Episode 80
August 24, 2018

There's Always Money in the Banana Stand

What do Wal-Mart, Target, Shipt, Instacart, and squeezing avocados have to do with the one-a-day banana? Plus: how Facebook and segmented targeting of social ads can lead to race discrimination. Listen now!

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Show Notes

At the forefront of innovation: B-A-N-A-N-A-S.

  • The One-A-Day Banana nearly broke the internet. One package, six bananas varying in ripeness so you can have the perfect ripeness each day.
  • This could be a good solution for grocery delivery services because produce is a big challenge for them. It's tough to get the perfect avocado or banana when you order online.

Rent the Runway has received a $200 million loan

Clicks Seeking Bricks

  • In a recent interview Natalie Berg said "clicks are looking for bricks"
  • There was a structural advantage for ecommerce at one time being online only, but now that ecommerce is more prevalent, brick and mortar can be an advantage again for fulfillment and custom experience.
  • This is what makes Walmart a genuine threat to the big A. They have a huge structural advantage that can bolster their online sales.

Can Target compete with Amazon and Walmart online?

  • Target acquired Shipt to be more aggressive on their ecommerce front.
  • There was a lot of hype about same-day delivery, but for many, the primary option is free two day shipping on orders of $35+.
  • Their in-house brands for clothing and furniture offer unique value over Walmart and Amazon for certain demographics.

Is Walmart still a bad guy?

  • Amazon's competitive practices and working conditions make Walmart look like Trader Joe's.
  • Walmart is slowly shedding the stigma it gained in the 90's and 2000's.
  • Walmart has been a better contributor to the technology community, which has helped them get more web talent.

Is Amazon basically Thanos?

  • Jason Goldberg asked, "If Amazon were the only ecommerce provider in the US, could they implement a small but significant price increase?" or would offline retailers keep their prices low?
  • This question is a helpful indicator for whether Amazon is crossing anti-trust lines.
  • If Amazon and AWS were the go away, the internet would be devastated.
  • Amazon continues to launch new in-house brands, spreading their reach.
  • Though we may not be there yet, this conversation about Amazon is important.

Ok, wait, maybe Google is Thanos

  • Google has more data about us than any other company, by far. Why aren't we raising more flags about them?

Targeting Discrimination

  • Facebook hit with housing discrimination complaint by HUD because of filtering options that gave advertisers the option to filter by race, sex, religion, disability and other characteristics.
  • This should add perspective for advertising in all fields and the common practices that may be deemed discriminatory.

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Brian: [00:01:41] Welcome to Future Commerce, the podcast about next generation commerce. I'm Brian.

Phillip: [00:01:44] And I'm Phillip.

Brian: [00:01:45] And we have another great show ahead for you today. Lots of fun stuff to talk about and some pretty intense stuff to talk about, too.

Phillip: [00:01:53] {laughter} Let's start off with the lightest possible story that we could possibly find.

Brian: [00:01:58] Ok.

Phillip: [00:01:59] In all of creation. We were talking about how you can take sort of mundane products, I think one or two episodes ago. You take sort of everyday mundane products, but you package them in a specific way that make people sort of excited. And you would never think that you could have product disruption in things like smelly erasers and scented markers. But that's happening. And now we have it in bananas.

Brian: [00:02:25] I love this. This is the best.

Phillip: [00:02:28] This is the absolute best, most feel good story. And it's all downhill from here. But the One-a-Day banana, which is going bananas, b a n a n a s, on Twitter was shared out by Ian Bremmer. But it's a picture of a package of bananas supposedly from Korea, South Korea, where they are in various stages of ripeness. And it's called One-a-Day banana. And the first banana is perfectly ripe for you to eat today. And then for the next few days, you eat a banana at a perfect level of ripeness.

Brian: [00:03:09] Gwen Stefani was all about that idea. She's got a subscription to this. {laughter}

Phillip: [00:03:15] Yeah, she does. Absolutely. What I think is actually marketing genius here is that the One-a-Day banana only has six bananas in the package and not seven.

Brian: [00:03:25] You shall rest on that last day.

