Episode 140
January 10, 2020

Vision 2020

The next phase of the growth of your business will be based on your ability to plan for the changes coming over the next 10 years. Things like outsized customer expectations, online behemoths and marketplaces like Walmart and Amazon, Generation Z coming o

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Download the Vision 2020 Report Right now

The next phase of the growth of your business will be based on your ability to plan for the changes coming over the next 10 years. Things like outsized customer expectations, online behemoths and marketplaces like Walmart and Amazon, Generation Z coming of age, aging of the Millennial population, and a whole lot more there are things to consider in the 2020s that will either put you ahead of the pack in your DTC or retail business or at the back of the pack. In this podcast, we break down what you need to succeed in the next 10 years, from our perspective as analysts.

Show Notes:

Main Takeaways:

  • It's our annual predictions episode, and 2020 is going to be quite a fascinating year for retail
  • Relationships between company and customer are crucial to consistent retention
  • Phillip and Brian cannot go a week without making predictions
  • GenZ is all about building relevant and exciting skills, even if they can't afford life yet.
  • Consumers are going to start having expectations that the products they purchase are going to improve their health, and brands are going to have to meet that demand.
  • Future Commerce partnered with the customer-service platform Gladly to create a report on the future of retail, and it's crazy good.

Vision 2020:

  • Future Commerce partnered with Gladly to create a comprehensive report on what 2020 retail will look like, and it's available for download.
  • The report is a buffet of Future Commerce predictions all in one place
  • Want this report? Of course, you do, click here →
  • Brian and Phillip cannot go more than a week without making predictions
  • This is the year where profits are king

Brands Are Going To Have To Better Your Life To Retain Your Business:

  • Something we've seen at Future Commerce is that the relationships that retailers build with their customers can indicate if they can retain those customers long-term.
  • And brand trust is super important because it allows brands to take risks and loyal customers to follow that journey.
  • It's a new world: Zebras > Unicorns
  • The evolution of health and wellness is going to evolve beyond what we can currently understand.
  • How can the products that you purchase help make your life better?

Sustainable Skill Learning: Why You Need to Tune In To CARLY:

  • GenZ is a totally different generation, and GenZers are interested in a very different world than Millenials.
  • We covered this in our Future Commerce Insiders #18, where we talked about CARLY (Can't Afford Real Life Yet), as the new generation of shopper.
  • And while CARLY might value a new experience, they're also natural creators, seeking out new marketable skills.
  • And as Brian said: "CARLYs are learning skills because one, they care about sustainably doing things. They care about the environment. And so they're patching their clothes, and they're making their art, and they're doing things for themselves. We live in a Minecraft world where people want to build out things for themselves and build experiences for themselves and use those experiences."

The Future of Retail: Sustainability is Everything:

  • As we learned in 2019, sustainability is a lot more than just a buzzword; it's the path forward for retail.
  • Second-hand commerce is more sustainable, it allows for less waste, and resellers can capitalize on this.
  • The story for sustainability has to continue in the 2020s
  • Brands that are leading the way are public-benefit corporations or B Corporations, which is always a significant focus on our show.

Want to hear the rest of the key trends for 2020? Check out our report on the Vision of 2020 with Gladly, it has all of the info that you need to be able to indeed stay on top of the future of retail.

Download the Vision 2020 Report Right Here!

Phillip: [00:00:00] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation Commerce. I'm Phillip.

Brian: [00:00:05] And I'm Brian.

Phillip: [00:00:06] And this is our 2020 Predictions episode, and it's brought to you by Gladly. We're very excited to partner with them to bring you our 2020 predictions, to give you a vision of what the future could be like. If you are looking for a customer service platform, look no further than Gladly. And now we want you to reach out to them. Let them know that you heard about them through Future Commerce, and you can do that by going to Gladly.com/FutureCommerce. Brian, we wait all year for this. This is it.

Brian: [00:00:37] I feel like we don't wait all year for this. We just go willy nilly and make predictions all the time. {laughter}

Phillip: [00:00:44] But for a show that has the word "future" in it...

Brian: [00:00:47] Case in point. Yes. Exactly. Case in point, last week we were like, oh, we can't go more than a week without making a prediction, and we made a bunch of predictions in our recap of 2019. Of course.  But what I like about these predictions is that it's a really interesting collection all in one place.

Phillip: [00:01:08] Yeah.

Brian: [00:01:09] I feel like this is a sort of a cross section of a lot of different sort of tangential... Wow, I can't talk today. Or add apparently. I don't know. It's been an interesting day.

Phillip: [00:01:25] Yeah.

Brian: [00:01:25] So anyway...

