Why 95% of Retail Inventory Is Invisible to Consumers

0:00This show is brought to you by the Global Talent Co, a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find, hire, vet, and manage amazing marketing talent for 50 to 70 % less than their U.S. and European counterparts. To book a free consultation, visit globaltalent.co. Hey, everyone. Thanks for listening. Today, I'm speaking with Nick Brackenbury, co-founder and CEO of NearStreet, a company whose mission is to get people back into high street shops by connecting the world's local inventory to the web. So without further ado, welcome, Nick.

0:37How are you doing today? It's a pleasure to have you. I'm great. Yeah, thanks so much. It's great to be here. Yeah, no, we've been looking forward to this episode because the company you have and what you're doing seems really interesting. And it appears to be something that's quite different to what people are used to now, which is always getting the buys and people to do every purchase online. And what Near Street is trying to do, it sounds pretty appealing to me and I would love to hear more. So with that said, I'd love to know, Nick, what you think is the biggest misconception marketers have about online to offline commerce right now?

1:12I think a lot of marketers think two things, actually. I think a lot of marketers think it's incredibly complex because in-store inventory data is typically in very old, antiquated systems compared to what we're used to online. And so I think they think there's going to be a really difficult journey to get this online. And that was perhaps true a few years ago. But now there's kind of there's more companies like us that can kind of solve that side of the problem. But I think there's also this really big measurement question, which is so many marketers now are very used to kind of this amazing attribution you can do online.

1:52You know, you can attribute everything to each channel and, you know, multi-attribution, last attribution. There's all these different like ways you can model and attribute it. And it feels like that's going to be really difficult in an online to offline journey. And so I think a lot of marketers think, I'm not sure how to measure it, so I'm not going to do anything. And I think it's a really big missed opportunity, particularly when, you know, still, depending on which market you're in, about 75 % of all retail still happens in physical stores, but we all spend so much time on the internet, right?

2:19So if we're missing all these customers who could be coming to physical stores, then it's a huge missed opportunity. So yeah, I think there's a massive misconception around, particularly around like the measurement and attribution piece. Okay. I had no idea about the statistic of 75 % of people still purchase retail, like they go to the physical store. With everything we hear about Amazon here in Argentina, it's Mercado Libre. It's a whole bunch of different entities that are fighting for the online space that we totally forgot about in physical shops. Okay. And from what we've seen and kind of like investigated about Near Street, Nick, we've seen that over a billion stock updates flow through your platform daily?

2:58And what patterns do you see in how consumers actually shop today versus how brands think that they shop? I love the question because, you know, we talk to retailers about this a lot. And as you say, you know, we process well over a billion stock updates every day and we have kind of tens of millions of different signals coming back from our partners like Google showing kind of like how shoppers are searching for things locally. And I think lots of retailers and lots of marketers kind of assume that when we think about online to offline, we're thinking about shoppers searching for something like, you know, where can I find a can of Coke near me?

3:35And it feels very forced. And it's like, no one actually searches like that, do they? And of course, it's a little bit, you know, absurd or, you know, where can I find a Bosch power drill near me? It's these very kind of specific things that come to mind. But what we see much more in our data, and we're just talking about Google here. Bear in mind, that's like just one of many places the kind of online to offline journey starts. But what we see happening is there's actually all sorts of kind of searching, discovery, inspiration, exploratory type searches, which often don't have a local intent to start with, but we're making them from our mobile phones, right?

4:12Like we spend so much time on them and our mobile phones always have this local context, like we have them with us everywhere. And so there's lots of things where people are just trying to solve a problem and they're searching for it. But actually a local result can be really, really amazing. So let's say you've got like, you know, a friend's kid's birthday and you're like me and you don't have any kids. And it's like gift ideas for five-year-old boys. Right. But there might be an incredible bunch of toy stores near you that have like Lego or that have, you know, all sorts of things from Mattel or Matchbox cars or all these different things, but you've not even thought about them.

