It's Twenty-Bleeping-Eighteen

Phillip: [00:00:52] Welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:00:56] And I'm Brian.

Phillip: [00:00:58] And we have 30 minutes on the clock because I've got to get to Olive Garden with my family. That's how we roll. Friday nights in the Jackson house. It's a big party.

Brian: [00:01:08] Breadsticks. Salad.

Phillip: [00:01:09] Alexa, set an alarm for 30 minutes. Here we go. She's on it. There we go. All right, Brian. This is going to be a lightning round episode. Holy cow. Biggest news of the whole week. And it's not Homepod.

Brian: [00:01:27] No.

Phillip: [00:01:27] Homepod is here and nobody cares. That's the first story.

Brian: [00:01:32] Well people care. Care to talk about how irrelevant it is.

Phillip: [00:01:38] Article out on Business Insider says. It's something like, I don't know, like "Seven Reasons You Shouldn't Buy an Apple Homepod." And effectively, you know, it's a music first device. They're very hard... Like the number one bullet on Apple's Web site about the Homepod is all about music. They tout the features of the speaker, how it sounds really great. They're trying to position it against Sonos.

Brian: [00:02:06] It's just a giant iPod? Is that what I'm hearing?

Phillip: [00:02:08] That's basically... And it only works with Apple music. That's the way... It is 20-bleeping-18. All right.

Brian: [00:02:19] If you check partner with people, then you're done.

Phillip: [00:02:22] Unbelievable. You know, cue the "Steve Jobs never would have let this happen." But I feel like Steve would have done exactly this, actually. Anyway. I'm not going to harp on this anymore. Also, I heard on an NPR story a few days ago, I wish I had the reference, but it's a great story that basically talked about how the Siri experience as like a community experience, like a family home device. Siri just doesn't feel in the right context. She's very personal. You know, and Apple doesn't need a device to embody Siri. I mean, Siri is at everyone's fingertip, right? Siri is available. It's in everyone's ears already. It's on a lot of Macs as it exists today with...

Brian: [00:03:11] Yeah.

Phillip: [00:03:11] You don't need a device for Siri, whereas, you know, Google and Amazon both did need a device to access their assistant. So I think it's a very different play for Apple. It is a win for voice first. It's a voice device, but...

Brian: [00:03:26] It is a voice device. And like you said, it is more of competition for Sonos. I totally agree with that. You know, it's a market where Apple is entering. They know they can make money because they know there are people that are going to buy it. It's kind of a no brainer for them. But it's not super relevant to the discussion of like, you know, what's next in voice computing.

Phillip: [00:03:47] I want to rewind. If you go back to Episode 1 and Future Commerce. Ok. Go back in the Wayback Machine.

Brian: [00:03:53] Wow. That's the way back, man.

Phillip: [00:03:55] Hit Wayback Machine to almost two years ago. And we basically, I think, kind of dig in to the Apple sort of like all the announcements that came out of their WWDC, their developer conference, where they talked about opening up Siri to developers and they also talked about iMessage having an open API and they gave a bunch of commerce context examples of what they could do with conversational, both from a...

Brian: [00:04:26] Yeah that was super exciting.

Phillip: [00:04:26] It was, and they've done nothing with it.

Brian: [00:04:27] It was really exciting. Ugh. It's just like Siri.

Phillip: [00:04:33] Yeah. Just like Syria. They've done nothing with it. So anyway. Apple. Apple gonna Apple, I guess is the phrase. Apple just gonna Apple. But yeah. And you know, I mean, besides repatriating, you know, billions of dollars back to the United States and, you know, building another headquarters, Apple doesn't really have anything going on so well. OK.

Brian: [00:04:55] They had to copy another company that starts with "A." They're like, "Oh, that HQ to thing. Very cool."

Phillip: [00:05:02] Oh for Pete's sake.

Brian: [00:05:02] "We should do that, too."

Phillip: [00:05:02] All right. So speaking of HQ2, Brian, you're at home in your HQ.

Brian: [00:05:09] Yes.

Phillip: [00:05:10] You're in Seattle.

