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In this episode, you’ll hear Rick Watson’s unfiltered hot takes on the latest changes coming from the “Big 2” in eCommerce: Shopify and Amazon.
Rick Watson is an eCommerce influencer, former software CEO, and the host of The Watson Weekly podcast. Frequently speaking at large retail events like ShopTalk, NRF, and IRCE, he knows his stuff!
Here’s a look at what we cover:
- How Rick grew from 0 to 45,000 followers on LinkedIn in a few years (fun side notes for anyone wanting to grow their social following).
- The recent Shopify rate increases - people are complaining, but no one is leaving.
- Headless Commerce and Shopify Components - it’s new(ish), it’s sexy, and everyone is talking about it. Is it right for you?
- Amazon FBA changes related to IPI - this shows that Amazon is smarter than the rest of us.
- Buy with Prime - what is it, when does it make sense vs. when does it not?
- Walmart, Target+, and the other marketplaces - should you care?
Mentioned In This Episode:
Transcript:
Brett:
Well, hello and welcome to another edition of the E-Commerce Evolution podcast. I'm your host, Brett Curry, CEO mg commerce, and today I've got a treat for you. I have an e-commerce influencer, a consultant, a guy who's just crushing it on LinkedIn and beyond. He knows the ins and outs of Shopify, Amazon, all the marketplaces, everything, anything and everything happening that's big, and this guy knows it. So I've got Rick Watson on the podcast today. He's the CEO and founder of RMW Commerce Consulting. And so Rick, welcome to the show, man. How you doing? And thanks for coming on.
Rick:
I'm doing great, Brett. Thanks for reaching out to me and happy to be on the pod.
Brett:
Yeah, it's one of those things where I've been and I've mentioned this on a few podcasts, I'm trying to dial in my social media game. So I'm posting on Twitter, which I'm partially liking and just honestly partially not. But I'm enjoying LinkedIn a lot, so I'm posting on LinkedIn. I see this cat named Rick Watson <laugh>, and he's dropping knowledge bombs, and I'm like, I got to check this guy out. So I look at your profile, you're like 45,000 followers on LinkedIn. So I'm like, all right, I got to get to know this guy. So reached out and here we are. So just as a quick aside, and we'll get into e-commerce news and things going on with Amazon and Shopify, and we'll dive into some juicy nuggets there, but talk about social media. You well get started on LinkedIn, and do you think is that worthwhile for someone to consider investing in their LinkedIn game?
Rick:
Yeah, I mean, look, it all depends on what your goal is. For me, LinkedIn is marketing. I started my own consulting firm about four years ago, and I know this is not going to be an interesting business if I can't find my own deals. And so it just started with
How can I help people? And so naturally, I've always enjoyed writing and speaking. And so I think there is a few different sides of it. One is how do I talk about the companies that people care about, which is the big two ecosystems in e-commerce by far, or Shopify and Amazon. So that's why you'll see me talk about Shopify and Amazon a lot. And then if I can sprinkle in there information while I'm talking about those topics, other things to help people, that gives people an idea the type of work that I do, but not in a salesy way. I was never good at really selling myself per se. And what I've figured out over the years, especially on social media, no one wants you to sell to them on social media, not so don't do it. So right. I think you have to remember why you're there and everyone has a goal. If your goal is to find new partners, it could be to find new customers, it could be Ed, but a lot of that social media, the way I think about it, it's the top of your funnel. It's how you meet new people. And if those people trust you, then maybe one day they'll do business with you, but not before. Love it, but not before. Right?
Brett:
100% no. And trust you build that on social media for sure. So how long did it take Rick Watson to go from whatever you had in the beginning to <laugh> now almost 45,000
Rick:
Follow? Yeah, so I've been on LinkedIn since the beginning, 2004, five. I think everyone started on LinkedIn as their online resume, but I didn't totally until I used, until I started my business, I never got serious about it. So when I founded my business in 2019, I had about 2,500 con contacts. And so in the last, that's awesome. Four, the last four years I've maxed out, I've learned two things. Number one is the maximum number of connections you can have on LinkedIn is 30,000. I did not know that when I started.
