Discover more from Future Commerce
Episode 338
February 6, 2024

When Technology Changes, Context Changes

This week on the podcast, Phillip and Brian discuss the debatable success of the KITH loyalty launch, the “debauchery” during the prior eCom boom cycle, and the forthcoming Apple Vision Pro’s impact on Commerce. PLUS: Save the date for SXSW 2024! Listen now!

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This week on the podcast, Phillip and Brian discuss the debatable success of the KITH loyalty launch, the “debauchery” during the prior eCom boom cycle, and the forthcoming Apple Vision Pro’s impact on Commerce. PLUS: Save the date for SXSW 2024! Listen now!

“No one wants to make a decision about the future without data from the past”

Key takeaways:

- Incorporating tier-exclusive products into a loyalty program can provide real value and make customers feel special and incentivized to continue purchasing.

- The potential for current technology was always built into the technology itself, often requiring new ways of thinking to fully realize its capabilities.

- Pattern recognition, which is necessary for successful commerce, can be mentally exhausting, leading to reliance on algorithms and machines for assistance.

- Building a standout loyalty program requires an understanding of the shifting landscape of commerce and media, and adapting to new technologies and mediums.

- True loyalty programs should focus on customer engagement and long-term success rather than solely relying on historical data or familiar strategies.

  • {00:12:04} - “Kith's got a loyal following already. This is a great way to formalize it and reward people who are already incredible buyers and give them a reason to never leave. It builds a nice moat.” - Brian
  • {00:15:09} - “This is the interesting psychology of what a good loyalty program can do, and I think only a multibrand retailer can pull off, is that I started looking at what else can I buy here and shift my spending. I wound up filling up my cart with the other things that I probably would have bought anyway over the next few months and pulled it forward but away from those brands, which is what loyalty is intended to do.” - Phillip
  • {00:35:11} - “We've lived through one of those cycles already, so we understand the excesses of the prior cycle, and we're just young enough to reinvent ourselves and have already begun to do so because we saw the end of the era coming.” - Phillip
  • {00:37:40} - “When technology changes, context often changes, and the message changes too because it's a new medium. No one wants to make a decision about the future without data from the past. They think that that is the indicator of what to do next. And it often is from a year to year basis until things have a bigger shift.” - Brian
  • {00:41:25} - “Skeuomorphism in the abstract, not in the practice of the iPhone, but skeuomorphism in the abstract is taking tangibly something that is familiar and extending it into the new media format's unfamiliarity so that there's a bridge.” - Phillip

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Phillip: [00:00:05] Hello and welcome to Future Commerce, the podcast at the intersection of culture and commerce. I'm Phillip.

Brian: [00:01:21] I'm Brian.

Phillip: [00:01:21] You're on the road.

Brian: [00:01:22] I am. Down in Austin.

Phillip: [00:01:24] You're in Austin.

Brian: [00:01:26] Good to be down here.

Phillip: [00:01:27] This is the first that you'll be hearing of this, Future Commerce audience, but we are coming to Austin.

Brian: [00:01:34] Whoo.

Phillip: [00:01:35] March 13th for South by Southwest. We are bringing to you our first of what could be potentially four Vision Summit events this year, dates and venues TBD, but we will be at Vintage Books and Wine for a Visions Summit event, and we'll be joining our friend Alexa Lombardo, from Atomic No. 8 and a cast of characters and some are good friends and new friends, and so we'll be joining together, for an evening event, March 13th, at South by Southwest in Austin, Texas. Okay. Now that I've announced that, Brian, are you gonna scope out VVW before we go over there?

Brian: [00:02:17] It's on my list. That's the next thing I'm gonna do after this before I go to dinner. It looks so cool. It's like everything that I could ever want out of a venue.

Phillip: [00:02:28] I can't wait. Brian's like, "Okay. How can we squeeze in a live selection of readings at our next event?" And I was like, "Only if you do it at this bookstore." No. No. Actually, you read a lot at our salon events. So I shouldn't take that away from you.

Brian: [00:02:48] I read a little at our salon events.

Phillip: [00:02:51] You read with some frequency at a successive number of events is what I should say.

Brian: [00:02:56] I read with frequency. I do. I do. And I hope that we can do more reading events. More books. That's what I say.

Phillip: [00:03:05] More books.

Brian: [00:03:07] So excited about an upcoming episode. We have a guest coming on that I won't spoil at the moment who wrote a book, a recent book, and I'm a quarter of the way through it already. And I'm like, man, we have talked about a lot of this stuff before, you and I have.

