The Unofficial Shopify Podcast: Tales of eCommerce Entrepreneurship

Connected Retail: Bridging Offline & Online Stores

Episode Summary

Can physical retail lead to online results?

Episode Notes

This episode is for you if...

  1. You have retail locations (or are considering it) then you'll want to hear at least the first 20 minutes of this "Connected Retail" discussion with an experienced insider.
  2. OR you have a Shopify store and a Point-of-Sale but they don't talk, then you'll want to listen to the whole episode.

Lots of industry analysis and insight in this one from our guest Kevin McKenzie, the CEO of SKU IQ.

Aside from saving owners a ton of time avoiding the end of day double data entry across to systems that don’t normally connect, Kevin has a seriously impressive resume. As Chief Digital Officer at Westfield, he oversaw the development of all digital strategy and omni-channel initiatives. Before that, he was Sr VP of CNET Shopping.

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Episode Transcription

The Unofficial Shopify Podcast

Kurt Elster: Welcome back to another exciting episode of The Unofficial Shopify Podcast. I’m your host, Kurt Elster, AKA:

Ezra Firestone Sound Board Clip: Tech Nasty!

Kurt Elster: And today, we are talking about retail. And normally on the show, we talk about these digital first, online only, or an online store that has a popup, and really online is their focus. And that makes sense, but recently I was talking to, as in this week, I was talking to a merchant who had a successful Shopify store that they had added to an existing business that their father had started. And they had eight retail locations in a major metropolitan area, and they’d started it in the ‘80s, and that was a tremendously successful business, but it also had a lot of legacy systems, and that created issues.

So, if you’ve got eight retail locations, and inventory in a warehouse, and a business that started in the ‘80s, the chances are there’s a whole lot of legacy systems in there. And so, if you have an existing point of sale system in your business, and inventory system, and accounting system, how do I get all of that to talk with Shopify? Do I need to get it to talk to Shopify? Why do I care?

Well, it turns out there’s a lot of pains or problems there, and opportunity, so if you find yourself in that position, you’re an existing retailer with a Shopify store and some legacy systems, all right, this is about as niche and laser focused as it gets, but this is the episode for you. Because I have a gentleman here who’s quite experienced in all of these areas. I am joined today by Kevin McKenzie, currently the CEO of SKU IQ, which helps small businesses connect their Shopify platform to their brick-and-mortar point of sale system. But he’s got even more interesting experience than that. He was the Chief Digital Officer formerly at Westfield, which I am currently… Westfield’s my landlord. I’m in Westfield Old Orchard Mall in Skokie right now. And also helped lead the creation and development of CNET’s marketplace, which… CNET, no small brand.

So, Kevin, thank you for joining me. How you doing?

Kevin McKenzie: I’m doing well, Kurt. Thanks for having me.

Kurt Elster: My pleasure. Okay, so let’s start by defining who we’re talking about, who we are trying to help here, because you have so much direct retail experience, having been this big mall landowner. Talk to me about who we’re speaking to here.

Kevin McKenzie: Yeah, so I think most of us have been in a mall, and you know-

Kurt Elster: Probably.

Kevin McKenzie: Yeah. The typical kind of the way merchandising stores work in a mall, and it’s changing as we’ve all seen, is you typically have two department stores, an anchor department star like Nordstrom’s on one side, and then maybe Macy’s on the other, and in between you hear this term called in line retail, so you have a bunch of stores in the middle and those stores are made up of classic, kind of national brands that we’ve all heard of, like Apple, an Apple Store, to kind of small mom-and-pop stores that are really locally known. You probably… if I’m in California and you’re in Old Orchard, you probably have stores there that I’ve never heard of because I don’t live there or work there.

And these are stores that are in categories like jewelry, or footwear, or sporting goods, and they were born offline, meaning great example that you just brought up, they might be one to eight stores that were born in maybe the ‘80s or maybe the ‘90s, and they’re kind of live or die based on the total gross merchandised volume that’s done out of that physical store. And obviously, online’s been important for a long time, but we all know that COVID was a huge catalyst to moving people quickly online. It’s been more important than ever, like a lot of these stores had the mindset of, “Yeah, if I had a Yelp listing, or if I have a listing on Google Local, I’m good.”

