Episode Transcript
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Speaker 1 (00:06):
Welcome to Fear and Greed Q and A, where we
ask an answer questions about business, investing, economics, politics and more.
I'm Michael Thompson and Black Friday and Cyber Monday have
very much muscled their way into the Australian retail calendar,
becoming what is now the biggest retail event of the year,
and in doing so, it's really shifted the focus from
a month long retail build up to Christmas to a
(00:28):
really intense week or so where there's an enormous amount
of pressure on businesses and staff to deliver a seamless,
very efficient shopping experience for customers. And for so many businesses,
both big and small, the online component of what they
offer has become critical. My guest today is Carl Durrance,
who is the managing director Australia and New Zealand, a
(00:49):
payments platform Stripe, which is a supporter of this podcast. Carl,
Welcome back to Fear and Greed Q and A.
Speaker 2 (00:54):
It's great to be here. Thanks for having me again.
Speaker 1 (00:56):
How did we get here right? Because Black Friday Cyber
Monday have not always been on the retail calendar, yet
it managed to get so big so quickly. To the
point that it's actually shifted the focus for retailers.
Speaker 3 (01:11):
Yeah, I mean I think it's a relatively new thing
in this market here in Australia. It's gone back many
many years. In the US, Black Friday started in the
sixties and is aligned to the Thanksgiving holiday, and classically
what would happen is people would have Thanksgiving off, they
do a bunch of shopping the day after. Cyber Monday
was introduced in the US about twenty years ago in
(01:32):
order to incent a degree of online shopping.
Speaker 2 (01:35):
But you're right.
Speaker 3 (01:36):
With respect to Australia and New Zealand, I'd say it's
probably only really picked up in the last maybe five
plus years. And I mean it's huge, the transaction volumes
that we're seeing, the amount that Australian retailers are driving.
It's pretty phenomenal.
Speaker 1 (01:51):
Internationally because Strip is obviously a big global player. How
big was Black Friday? Cyber Monday? And do I have
to call it b FCM?
Speaker 2 (01:59):
Is it?
Speaker 1 (02:00):
I've got a bit of an allergy to acronyms.
Speaker 2 (02:02):
No, No, we don't have to call it that today.
Speaker 3 (02:04):
So it's still going right now, So there's still a
few more hours to go. In the US, but right
now we've just crossed thirty five billion dollars of transaction
volume on the Stripe Network across the sales season. I
think what's interesting though, is when you measure Black Friday
Cyber Monday classically in the US, it really is concentrated
(02:24):
into those two days. It elongates a little, but here
because we don't have the Thanksgiving holiday, it's become almost
a month long sales season. But what that means is
there's a huge amount of concentration of growth in that period.
So we see some retailers in this part of the
world doing twenty to thirty percent of their annual transaction
volume just in Black Friday Cyber Monday. So it's an
(02:47):
incredible moment in time for retailers to drive growth.
Speaker 1 (02:50):
That is extraordinary. And you have so much data as well,
which I have been pouring over that over the last
few days, just watching the transaction value, ticking over anything
that you've seen that affects the local markets.
Speaker 3 (03:04):
Yes, so interestingly, when it comes to the currencies being
transacted on the Stripe Network during this sale season, we've
seen the Australian dollar be the fourth biggest currency globally,
so only behind the US dollar, the British pound, the
euro and then Australia as being fourth, and that's a
relative proxy for the amount that consumers in this market
(03:25):
are leaning into. We also have seen that Sydney is
the ninth biggest city in the world in participation in
Black Friday Soyber Monday sales on the Stripe network. So
again you would suggest that Australians are really leaning in
to getting a great deal during this season.
Speaker 1 (03:42):
Okay, in terms of it's probably worth adding a little
bit of context in terms of what Stripe is doing here,
the fact that you are partnering with everyone from kind
of Amazon through to small businesses. Right, it is really
both ends of the spectrum and everything in between.
