The Future of eCom is Dead Celebrities

Phillip: [00:00:00] That sort of parasocial relationship already has commerce impact. And we see that through the explosion of celebrity brands over the last five years. What I think we're heading into is a deepening of that type of a relationship where the entertainment value of interacting with this person can be captured as both an experience like an ongoing experience and through the commercialization of that relationship.

Brian: [00:01:22] Hello and welcome to Future Commerce, the podcast about the next generation of commerce. I'm Brian.

Phillip: [00:01:26] I'm Phillip. Mr. Lange, I presume. Welcome. This is episode 300. We did this.

Brian: [00:01:32] Yeah.

Phillip: [00:01:33] Congratulations for making the move to full-time. We're in this together now.

Brian: [00:01:37] Yeah, we did it. We are here. We are live full-time. It's all systems go. You thought you heard a lot of me. Just wait until I get fully ramped.

Phillip: [00:01:52] Two and a half weeks, full-time on the job. How's it feel?

Brian: [00:01:55] So good. It feels so good. It's great to be... I feel like we have all the pieces in place now to just take over the world. {laughter} And it's been a wild ride straddling a couple of things. I'm sure you felt the same way as you moved over It's been great.

Phillip: [00:02:17] Yeah. I'm full-time at Future Commerce six months now. You're full-time two and a half weeks. There's nothing we can't do. Maybe here, right at the end, maybe make a two second impassioned plea to people that want to advertise on Future Commerce.

Brian: [00:02:30] Oh, yeah, if you want to reach multi-thousands of merchants and brands...

Phillip: [00:02:37] Brian. Just say the number.

Brian: [00:02:38] Just say the number. No. Come talk to me.

Phillip: [00:02:42] Literal tens of thousands.

Brian: [00:02:43] Yes. Tens of thousands of brands and merchants and interested parties. Come talk to me. We have a solution for you. That's as sales-y as I'm going to be. I'm done.

Phillip: [00:02:57] Instead of doing the navel gaze retrospective, we're just going to have a fun episode. And as with all episodes of the Future Commerce variety, I am mostly influenced in our conversation as to the last thing I saw right before we started recording. I just watched an absolutely unhinged video of Le Creuset. Are you familiar with the brand Le Creuset?

Brian: [00:03:22] Well, of course, dude, we cook in a lot of cast iron.

Phillip: [00:03:26] Prestige, enamel-covered, cast iron. Yeah, they just did this reveal in New York City of their brand new colorway that they made a really big deal about. Shallot, the colorway. And they had this sort of commissioned piece of art that was painted with Benjamin House paints.

Brian: [00:03:46] Benjamin Moore?

Phillip: [00:03:48] Benjamin Moore paints and it's like this really strange brand collab of shallot as a color, and then they had like, what must have been, I don't know, $5,000 worth of florals mocked up. But they had this brown paper craft paper cover that they like dramatically tried to rip off. But paper doesn't rip the way that you want it to, but it felt like, hey, brands are attempting the art X commerce thing and I don't know if... It's funny. It's like sometimes you get exactly what you wished for. It's the monkey's paw. This is trying to be artful plus do collabs, plus do big, earned media.

Brian: [00:04:29] So I feel like it was kind of supposed to be a little bit silly and also awesome.

Phillip: [00:04:38] I don't think it was supposed to be silly at all.

Brian: [00:04:38] I don't know. They pulled off multiple layers of paper when they hit shallot, as in peeling back the onion. {laughter}

Phillip: [00:04:48] {laughter} Okay. Okay. I get. I get the joke. It doesn't... It had sort of a comedic like you could have put the Benny Hill music under it.

Brian: [00:04:59] Yeah. Like little pieces of paper sort of left behind. Like when you're unwrapping a Christmas present.

Phillip: [00:05:06] It feels like an episode of Arrested Development when they're doing a flashback to Dr. Fünke's whatever miracle drug thing that they're like hawking and they're trying to do a big reveal and they try to tear it down and it just doesn't go the way exactly that you plan. Anyway.

Brian: [00:05:26] That color, though. That color.

Phillip: [00:05:27] It's a nice color.

Brian: [00:05:28] It's very nice, actually. I get what they're doing.

Phillip: [00:05:32] Let me ask you this. Is Le Creuset a middle class brand?

Brian: [00:05:40] Yes.

Phillip: [00:05:41] They're in the outlet malls.

Brian: [00:05:44] That's why I said yes. Yeah. It's for some middle class homes, it is their pride and joy. For them, when they cook in that they feel awesome and they should.

Phillip: [00:06:00] They should. It's funny when you're watching how innovation in retail... I just got a weird notification that I'm reconnected. So I don't know if now my audio...

Brian: [00:06:17] You're good.

Phillip: [00:06:17] It's funny how innovation in retail sort of is at this leading edge of high AOV, low lifetime value products. Presumably, you would never buy another Le Creuset set. How many sets of Le Creuset can you actually buy?

Brian: [00:06:37] It depends. When you start to get into the upper middle class, I think they kind of...

Phillip: [00:06:43] They might be replacing the whole.

