DTC Theory and The Innovator's Dilemma

Phillip: [00:00:08] Hello [00:01:20] and welcome to Future Commerce the podcast about the next generation of commerce. I'm your Captain Jean-Luc Picard. And a huge nerd.

Brian: [00:01:40] That makes me... [00:01:40] Jonathan Frakes?

Phillip: [00:01:44] Yeah. Do you sit on a chair in a weird way that we could maybe make a YouTube video out of? That's the question.

Brian: [00:01:51] There you go.

Phillip: [00:01:51] For real, though, we have an amazing show. Brian, there's been a lot going on. We haven't done a one-on-one show in a long time. Buckle up, people, [00:02:00] because we have things to say. We are two weeks away from Visions Summit, which is not a thing we've talked a lot about publicly, but we do have some new content coming. We have our new annual report coming in just a couple of weeks time. If you're listening to this, Visions.report is [00:02:20] where you can go to get signed up for the once and future report. It's on its way. And it's the trends that I think are the most important things, or that we think, Brian, are the most important things that we need to be paying attention to that will shape how people engage in commerce.

Brian: [00:02:40] Yes. [00:02:40] For this year and beyond.

Phillip: [00:02:42] And beyond.

Brian: [00:02:43] I feel like the trends we're talking about are long-lasting. The ones that we came out with in last year's are the things that we're still talking about.

Phillip: [00:02:54] It's true.

Brian: [00:02:56] I think we will be for a long time. I think this just adds to [00:03:00] the list, really. It's interesting. A lot of annual trend reports just sort of refresh their view of a specific trend. We just keep adding to the list. {laughter}

Phillip: [00:03:10] Or they echo the echo chamber that exists. I was listening to a podcast this week and something [00:03:20] happened on one of their After Dark episodes. So I have to give a shout out to a really awesome creator that I follow, David Chen, who has a number of podcasts, including one called Culturally Relevant, which is a piece of content that is, I think, really, really artful. It has, you know how you're [00:03:40] always talking about, Brian, about having like a plurality of brand and this idea that you can't really pin something down?

Brian: [00:03:48] Yup.

Phillip: [00:03:48] Culturally Relevant as a podcast for me is that because there's like five formats and he sort of vacillates between like monologuing for an hour to having like really esoteric, like [00:04:00] artists on. It's really cool. But on one of his shows this past week he said, "Elon Musk just bought Twitter and the Internet freaked out." And one of his guests said, "No, no, no, no. The Internet [00:04:20] didn't freak out. Twitter freaked out. And Twitter is not the Internet. Twitter is just Twitter."

Brian: [00:04:27] Wiser words were never spoken.

Phillip: [00:04:32] And [00:04:32] it made me sort of think back to a friend of the show, a longtime friend of ours in the eCommerce space, Ian Leslie, who had said to us one time [00:04:40] that "The problem isn't the fact that Twitter is an echo chamber that we all subscribe to. The problem is when we take what happens in the echo chamber out to the real world and try to impose it on everything we do." And I think that our report this year is going to have a lot of that sort of [00:05:00] undercurrent to it of rethinking the way that we express what we believe to be true or what we buy into as gospel, maybe, for lack of a better word. [00:05:16]

Brian: [00:05:16] Not for lack of a better word. That's the exact word.

Phillip: [00:05:19] That [00:05:20] might be. And it might be a theme that we'll touch on later in the show. But what have you been up to? We're just we're kind of just talking about stuff that's coming. We've been hard at work.

Brian: [00:05:28] Yeah. I mean, you know exactly what about to. Hard at work on the report and hard at work in general. It's been a busy spring season. It's  [00:05:40]conference season.

Phillip: [00:05:42] That's right.

Brian: [00:05:44] Yeah. I've been to a lot of conferences, and I'm going to more.

Phillip: [00:05:50] We are going to be at RICE. If you're listening to this, the day it comes out, which should be on or around, I think like May 5th or 6th or something like that. We [00:06:00] will be at RICE next week, which is the Retail Innovation Conference and Expo. I have recently found out that the name IRCE is still co-branded somewhere on this event.

Brian: [00:06:13] Yes. Correct. No, actually, I am hosting one of the IRCE tracks.

Phillip: [00:06:18] Really?

Brian: [00:06:19] Uh huh. Yes. [00:06:20] IRCE is alive and well, and it will be living through my lips. {laughter}

Phillip: [00:06:27] {laughter} There's a show title for you.

Brian: [00:06:29] Yeah. No, I'm very, very excited about this conference actually. Last year, back before it was called [00:06:40] the Retail Innovation Conference and Expo and it was still called Retail X, the show was what we called the sacrificial lamb of eCommerce conferences. It kind of had to have... Something had to happen. And it came back in very minimal force, which [00:07:00] was still incredible. I think I recall it was actually one of my favorite commerce conferences of all time.

