James Thomson 10:09
what sharing data means, because I think that there’s potentially some confusion around what Amazon does in sharing data. Amazon’s actually really good at hoarding data. They don’t share data with other companies in the sense that I say, Hey, this is guy, Rolando. He’s bought these products in the past. He’s interested in this, this and this. That’s not the level of data that Amazon’s sharing with anybody. Instead, what they’re saying is, if you want to target people, certain age groups, certain purchase behavior in the past, we will present data to those folks, you will never know who those people actually are. You will never know that it’s Rolando or James who was in that group, but we will serve up customer groups that have certain characteristics. And so when we talk about sharing data, I would argue Amazon is leveraging that data, and they’re licensing double blind versions of that data so that companies can use it for advertising purposes, but at no point is someone going to go in and say, Hey, let’s look at all of Orlando’s past purchase behavior, and let’s use that for nefarious purposes instead. It’s around. Let’s use Orlando’s past search behavior and purchase behavior to help predict what he might be interested in the future, and if he’s interested in the types of products that this particular advertiser is interested in showing, then maybe it makes sense to include Rolando in whatever group that’s going to be shown certain types of ads. So this idea of sharing, again, I think it’s important to spend a few minutes to talk more about it, because the last thing Amazon wants to do is take all this data and make it available to other people so that they can see the level of granularity that typically gets most consumers really freaked out when you hear about a data breach because your credit card or your social security number was shared on the dark web. That is not the kind of information that Amazon is sharing today with anybody, and they’re not sharing your exact purchase behavior with anybody. Instead, they’re saying, if you want to serve up ads, we’ll find you the groups of people that are most likely to be interested in that and if you have in fact, demonstrated certain behaviors that make you more interesting for that advertiser group, then you may be included. But again, the advertiser never knows that you specifically were included. They have no idea. Only Amazon knows that.
Rolando Rosas 12:18
Let me ask you about something else related to that, because you’ve seen what Amazon’s been doing the last six to nine months. And they announced partnership with Tiktok, they announced the partnership with Pinterest, they announced the partnership with meta, and what people are now calling social commerce, which gets to the little bit of the ads question, what do you think’s happening there in the background that would make two companies, especially to tick tock side, tick tock, want to join an agreement with Amazon. Why is this happening now?
James Thomson 12:50
So let me answer the inverse of that question. First, why does Amazon want to get interested in all these other channels? There is a natural stage where Amazon has grown as much as they can in terms of being Top of Mind with as many consumers in this country that yes, if you want to buy on Amazon, people are going to go shop on Amazon. There are massive groups of consumers out there who’ve never heard of Amazon, who say, I don’t know what Amazon is. Do I want to buy there? No. Instead, Amazon is saying, Okay, we’re naturally starting to tap out on how often we’re going to be top of mind as the channel of choice in which consumers are going to start their shopping. So now Amazon has to find other channels for growth and looking at some of the other things Amazon is really good at doing, not just selling, but doing fulfillment, helping with advertising, being able to do international logistics. These are all things Amazon has had to learn how to do in scale at cost effective levels to be able to continue to grow and meet that prime delivery promise. Amazon can take all those different skills, figure out how to parcel them out and now start to be part of those online transactions that don’t start on Amazon at the end of the day, if Amazon collects data on every transaction that happens online, whether it’s starting on Amazon or whether Amazon’s doing fulfillment or Amazon’s driving traffic through advertising. At the end of the day, Amazon will continue to get a richer and richer perspective of who you are as a consumer, whether you’re shopping on Amazon or whether you’re shopping on one of those other sites. At the same time these other channels, they’re not as good at fulfillment. They’re not as good as being able to serve up some of this first party data for advertising that we talked about earlier. So it makes sense for other companies, for better or for worse, to say, if we want to be able to compete with Amazon in some ways, we actually need to partner with Amazon to get the opportunity to take advantage of some of the things they’re differentially better at doing than we will ever be. You want to be as good at Amazon a fulfillment Okay? Well, first show up with $100,000,000,000.30 years of experience. You can go build a bunch of this massive logistics network, both domestically and internationally. Just do that. And then we can start to talk about competing. Or you could say, Listen, why don’t we tap into Amazon’s logistics capability? So that when we do an ad on Tiktok, we can start to make those products available to consumers in a time frame that’s much more like an Amazon purchase than some random DTC site that might say in five to nine business days. We hope to have it out to you. Hope that works for you. The reality is that’s not really going to cut it.
Rolando Rosas 15:19
You know, one of the things that when we’re talking about Amazon and Tiktok, the social side, something that I hear in the rumblings when I talk to other fellow sellers and other people in the community, is, you know, Walmart does have infrastructure. They do have billions of dollars behind them, but there’s still a far number two, and the platform is not as rich as Amazon. What’s holding at Walmart back from really making serious inroads into the Amazon market share?