Phillip: [00:03:24] I may have actually accused him of stealing from our ideas at some point. Cool. Well, I don't know. Do we have to be cheeky or coy about it? Should we just say who it is?

Brian: [00:03:35] I wasn't sure if we should or not, because we haven't recorded it yet.

Phillip: [00:03:38] It doesn't matter. Just say it.

Brian: [00:03:38] He'll be like, "I'm pulling out that interview." {laughter}

Phillip: [00:03:41] Subscribe. Subscribe. You'll find out. Kyle Chayka will be joining us, the author of many books and a vaunted author. I think staff writer nowadays at The New Yorker.

Brian: [00:03:53] Yes, he is.

Phillip: [00:03:53] Also Co-Founder of DIRT, a publication that you and I have both fallen in love with. Of course, nowadays, he's on to his book tour having written Filter World, and we'll have him on the show in just a few weeks' time. Pick up a copy of Filter World and read through it before you get to our episode. And maybe if you, listeners, have questions that you want us to ask of Kyle, especially around this idea that Commerce is Culture, which is kind of our big thesis, then yeah, ask away. We'll get them in front of him, and then we'll put that Future Commerce Plus members as well, and they'll get sort of the priority order there in the question asking from our audience. Cannot wait for that. I think that's gonna be so rad. But there's a lot. We got a lot here today, Brian.

Brian: [00:04:40] Yeah, we do.

Phillip: [00:04:40] A little bit of a tight episode. I think today, we're gonna cover at least, the Kith loyalty launch and sort of my take on what was actually good about that. It's not what you think. I think we'll potentially cover another thing, a brand activation and a celebrity brand activation. I think it's interesting and something to talk about. And maybe we'll even look ahead a little bit to some signs of being a CAROL, which is our new acronym: the Can't Afford my Rich Old Life. {laughter} I can actually get us into the first story, Brian, if you wanna just... You wanna just get into it?

Brian: [00:05:24] Let's go.

Phillip: [00:05:25] Okay.

Brian: [00:05:25] Let's go. Let's just go.

Phillip: [00:05:27] I've been on my CAROL bag for a little while. I told our Future Commerce Plus listeners in our very first After Dark episode about three months ago that I stopped buying bougie soap. And for me, that was sort of the end of the end. It was, like, I can't afford living like this anymore. It's not inflation. It's really just founder life. I can't be spending money on this sort of thing. And we trimmed back in other ways. But then, Kith launched a loyalty program. {laughter}

Brian: [00:06:00] Game over. Game over, man. Game over.

Phillip: [00:06:03] Yeah. And then I switched back into HENRY mode. High Earner, Not Rich Yet. Although I don't know if the high earner is so accurate these days. And in bootstrap media company land, I miss the consulting firm paycheck. I don't miss the w2 taxes, but I do miss a consulting paycheck. But you just recently wrote about a resurgence in Chicory coffee over on The Senses too. So maybe we can tie these ideas of a CAROL together.

Brian: [00:06:36] Direct to consumer, chicory coffee is making a little bit of a comeback. Some old-timey stuff making its way back into the mainstream, although I don't know how mainstream it is. Seems like it's just kind of peeking out a little bit. We'll see if it actually takes off or not. I don't really know if it will. Certainly, it will not be as big as coffee is. I can say that with confidence. {laughter}

Phillip: [00:07:02] That's very true. So this brand, that recently launched as a DTC send up of what otherwise is just a single offering from a company like Bluebell. And there's a French DTC brand called Cherico, and they come out with a ready to drink chicory coffee. And for those that aren't familiar, the download on chicory is it's sort of like it was a filler or a way to cut coffee that started, I think, in New Orleans.

Brian: [00:07:35] Yeah.

Phillip: [00:07:35] Yeah.

Brian: [00:07:36] Yeah. It seems like a depression era. It was the way to if you didn't have enough money to make coffee, then this was like a stand-in. I actually haven't tried it before, so I am curious to try it just for the fun of it. Kinda like drinking raspberry oil... I feel like a DTC to Sasparilla brands inbound because, you know, it's one of those things that's got some historical significance and it could be a point of curiosity for people. Curiosity is a great way to launch a business.

Phillip: [00:08:23] Yeah. I'll try anything once. Chicory coffee I've tried at least twice.

Brian: [00:08:30] You might not say that after you have it. You might be like, "Nope. I'm not doing that again."