Brian: [00:06:44] Yeah. Like the whole vibe. If you change your furniture or the tile in your kitchen you might rebuy a set.

Phillip: [00:06:56] It's an interesting category, cookware. So you've probably seen HexClad around quite a bit recently.

Brian: [00:07:03] Yeah.

Phillip: [00:07:04] They spent a ton of money on celebrity endorsements. You have Gordon Ramsay is sort of their celebrity backer. They're on every podcast that I listen to recently is sort of really crushing paid and influencer. So I find it to be a really interesting category. If you were to go back in time 3 or 4 years ago, you would have seen, well, Pattern brands when they launched their cookware or you look at Caraway and their cookware. Cookware seems to be like this leading edge category to new realms of eCommerce engagement, physical retail investment. Maybe as cookware goes, so does the entirety of a direct to consumer category, especially as you see as, I don't know, Bed Bath and Beyond takes a back seat. Those retail models are dying away. Harder to find products like that in the real world.

Brian: [00:08:01] Yeah. Actually, I think that IRL thing is a really good point. It's easy to buy cookware online because even there's actually less of a difference in buying online or in a store. Like the gap between the online purchase and the store purchase in the level of like quality, you can determine while you're in-store versus online. Of course, if you're a trained chef, I bet you a lot of people would take offense to that. They're like, "No, of course, I can tell the difference between the tri ply pan and..." Yeah, yeah, sure.

Phillip: [00:08:41] It's interesting because there's, again, I think it comes down to sort of the buyer cycle and sort of your perspective on what quality is. Is it good or is it good enough for now? We had this really interesting, like our gateway to Amazon Prime just talking about like buyer journeys. My gateway in my household to Amazon Prime was standing in I want to say a Bed, Bath and Beyond 12-13 years ago and looking at a Rachael Ray cookware set and it's $350. And my immediate sense was, "I wonder if this is cheaper elsewhere," finding it on Amazon. Free shipping if you sign up for Prime. Bang, that's what closed me in Prime.

Brian: [00:09:34] There are so many things about that story that just blow my mind right now. {laughter}

Phillip: [00:09:38] Which by the way...

Brian: [00:09:40] Maybe the era of Amazon is over because you can't go to Bed, Bath and Beyond, find Rachael Ray cookware for $350 and then be like, "I bet I can get this cheaper online." Amazon's dead. {laughter}

Phillip: [00:09:53] You know what's really interesting about it is you have this mentality of and the irrational part of your loyalty that's formed in a certain part of your life, right? Like, I don't know. Do you ever outgrow the band that you listen to in college?

Brian: [00:10:12] Yes.

Phillip: [00:10:12] Those sort of questions. You have this sense of affinity for certain brands. My wife just the other day on Amazon, by the way, bought two pieces of nonstick replacement. What brand do you think she bought?

Brian: [00:10:26] I mean, I'm going to say Rachael Ray.

Phillip: [00:10:28] It's Rachael Ray. Yeah. What's interesting about that is I'm thinking to myself, I would be looking at whatever brand DTC Twitter is talking about right now. Her perspective is this thing has worked great. It's worked great for years. It'll be the third time we've replaced Nonstick since that purchase and the Amazon Prime Gateway. Anyway, I guess the question is like the future of commerce is like looking at things like cookware as a leading edge for customer acquisition and customer experience. And maybe again, do we need a physical brick and mortar store to buy pots and pans from? I don't know, probably not.

Brian: [00:11:09] I don't know. This actually could be an exception to some degree. I know a lot of it does get bought online, but when you're buying something that's going to last you for the duration of your style in your house. Now, for some people, that's a few years. Some people that's like more than that. Some people that's like one year. You kind of want to make sure the colors match. And so unless you have seen those colors in person at least once, it gets really difficult and honestly, if if you're anything like my wife and I as we built out our house that we're building now, you take the chip with you and you look at it over and over. You end up wanting...

Phillip: [00:11:53] The shallot.

Brian: [00:11:54] The shallot paint chip.

Phillip: [00:11:57] I'm building my kitchen, my new kitchen around this heirloom piece that I just bought.

Brian: [00:12:03] Yeah.

Phillip: [00:12:04] By the way, if we're going to, this might be a really interesting segue, but just to close the loop on that, on the thinking around the way that you buy certain categories... Sorry. I'm losing my train of thought. Maybe we can make a note about that.

Brian: [00:12:23] That's cool. So I have an idea to talk about next. Because the future of commerce... Well, go ahead.

Phillip: [00:12:32] I know where I'm going, but I don't want to get too far away from it. Sorry. Go for it.

Brian: [00:12:35] Okay. Okay. Okay.

Phillip: [00:12:35] We'll take care of this in post. It's fine.

Brian: [00:12:39] Oh, yeah. Oh, of course. Every time. You know San Franciscans are really into zerps and getting tax credit for things and so on.

Phillip: [00:12:54] Retail stores like Whole Foods are not allowed to operate retail anymore in San Francisco.

Brian: [00:12:59] Well no, it's the opposite. They're like there's so much open property. They're like, "Oh, we should give people credits..." Let's open up pop ups.