Phillip: [00:03:28] You will rest. There's a Sabbath for the banana. I didn't realize that. But there is a a day of rest in eating bananas. So that's a great story. Product innovation, even in produce, of the non GMO variety.

Brian: [00:03:44] Even in produce. {laughter}

Phillip: [00:03:46] I love that. Do eat a lot of bananas?

Brian: [00:03:51] You know, enough bananas. When I was at Amazon, I ate a lot of bananas because they have a banana stand on campus.

Phillip: [00:04:01] There's always money in the banana stand.

Brian: [00:04:03] Exactly. I said that almost every single day as I ate my banana.

Phillip: [00:04:09] That is funny. Actually, this... We totally didn't plan this at all. But I've been using a local delivery, or two local delivery services. One is called Shipt, which I get the feeling is not a national service. The other one is the... What's the one target uses? I forget. It'll come to me in a second.

Brian: [00:04:29] Instacart?

Phillip: [00:04:32] Yeah, yeah, yeah. So I've been using those sort of like off and on to get groceries and some various things from, you know, local stores, which is really, really cool. I have a problem buying bananas with them though. I eat a lot of bananas. I will eat a banana as a snack generally once a day, maybe twice. And I usually put a banana into a protein smoothie of some kind, either for breakfast or for, you know, lunch or something like that. So I eat a lot of bananas. I feel like they don't know how to pick out a banana. Personal shoppers just don't know how to pick out a banana. They always ere on the side of too green. I would love to have the One-a-Day banana because at least I'll have at least one ripe banana. But no, I always get this big bunch of these totally green bananas. Anyway. It's a problem. The thing that I find interesting, though, and where I think the problem that we have right now in the retail delivery mechanism is things like produce are experiential. I know by squeezing an avocado that it's fairly ripe and I should buy it to use tonight. But I will never be able to communicate that effectively to someone else who doesn't have the skill of picking out an avocado.

Brian: [00:05:52] That's just training. I mean, that's simple. That's not actually that difficult.

Phillip: [00:05:58] It's not that simple.

Brian: [00:05:58] You squeeze them, and if they're squishy, they're ready.

Phillip: [00:06:07] {laughter} I don't know. I feel like there's so many different varieties of bananas and apples and various... It feels like it's a problem that needs to be solved. And it's the kind of thing that you don't think about when you're standing there looking at a banana.

Brian: [00:06:22] It depends on how much choice you have. Right? Like if you... Yeah, that's true. I mean you could have instructions at every picking station, if you will. But yeah.

Phillip: [00:06:35] Nobody is going to follow those instructions. Like you go to add the banana to your, you know, Instacart app and it's like here are pictures of various bananas. Which kind of banana would you like? And like I'm selecting from a scale of the One-a-Day banana. It's like I want a banana that's slightly spotted because I plan to eat this as soon as it arrives.

Brian: [00:06:54] Or you can have like a banana workflow where like you get the bananas in at a certain greenness, and you know how long... Actually, I wonder if... Yeah. One-a-Day banana company, if they ran some tests to see like maybe six days was actually the optimal time between green and yellow. And so like that was the most common amount of time it took for a banana to ripen from totally green to totally yellow.

Phillip: [00:07:20] Right. And 7 is is just a bridge too far.

Brian: [00:07:22] Right.

Phillip: [00:07:22] It's like brown. The thing just looks pretty bad.

Brian: [00:07:25] Yeah. Starts to get spotty. Yeah. Exaclty.

Phillip: [00:07:27] What's interesting here is that you've seen pre-packaged produce I'm sure in your local grocery store where they'll go to the trouble of cutting up a pineapple or a watermelon. Consumers have no problem spending seven, eight, ten, eleven x what they would on a bunch of bananas for a pre-packaged one a day banana.

Brian: [00:07:47] Yeah, totally.

Phillip: [00:07:48] It's crazy. Anyway, I felt like this went right... I didn't expect us to spend 15 minutes on it, but it went hand in hand with a couple episodes ago and sort of the theme there of product innovation.

