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Episode 51
November 20, 2017

AI, Classism, and the Digital Divide

This week we've entered The Odd Couple territory. Brian's relentless optimism and hope for harnessing technology for a bright future contrast with Phillip's expressed skepticism that advancements in AI and automation will benefit the working class without regulatory oversight.

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The Digital Divide and New Classism

This week we've entered The Odd Couple territory. Brian's relentless optimism and hope for harnessing technology for a bright future contrast with Phillip's expressed skepticism that advancements in AI and automation will benefit the working class without regulatory oversight.

Get out your Xanax and buckle up!

Making Walmart cool again

The Digital Divide:

  • Many Americans are in a lower market tier based in cash only transactions, and companies like Walmart are trying to enable these customers to purchase digitally. But how do Walmart's upmarket aspirations affect the working class market?
  • Brian thinks Walmart's just appealing to all markets, not just moving up. The middle class is a new opportunity, and they have the scale to expand.
  • Brian's optimistic about the future of technology and the working class:  "maybe there will be more people in the lower class, but the lower class won't suck as much."
  • He thinks technology is enabling us to be more efficient and provide better products, better services, and better life for the working class.
  • Counterpoint: Only the top 1% of earners will benefit from AI and machine learning: Robby Berman posits that AI will serve and make life better for humans, but only the top 1% of humans.
  • A Princeton study on bias in bots explores how AI has the problematic ability to target people for committing potential crimes based off the bias and prejudice of the bot creators.
  • Walmart has a litigious history of negative workforce practices partly due to their workforce scheduling algorithm.
  • Brian sees the problem as cultural. He wants business leadership to create ethical algorithms and let the responsibility rest on individual business leaders making ethical decisions.

Retail Apocalypse:

  • Bloomberg's collaborative article explores the reasons behind the "retail apocalypse."
  • It's not just about how many people have real estate and retail debt but about the number of people delinquent per capita in certain markets.
  • The consumers in debt don't have the income and opportunity to pay it back due to lack of employment in retail.
  • "You can be as rosy as you want about the corporate ethics, if there are no jobs, then it doesn't matter what how ethical the corporation is."
  • Brian thinks we can create better jobs and pay better wages, and maybe it's ok that retail jobs shrink over time. He considers Amazon's warehouse workforce.
  • And Brian takes comfort in the employment rate being at an all time high.

AI enabling job elimination:

  • Chris Gardner from Forrester predicts that automation will eliminate 9% of jobs in 2018.
  • "These jobs are not low end jobs, they're white collar jobs being replaced."
  • Brian is again optimistic: a whole new host of jobs will be created for creating and servicing AI.

Bank of Amazon:  

  • Internal rumblings that Amazon might also become a bank. Some regulators are willing to explore this option.
  • Brian's optimist view: As Amazon has a view into our finances, they're going to start to help us like mint does by keeping track of our purchases and how they relate to other items.
  • They might even create living type packages. Amazon will aggregate your financial data and help you craft a livable and economically responsible lifestyle.
  • Phillip feels like the foxes are guarding the hen house in that scenario.
  • When you rely on a few companies that do way too many things so that they become ingrained in society, then when that company fails, a disproportionate amount of the population is negatively affected.

AI and Permanence:

  • Reuters reported that a son used data to recreate his dad as a chatbot.
  • Listen to this week's FC INSIDERS Exclusive Content on the possibilities of body data and machine learning.

Brian: [00:00:43] Welcome to Future Commerce, the podcast about cutting edge and next generation commerce, rated as one of Forbes Top Six Tech Podcasts Worth Your Time. I'm Brian.

Phillip: [00:00:52] And I'm Phillip.

Brian: [00:00:53] And as always, we love to have your feedback about today's show. So please leave us some feedback in our Disqus comment box on our site or anywhere else that you want to get back to us and leave us some feedback or start a conversation. You can also always subscribe to listen to Future Commerce on iTunes or Google Play or listen right from your Amazon Echo on Tune in radio with the phrase "Alexa, play Future Commerce podcast." And always do not forget to sign up for FC Insiders, our weekly newsletter about what's new and what's next in retail. And that comes with exclusive content that I will actually be the author of that exclusive content coming up here pretty quickly. So subscribe now, so you don't miss that. It's going to be worth your time.

Phillip: [00:01:37] Yeah. It's going to be worth your time. And there's always a good roundup of news and some of our own hot takes. Hot takes, if you will, on some of the news that's coming out. But today's episode... We have a theme for once. We have a theme. I'm really excited. Get ready, because this is not a very happy theme. A lot of news in this past week has really been centered around sort of one central topic that took Brian and I both by surprise. So today's theme is really talking about the digital divide and the new classism and how we're starting to see it's not just in retail, but in technology trends. There is a new divide, or the divide is actually deepening. It's widening between the haves and the have nots. So get ready. Today's episode is going to be a wild ride.

Brian: [00:02:25] Yes, it is.

Phillip: [00:02:26] And speaking of wild rides, I just want to prepare everybody. We are excited to announce that Daniel Sepulveda will be joining us. If you didn't get a chance to listen to his in-depth interview that we did with him.

Brian: [00:02:38] Episode 49.