James Thomson 15:48
Let’s talk about the things Walmart and walmart.com are really good at doing. They have a huge customer base in combination between the two, the online and the offline customer base. They obviously have a lot of selection as walmart.com becomes a destination that can add huge amounts of incremental selection to the overall Walmart selection. That takes time for many of the brands I worked with over the past 1213, years, they have resisted going into WalMart stores because they don’t believe their brands are the kinds of brands they want to have on the shelves in Walmart, but the idea of being on walmart.com might not be quite as big an issue. We can talk a little bit more about why that hasn’t worked out quite as well for some brands, but at the end of the day, Walmart will continue to grow its overall selection by leveraging walmart.com walmart.com has also been able to leverage some of its logistics through the massive network of stores they have. But the reality is, during COVID, a lot of the brands that did really well on Walmart comm were brands that were already on the physical shelves inside Walmarts. That is, say, companies whose products could be available for same day pickup because the product was sitting on the shelf and somebody could go and pick it off the shelves and make it available for you to come and pick up at the store. When you think about where is Amazon competing, Amazon said, Let’s put fulfillment centers in all the major metropolitan areas and put them in fantastic regional locations all over the country, so that we can make literally hundreds of millions of products available to you within one to two day delivery. It is one to two day delivery going to be competitive enough with same day pickup. If I go to the store, for some customers, they may not necessarily need it same day. So that one to two day delivery option through Amazon serves as a good compliment or a good competitive alternative to what walmart.com can do so Walmart comm will continue to grow. They will continue to add selection. They will get better at additional fulfillment options. They certainly started the advertising platform to start to collect more information. But one of the things that Amazon is years and years ahead of compared to everybody, not just Walmart Comm, but everybody else, is the fact that their whole purchasing business is based on collecting data on search and on purchase, and they’ve got literally trillions and trillions of pieces of data, because every customer that comes to amazon.com provides search data and purchase data for Amazon to put into its first party database. That first party database that we’ve talked about Amazon using for its advertising. They’ve been using that for decades for itself, to create better online experiences. To know which types of products do they need to go out and recruit to add to the platform, which types of brands do they need to add Walmart? COMM is figuring that all out. And not to say they’re not going to figure it out. It just takes time to figure it out. It takes time to go find all the brands that have High search volume but low conversion because you don’t have enough selection, or you don’t have good enough prices. Walmart, again, will figure that stuff out, but they will continue to be a two channel business where you can’t put hundreds of millions of SKUs on the physical shelves and rely on same day delivery. You’re going to have to find another model that says, if we want to compete with amazon.com, we’re going to have to figure out how to be able to do vast amounts of selection that’s available for one to two day delivery. I do want to note one thing here, many years ago, I went to a private equity event, and one of the leads for the Walmart comm team stood up and spoke, and she was asked the question around, what are you doing to take business away from amazon.com So again, a walmart.com executive, what are you doing to go after the amazon.com customer? And the response was absolutely fascinating to me, and revealed a lot around what walmart.com is trying to do here. This lady said, if we can get people who go into the physical Walmart stores to do some of their online shopping through walmart.com we’re happy with that as our source of growth. That is to say, we’re not necessarily trying to go after the amazon.com customer and switch them over to walmart.com we just want to make sure. That people who are already physically shopping in Walmarts, if they start to do some online shopping, their number one choice of online channel is going to be the Walmart comm channel. It’s a
Rolando Rosas 20:10
different, different strategy that’s a physical retail first strategy at all costs. Then it obviously
James Thomson 20:15
creates certain types of choices by pursuing it that way. Let’s not make a mistake here. There are literally 10s of millions of customers going into WalMart stores every month. And yes, some of those folks may be shopping on amazon.com as well, but if you can get them to also start shopping on walmart.com then what you’re saying is, if we do a good job there, we’re not trying to create the next version of amazon.com on Walmart comm. Instead, we’re trying to be complimentary to what we already have in the physical stores, because our customer base in the Walmart stores is already large enough that we need to learn how to serve them better by offering them online options. Okay, that makes sense. So for every Amazon seller that says, gosh, when will the walmart.com channel be just like the amazon.com channel? I’m not sure it ever will be, because I don’t think Walmart, the Walmart company, has to create little mini me version of amazon.com on walmart.com to be successful, that they’re actually pursuing a different approach, one that can still be very successful, but also one that requires Amazon sellers to say if I want to sell on Walmart? COMM, it’s unrealistic for me to anticipate that it’s going to be something that I could compare apples to apples to what I already have today on Amazon. COMM,
Rolando Rosas 21:31
super enlightening, super enlightening, because I’ve been waiting for somebody to give me some of these clues, and it’s really insightful to understand the mind frame or the mindset of leadership. And if leadership believes that Walmart comm is more or less primarily complimentary to its current base of customers, rather than competition to Amazon, that tells me all I need to know where the resources are going to go versus Amazon and how they approach the online space. We
James Thomson 22:03
see articles from the media talking about walmart.com is growing at this rate, which is faster than amazon.com rate. When will walmart.com catch up with amazon.com I see those types of articles, and I think to myself, that sort of misses the whole point of what is it that each company is trying to accomplish here? Walmart.com I don’t believe is trying to become as big as amazon.com if it happens to be that big, that’s fine. But what’s more important is, where did that growth come from? If it comes by capturing more of the wallet of the WalMart customer, because the WalMart customer also has a.com portion of its wallet, and walmart.com can capture a disproportionate amount of that. That’s a big win for Walmart as a company. And quite frankly, think about the kinds of things that Amazon has done in the last couple of years to try to go after the WalMart customer that they’ve looked at ways with doing month by month prime rates where you can try it out because it’s not too expensive. They’ve recently changed the shipping rates on some of the low cost products that you know as they compete with with temu and shine, for example. But these are all ways to go after a customer base that socioeconomically might be more aligned with a Walmart in store customer than the household income of an Amazon comm customer. And it’s interesting that everybody’s trying to chase everybody else’s customer, but at the end of the day, I think walmart.com can win without having to recreate an amazon.com mini me version. You
Rolando Rosas 23:29
know what? Anything can happen. And that’s something that the last three years have taught me. The horse race changes. Sometimes the leader in the horse race is leading at the moment, but the folks behind catch up, and then again, the leader takes off. And you don’t know when that’s going to happen. Just Just remember,
James Thomson 23:49
Amazon and Walmart are not running the same horse race, so the fact that we’re referencing this as a horse race suggests they’re in the same race. I don’t think they are. I think the assets that Walmart brings to the table and how it can leverage what it’s really good at doing are very different than the things that Amazon is good at doing. And so for them to try to play the same game with very different assets, I think they can both win, but by pursuing slightly different groups of customers and looking at success in slightly different ways. So
Rolando Rosas 24:20
if I were to just now take what you just said, and I’m a brand, right? And your brand that’s at retail or selling into retail, one of the challenges is, let’s say you want to go on to the Amazon world, and you approach Amazon with the same packaging, the same design, the same marketing strategy that maybe was a little more retail centric, and take it over to Amazon. Say, oh, just throw up some ads, you know, put some images of the product. What are the headwinds that I’m going to run into when I do that?
