Late-Stage Capitalism

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

Phillip: [00:00:26] And I'm Phillip.

Brian: [00:00:28] And we have another great show ahead for you today. We're going to talk about some pretty fun topics... Stuff that we've been talking about for a while, but maybe we're gonna get a little more detail on some, which is cool.

Phillip: [00:00:43] Before we do, I do want to make sure that we shout out our sponsor. Thank you to Vertex for sponsoring this episode, and almost two years now we've had a partnership with Vertex. If you are looking for an enterprise or SMB tax solution, look no further than Vertex. Check them out online at vertexcloud.com. I think that's right. I should check that. That's a good thing to know before you go shouting out. That's correct. Vertex cloud dot com. And we don't want you to miss any episodes Future Commerce, so the best way to do that is to like and subscribe, and you can do that at Apple Podcasts, Spotify, Google Play or like pretty much anywhere podcasts are found. And if you could, turn on a new generation of podcast listeners. Get your get your mom and dad and your kids to listen to the show like our listener friend, Pat McClain, who he did that on his road trip this summer. He's a big fan of the show and he had his kids listening for seven hours in the car, and now they hate our guts.

Brian: [00:01:48] That's the opposite... Thanks. Thanks Pat for doing that.

Phillip: [00:01:53] Yeah. Thanks for listening. Yeah. Don't bludgeon your family with the show, but you share it. It's family friendly. This is good fun. And we are talking about generational themes today.

Brian: [00:02:02] Yeah yeah. Episodes are getting shorter. I don't know if you've all noticed that, but it's been making it a little easier for you to turn on an episode and listen to it all the way through. And your kids won't die.

Phillip: [00:02:14] We should incorporate some like Sesame Street style songs into our show where it's like, "We're going to teach you about retail, kids. You ready?"

Brian: [00:02:24] Every time we say a certain word we should have a sound effect play.

Phillip: [00:02:27] Like a jingle. Ok. So you wrote a blog, and it got the gears turning, and it's a forthcoming blog, as are all of our content pieces. Give me a little... Give us a little bit of a tidbit on what that's all about because I love the idea.

Brian: [00:02:47] Actually, this is an interesting one. About a month ago marked the second anniversary of my dad's passing which got me thinking about my dad. And I'm also thinking about retail all the time. And one of my favorite stories in the history of retail, really truly, is a relationship that my dad developed, or someone developed with my dad. He was a huge fan of...he loved to cook. And he loved to get quality ingredients, and he loved to buy wine. He was really into finding wines. He loved what's termed value wines in the industry. He loved finding good wine for a good deal that was interesting and went really well with this meal. And so he loved going to grocery stores and Costco and talking to the wine stewards in those places, and in particular he loved to go to Costco and talk with the wine stewards there and really developed an interesting relationship with the wine stewards at one Costco in particular. And what I loved about this was, there were two gentlemen at this Costco who really made time for my dad. And he was a chatterer. He loved to talk and they probably spent more time with him than they maybe should have allowed for, but I kind of love that. They made space and Costco allowed them to make space or whatever it was. And so this is the interesting thing. Not only did my dad really appreciate it...

Brian: [00:04:39] Because, I think he knew that they spent a lot more time with him and they liked talking with them. But I think as they made space for my dad they really got to love him as well, which was interesting. You don't see that in a retail setting all that often. And it got to the point where...

Phillip: [00:04:57] Yeah. I mean that's really what this is, right? They work in retail, some way or form, but they develop a personal relationship along the way.

Brian: [00:05:05] It's not like them just getting... effectively my dad really liking them and going to them just to buy from them... It's the other way around where retail, a front end retail associate actually considers his customer his friend. Which is what I think what clienteling is all about. And so they got to the point where they would be exchanging tasting notes via text message. And they would...

Phillip: [00:05:48] Wow, they were on a text basis. It got, it's getting serious now.

