actually

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came out of stealth on February 28th and announced to the new company and that we had raised 1.7 million companies name is Ari fee by and our URL is

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refi Bowie Ai and it stands for research find and buy which is the cycle,

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people should be going through right now they don’t because I think Discovery is broken we can cover that on another pot sometime and,

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we’re excited we got some really good investors but we have an angel investor that stands above all the others he is the chief digital retail and contentstrategic,

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andcommerce officer of pubis.

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Jason Goldberg so excited to have you as a a small angel investor on this venture.

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I’m I’m honored to be part of it although I’m pretty certain I’m the worst investor in your portfolio.

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Well we’ll see ya.

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So appreciate your support and look forward to talking about some of this here more on our show but we are going to start a substack

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this is breaking news so this isn’t announced yet so this is an exclusive for Jason and Scott show listeners we’re going to start a newsletter kind of substack around this topic because I think it’s a big enough topic and it’s certainly enough news coming out here we’re going to cover a little bit of it

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um just kind of naturally on our showbut we’re going to go deep on it

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and it’s called retail gentic so if you get a retail gentic do Comm you can sign up for that substack it’s totally free and then we’re going to be launching a podcast both a video and audio version where I interview folks and and Retail and some of the vendors out there about this new kind of

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corner of the world that that’s growing very rapidlythat’ll also be called retail gentic it’ll be on YouTube and all your favorite

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podcast areas that you go to to find podcast.

00:13:19.410 –> 00:13:22.570
That is awesome I’m already subscribed I’m looking forward to it.

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Yeah and I got to call your people to try to get booked you to be a guest I hear it’s hard I’ve heard through the grapevine that your travel schedule is a bear so we’ll see how it goes.

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It is but I think you know a guy.

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Yeah I know again I I can get right to your scheduler.

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Exactly um.

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As long as fortnite is not on the agenda or the pit.

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Exactly you just have to wait till Stephen goes to bed.

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So that I feel like alone is a lot of exciting stuff but on top of all that our our friends at Amazon are still in business and sharing their quarterly results.

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Yeah and it was a really interesting quarter so the setup coming into this 1 and it’s always funny the way these different public companies announced

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coming into this 1 we had mostly positive surprises So Meta and Microsoft did better than expected Microsoft’s,

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having a little bit of friction in their relationship with openai and a lot of people were expecting their.

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You know their Azure which is largely driven by AI to be kind of under some pressure but it actually outperformed by a point or 2 so Microsoft cloud was good meta did quite well,

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they had just announced they had licon which is their AI thing and they announced llama 4 and then on their earnings call they announced that they were going to

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they’ve had something called meta AI but the and it has a lot of users but it’s mostly through WhatsApp and a little bit through like Facebook Messenger or some other places you can get to it

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so they announced that they were dropping that as a standalone app to go compete against chat gbt Ben Thompson did the strategy dude did a really nice interview with Zach and he he kind of is like out there

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pushing pretty hard on their AI capabilities which was interesting to see although I watched Pretty closely and he hasn’t really mentioned shopping yet so we’ll

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we’ll uh I’ll let you know when that changesbut the 1 thing about those 2 companies is they don’t have that much exposure to tariffs

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unlike Amazon and the first read to on this is a surprising 1 you probably would understand this but a lot of people on CNBC were scratching their head and it Snapchat which is a snap in in the public markets they got hammered,

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because I’ll let you explain it you know who do you think their biggest advertisers are.

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Yeah so all of these social platforms the a majority of their advertisers are Chinese sellers both big ones IE T-Mobile and shien and also a lot of small ones as kind of.

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Teamu and shun have proven out or had proven out this model of being able to successfully sell Goods direct to American consumers from China and so.

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It’s a huge chunk by by many accounts over 50% of the advertising revenue on all these platforms and of course,

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that whole model is the 1 that’s most directly impacted by all of these changes in tariffs and and in particular changes or elimination of the diminum provision,

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as it as it affects China so a ton of these these big and small entities that were kind of keeping keeping Snapchat a float and we’re also a significant amount of Revenue even at meta.

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Are turning off all their their and Google turning off all their their ads as they,

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or at least their ads for North America as they kind of reevaluate their business models.

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Part of the setup and I I forgot to put this even in the show notes is that Google came out before Amazon and it was a bit of a flex they they beat and raised and they basically said hey

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are we’re rolling out AI very aggressively and they put out some numbers that showed that Gemini is being used very heavily they’ve got they call them AI insights,

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overviews AI over AIO AIO reviews which is that little window that kind of takes further load and gives you kind of an answer but hopefully not,

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2 goodness or seals Still Still click on the 10 blue length,

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that is got 75% and this is interesting I read this and listen to the call they’re very careful to say search coverage you and I know that there’s kind of a,

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the that last 25% is probably where the innovator’s Dilemma lives where their most.

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Profitable terms these are things like the most problem terms are always lawsuits like methylone or whatever that is and,

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all this kind of jazz and then you get into your travel terms your e-commerce terms,

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you know fintech kind of terms it’s going to be interesting I think I think it’s going to be hard for them to turn that on there so I don’t think we’re seeing much progress past the 75% threat,

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but anyway Wall Street loved that that Google seemed to be awake and really paying attention to the AI threat because there was a story,

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kind of a wall of worry around Google that perplexity and and and chat gbt’s web search has gotten quite good anthropic now has 1 that’s quite good we’re starting to eat away,

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so so that was kind of the positives coming in and then Amazon announced and it was kind of a mixed bag so so the the big picture is

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they they they landed on Revenue was in line and then they crushed it on profitability so operating income they beat by 5% which is you know 5% doesn’t sound a lot but at Amazon scale its billions you know that they’re beating by which was very popular.

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And this kind of environment where everyone’s worried about uncertainty the current quarter doesn’t really matter it’s the next quarter,

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and we’ll talk a little bit about their guidance but it was not super well-received and I’ll walk us through what happened there the other thing I thought,

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was interesting I wasn’t sure if you saw

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you know they they said they would have beaten that operating income number by by quite a bit more but they pull forward 2 billion dollars in inventory yeah I think I think when they saw the tariffs coming they pulled in a ton of inventory to to get ready for,

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to bridge into Q2 for this new tariff regime.

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Yeahit’s it’s interesting like I I follow obviously the the retail side of Amazon most most closely.

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And I did want to say 1 thing first on the going back to the Google thing there’s been so much Buzz about how.

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Effective all these new AI searches are like like perplexity and Chet gbt deep research and all these things and so there’s a narrative in my world that like oh man shrink.

