Fine. Now take out gas stations, then take out price, and here’s what’s left: the store-based half of American retail grew about half a percent this year. That’s your TLDR;

August against last August

Total retail trade grew 5.5% over August 2025 in dollars, and 1.5% after price. Core retail, which strips out gas stations and auto dealers, grew 4.9% in dollars and 2.0% in real terms.

The gap between those two toplines is gasoline. Gas station sales were up 20.5% in dollars and down 5.4% in real terms. Americans bought less fuel in August than a year ago and paid a lot more for it. Roughly a third of the total retail dollar growth in August walked through a gas station.

A few other August reads worth pulling out:

• Nonstore retail: +10.4% in dollars, +6.2% real. Still growing at twice the pace of core retail.
• Grocery: dollars fell 0.5% against last August. With food-at-home prices up 2.2% for the year, that’s a 2.7% real decline, the worst month of a year in which grocery hasn’t had a single positive real month.
• Apparel, in the back-to-school month: +3.5% in dollars, -0.1% real. All price. Apparel’s real growth has faded every quarter this year, and August is the first month it went negative.
• Home improvement: +5.2% in dollars, +3.8% real. That’s three straight months of real growth after five straight months of decline.
• Electronics: +7.9% in dollars, +8.5% real, because electronics prices keep falling.

January through August

Eight months in, the year-to-date story hasn’t moved much. Core retail is $3.55 trillion, up 5.2% in dollars and 2.2% in real terms. Total retail trade is $5.17 trillion, up 5.3% and 1.9%. About 57% of this year’s core retail growth is price.

The range I gave you last month for inflation was wrong. My assumption was that All Items overstated inflation for home centers and general merchandise because it’s a third shelter. It doesn’t. Tools and hardware inflation is running hotter than the economy, so I’ve started adjusting for inflation on a segment by segment basis. If you do your own deflation adjustments, pick your deflators carefully. I’d rather tell you that than quietly move the number.

The two retail economies are channels now

I’ve been describing “two retail economies” for a while, meaning categories growing in real terms next to categories shrinking. Eight months into 2026, the cleaner split is by channel.

• Nonstore retail: $1.06 trillion year to date, up 10.3% in dollars and 6.6% in real terms. It’s now 30% of core retail, up 1.4 percentage points in a year.
• Nonstore accounts for 56% of all the dollar growth in core retail this year. $99 billion of $175 billion.
• Everything else in core retail, meaning every store-based category combined: up 3.1% in dollars and 0.5% in real terms.

Half a percent. That’s the store-based economy, in aggregate, after price. And that figure is generous, because store-based retailers book their own e-commerce inside their store categories. Big box e-commerce sales land in general merchandise, not nonstore. Strip those out and physical stores are almost certainly negative in real terms this year.

The usual caveat: nonstore is a proxy for e-commerce, not a measurement of it. It includes vending, fuel dealers and direct selling, and misses the digital sales of store-based retailers. The cleaner number is the quarterly e-commerce report, which had second-quarter e-commerce up 12.4% and at 16.4% of total retail, up 0.8 percentage points, according to the Census Bureau. Same story, different instrument.

The category picture

Nominal and real, January through August:

• Gas stations: +15.7% / -3.0%
• Sporting goods and hobby: +10.1% / +7.2%
• Online and mail order: +10.3% / +6.6%
• Electronics and appliances: +6.7% / +7.4%
• Apparel: +5.4% / +1.7%
• Home improvement: +4.6% / +0.8%
• Restaurants and bars: +4.2% / +0.6%
• General merchandise: +3.1% / -0.4%
• Health and beauty: +1.9% / +1.2%
• Auto and parts: +1.9% / +2.6%
• Grocery: +0.7% / -1.7%
• Furniture and home: -1.6% / -3.9%

Four categories are shrinking in real terms. Furniture down 3.9% which is the worst category in retail and still shows no sign of turning. Home improvement, showing some strength. When people can’t move, they fix.

General merchandise at -0.4% real is the one I’d watch most. This is Walmart, Target, Costco and the dollar stores, combined, running slightly negative after price on a generic goods deflator. It’s a coin flip around zero, not a confirmed contraction. But the largest store-based category in America is not growing in real terms, and it hasn’t been in five of the last seven months.

Electronics is the one category where the real number beats the nominal number. Prices fall, so the same dollars buy more. Some of that is more devices and some of it is BLS quality-adjusting a better device at the same price. Don’t call it unit growth. But it’s the healthiest looking category in the data, and it has been every month this year.

What to do Monday morning

Split your growth three ways: price, channel, and everything else. If you’re a store-based retailer running a 3% comp, you’re at the category average, and the category average is roughly zero after price. That’s not a criticism. It’s the baseline you should be measuring against, instead of the 5% topline in the press release.

Check your gas exposure in the consumer wallet, not just your P&L. Americans have spent $65 billion more at gas stations this year than last for fewer gallons. That money came out of something, and the grocery and general merchandise numbers suggest where.

The question I keep coming back to: if nonstore is 56% of the growth and stores are flat after price, is a 5% retail year actually a good year for anyone who isn’t a marketplace?

I built these two images because I wanted to actually look at the thing we keep calling fragmentation. And I think we describe it wrong. Content was already fragmenting in 2006. Cable, TiVo, early YouTube. The audience was splitting well before the iPhone existed.

What broke is co-viewing. Four people in one room used to be one audience. Now it is four.

Before anyone tells me mass reach is dead, it isn’t. The Super Bowl still does exactly what it always did. So does a finale people decide to watch at the same time. Ehrenberg-Bass has been right about this for forty years: growth comes from reaching people who don’t buy you yet, and that takes reach.

Here is the actual change. We used to inherit a shared culture. Now we have to build one.

Inheriting was free. Buy the right dayparts and you were in that living room by default. Building is not free. It means paying up for the few moments that still assemble people, and then doing the unglamorous work of showing up in four separate feeds for everybody else.

Most media plans I look at are still written as though the first panel is true.

Which panel is your 2027 plan built for?

I got to that number the hard way, because nobody publishes it. I wanted to answer what sounds like a simple question. How many Americans use AI chatbots to find and buy products?

The published answers disagree by a factor of ten.

The estimates run from 2% to over 20%

Here is the spread.

• 2.1% of messages are about a product someone can buy, according to the paper OpenAI’s own researchers published with academic economists in September 2025.
• 5.2% of conversations are about buying things, according to Google’s ATLAS report from August 2026, which covered 15 million conversations with Gemini.
• 21.6% of sessions show some commercial interest, according to a research panel called Measure Protocol. Only 7.1% showed a real signal that someone was close to buying.
• 19.2% of conversations are commercial, according to Profound, a company that sells AI visibility software.
• “Roughly 20% of queries in ChatGPT have a direct commercial intent,” according to OpenAI’s head of global ad sales, speaking at Cannes Lions in June 2026.

Four of those five are about ChatGPT. Same rough time period. Numbers ten times apart.

Two definitions are doing all the work

The first problem is what counts as shopping.

“What laptop should I buy for under a thousand dollars” is clearly shopping. What about “help me plan a beach trip”? What about “how do I fix a leaky faucet”? The beach trip ends in a hotel booking. The faucet ends in a hardware store run. OpenAI’s researchers count only the laptop, and that gets you 2.1%. Count anything that touches a buying decision and you get 20%.

Neither one is wrong. They are just answering different questions.

The second definition is what you are counting. A message is the actual thing you type. A conversation is the whole back and forth, usually about five messages. Profound counts conversations. OpenAI’s researchers count messages. Mix those up and your answer moves by five times, in whichever direction happens to flatter your argument.

Watch who is doing the counting

Two of these numbers come from scientists. The OpenAI paper and Google’s ATLAS report both publish their sample sizes, their methods, and the exact instructions they gave their classifiers. You can check their work.

Most of the others come from companies that do better when the number is big. That does not make them wrong. But it does mean you should want to see the method, and in most cases it has not been published.

The 20% figure needs the most care. It was said out loud at an advertising festival by the person who sells ChatGPT’s ads. There is no paper behind it. No sample, no time period, no definition of what counts. It also happens to be the highest defensible number available.

Here is the part that bothers me most. OpenAI has not said how many messages ChatGPT handles since July 2025. That figure is fourteen months old now, which is about twenty years in AI time. There has never been a US-only version of it. The one number you most need to size any of this does not exist.

My best estimate, and how I got there

Start with 2.5 billion ChatGPT messages a day worldwide, which is OpenAI’s last published figure. About 19% of ChatGPT’s traffic is American. Group those messages into conversations. Then apply the commercial share.

You land at about 566 million commerce conversations a month in the US, with ChatGPT alone.

I checked that a second way. Profound publishes its own worldwide count of commercial conversations. Take the US share of that and you get 448 million. So the range I use is 448 million to 566 million.

Remember that this is one chatbot. Gemini, Copilot, Claude and Perplexity are not in the number at all. Comscore has ChatGPT at roughly 69% of American AI assistant users, so counting everybody would push this up by a third or more.

Some of my assumptions can’t be validated (yet):

The first is that a conversation runs about five messages. That ratio is implied by the OpenAI research paper rather than stated in it, and if the real number is four or six, my estimate moves by 25% in either direction. The second is Profound’s 19.2%. Profound has never published the rules it uses to decide what counts as a commercial conversation, so I am trusting a classification I cannot inspect, from a company that sells software to brands who want to show up in AI answers. I used their number because a second, independent route landed close to it. But that is reassurance, not proof.

This should get better. Similarweb and NIQ say they will start measuring shopping inside ChatGPT and Gemini by the end of this year. OpenAI could publish a current message count tomorrow and settle half of this. Until somebody does, everyone working in this space is estimating, and the honest move is to show the arithmetic so we can all argue with it.

What this looks like compared to e-commerce sites

Monthly US visits, according to Similarweb, with my ChatGPT estimate slotted in at the middle of its range:

• amazon.com 2,300 million • ebay.com 512 million • ChatGPT shopping conversations 448 to 566 million • walmart.com 492 million • temu.com 357 million • etsy.com 250 million • target.com 226 million

ChatGPT sits right alongside eBay and Walmart, and at about a quarter of Amazon. That is a real number. It is also not the number some people want it to be.

It is fair to ask whether any of that turns into a sale. ChatGPT can take your money now. Instant checkout is live, and Best Buy checkout showed up in the wild this week. But OpenAI has never published a transaction count, only about 30 Shopify merchants were actually live in February against a launch promise of more than a million. For now this is a discovery channel with a cash register in the corner.

So this is not ChatGPT eating retail. This is ChatGPT showing up as a large commerce property, about the size of the second tier.

Where I could be wrong

A conversation is not a visit. Someone on walmart.com has already decided to shop. Someone asking ChatGPT about running shoes may be a long way from buying anything. The comparison is fair on units. It is not fair on intent.

The traffic AI actually sends to retail sites is also still tiny. Amazon got about 0.16% of its visits from AI referrals in June 2025, according to Similarweb. Adobe reports that AI referred traffic to US retail sites more than doubled in the year to May 2026, but has never published what share of total traffic that represents. Fast growth on a base nobody will state.

One thing cuts the other way. This is ChatGPT alone, so every other assistant is upside on the number.

What to do about it Monday

Stop asking whether customers are shopping inside AI. Enough of them are that it is worth your time now.

Start asking whether your products show up when they do. Your product data, your reviews and your specs have to be readable by a machine that will boil them down to two sentences. Most product pages are still written for a shopper with a browser and time to scroll.

Anyone quoting one of these numbers at you should be able to tell you which one they mean, and where it came from.

Which number have you been using?

I’ve had a personal interest in productivity since I first found David Allen’s Getting Things Done in 2001. I spend most of my working hours on a Mac and, like most of us, I use a wide variety of tools to make the work more comfortable. But there’s a small handful that give me actual joy every time I use them. Mostly because they take the friction out of something I do constantly, or because they eliminate something that used to be reliably annoying. The best of them solve a problem before I’ve consciously noticed it was a problem.

This isn’t my usual content. I’m posting it mostly because I want the reverse: I want to hear what’s on your list that isn’t on mine.

One disclosure before I get into it. The Raycast link below is an affiliate link, and it’s the only one in this piece. I’m using it because it gets you 10% off if you decide to subscribe, which seemed worth passing along. It also pays me a commission, and I’d rather say that up front than have you wonder. Every other link here is an ordinary link that earns me nothing.

Raycast

*[IMAGE: Productivity_Tools_Logos/raycast.png • link: https://raycast.com/?via=jason-goldberg (affiliate, 10% reader discount)]*

I’ll start here because it’s the tool I probably use most in a normal day.

Raycast is in the category people call Spotlight replacements. You hit Command-Space, you get something much better than Apple’s search, and then it keeps going well past search.

The first tool I used in this category was Alfred, and I was an avid user for years. Alfred is still genuinely good. I think a lot of us drifted to Raycast because we got impatient with the pace of modernization, and I’ve never looked back.

Raycast does far too much to list, and I suspect every user has their own shortlist. Mine:

• It’s my app launcher. Command-Space, a few letters, I’m in the app.

• It’s my file search. A few words and it finds the file.

• It’s my hotkey manager, which means I rarely type an app name at all. Mac modifier keys get messy fast once you’re stacking Command, Option, and Control. Raycast lets you set up a hyper key, and mine is Caps Lock. Tapped once, Caps Lock still works normally. Held down, it’s a modifier. Hyper+F is Finder. Hyper+Z is my browser. That one change reorganized how I move around my machine.

• It’s my window manager. Hyper plus an arrow key throws the focused app to a half, a quarter, or another monitor. I reconfigure two screens all day long.

