What Makes a Brand Meaningful?

Phillip: [00:00:01.30] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. We can say that again.

Brian: [00:00:06.44] We can.

Phillip: [00:00:06.88] I'm Phillip.

Brian: [00:00:07.33] Yeah. Oh, I mean, we always are about that, no matter what.

Phillip: [00:00:11.89] Always have been.

Brian: [00:00:12.69] Yes.

Phillip: [00:00:14.44] And whatever that means in your present context, when you're listening to this...

Brian: [00:00:19.35] Exactly. Exactly.

Phillip: [00:00:19.35] ...is what it means. Brian, we're talking about Nine by Nine today.

Brian: [00:00:23.56] We are. Oh man.

Phillip: [00:00:26.05] I feel like I cannot get tired of this.

Brian: [00:00:29.23] I can't either. I mean, it's been such a fun time releasing this report. It was so fun to make. It was such a fun report to build.

Phillip: [00:00:37.09] Yeah. And six months of our time, you know, all of our free time. Future Commerce is a bit of a side hustle. We're bootstrapped. But to put that much time and effort into it and many, many people's time and attention and brilliance that went into it. And so if you don't know what Nine by Nine is today, it is a report that asks the question, "What makes a brand meaningful?" And spoiler alert... There are nine answers. Nine categories and nine brands that we feel like exemplify those nine answers. So why don't you go check it out today? FutureCommerce.fm/ninebynine. That's Future Commerce dot f m slash n i n e b y n i n e. First, right up top, can we just say thank you to Klaviyo?

Brian: [00:01:25.63] Oh yeah.

Phillip: [00:01:26.35] For helping us put that together. And I know they are no longer a sponsor of the show. They did sponsor the Nine by Nine, and made it possible and lent a lot of creative energy into making it.

Brian: [00:01:38.86] Work and time and creative energy.

Phillip: [00:01:42.31] And we've all shared in the success. Let's talk a little bit about the broad reception to the Nine by Nine. And some of that, Brian.

Brian: [00:01:52.02] Yes. So I would say that the reception of Nine by Nine was well beyond kind of what we expected it to be. It's our first time being picked up by GQ and Women's Wear Daily and Sourcing Journal and Adweek and Morning Brew... And whatever else... Oh, Market Insiders.

Phillip: [00:02:15.12] Yes.

Brian: [00:02:15.73] And a few other things.

Phillip: [00:02:17.58] Business insiders. Yeah.

Brian: [00:02:18.89] Yeah. Yep. And so, yeah, that's...

Phillip: [00:02:21.52] It was a lot.

Brian: [00:02:22.48] Yeah.

Phillip: [00:02:23.79] It was a lot.

Brian: [00:02:24.43] But it was really cool to see just like what trends people picked up on. Like the story that hit GQ's home page was all about CARLY, which I thought was a really, really cool to see that sort of take life through this report and see people kind of start to go dig deeper and read your original article that you wrote about CARLY. And we've got a lot more coming on CARLY in the future. So it's very, very cool to see that GQ and Business Insiders and others see this as a moniker, as a psychographic, as a title that is going to continue on for years to come.

Phillip: [00:03:07.66] And worth discussing.

Brian: [00:03:08.98] Yeah.

Phillip: [00:03:10.36] CARLY, for those uninitiated, is a consumer psychographic that we created here back in December, I think, that we wrote an article about called Meet CARLY. That was the title of the article. Check it out. You can find it on our web site. But that particular article outlined a psychographic of a consumer. It is an acronym, Can't Afford Real Life Yet. And so might be part of Gen Z, but not necessarily. Depends on sharing expenses with other people, sometimes their own family, maybe just young enough to be spending money on some things. And where CARLY spends money is deeply personal and very important to her at this point in her life. And she cares a lot about it and considers every purchase very highly.

Brian: [00:04:05.00] Yes.

Phillip: [00:04:05.34] Yeah. And we spent a good amount of the portion of the Nine by Nine research thinking about CARLY as a psychographic. And I think it resonated, to your point, resonated in GQ and some other journals that picked it up.