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Dramatically under stress it at Google as as people flock to these new search engines and well I think the new search engines are super interesting and have some good customer experiences that that should be scary to anyone in the search space,

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Google is still growing at search volume by like 20%a quarter and they’re still like,

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300 times larger than the search volume on all these AI things combined so,

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while while these search engines are are a Potential Threat to Google in the long term they’re not having those things are not having an economic impact on Google in the short term and I think that came through in the,

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in the Google earnings but on the retail side what was interesting to me about the Amazon,

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announcement was you know they’re 1 of the first retailers to to announce q1 earnings so kind of coming into this,

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all the retards have done their Q4 earnings which were all

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for the most part pretty darn favorable and there are a bunch of you know people had good Q4 quarters but a bunch of retail stocks got hammered because even though they had good q4’s uh

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most retailers were giving soft guidance including Amazon we’re giving like somewhat softer guidance and giving guidance for 2025 that was going to be a slower rate of growth,

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then 2024 was and so then Amazon comes out with its q1 results which were kind of met that guidance and they did not.

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Really lower their guidance I would I you tell me if you you viewed it differently but I would say they they maybe broaden the range.

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Of of their guidance but they didn’t like,

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dramatically restate their guidance for the rest of the year um a number of other retailers like even haven’t even done that you want to announcement but they’ve actually gone back and pulled their guidance for the rest of the year or restated their guidance and so.

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Like Amazon keeping their guidance out there and and not dramatically lowering it is kind of a a flex against a lot of other retail that we’ve seen so far.

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Yeah yeah the as a operator.

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I run a public company for a couple years and guidance is the biggest pain in the butt ever because you have to predict what’s going to happen in the year and it’s actually pretty hard

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and your initial Instinct as well I’ll just be as conservative as possible but it it needs to be in a certain number or your stock price will go down

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so so so you get locked it’s kind of a stupid game and I’ve always been envious there’s a set number of people and I’ve always been surprised Amazon,

00:22:05.100 –> 00:22:08.490
does this but getting rid of guidance is actually,

00:22:08.710 –> 00:22:21.830
a a good thing as an operator because the other thing that happens is if you miss your guidance you get there’s like these ambulance chasing you know lawsuits that happen and it’s always someone with 1 share somewhere or something that you know.

00:22:22.070 –> 00:22:35.640
The claim that you’ve ruined their life and it’s fraud and all this kind of stuff and it ends up costing you all this money to fight these lawsuits that are just super villainous you can’t really if you settle them then you’re you’re toast you’ll you’ll that will you know.

00:22:36.450 –> 00:22:37.280
Every dime will go.

00:22:37.480 –> 00:22:39.200
An entire industry in East.

00:22:38.950 –> 00:22:47.820
It yeah it creates a you know the the incentives are already wacky they have no cost of suing you but if you settle it all then like man it just goes crazy,

00:22:47.940 –> 00:22:53.940
so you knowI I have a lot of empathy for the people that use this opportunity to get rid of

00:22:53.870 –> 00:23:07.850
rid of it but it it is you know it basically does say hey our business model model is more resilient than yours which it you would think it would be you know given the global nature of what Amazon does the supply chain,

00:23:07.990 –> 00:23:11.030
of any company that can navigate this it’s going to be Amazon.

00:23:11.640 –> 00:23:18.000
No 100% And so kind of just zooming into their actual retail numbers like if you go read their earnings.

00:23:18.200 –> 00:23:26.100
You’ll get a bunch of retail numbers and as a reminder to listeners none of those are the most relevant to us right because it’s it’s,

00:23:26.130 –> 00:23:39.860
their their revenue which they you know are a 1p market and a 3p market and obviously that the 3p Market the revenue is just the fees they’re collecting not not the the value of the goods they’re selling,

00:23:39.960 –> 00:23:51.960
and increasingly there are all these other things that are that are in their earning statement and even in the the retail sector that it’s that that number is hard to compare to anyone else’s number,

00:23:52.140 –> 00:23:56.960
and so you know we always try to back out of of the numbers they report into,

00:23:57.020 –> 00:24:06.800
a number that’s more apples to apples with other retailers which is this gross merchandise value and so our friends at Morgan Stanley are much better at math than me and

00:24:06.780 –> 00:24:15.100
and they they processed all the the earnings number and updated their model and they believe that in the US in North America,

00:24:15.180 –> 00:24:22.740
Amazon’s gmv was up 7.9% in q1 of 2025 versus q1 of,

00:24:22.910 –> 00:24:28.020
2024 so 7.9% growth is a very good number,

00:24:28.100 –> 00:24:42.350
last year all of retail grew 3.6% core retail this year in the first quarter core retail has grown 2.6% so if if Morgan Stanley’s right that Amazon’s growing at 7.9%.

00:24:42.700 –> 00:24:52.250
Amazon’s growing at more than 3x the rest of retail despite the fact that they’re they’re 1 of if not the you are just retailer in the space,

00:24:52.380 –> 00:24:54.140
so so per your point.

00:24:54.410 –> 00:25:06.760
They they have great diversification they have over you know 2 million sellers on the platform they they you know potentially have a billion items for sale now some someplace between 800 million and a billion items per sale.

00:25:07.310 –> 00:25:17.340
And and so they’re they’re continuing to thrive so that was super interesting to me when I think about their impact on on the rest of retail.

00:25:17.640 –> 00:25:25.290
But also what was really interesting is secretly 1 of the soft spots in Amazon’s incredible growth has been.

00:25:25.890 –> 00:25:29.860
Grocery and every day Essentials right what that those,

00:25:29.900 –> 00:25:44.540
those smaller ticket higher frequency purchases have have been harder for Amazon to capture and then and other retailers have done better Visa V Amazon in those categories most famously Walmart in grocery for example.

00:25:44.780 –> 00:25:48.470
Which Walmart probably still has a bigger digital grocery business than Amazon.

00:25:48.940 –> 00:25:58.390
So that’s been kind of a soft spot and and in their earnings they they came out and said that hey every day Essentials is growing at 2X,

00:25:58.500 –> 00:26:07.900
the rest of our merchandise categories we passed a 100 billion in grocery sales in the US and so that’s going to put grocery at something like.

00:26:08.210 –> 00:26:13.190
22% of Amazon’s gmv so you know,

00:26:13.370 –> 00:26:23.220
I would say the 2 Lagerfeld.

00:26:23.730 –> 00:26:35.990
And then Scott I’ll I’ll be curious if you have an opinion but the the last thing I was paying super close attention to was any discussion about the 1p versus 3p mix and there there was not a lot,

00:26:36.120 –> 00:26:41.960
and the reason I’m super interested in that is if you kind of think of the es and flows 2024 was a.