Phillip: [00:13:07] Yeah, yeah. They're incentivizing people to open pop ups in vacant retail spaces. We should move on that. Actually we should do an Archetypes pop up.

Brian: [00:13:18] I think we should. Like three months of credits or something like that.

Phillip: [00:13:21] By the way, the AI technology space is exploding in SF. SF, I think is actually back. The commercial real estate is destroyed.

Brian: [00:13:33] That's the zig right now is like, oh, SF is back. Like no one actually thinks that at the moment.

Phillip: [00:13:39] Well, if you're in AI, you do. Friend of the show and Claid.ai Founder Sofiia Shvets thinks SF is back. I'm seeing a lot of people say that if you want to hire talent. For instance, I was sitting, another sort of South Florida AI company who I think actually is building a really interesting new way of shopping. If you want to talk about evolution of shopping and online shopping, I think, there's this company called Shop With AI. I met their founders this past week. I'm not an investor. I have nothing to gain from this other than I met them. And I think they're on to something really interesting. But if we were to fuse a chat style interface, like a ChatGPT meets a shopping experience, then dare I say it's the conversational commerce discourse that we had six years ago on this show back in the early teens episodes of Future Commerce. But it's funny that it's coming back now in the three hundreds, but for us, we sort of envision, well, what does a conversational commerce look like? You're having contextual train of thought conversation coming, narrowing down to a decision around a type of a product. Shop With AI is effectively doing that by creating this parasocial relationship with...

Brian: [00:15:47] Oh, we did get nostalgic. Full circle. It's full circle.

Phillip: [00:15:50] Sorry, didn't mean to. What I find interesting about what Shop With AI is doing is they're having to hire all of this new AI talent recruited away from these big incumbent companies who have been hoarding talent for the past 4 or 5 years. And where's all that talent located? It's not in South Florida. It's all in SF.

Brian: [00:16:09] Right.

Phillip: [00:16:10] And so, yeah, I think that might be another interesting leading indicator of where the talent is, is where, you know, this the need for goods, services, commerce to exist, those things kind of have to be working in lockstep with each other because otherwise why even live there?

Brian: [00:16:28] Or do they? I don't know. Seattle is probably dead after 9 p.m. I was just reading an article in the Seattle Times and Seattle as the point now where a lot of restaurants aren't open for lunch and Seattle is sleepy. It's not Sleepless in Seattle. It's Sleep in Seattle. Everyone's done by 9 p.m.

Phillip: [00:16:56] Did you make a Sleepless in Seattle reference?

Brian: [00:17:00] So I don't know actually. Cities coming back may not have to do with the scene potentially. At jobs for sure... I don't know, everyone in San Francisco of course they want to believe the city is back, and yeah I'm with you. I think it is back. I think AI talent's there. But when you're in a city, you want to believe that it's going to be successful, especially if you don't want to leave. I've noticed this homerism trend is always there. You know how you bring a city back, though? Or conversely, if you have like a rival city, you go after them. You just draw good luck circles everywhere. {laughter}

Phillip: [00:17:46] Sort of disrupt traffic patterns by requiring people to loiter in areas.

Brian: [00:17:52] Exactly.

Phillip: [00:17:54] In SF, you don't have to do that. There are bad luck circles and homeless encampments, you know, pretty much everywhere. You don't have to worry about those. They're drawn for you.

Brian: [00:18:02] They're drawn for you already.

Phillip: [00:18:04] I'd like to get back to... So I was going to make a little bit of a segue earlier, thinking about the way that we purchase products online has changed so dramatically in the six years that we have been doing this show. Seven years. Oh, my gosh. Is it seven years? It's seven years we've been doing the show.

Brian: [00:18:25] Yep.

Phillip: [00:18:26] Coming up on seven. And one thing that has been talked about quite a bit in the discourse is the evolution of live stream shopping. And my insistence that the West is just not prepared to... Well, we'll probably never make the leap. I've said never. I'll stick with never. We'll never make the leap to live stream shopping, mostly because our attention spans are not durable enough to withstand things that are boring. For instance, if you are still listening to this 14 minutes into a podcast with Phillip and Brian, you are among the very few who have an attention span to long form media.

Brian: [00:19:09] Okay. Yeah. Yes. Few being actually thousands but yes.

Phillip: [00:19:14] Or tens of thousands, depending on... But for the most part, podcasts are passive consumption. live stream is active consumption. Podcasts can be listened to while you're doing other things. We have friends of the show who listen to us on a run. They listen to us on their commute. They listen to us while they're doing laundry. Who knows? For a live stream shopping experience, the assumption of the default is that you are actively participating and you're actively watching something. And that's where I see brands, for instance, recently there was a case study that Diptyque had put out about its live stream shopping, Digital Commerce 360, and I believe it was even featured at ShopTalk, talking about the prevalence of certain brands finding an audience with their consumers via live stream. Brand founder of Diptyque does these live streams. Has done since 2020. Her name escapes me. One second. I'm gonna have to Google it while we look at it. Christiane Gautrot, I think is how you pronounce it. But she does these live streams from her Palm Beach mansion that the production value just continues to get amped up on to the point that they're not as frequent as they used to be during the pandemic. They were happening like, every week. They've definitely scaled back. They're doing like these once a quarter releases now, and it's sort of fusing this lifestyle. It's a little cooking, it's a little bit of candles, it's a little bit of new product releases, a little bit of audience engagement. I watched the most recent one where they said, "Oh, they're closing millions of dollars on Instagram Live." Watched the most recent one. And I live in Palm Beach. I live more specifically, I live in West Palm. The day that this live stream went out was a day that we had a phenomenal amount of rainfall in West Palm, and this Palm Beach mansion had zero rain. And so either it's a geographical anomaly or this wasn't live at all. And this idea that I have about the idea of live stream and the way that we're creating the illusion of live streaming, I think is happening both in like form and function. Like brands are faking live streams, customers are faking liking them.