Brian: [00:04:20.10] Yeah. If you're not in Gen Z  and you're a CARLY, you might be a CARLE. And as far as the article pointed out, it's used like, "I'm afraid I might be a Can't Afford Real Life Ever." {laughter}

Phillip: [00:04:35.23] Which is unfortunate, but it's kind of true. Millennials have gotten the worst of it in that they've been through two big economic disasters. Having lived through one in 2008 and probably at the beginning of the real life portion of their journey. And now again now twelve years later. But we digress. There's a lot coming in future reports about that. And we will unpack that, at this present moment, then. But we said there're nine answers. What are the nine categories of the Nine by Nine?

Brian: [00:05:09.42] Great question. So this took a lot of thought. We sort of had been looking back at stuff we've been covering over the past year to see what trends that emerged. And as we started talking with people and sort of floating the ideas of doing this report in the first place, which we really didn't want to just do another list. Did we end up with the list? Absolutely. But we wanted to do something that we felt was really, really meaningful unto itself. And so we identified these nine trends. Community Driven, New Luxury, Hundred Club, Prime Challengers. Audience First, Purpose Driven, CARLY, Late Stage Retail (or really Anti Late Stage Retail), and Local Heroes. And these are all different things we've talked about over this show at length in the past 12 months and see as really important going forward. I'm really excited for when we do a refresher of this report, because it will be something that we do on a scheduled basis to see what additional trends end up kind of cycling in here. But these the nine that we came up right now. And we'll get into what each one of these throughout this show and give you some additional insight that maybe you won't find in the report. But, Phillip, maybe we could talk about some of these one by one. Do you want to give us some thoughts on the first category from the proposal? Actually, before we get there, maybe talk a little bit about the thought process behind this. We wrote an open letter at the beginning about why and what's important about this? Talk to the audience a little bit about that.

Phillip: [00:07:01.13] Yeah. Well, the why, I think, is the important part. There is a question here that we frame or open with, which is, "What makes a brand meaningful?" And I think we had framed it in our qualitative interviews with our Future Commerce expert network, which is a group that... We're transitioning to LinkedIn, by the way. If you feel you that you're an expert in your field and you'd like to apply to be in our expert network, please drop us a line at hello@FutureCommerce.fm. We'd love for you to take part in that. But when we had framed this question for the expert network, we said, "What does it take to make a brand beloved?" And I think that it's really interesting, depending on who you are. The thing that you value most from a brand is very different, right? Depending on what stage of life you're in, depending on how much income you might have that's liquid or available for you to spend on goods or services. And I think another point of differentiation here is that brand has the sort of soft meaning in that "What is a brand?" is also a question that you have to answer.

Brian: [00:08:14.21] Right.

Phillip: [00:08:14.21] And I think it's really summed up very well by one of our expert network members Sucharita Kodali, who's been on the show many, many times. Sucharita of Forrester. And she had basically said that a brand is a promise. So what makes a brand meaningful? When they fulfill that promise. And for a couple of these categories, in particular Prime Challengers, you'll find that brands there are technology platforms and logistics platforms. They're not consumer brands, but they're intermixed, interspersed with consumer brands. So what makes them meaningful is the value that they're providing either to consumer or to a business operator in that category that helps that business or that consumer either part ways with Amazon or to do business with the business that's not Amazon, to have a decidedly better experience and spend their money elsewhere. Or for a business to compete with Amazon. And so I think each of these categories has so much nuance to it of what brands rose to the top and what brands were top of mind for our expert network at the time that we created the report. And that was the key for us, was there is a science and an art to creating something like this. And it is, you know, pushing 9000 words. It's 30 some pages long. It's sort of a deep dive. And we've received a little bit of criticism of, "What am I supposed to learn from this?" And I I would answer that criticism with, "Well, if you're asking that question, you're probably not the audience for this." I think this report is for a brand operator who is trying to take in the entire total landscape of everything that's happening in eCommerce, retail, and direct to consumer and anything that's digitally enabled in the retail environment. And what is meaningful to a consumer? It depends on who the consumer is. Sometimes that consumer is a 17 year old who still lives with their parents. Sometimes that consumer is a millennial who is discovering aperitif culture. Sometimes that consumer is somebody who just decidedly doesn't want to spend money on Amazon anymore because it no longer aligns with their values. And so we attempted to answer that question. I feel like we did a pretty good job. And the original idea, Brian, right... Was that we would make this an annualized report. And this was our first go at it. And we're going to make this better over time. And maybe you could talk a little bit about the qualitatives and the rubric and the scoring system and how our approach was maybe the science part of it, the science part of the art, in creating the Nine by Nine.