Brett:
Interesting. You cannot
Rick:
Connect followers. So I had to go to the whole follower model, which luckily Introdu, LinkedIn introduced this whole creator mode. So your profile becomes something that someone can follow rather than connect. Actually had to delete connections to meet to <laugh>. So it took me a while to figure out that after a couple months after I started my business, I basically post on LinkedIn every weekday morning. That's kind of my routine. I do it before I start. And that's really the foundation of all my content marketing, period. All my content basically starts on LinkedIn.
Brett:
Nice. And then you're taking pieces of that content and sharing elsewhere potentially.
Rick:
Yeah. So I might be like, if I post about a Shopify over a month period, maybe three of four of those posts might turn into a bigger blog post that will be then used for seo, or each of those stories might be used in my podcast in a little bit different way. And so I'm actually starting to get into looking to starting to get into video. So some of these more popular posts might turn into, so it's all these things are starting to reinforce each other as I kind of like, okay, I got LinkedIn, I have, okay. And the podcast is going, what else can I use this content for? Is what I think is interesting,
Brett:
Leveraging that content. Love it. Love it. Yeah. Well, let's dive into some news. I appreciate that. Side note. And for anybody wanting to build their social media following some free tips for you. So let's talk Shopify now fairly recently, depending on when someone listens, I think it was actually this morning or whatever as we're recording, but Shopify just announced a price increase. They bumped the price on basic and advance and sounds like it was a pretty decent hike, right? 30% or something. So talk that. Why did Shopify do it? It's probably obvious to most people, but why did they do it? And is this good, bad, or it just is?
Rick:
Yeah, I think it is. Look across the board, everyone's raising their prices totally. The cost of employees is higher, the cost of services is higher. And so that even applies to Shopify. Shopify hasn't done a price increase, and to be honest, since I've been following Shopify in the past five or six years at least, wow, I can't think of when they've done a price increase. And I think the COO mentioned that something like 10 or 10 or 12 years. So it's almost like a mistake. I think that they haven't raised prices till now. And so it was kind of inevitable when I saw their Q3 earnings and they kind of went from profitable to slightly, not terribly unprofitable, but negative 10% net margin. And I'm like, these guys are going to increase their price real soon here, <laugh>, no doubt. Because otherwise what do you have to do?
You have to lay, they're a software company who are all their expenses people, so they don't want to lay off people. So they're going to increase their prices and then they might do some layoffs and they ended up doing both. But yeah, I, I'm frankly kind of indifferent for it because I thought it was overdue before I posted my article this morning. I did some searching on Twitter just to get a sense for what people were thinking. There's a lot of complaints no one likes, no one likes to hear about a, no one likes to hear about a price increase, but in a week you will not hear one Pete, I guarantee
Brett:
It'll be dead. It'll dead
Rick:
Like
Brett:
Dead. This really sucks. But they're reaching for their wallet to
Rick:
Where else are they going to spend six months to pay a new agency to re-platform? No, nice to spend, no, they're going to spend the extra $10 a month <laugh>, right? Yes. Thank you.
Brett:
Yep. So likely long overdue. So interesting news there. Yeah, hopefully Shopify can get profitable because hey, we all need Shopify, even the ecosystem at large, a hundred percent Shopify's good for it. So let's move on to another topic. And this one's super interesting to me and it's one that admittedly I understand at a surface level but not deeper. And so I'm excited to chat with you about it. Let's explain what headless is for people and then Shopifys kind of play on that is Shopify components. We'll talk about that in a minute, but what is headless?
Rick:
Headless is an unfortunate term that has made its way into popular terminology in the e-commerce world. And I kind of came up as a developer, so I understand a lot of the technology. And I was a software engineer for many years as and an architect. So headless essentially means that there's a separation between how you display content to a user, the journey a user will go through on the path to purchase from back office and operations functionality. And traditionally in a software, Shopify, a Magento, a Magenta, a Salesforce, historically, all those things were kind of bundled in one software platform. So if the prototypical example is, if you don't your Shopify template, it's not like you could design a custom one. Let's is early on you couldn't design a custom one from scratch. You were kind of choose one of the a hundred templates and that's what you got, right?