Brian: [00:21:38] It's the only way to get them to the quality that the American audience would want though.

Phillip: [00:21:44] That's the problem. Is it really a live stream anymore? Is that a different form of media? And this is the thing I've been musing on is the way that we sell has to evolve to the culture of the customer that we're trying to attract. And I just think the culture is moving at a pace where we're just very bored very quickly. I don't know if live in the West can withstand even if it's to watch someone in Palm Beach lighting up a candle that you cannot smell. I don't know at what point the content is actually good enough to hold your attention.

Brian: [00:22:21] Right. Long form is not dead, but it's got to be really good. It's got to be really good. Or I mean, I am going to watch the upcoming for our record breaking Scorsese movie. But it may or may not hold the next generation's attention the way that it would the way that I know it's going to hold mine.

Phillip: [00:23:21] We had one way that you can do that is you can break it up with intermissions, right? You could take a long event like a Scorsese movie and maybe pack in, you know, an obvious break in the content.

Brian: [00:23:34] Isn't that what a Netflix series basically is? Just one long Scorsese movie with a bunch of breaks because people just watch it. Just skip to the next episode. Next up, I mean, I did that with Beef. Beef was that way for me. It was like a giant A24 movie. I'm just going to I'm.

Phillip: [00:23:50] Going to pause right here. That is a luxury that we don't realize that we have. I don't know. I think maybe it's part of my perspective is [00:24:04] the way that we buy is changing dramatically. And I think that folks make less concerted purchases of a higher order value based on this really brief calculus of what kind of a product it is, where you are in your need for that product. [00:24:24] Again, cookware is the kind of thing that maybe is such an infrequent purchase that you have a greater sense of openness. Anything could be better than what you have at the moment. And so you have this openness or willingness to try something new and maybe, I don't know, maybe actually we'll see this resurgence. I think actually live stream might work really well now that I'm thinking about it.

Brian: [00:24:54] You're like, "Wait, hold up."

Phillip: [00:24:56] For a cookware brand. I used to watch the Ron Popeil infomercials. Did you ever watch those?

Brian: [00:25:04] No, No infomercials never got me. I was never... I mean, the ShamWow, maybe. It was pretty impressive how much water it could hold.

Phillip: [00:25:15] Slap Chop?

Brian: [00:25:17] Nope.

Phillip: [00:25:17] No?

Brian: [00:25:18] You know what's interesting? I think you're dead on with cookware and live stream. If anything, QVC sells pots, pans, and Instapots. I bet you if you went and asked QVC, what one of their highest sellers of all time was it would probably be some sort of cooking device. Because it's something that is novel, you know what I mean? live stream I think requires novelty because there's got to be a story around the product that's not been told. So unique cookware that has special features to it I think probably has more of a life on live stream. But QVC has already proven that model out. So it's not like we're talking about anything new.

Phillip: [00:26:05] That was always my critique of the state of live stream and sort of the discourse around live stream as we already have that. And we have people that that's their whole job. That's all they think about. They're really good at that. The talent on air is phenomenal at holding your attention. They have a whole set of visual aids that help break up the monotony of someone just talking at you, right? You have all these things that are potential attention holders. You have a call in show, you have UGC and people's feedback. You have these trust builders like so-and-so. Many people bought this. You have FOMO. We only have X number of these left. You have the promotion angle of this last sold at this price and now it's discounted. So you're sort of building the urgency. All of these things are packed into the QVC interface and guess what? It's on in the background in tens of millions of people's homes 24 hours a day. You just don't get any of that with Telfar TV. I'm sorry. Telfar has this really unique generative video service, and it was created not just to hold your attention, but as a means of sort of combating bots, and scammers. So rather than me being able to scrape a website and place a purchase, I have to be able to scan a QR code that may or may not show up on some screen at some point.

Brian: [00:27:35] It wasn't even for like entertainment. It was to make sure that people... {laughter}

Phillip: [00:27:40] And that's the way that I think will mythologize a lot of this investment, especially from companies like Telfar is, yeah, can we get humans to participate in this? Absolutely we can for sure. Is it really actually a really clever way for us to combat a commercial problem that we have in the marketplace that our customers are frustrated over? I think that's a really... That's the untold story as to why some of that investment was made and why others are following suit. They don't have the same problems. They're not going to have the same successes or solve the same challenges.