Phillip: [00:07:11] Well, you had... It's one of those it goes to show that it's not necessarily the event, but maybe the people and the stuff you do around... You make the event. The event doesn't [00:07:20] make the event.

Brian: [00:07:21] Right. Well, I think Alicia Esposito over there at Retail TouchPoints, who is putting on RICE this year, I think she recognizes that and has made a very conscious effort to bring the [00:07:40] right people together and to leave space for good conversations and good times and good connections and serendipity as we talked about.

Phillip: [00:07:51] Serendipity. That's the word. Yeah. We just had her on the show not one or two episodes ago. And if you want to hear more about it, [00:08:00] check it out. If you're looking to come to RICE, as we're calling it, then hey, we've got a special code for you. Just check out the show notes and you can get 50% off your conference pass. We will be there. There are going to be six of us [00:08:20] from Future Commerce that will be there at the show. Teams growing day by day. We have one of our Future Commerce salons, which is one of our dinner events that we put on. Let me tell you, ladies and gentlemen, Mr. Brian Lange knows how to host a dinner like none other. And if you would like to attend a salon that will be putting on we've got [00:08:40] one coming up in New York. They are sort of specially curated events. We'll be having a salon coming up very soon in New York in June. Is that right? It's in June.

Brian: [00:08:52] Oh, yes, one in May, one in June. I think the next one after that will be in August.

Phillip: [00:08:58] And we're putting these [00:09:00] on with 20 to 30 of our closest friends to spur interesting conversation, diversity of thought, and try to bring people that I think are underrepresented voices around the table for us to learn from and to grow with.

Brian: [00:09:16] And have incredible food and wine.

Phillip: [00:09:18] Yes. And have incredible food and wine. [00:09:20] And sometimes we shoot out a blast every 60 to 90 days to our entire list. Well, not really. We sort of trying to target it a little bit to invite you to come. And they're sort of first come, first serve invitations to come to these events. If that doesn't whet your [00:09:40] appetite, I don't know what will. Maybe go subscribe to Future Commerce and get on the list. It's FutureCommerce.fm/Subscribe and we'll try to get you out to one of these next events. And oh my goodness, I can't wait until this one is kind of behind us next week so that we can [00:10:00] talk about some of the people that are coming, because I don't want to build it up too much and then also travel permitting and all that good stuff. Things are you know, things are things right now. I do want to switch gears. There's so much to talk about. Do you mind if I just touch on a piece of research real quick?

Brian: [00:10:18] Yeah. Yeah. Do it, do it. Do [00:10:20] it.

Phillip: [00:10:20] Yeah. Not to be too self-promotional, but that's kind of our thing. We have our hands in a lot of stuff. Over on the Rightpoint side of the house, you know, my sort of mild mannered Bruce Wayne, you know, Clark Kent sort of personality by day, I serve in a commerce strategy role over at Rightpoint, and [00:10:40] we've been hard at work in creating a brand new B-to-B research piece that I think might be worth this audience's time. It's called Capitalizing on Momentum. And it is a survey of 150 B2B operators who are [00:11:00] on platforms, eCommerce platforms like BigCommerce, Shopify, Adobe Commerce, and its ecosystem and Salesforce. And we sort of went really deep down the rabbit hole to figure out how people buy software, what makes them keen [00:11:20] on using the software, and maybe sort of some of the psychographics around the way that they think about whether they're satisfied with their role in their job, in the software they have to interact with. It's a really meaty piece in particular. There are a couple of pieces of data that I thought were really interesting, in [00:11:40] particular Shopify, Shopify as a platform, and this is no shade towards Shopify. It is the dominant eCommerce platform today and it's earned it. But people on Shopify tend to, in this survey, come back a little bit underwhelmed that it doesn't necessarily live up to the [00:12:00] hype that maybe they had gone into it hoping that it would deliver on. One click is not so one clicky. You know plug and play doesn't always plug and or play. And the idea that dev resources are abundant and available and cheap doesn't also match up to expectations. [00:12:20] What was really interesting is ecosystems like Salesforce, Brian, are not as... They aren't as underwhelming as you might believe that folks kind of build up this boogeyman in their mind that's going to be very expensive, hard to work with. Talent's going to be too costly or hard to come by, and none [00:12:40] of those things actually live up to their hype either in that they're pleasantly surprised or maybe it over delivers on their expectations. So it's a really interesting piece you can get it at. Well, actually, we'll link it up in the show notes here. Get it through Future Commerce. That way I can show [00:13:00] that I'm trying to make two halves of my world work together. {laughter} So that's me being selfish a little bit. I think it's an important piece. And Lord knows I put enough time and effort into making it, but I don't know. I think research is a really powerful lever. And I know that people like spout [00:13:20] stats a lot. Right? But I don't know. I think making informed decisions around things and understanding how people think about the stuff we all have to interact with is kind of an important thing.

