Visions Episode 5: The Role of Commerce in Society

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

Miya Knights: [00:00:05] I think the retailers and the brands should be listening more. With some of the comments that have been made so far, I also feel like we should say, well, why don't the retailers just ask? What are you here for? Do you want to be in and out? Do you want a really curated handheld experience? I think sometimes consumers might be, customers might be happy to volunteer what they're here for. Sometimes they'll go, "You should know."

Announcer: [00:00:43] Welcome to Visions. Visions is an annual audio-visual 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 5: The Intersection of Art and Commerce.

Phillip Jackson: [00:01:13] Hi. I'm Phillip. It has been said that capitalism has a solve for everything and none more so than the systemic challenges, societal disparities, and ecological disasters that we are currently all faced with. Can brands truly change the world? Or are there nuances in the behavior of consumers? People that make ESG, or Environmental Social and Governance programs, inside of corporations harder to deliver on the promise than was previously thought. Today, we go live to the Visions Summit in West Palm Beach, Florida, with commerce, brand, and retail leaders to talk about what the role of commerce is in a society and what good we can do in the world.

Announcer: [00:02:10] Just a note of warning. Mike Lackman's audio had some issues during our recording session. We've done our best to recover it.

Phillip Jackson: [00:02:20] Now, there has been a lot of discussion over the last ten years and a lot of capital has gone to support mission-driven brands, to put that capital to work in a way that is a net benefit. Some of that is very outward-focused and some of that is a little more subtle. But we do all have to engage in commerce, so I really believe it can be a change agent. The question I posed to the panel here is do we feel like that concept is one, top of mind or present or even tangible as a perceived value for a consumer, that I'm doing good in the world by engaging in commerce, and then maybe two, why or why not? And maybe give some supporting examples. Author and retail analyst, Miya Knights.

Miya Knights: [00:03:08] As consumers, we are so much more conscious of our commercial choices. We're bringing that pressure to bear on the brands and retailers we shop with that we spend our money with. I think we've said in other discussions today that the consumer can vote with their dollar, but they also, now with social media and user-generated content, can quite easily let brands know when brands have failed in their promise to deliver or are failing from a socioeconomic perspective or on sustainability grounds. It's a bit of a minefield in terms of being a brand or a retailer in that sense nowadays. I'm also seeing, from a corporate standpoint, brands are being asked to become more political entities. So the whole ESG trend, I think I've always thought that the bigger a business becomes, the more corporate social responsibility they have as an entity in the society that they operate in. I think we're seeing a lot of different trends converge in that sense. I often talk about sustainability as not just being good for the planet, but it's good for the business because you're doing more with less or you're doing the same with less and you're wasting less. So being a retailer or a brand, there are a number of different pressures that I think they have to address. But in doing so, it only makes them stronger companies. It'll only make consumers want to shop with them more. And I think that's got to be a good thing. It's difficult. It's added another layer of complexity to being just "I'm a merchant. All I do is buy and sell stuff." No, not anymore. Not anymore. You can't say that anymore.

Kiri Masters: [00:04:55] Well, I think that there are a lot of double standards that consumers have.

Phillip Jackson: [00:04:59] Head of retail marketplace strategy at Arcadia, Kiri Masters.

Kiri Masters: [00:05:01] During the pandemic, we didn't have any choice but to eat out of Styrofoam containers and use lots of gloves and wipes. And everything was disposable. People put their sort of sustainability value to the side in favor of a higher value of self-preservation. And I also see this same sort of difference in behavior with Amazon. And so some people have an aversion to Amazon because it's so big because there's a narrative out there about it putting other businesses out of business. But ultimately, convenience wins a lot of the time. And so I think that people will say that they care about sustainability and those sort of values, but how it actually plays out with how dollars are spent, I'm less convinced of that.

Michael Miraflor: [00:05:55] I think it's difficult to put an umbrella over all of it because you have to take into consideration, for example, generational differences.

Phillip Jackson: [00:06:01] Web3 Venture Firm Chief Brand Officer Michael Miraflor.

Michael Miraflor: [00:06:05] The environment is the number one through three most important thing for Gen Z on nearly every survey that I look at. Yet, Gen Z is fueling the rise of Shein and continuing the cycle of fast fashion at the same time that they're also exploring resale and vintage and all those things. But predominantly it is to support the most accessible, fast fashion. And that contradiction is something that is understandable because of the lack of buying power. But at the same time, you have to think about a brand that is not predicated on or whose value prop is not cheap, trendy goods fast, how do you compete with that? Do you compromise your business model to keep up or do you hold fast in your conviction that you can be a more sustainable company and defend your market share against something that is so aggressive and that just plays the reality of a generation who just might not get there for another decade to be able to buy higher priced, more sustainable goods? So it's sort of like a moving target, but it's easier to say than do and you know, to earlier points made, I think there is a higher demand for transparency. And consumers, given the extra time on their hands will look for evidence of statements made otherwise. I think people are tired of just hearing it. They want to see it. They want to see it in product. They want to see it in policy.

Phillip Jackson: [00:07:41] We actually act in a bunch of behavioral modes that are contradictory to your point. So is it a futile attempt to move a consumer out of one behavioral mode and try to train them to act in another behavioral mode with regard to your brand, by adopting a sustainability message? Is that really something that we can even enforce as a psychological behavior upon a consumer and to say, I'm going to move you from one cohort to the next? Maybe they just don't see your brand that way, and they never will. And ultimately does that mean we're kind of defeatist in our efforts to try to use commerce to change and affect the world in some positive way?

