Tiffany Serbus-Gustaveson 0:24

Happy Tuesday, everyone. I am Tiffany Serbus-Gustaveson, a digital strategist with BWG Connect, and we are a network and knowledge-sharing group. We stay on top of the latest trends and challenges whatever shaping the digital landscape we want to know and talk about it; we will do at least 500 of these virtual events this year due to the increase in demand to better understand the digital space. And we will do at least 100 in-person small-format dinners. So if you happen to live in a tier one city in the US, always feel free to check out our website or send us an email. These dinners typically 15 to 20 people having a discussion around a certain digital topic, it's always a fantastic time and we'd love to send you an invite, we spend the majority of our time talking to brands that's how we stay on top of the latest trends. We'd love to have a conversation with you if you always feel free to drop me a line at tiffany@bwgconnect.com. And we can get some time on the calendar is from these conversations, we generate the topic ideas we know people want to learn about. And it's also where we gain our resident experts such as Vorys eControl, who's with us today, anybody that we asked to teach a collective community has come highly recommended from multiple brands within the network. So if you're ever in need of any recommendations within the digital space, please don't hesitate to reach out we have a short list of the best of the best and I'd love to provide that information to you. A few housekeeping items. First and foremost, we want this be fun, educational, and conversational jump as many questions and comments you have into the chat, the Q&A bar or you can always email me at tiffany@bwgconnect.com and we will get to them. And we're going to wrap up this session at the 14-minute mark. So this will give you ample time to get to your next meeting and your next destination. And we will be moving fast. So with that let's rock and roll and start to talk about getting control beyond Amazon why you should be watching Walmart. I'm going to kick it over to our panelists. The team at Vorys eControl have always been awesome long-term friends of the BWG network. So maybe I can start with you, Jessica, and introduce yourself. We can go from there.

Jessica Cunning 2:08

Thank you. Thank you, Tiffany. Hi everyone. It is a pleasure to be talking with you today. And as somebody mentioned, we have some team members from the Vorys eControl team as well as Blake from the Precision eControl team. And real quick with respect to Vorys, we are part of the broader Vorys law firm Vorys, Sater, Seymour, and Pease, headquartered in Columbus, Ohio, where it's not as chilly there as it is where Tiffany is located, but still pretty chilly, nevertheless. I'm one of the partner attorneys in what's are called our strategy, some practice within our Voris eControl practice. And during today's webinar, we're going to be spending about 25 minutes really diving into the substance and strategy as it pertains to Walmart. Specifically, we're going to be talking about how Walmart has really grown to be quite the contender in the eCommerce space today. But then also diving in on the impact that it has on other distribution channels, in particular, Amazon, Amazon and Walmart are very interconnected. And then we'll be talking through how you need to have a holistic channel control strategy approach that accounts for the specific nuances of Walmart, if you want to be successful on Amazon, and as well as you if you want to be successful on Walmart and have an affirmative presence there. So briefly, Vorys eControl is a multidisciplinary group of attorney and non-attorney professionals like Jake Morgan introduced here, he's one of our non-attorney professionals. But we are a group that lives within the broader Vorys law firm that really seeks to bring together the various disciplines that manufacturers or brands need today to control their online sales of their products, and of course, a legally compliant way. We invented the eControl category a couple of years ago, and have had the privilege of working with over 1000 Different brands in the United States and globally. And we have a really exciting team that's just seen a lot of different issues, trade transpire a lot of different ways across a lot of different product verticals. So I have a lot of expertise to lean into to share out today. So with that, I will turn it over to Blake to briefly introduce Precision eControl the ancillary business to the law firm. 

Blake Burrus 4:18

Yeah, great. Thanks, Jessica. As you mentioned, Precision eControl is an ancillary business to the firm. It provides really the data and analytics but also a software ecosystem to support a complete brand control solution. So we found that to truly gain and then maintain control of sales and in your brand, it requires a combination of both legal IEP and kind of enforcement actions, but also tech and they need to work together in order to be able to do this at the scale that it needs to be done in sort of today's marketplace environment. So we created a precision eControl platform in collaboration with the experts at Vorys. And then the tech team to provide a comprehensive and it's really it's a purpose-built AI platform that specifically built for brain control, really with the goal of creating the conditions that are necessary that control conditions are necessary for brands to be able to invest with confidence and accelerate their growth. And look forward to sharing a little bit more about the platform with you today.

