Manufactured Scarcity: Secondhand Commerce

Phillip: [00:01:07] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:01:13] I'm Brian.

Phillip: [00:01:14] And wow, we're back on the saddle like officially. We're doing the show as if we actually still do podcasts.

Brian: [00:01:25] Exactly.

Phillip: [00:01:26] We have extreme consistency and frequency. I'm proud of us.

Brian: [00:01:29] Back at it.

Phillip: [00:01:31] One day at a time, Brian. One day at a time. Because retail waits for nobody. We've got a lot of interesting and sort of like really topical news, actually. It's always this lull heading into summer where, you know, like a lot of really interesting conversation before we actually start talking about holidays. Real quick, as we record this Google I/O is happening.

Brian: [00:01:57] True. True.

Phillip: [00:01:57] Like literally right now. The only announcement that's happened right now is that they're updating emojis, so nobody cares. And then also at this exact moment, Shopify Unite is happening. So it's also we're in the thick of, you know, user conference season, as well. So lots of interesting things talk about for probably from a digital commerce perspective in the next episode or two. But that's happening right now. So expect some thing to be talked about a bunch of these. I think [00:02:31] WWE [00:02:31] is probably coming up in the next month or so anyway, too. Lots of stuff happening.

Brian: [00:02:36] Interesting. Interesting things going on.

Phillip: [00:02:37] And what are you doing, Brian? What are you up to these days?

Brian: [00:02:42] Well, I think by the time this airs, I'll be back from vacation. So I had a great time, I'm sure.

Phillip: [00:02:48] You've been on vacation for four weeks now.

Brian: [00:02:50] That's right.

Phillip: [00:02:50] That's great. And also, as always, your thoughts and opinions do not reflect those of your employer.

Brian: [00:02:56] Correct. {laughter}

Phillip: [00:02:58] Do you confirm this statement to be true?

Brian: [00:03:00] I do. I do. {laughter} Well, it looks like Google's getting some serious body data stuff right now.

Phillip: [00:03:10] Is it really?

Brian: [00:03:11] Cardiovascular...

Phillip: [00:03:11] Oh, is it really? No way. Seriously? For real? That's a thing?

Brian: [00:03:20] I don't know. Maybe. {laughter}

Phillip: [00:03:20] We're going do like intermittent like, "Oh, my gosh, Google I/O," probably during this whole show, because that's pretty much... Oh they actually dropped the word "Google Glass." I didn't expect that. Things you didn't think would happen in 2018. All right. I can't wait to hear what actually happens. Anyway. OK. So let's actually talk about some of the things we were talking about. Speaking of you working for Amazon and they get to share you with us from time to time... Sharing economy...

Brian: [00:03:48] Sharing economy.

Phillip: [00:03:50] Sharing economy. I participate in the sharing economy. I don't know about you.

Brian: [00:03:55] Of course.

Phillip: [00:03:55] The great article or great podcast producer at Retail Dive... Actually, I have just started listening to this show very recently. Google Play just did this really interesting update. Or Google did an update where you can play podcasts in the web browser, like as a search result. That's neither here nor there, but that's actually when I searched for Retail Dive the other day... That's how I found it.

Brian: [00:04:26] Google I/O. Google I/O.

Phillip: [00:04:27] Yeah, we're not going to say the G word at all during this whole show. Retail Dive is... Actually that's how I found this particular story, this actual podcast. But there's a 30 minute interview as part of the 30 minute series on the Retail Dive podcast with Jennifer Hyman, who is the CEO and co-founder of Rent the Runway. And I was really impressed at these sort of like very topical discussion of how she sees where they fit into this sharing economy. And there's a really great pull quote, actually. You haven't listened to this right?

Brian: [00:05:07] No, I haven't listened to this, yet.

Phillip: [00:05:08] OK. All right. So this was a great quote. It's actually in the blog that accompanies this podcast, as well. But anyway, it says, "The retail economy in 2018 runs the majority of our lives. If you think about how we interact now with transportation, travel, entertainment, music and now clothing, we're so used to having an option to rent or an option to subscribe as a customer that we make the choice that's best for us." And she goes on to some other stuff, too. It was really interesting because I started thinking very deeply about that, and it's really true. You know, everything from like bikes in downtown now...

Brian: [00:05:43] Bikes everywhere...

Phillip: [00:05:45] Well, bike sharing has kind of been a thing for a long time. Actually we could get into that, but everything from bikes to now cars to I mean, there's Zipcar. There're lots of services for car sharing. There's ride sharing, which is, you know, all the services like Uber and Lyft, but that exists on every level for pretty much everything...many of the things we interact with on a daily basis, so I kind of wanted to talk about that a little bit.

Brian: [00:06:14] Yeah. I think even home sharing is starting to become a thing in San Fransisco, right? I think that's starting to move even in that direction. You'd think that would be sort of the last bastion of things that you don't share. We're sharing clothes, we're sharing cars, we're sharing just about everything that's not consumable. Right?

Phillip: [00:06:38] Well, right, for sure. Actually it came up recently. I saw it over on the... Where was it? You ever follow The Points Guy?

Brian: [00:06:58] Oh, yeah.