Grace Clarke: [00:08:19] Well, I think there's a positive element of spending that has, I guess, sustainability from a different perspective, which is just job creation.

Phillip Jackson: [00:08:30] Brand and Omnichannel Strategist, Grace Clarke.

Kiri Masters: [00:08:33] And beyond the idea of your purchases being sustainable or not in terms of how the company produces things, there is an idea that shopping is a very general statement here, but this is how it shows up on social media, particularly with younger consumers shopping is good for the economy because people will share stories about what it was like growing up. And if there wasn't an industry or a place to spend money, they wouldn't have had a job to save money and move away from home or send money back to their families. So there is an element that's a bit less defined or spoken about that sustainable purchases can be helpful for the economy. And just by virtue of participating in the economy, you are creating employment opportunities for certain people, which is taking a really extreme example. But that is an element of spending driving change. Change can be empowerment and employment and moving around in the world.

Phillip Jackson: [00:09:29] Not often the lens that we put on ESG. Environmental, social good. Social good is actually having economic upward mobility and giving people upward mobility in life. I think it does come down to meaningful employment.

Miya Knights: [00:09:44] They see their employees, their workforce, to Grace's point, as disposable or transient anyway.

Phillip Jackson: [00:09:52] So can we change that? Because it looks like it's not going to ever change. It's more automation. It's more technology to displace workers. It's more algorithms to make decisions. Is that a losing battle?

Miya Knights: [00:10:06] I think maybe I would have agreed with you had we not just come through a pandemic. But I know a lot of retailers who are really suffering in terms of being able to just hire people. And so I think every retailer is thinking about how can I become an employer of choice. And whether that's flexible shift bidding, flexible payroll systems, more training and career advancement, supply, or needing to meet the demand. I think retailers are being pushed in that direction even if they didn't really care about it beforehand.

Phillip Jackson: [00:10:45] It feels like a very Western-centric point of view. I know your roasters work with a lot of growers that are all over the world, Mike. What's your perspective on some of this? Is this just the sort of tip of the Maslow's that we all concern ourselves with when we're all taking care of in the other areas? Mike Lackman, CEO of Trade Coffee.

Mike Lackman: [00:11:05] We're really excited at the opportunities to more effectively transmit data and capital from consumers who are learning about a higher quality product for the first time to the roasters and the growers that they work with and celebrate those wins that we find. So when we do have an example of somebody who brings an experimental coffee from a woman in an apartment in Kenya, we sell 80 lbs of that to validate. And then just last month, we actually got a full container of that particular product. Those are really exciting things to see, and I think it's important that we don't get over our skis. When we got our packaging to be 100% backyard compostable brown matter it was a good economic proposition for us. It's something we can claim. We have to be very deliberate about how much we try to make that... Is that the head or the deck? Is that the deck two of the deck three? I think all things in moderation. And again, I caveat that by saying it's a pretty parochial view of it, given the way we think about it within our business. I don't know that that's necessarily transferable to every business and every one of those same circumstances.

Brian Lange: [00:12:04] It's certainly incremental steps. I think that's being smart, being thoughtful, being careful about how you go about making those differences.

Mike Lackman: [00:12:13] And making sure that the business or the customers are pulling that through. I think if you look at it like a tax as a business, like let's get the ticket punched and do this thing, and then we can say we did that. We put it in the balance page and we want to go back to the stuff we were doing. I think that's going to be somewhat unsustainable. But I think if you can find ways for either the economic model or the customers to demand that you pull more of that through what you're doing, just running your business every day will start pulling more of that through more organically. And it won't be such a tension of like, should we make this a part of what we're doing? It will kind of just be what you're doing.

Grace Clarke: [00:12:45] And I think there's limited conversation or at least less specific conversation around what that actually means. It's really easy to talk in generalities about being sustainable or being, like you said, an employer of choice. But if someone were to ask me what is compelling? What is it to be an employer of choice? How can you attract great talent and then make a great experience when they're there at any level? That's something that even I would have to sit down with the pen and paper and make a list on for the first time because I don't think, my hunch is it doesn't look like necessarily being flexible in or out of the office. It might look like a different structure of benefits or a different structure of investment in the business or different ways of compensation or further down the line. 20 years, 30 years? Who knows? I'm projecting. Fractional employment and the ability to support multiple businesses and I don't mean as a consultant what a consultant looks like now, which is almost doing it without anyone's permission. I mean, a business actually creating a different structure where employees are more fractional at working in more fractionalized ways or the roles are more collaborative. I'm interested in that part of a business being able to recreate what actual work looks like.