• It’s my snippet library and my clipboard history, so anything I’ve copied recently is searchable.

• It’s now the front end for most of my quick AI queries. I used to run those in Gemini. Now I type the prompt into Raycast, hit Tab instead of Enter, and it goes to whichever model I’ve chosen. I can share the screen I’m looking at, which I do constantly when troubleshooting. And it’s easy to build small skills: highlight an email, have it fix the typos and grammar in my voice, paste the clean version back.

The extension ecosystem is the other half of the value. Raycast talks to most of the other tools I use. My favorite is an extension called 2FA. Apple already does a nice thing where a texted authentication code gets offered to you automatically in the browser. It doesn’t work for emailed codes. The 2FA extension checks my Gmail and Outlook for recent authentication emails, pulls out the code, and offers to type it. Every time I don’t have to tab to an email client, find a code, copy it, tab back, and paste it, I say a small thank you.

And I think Raycast is a model of how to run an app company. The CEO and the developers are visibly active. They publish real teaching content. They run a Slack channel and answer in it. It feels like they’re actually trying to get ahead of what their users need.

CleanShot

My favorite screen capture tool, and I take an enormous number of screenshots for work.

It’s organized in a way that fits how I work. Captures go into my native file system and onto the clipboard by default. I have separate hotkeys for the different capture types I use often, including full scrolling website captures, which are genuinely useful in my line of work. The annotation tools are good and I use them daily. The video capture and editing features have gotten interesting.

I used Snagit for many years and it’s a good product. It also got quite bloated. CleanShot has all the utility I actually used, runs much faster, and integrates cleanly with the Mac and with Raycast.

1Password

I haven’t typed a password in a very long time.

I’ve used password managers for years and I’ve moved my whole family onto one, including the older adults in my life I help support, which has been a relief for everyone. 1Password is my current choice.

When someone asks me what my password is for something, the honest answer is that I don’t know. 1Password generates a complex one for every service and types it for me. I’ve never seen most of them.

It’s also my authenticator. All the six-digit codes moved there, which means they’re available on every device I own instead of trapped on one phone, and they’re backed up. And it holds my passkeys, so more and more logins are now a single quick approval. It’s the first utility I install on any new machine, because without those credentials I can’t do anything.

PopClip

A small utility I’m not sure enough people know about, and one I use nearly as often as Raycast.

It hooks into the native Mac highlight behavior. Whenever you select text, PopClip works out what kind of text it is and pops a small context menu right there with the things you’re most likely to want:

• Highlight a word, run a search.

• Highlight a URL, open it.

• Highlight text, convert the case.

• Highlight an address, open it in Maps.

That’s it. It’s a context-sensitive way of acting on small pieces of text, and I use it so often that I forget it isn’t part of the operating system.

Readwise Reader

Part of being a knowledge worker now is keeping an archive of interesting things. I consume a lot of content across a lot of platforms, and my brain only rests once I know something is safely stored where I can get it back. Candidly, most of it I never return to. Knowing I could is the point.

Reader has a plugin for every browser. When I hit something worth keeping, one hotkey saves a copy plus a link to the original, lets me tag it, and lets me route it to Archive, Read Later, or Inbox depending on whether I want to see it again today. It captures emailed content if I forward it. It handles PDFs and full web pages natively. The search is fast and the hotkeys are good enough that my hands never leave the keyboard.

I’ve kept an archive like this for a long time, going back to the early Evernote days. What makes Reader better is the speed and the fact that it’s rarely missing anything. Every time I’ve sent the company a feature request, I’ve gotten a polite note back showing me where that feature already was.

The real unlock is the MCP connection. Reader is wired into my AI agents, so Claude can search my saved articles and my tags. Whenever I start a research project, one of the first places it looks is my own archive, filtered by the tags I’ve already applied. My reading history became a primary source instead of a graveyard.

Mylio Photos

In my line of work I deal with a punishing volume of photography: screenshots, samples of digital experiences, pictures of stores, pictures of shelves, pictures of things I’ve built. I have somewhere around 60,000 photos taken inside retail stores over the course of my career.

Mylio stores, syncs, and organizes all of it. It’s local and native, keeping multiple copies across devices I own, and it doesn’t require the cloud for anything if privacy matters to you. It puts optimized versions on my phone so I’m not hauling full-resolution files around, and if I need an original, the phone app pulls it down on request. I never think about any of this, which is the highest compliment I can pay a sync tool.

The organization and search tools are deep, and the AI categorization means I can usually find an image by typing the subject even when I never tagged it. It’s the best photo organizer I’ve owned.

Mylio also gets the customer relationship right. They have a team producing educational content and answering questions, a weekly webinar on features or use cases, and an unusually open development backlog. They’re in advanced preview of a major replatform right now with much deeper AI integration, and I’ve been playing with it and want to move my archive over.

The part that actually annoys me

Companies like Raycast and Mylio are so open about what they’re building, and so fast about shipping it, that they’ve ruined my patience for the legacy apps I’m required to use.

I have no idea if this is true, but I imagine there’s an enormous engineering organization at Microsoft working on Office. There are features I’ve used every single day for six years on mobile Outlook that still aren’t in desktop Outlook. I bounce between the web app, the iOS app, and the Mac app to get one job done, because certain things only exist in one of them. These are small annoyances I’ve been routing around for years, and they never get fixed, while new features I have no use for keep getting announced.

That would be irritating on its own. It’s worse when much smaller and far less resourced companies are so clearly doing it better. Raycast and Mylio are raising the bar, and some of the legacy apps are going to get left behind if they don’t notice.

Your turn

That’s the list. These tools make me happy, which is a strange thing to say about software, but there it is. I hope one or two are new to you.

What I actually want to know is what’s not on my list that you expected to be. Or what tool or habit gives you the most joy in your own day.

These 5 retailers captured 48% of all new spending in 2025.

1. Amazon $47.2 B
2. Walmart $22.8 B
3. Costco $16.9 B
4. TikTok Shop $6.1B
5. Home Depot $5.2B

Here is my best estimate of the top 5 retailers in the US in 2025, and what their GMV is. Note that this include Walmart only, not Sam’s Club $93B in US GMV, then Walmart Inc is the #1 retailers in the US in 2025.

Amazon $536 B
Walmart $495 B
Costco $ 200 B
Home Depot US $152 B
Kroger $148B

These 5 retailers alone represent 29% of all US retail sales (excluding Restaurants, Gas, and Automobiles).

His list was slightly historically inaccurate (due to how the source used to define retail), and hadn’t been updated in a while. So i made him (and you) a new one:

Or if you want to include GMV numbers in your version:

It now lives on a page that updates as companies report: retailgeek.com/comps

1. Retail is growing at two speeds again.

Across the 47 store retailers that reported a calendar Q1 2026 comp, the median was +2.9%. Across the 22 companies that disclose a digital growth rate, the median was +12.5%. That gap is the widest it has been since early 2021.

Digital had a real hangover after COVID. From mid-2021 through mid-2023 the median digital growth rate sat at or below zero in four of nine quarters and never topped 10%, while store comps stayed positive throughout. Digital only pulled away again in late 2024, and the median has climbed from about 6% then to 12.5% now.

2. Growth is broad again, at least through Q1.

In early 2024, barely more than half of tracked retailers were posting a positive comp (27 of 46 in Q1 2024). In Q1 2026 it was 40 of 47, or 85%, the broadest quarter since 2021. The Q2 read is still filling in (41 companies so far) and looks a notch softer: median +2.0%, with 27 of 41 growing. I’ll update the page as the September reporters land.

3. For a lot of retailers, digital is all of the growth.

Comps include digital. So a +1% comp next to +19% digital growth means the physical store business shrank. That is the pattern right now, and it is not just a couple of names:

• Walmart U.S.: comp +2.6%, e-commerce +24% • Kroger: identical sales +1.0%, digital +19% • Lowe’s: comp +0.2%, online +16% • Albertsons: identical sales -0.8%, digital +13% • BJ’s: comp +3.1%, digital +30% • Home Depot: U.S. comp +1.3%, online +11%

All most recent reported quarter, as reported by each company. Best Buy is the counterexample worth noticing: comp +4.5%, online +5.1%.

A word of caution before anyone puts these in a deck: every digital number is on the company’s own definition, and the definitions are all over the place. Walmart’s includes advertising and marketplace revenue. Some count store pickup as digital and some don’t. The page shows each company’s definition next to the number, because the definition is half the story.

Also: 14 of the 52 companies never disclose a digital growth rate at all, and a handful that used to have stopped. Digital disclosure in retail is still a courtesy, not a standard.

What to do with this Monday morning: if you benchmark your own comp against “the industry,” stop using a single average. Pick the six to eight retailers that actually compete for your customer and compare against them, on their stated definitions.

Which comp-versus-digital gap surprises you most? And who’s missing from the tracker?

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We’re unapologetic fanboys of Apple and great retail experiences on this show, so for Apple’s 50th anniversary — and the 25th anniversary of the first Apple Store — we brought on the person who actually created the modern Apple Store concept: Ron Johnson.

Ron built his career in 10-year cycles, and each one changed retail. At Target, he dreamed up the first designer collaboration in retail history (Michael Graves) and helped turn a Midwest discounter into a place people bragged about shopping. At Apple, he opened the first stores in 2001 — when Gateway was folding, Dell was winning, and everyone thought a 5%-market-share computer company had no business signing mall leases. He named the Genius Bar (Steve Jobs told him nobody would buy it), killed the cash register with a mobile checkout built on an iPod Touch, and left in 2012 with a million people a day walking into Apple Stores. Then he took the hardest job in retail — CEO of JCPenney — and he’s refreshingly honest here about what went wrong.

What we get into:

? The Michael Graves deal, and why “design” beat “fashion” at Target

? Why Steve Jobs hated the idea of mall stores — and how Ron changed his mind

? Where the Genius Bar name came from, and the meaning behind it

? Killing the cash wrap: mobile checkout in 2008, self-checkout in 2010

? Spending the morning of 9/11 with Steve Jobs

? JCPenney, situational arrogance, and the change-management lesson he owns

? Why omnichannel won — stores didn’t, online didn’t

? What agentic commerce and AI actually do to shopping (and Satya Nadella’s “token capital”)

Ron’s book, Shop Different, comes out September 22nd from HarperCollins. It’s built around the Harvard Business School case study of his career — Harvard’s most popular first-year case — and it’s going to be one of the must-reads of the fall for anyone who loves retail. Links to buy it are in the show notes.

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of ReFiBuy.AI and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Episode 340 of the Jason & Scot Show was recorded on Friday, June 19th, 2026

Transcript

Jason:
[0:22] Welcome to the Jason and Scott Show. This is episode 340 being recorded on Friday, June 19th. I’m your host, Jason, Retail Geek Goldberg. And unfortunately, Scott had an unexpected emergency and isn’t able to join us. But we have a very special guest in his place. Regular listeners of the podcast will know we are unapologetic fanboys of Apple and awesome retail experiences on the show, and this year marks the 50th anniversary of Apple. So who better to help us celebrate than the actual creator of the modern Apple store concept, Ron Johnson. Welcome to the Jason Scott Show, Ron Johnson.

Ron:
[1:02] Hey, it’s great to be here, Jason. Thanks for having me, and it’s a big year for Apple. You know, the 50th year for the start of the company, but it’s also the 25th anniversary of the year we opened the first store. Yeah.

Jason:
[1:15] Yeah, that’s amazing. That was Tyson’s Corner, right? Was that?

Ron:
[1:19] Tyson’s Corner. Yeah, Tyson’s Corner and Glendale opened the same day, May 19th, 2001.

Jason:
[1:26] That is amazing. It kind of dates me because I do remember a world without Apple stores. It’s sad to think I’ve been doing this so long. You, of course, were a very young man when you started that first store. And Ron, I’m super excited because I understand that you have written a book called Shop Different that’s going to release this September, which is coming fast, September 22nd. Why did you decide to write a book? What’s the thesis of the book?

Ron:
[1:54] Yeah, well, I wasn’t going to write a book, but it turns out there’s this case study that was written at Harvard Business School that’s used by almost every business school. And to this date, it’s Harvard’s, according to the school’s, most popular first year case. And I’ve gone back to the school a couple of times and talked. And it’s just packed with lessons. And that case looks at my career from Target, Apple, and JCPenney and asks the questions, what worked at Target, what worked at Apple, and what happened at JCPenney? And as I thought about it, I said, you know, the way to give back is to really share the inside story of all of those. And after a lot of time, I decided, you know, I’m going to write a book. And I found a great person to help me write it and we’ve been working on it for three years and HarperCollins is publishing it and it comes out September 22nd, this September, And I think it’s a really beautiful book.

Jason:
[2:51] Well, we are all really excited. Obviously, everyone that is generous enough to listen to this podcast is someone that loves retail. And this is unquestionably going to be one of the must-reads for us this fall. So thank you very much for writing it. We’ll double-click on it a little bit more. But one of the ways we always start the show, and it’s kind of a perfect segue, is kind of understanding the background, of our guests. And so we alluded a little bit to Target. Is that where you started your retail career?

Ron:
[3:16] Yeah, I did. I grew up in the Twin Cities and went to Stanford Harvard Business School and then decided coming out of business school, I didn’t want to go into investment banking like everyone else. And I had offers to do that. So I want to go into retail. But you got to remember, your listeners will know this. The 80s were the greatest period of retail innovation of any decade in the history of retail. And just like venture capital today is funding ai venture capital is funding retail growth you know 84 is when mickey you know repositioned the gap and that’s when the limited started to open all their stores and that’s when all these big off, mall big box stores started to come out and when the outlet center was invented and on and on and so the 80s were a big time for retail so i said, I’m going to join that parade. And I started at a division of Target called Mervyn’s, which was their most successful strategy at the time. And I started unloading trucks down in Glendale, California.

