Joining us in conversation about his just released new book Winner Sells All: Amazon, Walmart, and the Battle for Our Wallets is Jason Del Rey, the veteran business journalist who has spent a decade reporting on Amazon, Walmart, and how technology is transforming retail.
Joining us in conversation about his just released new book Winner Sells All: Amazon, Walmart, and the Battle for Our Wallets is Jason Del Rey, the veteran business journalist who has spent a decade reporting on Amazon, Walmart, and how technology is transforming retail.
We explore the evolution of the rivalry and how it's shaped the world of commerce, while learning about some of the key inflection points that have propelled Walmart's race to embrace digital technology, including the Jet.com acquisition. We compare and contrast the two retail giant's innovation DNA through Jason's great behind the scenes anecdotes gleaned from his more than 150 interviews. We conclude with a review of each company's healthcare ambitions.
But first, as is our custom, we kick-off the penultimate episode of Season 6 with the week in retail news, exploring what the latest macro-economic news portends for the balance of the year. Then we do some quick hits on Overstock.com's "stalking horse" bid for Bed, Bath & Beyonds intellectual property, Westfield's decision to walk away from its downtown San Francisco mall, and what to make of Kroger's lukewarm earnings report.
About Jason
Jason Del Rey is a veteran business journalist who spent a decade at Recode, a leading online technology publication, reporting on Amazon, Walmart, and how technology is transforming retail, both online and in stores. He is the host of Land of the Giants: The Rise of Amazon, a narrative podcast series about the tech giant’s rise and the impact of its relentless ambition on hundreds of millions of people across the globe. He was also the producer of Code Commerce, an event series featuring unscripted interviews with the most influential executives and entrepreneurs working at the intersection of technology and commerce. In 2019, the National Retail Federation named him one of the “25 People Shaping Retail’s Future.” He lives in Northern New Jersey with his wife and two children.
About Us
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global eCommerce Leaders podcast, and The Food Professor with Dr. Sylvain Charlebois. You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:06
Welcome to Remarkable Retail podcast, Season 6, Episode 23, presented by MarketDial. I'm Michael LeBlanc.
Steve Dennis 00:12
And I'm Steve Dennis.
Michael LeBlanc 00:14
In this episode, our second last of the season, we're thrilled to have the opportunity to host one of the savviest technology and retail reporters, someone whose work on Land of the Giants podcast series set the bar high for anyone who aspires to help us all understand digital retail and its impact on society and business. Jason Del Rey.
Steve Dennis 00:31
Yeah, Jason is a guy that I, whose work I've followed for quite some time and actually, the day we released this, his book, ‘Winner Sells All’, which details the evolution and the rivalry between the two biggest retailers on the planet. That would be Walmart and Amazon, for those keeping score at home. Who might not know that is, yeah, it's out today and it's a great book and it's a really interesting interview.
Michael LeBlanc 00:56
All right, and it's a little bit, it's a touch longer than our usual interview that's so fascinating. We could have talked to Jason for like at least another hour, like it was really a rich interview. So, let's, let's get into the news. Let's do a quick overview. So, it's a big week for macro-economic news, so to speak. So sometimes in our news, we like to start about the, the overall economic picture, what did you make out of the latest kind of threads of discussion in the news around the overall economy?
Steve Dennis 01:24
Well, I think the biggest change was what happened with monetary policy. So the US Fed, after a lot of toing and froing, on the part of people watching this ended up not raising interest rates this time, they're taking a pause, but they definitely signaled that they thought more increases would be necessary to tame inflation. So I think that's kind of what ultimately people were expecting, remains to be seen, obviously, as to where they're going to end up, the balance of the year and then the European Central Bank, they broke from tending to follow what the US Fed does, by lifting interest rates, 25 basis points, I think it's not terribly surprising that they moved higher, given that inflation has been running a little bit hotter, in the UK, as well as in the EU countries.
Steve Dennis 02:15
So not, not surprising and generally, the view on inflation is that it is improving, but it's still quite persistent. The numbers have looked a little bit better, but some of that has been driven by cheaper energy prices, which you know, that's hugely volatile. Food continues to be the area improving, but you know, tending to really push inflation up cost, the rent, also continues to be high. One of the things that came out last week, there was a story, I think it was in the New York Times that I thought was interesting is this so-called revenge spending, you know, it's like spending on travel and, and just luxuries, kind of, in general personal luxuries, and otherwise seems to be moderating a bit. They pointed out that spending at hotels is actually now lower than 2019 and that was surprising. Yeah, surprising to me. So-
Michael LeBlanc 02:20
As people, you and I, who try to book hotel rooms to go to conferences, I don't see it. Maybe we're going in the wrong places or the right place.
Steve Dennis 03:14
Yeah.
Michael LeBlanc 03:15
The, the news out of Europe is, it's on, is it's jammed. I mean, we saw some of that even, even when we were at the World Retail Congress in Barcelona, I remember you and I looked around and like are we in June here, like there's a lot of people traveling so that was interesting news. I found that a bit surprising.