Brian: [00:05:10] Seattle. That's true. I'm here.

Phillip: [00:05:12] And the company that starts with an A that you just referenced has a very exciting... Their public beta is now over, and it's in full on launch mode. What is your...

Brian: [00:05:22] What. What. Amazon Go. That's what we're talking about. No, we're not talking about that today. Since you're coming out here shortly.

Phillip: [00:05:31] Yep.

Brian: [00:05:31] We are going to both go to the store.

Phillip: [00:05:33] Yup.

Brian: [00:05:33] Have a little tour, a little review of it. And we'll get back to you with our thoughts.

Phillip: [00:05:38] Two weeks from today. Two weeks from today. All right.

Brian: [00:05:41] The best tweet I saw on this, so far, was... And people have been giving a reviews all around. But my favorite tweet was "The store that promised you no lines has a line." Because there's a line to actually get into the store.

Phillip: [00:05:55] I don't know if that will die down anytime soon.

Brian: [00:05:58] I don't think so.

Phillip: [00:05:59] Friend of the show, Bob Schwartz. Thanks for listening, Bob. Who's sort of in the angel investor world. He's a longtime listener of a bunch of podcasts that I produce. Bob. Looks like he stood in line. He was one of the first ones in on day two of the launch, I think. And he he said it worked seamlessly. He tried to trick it a bunch of times, picked up a bunch of different things, carried them around, put them back, and it got the order perfect. Right?

Brian: [00:06:29] Yeah that's amazing.

Phillip: [00:06:29] He said, as a caveat, he didn't like the drink or the sandwich that he picked up. So, you know... {laughter}

Brian: [00:06:35] I mean, it is kind of close to convenience food, right?

Phillip: [00:06:38] It is a convenience store.

Brian: [00:06:40] It's a convenience store. Exactly. So, you know, temper your expectations about food quality.

Phillip: [00:06:48] Yeah, for sure.

Brian: [00:06:49] Anyway, it's really interesting. So we'll be giving you our full in-depth review. We'll talk all about what we experience at the Amazon Go store, and we'll be there in just two weeks time. So make sure you subscribe to FC Insiders. We'll be reminding you when that episode drops. We don't need to remind people when episodes come out anymore because we have such a massive audience. I don't know what's going on. When did all of you start listening to us?

Brian: [00:07:17] I don't know, man. {laughter}

Phillip: [00:07:17] I guess what we say, actually, you know, is listened to by the real world now. We just want to thank all the new listeners. Thank you, everybody, for tuning in. I think we picked up a bunch at NRF.

Brian: [00:07:30] I think so. Yeah, our audience grew significantly.

Phillip: [00:07:34] Yeah by orders of magnitude. So you know what I think it actually is? I think it's that Branden Moskwa guy. He's been sending a bunch of listeners over our way. So I'm going to attribute all the growth is due to Brandon.

Brian: [00:07:48] He has.

Phillip: [00:07:48] That means ECommerce Allstars. If you're not listening to ECommerce Allstars, get on it. But we like you a lot, Branden. Thank you for being a fan of the show. Anyway. OK, so you've got a bunch of cool...

Brian: [00:08:01] So what's the actual big news? The actual big news is there're companies that are really starting to believe in retailers. A lot going on. There's a lot of positive news about retail. At NRF, there was a lot of positivity. I felt like a lot of the discussions that I had were around retail. Retail is not dead. It's not even really an apocalypse. If it is, you know, it's more of just a transformation in retail. I had a great conversation with Rob Lewis from the Robb report. And he said that there's not really a crisis, it's just that retail is crowded. But there's a lot of positivity about what's happening next with retail. And one good sign of this is there's an article in The Wall Street Journal recently. Just came out.

Phillip: [00:08:54] A week ago.

Brian: [00:08:55] 22nd? Yeah. About how there's a company... GHC development... Allan Fried is the leader of that company. He is planning to convert the former American Stock Exchange building in the financial district into a hotel with a large retail component, which is a very...