Jason:
[4:19] Yeah, I do feel like that was a golden age of retail, although it’s always a golden age. There’s always cool stuff happening. But I’m going to say the vast majority of great people we get into retail, especially back then, were not coming from Stanford and Harvard. So, you were probably a little bit of an outlier with the super fancy degree. So, we’re grateful that you did that. It’s maybe a little more common path today. And I’ve spent a lot of time walking the halls of Target. And one of the things I hear a lot about your tenure there is you were intimately involved in the Michael Graves deal, which I would argue is seminal at Target. Can you tell our listeners a little bit about that?

Ron:
[4:57] Just a quick, this would be interesting.

Jason:
[4:59] Yeah.

Ron:
[5:00] You know, when I started my career, there were 13 regional discounters. You know, Walmart started in Veneville, was doing rural stores, and Target was in the Midwest. And wherever you’re from, there is a regional discounter. Just like there were department stores that were local. And by the 90s, it was pretty clear that only three were going to survive. And that was Walmart and Target. And then Kmart still had some life left at the time. But Target had the fundamental challenge of how do we beat Walmart? Because in the 90s is when Walmart started to open up in suburban areas. And Walmart had a significantly lower cost structure.

Ron:
[5:37] So Target was known for hip fashion. But the problem is, you know, fashion is you get a good markup. But by the time you mark it down, you don’t make much more than you do on basics. And so I had this idea that Target should come up with a third category, which was design. Design would let you get the markup of fashion. It’s unique product. But design products should be in the assortment for a decade, not a season, like apparel can be. And so we launched a partnership. It was the first retail collaboration, believe it or not, ever. And these are commonplace today. But we went on, got Michael Graves to design home products for Target. That was my idea, my initiative I led with the team. And it just turned out to be fabulous. You know, the 90s had gone through a period of design. It was a decade of design. And it was happening, the Volkswagen Beetle. You know, Johnny and Steve did the iMac in 98 when that launched. You know, on and on and on. It was a decade of design and we caught the wave at Target. And during my time at Target from 90 to 2000, the stock went up 12 times.

Jason:
[6:45] Yeah. Yeah. Yeah. Yeah. Hopefully you, you got to hang on to some of that equity, but that to me, that, that Michael Graves collab started this, obviously it started collabs across all of retail, but particularly Target, it started this whole surprise and delight thing that, that, uh, Target was.

Ron:
[7:01] Well, that’s what, you know, Target, you know, they had to get people to, And part of it was, you know, there was a lot of status in the 90s about where you shot. And people would whisper to the friends, oh, I got this at Target.

Jason:
[7:14] Yeah.

Ron:
[7:14] But when we did design, it was legitimate. And people started to shout, look what I found. And people would go on these Target runs to see what was new. Because we were really, really exciting merchandise. Some was designed by us. Some was from Europe. You know all these things we were doing and then you know of late unfortunately target lost its way a little bit you know hopefully target target finds its way back um and the stock price has gone up yeah yeah and i think they will, But that was a great period for Target.

Jason:
[7:50] Yeah.

Ron:
[7:51] And I love being a part of it.

Jason:
[7:53] Yeah. They did have a good quarter last quarter. So we’re hoping that’s the beginning of a turnaround for them. I think that’s funny. It used to be that you were kind of quiet about your patronage at Target. But during that era, it became Target. And I think of you and Michael Francis as really kind of making it cool and hip to shop at Target.

Ron:
[8:14] Michael did. Target had great marketing. You know, there’s a guy, John Pellegrin, who did an amazing job and Michael was at the department stores and he came to Target and did a fabulous job building out the Target bullseye, that it became one of the most recognized symbols, you know, in business, not just in retail.

Jason:
[8:37] Yeah, it’s this whole story is going to come full circle because he’s at the gap now. Um so so what what i’m curious and i honestly don’t know the answer to this is how how did you go from target to apple were you recruited were you looking for your next challenge interesting.

Ron:
[8:54] I got a call one day from a recruiter and he said ron remember in 1991 he said you were 20 How old was I? I was in my late 20s. And he said, you know, there’s a guy named Mickey Drexler who wants to open up a new concept called Old Navy. Would you like to talk to him about running it? And I said no, because I was early on in my career at Target and wasn’t ready to move. And he said, you know, you turn that down. Look at how Old Navy’s done. I’ve got another one for you. And he said, Steve Jobs wants to open stores at Apple. Yeah. He asked me to look for who’s that guy doing all the design work at Target because Steve loved design. And so I decided to go out and meet Steve and I met him. We interviewed for three hours the first night and I walked away saying, I have to work for this guy. You know, it was one of those moments and Apple was struggling. You know, it wasn’t doing well. Target was on fire. People couldn’t understand why I would do that. And then a lot of my friends said this was 2000. I said, Ron, the dot-com boom is what’s happening in retail. Don’t go to Apple. Go to one of the dot-coms. Start a dot-com company. I said, no, no, I want to go to Apple. I believe in physical retail, and I believe it’s a great brand, and if we do the stores right, it can really make a difference.

Jason:
[10:16] Yeah.

Ron:
[10:16] So I joined Apple.

Jason:
[10:18] That’s amazing. And I do think, in fairness, in hindsight, that seems like a no-brainer decision, but people have to remember that at that point, It was not clear that Apple was going to be the runaway success that they’d become. And it for sure was not clear that manufacturers should own their own retail stores. Like there was.

Ron:
[10:36] Well, no one thought that was a good idea. Well, remember back in 2000, the PC had 95% share. And who was the big PC one? Dell.

Jason:
[10:44] Yeah. Direct to consumer online.

Ron:
[10:45] They had built out online shopping starting in 94 or so. And they were just killing it.

Jason:
[10:50] Yeah.

Ron:
[10:51] But the reality is, was selling mainly to business, not to consumers.

Jason:
[10:54] Yeah.

Ron:
[10:54] But then Gateway had gotten up to 300 plus stores. And when we’re going to open the Apple stores, they were folding.

Jason:
[11:01] Yeah.

Ron:
[11:02] You know, they closed down the year we opened our stores. So people are going, what’s Apple doing? They can’t make money in stores. Dell’s winning. Apple’s got 5% market share. And they’re going to put stores in malls, expensive real estate in those big stores. These guys are crazy.

Jason:
[11:19] Yeah. Yeah. So I can imagine some people were questioning your career choices at the moment.

Ron:
[11:25] And then your choices and my business strategy. Yeah, mostly it wasn’t. It wasn’t just that Apple was going to open stores. It was that we weren’t going to test it. We were going to open them and we’re going to do everything different.

Jason:
[11:39] Yeah. And. The I I’m trying to put myself in your shoes and I literally can’t do it. But like you’d both to work with someone like Steve would be like so exciting and such a privilege. But it also would be, quite frankly, terrifying because he’s he’s famously fast, sharp and not not very tolerant of people that that can’t keep up.

Ron:
[12:02] That’s true. But, you know, that’s one of the reasons I wrote the book. And one of the things I’m delighted with is I was able to portray the Steve I knew and the Steve I knew would be the same kind of person Johnny Ive knew and Tim Cook worked with. You know, Steve was actually a great person to work with. No one inspired you more, taught you more, helped you more. And if you were one of his close, you know, I was on the executive team. He was a great leader. He delegated better than anybody I’d ever worked with. High standards you know and you know he it could be tough sometimes yeah but that’s what you want you want to work with people who are smarter than you who stretch you who challenge you if you don’t you know i think that’s a big issue.

Jason:
[12:49] No for sure i i’m curious how like how did that work like did was he super involved did you have to build the concept store and did he get did he get involved in approving it like did you.

Ron:
[12:59] Have to he was very involved he he was involved in the things he loved, so he cared about design so he got involved with the development of the initial store, and from then on he kind of helped with some of the big like the fifth avenue store the all glass cube yeah you know but after that he just delegated he didn’t get involved with the culture the people who i hired, it was really his input was in the design of the store And, you know, we had a lot of great conversations early on about conceptually how we are going to compete. And those were really good conversations. Like, he hated the idea of putting stores in malls. You know, but I said, Steve, your goal is to reach the 95% who don’t use a Mac. They’re not going to get in a car and drive 10 miles to a store. You might get them to go 10 feet out of their way. You know, and Steve, once he understood that, he said, okay, we’ll be in malls.

Jason:
[13:57] Awesome.

Ron:
[13:58] So, you know, and.

Jason:
[13:59] Yeah. So you were able to convince him. He was open-minded. Yeah.

Ron:
[14:03] Steve is extremely open-minded. You know, his strength is his ability to innovate through conversation. You know, some people call it, David White would call it conversational commerce. You know, but it’s really a great conversation is when no one has an agenda, they want the best idea to win. And you’re both absolutely present. You’re debating an issue. You’re bringing your own personal geography to it and the best idea wins and steve never never never did something because it was his idea, it was only if he thought it was best but he was very open to input and there are many examples of that throughout the book you know.

Jason:
[14:50] That’s that’s gratifying to hear i i am curious by the time you left apple stores were were universally regarded it as a wild success. And there are all these crazy stats about the revenue per square foot being, higher than Tiffany’s. And it was at the top of the ecosystem. And they say imitation is the most sincere form of flattery. Everybody, of course, was inspiring their new work based on the success of that store. I’m kind of curious, though, from you, from the horse’s mouth, what do you think about and what are you most proud about in that Apple concept? What do you think were… There was a lot of innovation in there, but what was the secret sauce that really caused consumers to resonate.

Ron:
[15:30] The secret sauce is we created a place that people wanted to belong. You know, the store, it was, and it was interesting because it was the time of the internet, when the internet was all about a transaction. And if a store was going to survive the internet, you had to build an experience. And so part of the benefit of the Apple store coming out at the time when the internet was just taking off is they were our competitor. And we had to do something that they could never do. you know and so ultimately what i’m most proud of i think is you know i was in the apple store in milan two days ago a beautiful store and the experience was fantastic, and the store was essentially the same layout same vision that we established 25 years ago yeah with all the changes and that that’s hard to do in retail to keep something, vibrant and working but i think the strength of the apple store has always been its people, you know they’re not on commission they love people they love serving people, they’re not in a hurry you know they take time to welcome you to the store to get to know you to find out what you’re trying to do and then they present a solution that’s exactly what you need not more than you need that.

Ron:
[16:42] You can take home today you know and then the store’s got great support, after you buy whether you want to learn more through classes and theaters or you want to get help like in a genius bar yeah but it just it turned out it was just a well-conceived store, that has stood the test of time and when i left you know i think there were 370 stores open, we had another 50 in works today apple has 530 stores so in our first 12 years we got about 80 of the footprint done globally and you know in the u.s you know there’s Apple stores within, you know, seven, a 10 minute drive today of 90% of the population.

Jason:
[17:26] Yeah. So it’s, it’s, but I have to digress for one second. When you walk into Milan, do, does anyone know who you are? Do people recognize you?

Ron:
[17:34] They didn’t this time.

Jason:
[17:35] Okay.

Ron:
[17:35] But it’s interesting. Most of the stores I visit, especially in Europe, people recognize me.

Jason:
[17:42] Yeah.

Ron:
[17:42] Because, you know, they stay around a long time. You know, like I was in the niece store three weeks ago and I was having this girl. I said, you seem so familiar. She goes, Mr. Johnson, I helped you five years ago. I had forgotten. But she didn’t remember.

Jason:
[17:56] That’s amazing.

Ron:
[17:56] She’s worked at that store since it opened 16 years ago.

Jason:
[17:59] Yeah. And in some ways, I feel like that, I know it’s not directly analogous, but the evolution of consumer electronics in the U.S., like, you know, there was a time when there was this big battle between Circuit City and Best Buy. And Circuit City was the commission-based model. Best Buy was not. And obviously, Best Buy won because they’re here and Circuit City isn’t. But Best Buy was very low touch, right? And, you know, there was huge turnover. And so then the Apple stores emerged and, they’re non-commissioned but much higher touch. And you know they certainly you you invested a lot more in you.

Ron:
[18:32] Know best buy under Herbert Jolie Mr. Jolie did a great job oh yeah he had a book what I found kind of funny is, our two-word goal for the apple store for service was to enrich lives, and in 2012 or 13 best buy said our goal is to enrich lives yeah but they started to put in store within a store throughout the store You know, Apple was probably the first one, and they have many of those, and those are sometimes staffed by partners. You know, so it’s become a great place to buy consumer electronics.

Jason:
[19:05] Yeah.

Ron:
[19:06] And I’m a great admirer of Best Buy products. They’ve survived. It’s a difficult category, but they’ve done a great job.

Jason:
[19:13] Yeah, no, I totally agree. And I am also a Best Buy alum. So I appreciate that. It is funny, though. It was almost a self-fulfilling prophecy. Part of the reason that we had to open shopping shops at Best Buy is we used to have this great traffic driver in the middle of the store called Music. And people used to buy music on these plastic circles. And Apple may have had a role and making those plastic circles a little less popular. And so we had to find alternative uses for some of that excess footprint in the middle of the store. Oh, that’s so funny. That’s true. Yeah. You know, my moniker is Retail Geek, and I was accidentally involved in Best Buy’s acquisition of Geek Squad, which was founded by an entrepreneur in the Twin Cities.

Ron:
[19:56] Yeah, that was like 1996.

Jason:
[19:59] Yeah, Robert Stevens. History. Yeah.

Ron:
[20:02] I knew Robert.