Phillip: [00:02:39] On Episode 49. We want to encourage you to go and queue that up next to listen to. Go check out Episode 49. We did a great interview with him. He's the former ambassador and deputy secretary of state under the Obama administration. And sort of also dubbed as the savior of the Internet. And so he will be joining us in future episodes pretty soon for a segment we call Future Policy, which will be brought to you by our new sponsor, Vertex SMB. So we're really excited to have that coming in a very short order. So this next year...

Brian: [00:03:13] Super excited about that.

Phillip: [00:03:13] 2018 super exciting right now. And don't forget, we're going to be at NRF in January. We're going to be doing a live event that we call Merchant to Merchant in Seattle in February. So there's plenty of opportunity. Shoptalk in March. There's a lot of opportunity to meet Future Commerce live. And so make sure you subscribe to FC Insiders, because that's how you're going to find out where we're gonna be and when we're gonna be there. So, ok, everybody get out your Xanax and buckle up.

Brian: [00:03:47] That's no lie.

Phillip: [00:03:50] Today we actually start the podcast with a bit of news that took everybody by surprise. Walmart making Walmart cool again. And Walmart's partnerships are getting just crazier and crazier by the day, as if Moose Jaw and Bonobos. And Jet. And Google Home and some of these other sort of really innovative acquisitions and partnerships weren't enough. They just announced a brand new one here this week.

Brian: [00:04:20] Yeah, Lord & Taylor will start selling on

Phillip: [00:04:25] Oh, my gosh.

Brian: [00:04:26] With like their own like special home page.

Phillip: [00:04:31] I don't even get this.

Brian: [00:04:33] I do get this.

Phillip: [00:04:33] It's insane to me. But here's the first thing I did. So I haven't been in a Lord & Taylor in 10 years, maybe longer. I know that they are an upscale luxury department store...

Brian: [00:04:49] It's Hudson's Bay.

Phillip: [00:04:50] Sure. Sure. Yeah. But they are known as sort of like one of the oldest, you know, brands, retail brands in the United States. And certainly in the northeast. And I've been aware of their brand. I'm not a shopper there, but I'm blown away at if you type in Lord & Taylor right now in Google, and you look at the first two or three results that come up, both paid and organic, all of the messaging, all of it is value based. It's 40% off of apparel. 50% off handbags. Pre Black Friday sale. That might be their paid search, but their organic is 20% off regular price. Free shipping on $99 orders. $49 on health and beauty. They have transformed. I didn't know this because I don't shop there. But apparently this maybe fits really well on the Walmart model, and they're engaging in a new way.

Brian: [00:05:49] Yeah, I think that the appeal for Lord & Taylor is obviously broadening their audience. Right? Because Walmart has a lot of people shopping. And it also I think, and I don't have the article or data to back this up, but millennials have kind of changed their shopping behavior quite a bit. Or they haven't changed it. What I should say is millennials have a shopping behavior where when they're gonna go buy cheap stuff, they buy the cheapest of cheap. And, you know, and then when they want to buy something that they're really going to enjoy or like they'll buy up. And so actually, maybe this is a really meaningful partnership. I think, to me, it smells of Walmart's new strategy. One hundred percent.

Phillip: [00:06:41] Oh, for sure. Yeah.

Brian: [00:06:42] Right? They bought Bonobos. They bought ModCloth. They bought Moose Jaw. We're talking high end... I mean, or not high end.

Phillip: [00:06:49] Higher end.

Brian: [00:06:50] Higher end. Yes, high compared to Walmart's.

Phillip: [00:06:53] Yeah, definitely. Upscale compared to, you know, Cherokee. Or whatever their house brands used to be.

Brian: [00:07:02] That's Target.

Phillip: [00:07:03] Is it?

Brian: [00:07:04] Yeah, I think it is.

Phillip: [00:07:06] Wait, wait, wait. Faded Glory. That's the one.

Brian: [00:07:09] There it is. Yeah. So I think what we're seeing here is that actually shoppers in the middle class are buying sort of across the spectrum. It's not about lower class buying from Walmart only. And middle class buying from Target. I think what this is kind of showing is that, or at least Walmart wants to sort of encourage the idea that everyone buys from everywhere.

Phillip: [00:07:44] Yeah. And from the horse's mouth... So the article that we'll post probably in the show notes is is from TechCrunch with their you know, their editorialization of it. But the actual press release that came out of on the 13th of November actually quotes Lord & Taylor's President Liz Rodbell saying, "As retail continues to change, this flagship store creates enormous growth opportunities for Lord & Taylor and our brand partners. Our customers trust us to deliver high quality fashion apparel and accessories, and we will soon be able to extend the reach of that offering to new customers through this flagship store. is a shopping destination that reaches a wide base of customers looking for premium fashion brands." So oh, "They are a great company for us to work with as we continue to grow our digital presence." So this is what it is, is that they see their shoppers are likely already the types of shoppers that are frequenting Walmart these days. They're the ModCloth, Moose Jaw, Jet... They're those kinds of consumers. And I think this shouldn't be surprising. Lord & Taylor is looking at what's the quickest way for us to get into marketplaces and reach the kinds of customers that we're already engaging elsewhere?

Brian: [00:09:03] Yeah, I think this is a really good point. Marketplaces. Marketplace selling is continuing to gain dominance.