Phillip: [00:08:35] I actually really like the Ice New Orleans from Blue Bottle, which is sort of what I keep coming back to. It's the only chicory coffee that I think I've had. I like it with a little milk, which is not normal. I typically drink black coffee, but I don't like the chicory coffee on its own, which I think tells you everything you need to know about chicory coffee. Coffee these days, though, iced coffee being the norm, that's if you just look at Starbucks earnings, you would say that iced coffee has sort of taken over.

Brian: [00:09:07] Yep.

Phillip: [00:09:08] Especially, like, coffee out. So coffee at home from a pod ready to drink intended to be hot, and it being a New Orleans style chicory coffee seems like it's a small market. I just do think it's interesting that we continue to see launches like this.

Brian: [00:09:26] Yeah. That's why I think there's gonna be direct to consumer Saasparilla at some point.

Phillip: [00:09:32] Predictions. Predictions. But if you can't afford real coffee, maybe you can afford the bougie expensive version of not real coffee. What you can afford is to get on to Kith's loyalty program. It ended my CAROL streak, Brian.

Brian: [00:09:49] You went straight to it. You went right after Clark's x Adidas.

Phillip: [00:10:01] Yes. So what I did was I spent a stupid amount of money for no good reason, much to my dismay. You know, this is the thing about a loyalty tier is I don't like being on the bottom rung. So I saw I had a certain amount to spend to not be molecule tier.

Brian: [00:10:22] It's a little bit demoralizing to be down at the bottom. You're like, "No."

Phillip: [00:10:29] Are you still are you still Delta Diamond?

Brian: [00:10:32] Yeah. Yeah. It's probably my final year because of how much they changed the program. I'm gonna enjoy it, and then I'm probably I mean, I've already I think flew Alaska here. We've talked about this at length though.

Phillip: [00:10:46] Yeah. You know there are people that listen to the podcast every week that are new. So, you know, you could rehash something sometime.

Brian: [00:10:52] Yeah. I think I understand. The Kith one's super interesting, though. I mean, obviously, everyone's talked to death about how they're including the last 10 plus years of history in your loyalty status, which is a really bold move. It probably is a pretty... There's a little bit of a hit that Kith is taking by doing this. Right?

Phillip: [00:11:15] Yeah. Unnecessarily generous, I think, is what one person called it. Yeah.

Brian: [00:11:20] Yeah. But I mean, it feels like it's gonna pay off. I think it's actually a pretty smart move because people don't feel like they're starting from scratch, and that's one of the reasons why a lot of loyalty programs have a lot of trouble. It's hard to get status in a lot of these programs. And if you've been a loyal customer for a long time or you feel like people outpace you even though you've been with the brand for a while. I saw one person describe it as almost like retroacting what you would have done with a token, but without a token.

Phillip: [00:11:56] Oh, like a nonfungible token.

Brian: [00:11:59] Yeah. Yeah. Yeah. Exactly. But, I mean, I think [00:12:04] Kith's got a loyal following already. This is just a great way to formalize it and reward people who are already incredible buyers and give them a reason to never leave. I think that's one of the things. It builds a nice moat. [00:12:18] And that might be in Kith's favor right now. It feels to me like their sort of brand of what they've done is still really popular, but I feel like there's a lot of, I don't know, movement right now in the fashion world. And so keeping your core white-hot center customers engaged is, I think, essential right now, especially in a brand that's been so dominant for so long in their space. And they continue to evolve. I mean, The Clarks collab was probably one of the coolest shoe collabs I've ever seen.

Phillip: [00:13:02] That was an interesting happening there. We witnessed the announcement of the loyalty launch. Came with it specific merch, Kith branded merch, and tier-exclusive products that you would have access to on the day of the launch of the program. One thing that I think is really interesting about that collab is that it's styled by Ronnie Fieg, who's the Founder of Kith. And it's this three way collab, which typically, I think, is panned by sneaker aficionados. But, you know, Kith exclusives with other, brands like New Balance had really paid off over the years, and people love Ronnie's styling. So to come alongside for a soul and sort of super Clark's fanboys, like you, would notice is sort of like the leather tag. Certain things that kinda, like, appointments that come into the samba. Super interesting. I kind of just there was part of me that wanted to just clear the bottom rung of the tier, and that's why I bought them. But then the other part of me realized that I could have been buying, and [00:15:09] this is the interesting psychology of what a good loyalty program can do, and I think only a multibrand retailer can pull off, is that I started looking at what else can I buy here and shift my spending [00:15:21]. And it turns out I already buy a lot of fragrance from other brands direct, like BYREDO or Diptyque, or MALIN+GOETZ. And I buy bougie soap, MALIN+GOETZ, said it on that After Dark. And you know what I wound up doing? [00:15:39] I wound up filling up my cart with the other things that I probably would have bought anyway over the next few months. [00:15:43]

Brian: [00:15:43] There you go.

