The Martech Show Episode #11: The Great Unbundling with Benedict Evans

Benedict Evans on The Martech Show

The Martech Show is back! Our latest episode is an interview with Benedict Evans, tech and media analyst extraordinaire, talking about his latest presentation, The Great Unbundling, and what it means for marketers and martech.

Here’s a transcribed excerpt from Benedict explaining how the “The Great Unbundling” breaks the traditional silos of the different budgets connected to customer relationships:

How does somebody get the thing? Is it a shop? Is it delivered? Do you collect it? And B how do you know that it exists? And all of those used to be encapsulated in this fairly straightforward value chain, which was, if you were in CPG, like you, you made the thing, you had an ad budget, you ran magazine ads and TV shows, and you sent trucks of the staff to stores and you maybe gave the store some money to market it as well.

And you gave them a 50% margin and the customer would see the ad or see the product in the store and they’d go to the store and they buy it. And this was like, this is how it’s been for a hundred years or so. 150 years.

And now, 25% of L’Oreal’s sales are online. Not their own channel, but online. And 15% of Nike’s sales at nike.com. Amazon is probably eight to 10% of US retail, but 40% of e-commerce. And do you get that by parcel or do you get that delivered? Or you go to the store? Or does it come to you with somebody on a bike?

You’ve got logistics on one side and discovery on the other side and in the middle, you have all these budgets.

So you have a rent budget. In the US, I have a, like a wild, very approximate guess that retail rent is say $250 billion. Then we know there’s an advertising number. There’s a marketing number. There’s a delivery number. There’s also of course their returns number. And in the past, those were like all separate budgets in different bits of the P&L.

And now you might ask yourself, okay, do we open more stores or do faster delivery or free returns?

So is that the rent budget and their returns? Of course, on the P&L their returns are in their gross revenue above the top of the P&L. But if you were to open more stores, which would be like halfway down the P&L, then your gross revenue might shift. How does the CFO think about it versus what’s actually going on in the levers that you put your business?

These used to be all separate things. And now they’re all one big sort of fuzzy question of, what does our relationship with our customer look like?

Watch the full episode here.

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