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Is DTC all its cracked up to be? With Simeon Siegel

Episode #: 285
Is DTC all its cracked up to be? With Simeon Siegel

Guest: Simeon Siegel
Topics: Supply chain, DTC vs. wholesale, profit margins, convenience vs. cost

In this weeks episode, fan favorite Simeon Siegel is back with some fresh new insights! Listen in as he and Chris chat about the normalization of retail after Covid and do a deep dive into the costs and benefits of DTC vs. wholesaling.

What You’ll Learn:

  1. What effect has supply chain normalization had on retailers?
  2. Why is “high vs. low income” not a valid excuse when evaluating retailer sales?
  3. When does DTC become a better option for brands than wholesaling?
  4. What are the advantages of physical stores vs. e-commerce?

About Retail Retold:

The Retail Retold Podcast highlights community retailer stories from across the country and gives a behind-the-scenes perspective from business leaders in both retail and real estate industries. The show’s episodes contain valuable insights that help solve the needs of entrepreneurs and real estate pros. Join host Chris Ressa and new guests weekly for amazing insights and thought-provoking stories.


This is Retail Retold, the story of how that store ended up in your neighborhood. I’m your host, Chris Ressa. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC Management.

Today’s episode is sponsored by KCI Corporation. KCI is a partner of ours at DLC and we trust them with paving and concrete needs at our properties

KCI Corp. is your one-stop, professional solution for all paving and concrete needs. KCI provides commercial properties with the highest level of professional workmanship and services including asphalt paving, repairs and prevention, pothole repairs, sealcoating, line striping, pavement marking, site preparation, crack filling, concrete, masonry work and ADA compliance. With 30 plus years of experience and the latest equipment available KCI gets the job done right the first time.  You can rest assured that KCI will provide you with the best service available. Visit to learn more.

Chris Ressa  00:03

Welcome to retail retold everyone. Today I’m joined by Simeon Siegel, Managing Director and senior analyst at BMO capital markets. Welcome to the show Simeon.

Simeon Siegel  00:14

Good to be back my friend.

Chris Ressa  00:16

This is our third time.

Simeon Siegel  00:18

You know, at some point you stop counting and you just enjoy the friendship.

Chris Ressa  00:23

I love it. I love it.

Simeon Siegel  00:26

Unless unless there is a ranking, and I should keep track. Do I get a green jacket after a certain amount of goes, like what’s what’s the policy here?

Chris Ressa  00:36

It’s not number of goes. But the green jacket could be coming because, I haven’t checked lately but, at one at least, whether it was last year, the year before you were the most listened to episode, so you could get a green jacket for that.

Simeon Siegel  00:54

That’s a nice thing to say at the beginning, way to add the pressure here.

Chris Ressa  01:00

Alright, so here we are. We’re in summer of 2024. First question, I’m gonna jump right in Simeon, jump right in. What is interesting you about retail today?

Simeon Siegel  01:17

Oh, boy, oh, boy, we’re going we’re going broad first. I think the beauty of retail is probably the same thing I would have said every version of this that we’ve had. What is interesting about retail is how it constantly changes. I think the nuance is what’s different. I think if that’s a cop-out answer, here’s how I’ll follow it up.

Simeon Siegel  01:39

At the end of the day, what I think is really interesting right now, and hopefully really encouraging right now, won’t be for everyone. But I think what is really encouraging right now is you and I became friends around COVID. The beginning of COVID. Before COVID. Being a retailer is really really hard. Being a brand is really really hard. You need to predict and understand your consumer better than anyone. But during COVID, you also have to predict supply. That’s impossible. Predicting demand is hard, predicting supply is impossible.

Simeon Siegel  02:12

If you decide you want to have 12 Red sweaters for Christmas. That’s your decision. But if you have no idea whether you’re going to get them, you’re somewhat handcuffed. During COVID, that happened, you had to predict supply, which meant, it was all about rising and receding tides, it was all about whether the environment was good. And there was no inventory with a lot of stimulus.