Steve Dennis 03:29
Yeah, maybe there's some anomaly there. I don't know, but anyway, something, something to look out for. So maybe this you know, services versus products thing is, is not quite as true as it's been, but we'll see and then just really quickly on monthly retail sales, I guess, to a certain degree, kind of, same story, different day.
Michael LeBlanc 03:46
Is that month over month, is that more important than year over year,
Steve Dennis 03:49
I'm not, I'm not talking about that. I'm gonna focus on the year over year numbers until the day I die.
Michael LeBlanc 03:55
It’s your catch phrase.
Steve Dennis 03:56
Like shaking, but, but really the headline is that sales growth, in general, is pretty much keeping pace with the rate of inflation, when you dip below into the category breakouts. As we've been saying, it seems like for five or six months now pretty much the same story big ticket appliances, furniture, consumer electronics continue to be down, department stores continue to be down, the leadership categories are health and beauty, personal care, going out to eat, and, and as well as kind of a bounce back in, in e-commerce or at least the number they use, which is kind of a proxy for e-commerce, not exactly that and then everybody else is just kind of, you know, moderate. So very much a polarity, I think in terms of what's going on there, but again, that's pretty much been the pattern for the last few months.
Michael LeBlanc 04:51
You and I have been talking about what's going on in San Francisco and I guess the debate or discussion between us as it is amongst many people, is San Francisco kind of a canary in the coal mine to what's going to happen to big cities if they're not careful with a big bet on office buildings and employment and we had some news out of San Francisco that caught our attention and we wanted to cover to kind of sparked our discussion again. Talk about that.
Steve Dennis 05:15
Yeah, just really quickly. So several weeks ago, we talked about Nordstrom closing their flagship store at the Westfield Mall in downtown San Francisco. That was quite, quite surprising and then more surprising news, Westfield, the owners and operators are, I guess, the operators of the mall, they're walking away, they handed the keys or are handing the keys back to the landlord. Just that mall is not working and when did that open, I remember pretty well. When it first opened, it was quite a showplace and there are a lot of really top brands there.
Steve Dennis 05:48
So I think as we've touched on a bunch of times, the just reduction in daytime traffic, in particular, in some of these urban areas because of the work from home, hybrid work, whatever you want to call it, phenomenon is, is really shifting, kind of changing the dynamics of the retail environment in many places. You know, San Francisco's definitely had some more issues in terms of homelessness and crime, then some cities. So, I'm sure that's a contributing factor, but I think a lot of this really stems back to the daytime traffic is just down a lot because people aren't in the office, either at all, or nearly as much.
Michael LeBlanc 06:27
Well, I think it's, it's the challenge of, of our age, I think, is how to figure out what cities do if everybody's not downtown. I mean, for decades that were built around, you know, a lot of people going to work in an office building, and I think we need to adjust that and-
Steve Dennis 06:43
Absolutely.
Michael LeBlanc 06:44
It's fascinating to watch. Speaking of fascinating Overstock bids 21.5 million for Bed Bath and Beyond, for Bed Bath and Beyond intellectual property. What on earth is going on here, like, is that their customer list or their private brands?
Steve Dennis 06:58
Yeah.
Michael LeBlanc 06:58
Like Is that what they're doing?
Steve Dennis 06:59
Yes. So, this, this actually, this story may be updated significantly, by the time this episode comes out. We're recording this on Friday, Overstock put in a bid for 21.5 million rumors that they were able to take advantage of a 20% off coupon, in placing that bid, I understand, are not true. My sources are telling me that.
Michael LeBlanc 07:18
Or maybe they'll do a BOGO, maybe you get the box thrown in and, in, yeah.
Steve Dennis 07:23
Yeah, could be, but the court asks for bids on various assets and so they put in what's called the stalking horse bid, which is kind of the first bid that sets the price for others to, to come in and try to beat so we'll see if there are other options, there are a few rumors about some folks that may be submitting bids.
Michael LeBlanc 07:43
And that's a list to be, so to be clear, that is their selling the customer list, their email list.
Steve Dennis 07:49
Well, a bunch of, bunch of things, but yes, it is not their stores. I guess that's the most important thing-
Michael LeBlanc 07:54
Right.
Steve Dennis 07:54
To say, or in any inventory though. At this point, I don't think there's much inventory left, it was really customer lists. Brand name-, you know, some of, they got some private labels, turned out was, maybe, not that awesome. So yes, it's intellectual property, I think actually, in the scheme of things it's, it's potentially pretty, pretty valuable. You know what, they have a wedding registry, you know, that kind of thing. So for Overstock, which is a pretty sizable player, and certainly has a big position in home categories and gift categories and things like that. Sounds like a bit of a bargain, but again, will, the bidding process will wrap up in the next week or so. So, we'll see if that's successful.
