Video Transcript:
SCARLET:
LET'S CONSIDER -- CONTINUE THE
RETAIL CONVERSATION WITH KEITH GEORGE.
HE'S THE COFOUNDER OF CORTINA, A PLATFORM THAT ALLOWS BRANDS
AND RETAILERS TO SELL OTHER VENDORS PRODUCTS.
WHAT'S TALK ON BLACK FRIDAY AND CYBER MONDAY.
ROMAINE MENTIONED BUDGET CONSCIOUS CONSUMERS.
WHAT DO THE DEALS LOOK LIKE THIS HOLIDAY SEASON?
KEITH:
LET'S LOOK AT BLACK FRIDAY IN GENERAL.
IT'S FROM WHEN RETAILERS GO FROM BEING IN THE RED TO BEING
IN THE BLACK. THE CHALLENGES PEOPLE NEED TO
START PLANNING THAT IN APRIL OR MAY.
A TYPICAL RETAILER, THEY START PLANNING.
THEY THINK THAT WHAT THEY WANT TO BUY THIS YEAR AND PLACING
THOSE ORDERS AND OFTEN TIME THOSE ORDERS ARE MADE OVERSEAS.
THERE'S SO MUCH THAT HAPPENS BETWEEN WHEN THEY ACTUALLY PLAN
IT AND WHEN IT ARRIVES AND WE AS CONSUMERS SEE IT IN THE
STORES. FORGET THE WAR IN UKRAINE AND
RISING INFLATION, WHEN A RETAILER ACTUALLY GOES LIVE ON
BLACK FRIDAY LIKE THEY DID THIS PAST WEEKEND, THERE'S SO MUCH
THEY ARE WORRIED ABOUT FROM AN INVENTORY PERSPECTIVE AND
INVENTORIES ARE REALLY HIGH. AS CONSUMERS, WE SEE DISCOUNTS
BEING PULLED FORWARD, BEING MUCH DEEPER THAN THEY HAVE
BEEN TRADITIONALLY.
WE ARE WINNING, BUT RETAILERS ARE LOSING.
ROMAINE:
LET'S BREAK THE RETAILERS INTO DIFFERENT GROUPS.
I CAN SEE HOW TARGET OR MACY'S COULD NAVIGATE THIS, BUT IF YOU
ARE A MIDSIZE OR SMALL BUSINESS, HOW ARE YOU PLANNING
WHAT PEOPLE ARE GOING TO BUY IN NOVEMBER AND DECEMBER AND DO IT
IN A WAY THAT IS ACCURATE?
KEITH:
IT IS DIFFICULT AND MOST
RETAILERS ARE USING THE SAME PROCESSES THEY'VE ALWAYS BEEN
USING. I WAS AT GAP DURING THE FINANCIAL CRISIS IN THE
PROCESSES WE USED TO BUY, USING TREND FORECASTING, VERY INEXACT
SCIENCE. IT STILL BEING USED TODAY BY
SMALL RETAILERS AND LARGE RETAILERS.
SCARLET:
HOW DO YOU GET AROUND THAT? LET'S SAY YOU ARE A SMALLER OR
MIDSIZE RETAILER, THE IDEA FORECASTING WHAT YOUR NEEDS ARE
GOING TO BE BACK IN APRIL HASN'T WORKED OUT FOR YOU.
KEITH:
IT DOESN'T MAKE A LOT OF SENSE
AT ALL. THINGS ARE SO FLUID IN OUR
WORLD, YOU ARE TYING YOURSELF TO THAT ROCK BACK IN APRIL
OR MAY. ALL THE PEOPLE ARE MOVING TO
THE MARKETPLACE MODEL. AS AMAZON AND TARGET PROVED
EARLIER, BEING TO HAVE THE -- IT HAS BEEN CHALLENGING FOR
SMALL AND MEDIUM RETAILERS TO DO THAT.
ENTER MARKETPLACE TECHNOLOGIES LIKE CORTINA.
WE ENABLE ANYONE THAT HAS AN AUDIENCE, I BRAND A RETAILER TO
CONNECT MERCHANDISE AND PRODUCTS TO MANUFACTURERS AND
BRING IN THAT PRODUCT ON THEIR SITE WITHOUT BUYING THE
INVENTORY SO THEY ARE NOT TAKING ON THE INVENTORY RISK
THAT ALLOWS THEM --
ROMAINE:
ARE YOU TAKING ON THE INVENTORY
RISK?