Simeon Siegel  02:34

 So people were spending, or whether it was the reverse. And the supply chains effectively opened up, inventory was in surplus, and the stimulus was behind us. And all of a sudden things were bad. We’re back to an environment where retail is normal. And again, normal is a weird word to use. But the notion that you have to predict demand, and you don’t have to predict supply, you just have to pay for it, I think is a very encouraging thing for people in businesses, you know, to execute. Because I think that allows the winners to win, and it’ll be  the laggards who will lag. And so, at its core. If you were simply hanging on to that rising tide, you’re getting swept out to sea. I mean, it is not a fun time. But if you’re a great executor, if you’re a great retailer, you’re back in an environment where you can shine.

Chris Ressa  03:26

Well said well said. I hadn’t looked at it like that, but that that is super articulate and something interesting that I will be pondering post show.

Simeon Siegel  03:40

Good alliteration there, pondering post.

Chris Ressa  03:43

There you go. So bring me back to what are you seeing, you mentioned nuances, and the supply piece I think I think retailers have had some predictability in that for a little bit now. What do you think are what are you seeing are the big differences from last year to this year as it relates to retail and why some might be successful and some might not be.

Simeon Siegel  04:11

Well it’s interesting the supply just, so we have just lapped it. So for the past few you know again, I don’t I don’t like to live my life in quarters but I am a research analyst at an investment bank so I do need to mention the word quarterly at least once otherwise I get I lose my ability to speak, but I if you think about it from a quarterly perspective, the last four quarters meaning the last year, you’ve seen companies call out, apologize for getting financial statementy, call out great gross margins.

Simeon Siegel  04:42

The gross margin normally is codename for what you and I just want to say company health, for what you and I want to think about in terms of discounters and and full price. The past year, it’s included the benefit from supply chain. So to your point, supply chain was a problem up until about last year. And now we’ve just worked our way through, this has been the year of normalization. And so when I say like now that we’re through that, we should start seeing, you’re no longer the collective group of retailers, small lift to their gross margin. So a lift to that profit line item, because of an external fact, not because they were necessarily healthier from a markdown better product, better customer reception.

Simeon Siegel  05:28

But because they had something masking it, they were now lapping all the pressure they had the year earlier. And so what I mean is right now, the next quarter, is the quarter where that really starts to change. And so when I think about thats from from a profitability perspective, when you think about it from a revenue perspective, what’s interesting is I get asked all the time, there’s a view now that it’s high versus low income. And I don’t want to belittle the challenges or the comfort of high versus low income. But I do think that we find ourselves, we flock to this as an excuse, because it’s an easy narrative to say. What I think is important to understand, and this is what I mean by the execution matters. This is what I mean by the fact that you’re back to an environment where things matter. You have companies selling the exact same thing, to the exact same people, seeing exactly different results.

Simeon Siegel  06:23

 And we didn’t have that years ago. And so what do I mean by that? Well, just this past quarter, again, one quarter does not make a trend, but just using most recent examples, Coach, saw it’s revenues up, Michael Kors saw its revenues down, Aerie saw its revenues up Victoria’s Secret saw its revenues down, Warby Parker, up, National Vision down, Walmart, up, Target down, like the list goes on. That was not the case, if everything was grouped into high-low or clusters, we wouldn’t see the same demographics, showcasing winners and losers. And so I think that’s what’s important. And it doesn’t mean that others won’t be able to come out and find opportunity, there’s always going to be sharetakers and share losers. But that’s a healthy environment for businesses and people that believe that they are good. If you don’t think you’re good, if you don’t think you’re skilled, and you’re just skating along then you don’t want to hear this. But if you believe that you can make change, if you believe that your decisions will allow you to succeed, what I just described, that break that divergence. That’s that’s exactly the environment you want to hear about.

Chris Ressa  07:34

Totally, really interesting. And if I my takeaway from that is that, the businesses that are that might not be doing well, aren’t necessarily indicative of some macro-economic trend, because that’s what the markets do. They see someone puts up poor numbers, and they immediately go to like, as you said, demographics and economics. And sometimes it’s just and most times, it’s probably not that and it’s just the business is not doing well, that business, that brand. And I think we lose sight of that at times.