Brian: [00:10:50.91] Absolutely. It's a really good thing to kind of expound on here for a minute. One last comment on what you're saying. I think what's interesting for takeaways here isn't necessarily that you're looking at a bunch of brands that are really cool or that are being ranked or awarded or whatever. I think the real takeaway here is these brands actually exemplify these trends. And so you're not looking to discover brands here. You're looking to find... The way that those brands exemplify those trends is super clear to us. And we wanted to pass that along to you and to our network.

Phillip: [00:11:35.95] And we did learn a lot in creating the report.

Brian: [00:11:38.34] Wow. Yes.

Phillip: [00:11:38.34] There are brands here that I had never heard of before that I feel like have missed any kind of like spotlight or hype in the world where... The world around the direct to consumer echo chamber very often builds a lot of hype and fanfare for venture capital backed brands or ones that are incredibly disruptive. And we decidedly asked our expert network in the qualitative to find ones that were top of mind that were probably hidden gems. And I feel like we did that. I'm very... To pat ourselves on the back, and we're taking a victory lap on this podcast today. To pat ourselves on the back like there are a lot of... It is really difficult to cut through the noise of this idea of brands that like get a lot of attention and earn media. And earn media is one part of that scoring, to come back to the score.

Brian: [00:12:31.80] Yes.

Phillip: [00:12:32.32] Earned media... When you're ranking brands, earned media is part of how consumers find out about brands. And that's through like influencers, finding out about brands through things that like do build that excitement. But it's only one part.

Brian: [00:12:45.63] Right.

Phillip: [00:12:45.98] There are a lot of pieces.

Brian: [00:12:47.09] And to that end, we actually did kind of break things down into outlook, relevance, audience and channel strategy, innovation, and sort of within those things we had different categories as well. We broke it down a little bit further and we gave scores, and actually we gave a weighting, to those scores such that we weren't... We did our best to make sure that there was an appropriate amount of weight placed upon any given thing. So like Phillip said, earned media is only part of this. And so we actually ran this against our expert network and got feedback on this particular rubric. And this is where we landed. And so if you go down on the report, you can actually find out what that weighting exactly was and how many points we gave to different things. Cultural currency as a touchstone. Community touts ethical and sustainable values. EMV, which we just talked about a second ago. Brand advocates and community.

Phillip: [00:13:51.54] EMV being earned media value.

Brian: [00:13:55.32] Yes. Creating killer content, which we think is super, super important today. Having an omni channel strategy, having innovation in your products, but also innovation in your business model for your category, because some categories are a little further along than others are. And so we didn't want to penalize someone for introducing a new model to a category that has never seen it before or sort of copying another category when they're category...

Phillip: [00:14:24.11] And vice versa. Right?

Brian: [00:14:25.62] Yeah.

Phillip: [00:14:25.62] Like, the vice versa plays out, too, which is that you can have, you know, yet another entrant in an otherwise proven category that you shouldn't be dinged for that.

Brian: [00:14:35.67] Right.

Phillip: [00:14:36.06] Especially if you're doing it well. To displace incumbents, you'll have to do something else fairly exceptional. And so, again, when you and I started dreaming up this idea of Nine by Nine, we had a couple of guideposts for ourselves. One was, we don't want to create another list. Who needs another list? I don't need a list. You don't need a list. And we had looked at a few out there that were just like logo clouds of 300 logos, and they were grouped into verticals. And they don't mean much of anything.

Brian: [00:15:12.53] What is a vertical even... How is that helpful for you as you're trying to figure this stuff out?

Phillip: [00:15:17.58] Right. Or when you say figure stuff out, like if you're a brand strategist or you work for a brand how does that help you? It maybe gives you like some visual like area that there are a whole lot of skincare brands in the world. Maybe that's useful, but it certainly doesn't tell you what the core ethos or value prop behind the brand is or how consumers find that brand to be valuable. Also, another point of contention, or another thing that we've received some feedback on is, "Is it fair to take a brand like, let's say, Peloton...?" Which was one of the few that received a perfect score and in our rubric which, by the way, I feel like is the most transparent brand scoring system that's ever been put out in the direct to consumer brand ratings space. Everyone else is very cagey about the way that they come up with a score. We are very open about our scoring system, and it will become more complex over time. But I will say can you distill Peloton down to one thing? "Is it fair to say that Peloton is community centric or new luxury and not both?" And I think that that is a fair question to be asking. We sort of decided, again, a guide post early on was, what, "81. No repeats."