00:26:42.440 –> 00:26:47.940
A good year of sales for Amazon everybody said 2025 is going to be slower,

00:26:48.120 –> 00:26:56.030
and and you know there were no terrorists and q1 so so these numbers aren’t really tariff impacted in any way but we,

00:26:56.040 –> 00:26:59.810
we now have a at least a month of sales data where

00:26:59.760 –> 00:27:14.170
the consumer knows tariffs are coming and Amazon came right out and said hey we’ve we’ve actually seen an increase in sales in April and we think it’s people stocking up to get to get ahead of potential tariff impacts,

00:27:14.280 –> 00:27:19.000
but when you talk to all these Brands they are,

00:27:19.230 –> 00:27:28.600
between Iraq and a hard place Amazon may be well Diversified and and selling really well but Amazon doesn’t want to let any of these 1 piece sellers raise their prices,

00:27:28.740 –> 00:27:41.200
and a lot of these 1 piece sellers you know are very fearful that their their costs are going up meaningful even if you’re not sourcing product from China I mean costs went up worldwide 10% right and in some cases a lot more so.

00:27:41.660 –> 00:27:51.420
The the brands all are worried that they need to raise prices and are finding it extraordinarily difficult to raise prices at Amazon and so 1 of the

00:27:51.410 –> 00:27:57.200
the kind of pressure relief ba valves that I’ll be curious to see if plays out is

00:27:57.130 –> 00:28:04.540
if people stopped wanting Amazon to set their prices and the way you do that is you move from 1 P to 3 p and set your own prices,

00:28:04.690 –> 00:28:13.680
and so I’m I’m going to be curious I was curious if there was any any discussion of it in this earnings call but in the next earnings call in particular I’ll be really,

00:28:13.870 –> 00:28:19.410
3p has been growing much faster than 1 P I’ll be curious to see if that that accelerates,

00:28:19.520 –> 00:28:24.620
as as maybe some big 1 piece sellers shift more of their attention to 3p.

00:28:25.000 –> 00:28:35.410
Yeah it was a 61% and the only tell you the units right like some of the analysts break it down like like wasn’t Morgan Stanley that that had the report there that that kind of back into it,

00:28:35.520 –> 00:28:42.270
I used to have a model that did this uh that people at Amazon told me was pretty close and then the Wall Street now started doing this so I retired.

00:28:42.890 –> 00:28:45.720
So I did see 61% of.

00:28:45.420 –> 00:28:51.310
Yeah I saw it but 61 is like within a percentplus or minus of the last couple quarters yeah.

00:28:51.480 –> 00:28:58.390
Yeah you’ll you’ll see it change next quarter it can move pretty quickly the other 1 is paid units and it looked like it had slowed down a good bit to me.

00:28:58.620 –> 00:29:01.540
Poses 6% it felt like really low to me,

00:29:01.750 –> 00:29:12.860
so whenever Revenue grows faster than paid units it means your aov went up which feels weird in this kind of climate because most people are trading down so that 1 that was a little bit of a head scratcher there.

00:29:13.010 –> 00:29:19.580
Yeah that is also the the outside growth of everyday essentials you would think would hurt their aov.

00:29:19.490 –> 00:29:23.130
Yeah those are cheaper items I don’t know I don’t know.

00:29:23.430 –> 00:29:37.210
Yeah they’re still Mysteries Mysteries to be unwrapped at Amazon um and then the other part of the Amazon earnings that I always get stuck talking about is the ads business and the ad business at Amazon is still awesome it grew at 19%,

00:29:37.330 –> 00:29:44.230
the I think you’re going to talk about AWS which is also going to be a a a good story for Amazon this quarter but so,

00:29:44.440 –> 00:29:55.690
it is still a rocket ship and of course it’s extremely profitable as we’ve been talking about on the show for a number of quarters now like the ads business is almost certainly the most profitable business that at Amazon.

00:29:55.940 –> 00:30:10.020
Part of the reason I don’t like talking about it is every other retail in the world looks at that and goes oh I want a piece of that and now every Ad Agency in my holding company and all of our competitors like all have stood up armies of retail media people,

00:30:10.050 –> 00:30:15.260
and I actually like don’t think the retail media opportunity is near as exciting,

00:30:15.320 –> 00:30:24.210
outside of the Amazon ecosystem as as some people will have you believe right so the the dirty secret of of this ad business is it’s it’s.

00:30:24.590 –> 00:30:32.980
The vast vast majority of it is sponsored product listings and the vast vast majority of the sponsored product listings are from third-party sellers

00:30:32.940 –> 00:30:42.900
the as I mentioned there’s 2 million sellers on Amazon there’s almost a billion items No 1 is ever going to find your item unless you buy an ad to make it show up right and so,

00:30:42.900 –> 00:30:44.010
when you have,

00:30:44.170 –> 00:30:57.750
the world’s best third-party Marketplace you you have a very valid reason for people to give you a lot of AD dollars and so it makes total sense for Amazon like on a slightly smaller scale it it it makes similar sense for someone like Walmart.

00:30:58.050 –> 00:31:11.390
I’m I’m very skeptical that there’s a lot of incremental ad dollars for a regional grosser with no third-party Marketplace or a specialty retailer in home furnishings with like.

00:31:11.720 –> 00:31:20.230
Like no no traditional Shopper marketing spend and no no cpg or everyday essentials like I just I think,

00:31:20.340 –> 00:31:28.930
once you start getting out of these like 2 or 3 biggest retailers in the ecosystems the retail media opportunity gets a lot less exciting for me and I would I would argue

00:31:28.860 –> 00:31:36.290
it’s it’s overhyped not saying it doesn’t exist but it’s it’s not as lucrative as it certainly is for Amazon.

00:31:37.050 –> 00:31:41.860
Interesting don’t believe the retail media Network hype the.

00:31:42.480 –> 00:31:51.240
AWS everyone was kind of a little worried I think they were relieved coming in because of what meta and Microsoft released and Google Google

00:31:51.150 –> 00:31:56.650
that also has a cloud computing element AWS came in slightly ahead of

00:31:56.580 –> 00:32:06.930
plan at 17% year-over-year growth but what got everyone excited is this comes out so on the call they make all these announcements and then later they file their cue and which is where they file

00:32:06.810 –> 00:32:19.460
10K I think is what they call that it’s 1 of these SEC documents and analysts sift through the the you know 800 pages of these things and find interesting things in there in 1 of the appendices they actually talk about the

00:32:19.350 –> 00:32:27.200
backlog for AWS and that has grown substantially which is a 20% backlog which is a 6-point acceleration and what,

00:32:27.410 –> 00:32:35.180
what Wall Street reads through on that is that demand is starting to outstrip aws’s infrastructure ability to keep up with it which is a

00:32:35.050 –> 00:32:44.500
positive signal so Amazon continues to invest in both CPUs and gpus so traditional Computing and then accelerated Computing and.