Michael LeBlanc 08:35
I want to move on to, to Kroger. Now Kroger put out their earnings. We haven't done much earnings this episode, but these ones are important for a couple of reasons. One is I'm keeping a close eye on Kroger because of the Albertsons merger, which we should, you know, which is every day, there's more news on that, but, but I also think that it connected their news kind of connects back to a couple of year predictions talk about that.
Steve Dennis 08:57
Yeah, so yeah, there's two reasons to talk about this. They are a huge grocery store, and they did have earnings, and really kind of the only earnings story of the week and from an earnings perspective, their sales growth was, was pretty anemic, only up about I think three and a half percent. So, when you think about inflation, that doesn't sound like real growth, but they did manage to increase their profits quite substantially. So, some gross margin expansion, some expense reductions. So that was, that was pretty good, but the tie, to put my predictions in, as we mentioned last week, we're not going to do a formal medeor view of the predictions as we did last year. So, we're just going to kind of weave them in through some of these mid-year episodes.
Steve Dennis 09:35
And one of the things they talked about so my prediction was that trading down will largely define the year for retail more broadly and they definitely talked about how their private brands in particular, were performing very well that there was a real shift to private brands, which generally speaking are more value oriented, as well as they were seeing were high income, kind of like some of the stuff Walmart said, seeing some more high income shoppers shop with them and Kroger, you know, being a very moderate price grocery store, you know, that's maybe a shift from some of the more upscale grocery stores. So, I think that's very much in line with this trading down phenomenon that I think we will continue to see a lot of action in the balance of the year.
Steve Dennis 10:18
And then the other thing we spent a lot of time on was the growth in their media networks and my prediction, there is, not that media networks aren't going to be important. I believe there'll be continued to see a lot of growth, but I think some of the early estimates are overly aggressive and will start to see some moderation or at least some growing pains. Now they didn't talk about the growing pains. What they did talk about was how big their media networks are and, and Sushruta Kodali actually pointed this out on LinkedIn.
Steve Dennis 10:52
I mean, they're still really tiny. So, this idea that media networks are going to be big contributors to profits very soon, not so much seeing that yet from Kroger. So, I was kind of surprised given all the hoopla, particularly supermarkets being one of the big potential partners for media networks, I kind of expected the number to be quite a bit bigger. So good growth, but still a long way to go before they're really meaningful to Kroger and presumably others.
Michael LeBlanc 11:22
All right, well, that was the news. Now before we get to our excellent interview with Jason Del Rey, a few words from our presenting sponsor.
Michael LeBlanc 11:30
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Steve Dennis 12:03
Well, I am very excited to welcome Jason Del Rey to the Remarkable Retail podcast. He's a guy whose work I've followed for quite some time. So, this is a real thrill. Jason, welcome. How are you?
Jason Del Rey 12:15
I'm doing great and really, I'm thankful we're having this combo today.
Steve Dennis 12:20
Well, we are. I mean, there's a lot we could talk about, but the primary reason we have, have you on is you've got this great book that is coming out today, the day that we're releasing this episode. But we'll get to that in a second and I imagine a lot of our listeners are familiar with your work. If they're not, we should shame them, because it's such an important stuff but maybe for those who may not be as up to speed, maybe you just tell us a bit about who you are, the work you do kind of your personal and professional journey.
Jason Del Rey 12:50
I'm a longtime journalist, mostly focused on business journalism. I did have a few pitstops early in my career sports journalism and breaking news and the like, but for the last let's call it about 16 years or so I've been a business journalist and the last decade focused almost exclusively on covering retail e-commerce and the future, you know, of, of the omni channel world and so I've done that, mostly for a publication that has had a couple of names and it's in history but was, was first called All Things D or All Things Digital, run by Kara Swisher and Walt Mossberg to sort of famed technology journalist, and then under the Recode brand, and eventually under the vox.com brand as well and so really have become a person who likes to nerd out on this space. I mean, you can't really stick with writing about a space for 10 years and not really enjoy it and learn along the way and so that's my background.
Steve Dennis 14:05
was journalism, kind of always in your future. And then as you think about being a journalist, what, what part of it do you like the most? Is it kind of the investigative part or the storytelling or, or what exactly,
Jason Del Rey 14:19
Yeah, so I wanted to be a sports anchor and I don't know if it was my Staten Island, New York accent that dashed those dreams or what but, you know, I did go that, I always wanted to do something in the journalism field and really enjoyed writing as a kid. Enjoyed reading a good amount too, and didn't know exactly where in journalism, you know, I might fit best and so I thought for a long-time sports journalism really enjoyed it, and happened to go back to grad school though, to get a journalism degree. By no means, you know, necessary for everyone, but it was, it was a good thing in my case for me and, and I came out and the truth is, there were not a lot of sports journalism gigs out there, but at the time, this is now.