Phillip: [00:09:13] For sure.

Brian: [00:09:15] I think even Hudson's Bay is saying, yes, we believe in marketplaces with this kind of a move.

Phillip: [00:09:21] Okay. So let's kind of take this back to what our core topic is today, which is Walmart used to be the middle and working class haven for price shopping. And Walmart is very obviously, for the last 18 to 24 months, moving its own brand image up market. So where does that leave middle America and working class America today? Is that Amazon? Who fills that? Does Walmart still fill that gap in? Is it just the retail stores in their dot com brand is the one that's moving upmarket? My perception is the whole brand is moving up a stream.

Brian: [00:10:01] Whoa. OK. So we were talking about depression at the beginning of this episode.

Phillip: [00:10:06] Sure.

Brian: [00:10:06] What you just signaled to me is that the whole of America is actually moving up.

Phillip: [00:10:12] Do you think, though? I don't think so. I don't. I really don't think so. I think while there are three 3 billion, billion, smartphones in the world right now, and most most people have access to high speed Internet and to some sort of a device that has Internet connectivity, that is certainly not everybody's story. Right? A lot of people, if you look at the type of payment partnerships that Walmart has enabled over the last decade, they're all, even PayPal, Apple Pay, Apple cash now, they're all focused at a lower tier of consumer who still are based very much in a cash... They still live in the paycheck to paycheck cash only transactions, but they're trying to enable them digitally. So I still think of Walmart as being the accessible marketplace for that type of a buyer. What does Walmart's aspirations to move up market do to those kind of consumers?

Brian: [00:11:12] Well, maybe this isn't about a move upmarket market, though. Maybe this is actually just them sort of capturing all markets. The idea is you have different offerings for different markets. And, you know, they're blended. But essentially what I'm going to get is I think Walmart's looking at the middle class as a new opportunity, and they're just taking advantage of that. And it's something that they can do because they have scale.

Phillip: [00:11:42] It's possible. Yes. My pessimism kind of tells me, though, that we're, in the same way that Target prioritized its dollar value section at the very front of the store to signal to people who otherwise think of Target as an expensive version of Walmart, to say that, "Hey, we have deals for you, too." I feel like Walmart is doing the exact opposite. And it's increasing its brand cachet to attract the Target buyer. And it's very confusing for me. But I'm not the Walmart consumer. I think they're very nearly making me a Walmart consumer. I certainly when I was looking for a Nintendo Switch to buy for my kids, the first place I went was to And that should tell me something about how my perception of Walmart is changing as a marketplace.

Brian: [00:12:29] Yeah, definitely. Again, to me that sort of marks maybe there will be more people in the lower class, but the lower class won't suck as much. You know what I mean?

Phillip: [00:12:44] Let's not make that the show title. Whatever we do.

Brian: [00:12:49] {laughter} What I mean by that is the quality of life for the lower class will actually start to rise. And then maybe that's what all this technology is actually doing, is it's actually enabling us to become more efficient and provide better products and better services and better life to the lower class.

Phillip: [00:13:10] Wow. Ok.

Brian: [00:13:11] There will be... Maybe there's going to be more of a split, but maybe it's just not, and we're going to get into this more, but maybe this divide is actually not going to be the horrible future that some people are predicting it to be. It's like, OK, well, you can have like a very comfortable life in the end, sort of the down market. Or you can have a super high life in the high end of things.

Phillip: [00:13:44] That's actually... So that's actually the article that came out this week by Robbie Berman over on and sort of delving into AI is going to serve humans. It's almost definite. AI will be assistive to make life better for humans, but probably only about 1% of them. And so it actually goes really deep into how automation and technical potential for automation across various sectors actually has a lot of potential. But for the types of things that only the top 1% of earners really would benefit from. So in areas like manufacturing, where you actually have a lot of jobs, you would be displacing a lot of workers for things like professionals information management and educational services, less displacement. And those are the ones with the highest type of earning potential. And they go on to even quote a Princeton study that said that basically there's the ability to make large scale decisions about people and classism based on things like their names or their familial attributes, whether their parents were, you know, married or divorced, the kinds of salary that they make and target them for potential to commit crimes. And at any rate, AI is going to deepen a divide between an upper class and a lower class. And so I don't think that the Walmart story is something that we should be taking lightly. It's that things like a AI and machine learning have been powering the algorithms that have kept a Walmart workforce for years depressed and kept in underemployment. People that algorithms that program and schedule employees at Walmart that have been sued by many states in the United States, many state prosecutors going after Walmart for under employing people and keeping them from earning their workers rights, keeping them from unionizing, keeping them from having the ability to have paid leave and from having benefits and using algorithms to power that. So I don't know that it is as rosy of a story as what I think you're telling..

Brian: [00:16:12] So that's people who are are trying to... That comes down to leadership, that creates algorithms to create...

Phillip: [00:16:29] Maximize profits and minimize...

Brian: [00:16:31] Right. But what if part of the algorithm was actually we want to make sure that people have a living wage. We want to make sure that people have a living life. Like what if you have ethical leaders, you have ethical leadership, that are programing the algorithms and they're building in factors into machine learning that are beyond just profit, which is frankly a better indication of long term success than... Who's to say that AI actually won't help us find a way to provide better situations for people while still being profitable? I think it comes down to usage.