Brian: [00:08:02] Nice. Well, no easy transition from from One-a-Day Banana to Rent the Runway. {laughter} But since we've been talking about the second hand market a lot lately, I thought it was interesting. Just recently, Rent the Runway is doubling down. Well, I shouldn't say that. They are already one hundred percent in on unused clothes.

Phillip: [00:08:27] Yeah.

Brian: [00:08:28] But it's just picked up another tuner million dollar loan to increase its subscription rental business. And so. I think, you know, basically what they're doing is they're looking to expand further, and they're seeing lots of strength and, you know, they're ready to to keep pushing hard. And I like that. I think It's smart because if they're seeing success, they should keep pushing hard. It gives them more runway. So, you know, maybe they need that runway.

Phillip: [00:09:04] Runway. {laughter}  Maybe if they don't have enough runway, could they "rent" a runway?

Brian: [00:09:12] Oooh. I think they kind of what they're doing.

Phillip: [00:09:16] It's interesting because I saw a post recently on Twitter that people are buying clothes more and more just to post on Instagram and return them a day later because they don't need to wear the clothes in public to get the same sort of exposure that they would or the sort of social cachet, the social props you would get as if you had to, like, try to put the tag back on, it's like the 21st century version of wearing the clothes with the tag on and trying to return it afterwards. Really interesting trends, and I feel like it just leads to higher costs in the end for retailers that they pass on to the consumer because you have a lot of inventory that's being worn and returned and everybody knows it was worn in returned, but you can't really prove it.

Brian: [00:10:18] That's the downfall of retail. People buying clothes and returning them.

Phillip: [00:10:26] It will come full circle when we have full shoppable Instagram, you know, one tap to purchase, it gets delivered to your house. You wear it. You take a picture of yourself in it, and then you return it back to the retailer only for someone else to buy it again with one tap.

Brian: [00:10:39] Chicken and egg, right there. Or no, infinite loop. Infinite loop.

Phillip: [00:10:44] This is where we cue Celine Dion's "My Heart Will Go On." And that's just that... It's funny. This actually leads into the story that I was talking about in the pre-show. Natalie Berg giving a really cool talk over at TCC Global in Barcelona. And there was this... Somebody coined it as like retail Darwinism. But the idea was it was like 20 minutes of her thoughts about the future of retail. Which I always perk up. I always sit up and listen when people start talking about future of retail because that's my, that's our shtick.

Brian: [00:11:31] There's a lot of that, by the way..

Phillip: [00:11:32] That's our thing.

Brian: [00:11:33] There's a lot of that happening right now.

Phillip: [00:11:36] Oh I know. I know. Yeah. Yeah. Got you. So this is sort of like one of those... Oh, by the way, I mean, she's a retail analyst. Just very well know. I respect what she says, but she had this one phrase that I thought was really interesting is she said, "Clicks are looking for bricks," which went, you know, goes back to one of our most recent shows. But what she said was in sort of the context of "Clicks are looking for bricks," meaning that there was a structural advantage that e-commerce had, you know, 10, 15 years ago, where early adopters would buy from online stores only. And then those stores didn't need a distribution model or have the customer engagement to warrant or require the frontage that you would have in a retail space to compete normally. But what happens is over time, you have big retailers that are also getting into e-commerce. Now they have a structural advantage over e-commerce in that they can acquire a customer who otherwise has different needs to just sit around and wait for a delivery to come to their house, and they can go and try on the clothes. They can go and experience it, and find other products that they wouldn't normally find. And they have a means of, now they have in-store distribution, and they're fulfilling from store. They could buy online, they could pick up in the store. And so now they're actually at the advantage. So we're coming full circle on the e-commerce being... E-commerce is the death knell of retail. And that's why we have retailpocalypse. And her take is actually e-commerce is going to bolster the large global brands who actually already have the infrastructure in place to service...

Brian: [00:13:30] I think people are talking about this for a while with Walmart. And like that's the advantage it has coming up against Amazon. That's the one big advantage it has. They can basically look at Amazon and basically do what Facebook did to Snapchat and run their spin off brand, Instagram, and then run Instagram stories, which becomes their most successful feature because they've already got all the users. All they have to do is copy what Amazon's doing, and they can be more successful because they already have...

