We’re onto the third episode of Merchantry and it’s our best one yet. We’re starting to get a better sense of what makes a good podcast. From recording to working with our guests and getting the best out of them, to editing and rolling out the episode in a quicker time frame, things are beginning to fall into place. We had a very interesting guest join us for the third episode ‒ Vijay Ramachandran, VP of Marketing Strategy and Planning at Pitney Bowes. Apart from having a voice made for radio, Vijay is a highly articulate and informative speaker. He dropped enough knowledge on us to justify releasing the episode in two parts. Here are some highlights from part one.
It’s not every day that you get to speak to someone from an organization a hundred years old. That's a longer time than some countries have been around. But what makes this milestone even more noteworthy is the fact that there is a pandemic raging across the globe, much like in 1920 when Pitney Bowes first came into the picture with their now-famous postage meter. This ingenious invention was a landmark in commerce, providing a safe way for users to stick stamps on their mail without having to face the health hazards that licking a stamp in the middle of the spanish flu could pose. The rest, as they say, is history. Fast forward to 2021, Pitney Bowes is fulfilling the same role, ensuring that the ‘back-bone of commerce’ is up and running smoothly.
Thanks to the ‘zero-marginal-cost’ of the internet economy, there has never been a more straightforward way for entrepreneurs to get their idea off the ground. Aside from the cost of setting up the business online, the barrier for entry has never been lower. But is it really as simple as that? Not according to Vijay, someone at the ‘very intersection’ between ‘bits’ and ‘atoms’. Bits being the zero-marginal cost online world and atoms being eCommerce and logistics, where the cost for scaling is very real. Unless you’re Amazon and have built the necessary infrastructure, one has to adhere to the laws of physics when dealing with the world of atoms. Costs rack up in the form of warehousing, inventory, shipping, returns, etc. This is a challenge that digitally native brands have to overcome to truly succeed.
With the endless availability of options online, it is easy for brands to get buried under the slew of choices. If digital spaces like Facebook, Instagram, and Amazon are the courtyards of commerce, the tastemakers are the royalty whose services brands clamor for. In today’s influencer-driven era, following your favorite influencers is how one does product discovery. With an infinite number of niches with their own tastemakers forming their own tribes of followers, the world of bits is one of endless possibilities. While brands might leverage this dynamic by creating scarcity with a product drop or two, if they wish to scale up, they have to face the harsh realities of the world of atoms where incremental cost is a fact of life. This might be a tough pill to swallow for many brands, but from Vijay’s perspective “the scarcity thing doesn’t work with a sustainable, growing business model”.
Dispersion is not something that’s talked about widely. Which makes it a perfect topic for Merchantry. While there are books written about the dispersion to the online world, our conversation tackles the physical dispersion of the population out of metropolitan areas to suburban and rural areas. The COVID-19 pandemic has played a huge role in speeding up this process. With the threat of the virus forcing offices around the world to work from home, the remote mode of work, previously thought of as a distant possibility, has become a fact of everyday life. While companies initially made the decision out of necessity, they soon found themselves witnessing the benefits of working remotely. From the company’s perspective, they save a ton of money on renting office spaces, furnishing, equipment, electricity, etc. Meanwhile, employees can say goodbye to things like rush-hour traffic, choosing a tie that matches their shirt, and awkward conversations at the water cooler. A win-win for everybody. It was only time before people started wondering why they should live close to their office when the office is no longer needed. Thus began the great migration of our times. According to data that Pitney Bowes publishes on a weekly basis, more and more white-collar Americans are choosing to move out of crowded metropolitan areas to suburban and rural America where the cost of living is much cheaper, where one can afford a larger house with a back-yard and not hear the cacophony of traffic outside their window. But what does this shift mean for eCommerce and logistics? A
With the dispersion of a largely affluent demographic to middle America, brands face a new kind of challenge. With much of the logistics infrastructure centered around major metropolitan areas on the coastline, the price for fulfillment goes up by a considerable amount when catering to middle America. While this doesn’t pose as big of a problem to an established giant like Amazon whose reach is seemingly endless, for the average D2C brand, this presents a major obstacle. With customers used to things like same-day delivery, no-questions-asked returns, and free shipping, brands have to deal with customer expectations that are higher than ever before. While these expectations could be met for a customer living in a city where there is an established distribution network, the same cannot be said for someone living in The Middle of Nowhere, USA. So how do brands tackle this problem? Well, we can’t give out all the answers here, can we? That’s what the podcast is for. The third episode of Merchantry is now streaming on all major platforms including Spotify, Apple Podcasts, Google Podcasts, and Anchor.
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