Phillip: [00:01:27] Usually these are self-contained topics. And you get them all in one. This is like a buffet of Future Commerce predictions all in one place. But let's let's not waste any time at all.

Brian: [00:01:43] Dive in.

Phillip: [00:01:44] If you want the full thing, the whole thing, we're going to encourage you to go download the report. It's on Gladly's web site. I'm just gonna say Gladly.com/FutureCommerce is the place to get it and make sure that you download that report, get the PDF and go through all the actual quantitative and qualitative data that we've compiled with our Future Commerce alumni and with our broad market research and our partnership with Method + Mode to put all this together and to give you data and insights based on the things that we see coming down the pike in the future. But why don't we just kind of round robin? You take the first one, and let's unpack it.

Brian: [00:02:22] All right. Here we go. Future Commerce 20/20 Vision, Vision 2020.

Phillip: [00:02:28] %That's it.

Brian: [00:02:30] My first prediction for this year... We'll start at the bottom. So profits are going to be a big focus this year. {laughter} We have been in a crazy period of focus on growth the past, really, 10 years. The entire business strategy for everyone, not for everyone, but for a lot of businesses in the past few years has been acquiring customers, acquiring or customers, acquiring customers, and then monetize them. Instead I think this is going to be a year and really, you know, next few years where profits are going to be king, and we are going to see a playbook for growing businesses that is focused on being profitable more quickly and having growth in a very measured way.

Phillip: [00:03:39] That sounds tough, Brian, because some of our other predictions talk about rising customer expectations. And so it's going to be... This is the long, slow road. Our last episode of 2019 was with Audrey McLoghlin, who's the founder of the new shirt brand Grayson and also Frank & Eileen. And she talked about being part of the Hundred Club, which is you own 100% of your business. And that was a 10 year road to get to a very prominent place within a very narrow category. It's not the easiest, fastest route.

Brian: [00:04:22] It's not the easiest, fastest route, and I think that's sort of going to be part of the the mantra going into this decade. Easiest, fastest is not always best.

Phillip: [00:04:34] Yeah, I think that's a great place to leave it. We've learned a lot of lessons, and I think we're going to apply some of that learning to the next decade. So, yeah, a refocus on profits. I think that's a pretty... That seems like an interesting and obvious choice, but it's one that should be mentioned.

Brian: [00:04:52] Right. I think it is kind of obvious. There's a lot of chatter about this right now. The idea of zebra's instead of unicorns... There will be some challenges, like you said, in doing this. The cost of customer acquisition is high, so the methodologies to get to this place are going to be different than the playbook that we had before for growth.

Phillip: [00:05:12] Yeah.

Brian: [00:05:12] So before it was like throw money at ads, throw money at ads, throw money at ads, throw money in marketing campaigns... Right? This is going to be a lot more focused on building relationships and having a deeper knowledge of the communities that you sell in to, and hiring the right people, being very thoughtful about hires. But like you said, let's leave it here. I think that's a good first prediction. Let's move on to the next one.

Phillip: [00:05:37] Ok. Well, you started in an interesting place. I'm not sure where to go from here. Profits. What should we talk about? Personal health care is the next one? That was technically the last one.

Brian: [00:05:50] Sure.

Phillip: [00:05:50] Yeah. I think the 2020s will be a huge advancement in personal health care. I know you have a lot of interesting ideas here. I would say that our understanding and access to health care is evolving. And it used to be about obtaining health care directly only through face to face services that could be provided. We saw a big uptick in the last decade, especially in like wellness centers that are, you know, in retail establishments like CVS, Walgreens, Rite Aid, and those little one off, things like flu shots and things can be done on demand. I saw a really interesting advent in my local Walgreens. They've changed their wellness clinic into a Jenny Craig. And I don't know if that's just for this season for New Year's.

Brian: [00:06:39] Interesting.

Phillip: [00:06:40] But the idea of personal wellness being on demand is going to evolve more where we'll see more of the Kaiser Permanente, Oscar virtual health care providers that are available through FaceTime for common, normal, everyday ailments. And I think that that evolution will continue, and it will be meshed more in the technology space and become ingrained more in the places where we have technological advancements. So when you think about your digital assistants in the next 10 years, we will be getting access to more things like prescription filling, etc. on demand, you know, virtually and digitally. And our devices are becoming more capable of providing health care statistics. One thing we talked about in our 2019 retro is that Apple has made huge strides in in providing personal fitness and the quantitative self diagnostics beyond just the step counter and to actually measure overall fitness and to the point of providing ECG type heart rate data and and health monitoring services. And so, yeah, that's that is a huge advancement. I think you wanted to take another stab at like talking about from a brand standpoint and investing in well-being.