Phillip: [00:14:00] And they'll be more successful. Exactly. 100 percent. And listen, we've talked ad nauseum about the jet.com and the Flipkart and the Moosejaws and the... It's like, you know, they've done a lot of acquisition investment in omni channel and M&A activity around e-commerce to sort of learn and absorb what pure play e-commerce is all about. And then fold that into their store. And guess what? It's paying off for them. Their earnings came back. I think it was yesterday? Gosh, I can't... Things move so quickly. It's really hard to keep up. Massive growth, massive growth in their e-commerce, which, you know, was a big flip over, I think, their Q4 earnings of last year where there were some guidance that they would be down probably based on some investments. Anyway. If you want real stock advice, don't come to Future Commerce to do it. What I'm saying is, is that when people like Jim Crammer saying, "It's not too late to buy at Walmart," and it's at 96, and he thinks they can go to 120, that's a big deal. Walmart is strategically positioned to compete against an Amazon. Where Amazon is at a structural disadvantage because they don't have the retail frontage that a Walmart does. And as much as we like to brag on Amazon's distribution, Walmart arguably has a more incredible distribution network in that it has stores everywhere that they've been investing in for 50 years.

Brian: [00:15:43] Think about this. Walmart is... You can see what they're doing. There are copying Amazon. They've got their marketplace now, which they're really starting to invest in heavily. They have released their media group, which is competitive with Amazon's media group. Like they're basically just, they're doing exactly what we're saying. It's on its way. Store number nine or eight or whatever it is. Their future store. Interestingly, you mentioned Target earlier. I want to point out two things. We're talking about structural advantage right now and delivery networks and things like that. Two things, one, Walmart all but discontinued its last mile program, which I found really interesting, where you had employees dropping off packages. And actually it was shouting about this program from the rooftops at NRF last year. And it's pretty much abandoned it. There's only like one store that's still running the program. And I think they just found that employees really didn't like it. There weren't high enough incentives. It cut into their lives too much. And so it was just a bit of a like a non thing. The second thing I want to point out is Target acquired Shipt earlier last year.

Phillip: [00:17:22] Oh, that's the one I was thinking. Not Instacart.

Brian: [00:17:24] Yeah.

Phillip: [00:17:24] Shipt is the one that I use more often. I'm sorry. Yes, I use Shipt and Instacart. Sorry. Carry on.

Brian: [00:17:30] Yeah. We need to go back and review this, because I actually I haven't seen Target... I don't know. I haven't really thought of... I don't think of Target in the realm of Walmart and Amazon, yet, at all.

Phillip: [00:17:47] Yeah. Well, I'll tell you why. I mean, Walmart spent the entirety of the 1990s investing in rural America. Walmart is almost literally everywhere in the United States, and Target is not. But I think that Target definitely has...

Brian: [00:18:13] No, sorry. Sorry. That's not what I meant. In terms of like e-commerce purchasing. Like right now, when I go to buy something online, I'm going I go to Amazon or Walmart. For your main items. And if you don't like what you see on Amazon, you go to Walmart.

Phillip: [00:18:29] Right. I see. I see what you're saying.

Brian: [00:18:30] Yeah. And Shipt was supposed to be this like transformational acquisition where we're gonna see same day shipping out of Target. And it was this big deal. And now I think all that Target has is free two day shipping on eligible items with $35+ orders. And so I just feel like it was a really big deal and there was a big hubbub about how Target was now like actually going to be competitive with Prime and like all of this. And it was just like. No, not yet. No, not really. And so a little retrospective there. Like Target has not caught up yet.

Phillip: [00:19:12] No. And they're a long way from doing so. But. You gave me the tit and I'll give you the tat. Here's my take on it. There are things that I want from Target that I cannot get from Amazon. And I will not buy from Walmart. Just because I'm that kind of a consumer.

Brian: [00:19:30] What's the will not?

Phillip: [00:19:31] I mean, clothing really is what it comes down to.

Brian: [00:19:34] Oh, yeah.