And then I think when COVID hit, they went, “Oh boy. We really need to get prepared for buy online pickup, or curbside pickup.” But we have so much invested in our legacy accounting system, inventory system, or just simple point of sale system, that… How do we connect these things? We have to be on Shopify, but is there a way to connect our existing systems, which I like to call connective retail, to Shopify? Because boy, we never want to sell something online that we don’t have in stock. Everybody will be angry, and it throws a wrench into the overall business operation.

So, that’s kind of the classic definition of what I think is a really big market. It’s kind of that longtail market out there.

Kurt Elster: So, I’ve got… I’m an independent retailer and I’ve got one location, or perhaps a location with inventory in multiple locations, and then I’ve got this online store, and for the customer, the expectation is that these things are all representative of each other. And yet the reality is if I go on the website, that will show me probably a lot more availability than necessarily what’s in the store, and then the real pain comes in when the assumption is made that what’s online is also available in the store and it turns out it’s not. Or hey, I want to be able to buy online and pick up in store and I can’t. Is that right?

Kevin McKenzie: Right. That’s exactly right. And I’d say that’s… You know, hopefully most of these merchants are customer first, so that’s kind of the customer to merchant pain. And then I think their internal pain is really they have all these systems that they have to keep up to date just to account for their inventory and their business, and so this idea of having to kind of log into multiple interfaces and update it is painful, and time consuming, and too many things can go wrong when you’re logging into multiple windows. So, what they need, and they don’t have an IT team, they don’t have developers that are on call, so they really need this ability just to connect their retail and just make it work.

And so, that’s really, we think a very big market opportunity.

Kurt Elster: So, for the customer, the pain is that disconnect, and the annoyance, and disappointment of discovering it the hard way. And for the retailer, suddenly you find yourself in the IT business, trying to support these kind of band-aid solutions are what I often see, where it’s like, “Oh, well, there’s this Google sheet and that Google sheet, and every day my son-in-law, Brian, goes and copies and pastes the columns. Well, sometimes he screws it up and it goes in the wrong column.” I go, “Oh, geez. This is painful.”

And they know it’s a problem, but then they also don’t know what to do about it, and then it also develops inertia, where you just kind of… You’re like, “Well, that’s how we’ve done it, so kind of how we’re still doing it.”

Kevin McKenzie: Right. That’s it. And you’re not… You know that old term, you’re not gonna teach an old dog new tricks, right? As much as we hope everybody modernizes into the 21st century, it doesn’t work that way, right? And so, you really have to kind of have empathy for that, which I really learned going from CNET and eCommerce into brick and mortar, which was terrifying at first, but then I developed real empathy for the problems that I was seeing in that physical marketplace.

Kurt Elster: Absolutely. Are there other pains, problems, or considerations that we should mention?

Kevin McKenzie: Yeah, so here’s something I’ve seen, and I was blown away by this, and it’s actually the opposite. So, now more than ever, you’re seeing big Shopify Plus brands, like Allbirds is a great example, born online, are opening physical retail stores. And UNTUCKit is another example. And so, these are stores that we all learned and saw grow online on the Shopify platform, and then suddenly what happened internally is they raise a lot of money, they want growth, they get really good at digital marketing and buying eyeballs on Instagram, Facebook, Google, but to some degree it turns into a kind of a race to the bottom, right? It gets really expensive, and you hear terms like CAC, customer acquisition, or LTV, and so they go, “Oh, you know what? In order for us to grow, it’s kind of the opposite. We need to open physical retail.”

And so, one of the other use cases we’re starting to see are you have kind of digitally native brands open a store. They’re looking at their online data and their offline data through their point of sale and they go, “Whoa, it’s actually more efficient for me to acquire new customers in a physical retail store than it is Google or Facebook.” And the reason why is if I do all the math of what it takes to kind of open a physical retail store, operate it, acquire customers, walk-by foot traffic, and then I see the return purchase of online traffic LTV, it’s actually better.