Phillip: [00:06:59] Yeah. Great blog. If you're really into travel at all. So actually I do a lot of travel, specifically with JetBlue. And I got a notification... There was this great blog over on The Points Guy that JetBlue and JetSuiteX now have a code share partnership, which is really interesting to me because there is a whole... JetSuite is one of those sort of like NetJets type of companies where it's a fleet of private jets that are used for short haul or for semi private flying experiences. What's really interesting is that JetBlue is now doing code share with them, meaning you can book some JetSuiteX flights through JetBlue and fly any one of their Embraer 135s. And so they are regional jets. It's basically like business class type service. And that whole experience is now available to a whole separate set of people. And it's very similar to another service that did this recently to on a subscription basis where you could basically buy... Jet Blue is basically just buying extra capacity and selling it through to their customers. Like the top tier customers...

Brian: [00:08:29] Right.

Phillip: [00:08:29] ...on this otherwise luxury service that's available only to a select few people who use it on a daily basis. And this is part of the sharing economy in that that would be unsold inventory that otherwise would go unused is now open to a larger group of people. And I think that that's fascinating.

Brian: [00:08:50] Totally. I know planes make a ton of sense. Private jets.

Phillip: [00:08:53] Sure.

Brian: [00:08:54] And, you know, I think there are actually a couple services out there that actually do this on a broader basis even. I forgot the name. It's like Elite or something or other. Yeah. Now, the sharing economy... It's interesting. It has invaded every part of our lives.

Phillip: [00:09:14] Yeah.

Brian: [00:09:14] I think there's been a lot of talk about this, but yeah, it's going to continue advance. And the secondary market, as well. I mean, I kind of consider that the sharing market, as well.

Phillip: [00:09:32] Yeah, we've talked about that on the show. I do, too. We talked about that a lot in the last episode. You should definitely check that out. But yeah, you're right. Especially in luxury goods or aspirational luxury, like things that people really find very desirable. And they're from a lot of brands that aren't just Gucci and Prada. There's a brand that I wasn't aware of until recently when I started becoming a baby hypebeast... {laughter} A brand called Supreme. Are you familiar with them?

Brian: [00:10:10] I've heard the name.

Phillip: [00:10:12] So you'll definitely recognize the logo. If you were to see it. It's interesting because they do a lot of collabs with a lot of sneaker brands, but they also do a lot of like outdoor lifestyle and like sort of active lifestyle, things like Red Bull or Fox Motocross, that sort of thing. But, you know, it's just interesting that there are these brands that have sort of manufactured scarcity and very expensive for like canvas and leather or very expensive products. But what they've done is they have a very, very large following in a secondary market. And these products take on a sort of a life of their own and amplify the brand in secondary market more than the brand could do on its own in direct to consumer.

Brian: [00:11:05] Yeah, I wonder if there will be more companies that build out their own secondary markets brands. That build out their own secondary market...

Phillip: [00:11:14] That's fascinating. Yeah, yeah, that's fascinating. So how would you see that actually like... If it were done well... Who would do that?

Brian: [00:11:19] Think about this... People trade in their cars, right? At dealerships. Why couldn't you trade in your clothes and then that company could resell. I think they don't want to undermine their own... Probably that's going to be the biggest fear is that they're undermining their own brand and their own like top end sales, but people are using the secondary market anyway. So why not make that, you know, your own channel?

Phillip: [00:11:43] What's really interesting... So cars is this really fascinating example there. I love that you use that example because they do things like rev body styles and specs from year to year. Definitely, you know, as style progresses and the market changes, you notice change in shift of a particular brand.

Brian: [00:12:08] It's actually slower than, say, fashion.

Phillip: [00:12:11] Oh, for sure. Oh, it's way slower.

Brian: [00:12:13] Yeah. But it is significant. So...

Phillip: [00:12:15] Yeah, yeah.

Brian: [00:12:16] But I think it's a comparison there.

Phillip: [00:12:18] Now that comparison is fantastic because you could make the argument that the consumer that would buy a used car is not your new car consumer. Like you are selling to a fundamentally different person.

Brian: [00:12:29] Right. Exactly.

Phillip: [00:12:30] And I think that the same would hold true to anybody buying on the secondary market.

Brian: [00:12:33] At least for certain types of brands. That's not true for... Like someone that's going to wear, like, I don't know, Old Navy. There's not really a secondary market for Old Navy to go after. Right?

Phillip: [00:12:51] Show title.

Brian: [00:12:52] Right? {laughter}

Phillip: [00:12:53] There's not really a secondary market for the Old Navy USA flag tee. The six dollar T-shirt from Old Navy.

Brian: [00:13:04] Right. Exactly.

Phillip: [00:13:04] Although I do miss my like orange Old Navy performance fleece from like 1996. I kind of miss that a little bit. But I hear what you're saying. It would have to be a certain level of {laughter} durability.

Brian: [00:13:18] Hey don't knock the durability of Old Navy. {laughter}

Phillip: [00:13:24] There's the show title. Yeah.

Brian: [00:13:29] Where do we even go from there?