Phillip: [00:15:45]  [00:15:45]And pulled it forward but away from those brands, which is what loyalty is intended to do. [00:15:49] And this is where I think the non multi brand loyalty direct to consumer brands that will look at this will take the wrong signal as they'll say, "We need a multi tier loyalty program that has really cool Photoshop mock ups of metallic cards. That's what we need to do," and they'll have taken away... And with all of this gamification of all these ways to earn points, but it's the wrong... It's not the right thing for that brand mostly because there's no other shift of spending that you can pull into it because they're not multi brand retailers.

Brian: [00:16:24] I think the one thing that they could probably take away, and I think this is the thing that, I think the best loyalty program to do is you've gotta pull your product strategy into your loyalty program. If you do offer products that are unique to each tier and you do have a white hat center customer base that will want those products, there is an opportunity to sell them more, and also make them feel extra special. So I do think that of all the takeaways from the whole program, offering tier-exclusive unique product that is actually good, that's actually something you could probably make more money on if you offered site wide, but you're not going to. That's actually value. That's real value. I think that if you offer something that's not as cool as the tier upgrade, and it's something that you could probably just get anyway, then why does anyone care? It's like, at that point, you're just talking about discount you're just talking about wholesale pricing, really.

Phillip: [00:17:37] There's another part of this too that reminds me of a conversation we had at NRF with Casey Golden about the importance of very clean data, very clean customer data, and this can only be powered by having pristine customer data that goes back ages. But let's be real. Let's talk about the thing that I think is the actual what I called in my essay about this launch, what I called the actual magic trick. And I don't even think it's all that magic. The thing that they did that was really, really smart here was not that they created a program that people like.

Brian: [00:18:23] Right. This is a marketing move. That's the magic. Go into it. I think it's not about the loyalty program itself. It's about how they introduced the loyalty program.

Phillip: [00:18:34] So let's play the quantum journey, Brian. So let's consider a couple realities. Let's think about this using your language, in a quantum way. Let's think about the world where they announce the loyalty program and the launch on the same day, and then the site went down like it did, or the app crashed like it did, where the stock levels weren't correct like they were. If they had done that, everyone would be saying this is an utter disaster. But they didn't do that. They announced it two days ahead of time, and that two days ahead of time gave a day enough for everyone to praise the specifics and aesthetics of the campaign rather than the actual technical rollout of the campaign. And by then, people had already had it out of their system. And the most critical crowd among them had already said glowingly positive things about a brand that otherwise is typically glowingly positive. And those people that write think pieces on LinkedIn are usually not the customer that endures the pain and gets in and actually buys the product on the day of the launch.

Brian: [00:19:54] One hundred percent.

Phillip: [00:19:54] So the genius here was the comms strategy wasn't weeks away from the launch. It was days. And the strategy yes, it was so multilayered that it just presented this really juicy story that everyone could think piece it to death. But it also timed the launch to be at a date and time where even if it was a failure, it would still be that the reverberations from the praise outweigh and sort of outlast any critique that would have come from a botched launch. That's the genius. Yeah.

Brian: [00:20:34] And there were issues with the launch. Although I think that there are issues that are often the expectation is set among hype sneaker buyers and, you know, exclusive merch buyers that there probably will be a crash to the site at some point. The likelihood of getting what you want is low. It's a lot of work, and it doesn't always actually pan out for you. So those things are expectations that a lot of these purchasers already have going in. However, I think you're right. Like, if it was announced too far ahead of time, then everyone would just be focused on what happened at the launch as opposed to how cool the program was. They also made a big enough statement with the 10 years of history, so no one even cared. The program itself was the news because there's no other retailer that I know of that incorporated 10 plus years of history into their loyalty program on launch. So the technical side of it didn't even matter at all.

Phillip: [00:21:52] I think that this also only works for the type of consumer that Kith courts, which is the irrational, conspicuous consumption consumer who wants to flex their top-tier level.

Brian: [00:22:08] Totally.

Phillip: [00:22:08] And they knew that there would be a viral moment for some people to say, "Look how much I have spent with Kith in the past." It is a signal of your very opposite of CAROL life is that you have been a loyal customer.

