Real Estate as a Luxury Impulse Purchase

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

Brian: [00:00:04] And I'm Brian.‍

Phillip: [00:00:05] And we have the top stories of the week, all the news you can use... what's with...‍

Brian: [00:00:10] But let's not steal from other people.‍

Phillip: [00:00:14] That's how the cookie crumbles.‍

Phillip: [00:00:18] It's been great. So OK first story that caught my eye. We just get right into it nowadays we don't waste time. Everybody's been talking about. You know social shopping. It's like, a big big deal recently. Instagram piloted with twenty six brands turning on enabling commerce on their Instagram app. So we're seeing more of that now. In fact there was a story today on Digiday about Snapchat launching an app store for influencers. By the way, Snapchat is making a bit of a comeback. They're posting some quality earnings. They are selling advertising left and right. So it's we might be seeing Snapchat actually come into its own, but they haven't in-store app or an in app store for SNAP influencers to shop products. So that's kind of influencer commerce meets social commerce. Question mark?‍

Brian: [00:01:20] Yeah. So yeah. No I think this is kind of cool. I wonder if Snapchat is actually making a comeback or if they're just getting really good at like selling stuff to people. And when I think what I'm getting at here is that I don't know anyone that uses Snapchat anymore really. Like everybody uses Instagram. You know you can sell stuff to retailers to, you know and to and to content creators and and brands and make money that way. But unless there's the natural user base this doesn't get as exciting to me. Now I might just be out of the loop. Maybe SNAP is doing quite well in terms of engagement or maybe like SNAP has its own set of users that are just really engaged even if it's not growing its user platform or its user base. But I mean this is cool. I mean I'm glad to see SNAP doing better. I think that they still have something to offer. But yeah that's my view.‍

Phillip: [00:02:30] I mean let me give you a few. Let me give you a few numbers, k?‍

Brian: [00:02:34] All right.‍

Phillip: [00:02:35] Because remember, you know how Gary Vaynerchuk is always ranting about like quanting things and and you know going where eyeballs are and getting your getting the best ROI for dollars and for you know people on on a platform.‍

Brian: [00:02:51] Yeah yeah. He was talking about that when you interviewed him.

‍Phillip: [00:02:53] People count Snapchat out because they have the same sense of Snapchat as you. We were super hot on SNAP three years ago, you and I, because the glasses seemed like they were gonna make a transition to a hardware company. It was right as they were going public. It seemed like a really great thing that they had a couple of years in the toilet.‍

Phillip: [00:03:14] There was an article on The Verge in April that talked about how they are, they've grown their daily user base by 4 million people globally to 190 million daily active users, and that... and they've doubled their... they've doubled their stock price in the last four months.‍

Phillip: [00:03:34] So they're on the way up they've turned on, and they re-engineered some of the pain points around the way that the app was redesigned some time ago and they have...‍

Phillip: [00:03:46] According to The Verge 6 percent increase of people doing snaps daily within the first week of upgrading the app on Android. So I think it's an interesting... It might be a really interesting platform if you are trying to look for broad user engagement as a brand and maybe getting there while people still think SNAP is dead. Because that means that advertising costs for you and [00:04:12] CAC [00:04:13] would be super low.‍

Brian: [00:04:14] Exactly. That's a really good point. I love that point like, effectively buy, buy while you can cause... Yes. Yeah that's good. Yeah. So you're gonna get to buy a 190 million users worldwide. I wonder if there are a lot of... I wonder where the growth is at. Maybe it's not the US it's actually growing SNAP. Maybe it's it's other countries. I'd love to see that data. Interesting.‍

Phillip: [00:04:41] 90 percent engagement and 13 to 34 year olds, so... It's sort of that prime, you know prime consumer territory. High disposable income, high influencer. Yeah hi customer. Hi customer touch, customer engagement.‍

Brian: [00:05:01] That's that's a good spot. Lots a good spot. Great.‍

Phillip: [00:05:04] Great spot to be. We're not saying anything that's never been said before. I think it's interesting because if they're piloting commerce inside the app, they are doing it reactively because Pinterest, which I can't believe I'm even saying, Pinterest did it first back in March and then Instagram did it and made all the news. And you know Pinterest now has Jeremy King Right?‍

Brian: [00:05:28] Right. Yeah

‍Phillip: [00:05:29] So Pinterest interest has you know someone at the helm who understands how to create a marketplace and commerce experiences in its app. So Instagram already has all the launch partners. We know that they can do it. We're talking about three major players who are poised to flip on social commerce. I think it's here. I think social commerce is here and...‍

Phillip: [00:05:56] It makes me wonder.‍

Phillip: [00:05:59] It makes me wonder how far away we are. If by this time in 2020 we're talking about big players like Amazon having to find ways to compete through partnerships because they couldn't skate to the puck. They couldn't get here on their own because they are truly retail marketplace first for browse and buy rather than audience first and then flipping on shopping.‍

