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Speaker 1: BusinessWeek with Carol Masser and Tim Stenoveek on Bloomberg Radio.
Speaker 2: Happy Friday, everyone, I'm normal Linda here with Tim Stenovic.
Speaker 2: I'm in for Carol Master today. Tim let's talk logistics.
Speaker 1: I love talking logistics.
Speaker 2: Okay, it's oh Mayor's Tariq's he's a specialty for this.
Speaker 2: This is his specialty. He's the founder and CEO of
Speaker 2: krt dot Com. That's a logistics firm based in Houston, Texas,
Speaker 2: and it provides services for B two C and B
Speaker 2: to B companies think about online store management, fulfillment, marketing,
Speaker 2: and customer support. He's joining us now from Houston. Omiir
Speaker 2: can talk to us a little bit about cart dot com.
Speaker 2: Seems like you all have done a lot over the
Speaker 2: past four years since your inception. What exactly is kart
Speaker 2: dot com and what inspired you to launch it?
Speaker 3: Thanks Er, thanks for having me. First of all, Look,
Speaker 3: we started the company to build the world's flow just
Speaker 3: infrastructure as a service. The problem we're trying to solve
Speaker 3: is we have billions and billions of dollars of GMV
Speaker 3: flowing through our operational infrastructure, the power of the technology,
Speaker 3: services and operational capabilities for brands of all sizes. About
Speaker 3: half a billion dollars in revenue, about ten billion dollars
Speaker 3: of GMV, twelve hundred employees globally, and we're just four
Speaker 3: years old.
Speaker 1: Wow, Okay, that's pretty impressive stuff, Omair. One of the
Speaker 1: reasons we like to talk with people like you is
Speaker 1: because you have a good idea of what's happening in
Speaker 1: the economy right now based on your customers, what you're
Speaker 1: seeing on the B to B and B two C level.
Speaker 1: Have you seen a significant difference in order fulfillment given
Speaker 1: the uncertainty around tariffs post April second?
Speaker 3: Yeah, I mean, look, there has been a volatility of
Speaker 3: things going up and things going down for the last
Speaker 3: two years. Consumer sentiment has been shifting almost every quarter.
Speaker 3: The last couple of quarters. We've definitely seen a couple
Speaker 3: of very interesting trends. The first was, you know, in
Speaker 3: Q one, we actually saw a pretty big influx of
Speaker 3: consumers flying to get ahead of the tariffs, and the
Speaker 3: retailers kind of you know, build up the warehouses to
Speaker 3: have the inventory to take care of the consumers that
Speaker 3: are shopping. Q two. As the sentiment sort of continues
Speaker 3: to be around inflation and pariffs and uncertainty, there's a
Speaker 3: little bit of slowdown that we're seeing across the retail landscape.
Speaker 2: Oh Maeric, bring us into the boardroom. What are conversations
Speaker 2: like right now? What types of changes are you all
Speaker 2: having to implement given the uncertainty?
Speaker 3: Yeah, I mean, look, I think in times like this,
Speaker 3: we are doubling down because if you think about it right,
Speaker 3: scale is something that's going to become so much more
Speaker 3: important as you think about economies that these brands are
Speaker 3: now looking for. The larger we are, the faster capabilities
Speaker 3: that we can provide to the brands we work with,
Speaker 3: the better off they're going to be by working with us.
Speaker 3: So we're actually you know, we've just announced a couple
Speaker 3: of acquisitions in the last nine months, and we're actually
Speaker 3: going to announce a couple of more acquisitions in the
Speaker 3: next six to nine months. So we're going both organic
Speaker 3: and and organically pretty aggressively towards the next couple of years.
Speaker 1: Who would you say, when you know, when you were
Speaker 1: when you were building this company, when you founded this company,
Speaker 1: what was the problem that existed that wasn't being solved.
Speaker 3: Ah, think about a company called Jennie and Jack. They
Speaker 3: you know, made beautiful addresses for girls. And if you
Speaker 3: think about them selling through their website, selling through their stores,
Speaker 3: and their end consumer continuously shopping in other channels outside
Speaker 3: of just online and their stores. So think TikTok, think Amazon,
Speaker 3: think epay, think Walmart, think notestrom everywhere the consumer is going.