Brian: [00:22:20] You're already a top-tier customer. What Kith doesn't know is that half of these customers are already on the CAROL path, and now they get the claim that they're not. {laughter}

Phillip: [00:22:32] {laughter} Which is great air cover in itself because, you know, being able to look like you're at a specific tier is really, really, important in a time where I think a lot of people like myself are kind of tightening the belt because the lure of entrepreneurship and also the move away from having multiple streams of income, I think, is a thing that a lot of folks... And also creator economy. We are part of the creator economy. We're trying to make a bigger deal, you know, a larger media business out of it. But when you're making a living in that way, you also still need to project a certain level of lifestyle, especially when you're talking to certain, when your audience is in the lifestyle, a specific type of lifestyle, then you need to talk about the things that they care about, which means you need to have some physical, real-world experience. I can't only talk about Costco, Brian, for the rest of my life.

Brian: [00:23:28] The thing is Costco's cool, so I think it'll work out. And Clarks are cool too, I guess. You know what else is really cool? Suja. {laughter}

Phillip: [00:23:41] That's true. That's true. Everything that Brian loves and has become a meme is culturally important right now, which is so weird that you're like a taste maker.

Brian: [00:23:54] It is weird.

Phillip: [00:23:54] Oh, what was it? You have to tell the story about the thing you said when you came home from Muses because that got me. You had a whole thing about that.

Brian: [00:24:05] No. I mean, I was just it was such an incredible activation being a part of that and being able to see the people that came around it and the art that was there. I came home and I was talking to my wife, and I'm like, "Man, I kinda got cool. How did this happen? It was weird." We took a really cool picture, Philip. All my stuff that I like right now is on fire. It's probably at the peak of where we'll ever be. It's downhill from here. Good thing I have other things that I like that no one knows about. So I'll have to start to surface some of those things.

Phillip: [00:24:53] For sure. And we're getting you know, we keep building the future. I'd like to think that you're out in front a lot, and it's been a real moat for us that I think in particular around bigger ideas, and some greater insight, I think, into human behavior, you're really well read. I think all of those are important. I jump on the mimesis train.

Brian: [00:25:19] You catch Mimesis early though, very early. I think that's one of your superpowers too. And do you know what's a really weird one was the McLuhan one? Because I swear to you I said the word McLuhan and just all of a sudden, McLuhan was everywhere. Andrew hadn't even joined Twitter yet, I don't think. Yeah. That was a weird one.

Phillip: [00:25:44] Trendsetters. Well, it'd be bad if we were Future Commerce and we didn't somehow predict the future in any way. This is also strangely and there's no other reason to bring this up other than my own excitement, but this is the last time that you and I will talk on this podcast in the era before I owned a VisionPRO headset. I'm really excited.

Brian: [00:26:08] We'll get a lot of VisionPRO content.

Phillip: [00:26:10] Really excited for that content. But the world is, I think, on an accelerating path towards more channels and more ways to buy things and various levels of immersion and engagement and relationship to either a brand or the parasocial relationship to the person who introduced you to the brand. And those things just make the world so much more complicated. I think that's a really interesting way for us to keep exploring all of these ideas in Future Commerce.

Brian: [00:28:49] Feels like we're on a bit of a precipice right now. I agree. That's why I wrote the piece that I wrote recently. I think all of eCom has matured at this point. The players are pretty much set. There are a couple of upstarts out there that might steal some market share in terms of eCom platforms. But a lot of the players are kind of on the board, and things have matured significantly. And I think that we're finally gonna hit something. I remember we talked about the Imagine conference for Magento in the piece.

Phillip: [00:29:27] Let's give it justice. Let's set it up real quick. Sorry. You wrote a piece for Future Commerce Insiders. You wrote an essay. I think it's 2500 words. It's not a short piece. And in the essay, you sort of draw this parallel between a film you recently saw and its depiction of the end of an era for film and sort of the beginning of a new one that was technology-infused. So maybe set that up for us and then talk about the specifics.

Brian: [00:30:00] Yeah. It was early technology being replaced by new technology and how it transformed the industry. So the film industry started as a silent endeavor where words were read and there was music played live or in post. And there was a whole world that people got on top of and there were stars and there were producers and there was a whole set of industry built around this and people were deep in on their careers for this type of technology. Well, Talkies came along, and the skill sets and the world that was built around silent films, all of a sudden, the industry that's going into Talkies, but a lot of them no longer fit. The skill sets that they have are not a natural fit for the Talkie industry. And so it's about technology cycles and their effect on the communities that build around them. And so this is where I feel like we're kind of at right now where we had all of the different, if I was gonna draw an analogy is, like, each commerce platform out there built their own little ecosystems, though they were like the different production companies out there like MGM, etcetera.