Brian: [00:16:40.59] Right.

Phillip: [00:16:40.59] So it would not be fair to have Peloton appear six times across it. So like the thing you kind of learn when you're creating something like this is, well, brands aren't just any one thing anymore.

Brian: [00:16:53.07] Yeah. And of course with the categories that we picked, I think that they naturally lend themselves to some crossover because these are cultural trends. And so, yes, you could absolutely be purpose driven and community driven. And they definitely play together really well. But I think that we picked these particular categories because they seemed like they had very distinct markers of what a specific company was extra strong in. And yes, some of them were extra strong in a few categories. So they easily could have been ranked into other categories. I think another point to make on this is that we tried to make sure that we had a good representation of different types of people that we interviewed in this process. So as we went out and talked to our network, we wanted to make sure that we had analysts, we had operators, that we had consultants, that we had a whole host of founders... We wanted to make sure we got a really good broad view of people's view into this because, like you said at the beginning of the show, Phillip, different people have different expectations. And so was really important to try and get that from all the different angles of different types of operators.

Phillip: [00:18:16.26] Yeah, because we wanted broad representation of like roles and from like an expert's perspective. I think we also aimed high for people that are notable and visible in the ecosystem, that are outspoken around some of these issues. And so for us, it was like a huge get to have Sucharita participate. Security Kodali, who we mentioned before. But Robin Li, a principal at GGV, who has been on our show in the past and participated in our Step by Step series, Robin Li is one of the like preeminent venture capitalists in the world, without a doubt. In particular in consumer brands and in particular in tech. And GGV has a number of investments that appear on here. But it wasn't because Robin nominated them. It's because, you know, they are top of mind in they're stand out. So I find it really interesting that we made sure to have broad representation. And that being said, we set the bar pretty high. I said early on another guidepost for us was to have equal representation of men and women founders, male and female founders. We wanted a strong representation of female founders. And we have a section, also talking about transparency, our contributors are listed by name, our methodology is spelled out with an entire page. And we have an overview of diversity. And we've tracked for 287 brands that were nominated in the Nine by Nine over a six month period. Among those 287 brands, it came down to 40% female founded, which we missed the mark. I wish it were much more equal representation. Or female founded or female executive leadership. And only 20.43% as having someone as a person of color in the founder or chief executive role. I feel like we did a little bit better with our representation in our expert panel. But as we talked about in our Black Lives Matter episode just a few weeks ago, I really feel like we can do a better job. It just is going to take a lot more work than what we had. And it shouldn't. It shouldn't be this hard, to be honest with you.

Brian: [00:20:37.99] Yeah.

Phillip: [00:20:37.99] But that's another conversation for another time. But again, transparency... For us in the methodology, who's involved, how brands wound up, where they are on the list, and why certain ones were chosen. But I think there's also the diversity of the business type, right?

Brian: [00:20:57.34] Yes, absolutely. Yeah. We tried, like you said, when it came to Prime Challengers, to make sure that we thought outside the box, and we got some really interesting nominations there. And we got brands from health and beauty and food and bev and athletic. And you know whatever it was, there's a whole host of different types of brands. And we tried to make sure that we saw a good representation across different categories there as well. Not every category. Some of them are a little bit more fashion focused than others. But I think that we did a pretty good job of having some good personal care brands in there and wellness and all kinds of really cool stuff. Phillip, do you want to dive... Let's dive into some of these categories and talk a little bit about them.