Phillip: [00:09:21] That's no tiny investment. Sixty five million dollar investment to develop new retail space in Manhattan. You know what Manhattan needs, Brian? More retail space.

Brian: [00:09:33] More hotels.

Phillip: [00:09:33] We need more retail space and more hotels. If there's one thing we're hurting for in Manhattan, it's those two things.

Brian: [00:09:43] Right. Yes. Right. It's crazy because you're making your point effectively with sarcasm there. There is so much retail space is so much retail space in New York, and there're so many hotels. And so that the fact that people are still making investments here in probably one of the most retailed places in the world... I mean, that's a big signal. That's a good signal.

Phillip: [00:10:10] Yeah, for sure. One thing that I think is really interesting, it was an article I think we referenced 30, 20, 30 episodes ago. And it was sort of the... It was right after everybody kind of got over the honeymoon of the Amazon/Whole Foods merger. There was a lot of the early stores right after the the actual go live date. There's a lot of the early stores or the Whole Foods stores that cannot carry any of the electronic goods that Amazon's been putting in some of their stores. And the reason being is do you lease agreements and competition that they have with neighboring stores and real estate. Okay.

Brian: [00:10:56] Yes.

Phillip: [00:10:56] So I understand. I'm not a retail real estate expert, and I'd love to get one on the show. If you know a thing about this, come explain it to me. I have no idea what I'm talking about, but I can see a future in which developing your own retail space that can't be entangled with these existing sort of lease agreements and kind of just kind of starting fresh and forging some of that forward yourself makes a lot of sense.

Brian: [00:11:19] Yeah.

Phillip: [00:11:19] Right?

Brian: [00:11:20] Yes.

Phillip: [00:11:21] So that's kind of an interesting... It's kind of an interesting thing that I don't if it comes into play here. But yes, what you're saying is that there are a lot of people who are putting a lot of money into developing new real estate and rehabilitating some old some storied architecture in New York.

Brian: [00:11:41] Expensive architecture.

Phillip: [00:11:43] Right.

Brian: [00:11:44] Yeah, I think that's the part that got me excited. You know, we've had this talk about Macy's flagship store in New York is worth more than the entire value of Macy's. And, you know, maybe they're going to sell it off. But the fact is someone's taking expensive real estate and turning it into retail space. That's a very good sign.

Phillip: [00:12:11] Yeah that's a good point.

Brian: [00:12:12] For the record, I don't think Macy's is going to sell that building.

Phillip: [00:12:16] It does buck the trend of what I am, you know, trying to predict for 2018, which is we see more stockless true flagship stores like Nordstrom's concept. And seeing us continue to repeat some of these past sins.

Brian: [00:12:33] Well, hold on. Not necessarily. The retail space that, you know, that he puts in. It could have things like that in it.

Phillip: [00:12:40] It could. It could. But know to have that large of a space dedicated to retail, I guess some of it's hotel. Let's see.

Brian: [00:12:51] Wait and see. Yes.

Phillip: [00:12:52] Oh, there's only so many headlines on The Wall Street Journal that says the Dow is at another record that I can take for a year before I start to feel like, you know, maybe the economy is doing OK. Maybe this retail apocalypse thing is just, you know, fake news.

Brian: [00:13:08] I don't think it was fake news. It wasn't fake news.

Phillip: [00:13:11] It's fake news in aggregate.

Brian: [00:13:13] Yes.

Phillip: [00:13:13] And there are little pockets of those old, you know, sort of the old brands that are just dying their last gasps, their last breaths.

Brian: [00:13:22] Yeah.

Phillip: [00:13:22] In fact, three Toys R Us/Babies R Us locations right near me, all of them that are accessible to me here in Palm Beach are all closing. And so yeah, I'm seeing it. I'm seeing it. I don't know what's gonna go into it. It's probably like a VR arcade will go into those old spaces for the time being.

Brian: [00:13:44] Yeah, that's something... A lot of these places are getting replaced. Like for instance, I had an OfficeMax, I think, that went out of business in a town near me, and it was pretty much immediately taken over and replaced with a Lazy Boy. You know, things are happening. Just because things are disappearing doesn't mean that things aren't going to take its place because there are a lot of things to sell to people. And like you said, the economy is doing well.