And what we’re seeing in our data sets is, and I can’t say the names, but there’s a very popular brand who uses us, they opened a store and the zip codes that were in proximity to the store, like Old Orchard, the eCommerce business went up by… In some cases, if they marketed locally, 300% over 30 days, or 43%. And so, these insights are really, really phenomenal, and it’s just kind of a third dimension or third use case of kind of merging and understanding how do you connect these data sets to kind of understand the value of cost per acquisition in physical retail. And so, that’s been fascinating to see.

Kurt Elster: So, there’s a synergistic effect that occurs here. Interesting.

Kevin McKenzie: Yes. Yeah. It’s… You know, the data that I’m seeing, and I used to be in the digital media business where it was all cost per click, and LTV, and cost per acquisition. It’s like if you think about physical retail properly as a digitally-native-first brand, you can actually probably get better economics in some cases than you could from Instagram or Google. Based on what I just said.

Kurt Elster: Mind blowing.

Kevin McKenzie: Yeah, I’m actually seeing that data, which is mind blowing. Yeah. It’s absolutely mind blowing.

Kurt Elster: It’s quite the turn we’ve taken. Is it because… Has rent gone down? Or is it because customer acquisition costs through PPC ads has gone up? Or both?

Kevin McKenzie: I think it’s both. But I mean it all depends on the category, right? PPC ads, the bigger the market, the higher the cost, and it’s kind of a race to the bottom. And so, at some point, and when I was in the mall business I kind of benchmarked, right? So, if you were doing between $30 and $60 million annually as like a Shopify Plus brand, you’re kind of hitting a plateau in how much faster you can grow purely on cost per click. And so, you kind of have to think, “Okay. Well, it might be time for us to open stores, and if I could measure the cost of opening a store in the same way that I measure ad production, and marketing as a science,” and all the bits and pieces that go into understanding your cost per click and LTV, when I kind of take that same mindset and apply it to brick and mortar, I might get better economics.

And we’re actually seeing that. We’re really seeing that, which is fascinating. So, I would say… You know, we talked about two use cases, two for the mom and pop, but this is a use case for really for the digitally kind of first brands, Shopify Plus brands, as they think about opening physical retail.

Kurt Elster: And so, it is simultaneously customer acquisition and data insights. And this hyper-local targeted growth.

Kevin McKenzie: Yep. Exactly. And you know, your costs in opening a store is you have the physical buildout, and the landlord like Westfield’s gonna contribute to rent based on the number of years that you sign a lease for. Then you have your cost of goods, your inventory. Then you have your staff, your operating costs, and so if you look at the math and you go, “Okay, there’s a one-time cost to kind of design and open the store, and then there’s a recurring monthly cost of cost of goods and staff. Is that… Am I making a return when I not just look at the sales in the store but when I look at my zip codes and proximity to the store, did they go up?”

And the answer is typically yes. And if you look at the math that way, and you look at these two unique datasets, it’s a fascinating way to look at physical retail now, and I just fundamentally believe that’s how it’s gonna be in the future. I think that’s how landlords are gonna charge rent and I think that’s how brands are gonna value physical retail. Not that different than they value Google and Facebook as digital channels of acquisition.

Kurt Elster: I agree with you. And I see, because I rent an office in a Westfield mall, and I see the change happening. Within Westfield’s management, I think they refer to them as dynamic retailers, like we have these brands that are as comfortable as a physical retail location as they are with their online presence. And that’s really… That makes for an ideal tenant.

Kevin McKenzie: Yes.

Kurt Elster: Within the mall itself, just looking around, you see that happening. You see more of those stores that it’s like, “Oh, I recognize that as a DTC store.” And now that’s in this store, or places like Apple, where it’s really more showroom than anything.

Kevin McKenzie: Absolutely. Yeah. Absolutely.

Kurt Elster: There’s two Amazon stores in one not particularly large mall now. Two of them.

Kevin McKenzie: Yeah. I mean, here’s a brand that kind of invented digital marketing and now they’re putting most of their investment, including buying Whole Foods, into physical retail. So, it’s just like what’s old is new.

Kurt Elster: Yeah, exactly what I was just thinking.

