Visions Episode 10: The Profitability of Distraction

Announcer: [00:00:02] Today on Visions.

Mike Lackman: [00:00:04] Now you can have a lot of these sites that look pretty similar and highly polished. But there's no one to answer the phone on a customer service team, and it's just stuff that went through a co-packer and someone slapped a label on it.

Brian Lange: [00:00:04] You have a carbon footprint as a company, you also have an attention footprint. And we look at companies that have sort of scaled up the offerings that they have, whether it be more products to browse through or more content to browse through... And that can be good for your business, but is it good for people?

Announcer: [00:00:46] Welcome to Visions. Visions is an annual Audiovisual Trends report that covers the changes in culture and commerce. This series is meant to be a companion guide to our 100 page report. Download and follow along at Visions.Report. Episode 10 The Profitability of Distraction.

Phillip Jackson: [00:01:15] Hi, I'm Phillip. Are you listening to me? No. I mean, are you really listening? Odds are you are likely listening to my voice right now while doing something else. You're cooking dinner or taking the dog on a walk. You're working on your three weeks' overdue expenses. Why? We are always distracted, and it seems that the most successful people among us are the most distracted as well. The average millionaire today has seven streams of income. Seven. Can you name a single C-suite executive where their job is their only role? It seems that our culture has convoluted success with a plurality of distractions, all vying for the highly paid, highly influential. And the driver of this distraction? Well, for one content and ad placements. I can pick up my phone any time of the day and watch more content than can be consumed in a single lifetime. All of it available at my fingertips. This fight for our attention is key to understanding the modern media landscape, startup culture, capital allocation, and more importantly and ultimately, our economic system as a whole. Today we go live to the Visions Summit to ask the question, "Just how profitable can distraction be? And can we claw back any semblance of mindfulness without sacrificing prosperity?"

Brian Lange: [00:02:49] This is a really interesting moment in history where we have so many ways of getting people's attention. So is attention a zero-sum game? Is each person's attention completely limited to their 24 hours or is this something that can just grow and grow and grow and expounded upon forever?

Mike Lackman: [00:03:13] I mean, the answer is a simple yes.

Announcer: [00:03:17] Mike Lackman, CEO at Trade Coffee.

Mike Lackman: [00:03:20] Anything of value has to be scarce. And I think that's been true. I don't think that's a novel concept. Now, I think it's been easier to reach folks in more parts of their lives to grab more of that attention. But it shows just how much more fleeting some of those interactions can be. We had one of the larger up days in the market earlier this week because people said, "Oh, consumer spending is actually up." Between the lines, it was, well, the spending is up, but the number of store visits and actual items purchased is way down. Less than 12 hours later, you actually have the worst day in the market because everybody realizes that serendipitous purchasing and discretionary purchasing is going way down with all of these dynamics. So I think there is more scarcity than ever, but it's also an opportunity for folks that have those more durable and sustainable promises to then emerge because they're going to be able to satisfy the needs of a more discerning consumer.

Ben Marks: [00:04:10] I would add that there is just a general level of noise.

Announcer: [00:04:13] Ben Marks, Director of Global Market Development at Shopware.

Ben Marks: [00:04:17] And that noise, I think, also takes away from that finite quantity of attention. So as we start to look at how brands get more and more in touch with the consumers in the market out there, I think we should look at how we can declutter some of these channels.

Brian Lange: [00:04:38] Attention footprint is something that we've talked about. You have a carbon footprint as a company, you also have an attention footprint.

Announcer: [00:04:45] Brian Lange, Co-Founder at Future Commerce.

Brian Lange: [00:04:48] We look at companies that have sort of scaled up the offerings that they have, whether it be more products to browse through or more content to browse through. You're just asking for more and more time from consumers to sort, even just sort through what it is that you have. And that can be good for your business, but is it good for people? We talked about how it is a zero-sum game, but one thing that I think we've done to your point, Ben, with technology is allow for a lot more passive consumption or even dual consumption or more. And just look for other ways to add on to that level, and to that point, people are decreasing the amount that they sleep to continue to engage with our products. And so I'm curious, do either of you engage in passive consumption, or if you have kids how engaged are they? When they are engaged in something that they're doing do they have other things that they're paying attention to at the same time?

Ben Marks: [00:05:56] This is a resounding yes, of course. It's almost unavoidable.