Phillip: [00:21:49.13] Yeah. Understanding that we can't distill 30 pages in nine thousand words down to forty five minutes. We did do an hourlong webinar with Klaviyo on the subject. We'll pop that link, so you can watch back, into the show notes and then we'll have a link for you to download the report, so you can check it out on your own time as well. But let's just go sort of category by category and call out one or two that I think are notable. I can start at the top. Prime Challengers. I think for whatever reason, Amazon comes up a lot in conversations about retail. Aman Advani, who is a co-founder of Ministry of Supply and had been on another podcast property with me called Merchant to Merchant, said something I thought was really pivotal here is that there are a lot of brands who stand for more than transactional commerce, and the spirit of that is moving away... We're moving into a world that's more soulful, and we're moving away from transactional commerce as a culture and that brands need to stand for something bigger. And rather than calling out Amazon directly, I think that there is a deepening and a hunger from the consumer to have a better experience than the sort of spearfishing like, "I'm just going to get in and get out" experience they have on Amazon Prime. And the brands that are noted on Prime Challengers, I think, help accomplish that. Shopify obviously ranking quite high as number three on the list. But some folks might ask why I like Target and Shipt coming in at number one ahead of Shopify if you were to consider like who might be gunning for... And it's funny, Walmart doesn't make this list. Again, maybe kind of indicative of the timeframe in which qualitatives happened.

Brian: [00:23:33.34] Well, we actually did talk about Walmart. I think we we had a few reasons why we decided to include Target over Walmart. I think we kind of wanted to say we like what Target's doing better in many ways. And we thought, like, I actually... I know I'm the one that brought up Walmart. Nobody else did. And I think that's because we decided that Target was a better pick right now, because they have a different model. The way that they're going about things with Shipt is a lot more uberfication of last mile than, say, Amazon, which is like top down central. "We control everything. We own everything. It's our way." Like we wanted to call our Target as sort of saying we're going against the grain. We're going with a much more like, targeted brand strategy, taking the D2C playbook, and we're going with a more community centric model for how we're gonna go after Amazon. And I think Walmart, you know, they've made some big announcements recently, which yeah, like I think...

Phillip: [00:24:39.10] Oh, yeah, I'd love to revisit Nine by Nine in '21 and see how the Walmart strategy in the last four weeks has affected their outlook, especially in earned media value that I think would probably promote them much higher up on this list the next go around. Why don't you take New Luxury? What is New Luxury, Brian?

Brian: [00:25:01.36] Yes, New Luxury, I think... Well, you kind of have to know what Old Luxury is first, to understand New Luxury. Old luxury was more like exclusivity, quality, white glove... New luxury is a lot more about the times that we live in. It's about information. It's about being in the know. It's about knowing when that drop is going to happen and being the one that's actually able to get it. It's about knowing the right people and being involved in the right thought processes and cultures. And understanding the hype cycle and when something is out of the hype cycle, and when it's in the hype cycle, and when it's going to come into the hype cycle. Luxury in a modern age means having the resources at hand, whether that's information or time or just ease of use that exceeds everything else. Modern technology applied to best and forward thinking cultural elements.

Phillip: [00:26:17.05] That's... I mean, that's brilliant. Let's pick one. Pick one on this list that you think is worthwhile talking about.

Brian: [00:26:24.37] I mean, I think there's a lot of interesting stuff. Some people will be really surprised that we pick StockX is our number one.

Phillip: [00:26:33.05] Yeah, probably.

Brian: [00:26:34.21] And I think this is the key. Just because something is resale doesn't mean it's not luxury. Everyone is the seller today. Even people in luxury markets.

Phillip: [00:26:51.88] Everyone's a retailer, right?

Brian: [00:26:53.21] Everyone is a retailer. Exactly.

Phillip: [00:26:55.00] That's the big theory here.

Brian: [00:26:58.14] So when it comes to like being in the know, having the best drop on the drop, having the ability to keep track of prices, and keep track of trends, and keep track of what's important. StockX is doing that at a level that no one else is doing.

Phillip: [00:27:18.80] And they're much more than sneakers today. They do collectibles and they do luxury apparel. They do handbags, for instance, and they do watches, timepieces. And so, yeah, I almost think of them as introducing the millennial to a luxury product that they otherwise probably wouldn't have found. And I think that also describes a number of other brands here. And in some ways, New Luxury is about discovery. In the way that Aēsop is helping a millennial man discover skin care, gender neutral skin care and self care. In the way that Lord Jones is introducing CBD to the upper middle class. And Haus is introducing aperitif culture to millennials. I think it's about an introduction and orientation to an elevated experience.

Brian: [00:28:16.59] Absolutely. That's a great way to end that. CARLY. Why don't you take CARLY?