Kevin McKenzie: Yeah. And so, I don’t know, I wouldn’t have seen that or even had that perspective if I didn’t kind of myself start online and then really appreciate the power of physical retail. So, bottom line, there’s just this whole idea of connected retail, or what some people maybe used to call omnichannel, or whatever. There’s so many different applications that I think are pretty exciting, both for the longtail retail, that mom and pop that we talked about, but also for those classic kind of big brands, from Amazon to UNTUCKit to Allbirds that are seriously investing in physical retail.

And so, I just get excited about it, and you know, I’m really passionate, and really, I think there’s so many insights and so many applications that come out of these two unique data sets.

Kurt Elster: I wonder if we’ll see these brand aggregators that are buying up Amazon and Shopify brands at a tremendous rate over the last 18 months start pooling them together and then opening popup and retail locations for them. Because it’s like it might be tough to do, like if you have a brand that’s got a handful of items. Maybe that’s tough to support. But you know, if I’m an aggregator, a PE firm, and I’ve got this portfolio and across all of them I have like 200 related products, okay, well now maybe I can open a few popup stores or retail locations, proper retail stores with these items.

Kevin McKenzie: You know, Kurt, if it were me, and I worked for one of them, and what I’ve learned with physical retail is… There’s a couple things I would do, right? So, one is, which they all can do, is I’d go, “Okay, where are my existing customers?” From a kind of market geographic standpoint. Well, they might be concentrated in this market, or that market, or New York, or wherever, and I’d go, “Huh.” Just like when I buy audiences on Facebook or Instagram, I’d say, “What’s the addressable market of lookalike people that kind of live and work in those markets?” And I’m sure, and then that would help inform where would I popup physical retail.

And then I would do some experiments and it’s that old saying, like buy low, right? It’s never been easier to rent something today, given COVID, like let’s face it. Landlords are definitely struggling right now, so it’s a good time to negotiate and get flexibility in testing, and then I would measure what we just talked about. You know, I call it the halo effect, which is I physically opened a store. What happened to my eCom business in zip codes in proximity to the store? Did they go up? And what’s the delta between before and after?

And I think they would correlate to see incredible growth and it’d probably be economically more efficient than it would be to go buy more people on Google, or Facebook, or Instagram. That’s how I would think about my retail planning if I were them.

Kurt Elster: Man. That’s really expanding my mindset here, as I had not thought about it in these terms before. I don’t know. In my head, I suppose I was myopic in that I had really siloed these things. And I think for a lot of retailers or merchants, that that’s what they end up doing. And not necessarily intentionally, but you end up with your tools, your tech stack, they end up with these two things that don’t talk to each other.

Kevin McKenzie: Exactly.

Kurt Elster: And I’ve got my Shopify online store, my point-of-sale system, and then potentially inventory management separate of that, and then I’m trying to get all of this stuff to talk to each other, and then my bookkeeping is also wrecked in the process. So, what do I do beyond just dedicating hours to double data entry and just accepting that there’s gonna be some misrepresented inventory along the way?

Kevin McKenzie: You know, I think what we’re good at, and it’s really nerdy and geeky, but obviously there’s database schemas behind all these various systems. Whether it’s accounting, whether it’s a point-of-sale system, or whether it’s Shopify. And where it gets really complicated is you have things like variants, right? Which is just so painful, like, okay, I have a large black t-shirt in the context of Shopify, but I also have one in the context of Clover, which is a point-of-sale system, or Lightspeed, or whatever it may be. How do I connect this information without having to write a bunch of code to keep it up to date? And you know, it’s kind of an unsexy term, but there’s just middleware to do this now, and we think we’re pretty good at it.

There’s lots of different solutions, but we think we can make it, without having to have a computer science degree, let’s just log in, let’s connect these systems, let’s connect our retail, and let’s kind of program the business rules in a really easy pulldown menu, kind of eight-step process, and then let it do its work and go. So, we don’t have to think about double entry. We don’t have to have concern about selling something to the consumer and pissing them off that we don’t have in stock. So, these solutions now exist, and this is something that we’re really… We’re not the only ones by any means, but we think… We like the category. We’re calling it Connected Retail. And that’s what we do at SKU IQ.

Kurt Elster: I like connected retail for this as a better catch-all term than omnichannel. Because to me, omnichannel sounds ominous. And it usually really refers to I’ve got an online store and then I also have online marketplaces. Less than… Like that’s a much more common scenario that omnichannel refers to as opposed to we’ve got the much more classic situation of we have an online presence, and we have a physical presence.