00:32:44.780 –> 00:32:53.420
You know they also gave this tidbit that Jai services within AWS continue to grow in quote unquote triple digits so it’s much smaller obviously but,

00:32:53.610 –> 00:33:03.930
that means again in typical Amazon fashion that’s somewhere between 100 and 999% year-over-year I’m going to guess it’s towards the lower end of that but.

00:33:04.410 –> 00:33:13.080
It’s always funny when you actually kind of write this out and then look and say well that’s a pretty big range they gave us there but that that is definitely driving a lot of activity there.

00:33:13.500 –> 00:33:14.930
And then.

00:33:15.180 –> 00:33:29.100
End of the of the whole process they talk about the next quarter and to your point their their revenue guide was in line but their ebit there’s no a in there so it’s just e ebi there’s no D there so its ebit ebit

00:33:29.090 –> 00:33:31.360
they forecasted 13,

00:33:31.450 –> 00:33:42.350
third a range of 13 to 17.5 and Wall Street consensus was like 17.6 or 17.7 so the guide was a little bit below Wall Street now

00:33:42.350 –> 00:33:49.970
it’s jasse took overhe’s had a he’s kind of added a new level of conservatism especially to ebit,

00:33:50.190 –> 00:33:56.900
and so he’s beat this pretty handily I think every quarter since he took over what’s it been like 18 months now.

00:33:57.300 –> 00:34:07.090
I think 6 so probably 6 quarters I think he’s been here 6 quarters maybe it’s maybe it’s 5 yeah anywayget 1 of our researchers to to investigate that so you know.

00:34:07.370 –> 00:34:13.230
In in in after hours the stock was down pretty substantially like 7% which is

00:34:13.130 –> 00:34:26.740
a lot of as a 2 trillion dollar company that’s a lot of market cap but the next day it kind of traded back even so they kind of navigated through that I think people were expecting a lot worse than there were really negative whisper numbers with the tariffs so I think everyone was

00:34:26.710 –> 00:34:33.000
not surprised they took this opportunity to to come down a tad and add some conservatism but it wasn’t catastrophic.

00:34:33.170 –> 00:34:35.730
July 2021 the researchers tell us.

00:34:35.880 –> 00:34:46.220
Okay there you go oh wow it’s been a little bit longer yeah okay time flieswhat are however many quarters that is you know he I don’t think he I think he’s beat every.

00:34:46.260 –> 00:34:50.470
Yeah so so the big takeaway from this episode is the Andy is a sandbagger.

00:34:50.740 –> 00:34:54.370
Yes he is a sandbagger especially on his ebit he’s sandbags is ebit.

00:34:54.430 –> 00:34:59.090
Yeah he he I mean you’re really sandbagging when you take the d and the A out of it.

00:34:58.810 –> 00:35:05.590
Yes yeah can’t spell saying bad without a DNAokay,

00:35:05.740 –> 00:35:14.450
the most exciting thing and I’m a little biased here is there’s been so much cool AI stuff and Amazon’s AI stuff is a great way to jump off what did you see on that.

00:35:14.540 –> 00:35:29.300
Well they announced earlier and then reiterated during the earnings call that that the Alexa plus is in limited deployment so I think they said there’s a 100,000 users which are out there at the moment.

00:35:29.000 –> 00:35:30.290
Are you 1 of them.

00:35:30.040 –> 00:35:31.570
I am not 1 of them.

00:35:31.680 –> 00:35:33.530
Hey there you think 1 of us Jeff.

00:35:33.630 –> 00:35:45.650
I know I uh and a little wrinkle here in order to be eligible you have to own 1 of 3 models and I I own all 3 modelsum.

00:35:45.780 –> 00:35:49.050
I went out and got 1 just so I could swing into the eligibility.

00:35:49.100 –> 00:35:49.730
Yeah,

00:35:49.940 –> 00:36:03.860
um which is annoying because they’re all a little long in the tooth at this point I’d rather be buying newer Hardware which I’m sure is coming shortly but yeah so I’m not in that that yet I am eager to see how that goes like obviously it took it took,

00:36:03.980 –> 00:36:08.870
much longer than I think Amazon anticipated to bring it to Market,

00:36:08.970 –> 00:36:15.780
in the Q&A he got asked a question about it and he mentioned that he went on a trip to New York and,

00:36:15.930 –> 00:36:21.110
ask for a restaurant recommendations and it gave them great restaurant recommendations and could actually.

00:36:21.350 –> 00:36:27.050
Make a reservation for him and he he didn’t say what mechanism it it used,

00:36:27.210 –> 00:36:35.820
for that that reservation but my my assumption would be that that as Google had demonstrated its using computer voice to.

00:36:36.260 –> 00:36:40.520
To have an interaction with a a restaurant or maybe it’s open table or something who knows.

00:36:40.220 –> 00:36:45.490
I bet it’s resi open too I’m skeptical wait didn’t I bet this isn’t going to happen this year.

00:36:45.330 –> 00:36:50.520
You probably did but I was not going to remind you about that just yet umyeah.

00:36:48.180 –> 00:36:53.970
Okay I’ve got 7 months this thing this thing ain’t real until Jason or Scott has it it’s not real.

00:36:53.890 –> 00:36:59.440
Exactly yeah I I would call this a controlled beta at this point I’ll bet you those 100,000 people are all Amazon.

00:36:59.140 –> 00:37:02.650
Call it controlled vaporware okay keep going.

00:37:02.610 –> 00:37:10.830
In theory the big difference here should be and as we start talking about real agents the big difference should be that they can take action so they can

00:37:10.740 –> 00:37:23.110
instead of help us do stuff they can do stuff for us and I would argue like to be a full-fledged agent they ought to be complex actions that are leveraging multiple data sources not,

00:37:23.190 –> 00:37:27.750
you know kind of a very narrow tasks based on a single data set

00:37:27.630 –> 00:37:40.450
but so that’s interesting I think the Amazon thing that I know got you really interested and exciting excited was this by for me service which I’ll let you describe it Scott.

00:37:40.400 –> 00:37:49.040
Yeah so you there’s certain brands that are not on Amazon or they’re 1 P some of their inventory on Amazon and the rest are

00:37:48.910 –> 00:37:59.140
inventory isn’t on Amazon and you’ll be scrolling through and you’ll see this pretty interesting little treatment it’s kind of like a bracketed area it’s available on mobile only

00:37:59.060 –> 00:38:08.510
and it basically says that that inventory is not available on Amazon but it’s available through their a their AI agent that will go buy it for you through their

00:38:08.410 –> 00:38:18.240
quote unquote buy for me service so there’s a podcaster cury masters she’s really big on retail media Network so we’ll we’ll probably never have her off so.

