Transcript:
Peter Crosby:
Hi everyone, Peter Crosby here from the Digital Shelf Institute. After 7 years creating the Digital Commerce practice at IDC, Jordan Jewell has taken his analyst mindset to commerce platform provider VTEX, where he is applying his analytical brain to the future of commerce, and the paths to get there. Jordan joined Rob and me to talk about the path from analyst firm to vendor, and the trends and opportunities he is seeing to increasingly monetize every pixel on the digital shelf.
Peter Crosby:
All right. So, Jordan, I for one am so glad that you left the ivory towers of the analyst community to join us on the dark side. First of all, now I can talk to you for free. Seriously, thank you so much for coming on the podcast and sharing your brain with us.
Jordan Jewell:
Thanks, Peter. Really glad to be here.
Peter Crosby:
As a former industry analyst, what is it actually the sort of transition to the vendor side and what the heck does an analyst in residents do?
Jordan Jewell:
So, great questions. I could spend probably the whole podcast talking about answering that, I don't think we should. But it's been eye-opening, I guess I would say for starters, moving from the analyst side to the vendor side, just seeing one, what it's like on this side, how kind of things run within e-commerce software company. But then also, all the perceptions that exist about analysts that in some cases are wrong or are just, I think silly. There's a lot of them.
Analysts, you report on the market, you do these vendor evaluations. There's a lot of weight in those vendor evaluations. A lot of people look at them. A lot of people really care about how many millimeters your dot is to one side or another. And there's all these 3D chess games that vendors like software companies, SIs, try to play to move their dot that millimeter. And a lot of it's really silly again, but that's one big finding I've found in the past few months now that I've switched sides.
Jordan Jewell:
Just there's a lot of things I miss about being an analyst, just the access you get. Everyone wants to talk to you as an analyst, a bit less so when you're on the vendor side. So, that's been an interesting transition as well. And then, it's just seeing how sometimes chaotic things are at a software company. They're just a lot more, I don't know if uncertainty is the right word. There are a lot more ideas going around. And I would say, IDC, we were 50-year-old plus research company and it was a very templated, methodical process. And it's a bit less so on this side, at least in my experience.
Peter Crosby:
And so, as you've been assuming this analyst-in-residence role, what of the analysts have you brought to VTEX? What are you thinking about, how you are bringing that knowledge and then looking at the e-commerce space from that side? What is your role there?
Jordan Jewell:
Yeah, so VTEX, we are an e-commerce software company. And I think, well, the idea behind my role was that I was an industry analyst and I evaluate the market, size the market. I did a lot of bar charts and stuff like that, just analyzing what was going on and tried to do research and report things from an objective point of view. And I think there's some of that lack, I think what you're doing at the digital shelf, institute's actually awesome and there needs to be more of that. In the market, it actually, honestly inspired some of my ideas coming to the side, but that was part of what I thought was missing, that research backed or just trying to educate the market versus just shove marketing messages down people's throats.
And so, that's what I'm trying to bring. I've been really digging into some of the data around the census bureau data that came out a couple weeks ago prior to that, just really digging into data and trying to educate our customers about what what's actually happening, what's happening with inflation, what categories are being impacted the most, that sort of thing. So, just trying to take that qualitative and quantitative data approach and research, bring it to the content, how we talk to our customers a little more.
Rob Gonzalez:
I like this, the research and the market education angle and approach that you take to marketing. I mean, I think most good marketing is how do we this together if you can, as opposed to...
Jordan Jewell:
It should be.
Rob Gonzalez:
Shouting some message. So, combining the experience that you've got at IDC where you covered a wide range of technologies that ultimately add up to driving consumer experiences online, e commerce platforms, syndication solutions, and so on and so forth. I know that you've got this belief that's a win market share and loyalty, a brand needs to show up everywhere that consumers happen to be online and they've got to deliver experiences that are aligned with what consumers are expecting and they've got to do it better than their competitors.
So, can you talk about your view on this overall with a little bit of your analyst hat on and the trends that you're seeing to drive engagement across digital channels and then maybe we can get into some VTEX specific angles on this in a minute?