Brian: [00:08:11] Yeah absolutely. Totally. So I think you're absolutely on track here, which is both of our predictions. But yeah, the the idea is that as health care advances, we're going to see it sort of intertwined into things that we never thought would be intertwined into. And so there's going to be... We've heard this talk of Chief Health Officers at companies now.

Phillip: [00:08:34] %Yeah.

Brian: [00:08:35] Where consumers are going to have expectations that actually things that they buy are going to play into their health, whether it be their physical wellness, or their mental wellness, or whatever it is. We're going to be purchasing things that have a component that think holistically about our bodies and the way that we think and the way that we do things. And so as brands, and CPG, and retailers go to market, we're going to see this health component start to really play out as a narrative and a storyline and a part of how brands are explaining to customers what their products are good for, and they're going to have to because one of the things that's going to happen this coming year is that as people set more limitations and boundaries in their lives for what they want to get out of their lives and how they want to live their lives, it's actually brands and retailers that are going to have to help them achieve those goals coming up. And so health is one of those places where brands and retailers are going to have to play into the stories and assist consumers in the pursuits of the things that they're trying to pursue, goals that they're trying to hit, and boundaries are trying to set for themselves.

Phillip: [00:10:08] Yeah. And not for nothing, we're seeing a lot of investment. There is somebody who is sort of reading the tea leaves recently and the venture capital Twitter space, which I'm following more closely now since our Step by Step series last year, and VC actually was very concentrated the last four or five years on direct to consumer retail marketplaces. And we're starting to see them like crawl over towards health care and health and fitness, not just in the Peloton or Mirror devices, but in like broader health care and sort of disrupting broader health care. So I'm 100% on board for this. There's going to be more in our report, and we've got 10 of these to go through. So let's keep going.

Brian: [00:10:57] One final note before we move on. This is going to affect not just consumers, but also employees. When you look at ,recently, things that came out about Away and others...

Phillip: [00:11:11] %Yeah. Mental health is also wellness, right?

Brian: [00:11:14] I don't want to pick on Away. But, you know, it's not just mental, but also physical. Like there's just a full wellness strategy that I think that companies are going to have to employ for their employees as well as their customers. And we look ahead at examples like Gravity Payments and Dan Price over there who raised his minimum wage to $70,000 a year because he wanted to make sure that his employees could afford the places that they were living. That is the kind of initiative that we're going to see more of coming up this year.

Phillip: [00:11:48] Let's move on to the next one. We talk about know total wellness. We also talk about wellness for the planet. And one of our qualitative and quantitative insights that came out in our broad market research was that consumers care more about sustainability now more than ever. In our broad market research a number of sustainable brands were mentioned. Thredup was mentioned several times in sort of that re commerce, repurposing, you know, giving new life to old garments or previously used or previously loved items. But if you look at what they say from shopping habits in our quantative, we found that 41% of consumers across our broad market research, across all demographics, and across all areas of North America, or in the United States more broadly, 41.7% say that they had purchased from a physical secondhand thrift or consignment shop in 2019. And among the statements that reflect how they feel about shopping, they say that they love supporting small business and shop local whenever they can. Forty eight percent agreed with that strongly. And the most incredible data point was that 47% said that they were actively focused on buying fewer and better things. And so I think when you kind of take all those into account. And you think about, you know, in this trend for sustainability, this story for sustainability has to continue in the 2020s. And we'll see more brands begin to get hip to that, obviously. And if you're launching a brand new brand today, you have to have a story around sustainability in some regard or around building community. I think that we'll begin to see that shore up more with large retail and not just give-back campaigns, but telling broader stories of how they're actually making real differences in the world and how we're not, you know, robbing from the world, but we're contributing. And when we look at brands that are leading the way, they typically tend to be those, you know, what do they call them? There's a word for it. The Public Benefit Corporations, PBCs. Public Benefit Corporations that are like Certified B Corporations have been featured heavily on our show. We've talked about them quite a bit, especially in the latter half of 2019 we talked about them, but you'll begin to see this a lot more in 2020. I don't think we need to talk about it anymore. We'll have a lot more in the report for you to check out.

Brian: [00:14:37] Super excited about that.

Phillip: [00:14:40] Yeah. What's the next one?

Brian: [00:14:42] So here's another interesting one. We have seen the rise of consumer expectations. And I think that this is an interesting point. It's almost to the point where it's starting to get a little bit unrealistic. And we say that not as a negative term, just as a term that means that you as a business may not be able to meet the expectations of customers today. And so we're seeing, you know, "Free 1 day shipping with no questions asked returns," and this whole "with no minimums on purchasing to get this level..." We're looking at this from Verishop and these venture backed companies that we're dealing with the these days.