Jason Del Rey 15:18
This is now in the mid aughts. So, I don't know 2006, 7, there were a lot of business journalism jobs. Little do we know what was about to implode over the next, last, next couple of years, but I really grew to love business journalism. I started at Ink Magazine, where I wrote about startups and small businesses. I'm from the family of not journalists, but small business owners and entrepreneurs and so, you know, I really, really sort of continue to gravitate to those types of stories. I did a couple years at Advertising Age covering, basically my own field, digital media, and advertising technology. Little aside, I thought I was one, done with ad tech and DSPs in the like and it's back in a big way in our, in our industry at least.
Jason Del Rey 16:13
And so trying to adapt to that and, and then and then I loved I loved Advertising Age, I loved covering media and but I had an opportunity to go work for journalists, I really, really respected Kara Swisher and Walt Mossberg, a colleague, colleague named Peter Kafka who covers, think is, to me, the best media journalist on the planet and, and jumped at that opportunity and they said, well, there's one little thing Peter already covers media. So we have this one opening, it's commerce and, you know, I'm proud to say they didn't call it e-commerce back then, it was just called commerce and the main focus was Amazon and then, you know, that was 10 years ago, the day before my son was born, and 10 years laters still having a lot of fun covering the space and these very important companies.
Steve Dennis 17:08
Part of the reason for the question, and, and now maybe we can really dig into your new book is part of what I really enjoyed about your new book, Winner Sells All: Amazon, Walmart and the Battle for Our Wallets is, there is, to me, an aspect of not only this kind of investigative journalism, or kind of getting way behind some of the things that probably, many of us already know, from paying attention to the space, but you also do a great job of telling stories and it to me, in a way almost feels a bit like a novel at times, but before we get too into the weeds on that, just, just for our listeners, give us a sense of what the book is about what motivated you to write it and kind of what you hope the reader will get out of experiencing the book?
Jason Del Rey 17:56
Sure and I realized I didn't answer part two of your last question, which was, you know, how I look at the work I do and like what I enjoy most, so just quickly, you know, sometimes it does, you know, I do, I do really, really enjoy the reporting aspect and for me, that is digging in beyond, behind the press releases, behind the, you know, quotes on TV, and trying to figure out really what is going on inside a company what a company's motivations are, who's driving those decisions.
Jason Del Rey 17:56
So, I think they're important to, you know, it's important to, for the public to know that stuff, when especially when we're talking about big companies with so much impact like Amazon and Walmart. I do enjoy, right the writing part of it, but I definitely I would say I love, I love the reporting and digging part, the explaining part, and then the writing something I've gotten better at over the years, but, but it's still, you know, all these years later, I still consider it a work in progress and I think every great journalist or one ones who aspire to be great, like myself, you know, are always trying to learn more.
Jason Del Rey 19:06
So, you know, the book, you know, I really tried to chronicle the rivalry between Amazon and Walmart, the evolution of that rivalry over, you know, a long period of time, and then go inside key inflection points in that rivalry to help explain to people why the world that these two companies have created looks the way it does today and then a little to look ahead a little bit and try to help inform the public and people in the industry on what might be coming next from these companies and there's been, you know, great books written about Amazon. Brad Stone, a journalist I look up to a lot, you know, between The Everything Store and Amazon bound has done a terrific job chronicling Amazon's rise and impact and there are, there are some great journalists covering Walmart on, sort of, a day to day basis at big publications and indie publications as well.
Jason Del Rey 20:05
But I, what I was trying to do was really get inside, you know, in a in a deep way, Walmart's transformation attempts over, mostly over the last decade was frankly, I don't know, I'm curious what you guys think I think they've been sort of under covered in sort of a deep way and I mean, beyond sort of the day to day news announcements and so I, you know, I think it's a lot of people think Amazon's sort of the sexier story, and I get that, and I go inside their decisions as well, but I really, just looking at Walmart size and impact today. I just thought there were a lot of important stories to still tell about this transfor-, transformation they're trying to go through and so, you know, that's what, that's what I tried to get at, throughout the book.
Steve Dennis 20:57
Yeah, just one quick comment on that one thing I found particularly interesting, and I've certainly paid a lot of attention to, to both these companies for quite some, some time. So I feel like I'm pretty well versed, but I learned so much from, from reading your book, but I would agree in particular that, you know, the story of a huge legacy retailer, responding to disruption in the way that Walmart has, and maybe as we'll get into a little bit, they, they got a slow start, I would say for sure and had some bumpy patches along the way, but it's really interesting and I guess maybe I'm having been at Sears many years ago, and a company that didn't make those changes, I find that particularly interesting. So yeah, I think it is uncovered and I think you do it in a really, really interesting way and kind of the comparing and contrasting with, with Amazon makes it particularly interesting.
Michael LeBlanc 21:45
And I'd add and I think what makes it particularly readable is they both in a way start from the same place, the very both customer focused, but their approaches to how they go at that. I mean, there's many, many quotes that they live by Walmart and Amazon as well. It's all about the customer. So, they start at the same place, but they go in different directions and end up in different things. So, it really makes for, for a great read.