00:38:19.140 –> 00:38:22.160
She’s she’s heard my POV and she still likes me so.

00:38:21.910 –> 00:38:23.740
Okay okay.

00:38:23.620 –> 00:38:26.530
I mean she’s much smarter than me but she’s still humorous me.

00:38:26.290 –> 00:38:29.720
I don’t want to lose all my friends and she but she

00:38:29.590 –> 00:38:41.470
she found this uh brand that I wasn’t familiar with because I am not what people call a fashionista called rothy’s and so it was interesting they actually have these men’s sliders that look like very very expensive,

00:38:41.530 –> 00:38:44.710
Crocs but made out of leather I guess they’re that’s a bad comparison.

00:38:45.170 –> 00:38:51.890
But anyway I was actually able to go buy some of those and it was this is also breaking news I haven’t had a chance to even write this down,

00:38:52.030 –> 00:38:56.860
the agent went rogue and ordered 2 pairs of just 1 and,

00:38:56.950 –> 00:39:06.780
it was a really weird user and experience because it said I really liked it at first because it said here’s what our agent’s going to do and it gave like a little 4 boxes and it was very clear and then it said do you want

00:39:06.630 –> 00:39:14.610
to accept this and I said yes and then it went through it checked off box number 1 2 and 3 and then it just kind of stoppedand I was like.

00:39:15.500 –> 00:39:20.780
What’s that mean like I was expecting it to check your natural inclination would be oh it’s going to check off,

00:39:20.890 –> 00:39:30.730
the fourth box which is I’m done and then it would say success but it just kind of like did 3 boxes at home to away for a while and then it kind of said success and I was like oh whatever.

00:39:31.040 –> 00:39:43.300
And then you know just to make sure I went and looked at my credit card and it had just charged it and then you know 4 or 5 days later which is interesting again because this is not Amazon Prime 2 pairs of the shoes showed up.

00:39:43.590 –> 00:39:45.820
And I was like this is weird,

00:39:45.910 –> 00:39:58.140
and then literally within 3 hours I got an email from some VP at Amazon that said we’re sorry looks like you were using this new feature in beta we have detected a bug,

00:39:58.140 –> 00:40:03.030
you know which makes me think I’m probably like the first 1 through this thingI didn’t do anything really weird.

00:40:02.730 –> 00:40:07.200
It’s always a good sign when a VP at Amazon’s watching every transaction for.

00:40:07.290 –> 00:40:18.570
Figure it it was it was actually the best Proactiv customer service I’ve ever received it was like really amazing that they took time to do that and they they actually proactively gave me a credit because they said,

00:40:18.650 –> 00:40:27.260
because we can’t really control if rothy’s is going to give you a credit and I’ve got a whole another story there you know we’re going to go ahead and give you an Amazon gift card worth what you paid for these things.

00:40:27.560 –> 00:40:33.550
And it’s like you know feel free to return them or use them or whatever you want you see fit so then I sold it on him know I didn’t.

00:40:34.190 –> 00:40:48.920
I was able to return them but it was complicated because the first thing she wants to do is look up my email well 1 of the things a lot of these services do is they they don’t want it they don’t put your email there they put a a man in the middle kind of email system.

00:40:49.180 –> 00:41:04.060
So I was like and I knew my the email I had used because you can see it for my my non- buggy order but I had no idea and she looked she looked up my the 1 I had and it only had 1 pair but she was able to somehow.

00:41:05.410 –> 00:41:08.040
Through my credit card I don’t know what it was.

00:41:07.970 –> 00:41:11.770
Oh did it charge your actual credit card okay oh because of Amazon pay.

00:41:11.850 –> 00:41:25.060
Yeah yeah it did I guess it did charge my card twice I it must not have noticed it the first time but anyway she was able to refund so so I actually got the the whole thing I did a return and I ended up in a net positive.

00:41:25.800 –> 00:41:28.660
Um and I returned it to the store which was kind of fun too.

00:41:28.670 –> 00:41:29.930
Huh um.

00:41:29.630 –> 00:41:38.700
She had no idea that what she didn’t know about the Amazon by that’s right she’s like she’s like uh order number.

00:41:38.400 –> 00:41:50.060
Uh I do have an important question but before I do I just you kind of implied this but I don’t know if we explicitly said it like the mechanism that Amazon’s buying this is it’s it’s spoofing Clicks in a browser so it’s a.

00:41:49.760 –> 00:42:03.240
Yeah yeah so it’s spinning up somewhere in the you know the cloud on AWS it’s spinning up a browser and it’s going to rothy’s and it’s it it it probably is going right to the PDP because there’s a little faux PDP on Amazon and it it.

00:42:03.800 –> 00:42:11.030
They need to work on this it doesn’t give you nearly enough information to make a purchase which I thought was interesting because you’d think Amazon would know how to

00:42:10.900 –> 00:42:20.710
make a really robust PDP but it only pulls up a little bit of the information from the downstream retailer site so it goes there and then it adds the item to the checkout

00:42:20.590 –> 00:42:34.930
and then it actually reports back to you as 1 of the checklist is is going to I’m going to I’m going to add this item to the check and then report back to you the tax and all that information so that was pretty neat that it kind of did that at first it did an estimate and then it kind of narrowed that down

00:42:34.900 –> 00:42:42.550
and then what it does and this is the reason I did this whole exercise was you and I know that if anyone takes your credit card number and,

00:42:42.590 –> 00:42:49.620
usually people don’t even store your credit card number they store that a 1 of these like third-party systems in a token like stripe,

00:42:49.790 –> 00:42:52.860
um with Amazon being Amazon they have they they can

00:42:52.850 –> 00:43:03.590
go this extra step and be what’s called PCI Compliant where they can store these numbers but there’s all these rules about what you can and can’t do about them 1 of the things you absolutely cannot do is take 1 of your stored credit cards in your wallet and they

00:43:03.470 –> 00:43:04.480
asset

00:43:04.350 –> 00:43:16.730
over the internet and even if it’s into an encrypted browser you cannot do that that’s a that’s an open air transmission of your credit card and possibly even cbv which is like super no no credit card is bad CBD is like nuclear,

00:43:16.730 –> 00:43:22.040
nuclear end of PCI kind of thing so I was like how are they getting my payment information down there.