Phillip: [00:13:32] Well we are talking about cars, which I think hits on sharing economy as well, as well. Well it's not really sharing so much as... I find it really interesting how even car brands are... They've always pushed the envelope in technology, but Volvo in particular... I have a Volvo. I'm a fan of Volvo at the moment. But Volvo, they stay in the news. All of Uber's self-driving fleet or Volvos. They've made a commitment to, I think by 2022, for their entire fleet to be all electric. They're pushing that technology barrier. What I'm really fascinated with right now is that they just announced a subscription model. And I was hesitant to actually call it a subscription. I wanted to call it a glorified lease. But what's really impressive about this... So their subscription model, they're calling it Care by Volvo, I think it is. You have an app. If you are already a Volvo owner, you probably already use their app. And the app controls lots of things like remote start and, you know, travel log and stuff like that. There's an app that comes with your car. You can subscribe to Care by Volvo in the app. Right now they're only offering it on one of their cars, which is to their base model crossover SUV, the XC40. Here's what makes this mind blowing. So it's like a lease in that there is a fixed term, so there's a 12 month or 24 month term, and there's a mileage cap with overage. So in that way it is like a lease. However... It comes... First of all, there's no down payment, and there's no price negotiation. It's a fixed price no matter what. You either qualify, you don't, and the price is the price. So that's part of the subscription. There is already coverage for excess wear and tear. So you don't kind of get dinged for all the things you would get if you didn't change your tires, and you had a three year lease or something like that. However, this is what blows my mind. It comes with insurance. So where you would normally buy an insurance policy for yourself, you know, you have an insurance policy that you would take out for your car for you and other drivers in your household. This comes with like a Liberty Mutual insurance policy.

Brian: [00:16:08] That's a car in a box.

Phillip: [00:16:10] It's a car. It's everything you need to drive. It's literally everything. It's a car in a box. And you can subscribe from a freaking app.

Brian: [00:16:19] What's interesting about this is this is the pricing strategy, right?.

Phillip: [00:16:21] It is the pricing. Absolutely. For sure.

Brian: [00:16:25] Which I love. This is so innovative

Phillip: [00:16:26] Last thing, by the way, you can flip the car out every 12 months. That's that's the last thing.

Brian: [00:16:32] That's amazing.

Phillip: [00:16:34] So if you want, there're two levels. You can go with the Premium. And it starts at 600 a month, goes up to 700 a month. If you go to the Premium model, which is like there R design model, it's like, you know, basically like the more premium version of the car, then you can swap that car out every twelve months. So it's kind of like the new iPhone lease only with a car. And I really feel like this is fascinating to me.

Brian: [00:16:58] At a much higher price point. {laughter}

Phillip: [00:17:00] At a much higher price point. {laughter} That's probably true. But you know, if you think about it like someone out there who already does a lease of some kind probably is doing the math in their heads, like maybe this might actually get me out ahead with insurance.

Brian: [00:17:14] Yeah, and let alone get out ahead, you don't have to spend so much time thinking about and dealing with your car.

Phillip: [00:17:24] Oh, my gosh.

Brian: [00:17:25] Even when you buy a new car, there's still a lot that you have to do. You know, you have to get it insured. You have to take care of all kinds of things. I guess it's not that different. But it's awesome because if you are at a certain income level, and you don't want to think about your car, you just want to drive... It's kind of a no brainer.

Phillip: [00:17:46] And listen, I realize that not everybody's in. This is obviously, like we're talking about luxury goods and luxury products...

Brian: [00:17:54] Well hold on. Hold on. We are talking about luxury goods as an initial point of...

Phillip: [00:18:00] Sure. As a kickoff.

Brian: [00:18:02] Right. What if we did this with the Camry? Right. What if we did this with a Corolla?

Phillip: [00:18:07] And I believe that others will follow suit. This is the first of many, and I'm sure Volvo wasn't even really the first. I'm sure somebody is going to say, well, actually somebody did this thing...

Brian: [00:18:16] You just sounded like Jim Gaffigan right there. {laughter}

Phillip: [00:18:21] But I do think Volvo is going to be... They've found the right car for it, because I think this is a car that would fare very well from a price point perspective in, you know, selling it after the lease or selling it after you turn it in. They've got to turn that car around a second time once it comes in off of the subscription. Right? So there's got to be a market for people to buy this particular car that's a year old and been used lightly. So I think they've thought through all of that. And I think that's an interesting point. I would love to see brands.... I am trying to think off the top of my head who this will work for. I mean, there is a lot of... The Apples of the world sell refurbs already. So they're already in this market.

Brian: [00:19:14] Well, what about let's go back to luxury goods again? Why couldn't you do this with clothes? You have it, you stain it, you tear it, you do whatever with it... Like there's kind of a guaranteed policy, obviously it would have to have limits, but like, basically, you're good to go on clothes. You just go. You don't ever worry about sizing or the changes or problems or you know, you just wear what you want to wear, and you wear nice clothes all the time.

Phillip: [00:19:48] Right. Yeah. Somebody invent that service because I would be your customer. I would absolutely do that, for sure.

Brian: [00:19:54] Exactly. Exactly.

Phillip: [00:19:56] Clothing in a box. We'll call it Stitch Fix. Wait. No. That is not the model at all. OK, speaking of model... Now I'm just plowing through the whole...

Brian: [00:20:11] Hold on. Let's go back to...

Phillip: [00:20:12] You always kill my great segues. You kill them.

Brian: [00:20:13] I do.

Phillip: [00:20:15] And then they die.

Brian: [00:20:17] Usually I come up with awesome ideas while you're talking. That's because I'm not really paying attention to you. I'm thinking about those. {laughter}.