Jessica Cunning 5:22

Okay, so let's briefly jump into the substance of the content of freewill. When we're thinking about Walmart, it's really evolved quite substantially from where it started back in 1962. And one of the things that I'm always surprised to learn but it makes perfect sense is that about 90% of Americans live within 10 miles of a Walmart and I happen to drive past the Walmart on my exit to the highway every single time I'm going home. And in 2000, Walmart really decided to become that predominant online marketplace player. And that's when it expanded and opened up walmart.com. And then in 2009, that's when it opened up its formal online marketplace. And that was really in an effort to be a competitor to Amazon. And what is always kind of interesting to us is the ever-increasing number of third-party sellers that are ticking up on Walmart, and it surpassed 100,000. Sellers and fall of last year, and is only growing. And in terms of just kind of where the online marketplace President sits within the broader Walmart strategy is that it's a counted, it's anticipated to be about 12% of its retail eCommerce sales attributable to the third-party marketplace component of its platform. So this is an area that Walmart is very heavily focused in, and very much on the roadmap for growth. But a lot like Amazon, there are not very many barriers to entry for sellers that want to set up an affirmative presence on the Walmart marketplace. Currently, it costs $0 to open up a selling account. And there is very little to no vetting that is done by Walmart in terms of allowing that third party seller onto the Walmart platform. And I think one of the things that sometimes gets a little bit lost in translation is that when brands are looking out, and they're seeing their products being resold on Walmart, the first thing that might pop into their head is Who is this? How are they being there? Why are they here? But then the second piece is like, Oh, well, they can't do that that's not allowed. And the part that we like to educate brands on is that generally speaking, yes, they can. There is this first sale doctrine concept that exists under US trademark law that provides generally speaking, that the buying and reselling of legitimate product is a protected activity. You can do that as a reseller, as long as you're not like altering or tinkering with the quality of the product. And just the mere buying and reselling of that product is in fact, legal under trademark law. And so I think that's what something that's really important for brands that are looking out at Walmart to understand is that well, just the mere listing and reselling of that product on the platform may not necessarily constitute trademark infringement. And so what this really means is that a brand has to start thinking more strategically about how is it how are they going to be able to control distribution, and position themselves to protect their trademarks to protect their brand equity to protect consumers, and be able to address this unauthorized resale of the product on the Walmart platform. And regardless of whether you want your products there or not, this is something that we are increasingly seeing brands have to be mindful of. Particularly because what is transpiring on Walmart so much affects how the Amazon business is performing. Amazon's algorithm loves to watch Walmart, Walmart's loves to watch target targets watches the Amazon, everybody's watching everybody else. And thus the activity that's happening on Walmart really does impact Amazon performance and the two marketplaces end up being rather connected. So just to kind of demonstrate how this plays out and different scenarios that we've seen on our side is brands that want to have an affirmative retail presence, so they're selling to national retailers are selling to Amazon. But then they're also using two step distribution to provide a variety of ways for that consumer to ultimately purchase product. And it's quite common for a manufacturer or brand to have some kind of desire pricing, whether that's a Manufacturer's Suggested Retail Price, whether it's a minimum advertised price policy. And so in the brand's perfect world, you know, it's retailers would be advertising their products and in that compliant way at national retail Amazon, and at that regional independent level, sourcing through two step. And then we'll put Walmart in blue because I think a lot of brands aren't quite convinced as to whether they should be on an As are on Walmart in that affirmative presence or not, but nevertheless, the products are appearing there. And so if there's volume and pricing incentives going into distribution, distribution, maybe overstuffed, they have to offload some of that inventory, they'll shoot it off to the diverter. And the diverter will turn around and resell that product on the Amazon marketplace, again, little to no barrier, little to no barriers to entry to open up that selling account. And they're able to be competitive. And that activity in and of itself is protected under that first sale doctrine. And an Amazon one P situation, the Amazon algorithm is going to lower the advertised price to be competitive, or to three P situation your authorized three P may have to lower the price in order to be competitive. But depending on how that diverters source the product, they're going to likely have a lot a lot of margin room to play with. And they were able to just sit there on that authorized Amazon listing and lower the price in an effort to win the sale. But that is only going to trigger that algorithm continuing to lower the price as well. Another thing that we see is product getting liquidated through national retail. And so if that national retailer decides that they need to get some stuff off their shelves, they'll go ahead use that liquidator, which results in diverters sourcing through liquidation who then turn around and perhaps sell on the open online marketplace that Walmart IPs. And they're also going to be able to be price competitive and be able to lower that to 2075. And an effort of driving traffic and driving consumers over that Walmart listing. But that only then triggers the Amazon algorithm to go ahead and match that price and go lower in an effort to be the most competitive offer out there on the internet. But the diverter has wiggle room on their margins. So they're gonna go ahead and be able to lower price, the diverter pops in and says I can do that too. And before you know it, you have all these different players sitting there and just competing on the basis of advertised price and playing off of not just each other on the Amazon marketplace, but playing off of each other's offers across the marketplaces. So then we typically see some kind of map holiday are planned promotion being ran at national retail, they'll go ahead and run the $24 that perhaps isn't appreciated by the manufacturer, that Amazon is gonna go ahead and lower to 24 in order to be competitive and match that. But that just in turn, continues to put that pressure on those other diverters that have your product to go ahead and advertise that that lower price. And once that promotion ends, the retailer and again, your perfect world would come