Phillip Jackson: [00:14:04] The idea that a brand is a force for good in the world is a relatively new one. It has been said that companies like Starbucks and Apple haven't just become commonplace in our everyday lives. They're practically nonplayable characters, or NPCs, that populate our worlds to make them feel full and vibrant. They push us along on our main quest as the main character in our own story. In 2020, Starbucks popularized the phrase "social distancing" via social media and in emails long before the CDC enforced COVID guidelines. This signaled an era of corporate influence and corporate governance that is in many ways more powerful and more influential than the role that government plays in our everyday lives. Starbucks is leading people, but what gives them such license? Since 2010, in the United States, we've seen a shift in the role of corporations in everyday life. Businesses are bigger than ever. A trillion dollar corporation was unthinkable just ten years ago. Today there are three, and the time to trillion is collapsing. It took Apple nearly 40 years to become a trillion dollar company and crossed the one trillion dollar market cap in August of 2018. Two and a half years later, in August of 2020, it earned its second trillion. But just 16 months later, it clocked its third. When we think of the role that commerce plays in our society, we're not just giving corporations more control and more capital, we're also demanding that they exert their influence in the world. In many ways, that doesn't make them NPCs. It makes us wonder are brands the main character and are we the NPCs? The other side of our study here is that plurality of identity means a lot of things. It also means fractional employment. People don't really just hold one stream of income. When you get to the upper bounds of middle class, you have to diversify your portfolio of income to reach beyond some sort of a glass ceiling and class barrier. And we've all dealt with it at various stages in all of our career. I think that, and our study finds too, people are considered to be more successful when they have more extracurriculars. We're busier than ever. And when you look at a high powered CEO or you look at somebody even moving into college, colleges are more selective based on what? The number of things that you're doing outside of your schooling. And so that itself to me feels unsustainable in that we're going to become more encumbered to have to fill many roles psychologically and societally, for us to be able to have just some sort of sustainable, meaningful work. And I don't know, and I say that as a person who is living that out to.

Miya Knights: [00:18:05] I think there's evidence of that in social media, where I was told once that young people don't mind having a bunch of different profiles, a bunch of different accounts, they might have three accounts, one that they connect for their parents and their family, one for friends, and one for work. And I just thought to myself when you're young and you have time to maintain all those facets, different personalities, that's great. But the minute you get older and you have something to lose, I think the kind of issues that you're talking about really come to the fore. But I think for me the answer has to be transparency, to Michael's point, making sure that becoming an employer of choice, becoming a brand or a retailer of choice, you're being absolutely clear on why you're doing what you're doing, why the products are the way they are. A great example I heard of was offering consumers the option, to Kiri's point about convenience. Because we are so busy, maybe because we're so busy, we're so wedded to convenience, we don't have the room or the space to have to make slow choices. But in this survey that I saw, the vast majority of consumers said they would take the option of slow delivery if it was offered to them. And what does that mean? Again, to be transparent, you say "I'll get you this delivery in 3 to 5 days. It will offset X amount of carbon credits," and if someone chooses to make that to go for that, they're fully informed. They understand that they're forsaking the convenience of something better, but you give them that choice. I think retailers are going to have to be a lot more transparent and a lot more in the same way that they've had to cope with the diversification of channels, the complexity of just selling in terms of transparency and choice when it comes to sustainability, particularly around fulfillment, they're going to have to offer a lot more choice than they currently do. So I think it's choice and transparency for me are absolutely key to give us the option to not always go for convenience, to give us the option to not have to do so many things or keep so many plates spinning all the time.

Kiri Masters: [00:20:25] I'm not sure it's so new. I mean, going back through recent history, we've got the role that you have as a parent. We've got the role that you might have in a religious setting. And so how is it different now? is my question because hobbies, family pursuits... Those all require different sort of parts of our personality and things that we're willing to share. So, you know, I'm a different person on LinkedIn where I only talk about work stuff than I am on Instagram, where it's just family stuff, for example. But I'm not sure that's so new.

Miya Knights: [00:21:14] I think what's new is that we're expecting retailers and brands to know that. So if I come to you, I don't know, if I go to a hardware store or I'm on a mission. If I go into a fashion store, I'm maybe just killing time and want some fun. I want an immersive experiential store experience. Whereas if I'm going into a hardware store, help me find that four-inch screw really, really quickly. So in one sense, I don't know, in one setting, augmented reality might be really, really useful from a utilitarian perspective, like pointing me at the four-inch screws. But on the other hand, it might be really, really useful for providing an immersive experience if I'm going into a fashion store, like the Burberry store in China, for example, is a great one. I don't know, does that make sense that consumers want us to understand what we're inferring in terms of our mission, whether it's a convenience mission or a luxury mission, where we have more time and tailor that experience?

Phillip Jackson: [00:22:21] Brian Lange, Co-Founder of Future Commerce.

Brian Lange: [00:22:24] Actually, that's a very good question. So we talked about sort of the dissonance in consumers' expectations. They want Amazon, you know, one-click buy, one-day delivery as convenient as possible. On the other hand, they also want to not buy from Amazon because they feel like it's having a bad environmental impact. I think the question then is should brands and retailers try to address that and be all things to all people or to hit all expectations of a single consumer, which I think is what you're getting at. They expect us as brands and retailers to know what it is that they're looking for. Should we be addressing one part of the equation or should we be addressing multiple parts of the equation?

Phillip Jackson: [00:23:29] There is a type of relationship that a consumer has with the brand that is non-monetary, and it's to behold something beautiful or it appeals to the idea that something exists. When that gets played out, though, it almost feels like brands have to become not just so faceted in the way that they talk to a consumer, but in reality almost kind of unraveling of the brand and become very specific and pull on each of the threads of what a brand's tapestry is made of. And I don't know, we haven't seen it play out just yet, but I wonder if that plurality of the brand's identity is something that is being forced upon the brand that nobody there really even wants. They're just trying to engage a consumer who has more choice than ever before. They're literally being ripped apart into having to be certain things in certain channels. And that feels like it's a losing game to have to be punchy on Twitter and highbrow on Worth Avenue. But Michael, I don't know what you might think about that.