Jordan Jewell:
Sure. Yeah. So, one of the things I saw at IDC, I started our commerce digital practice at IDC and I think the traditional way to approach that market is commerce platforms like VTEX where I'm at right now, which is, it's a big market in itself. But one of the things I quickly found was that product information management and digital asset management and content syndication, and marketplace, and some of these other markets that are adjacent. And when you think about PIM have been under more data management, MDM space, historically I found that they were extremely relevant. They were extremely important for winning in digital commerce and on the digital shelf.
So, one of the things I very quickly started wanting to cover and I did a market scape and evaluated them was, I started looking at the PIM market and the intersection between the two. And I looked at other markets as well. But when I thought about commerce, I thought about it around a few key areas of orders around customers and products and product information. And I tried to cover those three areas pretty closely. And another reason is the space has seemed a ton of investment when you think about just digital experiences beyond digital commerce.
So, prior to leaving IDC, I did an analysis of pre-IPO funding in the digital commerce space and I had broad definition in 2020 and 2021 and the content or digital experience market, those companies raised over 2 billion during that time period, which is just an insane amount. If you looked at years prior, it wasn't close to that. And it actually exceeded the commerce platform market space itself, the space I play in. Now, so there's a lot of investment going into this area. There's a lot of focus and I have a few conflicting thoughts about the role of digital experiences, what these technologies that impact the content and your website and that sort of thing.
I think for one, I think they are really important and we've gotten to a period where there's a lack of, maybe not a lack of differentiation, but there's a lot of stores that look very similar. It's hard to stand out and everyone's competing. If you're not on Amazon, you're competing with Amazon in terms of just how easy to use your site is. So, one, you have to stand out and if your content sucks, then your whole experience sucks. It's one of the things I've found very quickly. But at the same time, I also strongly believe that there's some core, beyond the website, there are some core fundamentals that every retailer or brand needs to get right if they want to succeed. And if you're not getting an order to the customer on time, which is pretty common, then it doesn't matter how good your website looks.
All too often, I think, with headless commerce, which is very important, but with headless commerce and some of these trends in the market right now, there's been, I think too much focus on it in a way and not getting the fundamentals right. So, those are two completely conflicting thoughts, but they're all behind some of the things I was seeing. I don't know if that made sense.
Rob Gonzalez:
Yeah, it totally makes sense. I mean, ultimately there's the experiential part of commerce, then there's the operational part of commerce. And one of the tensions that you and I have talked about before is what each company is focusing on first and foremost. So, on the one hand, you've got these DXP platforms, which do a ton of experiential work and try to layer on sometimes a shopping cart and order management or whatever on top of them. On the other hand, you've got commerce platforms, which traditionally did the transactional stuff really well. But only recently, I mean recently over years, not six months. Only recently had been adding more of the DXP experiential components to what the commerce platform can provide.
And so, there is this intersection of the different technologies that a brand uses to deliver a consumer experience and ultimately create a website that competes with Amazon. So, I'm curious on that. When you went to VTEX, VTEX has, I mean, in my view, just a really broad product portfolio compared to a narrower pure play, like a Shopify.
Jordan Jewell:
Sure, sure.
Rob Gonzalez:
And it's got both more operational capabilities and more experiential capabilities. When you look at this, the DXPs and the coverage platforms and headless and how all of them are marching towards omnichannel, what's worked and what hasn't worked broadly? I mean, which of these categories seems to be grabbing that combination of experience and operations together really well right now? I mean, you're biased, obviously you probably are going to say VTEX, but if you just say, okay, fine, VTEX. But what else?
Jordan Jewell:
Well, no, I mean, I'm an analyst and resident, so I'm going to give you more of an analyst response than a marketer response, which is that it depends, which is an analyst favorite answer to anything always because it does depend. It depends on the company, the retailer, the merchant, the brand. It depends on what they're trying to differentiate on, what their strengths are, their strong suits. If you have a really, I think you had Gireesh Sahukar on from Dawn Foods just recently, they're an example. I've spoken to him a couple of times. They're a great example where if you have a great tech team and that's how you want to differentiate, and you have the talent on hand, you know what you're biting off, 100% go down that route of investing in more of a composable approach where these things might be from different vendors. That's how you're trying to differentiate. So, in those cases, you probably have a different operational and experiential vendor or set of vendors.
