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July 17, 2020

Streamline and Simplify

Keith Anderson, SVP of Strategy & Insights at Profitero, joins the show to discuss Profitero's role in the CPG and DTC world and brands' move towards building a stronger eCommerce presence.

this episode sponsored by

What is Profitero?

  • Profitero is a platform for eCommerce performance, measurement, analytics, and optimization for brands primarily in Europe, North America, and Asia.
  • Profitero isn’t an agency, though it has similarities. Profitero doesn’t actually perform the work for the brands, but does create data and create tech to make that data valuable. 
  • Agencies have seemed to be expendable or interchangeable in the past. Profitero comes in to perform the “know-how” of an agency, but allows the work to be performed in-house. This allows for better visibility into the processes and its effectiveness. 
  • Some brands that Profitero works with are working with agencies that are managing their eCommerce DTC, their Amazon presence, their paid media, etc. and Profitero’s data helps to inform and optimize all of those processes. 

How are brands moving forward?

  • “Everybody that was doing eCommerce is doing much more of it. Everybody that wasn’t doing it wants to do it. Either way, everybody needs to know: how do we do it and is it working?” - Keith Anderson
  • CPG brands (Pepsi and Heinz, for example) have pushed into having their own DTC platforms. During COVID, CPG brands that traditionally relied on retailers had to push into having their own domains in order to have that direct connection value due to supply chain disruptions or limitations on “non-essential” items. 
  • “We need to de-risk our dependency on others for fulfillment of demand.” - Keith Anderson

CPG to DTC

  • First-party data about customers is valuable - knowing who they are, how they’re behaving, and having direct lines of communication. 
  • In having your own DTC domain, loyal customers have a place they know they can receive your full selection and in displaying that selection, you have full control over the way those products are presented and priced.
  • Both Indirect (retail) and Direct eCommerce presences have value. Typically, these two branches lack communication with each other. COVID has pushed the realization that these organizational structures should be simplified so that brands can quickly and effectively adapt to a changing market.
  • Brands should recognize that moving into DTC is a way to get closer to their consumer, get more control over their brand and customer experience, and be more personal with their consumer instead of looking to DTC as a singular pathway to your consumers or as a way to get discovered by new consumers.
  • Anderson advises focusing on sustainability for long-term exponential growth: “The sooner you do the right thing, the better the outcome.” - Keith Anderson

CommerceLive

  • Profitero hosted a webinar conference to help discuss the uncertainties of the global pandemic and what brands can do to stay ahead.
  • “All of your scarce resources really have to be revisited during times of volatility, uncertainty and crisis.” - Keith Anderson
  • CommerceLive wasn’t opportunistic, but very community-centric and community driven.

Links


Have any questions or comments about the show? You can reach out to us at info@futurecommerce.fm or any of our social channels, we love hearing from our listeners!


Brian: [00:00:00] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Brian.

Phillip: [00:00:05] And I'm Phillip. And today we are joined by Keith Anderson, who is the SVP of Strategy and Insight at Profitero. Welcome to the show, Keith.

Keith: [00:00:12] Thanks, Phillip. Thanks, Brian. Great to be with you both.

Phillip: [00:00:15] Yeah, great to have you. For those who are uninitiated, like I was a few months ago, although I feel like I've come up to speed, tell us a little bit about Profitero and what you do over there.

Keith: [00:00:24] Sure. Profitero is eCommerce performance measurement analytics and optimization for brands. We work with a few thousand brands, most enterprise in Europe, North America, in Asia, really improving their performance with and through online retailers like Amazon and Walmart and Kroger and hundreds of others. And my role is in strategy, which includes leading a team of analysts that helps our clients interpret and act on the data, as well as sitting it sort of at the intersection of our near term and long term roadmap. You know, think of anything that's gonna be 12 to 36 months out and build/buy/partner type discussions... That falls into my wheelhouse. And it's an exciting time, really, at the intersection of eCommerce and data. So it's an interesting role and interesting company for sure.

Brian: [00:01:28] For sure. It's super interesting.

Phillip: [00:01:30] I was going to ask just as off the cuff, and feel free to not answer it. I get this weird sort of... First question. Would you consider Profitero like an agency? Or is there a better term to describe what you do? And the second half of that would be, do you feel like "agencies" (with air quotes... You can't see me right now, but...) Do you think agencies kind of get a bad rap in the direct to consumer mindset and brands that, you know, I think want to bring those kinds of capabilities in-house?