Mike Lackman: [00:06:00] It does seem like we've gotten so accustomed to some of the advances that have happened with personal computing that with the advent of Bluetooth headphones we didn't really take a moment and think about that. I heard a comedian asking Gen Z, it's like, "Is their attention span 3 seconds or 4 hours?" And so when you think about something like where we are right now, so much of that is consumed passively. There is probably an element where the pie got bigger because you have this element of in-depth audio consumption. But again, in terms of the real value and the real purchasing power of normal people, there is still some real scarcity there. So it's easier than ever to fill the pipe. The question is translating that through to those rich interactions that are going to lead to an outcome that both sides want. It's probably more competitive and more scarce than it's ever been.

Ben Marks: [00:06:47] I'm on kind of the platform side of this, but even I have to think about it because really we do have to actually be intentional and I think kind of change the narrative or focus and get businesses to really understand who they are and who they serve so that they can be more intentional, deliberate with their messaging. And I think there's a ton of value in that as well because you probably look more together as a brand and certainly it presents an opportunity to optimize your spend, optimize everything that goes into the creative behind these kinds of engagement campaigns. And it would be interesting to see if consumers feel that difference and if they might not make the brand relationship even stronger if you do that. I would be really curious to see that study.

Brian Lange: [00:07:48] As we look at the landscape of, let's just say, media company companies, we look at Netflix versus, say, HBO Max. Netflix has recently struggled a little bit, they've had a lot of subscribes. And I would argue it's because actually, their content is too broad and not very good. And with HBO, it seems like they focused a lot more on building quality properties. Fewer better. Do you feel like that's true for retail as well? Is fewer better the answer, or is Amazon's endless assortment the model that should be copied? Even for brands that have focused on fewer better, like Allbirds or whatever, as they've moved into other categories, is that good? Is that a smart move or is that just another way to grab people in and pull them into the world of Allbirds?

Ben Marks: [00:08:43] I mean, I'd say, it can be good. It can also be bad. I mean, you see different brands like, you know, I'm old enough I think of what was an example that we were talking about earlier. Best Buy. I'm old enough, I think, of Best Buy as my electronics retailer, but you go to Best Buy and they got stuff from all sorts of categories there now. And so in that way, it kind of waters them down and it puts them against well the Amazons. But as a consumer I think we could all recognize that there are certain things that are almost goods that are basically just a commodity. Like I know I need a mic cable or something. I'm just going to go and probably find it on Amazon because I don't need a brand relationship. But then there are those things where I'm like, "Wow, I really need a particular I want my swimsuit to have particular aspects," or something, or "I've seen that ad on Facebook, and they take bottles out of the ocean and turn them into swim trunks. Great. That's what I want to go have a relationship with." And so two very, very different modes. So I think those companies need to at least understand what it is they're doing because anyone becoming a generalist like you really don't want the appearance of going up against Amazon because you're probably going to lose that battle every time.

Mike Lackman: [00:10:00] Yeah, I think it does still come down to the promise you're trying to make, whether it matters and whether you can keep it. And so when you look at it through the lens, we're talking about platforms and the way that we build eCommerce experiences, for a long time and still a lot of what you see out there is a vestige of old paper catalogs. The buttons across the top were literally created to look like the tabs on the side of a paper book that you got in the mail because most of these websites were databases to narrow things down from a category that had a lot of the stuff. So you can find the one thing you're looking for because you go there when you need their things. And as these different kinds of platforms change, as you talk about the difference between DTC and some of these platform businesses, I don't think there's a right answer on which one of those it is. I think if you can't do any one of those things in a way that's really differentiated, the ability to get an assortment on a site with greater data portability across different sellers and all those things now, yes, you can get things up on the web, but the traffic's more expensive than ever. The durability of that traffic is such a hard proposition to deliver on. I think that's the piece that we're going to see a lot more innovation on just by the economics of how expensive the traffic's become.

Ben Marks: [00:11:15] Two points that you made that I'm going to put together... One was just about how almost insidious this made this massive transformation that happened when we had robust Bluetooth earpieces. And it's one of those things that changes that really has a huge impact. But you don't even feel it because it's just so easy and obvious. And yet a lot of commerce experiences right now, people think, okay, I have my online shop. And it is a virtualization of walking into a market or a department store and you've got things organized and categories and aisles and then like you put everything in a basket. The death of this experience of this mode of selling things to people has been predicted for quite a long time, yet we still are doing it. The Airpod moment in regards to this is that you do have commerce experiences leaking into other streams. So you have especially like social. So in stream stuff where it's just all I know is oh, "That thing, I need that thing. I didn't know I had that problem, but now I know I have that problem, so I need that thing. So I'm going to click, I'm going to buy, and the whole purchase experience is right there." And as we see, well, at least in the West, browsers will be able to essentially be a digital proxy, they'll have identity management built in. So I think that will start opening things up and we'll start seeing more and more of these commerce experiences moving away from the online shop and just into the channels where people are. I think that's what we'll see in the next couple of years.