Phillip: [00:20:24] {laughter} You're not my only co-host to say that.

Brian: [00:20:30] So back to the secondary market for one second. I was just thinking about fashion and then like how... It is an interesting situation because with fashion things change so quickly that having a model like this actually might not work, especially with like fast fashion. Again, I guess I was thinking about sort of that mid-market range with would this actually work or not? But that I was thinking about it, and honestly we've had a big trend towards durable long term. Millennials like things that last. And so there's that. Back, you know, even in the late 2000s, I don't think this model would have worked. But now that millennials have money, and they want to have things that... There's certain fashions that just stay in style no matter what and certain clothes that just keep on keeping on that actually it could work. It could work because we've changed our fundamental cultural understanding of what clothing is. And I think people can also dress in a more diverse way than we used to be able to dress, like we're not quite as trendy as we used to be. There are trends, but there are more of them and you can sort of be who you want to be. And so I think there's more opportunity for clothes to last now than they used to just simply because of that diversity of thought and diversity of style.

Phillip: [00:22:27] But I believe that that's just true of luxury goods in general, is that there's a reason why they're luxury goods. They're usually made to a higher level of quality and durability because of the types of fabrics or the leathers that are used. The stitching that's used. It's not that they're like purposely choosing to do things in an expensive way. They do things the way that are the most durable.

Brian: [00:22:58] The market wants them like this. One hundred percent. That's true.

Phillip: [00:22:59] The market wants it, and by default. And so by virtue of it being an expensive product. It is a luxury good that is highly desirable. And they do become status symbols. Right?

Brian: [00:23:14] Yeah, yeah. Now, here's another thing that could kill this idea. So sizing. We've talked about body data a ton on this podcast, and now Bonobos just announced that they've got an even deeper range of sizes.

Phillip: [00:23:30] Oh yeah, I saw this. Yeah.

Brian: [00:23:31] Yeah, yeah. Reporting one hundred seventy two men of different sizes and different ways of wanting fits and things like that.

Phillip: [00:23:43] A diverse both... Not just racial diversity, but in body shapes. Right?

Brian: [00:23:47] Exactly. And so what may allow the fashion companies to sort of keep the secondary market at bay is getting more specific with sizing. And then we as a culture sort of shifting our view of what makes clothes good. They have fit perfectly. Right?

Phillip: [00:24:07] Sure.

Brian: [00:24:08] So the secondary very market will take a bit of a hit here because it's going to be harder to find the exact right size for your body unless something is custom made or you find the exact right size. Right? So then all of a sudden the secondary market starts to shift because you're going to need to keep the same clothes that you bought to begin with if you want them to fit you the way that they should.

Phillip: [00:24:34] Yeah. What's crazy about this is it's funny. It's just a natural market pressure, I think. Instead of somebody having to think through all these things like just the desire for products that are generally one size fits all are the ones that have created natural after markets, right? So, again, with the exception of sneakers, which we've talked about ad nauseum now in the last three episodes... With the exception of that, watches and handbags and now scarves and a few other select items... Those are the kinds of things that have a lot of resale potential. And they are generally one size fits all items. So Yeah. It's an astute observation. Can we actually pivot over to this other story? Because I'm actually... It's like right there. We're right on that.

Brian: [00:25:34] Do it. Do your amazing segue.

Phillip: [00:25:37] You can't set up a segue I already set up. That's not fair. No, I was going to say that Nike does, when we're talking about diversity of body size and ethnicity as well, Nike does this phenomenally well. Which is sad because Nike just had, as we speak, a new article that just hit was far more execs depart Nike. Nike's also appointed two women into executive leadership role amid a bunch of shakeup there in the company. However, if you shop Nike at all, you'll see that they use like actual real true plus size models for their plus size clothing. They actually are using people with like fairly normal bodies, not just like ripped athletes for every one of their product shots. A lot of, especially the women's products, show actually natural looking people and normal looking people wearing some of the Nike brand, which I find just really refreshing. And obviously, Nike's done this for a long time, but Nike has a very healthy diversity and ethnic diversity of its models. On model and off model shots as well, sort of like the lifestyle. Not just around sports, but we're now seeing it in running, as well. We're seeing it in training, cross training, you know, sort of the cross fit...their trail shoes. All these things are actually showing a lot of people from a lot of diverse ethnicities in those  lifestyle shots, too, which I find really, really awesome. So just to call them out there, I know that they're under fire in a lot of different ways right now, but they're the one that comes to mind when we're talking about Bonobos. They're someone who is getting that right. At least that might be the one thing they're getting right right now. So credit where credit's due for that.

Brian: [00:27:38] Yeah, I think Nike's got a pretty good history of... Well, I should say at least movement towards this. So I think that's a really good call out.

Phillip: [00:27:47] There are a lot of pundits out there who probably could say a lot smarter things about it. But as a consumer and as a fan of the brand, I have a particular affinity towards the Nike brand for a lot of different reasons. So I find that sort of interesting and refreshing engaging with it a lot. It's funny because I was just there and it's a funny story that I put out. So you and I went to the Nike lab. I think last year when we were at IRCE?

Brian: [00:30:00] Yeah, I think you went by yourself. I think I had an event.