Rob Gonzalez:
If you've got a DXP platform driving the experience, but maybe you've got all the commerce coming from a headless provider and you're just doing the integration. Okay, yep.
Jordan Jewell:
Yep. And you might have a different order management provider and you might have a different inventory management provider, warehouse management. You could go with the best of breed for every single little thing and end up with this, a ton of integrations. The downside is you have a ton of integrations and you have to manage them individually. If something breaks, you have to figure out where the problem came from. What's affectionately described in software as whose throat to choke. And that's not for most organizations was my finding at IDC.
What I found is that a lot of companies, it does benefit them to have experiential and operational by and large provided by one provider. Now, you can pick and choose a couple of areas that you want to use a best of breed product, like a PIM for instance. But you probably, for most organizations, it doesn't make sense.
And something I've also seen in the market is that for a lower end of the market, a commerce platform like Shopify is a great solution. It have been very prevalent in direct to consumer for instance, but most commerce platforms out there. And I'm not saying VTEX is good at this either. Particularly, most commerce platforms aren't very good at understanding what your sales look like across all channels and helping you optimize products, experiences, orders in all those places.
That's part of the reason I think the PIM market, for instance, really is experiencing a Renaissance right now because these experiences and these orders and promotions and everything have been managed separately. They still are largely. If the manager Amazon information orders separate from your direct consumer ones, that's how often it is done right now and it's a Herculean task, I think there's a big opportunity here to really pull these more together. And this is something we're working on at VTEX, but it's a really hard one.
Rob Gonzalez:
So, if we dig into a couple of the things that you said before, I mean that I also is speaking of two things that are in conflict I find interesting. On the one hand, there is this focus on delivering great experiences and doing so omnichannel in particular and an enterprise platform like a VTEX is going to do the omnichannel thing better than a midmarket solution, like a Shopify, right?
Jordan Jewell:
Sure. Sure.
Rob Gonzalez:
But then separately, there's this whole headless world where you can decompose and use best of breed in specific enterprise circumstances in individual aspects of a commerce experience. And I always found this a little confusing because ultimately, I mean, my bias is that the experience matters a lot to consumers and headless by definition is like, there's no screen, it's headless. It's just an API. So, how does this actually fit in when you're talking about omnichannel solution around customer experiences that have got to be strong operationally is headless actually a great way to go in this current era that we're at?
Jordan Jewell:
I mean, the answer is going to be, it depends again.
Peter Crosby:
Jordan, you don't get to say that anymore. You're not an analyst.
Jordan Jewell:
I completely agree. And honestly, I don't think there's a couple of vendors who love the term headless, who frequently talk about how they invented the term, but you talk to 98.4%, that's a made-up percent. But you talk to the vast majority of people and they hate the term. Everyone hates it, because it's not good. It insinuates that you can have commerce without a head, which you can, there has to be an interface. Even if that interface is just by voice, you're talking to a smart speaker, that's ahead in the terminology we're using. So, it makes sense, but the terminology itself is pretty terrible. And the way people talk about it's really confusing. We're doing it right now, but it is often composable and headless are conflated where they're nuanced things that are different.
We're actually working on some content right now to hopefully help provide our point of view because our customers have a lot of confusion about this as well. And there is a lot of interest in the space rightfully. But the easiest way to think about it is headless means API first and the commerce providers aren't necessarily providing the front end. And I do think it's important because commerce platform providers in the past, frankly, just weren't able to keep up with all the different interfaces that consumers wanted to use. They weren't keeping up with, they didn't keep up with mobile, but they also didn't keep up with smart speakers, watches, IOT, whatever it might be.
But whatever fancy new devices there are that consumers are using to shop, commerce platforms weren't keeping up. And that was why headless became a thing because it made sense to have a different person, a different company focused on that. Whereas the company managing the catalog and orders and promotions and everything was separate.
And another example I called out is, I know you've had one of the executives from Cooler Screens on your podcast previously, and that's even an interface that you could put commerce on you. And ideally, that would also be in an API first fashion. So, you could have the same commerce engine managing your website, but also if you're CVS or something, you could have commerce platform managing your catalog and your orders and your inventory and everything in your store, on the screen, and also on your website. And that would be tied together in a perfect world. I don't know if that made sense. Headless could easily be its own podcast and it shouldn't be also, but that's the quick way to think about it.