Phillip: [00:19:34] I really like, in particular, Target's done a couple of things really well. So Target rebranded its Mossimo and its in-house brands and license brands into Goodfellow recently. There was another name for Target's in-house brand prior to that, which I guess I can't remeber what it is, but Target rebranded it as Goodfellow and sort of redid the whole line in a really modern lifestyle wear sort of take, which appeals to me. It has an aesthetic I like. But they recently redid another line of theirs which they launched, which is a streetwear brand, and it's called Original Use, and it's really kind of competing with the H&M sort of streetwear aesthetic. And it's ultra affordable, as well. And so if I'm going for clothing, if I'm going for locally, and I'm certainly never shopping on Levi's again, that's a whole nother thing.

Brian: [00:20:51] {laughter} Let's talk about that.

Phillip: [00:20:52] Yeah, but big global brands are not living up to my expectations that Amazon.com has set for me. But for whatever reason, Target is. And I know that I can use Shipt, a web app, and have Target deliver to me same day in my local town. I know that's not true for everybody. So I will choose a Target over a Walmart and an Amazon when it's something that I know that I want. If I'm looking for skinny jeans or joggers, and I don't have time to make that trip myself, or I'm home and the kids are already in bed, I know where I'm going to go. That's just the way it... Plus, you know, I can get a lot of other things. I can get some ice cream or almond milk or whatever. So that's my thing.

Brian: [00:21:35] I mean, that's pretty good. I mean I think. Yeah. Let's follow up on this and just kind of see where the whole integration...

Phillip: [00:21:42] Yeah, let's keep an eye on it.

Brian: [00:21:43] But it is interesting because Target's kind of in the same position as Walmart, just not quite as strong. It has the infrastructure. It has a fairly loyal fan base.

Phillip: [00:21:59] Oh yeah.

Brian: [00:22:00] It could come up against Amazon. I think that's why everyone was really excited about the Shipt acquisition. So, I think it's in line with everything we were saying about Walmart. We just need to keep an eye on them. I don't know. I trust Walmart to do a better job to compete against Amazon than I do Target. I think we might have talked about this before, but just to reiterate, do you think that that Wal-Mart has lost its stigma about being like a predatory company that you only buy the cheapest of cheap stuff at? Or do you see it as like a place where you can go to buy anything now?

Phillip: [00:25:23] I think it's more of the latter. But I do still carry the 90s and early 2000s stigma of the sort of work environment and the minimum wage and, you know, underemployment stigma. I still carry that around as thinking of Walmart and as that company. But I'll be honest with you, I really feel like the Amazons of the world have given them a run for their money.

Brian: [00:25:49] Right.

Phillip: [00:25:50] And so you think of them as the scrappy underdog. And in actuality, they're not because Amazon's created market pressure on them, and e-commerce in general is created pressure on them. They may still be doing all of the same things that they've gotten into regulatory issues and in local jurisdictions and equal employment... All of those things have been hot button issues in the press. But more recently we hear about Amazon workers crying and peeing in bottles in warehouses, you know, because they can't take a break. {laughter} That's what's more top of mind for me. But why do you ask?

Brian: [00:26:30] I was just curious. I think that Walmart's losing the stigma. And so it's definitely now to the point where I think, you know, a lot of people look at Walmart as their maybe even friendlier alternative to Amazon right now.

Phillip: [00:26:50] Yeah, that's interesting. I mean, they've done a lot of really interesting... Think about it like this. Think of how differentiated the three properties that we've been talking about are. I think of Target, as, you know, sort of a higher end version of like a Walmart. But they also in the past 15 years have been really spent partnering with designers and bringing in sort of accessible luxury. And nowadays, they have even more mass market appeal. Like Chip and Joanna Gaines are designers at Target. It's just weird to me. Anyway. So that's how I think of Target. Whereas a Walmart, you know, apparently all it takes to change the minds of the consumer is to buy a ModCloth, a Moosejaw and a jet.com...

Brian: [00:27:43] Just billions of billions of dollars.