back up to that $30. But they're looking on the internet, seeing the 23 on Walmart, the 2350 on Amazon, and people are walking into their stores whipping out their phone and say, Hey, this is what it is online. Why should I have to do it for 30. And the brand is going to probably be on the hook for that difference because the retailer is going to want to be competitive, but then turn around and demand that difference that margin protection from the brand. This can only be exacerbated if you have than intended distribution partners like a distributor, turning around and selling well, I too can play this game. Let me go ahead and offer the product here on Amazon for 20. That results in people getting upset at brick-and-mortar and then other uncontrolled third-party marketplace sellers being able to lower that advertised price to be competitive. And so this continues if left unchecked, and could get to the point where the retailer's saying I can't carry your products anymore, it's not profitable, I can't do it. I can't compete with the online activity. So your brick-and-mortar channel partners are disrupted. Amazon might be saying I can't realize a profit, it's not worth it to me to carry your products anymore. And this all can result in the brand equity erosion element of the one star product reviews and ratings. And the brand is just kind of sitting there like looking at all of this happening going, Okay, well, I've sell my products to Amazon, I want them selling my products. But why is all this other activity happening? Who are these three P's on Amazon and I don't even sell on Walmart. But my products are there. And clearly it's impacting my Amazon business. And so this is where we are increasingly finding a lot of brands because they have historically been very focused on Amazon, but not really appreciating that Walmart directly impacts that Amazon business, regardless of whether you want your products there or not. So that kind of intermingled mess of the inner of the dynamics of marketplaces, really highlights why brands have to take a more holistic approach to channel control. And this accounts for the reality that the brand's products are going to probably be on Walmart whether they want them there. And you can kind of think of Amazon Walmart and these online marketplaces is really kind of the tip of the iceberg like this is what everybody's see. You're not swimming, you're up on the iceberg. This is what everyone is seeing about your products, the reviews, they are what are informing their opinions about the products. But all of the sales that are happening there are really just symptomatic of everything that is happening down below that water line, starting with how your products originate with you, as the manufacturer go out to your retailers, your distributors, what leaks and the distribution chain you have that allow the products to be bought and resold up above on Amazon and Walmart for everyone to see. And where we kind of see brands today is kind of where we saw brands a couple years ago, where we were working with a manufacturer and the brand would tell us, well, we're not meant for Amazon, like we don't want our products there. It's not on brand. So we're not going to sell our products there. But eventually, like came around to the realization that well, people are buying our products in Amazon. So we might as well control the store control the brand story control or presence control the sales strategy. And I think that increasingly brands are kind of coming around to that realization of Walmart, while at first blush brands may think that, Oh, that's not on brand for me to be on Walmart, but it really kind of starts to boil down to the question about, Well, if your products are going to be there anyways, don't you want to step in and control the brand narrative and have a strategic strategy around how your products are bought and resold on the platform and how consumers are interacting with your products there to ensure that they're having that good quality experience that results in positive product reviews. And so this really is kind of where we sit from a Bories eControl perspective is thinking about all of the different components we have to bring together to account for Walmart specifically because there are some nuances to Walmart that just simply don't exist with Amazon. But importantly, the framework is the same. And so when we're approaching a holistic control strategy, we're thinking about it from a data perspective and an investigations perspective, which sellers are disrupted. What do we know about these sellers? What marketplace tactics? can we leverage standing here today? How are we going to more broadly xx exert control over distribution? What is going to be the way that we are able to combat that unauthorized resale of the product in a systematic way, and then also in a more tailored way? When the KPIs necessitate it? How can we engage in diversion diagnostics to peel back the layers to figure out how it is these problematic sellers are getting hold of the products, and how does the data and the platform inform all of those decisions, so that every decision that is being made is data driven and working towards the brand's KPIs. And so this really, is why there's lawyers and non-lawyers on on the team, because it does involve so many of these disciplines being brought together under a single roof to get the brand to where they want to be. So I'm going to talk through some of these and Jake's gonna take some and Blake's gonna take some at a high level. But each of these are going to be discussed with a Walmart specific lens, and how we are accounting for these different components from Walmart specifically. So with respect to investigations, and seller intelligence, some of the things that we've observed here are that third party sellers, particularly the more sophisticated ones, the professional ones, the ones that are really dialed in to having a speed their business, they're probably listing on both Amazon and Walmart. And one of the pitfalls that we've seen is brands being very focused on removing the seller from Amazon, and then Wednesday, get the seller off of Amazon are like, whoo, we did it, good job. But then they just still find that seller listing over on Walmart and be equally disruptive. And the sellers between the platforms often use different names. So it's not very clear that the Amazon storefront is the same storefront on Walmart. And that is why you have to have the appropriate data tools in the appropriate kind of people looking at this and being able to tie all the little knots together to understand, okay, this seller is over here on Amazon. It's the same seller, it's over here on Walmart, and how do we lead enforcement in a way that is going to impact the sales on both of those platforms, and not just focus on Amazon to the detriment of Walmart. A second, it's really important to think through marketplace tactics to leverage and so Walmart, as Jake will explain in a second is handled a little bit differently than Amazon just because of the way that the platform is set up. So there's some specific considerations that need to be top of mind when leveraging the marketplace reporting tools on on Walmart, Jake.