Simeon Siegel  08:18

Totally. And I think it’s because we like it’s easier to tell stories. It’s easier to benchmark things. And it’s easier to just group patterns are what we want to chase. But realistically, life is all about the nuance, life is all about the shades of grey. It’s not it’s not just black and white.

Chris Ressa  08:41

Yeah, in 2020, if you sold pampers and Pepsi, you were doing well. Period. If you had pampers in stock, you were doing well, right, if you sold Pampers and Pepsi, and today, you need more than that. You can’t just have pampers and Pepsi on the shelf. You need to be doing more

Simeon Siegel  09:01

Well. And again, I know you love the alliteration, specifically apparently using letter P. So that’s where we’re going. But I think what’s critical is at that time period, you actually didn’t need Pampers and Pepsi, you needed soda and diapers. It didn’t matter who you were. And I think that’s the point, the brand meant less.

Simeon Siegel  09:20

If you had if you were the only one with a fizzy drink and someone wanted a fizzy drink you were getting bought. And if you had those diapers on those shelves, to your point, you were getting bought, people were much less discerning. You needed an ugly red sweater for Christmas, you bought the ugly red sweater for Christmas, the label just didn’t matter as much in that very unique snapshot of time. And so that’s a little bit my point where no one wins on a sustainable basis in an environment where your product doesn’t win whereas your availability does. If all you’re competing on is availability, that will not be a sustainable recipe for more success.

Chris Ressa  10:03

Well, that’s the punch line there. You need more than availability. I love that. Okay.

Simeon Siegel  10:09

It felt like a good soundbite as I said it.

Chris Ressa  10:11

Yeah, its a good soundbite. I’m sure we’ll use it. So let’s go to something that you talked about a lot over the last few years. I want to bring it back up. Big Question. Where is Simeon on direct to consumer right now? You had a lot of discourse over the last few years about the difference between wholesale and direct to consumer. And is the middleman actually valuable? Where’s that landed you in 2024?

Simeon Siegel  10:49

Oh, my goodness. I don’t know if you even this is either the most prescient or you’re just giving me a layup. We actually, finally, ultimately, took long enough. But we my team, not not my team. They were good. I was bad. We finally published an update. And we did it yesterday. And so after three years, we finally published DTC is not all it’s cracked up to be 2.0. And it took us a long time to do it. So it’s I love that you’re asking this.

Simeon Siegel  11:18

So to backpedal very quickly. About three years ago, my team published a report entitled DTC is not all it’s cracked up to be the main premise that we found right. Rather, the main conclusions that we found was not a premise. The main conclusions that we found we weren’t looking for them. They we learned as we, as we researched, was that brands pivoting to direct, and remember, this was the heyday of DTC it was a DTC or die mentality. But we found that brands pivoting to direct, meaning their own stores for their own ecommerce walking away from wholesale, the brands that pivoted to direct did not see a relative increase in revenue, gross margin, profit dollars, or profit margin, it just didn’t happen. They did not become bigger or better companies by going direct, which was a huge part of the belief. Three years ago, when you and I talked about this initially, it was wildly contrarian. And I got into a lot of fights with a lot of friends, people called up. How dare you say so we, it’s so obvious. It’s counterintuitive to say otherwise, all these different things. Three years later, I’m not going to say it’s consensus. I’m not going to say it’s it’s just totally mainstream, but it’s dramatically less controversial.

Simeon Siegel  12:26

I mean, we’ve seen Nike effectively about face the process, and the commentary about moving away from their wholesale partners to realizing that those partners are these regional partners that they embraced, actually are the reason they are where they were. And so people started to get and it was tied to the VC funding drying up, it was obviously tied to what happened over the last few years, where there’s a focus on profitability, rather than just revenues, all these things are good things. But none of that really matters.