And headless I first heard about headless back in the magenta days, something like 2013. And part of it, it was performance of the site. Once you put over a thousand products in Magenta, it would start to collapse. And so people would build completely custom front ends, but use the Magento cart on the backend. And so people talk, what I heard was people would talk about taking the head off of Magento, and by the head they mean the ux. Mm-hmm. Things like the homepage, the category pages, the search engine, the pdp, basically everything up until that add to cart button is the head. And so that's what people meet by headless. And I think the real look, at the end of the day, the goal for headless is flexibility and as flexibility
Brett:
And is speed a component too? Speed of the, and user experience
Rick:
Speed's a component. If the platform is slow by default, right? <laugh> not a component. If the site is pretty fast, Shopify isn't natively slow unless you load it down with a bunch of stuff. It's not the fastest platform on the planet either, but and so some people have run Shopify in the headless mode. Usually that started out with some kind of CMS on the front end or a custom front end, and you can create a user experience. And so I think as Shopify I think Shopify has seen this and then we'll probably talk a little bit about this, but there are a lot of vendors, particularly in the enterprise space, you may have heard term composable commerce or mock microservices, all these kind of terms are in the headless universe per se. And they're just different flavors of this idea.
Brett:
So you can take all these little microservices and kind of stack them together to build your own flexible custom UX and e-commerce experience. And maybe it's to use the example you used before, and probably this wouldn't be today because this is old, but magenta's the checkout or Shopify's the checkout, we've got these other things that are on the front end. They're the
Rick:
Head and exactly. And look, flexibility is great, but similar to a Lego set, most people don't want to build an e-commerce platform by be being given a set of Legos. The reason that Shopify is such an amazing company is that it works pretty well for most things people need. Totally. And so I think as a result, I think what most people who hear about headless who are like, oh, it must always be better because it's new. And I think that's not true at all actually. I think there's a segment of scenarios where out of the box cloud platforms are not flexible enough. Like multinational companies, people with multiple E r P systems with many different fulfillment centers, many different brands. I had a customer ask me like, oh, could Shopify support a million skews? And I even had the Shopify sales rep. Nope, <laugh>, right? <laugh>
Brett:
Not a
Rick:
Chance. So you probably need a little bit more a different platform
Brett:
Than sense something that's top of the box then, but it totally makes sense. Shopify out of the box works for most people. But we got this, the headless component, headless commerce, which is all sexy and it's all the rage and stuff that most people don't need. So then what is Shopify components and how viable is it? Where do you think it fits into this
Rick:
Industry? Yeah, so what I think is Shopify components, if you think about where Shopify started from like's, to use the contrast, Shopify is really for smaller brands that kind of grew up. And that's really the whole Shopify business. Now, of course there are many multi hundred million brands that have been in e-commerce for years and years. And technical architectures are usually a disaster and very complicated. They have 15 e r p systems, they have four brands, they're all on different platforms. They have a pim, like a product, a put a catalog over here. They have an order management system, maybe multiple of them, different warehouse systems all over the place. There's no way you could plug Shopify in as a hub to all those things. And so the idea of composable commerce per se, or what Shopify is calling component components is how can we break apart what's good about Shopify?