Brian Lange: [00:12:55] The death of the shopping cart is sort of what you're talking about. I think what's really interesting about this as well, if we look at distraction and we look at, like you said, pulling people in and getting them to purchase more, I think my next question is should we be doing this? Let's say that we have incredible products, right? They're very, very good products. And when someone buys them, they actually really enjoy them. But maybe they shouldn't have spent as much money on them as they should have. So that is to say, we're taking a bigger piece of people's wallets and time and attention than is actually good for them. So if we're selling them things that are good products that when they buy, they enjoy it, we get all this feedback from them like, "Yes, I absolutely love this," but the rest of their life is falling apart because they spent their time and attention on our products, is that... Obviously, that's not a modality that any one of us wants to fall into, but I think it is happening. What do you think? Do you think that people are spending more on products that have been optimized for them to the point where they're actually ignoring other things in their lives that they should be paying attention to?

Mike Lackman: [00:14:25] At the very top, dopamine is a drug that we're starting to understand as a species here. And to analogize it to what I've heard comedians on podcasts talk about, to the point, there was this three or four year window in the late seventies and the early eighties where cocaine was both very poorly understood and very prevalent and actually seen as somewhat benign, and society very quickly realized that was not the case. And a lot of things were put in place not to let that proliferate in that manner for the next 20 or 30 years and probably for the better. We're just starting to understand how dopamine works. And we've all been guilty of it. We think it's a Gen Z thing. It's not. My retired father is addicted to YouTube and spends way too much time. It's a very human thing.

Brian Lange: [00:15:07] Yes, absolutely.

Mike Lackman: [00:15:08] And so start there and then go down into you can look at the proliferation of sports book gambling online. I don't know how much actual middle class net worth is actually tied up in those books or not. But you can keep going down that ladder. And I think at the end then there's actually a redeeming element where when you look at how self-reliant the rising generation is, you look at how much more financially literate the younger generation is, the trials and tribulations of this generation going through this low interest rate period, adopting Robinhood investing, seeing things rise and crash, Bitcoin, they're becoming really smart and accountable for themselves. They have very little trust in the system and so they've been very personally invested in making these decisions. I think you do have to usually assume consumers are pretty smart and then deliver on something where they're more willing than ever to kick you to the curb reputationally or cancel your service if you really aren't holding your end of the bargain.

Brian Lange: [00:16:01] So you're saying trust your consumers, and don't worry about this question really.

Mike Lackman: [00:16:05] I guess my point here is if you're running a dopamine factory, if you're running a sports book for gambling, or if I'm running a legal but still substance that could be considered a drug and coffee, you've got to decide whether you can put your head on the pillow when you do your business every day. I feel really good about the way we run things, and we're working really hard to offset some of the parts of our industry, like there are elements of monoculture agriculture or carbon footprint in the coffee industry that we're working to combat. You've got to make those decisions. From there, I think you can then trust consumers within the element of how you choose to run your life every day, run your business every day to then be really brutally on top of yourself about whether you're delivering on the promise you've chosen to make.

Ben Marks: [00:16:51] We look at Gen Z and worry about them. But actually, I would argue that Gen Xers, like myself, and Boomers like we're probably the poorest equipped because we didn't grow up with these well tuned dopamine engineered UI so that you just sit there and keep scrolling. I didn't even see TikTok until this year, but somehow it's like, if I know I want to kill time for like 2 hours and just let my brain go, I can do that straight away. And I would argue that, again, people's attention is kind of going toward these dope streams. And that's probably also we see the rise of these things as commercial channels because we know that's where the eyeballs are. And we know rather than paying all this money to try and get eyeballs to your site, you just meet them in their stream. You might be paying a pretty penny for it, but you're also going to get pretty good targeting. I mean, that much is true because I'm never on Instagram except when I am and damn near every time within like three or four scrolls, there's a product there and I'm like, "That's right. I'm doing a home remodeling thing. I need that little gizmo so I can do the cutouts for the floor." So they know me and they know how to meet me, but then we have to step back and say, "Okay, are the products good for the world? Are they good for the consumer? And if you have especially some kind of subscription model, are you delivering the value not just for today or getting the sales and hitting the sales for the quarter, but getting you all the way to a sustainable relationship with your customer? That's key and probably really key for subscription services.