Brian: [00:28:15] My gosh, while you were talking, I continue to think about the AI conversation we were just having, and I constantly thinking about how it's going to affect and change things, but AI-generated TV streams will be really interesting. Of course, that led my brain down the rabbit hole of well, if we're building live streams for purposes other than entertainment, what other purposes would we build live streams for? And then I was like, well, live streams could be training data, right, for AI. And if you have a constant 24/7 live stream that's being AI generated and AIs are chasing generated content that could be actually a honeypot for something being an AI crawling, your content because when we eventually just have unlimited content streams just as training data for AI, it never stops. It just keeps going. It's interesting though. I do think the idea of live streams being for other purposes, being put out for other purposes other than entertainment. I think there's a lot to that actually, not just for honey potting, but for being able to capture attention in given moments regardless. I mean, that was actually another thing about that 24/7 live stream. It was like it was not even about entertainment. It's just about capturing attention at a given moment. That's interesting.

Phillip: [00:30:00] I love having... I'm going to tell you something you probably didn't know or maybe you knew. But when you think about how certain products or certain landmark teams go on to do something really notable next, like a great example of this would be, do you remember the Barnes and Noble Nook reader?

Brian: [00:30:21] Oh yeah, yeah. Oh, that has a great history. Super interesting story.

Phillip: [00:30:25] The material, the industrial design of that has this great lineage, the design and the creation of that product. The team that did that went on to create Peloton. And so you look at what somebody did, the lessons they learned, and then the types of products they go on to make after that, one of the visual designers that created a lot of the generative art that became part of Telfar was one of the three founding members of the creative studio that launched Entireworld.

Brian: [00:31:06] Right.

Phillip: [00:31:06] Which is a brand I talk about endlessly, especially in this keynote I've been giving recently. Entireworld being that sort of the brand that we talked about as being like the anti-design design club. Entireworld having like breaking all the rules of eCommerce and the visual language of eCommerce to sell otherwise very basic, you know, overpriced matching sweatsuits to millennials back in the late 20 tens. What's interesting about that is watching how the lessons that are learned in the experimental phase of someone's career, like trying to do things differently and maybe differently on purpose, how that goes on to create an opportunity to elevate one visual medium. I do think that Telfar is interesting. It's like anything. If every brand was vying for your attention 24 hours a day, it would be a capitalist hellscape, 1 or 2 brands is really novel.

Brian: [00:32:09] It's like Telfar and MSCHF.

Phillip: [00:32:12] Yeah, potentially. I think that when you look at how many brands could really...

Brian: [00:32:16] I think it's a lot more than that. I think maybe we are in that hellscape actually.

Phillip: [00:32:21] Say more about that.

Brian: [00:32:23] Well yeah. I mean I think every brand at this point understands that we're in an attention economy. Even B2B brands understand where an attention economy. Okay. Not all of them. A few of them do. But I feel like the ad campaign is 100%, I shouldn't say 100%, but it's predominantly targeted at just capturing attention. [00:32:45] If you look at most of the recent jumps into culture from brands, it's really to just get people to look their way for a minute. And so the hellscape is already here. We're already in the attention economy. People don't even realize it. [00:33:06]

Phillip: [00:33:07] Yeah, I had this, I said this on Twitter some time ago. One brand is an outlier, right? Ten is a trend. 100 is a movement. And so let's be careful what we normalize. And I think that there are...

Brian: [00:33:24] Over one hundred here. Easy.

Phillip: [00:33:25] Oh, sure. And I think, you know. this is a tweet. So it's in no way is it true or scientific. It's just a thing I wrote one time. But if we were to apply that in sort of how many brands could potentially run live stream shopping and garner unfettered attention from their customers? Not all of them. If all of them did this, if every brand did this, there would be very little attention to spread around. And if there's anything that we've seen over the course of seven years we've been doing the show is that attention is becoming much more fractured. Right? So we're creating sub-60-second moments. I think the average view on a TikTok video these days is 3 to 4 seconds. I think was it Marc Lore who famously said that customers are highly attuned to that which is boring? Which, by the way, cosmic irony that he went on to acquire three of the most boring DTC brands in the world. But that's a whole other story. Which by the way, are all recently divested from Walmart's portfolio.

Brian: [00:34:39] For a lot less money than they bought them for.

Phillip: [00:34:40] Yeah. I don't know. It's like the Borg. It's like we acquire something, strip it for parts. And then...

Brian: [00:34:48] In many ways, Amazon did the same thing with his last company.

Phillip: [00:34:54] It's true. And funny actually. We've recently, speaking of him, we recently ran into somebody who was like an early Quidsi employee who is an avid listener of the show here. So it's interesting to watch people who sort of built the future that we all live in now and built the rails on which eCommerce and customer experience all run are paying attention to Future Commerce. I don't know that there's a lot... I've talked about the shop with AI. I think I actually kind of want to go back to that because if we think about what the emergent experiences look like and how we break out of the mold because right now we're very, very much stuck in one way of shopping. Almost every site looks the same, every website feels the same. I've said this on occasion, but that has its strengths. It has its weaknesses. One of the strengths is everyone kind of knows how to shop online. You don't have to teach people how to shop on your website. One of the weaknesses and maybe probably the primary weakness is that it's very boring and very transactional. And certainly, I'll probably get canceled for this. But there was a joke that we used to tell in grade school.