Keith: [00:02:01] Both good questions. So I'll answer him in the sequence that I received them. We don't think of ourselves as an agency, but there certainly are elements of our service levels that have some similarity to an agency, although we don't really do the work for you, which is why I don't think we're best classified like that. And when I joined the company six years ago, it was 95% engineers and data scientists and only a handful of business people. So that's where I sort of fit in is one of the new business people joining the company. And I would say at the heart of what we do is really some technology to create data, some technology to transform data into something valuable, and then where there's overlap, I think is a team of subject matter and domain experts that can help the huge and growing numbers of people that are certainly new or newish to the domain to understand how to use the tools that we offer and how to be more effective in their roles. And whether agencies get a bad rap or not. You know, not being inside of an agency, I don't think I have as many bruises as somewhere inside of an agency might. But I would say it certainly seems like an industry that takes a lot of arrows. And so it appears to me anyway, to be treated as expendable or interchangeable, you know, oh, hey, let's just fire that agency and pick another agency. But I think, truthfully, when you peel back some of the layers of decisions about what work to keep in-house and what work to work with external parties for, most companies of almost every scale and maturity level depend on agencies that often have more Know-How and are able to produce results faster than companies can internally. So I think that's something reasonable to acknowledge. You know, there's no question everybody wants to know how do we make it easier to work together? How do we get clearer visibility into what you're doing and clearer visibility into whether it's effective? And, in fact, a lot of what we're doing at the moment, we've been working with an ecosystem of agencies for years, but we're really leaning in on it at this moment because with the pandemic, the 20 year trajectory of eCommerce has really been accelerated sort of a 10 years in half that many months.

Phillip: [00:05:08] Yeah.

Keith: [00:05:08] And as a result, everybody that was doing eCommerce is doing much more of it. Everybody that wasn't doing it wants to do it. And either way, everybody needs to know how do we do it and is it working? And so since so many of our customers have partner agencies that are doing work, like managing their own direct to consumer eCommerce offering, or managing their Amazon presence, or managing sort of a paid media and sponsored product ads, our data ends up informing all of that optimization and automation in interesting ways. So we're working closer with agencies, I would say, than we did even a few years ago, really to get closer to the results that our customers need in these challenging times.

Brian: [00:06:07] Yeah. And I think it's interesting how different brands have responded to this crisis. I'm sure you've seen a whole bunch of different responses. And obviously, strategy should be different per company, for sure. I think you work with CPG brands? I'm thinking about the Pepsi example that launched two D2C sites. And these seem like some pretty modest first efforts. What do you feel like CPG brands can do today to have a really big impact and have a really good response to what's happening?

Keith: [00:06:41] Sure, yeah. We work with many, many CPG brands, CPG and Grocery, are certainly not the only vertical that we are active in. But it's one of the earliest that we get a lot of traction in. And I saw the two Pepsi sites that were launched just over these last few months. Heinz also got some press for spinning up a direct to consumer site on a very short timeline. I think it's worth thinking about the distinction between the motivation to launch something quickly in the present moment and what some of the longer term possibilities are and where direct to consumer fits broadly. I mean, to me, the urgency during this moment really had to do with just the supply chain disruptions that really constrain choices shoppers could make in the U.S. and other countries about where to shop and what to buy. So, you know, think back to February and March. In most parts of the country, some retailers where CPG products had been or were sold maybe weren't fully open, or if they were had significant limitations on how you could shop, what time of day you could shop, et cetera. Even retailers like Amazon designated entire categories as non-essential and as a result weren't stocking them in their own fulfillment centers.

Phillip: [00:08:13] Right.

Keith: [00:08:13] So to me, the bottom line behind some of these really responsive moves was, listen, we need optionality. We need to de-risk our dependency on others for fulfillment of demand, to the extent that we can support it. And so it really served as a backstop for shoppers that knew what they wanted but couldn't find it with their usual source. And I think, you know, almost any retailer would have to acknowledge. That doesn't really represent a form of channel conflict. If you can't or won't for a given period stock something, you really don't have much argument that your supplier is competing. And I think when you looked at what these recent examples represented, there's very little to suggest they were competitive. There are a few other motivations, I think, for direct to consumer broadly. And I think you can point to other examples. You know, Clorox is one that hired Boxed former CMO as their general manager of direct to consumer.

Phillip: [00:09:29] Jackson Jeyanayagam. We had him on the show recently, not too long ago.