Michael LeBlanc 22:10
I want to change tracks a little bit and talk about your tradecraft for a minute as a journalist and a reporter. So I think this is your first, you know, hardcover book edition and you've explored many, many media types, audio, you could have done a you've done some great series and podcasts and could have done a number of different things, was a book always in you, did you always want to write a book and was this kind of something that you just wanted to accomplish and or, and or you thought this was the best media to convey the message and the results of your reporting and I guess the follow up is, who did you write it for, who do you, who do you want to read it?
Jason Del Rey 22:48
Sure. So I'll try to, I'll try to hit each of those. I'll be super candid. Like I've, I've always since I was set on being a journalist and started, you know, in my career, I did, I always wanted to write a book. I'm a big reader and just, I thought I had one in me at some point and, yes, like that accomplishment was something I hoped would make sense at some point in my career. That said, I told myself, I hope I don't sound too much like an Amazon executive talking about differentiation in new markets, but I did always tell myself, I would only do it if I felt like I was the best person to take on that topic, or one of a few, right and so something you know, as I was thinking about books over the years, I did notice that a lot of journalists who covered this space, either focused on just the e-commerce side of things like the pure plays, or just the quote unquote, traditional retailers, or the brick, the folks who started in brick and mortar and, you know, I didn't see a lot of a lot of instances of journalists really covering both, both sides, or Amazon and Walmart, specifically, at the same time, in a deep way.
Jason Del Rey 24:05
And so, as I started to cover Walmart even more, we can get into this after, after they acquired jet.com in 2016. I thought there might be a story like this, that was, that could make a great book. You mentioned you know, I've written for a while for digital media publications, I did have you know, the Land of the Giants podcast first season, which I loved, I really loved and I really would love to get back to narrative podcasting at some point, but I thought you know, I have I have not made I have not made a movie yet.
Jason Del Rey 24:43
So, maybe someday, someday in the future. I'm not sure if this is it, but perhaps but I did think this story once, once I, you know, talked it through with an agent had interest, you know, from publishers I was, I thought it was deserving of a book length treatment and whether that's audiobook or eBook or print, I don't really care. I actually, a little plug for the audio book that I think I think the narrator that, that I selected along with my publisher. I think he's fantastic and I hope for people love audio, they'll consider the audiobook version of Winner Sells All, but, but just to wrap up, I, you know, I think I think for all those reasons, you know, I was, I was excited about the idea of a book. Yeah, I know, you had other questions in there that I probably ignored. So, if you want to remind me, if you want to remind me.
Michael LeBlanc 25:37
No, I-
Jason Del Rey 25:38
I'll try not to ignore them.
Steve Dennis 25:39
We try to pack at least four questions into one question.
Michael LeBlanc 25:42
We often ask, our guests often ask us is, is there a question in there somewhere. saying these things. I was just, we're just gonna add on I think, I'm excited to have the book turned into a series. I guess it would, it may or may not be on Amazon Prime, it might be on Netflix. Anyway, that's a whole other rivalry.
Steve Dennis 26:00
Listen, that is a, that is a real discussion we could have at some point, but we probably don't have time for it today.
Michael LeBlanc 26:05
Well, let's, let's, let's tap back into the book for a bit, you know, over and over again. There's just fascinating, I certainly found it fascinating inside stories of the evolution, I mean, that, you know, someone who wanted to start ecommerce in a big way at Walmart kind of wasn't getting traction. So, he wound up over at Amazon and then he had to stop on his way on the highway, because there was some lawsuit stuff. I mean, there's just so many great stories that make, you know, that make this book come to life, but are there any that stands out in your mind that as you were writing them, or as you reflect back that really jump out?
Jason Del Rey 26:37
Yeah, yeah, definitely a few I'll try to go through quickly, the one you just referenced, is definitely one of my favorite anecdotes in the book and, and I get to it, right in chapter one. So, I'm not giving too much away. If people haven't read it, but an employee at Walmart, tech savvy guy in the 90s, who was sort of leading a small team that was experimenting in the mid-90s, with online retailing for Walmart, he thought he would be there for life really, really love the company, still to this day cares a lot about the company.
Jason Del Rey 27:13
He's now retired, and I believe in his mid to late 60s, a guy named Robert Davis and as far as I can tell, and what he's told me this story, he's never told this story publicly. So that was a it was exciting to be, to find him and then hear from him and essentially, yeah, he, he wanted a bigger commitment from Walmart, all the way up to the CEO in, in the mid-90s, just to sort of corral the company get, get leaders together from different divisions and just say, like, we believe in e-commerce, and we're going to, we're going to do what we, we need to, to, to make sure we're giving ourselves the best bet.
Michael LeBlanc 27:55
And so the guys on call, basically, because I've been in that same position, you pick up the phone, return the email, this is important to us, right, I mean.