Phillip: [00:31:27] Right.

Brian: [00:31:28] And they had their own little circles and ecosystems, and one thought they were better than the other, etcetera, etcetera. But it was really all kind of the same thing. It was all built around this technology. And when you start to see the stars kind of hit a wall where the up arrow starts to plateau, and they're starting to feel concerned about what's gonna happen to them next, that's a good indication that there's water being churned underneath the floating dock. Things are happening that could rise the water level and destroy the dock. And so, I think to your point, we're about to see a lot of change. There was a reason I brought up Imagine was actually not even to reference my piece, but I remember I was talking to some of the leaders of one of the final Imagines. I think it was 2018/2019, somewhere in there.

Phillip: [00:32:35] Imagine is the annual conference from Magento that ended in 2019. Right. Yeah.

Brian: [00:32:40] So go read the piece, and you'll know a lot more about Imagine and that world, that particular ecosystem, production company. And I remember talking to leadership there, and they were curious what I thought some of the themes for the year should be, and I was like, "Commerce is everywhere. I think that commerce is everywhere is actually gonna be the theme for the next generation of commerce." But I was a little too far out, I think, on that because omnichannel just didn't take hold as quickly as we hoped that it would, and technology wasn't really there to get people to think about buying everything everywhere. But I think actually now we're right on the precipice of having tags on everything and being able to buy anything from anywhere and finding buyers from anything from anywhere at any time. And it's gonna come from our phones. It's gonna come from our glasses. Gonna come from spatial computing devices. It's gonna be the world will become commerce, and everything's gonna change, and I had this whole thing about, what was it? It was like everywhere commerce, commerce everywhere. It's like a rotating cycle, and you can just keep going. I think that's what we're about to see here. I know we're not on our predictions episode, but feeling like it.

Phillip: [00:34:09] Well, the interesting angle here was the sort of journey of obsolescence and sort of how certain people, the people haven't lost the skills that they once had. They just failed... They either don't fit the rigors of the new generation of this technology-enabled media, which is effectively what, you know, that's what the film industry is, but I think commerce is a form of media in its own right. And so if you think about how other technological leaps forward in media have left certain people and players and, to your point, production companies and even methods of communication behind, we are sitting at this really interesting time where we've already lived through one of those cycles. So this is kind of what I got out of your essay, without spoiling the whole thing. Go read it. But [00:35:11] we've lived through one of those cycles already, so we understand the excesses of the prior cycle, and we're just young enough to reinvent ourselves and have already begun to do so because we saw the end of the era coming. [00:35:26] And you and I had a conscious discussion about this in, like, 2018.

Brian: [00:35:31] We did.

Phillip: [00:35:32] And we said...

Brian: [00:35:33] No. It was 2017.

Phillip: [00:35:35] Yeah. Yeah.

Brian: [00:35:37] We had a conscious discussion in 2016, I think, at a Dave and Buster's, actually.

Phillip: [00:35:42] That's true. {laughter} Of all places.

Brian: [00:35:43] I remember.

Phillip: [00:35:44] That's a CAROL place if one ever existed.

Brian: [00:35:48] Walking to the elevator with you, and we were like, "Man, we gotta get out ahead." We had a really great discussion. "Everything's gonna change. We gotta figure out how to get ahead."

Phillip: [00:35:58] And that was at the conference formerly known as IRCE, I believe.

Brian: [00:36:04] Yes. That was. Correct.

Phillip: [00:36:06] And that show didn't live another three years after that. The point being is that a lot of the technologists and the technology of that era weren't concerned with future-proofing themselves. They were concerned with extracting the maximum amount of value out of the current moment with no consideration to what the next one would be.