Phillip: [00:15:34] Yeah.

Brian: [00:15:34] %%And so with one day shipping able to reach over 72% of the Amazon's existing customers right now, this is just a reality you're gonna have to deal with. So you might as well address it, whether it be through a policy that makes it very clear what it is that you're shipping is, or you can try to go meet it by partnering up with some third party like ShopRunner. It's going to be something you're going to have to deal with this year at a rate that we've never seen before.

Phillip: [00:16:10] If we just take, again, if we go back to our research that we did, our Future Commerce research, we found that among all surveyed we had 92.7% who said that free shipping was important for them to have from an online retailer, and 58.7% said it was critical. So more than half said it's critical that I have free shipping. So you're gonna have to figure out a way to price that into your products. And among those, 83% said that free returns was important. Now, if you look at a pretty steep drop off there, about an 8% decline on criticality. So 46.7% saying that free returns is critical. So if you just take those two data points where the third most important, at 76%, of respondents saying it was important being two day delivery... If you just take free shipping, free returns, and two day delivery, infrastructure exists and logistics exists today to give pretty much every direct to consumer brand the ability to offer these in some way. But typically for you to build it into the price of the product, you're going to be offering a more premium product, or you're going to have a strategy around free shipping that's going to have to meet some threshold or minimum of spend. And that is a very common strategy these days. It's just unfortunate that that is the baseline consumer expectation. And that's going to continue to grow because right now Amazon is handling 50% of last mile deliveries. We'll get to Amazon in a little bit. They're handling 50% of the last mile deliveries, and they are increasing consumer expectation of wonderful experiences in the last mile delivery process. We'll talk about that more in the Amazon section. So that is something that you're going to have to contend with as a business. On the flip side, we see that infrastructure is actually rising to meet you and that capabilities will grow on the infrastructure side for you to be able to find businesses and services that will provide those types of services to your customers for you in the decade to come. Can I take this next one?

Brian: [00:18:25] Yeah go ahead.

Phillip: [00:18:26] This one is very important to me. I've been thinking about this through the whole last month of December. We left a conference back in September in Boston that we attended with Klavio, who is another partner of ours. And they sort of professed themselves to be a no code platform. And the idea was, you know, it used to be that to build marketing campaigns, you had to understand how to code. You needed to employ a developer and to have cohesive experiences across all touch points. You had to have developers involved. And now they were saying we've democratized all marketing engagement. If you can build a flow chart, you're a programmer in our world. And that changed our line of thinking. And it set me down a path of no code. We've been building our new Future Commerce site, which will come out in the next few weeks. And the new FutureCommerce.fm site is entirely built on a no code solution called Webflow. And I look at the universe of tools that are available in that, and it makes me wonder what the next iteration and the future of and around a new modern web. And so actually I unpack this in like a twenty six tweet thread a week ago, and it's a phenomenon that I'm calling the Third Commerce Modernity. And it's taken from an idea that is woven together from Shoshana Zuboff's The Age of Surveillance Capitalism and De Geus' Towards the Third Modernity, which are both books that I've read. And by the way, the Zuboff's work is not quite a read so much as it is a very tough slog at the very end of it. I highly recommend buying the abridged audio book.

Brian: [00:20:22] I have the full version. It is that. It is what you described it as.

Phillip: [00:20:25] It's more than it is anything else. But in both of those ideas, the idea of a Third Modernity is, you know, a new expectation of the self. I think we have a new expectation of what it's like to launch technology. And this Third eCommerce Modernity, where the First Modernity was the idea that we have an undefined retail experience online, that it was kind of the Wild West. Some people did it really well. Some people were trying to create brand new paradigms. We didn't have an established or uniform UI or UX. In the Second Modernity, we did because platforms took over and platforms rolled up a bunch of those solutions together. So we had search, we had browse, we had catalog, we had inventory, we had payments. It was all in one solution. But those things are admittedly tough to implement. They're expensive, and they require a lot of developer or agency support to be able to get up and running. We're at the dawn of what I'm calling the Third Modernity. And this no code world that we're entering into actually builds on top of the idea of the platform, which is it provides you access to all those things, but with user friendly UIs to be able to allow anybody with any level of skill to setup and configure things like integrations to ERP systems, to accounting packages. We have a Step by Step series coming in 2020 that's talking about building out your tech stack, and some of the brands that came on to talk about how they built their tech stack are doing so with no code solutions, and they're building bespoke ERP platforms for themselves by taking the best of breed of accounting software, the best of breed of H.R. software, the best of breed of order management software. And they're putting it all together in their own unique package by marrying it together through solutions that are no code based. So I believe that we're at a new era, and the next 10 years will prove out that the era of platforms is going to give way to the era of no code solutions that allow a more modern paradigm to come together, which is I take the best of breed of all of these varieties of things, and I create a solution that's unique to my brand. And so that's that. Do you have anything to add to that?