Phillip: [00:17:15] Yeah, maybe. Yeah. I mean, the intent behind it for sure. I have an icky feeling in the kind of work that we do in especially in the conversion rate optimization fields of sort of strategy that you and I dole out. Which is my icky feeling is that are we convincing people to make decisions that are fundamentally bad for them? Are we continuing to perpetuate, you know, problems which financially will dig people in deeper that they can't dig themselves out of because we're making it almost too easy for them to make bad decisions. And maybe that's my own conscience taking over there. But I have to wonder, isn't the nature of that pure capitalistic point of view of maximizing profits and having efficient, extremely efficient economies...

Brian: [00:18:14] That comes out of culture, though. I think if you look at the upcoming business culture that that and I think there was a big clash when millennials bumped into boomers on this.

Phillip: [00:18:29] Right.

Brian: [00:18:31] Millennials said, wait a minute, maybe it's not all about profits. Maybe it's about profit and environmental responsibility and human rights and, you know, things that that make the world actually work and give people a better quality of life. Better quality of life does not directly equate to higher levels of profit and more money or the few.

Phillip: [00:19:06] Maybe. But I think that that comes down to your politics and your ideology, which is your...

Brian: [00:19:12] That's not a political thing. That's not a political thing.

Phillip: [00:19:15] It could be. It could say that, you know, government regulations on business stifle innovation...

Brian: [00:19:19] That's not a regulation thing. There are plenty of companies that run ethically that have nothing to do with regulation. REI. They'd go well above and beyond regulation. And they've built a company that really cares about its employees. Its employees love working there. And yes, they do cater to the up market. But what if you know what if done market companies did that, too. And I think you're starting to see that a little bit.

Phillip: [00:19:46] Well, yeah, I mean, Costco certainly seems to be one that comes up over and over...

Brian: [00:19:54] Yes, great example. Trader Joes.

Phillip: [00:19:54] The kind of company that invests in its employees. I will say that consumer confidence is high at the moment, but that could be, again, coming back to my fear here, which is that we are, if you look at the Bloomberg article that came out this week and this is, you know, part of the continuation of our story. There was an article from by Matt Townsend, Jenny Serain, Emmett Orr, and Christopher Cannon that basically tells the story of retail apocalypse that we're kind of sitting. It's not just about store closures. It's not just about well-known chains that are, you know, proving some sort of systematic melt down. It's that retail debt is at an insane incredible place right now. And that it's not just about how many people have real estate and retail debt, but it's about the number of people that are delinquent per capita in certain markets, basically in certain markets. So as stores are going out of business, yes, retail bankruptcies are on the rise. But it's also that the debt that's being held by consumers is also unable to be paid back. And that should be concerning. So anyway, and retail jobs, you know, are lagging.

Brian: [00:21:24] Yes.

Phillip: [00:21:26] And so it's not like the people that are holding the debt have a lot of income and opportunity to pay that debt back. And that should be really concerning to all of us. Again, it's, you know, the automation story that we've been on for the last few months is that it has a real impact in the labor force. So it's eliminating jobs and eliminating opportunity, so you can be as as rosy as you want about the corporate ethics. If there's not a job for them to take. I mean, the people who have jobs, they're gonna be very happy about having them. But there may be less jobs overall.

Brian: [00:22:08] There might be fewer jobs overall. But OK, let's think about the slow but more. Retail jobs that we're talking about eliminating in many ways are typically jobs that are sort of on the low end of the scale. They're hardly even living wage jobs.

Phillip: [00:22:26] Well now. But yes. I agree.

Brian: [00:22:27] Yeah, they're also they're also being replaced with other jobs. Like, for instance, Amazon hiring hundreds of thousands of warehouse workers and others. You know, it's getting moved into more efficient and higher paying roles. And so is the checker necessary? And is that even like a job that that we want to perpetuate? Aren't there better jobs that we can create that are worth doing that pay better, better wages? Maybe it's OK that the retail jobs shrink over time. I was just at Costco yesterday. And first, this just happened in the past couple weeks. Because I go to Costco every two weeks. I have a lot of kids. So forever, Costco has been sort of like this bastion of the Costco trip, followed by a quick dinner or a light dinner at their food court. Maybe not so light. It's always...

Phillip: [00:24:04] Did you have the new Shack Burger? Did you get some of that?

Brian: [00:24:10] That's not where I'm headed with this. No. There are always four lines open.

Phillip: [00:24:15] OK.

Brian: [00:24:17] And this time there were only two. And it was dinner time. And I'm like, why don't we two lines open at dinnertime and why are they not very full? Look to my left. There is now a self ordering station with four computers that.

Phillip: [00:24:34] Are you kidding me?

Brian: [00:24:35] Yes. At Costco.

Phillip: [00:24:40] At your Costco? How is this a rosy story of enabling a workforce? That sounds like it's displaced the people that we used to work there?

Brian: [00:24:47] No, no, no, no. So potentially they've been replaced. Potentially they've been put back into other spots in the kitchen where they could speed up the efficiency of getting food to customers and cut down on lines. And I can tell you without a doubt that I got my food faster and that there was less of a wait, or I should say there were no lines at the terminals. And the lines for in-person payments were also shorter.