Brian: [00:36:10] Uh oh.

Phillip: [00:36:11] And it is not PC at all.

Brian: [00:36:14] We're gonna stop right here. The 90s were not a good time.

Phillip: [00:36:19] Or even the 80s because that's how old I am.

Brian: [00:36:21] Oh, you're really old, man. The 80s are worse.

Phillip: [00:36:23] Brian, how did Helen Keller's parents punish her?

Brian: [00:36:29] No, no, no. I'm out. Peace.

Phillip: [00:36:34] They moved the furniture around.

Brian: [00:36:35] No.

Phillip: [00:36:36] That's kind of how eCommerce is. You don't want to move the furniture around too much because we're going to have this problem. Hey, I didn't say it. This was the 80 seconds. Okay? I'm just...

Brian: [00:36:47] You're just quoting it. You're just quoting it.

Phillip: [00:36:50] For effect to give you the bombastic example of we can't go moving the furniture around too much in eCommerce. We all understand the impact of that. But 1 or 2 brands doing that is notable. It's not really hard to design something that has some unexpected quality to it that is the good type of friction. If everybody did it, it would be painful.

Brian: [00:37:16] What you're saying is that everyone has AI, so no one has AI.

Phillip: [00:37:21] But it's true. When everybody has an experience that is predictable, nobody has anything that's really unique. And that's why I think that there's a new experience that is possible to completely rethink the model altogether. So I'd love to kind of maybe go there, but I don't want to get away from what we were just talking about too quickly.

Brian: [00:37:44] No, no, no. Actually, I do think you're right. Like basically the game of retail, the game of commerce is a game of arbitrage. And you go to somewhere where you're going to get you're going to be ahead of everyone until they catch up. And so what is that new paradigm of shopping? How do you get there before everyone else does? I think Shop With AI, like that experience, that chat like experience makes sense and actually makes sense with the big ideas we've been talking about at Future Commerce. The idea ofthe human to machine interaction and understanding the what is a good human to machine interaction and what sorts of interaction should be replaced by machine to machine interactions? And what things should remain between humans. And I think in the case that you're talking about, you're talking about human interaction with machine on human terms, human on human.

Phillip: [00:38:51] That's hot, Brian.

Brian: [00:38:54] It's yeah.

Phillip: [00:38:57] Human on human interaction.

Brian: [00:38:58] I will not make that joke. Okay.

Phillip: [00:39:03] But you get me to listen to Red Scare like one time and this is what happened.

Brian: [00:39:07] Oh gosh. No, no, no. Oh, geez. Just wait till you listen seven times.

Phillip: [00:39:14] That's the debased...

Brian: [00:39:17] You're, like, falling asleep to Red Scare. You're just turning into...

Phillip: [00:39:22] I think, to your point, there are certain types of interactions that humans experience a lot of friction and probably a lot of demoralizing or sort of like frustrating experiences because they're having to think like machines.

Brian: [00:39:42] In order to use the machine. Yep.

Phillip: [00:39:46] Actually, this is a pet theory I have. But I believe that we wouldn't have consent culture in the way that we do, which is extraordinarily transactional. Think about the way that consent works culturally in 2023 at the time of this recording. And it is very affirmative and very transactional in its nature. That is the expectation. I have a pet theory that I believe consent culture would not exist if it wasn't for Windows 7.

Brian: [00:40:18] Yes. Yes. You've definitely talked about this. I love this.

Phillip: [00:40:21]  [00:40:21]If it wasn't for the Apple iTunes end-user license agreement, we wouldn't have a paradigm for consent. We [00:40:31] need clickwrap agreements for in-person interactions. We're actually treating other people as if they're machines. I look at you and I was like, "Is this okay with you? Click yes to agree to the terms and conditions." Right? But it's funny because those types of interactions we didn't have a language for prior. We actually have an expectation for some human to machine actually is creating human to human paradigms.

Brian: [00:41:00] Right. In fact, if AI ever does pass the Turing test, it's not because AI got to the point where it could copy humans. It got to the point where culturally we became so much like machines that when we said, "Are they like us, they pass the test."

Phillip: [00:41:17] And so, okay, so let's go down the rabbit hole a little bit. This is where I think Shop With AI has an opportunity and I don't think it's in the everyday shopping experience. It's a new type of shopping experience. So imagine. So what they have done is they are creating these personas for parasocial relationships. For those who aren't familiar, a parasocial relationship is a relationship that I believe that I have with somebody that is happening socially, maybe through social media that we don't really have. I am a consumer of someone's content. Maybe I listen...

Brian: [00:41:59] You have parasocial relationships with us.

Phillip: [00:42:02] You might have a parasocial relationship with us. I have a parasocial relationship with Dave Chen, who's a great podcaster, right? I think I know this person. I don't really know this person. I'm really clued into this person's content. It's one window into a relationship with them, but it's not a real...

Brian: [00:42:18] In many ways, if you consume content of someone who has died much later in their life or past their life. Right? You have a parasocial relationship with that person.