Keith: [00:09:33] Yeah, he's a great guy. So you already unpacked some of his thinking and where Clorox is headed. But I think some of the other reasons one might do it are I think we all are aware in this sort of post cookie landscape, first party data about your own customers is really valuable, knowing who they are, how they're behaving, having direct lines of communication that are opt in and above board and you name it. There's value purely in that direct connection. There also is value in having your own domain where a loyal shopper or somebody curious knows they can get your full selection. And I think there's also a lot of power sort of going back to the direct consumer connection in having control over the way your products are presented and priced to consumers. It's really not just the data access, but it's the customer experience control. So I would say in many categories, but in CPG specifically, there's no question the sort of established wisdom is the reason that supermarkets exist and super centers and even Amazon exist, especially in sort of high frequency, low consideration categories of which many CPG categories might reasonably be considered. People are generally shopping for many categories of good at a time on one trip. And they generally want choice not just between categories, but perhaps within categories. And there may be insufficient choice within one manufacturers' portfolio, within a category or a brand. And so all of this leads you to aggregation of demand. That's what retail is. Hey, we're going to collect all that demand and then we're going to pull the supply and we'll call it a supermarket. So that, I think is likely not going away. And I'll never forget it... This is over a decade ago. But it was just an interesting data point that I think is representative of that period in thinking about direct to consumer. Tide.com in a year would get one tenth the traffic that Walmart.com would get. So the point is, if you are looking at direct to consumer is your singular pathway to consumers or as a way to get discovered and found by people that aren't already shopping you, and you're one of the incumbent national brands, you're going to be disappointed relative to all of the strategies and tactics that you're used to. But if you go into it with the right mindset that you're not doing this instead of retailing, you're doing this as a way to get closer to your consumer, get more control over your brand and the customers experience, provide a backstop where there are short term supply constraints with some of your other retail partners, perhaps offer a level of customization or personalization that mass retailers can't or won't support just because they're operational or financial models don't support it. There's all kinds of other reasons that you can do direct to consumer that really make a ton of sense. They're just not always the same reasons that you would go into distribution in a Walmart brick and mortar environment.

Brian: [00:13:35] Certainly collect 1P data. That's a good reason to do it, like you said, to get closer to the customer. If you're able to even collect one tenth of Walmart's traffic through your DTC site and build better connection with those customers that do come, you're going to know your customer better and be able to do more to address them through every channel. I think...

Phillip: [00:14:00] I struggle with... Sorry, there's a little bit of a delay. I kind of struggle with that notion that even having access to the data would give the typical run of the mill direct to consumer brand the strategy that it takes to do anything with it. I feel like we're data rich in the way that we're sort of calorie rich. We have way more nutrition and way more caloric intake than our bodies can handle. And that's how we get fat and happy.

Brian: [00:14:37] To be fair, a lot of that data is bad data. Like calorie intake. You can intake stuff that is not good for your body.

Phillip: [00:14:45] That's a fair point.

Brian: [00:14:46] But I think 1P data is typically cleaner. It's easier to work with. It's really hard to deal with a lot of the data that we receive from retailers or third parties. 3P data is a lot harder for our bodies to process.

Phillip: [00:15:02] {laughter} Mixing metaphors. Brian, I was trying to tee Keith up to say, "Well that's where Profitero comes in," which is you have to make use of the data in an elegant way and have someone with a line of strategy to it. But you ruined it.