Jason Del Rey 28:01
Yeah, right, right and so he doesn't get, you know, I won't give away too much more, but he essentially doesn't get what the commitment he thinks is deserved, you know, the opportunity it deserves, he, yeah, he packs up his pickup truck, you know, starts the cross country trek from Bentonville to Seattle where he had been offered a job, and by another former Walmart exec, and along the way, finds out that Walmart is suing Amazon for trade secrets. And so yeah, I have a great-, you know, fun little anecdote in the book that that I, you know, we could get to who, who I hope, you know, reads this book, but, you know, I think in a book like this, where I'm trying, I want, I want, you know, anyone who cares about commerce and the commerce industry, to think it's a no-brainer, and a must read, but I think there's a lot of smart people who care about the impact of these companies and, you know, are curious.
Jason Del Rey 28:59
And so stories like this, I think, just helped to make the book a little more readable and accessible for those who don't live and breathe this industry, you know, as their line of work and so that, that was one just, just quickly, this was a surprise, also, you know, fun to learn. I didn't realize how much inside Walmart, you know, people still talk about 30 years after Sam Walton died, what would Sam do, like, I know, I talked, and maybe I should have known that, but I was just struck by a bunch of folks who came into the company over the last few years from sort of e-commerce backgrounds and they were just, they were just, you know, blown away, mostly, you know, not in not in a super positive way a lot of the time by, you know, just, just how much Sam came up and you know, one of them had a quote, which I kind of get it was, could be a little bit cold, but this person was saying like, listen, Sam is, Sam is Sam and I, speaking of course, of Sam Walton, founder of Walmart and Sam was Sam, you know, we should care about the values he instilled in the company, but essentially like Sam's gone, like Sam's gone, we can't be living in the past.
Jason Del Rey 30:13
And so that was another thing that sticks out and then just lastly, you know, I have one of my favorite chapters, chapter eight, which is sort of the unsexy logistics side of the world, of the retail world and, you know, I've what I think is a never been told story, never, never told before story of Walmart's attempts to come up with a way to reinvent the middle mile at the company and it stars a bunch of folks who had worked at Amazon for a long time, thinking they found this sort of, this solution, this path forward and at the last minute, they're overruled, overruled by Walmart CEO, Doug McMillon and there's all this. There's all this speculation about the role that FedEx founder, Fred Smith may have played in that decision, since FedEx and Walmart are such deep partners. So, I'll take a breath and stop there, but those are some of my, you know, favorite parts off the top of my head.
Steve Dennis 31:16
Well, that's, that's part of what makes the book so special and creates a lot of intrigue. We could probably spend, I'm sure we could spend an entire podcast just on this topic. So, I don't know if we can compress it to just a few minutes, but you go into a fair amount of detail about the Jet acquisition and just I guess, just in general, how that, those, the decision to acquire Jet have Marc Lore in the company and just kind of all the tentacles that sprung out from that impacted Walmart's strategy. I think there's some people that believe they are greatly overpaid and that was a smart move. Other people that think like that was the thing that unlocked this, this new omni-channel, blurred world future for them. Can you, can you maybe just quickly give people a little bit of reminder in case you're not familiar exactly with the context for that, but, but generally, what's your view on whether you think the Jet acquisition was a good thing?
Jason Del Rey 32:13
Sure. So yeah, quick background Marc Lore, entrepreneur who years ago, first started Quidsi, which was the parent company of diapers.com. Amazon ended up acquiring diapers.com, Walmart was involved in those talks as well and I have a couple of those acquisition, you know, stories in this book, another one in the healthcare industry, where both companies are competing for essentially the same, same acquisition target, the same startup and, and Mark, went to Amazon after that deal, worked for a couple years, then left, may have been starting an idea for a new company, while still at Amazon, not clear, but essentially, eventually started jet.com. Which, you know, there's a chapter in the book just about the wild, the year and a half of jet.com's existence as an independent company, ended up selling it to Walmart, for $3.3 billion. Some people saw it as a $3.3 billion aqua-hire and had you know, Walmart was not really buying a sustainable business, but was buying Mark and his team and so, yes.
Steve Dennis 33:26
And the option to lose several 100 millions of dollars in the, in the, in the months that followed as well, right.
Jason Del Rey 33:31
I mean, that, that is true and so was that deal success-, a success or not? I'm gonna give you may be somewhat unsatisfactory answer, which is, it depends what your definition of success is and I end if your definition of success is, you know, changing the narrative of Walmart as a digital laggard for in both hiring circles, the technology industry, and, frankly on Wall Street, if your definition of success also includes, you know, frankly, just shaking things up making some folks think differently about what the future of the company could look like and, you know, if, if your definition of success includes bringing in some outside strong technical talent, like you can make, I think you can make a fair argument that it was a successful deal.