Brian Lange: [00:18:52] Do you think that there's going to be sort of a reaction to this attention? And actually, I do want to counterpoint to you a little bit, because I think while, yes, Boomers and Gen Xers and even Millennials weren't quite prepared for devices and the time we're going to spend on them, Gen Z is spending the majority of their waking day on screens. That's not necessarily an indication that they are overinvesting in one channel or another. But are we going to see a reaction against this? Are the next generations, to your point, are they going to say this is too much, we're backing off, we're going to become Luddites?

Ben Marks: [00:19:34] The tech and engagement genie is well out of the bottle. So I would just maintain that I think the kids that grow up in this world, I'll put it this way, I'd be interested to see their brain, like a PET scan of their brain while they're doing stuff, whether it's social... I mean, just looking at in general how their engagement affects them and how and what that experience for them is like. I mean, you'll never probably be able to find out to objectively figure this out. But I would think that even the existence of devices, it's all this cumulative effect. If you don't have discipline as a couple in a relationship and you could and I know this because I just celebrated my 14th wedding anniversary, it takes a little work. You know, it takes a little effort. And you have to be intentional. Do you get in bed at night and just scroll social until your eyes cross and you fall asleep? Or do you say, "Hey, no, no, I have something far more important right next to me. And I'm going to take this time, I'm going to use some discipline and put it down." I'll be really curious to see how these choices are realized and experienced and lived generationally.

Mike Lackman: [00:20:53] To try to compartmentalize the moral from the commercial here for a second. If we just look at dopamine as a drug, prohibition is not super successful. And so I don't think that we should be talking about toxifying the conversation around it. I just think we should look at it like a drug. And so we drank wine last night. That's fine. If we started today by drinking just as much of it again, it'd be a real problem. And so I think when we look at the kids we're raising or the way that we're interacting with our customers, the way we behave as individuals, I think if you find yourself in the bathroom and using the dopamine drug on your phone, it kind of sounds like people illicitly using drugs in the bathroom 40 years ago. We should be policing ourselves. Are you using this as a drug and are you doing it too often? Where if you can use it responsibly, you've got to be able to trust yourself to do that.

Phillip Jackson: [00:21:44] "Are we addicted to the dopamine hits from our device usage? The Chinese government seems to think so. Generation F as it's called, or China's Focus Generation will grow up in a world with enhanced and enforced digital blinders. China in 2020 limited the use of its TikTok competitor Douyin to just 40 minutes a day for children aged under 14. It also limited online gaming to just 3 hours per week for children aged under 18. Regulators have recognized the addictive nature of video games and social media, calling it spiritual opium. Meanwhile, the rest of the world continues to wrestle with China's other main distraction exports: Zoom and TikTok." From the Visions Report.

Brian Lange: [00:22:37] Okay. So, Mike, what does that look like for a retailer specifically? What is responsible use of dopamine with customers? And I know it's a little bit broad, but give me some, from your experience, and I actually believe that you're doing a very good job of this. This is why I'm asking you. What does that look like for your customers? How are you engaging their attention and hitting those neurons with dopamine, but doing it in a way that's like actually responsible?

Mike Lackman: [00:23:10] So I can think of two examples. One, when we've seen narrative formats for advertising work really well, whether that's influence or a podcast, it's when we've invested a lot of energy in making sure that the host understands the story we're trying to tell and why what we're doing matters to us, why we hope that they see value in what we're doing. And so when a host actually goes into their normal comedic timing or their normal kind of content rhythm versus getting the bag and doing the ad, folks respond really, really well to that. And we've seen that with really kind of emerging leading edge kind of influencer hosts, and we've seen some really old fashioned old world media hosts both do really well with that. And I think it's pretty responsible if someone's willing to put their content reputation by saying, "Hey, I do a bunch of these things. This is when I really, really like," that's a way to break through the noise and then make something that's we think really exceptional for a marginally higher cost. That's something we think is a C-minus experience available to a ton of people for a good purpose. I think on the other side of that, it's real-world stuff. One of the things that we're trying to do more aggressively is partnership-driven sampling because what we found is when we've seen people, their Uncle Frank gave him a coffee gift where they got to then get it personalized and get something delivered just by really nailing that experience, even when those folks don't have a credit card on file, we don't have any proprietary information about that person they're becoming really high quality customers with strong lifetime value anywhere from 20 to 40% of the time. And so I think those are the places where we're doing that responsibly and sustainably, you're willing to bank that lifetime value kind of game that you're playing as a business on "You know what? If we can get that in front of people in the right contexts with the right kind of qualifying friction where there's some scarcity involved in that conversation," you can't just print the stuff out infinitely, "then we can win at that because we stand behind the product."