Phillip: [00:25:20] Gotcha.

Brian: [00:25:21] And food came to me faster. I don't know if retail workers got displaced or not, but ultimately, I like this experience better. I think it's more worthwhile. And those jobs are, I guess what I'm saying is, well, a lot of the money that's being spent on things that are probably not worth having a human do that are better, like a self ordering station, that money is gonna get spent on giving me a better experience. Because ultimately it's about competitive edge. I'm really excited about eating at the Costco Food Court now because I don't have to wait as long.

Phillip: [00:26:03] It's interesting because I think if you look at the... When you tell the story from the Costco perspective, it's like, OK, well, that's exciting and blah, blah, blah. But if you tell it from the McDonald's perspective... I don't know. I don't know.

Brian: [00:26:20] Think about this. McDonald's is in the same boat. They've got a bunch of self ordering stations all over this area.

Phillip: [00:26:27] Yeah, sure.

Brian: [00:26:29] I'm getting better service at McDonald's. I mean that.

Phillip: [00:26:33] Yeah. I mean. Yeah. Okay. Well at any rate,.

Brian: [00:26:36] And employment is at an all time high right now. So I think these jobs that we're talking about are either going into giving better customer service or their jobs that shouldn't and don't need to exist and that there are other places in the economy they can apply these people.

Phillip: [00:27:51] Well, if you listen to... I was trying very hard to signal you to just go into that, but you're making the opposite argument. You can't actually, with conviction, deliver the story. That's not the story according to Forbes article about Forrester's prediction that AI is enabling automation that will eliminate up to 9% of U.S. jobs in 2018. In 2018.

Brian: [00:28:14] 9% of jobs, but we're talking about just eliminating jobs. We're not talking about job creation.

Phillip: [00:28:24] Ok. OK. Yes, I understand. Like you could tell that story. And however way you want. This in particular is supposed to be a surge of white collar automation, that means half a million new digital workers or bots of some kind will shift from manual to automated IT and data management. Forrester says that effectively robotic process automation will add five hundred thousand US digital workers, which means that it will replace about 311,000 office and administrative positions, 260,000 sales and related positions as result will exceed $500 million by the end of 2017 and maybe up to a billion by the end of 2018. And that means, if I'm reading it correctly, that it will replace or augment up to, you know, basically 570,000 jobs that are already occupied by living, breathing human beings. And if you read the rest of the article, this basically the the ops teams are finding, you know, continuous integration, continuous delivery teams that are driving the applications that are enabling this. Yes, those are net new jobs, net new opportunities for people. But there are people at a higher end of capabilities and technical aptitude than the people whose jobs that are replacing them.

Brian: [00:29:47] Wait. So you're saying we're adding a bunch of new middle class jobs to America and we're eliminating a bunch of low paying jobs in America?

Phillip: [00:29:53] Yeah. Where do those people go to work?

Brian: [00:29:56] Yeah.

Phillip: [00:29:56] So that's the question. I don't have any answer.

Brian: [00:30:01] Do you think... So you're saying the net is that we're gonna be down. We're going to lose 9% of our jobs overall. Right?

Phillip: [00:30:10] I'm saying... I don't know what the number is. Forrester's obviously thought a lot more about this than I have. The report that Forrester put out is that effectively these jobs are not low, they're not low end jobs. They are data and administrative work that's going to be replaced by automation. And they are white collar jobs. It says it right in the report. Just take a look over at Effectively, I don't know that that means that labor overall is down in 2018. I think that it should signal something that...  [00:30:49]Paul Bevair [00:30:49] actually tweeted out to me when I shared this, that the quote that was "First they came for the low class jobs with automation and I wasn't low class. So I didn't say anything..." And effectively he's like, you know, it starts with the displacing of work in the in transportation and in these minimum wage jobs that you're talking about with taking orders and things that could be easily replaced. But it's not going to stop there. It won't. There might be a future in store where programmers can be displaced by AI.

Brian: [00:31:30] I mean, that's certainly a trend or a thought that Brian Roemmelle pushed up on episode 19 and 20. If you're in school right now and you're going into computer science, I don't think you should be really afraid of not having a job when you get out of school.

Phillip: [00:31:45] No, no, no, no, no.

Brian: [00:31:46] Yeah.

Phillip: [00:31:47] That's not what I was saying.

Brian: [00:31:47] Are we looking at, you know, 20 or 30 years from now? Well, and 20 or 30 years from now, something more basic programing and things that we consider sort of low level programing work. Yeah. Probably will get done by AI. Creatively programing AI and servicing AI is going to create a whole host of other jobs that, along with the machines that that operate on AI and machines and computers and other things that need servicing and and building. Yes. Yes. Some of that stuff's gonna be able to be done by AI. What I hear is jobs that are relatively, and I mean this is in the best possible way, relatively mindless are going to be replaced by things like robots and AI.

Phillip: [00:32:46] Can I give you one other example of why I feel like that maybe you're right. Maybe you're right. But there are other jobs that will be eliminated entirely because there'll be enabled in other ways.

Brian: [00:32:58] Keep it coming.