Michael Miraflor: [00:24:34] I think it's part of the natural evolution of what a brand needs to do to stay relevant. You can make an argument. I know it's not a 1-to-1, but, you know, 12 or 14 years ago, there were probably the same types of internal arm wrestling about digital transformation. Now with things like ESG, is that another sea change that a brand must do to stay relevant, otherwise they just will lose favor from even the most important consumers? And when I read stats like 70% of the brands in the Fortune 500 since the 1930s have disappeared or they've recycled. You have to take a look at what did the brands that fell out of that or that just disappeared or got consolidated and got bought out by bigger competitors, what did they not do? And what are the leading or lagging indicators of cultural change right now that we're seeing brands kind of try to address or take advantage of? And of course, that will create some dissonance and some internal friction. But you're seeing it happen. And when they happen in the right way, it's sort of like it's applauded because it's what consumers want, especially younger consumers. But for the business-oriented, it's sort of like, of course you're doing that. You might take a hit in the short term, but if the entire industry doesn't go in this certain direction, then there won't be much of an industry to talk about. I'm trying to think of a tactical example. Burberry is a great example. I think they just announced in the past month that they're going to do a resale channel or they're going to own their own resale. Now, that's in reaction to retailers like The RealReal and all the secondary marketplaces online existing and maybe stealing share of gently used recent vintage goods. But it also says a lot about where they think the future of their retail and their brand is going to be. And as a signal to their youngest consumers who really think that, of course, it has to be in your DNA. It doesn't matter if you're a hundred-plus-year-old brand or if you're like a six-month DTC brand. If you don't have that, it's going to be like trying to be a brand now without an eCommerce offering. It's just you're going to be missing out on so much opportunity. So I think that might be one way to think about it. It's not infrastructure, but it kind of is. It's a DNA thing.

Grace Clarke: [00:26:57] But I think it is infrastructure. I mean, we have examples and I think as people who are responsible for building and scaling brands and helping them make better choices, something that comes up a lot is what do we want to do that feels more internal and what do we want to do that we want to talk about? And I think there are certain elements of decisions that get made that a brand doesn't want credit for or isn't something that they feel they want to be part of their brand story. But an example of where those things come together recently is with American Eagle and what their team is calling their frenemy network, and they are actually leveraging their own supply chain capabilities to some of their competitors. And the idea gets back to what we had spoken about earlier, which is not just sharing insights but also creating efficiencies. So theoretically, one of the benefits of that is that each of the brands can do what they do best, which probably isn't logistics and has a lot more to do with brand building and marketing, supporting consumers and engaging with them, helping them perform out one of the many elements of their personalities. But separately, that is one way that the business can look at the infrastructure of being a company on top of a grid and think about that as infrastructure. What are the highways that they're building between their own businesses so that the entire thing can just be a fraction of a percent better for everybody as they are creating and growing their business? And I thought it was such a funny and wonderfully media-bull way to call to talk about that as a frenemy network because it's super tongue in cheek.

Michael Miraflor: [00:28:24] I love that example too because if you put yourself in the shoes of a young consumer who might love the brand but not necessarily be educated about the way that business is done in the back end, especially with production logistics, you might react to that as, "Oh, that's interesting and funny and novel. But also, shouldn't that be the way that it's supposed to be?" Like, of course, leverage excess capacity and rent it out to who might be competitors, might not, but isn't that just better for everyone involved, even from like an energy usage perspective? That sounds like it's better for the planet without having to take an anti-capitalist stance about it.

Grace Clarke: [00:29:14] And from a comms perspective, what a smart way to get in front of what people might look at as a weakness in the business. And maybe it is. Maybe it isn't. Those are conversations that have a lot more to do with the operations of a company than the marketing. But to be able to say "No, this is a value add for us and it positions us as we start to become more of a data company, American Eagle, we're actually going to be getting efficiencies from insights into how other companies run their business because that might be the exchange that they're making.

Mike Lackman: [00:29:44] There may be an optimistic way of looking at some of this, too, without having to take such a hard stand. I think there's an element of like, is this authentic or is this not? And what's our purpose? If you kind of analogize what we're talking about to the Steven Pinker way of looking at things, which is you can look at some elements of today and say things have never been worse. You can look at some now versus 50 or 125 years ago and say things are dramatically better and let's not let progress get in the way of accurately understanding what's going on. So there are very many aspects of retail where ten, 15, 20 years ago the approach to a lot of customers was, I'm going to make my quarter. You had companies like Chewy that created much better customer experiences and you had businesses like PetSmart dividending shareholders and buying back their own stock. And there's much less of that now. Customer centricity is much less radical and avant garde. And there's actually a rush to get good at this because consumers want it. Now, like any gold rush, there's going to be a bunch of phony replicants that don't do a great job of it and sort of toxify things a bit reputationally. There's going to be a bunch of poor attempts at it, but the fact that lots of attempts are being made at it because the upside of it looks really high from the other side of that lens could be seen as a sign of progress, a little bit of a Pollyanna view of things. But at the same time, I think you don't want to completely throw out some of those elements.

Miya Knights: [00:30:57] I think it's also leading retailers and brands to reassess what's core to their business, to Grace's this point. To use your word, Mike, I always refer to retail as intensely parochial and dealing with them in terms of technology and what differentiators they derive from their technology. They don't want to talk about it because that's my secret sauce. But actually, if it's getting 1.1% extra efficiency out of your supply chain and you can share that with other retailers in the American Eagle example, surely that it allows me to concentrate on something else. I don't really want to worry about where my containers are, which is what they're preoccupied with at the moment. But I've always observed this tension and I want to own it all. I want to own the customer relationship end to end. I want to own the process end to end. And I think there's got to be a little bit of letting go in that sense if retailers and brands are authentically going to meet the challenges from an ESG and authenticity perspective, really.