Simeon Siegel  12:50

That was simply the curtain being pulled back on the underlying math that existed the whole time. So that was the report three years ago, we firmly believed it, you know, I fought it all the way up. And now again, I think it’s becoming a little bit more accepted. So we rehashed and we updated the analysis. And I’ll say, three out of those four things still hold. So that we didn’t, we still do not see a relative increase in revenue, we don’t see a relative increase in profit or profit dollars. The one that’s a little bit less clear now, and it actually makes me feel a lot better, is the gross margin.

Simeon Siegel  13:25

So the first go around, the biggest confusion was, if I’m Nike selling a pair of shoes, let’s just say for $75, on And I sell the same pair of shoes at a department store or a specialty apparel retailer for the same $75 It means I have to sell it to them at all at a lower price. So Nike will book $75 If it’s bought on And let’s say they’ll book somewhere 40 to $50 if it’s booked to a third party, the cost doesn’t change, the profit on that item has to be higher. But that’s not what we found in the first go around, that’s a little bit, this go around, it actually looks like you can drive gross margin, which is what it should be. I think that makes more sense. The problem is you’re still paying all the operating expenses, you’re still paying the rent and the labor.

Simeon Siegel  14:14

And so at its core, what we found is, the primary question, because we also found some exceptions, this go around, which I think are really important. But so the way that I’ve synthesized this after three years of conversations on it, by going direct you keep all of your profits, you also keep all of your expenses, by going wholesale, you share your profits, you also share your expenses. And so the simple question is, do you give up more in profits than you save in expenses? So if you’re gonna give up more in your profits, stay direct. If you’re gonna give up more of expenses, go wholesale.

Simeon Siegel  14:47

 The vast majority of companies have higher expenses than they do what they would share in profits. And so what we found, and what we what I believe the exception is, because I said fairly universally DTC is not all it’s cracked up to be. But we did leave a little bit of an Easter egg in the first iteration that we wanted to pull on this string of the potential exception. So we did, we found that businesses that start with higher profitability, think luxury businesses think Lululemon, while these handbag companies, the business that start with high profitability could actually benefit by staying or going direct, because those are the businesses that don’t have too much profit to give up. And so I thought that was an interesting takeaway that we flushed out and learn a little bit more this go around. So DTC is not all it’s cracked up to be. But sometimes it might be.

Chris Ressa  15:34

My reaction to the last piece that you just said, I think, to me would be because of a brand cache, right? Like, I think Apple, Nike, their brand holds so much, that when I think they can drive higher profit dollars, but someone who doesn’t have such international brand awareness and is so coveted, doesn’t mean they’re a bad business or it’s not a great product, I think it’s they probably fall into the they have more expenses than they do profit by going DTC.

Simeon Siegel  16:20

So, I agree with the premise, what I want to tweak slightly. And what I want to stress, is Nike very much is part of the core analysis here. So Nike very much has benefited by embracing wholesale. So despite their brand, and Nike, obviously, is one of the paradigmatic brands, Nike’s one of the largest, Nike’s one of the most sought after, right I mean, the Nike, Nike as a brand is somewhat unparalleled. But that doesn’t mean that Nike has high gross margins, it doesn’t mean that Nike commands incredible price premium, they command price premium, they’re not they’re not a commodity. But at its core, Nike actually does benefit by allowing third party retailers to do its job for it.

Simeon Siegel  17:05

And the way to think about it there, is the challenge and the criticism of many third-party retailers is that they are effectively a pass-through, they are, they have low margins, that they are a business that takes other people’s things and sells them and they’re trying to get scale rather than trying to get premiumization. What that means, if a retailer does not make much in the way of profit from their brand vendors, that means their brand vendors aren’t paying a lot to get the job done. That’s a good thing.

Simeon Siegel  17:39

So here you have these incredibly economical, incredibly efficient, economically, distributing wide-ranging audiences, pick the attitude you want, they don’t charge you a lot to sell their goods in their stores. That’s what their low margins mean, that’s the other side of that. Why would you give that up? And so the tweak that I would say to you is, I think you’re exactly right about the brand element that the brand element needs to translate to higher margin. And so a brand, luxury brands, can have gross margins in the 80 percentage range, if you have to share half of that, your opex will have to be more than forty, for that to make sense. So at its core, you want to follow, I think, the businesses that have implicitly higher margins, underlying higher margins have, less to gain, more to lose, by embracing a wholesale partner. And so I think that’s the that that that key of the higher margin, even though companies you and I would associate with incredible brands. It’s not just the brand equity, it’s the brand equity translating into higher profitability.