Brian: [00:06:23] I hear a bit of a prediction there.‍

Phillip: [00:06:25] I think actually. Yeah I think that Amazon's... Amazon is being surrounded on every side. I really see that between Wal-Mart and this, you know between Wal-Mart and Facebook. Oh, I was writing this great piece, which I don't know if it'll be out by the time the show lands, but I'm writing this piece right now that talks about Facebook marketplace. Are you familiar with Facebook marketplace?‍

Brian: [00:06:52] Yeah yeah yeah it's cool.‍

Phillip: [00:06:54] Yeah it's it's crazy watching what Facebook marketplace is doing right now for local business. So yeah, every bike shop in every auto dealer within 30 miles of me is putting all of their inventory on Facebook marketplace.

‍Phillip: [00:07:12] It's it's it's an incredible, well it's a marketplace. It's an incredible local shopping portal. And that is social commerce, too, right?‍

Brian: [00:07:24] It absolutely is. Yeah, no it's a social marketplace as opposed to like a shop, like a shopping driven one. It's like oh this is my local community. This is the... This is where I want to be. You can shop local in the Facebook marketplace.‍

Phillip: [00:07:40] Shop Local go global and shop local.‍

Phillip: [00:07:44] So social commerce you know, social commerce might be...‍

Phillip: [00:07:48] Which is not really in our themes for 2019 we talked a lot in the beginning of the year about clienteling. This might be a real differentiator. I'm really excited to see how this pans out.‍

Brian: [00:08:00] Well, and it kind of plays in to clienteling, to some degree, like... When you're interacting with your customers on Facebook, how much easier is it to treat them one to one?‍

Phillip: [00:08:09] It's true.‍

Brian: [00:08:10] I think that there's definitely a connection there.‍

Phillip: [00:08:15] You actually might be right. Yeah. Having that that that touch point especially digital touch point. Yeah that's great. You make a great point. There is an another story that was out on Chedder It was a sponsored post by Rocket Mortgage. So I'm absolutely in no way inclined to believe it's real. But the other story was folks using Instagram as a real estate purchasing decision making portal... So you have instagram influencing real estate sales. Sounds like a thing that could happen. Rocket Mortgage seems to think so, as well.‍

Brian: [00:08:51] This is so competitive. Like Zillow and Redfin even, like if they introduced it as... That would be insane.‍

Phillip: [00:08:57] Can you imagine Instagram, you know Instagram homes homes. Yeah Instagram Homes, powered by Rocket Mortgage. That could definitely upend another area of those marketplace, you know MLS type listing services. Super interesting there, as well.‍

Brian: [00:09:13] There was actually something we haven't talked about a lot on the show but but large purchases online... That's something I want to do. We should do a big show about that at some point.‍

Phillip: [00:09:21] You know we did talk for like half a second about luxury brands and luxury retail and being an impulse purchase point when we had Ingrid on the show last year. So Ingrid Milman, from Ann Inc.

‍Phillip: [00:09:35] She had talked about you know that search she called it "deliciously naughty" or "deliciously sinful" having this, you know buying something that you weren't planning on making like a huge luxury purchase but you can because it's online and you just decided to. And how how easy it is to do that nowadays when you can fractionalize those payments, too, and split it up into three equal payments. Those those things are are becoming more and more real. I wonder... And then you have we talked ad nauseum about Volvo cars doing a rental program right. Right. Real estate is an impulse purchase.‍

Brian: [00:10:11] Yes. Real Estate as an impulse purchase.‍

Brian: [00:10:11] That's nuts. That's nuts. People like buying and selling within like six months of purchasing their home... That would be crazy.‍

Phillip: [00:10:23] I mean how long until you have, you know, until you can flip a switch where you you pre qualify someone for a mortgage based on social markers? You know, based on, based on your social profile activity... Like how long before Instagram Facebook at et al become...‍

Brian: [00:10:43] We're going to are to like nosedive territory.‍

Phillip: [00:10:46] I know, I know, but how long how long before those, you know those those marketplaces or those social networks become a factor of credit worthiness?‍

Brian: [00:10:57] I think the only thing that I can say about that right now is that you can actually still manufacture quite a bit, like you can portray a very specific lifestyle or like, you can portray more on social that actually is, even if you're a verified user. My thinking is then, what they're going to find is people start to game that, and it's not at a place where. You can game it. And so people will. So there's gonna have to be ways to do more verification of of social standing before before something like that happens, I think.‍

Phillip: [00:11:40] Yeah. "Oh we lost the house." "Oh what happened?" "I don't know, turns out I'm friends with a bunch of losers online. Really really impacted me."‍

Brian: [00:11:52] My contingency was like only five days instead of two weeks because...‍

Phillip: [00:11:56] "We got a terribly rate..."‍

Brian: [00:12:00] Yeah.‍

Phillip: [00:12:02] "Oh really? Why is that?" "I don't know, I followed Trump on Twitter it's really embarrassing."‍

Brian: [00:12:07] Oh my gosh. Yeah.‍

Phillip: [00:12:10] The struggle is real.‍

Brian: [00:12:13] Yeah. You know what, you know what I saw...