Phillip: [00:14:11] It's picking up. My wife and I have a bet every time that there is new development in some place. We were really super excited when we lived in it in a different area. They started building this new building on the corner and nobody knew what it was for the longest time. They didn't put up a sign. Nobody kind of knew what it was. It was a big secret. And then we were all excited. We were like maybe it's a Chik-Fil-A. That's too big for a Chik-Fil-A. What it looked at possibly be?

Brian: [00:14:39] I love that Chik-Fil-A was the number one.

Phillip: [00:14:43] Yeah that's the number one. First thing. Right. And we had all kinds of theories of like what it would probably... Like Five Below. Wouldn't that be cool if we had a Five Below here? And we had all these theories like the really neat things it could be. And you know, lo and behold it's another freaking Walgreens. Like we need another one of those. There's literally like six Walgreens within like three miles radius. Do we need another? So now whenever something's being built, you know, it's definitely gonna be a bank or a Walgreens just to disappoint me. So do we need more Lazy Boy stores? Do we need more Walgreens? I'd love to see some more... I want to see some people doing some really interesting concepts in retail.

Brian: [00:15:29] Yeah.

Phillip: [00:15:29] It's gonna be hard. It's gonna be really difficult. I do think that like you said, that there are pockets of excitement. Generally, we're all just kind of redoing the same things over and over.

Brian: [00:15:38] I know. Yeah, no, I don't know if this was on the show because I started to lose track of what we've talked about on here.

Phillip: [00:15:44] Yeah.

Brian: [00:15:44] But I was talking with somebody, probably you, about whether or not Amazon Go stores will... Whether or not you're gonna get to see them pop up all over the US. And the answer is probably no. And that's disappointing. Like everyone wants an Amazon Go in their neighborhood.

Phillip: [00:16:07] I don't know that Sam Walton would have wanted Amazon Go in his neighborhood.

Brian: [00:16:11] Ok. Fine. Fine. Fine. You know, Walmart employees aside. {laughter}

Phillip: [00:16:16] All right. Okay. We've probably given this too much time.

Brian: [00:16:19] Wait, wait. I was going to plead with to merchants like interesting things going on to expand into places...

Phillip: [00:16:29] Send us your stories. I actually want to start hearing from our retailers. We have a lot of people that are listening to the show. I'm sure a lot of people are doing innovative things in retail. And, you know, I'd like to hear your take on it, too. We should have some way to do a call in where people can...

Brian: [00:16:48] Oh that would be awesome.

Phillip: [00:16:49] That would be an interesting...

Brian: [00:16:49] Like a traditional radio call-in.

Phillip: [00:16:51] Yeah.

Brian: [00:16:53] I like that.

Phillip: [00:16:54] Are we going to repeat the things in radio that haven't worked for two decades in the same way that retailers can repeat all the same things?

Brian: [00:18:53] Hey, hey, instore is still relevant.

Phillip: [00:18:56] You know what is still relevant, apparently is digital advertising. You like that segue? Goldman Sachs is predicting digital advertising. That means, you know, all the money you're spending with Google AdWords probably on social, too. It's going to account for over half of all advertising globally. All ad spend globally in all mediums by 2019. And Facebook and Google are probably going to gobble up 94% of the growth. And video is going to have a breakout year between 2018, 2019. And that's Goldman Sachs. We'll link it up in the show notes, but some really crazy stuff. This coming from a magna digital advertising survey. And effectively what we're seeing is, you know, traditional advertising is on the decline, still, down 3% year over year in 2017 and an additional 1% decline in traditional advertising in '18, and most that's probably coming out of print/radio budget. And so what you're probably looking for is a lot of that to be displaced or put back into services like Facebook, Google, and YouTube. And now Amazon has a paid self-service platform for advertising and so does Snapchat. Instagram is integrated into Facebook's digital advertising model. So everywhere we're eyeballs are on the Internet, you have self-service advertising. A lot of people are starting to test those out, seeing some returns on it, and likely to double down in the next years. That's kind of interesting.