James Thomson 24:49
You ready? We can go down so many paths here. I think, before we get into the minutia, I think it’s important to understand that selling online is a very different experience. Than selling in physical stores, just as shopping online is very different than shopping in a physical store. And so if I’m a customer and I’m presented with a seemingly infinite amount of selection online, helping me figure out, how do I call through all these options and figure out which one or two products are the best options for me, there’s a lot to work through, and Amazon has its algorithms and says, Listen, we’re going to have infinite shelf selection, but at the end of the day, most of the sales are still going to go to what happens on the first page of search. So as a brand, I may have functionally the very best product in the world, but not do particularly well online, because I don’t know how to play the online game. I don’t know what it means to be keyword optimized. I don’t know what it means to be in a position where I’ve got consistent pricing across online and offline channels. I don’t know what it means to educate consumers who are shopping online and don’t necessarily have the same type of queues that they might have in a physical store. Remember when you go into a physical store and there are, I’ll take the absurd example, even in the grocery aisle where there’s breakfast cereal, yeah, there might be 50 options. There might be 100 options, but there’s not 1000 options, or 10,000 options, the way there might be on Amazon. And so there’s been some natural selection that’s already happened to help the customer build a consideration set when they go in the physical store. Building that consideration set when you’re an online shopper is really hard, because there’s so many options to pick from, but that’s why we have algorithms to help figure out what are we going to put on page one of search rather than are we going to present customers with 1000 different options? So as a brand, you have to realize customers are going through a very different experience trying to figure out which product to select. And quite frankly, in some categories, most of the products all kind of look the same. They all have the same main image. They all have similar price ranges. They all have titles that use the same 12 words to give you the sense that they can serve you the kind of functionality you need. Quite frankly, how do you make a choice over which one to buy? And by the way, a lot of the brands you’re going to look at on Amazon that may be on the first page of search, you’ve never heard of them. You’ve been a successful physical retail brand, and now you’re on Amazon. You’re like, Who are these companies?
Rolando Rosas 27:15
How does that happen, that challenger brands are on page one? And I know from talking to Nick gazar, he worked in the ads department for Amazon. Before he went and started doing his own agency, he said that 90% of shoppers never get past page one. So if the reality is that you’ve got challenger brands on page one, maybe showing up organically and showing up on the ad side, which is now an oversized proportion of page one. How do you walk into that situation as a brand? Probably well established brand is some of the ones you’ve talked to, and say, James, what’s going on here? Let
James Thomson 27:52
me use an anecdote here. Think of yourself as a great big football lineman on an NFL team, and you spent your whole life getting big, getting strong, so you can barrel through, and that’s how you win. And along comes this 16 year old kid, a scrawny kid, who’s really, really good at flag football, and he’s nimble, and he can twist and turn, and he can get out of the way and get down field quickly. He’s playing a different game than you are. Yeah, you’re both so called football players, but that 16 year old kid who twists and turn, he plays a very different game than you do. And so you decide, hey, I’m going to go start to play flag football, and I’m going to be the guy competing against the 16 year old kid. And you realize I’m slow, I’m strong, but I’m slow, I don’t play the same way? Yes, that’s exactly the same thing as being really strong at negotiating shelf space in the physical store and now being thrown into the deep end online, where you don’t have to negotiate shelf space, you’re in the search results, just like everybody else, but you have to figure out, how do I play up to the search algorithm and do the kinds of things that make sense for Amazon to reward me with better placement. It’s not going to be the same things that made me really good in the physical retail stores. A lot of the companies I’ve worked with over the years came to me frustrated that, as they launched on Amazon, why didn’t they have the same 20% market share that they had in physical stores? The fact that the share was being taken by companies they’d never heard of. And one of the biggest complaints I hear is those brands are garbage. They’re not very good. They don’t have the 3050, 100 years of manufacturing excellence that we do. Well, it turns out, none of that is as important online as it is and in the minds of some of these big brands. So recognize it’s a different set of rules. Selling on Amazon. Your first goal is you’re going