Speaker 3 (03:59):
Yeah, I mean classically in these kind of use cases,
it's the acceptance of payments online. And because such a
large proportion of annual traffic gets concentrated into this season,
you know, businesses are choosing Stripe because we just have
such high levels of availability in performance. So during Black
Friday Cyber Monday, we're very proud to be delivering over
(04:20):
six nines of availability, So that's ninety nine point nine
nine nine percent availability. So if you kind of work
that out, well, how available is that over an entire
month that would be degraded performance of two point six
seconds or less than one hundred milliseconds a day of
degraded performance. So it means that retailers can trust that
(04:42):
they can they can get the transactions when they need them.
Speaker 1 (04:44):
Okay, how important is that for a retailer? But then
for the impact that it has on a consumer, because
I was curious about just how much pressure something like
Black Friday Cyber Monday puts on transactions and puts on
the infrastructure behind it where all of us and you
have got so many people rushing out there to do
their Christmas shopping early, and they are all expecting everything
(05:06):
to be processed instantly and smoothly, and in some cases,
speaking from experience, if something goes wrong, you just walk away.
And so it puts pressure on the retailer to nail
it and in doing so puts pressure on their partners
like Stripe totally.
Speaker 3 (05:23):
I mean, the attention span during these periods is very small.
Speaker 2 (05:27):
Speaking more the best of times. Yeah, it's smaller the
best of times.
Speaker 3 (05:30):
But I think the way that we think about it
is actually the pressure is more on our customers on
the retailers to be available to make sure they capture
the market opportunity when it's there, and it's our responsibility
to make sure that we're able to meet that expectation.
So you're right, though, it is the hugest sales season
of the year classically. In the past, we would probably
(05:50):
expect that to be the post Christmas sales, but the
data shows us that the majority of sales now are
happening in November, where people are looking for great deals
for the Christmas giving season is still big, but not
as big as Black Friday, Summer Monday.
Speaker 1 (06:03):
Yeah, it's extraordinary. I want to park that just for
a moment and go to the future of shopping because
Fear and Greed partnered with Stripe on the Stripe Tour
earlier this year, and so I was sitting in the
crowd watching this presentation about agentic AI and the future
of shopping and it's it's one of those things it's
(06:25):
almost hard to explain if you don't see it, but
the way that transactions were being processed essentially by AI
representing the shopper, this isn't representing the retailer and doing
it at the retailer's end, but actually doing the shopping
for you and comparing prices and doing all of that.
Where are we heading.
Speaker 3 (06:44):
We're heading to a world where agents actually start acting
on behalf of consumers and it becomes you know, a
decent portion of transaction volume that retailers are dealing with
and consumers are authorizing. Right, So it's still early, and
we've got a global partnership with open around the Augentic
Commerce Protocol allowing basically consumers who are operating inside chat
(07:07):
GPT to start transacting and buying goods and services in
there autonomously. So as opposed to the classic use case
where you may ask CHATGBT to do some research, which
is excellent, what it can start doing is actually conducting
the purchase for you as well as part of that engagement.
Instead of you then having to hop out of CHATBT
(07:28):
into a browser, find the product and conduct the purchase,
actually it'll do it for you.
Speaker 1 (07:33):
So say you were shopping and now I'm just really
curious as to how it actually plays out. If I
was to be looking for something, researching a particular product,
whereas in the past I'd go to CHATBT, I would
say look around, tell me in Sydney or in Melbourne,
where I can find the best deal on this. I
can now actually just go essentially tell it to find
the best deal and to complete the purchase and go
(07:55):
through it knowing that I'm looking for kind of good reviews,
best quality. I don't want to pay shipping, and it
can actually work its way through.
Speaker 3 (08:05):
That process, yeah, and conduct a purchase for you with
a payment credential that you've enabled it with YEP, and
then complete the last mile fulfillment as well to make
sure that the product gets posted to you. We've got
early use cases now in the US with ets and
so it's a marketplace and so essentially in chat Chept
it will do the search. But in the fullness of time,
(08:26):
we're expecting many many businesses to be surfaced here where
you can start doing searches for experiences or products and
then have chat Chept complete that purchase on your behalf.
Speaker 1 (08:40):
It pretty much changes the way we shop, and I'm
not unhappy about that because I find I find the
Black Friday shopping experience to be really, really stressful, where
you are trying to find a deal and the best deal,
and I find it overwhelming when everyone is offering a
deal and you're trying to calculate what is actually going
(09:03):
to be the best and I would just love to
be able to step back.