Brian: [00:05:54] Exactly. It was actually not just one wine steward from this Costco. It was actually two of them, or maybe even there was a third one, I don't even know. It got to the point where when my dad passed away they actually came to his funeral, which that's something.

Phillip: [00:06:11] This is the part that blew my mind when you told me this. I have a whole thing about this, but I'll save it until after you're done because that that's something else.

Brian: [00:06:19] I know this is clearly well beyond anything that Costco expects out of their employees. This is people caring about. This is real community. And you know I got to know these guys a little bit. I don't live near this Costco, so I don't get to go there very often. I do pop in occasionally, but for me, growing up going to Costco, seeing my dad interact with these guys and just being part of that whole process... Of course I'm a huge fan of Costco. There's so many reasons why I'm a fan of Costco, but this was you know icing on the cake. Beyond that. This was really personal, deeply meaningful to me that these guys came to his funeral and that they were his friends, like his real friends. So to me now I've got like an insane amount of fanboy-ism for Costco, which I'm sure has come out on this show.

Phillip: [00:07:19] Yeah. If you've listened to this show for any length of time... Yes Brian is a huge fan of Costco.

Brian: [00:07:25] Yeah, sustainable growth business practices and allowing employees to make space at this level is just great.

Phillip: [00:07:31] Yeah. Equitable employment for what could ostensibly be just cheap labor. They're hiring skilled people and they're paying them a living wage and they're giving them good benefits and they're being successful doing it. You want to applaud.

Brian: [00:07:47] Yeah, I definitely applaud Costco. I love Costco. I know people that work there. They love their jobs. It's an unbelievable company. And one that had a profound impact on my life. And now I shop there all the time. And maybe that's because I've got kids and I have to shop at Costco but I would be shopping at Costco... Well, I shopped at Costco even before I had kids, so it's what I think we're going to coin... and this is interesting because there's a lot of words out there around multigenerational... like "marketing to multigenerational" customers, and that really just means you need to address all your segments. Millennials, Gen Z, and baby boomers and blah blah blah...

Phillip: [00:08:40] How do you tell your story to 60 million Gen Z's. Yeah yeah I got it, right.

Brian: [00:08:46] This is multigenerational commerce. This is multigenerational clienteling. It is where you're building a brand that has such a profound impact that it is truly part of your customers' communities to the point where they're passing that along to their children. That is clienteling. That's peak clienteling.

Phillip: [00:09:12] Yeah. So OK. Let me... I always have to summarize so my brain understands. What you're saying is that you got a glimpse of something that you think probably exists in the world and that there are people who are doing this really well. Costco might be one of them, based on your own experience... that your father's interaction with people and the relationships that he formed, and how he got to that relationship was through a retail experience, but it was obviously much more than that. Right? And you are suggesting that there are probably other instances or examples in the world of great customer service transcending into something deeper that creates a generational relationship with a family. And when you wrote that blog and I read it, I said, "Oh my gosh I totally get this." I totally get this. Because I have that relationship in many ways. I am a fan of certain brands and therefore my kids are fans of certain brands, right? And not just because, I mean they're 7 and 8 and can't make their own choices yet, but because I think that there are some companies who excel at instilling some values, and making the right hires, and having the right people in the organization that represent that and do that really well.

Phillip: [00:10:47] And it's funny because we had talked about this to some degree. I think we touched on it back in January of this year, so if you're listening later on, January of 2019 I had recorded a podcast interview on another show that I'm on called Merchant to Merchant and we had a brand called Birdwell on there, which you might know them as like a board short brand Birdwell beach britches which is fun to say. And they had this really interesting discussion about how they've been around for so long like 60 70 years, and they've been in Venice Beach for so long that they've become sort of this generational outpost where you know dad brings in his son and grandpa who all buy clothes together, and they buy board shorts together, and they all surf together, and it's just this cultural fixture. So I thought that was a really interesting concept and we don't have dozens of examples of this.