Speaker 3: For a mid market retailer to be able to provide
Speaker 3: their product catalogs, their inventory, they're pricing across multiple channels,
Speaker 3: across a pretty complex permutation of product categories is really hard,
Speaker 3: especially when you don't have billions and billions of revenue
Speaker 3: and scale to kind of fulfill that, right. So what
Speaker 3: car dot Com does is makes that easy. If you're
Speaker 3: brand wanting to sell in every channel in the world,
Speaker 3: we enable that technologically and operationally. And you know today
Speaker 3: we're obviously North America focused, but very soon we're going
Speaker 3: to be international where if you want to add Italy
Speaker 3: or France as an international market, you can just come
Speaker 3: to cart dot com and within twenty four hours you
Speaker 3: can start selling there.
Speaker 2: Well, Mary, you mentioned acquisitions. What types of companies are
Speaker 2: you targeting? What comes to mind when you guys are
Speaker 2: thinking about the companies that you'd like to acquire.
Speaker 3: Yeah, I mean, look, I think we're looking for very
Speaker 3: interesting categories that are growing really fast. You know, logistics companies,
Speaker 3: software companies, services companies. Look, the thing about cart dot
Speaker 3: Com is that we're we're known as a logistics company,
Speaker 3: but we're really the broadest infrastructure company and the deepest
Speaker 3: infrastructure company, you know, as a service in the world today.
Speaker 3: We do logistics, we do order management, we do services.
Speaker 3: So when we think about acquisition targets, we're looking at categories,
Speaker 3: not just product categories, but you know, companies that are
Speaker 3: doing software, companies that are doing services, and companies that
Speaker 3: are going to help augment our operational infrastructure and scale.
Speaker 3: So we're very very broad. We're essentially trying to replicate
Speaker 3: the infrastructure that Amazon has built, except in a non
Speaker 3: marketplace format where we're partners with them, not competitors.
Speaker 2: So, speaking of scaling, where are you all currently positioned
Speaker 2: and what are you thinking about in terms of regions
Speaker 2: that you'd potentially scale in.
Speaker 3: Yeah, look, I mean today we're we're you know, we're
Speaker 3: shipping about three hundred and fifty million units a year.
Speaker 3: That's our last year numbers in the US alone. You know,
Speaker 3: we're looking at the UK, we're looking at Europe, or
Speaker 3: looking at the Middle East and Asia and Latin so
Speaker 3: in that order, right, So the idea is to sort
Speaker 3: of start moving eastwards into one geography at a time
Speaker 3: over the next couple of years.
Speaker 2: What are some of the challenges that come with expanding
Speaker 2: into international markets, especially given the volatility right now in
Speaker 2: the uncertainty regarding tariffs. Yeah.
Speaker 3: Look, we're in the business of making it easy for
Speaker 3: the mid market brands that we work with, which means
Speaker 3: that we have to do the hard work. So when
Speaker 3: you enter a new market, you're not only thinking about
Speaker 3: localized supply chain, the mid market challenges that occur, the
Speaker 3: regulatory challenges that are now being thrown because of tariffs.
Speaker 3: You also have to think about Okay, it's not just
Speaker 3: about procuring, it's also about selling. It's about increasing demand
Speaker 3: for these brands. So we sort of solve a three
Speaker 3: part problem. One we help consumers drive to these brands. Two,
Speaker 3: we make sure that they have the technology to basically
Speaker 3: sell in the languages and geographies that we're enabling the infrastructure.
Speaker 3: And then three we have to help with the procurement,
Speaker 3: which is the last amount delivery of those packages, right,
Speaker 3: So we are actually taking over the complexity of the
Speaker 3: problems so that the brands don't have to. Essentially we
Speaker 3: do all the hard work around the complex infrastructure from
Speaker 3: technology to logistics. Brands can just connect and integrate into
Speaker 3: our infrastructure and sell in these geographies.
Speaker 2: How are you thinking about artificial intelligence right now and
Speaker 2: implement it into the work process?
Speaker 3: I mean, look, AI has been in our DNA from
Speaker 3: day one. One of the first three hires we made
Speaker 3: was a chief data scientist at part dot com. We
Speaker 3: have been leveraging AI very significantly over the last four
Speaker 3: years in things like figuring out how to connect demand
Speaker 3: with inventry management. How do you predict demand? So, if
Speaker 3: you think about it right, the logistics problem actually starts
Speaker 3: with the consumer picking yes that they want to buy something.
Speaker 3: And if you can have very large data sets that
Speaker 3: connect the demand problem with the supply problem, then you're
Speaker 3: essentially optimizing the entire value chain. So we have forecasting
Speaker 3: models that are using and leveraging AI today we predict
Speaker 3: demand before it occurs, and we're continuing to invest very
Speaker 3: heavily in that technology so that we can give the
Speaker 3: brands you work with in upper and a much upper hand.