Jason Del Rey 34:27
Now, if you look at Mark and team's decisions, more on one off situation, you know, acquisitions, they made startups they tried to incubate, and the like, and just the overall cost, you know, and you look at how some of those decisions panned out one or in sort of a one off manner, like, it becomes sort of a more complicated, you know, story and, you know, the big question for me is, and it's sort of impossible to answer is how much missed opportunity was caused by some of the disagreements and tensions, I get into in the book, between Mark and his team and the leadership of the, you know, the physical side of the business mostly, which, at the time had a very, very difficult job on their hands, you know, without worrying about Mark and team, you know, growing but losing a lot of money and that was, you know, trying to get the stores back on track, which, of course, still is and was at the time, you know, the core of the business.
Steve Dennis 35:30
Yeah, I think one of the things that's really interesting is just, and maybe this, where, where we can kind of take the conversation next is just to kind of bring the Amazon side into it as maybe a little bit of comparing and contrasting, not sort of on the facts about Amazon, Walmart, everybody's probably familiar with that, but just kind of their, their kind of core DNA, I think, as you describe it in the, in the book and coming, Amazon coming from digital only startup kind of mindset versus Walmart being very anchored obviously in, in physical retail, and even just, you know, being anchored in, in a small city, small town kind of background, and is there any kind of just big takeaways that you've got from comparing their, their style and how they approach innovation and cultural changes?
Jason Del Rey 36:20
Yeah, I have some, I have some thoughts on that, you know, one, that one thing, though, just one thing related that was surprising to me was, you know, Amazon is famous for the these two pizza teams, essentially, small autonomous teams, with folks with different specialties that are essentially, you know, designed to move fast without needing to communicate all over the company and, you know, some would look at them as many startups in a way and so, the origin of this, you know, goes back to, among other people, a guy named Rick DeLaSalle, which was, who was a former Walmart executive, who became Jeff Bezos' first CIO.
Jason Del Rey 37:02
And Rick, you know, Rick, describe to me for the book, how some of the, some of the influence for the two pizza teams or a lot of it actually came from something at Walmart back in the day called strategy teams and there are there are differences. You were not ordering two pizzas for those teams, I don't think but anyway, that, that was something that was very interesting to me, something I learned I didn't know before. So yeah, DNA is of each company, I think, I think at Amazon, like the idea of the two pizza teams, and, you know, really setting up these autonomous, you know, groups of 10, 12 people to test out new ideas to build and try to scale and with limited resources, but also limited disruption from the outside world, outside bureaucracy at Amazon, I think sort of speaks to a lot of, you know, why they were able to move so fast for so long and, and try so many things in so many different parts of the business world.
Jason Del Rey 37:58
Walmart, you know, to expand super centers, like they were aggressively, you know, for decades, you know, they needed sort of, you know, there needed to be a playbook there needed to be, you know, according to folks there, you know, more of a top down execution and I think for a lot of, you know, in a lot of ways that that was core to their success, but I think it also slowed down decision making and created complications as they really tried to figure out what the digital world means to them and meant to them over the years. You know, under some new leaders recently, they've been trying to restructure, and, you know, think about how, how to move faster. One thing I didn't note in this conversation, I spoke to almost the entire suite, C suite at Walmart.
Jason Del Rey 38:53
You know, this is not, I like to say that this is not a book of access, like my book is, I talked to over 150 people overall, but, you know, I talked to Doug McMillon, the CEO in Bentonville, we met and he said, like, we're moving faster in a lot of parts of the org than we once did, but I'm still dissatisfied overall with our, with our, you know, lack of speed and so I think that's just, you know, that's something they're working through. The last thing I'll say just about companies' DNA, you know, we've seen some of Amazon's struggles in physical retail, and I'm sure you guys probably, maybe, I'm curious, foresaw this.
Jason Del Rey 39:33
I think a lot of people in the media world, you know, journalists, people who work in pure play, e-commerce, and technology, just assumed, like these guys are the smartest guys and gals in the room and they will figure it out and like, the truth is, their DNA is what it is and I think, I think that's, you know, partly why they've had such a wake up, you know, a hard wake up call. On the physical world that, you know, I think they entered it with a little bit of arrogance, but also just, you know, having to learn a lot and so anyway, I'll tell you, I'll stop there, but those are some of the keys I've, I've learned along the way.
Michael LeBlanc 40:15
You know, Jason, I love how you, we've created a pizza index for how the two companies’ kind of approach things, it's how many pizzas in the meeting. So, I think it takes 100 pizzas in a meeting to get some of those big Walmart Supercenters done by the sounds of it. Listen, you know what, what's always struck me as I thought about this over the years is, you know, reflecting on, would Walmart be the company it is today, the retailer it is today, because you're right, they do anchor themselves in Sam Walton, and they do anchor themselves in the customer. Some days over history, they struggled to be a more contemporary retailer, do you think, you know, reflecting on what we know, do you think Amazon has actually made them a better retailer, a better company that, that strong, you know, wily kind of nimble competition, do you think you think it's improved Walmart, could you, would you reach that conclusion?