Brian: [00:13:31] Yeah, I would say so as well. Research is a tool. It's a tool that if [00:13:40] you use it properly, it can be really helpful. And that is some good research that you did. So check out that report.

Phillip: [00:13:47] Thank you. In particular [00:13:48], having primary research where you actually went in search of a perspective and tried to tease out some insights from data is something that no one can take [00:14:00] away from you. And having that first-person perspective on the world is really... It makes you have to think critically. You have to find ways to express data, ask questions, and tease a lot out of a survey. It's an art form as much as it is a science. [00:14:19] Anyway, [00:14:20] there's a lot of news. I don't want to do all the talking here, Brian. Trying to get you to, like, pipe in. I'm done. I promise I won't talk too much in this episode.

Brian: [00:14:30] No. You wanted to plug the report. I think that was a good thing to do. It's great. It's great research. I definitely learned a lot when I read through it. And I [00:14:40] think we have a lot of shifts going on in the world that we live in right now. One thing that I've seen a little chatter about, and I think you may have said this in a recent episode or maybe not in an episode. I seriously have a hard time...

Phillip: [00:15:00] Delineating [00:15:00] what happened on or off the show.

Brian: [00:15:02] Yeah, yeah.

Phillip: [00:15:03] That's true.

Brian: [00:15:04] I think you said "RIP DTC Hype Club 2018 to 2022."

Phillip: [00:15:13] That was not public. But yeah. {laughter}

Brian: [00:15:19] That was not public? {laughter} I [00:15:20] think the interesting thing about the change that we're seeing right now is that there is a lot of chatter about the Twitter echo chamber, even from people that are in the Twitter echo chamber.  [00:15:40]

Phillip: [00:15:40] Yeah.

Brian: [00:15:41] This is the point we've got now that the echo chamber of Twitter is like calling out that it's an echo chamber, which kind of makes that part of the echo chamber. I don't know. I'm just kidding.

Phillip: [00:15:54] Well, beyond just us, kind of like elucidating as to what we think about the DTC [00:16:00] circle, the circle of friends that circle of friend each other all the time. There was a piece of news that actually kind of catapulted this train of thought. And one of them is, I mean, aside from Bolt and [00:16:20] Fast, which is something that we could probably come back to, it was that there was a marketplace that has received a lot of attention from this particular segment of Twitter as being a heralding of the kind [00:16:40] of vertical, specialized vertical marketplace that should exist or could exist, should direct to consumer brands become culturally important. And this marketplace, the fascination, I don't think existed for very long, maybe a couple of years at most, [00:17:00] and they were just acquired by StackCommerce. And StackCommerce is a content platform for publishers, which is basically an affiliate marketing tool that services a lot of really popular publishers. They've been on a little bit of an acquisition spree [00:17:20] and TheFascination.com, which is a direct to consumer marketplace, where you can... Basically it's the Amazon of direct to consumer brands. They were just acquired. I believe, for an undisclosed amount. They have partnerships with 1000 brands.  [00:17:40]From the article, which will link up, which is a press release in Business Wire. It says it was launched in 2020. The fascination quickly established itself as the curated marketplace and media partner of choice for trending brands. I think what I'm taking away here are a couple of things, and [00:18:00] I don't know a whole lot about M&A, but maybe I thought we could sort of tease out the man, this was really fast. So it was either unbelievably successful or it was unbelievably not successful. I don't know. What do you think?

Brian: [00:18:17] Yeah, [00:18:20] we could speculate about whether or not regardless acquisition within two years is quite fast.

Phillip: [00:18:27] That's a quick turnaround. Yeah, I guess being a little out of our depth but wanting to talk about the subject, if this was [00:18:40] a signal of the prominence and cultural importance of direct to consumer brands and sort of this idea of DTC theory, which has been talked about a lot. This idea that DTC, [00:18:52] anything that can be disintermediated would eventually be disintermediated, including this [00:19:00] idea of brand and direct to consumer. So if the presence and the existence of The Fascination is a sign that we have cultural importance and significance of direct to consumer brands then the acquisition is [00:19:20] further proof that that's still relevant, or is it potentially a sign of things to come? [00:19:27] We're going to see a lot of M&A, a lot of roll up activity in the space and potentially maybe some brands that are dying off. A few have already done so. I know we saw U.G.L.Y. Sort [00:19:40] of slowly wind down recently.