Jason:
[20:02] Yeah, Robert.

Ron:
[20:03] And then he moved to the Bay Area.

Jason:
[20:05] Yeah.

Ron:
[20:05] After later, after he sold Geek Squad to Best Buy. Yeah.

Jason:
[20:10] He would say after after Geek Squad acquired Best Buy is how he would he would put it.

Ron:
[20:14] He would say, no, it’s kind of funny because when I presented the idea of the genius part of Steve, I first talked about we’re going to serve people through a bar.

Jason:
[20:21] Yeah.

Ron:
[20:21] We’re going to dispense advice just like a bartender dispenses alcohol. He goes, I like that. He goes, what are you going to call it? I said, I’ll come up with the name. I don’t have it yet. So I called him up a week later and said, genius bar. He goes ron you can’t call it that and he said because the people who are going to be behind the bar, they don’t know how to talk to people if you want to call it the geek bar you can well he wouldn’t have known about the geek squad steve wasn’t in touch with that sure but that you know it’s interesting that that was the name that you know, the original founders of the geek squad chose because that’s kind of who technologists were back then they were these people that love technology kind of geeks and they spend all their time over themselves and yeah we’re great with customers but they know how to fix products yeah uh, but we we changed flipped that on said and called it the, probably the most you know relevant part of the store to most people.

Jason:
[21:16] I would i i certainly would agree it’s a lot of pressure though to get a title like genius in your title seems geek seems a lot lower pressure i will.

Ron:
[21:24] Say can i explain to you why we did that yeah please you know the key the key, you know i really think people want to have meaning in their life, and when we were opening our first store i said think of the i’m from minneapolis you know we’re gonna have our first store at the Mall of America in Minneapolis, we’re going to hire three geniuses, maybe it’s four. You have to be, you’re going to be credit for being the smartest Apple person, in Minneapolis and St. Paul. Well, if you love technology, what a great job. You are the smartest Apple person in the state of Minnesota. You know, and that gave people meaning and they’d stand behind that bar and they had to answer any question on the planet. And they were proud. that they could do that and they were proud that they were a genius at a genius bar yeah and that’s just part of conveying meaning and that’s really important to people who work in retail.

Jason:
[22:19] That that seems totally fair and in that same era robert and i were we’re desperately telling everyone that geek is not a pejorative so that was kind of our right you know still a negative thing back then so i do want to touch on two things that are super interesting to me about the genius bar i i worked for a lot of retailers that opened stores and were inspired by by apple, And my hypothesis is they always got it wrong. Like, of course, every attribute of the store contributes to the experience and the success. I’m not trying to say there’s one thing that makes you success and one that not. But the things that people always noticed and tried to emulate are like negative space, wooden tables, better lighting, right? And those are all important things. I’m not saying they’re not. But when I look at Apple stores and say, hey, here’s why they stood out. Here’s why they won the hearts and minds of their consumers. Steve Jobs might disagree with me. It wasn’t as much about those design elements as it was the service model that you had. You had more people per square foot, that you had those people well-trained, that you had the service in the Genius Bar. And so I always felt like all these emulators were emulating kind of the wrong parts of your plan.

Ron:
[23:28] You’re exactly right. You know, when I left Apple in 2012, we had a million visitors a day to our stores. I think a million people a day came to the Apple store and they came for, like we said, there were a lot of reasons to come. And it wasn’t about buying a product. It was so many other things. And but, you know, the reality is most people, what they call innovation is really improvement. Because when they do innovation, they go look at what someone else did, and they apply it to their store or their situation. And the customer sees that as a copy. It’s good to do, but you never get it right. You know, Microsoft tried to open retail stores. And they made the obvious, so many mistakes, it’s hard to, it’s not laughable, it’s sad. But you know they’re the big gorilla and they go open a store right next to an apple store that’s the same size so basically legitimized apple but they didn’t understand what made the apple store great, you know and it just felt different and they never even got traffic in the stores you know you’d go buy an apple store with people and this company serving 90 market share had nobody in its yours.

Jason:
[24:49] Yeah. Yes.

Ron:
[24:51] Yeah.

Jason:
[24:51] I remember well. And they, I mean, they, they literally followed your footprint. I think the first Microsoft store was also in Tyson’s corner. So that, yeah, yeah. Funny, unsuccessful part. But when I look at that store, one of the things that I think someone may have had an idea before, but it’d never been executed before. One of the things that was really interesting to me was, was mobile checkout that we went away from, from a cash register and know line of people checking out to sort of checking out in situ um was that like an accident or was that.

Ron:
[25:24] A very intentional choice yeah it’s a great part of the book i think we tell about all those innovations but you know it was interesting because in 1984 when i was at unloading trucks, someone at headquarters said i feel sorry for that harvard mba guy down there unloading trucks, why don’t we have do a little write-up on what should we do with the cash wrap, and i spent about three months studying the cash rep. And I just concluded, everyone hates, everyone loves to shop. Nobody likes to check out. You know, it’s just a really terrible experience no matter what you do. And so my dream was always to get rid of the cash wrap. And in 2008, we did. And what was the amazing thing is we had technology. We basically turned an iPod Touch into a mobile cash wrap. We gave one to every employee. And as the stores got really busy, you know, I remember the iPad launched. We had stores with 300 employees on the phone. Each was a mobile cash wrap.

Jason:
[26:22] Yeah, which scales a lot better than some super expensive NCR point of sale terminal.

Ron:
[26:27] We had no constraints.

Jason:
[26:28] Yeah.

Ron:
[26:29] We were selling 300 iPads a minute.

Jason:
[26:33] That’s crazy.

Ron:
[26:34] Can you imagine that?

Jason:
[26:34] No, I cannot.

Ron:
[26:35] And other retail stores would have lines at checkout.

Jason:
[26:39] Yeah.

Ron:
[26:39] We had lines outside the stores to get your hands on the product to try it. We had no operational hiccups, you know?

Jason:
[26:45] Yeah, that’s amazing.

Ron:
[26:47] No, I was really proud of that.

Jason:
[26:48] Yeah. And then I feel like eventually you even expanded that to self-checkout. So your app was also one of the first. Yeah.

Ron:
[26:55] 2010, we just said, you know, we got this app. Let’s create an app, put it in the Apple’s. Just let someone just scam the barcode and check out themselves.

Jason:
[27:04] Yeah.

Ron:
[27:05] Not a lot of people did it. It’s like most new technologies. But in 2010, you could do that. And I don’t think mobile checkout really became a thing until the 2018, 19, 20 period. And now you’ve got people like Inditex and Uniqlo have the most amazing checkout experience I’ve ever seen.

Jason:
[27:24] Yeah.

Ron:
[27:25] And the world’s changing.

Jason:
[27:27] No, no, no. It’s certainly having a moment now. I do a lot of work with our friends in Bentonville, and it’s one of the most beloved experiences at Sam’s Club is that scan and go. And yeah, in my mind, it all started in those Apple stores. I remember when you first launched that, I shopped one of your New York stores, the one in the train station. Is that Union’s?

Ron:
[27:48] Yeah, Grand Central. Grand Central.

Jason:
[27:50] Grand Central store. And it was such a surreal experience because already you made that store feel like part of the environment. It didn’t feel like you were necessarily like walking over the threshold of a store, right? So you’re kind of, you’re browsing, you see something you want, you scan it with your phone and you walk out. and I literally felt like I was shoplifting when I left with my first Scantico purchase.

Ron:
[28:10] Isn’t that great? Yeah, I remember. Well, you know, that was a real fun store because, it turned out to be just a hugely successful store because so many people in New York, all the people from Greenwich and up north are going through that train station every day and they’d stop in to get help at the Genius Bar. They’d buy their Christmas gifts on the way home. It was a great store. But you know what? It was the lowest cost store we ever built because you didn’t have to touch the walls. You couldn’t touch the floor. We just put in our little wood tables and a little lighting, and we were good to go.

Jason:
[28:40] Yeah, it’s nearly a pop-up store.

Ron:
[28:43] Yeah, it’s a beautiful store, though. It’s a beautiful building, beautiful space.

Jason:
[28:47] Yeah, yeah. No, that was super fun. And then one other thing, and in my mind, this might have evolved a little more over time, but like… So one interesting thing when you do mobile checkout versus a traditional cash wrap is you kind of move from this adversarial thing where the customer is on one side of a desk and the clerk is on the other side and they’re taking money from each other. They’re negotiating. It doesn’t feel like a collaborative win-win. You move to the shoulder-to-shoulder experience where two people are working together to solve a problem, which I love. And I feel like Genius Bar evolved to that over time as well. There may have been a time when people sat across from each other in the Genius Bar, but over time, the Genius Bar moved to those tables, too.

Ron:
[29:29] They’re bringing back. Some of their newer stores now, they’re bringing back a bar.

Jason:
[29:34] Okay.

Ron:
[29:36] And I think what happened is, and I’ve talked to them about it, people like to walk in the store and know what’s going on. And the challenge when you have a lot of tables with people sitting side by side, what are they doing? Where do I go? You know, because there’s setup at those tables, there’s classes at those tables, there’s genius bar at those tables. It’s very flexible, but you lose a little bit of the understanding of what’s being offered here, you know. And so things evolve.

Jason:
[30:07] Yeah. And so speaking of evolve, I am curious, and I’m not trying to throw shade on anyone, but like when you walk in an Apple store today, is there anything that’s changed that you go, oh, man, I wish we didn’t cave on that? Is there anything that bothers you at all in the current Apple experience?

Ron:
[30:23] No, there’s one thing we did, though, that I absolutely love that they eliminated is, you know… We wanted to find a way to create perfect placement where every product was exactly where it should be every time. And when the iPad came out, we created these beautiful acrylic displays. You might remember these with an iPad.

Jason:
[30:46] Yeah.

Ron:
[30:46] There was a point of sale device and the products like the phones would be right attached to that. And we powered the phones through the acrylic display and we just updated the software, but we could tell stories. So if the store is busy, you could read about it right there. It’s like going online and learning. You could check all the configurations all the price points you could and so we had really reinvented what i’d call point of sale how you communicate to a customer shopping on their own and for some reason apple decided not to continue up, you know and i and i think it then it requires you when you’re in the store on your own if a person’s not there, what do you do now with some products like a computer they put it on the screen, but with the phone it’s too small you know that was an interesting one to me.

Jason:
[31:32] Yeah. Yeah. That is, I do, I think that in my mind, and this maybe only a geek would notice this, another innovation of the store, like, you know, traditionally you put product on the shelf and then you put merchandising around the product to try to tell the story. And it’s all static merchandising. And so you can’t tell a super rich story. I would actually argue Bose was doing this for quite a while, even before there were Apple stores, but in the Apple stores, every device in that store had software on it to tell a story about that device like like you kind of built the custom the shopping customer experience into the device which is one of the nice advantages when you’re the manufacturer of the device, exactly and and so i do i think that no you’re in there’s a that’s.

Ron:
[32:12] A big part of the store because we delayed our first store six months.

Jason:
[32:16] Because we.

Ron:
[32:17] Went from the whole store was organized like a, And then it’s a great story, but Steve decided he’s going to reposition the Mac as the digital hub. And that means the Mac is about not about the computer. It’s about the software that allows a digital device like a camera to become something you can create with, you know. And so then all the software got put on the computers. And that’s what people love. They get on those computers to learn how to do something they’d never done before.

Jason:
[32:48] Yeah.

Ron:
[32:49] You know, and the stores came out when we were still in an analog world, you know, in 2001, 90% of people owned analog cameras.

Jason:
[32:58] Oh, yeah.

Ron:
[32:58] They were still good. They were walking to the grocery store to get their phone to go.

Jason:
[33:02] Yeah, it’s a little known fact, but in the early days, a lot of people walked into that Apple store to get Internet access. Like it was like the public library. They would sit on the devices and use the device for free and have Internet access. And I think there’s some some really popular social creators that actually, did all their content in the stores.

Ron:
[33:20] No, you’re exactly right. No, even when Facebook came out, you know, kids would come in there and that was the way they could do their Facebook thing because they didn’t have couldn’t afford a phone and they come use the Apple computers. But no, we had someone write a book for 30 days. He came into the Soho store. I don’t know how she wrote a book in 30 days. It took me three years.

Jason:
[33:40] Yeah.

Ron:
[33:40] But now it’s 10 minutes with a robot.

Jason:
[33:43] But that’s it. Yeah.

Ron:
[33:44] She just wrote a novel in the store and we let her do it.

Jason:
[33:47] That’s amazing.

Ron:
[33:47] Well, see, the thing is, I always said good things happen when people come to the store. And people would walk by the mall. And the truth is, Apple was a free internet cafe. Yeah. In 2001, 2002, no one was buying Macs. No one understood why we were learning to sell them, et cetera, how to create an experience that we get someone to buy. But the stores were packed with people on their computers.

Jason:
[34:09] Yeah.

Ron:
[34:09] And they thought the Mac was so fast, and they didn’t realize it was just high-speed internet.

Jason:
[34:13] Yeah. That’s amazing.

Ron:
[34:15] But it’s interesting.

Jason:
[34:16] Yeah. You know, you referenced 2001. I feel like you and I both had some novel experiences around, you know, the unfortunate event that year, which was 9-11. On 9-11, I was in a conference room in Minneapolis. Jeff Bezos as Target was signing a contract to outsource e-commerce to Amazon, which would end up being an ill-fated decision. We were all stranded in Minneapolis with Jeff. He found better accommodations than I did for a number of days. I understand you have a special memory of 9-11 as well.