Brian: [00:11:47] Well, we had one on our show, which was amazing. That was Michelle Cordeiro Grant from Lively, who talked about multigenerational shopping trips, which I think is amazing. She gets it. She's already building experiences that cater toward this. It's amazing.

Phillip: [00:12:11] Correct. Right. And it's funny because in that regard, you had mentioned on the last episode with Ingrid Milman, who by the way will be on our show much more frequently. Did you happen to mention that yet? Well we haven't really announced yet, but you'll be hearing a lot more from her. She'll be contributing a lot more to the show, and in a very short order, so keep a lookout for that. But something you guys had mentioned on that show was that brands are having to be more community oriented and create communities and foster communities. And what is the most natural community you have? It's your family. If you have a close family, and not everybody does, but if your family is close then you are naturally sharing your best experiences, and probably your worst experiences, in life with them first. And so it makes perfect sense that if you are having a great experience with a brand, like Lively, that you want your family members to take part in that experience, too, and if they're putting community at the center of their organization and how they're telling a retail story then it makes sense that those communities would be involved. AKS, like your family community, which I think is really interesting.

Brian: [00:13:33] I think also a big part of this is that personal relationship aspect, and if we hearken back to the days before Starcourt... The malls of the 60s, 70s, and 80s, or whatever, as they started to...

Phillip: [00:13:51] Starcourt. I get it. Yeah because I'm also watching Stranger Things right now. Yes. Got it. Yeah.

Brian: [00:14:01] You know we had shops in towns with owners who lived in those towns and were part of communities in those towns and you bought your things from that person who was... who yes, probably had employees in their shop that maybe weren't quite as long term although they were often long term. And you brought your kids along with you to those stores because you walked into town and you know those relationships lasted for multiple generations. My thinking is... employee retention in the retail space right now is something that is a huge problem. And if you can figure that problem out... Obviously it's a huge problem. If you can figure that problem out, you win because right now... And this comes along with the stigma of working in retail. I was just reading an article in The New York Times, which we'll link up with the show notes. And it was someone writing into the Times and said... It was basically a, "I like working in retail, but I'm ashamed to admit it." And this person had been in sort of a high powered job and found themselves, due to disruption in their industry, working a retail job and really liking it and really enjoying it, and thinking it was awesome, and they got promoted to something to the effect of some middle management position, and they were really excited about it, but they didn't want to tell anyone.

Brian: [00:15:38] Because to them they were ashamed to be working in retail. This is just sort of, a great anecdote to where we're at in retail right now. No one wants to admit they work in retail. No one wants to stay in retail when they're working it unless, even if they do like it... It's not something that they see as a long term play unless you work for Costco who has figured it out and does care about their employees and does invest in them and invest in their careers and build a path for them. But I just feel like this right now, to me, is investing in your own employees as much as you invest in your customers. It is a huge huge huge topic that we should be spending more time talking about.

Phillip: [00:16:27] If you are a marketer at heart and you've been doing this for a long time, you know that multigenerational marketing is a thing. And it's been around for a very long time. But we're not talking about how brands can appeal to many generations and speak in a voice that a generational purchaser will resonate with. That's not what we're talking about. We're talking about... And by the way, today you can do that just by speaking in certain channels. So yeah maybe many years ago... If you think about like multigenerational, historic family of brands... I'm talking like CPG really has this nailed, where you have the General Mills of the world, they're going to market healthy stuff to Mom. They're going to market fun stuff to kids, and they're going to market the quick fix and goes with your coffee on the way out the door to work to dad. And Metamucil probably to mom or to grandma, but that's not really what we're talking about. We're talking about retail experiences. And when we're thinking about retail, and not just digital commerce, we're talking about real, true, IRL, in-store, real life experiences that create relationships.