Chris Ressa  18:42

Fair enough. I understand. Can, when you say you just released that update? Is it on your site? Where did it go?

Simeon Siegel  18:56

Well, it’s part of my, the firm’s we have a research portal. So it’s not, it’s not widely available that is that.

Chris Ressa  19:02

Okay. It’s part it’s part of the firm’s research portal. Got it. Okay. Any other tidbits you pulled from the second iteration of this?

Simeon Siegel  19:15

So there was an interesting dynamic. So the most interesting takeaway was this notion that there are exceptions, and they likely are likely to rest in higher margin more profitable businesses. That was number one. Number two is this idea that gross margin may actually be able to, you might you may be able to influence gross margin, which feels better intuitively, versus the last go around. Number three is that gross margin, the delta, so the difference in your profitability between your channels, so the gross margin you make at wholesale versus the gross margin you make at direct, whether it be at ECOM or stores, that may be the most important factor in determining whether you’re going to benefit by going direct.

Simeon Siegel  20:01

And so again, it’s tied to that similar it’s an offshoot or a tangent to the higher margin as is maybe the exception. What we found is there’s a view, if I were to ask you, when a business sells wholesale, what’s the markup, the general, the generally accepted view is very easy 2X, you sell something to a retailer for 50 bucks, they’ll sell to the consumer for 100. Right? That’s just the understanding, it’s not really correct. And so based on the math we’ve done, it’s not far off. But that’s not the number, the number is closer to call it 1.6X 1.9X. It varies, that number, that markup seems to be a very important determinant as to whether you’re going to benefit by going direct or not.

Simeon Siegel  20:46

And so meaning, and this goes back, it is an offshoot to your point about brand, the ability to price up, the ability to generate that incremental like what how much margin is being captured by the partner? That right there is probably the most important metric to determining whether you want to go direct or not.

Chris Ressa  21:05

Got it. All right. Staying on direct-to-consumer for a second. Where do you stand today with all these and what’s your take on all these pre-COVID, like much smaller direct-to-consumer lifestyle brands that were trying to get scale and that they were preaching I’m never going wholesale, I’m only doing direct, whether it was on my site, or a physical store, but I’m only going direct. Where do they fall into this? I assume they’re the one that they should be sharing the expenses. But where do they fall into this?

Simeon Siegel  21:46

So it’s funny, because you’re talking about sharing the expenses, they were effectively sharing their expenses. Well, not not they completely overgeneralize here, the majority of the ones that were running off of a profitless, irrational, VC-funded, business model, were effectively sharing their expenses with the universe because no one else was paying them. Right. Like these were businesses that were not running effective businesses. And so when the funding stopped, that music stopped as well. So a lot of these businesses had to find a way to get more profitable. Well, if you accept my hypothesis, you accept the work that we’ve done, that wholesale is incredibly, not easy, not to say easy. But it is a way to be more profitable, as well as a way to scale profitably. to get big orders upfront, then, yeah, absolutely, they should embrace them. And by the way, a lot of them do. a lot of the most successful if you think about the most successful digital natives, but no longer digital only businesses are increasingly not digital only businesses, a lot of them do embrace wholesale. And so I think that that’s really important as we acknowledge how these businesses can get bigger and how they can do it in a healthy way. I think what we learned and you and I have spoken about it, and this is a little bit of a data comment, but I think what we’ve learned, is that businesses that don’t generate great economics should not try and scale their businesses. There was a, it’s like the most simple, most obvious, but most under utilized point in the last five to 10 years. But the view was scale solves all, scale solves fixed costs, it does not solve variable cost. If it’s going to cost you that same amount, no matter how many units you sell, and you lose money doing it, selling more of something you lose money does not help your costs. And so I think that was the big awakening, sounds silly that it took a big awakening, but I think people believed scale and size will save everything, even variable ongoing costs that don’t get better with size.