Brian: [00:22:44] Yeah, I think this is like you said, this is a huge trend coming this year. And I think that, you know, as you said, we're coming into an era of a new era.

Phillip: [00:22:56] Post developer era.

Brian: [00:22:56] Post developer era. That's not to say that there won't be a place for developers. I want to emphasize that there is a place for developers. We're still going to need to connect systems. You're still going to need to build these solutions. That's the other thing. No code means lots of code on the product side. And it's got to be really tight. It's got to be really good. It's got to be able to integrate really well with other solutions. And so we're not saying the developers aren't going to have jobs. We're just saying the jobs are shifting. The way that we're going to be employing developers is going to change. And that is OK. I think it's actually kind of exciting. I think about... I've been in the agency world for a long time. I think about what my best developers want to work on, and they want to build new stuff that's cool. Right?

Phillip: [00:23:48] Yeah. They don't want to build the same thing over and over again with the different logo.

Brian: [00:23:51] Right. And they want to build something that's like their own that they can call their own and really and support it also. I think what we're going to see is that developers are going to be able to do things that they're more excited about than ever before. And also those deep integrations, things that require a lot of thought... That's still going to happen to some degree, even in a no code world. There's going to be a level of developer support and integration that's required to make some of these solutions talk to each other. Not always, but...

Phillip: [00:24:33] Yes. Yea, blah, blah, blah. We need programmers. I'm not here to respect their feelings. I'm an engineer, too. You know, the best programmer works themselves out of a job. The best programmer solves a solution with some automation and moves on to the next thing that replaces human effort. And we should be proud that we've actually in ten years spanned the chasm of providing a lot of human effort between a lot of really tough to integrate systems. And now we can do those things. I mean, I have a friend of mine who does technology due diligence for first round capital. And she was saying that you would not believe the amount of venture capital that gets thrown at businesses that are basically just a beer and Google Sheets.

Brian: [00:25:22] Right.

Phillip: [00:25:23] Proving our ideas is part of building a solid business. You're always going to need, at the enterprise level, some sophistication and development. But it's the middle, it's the the proving out a theory that a brand could build an audience. It's bringing commerce experiences into previously pure content experiences. Some of those things I think are going to be more democratized and easier to integrate in the future that we're stepping in.

Brian: [00:25:54] Well, I think...

Phillip: [00:25:55] Let's move on, because we could spend a whole hour just on this.

Brian: [00:25:58] That's true. One last point. I know... Going forward, I think you're right. This isn't just for startups. You're going to be able to take no code up into the mid-market.

Phillip: [00:26:11] Oh, I think so.

Brian: [00:26:12] That is the big shift as well. Mid-market has had to generally take on enterprise solutions that weren't necessarily built for the mid-market. But I think that we're going to be able to see the mid-market leverage no code solutions in a much better way coming up here.

Phillip: [00:26:28] And not for nothing, too, I think that the very often adopted mid-market eCommerce platforms, who don't need to be mentioned, are being used in much more rudimentary ways than what they ten years ago because they're learning that customers don't actually buy into hundreds of features. Eighty percent of your customers want one experience. And I'm not saying that's good or bad. I'm saying that if you're focused doing the eighty percent really, really, really, really well, then you'll capture customers who have loyalty and love you and love your brand and love your product. And they see the web site as one part of the experience. But it's not the sum total of all of the experience.

Brian: [00:27:12] Absolutely.

Phillip: [00:27:13] And so you can repurpose some of that investment that you would have thrown ten years ago into that long tail of all these engagement points into other areas that actually continue to build on it. Like content. And I think that's where we'll begin to see a little bit more build out.

Brian: [00:27:27] The next thing I want to talk about is digital first brick and mortar, which I think is another really exciting trend. And we've talked about digital first over the past few years. But I think this is going to be in a new way. We look at tools like Hero, which allow for in-store associates to engage online as well and to leverage that knowledge of your in-store associate to address your online questions. But I think that that actual engagement is going to lead back to in-store relationship building. We've talked a lot about what it means to invest in your in-store associates and empower them to engage digitally. So we're talking about... It's more than just digital first. It's really a local digital strategy.

Phillip: [00:28:19] Yeah.