Phillip: [00:17:57] And I think that we have an opportunity to do that if we can revive... if some of the storied brands that come up a lot on the show, especially in fashion or clothing... I think about that with some big retailers, obviously like Neiman Marcus or Nordstrom or Macy's or those... They're trying very very hard to change their story. Macy's literally in that they have a story. They're trying very hard to change that. And I think to attract a different type of a customer, and if you can get Millennials and Gen Z excited to go to Macy's with mom, maybe that's part of this. I just, I'm trying to nail that we're not we're not talking about just the marketing message. It's actually about how we can foster relationships, which I think is a totally different thing and something that I think... Do you think... Let me ask you this. Do you think that maybe there is something special about your father?

Brian: [00:19:07] For sure.

Phillip: [00:19:07] Right. Right. He wanted those relationships and he valued those, but some people don't. Right? Like there's probably somebody out there listening saying I don't want that. And that's totally alright.

Brian: [00:19:17] And I think that's true, or at least in the way that my dad had it, for sure. I think that not everyone is going to have the same kind of relationship with their retail associate that's helping them find something that they want. But what I am talking about is community. And I think that if we looked at retail as actually a large part of our communities, thinking of how much time you spend out at retail locations in your community. It's a lot.  It's a lot of time. If we had digital play into that, think about what we could accomplish.

Brian: [00:20:03] People do text message with each other. They do. They use digital in their daily lives and in their communities and in their families. How do you build a strategy that uses technology to play into actual community building? That is, to me, that's the question. You mentioned digital not being a part of it. I think it absolutely is. It has to be because that's how people build community these days. So that I think is part of it. But ultimately it's about real connections. This is more than just Facebook. It's about the deep connections that build our lives up. I think that we've lost that. I think that people are craving that. This is why I think Nordstrom actually did really well. I think that they built some of these relationships with some of their retail associates as well, where people would go to the same person to make their purchases for 10 years, and they had a relationship with them and that person knew their likes and dislikes and greeted them as a friend as they came in. I think that Nordstrom has been a longtime case study in this, and maybe they drifted away from that at one point. I don't know.

Brian: [00:21:22] I don't know where they're at right now actually but yeah.

Phillip: [00:21:25] Well isn't the challenge there? Let's kind of go down a little bunny trail here. I think the challenge is when you're a luxury retailer, which I would categorize Nordstrom as in that category... When you're a luxury retailer, the concept of luxury is changing all the time, so they have a really interesting challenge there because one person's concept of luxury is a totally different concept to the next. I remember speaking with... Oh we have Charlie Cole from Tumi who will be on the show in a week or two, and that's... I'm really looking forward to that interview. But he had spoken at a conference in 2017 about the concept of luxury changing and it was like, "By 2020, luxury will mean something different." And because it used to be, "Nobody can get a Birkin bag," and now, I mean the real real, and now Poshmark and pretty much everything, like Facebook marketplace... You'll be able to find what you're looking for somewhere on the Internet nowadays.

Phillip: [00:22:33] It also used to be that you couldn't get a certain type of reservation. Well now Talk exists, which is also, by the way both mine and Brian's new favorite thing explore. Explore talk.com if you're looking for luxury type dining experiences. It's a great place that is not open table to get those reservations. There's a digital service that exists for everything now that sort of displaces that idea of what luxury used to be, which is basically just scarcity. Well you know, there is the idea of luxury now. Sneakers are a form of luxury in that they have some scarcity built into them, and they're unique, but that's not the kind of luxury that Grandma thinks of as luxury. So you have this moving target, I guess is what I'm trying to get back down to is that Nordstrom has a different struggle. But Nordstrom probably has some resources to invest to close that gap. Although the Nordstrom here in West Palm Beach closed. It's an interesting challenge that they have, but yes Digital Enablement is part of it, but I don't think it's a truly uniquely... It's not a marketing challenge.

Brian: [00:23:53] It's a conversational challenge. I think and an empowerment challenge. I think right now, we do not empower retail associates enough and this is starting to change. I mean it was like, a couple of months ago I saw a story about Half Price Books and how they enabled their associates to be able to curate their assortment, which is really cool, I think.