Rob Gonzalez:
Correct me if I'm wrong. But the part that VTEX has taken is, it's a hybrid model. There's a head, but everything is API first. So, if you really wanted to do your own interface, you could still do it off of basically the backend APIs.
Jordan Jewell:
And we have customers doing that. I would say less than a company, like a fully focused on headless, but we have customers using Contentful and SiteCore and different front ends, but we also have customers using our front end.
Peter Crosby:
So, Jordan, if you think about, you were talking earlier about the homogeneity of product detail pages. Now, when you look from site to site to site, I don't know maybe gotten to some generic middle space in a lot of cases. And it seems to me that over the next two, five, 10 years, a lot of those experiences will be completely recast in putting together the availability of consumer data and context. And then, with the technology capabilities of experiences starting to really shift. And I was wondering if you could walk us through what the future of digital experiences might look like to a consumer as we go. What are you seeing as brands ought to be thinking about?
Jordan Jewell:
Yeah. So, this is one of my biggest predictions or areas that I've really been focusing on since I came to the VTEX about six months ago, which is we're really into live shopping. So, I've been looking into video and how is live shopping being used in China and how could it be used in the Western world, in the US? And that led me down the rabbit hole of just how much more effective video is in general, which led me down the rabbit hole of why isn't this everywhere. Commerce right now, why do our product detail, pages and websites look pretty similar to each other and how they did a while ago? So, my thesis is that if you think about the progression we've seen in social media, for instance, and I would say most internet media, we had Facebook just seven years ago, remembering seven years ago, which feels like a lifetime with COVID.
But seven years ago, Facebook was easily the most dominant social media platform out there. And it looked very different than the platforms that had become bigger today than TikTok, Instagram, YouTube, others in APAC. And one of the biggest difference is video. Video is the defining feature of these new platforms. That's how you interact with them. That's how you submit content. That's how everything happens. And if you compare this to commerce, if you look at PDP, a product detail page and you squint your eyes a little bit, it doesn't look all that different from Facebook and how, this is my thesis, and how it's structured, the picture being up at the top and the information.
And then again, you look at modern social media just from the past couple years, particularly TikTok, and it's very different, the way you engage with it is very different. And I believe what we're kind of seeing at VTEX and what I believe we're going to see more of is commerce emulating that. And you're seeing, Amazon just made an announcement. They're trying to copy some of TikTok's engagement models in their commerce. You're going to see more of that, it is my main point. And every brand and retailer should be thinking, how can I essentially, if there's one takeaway on this topic, how can I embed video more in my commerce experiences? How can I put them on PDPs? How can I just restructure product detail pages, structure the entire website so that there's more video because it is so much more engaging?
And finally, going back to live shopping, because that's a big bet we're making at VTEX. If you look at China, we're using China as an example, they do 20% of all of their e-commerce through live shopping or live streaming. So, one, they have 1.4 trillion dollars in e-commerce. So that's just huge number, way bigger than any other country and 20% of that. So, over 300 million billion dollars going through live shopping and live streaming. There's something there. So, it is just to rethink about what commerce looks like is the main point.
Rob Gonzalez:
It's interesting. If you look by analogy, you go back to the 90s and all the coolest stuff was coming out of Japan and Japan was obviously the future and even dystopia. So, man, I guess Neuromancer was written in the 80s, but it used dystopian Japan as the model for what the bad future would look like. And I just remember back then, Japan was very early to mobile smartphone model, where there was a hell of a lot that you could do with your device. And folks were looking at the chat options that they had. And ultimately, they were looking at the integrated chatting and shopping and whatever experiences that were innovated in Japan and thinking like, "Oh my God, this is what we're going to see in the West." And we never got it.
It worked in Japan, it didn't translate. And I wonder a little bit with the live streaming stuff where we are on the, "Is it going to work? Is it not going to work?" TikTok was mucking around with it. I think they've announced that they're not doing it anymore. Now, TikTok also has another business that's doing pretty well. So maybe they just don't want to do the side gig. So, let's go into this a little bit more. Is this something that can exist outside of China and APAC more broadly? Can this work in the us?