Brian Lange: [00:24:59] Totally. I love that idea. Scarcity actually allows for responsible use because if you just offer unlimited options, you're just going to get unlimited engagement if someone's into what you're doing.

Ben Marks: [00:25:20] There are a lot of parallels here, here even in the platforms world, because I've got a couple of kinds of customers. But people, when they're trying to make a decision about the platform they're going to use and there's an incredible amount of noise in this space, in part because there's a lot of money. We have a lot of ways to put stuff out there. So I think it really goes back to again, if I'm going to interact and I'm going to do something in this space, why don't I try and bring clarity rather than commentary? So when I speak, when I put out a post that sort of talks about the ethics of what we do and our approach and how we do it, I want that to add material value to the overall space, because otherwise, I'm just actually it's really disrespectful because I'm just wasting people's time with noise if I'm just talking about myself and how good I am because there's a there's always the broader context to think of.

Brian Lange: [00:26:09] I think it's a really important point as well. As we go to market with products and services and platforms, the specificity of what you're providing needs to be high. Yes, fulfill on the promise. The quality of the product needs to be there. But also you need to make sure that you're helping your consumer understand what it is that they're getting into. I think that also helps cut down on noise. So getting more personal, getting more specific to someone so they don't have to go through the process of figuring that out for themselves because that is a waste of time.

Mike Lackman: [00:26:51] It's also a very delicate balance. So we talked about death to the shopping cart. We're a personalization-driven company. And you need a lot of humility to get this right. And we've always been on the bleeding edge between saying we don't think those kind of traditional PLP, go and shop a wall of coffee kind of experiences are going to make us successful and then trying to do things that are different from that that put you in that sort of Catherine Keener, 40 year old Virgin, can I just buy these shoes kind of experience? Like, "Well, actually, no, that's not how it works. You have to do this other thing." People really have to want that thing that makes you different. I was in the pet industry for seven years. I can't tell you how many brands were grasping at straws to say like, "Well, the thing that makes us different is we have the highest alkalinity because we've got to do something really specific." You need to do something that's really specific that the market really wants.

Brian Lange: [00:27:39] Sure, Sure.

Mike Lackman: [00:27:40] There needs to be enough of a market that really wants that, that you can sustainably build those solutions for them and treat a team well, and invest in the business for the long run.

Brian Lange: [00:27:59] The way to provide something that's not an attention waste is to provide something that actually makes sense for the market.

Mike Lackman: [00:28:08] Yeah, and there's a tremendous amount of ego involved in trying to make the thing that you think does make you different matter.

Brian Lange: [00:28:15] The other thing I think you do really well at Trade Coffee, and we've been talking about this for a long time at Future Commerce, getting to know your customer upfront first. You have this incredible survey coming into your site. That's like, "Tell us about yourself. Who are you? What are your actual coffee habits? We're not looking to necessarily over-provide you. We're looking to hit you where you're at." I feel like this is true for everything. I wish that companies took the time to get to know me a little bit more or I could even provide them information in what I felt was a very safe way where they were interacting with me one on one. And I could control how much time I was spending with them as a result. We all opt out of cookies, right? Those cookies, oftentimes the intention is to provide you with relevant experiences, which I get. Like we're all scared of having our data sold. So I think that that's another part of this is providing safe, very clear-cut ways for customers to provide this.

Ben Marks: [00:29:26] It's fundamentally respect for your customer, for your market. And also, I mean, Temet Nosce. I mean, you got to know yourself as a company because you have to get in touch with that humility. You have to be really self-aware in order to offer anything, and start to offer anything of value to your customers. I wish that it was in this industry easier for that business model to work. But it turns out it's actually it's just hard human work anyway so you just have to put in the effort to do it.

Brian Lange: [00:30:52] As brands become more and more like people, which forever corporations sort of function as a person in some ways. To both of your points, this is amazing. If you can't identify who you are as a company I actually think that's a waste of time for your customers. Your identity is as much a part of the relationship as their identity.

Ben Marks: [00:31:19] Yes. Yeah. Or you're basically a commodity where it's like the relationship doesn't matter.

Brian Lange: [00:31:25] That's your identity. Fulfilling on your promise, I am a commodity. Own it. Amazon's owned that. They get it. Ben, I'd love to hear also, at Shopware you're working with a ton of different retailers and we just talked about the death of the shopping cart. I would imagine that as they're building experiences and they're asking you questions about what can I do on your platform. What are some of the ways that they want their customers to start to come and engage with their platform?