‍Phillip: [00:12:14] What's the next story?‍

Brian: [00:12:15] Ok, here, Okay here's a story that I saw that was pretty interesting. Ikea is rolling out a new product. It's basically robot furniture. But but here's the thing. We need a coining of the phrase here, and I'm doing this on the fly which is bad, but effectively it's like space constrained commerce. It's been happening for a while. It's been happening for a while.‍

Phillip: [00:12:41] Product designed for, yeah, space constraint...‍

Brian: [00:12:43] Yeah. I mean there's even like actually a lot of furniture retailers have gotten smart and like you can shop by a small space. Right? I think there's a lot more going into this. This is like the pinnacle of that. Where, you know, you could like this, this piece of furniture gets put on tracks and those tracks you can like push the furniture around your room, it can spit a spit a bed out from the bottom and you can then like, like zip it back in. Or you can you know turn your your desk into a closet. It's like this whole, like you know, programmable furniture that I'm sure you can like create auto settings and it's like, Oh companies coming over... push a button and the whole room rearranges itself for company. Pretty cool. Pretty cool given, you know, the cost of real estate in urban spaces right now making those smaller spaces more livable. It's kind of goes in line also I've seen a lot of chatter...

‍Phillip: [00:13:46] Cost of real estate everywhere, actually, right?‍

Brian: [00:13:49] Everywhere. Yeah it's true. This kind of goes in line, and we've talked about this a little bit before, but there's been a lot more chatter about buying tiny homes on Amazon and module homes on Amazon. And like, there's these kits that are like $8,000. And you know there's a lot of stuff that's not included in them. So they're not quite as like turnkey as you might think but they actually are, like you usually have to get a builder to come in and kind of finish some stuff up for you if you want like, plumbing. But it's still, I think this is all in line, like with with a lot of the things we've been talking about about the real estate market and how it's affecting commerce and what can be bought and sold online now. So I think that it is an interesting marker. You know having a... Building products specific to, you know the rising costs of real estate and smaller spaces that were forced to live in.‍

Phillip: [00:14:52] I have to I have to believe if I were to take the other approach at this of how retail square footage is shrinking, as well, which by the way there is a whole other story that we didn't talk about, which is one of the largest real estate transactions that ever have taken place... is I think it was Blackstone. The the real estate deal recently did you see that?‍

Brian: [00:15:21] No I didn't see this. What's going on with Blackstone?‍

Phillip: [00:15:24] Yes there is a there is a story... I'm going gonna buy time because I wasn't ready to talk about it.‍

Phillip: [00:15:33] It was 18 billion.‍

Brian: [00:15:35] 18 billion?‍

Phillip: [00:15:37] Yeah. With a B...18 billion dollars in one of the largest real estate deals in history to acquire warehouse space because they're betting big on e-Commerce.‍

Phillip: [00:15:50] What's interesting is that at the same time e-Commerce and that delivery model is being focused on creating stores of product that aren't necessarily sitting at the end consumer like the Target's and Wal-Mart, or sort of the the old the old style retail of of having lots of goods under one air conditioned space. I think the the Bonobos model, the showroom purchasing, is probably more of what we see from those digitally native brands going forward.‍

Phillip: [00:16:23] And we'll have a lot more of those. So I wonder. When you have constrained retail square footage space that are showrooms only that don't carry a lot of stock in store that customers walk out with products... As those as those showrooms are becoming more pervasive, do products like the OBE product that is being launched by IKEA... Does that make itself useful into those retail spaces to transform retail spaces for multi-purpose use? So you have this idea that if you go to, you know, like a pop up shop that it could easily and modularly really change to be a luggage store one day and to be a clothing store the next. I wonder if that sort of modular retail model is something that would be really fitting for, you know a marketplace for digitally native brands.‍

Brian: [00:17:21] I think that's a really good point. I think that I think it is happening. I got a chance to talk with Franbox when I was at Future Stores Seattle, which I do want to talk about for a minute, as well, but Franbox is doing some really interesting things in that space kind of in line with what you're talking about. And so I do think that is another trend that we should probably just have them on the show, and like chat about that further.