Ron:
[34:55] Yeah the same it’s just that was a really tragic day but, I was up early, as I always got up early, and I got an email about 7 o’clock from Steve. And it said, in light of today’s events, you know, you’re welcome to stay at home. And then he followed up with a note to me. He said, Ron, I know we have a meeting with your team at 9 o’clock at the warehouse. We’re designing our store. He says, I personally would love to come in and be with people. I said, I’ll be there, too. dude but i remember telling my wife said karen what happened today and we turned on the tv and we saw all the images of the tower yeah and so i spent that day with that morning for three four hours with steve, and it was a day to reflect it was eerie i mean you know cupertino’s right where san jose airport all the planes are coming you’re driving there’s no planes in the sky, it’s quiet nobody’s on the roads, nobody knew what was happening that tragic day oh my gosh it was also, it was also you know it’s interesting to think back, because that was the birth of e-commerce and everyone had to figure out what to do but target didn’t think they had the skills to build their own site so they literally farmed it out to amazon till 2008 yeah they you know and yeah.

Jason:
[36:16] They were not alone. It was, you know, Borders and Toys R Us and Dick’s Sporting Goods and lots of, but yeah, I was both involved reluctantly in outsourcing it. And then I was involved in bringing it back in-house a little later. So it worked out.

Ron:
[36:30] You know, I thought I had the most fun job in retail. I think you had it. You were doing all these cool things.

Jason:
[36:34] No, no, no. You and I were in similar places. You were just wildly more successful in each one of those places. And now I know the secret. It’s because you get up early and I sleep in. I feel like that’s the path not traveled for me. I do want to do a hard pivot, though, because there’s a chapter of your career everyone’s always super interested in. It’s a whole other discussion point is at the peak of Apple’s greatness. You you decided to leave Apple and take on a new challenge.

Ron:
[37:01] Yeah. Yeah. I was turning 50. And I had looked at my career in 10-year cycles. I was at Target for 10 years. I had been Apple for 12 years. And I kind of asked the question, because opening Apple stores had become a hobby. I had such a great team, 60,000 employees.

Ron:
[37:21] I was just having the fun of imagining an e-store, designing it, bringing it to life. They all worked. It really wasn’t a challenge. It was just recreational. And and I kind of felt like I want my favorite days were creating the Apple store, bringing design to Target. You know, figuring out to resize kids’ clothes. And I wanted to have one more chance to do something really hard. And this after he came around, a couple of investors had taken a stake in JCPenney. Bill Ackman, who’s still quite famous, most people probably know on this show. And Steve Roth was running one of the large real estate funds, Vornado. And they wanted another board member. So they asked if I’d do that. I met them. And then in the process at the next meeting the ceo longtime ceo a very nice man got in a car accident, and it made the board get a little worried about succession plan because he was probably 66 anyway so they pivoted and said ron would you be interested in running jc penny, and i look back you know i’d started at mervins which is a competitor pennies yeah you know i’ve been watching department stores my whole life and i said wouldn’t it be a great challenge, challenge to try to see if the American department store can be reinvented, transformed. And, you know, I was led to believe that JCPenney wanted to do that.

Ron:
[38:49] You know, it turned out, I don’t think there was as much passion for change as I had. And it was very difficult. But I made a ton of big mistakes doing that. It was the hardest year, 18 months of my life. I was situationally arrogant where I really believed, you know, I’d been very successful at Target, Apple, and I think I believe that I could convince anybody that this is what we ought to do and let’s go do it. And it turned out the team wasn’t ready for it. Our board wasn’t ready for it. Our customers weren’t ready for it. And, you know, I went from being kind of the top of the retail world to the bottom, you know, reputationally and all that stuff. But it was a good learning experience. And I address it head out on the book, and I think people will enjoy reading that. Because it was a tough time for me.

Jason:
[39:40] Yeah, I can well imagine. As an independent observer, I mean, there’s this debate we’ve had in retail for 6,000 years, everyday low pricing versus high low pricing, right? And of course, the Walmarts of the world are famous for everyday low pricing. Before you came to JCPenney, they were one of the most extreme practitioners of high low pricing, right? And so there were tons of promotions.

Ron:
[40:03] Oh, they were the most. No, the average item. pennies sold, less than 1% of its merchandise at the everyday price.

Jason:
[40:12] Yeah.

Ron:
[40:13] And the average item was over 60% off.

Jason:
[40:16] Yeah.

Ron:
[40:17] And the company began with the golden rule where JCPenney, James Cash Penney, said, we will never offer a product on sale. Truth begins on the price tag.

Jason:
[40:28] Yeah.

Ron:
[40:28] You know, look how that evolved. But, you know, the reality is we all know today everyday pricing won. Yeah. Yeah, there are people that look at look at what’s happened to Ross and Marshall’s and the off price industry that continues to grow.

Jason:
[40:42] Yeah.

Ron:
[40:43] It’s everyday pricing and they they pretend it’s 60 percent off 40 to 60 of department store. Well, none of this merchandise sold at department stores anymore.

Jason:
[40:51] Yeah.

Ron:
[40:52] But but it’s an everyday low price strategy. Walmart’s everyday place.

Jason:
[40:56] Yeah.

Ron:
[40:56] Targets a large, you know, everything’s everyday place.

Jason:
[40:59] Yeah, I do think the conventional wisdom today is everyday low pricing is a better business model, comma, if you’re already high-low, it’s very hard to roll that back.

Ron:
[41:12] It’s very hard.

Jason:
[41:13] It is. And JCPenney would be one of the top case studies of how hard that was, although not the only one. Macy’s and others went through similar struggles.

Ron:
[41:21] But, you know, it is interesting. Our sales went down the first year because we just basically took off all promotion.

Jason:
[41:28] Yeah.

Ron:
[41:29] And our sales went down 20%.

Jason:
[41:31] Yeah.

Ron:
[41:31] Our plan was to be down 15. It was, you know, 5% worse because it’s hard to predict these things.

Jason:
[41:37] Yeah.

Ron:
[41:37] When I was at Apple in 2002, our sales went down 40%.

Jason:
[41:42] Oof.

Ron:
[41:43] As we transitioned the operating system and our processors. And that was really comfortable for Apple because we knew that we had to get to a new processor family, get off Motorola, get to Intel, to get to the other side to continue to grow. But in retail, people are saying, why would you fire your customer?

Jason:
[42:03] Yeah.

Ron:
[42:04] Well, we had an old customer. We wanted to get young people to shop at Penny’s. And to do that, we had to get these new brands to want to come. And we created a store with 100 store within a store. It’s kind of like Best Buy is today.

Jason:
[42:17] Yeah.

Ron:
[42:18] And we’re gonna fill those with all these DTC brands that now all have big footprints. Yeah. Look at Warby Parker. Look at Vori. Look at all these people. Who are just winning through stores.

Jason:
[42:30] Yeah. In my mind, I think people look at your tenure at JCPenney, and if they want to be really superficial, they’re like, oh, man, he came in with the wrong strategy, and the customer didn’t accept it and fired him. I look at that, and I’ve worked with a lot of very big retailers. And what I’ve learned in my career is the hardest thing is not – knowing what to do is very hard, but it’s not the hardest thing. The hardest thing is the organizational change management. It’s getting 1.7 million Walmart associates to do their job differently tomorrow than they did it yesterday or any of those things. And so I don’t think the data is there to say that any of your ideas of JCPenney were necessarily wrong. I think it was really hard to implement those ideas, and it probably required.

Ron:
[43:15] No, the way I implemented it was a disaster.

Jason:
[43:18] Yeah.

Ron:
[43:19] And if you look back, at Apple, I was the only retailer for a while. Then I built the entire team, and we created the store together.

Jason:
[43:26] Yeah. So you didn’t have the change.

Ron:
[43:28] I didn’t have the chance to. I went to Penny’s. The board wanted to go. And I just said, here’s what we’re doing.

Jason:
[43:34] Yeah.

Ron:
[43:34] And that was bad. The team wasn’t ready for it. They didn’t understand it. You know, so it was, there’s a lot, but there’s a lot of good lessons. Oh, for sure. And that’s, that’s, you know, why I wrote this book. You know, when I look back at my career, you know, when I was young, you remember this, there were people like Tom Hanks. Tom Peters.

Jason:
[43:52] Oh, yeah.

Ron:
[43:53] In search of excellence. And, there are all these great books we used to read. Stephen Covey’s books.

Jason:
[43:59] Yeah.

Ron:
[43:59] You know, and, you know, you read a book and you get one thought and you apply it to work and it can change the game.

Jason:
[44:05] Yeah.

Ron:
[44:07] Hopefully my book, someone will read it and say, I like how they thought about people. I like how they thought about culture, how they thought about real estate, how they thought about design, how they thought about change, you know, and hopefully people will you know think about it and and maybe it’ll give them a chance to do something different.

Jason:
[44:24] Yeah i i love that and i’m sure that that will happen uh my we’re coming up on time but my listeners will murder murder me if i don’t bring up two other topics, one is a debate we’ve been having for as long as the the internet’s existed is the whole, role of brick and mortar stores versus digital right and we have this funny saying the internet saw buying but broke shopping and there there’s a lot of people that say like oh man stores are done i think mark andreessen at one point said that you know stores are going to go away that hasn’t happened, the i’m kind of curious where where you sit you lived through the whole digital revolution of retail like what, like are they it’s.

Ron:
[45:02] Not there’s not even a debate anymore the answer is in front of us yeah stores didn’t win online didn’t win omni-channel one.

Jason:
[45:10] Yeah.

Ron:
[45:11] It just took time you know today 85 percent of revenue comes from well 70 of revenue comes from physical stores 30, from online but half of that is the online arm of a physical store like walmart or target or the gap yeah so there’s only one out of seven dollars that comes from a pure play online store, and every online store has tried to open physical stores, Look at what Walmart’s tried all these years or Amazon’s tried all these years. Yeah, Amazon, sure, sure. Amazon. Yeah. And they’re now building a 250,000 square foot super center in suburban Chicago.

Jason:
[45:44] I know. I live in Chicago. I’m, I drive by. I’m, I’m super excited to see what they do with it.

Ron:
[45:48] But the, the proof to me, the biggest proof point is if Amazon hurt any retailer, it would have been Walmart.

Jason:
[45:55] Yeah.

Ron:
[45:56] Walmart was the low price category killer. They had everything in the physical world and that’s what Amazon became. But walmart today its stock prices eight times yeah now hit a trillion dollars recently it was worth 130 million back in 2000 when the dot-com thing started, yeah and so what truly happened in retail is retail got overstored in the 80s and 90s when there was abundant capital like we talked about early that’s what people were doing the only way to grow is to add more stores, and if you weren’t opening 10 new stores a year there was a problem, we had overstored when the internet came on it took time for retail to learn how to do online shopping look at target we talked about took eight years they brought it on their own yeah but eventually they figured it out then they could reduce the the.

Ron:
[46:47] The overstoring they got to the right equilibrium and now you’re in a position where retailers are stronger and customers sometimes go online sometimes go to stores, stores you know but only channel is how we shop yeah you know that’s just the way it is so i think physical stores actually the online was the rebirth of the store, and gave them a chance to rethink that whole customer experience model, but it didn’t kill stores stores have thrived amen and it’s just the fact that you can’t argue about it now stores did hurt small town yeah you know where you couldn’t afford. You have people buy online. There’s just not a lot of volume that supports stores. Stores online hurt tired retail. It always has. Tired retail never works. But most of the great stores, look at the gap today. The gap’s on their way back at all their divisions, right?

Jason:
[47:39] Yeah.

Ron:
[47:40] It wasn’t an online issue. It was a merchandising, a branding issue that Richard and team are bringing back. And so the reality is tired retail doesn’t work. Omnichannel does.

Jason:
[47:50] No, I think that’s very evident. And so then forecast that to the next thing. All anyone wants to talk to me about these days is the robots, is AI, right? And so, you know, I started e-commerce in the 90s. We had to figure out card not present transactions because they were illegal. Now they’re trying to figure out human not present transactions. And there’s a bunch of talking heads that are like, oh man, the robot’s just going to shop for us. We’re going to stop shopping on our own. We’re going to stop picking brands and going to stores. How do you see AI playing out and and what will.

Ron:
[48:20] That add or subtract yeah we’ll have a ai it’s just it’s another technology, you know and technology has always helped retail it’s always helped business takes a while to learn how to use it there’s a lot of fear that ai is gonna eliminate jobs and it will but it’ll also create jobs you know it’s so interesting you read now, the jobs report the last three months has been really good.

Ron:
[48:43] And you read about people like block and you know meta laying all these people off. That’s big headlines. The reality is we’re still hiring. And most companies are using AI in really smart ways. But with retail, we’re all starting to use agents to shop. Walmart’s got the lead there, really doing a great job. Amazon’s trying there. They have an agent shopping thing. It’s very slow. And I don’t think it’s particularly good. I was playing around with it today. But the world’s changing. But I expect, I really believe Like, you know… In a world of the world’s gotten way too digital and the people in their 20s and 30s, they’re joining running clubs and they’re looking for human connection. And, you know, they’re the ones going back to stores and, you know, malls where I live, Stanford Shopping Center, where people have been trying to put stores out of business for 30 years is the hardest parking place in the valley. You know, so I just think people are looking for a connection. And, you know, hopefully AI, because we’d be more efficient at getting general knowledge, will let us spend more time connecting, you know, is what I hope for.

Jason:
[49:56] Yeah, I think I share your hope. And I think there’s there’s reasonable optimism that that’s how it’s going to play out.