Phillip: [00:30:03] No, you came with me. We talked about it. I'm pretty sure. I'm 100 percent sure someone was with me. Someone. I thought it was you. OK Anyway, I went for the second time this year. {laughter}

Brian: [00:30:16] You were in Chicago. Yeah. No, actually, why don't you talk about why you were in Chicago?

Phillip: [00:30:20] I was there for me to B2B Online. I was actually... I was getting there. Mr. Segue-Stealer. You know what it is. I just need to learn to be a little... I need to be quicker. I need to tell the stories quicker. That's my lesson learned.

Brian: [00:30:34] I don't let you. I don't let you. I stop you when you start just to make a segue too quickly.

Phillip: [00:30:39] I love this. This is awesome. Okay. Yeah, I was at B2B Online. I hosted a roundtable about voice commerce, and how it affects B2B, and how it can be used for B2B...everything from dashboards and analytics to actual like purchasing and procurement, order processing, supply chain... All those things can be controlled with voice interfaces. And we also talked quite a bit about, with a lot of really interesting brands who attended the roundtable, where sort of in the adoption curve consumer technology, or what they would say is consumer technology, becomes business technology. So the iPhone you know, the iPhone is a good example of how the iPhone displaced BlackBerry and Motorola and a bunch of other business devices that were traditional business, deployed business infrastructure, handsets, that sort of thing... And now you'll see an iPhone as a mobile point of sale in, you know, in the Nike store, like you see iPhones pretty much everywhere in business applications for a lot of reasons. And I surmise that we'll see Alexa and Echo and all those sorts of things in that same adoption curve for business. And so I was sort of preaching the good news of Alexa in that regard, which I found like really, really interesting as everybody has sort of the same take on it and that they're like all that will never happen. And I'm like, "Well, we've heard all this before," because your customers are also the people who work in your office, and they're going to say, "This is so much easier on my Echo at home," and you're going to hear a lot of that, as well. And plus...

Brian: [00:32:32] Yes.

Phillip: [00:32:32] We covered earlier this year, Amazon for business is a big, big, big thing. Or Alexa for business is a big thing. And it can't be overlooked. The sort of efficiency that you can get with, you know, two way video, audio conferences, you know, all of those things that will naturally come to bear with having those sorts of products in your business. Anyway. All that to say, it was a great session, and we all learned a lot and got to hear how other companies are using voice today. A lot of them think of voice as IVR, which is like, you know, telephone systems.

Brian: [00:33:09] Right. Right.

Phillip: [00:33:10] They've been doing this for decades now with telephone systems. And they're going to have to unlearn a lot of what they've learned through telephone systems.

Brian: [00:33:18] Correct.

Phillip: [00:33:19] And that's going to be a particular challenge to have to face, but very, very cool. And thanks to WB research for helping us have that panel. That was really great. But that's why I was there. And I thought that was great. Also, I was there. I don't know if you have anything to say about that because you are at the big A, do you?

Brian: [00:33:40] Yeah. I mean, I think what I will say about that is I think you're barking up the right tree in that... I use Chime, which is a service that you can sign up for as any business as a standalone product for businesses. Amazon Chime. It's like their meeting software, and Echo is even being integrated into that, too. So it's really exciting to see how Alexa is being integrated into every aspect of our lives, and I think business is definitely one of those things.

Phillip: [00:34:25] Yeah. And we all stand to benefit. Right? Like that's...

Brian: [00:34:29] And I really liked your point about... I think it's really astute to point about how business people used to use their iPhones at worked because it was more effective than using their business machines. And they really came to expect that level of being able to operate. And so as people get used to using Alexa at home, then they're going to expect the same things out of their office equipment, as well.

Phillip: [00:34:59] Yeah. And I find it interesting that we just came out of that not even 10 years ago. Like it's been 10 years of the iPhone or so, maybe eleven at this point. And we went through this already in the business adoption curve. And I think we're gonna go through it again with voice in a big way. We've also gone through it recently in sort of the, you know, the deployed IT infrastructure in like Cloud and on-premise server hosting. We've gone through this a number of times, and we're just have to keep... This is a truism of the way that technology adoption goes and it just goes.

Brian: [00:35:39] Yes.

Phillip: [00:35:40] It's not like we're gonna learn a lesson. This is how we learn the lesson.

Brian: [00:35:43] {laughter} We've learned the lesson before though.

Phillip: [00:35:48] I mean, that being said, like things do have to prove themselves out, especially at business scale in the billions.

Brian: [00:35:55] Yeah. Sure.

Phillip: [00:35:55] Anyway, while I was there, the conference was at the Marriott on Magnificent Mile, and right across the street is a Levi's like flagship store. So I popped in there with the expressed intent specifically to see if they had a Levi's Google connected jacket, which we talked about not so long ago.

Brian: [00:36:19] Yeah.

Phillip: [00:36:20] And so I actually got to try it on.

Brian: [00:36:22] How did it fit? Was it a Jean Jacket?

Phillip: [00:36:25] It is a jean jacket. Oh, yeah. I forgot.

Brian: [00:36:28] Your favorite.

Phillip: [00:36:28] Yeah. By the way, what's funny is that now Google and Facebook both believe that I have an insatiable desire for jean jackets. Like one jean jacket is not enough. You must have 30 jean jackets.

Brian: [00:36:41] That's going to get replaced pretty quickly with shoes.