Let's say the checkout maybe some of the hosting infrastructure that was designed for commerce and fit them into this complex enterprise world. Can we provide value to this type of brand? And look, the jury is out because it's a new idea and this is a new direction for Shopify. But I think that's the vision is how can we take the best of what build Shopify into this great all-in-one solution, break it apart, and now we have this componentized solution that runs on great infrastructure. I mean, no one, Shopify's not perfect, but no one really worries about Shopify going down day to day, right? Right. So they know how to host software and they have a great checkout. And so I think to me, those two things like the great hosting and great checkout to me, especially early on, what Shopify components is going to be most about. And then they're saying other things are components. I'm not really buying it right now. They threw fulfillment in the fulfillment's, not a component. I mean, come on, everyone needs a three pl. It's a service. Don't call it a component. I mean you're just confusing what it is. But anyway, that's kind of the,
Brett:
Yeah, it's interesting. Do you, you know anybody using Shopify components and is it getting some traction or still
Rick:
Too new? Well then announced said a month ago, so the answer is no. I read the original press release carefully and Shopify is very slick with its marketing. And so they have these components that they have components that they've built over the past few years before they came up with this new name components. So hydrogen, oxygen, the integrations with these new CMS systems. And when they release components, they said, Hey guys, those things we did in the last three years, those are components. And so as a result, everyone's using comp. So it almost depends on how you define a,
Brett:
That's a good way to get adoption for your new product. Just rename your old product for new one and now it's like instant adoption. Yeah.
Rick:
Shopify's something master at this
Brett:
That is smooth. That is smooth for sure. Okay, cool. So good stuff there. Let's get some Shopify news. That's fun. Let's pivot it a little bit and let's talk Amazon. Cause I know you are deep in the Amazon world and so let's unpack this a little bit, but Amazon has made some recent changes to fba. So talk about that. What are some of those significant changes and why do they matter?
Rick:
Yeah, so I mean FBA is obviously a huge part of the third party seller universe on Amazon. It's essentially Amazon's full system that they introduced 15 plus years ago. Now it's had some growth challenges in the past few years where they've struggled with capacity constraints mostly brought about by the pandemic. There's more sellers than space. And so they doubled their fulfillment capacity in the past two years. And one of the things that I think what they're trying to do now is they're basically trying to prevent the next storage crisis in advance. So Amazon is smart people, they try to think ahead of what's going to come going on. And so they introduced this new feature in the last month called I don't think they've rolled it out technically yet. It's called FBA Capacity Management. And basically what it means is every seller, even if they're using FBA ta, they get a certain amount of storage allocated.
Like, okay, you're a seller, you can get this much storage and if you want to get more tough, this is how much that each brand gets. And so what they found is, okay, we have this storage problem and we have sellers that want more space and we have sellers that aren't using their space properly. So what they came up with is a way to solve all these problems at once, which is brands that are doing well, you can bid for more storage. And Amazon we have, oh, we can grant you that request. So you're like, okay, we think that you want to double your storage. Great, tell me about the inventory you're going to put in this. It's like, okay, this inventory's not selling no request denied. Oh, if this inventory has really good sell through by and it's measured by a metric called I I or inventory performance index. Essentially if your sell through is good in 30, 60 days say, then you have a much higher likelihood of not only getting access to new storage if you ask for it. And second is you actually aren't going to pay extra for that storage if you sell through that inventory. So it's almost like a carrot of putting good inventory in FBA and taking out bad inventory and penalizing people who by giving them less space if their inventory doesn't sell well,
Brett:
Which is really smart on Amazon's part, how do they maximize even though they doubled their warehouse space and there are I think some 1200 fulfillment centers in the US or whatever. You probably need better
Rick:
Idea.
Brett:
It's crazy. Yeah. But yeah, still you got to maximize that space. So what do you, you incentivize the product they're selling and you make it really hard for people to send more products in there are not selling. Yeah, very, very smart. Why Amazon is a leader. Sure. So if your i p is good, you may get that extra space and not have to pay any extra fees If it's maybe somewhere in the middle, maybe they'll give you extra space but charge you a premium for hundred
Rick:
Kind of what's happening percent. Exactly. So if almost your I P I is good for the extra storage, then you get back what would've been your fees as not cash, but credits. Amazon is way smarter than the rest of us. So they're not giving you dollars back. They're giving you like, oh, if you want to get more, it won't give you future credits. So they're paying back you gift certificates basically to future FBA storage, which is again, which is really
Brett:
Hilarious.