4:46But that's an amazing local result at that point where I was like, oh yeah, I can actually just like, it's between my office and the train station. Like I can just go in, have a look and be like, oh, these are really cool. And so there's lots of these kind of, it's not, you know, where can I find product X near me? It's all these other sort of inspirational searches or discovery, or how do I solve a problem searches where a local result is amazing. But if you don't know that shop exists or you know the shop exists, but you don't expect it to stock that sort of thing, then you kind of just never go near it.

5:16And so I think that's a really interesting trend. And that's accelerating as well, because we all kind of expect our phones to more and more know everything about the physical world around us. And like the gap you're pointing out, it's super interesting, because like, as I'm talking to you, I'm noticing things of myself as a consumer that it's so true. It's like, I look for the present for the five year old, and I'll get all these lists, top five presents, and it's something from the state or something that's not available here. But if I did get that local result, just telling me like, hey, just go to this toy store, this other one.

5:49And if it's close by, I do as a consumer, I super appreciate the fact of going into a store and actually feeling the product. If I'm going to buy some glasses, trying them on because those are stuff that you don't buy online. And wow. OK, like getting into that seems so cool because you really are looking at a gap in the market. it. Yeah. I think a lot of the time as shoppers, we don't really generally have a preference for online or offline. And I think that's maybe going back to your earlier question, another misconception is as shoppers, like you don't often say, I really want to make an online purchase.

6:24Like it's just that your journey starts online because that's kind of the most convenient place to start it. But where the purchase actually happens, not many people are super passionate, Like, no, I must have this delivered. Like, it must be delivered. Even if it's in stock on the way to the store, I want it to be delivered. Now, of course, there's some things where it's like, if it's big or heavy, you probably want to deliver to your home, right? But there's also most things people generally don't care that much. It's like, does it look trusted? Is it good quality? And is it convenient? And is it at the right price?

6:54And that's, you know, that's one of these balancing acts. And I think what we're trying to do is say, well, there's so much inventory in the physical world that just isn't part of that purchase journey today. You know, our own data shows that about 95 % of all products in physical stores just don't appear online today. Like you just can't see them. And so if you think about that, like almost everything you see online is a thing in a warehouse somewhere, probably, you know, a hundred, 200 miles or, you know, a few hundred kilometers away from you, which is crazy. But all the stuff that's nearby, if you can start to see it in that journey, very naturally, you know, when you're searching for that gift for your your five-year-old nephew.

7:33And it's like, oh, I didn't even think, of course, there's this, you know, there's this general store, but it has toys. I didn't even think it had toys. And it's right outside my office or it's like five minute drive from my house. And it's like, oh, cool. Like, and I'm going there anyway, but you might not have walked that section of the store because you didn't think it's stock toys. So there's all these things where it's like, how do you just make it that little bit easier, remove that little bit of friction so that it's then just an effortless journey for the customer? And Nick, this is more of a question on my side.

7:58Have you noticed any specific industries that have more products in stock that they don't put online? Is there like a certain area that you guys are looking at or is it just mainly everything? So we work with every category of retailer. The ones that we see growing really fast right now and it works really well for is a few different categories and for a few different regions. We see like hardware, home improvement and builders merchants doing super well. And that kind of makes sense, right? Because often people kind of know what they want, but don't know exactly. So there's that in-store expertise that's really important.

8:31And you talk to the guy that's showing you whatever, who's in charge of it. Exactly. And it might be urgent as well. You might be on Saturday and you're doing some work on your house and you're like, I'm missing this thing. And so we see that working quite well. We see this as well with like garden centers or nurseries. And I think that's as well, because they're typically pretty bulky items that you're buying there that you kind of want to see, choose the one you want and bring it home. And we're seeing more and more growth, really quickly at them and actually in convenience and grocery. But I think that's particularly with like last mile providers, because lots of the delivery apps that previously just did takeaway food are now going into kind of convenience and more general delivery.

9:07So we're seeing that with a lot of our customers who were just showing their products in Google, but are now listing them in like Uber Eats, maybe in like Just Eat or Deliveroo. We see more of that happening now where it's like, oh, cool, now we can just offer to deliver locally. And that's kind of been a really interesting kind of development after the pandemic that a lot of these kind of Q commerce companies went bust, but a lot of the existing takeaway companies who have a ton of kind of resource and delivery drivers already out there are like, well, actually, we can deliver from these stores as well.