Jordan Jewell:
Yeah. So, this is always a question and it's one that should be asked when we talk about live shopping or live streaming. So, I was actually recently talking to Jason Goldberg, the commerce strategy officer at Publicis and he has a great quote for providing that critiquing it or questioning it, which is, chopsticks are used in China, very widely used there and have been for hundreds of thousands of years, but those didn't catch on the West. Just because something is very popular there or widely used, it doesn't mean it's going to catch on. To your point, Rob., and I think it's a good comparison because, I mean, just because it's working like that in itself is not the reason why people should pay notice. They should look at this and say, "Okay, there's something here." But to your point, that doesn't mean live shopping and how it's working in China, that's how it's going to happen here because I think we're still experimenting.
Peter Crosby:
So, Jordan, what are you seeing in your customer base that is out on the edge of this stuff, because it seems like you're bullish on it. So that says to me you're seeing something that is like, "Oh, there might be some cultural adaptations or something like that, but the metrics are strong and deserve attention." Right?
Jordan Jewell:
Yeah. We have two over 200 customers using live shopping in 14 countries. I've spoken to some of them. They have all the good metrics you hear out of it, higher engagement in terms of the customers interacting with it, they have high engagement, more time spent on the website, increasing the chance of improving sales and conversions. One customer I interviewed in Brazil, from Rio, they're seeing three times higher conversion rates. When they do live shopping events, they do one a week. They were doing a lot more during COVID as well and seeing good results. And there's a long list of results and they're almost always good. But I will point out, there's one thing that the customers I've spoken to struggle with is kind of, they're good at building websites and building e-commerce in the traditional way. They may not be good at hosting live shopping events or figuring out how to make this work. That's one of the biggest stumbling points.
And particularly in the West, salaries are a lot higher. So, it's harder to employ someone whose job is to sell online than it is frankly in China or even in Latin America. So, that's also a stumbling point. So, one of the things I've seen that works is just by and large video is more impactful than other media, whether it's on social media, on commerce. Using video just improves your conversion rates, engagement, having a video on your product page helps. I think everyone knows that. So how can we reuse some of our live shopping content for instance, and stick it on a PDP or stick it on the front page.
On customers, there's usually Q and As on product pages. And if you think about where live shopping performs really well, it's with technical products where customers have a lot of questions, big purchases. I've used it. I mean, looking up information on cars, even for instance, they're widely used in certain categories and why not just put those frequently asked questions that were asked in a live shopping engagement and just put it on your product page. So, reusing that content. These are all ways that customers can get more out of it because that's what's going to have to happen. And just generally, I don't think live shopping and how we're thinking about it today is how it's going to work in the long run.
Jordan Jewell:
It doesn't necessarily, I was looking at Amazon live, their live shopping attempts. They did particularly during Prime day. And it was probably the biggest live shopping event in the Western world ever for eCommerce. But it paled in comparison to anything that China's done, that happens in China. And if you looked at those individual videos, they had a few thousand viewers often, but they weren't that engaging and that's not how live shopping's probably going to work. It's going to have to look different. It's going to have to be either more entertaining and be stuck on Prime video or something, or it's going to have to provide value in different ways.
So, I don't have the answer necessarily, but I do think there's a lot of proof points from our customers about how it works, but every company needs to rethink, how can this help my business and not cost a ton of money? How can this be something we test and learn from? And finally, something we collect first party data from because that's a big struggle right now if you think about death of the third-party cookie and privacy changes. How can we collect first party data and feedback from our customers in a live setting to help inform some of our other commerce operations?
Rob Gonzalez:
Yeah, I mean, there's a dip your toe in the water and non-committal strategy in there, which is if you just redeploy some of your content development and marketing resources to live shopping for a while, regardless of what the outcome is, let's say that you set the KPIs, zero sales, for example. The fact is that you can use all the video and all the content that came out of those experiments. That's just part of your content engine. The videos can go on your websites and we know that increases conversion. The Q and A can go on your PDPs. We know that increases conversion. And so, it's a way to invest in the experiment without actually having to commit to it as a way that sales is done. I like that. That's a [inaudible 00:38:39].