Brian: [00:15:17] {laughter}

Keith: [00:15:17] I wouldn't say it was ruined, although I don't have much to add to the calories in, calories out discussion. I would say I do see a degree of what you're saying, especially with sort of two related factors. One, if you're an organization that's new to digital commerce or first party data in that area, then there's a learning curve to "What is this data? And what am I supposed to do with it?" And if you don't have the team with that expertise, then you at a minimum need to do some training and development or find a partner that can help you. The other issue sort of relatedly, is we see more and more companies that have the indirect and the direct eCommerce presences. Indirect meaning you'll have one team that does business through Walmart, Amazon and Target dot com. And then you'll have a direct to consumer team that runs the owned and branded domain that, in addition to all of the marketing copy, has a shoppable section of the site. But the level of collaboration between those two in many companies is relatively low, and in some they almost view each other as a co-op-petition. In other words, the direct to consumer arm view some of those other players as discounters that are really just compressing margins and average selling prices and aren't presenting the the brand the way that it should be. And so they actually have these sort of invisible firewalls, and they don't talk to or coordinate between each other in ways that might help them all be more effective. So I definitely hear more sort of 30,000 foot talk about the way that a direct to consumer offering isn't just worth doing as a standalone effort but can reinforce and inform what you're doing with other online retailers, what you're doing in brick and mortar. I think it's harder to find really detailed case studies of companies that are doing that effectively and systematically. But I think that work is almost certainly going to have to happen over the next few years because I see a couple of things happening that people are starting to work on, but nobody has solved, as best I can tell [00:18:15]. Really as eCommerce is rising on the agenda of the C Suite, as we sort of said earlier, functions that have traditionally been sort of interested, but not focused, are suddenly realizing, at least until something changes externally, this is much more important than I previously realized. [00:18:42] If I'm a marketer, and I want people to find me, or I want to attract and engage and convert them, I've got to do this. If I'm a supply chain specialist, this is actually where my products need to be routed and fulfilled. So I better learn what it means. And as a result, what I'm starting to see is people more senior in these organizations, especially large enterprises, are taking a greater interest, and they're looking down at the direct to consumer team, and they're looking down at the eCommerce team, and they're looking at the marketing team, and they're saying, "Everybody's doing work that has a lot of similarity." You're all using tools that have some similarity, but they don't talk to each other. You've got a bunch of agencies in the mix. Not clear whether there's overlap. And so what I think is really driving a lot of the debate inside, at least the larger companies that I work with, they're really looking to streamline and simplify because they don't have a choice. At the new level of materiality that digital commerce represents, at the lowest end of the spectrum, it now is sort of high single digit percentages of the total. And in many cases, it's mid double digit percentages of everything you're selling. And so if you've got four different teams that all think they're responsible for it, but they each have a different strategy and tool kit and they don't really coordinate, the rest of this year you're trying to figure out, boy, how do I simplify? So [00:20:39] one of the perennial topics that literally I can talk about with any company any year is how are you structuring the organization? And this year is no different. But that discussion this year is really gravitating towards, "We used to think of this as sort of a specialist function that was siloed over there. And now it's becoming apparent that it may still be that there's a level of specialization that isn't going away, but it also permeates everything else that we do in ways that we didn't appreciate. And we just need to simplify because we can't get anything done if we can't do this quickly and effectively." [00:21:23]

Phillip: [00:21:23] Something that you said there, which I think is sort of brilliant, is the sort of like this generational sense... I'm paraphrasing you, but basically we're on I think the second or third generation of in eCommerce, or executing in eCommerce, executing retail in a digital space, I guess is the better way to say it. And so we're doing it differently than we did, say, 10 years ago, even though the medium is the same via the Internet and Web browser. I find that to be interesting, because if you link that to a prior comment that you said around Big CPG is doing direct to consumer and having first efforts that are done in sort of a hurry to kind of get themselves position in the channel... Brian mentioned Pepsi. But there are many examples. I think of Profitero and my awareness of Profitero as having done that for themselves. You all sort of skated in, skated to where the puck was going to be at a time where physical events were being canceled, and you set one up in a hurry, and it was brilliant. I participated.

Keith: [00:22:33] We appreciated that.

Phillip: [00:22:34] Yeah. I thought it was great. The fact that you put it together in such a hurry, you commanded such a great turnout. You had such great content, if I do say so myself. And you had an awareness of the situation and the environment that we were in and the environment we're stepping into to be able to put that together. It just strikes me as an interesting parallel as a business that's not necessarily in a retail business, but it can act accordingly in the same way that retail needs to act and in the same way that retails playbook needs to play out in this moment as well. We're all sort of, to use someone else's quote, "We're not all in the same boat, but we are all in the same storm." And right now, with everybody sort of pivoting to digital, it seems like you got there first in the event space. I'm curious what with Commerce Live were you're trying to achieve? Do you feel like you achieved it? And now what does the future hold for events that you would be creating around the space and the conversations there?