Ron:
[50:01] Yeah. And I just did build a build off that real quick. I read an article last week. Satya Nadella was talking about where he sees AI going. And he talked about human capital and he talked about, what was his word for it? Token capital. That’s the same as physical retail and digital retail. Omnichannel is the intersection of physical and digital. What Satya is saying is really, it’s almost like there’ll be this new category called omniintelligence, which is agentic intelligence. It’s general knowledge, applied with human knowledge. And the bringing of that together is really the future, I think. And I think we’re going to rely more and more on people’s own lived experience. And we’re going to be bringing our own personal geography to work where we grew up, the lessons we learned. And that’s what’s going to matter. That’s where the value will be. And how you bring that together with knowledge you get from AI. It’s not going to be AI telling you what to do. It’s how it enables you to think differently.

Jason:
[51:05] Yeah, I think that is a really interesting way to think about it. And I think that’s going to be a great place to leave it because once again, we have used up our listeners time. But this super interesting conversation. I’m so grateful for you taking the time. I’m so grateful for you writing the book. And I’ll remind listeners, Shop Different is coming out on September 22nd, and we’ll have links in the show note to buy it. But Ron, thanks very much for sharing some time with our listeners today.

Ron:
[51:29] The pleasure of mine. Thank you.

Jason:
[51:31] Yeah. And until next time, happy commercing. you.

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In this episode of the Jason & Scot Show, Jason and Scot spend much of the conversation trying to avoid one topic they usually discuss (Agentic Commerce). They also talk briefly about Jason’s recent trip to Italy, Scot’s recent travel, and Jason’s son seeing his first Star Wars movie in theaters and getting his first phone on the same day.

Scot describes recent trips to Google I/O and Google Marketing Live, including interviews with Google executives and his sense that Google has a renewed customer focus. Jason and Scot also revisit earlier comments about Google’s position in the market and say the company now looks like a leader in the area they are referring to without naming it.

A major part of the episode is a discussion of U.S. Department of Commerce retail data. Jason says core retail growth from January through May is 4.9% year to date, versus 4% for all of last year, and that after inflation the numbers are close to normal organic growth. He notes strong performance in sporting goods, electronics, and non-store sales, while furniture, car dealerships, and grocery are weaker.

They also cover Amazon news, especially the upcoming Prime Day dates in June and the decision to keep the event four days long. Jason says the shift earlier in the year affects quarterly comparisons, and they discuss how Prime Day has changed from a one-day hardware event into a broader sale tied more to everyday essentials and summer goods. They also mention a Blue Origin launch failure tied to Project Leo.

The conversation turns to TikTok Shop, which Jason calls one of the most important commerce stories in the U.S. this year. He says TikTok has 100 million daily U.S. users and that TikTok Shop sold $9 billion in its first year, about $15 billion in its second, and could reach roughly $23 to $24 billion this year. He says the platform is broadening discovery and changing how brands approach marketing.

Jason and Scot also discuss Shein, Everlane’s acquisition by Shein, and the end of de minimis treatment in the U.S. and Europe. Jason says de minimis helped Chinese direct-to-consumer companies start by letting them avoid duties on small parcels, but that the major players adapted after the rule changed.

The episode closes with a quick review of recent earnings, including Target, Walmart, TJ Maxx, Victoria’s Secret, Coach, Ralph Lauren, and Lululemon. Jason says the retail market is increasingly a story of winners and losers, with value-oriented retailers and some rebuilt heritage brands doing well, while others are under more pressure.

Episode 339 of the Jason & Scot Show was recorded on Wednesday, June 18th, 2026

Join your hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of ReFiBuy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Transcript

Jason:
[0:23] Welcome to the Jason and Scott Show. This is episode 339, being recorded on Wednesday, June 17th. I’m your host, Jason Retail Geek Goldberg, and as usual, I’m here with your co-host, Scott Wingo.

Scot:
[0:38] Hey, Jason, and welcome back, Jason and Scott Show listeners. Jason, it’s been a minute. The last time we chatted, we went over the Amazon earnings. Where in the world have you been since then?

Jason:
[0:50] I have been numerous places, but before we get into it, I feel like I should tell the listeners that I’ve thrown down a challenge for today’s episode.

Scot:
[0:58] Yeah, under much duress.

Jason:
[1:00] Yes.

Scot:
[1:01] Go ahead.

Jason:
[1:01] You know, so I was actually in Italy on holiday last week. I’ve been with, you know, clients pretty much every week for the last six or seven weeks. And everywhere I go, people are asking for more episodes, more podcasts, more Jason and Scott show. And you know i constantly have to say you know i really want to but scott only talks about agentic and i’m getting kind of sick of it, um and so that’s possible i know i know uh well i think i think our mutual friend jason delray gave you like a new title right are you the.

Scot:
[1:33] Yeah yeah he called me an agentic commerce maximalist i don’t i wasn’t sure if he was throwing shade i took it as a compliment though so i.

Jason:
[1:40] Updated my.

Scot:
[1:40] Linkedin to include that that wordsmithing.

Jason:
[1:44] Yes i do know So generously gave me. I, yeah, I don’t think he meant it as a compliment, but I know he was really happy when you, when you put it on your profile.

Scot:
[1:53] It’s a badge of honor.

Jason:
[1:55] Yeah. So my challenge for today’s episode is we’re going to do a whole podcast, without talking about that topic.

Scot:
[2:05] Okay.

Jason:
[2:05] Do you think you can make it?

Scot:
[2:07] I can do it, but I need an exception for the trip report because it’s kind of fair.

Jason:
[2:12] Okay.

Scot:
[2:13] Or we could cut the trip report.

Jason:
[2:15] No, no, no. People are dying to know. I feel like for a while, I was the only one out and about, and you were busy building empires in Raleigh. So I think people are excited to hear that you’re out amongst the people again.

Scot:
[2:29] Yeah.

Jason:
[2:30] So I definitely think we should cover that. I want to mention one non non work related thing because I know that it aligns with all your interests. My son, Steven, it was the greatest day of his life on Sunday because we we saw his first Star Wars movie in the theaters. We finally got to see Mandalorian. And then afterwards, we went to the AT&T store and he got his first phone.

Scot:
[2:52] So, whoa, that’s a that’s a double header right there.

Jason:
[2:56] Yeah, it’s a lot.

Scot:
[2:56] That’s a lot to process.

Jason:
[2:58] Yeah.

Scot:
[2:59] Yeah. We went to Midnight Madness. So there was a 10 p.m. showing the night before on a Thursday. And one of my favorite things to do is friends have younger kids that are kind of your son’s age. And we got a bunch of we had like 20 people there. And it was fun to watch little kids kind of relive a little bit of the magic. And they loved it. So people, a lot of adults don’t care for it, but they, you know, you have to remember, even when Star Wars came out, the target age was kind of like seven to 12 or something like that.

Jason:
[3:30] So, yeah, I want to say, well, I was sitting in the theater. I was having a lot of flashbacks to like seeing Star Wars Episode four in the theaters with my father when I was very close to Stephen’s age.

Scot:
[3:43] Yeah.

Jason:
[3:44] And the impact it had on me. And so I was, I was seeing, I was experiencing a lot of the day through that lens.

Scot:
[3:52] It’s kind of good they don’t have the music because that’s like what really gets me going so yeah yeah that uh the the 20th century fox thing and then right into the yeah that’s the steep.

Jason:
[4:04] Yeah and you know fun fact there was like a publicist commercial in the in the the pre-trail uh pre-real.

Scot:
[4:11] Oh yeah which one.

Jason:
[4:13] We sponsor like a a creative director young talent.

Scot:
[4:17] Contest that uh But the young lines. That’s in Chicago.

Jason:
[4:21] Yeah, probably.

Scot:
[4:22] Probably very local. We’re not a hip enough metro.

Jason:
[4:26] There’s no creative people in Raleigh. So, yeah. Not true. Not true.

Scot:
[4:30] Hillbillies won’t understand this.

Jason:
[4:31] A lot of talented people in Raleigh. Just not on this podcast.

Scot:
[4:36] This is how you end up getting a lot of weird emails. Yeah. You’re still, remember the time you’d called retail media networks mid?

Jason:
[4:44] Yeah.

Scot:
[4:45] She still posts. I saw another thing go by. I didn’t read it.

Jason:
[4:48] Yeah.

Scot:
[4:49] I saw something else.

Jason:
[4:50] Yes. I feel. Yes. Andrew and Curie are both still very offended. I love you both.

Scot:
[4:57] Don’t go to con and be alone with them. I dark alley.

Jason:
[5:00] Yeah. Con is like in a couple of weeks, I worked for a giant advertising agency with like 120,000 coworkers. I think I’m the only one that’s never been to con of all 120,000.

Scot:
[5:13] You mean that giant stack of badges sitting there?

Jason:
[5:15] No, no compass French ones. I desperately want to go to Cannes, just not the week that all my co-workers are there.

Scot:
[5:23] Yeah, pick the week before or after.

Jason:
[5:25] Yes, yes, because I understand that that region knows how to ferment grapes.

Scot:
[5:29] Yeah, yeah. Did you have any trips? You’ve been doing all the vacationing, so those don’t count.

Jason:
[5:35] Yeah, yeah. I have not done a lot of public gigs lately. I have been doing a lot of private stuff with clients, which is awesome. I get to learn tons of stuff. It’s super fun to see everyone, but not a lot of stuff that I can really, share with our listeners but i know you have scott where have you been.

Scot:
[5:54] Yeah it reminded me over on the other, podcast called retail gentic we cross-posted we put it on the jason scott show audio but we put the video over on the youtube channel and despite all this effort to create compelling content i just recorded you at nrf and it’s the number one video so there you go, that sitting at 1,800 views. So that was your NRF keynote. Crushed it.

Jason:
[6:18] Yeah, yeah.

Scot:
[6:18] There’s a few more of those.

Jason:
[6:20] Yeah, I have unfortunately had to change that talk every week since then because of the pace of change in our.

Scot:
[6:28] Yeah, yeah, it’s hard.

Jason:
[6:30] I very much would like to have written it for NRF and then done it a hundred times this year for different clients. But I feel like I have to write at least pieces of it anew every single time.

Scot:
[6:39] Yeah, so I did, I got an invite to go to Google I.O. and Google Marketing Live. So that was fun to see all their big announcements and do a little some interviews with some of the folks at Google. So their PR people were very nice. And, you know, like, who do you want to talk to? And I was like, Sundar. And they’re like, well, learn as an entrepreneur, aim high. And then like you’re. But I get to interview this guy, Nick Fox, who’s like number two to Sundar. And, you know, basically everything but AI reports to this guy. And that was really interesting to hear how he thinks about stuff.

Jason:
[7:15] I watched that interview, of course, and I feel like reading between the lines, he was a huge Scott fanboy.

Scot:
[7:20] I don’t know if he even knew who I was. It’s like, I don’t know. I don’t think he was a fanboy. He was very nice. He was very good with interviewers. Let’s just say that. He was trying to butter me up. But I was.

Jason:
[7:31] Probably not the first interview he did that day.

Scot:
[7:33] No. That’s really neat to see. I’ve interacted with Google a lot over the decades, and there’s really a new energy there. And then they’re very customer oriented, more so than any time I remember in the past, which I think is pretty cool for a company that big to still think a lot about the customer.

Jason:
[7:53] Yeah. If I could allow us to take a slight victory lap, I’m remembering a podcast we did late last year talking about the topic that shall not be named. And we were we were ranking the progress that the different players made. And at the time, there was a lot of buzz about the the usual suspects.

Scot:
[8:14] And I think you’re having a hard time.

Jason:
[8:17] I’m doing. No, no, I’m going to make it. I’m going to make it. And I think you and I made the point that, well, those are all interesting. It would be a mistake to sleep on Google because, you know, we felt like they had a lot of endemic advantages that they only needed, you know, to deploy in the right area. And I think since then, they have, in fact, deployed a lot of them. And, you know, I think, you know, today are certainly looked at as the market leader in the topic that shall not be named.

Scot:
[8:48] Yeah. And then it was interesting. I did a New York trip, and it was like two different Wall Street folks invited me. So John Blackledge, who I know you know, and then Colin Sebastian, really good friend of the show. And I won’t say the topic, but you can guess what I spoke about. And but what was really.

Jason:
[9:04] Was that car washes?

Scot:
[9:06] It was not. It was close, but not quite in there. And what was really interesting is the hallway conversation. So I’m pretty well known in Wall Street because of the same store sales data I used to put out at Channel Wizard. Yeah. I don’t, Rick Watson puts out a lot of content around Shopify. There’s a bull and bear case on Shopify and everyone was really wondering about Shopify. It was like the weirdest thing. I never get asked about Shopify, but that was like what everyone wanted to know. I thought you’d find that interesting. Yeah. Yeah. Everyone’s very worried that, so what’s happened is Visa invested in Lovable. Aiden bought a big loyalty program. So all the payment people, PayPal imploded. So there’s a lot of activity at the payment level that we haven’t seen probably for 20 years, aside from like, you know, buy now, pay later or something like that. And it’s freaking everyone out that all these new entities are kind of, you know, they have potential to infringe on what Shopify has had a pretty much lock on for a long time. So it’s really interesting to see. I don’t know how much of it’s real or not, but it’s enough worry that it’s been pretty muted on the stock. I haven’t looked at it lately, but one of the reasons they were concerned was, the stock’s been underperforming and everyone kind of pegs it to this challenge, the topic that we can’t name.