to sell on Amazon. On Amazon is figure out what are the rules, what are the things that you need to do to define success? Yes, you want to sell lots, but if I want to sell a lot, the inputs are very different than what the inputs are going to be to succeed in physical retail. And the sooner you realize Amazon doesn’t care that you are. Or a brand that might have market share and physical retail, what they care about is your incremental selection will throw you in the pool with everybody else. And yes, if customers, in fact, do come looking for a specific brand and they do branded search, which is less than 30% of all search today on Amazon, but if they do branded search for your brand, they’ll find your brand, but that’s not the way the shoppers work online, and that’s not the way that you as a brand should expect that you’re going to win. Well, I’m a big, established brand. Everybody knows me. That’s fine, but that’s not how people search for brands on Amazon. So learn the rules of the game before you jump into Amazon. Ask yourself the question, what is it that I’m going to need to do in order to win on Amazon, including I may have to spend a lot more money on advertising, or I may have to fend off a bunch of unauthorized sellers who I never paid attention to in the past. There’s a lot of things that are quite different online that drive these big, established, physical retail brands. Drives them crazy, because they realize that I’m going to say this, and I don’t mean to hurt anyone’s feelings, but as soon as online and e-commerce started to become a big deal, a lot of well established physical retail brands started to realize that they had not properly changed the way they do business to adapt to some of the pressures that e-commerce was now putting on their whole business, not just the e-commerce portion, but the physical Retail portion as well. e-commerce is here to stay as a brand. You need to ask yourself the question, how do I need to evolve so that my physical retail brand is going to live successfully in a world where there are e-commerce marketplaces with e-commerce pressures that don’t normally affect my day to day in store experience, but now are actually starting to create those problems. How do I do a better job educating customers who don’t have a sales rep to talk to in the store, or don’t have some natural limiting of which brands are being presented on the shelf? Now these are the kinds of things that physical retail brands have to think through. Let me stop there, because I know I’ve thrown a lot at you. Where do you want to go with that? You
Rolando Rosas 31:59
know, I’ve found my Pete Carroll from my new playbook online. That’s James Thomson, because I’m going to use your blocking and tackling and knowing the rules of the game analogy. You’re my Pete Carroll. He’s pretty good. Or should I upgrade to Bill Belichick if I wanted to do that?
James Thomson 32:16
At the end of the day, we’re playing a different game online than we are in physical stores. I don’t really care how long a brand has been around. The reality is there’s a lot of two to three year old online only brands that are eating the lunch of big national brands that don’t know how to play the game, right, and they can they those big brands can get frustrated, and they can yell and scream and try to negotiate with Amazon and say, We’re special, but at the end of the day, Amazon’s objective is to put as much product in front of consumers to make sure they have lots of choices. They want to make sure as much of that product is in stock, that it’s prime eligible, that it’s priced competitively with whatever channel the customer might want to shop in. At the end of the day, there are very, very few brands in the world that are actually special to Amazon. Just about every brand is like every other brand. If you can make it cheaper, you can make it in stock, you can make it prime eligible. Amazon’s Glad to have you on the
Rolando Rosas 33:10
platform. Well, that’s good to know. That’s how they look at things, because you remind me of a conversation that I had with the brand. I’ll just call them Brand X. There are national, international brand like what you’re saying, and they basically threw in the towel on their consumer segment. And the consumer segment was a big focus of theirs, and Amazon played a very outsized role. Now this brand had a two tier distribution model, and they also were selling products into retail, into the big box, like Best Buy. But what they said in their recent quarterly investor call was that it just was unprofitable for them. And they didn’t mention Amazon, but I know of knowing people that work there that it was specifically Amazon channel that was becoming very unprofitable for them. And now I understand why, because of what you just said, the rules are different, the inputs are different, the challenger brands. And then you said 30% of brand, and this is a brand you would know, if I just searched for their brand name, I’m missing out on the 70% I can’t believe that that would change my whole vision. If I was at Brand X and I said, Hey, we’re going to go beyond there. We got to go after that 70% more than just that 30% I mean, that’s a bigger pool to play with.
James Thomson 34:30
I have nothing more to add today.