Keith: [00:23:42] Yeah. I have to say, during a really challenging time, that was one of the most authentic and invigorating professional experiences in memory. And I can take very little credit for it. I think Mike Black, our Chief Marketer, deserves a ton of credit. I think our new President, Sarah Hofstetter, and Bryan Wiener, our new CEO, really helped leverage their network to bring in some World-Class presenters. But I can share a little bit about the origin, and I played a small role in how we got there. And that is I, in my past life, helped lead a consultancy that did a lot of scenario planning, and all that means is setting aside wishful thinking of what you want to happen and thinking about different possibilities. And sometimes thinking about their likelihood of happening and their impact regardless of probability. And so we were sort of sitting there probably a month out from this big flagship retail industry event that we've attended every year since it launched. And it's a tremendous event. You fly to a hot part of the country and ten thousand of your closest industry friends and prospects and clients and competitors are there. And it's a very well-run in-person event that historically has been a good demand gen source for us. And so, you know, this pandemic started materializing, and we heard the lines, "Don't worry," "It's going to go away." "You won't believe it. It's just going to evaporate." But we sort of said, "I don't know what if it doesn't?" I heard people with actual expertise, medical degrees in epidemiology saying things like, "It won't just disappear. It may not be safe to gather in close quarters in person." And so we sort of said internally, what if that event that we are meeting every week to button up our event plan for didn't happen? What would that mean? Would we be able to generate leads to hit our plan for the year? What what could we do to generate those leads instead? What do we think people want? So basically, at that moment, we said the probability of the same number of people getting together on that date, regardless of whether the event happens or not, seems slim. So we already realized we're gonna have to have some kind of a backstop plan. And on top of that, we thought, boy, we may actually be able to fill a void if we can get something together quickly. And it was evident to us that on the kind of timeline that it would be required to pull something together, no way would it fall entirely on our shoulders. We do webinars, but we aren't a virtual event company by trade. We just had a point of view on, hey, what might the industry and our audience find helpful in this really chaotic moment? So that's sort of the origin. And interestingly, in the second version, my presentation was all about how do you plan and execute with agility in this kind of an environment? And it was actually a very similar story to what I just mentioned. HEB, which is really a world class retailer based in Texas, grocer based in Texas, got a lot of good credit for following a very similar approach that specifically emphasized scenario planning. They actually got a jump on it back in January. And in January, if you recall, it wasn't even here yet.

Phillip: [00:28:14] Right.

Keith: [00:28:14] We didn't know is it here? Is it going to impact us? They just started playing out what if it did happen? And by doing that, they already had a playbook for February, March, April. And so ultimately, that's all we did. [00:28:33] And I think whether that's somebody in your company that has a role like strategy and is doing that work in a formal way, or if you're just somebody who is paying attention and can find the time, even if only for 30 minutes when you have the bandwidth to think about the things that are in the future that you either need or want to happen, but are out of your control... Just start thinking about what if they didn't happen? How could we mitigate the impact and how could we adapt and evolve on a quick timeline? And it often has pretty immediate implications for the allocation of time and and budget and effort. [00:29:24] All of your scarce resources really have to be revisited during times of volatility, uncertainty and crisis. And the reason I say was authentic and invigorating is, you know, I really don't want to minimize the incredible effort that our team put in to make it happen. But just as importantly, I think the whole industry and everybody that supported it, you included... I don't know what your observation was, but it didn't feel like any other webinar or any other podcast, frankly, that I participated in. It was really just everybody getting together and sort of saying, "Hey, what the heck? What are we going to do? What what can we do? What are you doing? Here's what we're doing." And I think that was just inspiring at a tricky time.

Phillip: [00:30:27] Content aside, which is something that I think is sort of the conceit under which we all gather, the networking component was really interesting. The fact that you had access to so many people through that Slack channel ahead of the event to sort of get to know each other ahead of the event. In no way did it feel opportunistic. It felt very community centric and community driven. That's the thing that I think was really most notable about it. And I think that's a thing that just can't be manufactured. It comes from the authenticity of the people, the organizers, the creators of an event like that to create a place where folks come together to talk shop. And that is the thing that I've gotten from Shoptalk for the last few years that was sorely missed this year. But Commerce Live really did fill in that gap. Brian, I know you have the ending the book in here to this conversation. I'd love for you to take the last question.

Brian: [00:31:24] Yeah. And I think that as I was listening to you talk, Keith, something that perked my ears up was just the fact that you caught this early. You said, "Hey, we recognize that maybe things will get better, but there's a really good chance they won't." And so you started Commerce Live. As you look ahead to the next six months, talk to me about what trends you see emerging. Are you bullish or are you bearish on what's going to happen? What do you see as the road map for the next six months?