Brian: [00:28:20] And I think that that is going to be a really big emphasis going forward. We talked just a few minutes ago about how growing a profitable business means investing in communities and getting to know local communities better and being able to address those local communities. I think that this is going to be a huge point in terms of we're going to see a refocus on local advertising and local in-store engagement and networking at a level that that's on a digital level, because everyone communicates digitally, but it's in a much more brick and mortar, local context than before.

Phillip: [00:29:07] If you look at the data in our market research, it actually supports this by a long way. Forty eight percent of our survey respondents said that they love supporting local small businesses. They shop local whenever they can. And they also say, and I think this is a really interesting number to pull out... Thirty three point seven percent say they like finding unique items. Finding unique items is more important than having the same things that everybody else has. And when you marry that with other things, like brands needing to be transparent about the production and business practices, I feel like having real, authentic relationships with people in a store is the right way to bring all of that to bear. And for all of our conversation about customer expectations needing to be met, platforms like Toast and Shopify POS have actually given the leg up to local businesses to provide things like online ordering, app based ordering, BOPUS, even curbside delivery, Uber Eats, that sort of thing... Local businesses can provide the same kind of experiences that big, big retail brands can.

Brian: [00:30:28] Totally. We talk about rising customer expectations, and it's exactly right. We have the tools now where local and small businesses have the ability to to offer that level of experience that they've not really had the ability to do in the past. And so local businesses that embrace these ideas are going to be really, really successful. I think that also larger businesses are going to look at local communities as opportunities coming up. And we think back to Adidas, who was targeting like even specific city blocks and building out stories and campaigns around specific city blocks.

Phillip: [00:31:09] Yeah, hyper local is super important.

Brian: [00:31:12] Hyper local, but digital first hyper local.

Phillip: [00:31:16] Can I talk about hyper local digital first in a way that we haven't actually really uncovered much on the show before? I think this is an audio exclusive because I don't know that we have got qualitative on the report to cover this. When we talk about digital first, we actually might be leading into the idea of monoculture is on the decline. And so this idea of monoculture declining means that we've seen it decline as physical media has evaporated, and we have no more ownership of physical media. We've seen more pockets of interests and culture grow into small like little sects of interest. And so you have little pockets on Spotify of people who have their own experience that's algorithmically determined for them. I think we're starting to see the same thing in grocery and in food delivery where we have ghost kitchens and virtual grocers that only exist in the platforms that are digital. So they don't have physical brick and mortar. They don't have the baggage of having a physical brick and mortar retail presence that they have to bring along with them into the digital space. They are digital first, and as regulation in the 2020s begins to open up to allow more cities to have ghost kitchens, I think we're going to see more digital first businesses make the leap to physical, which will be completely the continuation of what we've seen since the Napster era of digital first leading the way into physical and providing new opportunities to set new customer expectation.

Brian: [00:32:55] Absolutely. I know. In fact, I was just looking at there's a catering company that they cater, and then certain days of the week they actually make extra food, and you can buy a meal from them that's like this amazing home cooked meal. No physical retail or restaurant to walk into and sit down and eat that. But I'm going to take it home, eat it at home, and for a really reasonable price at that, because they don't have to deal with infrastructure costs that more traditional restaurants have to deal with.

Phillip: [00:33:32] It's true.

Brian: [00:33:33] You're dead on. And this is happening not just in this suburbs, like I live in, but like you said, I think it's an urban movement already. So more of that to come. It's not just gonna be food. It's gonna be everything.

Phillip: [00:33:48] Let's quickly cover a couple that, you know, are sort of long tail that I think we might have missed, which is, you know, we talked about curating or creating your own experience on platforms like Spotify.

Brian: [00:34:03] Yes.

Phillip: [00:34:03] I think the 2020s will give way to creating your own experience in every interaction that you have online.

Brian: [00:34:11] Yes.

Phillip: [00:34:12] And so if you want to call that a filter bubble, so be it. I think what we're seeing is you creating the world that you want to live in and only engaging in it in that way, on your terms. And I think that that is this idea, again, an extension of the death of monoculture. The idea is you want sustainable products only? Well, guess what? You can filter the Web to only have a sustainable retail experience in eCommerce. You want to live in a world where other people on the Internet only care about the things that you care about? You're gonna be able to do that. And so whether, you know, as we see more consumer adoption and trust of things like browser plug ins, where it used to be just technologists would use something like BuiltWith to find out what technologies we're running on a web site, we now see platforms like Honey getting purchased by consumer trusted payments brands, like PayPal, for four billion dollars that are making strides and actually have a consumer trust in this area. So, again, this is a new world of creating your own reality.

Brian: [00:35:22] Exactly.

Phillip: [00:35:23] And it's not virtual reality. It is a virtual...

Brian: [00:35:31] Experience.