Jason:
[10:33] Yeah, yeah. Yeah, I think they’re always interesting because I have great admiration and respect for Shopify. I feel like they’ve been hugely disruptive in our industry. When I started, agencies like mine made a fortune installing all these like huge on-prem e-commerce platforms. And I would argue Shopify has like completely obliterated, that whole industry, like both the platform providers, but also the SIs that turned all those wrenches and do all those things because it’s now way easier and lower risk and faster to stand up a very serviceable platform. So I think they’re a great executor, comma, I get annoyed how many people want to talk about them as a benchmark for the e-commerce industry and a competitor, a direct competitor to Amazon, because I feel like it’s apples and oranges.

Scot:
[11:28] Yeah. And then as I talk to these people and unpack their concerns, some of it goes back to the CEO of BigCommerce, which is now called Commerce, which is infinitely confusing.

Jason:
[11:39] That should be illegal.

Scot:
[11:40] Yeah.

Jason:
[11:40] It’s like the hotel in Las Vegas that called themselves the hotel.

Scot:
[11:44] Yeah. They finally fixed that, but I know that costs so many who’s on first things and then it’s next to the bar. Like everything in that hotel was cutely named that way, which was not cute. Anyway, he basically said, I think it was the last earnings call, that they don’t have any new logos because no one’s re-platforming because no one thinks there’ll be websites, which was not a great thing. I don’t think he thought through the ramifications of saying that. So that didn’t go well. But that really freaked everybody out all across the map. So that’s just like an interesting trend thing that I haven’t seen written about much.

Jason:
[12:22] Yeah, yeah, I agree. It’s almost like there’s other topics that have everyone’s attention.

Scot:
[12:27] Yeah. All right. So we’re going to ignore that. We’re going to go on the no AI program here. Let’s jump into you were very excited to do the show today because this morning, I know you were up bright and early, the Department of Commerce data came out. So give us give us an update. What was revealed in today’s data drop?

Jason:
[12:44] Yeah, yeah, yeah. So quick reminder, refresher, the US Department of Commerce, the US Census Bureau, does a survey every month. They compel a bunch of retailers to submit forms saying how much stuff they sold, and they aggregate all that data. And we follow that data as one of our kind of best indicators. And so the data is a month in arrears, which means the data that came out this morning tells us May. So we now have January through May of 2026 data. And it’s broken out by category. We could talk about the categories, but the top level that I pay the most attention to is what we call core retail. So that’s all the retail categories except restaurants, car dealerships, and gas stations. And so core retail January through May of this year is 4.9%. To put it in perspective, core retail was up all of last year, 4%.

Jason:
[13:46] So we’re actually year to date growing a bit faster than we grew last year. But of course, one of the things we always worry about in the recent era is inflation. There’s always inflation in the numbers that have been inflation for as long as there’s been commerce. But around the pandemic, we had this extraordinary inflation, much higher than usual inflation. And so I had to learn how to do all the math to take the inflation out of the numbers. And so last year’s 4% core growth was actually only 3.2% of real growth.

Jason:
[14:24] And this year to date’s 4.9% growth would actually be 3.8% real growth. So I would call all those numbers kind of, within the band of normal, expected, organic growth. Like it neither indicates, a slowdown in any way, nor does it show a unusual acceleration. But when you double click on that, things change quite a bit. Like the categories that are winners and losers are, you know, pretty profound.

Jason:
[15:03] If you go just, you know, based on the nominal numbers, the numbers without adjusting for inflation, it’s been a terrible year for furniture. It’s down 3% versus these same months last year. Car dealerships have been flat. Grocery is down less, is up less than a percent. So those categories did really poorly.

Jason:
[15:24] Sporting goods, which has struggled for a long time, is doing really well. It’s up 9%. percent electronics which have been like the worst category since the pandemic by far is up six percent year to date and an interesting fact electronics is about the only category that has de-inflation.

Jason:
[15:43] So if you’re just for inflation electronics grow like even faster, at like 7.3 percent and so but of course the the fastest growing category, is normally e-commerce and And unknowingly, we don’t have e-commerce in the monthly data. We get e-commerce in quarterly data. And so we have this surrogate for e-commerce that we call non-store sales, which is kind of e-commerce and a few other things. And that category, non-store sales, grew 10%. So that’s at the very top. Normally, it’s the top. This year, it got surpassed by a category that we don’t talk about very much, which is gas. And of course the reason gas is up is entirely because of inflation right so gas grew people spent 13 more on gas this year january through may of this year than they did last year if you just for inflation uh people bought two percent uh less gas than they did, the year before so so none of that is is like, organic increased demand it’s just having to pay more for the same gas And, of course, that’s $100 billion that American families spent on their car that they then couldn’t spend on some discretionary purchase.

Scot:
[17:00] Cool. So takeaways, kind of flat when you take out inflation. Is that kind of- Yeah.

Jason:
[17:07] Yeah. And so to me, the big, it’s-

Jason:
[17:12] It’s kind of usual, I guess, is what I would call it. Like the industry always grows and it’s growing at the industry average. And so whenever you talk about a specific retailer, which we’ll probably do a bit later, what you don’t want to talk about their growth, their absolute growth. You want to talk about how they did versus that usual growth. They’re like, are they better or worse than that, that 4%? And so that’s all normal. I would say traditionally retail grows about 4%. And for most of our careers, Scott, e-commerce has grown like 15 percent. Last year, it’s slowed down the last couple of years. And so last year, e-commerce finished the year only up 5.4 percent.

Jason:
[17:56] And so that’s by far the slowest rate of e-commerce growth we’ve ever had. And so I’ve been very curious to see what happens this year. Is that the law of large numbers and e-commerce is just kind of hitting its natural plateau and it’s going to start growing at close to the same rate as retail? Or is this an impact of the unusual growth we had during the pandemic and so you’re just comping against some really high growth and we’re going to go back to growth again? And so we now have one quarter data, Q1, of e-commerce growth, and we saw a pretty significant uptick. We saw e-commerce grew in Q1 9.7%, so almost doubling. So that’s encouraging.

Scot:
[18:45] If only we had like an innovative new technology that would kind of really accelerate e-commerce.

Jason:
[18:49] Yeah, but then we’d have to have a whole argument about whether that technology is e-commerce or a competitor to e-commerce or part of e-commerce.

Scot:
[18:57] Yeah.

Jason:
[18:58] Yeah.

Scot:
[18:59] It’s a hallucination.

Jason:
[19:00] You’d need all kinds of definitions. And yeah, ultimately, you decide it’s just mid and a hallucination.

Scot:
[19:06] Amid hallucinations. Well, it wouldn’t be the Jason Scott show without a little non-AI.

Jason:
[19:19] Amazon News. Your margin is their opportunity.

Scot:
[19:27] That’s right. A little bit of Amazon news has been quiet outside of a certain topic we can’t really go into. But the big news is Prime Day is right around the corner. It’s a week away from when we’re recording this, so June 23 to 26. So, Jason, why’d they move this up? This has been previously in July, right?

Jason:
[19:46] Yeah, I think mostly because they wanted to annoy analysts. So now no one’s going to be able to talk about comps because normally Prime Day, the last couple of years has been in Q3. And so this earlier date means it’s in Q2. So it’s going to screw all the quarterly comps for the foreseeable future. I don’t know exactly why they landed on this day. It’s a super complicated thing to pick the date for this sale now because it’s such a global phenomenon that people forget about. It actually isn’t. It’s these dates in about 90% of Amazon’s market, but it’s other dates in a few other markets. And so, you know, this is a little early. This is kind of the traditional time when they first launched it. Originally, people forget, but Prime Day was originally intended to be Amazon’s birthday celebration.

Jason:
[20:37] And what is, I find also a little interesting, annoying, is that for the second year in a row, it is four days. So originally, it was a one-day sale. It crept up to two days. Last year, for the first time, it crept up to four days. And a bunch of people were, you know, speculating, well, what’s it going to be? Are they going to go back to two days? Are you going to keep it four days? And, of course, you and I, like, there’s nothing I was more confident in that Amazon was not going to shorten the number of days. Because the one thing Amazon cares more than anything about is reporting better comps than last year. And so they, yeah, once, once you have a comp for four days, you can never go shorter than four days.

Scot:
[21:19] No, absolutely not. Do you think this is a play aside from making it hard to compare year over year? Is this a play for just kind of the earlier you can get the wallet, the better kind of thing, or is there something? Yeah, I think this one, my mind was always the back to school and is there.

Jason:
[21:35] Like something changing and they are still trying to call it the back the start of back to school season and they’re they’re saying you know back to school season is starting earlier right like which is, is a little bit of a stretch i do think the nature of this sale has changed a lot over history right like you know originally the sale was one p only right because they didn’t invite the three people to provide to participate and And, you know, for many years, they had 3P deals in the sale, but the primary sellers that like four of the top 10 bestsellers every year would be Amazon Hardware. So there’s, you know, kind of the optimal time to offer those things. You know, then you’re you’re impacted by when you release new hardware. All of these things come into effect. Well, Amazon, you know, while nobody’s looking, is very rapidly shifting from kind of a consumer electronics retailer to a everyday essentials retailer. And, you know, so suddenly you want to be selling all those summer goods that people are consuming, all those picnic supplies, all the, you know, summer food items. And so it just changes where the sweet spot target is for having the sale.

Scot:
[22:55] Yeah, I did notice that once they changed it, everyone else followed Stu. So they’re definitely kind of proving that they’re setting the tone of this whole thing.

Jason:
[23:03] Yeah, yeah. I think that’s always been a thing. It was kind of ironic in the, you know, maybe no one responded to the first Prime Day, but by the second Prime Day, a lot of other big retailers were celebrating Amazon’s birthday as well. Yeah.

Scot:
[23:13] Yeah. They all would change the name, obviously, but it was awkward.

Jason:
[23:18] Yeah. One other thing that’s going to be interesting to me, I think there was an era when there were some really extreme deals that encouraged incremental purchases and that there was a manageable number of deals. I would now, you know, the Amazon catalog has expanded like unimaginably in the last 10 years. And the amount of deals on these prime days have expanded even faster. And so I actually think there’s a huge signal to noise problem now. There’s a bunch of, A, mediocre deals that are not exceptional. And there’s too many deals for any human to go hunting for deals, right? Right. And so, you know, it’s almost like consumers are going to need some kind of new technology that didn’t exist very long ago that they can use to both, measure the deals and find out if they are, in fact, really good deals or not. And also to, you know, find the deals that are uniquely relevant to the Wingo household amongst the, you know, tens of millions of products that will be on sale.

Scot:
[24:29] Yeah, kind of like a hyper personalization technique.

Jason:
[24:31] Exactly.

Scot:
[24:32] Too bad it doesn’t exist.

Jason:
[24:33] Yeah. So, you know, there might be some other podcast that talks a lot about technology that could do that. But I have a feeling that that’s going to be the primary difference about this Prime Day than any others is the front door to the deals is probably going to change to some kind of new technology like that.

Scot:
[24:51] Yeah the other the kind of sad amazon news was they had a a blue origin ship that was going to carry some of the low earth or the l project leo had a very cataclysmic, what do they call it rapid unplanned rapid disassembly yeah rapid rud rudded rapid unplanned disassembly yeah yes had a red event, it was pretty epic because it took out like the whole launch pad and it’s like we’re going to be quite expensive to it’s going to set it back at least a year i think but so that’s kind of a bummer Yeah.

Jason:
[25:21] That was a huge bummer. We had a lot of fun in our household for the Artemis launch. And so, you know, there’s a lot of excitement. And so that’s a pretty meaningful setback. So that was a bummer.

Scot:
[25:32] Yeah other thing that caught my eye i wanted to chat with you about is tiktok shops is kind of they’re kind of the the tortoise and the hare they’re just sitting there growing their gmv like crazy and, because they don’t have those two magic letters that are vowels they are not really getting a lot of attention but i saw e-marketer said that by 2026 they’re seeing it get up way, well above 23 billion in GMV in the U.S., which is pretty material.

Jason:
[26:00] Yeah, this is, I would argue, the most important story in commerce in the U.S. this year, right, is, Kind of quick, quick recap, like obviously they’re, you know, a phenomenal social network that has a ton of attention. There’s now 100 million Americans that go there every day and they spend on average 54 minutes a day on it. Right. So so the platform has taken their attention, everybody’s attention. Three years ago, they said, not only are we going to hold your attention, but we’re going to sell you stuff while you’re here. Right. So they launched a marketplace within the social media platform called TikTok Shop. And of course, you know, heretofore, lots of social networks had tried to do commerce and it never worked. Right. And so there was some speculation that that’s a, you know, Eastern thing that works in Asia, but doesn’t work here. Well, in the first year, TikTok shops sold nine billion dollars worth of stuff, which made them the fastest growing retailer in the history of mankind. The second year, they sold like 15 billion in the US. And yeah, this eMarketer article said, hey, this year they’re on track to sell like 23 or 24 billion. So we talked before about how the industry is having average growth, but I would really argue it’s a bifurcated industry. There’s a handful of retailers, Amazon, Walmart, TikTok shop that are growing way faster than the industry average. And then there’s a bunch of traditional retailers that are really struggling to find growth.

Jason:
[27:30] And what, so I think it’s super interesting how fast and how big TikTok shop is. I continue to visit brands every week and, you know, they all want to talk about the topic you want to talk about, Scott. And I’m like, that’s a super important topic. And when I’m retired, it’ll, you know, it’ll probably go down as the most important thing that happened during my career. But if you’re worried about making your numbers this year, we should stop talking about that and start talking about TikTok shops right now.

Scot:
[27:56] Yes, that’s up 48% year on year, which is, you know, you just went through the e-commerce numbers. That’s like 10x the growth of e-commerce, which is pretty amazing. So they’re taking share from somebody.

Jason:
[28:06] Yeah, they’re the fourth largest e-commerce site in the world.

Scot:
[28:09] Yeah, where’s it coming from?