Brian: [00:36:38] Yes. And I kinda get into that a little bit because, Matt Klein just released Zine's meta trends for the year, after reviewing all the trend reports. Matt does this on an annual basis. Friend and contributor at Future Commerce. Matt Klein is a futurist in his own right, an incredible thinker in mind, and always always looking for what Matt has to say. He's got great stuff. But he just released the report, and he was like, "The past five years, you can't even pick a trend and know what year the trend was from." And the reason I worked that into the end of the piece is everyone bases what they think is gonna happen in the future on data from the present or the past. The problem with that is that things could radically change and all the data is useless. Context changes. [00:37:40] When technology changes, context often changes, and the message changes too because it's a new medium. [00:37:49] So I think that what's happened is a lot of people have invested based on existing data. A lot of people think about the future in terms of existing data, and that's the only way to prove legitimacy as well.  [00:38:07]No one wants to make a decision about the future without data from the past. They think that that is the indicator of what to do next. And it often is from a year to year basis until things have a bigger shift. [00:38:22] And so what I think you and I try to do is not just look at data based on the things that are kind of happening, although that's part of it. We're trying to create that future as well by actually speaking things into existence that we think could happen as a result of the different ideas and components that we see available. That's not historical data. That's just looking and saying, "What happens when you combine these things? What would that look like? How would that change things?" And there's a little bit of, actually, it's an intellectual exercise. But it's not based off of previous data. It's about projecting what would happen when different things come together. And that's part of what we do, I think. That's why our best predictions come about when you and I sit in a hotel room until 4 AM.

Phillip: [00:39:20] That's real.

Brian: [00:39:22] That's real.

Phillip: [00:39:23] If I'm thinking about other examples of where this is happening right now. It's not a technology shift, but the format is shifting. The rise of short form video is creating an era of obsolescence for long form video creators. And that seems to be these things happen on what seems to be a predictable 10 year cycle. So YouTube became, I think, a culturally important channel for content consumption about a decade ago. And so you have these giant channels emerge, and there were only a handful of them. Those creators have been going strong now for 10 years, and they're tired. And there's a list of these creators. Tom Scott's one of them. They've been making basically, these big announcements of we are dialing back. And we're not sure what the future looks like, but there's an era for short form video that we are not built for. And here's an interesting way to think about the role reversal. I'm giving a talk tomorrow, at a conference. I'm the opening keynote, and my talk is basically this. Every technology leap requires an element of skeuomorphism for adoption.

Brian: [00:40:43] Yeah. True.

Phillip: [00:40:43] You start with the few who understand, who have an openness and a willingness to adopt this technology without any presuppositions about ways that it should work, and they can tolerate some pain in the process, and they're willing to make the platform migration. But as that technology becomes more adopted, the on-ramps to that technology need to be improved, and a lot of that has to play into the way that normal people understand the world around them. And skeuomorphism has always been tied back to well, it's in digital design. It's the thing in the real world's analog. But I don't think that that's really what skeuomorphism is. I think [00:41:25] skeuomorphism in the abstract, not in the practice of the iPhone, but skeuomorphism in the abstract is taking tangibly something that is familiar and extending it into the new media format's unfamiliarity so that there's a bridge. [00:41:43]

Brian: [00:41:45] Which is what Marshall McLuhan calls looking in the rearview mirror, stepping into the future, but you're looking into the rearview mirror.

Phillip: [00:41:50] Looking in the rearview mirror. Right. And I think that has happened in a lot of ways or will happen in a lot of ways as we move through the way that commerce is evolving. So paper catalogs would show you pictures, lifestyle imagery of what these products look like in the real world. And then one day, you no longer need the lifestyle imagery to sell the product because seeing it cropped out with the background is good enough. You can see the product standing on its own. When eCommerce launched, it just took the design language and the format of the paper catalog, and it digitized it. And it brought that forward into a new medium. We have category pages. Right?

Brian: [00:42:38] Mhmm.

Phillip: [00:42:39] The category pages in the catalog were mimicking. They were skeuomorphic in their own right. They were mimicking the way that products are organized in the real world. You go to the grocery store, you go cereal aisle. You have the Sears catalog. You're gonna go to the women's clothing section. Right? So things are logically organized in a way that is consumable. What happens later though is that as we move into new formats that are specific only to the Internet, like TikTok, you no longer have the skeuomorphic boundary. There's nothing that confines you to that old design language. It's the algorithm now. And the algorithm is tailored to interests and likes. It is every category is unique to you. It is the Phillip category. It's highly personalized. So I'm gonna go somewhere with it, and then I want you to rebut here.

Brian: [00:43:34] Yeah.