Brian Lange: [00:32:03] I do think it depends on the brand. At a certain scale, all of a sudden, I think there's high importance that needs to go into connecting the COO to the CMO, if you will. At a certain level, if you don't have the discipline of running a supply chain and running distribution networks, I think that's going to put you at a disadvantage being able to run an efficient business, but also being able to effect change and actually show your customers that you're making strides. Once you hand that off to someone else, you're fully at their whim.

Miya Knights: [00:32:38] It's deciding where the real differentiators lie. I think for me, promise to deliver is so important. So that might mean you decide you don't want to give away your supply chain to your point. Absolutely. But at the same time, retailers are fighting fires on so many fronts, you have to start prioritizing. And there are people out there that are so much better at shifting goods around the planet than retailers at the end of the day. So it's finding the right partners.

Phillip Jackson: [00:33:06] Authenticity came up more than once in the last few minutes. Something that came out of our study was that there is actually sort of a warring faction of people who believe that, 51% of our study said "You have to fake it till you make it." So slim majority. And 49%, said "Authenticity at all costs." And I think that that's actually the undercurrent of tension that we have in the world, even in our own businesses, is that we have to project outwardly like we are doing everything because we've got to fake it till we make it. When it becomes operationally efficient for us to do it all, we'll really do it all. Maybe. But there's the other side of that which says, "I just want you to tell me the truth. Just tell me the truth." I have a pet theory that the pendulum swings far back the other way, that there is going to be some sort of discontentment coming on the horizon where people say, "Just give me a good product. I don't want to hear all the other stuff. Don't tell me how you're fixing the world. Don't tell me how you're changing life. I don't care. But I'm just tired of buying stuff that looks pretty and tastes awful." I'm tired of not getting the thing that I thought I was getting and my discontentment will lead me to, "Let's just go after a brand that just tells you it's really frickin awesome. That's really, that's what I want."

Miya Knights: [00:34:48] I think that's a really good position of devil's advocacy that you've taken on board. But to Michael's point, those brands that have shaken out over the last 50 years made products that were all sub-form and no function, as it were. I think if you make a product that doesn't taste good and you wrap it up and make it look amazing, you might sell a few units or plenty of units in the first few months, years, but soon enough people will be like, "Well, it's not as good as these other products." In that sense, the transparency that we've been talking about totally exists on the side of the consumer. The consumer is sharing all of their experiences all the time with whoever wants to listen. I think the retailers and the brands should be listening more. With some of the comments that have been made so far, I also feel like we should say, well, why don't the retailers just ask, what are you here for? Do you want to be in and out? Do you want a really curated handheld experience? I think sometimes consumers might be, customers might be happy to volunteer what they're here for. Sometimes they'll go, "You should know." I'm a loyalty customer. I live in your shop. Surely you know what I'm doing here. I'm here every Monday. So there's a balance to be struck there. Again, no easy answers. Very complex.

Grace Clarke: [00:37:28] It sounds like a lot of the examples we're bringing up happen to be physical products, but I'm really curious about the conversation as this pertains to software and digital products. The easiest thing to talk about there in terms of authenticity and transparency is how your data gets stored and shared and saved. And if it does at all. But there has to be a bigger conversation. It's funny that as a consumer, my experience of people and how they spend their time with digital products is that they diligence them a little bit less, but classify them as generally bad, much faster, just to say, "They have all my information, so they're probably doing something bad with it. But I don't have as much intensity to scrutinize them." Yet, we interact with those products way more often, for the most part. I'm spending much more time on apps on my phone, whether it's Waze or MyFitnessPal, and I ask myself questions about that product much less than I do about what I use when I'm cooking or even the gym that I go to, which is both a physical product and a digital product. So diligencing those things as a consumer seems to be really funny because it doesn't happen as much.

Kiri Masters: [00:38:40] Well, I think that comes back to the convenience versus what I think are my values and what I say are my values because I don't trust Facebook, but it's the dang easiest way to log in to any other app. So I keep using it and I keep sharing my data all over the internet because it's convenient. And that is, yeah, a case where what I say I believe and trust and my convenience-oriented behavior doesn't actually align.

Grace Clarke: [00:39:11] No, but I have great conversations about this exact thing with the design community. When we talk about choices between Figma or Canva or how they want to actually interact with those types of products, I think it depends on how we actually use that piece of software in our daily lives. And what for, like you said, certain age groups and what the utility is for that product. But I think once we start to talk about products that support other brands, especially enterprise SaaS, there are more conversations there. They just aren't as fun to talk about perhaps. It's much easier to argue on TikTok about why brands all start to look the same, consumer brands, than it is to talk about how are software products differentiated and how do we interact with them as an SMB. So I have a ton of excitement around UX design debates and what authenticity and accessibility for people with different conditions look like. That's another part of it. It's just less tangible quite honestly.

Brian Lange: [00:40:20] One danger in all of this plurality of identity, addressing it, whether it be software or physical product, is in getting back to the authenticity versus inauthenticity question. The more like plural we get in our identity, the more chance we have of looking inauthentic. Like if you look back at Crocs and what they did before the turnaround. They were like trying to build the Crocs ballet flats and they're like, "Yeah, we're going to be all shoes to all people." That created this real, like, massive dissonance in the market. And people were like, "No, I don't want crocs ballet flats." At least then. Maybe now it'll work.

Phillip Jackson: [00:41:09] Yeah, maybe. 