00:43:22.240 –> 00:43:26.840
And we can talk about this more if we want to spend some time on it when we talk about payments,

00:43:27.020 –> 00:43:37.670
but it turns out what they did is they just this Merchant takes Amazon pay and they just they just kind of behind the scenes they said okay this is this person’s Amazon

00:43:37.520 –> 00:43:44.790
pay wallet and just go ahead and hit them for this number so so they they kind of it was interesting they got around the problem by using Amazon pay.

00:43:44.500 –> 00:43:50.390
Yeah and so do you think they’re limiting it at the moment to only work on Merchants that take up Amazon pay.

00:43:50.560 –> 00:43:57.330
Yeah 2 other people have found Merchants I haven’t gone to look but I can guarantee you it’s going to be Amazon pay and

00:43:57.160 –> 00:44:12.870
the the challenge with that is it it takes the surface area of this down to you know those people that are selling first-party on Amazon have some third-party some inventory that’s not on Amazon that are also Amazon pay and I think that cannot be a large number.

00:44:12.570 –> 00:44:24.450
Yeah and you would think the service would be most useful if it reached people that were like philosophically opposed to being in the Amazon ecosystem and those people are for sure not taking Amazon pay exactly.

00:44:24.790 –> 00:44:34.830
Yeah Birkenstocks is famous 1 that is said they’ll never saw on Amazon they fight 3 pm inventory you know they’re constantly taking sending takedown notices and you know,

00:44:34.850 –> 00:44:43.950
that that will be when we know this is like really gotten mainstream adoption is so I can like have seat Birkenstock inventory on Amazon that’ll be bonkers.

00:44:43.860 –> 00:44:52.660
Yeah well fun geeky addition to this story Scott is I did some spelunking um and I found in Bedrock which now has.

00:44:52.910 –> 00:45:06.630
Thousands of of AI apis in it this is their their stack of all the these agent Based Services there is a service called a Nova act and Nova Act is a,

00:45:06.820 –> 00:45:10.710
like take actions in browser API so like,

00:45:10.920 –> 00:45:18.170
like I’m pretty sure you could actually build this Amazon feature yourself or something similar using this this uh Bedrock API if you wanted.

00:45:18.430 –> 00:45:30.660
Yeah yeah the the part that isn’t there is the payment right and then also the pulling up the PDP the the data feed is interesting.

00:45:30.540 –> 00:45:32.930
Oh and there’s there’s a whole as we may,

00:45:33.020 –> 00:45:47.500
talk about later or on another show like there’s a whole host of other problemscustomer service and edge cases and liability and all sorts of other other fun fun things who who’s responsible for notifying you when there’s a product recall.

00:45:47.750 –> 00:45:55.880
The shipping notifications were actually very clean uh everything was double communicated so I I got a you know so Amazon.

00:45:55.990 –> 00:46:03.990
Yeah but you get like there’s a bunch of lawyers that want to sue you for not telling them that there was a recall in your product and who are they going to sue yeahthe,

00:46:04.150 –> 00:46:12.070
so here’s a fun rumor that I have now heard from multiple sources is that there is a feature coming to AWS,

00:46:12.170 –> 00:46:20.080
that is a a new e-commerce website builder using using agentic principles and so the,

00:46:20.220 –> 00:46:29.210
the demo and this must have come out of a white paper or something or 1 of Amazon 6 Pages because I saw the same explicit demo mentioned a few times.

00:46:30.640 –> 00:46:36.390
Build me a candle store with PayPal as a checkout so this is essentially.

00:46:36.620 –> 00:46:47.910
But people are interpreting this that like Amazon’s going to build Standalone very simple Standalone web storefronts that you you can build with no code,

00:46:48.100 –> 00:46:53.710
using using these new agent based based capabilities so uh.

00:46:54.190 –> 00:46:58.210
I don’t know how big a deal that is it’s not super interesting to me but it’s it’s.

00:46:58.510 –> 00:47:04.970
What’s interesting about it is of course Amazon used to be in the business of building these little Standalone stores and they got out of it like 10 years ago.

00:47:04.720 –> 00:47:13.370
Well 1 argument is we went from you know open source which was a total pain because you had to like figure out how to host a thing and then Shopify came out with SAS

00:47:13.250 –> 00:47:20.610
and then you had headless which was kind of like oh this is nice I can kind ofI prefer the composability where you’re like

00:47:20.520 –> 00:47:28.730
let me just break a website into its little Lego blocks right you got this cart you got a PDP you got a search got home page got to this you got to that but a boom and

00:47:28.620 –> 00:47:33.600
take the pieces I want and swirl them together with what I want and then now if you could do that

00:47:33.560 –> 00:47:43.270
and then put an agent on top of it then that starts to get really interesting and you know the question is would would Shopify do that because

00:47:43.250 –> 00:47:56.720
Shopify is Shopify is like this giant dragon that has 1 little chink in its armor and that chink is that they get the bulk of their revenue through payments and,

00:47:56.930 –> 00:48:05.260
in some waystheir Merchants are are there’s this kind of hidden fee inside of there you could argue so that.

00:48:05.560 –> 00:48:10.510
That’s a nursing little wedge that Amazon could come at at some point so we’ll see.

00:48:10.210 –> 00:48:13.810
Yeah and it’s certainly interesting to just think like this is 1 area where,

00:48:13.930 –> 00:48:27.100
potentially Shopify is is that the business with innovators dilemma and Amazon is the the the upstart that can come in and disrupt it and we we’ve heard rumors for for a number of years that that Amazon.

00:48:27.350 –> 00:48:34.030
You know eyeing eyeing Shopify is a business so this may be another little little way to nibble at it um.

00:48:34.690 –> 00:48:43.030
Kind of leaving the Amazon ecosystem the other stuff that that keeps coming up very frequently in the AI Commerce thing at the moment is,

00:48:43.170 –> 00:48:48.390
about 2 weeks ago Chad gbt improved its Commerce experience so.

00:48:48.650 –> 00:48:53.980
It searches has been given some pretty interesting Commerce results for a while so you can,

00:48:54.060 –> 00:49:01.750
ask it what the best product to buy is and it’ll give you some really intelligent criteria that could be really helpful in your shopping process,

00:49:01.780 –> 00:49:15.740
and it and if you ask it to it’ll recommend specific products that meet that criteria but it was all kind of text-based and so about 2 weeks ago they added kind of Rich product tiles and kind of you know product images for the first time,

00:49:15.940 –> 00:49:29.390
which you know suddenly makes it you know a much bigger threat to Commerce search engines that you’re now seeing you know pictures of the sunscreen that you might buy and then you know you can click a link and go to a Walmart PDP and buy the sunscreen,

00:49:29.580 –> 00:49:34.180
you know relatively low friction experience so that,

00:49:34.390 –> 00:49:44.800
upgrade to chat gbt’s interesting there are strong rumors that there’s chat gbt Shopify integration about to go live and I think we’ve.