Jake Morgan 19:47

Yeah, thanks, Jessica. So yeah, even if you're intentionally selling on Walmart, they're likely a number of road listings created by unauthorized sellers that are diverting traffic away from your authorized channels and causing other or disruption in the listings listings can often violate your IP rights or Walmart's policies. And those can be used to kind of D list those. And there's a, there's similar mechanisms to Amazon. But some key differences I thought I'll highlight just to kind of take you through how you get those delisted. So Walmart has a brand pour that is similar to sort of Amazon's brand registry. But there are a few key differences in that Walmart is a little bit is a lot more simple than Amazon. So Walmart, Amazon can, will take measures to gain a brand so that only specific entities can list. Branding ASINs, Walmart doesn't have any of that gating at all. So you tend to see a lot more rogue activity on Walmart. And then their brand portal only allows you to report IP rights and track those. Whereas brand registry will allow you to report policy violations and other types of activities. So it's a lot more robust. And then on the positive side, copyright use is handled much differently at Walmart than Amazon. So Amazon when when a user were a brand owner, rather, authorizes use of their copyrighted material is authorized across all of the ASINs on Amazon, so not just the one that they're they're listing on. And I want more that's different. So when when you authorize that material on Walmart, it's only authorized on that specific listing. So any other road listing can be delisted, signing your copyright rights. So that's, we can get a lot more done with copyright at Walmart than you can at Amazon. Another key difference is the email system. So at Amazon, when you report your brand, registry or other mechanisms, when they respond, they respond with a no reply email. So you can start a conversation with them see that email mechanism, you can escalate their decision and communicate with them that way, but it's a little bit more cumbersome process, whereas with Walmart, they'll respond to you with an actual email address that you can respond to, and have a conversation with them and and work through issues that you're saying. So we see those two positives as a mechanism to delist a lot more easily at Walmart and Amazon. So, but in general, it's it's it makes a lot of sense to make sure you regularly audit the listings on Walmart to see which ones are rugs and address those that way. So I'll just turn it back over to Jessica.