Brian: [00:19:44] Yeah. And I think that's what the roll up strategy has been as well. A lot of these brands have been through some marketing hype cycles and didn't really know how to go to the next level, whether that be from an operational standpoint [00:20:00] or a customer acquisition standpoint. And so it's easier to sort of to roll that all into one instead of trying to do it on your own. So yeah, there's still a lot of really interesting ways. So [00:20:18] I don't see it as the death of DTC. [00:20:20] I think that's the wrong way to put it. I think it's more the death of marketing first DTC. So the antidote in my mind is I actually think we're still actually at the beginning of the creator economy in many ways, or however you want to define [00:20:40] it. I think there is a lot more opportunity for those that come to the table with interesting product and interesting ideas to find ways to scale their brand. So I think product first is actually the new model. Distribution is [00:21:00] the secondary component of that. [00:21:02] And I think I talked about this a little bit in a few episodes back when we were at Shoptalk, but interesting distribution models and maybe even traditional distribution models for good product: getting into grocery stores, getting into [00:21:20] local retailers, getting into even mass market retailers. There's an opportunity for all of this to come to play in the creative economy. And actually, I think there's going to be a new brand of retailer that arises, retailers that hit key [00:21:40] markets with shared spaces and offer in-store experiences for just for product that has just won over people because of its uses or quality. In fact, I was talking to [00:22:00] someone about this recently. I won't name, but he said that his brand was looking at partnerships in spaces that were maybe a little too large for their mode. So they had a lot of natural [00:22:20] opportunities with like bike shops and coffee shops and looking for ways to distribute product through those local venues and not just Food and Bev. Food and Bev has done a very good job of this. I live in a small [00:22:40] town, and the coffee shop that's close to me, Olipop is already in. Food nd Bev has done a really great job of working its way into very single store instances.

Phillip: [00:24:29] I [00:25:40] just saw an article today that Fly By Jing is, you know, heading toward Costco and that seems so fast. I think that brand is all of two years old.

Brian: [00:25:53] Wow.

Phillip: [00:25:54] When you think about the prominence of other... The ascendancy, the ascendancy, of other brands [00:26:00] like Vital Proteins, which sort of made its name in getting into Costco and being right next to Premier and some others. Yeah. It's on an accelerated path. I think the winners are just extraordinarily they're winning. But to your point, Brian, U.G.L.Y. had distribution. They were in [00:26:20] CVS. I think we just saw I think Sanzo is now in Whole Foods or has been in Whole Foods. There was a press release, I believe. It's like they're full on distribution pretty much everywhere now. So maybe some of these beverage brands are really finding and cracking the code. But [00:26:40] yeah, I think you're right. My challenge is that I don't know that the product is always there. I don't know that... I've tried Olipop. It's okay. I've tried Sanzo.

Brian: [00:26:56] That's the problem is the product isn't necessarily there [00:27:00] yet and that's why I said...

Phillip: [00:27:02] I mean, I'm not saying like it could just be not for me and that's okay. I also don't like... {laughter} There's a lot of things I don't like.

Brian: [00:27:10] I'm with you as well.

Phillip: [00:27:11] ...that are extraordinarily successful.

Brian: [00:27:12] I am very picky about my product as well. And so that's why I said to begin with, [00:27:20] I think it's got to start from a quality product perspective.

Phillip: [00:27:26] Yeah. If the whole of our industry is fascinated, pardon the pun, if the whole of the industry is fascinated with new and exciting, and there's that dopamine [00:27:40] hit of something like... It's discovery and its brand launches as a form of serendipity. Having a marketplace where there's something new coming out all the time because your space is laden with new launches and because capital used to flow there quite freely [00:28:00], that seems like a really interesting space to be in. Not so interesting when new brands aren't launching all the time, when new brands barely launch at all, or when a lot of existing brands that you might have frequented or have filled the virtual shelves, so to speak, are [00:28:20] all going out of business. And I think that if we fall on, I guess, making a prediction here, if we fall on hard economic times, discretionary spending will be down, Consumer Price Index... We had a really bad CPI print recently and we saw [00:28:40] negative GDP growth in the first quarter. We could be heading toward a little bit of a recession here. I don't think that that's a silly thing to say.

Brian: [00:28:52] Recession is high...

Phillip: [00:28:54] Are people spending [00:29:00] more or less on direct to consumer CPG? I guess that's the question.

Brian: [00:29:06] Well, direct to consumer CPG, CPG is one part of the picture, I feel like.

Phillip: [00:29:12] There's an entire industry. I guess that's the thing. There's an entire industry that's a services industry. And even [00:29:20] I mean, we thrive by this too. There's a newsletter culture that exists solely around reporting and testing and doing consumer reports on all of these brands. I think about Thingtesting and there's going to be a lot of pivot.

Brian: [00:29:35] That's not just CPG though. But yes.

Phillip: [00:29:36] You understand what I mean.

Brian: [00:29:37] No, I hear exactly what you're saying.

Phillip: [00:29:37] Let's nitpicked my argument. All right. It's fine.