Rick:
Another evil genius idea that they came up with this at the same time.
Brett:
Totally <laugh> incentivizing merchants to do what's in the best interest of Amazon and in the best interest of Amazon's customers. So that that's good. And then the reward is gift certificates, basically
Rick:
<laugh>, right?
Brett:
Future credits on stuff.
Rick:
We're going to try that. You can only buy from them, right?
Brett:
<laugh>, right? Yeah, yeah, yeah. That is super interesting. Okay. But we deal with this a lot to our agency. Obviously we've got a big Amazon department and we help with the organic side and the paid side, but we do run into this sometimes with clients where they're limited on inventory and then you can't really hit the gas pedal too hard on some of your growth strategies because then your sell through is too high. So then it's like this game of let's consistently build that I I. So that increases your capacity. So it's a bit of a process for sure.
Rick:
And so I think long term, look, I has always been pretty important to Amazon, but I think you can see how it becomes more important with as space becomes an issue.
Brett:
Yeah. So space becomes premium. Cool. So we got that as a new rollouts fbi. F b what else is new on the f b side?
Rick:
I, it depends if you want to go for buy with Prime, that's probably the next big
Brett:
Tools. And first of all, explain this because Amazon and really all the tech companies are notorious for this Google name something then renames it three times. And I know Shopify may be similar, but Amazon, so there's a few things that are named similarly, but what is Buy with Prime?
Rick:
Buy with Prime is essentially a way for, let's describe it from the consumer point of view first, A prime shopper can go to a non-Amazon website and get a prime-like experience, meaning they can be guaranteed that they can use their Amazon account, they're stored information and get their item in with a prime promise within two days. And it be part of the A to Z guarantee, which means you'd get free, no questions asked, returns and everything, the whole prime promise essentially. So that's the consumer promise from a merchant side, it means that if you're a merchant with a direct consumer website, basically like fba, Amazon's fulfillment plus Amazon Pay had a baby and that's what Buy with Prime is. And so a lot of people, a fair number of merchants already had Amazon Pay on their website. And this AM Prime becomes basically a new button on the product detail page labeled Simply Buy with Prime.
And when you click it if you have that inventory in an Amazon facility either mcf, which is kind of the white box, Amazon or fba, which is all your stuff for your three P business, which is in a Amazon box you can actually do either you then click off to the normal Amazon pay flow, which looks like PayPal or any other third party payment flow. You go off to a page, you select your shipping method, and then you go back to the website and then Amazon will share your contact information back with the brand. And so the brand gets something from it, they get to mark themselves to Prime shoppers and they get to co-own this shopper's data. And then Amazon gets something to put them because obviously they're interacting with Amazon. And for Amazon everything is about Prime. So why does Amazon do Lord of the Rings? Like the answer is they want more Prime members, right? Totally. So yeah, everything about anywhere the Prime brand can ensure that prime members get more value wherever they go.
Brett:
Prime is the ultimate accelerator for that growth flywheel. Once someone becomes a prime member, your consumption on Amazon goes up dramatically. And so Amazon knows that and they want to incentivize that. And this is really interesting because one of the arguments we hear some of the things that, of the things I hear a lot is, hey for those that don't want or think you shouldn't sell on Amazon, hey, if you grow your business on Amazon, it's no longer your customer customer. And that's partially true from a data standpoint. Amazon owns the data. You do get to see some of that. But ultimately, in my mind, that's not a reason to not be on Amazon. That's kind of like saying, Hey, if you sell a product, don't get on the shelves of Walmart because that's a Walmart customer. Now you like this way, retail's always worked, right?
It's distribution and if you're a great brand, you want people to discover you on Amazon just like you would on the Walmart store shelves. But anyway, this is a little bit better in that, hey, what is one of the hangups if someone's checking out on your D two C store? Well, do they trust it? Do they trust the delivery? Do they trust the checkout? This gives you that Amazon checkout and you still get the data, which is interesting. Now, I would love your take on this. I know when this first happened, Shopify said, Nope, not on Shopify against t o s can't do buy with PRI on Shopify. Yep. Have they they backtracked on that? Are people just doing it anyway? What's your take on that?