Phillip: [00:36:44] Oh, gosh, it's already happened. Yeah, in a big way. Yeah. I get push notifications now from Google about sneakers, which is just terrifying. I really don't need anymore shoes at all.

Brian: [00:36:59] Stadium Goods? Villa?

Phillip: [00:37:01] Yeah. Stadium Goods. I get Villa. Now I get apps to like Kixify, StockX. What else do I get? I don't know. Lots.

Brian: [00:37:16] Are you going to collect shoes and start reselling them and all that?

Phillip: [00:37:20] Yeah. That's where I'm at. I'm already keeping boxes. I've never thought about keeping shoe boxes.

Brian: [00:37:25] You're keeping boxes? Wait you're not allowed to wear them. You know that right?

Phillip: [00:37:29] Yeah. No, I know. But you can. You can sell them worn. You just sell them for less. That's fine.

Brian: [00:37:33] Yeah. Right. Yeah. If you want to make money though.

Phillip: [00:37:37] Yeah. No. Yeah. I got you. Yeah. I'm not looking... I want to experience the product and then make room for more product to experience. Yeah.

Brian: [00:37:45] You have to fund your your habit though by becoming a reseller.

Phillip: [00:37:49] Yeah that's... I'm not... I said I'm a baby hype beast. I'm not all the way up to an adult hype beast, yet.

Brian: [00:37:54] Babies grow.

Phillip: [00:37:57] Let's talk about Google Jacquard. The Jacquard by Google.

Brian: [00:38:01] Yeah.

Phillip: [00:38:02] Levi's Commuter X, which was the jacket, that's the connected jacket. And I think we talked about this couple episodes ago.

Brian: [00:38:06] We did. Yeah, it was several episodes ago now, but yeah.

Phillip: [00:38:09] The wearables category. So. So a couple gestures for this jacket. There's actually not a whole lot to it. I wish there was more to say. One, I think it's kind of ugly. All right. So that's just my take on it. I do like sort of the function, though.

Brian: [00:38:30] You love jean jackets though.

Phillip: [00:38:30] I do. I have an insatiable desire for jean jackets. I wish it were more form fitting, but I totally understand that like a $350 jean jacket that has technology in it and Bluetooth compatibility, like Bluetooth connectivity, and it comes in multiple sizes and only one colorway... It's a hard thing to produce. So you kind of have to make it more mass market and having a fitted style probably wouldn't appeal to everybody. So it's a bit boxy for my taste. That's just sort of my take. I do like the color, but the fabric is a little stiffer and more of the sort of trucker canvas, heavy denim sort of a feel to it, which may wear in after a little while. But anyway, I don't know. Yeah. That's sort of my take on it. So the technology itself... They had a model on display. The ones you can try on, they didn't have like any charge to them or anything. So I couldn't actually, like, pair it with my phone and try it. But they had a demo model on hand. There's really only a couple gestures, so you can brush the cuff of your sleeve. I think it's like I mean, I did the left cuff because I'm right handed. I don't know if it works on both or not. You can basically... Anything you can do... This is sort of the disappointment of it. And I really hope that it's more of a direction for the future than it is sort of like, you know, where we're gonna be for a little while, but anything you can do with the headphone controls that you might have on a standard set of headphones... So like volume up or down, pause or play or double tap or something like that, you can pretty much do with the touch of the sleeve on this jacket, so you can sort of swipe, and you can tap, and that's just about it. And it uses Bluetooth... It's kind of a disappointment.

Brian: [00:40:28] So for someone who maybe chews on their sleeves, it's not going to work for them?

Phillip: [00:40:33] Yeah. You chew on your sleeve of your jacket, you're gonna be in for a rude awakening. This jacket is not for you. It's Bluetooth, low energy, so it's BLE. Basically, they say the battery life is like up to 10 days or something crazy. I figure if you really swipe a lot and tap a lot, you can probably get that down quite a bit. I can't see how it like... But what it does not have, which is sort of what I was hoping it would have, is it doesn't have like an integrated Bluetooth capability where like there's no headphone jack for me to plug into the jacket. There is no...

Brian: [00:41:19] Yeah. But people have kind of done that before.

Phillip: [00:41:21] I know, but I'm just saying, it's really just for hands free control of your phone while you're riding a bike. And it's more of a gimmick than anything. But I like that it was exciting enough that I wanted to go see it. And if it weren't a Google collaboration, I probably wouldn't have cared.

Brian: [00:41:41] Yeah.

Phillip: [00:41:42] The technology feels absolutely invisible in the jacket, though, for what it's worth.

Brian: [00:41:47] That's cool. Yeah, I think that's the problem with a lot of the smart wearables that we've seen before. It hasn't been super integrated. Like it hasn't been integrated very well. And so yeah, I think... There are still, I mean, there's a lot coming out right now. There's a ton of wearables coming out right now. I think a lot of it's connected back to body data more than anything else. Although just on May 1st, I think the Amazfit... Did you see this? Amazfit just launched their budget smart shoes, which they're like $32.

Phillip: [00:42:28] No.

Brian: [00:42:31] Yeah. Look this up real quick because this looks super cool.

Phillip: [00:42:38] Okay.

Brian: [00:42:38] Amazfit Antelope. Looks like they can do some tracking, some basic tracking.

Phillip: [00:42:45] So it's like Under Armour connected shoes type thing?