KEITH:
WE ARE THE TECHNOLOGY PLATFORM
THAT PROVIDES THAT.
ROMAINE:
WHEN WE TALK ABOUT THE
INVENTORY LOAD OR RISK COME A LOT OF THAT HAS TO DO WITH THE
IDEA THAT INVENTORIES MADE IN CHINA, INDIA, OR SOMEWHERE
OVERSEAS. THE TIME IT TAKES TO GET FROM
THERE TO HERE, IS THERE A WAY THAT CLOSING THAT DISTANCE CAP,
IS IT POSSIBLE?
KEITH: IT IS THROUGH TECHNOLOGY.
AT THE MAIN THING WE ARE SEEING IS ABOUT HAVING THE AUDIENCE.
RETAILERS COULD NOT EXIST IN THE SAME WAY THAT THEY DID
BECAUSE ACQUISITION COSTS HAVE GONE UP SO MUCH.
THEY ARE ABLE TO BUY A PRODUCT, WHETHER THEY ARE BUYING IT
THROUGH THE MARKETPLACE WITHOUT TAKING ON THE RISK.
SCARLET:
LET'S GO BACK TO THE IDEA THAT THEY WOULD NOT BE ABLE TO EXIST
TODAY. IF YOU ARE A DIRECT TO CONSUMER
BRAND, HOW DO YOU GET THAT INFLUENCE THAT THE OLDER
COMPANIES WERE ABLE TO AMASS?
KEITH:
I HAVE A VERY CONTROVERSIAL OPINION ON THIS WHICH IS DIRECT
TO CONSUMER NEVER REALLY EXISTED IN THE WAY PEOPLE TALK
ABOUT. THEY TOOK ADVANTAGE OF INEFFICIENT MARKETING
OPPORTUNITIES WITHIN FACEBOOK AND GOOGLE MANY YEARS
AGO AS WELL AS JUST BEING ABLE TO BUILD THEIR BRAND WITHOUT
BEING ABLE TO PAY FOR IT IN THE WAY THEY DO NOW.
ACQUISITION COSTS ARE UP 60% IN THE LAST FIVE YEARS BECAUSE
AMAZON, FACEBOOK AND GOOGLE DOMINATE MOST OF THE MARKETING
SPACE. SO YOU CANNOT ACQUIRE CUSTOMERS
AND HAVE A PROFITABLE BUSINESS IN THE WAY YOU USED TO BE ABLE
TO.
ROMAINE: SO IT'S THE IDEA THAT THESE
PLATFORMS HAVE CAUGHT UP. HOW DOES THAT CHANGE THE COST
STRUCTURE RELATIVE TO A MORE TRADITIONAL MODEL?
IS IT MORE -- PARTICULAR IF YOU ARE RELYING ON THOSE FORMS?
KEITH:
EVERYTHING IN E-COMMERCE IS
ABOUT TRAFFIC AND CONVERSION. HOW YOU'RE GETTING PEOPLE TO
THE SIDE AND HOW THEY ARE CONVERTED.
DO YOU HAVE THE ORGANIC AUDIENCE?
KOURTNEY KARDASHIAN HAS 200 MILLION FOLLOWERS.
WHAT SHE DOES NOT HAVE IS A LEGACY INFRASTRUCTURE.
SHE TAKES NO INVENTORY RISK, DOESN'T HAVE TO WAREHOUSE
ANYTHING OR EVEN PAY THE BRANDS UNTIL AFTER THE CUSTOMER HAS
BOUGHT IT. SO WHAT DID SHE DO? SHE FOCUSES ON BUILDING HER
AUDIENCE. THERE IS A REASON THE
KARDASHIANS ARE SO WEALTHY, THAT'S BECAUSE THEY FOCUS ON
MONEY AND NOT RETAIL PRACTICES.
SCARLET:
GREAT TO HAVE SOME TIME FOR HOLIDAY SHOPPING SEASON BEGINS.
EVERYONE ON MY CHRISTMAS LIST IS GETTING PRESENTS FROM THERE.
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END