Rolando Rosas 34:33
Okay, so I want to change the topics a little bit here, because I want to ask you about something I heard on another podcast. I heard a science guy who’s also a writer named David Epstein. He was talking about the Explore exploit trade off that I’m just going to want to have it, word for it, so I get it right. If you do not do the exploration, then you settle one of the things. Things that I’ve noticed about selling on Amazon is that there’s this just constant Amazon themselves, right? They’re known for their own flywheel, right of innovation, but there’s so much that happens around and on Amazon that whole constant exploration, exploit, explore, explore. Exploitation is a very hard this paradigm, and that once you settle because you’ve had some success, I would say maybe, like the aggregators, they had some success in. You know, here’s the spreadsheets, all these columns. We know how to do this. You go on Amazon. Doesn’t work out, because it does require a new set of rules. What do you say to somebody that’s maybe thinking twice about if they should stay on Amazon as a brand? Maybe it’s not working out. Would you say that they need to do a little exploration? Or there’s something else about being on Amazon that they should consider before maybe calling it quits, step
James Thomson 36:00
back and look at brands that have a successful in physical retail. To be successful in physical retail, what do they need to do? First, they had to negotiate shelf space. Then they had to sell enough product consistently year over year on that shelf to be able to continue to retain that shelf space. Yep, they may have to pay up a little bit more each year for that shelf space and do more promotional dollars. But at the end of the day, there were a finite number of competitors that they were competing against on the physical shelves that you’re a great, big, huge, global CPG brand, and you’ve worked hard to make sure that you’ve got that prime shelf space in the grocery store. Chances are the amount of turnover of which grocery stores are going to take that shelf space away from you, you can always write a check and you can get the shelf space back. So the idea that you have to continue to adapt every year, not just by writing a bigger check, but by coming up with better products or better packaging, you don’t have to be quite as adaptive year to year. When you’re in a physical retail setting,
Rolando Rosas 36:59
you’re not forced to explore as fast on the shelf as you would in the digital space. That’s but what I hear you saying, I think
James Thomson 37:07
back to when Intel was the provider of computer chips that They prided themselves on how to make themselves obsolete, because they recognized that if they didn’t make themselves obsolete, someone else would. One of the very few physical retail companies that I know that recognized they had to make themselves obsolete with new product launches. Otherwise, again, they were in trouble. When you look at Amazon, the marginal cost for Amazon to introduce and welcome 10s of 1000s of additional competitor brands in the same category as the one you’re selling in, there’s almost no marginal cost for Amazon to do that. I used to run the group that would sign up $100,000 a year. We didn’t really care if you were the fourth or fifth or 10th guy selling the same brand. If you’re bringing new selection, we love you because new selection means more keywords, more search terms that Amazon can index to help present customers with more choices. But if you’re bringing the 10th or the 12th offer on the same product, that means more price competition, and that’s good for Amazon as well. But if you’re a brand that grew up in that physical retail experience, where the pace of change doesn’t have to be quite as massive as what would have to be online, and all of a sudden you go on to Amazon, and not only you’re competing with a bunch of companies that you’ve never heard of, companies that you may or not respect, as though respect somehow has anything to do with this. But at the end of the day, your ability as a company to launch products that will be successful on Amazon, to continue to adapt those products, it’s much harder to do that when you’re in a culture where every time we launch a new product in a physical retail store, it’s got to be a billion dollar success story. Well, guess what? There are lots of ten million a year success stories on Amazon, and those companies every year are launching another ten million success story. They can move quickly. They’re collecting data on Amazon. They’re figuring out how to tweak different characteristics, and they’re essentially creating a mechanism by which they make themselves obsolete by replacing last year’s version with this year’s version, or last month’s version with this year’s version. I had a colleague who was a successful online private label seller, and he said that every time you reorder from your overseas manufacturer, ask yourself, What are the two or three things I can do on this order to make my product that much better? Maybe I tweak the packaging, maybe I tweak the instructions, maybe I tweak some tiny design characteristics of my product, but I need to keep getting better every time I have an opportunity to manufacture more units, because otherwise someone else is going to say I read the same product reviews as you did. I saw the same complaints customers have about your product. I went to my manufacturer and I tweaked my product so that it would address your failures. Well, that’s how brands on Amazon succeed. They have to keep changing, but they have to get over this ego thing that somehow their product, because it’s been around a long time, by definition, it’s great. Well, the best product is the one that addresses the customer’s complaints from yesterday, and if you can address yesterday’s complaints and incorporate it into. Product offering today, you’re in a better position to serve the customer today than you were yesterday. If you’re a company that takes a year for you to make refinements to your packaging or your physical characteristics, guess what? You’re not moving fast enough to keep the online customer happy. So when we talk about not only brands, exploring and figuring out how to collect data to make themselves better, consumers, the cost of them searching and saying, none of these products I’m seeing on page one are actually the best products. Let me see if anybody else has something that addresses the failures of all these products. There’s not a lot of incremental cost for that customer to keep looking and to find something that says, Oh yeah, we actually do this. Do dad or this characteristic, and that product, by definition, becomes a much more reasonable choice for the customer. The cost of search is low. For customers online, they’re going to keep looking for better options. So you as a brand, if you’re not keeping up with addressing the complaints or the shortcomings of your products, someone else is going to do that, because it’s easy for competitors to find that information. It’s easy for customers to see the complaints of fellow customers. So you need to be able to adapt much more quickly. You need to move much more quickly. And you need to view success not as we only do things if they’re billion dollar successes, but rather, we make a lot of small, incremental improvements, and those small, incremental improvements keep us near the front of the line, even though every one of those improvements, by itself, may not be a big financial uplift to our overall business. I think of 10 years ago, when everybody was buying Bluetooth speakers, it’s one of these ridiculous categories. If you look at the number of companies that churned in and out of page, one of search for Bluetooth speakers, we’re talking hundreds of products a month. So just because you were on the first page yesterday doesn’t mean that next week you’re on the first page. That’s how many new products were being launched and were continuously building up, product reviews, bidding on ads, figuring out ways that they could move briefly onto page one. The same thing happening in other categories, maybe not with quite the same churn, but the reality is, your position on page one is by no means guaranteed, because you’ve somehow got some sales inertia in your physical retail stores.