Brian: [00:42:48] Exactly. But at that price point $32.

Phillip: [00:42:52] That's a killer. That's ridiculous.

Brian: [00:42:54] That's insane. I think I might have to get some of the those.

Phillip: [00:42:58] That's interesting. One thing I want to...

Brian: [00:43:02] Go ahead.

Phillip: [00:43:02] No. It's not about the product. I kind of want to get away from like, you can go to a lot of podcasts and talk to a lot of people that are a lot smarter than us about consumer technology and fashion.

Brian: [00:43:15] Right.

Phillip: [00:43:16] For me, it's more about how Levi's as a retailer is utilizing technology to to appeal to a certain type of consumer and how that's going to change how Levi's does business. In fact, there's a couple of things that I noticed in the store, which is they have to have a separate display for this. Right? This is like it's own little thing. This is not the kind of product that you just shove on a rack. This is a flagship new direction for them. And they have to make a special display for it to show it off. That means we have to educate the consumer. There's like, you know, a touch screen kiosk that tells you the story of the Jacquard jacket and how Google... There is a consumer education component here, and I think from a retail perspective, that's really interesting.

Brian: [00:44:09] Well, it's important to do now, because I think a lot of consumers still aren't even close to ready for smart clothes.

Phillip: [00:44:18] Oh for sure.

Brian: [00:44:18] The educational aspect is huge. Rolling this stuff out in flagship stores and like sort of building momentum and hype... I doubt they're going to see an ROI on the jacket. But it's part of getting movement towards having sensors all over your body and all that.

Phillip: [00:44:43] For sure.

Brian: [00:44:44] Sensors and other technology. So, yeah...

Phillip: [00:44:44] You just cannot sell this product the same way that you sell the 501 jean. You just can't.

Brian: [00:44:49] No, of course not.

Phillip: [00:44:51] It's a different type of product. And I think that's pretty bold. And it's from a brand that I wouldn't have expected it to come from. And when we see brands like Levi's doing stuff like this, whether it lasts or sticks or is successful or not is, I think, irrelevant. It's that this is the kind of market condition right now. This is the economic climate where we're going to see things like this because you cannot do this at any other time than when you have historical low unemployment in the United States. We're at almost full employment in the United States. And we have a booming economy.

Brian: [00:45:29] Well you can if the usefulness is there.

Phillip: [00:45:32] Right. The utility has to be there. But that...

Brian: [00:45:34] Yeah, the utility has to be there. And it's definitely not. This is a luxury item.

Phillip: [00:45:38] A $350 jean jacket is not... Oh, God. I'm saying myself up to buy one now I'm sure. But that's not what anyone needs, right?

Brian: [00:45:46] Yeah. Especially like gestures on your sleeve. Like that's just not really compelling other than again, it's getting people ready. I mean this is like the Palm Pilot of clothes.

Phillip: [00:46:00] But I don't think in a world where people are buying $700 Yeezy's... I don't know... It is actually simplistic enough that this technology and the Bluetooth capability might endure. This could be a product that you keep for seven, eight, 10 years like you would any other denim jacket, it might still work in 7, 8, 10 years time. I have Bluetooth devices that work from 5, 8 years ago. It might be just simple enough that it could actually...

Brian: [00:46:34] And then it might not. It's like you never know.

Phillip: [00:46:39] Yeah, probably. I don't know. I don't know, actually. Right.

Brian: [00:46:41] Right. Yeah. Because like we might not be using Bluetooth and in five years possibly.

Phillip: [00:46:46] I don't know.

Brian: [00:46:48] Well I think we will. I tend to agree that we will. But I'm just saying technology has a way of surprising us. And so...

Phillip: [00:46:55] Right.

Brian: [00:46:55] Yeah. There's a lot of opportunity for things to change and that's... But I mean most people don't wear a jean jacket for five years. Like usually that jacket is done within a couple years.

Phillip: [00:47:13] Not with that attitude they don't. You have to really go in for the long haul on a jean jacket.

Brian: [00:47:21] I know you did.

Phillip: [00:47:22] Yeah. I love my jean jacket. I just wore it this week.

Brian: [00:47:25] It's one of your personal branding things.

Phillip: [00:47:31] It is now. Unfortunately. That is a sad thing. Yeah.

Brian: [00:47:37] Because you've talked about it so much on so many podcasts.

Phillip: [00:47:39] You know I need to do a keynote about that. I'm gonna have to craft a keynote about the jacket and the customer journey.

Brian: [00:47:45] Yeah. Yeah. And then tack on shoes to that, too.

Phillip: [00:47:51] {laughter}

Brian: [00:47:51] That's awesome.

Phillip: [00:47:52] This is unexpectedly really interesting conversation from us today. Anything else we want to cover?

Brian: [00:47:58] All that to say that there's no such thing as the retail apocalypse.

Phillip: [00:48:02] Oh yeah, that's for sure. That's I think you're 100 percent right. Even though Charming Charlie and like for Gap properties all closed up.

Brian: [00:48:13] Destination Maternity is going now..

Phillip: [00:48:16] Right.

Brian: [00:48:16] There's a lot of stuff still happening.

Phillip: [00:48:18] A lot of stuff.

Brian: [00:48:18] A lot of things still happening in terms of store closings. There's just I think we just we reached a point of like... Yeah we're seeing new retail. Pure play brands and retailers are moving in store and kind of taking over that space. So it's like we're done.