Jason:
[28:11] Target. No, I’m being a little sarcastic. But some like so a, I think more than like really hitting one retailer in particular, what it’s doing is it’s consuming most of the growth so that organic growth is going to a disproportionately small handful of retailers and it is going to tick tock shop.

Jason:
[28:36] TikTok is in this like group of this triumvirate of brands I talk about a lot, Team Ushian and TikTok Shop. But of the three, the thing that’s unique about TikTok Shop is they are selling a lot of branded merchandise, right? So this is not all inexpensive, direct to consumer from China stuff. A lot of it is global brands selling on the platform.

Jason:
[29:00] And it’s a much broader assortment of categories than people realize. Health and beauty is right at the top and fashion is, of course, very big, but they’re selling steaks, they’re selling food, they’re selling pet food, they’re selling all sorts of things that people don’t realize on the platform. And to be honest, as big a number as that is, let’s say they sell $24 billion this year, I would actually argue that that is the tip of the spear. Because for every dollar they collect on their platform, I would argue they’re generating $4 of incremental purchases, right? That someone didn’t know they needed something, they discovered it in their 54 minutes of doom scrolling on TikTok, and then they walk into Walmart or they jump onto Amazon and buy it. or they buy it from a creator right on TikTok. But the big trend here is this thing that was the most important source of leads in my entire career is this thing we called SIS, saw in store. You went to that store to get Oreos for Stephen’s lunch, and there on the shelf next to the Oreos were the Coca-Cola flavored Oreos, right? And did you take them home? And that discovery, while it still happens in store, it happens way less because you are way more likely to have discovered the new products you’re going to spend your discretionary budget on on TikTok before you ever walked into a store.

Scot:
[30:27] Interesting. I think to do our listeners service, this should be the first app you install on your son’s new phone to make sure he has unfettered access 24-7.

Jason:
[30:37] We have a lot of problems managing screen time and TikTok is not one yet. Twitch and YouTube are a lot bigger problem for us at the moment, but I’m sure my days are numbered on that one too. Thanks for the suggestion.

Scot:
[30:51] Absolutely. Happy to help.

Jason:
[30:53] I would say one other kind of interesting difference, like in the old days, you bought attention on these platforms, right? Like you buy an ad on Facebook, right? Or you buy an ad on Google. And then there was this idea of influencer marketing and influencer meant like Rinaldo or Kim Kardashian and these huge celebrities and you paid them a fortune to make content that say your product is good. None of that works on TikTok. You cannot buy your way to success or you can spend your way to success, but the spending pattern is wildly different. What works on TikTok are small creators that have limited reach, but that there’s a huge number of them. And you can’t pay them to create inauthentic content and expect it to work.

Jason:
[31:39] So the main kind of top of funnel strategy for TikTok shop is sampling. What you have to do is send free product to a huge number of very small creators, and get them to receive your product for free and talk about it on TikTok. And what you’re hoping is enough of them talk about it and get affiliate fees for selling stuff on TikTok shop that the slightly better creators than those will see it and they’ll want to make content. And then we’ll call those tier four creators. And then the tier three creators see it. And then the tier two. And then you actually don’t make any money on TikTok until the tier one creators, who are still relatively small micro influencers, are creating their version of content about your product. So it’s this whole different funnel that people are having to learn. And it’s a completely different kind of marketing process than we’re used to on marketplaces or e-commerce sites.

Scot:
[32:32] Yeah, it’s pretty personality driven.

Jason:
[32:36] Yeah, absolutely.

Scot:
[32:37] One thing we hadn’t covered yet that I thought was interesting because we covered them when they were born was Everlane has been acquired by Sheehan, which just made everyone very salty. The whole idea of a very clean, purposeful, everything is good being acquired by Sheehan, who probably has an opposite view of the world, fast fashion versus permanent, high quality fashion. Why would Sheehan buy that if it’s so misaligned?

Jason:
[33:05] Yeah, well, it’s almost impossible that Sheehan acquired Everlane because in every survey, every done, U.S. Consumers care about purpose-driven brands and missions. And of course, Everlane is the ultimate mission-driven, purpose-driven brand. And Sheehan, many people view as the antithesis of that, right? So it’s utterly impossible then that Everlane totally failed and got acquired, at a discount rate and that Sheehan is wildly successful and had tons of capital to buy them. I don’t know if listeners can hear the sarcasm in my voice. But yeah, you talked about all the people that were salty, no one more salty than the founders of Everlane who had sort of already were uninvolved in the company but shocked to see this acquisition.

Scot:
[33:56] I think you want to vouch to start a new company to re-resurrect the idea of Everlane.

Jason:
[34:00] Yeah, yeah. And I hope they’re successful. I wish them nothing but the best. But I tend to be kind of a centralist here. Like, you know, I sort of don’t believe the Everlanes of the world are quite as good as, you know, everyone would like to believe they are. Like, apparel is bad for the earth. Like, organic cotton is awful for the earth and uses, you know, an overwhelming amount of water.

Jason:
[34:25] There really is no such thing as like green clothes. And I would actually argue there’s some things about Sheehan’s model that are much greener than any apparel company before them. For example, they perfectly match supply to demand. So they don’t have to dispose of or discount any products because they know exactly what consumers want when they make it. And they know they have a consumer for everything they make, which is actually much better for the earth. So I don’t think any of these companies are as good as their PR. I don’t think any of them are quite as bad as their PR. But Shein is another one of these hugely disruptive companies. We talked about Shein, TikTok, and Timu. You know, when TikTok became the fastest growing retailer in history, they did it by surpassing a recently set record by Shein. And, you know, Shein is now much larger than most of the traditional U.S. Apparel resellers that have been trying to grow super hard for tons of years. And, you know, Shein was a wedding dress manufacturer in China that in five years sells way more clothes than, you know, almost any of the U.S.-based apparel brands that we could mention. So they say what you want about them. They have figured out what the American consumer wants to buy and they are offering it and they’re making a lot of money doing that. And I want to say they’re now in…

Jason:
[35:48] I’m going to stall so that I can find a semi-accurate number, but I want to say they are…

Jason:
[35:56] Trending towards $25 billion just in apparel sales in the U.S. This year, last year. Last year. So they’ll sell more clothes last year than TikTok shop will sell all products this year.

Scot:
[36:09] That’s crazy. That’s a lot of she-ing.

Jason:
[36:13] Yeah. And so they obviously, you know, they very famously and visibly put Forever 21 out of business. I’m not sure they were the direct cause of Everlane’s demise, but it’s somewhat interesting and, superficially ironic that Everlane, whose core purpose was transparency, which I really liked, like they put the bill of materials right on their product detail pages, you know got acquired by by you know a company that you know people rightly criticized for their lack of transparency.

Scot:
[36:41] Yeah that’s crazy so that was interesting to watch uh unfold everyone was angry, yeah the another thing that kind of ties to this china retailer, marketplace is i saw the eu is getting rid of de minimis they had 150 euro de minimis there and that reminded me that we had talked a bit about it that that ended in the u.s at some point last year and you, you thought that would be pretty bad for the team moves of the world and and that type of thing because that played out or did the always innovative chinese merchants figure out a way around this through some some loophole.

Jason:
[37:18] Yeah the so a i would slightly characterize it differently it never occurred to me that that i i always felt like that the elimination of de minimis would not slow these companies down because they all did grow. So, well, let me start one step earlier. For people that don’t know what de minimis is, when you import goods into the United States, you have to pay an import tax, a duty on those imports. But we do not have an unlimited amount of inspectors to look at every box that comes into the U.S. and collect those taxes on every box. And so, for our own convenience, the customs department said, you know what? If someone sends a small number of goods in a small parcel into the U.S. And it has a commercial value of less than $15, we’re not going to collect the taxes. And then over time, $15 became $60 and $60 became $240. And these Chinese companies said, ah, instead of sending a container of garments to the U.S., I’ll send a bunch of packages that are less than $240. And then I essentially will not have to pay import duties on any of those garments and I’ll pay more in shipping but I’ll pay way less in taxes and so I would argue all these direct-to-consumer from China companies.

Jason:
[38:32] Were able to jumpstart their business because of De Minimis. But when we canceled De Minimis, it was already too late. Those companies were now very large and had lots of means to import products in the country in a lot of ways, and they’re perfectly capable of paying taxes. What eliminating De Minimis likely did in the US, it made it way less likely that there’ll be a new wave of competitors to these companies. Essentially, these companies walked up a ladder, and then we burnt down the ladder so no one else could walk up it. So that’s what I think happened. And did it require these companies to change their business model? It did. They were all big enough and well-resourced enough to successfully do that. So they all started shipping containers of goods to the U.S. Instead of small packages. They all started buying all the U.S. 3PLs and storing goods in the U.S. And so a sort of unintended ramification is you can buy goods from most of these companies and get it delivered in one to three days instead of the one to two weeks that, you were getting the goods when they were availing themselves of de minimis. So that’s how it played out in the US. All of these companies had a business disruption the day it happened and they all recovered pretty quickly. And we’ve already talked about how fast Gn is still growing and how fast TikTok Shop is still growing.

Jason:
[39:49] And Timu is as well. We’re now seeing Europe run the same play for largely the same reasons. And there’s kind of a funny one, or not funny, depending on how you want to look at it, In France, France is the home of some of the most oldest historic luxury department stores in the world. And Shein, essentially, they’re all distressed because department stores are not a good business anymore. And Shein essentially like invested in one of the famous French department stores to keep them afloat. And the brand still exists, but the stores are essentially franchisees. And so Shein bought a bunch of the franchisees. And so all these luxury French department stores are now selling Shein apparel, in these famous stores, these BHV Marsal’s stores. And this was a huge affront to a lot of people in France. And so now you’re seeing Europe, you know, kind of explicitly change the import laws to try to slow down Shein. And I don’t think it’ll be any more successful in in europe than it was here in the u.s.

Scot:
[40:58] Yeah time check we’re we’re kind of close to the end do you want to do a little lightning round.

Jason:
[41:05] Sure sure sure.

Scot:
[41:07] So I just took some notes of some interesting earnings that came out since we had the Amazon report. And it’s kind of a tale of two cities. So you mentioned Target. They actually had a pretty good quarter up 5.6. That was their first positive quarter in five quarters, which is pretty wild. Walmart had a decent quarter up seven, but they kind of cautioned that they were seeing some softness in Q2. So that kind of was a meh reaction by Wall Street. TJ Maxx had their best profitability beat since August of 2021. And the biggest surprise was Victoria’s Secret really took off with 13% growth. A lot of people, I think, attributed that to GLP ones, giving people confidence to go back into that brand. I haven’t yet, but maybe you have. And then Walmart reported probably the biggest news was their e-commerce grew 20% year over year, and they made a statement that it is profitable. So that was a 15-year journey to get there, but they are now a profitable operation. So I thought that was interesting. What are your hot takes on those?

Jason:
[42:14] Yeah. Yeah. I think that kind of winners and losers is the way to think about this whole market. And again, if the industry is growing at four to 5%, like what you want to see is, are your comp sales faster than four or 5%, right? So Walmart is the second largest retailer in the United States of America, they’re growing at 7%. So that means they’re wildly winning, right? You know, Amazon is tied with or slightly ahead of Walmart at this point as the largest retailer in the US. And they might be growing, depending on how you count, as much as 11%. So they’re wildly winning.

Jason:
[42:50] I’m a fan of Target. I’m rooting for them. I’m thrilled they had a good quarter. I think it’s too early to declare victory for Target. What you have to remember is, you know, when you have five consecutive down quarters, you’re now comping against soft numbers, right? So, you know, I hope they are investing a lot in stores.

Jason:
[43:09] They’re, you know, trying to fix a bunch of the fundamentals and they are getting better results. I think it’s too early to declare victory. And I still worry that Target’s product mix is not favorable for the macroeconomic climate. Like a lot of the Walmarts and Amazons are winning by selling everyday essentials and food. Target is not very successful at selling food. The other retailers that are kind of universally winning are a lot of these really good value-oriented retailers. And TJ Maxx is kind of the best example of that. So they’re doing great. And then there’s some apparel and American heritage brands that are having really lovely, surprising turnaround stories. And so I would look at like Victoria’s Secret is one of those. I don’t think it’s merely a GLP one thing. I think they have a completely new management team and kind of reposition the brand and it’s resonating with their target market. I think Coach had kind of lost their way and they’ve kind of recreated the brand and launched new products and new avenues to market and they’re having phenomenal growth. So I think there’s some great stories of of re-emerging heritage brands, Ralph Lauren is, I think had maybe their best quarter ever this quarter. So, some of those guys are doing really well. Some of the guys we’re used to talking about growing really well, like a Lululemon is, you know, probably, you know, kind of lost some of their mojo. So, there’s winners and losers out there.

Scot:
[44:30] Interesting. Well, I think we have used all of our listeners, Tom.

Jason:
[44:36] Yeah. So hopefully, and I’m going to admit defeat, you made it all the way through without talking about that other topic that will not be named.

Scot:
[44:44] So there was a struggle. My tongue is bleeding right now. You can’t see the visuals.

Jason:
[44:48] Well done. If you want, feel free to go lay down a couple of Retail Jantic episodes right after while I go take a nap.

Scot:
[44:56] I may have to. I’m kind of wound up now.

Jason:
[44:58] Yeah. That is an interesting topic and there is a lot of news there as well so i i hope our listeners are following following all hopefully you know for our our next episode which is going to come sooner than people expect hopefully we’ll we’ll have a little bit of a blend of of uh, all the industry news including that stuff.

Scot:
[45:18] And until next time.

Jason:
[45:19] Happy commercing.