Chris Ressa  23:51

So, that was perfect. So one of the last things I want to talk about is you know, physical retail the store is kind of having a moment here and you know, it’s it’s no longer that e-commerce is killing physical retail. It’s, and it’s not even that, you know, omni-channel it’s like moved to and I’m happy about it. Like you can’t make money in clicks without the bricks. And so I’m curious where you’re kind of, where you’re thinking as it relates to the physical store and e-commerce and where that is today.

Simeon Siegel  24:42

Well, you know, I love it. I mean, you and I became friends over over my view about stores. So you know, I’m on your side. I think there is no better way. If you’re a retailer, there is nothing you would prefer more than having your customer walk into your box. Go pick something out from an aisle, bring it up to the cash wrap, hand, your credit card, even better cash, take the bag. and walk out the door. I mean, think about everything I just described, on the E-commerce side, is an expense, the customer is literally, you stock the inventory once, you pay your rent once, you have labor, and then someone comes in and becomes your e-commerce employee, their pick, packing, shipping it all themselves, right, the only thing they’re not doing is you’re still going to pay their credit card processing fee. But other than that everything the customer does when they walk through your lease line is on your p&l. It’s your expense, when you do this online. And so the beauty and and you haven’t got

Chris Ressa  25:48

What, what a fascinating way to put it.

Simeon Siegel  25:53

Right? That like, if you think about it, that’s what it is. And so and that’s, by the way, not even acknowledging all the personal benefits, all the brand building benefits, the ability to touch your consumer, and speak to your consumer, all of that, right? So you compound that. But the sheer numbers is when you walk into it, it’s the reason TJX is so magical. Customers walk in and become TJ’s employees. So I think if we had our druthers, if you were able to create the most optimal scenario for a retailer, it’s a store. Now, the problem is, we have this thing called e-commerce, we have this, we have all these different other flash sale sites grew by like different things that pop up at different time periods. And so the consumer does have a lot of choice. And so you may create the most optimal scenario for the retailer. If no one walks into that door, you have a problem. And so I think what is important to acknowledge is that it’s important to understand what the retailer prefers. And then it’s important to understand what needs to be done. But I think the beauty of retail, when done right, is you convince the consumer to come in. The consumer wants to shop for convenience, when they’re not given a reason for experience when they’re not given a reason to walk in that box. But I still believe and maybe I’m completely wrong. I still believe if we had a magic teleportation device, I think everyone sitting on their couch would rather be transported magically to the aisle and then transported back home. Like I think there still is. And not for all items, picking up a can of tuna fish, you don’t necessarily need to unless you’re specifically about about what tuna fish are picking up. But I think for many, many things, the allure and the benefits of shopping live, if you give the person a reason to walk through that box is beneficial to both the consumer and to the retailer. We just have to acknowledge it, can’t put your head in the sand and need to you need to have it all.

Chris Ressa  27:43

For sure on that last point. I would say the following though, I think I don’t know if the right word is laziness. But I think we merge convenience and laziness. To me, if I need something from the store, I can drive there in five minutes, walk in the store. Buy it in 20, and be home in five and 45 minutes have it, that’s convenient. Buying it online, and then getting it next day. That is easy. But sometimes not convenient. I’ll never forget, like this is where the I’ll never forget like in COVID You know my kids were in diapers. And I went online and like every site was like three weeks. I was like well how does that work? This is a problem. I better I better figure out potty training real quick, and then I went to Walmart and got it in five minutes and Walmart told me exactly what shelf it was on and.

Simeon Siegel  28:52

I was about to ask were you waiting longer for the diapers or for the peloton you ordered?

Chris Ressa  28:56

ordered right right what’s what’s your I forget what your line was but I kind of miss quoted sometimes in the in the in the one article like what was it love the love the bike not the stock?

Simeon Siegel  29:10

I historically would say recommend the bike, not the shares. Just recognizing we can have cognitive dissonance, company value does not have to be tied to company to product love.