Kevin McKenzie: That’s it. Yeah. You’re right. I used to go to these silly real estate conferences and there would be these big keynotes, and someone would come out and say, “Omnichannel!” And all these people would just look up and be like, “Wow. It sounds like an amazing term but I’m not really sure what it means.” You know, and so I would scratch my head, and I’ve been in technology a while, so I was like, “Okay, I just think it’s not…” That term will exist forever. Don’t get me wrong. But I just think it’s about connecting these two worlds and making them work, right? That’s really what it is and that’s why I like to call it connected retail.

Kurt Elster: And so, one of the… Going into the holidays I think especially, and with the pandemic, one of the things that suddenly became… went from a nice to have to possibly table stakes for physical locations is BOPIS, buy online, pick up in store, and BOPIS is such a fun acronym to say.

Kevin McKenzie: Oh yeah.

Kurt Elster: Well, I’m assuming that you have some insights, or at least an opinion there. How important is BOPIS?

Kevin McKenzie: You know, this pandemic is awful. I mean, I love retail. I grew up managing sporting goods stores. I fell in love with eCommerce. And it’s just awful, this pandemic, and you know, I don’t… Obviously, it’s not over yet. And it’s a live or die thing, I think, right? So, if you’re that example you said, a merchant you met that was born in the ‘80s, and has eight stores, BOPIS is… You better know what that means, right? And it’s incredibly important, especially for the holidays, and you know, you don’t want to publish information on your Shopify site that’s out of date. How awful would it be, you’re during the… I think it’s in some cases 60% of your revenue comes during the holiday seasons as a small to medium brick and mortar store, so you cannot afford to have information wrong on your Shopify site, whether it’s your catalog of products that’s in your store or your availability.

And that all leads to BOPIS, right? It all leads to BOPIS. And so, it’s that important. This year probably more than ever, given who knows what’s happening with this variant, and who knows what part of the country will be shut down, and what part of the country won’t from day to day, and so that… It’s incredibly important in my mind.

Kurt Elster: Well, and the looming specter of shipping delays, which I think we’re already predicting is a thing we’re going to have to struggle with again this year.

Kevin McKenzie: It really is. Yeah.

Kurt Elster: Yeah, like last year I kept talking about Shipageddon, this is a problem. It’s gonna get worse. It’s gonna happen. And I had a lot of people who were like, “Oh, you’re just trying to get free publicity,” which I thought was ridiculous. But this year, now we’re in September, and it’s already national news that you’re gonna see the same thing again. So, suddenly I’m in a position where I’m not happy to be right. And so, I think you can’t avoid BOPIS.

All right, so really the limitation, the pain that happens is the online store has to know the inventory that’s available in the physical location and vice versa, and there can’t really be a delay between those things. So, the middleware software, be it yours, or I’m sure there are others, or maybe I do it natively. I’ve got the Shopify online store I can add the Shopify point of sale system. And they talk to each other. What are some of the problems there? I bet if we peel this onion back of just making inventory sync, this seemingly simple problem is actually a lot more complicated than we think.

Kevin McKenzie: It is. Yeah. There’s a lot of nuance with it, right? So, you know-

Kurt Elster: Help me understand it.

Kevin McKenzie: Yeah. You know, the biggest problem is variants. Variants is an awful, awful term. It’s ugly, right? And you know, you’ve got obviously especially in… It’s less of an issue obviously in food and restaurant and more in kind of classic retail around sporting goods, and apparel, and jewelry, where you’ve got so many different sizes and colors of a single product, and so-

Kurt Elster: I’m thinking about shoes. Shoes, like-

Kevin McKenzie: Yeah, shoes, exactly.

Kurt Elster: It’s got 10 sizes and potentially comes in multiple colors and widths. Oh, no! So, my one product listing turns out is actually like 30 to 100 SKUs.