Phillip: [00:27:45] Yeah, it's just billions and billions of dollars of acquisition. That's really all it takes. And for a company their size, you know, very smart, very strategic investment. On the e-commerce front, they and PayPal in particular, have spent a tremendous amount of money and time changing the developer mindset, and the e-commerce developer mindset, around open source in that Walmart and PayPal and a few others are pretty much the main contributors to a couple projects on the open-source front that run a lot of software that are powering modern e-commerce. Like Nagios and some others. So their adoption there and investment of, you know, millions and millions of dollars and lines of code have changed a lot of developers mindsets around what those organizations are and what they mean. So where you might see a Walmart as a traditional like SAP or Oracle backbone type company. They're actually investing tremendously in open source and contributing back to it. I think that changes a lot of people's minds. It's a very small audience, to be sure, but it allows them to hire the right people who are in e-commerce and who are the ones that are making the decisions that will guide the platform in the future.

Brian: [00:29:05] Yeah. I think that's exactly right. Like the talent acquisition and, you know, even with Mark Lore. It's a great example of that. Like when you bring those minds in, they're going to make the company be the kind of company that they want it to be. You know, I mean? It's going to change culture. It's going to change the way that they go to market. It's going to change, you know, their DNA. And so I think that's definitely happening. [00:29:28] Matt Kenneth. [00:29:29]

Phillip: [00:29:29] Yeah.

Brian: [00:29:29] Yeah.

Phillip: [00:29:30] Yeah. Anyway, I think very interestingly... Those things are fascinating to me.

Brian: [00:29:35] Well,.

Phillip: [00:29:36] Probably not to everybody. {laughter}

Brian: [00:29:37] There're two more things I want us to really get into. One of them's a really natural transition. But I think you really want to hit on the other one first.

Phillip: [00:29:48] That's OK. No, no, no. You hit the natural transition. Give us a segue, Brian. I like a segue.

Brian: [00:29:51] We were talking about Amazon versus Walmart versus Target. And there was an interesting thing that came up recently. Scott Galloway, who is very critical of the larger tech companies, has been arguing that Amazon should be broken up and... Jason Goldberg made some interesting points about maybe why not?  And so like his basic idea was if Amazon was the only e-commerce provider in the US, could they successfully implement a small but significant price increase, or would competition from offline retailers keep Amazon's prices low? And that's the test of the relevant market in the US, in US antitrust. Which I found to be an interesting statement. You found that to be an interesting statement. Just thinking about antitrust in a digital world, and what it means to be competitive and not competitive. And Amazon, which is not a pure play retailer, but majority of its revenue is coming from online. Is that so dominant that people wouldn't just go to stores to make purchases at a certain point just because they have 44% of all online transactions, which is, by the way, increasing as e-commerce increases. If things are off their current trajectory, I think there's a year in the future in which Amazon's total amount of revenue will actually equal all of its past years combined. In one year.

Phillip: [00:31:53] {laughter} I don't think we had talked about, you know, Apple becoming a trillion dollar company. So, I mean, are there more valuable or larger companies in the United States or in the world? Yes, but very few of them are in every area of influence in everyday life. From powering all of... I mean, the e-commerce that you're speaking of, that Amazon owns... Amazon is likely running the infrastructure of the other 60%.

Brian: [00:32:27] Right.

Phillip: [00:32:28] Amazon is likely running the infrastructure of, if not the actual infrastructure that those other competitive e-commerce sites are running on. then the infrastructure of the complementary marketing services that they all use. So it is so deeply ingrained. If Amazon were to go away. Let's say if AWS goes away. We won't have a world wide web in the United States. That is that is how fundamental AWS is, and it is the most profitable part of that one part of their business. And you look at the other things that they're doing, where they have a tremendous marketplace business. I've heard people say 51% of all transactions on Amazon are...

Brian: [00:33:11] They said that.

Phillip: [00:33:12] Fine. OK. Well, I've heard other people say it. Probably you. {laughter} Fifty one percent of transactions are marketplace transactions. That's great. But Amazon keeps launching house brands that effectively, you know, that they're learning and competing with their marketplace competitors. If they may be selling batteries and USB chargers... That's fine. Like I'm saying, listen, selling batteries and USB is not a sustainable business on Amazon. We've talked about this ad nauseum. But at the end of the day, they're into the long tail now, and they're creating more and more clothing brands. They're creating more...