Brian: [00:29:39] I'm [00:29:40] not nitpicking your argument. My point in saying this actually is that actually [00:29:45] recession aside, larger economic climate aside, how are people discovering and purchasing new products? Because I think that they will keep doing that. [00:30:00] There will be spending at some level. It's just that there was a lot of fire without too much of an engine in the past four years. The engine was was a lot of belief and a lot of like marketing first efforts. How [00:30:20] do we take all these learnings and say, okay, well, there are good products and there are a lot of like new really cool things are being created. How do we find a way to empower the stuff that's really good? I think that's actually [00:30:40] what's next. [00:30:41] And I think I mentioned on the episode at Shoptalk with Ingrid that I'm enjoying going into my local Kroger right now because my Kroger has a really cool stuff in it right now, like ocal coffees and  [00:31:00]Ghost is in my local Kroger and it had its own display. There's a lot of really cool stuff that's happening right now. I think at an in-person level. And I think it's going to get even more interesting. Actually, if you really reach back into the Future Commerce [00:31:20] archives, back when we talked with Ashwani Gujral.

Phillip: [00:31:26] Oh, Ashawni Gujral. Yes.

Brian: [00:31:28] She was at Madrona Labs at the time. Yeah, yeah, yeah, yeah. One of the ideas that I had was building out a platform for local companies to find ways to attract interesting brands [00:31:40] and give them a way to sell into their, like, create spaces for them to come into their...

Phillip: [00:31:46] I believe you called it Townee.

Brian: [00:31:48] Yes.

Phillip: [00:31:49] If I'm not mistaken.

Brian: [00:31:51] Something ridiculous like that. Yeah.

Phillip: [00:31:54] I'm pretty sure she was not a fan of this idea, by the way.

Brian: [00:31:56] No, she wasn't. She wasn't. I was.

Phillip: [00:31:58] Because it doesn't scale for venture. [00:32:00] And that's I think the climate that we're kind of in is, you know, there's a lot of uncertainty. We'll see. I think. Will things continue to... I mean, [00:32:08] new brands are going to launch all the time. I think their route to market being through the Twitter hype train is going to be a well that's going to dry up in 2022, [00:32:20] if it hasn't already. I think the cadence is slowing down already anyway. [00:32:24] The pace of launches that a bunch of thought leader Twitter and angel investor Twitter were hyping were many, many, many every month a couple of years ago. So [00:32:40] much so that we had met our friend of the show, Kris Gösser, through a Brian Sugar launched website just specifically to cover news. It was like the Reddit of direct to consumer launches. Anyway, I digress.

Brian: [00:32:56] Hold on, hold on. Maybe it just looks different, though, [00:33:00] because I think maybe the money is still there. It's just looking like roll ups.

Phillip: [00:33:05] Yeah, the money is certainly shifted to a broader strategy that's not, you know, stock picking. It's not like onsie, twosie. We're going to find a way in through, you know.

Brian: [00:33:14] I'm not going to buy one little niche play and then try to scale that out over a whole category.

Phillip: [00:33:18] Right.

Brian: [00:33:19] Yeah, [00:33:20] for sure. We'll just take over all the categories with all of our little niches. {laughter}

Phillip: [00:33:28] I just wanted to have, like, a juicy soundbite about the death of direct to consumer, and you had to go and give it a really evenhanded take. Yes. It's changing. Yes. New eCommerce sites [00:33:40] are going to launch every day. Shopify is going to do just fine until it doesn't. And that's the thing I'm concerned about.

Brian: [00:33:47] Well, I mean we already predicted that Amazon was going to have some trouble, like why not all of eCom? I think that's actually sort of the takeaway here. That's sort of both of our points. eCom, [00:34:00] as we've known it is in for a few bumps. Because different distribution methods are actually making more sense and different channels are making more sense. In-person is continuing to be one that that comes back.

Phillip: [00:34:16] One interesting way that these brands might find [00:34:20] new routes to a consumer is I think it all comes down to the ways that we acquire customers. And if Facebook is being harmed to the tune of $10 Billion because of changes from Apple's privacy policies, the entire rest of the industry [00:34:40] is working that out of their system right now. Shopify is going to deal with it because Shopify takes a percentage of revenues from brands that transact on its platform. And they're going to have the same kind of effects and fallout from the privacy changes that a Facebook would. It's just [00:35:00] it comes later in the cycle. So let's think for a little bit. There are new advertising models that are making the rounds. There was a NBC Universal last year, I think launched a new ad product that allows you to use sort of like an AR type [00:35:20] lens to project advertising into shows as if they were filmed. So if there's a billboard in the background, you can put, you know, GERN Beauty or Starface could advertise on that billboard virtually and do it in a segmented way [00:35:40] to deliver it to certain homes by region or by income level. So these might be new, interesting innovations that bring content and commerce closer together. Can you think of other ways that, besides just distribution models, which at the end of the day basically just means Target and last mile delivery? [00:36:00] Can you think of other...