Rolando Rosas 42:05
Wow, something that I’ve just listening to that there’s a couple of things that really stood out. It’s a culture shock for retail first brands to make that pivot successful on Amazon, and really requires to adapt, to probably bring in people that know the Amazon space to help you get up to speed. Because if you were playing flag football and you jump into the NFL, you may get hurt, you may get run over, you may get Mack trucked, you may find yourself back on the bench because you’re just not good enough. You’re not cut out for that game, and
James Thomson 42:40
and vice versa. You played in the big leagues in physical retail. You think you’re that big lineman, you’re not gonna be able to play in the Nimble space of Amazon by playing with the tools and the capabilities that made you successful in physical retail.
Rolando Rosas 42:53
Man, there’s so much there to dive into, because for me, there’s like, a bunch of light bulbs going off, and it explains certain behaviors that I’ve been noticing lately. But I want to ask you, let’s jump in, into an area here that I really was really want to get your opinion on, because you and I had an opportunity to talk earlier, and you had mentioned that, how you start your day early, and then by 4pm your kids come home, you turn off the notifications, and then it’s essentially family time for your kids, and you’re there for them. You’re there to be present. And it’s hard. I know I’m a businessman, just like yourself. It’s hard as a worker. If you’re working for the man, you’re working for the company, sometimes to be forced to choose between your work and your family life, and it feels like that’s happening more and more with different announcements. Why is this important to you, and how can other families or other folks, other fathers? I’m a father, you’re a father. How can we do this intentionally? Because it’s a struggle to make that a habit, like 4pm or five, whatever the date is or time, to make that time from so by the time they get to be teenager, whoa, this kid’s 15. What? How did that happen?
James Thomson 44:15
So this sounds really simplistic, but the first thing I would do is you need to start protecting your calendar. And what I mean by that is there’s lots of people that have access to your calendar that say, Hey, I want to meet you. I want to talk to you. And it turns out, if you make all the hours in the day available, then other people are ultimately determining what ends up on your calendar and when you’re going to be working, when you’re not going to be working. When I started my agency after I left Amazon, my business partner and I, we were very, very aggressive in blocking time on our calendar and saying, You know what, I don’t take meetings after four o’clock in the afternoon. There’s lots of hours before that if you want to talk to me, it just makes my day busier during the hours I do make available, but I have to protect myself. Do. Booking time for my family on my calendar. So yeah, the consequence is you’ll be even busier during the day that you make available to everybody else. And yes, to realistically get the work done, you may have to start your day a little earlier. Well, if it’s important to you, then walk the time that way. You’re not at the mercy of some random person who’s got access to your calendar booking tool. It sounds super naive what I’ve just said, but the reality is, you need to control your calendar if it’s important to you, otherwise somebody else will fill it up with a bunch of meetings you don’t want to go to anyways, or meetings that, quite frankly, are not as important to you as spending time doing whatever it is you’re looking to do. I don’t care whether you’re spending time with your family or you say, Listen, between noon and one every day I go swimming, or I have a Thursday afternoon clay class, and I got to go to that class, whatever, but you got to book it. You got to protect your own calendar. And you got to ask yourself, this is important to me. What am I doing to make sure that it happens just just like people say, hey, I want to go to Europe. Okay, then, if it’s important, you better start saving up money so that you can actually buy the ticket to make it happen. It’s the same thing with your calendar, if it’s important for you to spend time doing certain things with your family, with yourself, with your wife, whatever. Again, you need to protect your calendar. So I can’t give you any more secret sauce, because it starts with each person controlling his or her own calendar and saying, This is important. I need to do this, but also understanding, if you block certain periods of time in your calendar, there will always be a trade off. So you’re going to have to figure out how to manage that trade off. But turns out, we get pretty good at managing trade offs if things that are important to you always fall to the wayside, because, gosh darn is somebody else wants my time for something else, and I got to make myself available. Guess what? It’s a self fulfilling prophecy, and you’ll never be able to do the things that are important to you.
Rolando Rosas 46:47
Let me jump off on that one. I like what you’re just saying there. You’ll never be able to do the things that are important to you. You’re a former Amazonian. I know you’re paying attention to the news. If you had an opportunity to sit down with Andy Jesse tomorrow. He says, Come on, James, let’s chat. What’s the one question you would ask him?
James Thomson 47:06
I have lots of questions I would ask him. People may laugh when they hear this, but I would ask him, Why did you wait so long to require people to come back to the office? Okay? My time at Amazon, the most precious thing that I got from my time at Amazon was my interactions with my colleagues, and a lot of those, yes, some of them were in meetings, and lots of them were not in meetings. Amazon was when I worked. There was a place where you were surrounded by really smart people, really smart colleagues, who you could work with to figure out really difficult problems. Listen, we were building businesses that were growing 40 to 80% year over year, every year. You don’t do that by tooling your thumbs and saying, we’ll just hope things fall into place. No, you’re sitting down and you’re trying to figure out, what are the key levers that are going to fix this problem. When you’re a bunch of people all working out of your own homes, the way you get together is you have to schedule a meeting and say, Okay, we got to have a meeting. And then here’s the problem. We got to grow 40 to 80% Okay, anybody want to think about ideas that kind of formal structure to try to work out every problem makes things really hard for getting things done? There was constant tweaking. Literally, I start in the morning on a problem, and I would have talked to five or six people by the time the day ended, and I’d have a much better sense in my head. Okay, I think I’m going to solve the problem this way. That doesn’t happen when we’re all working in different locations, out of our homes. To keep the culture of Amazon focused on, how do we continue to solve really hard problems that require an absolute Eagle Eye approach of we need to understand the key levers that drive this problem. I don’t know how you do that, with everybody working out of their homes in different locations.