Jason Del Rey 41:06
I, I think so. But the part I struggle with is that, you know, Amazon has existed, right, since the mid-90s and really, you know, hope I don't offend anyone too much, but really, until the last, you know, I don't know, three to five years, it's been really hard to see, you know, the impact of that rivalry and the pressure Amazon has applied, manifests itself in a way, at Walmart, that I think is actually, you know, a better thing for customers and, you know, I still have questions about, is this a better experience for customers overall, at Walmart today, I think it is, you know, I ordering something online, and the magic of, I'm putting magic in air, air quotes, but the magic of thinking it might show up in two days, but it actually lands on your porch, that same day, because Walmart is now effectively in some areas, ra-, rerouting stuff.
Michael LeBlanc 42:13
Their curbside game is super, super strong right.
Jason Del Rey 42:15
It, it is, you know, the parts I worry about, you know, I don't there was opportunity, when we talk about the, the marketplace that each company now runs online, I thought there was a way that Walmart might try to differentiate, that was not just opening up the marketplace, to every seller under the sun, and all the problems that that creates for really everyone the company, you know, the customers eventually and sellers and instead, they've largely seemed to just follow the Amazon playbook there and so I hope it doesn't blow up in any meaningful way for, you know, either company, because that would mean it blew up for consumers, but, but that's one, that's one part of the, you know, the, the space that I do worry about, both, both just as a consumer and just as you know, someone who thinks these companies have a lot of influence over everyone's everyday lives.
Steve Dennis 43:13
Well, Jason, obviously, we can only kind of look at the tip of the iceberg here in a podcast, I would really encourage people to go check out the book, it's a, it's just a font of interesting stories, but I think in particular, there's a lot to be learned on the part of just about anybody, I can imagine the retail ecosystem. So I'll, I'll put a plug in for that. Just as we wrap up, I'm curious, as you look ahead, since you follow these companies very closely, and obviously, you follow the broader world of commerce, are there any things in particular that you think are most important to really monitor, as we go, I'm not thinking so much the next few months, but kind of as we go into the years ahead?
Jason Del Rey 43:54
Yeah, I, you know, I'm gonna admit that in the past for, you know, in the past, I would, when I would read coverage, or hear coverage and the word healthcare would, would come into come into play, there was a period of my journalism career where my eyes would glaze over, just because disruption is so few and far between in the space and the incumbents are so entrenched that, you know, I just, I just, it just seemed like the status quo was going to remain and what why am I going to bother, you know, digging in, and I forced myself for this book to dig into both company's ambitions in the space, just because it, it just affects all of us could affect all of us, beyond, you know, our lives as quote unquote, consumers.
Jason Del Rey 44:37
And so, you know, I did a lot of work. I had a lot of help from great sources, to write a chapter about what their ambitions and motivations are in the healthcare industry and that is the space I just you know, yes, of course, I, I'm curious what happens with you know, how they treat employees with new businesses they go into with, you know, new innovation's, social commerce, but I think just for you know, just as a citizen of this world and this country, I really do care about what they end up doing or failing at or trying to do in the healthcare space, from online pharmacy to health clinics to virtual care and I really think we're going to be taught a decade from now, you know, hopefully they've, they've made things better for some people in their efforts, but that's the space that beyond you know, most of the book is about sort of the retail world we know and breathe, but I would just encourage people to a read, read chapter 11, in my book about health care and their ambitions, but also just follow along in that space, because they're both committed to it, it seems and there could be profound impact for all of us on the other end of this.
Jason Del Rey 45:55
My pleasure.
Michael LeBlanc 45:55
Our guest is Jason Del Rey, the book is Winner Sells All: Amazon, Walmart and the Battle for Our Wallets. Available today wherever you buy books, perhaps Amazon or Walmart, or wherever else you buy your book. Jason, thanks so much for joining us on the Remarkable Retail podcast. A real treat for me. I've been a big fan and follower of your work and really enjoyed reading the book and on behalf of Steve and I, thanks again for carving out the time and joining us on the pod.
Michael LeBlanc 46:24
If you like what you heard, please follow us on Apple, Spotify, your favorite podcast platform so you can catch up with all our great interviews, including Judith McKenna, President International, Walmart. New episodes of season 6, presented by our friends at MarketDial will show up each and every Tuesday and be sure to tell your friends and colleagues in the retail industry all about us.
Steve Dennis 46:43
And I'm Steve Dennis, author of the bestselling book, ‘Remarkable Retail: How to Win & Keep Customers in the Age of Disruption’. You can learn more about me, my consulting and keynote speaking at stevenpdennis.com.
Michael LeBlanc 46:58
And I'm Michael LeBlanc, consumer retail growth consultant, keynote speaker and producer and host of a series of retail trade podcasts including this one. You can learn even more about me on LinkedIn, and you can see both of us at the Lead Innovation Summit in July. Live on stage in New York with our friend of the pod Simeon Siegel from BMO.
Until then, safe travels everyone.
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