Kevin McKenzie: That’s exactly right. And you know, middleware at the end of the day is just a big Rosetta stone between translating, “Okay, well, in the context of Shopify it means that as a variant. In the context of my legacy retail stack, for lack of a better term, it means this.” And when you add variants as another variable in the mix, a lot of things can go wrong. And you know, you end up having a case where you’re… It says one thing on one system and another and then you end up customer says, “Wow, this unique size, 11 and a half, of this color of a shoe, is being published on Shopify, my Shopify instance.” I go in, I’m super excited to go get it. I go to the physical store and it’s actually the pink one, not the blue one in size 11 and a half.

And it’s just due to the database schemas and the taxonomy of how people are organizing this information. There’s just too many things that can go wrong. And then everybody loses. The customer is angry. They get bad ratings on Yelp. The merchant is given bad ratings on Yelp or other places that could hurt their business. And it all just starts to fall apart. And that’s why this middleware and kind of connecting these retail systems is so core and so important in our minds.

Kurt Elster: All right. My worst-case scenario here is someone places an order online, they choose buy online, pick up in store, someone in the store buys it. How do you account for the scenario where we keep these things from overlapping?

Kevin McKenzie: So, what we do is it’s not just about syncing inventory and catalog. It’s about actually routing the order, too. So, in the scenario of let’s say Shopify, you’re using Shopify to obviously offer eCommerce and an order comes in, and let’s say you want to route that order to your legacy retail technology stack. You know, like a Clover, or Lightspeed, or even Square. Square’s got this really cool thing, it’s called an order manager, and so what we’re able to do is take that order that initiated on Shopify and route it actually into the terminal of let’s say Square, and give it a unique flag, so when the clerk authenticates into their point-of-sale system, they actually say, “Hey, there’s an order that just came in online.”

So, they know that if Kurt comes in and he’s expecting his order, Kurt is labeled, he’s in the point-of-sale system, so an attendant can actually identify you, Kurt, with the order for buy online pickup. And we’re doing that all with legacy systems. I mean, I totally believe like Shopify is amazing at point of sale and eCom, but let’s face it, Shopify is an eCom-first company in my mind, and point of sale second, and there’s a lot of differences and nuance between the two, and I also don’t think with small-to-medium businesses you’re ever gonna just have them convert off their legacy operating procedures and tech stacks into one cohesive vendor that provides both. And so, what’s unique is routing that order into the legacy system in a way and in a context that those clerks understand how to react, if that makes sense.

Kurt Elster: No, it does. I think the other issue, especially when I think about middleware, especially like ERPs. If someone says to me like, “Oh, we’re implementing a new ERP, it’ll be done in a week.” I’m like, “All right, well, I’ll see you in six months.”

Kevin McKenzie: Exactly. Yes.

Kurt Elster: Right? So, your experience when connecting my online store and my POS system with a piece of middleware, what level of effort, what kind of lifting are we looking at here?

Kevin McKenzie: It is lifting. I mean, look, SKU IQ is not a young company. I think because of COVID, our business has accelerated more than ever like a lot of businesses. I mean, look at Shopify’s market cap. It’s just exponentially accelerated. But it took eight years to figure out how to connect these systems, right? It’s hard. And so, to do that on your own, even if you have a huge IT budget, you could have all the engineers in the world. It’s really simple. I mean, it’s really difficult and not simple. It took us years to figure it out, so to do it independent when you’re not a specialist, I can’t imagine in most cases. That’s why we exist.

Kurt Elster: Yeah. I can’t… The difficulty of trying to manage data translations between two systems, let alone… How many platforms do you support right now? 10?

Kevin McKenzie: Yeah. About 10.

Kurt Elster: I mean, that’s gotta be maddening.

Kevin McKenzie: Yeah, it is. It is. I mean, APIs are changing. I mean, it’s not quarterly changes. It can be weekly changes. We’re constantly monitoring. At the end of the day, it’s monitoring database schemas of all these various systems, because you have to be good at that in order to connect them. And that’s what’s really difficult.

Kurt Elster: But I think that’s also… Your answer is also the argument for why, even if you had the skillset, you probably don’t want to own the middleware. Certainly, some of these legacy systems are things that we’ve seen retailers had made as bespoke systems for themselves, and now, like, “Oh, good. You have found yourself in the IT business.” And that’s where I think there is an advantage to outsourcing these things to software as a service apps.