Phillip: [00:28:22.77] Yeah. So we've already kind of distilled CARLY a bit as to what CARLY is. But I think to just to... Let's cherry pick one off this list. I might even kind of say it's interesting that the Kardashians make the list so many times. If there's over representation in any way, it's that the Kardashians/West/Jenners are represented in the Nine by Nine very heavily. I would just want to point out Starface, I think, as one that I might... We've written probably at length about almost every brand here, and we could spend hours upon hours chatting about it. Starface is interesting in that it's taken sort of skincare and where skin care or makeup in the past would be used to conceal the blemishes you have, Starface celebrates them and draws attention to them rather than trying to draw attention away from them. They started with a particular one sticker and a sort of anti-design design club esthetic on their web site that sort of evoked a little bit of like the 1980s, like, you know, old Atari graphics type Amiga throwback retro futurism. And they really leaned into that. And now they're scaling category to more than just the sticker. But I think the sticker was sort of the soul of the brand, to put a star like a gold star. And it almost kind of feels subversive in that Gen Z, Zoomers versus millennials have this sort of like... The millennial mindset of getting a gold star for everything is a thing that I think is being sarcastically portrayed here and in a very subversive way as well. It's like we're gonna put a gold star on our zits. It's just a very interesting brand to appear that I think really resonates with the soul of the idea of CARLY seeing the world as fundamentally flawed, and celebrating her flaws makes her more authentic than anyone else around her. And she loves people like that. And she loves drawing those kinds of people into her social circles. And that's how we see CARLY.

Brian: [00:30:43.63] Yeah, absolutely. And I think that you touched on something, and I'm going to be putting out an article to this extent here shortly, but this idea of of subversive and being self-aware. I think CARLY does a really, really interesting thing in that she really likes things that are cool unto themselves, but also have this sort of self-aware, subversive tone to them. And I think Starface is a great example of that. MSCHF does this all the time. And some of these other brands sort of represent that as well. So we've talked about CARLY a lot. We're going to talk about her a lot more. Let's move on to Community Driven, which is such an important category as well. Community driven is so important because these are brands that are prioritizing not just their relationship with their customer, but their customers' relationships with each other, as well, and giving them the space and the environments and the safety of being able to do that with each other is essential to these brands. I think that, you know, we talked about Peloton being at the top of this list, and we actually put them into this category above all else. And we think this is true, because they've really done a good job of sort of building a tribe that can relate to each other and connect with each other in ways that many of these other brands cannot do and have not done. And so that is such a differentiator for them, and it's going to be what powers them going into the future. It's so funny, community driven brands can actually make missteps. But if they have those relationships with their customers, and their customers have relationships with each other, they're going to get good feedback and they're going to survive those missteps more than other brands are because they have a group around them that cares about them, and they care about the people that are using their things. So, yeah, this is huge. This is one of the most important categories in the whole list.

Phillip: [00:32:58.97] And that brings us almost to the halfway point and being a little pressed for time today, us trying to get this into one episode seemed like a gargantuan effort as it was. I would encourage you to stick around for part two. We will be rounding out the Nine by Nine. I would love for you to go get the Nine by Nine report for yourself and peruse it. If you're pressed for time, check out the webinar that we did. We'll link it up in the show notes. But right now, go get the Future Commerce Nine by Nine report. You can do that at FutureCommerce.fm/NineByNine. That's Future Commerce dot f m slash n i n e b y n i n e. And in part two, we'll be covering purpose driven brands. We'll cover what the concept of late stage retail is and what that means. We'll cover what it means to be audience first and how local heroes and are changing the game. And then one of my favorites, this concept of the One Hundred Club, the idea that owning 100 percent of your brand and giving up no ownership of it or sharing that ownership with your employees is a model that should be celebrated and one that I think we're going to have to see a lot more of in the post direct to consumer era. And that that will leave you with a cliffhanger. I think probably our first ever cliffhanger in the world of Future Commerce.

Brian: [00:34:26.45] Second.

Phillip: [00:34:29.63] {laughter} Yeah, this has been just brilliant. Thank you so much for listening. Brian, any last words?

Brian: [00:34:35.30] No, that's it. We'll talk to you guys soon.

Phillip: [00:34:37.34] Thank you for listening. And remember, we have the power to shape our future. Let's create a future that we can all be proud of.

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