Jessica Cunning 19:49

Thank you, Jake. So from a distribution control perspective, this is where a brand needs to think about a broader authorized seller program. Authorized seller program terms are terms that flow from the manufacturer or downstream that convey channel controls, online sales restrictions, online marketplace restrictions as well as quality measures. And I think there was actually let me see a question in the chat about in a brand have an effective and enforceable online distribution agreement with wholesale accounts that prohibits them from selling third party? And the answer that is yes, generally speaking, you can absolutely prohibit your downstream sellers from selling as a third party seller on online marketplaces. And that's a key component of the authorized seller program documentation. And so here from a Walmart lens, this is where the brand has to kind of come to that question about well, do you want to have an affirmative presence on Walmart? And if the answer is yes, then what? How are you going to account for that? Yes, in the authorized seller program documentation? And if the answer is no, then again, how are you going to account for that in your authorized seller program documentation. So this is where kind of the first party third party element of Walmart comes into play. So if you are a manufacturer, and you sell to Walmart, first party, so that's a Walmart retailer relationship, then Walmart more likely than not is going to be getting terms from the brand that convey something along the lines of Walmart, you're authorized to sell to end users, you can sell brick and mortar you can sell on walmart.com. And here are the quality measures I expect you to abide by. And the customer service I expect you to provide to your to end user consumers when they're interacting with our products. And if you're instead, using a third-party selling strategy on Walmart, so you have a dedicated third party, ideally, a professional seller representing your products for you on walmart.com, then this would mean that you're not in brick and mortar, you're just on walmart.com. And you want from an authorized seller program perspective to make sure that your third party seller is contractually obligated to follow Walmart specific quality measures. And so for example, this would be things like making sure that the seller is working towards getting pro seller badging on Walmart, that they have a high feedback score so that they're going to be able to be competitive for the buy box. You have control and visibility over their fulfillment practices. Are you allowing them to use fulfilled by Walmart and that they are being an open book in terms of allowing use screenshots and other information from their Walmart selling account. And then last but not least, if you're the brand that is landing on the side of we don't want to be on Walmart whatsoever, we don't want to have our products sold on that platform, then you have to craft your distribution documents in a way that very clearly prohibits online marketplace sales, and that everyone is aligned from the top of leadership decisions all the way down to the sales team, that third party seller marketplace presents on Walmart is not going to be approved by the brand to the extent that different accounts are asking to sell them. The next piece is making sure that you as the manufacturer have an unauthorized seller Legal Foundation, and you're able to enforce against disruptive Walmart, third-party marketplace sellers that are impacting Amazon, and that may be impacting the KPIs that you have on Walmart. And so this means that you need to be able as a manufacturer to leverage your intellectual property rights and other kinds of trademark-related theories directly against third-party sellers that are retailing your products on the platform. And this is done completely outside of Walmart communication portals like unlike what Jay talked through in terms of leveraging marketplace tactics, where you're working through the IP reporting systems, this type of enforcement is done directly at that third-party Walmart seller outside of the Walmart platform. And this is really key to being able to control and stop those unauthorized diverters bad actors that are turning around and reselling your product in an unauthorized fashion on Walmart. Diversion diagnostics is also a really important part of looking at this more holistically, because this is the process of identifying where the disruptive sellers are sourcing your products, and that you as a manufacturer are able to step in and stop the flow of products to those bad actors. And so this is where making sure that the person that is diving deep into this, and we have a whole dedicated team that this is where they sit, they have a thorough understanding of how Walmart operates. And some of its particularly unique characteristics. Like for example, its dropship vendor program. For high volume product suppliers. That's something where you want to make sure that somebody is dialed in on that they know how it works. And they're able to provide tailored advice to the manufacturer, about diversion sources. And then last but not least, is making sure that you have the right monitoring and insights on Walmart to make these strategic decisions that impact the business on Amazon and Walmart. And there's definitely some nuances here from Walmart that are different than Amazon. So for that I will turn it over to Blake.