Phillip: [00:32:58] So if you are, and I'm not trying to own the conversation and be eternal pessimist here. If you're on our FC Insiders newsletter, then you saw two weeks ago that we put out an article about BitBarista, which is more of a concept in sort of a hack than it is a real product. But I feel like this is an incredibly novel story in that somebody has created a proof of concept coffee machine. Ok? That is a commercial coffee machine that pays the people buying coffee small amounts of Bitcoin to perform routine maintenance tasks. So changing out a filter or replacing, you know, some sort of a piece or a nozzle or... It's fractionalizing the maintenance work that would usually be given to a larger corporation and it's giving it back to the consumer to perform small routine tasks and paying them for it. It's the gig economy, but for maintenance of those sort of everyday devices that we come in contact with. Now, if you could extend that out and imagine, you know, everything.... Imagine that taking place in the workplace for printers and for copiers and imagine that taking place, you know...

Brian: [00:34:21] Copiers.

Phillip: [00:34:21] Yeah. I mean, I don't know, the car dealership or I don't know. Like there's there's a million places where this kind of a concept could be applied that would have a real impact overall on the type of, you know, working class job that would be focused on being very good at repairing and maintaining equipment of this nature. And again, I'm not saying that that overall has a detrimental effect on a large number of people, but it is innovation that has an effect somehow, some way, to somebody. And I think that that creates a further divide between people who have the ability to afford coffee, who are displacing the jobs of the people who, you know, give them the ability to have access to the coffee that they're buying. Does that make sense?

Brian: [00:35:11] Yeah, 100 percent. But also, think about this. What if you had a low paying job?

Phillip: [00:35:15] Well you wouldn't have a low paying job in 2018. You're going to have like many low paying jobs. That's what it comes down to.

Brian: [00:35:27] So you're saying that people want to have employment. They'll just run around from machine to machine, hoping that, you know, that there's something available to them to do.

Phillip: [00:35:36] Something to that... Yes. Yeah. Not to be too dystopian about it, but most people have more than one stream of income right now.

Brian: [00:35:42] Yeah. No, I don't disagree with that. I think that what people will have is they'll have a sort of steady stream of income and they'll also have sets of side jobs that they do and this could be a good opportunity. So let's flip this around. Let's say actually, this gives people opportunities to make a little scratching on the side and be able to afford that coffee, because you know what? They come, they clean that coffee machine. They wouldn't be able to afford a coffee before. They clean that coffee machine and then they get it. They can buy a cup of coffee because they just did that, and they weren't able to do that before. So actually, instead of taking a dystopian view of this, actually this could be an opportunity, the reverse of what you're saying. And I'm not saying that I'm necessarily convinced of one or the other. But I'm saying is there's opportunity for either things to happen.

Phillip: [00:36:40] Ok. So I don't think either of us or we're going to just become more entrenched in our viewpoints. I think that's fine. But the next three stories are very much in line with, you know, it's not just a few people that are saying this, so I'm going to force you...

Brian: [00:36:57] Keep going. Because I've got a few stories of my own.

Phillip: [00:36:59] No, no, no, you should. I want you to take the next one. I think it's interesting. I want you to kind of just take it. Just take it.

Brian: [00:37:05] Fine. Well, what if I want to take a different story next? {laughter}

Phillip: [00:37:11] Ok. Yeah. No, you can. I've been moving this around as we talk.

Brian: [00:37:14] No. It's good. So let's jump down to something else that I kind of want to push on for a second. There's a story that came out earlier this year about Amazon's aspirations, maybe potentially to become a bank. That sounds scary to some people, but let's talk about for a minute the sort of the future purchasing on Amazon, because one of the things that I see coming up with Amazon, and Amazon is everywhere there. They've got Whole Foods, they've got payment solutions. They've got Alexa. They've got, you know, a whole set of tools for consumers. And consumers love it. They're doing... You know, ultimately, I think Amazon in many ways has done consumers a favor by being first movers in a lot of areas and providing these services. As Amazon payments continues to increase its reach, we're going to be able start to pay other things with Amazon. And I'm getting a little bit predictive for a moment.

Phillip: [00:38:29] Yeah, that's fine. Go for it.

Brian: [00:38:30] Beyond just payments on web sites... Easy transactions on web sites. We're going to start to be able to pay things like bills and taxes and even potentially peer to peer payments. And we're going to use Amazon coins and other things like that to do it. As Amazon starts to have more of a view into our finances they're going to start to help us with things like that that like Mint does, where we're keeping track of our purchases on Amazon as it relates to other payments that we're making in our lives. And if Amazon does have the opportunity to become a bank and there's a lot of pressure on this right now, and the story came out in August. There's been a lot of chatter about it recently as well. I think there's going to be opportunities for Amazon to start to create living type packages, where you can look at your financial data as aggregated by Amazon Financial Services, and it's going to help you be able to craft a livable lifestyle that is within your means and helps you achieve your financial goals. Like people are gonna be able to put a very dystopian spin on this. No doubt. And I'm sure you'll have your comments on this. But ultimately, overextension of spending in this scenario is actually not good for Amazon. Because what they want to do is create a consumer that is repeatable and sustainable. Lifetime value of customer is more important than just making a few extra bucks in the moment.