Ben Marks: [00:32:02] We are where a lot of the commerce functionality comes together, but we're also back to know thyself. Yeah, I'm not trying to be like your expert ERP. Let some business who's an expert ERP be that. We will build the integration. Now then what we have to do though is we have to facilitate. We do have to facilitate and curate so that as merchants get to know themselves better and maybe the agencies are usually in the mix there, they get to know themselves better and then that's great. If we're doing a good job curating like say, okay, well, this is the kind of circumstance where you would probably want to use a PIM and not just rely on the product information management features that are built in. You have more complex needs. So here we've got a couple of PIM providers, but because we have a relationship with them, we also can say, "Well, I think for your needs you're probably going to want to go here," or any number of these integrations. And then that's sort of that's all back office stuff. But that is essentially a customer... It's an experience for the store operators and then that allows us to get into why people would choose especially a platform like ours which really indexes on customization and really building unique meaningful experiences. Or occasionally you don't need a unique experience, you need an experience that your consumers expect. But the difference is whatever platform people are choosing, they really, really want to get on the platform that's going to allow them to have some consumer insights and allow the merchant to build experiences that are relevant for the people they're trying to serve.

Mike Lackman: [00:33:43] In some ways, it's all in a cycle. I think I remember, let's say 2010 to 2014 era, we had teams of people filling rooms, trying to make a button add a thing to a cart or get an image to load in a certain kind of device across browsers. It was so hard to do these really simple, basic things. We've gotten so accustomed to it being basically very commoditized to be able to accomplish some of these web things that we're trying to do that I think we do need to reflect back again on as management teams or as Web teams we know what we want to focus on for a customer. Let's say that you know who your customer is. How do we make the kind of quality of execution and speed of iteration fast enough in the places that they can test? So we're in a subscription world with coffee where part of the reason that we've built the capabilities the way we have them is because we need to be able to fulfill that full coffee promise for people. And standard fixed interval billing apps don't work for that. So that was something we had to build so that we can continue to really quickly iterate. If we were a company built on what we know that they would like that, but that's too complicated. It's not configured. If the resistance to iteration is too high, you're never going to find those new things you want to do.

Brian Lange: [00:35:11] Building the standard experiences got easier to build in recent times, and all eCommerce experiences as a result have started to feel basically the same.

Mike Lackman: [00:35:22] That's right.

Brian Lange: [00:35:23] When customers go on a site right now and they spend a bunch of time scrolling through and looking for the products that they want and trying to figure out where they want to, what they want to buy, it is actually sort of a waste of time because it got so easy for us to build experiences that we stopped focusing on things that were actually enjoyable and worthwhile.

Mike Lackman: [00:35:50] I don't mean to be too judgy here, but I think again if you roll back ten years, you had platforms that were clearly really robust in terms of the investment that went to their customer service teams, that went into the quality of the product itself and these really exciting web interfaces. I've never seen a website that works like this. It loads really fast. Well, we've taken all the visual side of does the app work, do the thumbnails look good, or do the reviews...? We've leveled the playing field there. But now you can have a lot of these sites that look very similar, pretty high polished that have no one that'll answer the phone on the customer service team. And it's just some stuff that went through a co-packer and somebody slapped a label on it. So I think you have some pretty crappy products that have pretty decent looking websites, and so it's harder to make your website show the value of the experience you're bringing.

Brian Lange: [00:36:33] And that's part of the attention problem as well. Again, like maybe the experience even is really good. Let's maybe we're just scrolling through Instagram and everything looks amazing, but then when you actually get the product, it's actually terrible. That is another huge part of this.

Mike Lackman: [00:36:49] If you'd asked me three years ago what our customer service team meant as part of our business because we're a pretty small company, we do some really complex stuff. We still have about 40 people that work in the whole company, of whom almost 20% of them are just talking to customers all the time. And I kind of just thought that was table stakes. The old Tony Shea delivering happiness, sort of that's just table stakes. That's no longer a differentiator. People can't believe that we answer the phone with really thoughtful, invested people who have a sense of ownership over the product and take care of their problem.

Brian Lange: [00:38:39] Again, I think this is absolutely part of it. If someone goes and they and they buy your product and then they have an issue with it, maybe it's even a good product, but they need to talk to someone. It's been a huge problem. A lot of time gets spent on reverse logistics and talking to someone that actually cares about giving you a good experience as a person, as a customer. Those types of engagements, I think there are two sides to it. One is brands don't spend enough time helping customers vet what they should be focused on. And I think you do a really good job of that. The second side of it is the back side where if something does go wrong, customers have to spend an inordinate amount of time trying to actually make things right. So in my view, the way to counter a lot of this and to make sure that we're not building brands that again could be incredible product companies, could be incredible marketing engines, could actually be really profitable as a business. But we're getting there at the expense of the customer. We're getting there on at the expense of sucking customers in to buy something and then giving them a terrible experience through getting it turned back in and all that.