Simeon Siegel  29:21

With that comment that I just said people think company value needs to be intrinsically linked to product love and product perception. And I think we need to remember we’re not always the target audience or the target audience may not always be as large as the hope.

Chris Ressa  29:21

Recommend the bike not the shares.

Chris Ressa  29:39

I think the other thing where I was going to

Simeon Siegel  29:42

Sorry, totally different conversation.

Chris Ressa  29:45

So the convenience versus easy is, we can’t discount price. Like, if I ordered groceries online to my house. It is significantly more than if I go to the store and get it. And I think what we’re starting to see is, I’m gonna use the word easy not convenience, easy, is starting to become a premium product. Easy is becoming a premium product. I mean, if you DoorDash, or you get delivered a cup of coffee, it’s not economical for the affluent, let alone lower incomes. And I think we’re starting to see that there’s, what we’re seeing is, and I’ll use the word convenience, there’s a price for convenience. And it’s not coming down right now. And so I think that one of the things that’s helping physical retail is, you know, it doesn’t no one likes to waste money, no matter how high up the income ladder you are, or the wealth ladder. And I think we’re starting to see that because the cost of convenience is getting high.

Simeon Siegel  31:08

You say affluence so nicely, I have to, I have to work on that. I think you and I, I think it’s a brilliant point. You and I have been talking about the notion of returns for some time. I think what you are saying in another direction is the acknowledgement from the retailer and the brand and the company that they don’t have to give the consumer everything simply because the consumer raises their hands and asks, and I think that that’s critical. I think you’re seeing more companies charge for returns. I think you’re seeing more companies push back, I think you’re seeing more companies not simply give everything they possibly can. And whether that’s by necessity, whether that’s the companies internalizing the need to make money back to our profit versus revenue conversation, whether that’s because they believe they can, and they believe the consumer, is now to your point willing to pay up for ease. And if not, it’s simply trading time versus money. I don’t know. But I think factually it’s happening. And so I think you’re used to be the consumer would pay for a special service, the age of DTC and digital natives said the company will bear the brunt of all costs to make the consumer happy, because again, scale solves all. And so I think the recognition that it does not, is forcing a lot of companies to remember that they’re supposed to be special. They’re not necessarily supposed to be universal.

Chris Ressa  32:30

Yep, remember, I remember when I don’t know when this was when I forget, it was at Amazon and Walmart, where they were like, if you’re going to don’t even send it back, we’ll just refund you just keep it. Like when when people wanted to return, there was like, some time period where they’re like, We don’t want it back. Just keep it.

Simeon Siegel  32:57

Right, right. There’s plenty of companies that still do it. And they won’t tell you, because I mean, what’s worse than that would be refund fraud. But I mean, for certain companies, it’s simply not economical to take the product back, restock it, and and then have to worry about is it appropriately sellable. And so it’s the type of thing where you can’t broadcast, and you do it too many times and hurt your future. But on a sheer numbers basis, there’s plenty of products where it simply makes less sense to actually take back and makes more sense to surprise and make it seem like a surprise and delight. And it’s just a question of today’s math and tomorrow’s

Chris Ressa  33:39

right. All right. Well, this is a fascinating discussion on like the general state of retail, DTC, and physical and e-commerce, anything else we didn’t talk about today that we should?

Simeon Siegel  33:50

I’m sure the answer to that is yes, I’m sure you and I can have fun talking forever, and pronunciations of words like affluent in finance. But I will I will leave it here and wait to see how we did versus the first go around.

Chris Ressa  34:08


Simeon Siegel  34:09

They’re always fun. Love our chats.

Chris Ressa  34:11

Where can people find you if they want to learn more about Simeon and what you do?

Simeon Siegel  34:16

I don’t know why anyone would but if they do, the easiest place is probably LinkedIn.

Chris Ressa  34:21

Ok. All right, everyone.

Simeon Siegel  34:26

Or with Chris Ressa. Coming soon to a pod near you

Chris Ressa  34:31

Touche. All right. Well Simeon. This has been great, everyone. Thanks for listening. I really appreciate it. As always.

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