Jan 2, 2019 · 22m · a16z
a16z Podcast | Ecommerce and the Holiday Shopping Collision
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z Podcast, Andreessen Horowitz General Partner Jeff Jordan joins host Michael Copeland to analyze holiday shopping logistics failures, the structural decline of physical shopping malls, and Amazon's market dominance. They also discuss strategic opportunities for retail startups and the market implications of Apple Pay.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 2.8 Guest teaching 5.0 Guest disagreement 2.4 The host pushing back 2.2
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 8:40 Jeff calls omni-channel strategies hyperbole
Jeff forcefully rejects the prevailing industry buzzword 'omni-channel', arguing that retailers using it are simply layering additional online costs over cost-uncompetitive physical stores.
Hardest push from the host ▶ 14:58 Michael challenges assumption on shipping address costsMichael refuses the implicit premise that shipping costs vary by destination type, challenging Jeff with 'I thought an address was an address'.
Biggest teaching moment ▶ 14:58 Jeff explains logistics density and delivery economicsJeff educates Michael on delivery density mechanics, contrasting urban courier efficiency using rolling carts in office buildings against long-haul drives to rural farms.
The host holds their own ▶ 21:13 Michael correctly positions Apple Pay as a physical retail toolMichael demonstrates keen industry insight by noting Apple Pay is primarily a physical retail point-of-sale enhancement rather than an e-commerce disrupter, earning explicit agreement from Jeff.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Amazon Setting Standards and Holiday Retail Economics | 2 | 4 | 2 | 1 | Host Michael Copeland introduces the holiday e-commerce delivery bottlenecks and asks how retailers set expectations. Jeff Jordan explains how Amazon has established fast delivery as table stakes, contrasting Amazon with Zulily's value-driven model and explaining fourth-quarter retail economics from his Disney Store experience. | |
| Logistics Management, Sales Forecasting, and Seasonal Outlook | 2 | 4 | 1 | 3 | Copeland presses Jordan on forecasting accuracy and puts him on the spot for a holiday outlook. Jordan draws on his background as Disney Store CFO and eBay executive to explain how retailers forecast against calendar gaps and weather events while highlighting macro headwinds for physical malls. | |
| The Decline of Shopping Malls and Omni-Channel Realities | 3 | 6 | 4 | 2 | Jordan dismisses retail 'omni-channel' strategies as hyperbole that merely layer online operating costs onto uncompetitive physical footprints. He provides category-level breakdowns of e-commerce penetration and cites Starbucks mall foot-traffic declines to illustrate second-order impacts. | |
| Competing with Amazon Scale and Modern Retail Strategies | 3 | 6 | 2 | 3 | Copeland questions why shipping addresses differ in cost, prompting Jordan to explain delivery density economics between urban cart routes and rural farms. Jordan then outlines actionable strategies for startups to compete with Amazon by avoiding head-to-head commodity selection. | |
| Apple Pay Impact on Retail Payments and Conclusion | 4 | 5 | 3 | 2 | Jordan demystifies Apple Pay as an incremental fee layer on legacy credit card rails rather than a breakthrough payment innovation. Copeland correctly identifies that Apple Pay serves physical retail point-of-sale systems better than online checkout, which Jordan validates. |
Statements from this episode (17)
Jordan: Amazon has driven consumer expectations toward next-day delivery
“And at the same time, the M and Amazonization of e-commerce is increased consumer expectations on if I ordered today, it's here tomorrow.”
Jordan: Pre-Christmas orders overwhelmed UPS and USPS delivery capacity
“And the real collision came last year on the, you know, right before Christmas, because everyone said, okay, on the December, 23rd, I can place orders and expect and get them on the 24th. And I'm a hero on Christmas and everyone placed those orders and it just…”
Jordan: Over 40% of Disney Store sales occurred in Q4
“When I was at the Disney store, I think it was over 40% of sales happened in the fourth quarter.”
Jordan: Gifting-focused retailers generate almost all profit in Q4
“Given all the fixed costs in retail, it, you know, that, that over delivery of sales just gushes into profit. So it's, it really is the, is where most retailers, particularly anyone who's involved, whose business improves through gifting. Makes all their money…”
Jordan: UPS and USPS proactively capped last-day holiday shipping volumes
“There's a story in the newspaper a couple of weeks ago about UPS and USPS proactively going to the companies and saying, how much last day shipping do you want to basically reserve? And by the way, that's all you're going to get.”
Jeff Jordan: About 25% of US malls face vacancy rates above 30%
“There's something like a quarter of malls have over 30% of their storefronts vacant.”
Jeff Jordan: Staples reaches 40% online sales while rapidly closing stores
“Staples is right now up to something like 40% online, and they're starting to close stores pretty furiously.”
Jeff Jordan: E-commerce accounts for 8% to 9% of total US retail
“The overall average is something like eight or nine percent of retail in the U.S. Now happens online”
Jeff Jordan: Starbucks missed Q4 revenue due to declining mall foot traffic
“Starbucks in their fourth quarter earnings call. Came in light on the revenue line, and they blame the fact that their stores in malls experience declining year over year foot traffic.”
Jordan: Amazon and eBay each represent 20% of US online spending
“I've done some back of the envelope calculations that Amazon, if you take their first party business and their third party business and normalize it for consumer sales, they represent about one in five dollars spent on the internet. Interestingly, eBay also re…”
Jordan: Amazon will handle low-cost shipments, leaving high-cost deliveries to UPS
“I've got a thesis that they will soon be, I think they are already entering the shipping market cherry picking the best the, low, the lowest cost shipments they are starting to do themselves. Increasingly and just leave UPS with the higher cost shipments, whic…”
Jordan: The best outcome for USPS is privatization by Amazon or UPS
“USPS is, you know, been having, you know, been running a massive loss for many, many, many years. I mean, for me, the best outcome is either one of two people buys it and basically privatizes it, UPS or Amazon.”
Jordan: Julep and Walker & Co avoid selling on Amazon
“We have a couple investments Julep and Walker and co in Beauty and personal care for people of color respectively, where they're building products that they elect not to sell through Amazon because they can control the distribution of their own product at that…”
Jordan: Amazon remains weak in soft goods retail despite continuous efforts
“You can go in categories where Amazon isn't particularly strong in spite of a lot of efforts. They're not that they're good. They're really strong and hard goods and you know, mass mass marketed UPC code type things. They're not that good in the soft goods and…”
Jordan: Consumers ultimately bear the costs of credit card fees
“And, you know, and a lot of people thinks the merchants pay that. I believe the consumer pays that, you know, just because the merchants pass on the cost, you know, for their profit margins.”