Mike Lackman: [00:40:00] You see, I'm going to disagree with you on that one. I think we've gotten way better for customers in that regard. I think if you look at anything from the regulatory environment to just the reputational environment, negative option continuity subscriptions is really not a thing. You can't dupe people into some free crap and then make them spend a ton of money they didn't realize they were going to spend and then make a call to cancel. Those things were so much more prevalent five, ten years ago, even 20 years ago, with the CD clubs and magazines.

Brian Lange: [00:40:32] There are a lot of fake products out there and a lot of product that's like knockoff and a lot of time gets spent on buying these products that end up being tossed in the garbage and not returned. Or they do get returned and they get tossed in the garbage. If you look at how difficult it is to determine whether a product is good or not, it's almost as difficult for someone to discern whether a product is legitimate, especially with new products coming into the market, which people have trouble with.

Mike Lackman: [00:40:59] I hear the thread you're getting at. I'm just not following you with it. I do think people choose to buy something that does seem to have traction and reputation or they choose not to. So I think there's a burden on brands that don't have any validation of their reputation, that they can't just rely on decent graphics to confer that the way they used to. At the same time, if you look at a platform like Amazon, part of the value they add is not just the utility of its showing up. It's that consumers feel pretty good that if it has 11,000 plus 4.8 star reviews, it's probably not garbage product. It's not going to break when you open the package. And they've invested a lot in trying to make sure that ecosystem is pretty high fidelity compared to what you had at your fingertips five years ago, ten years ago.

Brian Lange: [00:41:40] Do you trust stars? Do you use star ratings?

Mike Lackman: [00:41:42] It depends. I read them.

Brian Lange: [00:41:44] Okay. You read them. Yes. Yeah.

Ben Marks: [00:41:46] Reading. Reading is key.

Brian Lange: [00:41:47] Because again, that's attention. That's something that customers, the burden's on the customer to not just look at the stars but actually get in there and make a judgment call.

Mike Lackman: [00:41:57] But what's the alternative? I guess my point is like, what are we arguing that against? Are we kind of victims of our own progress here?

Brian Lange: [00:42:03] A little bit. No doubt. No doubt. Investing upfront as brands and providing, I think, more of a gate, provide a little friction before someone makes a purchase, which again I think you do really well. Provide a little bit of instead of just making it slick as possible for people to go and browse and purchase, make sure that they have some stopping points and checks along the way before they buy. I think that actually helps cut down on the whole cycle of purchase and return.

Ben Marks: [00:42:50] That goes back to the point I was making about having a sustainable relationship with your customer, where you're not hitting them with too much. And then they just kind of like burn out and leave you, but you actually establish that proper cadence. I think that is a good approach. I mean, for what it's worth, I'm actually going to take it back a little bit further because on the point about customer support, it's just not ideal for customers to have to escalate or for customers to need direct human assistance. But I love it, too. Because no matter what industry you're in, anytime a customer is engaging you, I mean, that's already a good thing because they could just silently go away. So it's a time to figure out, okay, is this problem happening now something that we could have optimized and handled proactively? And then once it has happened, if you handle it with again, that same care, that same respect, and attention, you probably will reinforce that relationship. I'm sure you've seen that in your business.

Mike Lackman: [00:43:53] Well, that is where, again, the broad brush depends on the business. We're a business that is built on a very low AOV and a very high number of deliveries. Twenty to 30% of our customers are getting delivery every 7 to 10 days. So I'm talking about a customer relationship where they're getting upwards of like 50 orders a year in a lot of cases, probably at least once a year, you're going to have hang on this thing didn't... I mean, we use the mail. There are going to be things that happen, holidays, blizzards, elections crushing the mail capacity, like any number of those things are going to happen. And so I think it is about like how it works for your business or to your point, you can't be leaning on real people to solve what you should have invested in technology for, but I think from a friction perspective, it does depend on the nature of the business model. I think for us, we embrace friction in places where we feel like it's in the greater good of being able to share a promise with the customer around, giving us a try, understanding that's going to be a variety of different coffees and then building what is likely to be really high loyalty experiences where customers are happy to be getting it. I think if you're not trying to get dozens of orders a year, then friction can be antithetical to some of those goals that you're trying to achieve.