Phillip: [00:40:44] Yes. OK. I will agree with that. But when you give the... I don't know. It just feels a lot like the foxes are guarding the henhouse. Like when the banking is being performed and your insight into your money's power is being performed by the very company who also wants to then take it back away from you in giving you infinite access to infinite products that you infinitely may not even need, it gives me a little pause because it has the ability... I wasn't even going to say anything about this, but I just feel so... I have such a visceral reaction to this idea. Like, I kind of just fundamentally want the retailer to have a completely different relationship to me from my bank, because I don't want the retailer to say, but you could afford this. But you could afford this. Like you could do this. You could do that. Like you have... It already feels icky to me...

Brian: [00:41:49] They're already telling you that.

Phillip: [00:41:51] Yeah I know. That's a problem. This is I mean, it's already happening. If you have an Amazon credit card. I don't. But if you do, they probably already tell you how much of a balance that you have to be able to spend and how much you could save if you did it now. How many more points you could earn if you did this and money back... And you could probably, I see it myself and it feels icky already. Amazon tells me how many American Express points I have available and how many I could spend on the site. And like those things are already feeling like it blurs the line. And anyway. I'm the curmudgeon. That's OK. I'm allowed to be.

Brian: [00:42:33] No, I think there's definitely danger associated with this. But I think there's also at least upfront, you know, there could be a lot of good intentions behind it.

Phillip: [00:42:44] Yeah, I know. It's always paved with good intentions. So but doesn't part of you, like doesn't part of you wonder where this all ends? Like what happened to trust busting? What happened to...? I mean, remember that the term "too big to fail" 10 years ago?

Brian: [00:43:01] Of course.

Phillip: [00:43:01] I feel like when you put so much of an economy and so much reliance on a few companies that do way too many things that are becoming so ingrained in people's lives, if and when those things topple over...

Brian: [00:43:15] They get hacked...

Phillip: [00:43:17] Or they go they get hacked like Equifax... I mean, a disproportionate number of the population is adversely affected. And that's... And again, if it's just upper class, then maybe people aren't so affected. But when it's... Or maybe people aren't so up in arms or incensed, but Amazon's starting to have reached across the spectrum. I don't know. Anyway, we've belabored the point.

Brian: [00:43:47] No, it's true. Exactly. I mean, they're in grocery, if all they have to do is take over tax payments and bill payments and then they have every set of data that they could ever need to do this.

Phillip: [00:43:58] I'm 100 percent sure that they're already doing that. I mean, any idea that you have ever had, Amazon already does.

Brian: [00:44:05] Oh, I know.

Phillip: [00:44:08] Right?

Brian: [00:44:08] Oh my gosh. Amazon introduced Amazon Key?

Phillip: [00:44:14] Yes. Right.

Brian: [00:44:14] I heard some stories about this beta and like what people discovered about what was going on in their home during the beta.

Phillip: [00:44:23] And for those who aren't familiar, what is the Amazon Key?

Brian: [00:44:26] Well, we talked about that... Did we talk about this last episode? No..

Phillip: [00:44:29] We talked about a few episodes ago.

Brian: [00:44:31] Yeah. So Amazon key is when you give Amazon the ability to go into your home and put your package into your home. But eventually it will allow, you know, different services to happen within your home while you're not there. So like repairers and other services, cleaning and other things that people will actually need to get into your home for. And it comes with a nice little camera that you set up that allows you to keep track of who's coming your door and when and why.

Phillip: [00:45:09] Sure and that make sense, makes perfect sense.

Brian: [00:45:12] I've heard this story about this one woman who was in the beta who found out that her mother in law was coming into her house every day, and she didn't know that was happening.

Phillip: [00:45:23] Well, that's not quite the story I thought you were going to tell. Mother in law troubles there. They're a real thing. Okay. So, okay. Well, we can't just keep on this negative spree. I do want to wrap it up a little bit here. And I would like to kind of get back to, you know, one other thing that kind of comes off as like a heartwarming story. But I think we can fit it into our little cookie cutter here today, which is a story out of Reuters interview actually on their Reuters Twitter, which has an interesting video of a son who has used some data to sort of recreate his dad as a chat bot. So check that out. You can hit the link in our show notes. You can actually watch his 1-2 minute video. But this kind of makes me feel like it's the kind of thing that, you know, is novel. It's kind of creepy. You could probably say the guy just needs to probably like... It's endearing. But also, you know, I wonder if this helps people move on or if it delays people moving on. I don't know.

Brian: [00:46:34] Or if it's something else altogether that we've never experienced before.

Phillip: [00:46:37] Correct.

Brian: [00:46:37] I think, you know, this is the first, actually, I don't think this is the first story of this happening. But it's at the beginning. We I think we talked about this with Roemmele in 19 and 20 a little bit. But the idea that posthumously, we'll be able to have our AI trained consciousness persist past our life. And I'm going to add my own little spin to this with maybe even our body data associated with it so they could be...

Phillip: [00:47:12] Here it comes.

Brian: [00:47:13] ...something that, you know, lives in a hologram or in virtual reality.

Phillip: [00:47:19] Ok. Alright. Yeah. Yeah. You lost me. Carry on.

Brian: [00:47:23] Yup. I know I lost you. It's not that far off. I mean, we. Okay.

Phillip: [00:47:27] Probably isn't.

Brian: [00:47:30] Think about this. Have you played any of the most recent Madden football games?