Phillip: [00:42:29] So an older example of this would be a blog. Did I say blog? I wrote a blog some time ago called Did Virtual Influencers Kill the Dead Celebrity? And in that piece, I suppose that at some future state, you know, we don't need the James Dean's the Marilyn Monroe's. We don't need the John Wayne's and their estates and authentic brands group and whoever holds the licenses for these folks. We don't need Marilyn Monroe to rep Chanel for us anymore. We'll have a virtual influencer who will do that for us and we'll never die and whose estates would never be able to survive them because they're not real to begin with. I think that sort of parasocial relationship already has commerce impact. And we see that through the explosion of celebrity brands over the last five years. What I think we're heading into is a deepening of that type of a relationship where the entertainment value of interacting with this person can be captured as both an experience like an ongoing experience and through the commercialization of that relationship. So let me give you a very concrete example of something Shop With AI is already doing today. I'm heading to the Poolsuite Ralph Lauren party in Miami on the 28th. I got into this party. I need to buy something to wear to this party. Now the smart thing to do would be to buy a piece of Ralph Lauren, which I do not own. So maybe I could go look on vintage. What if Shop With AI could help me shop vintage to find something to wear to this party? So the way I could start that is well, the human to machine interaction is I'm going and I'm just going to start filtering things, right? So I'm going to tell it exactly what I'm looking for. What Shop With AI does is, well, what if we remove that altogether and you find somebody who we already have a model created around who has taste that you like. That could be Pharrell, right? Could be Kat Von D But in this case, maybe I chose JFK Jr. JFK Jr is a really interesting experiment because it's posthumous, right? JFK Jr is no longer alive. And if JFK Jr's estate, the the Kennedy estate or the Onassis estate, whoever owns his likeness, were wanting to create a commercial opportunity there, they could license his interaction through this model and take some cut off the top of every product that ever gets suggested through it, through some sort of like today, it would be through a company like Share a Sale or have an affiliate relationship through an estate that would create commercial value. Now I'm going to conflate this even further by giving you one more example, Brian, and then I'll shut up. I already have this kind of relationship with some creators today. For instance, my kids are really into animation and a prolific voice actor is a woman named Tara Strong, who has voiced everything from My Little Ponies to Teen Titans Go. She does Harley Quinn on a bunch of DC series, so she's a prolific voice actress. I will pay her $150 for my kids birthday to record a birthday message on Cameo. What if that is no longer a 1 to 1 transactional relationship?

Brian: [00:45:48] That's not even what if. We're already there.

Phillip: [00:45:51] But what happens if I want to have that relationship on an ongoing basis? Shop With AI is no longer just an I get to use this and have an affiliate model with JFK Jr making a recommendation for me of what I'm going to wear to a party. No, no, no. I'm now friends with JFK Jr in perpetuity and he will give me style recommendations. But I also have this parasocial relationship that I'm now willing in a cameo style to pay a monthly fee for. It [00:46:19] is entertainment mixed in with social media mixed in with commerce. [00:46:26] That is a future that I think that we're on the cusp of, and it changes the entire way that we engage in this transactional commerce experience, where instead of that, we have this curated relationship that exists over a long period of time. It's the future in that someone has already built that today. And I think we're going to see more brands take part in it. And I think that this is a brilliant entertainment play, like Warner Brothers needs to move fast on this. Disney needs to move fast on this.

Brian: [00:46:56] Maybe this is how Netflix takes The Crown back.

Phillip: [00:47:00] I can have a relationship with Squid Game.

Brian: [00:47:04] Yeah, exactly.

Phillip: [00:47:05] For choosing my casket through Titan...

Brian: [00:47:07] I want to have a Beef, too.

Phillip: [00:47:09] That's true. Right? You could have a Beef. You've brought up Beef twice now. What are some... Is there an entertainment angle to having this relationship that's not a flash in the pan cultural moment that might guide like, do you want a relationship with Netflix or do you want a relationship with the character in Beef?

Brian: [00:47:30] Right, right, right. This is the cool thing is like it's not even about the... It could be it could be the celebrity themselves or it could be that character. Brands are sort of parasocial relationships unto themselves.

Phillip: [00:47:48] Unto themselves. Primitive one.

Brian: [00:47:51] Yes.

Phillip: [00:47:54] They're whatever who happens to be at the head wants them to be.

Brian: [00:47:59] That's correct. Yeah. And actually preserving and maintaining the legacy of a brands is part of that parasocial relationship. And actually, I want to explore this further and I probably will in what makes for the canonization of a brand, like how does it enter our psyche as a permanent fixture? It's a character that has a story for generations and it's because that parasocial relationship has been properly stewarded. That's part of it at least. I think it's also really interesting... I was listening to a lecture by Norbert Wiener, the author of The Human Use of Human Beings, and he said that we're in a new industrial revolution, which consists of replacing human judgment and discrimination. And he says that one of the results of that is that administrators of business, industry, and politics are going to have to have like a state of mind that the leisure of people is their business, which is, I think, a very on point thing here. We're talking about purchasing as entertainment again. It's become incredibly transactional because the interactions that we have to go through to buy something on the web require us to do something that's unnatural, and shopping used to be fun. Shopping as therapy, shopping as, as something that brought life and excitement and joy. Post Black Friday purchasing or I should say Black Friday purchasing was supposed to be something people went out and did and had an exciting time with.