Keith: [00:32:00] Six months in this environment is a very dangerous time frame. I would say over the next 30 years I'm bullish. Over the next six months, I have no idea. Then just to be clear, I don't think we knew what was going to happen, but we asked the question, "What if?" So we didn't know that the other event wouldn't happen. But we did start thinking seriously about "What if it didn't?" And so, again, like a month ago when I presented to the second Commerce Live audience, I said everybody is trying to guess which letter of the alphabet the recovery is going to look like. Everybody wants it to be a V. You know, we took a brief dip in March, but, man, it's gonna shoot right back, and we're in the clear. Summer's gonna be smooth sailing. And we'll be at new heights by August. Maybe it'll be a W. Maybe there will be a second spike. Some people said, "How can you have a second spike if the first spike never goes away?" So what I have said is [00:33:15] I'm paying very close attention to leading indicators. And leading indicators in our world are things like what are people searching for? We look at the search logs. We look at things like that because they are signals of demand and signals of intent that haven't yet been realized. And they're leading indicators in every sector in the economy [00:33:45], whether it's at a corporate level, whether it's at a household balance sheet level, there are leading indicators in technology. What are people adopting? And to me, what's really important to pay attention to are rates versus levels. That just means levels are is it ten or a thousand? But rate means what's the rate of growth or change? [00:34:10] And what I've realized about what captures my attention, and how I've tried to have an impact in some areas is anything that's on an exponential trajectory, that is the rate of growth or change is constant even as the levels increase, you really have to get out in front of because most change is sort of slow and steady. Some of it is really abrupt but is relatively foreseeable. Exponential change tends to move really slowly, or feels like it's moving slowly until it moves really quickly. [00:34:55] But when you look backward at how we got there, the rate of change was fairly constant. And so in my career I was first really focused on Amazon and eCommerce. And for at least 10 or 15 years, people have been saying, boy, eCommerce, sure it grew at 15% year over year last year, but it's so big now, it's got to be pretty saturated. And if you look at some of the big research companies, annual eCommerce forecasts that they'll publish this year and every year since I've been in business... Every single year they will say this year's growth rate will be lower than last year's. And every single year, literally, they've been wrong. It's never occurred to them to question, you know, we've got a 10 year track record of being wrong every time, should we consider changing the approach? But it's important because it's easy to miss these things that seem on the distant horizon until they're right on your nose. Climate change is another one. So that's one that I remember 20 years ago. "Hey, guys, somebody is paying attention to this one. So don't sweat it, but be sure to recycle." Well, here we are. And it's snuck up on us. [00:36:38] So I think to me, the two themes that have immediate implications, but I can't really say anything with conviction about what the next six months look like, are the dual pressures of economic pressure and environmental pressure on digital commerce. That is, we need to be sustainable in both senses. And [00:37:09] the economic pressure, if I can summarize it, it isn't really news that, generally speaking, most digital commerce models are less profitable than traditional brick and mortar, if not unprofitable. And that's always been a challenge. But it's been an easier challenge to kick down the road when eCommerce was a very small percentage of the total and a relatively small percentage of the growth. But now that it's all of the growth and an increasing percentage of the total and is in its current state typically dilutive to margins and earnings, there's immediate pressure from the C suite to preserve share during this crisis time. And that means, yeah, we have to keep supporting eCommerce. We may even need to support it more, but we also have to make sure that we are at least on a pathway to profitability. [00:38:17] And so the advice I'm giving all of our customers and anybody that hears me speak is take a very holistic view of the value chain for getting your products to consumers. [00:38:33] The demand chain, where I would argue 80 or 90% of most companies attention is focused, and that means where are our audiences and how do we attract and engage them? But also the supply chain... What do we make? What are the ingredients? How do we package it? In what configurations? Where do we store it? How do we flow the good to a retailer or to the consumer directly? Because the unit economics of fulfilling those online orders has to improve. And they have to improve faster now than they did a year ago, because the immediate impact to our PNL is greater now than it was a year ago. And the environmental issue is an even bigger issue because I don't think we have the vocabulary or the metrics yet to reconcile in a broad way the real costs of some of the decisions that we make day to day. And that, you know, you can look at spreadsheets and conclude, hey, no big deal because our margins are good, but not unlike what the pandemic has done, there are just certain physical realities that no level of magical thinking can overcome. And so we can put it off, but it's only gonna get harder. And it's just like compound interest.  [00:40:05]Many people have seen the chart shown to early professionals that says, "Here are three people, one who started saving for retirement at age 25, one who started at 35, and one who started at 45..." And every time you see that chart, the person that started earliest saved the least, but ended up with the most money. And as it turns out, any development that's on an exponential trajectory is the same thing. The sooner you do the right thing, the better the outcome.  [00:40:44]So what I'm trying to get our customers thinking about now is, listen, nobody's going to fault you in a crisis for being totally tactical, looking out for your team's health and safety and well-being first, just trying to keep in business, keep the lights on, etc.. You know, it may seem wildly out of touch to be talking about five or 10 or 20 year timescales in month four or five of a pandemic. And yet [00:41:23] I would say we don't really have the choice to focus purely on the short term without beginning to make some of the right decisions and investments that will set us up to continue succeeding in the long term. [00:41:39]