Brian: [00:20:34] They also said that video can have a breakout year.

Phillip: [00:20:38] Yeah. Sure.

Brian: [00:20:39] Which I think that's going to be interesting. Like who plays into that space? It was really interesting that Meg Whitman, the former CEO of HP Enterprise, she went from doing that to becoming...

Phillip: [00:21:02] From HP.

Brian: [00:21:02] Yeah. From HP to being the CEO of like a startup, basically, for Jeffrey Katzenberg, backed venture... I think it's called NewTV or something like that.

Phillip: [00:21:14] No, that sounds right. NewTV. Yep. That's crazy. So, I mean, there must be something there.

Brian: [00:21:19] The stated goal was to revolutionize entertainment with short-form premium content customized for mobile consumption. I think the idea is that it will be scripted content that's under 10 minutes long.

Phillip: [00:21:30] Interesting. So basically what a lot of, you know, content creators on YouTube are doing now, but they're going to Netflix-ize it. They're going to put money...

Brian: [00:21:39] Exactly.

Phillip: [00:21:40] Yeah.

Brian: [00:21:40] I just can't help but wonder if like you take that combined with the video advertising having a breakout year, it's probably going to be... You're going to see a lot more advertising around content like this.

Phillip: [00:21:54] For sure.

Brian: [00:21:54] So, yeah, that's interesting.

Phillip: [00:21:56] Yeah.

Brian: [00:21:56] If Meg Whitman's go into it, I mean, I think there could be something there for sure.

Phillip: [00:22:01] Yeah. Potentially. I always look at this as people who have thought a lot harder about this and are a lot smarter than me...

Brian: [00:22:08] Yes.

Phillip: [00:22:09] ...are making really good... It's like, you know, just let's just all copy Warren Buffett. That's how I think about these sorts of things.

Brian: [00:22:17] Well then I guess no more _____ for you.

Phillip: [00:22:19] You know, what's interesting is we were talking about Amazon Go. I know you and I had planned at one point a trip to the Amazon bookstore in New York, which is in the old mall...

Brian: [00:22:32] We should do the one here in Seattle.

Phillip: [00:22:33] ...Columbus Circle. I'd like to.

Brian: [00:22:33] That'd be good.

Phillip: [00:22:34] I want to see the idea of what it's like when, like, pure play eCommerce store decides to come down to brick and mortar. I want to see how they approach it and what they do differently. And Dollar Shave Club is doing just that. They just announced, it's an article over in Retail Focus, a UK version of Retail Focus, that Dollar Shave Club is opening up a concept store on Old Street. It's a pop up. I don't know how long it will be there for, but it looks like it's kind of more of a sort of retail experience with an old timey sort of barber setup. But Dollar Shave Club, which is the... You know, well, it is a dollar shave club. Their name is actually... What they do is right there in the name. They're the subscription service online that has caused a lot of pressure and created a lot of other headaches for the Gillette's of the world and caused a lot of interesting copycat sort of businesses to pop up like Harry's and some others. But it's really interesting to see these eCommerce first, eCommerce focused/centric companies that are starting to do larger retail experiences. I want to check out all of these. I want to try to learn as much as I can about them. I think the best way to learn is to experience it.

Brian: [00:24:02] Yeah, let's do it. I'm looking forward to it.

Phillip: [00:24:04] Let's go to London. Let's you and me. Let's go.

Brian: [00:24:06] Alright. Let's go. {laughter}

Phillip: [00:24:07] Old Street, here we come. This sounds really cool. If you've been there, I'd like to know what it's like. I mean, it basically looks like you pop and you get a shave. They have three products. I don't know. They're probably 10 products. You know, there's it's all shaving accoutrement. But it's an interesting...

Brian: [00:24:24] It's interesting. You know, I think a lot of this is, well, I mean, for Dollar Shave Club, this is their way of sort of finding new ways of expanding beyond pure play.

Phillip: [00:24:35] For sure.