Rolando Rosas 48:44
James, can I challenge you a little bit on that? Absolutely. You probably have heard of Professor Nick bloom out of Stanford, and he’s put a bunch of articles and research around this topic, where the opportunity for hybrid work presents a rare opportunity where you have three W’s three wins, a win for the company, because their bottom line is better. It’s a fatter pocket at the end of the day, they’re making more profits because of it. It’s a win for the environment. There’s less cars on the road, less pollution, and it’s a win for those workers that want to be at home and spend more time with their family or loved ones or care for a sick person that they have in their family, because now they’re able to work two, three days or more from home. What is Andy Jassy seeing with his announcements that goes really against kind of what Professor Bloom has been talking about the last couple of years.
James Thomson 49:41
How to say this without being very unpopular, I can tell you the number of times where a colleague of mine would go out on holiday, rightfully so. Would go on holiday on Amazon, and I would say, Gosh, I wish that person was here, because their insights would be really useful if that person was working from home. I. I could pick up the phone and call them, but they wouldn’t be part of an impromptu discussion with four or five other people so that we could solve a problem in the next 10 minutes together. Everything gets scheduled. Oh, I gotta schedule a call. Oh, I gotta figure out with you how I can get five minutes of your time. It’s not you’re in the office next to me, and I swing in and I just say, Hey, what’s going on? I agree that if people are good about organizing their schedule, blocking time off that matters, and saying, Listen, I need to work from home one day a week to get things done. But the reality is that day of the week is actually still work. It’s not me getting my grocery shopping done and hanging out with my sick aunt. It’s actually I’m on the clock for work. I’m just doing certain types of busy administrative work that I have to do. Okay, fine. To me, that comes back to you’re organizing your calendar better, so that you’re better organized with your time. Will Amazon employees be frustrated that they can’t work from home one day a week? Maybe. But the problem that Andy Jassy, I think, is trying to solve is people who’d basically never come into the office, essentially colleagues that are not really collegial. They’re just one more person in a meeting. I don’t want one more person in a meeting. I want someone with very specific skills that can help me solve particular problems. If I was a manager of a bunch of employees that never came into the office, I don’t think we’re getting anywhere near the maximum in terms of the group benefit of having these people understanding each other, appreciating each other and understanding how do I leverage the unique skills and capabilities of each other? You can’t do that by having to go one scheduled meeting after another and be like, Okay, we’re done at that meeting. Let’s go on to the next meeting, or I’ll talk to you at four hours when I have more time slotted with you. It doesn’t work that way. I think of the weekly business reviews that I sat in at Amazon, every one of those was a huge professional learning experience to watch the dynamics of how decisions get made, to see how people are held accountable for their information and their businesses like those, things have to happen in person. You can’t get that on a zoom call where you’re like, Okay, we’re all sitting here admiring each other’s backdrops in our different homes. Let’s focus on the business problem at hand. So will things with Amazon’s back to work policy? Will they potentially get loosened a little bit later, possibly. But I think the bigger issue here is we need to get people coming back into the office, whether that’s four days a week, or five days a week. It’s definitely a number that starts with at least three and a half days a week. It’s not I’m an independent thinker. I sit at home and I do my best work at home, fine, but then don’t come and work for a company that’s trying to grow 40 to 80% year over year in an already huge business. There are companies that will be happy to have you work from home, but for Amazon and the types of growth that they’re pursuing in the industries they’re in, you can’t have people sitting at home only connecting with each other because they happen to have a scheduled zoom call of one another. It’s not going to work. So anyways, that’s the question I would ask. Andy Jassy, you got a lot on his plate, but
Rolando Rosas 52:56
that’s the one thing, a teeny bit, just a teeny bit time at Amazon
James Thomson 53:01
is rewarded by way of the interactions I had in person with my colleagues.
Rolando Rosas 53:05
I would say, I agree with some of that. I started my career at Philip Morris, which is now known as Altria, and we had interaction. And I was very blessed to have a very good mentor who gave me a lot of instruction. Some of that came from collaborating with him with his accounts and finding out how to present yourself to accounts and how to use influence and all that, and that came from interacting with the colleagues. I do think, though, James, that if we want to reduce the amount of cars and that kind of stuff, there may be some folks that would feel very strongly. I think last year, the bunch of them showed up at Amazon office saying, No, we’re not going to go back into the office. So it’s going to be very interesting to see what happens when this is supposed to go into effect, and see if all goes well or maybe not. I don’t know. I don’t know. That’s why I’m asking you that question. Having somebody that worked there, you understand the mindset and the culture way better than I would ever understand that culture. I can’t wait to see what the comments are. That’s going to be even more interesting about that.