Brian: [00:24:24] Giving people more control, giving them more responsibility, not assuming that... Hiring good people and then giving them the freedom to be able to actually address their customers in the place that they're in. I think that's what Costco allowed their wine stewards to do. They maybe didn't have complete control of their assortment, although I do think that wine stewards at Costco have some freedom, but ultimately it was the freedom to be able to make space to talk to customers directly. And actually I think where I ultimately want to... I see this as it's actually pulling over B2B practices into BC. Because B2B has been nailing this for a long time. B2B relationships oftentimes last 20, 30, 40 years. Because the suppliers are building relationships, and they're dependent on each other. Those relationships are... and I know that there's not as much dependence on retail, but I think that giving your retail associates the ability to provide, maybe even provide discounts to loyal customers and give them the ability to be more open with with what's coming. And kind of give them insider track as they build those relationships. I think that happens a lot and B2B. It doesn't really happen in retail at all.

Phillip: [00:26:03] It's interesting that there was a story out recently and I it feels like it was more of a national story, but for some reason I really only found it over on Star Tribune, which I'm trying to figure out... I don't even know which market this particular paper serves and have to look into this. Minneapolis. Duh.

Phillip: [00:26:27] Interesting that they're reporting on... Target is basically changing a lot of things trying to attract longer term employees. And part of that is to bolster programs like emergency child care, paid family leave, having more full time workers, and having more beefed up benefits for them because that's just real life. If you want people who want to stay in a job for a long period of time that's going to be a little bit more challenging because they have complicated lives, and kids that need to be sent home from school, and we just have to be okay with that.

Brian: [00:27:09] And that it's actually treating your employees like they're part of your community. That you want to lift them up. You want to be there to support them. If you think you need to treat... If you're treating your employees this way, without those kinds of benefits, how do you think they're treating your customer? It creates a culture that spirals all the way down your customer.

Phillip: [00:27:36] Yeah. Yeah. And there's a lot of discussion in sort of the H.R. space about companies who are leading the way on a bunch of these. I think Target's just one of them. So yeah just trying to find more examples in the retail space of... Now I'm gonna tell you right now I don't think that your average Target employee is making, you know, ninety thousand U.S. dollars a year.

Brian: [00:28:07] Well neither is your average Costco employee.

Phillip: [00:28:09] Yeah your average Costco employee though is likely being paid a heck of a lot more than let's say, those that were at Toys R Us. Right? And hat is one of those struggles that we've seen, especially in retail closures that... And hey, maybe this is just the effect of this idea of late stage capitalism. Have you ever heard... Have you heard this? It's like a meme at this point.

Brian: [00:28:39] Yeah. Why don't you do a quick explainifier.

Phillip: [00:28:43] So, I love... Well I hate that this is a thing, but it's also like is totally a thing. So it's just this idea that late stage capitalism sort of just trends toward cruelty. And I think there's no better example of this then there is, I think there is this show that recently came out called the 24 hour million dollar challenge. Have you seen this?

Brian: [00:29:11] No, I haven't seen this.

Phillip: [00:29:14] So it's a real thing. It's it's crazy. It's on Netflix. It's called The Million Dollar Game, and contestants stay awake for 24 hours, and then they start the game show. And oh yeah. It's called Awake. Yeah. Sorry. So have you seen it?

Brian: [00:29:35] I haven't watched it. I'm like oh my gosh. Like what...

Phillip: [00:29:38] Don't give it any attention. Because this is like, it's just cruel. And by the way, the longer that... it's funny that over the years we're trending more and more towards, you know, Japanese style game shows, which are just you know inherently cruel and exist only for us to laugh at the contestants and how vain their attempts are to actually succeed in the tasks they're given. A good example of this... And it's the one that everybody mentions because it's the first episode of Awake. You're awake for 24 hours, and now you have to count, you know, four million quarters and you have to be exact perfect about it. And it's just the sad thing of...