Phillip: [00:35:31] It is a virtual web. It is its own... You're creating a Web that is unique only to you.

Brian: [00:35:37] It's a much more efficient experience. That's the other thing is like we use Google right now, and we have to scroll through pages of stuff that has no relevance on what we're interested in.

Phillip: [00:35:48] Do click to page two of results?

Brian: [00:35:52] Every once in a while.

Phillip: [00:35:52] Do you still use Google?

Brian: [00:35:54] We talked about this.

Phillip: [00:35:56] Yeah. I think that that's a huge thing when you think about what people actually do use Google for, it's probably not google.com as much anymore as you know, they're using Google properties. Like they're definitely using Google shopping, right?

Brian: [00:36:11] WYes.

Phillip: [00:36:12] They're definitely using YouTube.

Brian: [00:36:14] And I think we've brought up some pretty like obvious examples here, like filtering by its sustainability, and filtering by discounts, right?

Phillip: [00:36:24] Sure.

Brian: [00:36:26] And filtering by viewpoint. But I think that there could be all kinds of micro filters that you're going to be able to adjust and play with.

Phillip: [00:36:34] Well we talked about this with the Ishani Gujral from Medrona Labs, which is the idea that I can live in a world that, you know, respects my boundaries. And I think we'll be talking about that a lot in 2020. This idea of you defining boundaries that, you know, define limits for yourself that are healthy boundaries. Like in the terms of probably people making New Year's resolutions in January, I probably don't want to get ads from McDonald's during January of 2020. And I think opting out of society that doesn't align with your viewpoints is a world that we're stepping into. Another world was stepping in to, just to transition over, is that preservation of skills and learning those new skills. And I think we're starting to see that, especially when we talk about local. We are talking usually about local artisans or craftsmen. You know, local food halls that feature small, independent chefs, or regional food, regional restaurants, regional food brands. So when you're talking about preservation of skills, we're starting to see people learn those skills via platforms like YouTube, where they're taught and shared and being preserved. And this comes back to IRL experience and doing things with your hands...

Brian: [00:38:03] Right, and to take it a step further.

Phillip: [00:38:05] Right.

Brian: [00:38:05] We're going to see these... You've probably seen these pop up in your community already, but basically workshop and shops that you can share and book spacing in and find time with. We're going to see a continued focus on this. And we're seeing investment already into transforming sort of the raw materials, the arts, crafts supplies space that has been so dominated by, A.C. Moore, which just went out of business, and Michael's which didn't provide necessarily the most interesting of experiences in a category that's picking up traction. It's crazy to me that these types of shops have struggled in this space because so many people need these kinds of supplies. And so just recently we've started to see some more venture come into this space to provide people with an experience for purchasing sort of the supplies, the ingredient brands, if you will, to build out these...to build out the things that you're going to actually use in your home. We talked about Carly earlier. We haven't talked about Carly all that much yet...

Phillip: [00:39:15] On the show. We've featured Carly as a psychographic quite a bit in Future Commerce Insiders. But for those who aren't up to speed, you've probably heard of Henry, which is a psychographic of a consumer who is a "high earner not rich yet." Carly is a psychographic of a consumer who is usually younger and doesn't have a ton of money to spend, or at least not money she made on her own. And we refer to her as Carly. It's "can't afford real life yet."

Brian: [00:39:46] So those types of people, Carlys, are actually learning skills because one, they care about doing things in a sustainable way. They care about the environment. And so they're patching their clothes, and they're making their art, and they're doing things for themselves. We live in a Minecraft world where people want to build out things for themselves and build experiences for themselves and use those experiences. And so we're not just seeing this in the gaming world. We're seeing this in real life. And so the rise of physical spaces to learn these skills, to practice these skills, to make these things, and to purchase the things required to do them... That's a huge trend for this coming year and decade. I think it's picking up traction this year. We're going to see it really take rise over the next few.

Phillip: [00:40:46] So the next three... Or the last three... I think we're it's seven. So the last three predictions are things that we've talked about extensively on the show, and we have some good data to back it up. But I think we're going to see a continuation of it. Do you want to talk about audience first? Because I think you first broached the topic on Future Commerce Insiders.

Brian: [00:41:07] Yes. I think that right now we're living in the attention economy. We've talked about this at length. We've talked about the rise of audience first brands. We'll look at Kanye and others that have built out like these cult followings at white-hot centers and then have built out fan bases around those and then have spiraled out the whole linear commerce idea. They've built on top of that and sold more and more and more things. Maybe first it's art, and then it's shoes, and then it's clothes, and then it's... You know, and so it goes. And maybe housing someday is going to get spun out of an audience. I mean, I think Kanye has sort of tried to do that at one point. Didn't quite work out.