Brian: [00:24:36] It's interesting to see how the traditional market is responding to this. Like Nordstrom's is like, "Oh, hey, genius. We're gonna take these experiences that these pure players are doing and kind of do our own version of it." And then there are other brands who's, you know, sort of response to this kind of pressure.... There was an article recently, Michael Kors, GAP, and Ralph Lauren are pretty much all going to a no discount approach to their business.

Phillip: [00:25:12] Right. Yup.

Brian: [00:25:14] And it's...

Phillip: [00:25:17] I love that. I love that you segued into that, because that's exactly how I was gonna do it, too. You're right on the money. This is so good.

Brian: [00:25:25] Yeah. Yeah. In short, like their strategy is to say we're done. We're done with catering to passive shoppers and bargain hunters. We're just going to sell our clothes for the price we sell them for. And that's their response to, "Oh, wow. Pure play." I mean, it's not their direct response necessarily. But I think it kind of is a response to these pure play companies that are just eating their lunch in many ways. And Bononbos and Warby Parker and others that have kind of gone from pure play to building out stores.

Phillip: [00:26:07] I mean, the brands that you mentioned before are all luxury brands who have taken a beating since, you know, 2008. This ten years that they've been sort of chugging along, just trying to stay afloat and actually remain relevant. And in some of them, you know, Coach in particular, I know like last year shut down 250-some of its wholesale type stores, like outlet type experiences. Basically, it's like, you know, the product is way too ubiquitous. It's way too promotional. And we need to preserve our brand status. And we'd rather do that with a smaller footprint going forward. What I find really interesting is that I don't think Harry's and Dollar Shave Club need to get customers in the door with 30 and 40% off sales.

Brian: [00:26:57] Right.

Phillip: [00:26:57] People understand the value of the everyday low price because their competitors kind of own the market. They were sort of ingratiated as as a sort of unbeatable in the space. You really only had one or two competitors that owned that entire space. And these guys were the disruptors. They don't need a discounting model. I think what's likely to happen, is we're probably going to have to see a big shift or more competitors come in to sort of fill in the gap because, you know, a dollar razor on a subscription... I don't know. The Gillette's and the Bics of the world have already adjusted to try to meet that demand. They're already going direct-to-consumer. They're routing around wholesalers, their wholesale relationships. They're creating loyalty programs. They all have direct to consumer subscription. They're already... You can find it cheaper every day at the wholesale stores like Costco and Sam's Club. Rest in peace. So there's a lot of those...

Brian: [00:28:05] {laughter} It's not dead yet. "I'm not dead yet."

Phillip: [00:28:07] But I do see that there is an option. There's an opportunity here for, you know, the market can withstand a bunch of competitors in a space if one of them is priced more competitively.

Brian: [00:28:19] Yeah.

Phillip: [00:28:21] So I can see where you would draw the line. I was going to try to draw the line between these two stories, too.

Brian: [00:28:25] No, it's good. It's good, I think...

Phillip: [00:28:27] I don't know how we retrain the consumer, though, right?

Brian: [00:28:30] Well, no. So here's the deal, man. Let's talk about GAP, in particular, for a second. I have a real life anecdote I just heard yesterday. My friend was telling me a story about how she went into Old Navy recently and saw a pair of shorts that she'd like on the clearance section, but they didn't have a price on them. And so she took them up front and was like, "Hey, can you ring this up for me?" And guess how much they rang up for.

Brian: [00:29:00] How much?

Phillip: [00:29:00] Forty seven cents. Forty seven cents. Now that's cheaper than Ross. You know, that's like the discount at the dollar store, man. This is the problem that these retailers have right now. And I don't know if it's a lack of control or a lack of understanding of how their discounts... Maybe they're like triple discounting on top of things, you know?

Phillip: [00:29:27] Yeah.

Brian: [00:29:27] But when someone can walk out the door with a pair of shorts, that they liked enough to actually get a price check on, for forty seven cents you might as well be giving away clothes. You might as well be giving away your merchandise.

Phillip: [00:29:45] For sure.

Brian: [00:29:46] And so I can see why Michael Kors, GAP, and Ralph Lauren are saying we're done with this because they're not doing it very well. They're not. I mean, that's just not being smart with your merchandise.