Kevin McKenzie: Yeah. For sure. Yeah. I mean, especially if you’re small to medium in size, meaning you don’t have big budgets and you don’t have the time or expertise.

Kurt Elster: Yeah. If I’m the Gap, I’m probably making all kinds of weird stuff on my own.

Kevin McKenzie: Right, right.

Kurt Elster: Okay. Well, I want to know, given your vast and varied experience, what predictions do you have for us about Q4? What is our holiday for eCommerce and retail going to look like?

Kevin McKenzie: You know, I think a lot of it is obviously contingent on this pandemic, and I think I’m no expert in it, but it feels like there’s pockets of this pandemic around the country, and so it’s almost like different parts of the country from a retail perspective are affected in different ways. So, you might have one part of the country where it’s not so bad, and people are freely walking around, and not only purchasing online but they’re purchasing offline, and I think it’s gonna be incredible, because I think people are excited. They want to get out again. They want to experience the holidays with their families and purchase things. And I think we’re gonna see an incredible uplift in certain pockets of the country in physical retail. It’ll be 3X or 4X what we saw last year and exciting.

In other parts of the country, it won’t be. It’ll be depressed and probably people will struggle, merchants will struggle. Not just because of COVID and its impact of physical retail, but what you talked about earlier, right? Which is I worry about the supply chain. I think that’s gonna have a really big impact and could have a very negative impact on retail, because it’s this weird thing where you’ll have tons of demand but no supply. And so, I think it’s all gonna net out, but I do think it’s gonna net out to positive, not negative. I just think it’s gonna be different in different parts of the country as opposed to looking at the country holistically. It’s gonna be different in different parts of the country.

Kurt Elster: During the pandemic itself, we saw some categories got crushed, like if I’m selling swimwear and luggage, not so great for me. But if I was selling baking supplies, et cetera, things worked really well. I think there’s way less of that this year, but certainly there will be some dependence on category. I like your insight about geography. I think that’s… I had not considered that, but you’re absolutely right. But overall, you’re right. I think net, all of the industry analysis I’ve seen has been 100% optimistic, where they’re saying, “Hey, you’re gonna see growth in retail. You’re also going to see year-over-year growth in eCommerce.”

And I thought what was interesting in most of them, they had eCommerce growth higher than retail growth. I figured it would be the other way around. That’s not been the case.

Kevin McKenzie: Well, you know what? I think it depends on how you look at it, right? So, the physical retailers who have survived have done everything we just talked about, right? They got really good at BOPIS. They got really good at fulfilling out of the store. And so, what’s exciting about that for this retail system, this retail year, is I think you’re gonna have more of a selection of product for the consumer than you’ve ever had in the history of eCommerce. Ever. Because for the first time, COVID, it’s awful, but it really forced those classic small boutiques that we’ve all been in, walked through, in these lovely towns and main streets of America, they’ve actually activated their physical retail online for the first time ever.

And so, all of a sudden people have access to that, and that’s a merchandising mix, that’s a product mix that’s never happened before until this holiday season. So, I think that’s the exciting part, and we ought to see lift from that generally is my view this holiday season.

Kurt Elster: I like it and let’s end on that note. It’s optimistic. It’s positive. And I think it’s accurate. Kevin, where can people go if they need some middleware to connect their legacy system to their online store?

Kevin McKenzie: Yeah, so-

Kurt Elster: I hear you have some software for that.

Kevin McKenzie: We do. We do.

Kurt Elster: Tell me about it.

Kevin McKenzie: We’re in the Shopify app store and it’s just SKU, like a product sku, IQ. or SKU IQ in the Shopify app store, and we’d love to help you. The company, we recently got financing. We’ve built up our support. That’s the other thing, Kurt, is we have to support this from a customer support perspective. It’s not an easy thing to do. We really want to be good at it. We have great content we’re producing, and we want to be really helpful in connecting everybody’s retail for this holiday season.

Kurt Elster: Cool. Yeah. You know, if you’re listening, you know immediately if you’re in a position to need this. Certainly, Kevin has proven his authority in this space, so definitely consider it. Check it out. Kevin, thank you so much. This has been really insightful. I enjoyed it.

Kevin McKenzie: Kurt, thank you. I enjoyed it too.