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June 4, 2018 • Volume 16


Supreme court legalization of sports betting

During the NCAA Men’s Basketball Tournament this year, I had the epiphany that the NCAA men’s tourney was the perfect consumer engagement machine. Despite the fact that my beloved Huskies did not make the tournament, [they didn’t even make the NIT tournament, famously dubbed the ‘Not In Tournament’ by Celtic great Kevin McHale], I found myself watching the evening of the first Thursday of the tournament with the TV on, live brackets on an iPad, while throwing [very] clever barbs at friends scattered across the country via text message on my phone.

All of this engagement was compelled by the unlikely chance that my $10 pool bet would pay for a weekend in Newport, Rhode Island with the wife [yes, I had planned that far ahead].

Before yielding the TV to his father, my son [12] had been engaged in an epic Fortnite battle, teamed up with a handful of middle school friends trying to earn not dollars, but the far more valuable social bragging rights that can obsess a 12-year-old boy, or a 49-year-old man. 

The game itself is a technical marvel, with games where 100 people join teams and work together to kill off their competitors, by shooting, building, and strategizing. It truly is amazing to a person that grew up thinking that Pac-Man was a technical wonder.

What do Fortnite and free throws have in common?

The link between NCAA tournament pools and Fortnite is clear. Both take full advantage of modern technology, in all of its forms. Both recognize that we want to engage with our friends in [mostly] healthy banter. More importantly, both recognize that consumers are evolving toward an expectation that they can lean in to their media, and that they ought to be a part of the game – not passive observers. 

Both also fill the gap that exists in American society with the breakdown of mass media as we used to know it. Gone are the days that everyone watched the Beatles or Elvis on The Ed Sullivan Show. Today, mass media has fragmented into hundreds of niche cable channels and streaming video services – each of which plays to narrow audiences.

Fornite had 3.4 million people playing concurrently at one point during February 2018.  Compare that with the 6.6 million people that watched the first episode of the revamped Rosanne [before ‘the tweet’], and recognize that Fortnite games are going on ALL THE TIME, not just once per week – 20 or so times per year.

Which brings me to the recent Supreme Court decision, Chris Christie v. NCAA, where the Supreme Court allowed states to allow sports betting. If this had happened 20 or 30 years ago, I would have been completely ambivalent about it, not being inclined toward sports betting.

What has me excited is the coincidence of the legalization of sports gambling with three other factors: the emergence of ubiquitous high speed Internet connections, a proliferation of reasonably priced devices that provide us access to the Internet wherever we are, and an understanding of how to engage masses of people in a very sophisticated manner around digitally delivered games.

Sports gambling on the rise, a safe bet

The future of sports gambling that I see isn’t a small number of inveterate gamblers squandering their week’s paycheck betting on NBA basketball games. The future of sports betting, I believe, will be games that everyone is participating in with small bets – a tiny slice of skin in the game to keep us engaged and competing with our friends and strangers.

The Ed Sullivan of the 21st century is not going to be a TV show, it’s going to be a game. And advertisers are going to love it because consumers will be engaged again, as they were in the golden age of television.

Amazon and the e-commerce Bermuda Triangle of Doom

I’m preparing for a presentation this week at the Internet Retailer Conference & Expo, in Chicago, where we will tap into Slice’s wealth of shipping data. Our non-retailer clients might not be aware of the fact that for most merchants Slice is able to see a ton of detail between when our panelists click the buy button and when the package arrives on their doorstep.

We can see the duration from the click of the buy button to when the package is passed from the retailer to a third party shipper. We see which carrier is handling the delivery, the route that the package takes, and whether there were handoffs from one shipper to another. And we see when the package was delivered. It’s sort of a consumer panel-based view of the US e-commerce logistics system, all anonymized and aggregated to protect the privacy of our panelists.

The topline metric that is the best starting point into this data set is what we call ‘click-to-door’ speed–the duration between when a consumer clicks the buy button to when the package arrives on their doorstep. 

The good news for consumers is that packages are reaching us far faster today than they had a few years ago. In April of 2016, we had to wait 5 days to receive our packages. In April of 2018, we only had to wait 3.1 days. Of course, this is financially difficult for retailers, who are pressured to get packages to consumers more quickly, generally with free shipping & handling. 

Amazon sets the tone for shipping expectations

The increasing penetration of Amazon Prime’s free two-day shipping program, of course, is at the root of this improvement. There are more packages being shipped to Prime members, and Amazon competitors are compelled to compete with Amazon’s free, quick shipping. The chart below tracks click-to-door speed for Amazon versus all other merchants combined from November 2015 through April 2018.

Amazon’s click-to-door lead shrunk by .8 days in two years (1.4 days in April 2016 compared with 2.6 days in April 2018) as competitors have improved their warehouse operations and footed the bill for faster delivery.

Will competitors eventually catch up with Amazon? No, not in the aggregate. Some will, but there will be many retailers that don’t have the stomach to fly into the e-commerce Bermuda Triangle of doom. This is the triangular relationship between shipping speed, shipping cost, and market share. No three factors are more interrelated and impactful in the e-commerce universe. And unfortunately, the near mathematical relationship between these three factors has caused billions of dollars to be lost in this triangle of doom.

There is hope, of course, for the channel. The increasing online availability of locally sourced inventory creates opportunities to push the burden of pickup to the consumer. And, with enough scale, local delivery networks such as Prime Now, Instacart and Shipt MAY drive costs down. So all hope is not lost in the e-commerce Bermuda Triangle of Doom.

About Ken

Ken Cassar is vice president, principal analyst at Slice Intelligence, where he looks at trends in the e-commerce industry armed with Slice’s robust set of online sales data.

Ken brings a rich online retail background to Slice Intelligence. Most recently, Ken was SVP, Media Analytic Solutions at Nielsen, where he developed several innovative digital commerce measurement and advertising effectiveness solutions. Prior to Nielsen, Ken was an analyst at Jupiter Research, where he was an early thought leader, trusted adviser, and media source on e-commerce. His prescient outlook on fledgling e-commerce industry was a key contributor to Jupiter’s dominance as a digital media zeitgeist at the dawn of the Internet. 

Ken has an MBA and Bachelors Degree in Political Science from the University of Connecticut. Ken aspires to stay technologically ahead of his teenage children, as evidenced by his ‘Gadget Geek’ Slice profile. He also has the appropriate jacket for every occasion.