Phillip: [00:43:34] Same thing happens in commerce where it used to take, it was the narrowing, the progressive narrowing of the teams that were required as the scale increased. So, when you had few paper catalogs and a large audience, it took 100s of people to create that paper catalog with 100s of different disciplines. Right? Merchandisers, pricers, print designers, the printers. You had to get it through the mail. The channel for distribution was through the US email here in the United States. In the Web era, it took dozens of people because we had to digitize those things that already existed in the traditional catalog business. And then in the SaaS era, it only took a handful of people to take that prior generation's data and format it for the new platform's requirements and sort of generalize it for use in any channel. But in the TikTok era, it's a singular person becomes the brand. And that is if the funnel narrows as it then also broadcasts wider and wider in that a handful of people can affect commerce in a multitude channels. Well, now it's one person's algorithm, and their tastes are being shaped by that algorithm, and that same algorithm becomes the distribution method. And so I'm gonna talk about that and sort of relate it back to all these same ideas that we're just talking about right now. And that's why the people of the prior era who only think in the bounds of the Web, and they only think in the bounds of the catalog transition, the skeuomorphism that goes into the information design on a www.com website are having trouble making the leap forward into the future, and some people will be left behind. They don't have the ability. Not that the Web is not important. It is where people are shopping. But I think that there's another future where that becomes less and less and less important.

Brian: [00:45:37] Yeah. They won't fit into that new world or they've invested their skill set too heavily. You use up your brain in your effort and your time...

Phillip: [00:45:46] My brain is all used up.

Brian: [00:45:46] Sunk costs go into building out skill sets around a specific piece of technology or a tool. Right? Tradesmen focus on a tool. That's what a lot of this was. I think the thing that's super interesting is that we have to use those terminologies and then organize things the way that our brains all kind of work because people can't absorb it as easily. But the truth is the potential for what we're at now was always built into the technology to begin with. We had to use prior language and prior ways of thinking because we couldn't take our brains to where the optimized world goes, and that is what Marshall McLuhan said, all information now flows upon us continuously.

Phillip: [00:46:40] Mhmm.

Brian: [00:46:40] Right? All of it can hit us all at once. The people who are able to do pattern recognition and move out of linear thinking to pattern recognition are the ones that can work through all of that data. The problem is when all of data is washing over us at all times or has the ability to, only a certain set of people are able to actually do that, one, and two, it's exhausting. So the reason why we're now looking to algorithms to help us is we're outsourcing pattern recognition to machines. And actually, this is the perfect lead into our interview that we're gonna have with Kyle Chayka because that's what Filter World is all about, his new book. And so that pattern recognition is something though. However and I think you alluded to this just now, machines aren't as good at it as we want them to be and can also get us caught down paths that take us to a norm as opposed to taking us to new. So we are gonna rely on other people still to do pattern recognition for us, but it's gonna be propagated by machines. And that's what the algorithms are really gonna do, and we've talked about this before. But it's not just bring your own algorithm. It's rent other people's algorithms based off of their taste and have those extended to the things that you are that your algo already knows about you. Application of people with taste. It's just a lot of work. Building taste requires knowing a lot about the world and also having the capability to synthesize all the things that you know and then take that back. And it also requires something almost spiritual, which is the ability to assess beauty, which is a quantum ability all onto itself. And actually, a lot of what I got into in that quantum article relates back to this very concept. There are people who have more what I called, and I'm using the language of science because I don't think that there's a language around this, but they have an inherent understanding in a sense around pattern recognition, around moving from technology to technology and an understanding of when content best fits its medium. And actually, this is where I have just a slight rub, and I haven't got into this anywhere yet with McLuhan. I actually have a whole theory about what the role that content plays in a medium that I might have to get into in an essay, because I have just a little evolution on what Marshall talked about, which I can't wait to get into, and I'm not gonna do it right now.

Phillip: [00:49:54] This has been a wild ride. Somehow, we wound up here in future corner. I am freaking loving it, though. Whatever happens, we'll be there to witness it with you, and hopefully you'll come along with us on the journey because we help you see around the next corner, and you can do that even better with Future Commerce Plus. How? Well, we have ad-free episodes in your podcast feed. You get bonus content from Future Commerce. You get discounts on merch and print, including our new Muses journal, our annual, printed journal from Future Commerce. 200 beautiful pages of insights, essays, spotlights, photo essays, and everything you could possibly want about the people who inspire us in the way that they are inspiring customers in this new world that we just talked about. You can get all of that for just a little less by joining Future Commerce Plus, including access to private GPT where you can borrow our brains, search up everything... Search it up. Everything that we've ever said, every essay we've ever written, every piece of research we've ever conducted, from eight plus years of Future Commerce history. You can get all of that for one low monthly price. FutureCommerce.com/Plus. Thank you for listening to this episode of Future Commerce.

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