Phillip: [00:50:05] So emotionally scarred by this.

Brian: [00:50:07] I am.

Phillip: [00:50:08] Years. You've been talking about this.

Brian: [00:50:09] I have. I have. No, I think but I think this is it. As businesses and media people and commerce people and brand people, it gets back to what you were just saying everything has to be engaging. Everything that we do. If consumers are highly attuned to boring experiences, they will engage in them if they have to. But if I think that what you're on to is the next round of what is entertaining and engaging and takes up people's time in a fun way. And so I think you're dead on. I think this is going to be the next wave of how and why people shop and it's going to be tapping close, getting closer to the things that they care about. There's going to be a deepening of relationship. I agree with that.

Phillip: [00:51:11] I thought while you were talking, I thought of a counterpoint to this idea of having a parasocial relationship with a celebrity. In reality, I think it's a bit of a conflated idea to say, oh, this celebrity has taste. Because in reality, the celebrity has money to pay a stylist who has taste.

Brian: [00:51:33] And then we get closer to the stylist. I mean, that's already happened as well.

Phillip: [00:51:37] That's happened as well. But I think a modern example would be how many people know who La Roche is because of, I don't know, issues with Zendaya. I don't know. These people sort of take on personas of their own, but it's really infrequent. And so having this parasocial relationship with a celebrity is in reality having a closer relationship to the people that they have in their employ.

Brian: [00:52:08] That make them.

Phillip: [00:52:10] And that is itself like those people are tastemakers and artists. It's the reason why you might like Tom Petty. But you don't realize that it's Rick Rubin who is creating the sound. I mean, very few people are probably Rick Rubin fans.

Brian: [00:52:26] And no, he's really entered the zeitgeist.

Phillip: [00:52:28] At this point. Yes. Yeah. And I often reference the broken record episode with him and Malcolm Gladwell about this idea of art is producing waste. When you create art, you produce waste. You decide that's not good enough for the world and you lay it to the side and then you pare it back to this is the best of the best. Whereas content is not art. Everything that you make gets consumed. You just put it out, right?

Brian: [00:53:00] You just keep going. Yeah. Yeah. There's no cutting room floor. You just keep going. You just keep putting it out. And it's a constant stream of whatever's in you, which is basically what this podcast is. Actually, that's not true. I think we do a lot of self-regulation on here.

Phillip: [00:53:18] Helen Keller jokes included.

Brian: [00:53:20] Oh, geez.

Phillip: [00:53:21] I don't know. I find it's a really good example. So we were at the Visions Summit, Visions Content Summit. We hosted an event at MoMA, the Museum of Modern Art in New York last week. Future Commerce is gearing up for our newest edition of Visions, which you've heard at the top of the show. We have a big summit coming up that you can attend if you're listening, on June 15th. We'd love to see you right after the Retail Innovation Conference in Chicago, on June 15th. Come to the Visions Summit. Anyway. FutureCommerce.com/Summit. But anyway, beyond that, we had all these, you know, brilliant minds in one room. We had three panels, had the symposium.

Brian: [00:54:08] It was so it was so cool. It was so fun.

Phillip: [00:54:11] But the thing I kept hearing over and over is a lot of the things that we talk about kind of come back down to, we think certain things we have formed certain opinions because we're a product or it's the nature of an echo chamber. We're all part of a singular conversation. And when you're not part of that conversation, you tend to think differently about your environs, and so I think that, by and large, if you just look at eCommerce penetration, that being a good example of like, let's take a little bit of a chill pill here. eCommerce penetration is nowhere near normalized. It's come up since the pandemic. But retail sales by and large, you know, think we're at 11% of retail sales at this moment are digital commerce influence? We're nowhere near maximum penetration of eCommerce. And so to say that there is a way of buying online, but it is in no way enough of a cultural force to change all of commerce altogether. It is one facet of the way people shop.

Brian: [00:55:26] Yeah, it is. And it's growing. That's the thing. I think it's continuing to grow at a very, very specific, very linear pace.

Phillip: [00:55:37] Not be encouraged no matter how much capital you throw.

Brian: [00:55:42] Not even the pandemic could change that, that very linear growth. A little bit of acceleration. Yeah. Ten years in three months. No. Regression, baby.

Phillip: [00:55:53] Thank you all for listening to Future Commerce. You can find more episodes of this podcast in all Future Commerce properties at FutureCommerce.com. That's where the cool kids are going these days. FutureCommerce.com and subscribe so you don't ever miss an episode of Future Commerce. We'll get it into your inbox. And also you're going to be signed up when you subscribe to twice a week getting the best of the news contextualized for what you should be caring about. And that's how the future is built. You can find that at FutureCommerce.com/Subscribe.

Brian: [00:56:22] That's dot com.

Phillip: [00:56:23] Don't type anything else. You'll wind up at dot com if you do. FutureCommerce.com/Subscribe. Thank you so much for listening to this episode of Future Commerce.