Speaker 3 (09:06):
Yeah, imagine delegating that to an agent and saying, actually,
this is a lego set, and this is the budget,
and this is the time frame around how long it
may take to ship and go and find that deal
for me, along to those parameters. And then also imagine
a future agent that does grocery reloads for you, and
it knows how often you're buying these things, and it
(09:28):
just takes all that buying away so that you can
focus on things that you really want to invest in
where you get a joy of buying, but maybe the
administrative buying you can delegate to an agent. And so
there's this future where there's actually more transactions that are happening,
where you can focus on the ones that you want
to focus on and you can delegate the rest.
Speaker 1 (09:45):
So when we talk about AI improving productivity, right, this
is a great example of speeding up a whole lot
of individual transactions and the research that goes into it
and making it a more smooth, seamless experience. What does
it mean for retailers then, are they going to benefit,
mostly because it will increase the speed at which that
(10:07):
has done and reduce the potential friction between customers and retailers.
Speaker 3 (10:11):
I think there's a few things. Firstly, based on what
we're seeing in the early data, this is going to
be a net new channel of growth. It's early, but
the expectation is that it is probably not going to
replace human buying, and so there's an opportunity for a
new growth vector, which I think is interesting. I think
the way that generally online retailers dealt with bots and
(10:32):
the fact that non human interactions with a website does
need to change because historically that's been associated with some
sort of spam or threat, and so that needs to evolve.
Speaker 2 (10:42):
But there's a future where.
Speaker 3 (10:44):
A percentage of the transactions are going to be agent based,
a percentage is going to be human based, and how
do you engage both of those channels as a channel
for growth. So there's a huge amount of I guess
innovation that's going to happen over the next twelve to
eighteen months in enabling this.
Speaker 2 (10:58):
But it's a super exciting time.
Speaker 1 (11:01):
Timeline twelve to way ten months. So what in the
next maybe two or three years, we could see it
really affecting the way that say you or I shop.
Speaker 3 (11:12):
I think it's going to be earlier than that. I
think what we're going to see is Australian merchants be
listening on these platforms as early as next year.
Speaker 2 (11:18):
Okay.
Speaker 3 (11:19):
I think the more merchants that get listened on these
platforms create some surface area where suddenly it becomes a
place where you expect to be able to shop. And
then we're going to start seeing a decent percentage of volume.
And I'm really looking forward to next year or even
the year later around Black Friday Sober Monday, of what
percentage of those transactions have been driven by agents versus humans,
(11:39):
because I think it's going to be meaningful.
Speaker 1 (11:41):
Bringing it back to Black Friday. We are out of time,
but bringing it back to Black Friday and online sales.
Is everyone doing it now in terms of retailers or
is there are there still pockets that are potentially holding
out and not getting involved in this and then maybe
setting themselves up to miss out on the next wave
(12:01):
being AGENTICAI and those changes to shopping.
Speaker 3 (12:04):
I think the majority of retailers are leaning in and
we're seeing it though it extend. So now we're seeing
the emergence of travel Tuesday, and so business is saying, well,
hang on a second, maybe I'm getting lost a little
in the classic retail season and let's create something new.
In the US, they've got Giving Tuesday, which is classically
more aligned to donating to charity, and so we're seeing
(12:26):
it extend getting bigger versus getting smaller. So generally speaking, retail,
we're seeing them lean in because it's just so important.
But then some of these other sectors are starting to
create individual areas to make sure that they're able to surface.
Speaker 1 (12:39):
Awesome, Kyl, thank you for talking to Fear and Greed.
Speaker 2 (12:42):
Wonderful, Thanks for having me.
Speaker 1 (12:43):
That was Kyle Durrance, Managing Director Australia and New Zealand,
a payments platform Stripe, which is a great supporter of
this podcast. If you've got something that you'd like to know,
then send through your question on LinkedIn, Instagram, Facebook or
at Fearandgreed dot com dot au. I'm Michael Thompson and
this is Fear and Greed Q and A