Brian: [00:36:01] Well, I don't think he says mean that, actually.

Phillip: [00:36:04] Okay.

Brian: [00:36:05] That's what I was getting at is like I actually think there's a huge opportunity for local shopping and addressing stores that requires specific strategies to address. But the startup that I proposed was [00:36:20] supposed to help address that at scale, actually. But the idea being that I think that there's a lot of retail space right now in specific markets that's open for opportunity and brand. Retail shop owners are more open to opportunities with some of these brands [00:36:40] that deserve national distribution. So anyway, long story short. Yes, I think that technology is opening up doors for some of this as well, like AR projected billboards. I [00:37:00] don't know if that's going to be like a very large opportunity at the moment, but I think that the net effect is if you're dipping your toe into a lot of different channels, that's actually a really good way to catch the ones that are going to be the winners. So being really liberal [00:37:20] actually with your channel spread, having your toe in different places, even if they're not necessarily performing at the moment and keeping an eye on what happens with them is better than not being in those channels and seeing someone go take over real fast when they start to take [00:37:40] off. I mean, obviously there's downsides to that too. Like you could do a really bad job it and be ridiculed.

Phillip: [00:37:47] Yeah I was going to say. There's somebody out there crafting a very strongly worded email with "With all due respect" at the end of it.

Brian: [00:37:52] I mean, I understand both sides of that argument very, very well. I think that there are [00:38:00] a lot of companies that do take an MVP approach to specific channels. And when those channels start to see some traction, then they jump in with both feet and then they do them very well.

Phillip: [00:38:11] Why don't we pivot the discussion a little bit to then talk about, well, we have innovation [00:38:20] at the top of the funnel, new ways of acquiring customers, maybe some growth in innovation at the bottom of the funnel. There's this story that despite all of the interesting press that Bolt, the one click checkout payments platform, [00:38:40] has had in the press recently for all various and sundry kinds of reasons. The COO Maju Kuruvilla recently just posted a blog post today, actually, in fact May 2nd, saying, well, the results actually kind of bear out. They have 192% [00:39:00] increase in active Bolt merchant accounts in the last year. 192% year over year.

Brian: [00:39:08] That that makes the Fast story even sadder.

Phillip: [00:39:11] Well, let's compare some. I mean, yes, but I think maybe we could do like an apples to apples numbers comparison, kind of break it down a bit. Some of the other data points were [00:39:20] 131%, year over year increase in total shopper accounts, bringing the total to 13.8 million and a 31% year over year increase in transactions going through the one click checkout. [00:39:40] So 29% of transactions were just those one click. And I'm assuming that to get to one click you had to have set up the account and purchased once before. So I'm kind of reading that as one in three customers are retained or come back and use the one click feature again. That's interesting. These are all year over year numbers. So the [00:40:00] here's the back of the napkin math. They signed 415 merchants in the last year. Is that a big number?

Brian: [00:40:11] Depends on which merchants they signed. {laughter} It means absolutely nothing.

Phillip: [00:40:20] {laughter} This [00:40:20] also, what I find really interesting is sort of an interesting admission. This probably came I'm sure investors got the Q1 report a couple weeks ago well ahead of this blog post. But I don't know, 192%. [00:40:40] I mean, 2x growth is maybe tracking a little bit, especially, I guess, in this environment at the moment with kind of a drawback in eCommerce. It's kind of tracking toward the multiple that they kind of need to be in the range of for them to [00:41:00] justify a valuation. The fact that this... And by the way, full disclosure, we're partners with Bolt, we're longtime friends with Bolt. And we know a lot of folks at Bolt. And I will say, as on the service provider side, I [00:41:20] wonder if the press helps or hurts. I'm sure there are people that are more aware of Bolt today because of all the press. But I'm sure there are also people that must exist that are like, "Wow, that's a lot of drama. I don't know if I'm ready to sign up for that or not."

Brian: [00:41:35] I mean, drama around tech [00:41:40] companies... Oh, my gosh. {laughter}

Phillip: [00:41:42] It's the whole tech sector I guess.

Brian: [00:41:45] Yeah. I think press is probably good in general. Obviously, there are some things that that have come out that aren't considered good press. But I do think that the fact that they're able to come back with [00:42:00] numbers like these and to show that they're making strides at minimum, maybe big strides potentially, these are good things.

Phillip: [00:42:13] It's interesting, though, because what I learned by reading this, by the way, is there's not just one product. [00:42:20] In fact, they sort of took a little bit of a victory lap. Something we hadn't covered here is they acquired an API first crypto company called Wyre with a Y. So that's interesting. It's on their roadmap. They say the future is one click [00:42:40] crypto. They have a bunch of other products, including check out OS, which is apparently a headless platform. I'm not quite sure what that does.

Brian: [00:42:49] Well, Bolt's got vision.