Phillip: [00:41:41] That was a masterclass in how to respond to very open ended question. I really appreciate all the insights. I tend to agree. I think we're... I don't know... If you ask a consumer who has trouble also seeing six months into the future, they're probably very bullish right now. We're working on a study ourselves entitled Retail Rebirth. We asked a nationally representative sample of consumers how they're feeling about Q4 and Christmas holiday 2020. And they give you a two thumbs up and say, "Things look great. Super excited about that." But the leading indicators...

Keith: [00:42:30] And is there more behind it? Is that because they think it couldn't get worse? And I'm not saying there's no deeper depths. But I'm sort of wondering, like, is there any qualitative voiceover on top of that?

Phillip: [00:42:42] Oh, yeah, I think there needs to be a voice of reason. By nature of when we're asking the question, we have extensions of PPP, we have extensions of these payroll benefits we're seeing. But we're also starting to see talk of rolling back openings in business, I think we're in a time where things might still... Like the outlook could be positive based on environmental factors, but give it to the end of July, we see bank bankruptcy and foreclosure restrictions start to lift, I think environmentally things begin to change a little bit. And I think the consumer outlook starts to look a little less rosy. If I had to bet, I think that we are probably in a great industry and a sturdy industry in eCommerce as a lot of investment shifts to digitally enabled retail experiences, whether those happen in-store or not. You think about it, right, Keith? You go to the grocery store and there's more digital interaction than you've ever had at a grocery store before, from the payment terminal to kiosks to signage. And I think that we'll continue to see that. I'm really hopeful that, as you said before, those leading indicators continue to point towards strong consumer confidence. And regardless of the shape of the recovery, this is a real... We are compressing a lot of change into a very short period of time. And we're seeing that everything from education, including Harvard, everything from education and to your normal everyday jobs can be done at a distance. And this is the world we're all having to adapt to. Yeah. Last word with one minute on the clock. Keith, any thoughts or anywhere you want to point people if they want to learn more about Profitero?

Keith: [00:45:02] You can visit our web site, Profitero.Com. If you want to search for Commerce Live, I think we're close to finalizing, if we haven't already, the next iteration, which is coming up in mid-September.

Phillip: [00:45:16] Oh wow.

Keith: [00:45:16] So we're going to give folks a little time to enjoy their summer. But I'm certain that we'll have an updated point of view on the fourth quarter by then. And you can find me on Twitter and LinkedIn, Twitter is @KeithAnderson. I got there before the country music star.

Brian: [00:45:39] Well played.

Keith: [00:45:39] Most of my engagement on Twitter, by the way, is from fans of a country musician named Keith Anderson, with I basically have to say, "Wrong, guy."

Phillip: [00:45:48] Being Phil Jackson in the 90's also had its benefits. So I agree.

Keith: [00:45:50] Or you can find me on LinkedIn.

Phillip: [00:45:51] Very good. I think people should follow you. I think you are a treasure trove of knowledge. It's wonderful for you to share it with us. Thank you for spending your time with us and with Future Commerce. Thank you, Keith.

Keith: [00:46:07] Hey, happy to be here. I really respect what you guys are doing with the show and with the company and grateful for your partnership.

Phillip: [00:46:15] Thank you. Thanks for listening to Future Commerce, we want you to lend your voice this conversation. Drop us a line at hello@FutureCommerce.fm, and sign up for our Insider's weekly essay. It's all of what you need to know compressed into just a short 2500 word read on Sunday morning every week. So we really want you... We don't want you to miss the things that will help you shape the future of your business. And remember, we don't have a fixed future. We have the power to shape our future. And that's what we're all about here at Future Commerce. Thanks for listening, and take care.

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