Rick:
Yeah, I look they technically, I think Shopify warns against it. Okay. They're not preventing it. And it's almost like I think they're taking a little bit of a wait and see attitude. And I think it's smart to be honest with you, because I think the average D two C brand who is really focused on their brand probably doesn't want Amazon on their website in the short term. Maybe in the long term they might change their mind, but in the short term, for sure not. If I think about the average D D C brand, that's just not how they think about the world at all. It's just a different reference. However, there's millions of Amazon sellers that have a very small d TOC presence and they have no hope of building their own traffic on their own and attracting customers. And so if Amazon can be an accelerant to help them move some of these Amazon shoppers to their website, which it's, look, it's proven to happen. There are multi-billion dollar businesses. Anchor is one of the started on it as an Amazon brand.
Brett:
And one of my favorite brands, by the way, in terms of Chargers for your phone, for your MacBook, whatever percent, that is always the brand that I buy. I trusted.
Rick:
Yeah, yeah. No, it's great.
Brett:
But it's another example of a good brand that was built on Amazon, but now it's a brand. I'm not just buying an Amazon charger, I'm buying Anchor even though I buy on
Rick:
Amazon Charger a hundred a percent. But you gained that trust on Amazon because you trusted what the reviews. Yep, yep. Right?
Brett:
Yeah, exactly. And you bring up a really good point. I think if someone is highly skilled, and we talk about this a lot. In fact, I posted on that on Twitter a couple weeks ago in the tweet and gain a lot of traction. I was like, Hey, if you were to start a brand today, start an e-commerce brand, would you start on Shopify and then launch on Amazon? So start on Shopify, build a following, build a community d toc, and then once you've got a brand following, then launch on Amazon. Or would you start on Amazon first and then try to go D to C after? And it was really interesting. People were very passionate both ways. It was almost 50 50, a little bit more leaning towards building on Shopify. And I would kind of agree, if you've got the skill to build D two C and you can build up that brand and build up that demand and build up that interest, then when you go to launch on Amazon, you'll take off there and you won't be as priced.
It won't be like a pricing game as much and stuff like that, but I could totally, so if you can build that D two C customer, I see there's no reason why you just don't do a Shopify checkout, just keep it all within Shopify. But if you need to maximize your inventory that's inside Amazon, or if you live on Amazon mostly and now you're trying to go D toc, maybe it is a good gateway. Maybe it is a good little transition little bridge to go from strictly Amazon to D to C. So definitely it is super interesting. Yeah,
Rick:
No
Brett:
Percent. Any case studies or takeaways or anything you, you've heard from people that are using it? I know it's pretty new.
Rick:
Yeah, it's pretty new. I have been doing some secret chopping recently, so I will be hopefully releasing some content about what's it really working. And Amazon has a number of case studies and if you saw, they announced it in September something last year, and then January they're launching it. It's been invite only, it's actually going to be invite only until February 1st this year. But apparently they did some studies and they, they'd be testing that the Buy with Prime button increase conversion over a similar PDP 25%. And so
Brett:
Interesting. We'll
Rick:
See. And I'll say in some cases it's more, some cases it's less like your mileage may vary. And so I think that I, that's why they're did the beta period is so they can prove and gather this data so that they can launch it to the wider world. I think to me, the hardest part of adopting power with Prime is FBA period. The average DDC brand doesn't have their stuff in fba, they have their own d P,
Brett:
Right? Right, exactly. So
Rick:
It's not really an option. And look, if they have an Amazon business, that's one thing, but then do you, now you're confusing the ba, so
Brett:
Yeah, yeah, it's like don't straight, your inventory is not there.
Rick:
Yeah, it's not straightforward, I would say.