Phillip: [00:42:51] Oh, yeah.

Brian: [00:42:52] They're not just thinking about one click checkout.

Phillip: [00:42:53] Yeah. Like a lot of, a suite of a lot of different solutions and products for various types [00:43:00] of applications. Yyeah, it's an interesting thing to say the least. Yeah. Future Commerce is partnered with Bolt. And I'll tell you, the people that we've worked with at Bolt are bar none some of the smartest and the brightest and [00:43:20] most motivated people that I've met in our industry. Yeah, I know that they're hard at work. You know who I wouldn't want to work for is Twitter, because that's got to be a distracting company to be working for at the moment. So I bet there's a lot of folks moving over to Bolt these days.

Brian: [00:43:39] But Twitter's the [00:43:40] internet, Phillip.

Phillip: [00:43:42] I heard de facto that is not, earlier this week.

Brian: [00:43:45] Yeah.

Phillip: [00:43:47] Speaking of the internet and things that make the Internet enraged, I thought maybe we could shift gears sort of at the end. And now that we've weeded out all of the looky loos, we only have the real [00:44:00] listeners around. I thought maybe we could touch on a little bit of a softer topic and a heady one that kind of relates back to a piece you wrote last year that I just could not stop thinking about.

Brian: [00:44:13] Yeah, I like this shift here. So we talked about the upcoming Visions [00:44:20] report, and we're going to give you a little preview into one of the things that we're going to talk about in that report. And that is this idea that we're calling The Sacraments of Commerce. And this is not something that's just happened this year. It's sort of been [00:44:40] building up for a few years now. But Phillip and I noticed that commerce is sort of taking on all of the elements that are included in a religion and the [00:45:00] religiosity of a brands is something that a lot of them don't even want to claim, but a few of them sort of have leaned into and we saw this story recently come out in The Bustle [00:45:20] about Glossier. And Emily Weiss was cautioned not to say something about religion and her brand, but she ended up saying it anyway.

Phillip: [00:45:37] She basically said, "I kind of think about [00:45:40] well, how our religions built? And that's how I'm going to build Glossier."

Brian: [00:45:45] Yeah. And so like as we see our culture sort of move from religious sort of a-religious, like less religious.

Phillip: [00:45:55] Yeah. More secular.

Brian: [00:45:55] Secular or atheist. I think  [00:46:00]there's a lot of opportunity for replacement of what religion has offered in the past, things that people sort of want to cling to that are rhythms of life almost that can be worked into brands.

Phillip: [00:46:18] The way that I think we expressed it. [00:46:20] And I really liked the way that it'll be framed in the report. But it's actually two things happening at once. It's brands have become more spiritual. If you just kind of look around, you'll see a lot of religious iconography in brands now and not necessarily Abrahamic religions, [00:46:40] but there's a lot of spirituality. There's numerology and astrology has gone through a moment in brands in the last year. Heck, the Future Commerce, has some of that iconography as well to some degree. So that's very in fashion. So brands are becoming more spiritual. [00:47:00] But I also think that religions are becoming more brand. And I think that that is, there is a duality. There's sort of this convergence in the center where there are brands in the world of [00:47:20] in particular, an area that I pay attention to in Christianity. There was a documentary recently that just came out, a big expose about Hillsong. When I say Hillsong, most people can picture the logo if they are familiar, like most people could picture or at least identify that that's an Australian movement of music or  [00:47:40]brand of Christian faith. Some might call it a cult. I don't know.

Brian: [00:47:44] I mean, it did hit the home page of Amazon Prime Video.

Phillip: [00:47:48] And but one of those things that are really interesting is, you know, they have executed a brand playbook. And at the same time, brands have found that maybe the [00:48:00] structures of religion, the traditions there, the traditions that we find or maybe the sacraments that you find in a tradition of religion, hey, maybe that's a playbook to. So with that in mind, you know, I feel like there's a number of ways that that could sort of be expressed. We'll go [00:48:20] into it in the report, and I don't think we need to get into it here too too much, because I definitely want to leave some.

Brian: [00:48:25] Let's leave most of it for the report. You've got to come download a report. This is actually really interesting stuff.

Phillip: [00:48:33] But I think if you have paid attention to our our podcast in particular [00:48:40] for the last four or five years, you'll have heard smatterings of this, a little smack roll of it here in there. But I think that it's not just brands becoming more community centric or providing mechanisms for you to share [00:49:00] your experience with others. But it's also interestingly enough, we've sort of created our new deities to some degree, right? Like the things that we concern ourselves with and the things we serve on a daily basis can be, they're unseen forces that [00:49:20] act on either for us or against us in life. The algorithm in particular, is a form of deity that we all have to reckon with every day. And so I think these are really interesting topics to sort of pick apart within the lens of commerce, but probably as a broader cultural impact.