Brian Lange: [00:41:10] But I think, again, I think software is a really good example of this. Actually, we technically have the ability to make software like become more unique. It's a little easier to address specific segments or markets with pixels. But I think the problem with this is if we pixelate our businesses. Is the net effect that we look like we don't have an identity as a business? I think that's a huge danger. I think that's what got Crocs before they turned around.

Phillip Jackson: [00:41:55] I mean, there are so many different factors that we could actually tease out. I think let's follow the software thread because I think it's fascinating, actually, Grace. I think there are consumer dynamics at play in software choices, especially as the more people that are buying enterprise SaaS type software are actually more single operator or small team operators themselves. They express more consumer dynamics in the way that they make choices. I think most people honestly choose software because they say, "I want to be like that person who has that thing. What is your stack?" And in fact, a good portion of my own little Twitter bubble, which I know is its own filter bubble, but a good amount of engagement comes from the "What ten apps are you using on Shopify?" And because everybody wants not only the fastest way to emulate success and the tools on which they built but also you don't want to be the one oddball in your industry who's running the ancient software. You kind of want... There are people, the people that are buying that are thinking about a bunch of things. One of them is my future upward mobility and career path. I don't want to be the guy who sat on Magento for ten years, so I need to choose the thing that's next relevant. And so those are things that I think we don't consider enough. We look at feature and functionality and UX or whatever the hot new AI/ML capabilities. We're not considering at all the network dynamic that gives that kind of pressure on the choices we make as business operators.

Michael Miraflor: [00:43:27] It's also a reflection of who's acquiring or buying those licenses. So when I was freelancing heavily over the past couple of years, I so happened to work for a handful of agencies or companies that used a certain video conference platform, let's say Microsoft teams, whatever. And I found myself having to apologize to people that I was sending invites to because of the perception in the marketplace that it was an inferior product to Zoom or Google or whatever else. And that directly I would have to say that because it would offset something that would be obvious in the first 20 seconds of the interaction in that this is an unfamiliar login. It's probably less friendly and less familiar. Therefore, it's making the beginning of this conversation to be a little less comfortable than it should be. I think you can zoom into that and apply it to a lot of things as well, that your stack is a reflection of the values that, or maybe that's too heavy-handed to say, but the stack is a reflection of especially if you're a small operation or if you're in an SMB, it directly affects, you can argue, the quality of life of your employees.

Grace Clarke: [00:44:37] Completely. And then we see some of those software providers themselves becoming media operations where they spotlight their own clients. So it really is this virtuous cycle. And I only use virtuous to mean that it continues to happen. I don't know that it's always the best thing for everybody, but that means that software, which increasingly is easier to produce, you have people who operate. Honestly, I wish all of my CPG clients operated more like the Agile method and focused a little bit more on their product, like engineers and iterated rather than committed to one vision unfailingly. But that is really true that it is such a signaling device to say, especially when you are raising money or you are trying to explain to investors how your business is going to continue to grow. A piece of software can almost make or break what might be a tiny percentage point of a margin.

Michael Miraflor: [00:45:39] I've talked to a small, very small handful, but interesting case studies of Web3, very young Web3 engineers who have decided to work for one startup versus another based on their day-to-day workflow stack. And when you ask, why are you just so familiar with this tool and not that tool that it's just a familiarity thing? It's like, "No, it means that this company doesn't care about what their employees go through day to day versus this company who has even explained why they use this as messaging and this is project management." And it's like it's all to the tune of making your life as efficient and easy and low load as possible because we want you to lock in and do good work. And I'm like, you know what? I think that's been a truism for my entire career. And I've worked mostly at like big box enterprise, big conglomerates, and the stack that you would have to deal with would always be something that you complained about, but you felt like you had no agency to actually change. And like, "Oh, man, I can't believe I have to deal with my email through this. But I'm not going to go to someone upstairs and complain about that because I'm just an employee." But at the end of the day, it really doesn't affect your productivity and your quality of work life.

Kiri Masters: [00:46:45] That's why sites like one 800 DTC exist, which is just basically a glass door for pieces of software that operators use to build their companies.

Miya Knights: [00:46:55] I think also listening to the discussion, I just think that it's a well-worn phrase being a brand with a purpose. But what I'm seeing happen actually is that the relevance of that is starting to permeate to every part of your business. It's not just greenwashing marketing. It has to be from the moment I start product development and innovation, who am I hiring to do that? What are the tools I'm giving them to do that? That's all a reflection of who I want to be seen as from a brand perspective. And yeah, from an authenticity perspective, you can't afford to sort of fake it because personally on that point, I would say if you're faking it till you make it, there's always the chance that you could get found out. Whereas at least if you're being authentic, it doesn't mean that your respondents are perfectly entitled to their opinion. But I would rather be completely authentic and make sure that that runs through every part, every vestige of my company from the DNA right through to the advertising.

Grace Clarke: [00:48:04] I mean, look at any investor update of an early piece of software company, whether it's a Notion or an email, you're probably getting some instance of building in public, even if it's performative. But it's a definite part of building your brand as an entrepreneur. And I would love to hear anyone take a bear case on building in public because I don't like it.

Brian Lange: [00:48:27] That's exactly... It's not so much that I want to have a better case on building in public. But what I do want to say is we talked about transparency. Transparency leads to the Hawthorne Effect, which we've talked about in the report, which is people's behavior changes when they know or think that they're being watched. And so, like you said, the word performative. When you said that, I was like, yes, exactly. I think this is giving rise to actually a lot of insincerity and actually, sort of almost the celebration of insincerity as like a mode of operating, which I'm not saying is good, but I do think that it's happening. And so like I think there's a lot of employees... Actually, I think back to your original example, Michael, you just kept using that email, you didn't complain about it, even say anything about it. You just kept using that email provider because you kind of just had to. And instead of having a boss, we have Twitter, which is the whole world is now our boss.