9:36So that's been really popular. Yeah, no, here in Argentina, it's going crazy. Like people aren't going to the market, like to the supermarket that much. Everybody is ordering everything like through the delivery apps. The supermarkets are even like giving the, what's it called, the discounts and the promotions that they offer by going there physically, they're not even offering them via the app because people are going crazy of not going to the grocery store. Fascinating changes. Okay. And tell me something else, Nick. You've worked with brands like Land Rover and Ford. What's the biggest shift that you've witnessed in how global companies approach customer connection?

10:15Gosh, global companies, they're probably, this is going back a little bit of my career now. I think there's a big authenticity piece here. And there's kind of a big data piece in there as well. And of course, everyone has more data than they've ever had before. And customer expectations are higher than ever before. But at the same time, it's like how to not be intrusive or creepy about that in some sort of way. And so it's like, how do you balance those needs of wanting to be personal, wanting to be, you know, really targeted and deliberate, but also not be like annoying or, you know, kind of that person who's helpful, but is actually now too helpful and too annoying.

10:54They're kind of, you know, you don't want to reply. It's like, leave me alone a little. Yeah. And so, for example, like there is, I won't name them, but everyone can probably guess, you know, there's a certain like phone case company that somehow must think like, I don't have a phone case and they would be correct. You know, I'm notorious for never, ever having a phone case on. And they do some pretty kind of outrageous, creative advertising, but I'm just now bombarded by it relentlessly. So it's gone from being funny to like, okay, this is not really, really annoying. So I think there's a lot of companies that have to walk that fine line.

11:27And I guess coming back to kind of the area that we operate in, I think there's kind of two pieces in marketing, right? There's like the brand building, targeted piece of like, how do you help customers understand what you stand for and what you do? And that's kind of the really sexy, exciting stuff that we'll see and remember. But then there's also just like doing the fundamentals right. And that's kind of what we're trying to really help brands work on or help retailers work on is like, great, you know, if you want to build a great brand, if you want to help people trust you, these are all super important things to do, you know, more so than ever now, probably given how AI is, you know, transforming many of these things and kind of almost making it possible to contact everyone with a perfect personal message all the time at massive scale.

12:06So how do you kind of stand out and have a really meaningful brand, but at the same time, you've got to do the kind of basics of convenience, right? And that's what we're trying to help them do, which is like, you know, how do you just make sure you appear in the first place? Like you stock a bunch of great stuff in your stores, make sure people know about it on the platforms they use on Google, on Instagram, you know, inside Facebook, inside the delivery apps they use. Like it's not necessarily very sexy, but it's kind of a basic of you just got to appear as a starting place. And let's get that right first and then do all the other cool stuff as well.

12:40But like, let's make sure you got the basics there of just appearing and letting people know what you actually sell. It sounds very basic, but I think these basics are often so important. Well, they always are important. No, of course. And I totally agree with what you're mentioning because if you guys are even like expanding and as you go in like including more and more shops into your own platform, I believe that we're going to see the local people that arrive to Near Street are actually people who haven't been online properly doing ads or being marketed appropriately. I imagine it could be more like local shop, old school owners and more orthodox type of selling from what it used to be before.

13:17And maybe they haven't been able to catch on. Would that be correct in my assumption? Yeah, directionally, very much so. So we, you know, our customers today are mostly what we think of as like mid-market retailers. So, you know, anywhere from maybe a dozen locations up to a couple hundred. And that's because, you know, a lot of the big enterprise ones, they'll try and do a lot of this in-house. But what's been so interesting in the last, really even the last 12 months, last 18 months, is how the kind of the small retailers, the corner shops, the mom and pop shops, they're starting to see not just the big enterprise guys doing this, but also they're starting to see the mid-market retailers do it.