Speaker 1: You know, there seems to still be this disconnection between
Speaker 1: what companies know about me and Look, I think consumers
Speaker 1: value privacy, no question, but I also think that it's
Speaker 1: like kind of weird when you're browsing the web and
Speaker 1: you get an AD for something that you just bought,
Speaker 1: because the browser doesn't understand that you have just bought
Speaker 1: this this good. Is there a way that your your
Speaker 1: software can and your solution can actually help companies understand
Speaker 1: consumers online and offline behavior better?
Speaker 3: Yeah? Absolutely. I mean, look, we're big believers of privacy
Speaker 3: and security and you know, consumer preferences, so this is
Speaker 3: a this is like a very important topic that we
Speaker 3: talk about almost on a daily basis. We use very
Speaker 3: large anonymized data sets to you know, do empower the
Speaker 3: analytics that we ultimately end up providing for the brands
Speaker 3: we work with. So you know, once the consumer feels
Speaker 3: comfortable that you know, the way their data is being
Speaker 3: used is only to help them not to invade their privacy,
Speaker 3: they then become more willing to actually have you allow
Speaker 3: you access to it the way we're connecting for these brands,
Speaker 3: the data from the time that the consumer or starts
Speaker 3: thinking about a product to the time the product actually
Speaker 3: shows up to their doorstep. We're the only company in
Speaker 3: the world that has that breadth of information, right because
Speaker 3: we sort of connect the demand side with marketing services
Speaker 3: and marketplace services, and we obviously have the operational infrastructure
Speaker 3: tens of billions of score feet of space.
Speaker 2: How do you think about sustainability as it relates to
Speaker 2: AI implementations.
Speaker 3: I mean, look, the first thing is that you have
Speaker 3: to prevent AI from running enough, right, You have to
Speaker 3: keep control and tabs of how artificial intelligence is being used.
Speaker 3: I think too many companies are either using AI as
Speaker 3: a buzzword and not really using it, or they're using
Speaker 3: it in a way that's maybe abrasive and not actually
Speaker 3: what consumers really want. So you have to find the
Speaker 3: sweet spot of using artificial intelligence in a way that
Speaker 3: you're optimizing for the profitability of these brands, for the
Speaker 3: growth of these brands. And obviously there are lots of
Speaker 3: internal use cases that we're using II for, but ultimately
Speaker 3: what we're really trying to do is help these brands
Speaker 3: grow faster and make more money.
Speaker 1: Oh maor how do you how do you make it
Speaker 1: so that your order book grows? I mean you mentioned
Speaker 1: a couple of your clients, Janey and Jack. Authentic Brands
Speaker 1: is also another Tom's pacsun certainly brands that our audience
Speaker 1: is familiar with. How do you grow that number?
Speaker 3: Yeah? I mean, look, we are known as a company
Speaker 3: that does a lot of work in the B two
Speaker 3: C space for mid market retailers. But the interesting story
Speaker 3: about car dot com is that about half of the business,
Speaker 3: half of our revenues actually with B two B companies.
Speaker 3: So you know, first of all, you've got virtually almost
Speaker 3: a trillion dollar addressable market in the mid market retail segment,
Speaker 3: and then you've got another trillion and a half dollar
Speaker 3: addressable market on the B two B site. So we
Speaker 3: actually do a lot of work with B two B companies.
Speaker 3: Charismatics Brands is one example where they are the providers
Speaker 3: of scrubs for doctors and they work with a large
Speaker 3: number of shops across the United States where small mom
Speaker 3: and pop shops are the provide their scrupts to and
Speaker 3: we're powering their order management and logistics platform. We actually
Speaker 3: do a lot of work with the federal and state government,
Speaker 3: so we are we're actually doing a lot of work
Speaker 3: in health and pharma. So when you think about the
Speaker 3: infrastructure that we've built for the B two C segment,
Speaker 3: that's only about one third of our overall customer segment.
Speaker 3: But you know the other one, you know, two thirds
Speaker 3: is actually B to B and the government. So growth
Speaker 3: is virtually unlimited when we think about the address of
Speaker 3: the market and what we're going after. That's why we have,
Speaker 3: you know, gotten so big so quickly.
Speaker 1: Oh, Mark Tuick, thanks for joining us. Really appreciate appreciated.
Speaker 1: Founder and CEO of cart dot Com, the logistics firm,
Speaker 1: joining us from Houston