Brian: [00:49:40] Yeah, [00:49:40] I think so too. Then that's part of visions, right? So we're talking about trends that are that. I mean, some of them are more specific to our industry, but some of them are more broadly cultural. I think any way you cut it, we try to blend the two together. Whether we come from more of a culture angle, we [00:50:00] try to pull in commerce and vice versa. But this one in particular, I think, there are things happening right now that are representative of this. The Emily Weiss article was just one small example.  [00:50:20]Phillip, do you want to hit on just a couple of the other 1 to 1 type connection points?

Phillip: [00:50:27] I mean, maybe. I think that there's a particular, and maybe timely now, there was a news article recently about Yuga [00:50:40] Labs, which was the founding team behind Bored Ape Yacht Club. They had a drop that didn't go very well for a lot of people. In the midst of that drop, sort [00:51:00] of kind of broke Ethereum to some degree. We won't get into the specifics here, but on the heels of that, they effectively announced that for the scale of the thing that they want to build, there is no existing blockchain that can support what it is they want to do. And so therefore for them to grow, [00:51:20] what they're going to have to do is build a new layer one blockchain specifically just for Bored Ape. And it is yet another, it's the next carrot on the next stick that kind of keeps people thirsty for more. It's the next thing to have to anticipate. [00:51:40] And I'll tell you, having been around a lot of narcissists in my life that's pretty scary [00:51:47] behavior. There's always the next great thing right around the corner that's going to change everything. And it's always on the heels of the last thing that didn't go exactly the way that was planned. [00:51:58] I don't know. So [00:52:00] using that as sort of a couch here, we saw a movement recently in the last year and a half around NFTs, that changing your profile picture was sort of a symbol of allegiance. And I was raised in a tradition where baptism was a public profession of faith,  [00:52:20]so much so that Twitter released a whole facility for you to use an NFT. They minted their own NFTs, gave them away, and then created a facility for you to be able to authentically show that you were one of the, that you had a group [00:52:40] affiliation. And I think that those are really like maybe that's a weak parallel, but there are parallels for a lot of things. So yeah, we're going to dive into this in the report. I think it's worthwhile.

Brian: [00:52:52] Yeah, I'm excited. I think it's going to be really fun. And this and many trends to come. Look forward to [00:53:00] Visions 2022. And yes, we did change it just a little bit. Vision is now Visions.

Phillip: [00:53:07] Yeah, Vision was like a report of annual trends. Visions is going to be our future home for our biggest ideas. And I think some of those extend our reach well beyond commerce. And like I said before, hey, we've [00:53:20] got a lot to cover. We could probably spend, and we have plenty friends that do, we could spend the rest of our lives just building content around one or two companies in our ecosystem and probably have plenty of work to do. So we don't need more things to cover, but it is the way that we think [00:53:40] is a little different. And I love our commitment to doing this in an artful way. And it was continually inspired by this team. And I love what we're building. And that's it. I can't think of anything else. Brian, we're going to go down some crazy rabbit holes if we do.

Brian: [00:53:59] I [00:54:00] think we will. Let's let's wrap it up here.

Phillip: [00:54:02] That's it. All right. Thank you for listening. And if you want more episodes of this podcast, you can get it FutureCommerce.fm. If you do want to get on the list so that you don't miss anything, we send you email in a very, I think, engaging and thoughtful way more than once a week. [00:54:20] We'll get in your inbox Monday, Wednesday, Friday. We have two pieces that go out. We have Insiders, which is a long form, thoughtful essay about the things that we think matter to you in the way that we sort of put those into context and how they're affecting the world around us. And we have The Senses, which is our newsletter that goes out twice a week. And both [00:54:40] of those things come with our own unique perspective. It is better than just having an RSS feed. It is actually our curated and thoughtful wrap up of the things that matter the most in our world. And so, hey, you can get all of that with one subscription. It's absolutely free to you. Go over to FutureCommerce.fm/Subscribe and [00:55:00] hey, if you want to support the show and you don't want to clutter your inbox, it takes no time at all. Go leave us a review on Apple Podcasts or on Spotify. One thing... Total side note as we're wrapping up, you have to actually listen to multiple episodes on Spotify before they allow you to leave a review. I think that's really cool. We need [00:55:20] more of that in our industry.

Brian: [00:55:21] So go listen to a bunch of episodes.

Phillip: [00:55:22] So go listen to a few episodes, and then leave us a great review on Spotify.

Brian: [00:55:27] If you really don't like us, go listen to a bunch more of our content.

Phillip: [00:55:30] Yeah, exactly.

Brian: [00:55:31] And then write us a review.

Phillip: [00:55:31] That'll be the way that like we know that you really committed to dropping that one star on us. Challenge accepted. And we always welcome critique [00:55:40] and feedback. You can drop it to us at hello@FutureCommerce.fm. Thanks for listening.

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