13:54And they're like, huh, that's cool. We want to do that as well. But starting to believe that it's possible too. I think that's really interesting because small retailers actually make up, you know, again, depending on the market, about 60 % of all stores are small businesses. So if we can help them come online and start to show their products locally, that starts to get really interesting. You know, if you think about that stat we were talking about earlier, where 95 % of all products are invisible to the web today, like imagine if we can get that to like, you know, down to 75 % or 25 % of all products are visible, or we start to get that to 50%.

14:27Yeah, but lots of that's going to come from these small stores. Wouldn't it be cool if, you know, when you see a product, you know, let's say there's a beauty influencer on Instagram or on TikTok, and they kind of tag some of the products in their video. And it's like, cool, you can order these online here and here. But there's also three pharmacies that stock these beauty products nearby. You know, pharmacy, you think it's a pharmacy, it sells, you know, it sells medicine. But it's like, actually, most pharmacies also stock beauty products. Yeah. It's like, but they're small businesses, usually, like most pharmacies, again, And they're either franchisees or they're a genuinely, you know, a small business.

15:00I was like, cool, but imagine if there's tens of thousands of those connected. And it's like, oh, yeah, that new, you know, that new eyeliner is actually available in this pharmacy that's like right next to my house. So, you know, imagine what that does to consumer behaviors when that starts to become the norm. And you just kind of expect that as opposed to being like something that's novel and rare and kind of a surprise to find this information. No, yeah. And I also imagine it's going to help like domestic, domestic stores, domestic jobs that people have there, it's going to bring it back in because I see this beauty influencer using makeup that I want to give my girlfriend.

15:33And it's just one that's sold in the States as from where this influencer is from. But if you were able to like connect me with the person that brought it to Argentina, it's going to be so beautiful. Yeah, wouldn't that be great? You know, I love it. I think that's what's going to happen. It's just kind of a question of how fast. Wow. No, no. I bet near street is going to help us get there faster. That's the goal. Oh, no, no. Fingers crossed. Okay. And Nick, next question. So local inventory visibility seems simple, but you're solving a massive technical challenge as we talked about stock updates, just making sure all the stores are there.

16:10But what's the one thing most retailers get wrong about connecting their physical and digital presence? It's definitely on how to get their inventory data connected. So what a lot of retailers will do, You know, most mid-market and small retailers will be on kind of an older stock management system that, you know, might be 20 years old and it's probably specialized to their industry. But it's not necessarily built as we think like a Shopify or a Lightspeed or a Square, you know, something like that with lots and lots of just kind of a marketplace and a bunch of APIs and apps you can install. Doesn't typically have that.

16:50And so they'll often look at like, well, what's a makeshift solution I can put in place? And that'll be okay. So they might be like, well, I can upload a spreadsheet kind of every week or two with what I normally stock, or I'll just show my hundred most popular products. And that'll be okay. Because it feels like that's how to get there. Because, you know, getting live data out of the system seems impossible. So we'll just sort of do kind of halfway solution that kind of gets something online. And it can feel like, cool, I've ticked that box. but actually in doing that they leave so much on the table both in terms of missed opportunity but also in terms of like compromised customer experience and let me explain what i mean by that like on the one hand if you're only putting sort of a small number of your products online you know just saying these are the ones we know we always have in stock it feels safe you know we stock 5 000 products but these are the hundred we always have and they're our best sellers online so we'll just show those as like our local inventory because you know we're confident they're always there.

17:47But it might be that you're leaving a huge amount of business on the table because you're not telling sites like Google what you've got in stock. So let's say you're a toy store, but you don't put the fact that you've got a huge range of Lego in the store. So all of a sudden, all the searches Google gets for Lego, it's just not going to surface your business because it doesn't know you've got a Lego or it thinks you've got two Lego products. Do you just put your two bestsellers online? When actually, if Google sees that you've got, you know, 50 different types of Lego and they're all in stock right now.

18:18Anytime someone's searching for a Lego or maybe not even Lego, maybe they're searching for these gifts for a five-year-old still. It's like, well, Lego is a good gift. Let's surface the shop. And so the business misses out because they're like, well, we just need to show that we have local imagery. So we'll just sort of manually do it and call something together and we'll export a spreadsheet and upload it because we can kind of get by. And so we see quite a lot of that. And people will try and use their existing feed provider to do that. And it kind of works, but it doesn't really get them the benefit.