‍Phillip: [00:17:45] Yeah. How was Future Stores Seattle, by they way?‍

Brian: [00:17:48] It's awesome. I'm super happy that I got to go. And let me tell you, this is the my biggest takeaway...‍

Brian: [00:17:56] Like. The biggest trend at that show was the focus on the retail store associate. There was an entire track of content just dedicated to that.‍

Brian: [00:18:08] And I think there were only three tracks in total, so it added several of the mainstage talks were about that, as well. So I think our prediction at the beginning of the year about, about what's going to happen with retail store associates... the fact that they're going to be better trained better brand ambassadors, have more autonomy, and you know and get paid better, like this is, this is coming. So you know half of... I'd say about, this is a very like approximate number here... But like, half of the booths at the innovation lab were focused on on training, training enablement, clienteling, and and efficiency for store associates. Like that, that is the focus in retail right now, and for good reason because you know these these retail associates are actually the front lines for for your brand, and it's getting more and more competitive, and they they need more autonomy because they're, they're the ones they're going to be active on social,‍

Brian: [00:19:22] they're the ones going to be developing these one to one relationships with customers. Like this is, this is the future, the future of retail is is is empowering retail store associates to be able to do more and have better relationships, and be true ambassadors for the brand.‍

Phillip: [00:19:41] I think that you're 100 percent right. I felt like Future Stores Miami was very much in line with that messaging, as well. We heard from Kohl's, we heard from Samsung, we heard from Swarovski, we heard from even KFC... what they are doing to enable retail in-store associates to be more empowered to help customers make decisions, to use technology to close the gap, have more digital in-store experiences, and to know more about the customer and their journey prior to them walking in the door. That is a huge trend and I think every brand that has a brick and mortar presence now is struggling with trying to find where to make investments in the customer experience next. The ones that will succeed in the next three to five years are the ones that double down on not technology based experiences, but personal interaction and clienteling.‍

Brian: [00:20:41] 100 percent. 100 percent. Like the technology should empower that.‍

Phillip: [00:20:47] Right. Right.‍

Brian: [00:20:48] That's all it's there for. That was actually, those were my opening remarks when, when I was emcee at NRFtech a few, a few weeks back. Like I told the story, and actually I want to save this story because I want to I want to talk about this a lot further, but the whole point of my story was that technology is all about that client relationship. That's what it's for. And when you lose sight of that and you start doing technology for technology sake or even technology for your brand sake then you lose track. You've lost track, you've lost your way. You're not, you're not doing what retailers need to do anymore.‍

Phillip: [00:21:29] Yeah well said. I'm thinking that there's, you know. Yeah. There's a, there's a story unfolding this year around the enablement of clienteling both online and offline. One thing that we'll see so I'll be at IRCE in a couple of weeks. Are you coming IRCE?‍

Brian: [00:21:51] Oh yeah.‍

Phillip: [00:21:52] So, we'll both be there, and you know, I'm I'm building a bunch of content myself outside of Future Commerce with a company called zoovu which is an AI powered... I would call it more like a decision engine, but it's a thing that I call, like guided commerce. Is guided commerce experiences where, you know, your your... You've got an in-user experience that can be chat based, it can be like sort of decision tree and quiz based that arrive at understanding more about your customer and using that to power other parts of the customer experience, even post engagement. So if I understand the data points of who a customer is I can sort of understand what their intent is rather than trying to tell myself a story about what they may have intended to do based on what they looked at. So I think it's really intriguing, and that's something that we'll be talking about a lot more in the few weeks to come. I do have some content I'm building with them with their CMO that I'm still trying to find, like what channel to put that into. It might wind up being an episode, like a bonus episode of Future Commerce because it's certainly one technology partner we're not, you know we're not partnered with them and they're not a sponsor of the show, but I think that those types of experiences are so different. Like they're what consumers expect from us nowadays in retail and in commerce, but they're not the experiences that we're delivering to them, and none of the major e-Commerce platforms provide that experience out of box to them.‍

Phillip: [00:23:24] So it's a it's an interesting... What a time to be alive. If you are around at IRCE, I'd love to meet up and talk more about this talk shop. So drop me a line Phillip with two L's at Future Commerce dot fm (phillip@futurecommerc.fm) or Brian with an "i" at Future Commerce dot fm (brian@futurecommerce.fm). ‍

Brian: [00:23:42] Yeah. And I think with that... that's the end of the day.

‍Phillip: [00:23:46] There's a million other things...‍

Brian: [00:23:48] ...more the news.‍

Phillip: [00:23:50] All the News That's Fit to Print.‍

Phillip: [00:23:54] What are some other tag-lines we can steal?‍

Phillip: [00:23:57] Retail tech moves fast,‍

Brian: [00:24:00] But Future Commerce is moving faster. Thanks everyone.‍

Phillip: [00:24:03] Thanks for listening.

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