Brett:
Yeah, that really makes sense. So Rick Watson out there doing some mystery shopping, so hey, another reason to follow Rick on LinkedIn, because you'll get access to those case studies and those examples when they come out. So sounds fun. Alright, kind of as we wrap up curious your take on Walmart. So when you look at the two biggest players online in terms of marketplaces and just online retailers, it's Amazon and then Walmart, but it's not really that close. If you look at market share and shoot from the hip a little bit here, but different numbers, but Amazon's like 40 to 49% of all purchases are on Amazon. Somewhere in that neighborhood. Walmart is like six, right? You know, look at fulfillment centers like we talked about Amazon's like 1200, Walmart's like 200 and Walmart's got all the stores and stuff. But what is your view on Walmart as a marketplace and as a viable online competitor at Amazon? And how are you consulting your clients to
Rick:
Use? Yeah, what I would say is for the average brand look you, Walmart, you have to pay attention to, but I mean the big three, Amazon, Walmart at Target, everyone needs to pay attention to. Beyond that, it kind of drops off and it becomes much more a niche. If you're at home improvement, you have to worry about Home Depot, and if you're in beauty, you might need to worry about Ulta and Sephora. So it gets very niche after that. But the big three, everyone needs to care about. And so most of the brands that I consult with, Amazon, Walmart, and Target are there customers on retail wholesale side period. And so as you think about marketplaces, those are really, Walmart is the only really market marketplace that you can recommend without question, as long as someone has already started to scale their Amazon business, you're like, should I care about when you go, there's like, I don't know, 50 marketplaces in the us which one should I care about? Well, probably not 50 of them. You should probably just make sure your Amazon and Walmart business are optimized first and then you can start caring. But for most people, they're never going to get there because there's always, if you have $10 to spend, you should probably invest eight in Amazon, one in Walmart, and one across every one else. You know what I mean?
Brett:
Exactly. Or maybe in the beginning you just invest all $10 in Amazon
Rick:
A hundred
Brett:
Percent and really grow that. And then you start looking at other things. And for a lot of our clients, we recommend something similar where let's really focus on the immediate opportunities on Amazon and then we'll begin to look at Walmart. And sometimes Walmart is a couple percentage points in Lyft. Yeah, maybe it's 5%, maybe it's a little more, but it's not going going to be a game changer, but it is certainly something considered. Yeah. Curious also your take on, you mentioned Target. So we've got kind of an end with Target plus for at least some verticals through a couple connections we have and have a few clients that are on Target Plus that's pretty interesting. We actually got some people that are moving some products on Target plus what's your take there? And it sounds like probably a lot of your merchants are on Target plus as well.
Rick:
Yeah, I think it's interesting, particularly a O V seem to be higher on Target relative to other places, which I think moves in needle for some people. I think Target is just such a quality retailer that relate, that relationship is important.
Brett:
Oh, quality customer buyer, pretty loyal, the target fans or still loyal to Target
Rick:
A hundred percent. Again, marketplaces smaller than Walmart, so it's like diminishing returns as you go down. So Walmart and Target are never going to make or break someone's year if they're the head of marketplace period. It just won't cause it's always going to be, it's certain it's on the wrong side of the 80 20. Yeah, yeah. Even maybe 90 10, right? And yeah, I'm sure you
Brett:
See, yeah, I would say so. I would say probably more like 90
Rick:
10. Yeah, exactly. With your clients as well. So one of them can of these businesses can be a 200 million business and one cannot, right? So yeah, it's a very powerful idea, and this is something I coach my clients on, where should you spend that next incremental dollar? And almost more important than your dollar is your time. Most people have a fixed team, they have three people on their team, and I've walked into clients that were on 10 marketplaces and a 10 million Amazon business. I'm like, this makes, no, doesn't make any sense. Yes, you're diversified for
Brett:
All three people on Amazon, forget about the rest for a while.
Rick:
<laugh>, right, for forever, yes, you're diversified, but you are destroying your own opportunity. So
Brett:
Really good point. Really, really good point. Awesome. So you talked about clients and I mentioned your business as we kind of launched here, but RM W Commerce consulting. So talk about what you do, how do you help people and what are the types of brands and companies you're working with?