Phillip: [00:29:58] I mean, there's yeah, there's a whole thing about retail like sort of category management merchandising that is getting old product out of the store to make room for...

Brian: [00:30:07] Room for the new product.

Phillip: [00:30:07] The new stuff that you're going to make a lot more money on it. In that case, it's probably a lot of product that's already sort of worn out its welcome. And yes, you could just give it away, but the 47 cents is better than zero. So coming back to Dollar Shave Club, there's a really interesting comparison there, because the sense is that the lifetime value on a customer who is in the dollar subscription price is negative. They're losing money on the dollar customer. They're making money on the customers that are at the much higher end of the tier.

Brian: [00:30:45] Interesting.

Phillip: [00:30:45] Right? So the idea that like they sort of have stabilized costs in just the blade, but they make a little more money on the handle and they make a little more money on... They make a little more money on the higher end, like the four blades, the five blades type, you know, configurations because they charge so much more. So there's an article on Quora that sort of estimates the LTV of a customer, but that, you know, basically... And also they were acquired by a much larger company recently. Unilever actually purchased them for about a billion dollars. But the idea here is that it's not just what you sold one product at. It's not the price that you sold a single product at. It's the dollar cost average of how you've sold all the products at the various prices across the lifetime of the product and the brand. And it's not going to take a whole lot for Dollar Shave Club to come up with another offering that's at another price point that will attract either new customers or get old customers to spend a little more. And you can see that, too, in your example. So anyway, that's I have no idea where I'm going with all that. It's very interesting though.

Brian: [00:31:59] It is interesting, no doubt.

Phillip: [00:32:01] I do want to hit before we run out of time because we're right at time.

Brian: [00:32:05] Oh shoot. Because this is like the most exciting story of the day, at least to me.

Phillip: [00:32:08] Yeah. Me too. OK. So I'll just talk about it real quick. So Nike is actually doing some really innovative things. They're certainly not the first to incorporate this type of product. But Nike's released a new foam based sole. Shut up, Alexa. Alexa, stop. Yes, we know we're over time.

Brian: [00:32:29] Do you see how it treats Alexa? {laughter} Everyone does that.

Phillip: [00:32:31] Exactly. When the at the robots takeover, I'm going to be one of the first to go.

Brian: [00:32:38] Yeah definitely.

Phillip: [00:32:38] I need to start driving a Nissan Cube, so that I'm safe. They'll see me as one of them. And that's how I'll hide. I'll prolong myself a little bit longer in the robot apocalypse. Anyway, Nike. Speaking of robots, they're using freaking robots to make their shoes. So they've actually created a new React Foam running shoe. And what's interesting about the React Foam is effectively, and what makes it different from every other foam soled shoe is that, they basically aren't taking just a sample size of a shoe design. Most shoe companies take like a particular size and then scale it up or down. And there's diminishing amounts of performance based on the sample size and how far you scale it in each direction. For instance, if you take a size 10 shoe, that might be the optimal shoe. And it's designed optimally for that shoe in the way it's engineered. Once you scale it up to a 13 or down to a seven, it's lost a little bit of its performance because you can't really manufacture the shoes specifically for that size. Well, Nike says, "Hold my beer. We're gonna do that." And they have decided that they are creating a perfectly designed shoe, an algorithmically designed shoe, that is geometrically and algorithmically proportioned, scaled up or down, in the way that the foam is constructed. So that it has the exact same performance at every size. And no two shoes have the exact same soul texture design. So every size of the shoe is engineered for optimal performance for that particular size of the shoe. And I think that that is amazing. That blows my mind.

Brian: [00:34:18] Yeah.

Phillip: [00:34:18] I might just be drinking the marketing Kool-Aid here, but I feel like this is getting us much closer to what we're talking about, personalized products, which is a type of product that is perfectly suited just for you. It's your hammer, Brian.

Brian: [00:34:32] This is my hammer, man. That's what I'm talking about.