Jordan Jewell:
Yeah. And one of our customers, Motorola, they're deploying it right now, live shopping and they just basically, they didn't announce it. They just stuck it on their homepage, literally just stuck a live shopping feed on their homepage and didn't market it. They just wanted to see what was going to happen. And it did pretty well. I don't remember the exact numbers, but they sold several dozen handsets over the course of, I think an hour. And they were trying to think about how do we, it comes down to that talent and resources standpoint. How are we going to support this in the long run?
But I think if you're thinking about it more and that redeploying your resources and how do we just augment what we're already doing with this? And the good thing about VTEX is it's built into the platform. So, it's not like you have to do a separate implementation. If you can do something incremental like that, that's where it's going to have the highest ROI.
Peter Crosby:
And so, Jordan just summing up, that sounds like your call to action. Because we talk about this on podcast and in Zoom rooms a lot with the current economic environment, budgets can be impacted. We're seeing across the board in tech and commerce, extra initiatives being slashed to get, as you said earlier back to the basics. So, to close, what is your advice in terms of, I think you just outlaid some of it. But if you think about it in that environment, is this something that you feel ought to be in everyone's 2023 plan to figure out, at least figuring out whether this is something that works in your category and in your business and on your site and what would you recommend?
Jordan Jewell:
Yeah, pretty much exactly what you said. I think, I mean that's what I've been seeing in the market. Companies are, if they were looking into NFTs in the Metaverse previously, there may be pulling back those moonshot investments now that there's kind of been a refocus on profitability and return on investment. Profitability overgrowth has definitely been the trend we're seeing. And my recommendation, I mean, we've been seeing a lot of success with our customers in live shopping, but the point of this is just rethink what your product pages and your experiences are going to look like in the future is the main thing.
Jordan Jewell:
And what can you do to your top 10 performing products and their product pages? Can you embed video more in them? How can you just rethink them in the future? What they're going to look like? How customers are going to engage with them? Because it will change. And this thing, it obviously evolves over time, but it's going to change in this path towards video. And how can you be ahead of it versus behind is the main way I would think about it.
Peter Crosby:
Yeah. I was talking to somebody today who was saying, if you think about the grocery store or the in-store experience, so much thought has been spent for decades, if not more, on how do we monetize every square inch of a store? What is the shopper marketing, the displays, the promotions, everything around, how do I get as much money per square foot as possible? And I feel like we're heading into a, and no, I shouldn't say, I feel like. One of the things that he said to me, which resonated with me was, "We will want to think about a future where together brands and retailers are monetizing every pixel in a digital experience."
And if you think about it that way, like your real estate is essentially on your screen where the money comes from and everything you do on that page is either good at that or not good at that. Hey, does that resonate with you? And is that the next of way we should think about how we work together to make great and profitable experiences?
Jordan Jewell:
Yeah, I mean, that's how I think a lot of retailers particularly are thinking about it already.
Peter Crosby:
Sure.
Jordan Jewell:
Look at amazon.com, that's certainly how they're thinking about it. And actually, that quote was very similar to one of the customers I recently interviewed. He said our website, that's our real estate. That's exactly the way I can't remember which customer, but that's one of our customers is thinking about it. And I really liked that you said brands and retailers and that you're not just trying to optimize sale, for an average retailer or brand with products also in store, you're not just trying to improve sales in store necessarily. You're also trying to improve sales offline with your online real estate for calling it that.
So, just thinking about how you can, because too often you get the separation of online and offline, and maybe there's been a focus of improving online conversion online, but you should also be thinking about just making sales offline, online and vice versa of course. So, that is the way I think every branch or retailer should be thinking about this. How can I leverage every pixel to improve my sales across every channel?
Peter Crosby:
Yeah. These days that's a collaborative effort between brands, retailers and getting better at that democratizing that for the industry is a really interesting effort. Jordan, thank you so much for coming over the dark side and particularly for coming on the podcast and sharing what you're seeing as you step over here. We really love having you here and you are such a, and always are, continue to be a really important resource for us as we thought about the industry. And so, it's great to have you come on.
Jordan Jewell:
Of course. Thanks for having me and this has been fun.
Peter Crosby:
Thanks again to Jordan for his insights. Become a member at the DSI at digitalshelfinstitute.org for all the latest. Thanks for being part of our community.