Phillip Jackson: [00:49:41] But Twitter is not the world.

Brian Lange: [00:49:43] Yes.

Phillip Jackson: [00:49:44] Yes, that's actually the problem.

Brian Lange: [00:49:46] Yeah, that is. There's a public boss. What I'm saying is...

Phillip Jackson: [00:49:49] Yeah. No, Twitter is not even the Internet. Twitter is just Twitter.

Miya Knights: [00:49:52] Yeah, what we are seeing now with the great resignation is you have to position yourself as an employer of choice. You've got to be more mindful of these kinds of things because they will just vote with their feet.

Mike Lackman: [00:50:02] And that's why I actually took the opposite interpretation of what you were saying. I was expecting you to go a different way when you talk about the Hawthorne Effect. When I think about myself as an employer and again, not a very, very large one by any extreme, but my biggest fear is that anyone in our company, whether it's a CX rep handling a ticket for one of our customers or one of our more technical folks dealing with a particular ticket in a project, regardless of the level in the company that someone's working at the second that just becomes a ticket, I think there's a 50% chance they're gone within two or three weeks. That's the way I approach work every day. And so the idea of I absolutely feel like I'm being watched by a company all the time. And if I can't make promises that I can keep every day or Friday emails to the staff 52 times a year, if those ring a little hollow... And it's not like someone's going to jump in the email and say "You're wrong." They'll just fail to be compelled and quit. So you need to keep up with that bogey all the time and make promises you can keep 52 times a year when you communicate with everybody on those cadences or something like that. And so I like that forcing mechanism. I think that really drives you to make meaningful promises and keep them 50 times a year.

Grace Clarke: [00:51:12] And build that into the fabric of yourself as a leader. Because so often I'll see companies have lowered morale and no one can really understand why. But chances are it has to do with lack of consistency or overpromise from the side of leadership, and chipping away at your own credibility over time doesn't really serve you. So you could adopt a truism, I guess, certainly in the consulting business almost anywhere, under-promise and just overdeliver as it pertains to your own team so that you can invest in them and let them know that I am absolutely committed to this being a good experience, not just for our investors or other people who are funding the business or our customers, but also the people who are building this thing and starting small and being very being sort of economical with the promises that you're making seems to be a more efficient path if I'm understanding your take on it.

Mike Lackman: [00:52:12] If we're successful, I'll tell you what actually works, but I think I've been on the wrong side of that too. So I've been chased by the demon of what's the purpose clearly enough? Why aren't we promising something bigger? It needs to be big enough that it's worth spending your time with. Folks that care about the purpose of the business, where they want to work, customers that care about who they want to spend their dollars with, you can't sandbag those things. And so it's a very fine line between under-promise and then failing to compel versus pitch the best pitch you can come up with right now in this room and fail to think through whether you can do that the next 52 weeks of the year. And I think the answer is if you do it right most of the time, ideally you have folks who will forgive you the 5% of the time you get it wrong. But it's a tough one.

Miya Knights: [00:53:11] There's the element of productivity as well. I think the point about being watched, what I've heard a lot of business leaders, BTC company leaders talk about is not watching, not judging their employees on whether they're coming into work. If you're not here, you're not working. It's the outcomes, measuring the outcomes in that sense. So to your point, you make the promise, but you have to deliver it on it 52 weeks a year and you're measured on the outcome of that. If you miss one, then obviously you failed on that outcome. But also it's the quality of what you're putting out there as well. So I think people would at the end of the year, take a step back and go, "Well, how productive has Mike been? Oh, well, he's kept his promise. And he's not about the park every time." It's the outcomes nowadays. I think that's much, much more important. You've got to be really clear about what they are from the point of view of promising your promise.

Brian Lange: [00:54:07] I think they can cause some challenges though as well. If we focus 100% on outcomes, outcomes are almost always KPI based. KPIs are almost always imperfect, and then they end up driving behavior that is to hit KPIs as opposed to hiring good people to do good work and understanding that the KPI isn't always the end all to be all. And so I do think again, I think this gets back to a certain level of like performative action. If we're 100% focused on outcomes, then we are going to do things that we don't necessarily... If you're a certain kind of employee, you're going to go try to hit those outcomes as opposed to potentially doing things that are actually better for the business or better for the environment or whatever it is. So if we're 100% outcome focused and I think that leads to insincerity.

Phillip Jackson: [00:55:03] The new KPI is vibes. We're just here for the vibes. That's not really what it is.

Miya Knights: [00:55:10] What about satisfaction levels? I would prefer it if someone said, "Have you hit your targets, and did you enjoy doing so? What did you have to fudge? What should we learn from the experience of reaching or missing that KPI?" Rather than it being, I suppose, an absolute hit or miss the KPI. You just need to tease out the nuance of why you got the result you got. So I agree with you, it shouldn't be all outcome based, but there doesn't seem to be room to measure or nobody seems to have worked out how to measure the softer side of business in that sense, have they?