Phillip: [00:34:37] And this isn't even the first example of foam technology in a Nike shoe. This is their first running shoe of the kind.

Brian: [00:34:46] Yeah. Foam's been around for a while. I mean, Adidas had the Boost shoes.

Phillip: [00:34:51] I have the... New Balance, has a fresh foam, and I have the shoes. I have a foam sole shoe.

Brian: [00:34:58] But this is so cool. Like this is different than that. Like, this is not just using foam. This is using foam and actually addressing specific sizes the way it should be addressed. And yeah, you're right. I totally think you're right. That's why I'm so excited about this story. This is the next move towards personal products.

Phillip: [00:35:14] Yeah, exactly. And it's what's really cool is that Nike has a professional running shoe for Ultra or for the elite runners that they call the four percent. I don't know if you've seen that. I feel like Shalane Flanagan. The Vaper Fly, the Nike Zoom Vaper Fly, actually, anybody can buy this shoe. It's a marathon shoe. And Shalane Flanagan, who won the New York Marathon back in October, she was wearing the Vaper Flys. And it's supposed to have like a 4% energy return or 4% improvement to some sort of energy expenditure. This is boasting... The React Foam supposedly is boasting a 13% greater energy return because of the bounce of the foam soul. So I don't know if those two technologies are closely aligned and that number represents like an actual 9% delta, like it's 9% more effective at energy return. But that's how I'm reading it anyway. This is really freaking cool.

Brian: [00:36:29] Yeah. Four to 13 is huge.

Phillip: [00:36:31] We'll see. We'll see. Very, very cool. And I actually kind of want to try one of these. This show makes me want to spend way too much money. That's what happens.

Brian: [00:36:42] I know, man. We see all the cool stuff. You're gonna buy these, actually. I'm almost sure of it. Because you've got some pretty amazing runs planned. I mean, you've got some really intense runs.

Phillip: [00:36:54] We should do some meetups in the Future Commerce space where we do some fun stuff like that.

Brian: [00:37:00] Shh. Don't give away our secrets yet. Yeah that's gonna happen.

Phillip: [00:37:05] We went with Future Commerce sponser Vertex. We went out with some of their folks. We took them hiking, and we've done some really cool stuff, one on one, with the people that were friendly with on the show. But we got to do a broader community get together. So that's something we're gonna have to do. Maybe we do that around Shoptalk. Then we kind of cool.

Brian: [00:37:25] I think so. I think that's a great time to do that.

Phillip: [00:37:27] It sounds like we're teasing something.

Brian: [00:37:29] All right. All right, listeners. Get ready. You better be at Shoptalk or you're gonna miss the first one. {laughter}.

Phillip: [00:37:34] That would be really, really cool. Anyway, I'm out of time. I got to get to Olive Garden.

Brian: [00:37:38] You are.

Phillip: [00:37:39] I don't know about you. {laughter}

Brian: [00:37:43] Eat some salad for me, ok?

Phillip: [00:37:43] Salad and breadsticks. They still do it. Can you believe that? All these years later. This is where the outro music should start rolling.

Brian: [00:37:49] Yeah.

Phillip: [00:37:50] Anyway.

Brian: [00:37:51] Like maybe like five minutes ago, actually. {laughter}

Phillip: [00:37:53] Thank you for listening to Future Commerce. We want you to stay in touch with us and never miss an episode. Make sure you subscribe on iTunes or Apple podcasts, Google Play, Stitcher, and on Tunein radio or anywhere you get podcasts, and make sure you hit FutureCommerce.fm. Give us your feedback about today's show and subscribe to FC Insiders where you're gonna get a weekly dose of all things retail, technology, voice first, Bitcoin, crypto currency news, rumors, reviews, all that stuff.

Brian: [00:38:22] Exclusive content.

Phillip: [00:38:23] Everything that you're never going to get from this show, you'll get over there, including life, love and infinite amounts of happiness. Ok, that's it. Brian...

Brian: [00:38:33] Retail tech moves fast...

Phillip: [00:38:35] And Future Commerce is moving faster. Take care.

Brian: [00:38:38] Bye.

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