Brian: [00:33:52] People freak out about this.

Phillip: [00:33:52] It's just not aggressive competition.

Brian: [00:33:54] You know, I actually don't see it as that different. And I know a lot of people are going to make an argument against this, but I don't see it is that different than a lot of retailers' generic brands. Like Target's got their Goodfellows brand. They're competing against... I mean, I guess that's not a good example because they make all their own stuff or whatever. Or I guess they bring in a few things. But my point is like how different is this than a generic brand?

Phillip: [00:34:29] Listen, that's fair. I think that's fine. And there are companies like Brandless who are doing it better. What I'm trying to say is that it's pervasive in that they're not just in one or two things. They're everywhere and fine. Maybe they can't exert... And I like the thought experiment of what US antitrust actually is, which is could they... Do they have so much influence that they could exert market pressure? I think in one area you have to start and you have to sort of wonder if Oracle can be found to be exerting pressure on their ERP customers and faced with threats of audit so that they would have to get locked into long term contracts for their e-commerce products... You have to wonder if you can exert influence in one area by having, you know, a leveraged contract or relationship in another, that's meaningful to me. It may not qualify for US antitrust or to break them up under US antitrust. But it means that they're extremely powerful and it makes... But it's not like we don't have choice in the United States. It's not a monopoly. But I like this back and forth. And if you want to read more, there's actually a great article on [00:35:54] dot com [00:35:54] about it, which will link up in the show notes because we actually have show notes again, which is great.

Brian: [00:35:57] You know what I think i interesting is... Let alone like if they should be broken up for a minute, like in this conversation. But I think the question is, will they be broken up in the future? I mean, this conversation between Scott and Jason, I guess, you know, it's just a little bit of a back and forth, but that's happening not just in the realm of retail. That's happening at a national level, I think. And obviously a political level.

Phillip: [00:36:39] Sure.

Brian: [00:36:41] I think the big question is not whether this is even like something that should happen, but something that... People are discussing it across the nation and world. And so if that's what I think is the bigger question for me right now, just because...

Phillip: [00:37:05] Well, there's only one other company that controls a majority of e-commerce, has a speaker and a microphone in a lot of homes, and is running almost all of the hardware that you depend on on the Internet. And that's Google. And why do we not feel about Google in the same way? Ostensibly Google knows way more about us than Amazon ever will. You know, in that we have our email with them, and we use them as an identity platform, to Allen Nance's point in our last episode. So, a lot of interesting stuff.

Brian: [00:37:44] Well and who knows? I mean, I still wonder what's happening with our Google data. No, seriously. Like when I got Google Mini... I might have talked about this in the show before. So forgive me if I'm repeating myself, but I was absolutely blown away. I took a phone call on my Google Mini... I actually made a phone call, like I said, "Google Call so and so" using my phone number. And we talked about something that we had never talked about before and a place that I never talked about before. And within an hour, I had an ad that wasn't just an ad, actually, it was a targeted email in my inbox from a hotel chain about staying in that location. And I mean, maybe it was a coincidence, but that's just mind boggling to me.

Phillip: [00:38:48] I mean, fine, like, yeah, that's how it works, right? Like, we actually say as consumers we like targeted advertising because when we get random advertising it is more annoying than having targeted advertising.

Brian: [00:39:01] My point is... The data. The data aspect is actually scarier. I think you're right.

Phillip: [00:39:07] Yes. Oh, yeah, you're right. Yeah. Yep.

Brian: [00:39:11] Right.

Phillip: [00:39:12] And why do we think of them in the same way? I don't know.

Brian: [00:39:13] If data is the new oil, than why are we not looking at Google as a monopoly?

Phillip: [00:39:22] Yes. OK. This is great. OK. And then on to that. So since we've already talked about all of the other scary people who have your data. Let's talk about Facebook.

Brian: [00:39:30] There's the segue.