Phillip: [00:48:44] Like who, Brian? Give me an example..

Brian: [00:48:46] Like Indochino has been expanding their in store footprint, brick and mortar footprint, quite a bit in the past two and a half years, three years here. They launched the first one in 2015, and they've been expanding a bunch of them. In fact, there's one just not far from my office downtown in Seattle. So, you know, it's interesting. Where we see poorly run or irrelevant brands starting to fade away, new or more savvy brands are coming in and taking their place and putting themselves into positions that I think that those other brands weren't putting themselves into. Those other brands, a lot of them a lot of the brands that we're talking about that have failed where in malls or in strip malls. A lot of these new brands are finding interesting spaces in urban areas or finding standalone spaces out in rural areas. And, you know, I think the way that people shop, the way that people are finding clothes is just changing. So, yeah, no retail apocalypse just change.

Phillip: [00:49:55] What's interesting is somebody was talking about at B2B Online, that there's not a retail apocalypse. What's actually happening is it's like a supply chain apocalypse or something like that. The actual things that actually get products into big, big, big stores or stores that have retail footprints, they're lengthy, time consuming, expensive propositions that create a lot of pressure on a company that has to hold very large capital positions and inventory. There's all these things that are sort of knock on effects that cause retail apocalypse. But in actuality, it's that there're cheaper and more efficient ways of doing business in 2018. And customers have found that they can get all the things that they want without the expensive parts of what drives retail. And I'm not saying it very well, but it was an astute observation by someone else that I'm going to have to dig up and find and say it in a much better way.

Brian: [00:51:11] Definitely follow up on that. I mean, this is something we've talked about probably ad nauseum at this point. You know, it's not like we ever really thought there was a retail apocalypse before. But I think what you're talking about right now, you know, is a new angle on this that I haven't really heard too many people talk about it that way. And I think there's still a lot of color to add to this discussion. We should probably start calling it something else and stop referring to the retail apocalypse, because I think everyone knows that that's just not true anymore. I don't know of any retailers except the ones that maybe are going out of business that are like, "Yeah, there's a retail apocalypse."

Phillip: [00:51:55] Net-net, a lot of people... I mean, retail is booming. It's not that retail is dying. It's that the places where people shop have changed markedly in the last five years. Where people get their stuff has changed, and that's created an imbalance. So you have these very large shopping malls that are, you know, derelict and you have some tent pole stores that are going under and giving way to all manner of other real estate ventures. My local mall no longer has a Dillard's in it down here. There used to be a Dillard's men department store and a Dillard's proper. Those are both gone now. And the one, you know, store is a church which has taken over that part of the mall. And the other side of it is like...

Brian: [00:52:56] Wait there's a church in your mall?

Phillip: [00:52:58] There's a church in the mall now. Yeah. Yeah, I mean and actually who was it? I think was Sucharita Kodali who is talking about non-profit and religious organizations that are buying up brownfield properties. And how that creates really interesting property tax dynamics for local governments. That was an interesting conversation. I think you have to dig that one up, too. I think it was Sucharita who mentioned that. Anyway, very interesting stuff happening there. And like, you know, malls are not these... Depending on the mall, but, you know, malls are sort of like very hit and miss with the real estate nowadays. You know, some very strange stores tend to open up the Halloween store takes over the... It's like it's just crazy things that are happening in that space. Nobody needs to rehash it. But anyway.

Brian: [00:53:52] Yeah. Have you ever been in a dead mall before? Just walking around?

Phillip: [00:53:55] Oh, yeah, yeah, yeah.

Brian: [00:53:57] It's creepy.

Phillip: [00:53:58] Yeah. It's really creepy. They did a tour of one in like I want to say... Where was I? Like Pewaukee, Wisconsin. This is 10 years ago now. It was like a mall that died in the late 80s, and they gave tours of it. It is really interesting anyway. Gosh, I feel like I'm losing steam. What else do we have to talk about today?

Brian: [00:54:21] Man, I think we need to wrap. That was a good episode.

Phillip: [00:54:24] That feels really good. Well, thanks for listening. We want to hear your take on this stuff. Anything from wearables to Google I/O's new emojis to the sharing economy, model diversity. What do you think? Were you at B2B Online? We want to hear your voice. You can give your voice to this conversation over at FutureCommerce.fm  And please, while you're there, subscribe to FC insiders. It's your way of staying in touch with everything that's going on in the Future Commerce world. Find out where we're gonna be and what's coming up. Get the inside track on new guests, exclusive content. We've got some new stuff coming from Danny Sepulveda and a bunch of other contributors as we get into the summer. And also while you're there, leave us five star over an Apple podcast. And now we are available anywhere where you listen to podcasts, Google Play, Stitcher, Spotify now as well, or from any smart speaker device with the phrase "Alexa Play Future Commerce podcast" or, you know, whatever your smart speaker's name might be. OK. Thank you, Brian. You're awesome.

Brian: [00:55:28] Great. Yeah, with that man, Future Commerce is moving fast... I mean retail tech is moving fast...

Phillip: [00:55:33] But Future Commerce is moving faster. We'll have to find a new one. We screw it up every time. All right. Thanks for listening.

Brian: [00:55:40] Bye.