Brian: [00:30:22] Isn't that basically like torture? Like sleep deprivation...

Phillip: [00:30:27] It is. But they're going to win something. Let's say it ostensibly they could win a million dollars that could change someone's life in some sort of meaningful way I'm sure. But that is an example of late stage capitalism. I think that the underpaid retail employee is just a good example of late stage capitalism. Of the type of thing that exists in the world that everybody is just kind of... That's what we're veering towards the longer that retail brands exist the more they have to provide benefit to shareholders, the more that they have to provide increasing quarter after quarter after quarter they have to have some sort of a plan to increase their earnings per share to increase.... There's an eventuality that leads to you know underpaid retail employees.

Brian: [00:31:27] See that's right. But it's bad business ultimately. It's not a sustainable  business. And that's what I think Costco has basically said, "We don't see that as sustainable, so we're not going to play that game."

Phillip: [00:31:40] Right. You're not going to play the game. And but being a public company. Right? We see a lot of IPOs right now... being a public company is inherently...it leads to some of the practices that we see that I would call late stage capitalism. The memes about what late stage capitalism are are kind of funny but they're so on the nose that it's kind of like "That's real life," A good example is what would Stranger Things Season 8 be like? And it's well OK. Well the kids are all grown up and now they're being denied health care for the cancer that they developed while they were exposed to... the upside down right? And that is that is late stage capitalism because... that's...

Phillip: [00:32:24] Anyway, I find it... maybe. My cynicism is showing... Maybe the brands that will continue to thrive and create multigenerational customer experiences and customer relationships I should say, not experiences but relationships, are the ones who remain privately held. And I'm not saying that the Walmarts of the world or are perfect, or the Costcos. These brands aren't perfect. These companies aren't perfect, but they're doing a better job of trying to prioritize the human side of employing real people and in so doing those people do the things that real humans do which is seek connection, relationship, and build community.

Brian: [00:33:22] I think that's a great way to end the show. We need to, as retailers, we need to be finding ways to, I think, give retail associates... Minimize tasks that are more menial by leveraging technology to provide them with opportunities to do things that engage their brains and engage their attention. And I'm not saying it's not work. Work is work. But provide them where with things that they can apply themselves into in creative ways that leverage the talents they have. And I think that there's a lot of opportunity for that. So invest in your employees that gets us the... Maybe that's the title of the show.

Phillip: [00:34:14] I love it. Thanks for listening. And we want you to lend your voice to the conversation. You could do that a futurecommerce.fm. You can always reach out to us directly, and we'd love to hear from you. And you can do that just e-mail us phillip@futurecommerce.fm or brian@futurecommerce.fm and maybe you have a story idea. Maybe you want to tell us your story. Maybe you will appear on the show. We'd love to have you. We will be at Commerce Next at the end of July. We want to see you. Reach out and let us know. We've got a ton of interviews coming out. We have some folks from some really interesting retail tech that's out there. Someone we met at IRCE named, Draper, this like virtual try on technology... Really really cool.

Brian: [00:34:59] Love that.

Phillip: [00:35:00] And a whole separate cool thing that I didn't even know exists. But it's one of those things you slap your head like, of course this exists in the world, but retail in-store compliance and the technologies and A.I. solutions and machine vision that they employ to make sure that retailers are upholding brand value standards and display standards. I think that's really cool, too, so we'll have some folks on the show coming up and some actual really great brands like Tumi, Samsonite, and some other really cool stuff coming up.

Phillip: [00:35:31] Great. That's it. Take it away Brian. What do we do?

Brian: [00:35:34] What do we do... Retail tech moves fast.

Phillip: [00:35:37] But Future Commerce is moving faster.

Brian: [00:35:39] All right.

Phillip: [00:35:39] Thanks for listening.