00:49:44.500 –> 00:49:49.080
That is that is live on those those cards now have a some of them have a Buy It Now.

00:49:48.780 –> 00:49:51.240
Fire with Shopify yeah um.

00:49:50.940 –> 00:49:57.890
Just kind of says hey now I think it says pay now and if it’s Shopify it’s kind of lit up and it just kind of like for plexity.

00:49:58.020 –> 00:50:05.320
Yeah the other 1 that I think is more fun I you know it’s it’s further away but there’s a feature in.

00:50:05.580 –> 00:50:08.200
Chad gbt called Advanced Vision,

00:50:08.350 –> 00:50:22.260
and this essentially uses the camera in your phone and does computer vision so in addition to giving it speech or text based prompts it can see the world in front of you and interact to it so I’ve been going to stores all over the place,

00:50:22.360 –> 00:50:24.830
pointing my my camera at,

00:50:25.000 –> 00:50:34.510
aisles of products and asking for purchase recommendations right so what’s the best floor cleaner for this kind of floor what’s the best stain remover to remove this stain,

00:50:34.650 –> 00:50:42.260
you know what’s the best sunscreen all these these like product specific questions you might have while you’re standing in the aisle of a Kroger and.

00:50:42.530 –> 00:50:46.610
Asking it to recommend which product on the Shelf I should buy and it’s.

00:50:47.220 –> 00:50:56.670
It it gives you some really valuable interesting results so I I now have a bunch of videos I’ve been recording as I run around stores video taping these experiences.

00:50:57.090 –> 00:50:58.570
If you played with vision at all.

00:50:58.730 –> 00:51:07.050
I have a I give it a really tricky 1 so there’s this 1 pet store that has a wall of Bully Sticks and they’re little baskets and I was like what’s the best deal

00:51:06.900 –> 00:51:19.040
and it took it quite a while and it was like walking through it had to do reasoning and it kicked it over to reasoning and it was walking through the math and its recommendation was to buy these really long ones and cut them up myself and to get the it did like calculated.

00:51:19.700 –> 00:51:29.080
Like dollars per into the Bully Stickswhich is because it took the count every 1 of these Bully Sticks things has a count and a length of the bully stick so I thought that was really interesting.

00:51:29.230 –> 00:51:31.420
Yeah I’ll tell you what it doesn’t do yet.

00:51:31.120 –> 00:51:37.680
You know buy like a like it was a good savings for but I never I would never have done that because you know there’s some actual work in there too but.

00:51:38.130 –> 00:51:47.280
I’ll tell you what it doesn’t do yet which is going to make it really dangerous and I assume it’s coming is like which product on the Shelf is the best value like.

00:51:47.690 –> 00:52:02.510
What like you know relative to buying that same product somewhere else at a different price or which product has the most reviews like you can’t really get into the the Commerce attributes of the product yet or at least I wasn’t able to do a query that that triggered that but,

00:52:02.690 –> 00:52:09.730
but given that all those attributes are on that that enhanced product tile pagefeels like it’s it’s going to be coming.

00:52:10.040 –> 00:52:23.010
Yeah where it really goes off the rails is it doesn’t understand variations so it gets kind of super sideways if you if you give it some of the stuff we’ve been trained to like men’s size 11 Merrill it goes it shows you all it shows you.

00:52:23.530 –> 00:52:26.730
Yeah it it doesn’t take those as kind of like a a signal.

00:52:26.990 –> 00:52:35.350
What you would think it would be really good at but this is interesting we we learned this at Channel visor all these search and and social people would call and say we want to build a Marketplace and we’d be like,

00:52:35.470 –> 00:52:46.540
okay here’s all this complexity I need to think about that like we’re just going to have like comparison shopping thing and ignore variations and throw up a Buy It Now button on there and not even check inventory and we’re like,

00:52:46.740 –> 00:52:50.670
okay and then it would they’d be like e-commerce failed and they were like okay.

00:52:51.490 –> 00:53:04.740
Yeah so so I wonder if the search guys the the the llm guys the perplexity 1 has that perplexity pro pro it all looks good on the surface and then if you if you start digging a layer in it starts to get sideways really quick.

00:53:05.000 –> 00:53:06.150
Like I’ve had it,

00:53:06.340 –> 00:53:18.480
it doesn’t check inventory at all so it’ll you can actually go look at the corresponding retailers page and see it’s out of stock and they’ll let me place an order all these kinds of things I did that 1 time and it took them 3 weeks to figure out and.

00:53:18.750 –> 00:53:20.920
And uh send me a refund.

00:53:20.940 –> 00:53:29.280
Yeah I will tell you so and perplexity Pro is interesting like I agree it’s totally fragile and imperfect when it goes right,

00:53:29.370 –> 00:53:43.070
like it does give you like a pretty interesting Taste of the future right so I’ve I’ve a couple times I’ve done a query that recommended some product tiles and some of those product tiles are available for perplexity Pro which essentially is a,

00:53:43.160 –> 00:53:50.430
a native checkout in perplexity and so basically 1 1 Click ordering from in the search engine so if.

00:53:50.890 –> 00:54:03.500
You know it seems pretty clear that 1 of the the the monetization models perplexity is interested in and it’s in is Commerce and I’ve been stalking them they’ve hired a bunch of EX instacart people at perplexity so you know clearly they’re trying to,

00:54:03.610 –> 00:54:05.720
develop some Commerce expertise,

00:54:05.810 –> 00:54:15.240
in the happiest path I’ve clicked buying a product on a Friday and received the product from 2 different merchants on Saturdaywhich is.

00:54:15.970 –> 00:54:24.400
Super impressive um here’s the bad news I paid like that Merchants the lowest price for the product.

00:54:25.070 –> 00:54:33.690
And and I know that perplexity paid a multiple of that to to the merchant to get the merchant to ship next day delivery.

00:54:33.960 –> 00:54:40.530
And so I think what’s happening now is to kind of Goose goose utilization perplexity is offering fast free shipping even when the,

00:54:40.660 –> 00:54:50.970
the merchant does not offer it so so 1 example I put on LinkedIn was was REI example where I bought like a 17 dollar thing and perplexity paid twenty 5 dollars of shipping for me,

00:54:51.120 –> 00:55:02.150
and so my new my new business model in the in the e-commerce Arbitrage business is buy a bunch of 17 dollar items with with twenty 5 dollars of free shipping and then return them.