Blake Burrus 27:49

Yeah, great. Thanks, Jessica. So what I'll do is I'll provide an overview of the types of of analytics and insights that are available to support an eControl program for Walmart, the platform does support a number of those items that we just ran through. So controlling your distribution and managing your your seller authorizations, managing a quality control program. But today, just kind of in the interest of time, frankly, we're going to focus just on the functionality that supports enforcement around the unauthorized sale of products. So that's second, third, last one, and then impact measurement. So the particular example is pulled up here that will go through the platform is set up assuming that the brand wants its products to be sold on Walmart and has a relationship with Walgreens, Walmart. So you'll see that Walmart is listed as an authorized seller in this example, along with a bunch of authorized sellers, but there's a one P relationship that's assumed and in this. So generally we start with a with a landscape assessment. So understanding you know, who's selling number of sellers, number of offers BuyBox dynamics ropes, like like Jake said, and our goal really when assessing sort of disruption is, is to identify the disruption clearly, but but also to quantify the disruption like finding and a source of disruption and like an authorized seller, it's not terribly difficult. But as you can imagine, not all sellers are created equally when it comes to the how disruptive they are. So it's important to quantify that disruption, which allows us to then we prioritize our actions, right? And we'd be very deliberate in saying we're going to focus on the highest value actions, the most disruptive and do that first. There might be dozens, hundreds, sometimes of sellers, but generally we see as the sort of 8020 principle that those sort of top 10 sellers are the most disruptive so you want to start there. It's not just to sort of black and white. Yes, no, and you really need to get to the quantification so you can spend your time you have to spend your time wisely. So on Walmart, which you start to see here the KPIs we tend to focus on our Buy Box ownership, the price of the offer, and then the number of offers if you can mitigate the most disruptive sellers being on the buy box. 95 years add more of the time, if you can get the products going out the door, at the price you want 90% of the time, you'll be in control. And you'll have omni channel control which which will really help you reduce channel conflict. So what Jessica has gone through here is disruption insights module lets you see those KPIs we viewed which sellers are the most disruptive, you can see the top storefronts that are capturing by box, we just kind of have like a top five capturing, capturing by box, we had a top-five storefronts by a number of offers. But the view that you see on the screen now is you have the full list and a table from all the sellers all the listings, there by box ownership. And you can see a number of the the KPIs there. So you have storefront name you'd have or the active inactive offer on the on the marketplace or not as their seller ID or the authorized, authorized. And then some some KPIs or metrics around by box and products, their listing? I'll call it particularly attention. There's one it's a little bit small, but it's called seller intelligence. And it's a binary, you know, yes or no, do we what do we know? Do we know something about this seller, so we have a database of it's over a million sellers. And now that we've been keeping for the last seven years or so just keep populating it when we do the investigations and some of the things that Jessica talked about. So we have a database. And so it's very easy for us to check and see, do we already know something about the seller? Do we know who they are? And we know that they also list on Amazon? Do we know if they're represented by counsel or not? And this is some demo data. So they all say no, in this particular case. But generally speaking, about half the time, we already know something about a seller in our database, that just helps us move quickly through the through the enforcement process just accelerates the enforcement process. So if you go to the next slide, you know that was all through a seller lens, you can also have a have a platform, it's really important for the platform to be able to look through a product lens or a or a SKU lens. So you can see what particular items in your catalog are being disrupted as a certain skews. Are you? Are you losing on your muscling skews, or you're losing on high margin skews, or your new products being disrupted? People are often surprised at how quickly new introductions can be disrupted are items that you're trying to support with sponsored search or other other advertising spending, are those being disrupted? And what impact would that have on your ability to like deliver your budget in full around, you know, your advertising budget in full if you don't own the buy box. So again, you can kind of see here is similar, you got top five products that are being disrupted by by box top five that are being disrupted by a number of of offers or listings that there are and then down below, you've got, you know, super detailed for every SKU, you have to have all the metadata down there. So in slightly the week, then you can we've now we're kind of switching to a module of the platform called marketplace details, which kind of goes beyond just this, what I showed there is kind of snapshot in time as a landscape assessment the way we talked about. But here we're able to look at changes in KPIs over time. So for example, we have my box KPIs here, and you can see on authorized by box and in percent, you can see the average price of the of the offer that's occupying a Buy Box, you can see the number of storefronts that are capturing the buy box and trend that over time, you know, daily, weekly, monthly. And this is where you start to think about like the concept of measurement, which I'll talk more I'll talk more about in a minute, but I want to go through go through a few more. But with more slides, you can go deeper on just advertised pricing. So instead of by box, you flip your KPI to be advertised pricing. So you can look at what percent of offers are going out the door at our intended or preferred price, you can see what's the gap between what the actual sale price is or list prices versus what we would like it to be ideally. So just in this particular case, you can kind of see we have some unfavorable trends, frankly, on pricing, we have, you know, fewer offers are being sold with our intended price, you know, in the last 30 days, and then the previous, you know, three months, it's you know, down seven percentage points and the gap between what we'd like the price to be in what it's actually going out the door at is also getting, it's getting, it's getting bigger, right? So it's now almost 10% When it was previously around 6%. And so you can look at this, at a certain group of products, one individual SKU, you can look at it at a seller level and really get very granular on, you know, what are the sources of disruption? How much is it costing me and and am I making progress and what actions do I need to take next and continue to continue to take so we go to the next slide. This is just sort of the last set of KPIs. This is all about offers so it's just kind of showing the number of storefronts that are listing and the number of total offers that are being listed number of distinct products that are being listed and you know ideally what you want to see over time when you work in conjunction for ease. You want to see you know progress on number of storefront As listing, you want that decline, you want the number of offers being listed. And with that declining, you want your Buy Box ownership increasing, you want your list price increasing. And so we are we're just keenly keenly focused on measuring outcomes in this way. My my background and the background of a number of our focus on our products and data science teams is measurement. So brand analytics, digital marketing, measurement, digital media measurement. And we're just we're bringing a lot of the concepts and principles and techniques from some of that marketing analytics market mix, you know, digital measurement, and tying these things into business KPIs, like sales and profit and margin. And, and we're bringing it into the platform really, but the ultimately the, you know, we want to demonstrate that brand control is a growth and profit center, rather than, you know, some kind of about cost center and we're just maniacally focused on that we're actually, it'll probably May or June, but we'll have a module in the platform that is specifically set up for measurement, like you can do measurement. Now I show you some of the ways you can do measurement. But there's a few too many clicks, but we'll have a module that is dedicated to be able to set up your measurement window, pre-period, post-period, select your KPI, select your brand, right and or your so some products and have reporting that's just, you know, very sort of fluid on on measurement. So that's just the theme of something that we think is important in the space and frankly, hadn't hadn't seen that kind of measurement and impact focus. In the space, we see a lot of the a lot of the metrics that I see tend to be, I think of them as like input metrics, like number of sites, we monitor or, you know, number of takedown notices we've sent or things like that, but we really try to get focused on outcome measurement, like BuyBox ownership, and, you know, pricing and, and, and margin. So that's it, I think, just go for the platform demonstration.