Brian Lange: [00:45:06] Potentially. Potentially because like there are things that people buy, they only buy it once a year or less than that. And I think that actually, that might be a place for higher friction because it is such a considered purchase often. It depends on the industry, of course, or what the product is. But I'm going to make the case and this is a bold case that we need more friction across most products, like almost all products. You have actually a pretty commoditized product that you work with, right?

Mike Lackman: [00:45:32] Well, no, I'll push back on you on that. Okay. So, I mean, I don't think we have a commoditized product. I think we're in a category that has a lot of commodity.  I don't think that chicken served at Danny Meyer restaurants is a commodity, but chicken breasts at Costco are. I think there's plenty of commodity coffee and there's plenty of non commodity coffee.

Brian Lange: [00:45:57] You're in an industry that people are purchasing from frequently at minimum.

Mike Lackman: [00:46:01] Sure.

Brian Lange: [00:46:02] And you're often replacing their commodity with your product. So they could go buy that as a commodity or they could go buy it from you. My viewpoint is that that's actually a pretty, if you think about a world in which there are commodities, typically commodities, you even think of needing friction to purchase something that's a commodity or replacement for commodity. But you've done just that. I would argue that's true for most products on Amazon. I wish there was more friction on Amazon. Actually, I'm tired of slide to buy. I want more steps in the process to sell me whether or not I should buy something, and I think that would save people a lot more time.

Ben Marks: [00:46:45] So my Amazon story I've told this on stage a few times is like the first time, you know, one click checkout, which they had that patent until not too long ago. But it was just one of my first times really kind of using Amazon going through this thing. And I was like a soundbar like all I needed to get a Soundbar, I needed to get a soundbar And I put it in my cart, so I could just review it later. But I just kind of wanted to get the ball rolling. And then three days later it showed up because I just, it happened without me even thinking that what I thought I was doing in a normal cart experience. No, I just bought that guy, just like that. That was kind of an eyebrow raising moment for me, just given the business that I've been in for so long. But sometimes I need to go and fire off. I just know I know one thing I know where I want it to go. So I like the one click, the low friction. That's actually a respect of my time. Sometimes I want to go through and compare a lot of things and be really more intentional about it. And I'll go and act more like a traditional commerce website experience. So I just realize that in some cases, sometimes I'm one consumer, but sometimes I want frictionless, sometimes I want all the resource and utility that I can have from that site.

Brian Lange: [00:48:07] Impulse purchasing and quick purchasing typically leads to purchases that are not desired. Ultimately, that's a bigger burden on customers than putting a little bit of thought up front for them or making them think a little bit before they make the purchase.

Mike Lackman: [00:48:22] So if we look at that lens, your contention here would be as an industry, if we as an industry, don't police ourselves better, then we will basically have the reputation of the least common denominator that we're a part of.

Brian Lange: [00:48:34] Correct.

Mike Lackman: [00:48:34] It's going to be too hard for any of us to get out of that noise if holistically one in three experiences is really subpar.

Brian Lange: [00:48:41] Correct. And the ones that are going to stand out are going to be the ones that actually engage you. It's not just stand out, it's going to be a better experience.

Ben Marks: [00:48:59] Capitalism by nature fits unfettered. It is all-consuming. It's literally what it does. Sustainable capitalism would be a lofty goal for us to take on as an industry. But I'm up for the challenge. I'm kind of curious about the reactions to this.

Mike Lackman: [00:49:18] I think it's healthy to feel haunted by a sense of servant leadership for your customers and for your teams. I think employees have never had more options about where they could dedicate their time. Customers have never had harder choices to make about what they can do with dollars that are harder to get and that get them less far. And so I think without debating the morality of whether they ought to buy things on impulse, if you're okay with the idea that everybody at every rung of society deserves to have something really nice, then you have the opportunity to be able to provide them some delight by getting something that's just fucking great when they really want it. And if you can do those things well with a sense of service to those people, to be able to keep promises to those entities, those connections that you have, your partners commercially, your employees, your customers, you can probably make that pretty sustainable. To your point, if it's that you're able to exploit arbitrage and get that click done and then try to kind of look at the bits and bytes of bidding on a certain level or a certain time of day those are the things that are going to be the most openly exploited. And the best solution to that is more and more people innovating higher quality experiences to drown that out.

Announcer: [00:50:26] The Visions Podcast is brought to you by Future Commerce. You can find more episodes of this podcast and all Future Commerce properties at FutureCommerce.fm. Download our 100 page Companion Guide on cultural and consumer trends by visiting Visions.Report. That's Visions.Report.