James Thomson 54:09
Again, I respect that for some folks, reducing the number of cars on Earth is an important issue. Reducing pollution is important. I still believe that if you want to work at a high growth company, you need to be together, whether that means walking, riding your bike, taking the bus. I don’t think we solve whether you own a car or drive it to work or not. I don’t think solving that problem should be the same problem that we’re trying to solve. Of do I want to work at a very high growth company where we need to make decisions using the best inputs from the best people, and the best people typically get the best out of each other by working together constantly, not through random half hour zoom calls. Very
Rolando Rosas 54:51
clear. Let’s end this on a very easy, lighter note. Sure. We’re going to do a little rapid fire. Okay? Yeah, whatever hits your brain is your answer. Here we go, Walmart
Unknown Speaker 55:11
versus Amazon. I like them both for totally different reasons.
Rolando Rosas 55:13
Favorite social media platform I
Speaker 1 55:17
only use LinkedIn, so I can’t comment about any of the other ones. All
Rolando Rosas 55:21
right. Favorite piece
James Thomson 55:23
of tech, I drive an electric car. I love the dashboard on my electric car.
Rolando Rosas 55:28
Nice. All right, what’s the first thing you check for on your phone in the morning?
James Thomson 55:35
I want to make sure I didn’t get any emergency phone calls through the night that I somehow failed to listen to
Rolando Rosas 55:42
check the notifications, all right. Game Changing book, I
James Thomson 55:47
read a book I think was called good enough. It was all about how hard we work to achieve the things we want in life, and we have to realize that we’re never going to have everything. So figuring out, do you have enough of the social benefits in life? Do you have enough of the financial benefits in life, enough of the professional achievement aspects in life, realizing that there is a maximum to what we want to achieve and what we can achieve, and figuring out that we can’t just aimlessly pursue things just because somebody told us, the more money you have, the better. Everything will be no, it’s not all about money. It can’t be about money. And having been an MBA student, that was all about, yeah, we all got to go out there and make a gazillion dollars, and we’ll be happy.
Rolando Rosas 56:31
But you’d mentioned something like that to me when we talked earlier. Money can’t buy you time. There’s no time machine that allows you to go back in time. And I really lock your calendar, lock your calendar. You said that, and so I believe it’s in my brain. That’s all. I want to make sure I asked you that today. Last thing, speaking of people, yep, a person you admire.
James Thomson 56:51
I got to work with Jeff Wilkie, who was the SVP at Amazon, who ran all of marketplace, if ever there was a situation where I was actually excited to go to weekly meetings, it was my weekly meeting with Jeff Wilkie, one of the most interesting people I’ve ever seen in terms of understanding the big picture, of holding people accountable for what it is that they’re supposed to be in charge of asking the exact question that needs to be asked to get at the root of the problem. I’ve never met anybody who’s as good as Jeff Wilkie at asking the right question. It turns out, if you want to be a leader and you want to motivate people, the way you do it is you ask the right question. If you ask of the right question, all things are uncovered. All things need to be examined that matter. And so rather than talking to talk and be heard because you’re talking be the guy that asks the best question, the right question, at the right time. And I’ve never met anybody who was as good as doing that as Jeff Wilkie was.
Rolando Rosas 57:49
You know what? We got to bring Jeff Wilkie on, because I need to learn how to ask the right questions. That’s for sure. It’s been doing these kind of things. Big props for Jeff Wilkie. All right, now, James, if people want to, maybe want to follow you. They want to ping you. They want to Hey, you help me with my brand or whatever. What do you say to those people? Do you want them to go somewhere and look for you? Or where can they learn more about you?
James Thomson 58:13
I’m on LinkedIn. I’m James Thomson, Thomson. I have another colleague who has a P in his name, who’s also an Amazon guy. That’s not me, okay? I’m the James Thomson in Seattle. Happy to talk to folks.
Rolando Rosas 58:27
All right, so look for James on LinkedIn. He’s got a bunch of good stuff there, James, I want to thank you for coming on today, because you’re certainly like I said, a lot of light bulbs have gone off. The brain is some new ideas that I’m going to take back to my team as well, because we talked to customers on the regular, and you’ve answered some of the questions that I just didn’t know, because you’re plugged in on the Amazon side and way, way more than most out there. So thank you. I appreciate you bringing and sharing your knowledge with us today.
James Thomson 58:55
Thanks for having me on What The Teck?
Rolando Rosas 58:57
absolutely and if you want to support this podcast. Check out the links in the description where you can get involved, especially if you’re a business, if you need help solving complex technology issues, that’s what we do at global tech. We help companies solve complex technology issues. We’ve been in the business for over 20 years doing that, and we would love to help you out. And if you want to see more guests like James, come on the podcast. Go ahead, check it out. We’ll talk to you. We’ll see what best suits your need. And if you want to continue nerding out on information that can help you grow your business online, maybe you want to find out what’s happening in the digital ad space and SEO world. I recently talked to Neil Patel, one of the foremost persons in this area. He had amazing nuggets on why so many companies are drowning in a sea of noise when it. Comes to online social media and SEO, so go ahead check that Neil Patel episode out, and I will see you in that episode.
Recent Comments