Tiffany Serbus-Gustaveson 36:57

Awesome. Thank you. Reminder, final questions, and comments put into the chat, and we'll go through them here towards the end. So there's some really good questions queued up.

Jessica Cunning 37:11

Yeah. And so yeah, we'll go ahead and wrap up and move to the questions. But really, we're where we say, and just seeing this play out hundreds of 1000s of times, Walmart has to be accounted for when a brand is looking to more broadly control its online sales channels. And that is true if the Baron wants its product sold on Walmart or not. The platform that that Blake just talked through is thinking about having an affirmative presence on Walmart. But if you don't want to have that presence there, it's equally important that you're leveraging the data tools to ensure that your products are not appearing on the platform. And so the data really does underpin and inform the broader legal strategy. So with that, we can jump into the chat, Tiffany and maybe just one by one.

Tiffany Serbus-Gustaveson 37:57

Yes, thank you. This is fantastic information. And looking at that first slide with like all the blue, and I just made my head spin because I remember those days playing Whack a Mole every day on Walmart day. So very well put together. Thank you for presenting today. So a question here is How do you deal with unauthorized sellers who continually change their seller names and addresses right now? Are not the right sellers seem to pop up as soon as we shut them down?

Jessica Cunning 38:23

That's a great question. So that really boils down to making sure that you are tracking the seller at the merchant ID level on Amazon or the seller ID level on Walmart. And that's why when we are enforcing against a seller and investigating sellers and tracking the feller intelligence we have about them. And we're putting them in the product, divergent database. We're doing all of that at that seller ID or merchant ID level, which is essentially like the social security number of that seller. And so you can change your name all day long. But you have to be able to be able to track it at that seller ID level so that if they are related, if that seller is targeted enforcement agrees to see selling their products, pulls down the product listings, but then reappears under a different storefront name, you're able to say we had your agreement to not sell and you're able to directly pursue like breach of contract claims or other injunctive relief directly against that seller.

Tiffany Serbus-Gustaveson 39:10

So can we get a copy of the presentation? Of course, yeah. Beautiful. So yeah, we can send it out. And with the link of the webinar, we can get that out to you. If you guys are interested. There's a term copyright follow-up brand to request third-party takedown for use of improper aged branded product images.

Jake Morgan 39:34

So the short answer is yes, any of your product images that are copyrighted can be reported and the less than baseline they can be if you have a digital and online copy of your image it can be easier to report but these old images can be used as well.