Phillip: [00:47:36] I think I stopped at 2007. But yes.

Brian: [00:47:38] OK. So it's freaky, realistic.

Phillip: [00:47:42] Yeah.

Brian: [00:47:42] We're talking about it... And they track it data on these athletes. And then you're playing as them with their most recent stats that are updated on a regular basis a very good indication. And actually, I'm talking about this a little bit in my upcoming FS Insiders article. It's actually one of the first examples of body data being used in gaming, which is going to happen even more.

Phillip: [00:48:20] Sure.

Brian: [00:48:20] But imagine if it was a, you know, Antonio Brown that you were interacting with on this game, but actually it was this exact personality that we just you know, this dad bot. But it was your dad.

Phillip: [00:48:38] It was your dad.

Brian: [00:48:38] Was your dad in virtual reality.

Phillip: [00:48:40] Right. I mean, and you could see this easily being trained from, you know, from a person... I've been using Google Chat or Hangouts or whatever it's called now, one of their 20 chat products. I've been using that for ten years. Right? With many people. And you could easily see with that kind of data, my personality, the way that I react to things, the way that I treat certain people in different social circles, the way I respond to them, you could easily embody someone posthumously.

Brian: [00:49:15] Yes. And machine vision gets better and better, we're gonna be able to look at videos. We're going to look at pictures.

Phillip: [00:49:21] Yeah. Okay. That's all great.
Brian: [00:49:22] Yeah.

Phillip: [00:49:22] Here's what I'm trying to get.

Brian: [00:49:24] Yes.

Phillip: [00:49:27] What happens to us as a society or as a in our humanity, when grief and mourning is reserved only for the poor? When we have created the ability as a society to not have to deal with our problems, not medically, but we can use technology to deny ourselves from feeling part of the human experience.

Brian: [00:49:59] I'm going to say something controversial. Then the poor win.

Phillip: [00:50:04] Well, I mean, that might be true. I don't know that we're better for it. And you had a story in here about depression being aided by additional screen time. And I think that there is an interesting story to be told there about what it truly means to be human. Because I do think that you have to... But you can't deny yourself the human experience. Grief is real and creating a bot that maybe that is a form of grief. I don't want to disparage this person. It's an interesting thing. But I do think it signals that there is the opportunity for us in the future if we continue on the path that we are on, for us to continue to create distractions and opportunity for us to not have to deal with things that are challenging in our life. And there will be a class of people who do not have access to that and their experience as humans will be different.

Brian: [00:50:57] I'm going to argue that they will have access.

Phillip: [00:50:58] That is the new classism. The technology divide is the new classism. And it's kind of disturbing.

Brian: [00:51:03] I am going to argue that they will have access to it because this AI that we're talking about, there's going to be different levels of this, obviously. But I think you're right. I'm not saying this to disprove your point. I'm saying this to say there's gonna be different levels of technological.... How do I put this? There's going to be high tech experiences and low tech experiences.

Phillip: [00:51:32] Ok. For sure. Right. Yeah. Yeah. Burner phone versus a smartphone, right?

Brian: [00:51:37] Correct.

Phillip: [00:51:39] You still have a phone.

Brian: [00:51:39] That's right. That's right. And the high version of this, it's going to be downright freaky. You're right. It could delay grief. It could suppress grief. It could remove grief in some ways. You know, I think you're right that the digital divide is going to get worse and worse and the difference between low, low tech... And interestingly enough, you may not have to be rich to have a a higher understanding or a higher tech experience. This actually may come down to desire and also culture, because a lot of tech is right now it's free, it's available. You can actually, if you know how to leverage tech, you don't have to be rich to leverage it well.

Phillip: [00:52:43] Well, that might be true. It could be that in the future it flops on its head and that people actually go into virtual reality to have the presence or the feeling of experiencing that grief. But I think it could also very easily be used to take yourself away from it. And the loss of a loved one being embodied in a VR experience where you're engaging with them doesn't help you to necessarily... I mean, I don't know. I feel like loss and grief are core to the human experience. And the more that we push the boundaries of not having to deal with that, the less it makes us human.

Brian: [00:53:15] Sure. And I was talking in a more general sense, my last statement. But I think you're right. Interestingly enough, this actually may come down to how much data we decide to collect about ourselves or how much we allow ourselves to be monitored. Like that actually might be the divide.

Phillip: [00:53:34] Well, OK. So hopefully the Xanax has kicked in by now, and you were able to make it through. If you were able to make it through, we'd love your take on this. So please hit us up by and add your voice to the show. We'd love to hear more from you about what you think. Do you think that we're on the right track here? Do you think that this is something that's coming, or have you already experienced this in some way? Let us know. And we do want you to subscribe to FC Insiders, so you never miss an episode of the show. And we want you to be in the know. In FC Insiders we have a wonderful welcome series that's a five day, five part series that introduces you to the topics that are core to our show, that are core to making you feel like you're in the know, and keeping you up to date on what's going on in the future of retail and the future of commerce. What it is that we say now, Brian?

Brian: [00:54:20] Retail tech is moving fast.

Phillip: [00:54:22] Future Commerce is moving faster.

Brian: [00:54:24] There it is.

Phillip: [00:54:25] Thank you for listening, and we'll catch you later.

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