00:55:03.420 –> 00:55:07.680
Right cuz I I pocket that twenty 5 dollars in shipping on each 1 of those.

00:55:08.200 –> 00:55:10.020
Yeah and I think what so,

00:55:10.160 –> 00:55:24.490
there’s a couple ways to skin this payment problem 1 of them is use Amazon pay if you happen to have your own digital wallet Downstream the other 1 is you you inject your own credit card so you do a a 1-time use credit card this is what instacart used to do I think.

00:55:24.190 –> 00:55:37.200
I’ve actually seen in perplexity Pro and do both I’ve I’ve bought from a merchant that had a digital wallet integration and it used it and I bought them from 1 that didn’t and it it made up a fake Visa card and passed it to the merchant.

00:55:37.460 –> 00:55:45.970
Yeah and when you the downside is when you do thatyou have to pay the the credit card fees twice yeah so and then the other.

00:55:42.880 –> 00:55:48.120
Twice yeahamongst again amongst other problems like.

00:55:47.820 –> 00:55:53.870
The the Dark Horse and all this is there’s a lot of people that want to use these stable this kind of gets into crypto,

00:55:53.870 –> 00:56:05.130
but there’s this thing called a stable coin where you can convert dollars into this crypto stuff and then moving it around becomes much faster and cheaper than traditional rails so a lot of people

00:56:04.940 –> 00:56:12.270
there’s a lot of Sam Altman has a very big stable coin thing called world and it’s also got this orb that reads your eye,

00:56:12.420 –> 00:56:21.330
and a lot of people are are thinking maybe that’s what open AI is going to do is some kind of a stable coin down the road so there’s a it’s interesting there’s there’s a couple ways to do this.

00:56:21.410 –> 00:56:27.860
Yeah and then and there have been some recent like I know Visa launched a service last week right that is trying to.

00:56:27.560 –> 00:56:39.120
Yeah last week was all the payment guys coming out so you had MasterCard visa and PayPal the 1 I thought you’d find most interesting is Visa also offered so so what it does is it kind of says.

00:56:39.570 –> 00:56:52.550
Allows you the consumer to say hey MasterCard I’m gonna allow this agent and it’s going to go work within these parameters and I want you to give access to my credit card it’s kind of like opening up the wallet for an agent to have access to it within your criteria.

00:56:52.950 –> 00:56:54.850
And that’s exactly what visa did in PayPal.

00:56:55.210 –> 00:57:04.820
But the 1 that Visa did that was interesting is there’s also Visa insights where an additional permission you can give the agent is access to your transaction history in a.

00:57:05.160 –> 00:57:10.080
And they they had a weird word for it was kind of like in a it’s not anonymized but in a.

00:57:10.360 –> 00:57:20.970
Macro kind of a way where they can’t see it can’t see every individual transaction then the use case they gave was kind of cheesy it’s like let’s say it looks at Jason’s Visa records and sees that.

00:57:21.340 –> 00:57:25.990
It asks about his hotel Trends but they call it a Trends data not transactions,

00:57:26.200 –> 00:57:38.000
and every Hotel Jason stays in is under $200 so now it knows to instead of asking Jason how much do you want to spend on a hotel it’ll automatically assume that it has to be under $200 it’s kind of like a.

00:57:38.290 –> 00:57:46.440
I can think of so many but you know better things for it to go look at but I think the problem is like the things would be like oh look

00:57:46.330 –> 00:57:55.590
Jason spends a lot of money on you know digital stuff on fortnite let’s go find him some cool new I don’t think it can get to that level of detail or something.

00:57:55.620 –> 00:57:56.640
Yeah I

00:57:56.580 –> 00:58:08.070
for visa to me that’s a stretch like a a big problem the payment companies have collecting data is they see the total transaction but they don’t see the individual items I bought in most cases

00:58:08.000 –> 00:58:20.170
but I do think you’re hitting something that will have to do another show about because we’re we’re we’re probably going to be too long to do it tonight but uhthe is this idea of these these agent based search engines have memory

00:58:20.120 –> 00:58:28.100
and so 1 of the promises of them is they can learn more about you and your preferences over time and

00:58:28.070 –> 00:58:36.190
increasingly give you much more valuable relevant results with less effort on your part like for the most part

00:58:36.140 –> 00:58:38.550
traditional search engines avoid that,

00:58:38.670 –> 00:58:50.050
and they do it for a kind of Nefarious reason they want to be able to sell a lot of ads and you sell more ads when you have a big broad audience not when you have a really narrow specific audience and so they don’t want to

00:58:49.930 –> 00:58:56.710
have these super narrow relevant search engines that are different for everyone because then they can’t sell the same ad to everyone.

00:58:56.970 –> 00:59:06.510
Yeah I was talking to you a retailer and they were talking about how their personalization engine was going to talk to the agent and I was like I didn’t want to tell him I was like.

00:59:06.770 –> 00:59:13.610
Now the agent you’re going to lose personalizationI don’t see a world where that stays down at the individual retailer level.

00:59:13.840 –> 00:59:24.940
Yeah so it it is super interesting right now it is the wild west there’s lots of interesting new Evolutions coming out every week it’s almost like someone should start a company to try to.

00:59:25.220 –> 00:59:29.710
Try to solve all of these these sticky problems and make the world a better place for shopping.

00:59:30.230 –> 00:59:40.900
Yeah we’re chugging away learning a lot and look forward to sharing it on future podcasts and if you want to if this topic is interesting check out retail.

00:59:41.260 –> 00:59:51.350
And we will put a link to it in the show notes but Scott that’s probably going to be a great place to leave it because once again we’ve done a super long Amazon earnings recap episode.

00:59:51.440 –> 00:59:59.700
Yes we have every time we’re like you say Scott we only have 5 minutes of material I’m like Jason just wait and then boompull the string and go.

00:59:59.750 –> 01:00:02.710
As soon as you ask me about Star Wars I know we’re going off the rails.

01:00:02.670 –> 01:00:13.000
We’ll have safe travels hopefully we can get another pod in here in 30 to 60 days solisteners are going to hold you to it.

01:00:13.270 –> 01:00:25.680
I I will look forward to it and thanks again everyone for listening we do appreciate it and we we love hearing all your feedback and running into you in all these shows and now we’re going to get Scott back at some of these shows so I’m very excited about,

01:00:25.830 –> 01:00:29.150
2025 as long as you don’t think about the economy in any way.

01:00:29.620 –> 01:00:33.170
Yes speaking of feedback this is a great time to leave a review.

01:00:33.010 –> 01:00:47.360
It is it is I understand that you can still type them you don’t have to say them into iTunes just yetso with that we are going to say good night to everyone and until next time happy conversing.