Tiffany Serbus-Gustaveson 39:50

Awesome. Any plans or word of Walmart to add barriers to prevent stolen merchandise from being sold on their platform?

Jessica Cunning 40:01

So that is something that the Vorys team is continually working with different retailers on the loss prevention side to address so that whether there's any specific program that Walmart has launched to address that I'm not aware of any, but it's certainly something that that's an example of where having the right contacts internally, and leveraging and pushing the marketplace platform on that side of things can definitely move the needle in a meaningful way.

Tiffany Serbus-Gustaveson 40:28

So does Walmart have a transparency program similar to Amazon? And maybe if so, I can expand on what the transparency program is on Amazon?

Jessica Cunning 40:39

I am not aware of that. Jake. Are you aware of the Amazon transparency equivalent on Walmart?

Jake Morgan 40:45

No, I'm not aware of that at all.

Jessica Cunning 40:48

And then real briefly, what Amazon transparency is, is it's, it's it's stickering programs, so to speak of where, if a brand has had counterfeit challenges on Amazon, then the brand can enroll in Amazon transparency, where they are stickering, all of their inventory that is sold not just on Amazon, but also off of Amazon. And if it doesn't have that sticker, then it is not able to be go into the fulfillment centers. And so it's really more of a tool to help combat counterfeiting. In certain instances, there's pieces of it that can be helpful to inform different aspects of unauthorized resale, but by and large, it's a counterfeiting tool. But I'm not aware of that equivalent program at Walmart.

Tiffany Serbus-Gustaveson 41:30

Got it? Um, does Walmart offer brand gating.

Jessica Cunning 41:37

Brand gating is like the unicorn AI and Amazon will sometimes offer brand gating, which means that it will say they are not going to be any other sellers that are allowed to sell this product on the Amazon platform, eight is really difficult to get. And it's completely within the discretion of Amazon, Amazon can take it away just as quickly as the event or it can drastically alter the scope, perhaps it was applicable to all 100 of your products. And the next day, it's only applicable to two in terms of a brand gave equivalent on Walmart. I am not aware of that I have heard anecdotally from brands that we work with, that if there is a brand that Walmart really would like to have in store that is not currently in store that as perhaps a an enticement to come in store and have that first party retailer relationship, that they will be more cooperative with respect to unauthorized resale on the walmart.com platform. But that's just something I've heard. It's not something I've actually seen.

Tiffany Serbus-Gustaveson 42:42

And to confirm out of longer, can you authorize third-party sellers to have permission to list our items while restricting others?

Jessica Cunning 42:51

Yes, yes. If you only wanted a third-party, Walmart marketplace seller to sell these three products out of your 50 then you could slice and dice your product portfolio and your third-party authorizations to effectuate that generally speaking.

Tiffany Serbus-Gustaveson 43:05

And can you report to Amazon fraudulent abusive behavior?

Jessica Cunning 43:10

Can you report to Amazon fraudulent or abusive behavior?

Tiffany Serbus-Gustaveson 43:13

Sorry to Walmart. Can you report abusive fraudulent behavior from these third-party sellers if you're experiencing that?

Jessica Cunning 43:20

Jake, is there a specific tool that you can use for fraudulent but he don't want to wear that?

Jake Morgan 43:24

Yeah, and no, to be clear to Walmart does not allow you to restrict the specific distributors would be something that has to be done outside directly with your distributors.

Tiffany Serbus-Gustaveson 43:35

And agreements.

Jessica Cunning 43:38

It's just like Amazon, like Amazon takes the position that the downstream resale of your products is a distribution issue. And Walmart says the same way, it's an open online marketplace platform. So if your issue with a seller there is that you're listing my product, and I don't like it, there is not going to be a Walmart reporting tool to leverage against that behavior. That's where you have to have the broader unauthorized seller foundation to directly target that seller outside of the Walmart cloud.

Tiffany Serbus-Gustaveson 44:08

 Awesome. Well, we are at time Jessica, Blake, and Jake. Thank you so much for your time, your intel and all the knowledge you share today with the community. Thank you all for joining. I would definitely encourage follow-up conversations with the Vorys eControl team. And we'd love to have a conversation with you. That's how we get the content for our future events. So, with that, it is a wrap-up. Have a lovely Tuesday and into the week and weekend, and take care. Thank you all. Appreciate.

Jessica Cunning 44:32

Thanks, everyone.