Rick:
Yeah, so I've worked with a number of different, mostly private equity back brands over the years, which means basically the ultimate owner is an investor that has a portfolio of brands and companies that work for them. Some of them I've worked with are like W H P Global, which bought the brand Ann Klein. They own toys of Russ. They own Joseph Aboud. And so helping them with digital strategy. And a lot of these brands that private equity buys are in the e-commerce world, you might call them opportunity buys and because there's something that people love about this brand, but maybe it's been mismanaged and people under, there's name recognition there, but something about the execution is not right. The profitability is upside down or their digital strategy is bad or they're not in the right, there's something about the business that needs to be improved. And so that's when private equity comes in.
And so I'm usually very much aligned with the new investors and the CEO to help transform these businesses. Basically kind of assess where we are, recommend like a punch list of items. These are the top 15 things that I would be doing right now, and here's what your returns are going to be over the next two years, whether it's people, process technology across digital marketing platforms supply chain, merchandising, but you name it, insourcing out outsourcing. And it's different for every brand depending on how much money they're working with, what their timeframe is et cetera, how many staff they have.
Brett:
Yeah, totally makes sense. So yeah, it's a lot of fun. People, processes, technology, mapping that out. So you're looking, working on the strategic level, you're maybe helping build out the team or find the right agency or find the right partners. And so you are guiding these companies, which is awesome. And so you are primarily working with private equity back companies or exclusively working with private
Rick:
Equity back companies? I would say primarily that's about two thirds of the business. I also worked with software and service providers in the e-commerce industry. I, I've been in the software most of my career and I've been a software company ceo. So a lot of e-commerce service providers, a lot of times in supply chain marketing payments have come to me for advice on Broadway, go to market strategy i e-commerce is a competitive market. And so if you are a supply chain provider or technology provider or a three PL or a payments company, you may be like, how do I stand out? What should my strategy be? What is the right message for me? And it's usually companies that are between series A and series C and they're trying to make some kind of change in the business, right? Well, we've grown to this point, but we're kind of hitting diminishing returns and they're bigger players above us, so how do we break through to that next level is really how I help them from a go-to-market messaging and approach point of view.
Brett:
That's awesome. That's awesome. So if someone's interested or like, Hey, I need to find out more about this, or this sounds like it might be a fit for me, how can they get in touch with you?
Rick:
Yeah, the simplest way that has all the information there is my website, rmw commerce.com or it's also easy, just hit me on LinkedIn search for Rick Watson and you'll find me and should be a message and I'll respond. So
Brett:
That's awesome. That's awesome. Well, Rick, this has been a ton of fun but do follow Rick Online. He's a great follow on LinkedIn. You'll learn a lot, you'll learn a lot daily but also catch you at events, right? You're speaking at nrf, you're speaking at other Yeah,
Rick:
Events. I'll be at Shop talk events, happy at I R C, I'll be at leads, so that'll be fun. Yeah, looking forward to meet anybody who comes around.
Brett:
Awesome. And also, I think I mentioned at the top of the show, but the Rick Watson Weekly, is that the name of the
Rick:
Podcast? Yeah, the Watson Weekly is a podcast Watson, we started about a year and a half ago, and it's kind of a different than the normal podcast, 15 minutes every week. It's a digest of e-commerce news and hit subscribe in your Apple podcasts and would love to have you, Liz
Brett:
Watson, weekly, get that weekly e-commerce news. I like it. Rick, thank you so much. This is a ton of fun and we'll have to do it again.
Rick:
All right, thanks a lot, Rick.
Brett:
Alright, thanks man. And as always, thank you for tuning in. We'd love your feedback. So if you've not already done it leave us that review on iTunes or wherever you consume podcasts. And as I've mentioned, hit me up on LinkedIn or Twitter. We'd love to connect with you and keep the conversation going on the socials. And with that, until next time, thank you for listening.
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