Mike Lackman: [00:55:43] But that's why I like the outcomes approach. If you're an employer, the outcomes of when the vibes are right is do you have great people you'd be proud to associate yourself with. Like when I think about having young kids, do I have people around me I'd be proud to see my kids become like those people. And are they doing great work? That's an outcome thing. I can say the vibes are great and the people I'm talking to like things, but if you're not earning their buy in every day, that's a hard empirical outcome of do you have the team you need to accomplish what you're promising to your customers and are they actually showing up every day and being bought into things as owners? I love the outcome approach.

Brian Lange: [00:56:18] You're also one of the most sincere, empathetic people that I know.

Mike Lackman: [00:56:25] I hope not. I mean, seriously, I don't think that should be an exceptional standard for people. I think we all have to be servant leaders in that regard. People are really selective with their options and so you just have to earn it.

Brian Lange: [00:56:36] I love that as an outcome though. I love that. I think that's a fantastic way to think about it.

Miya Knights: [00:56:40] Brands need to be reminded that their staff are their best brand advocates and they need to make sure that their staff are happy. And I suppose it starts at home in that sense, doesn't it really?

Grace Clarke: [00:56:50] But I think we're seeing some of that happen from some pretty big leaders in the space. Neiman Marcus is a great example of a company that is encouraging, encouraging, begging its employees to get on TikTok and talk about what it's like to work there from the shoe department when they're on the floor working, to actually walk around the floor, talk about the products, not to say, "Here's what's new in stock," but just to simply give some life to a company that may be a little bit faceless or maybe maligned in certain regard, but that's a legacy company. And for someone internally or a group of people internally to be advocating for that the same way Tiffany is doing the same thing, I'm encouraged by that because of course there is still a win for the business if that drives people to the store or it drives people to make purchases or helps acquire customers who may be saving and saving and saving to buy something at Neiman who might not otherwise. It is still, to me, a step in the right direction, or at least advances the conversation around what it can be to treat your team as really strong ambassadors. I worked for a company about a decade ago, and I was there when we started Instagram, and I wasn't allowed to put my company's name in my own Instagram bio because the fear was great talent gets poached. I am hoping that we have completely come 180 and now we are understanding that people are the best recommending engine not just for new customers but also for better talent.

Miya Knights: [00:58:47] It's a great example of an English fashion brand called Jewels, and I interviewed their head of HR about three or four months ago, and they had an intranet for their HR system for training. It was impenetrable. It's hard to search. People were told to go and read this document. There was no way of checking that they'd read that document. So they put in a new learning management system and then the pandemic hit. And it was just good timing in that sense that they suddenly had this central Web 2.0 kind of quite modern, mobile responsive system that they could reach out to their employees with. And what they found was that the employees really started to use it to create a community amongst themselves and the employer, Jewels themselves, gave the employees license to do things other than what was core to the learning management system. So they started to share hobbies, and lockdown tips, and it became a self-sustaining thing that they ended up, to your point, Grace, putting out on social media, which reinforced their own culture internally, but added to their sense of brand purpose, what they stood for. They actually discovered that they had a couple of budding stars amongst them, a lady that would teach people how to gift wrap. And her lessons went viral within the company. And then they put them out there and they went viral on Instagram. You've got to be willing to give people the tools and let them, to Mike's point, let them use them to the point where they can affect their own levels of satisfaction.

Kiri Masters: [01:00:32] This is sort of like the old saying, people don't buy from companies, they buy from other people. And it's bringing a face, not just one face, but individual faces to a brand and bringing that brand to life in a similar way that we've seen influencers drive sales and be the face of a brand. And that's why influencer marketing has been so successful is because there is a face, there is someone that I trust, there is someone who I want to be like, someone who I want to look like. So, yeah, great job for those companies to actually turn their employees into influencers in a way.

Miya Knights: [01:01:18] I think it's great that we've had this organic conversation where I've maybe, tell me if I'm wrong, tell me if you guys agree with me, I've come up with what I would think is an authentic example, whereas nowadays, I don't know, maybe the tide is turning, but in my opinion, celebrity influencing is faking til you make it. Do you know what I mean? There is a nuance between the two. They kind of have the same effect. And if you love celebrity advertising and marketing, then that's for you. That's brilliant. But there's a distinction. There's a small nuance there between the two.

Brian Lange: [01:01:51] Circling something here, which we circle a lot at Future Commerce, is the difference between the way things should be if we all operated the way that we want them to versus the way things are and the way things are trending. And it's funny, we talk about... And I think, Mike, you said something after the last session. You're like one of the dangers of talking about what makes people happy. And then here we are as brands, like sitting around like, oh yeah, we're going to make people happy by selling them more stuff. We're going to influence change in the world through commerce, through capitalism. The danger of all of this is a lot of these thought processes circulate in our thought leadership communities, a lot of these ideas, and then we see the largest rise in depression from year to year that we know of.

Phillip Jackson: [01:02:46] Yeah. To have more and feel less, maybe. And that's where I do find that one danger is us putting ourselves in a position of having answers. Inherently I don't want this platform to be about that. I want to ask questions and I don't know that all questions have answers. I think that some people try to solve them in interesting ways and some people have their own perspectives. Maybe it is KPIs, maybe it is vibes. There is no one universal truth when it comes to solving any given problem in this world that we're all living in. I do think that when we're just thinking about starting a conversation in our industry that's way above the tactical conversion rate optimization AOV and channel arbitrage. We need to elevate the conversation to think more about the personhood of the person on the other side of that transaction who actually has a lot of conflicting behaviors that are giving us mixed signals and causing us to try to interpret them and sometimes a really difficult and brand-defining way and potentially not serve the end goal that we've all set out to achieve. And we'll keep asking the questions.

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