Phillip: [00:39:30] Might as well. So to kind of round it out, this was the last... Hey, we finally found the segue. You know, again, there are other more journalistic entities out there who can do a lot more justice to this story. I thought it's worth mentioning at least. Because apparently... I mean, this really, really matters in certain regulated areas like housing and banking. But we may not be thinking about this in consumer senses. So Facebook was hit by a federal complaint from the US Housing and Urban Development, and they were basically found in violation of the Fair Housing Act because certain add filter options allow you to target things like race and religion and gender. And according to the article that we'll link up here... Accessibility, national origins, parental status... Those are all things that you can target with ad filters in Facebook. So I can create an ad for an apartment that I'm going to rent out, and I can specifically target just white people with it. And that is a violation of the US Fair Housing Act. So Facebook is under fire here, which listen, we all if we're all in digital commerce, I assume that most of us listening are, we understand how targeted ads work, and we know that that's how it works. And now Facebook is going to basically... They said, listen, there's no place for discrimination on Facebook, and they removed the ad filtering options for certain types of ads, for certain types of products. Again, you know, those that are regulated in specific ways. So a good example would be housing. But it also, you know, applies to banking or credit loans, because there are laws around this. But I find it interesting because I've never thought about how targeted advertising could work in social media in a way where you could discriminate the types of products or that market to which you would advertise a specific type of product to.

Brian: [00:41:48] It's not just targeting. It's discrimination.

Phillip: [00:41:56] It's discrimination. It's not targeting. It's discrimination, which I find incredibly fascinating and dystopic. And if we had more time, I would go absolutely crazy on this. But that's a scary thing. I don't really have much more to say about that because I don't think we have enough time to get into it.

Brian: [00:42:12] Yeah. It is interesting.

Phillip: [00:42:14] But I want your take on it.

Brian: [00:42:16] If you had an agenda, you could set your agenda by who you actually put your ads in front of? Interesting. Right.

Phillip: [00:42:32] I mean, this is the case for the US elections in 2016. You find a particular audience that has a bias that you can target a specific message to. And if you're Russia, you know, to all but a few people in in the United States government. I think most of us care about this. And that's scary. But I've never thought about it in the terms of commerce and how we still... To be honest with you, we probably do this already. We have natural affinity to do this.

Brian: [00:43:09] Market segregation. Right. That's a form of discrimination just in general. Not just on Facebook, but in general.

Phillip: [00:43:21] Yeah. Precisely.

Brian: [00:43:21] How far is too far?

Phillip: [00:43:24] Yeah. So I find this... I would like to know. Maybe our listeners have some thoughts about this. I'd love to prod them for that. If there's any example that you've seen out in the wild. We'll give this a think, too, over the next a week or so and see if we can't come up with some more. I'd love to maybe invite someone on the show who has some thoughts around this. But, you know, a good portion of the work that you and I do is recently around Americans with Disabilities Act and Compliance online, and we're seeing, you know, if in some areas without it actual legal requirement and compliance and regulation, we wouldn't have handicapped accessible storefronts and government buildings. And that is a necessary and legally required thing. I think this is a good thing in general, and it potentially signals the future of where we might be heading. Although probably not the near future because we're very busy de-regulating a lot of things in the United States. But I do see a future where we're very concerned about the way that targeted advertising works on the Internet. We might be in the golden age right now where it's kind of a Wild West.

Brian: [00:44:43] I think the Wild West was a while back. We are in the slightly less Wild West. I think the golden age of advertising was when people throw it back and automatically make money.

Phillip: [00:45:01] Yeah. It's like printing money. Yeah, printing money. Seven to one, eight to one, ten of one. I've heard about those days, actually. Interesting stuff. You want to close us out, Brian?

Brian: [00:45:12] Sure. Well, thanks for listening. As always, we love your feedback, so hop on over to FutureCommerce.fm and leave us a comment or reach out to us on LinkedIn or Twitter or wherever. And you know, also would love to get a 5 star from you if you love the show. Hop over iTunes. Leave that 5 star. And if, during your day, you find that you're busy, and you can't click on the play Future Commerce button on your phone or wherever you press play, you can always listen just by saying, "Alexa" or "Google...Play Future Commerce podcast," and we'll come right to your door. There you go. Thank you so much. Retail tech is moving fast...

Phillip: [00:45:59] Future Commerce is moving faster. Thanks for listening. Bye.

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