18:44And the flip side is you can also end up telling customers that you have stuff that's not really in stock. And that really compromised the customer experience. If someone's like, oh, great, this retailer has the thing I want. They go to the store and then it's like, oh no, that's not there because our spreadsheet was uploaded on Sunday and it's Thursday and it's sold out. Like a super bad customer experience, right? It is. And so you kind of get burned on both sides. And so I think that's a very common mistake where retailers are so busy, like they have so much to do managing their businesses.

19:15and this is just another thing to manage. And so it's like, oh God, okay, let's just upload a spreadsheet. We'll export something from the system. We'll manually upload it or send it to our kind of existing solution and that'll be fine. It's kind of like getting the assignment done, but not doing it well. Exactly, yeah. Like getting a C. Yeah, yeah. And then your customers will give you a C in return and be like, well, I'm gonna give you a C and I'm gonna go to the people who give me an A, you know? Exactly, when the billing comes back and it's actually a C as well, you'll be like, uh. Yeah, exactly right.

19:47And that's what we try and help retail ourselves. It's like, let's find a way that you can do this easily to a really high standard and then not have to worry about it and just let it run in the background. Wow. Okay. That sounds amazing. And that really helps out people who haven't been able to develop their process for marketing inventory, placing it online, making sure everything's updated and up to date, because that's true. It's happened to me so many times. Like I go online, I see this store, I'm like, They have the skateboard I'm waiting for. I go to the store. Nah, man, that left last week.

20:16And I'm like, dude. Yeah, it's super frustrating, right? It's super frustrating. Okay. And Nick, Google and Facebook use your technology to drive foot traffic. So how do you see the relationship between big tech platforms and local retailers evolving? It's such an interesting question. I think there's a huge opportunity for local retailers with these platforms, you know, And this is only getting bigger right now. And by that, I mean, like, today we're talking about Google, we're talking about Facebook and Instagram. We talked about some of the last mile platforms. But like TikTok shop is huge for online and growing super fast.

20:58But that's going to start to become local soon as well. And that's going to be really interesting. We're seeing more and more of the big large language models starting to incorporate e-commerce data. And again, think about it when that can start to be local as well, when you can start to ask ChatGPT for like ideas for gifts. It's like, here's a bunch of gift ideas and here's all the places near you that have them right now. And I think all these sorts of things are going to become really, really interesting. The challenge for small retailers is like, how do they manage this growing network of integrations?

21:31Because it's like, you know, if you're Walmart, great. Like you're Walmart, you can go and build your ChatGPT integration. You can build your perplexity and your cloud integrations, and you can go and build your Google integration and manage it. And you can kind of stay on top of this because you've got a 200-person development team and a 50-person marketing team, right? And so this is what we're trying to help mid-market small retailers do is say, look, there's a growing number of connections. They're really, really valuable, but it's super difficult to stay on top of. And I think that relationship is both a very practical one, but then it's also, you know, it's like, how do you use these tools?

22:02But there's also a trust piece as well. Of course, you know, big tech can benefit all of our lives in so many different ways, but it's important also not to be naive about kind of how it can be used. And so I think for a lot of these retailers, having kind of knowing that there's some trusted partner in between can be really, really valuable. And I think that's, you know, and I'm not saying that like Google actually do a lot, for example, to help local retailers, but there's often, you know, this kind of background media sense of like, can I trust big tech? and it's kind of just, it's a general feeling, whether it's grounded or not for these retailers, it's that kind of feeling they have.

22:36So trying to help them get comfortable with that is something we try and do as well. Yeah, because like these big tech companies have gotten so huge that it's like, you don't even feel noticed or if you're just another number and if it's going to flow correctly, obviously they have their SOPs and the process is super set, right? If you have a partner like Near Street or that teaches you the ropes, that shows you it's all okay, it really must provide value for the employer who's looking for that. Exactly. You know, no one wants to think that I spent a bunch of money on ads. Have I got anything in return?