Phillip: [00:41:53] But there're others. There's goop. There's Kylie. Other people not related to the Kardashians, I'm sure.

Brian: [00:42:06] Right? So, you've seen this even at a micro level. Smaller influencers are making things and selling them on Etsy.

Phillip: [00:42:14] And big content brands that are wading into retail direct themselves, or collaborations with big retail partners like Stranger Things, the Netflix property, you know, doing a capsule collection with Nike and those sorts of getting that closer to the actual audience experience to give them a reason to engage with the brand that's outside of just the entertainment value is what we're predicting.

Brian: [00:42:46] %%Absolutely. And we have some interesting data points that sort of play into this a little bit. We look at the attention economy, and we asked our respondents would they rather scroll through their social feeds or meet up with local friends and family? It was actually a pretty even split. It's pretty interesting. Forty seven percent of all of our respondents would actually rather scroll through their social feeds than meet up with local friends and family, which is kind of a terrifying stat. But the idea is that the reason people love to scroll through the social feeds is because they are following and finding things that they care about and want to engage with. Well, that's one of the reasons. It has such an influence on their lives that they would rather do that than meet up with friends and family. This is why this is a good way to build out a brand.

Phillip: [00:43:45] That's a data point that that actually supports more what we're saying about audience first is that 75% respondents say in their free time they would rather binge a show that they're loving than catch up on reading. And I think when you're building an audience, if you have a built-in audience that is more likely to binge your show than do anything else in their free time, capitalizing on a retail experience for that audience could be a huge potential linear, like a line through, to high engagement in a retail brand experience. And also not for nothing, in their free time, they also say 58% would rather order whatever they need online than go run errands in their neighborhood. They're telling you what they want. And I think that points to the audience first future that we're predicting. You kind of moved over into attention economy. You're a hundred percent right on all of these things. The only thing that they'd rather do than, you know, get on their social or, you know, buy things online or watch Netflix, is take a nap. So when they're not sleeping, they're spending their attention on something digital. And but as an aside to all of that, people actually want to be content creators in their own right, and they want to build their own audiences. Among all people who say that they create content on a regular basis, 48% of our survey respondents say that they publish content on YouTube and 45% that they create stories on HGTV or Instagram. The thing that blew my mind was over one third, 36%, said that they participate in Snapchat stories. And so maybe a stretch prediction, Brian, is Snapchat becomes the de facto platform for a quick one off content creation amongst those who are attempting to build audiences to sell to?

Brian: [00:45:48] That's a stretch prediction, I think. Maybe not Snapchat. How about Tik-Tok? Maybe Tik-Tok happens in the next few years? We'll see.

Phillip: [00:45:59] Yeah. Interesting. Interestingly enough, there was a thing that just happened. I think we'll see a play out. I wonder how this episode will age. The US government just ordered all US military to cease using Tik Tok because of national security concerns. So I think that it has some entrenched problems with uptake. But it is a far more compelling platform than Snapchat in every way, especially because it's more along the lines of a Twitter where, by the way, 20% of the United States uses Twitter every single day.

Brian: [00:46:39] Which is amazing.

Phillip: [00:46:41] It's kind of insane. And so it's more on the lines of trying to find people who are creating content that aren't part of your social circle. And it's not about brand engagement. It's about human engagement. So I think that Tik Tok does definitely have a much brighter future. Maybe you're right.

Brian: [00:46:59] I wonder how that Twitter number would compare with Facebook this year. Just as an aside.

Phillip: [00:47:04] From a growth perspective, Facebook definitely won. All it takes is spending the holidays with your family to know how addicted to Facebook your parents are.

Brian: [00:47:14] Yeah I know. It's all the baby boomers. They're all addicted Facebook now. It's crazy, actually. It's mind blowing.

Phillip: [00:47:22] Yeah. It's mind blowing. Anyway, the attention economy is raging. You know, hopefully we can sort of break or buck that trend. But if you're looking to capitalize on it, it seems like there's a whole generation of people that are ripe for creating content that resonates with them and selling linearly to them. Alright, what's the last one, Brian?

Brian: [00:47:46] The last one... It's actually a continuation from last year. Amazon continues to see competition. And Amazon has continued to see growth and dominance in US eCommerce and around the world. But everyone is rising up. And I think that we're looking at the success of Target and Walmart this past year, but also we're looking at the success of a lot of mid-market brands as well. And you look at Nike has as left Amazon now.

Phillip: [00:48:23] %%Yeah.

Brian: [00:48:24] Is that indicative of more to come? We think it is. We see that Amazon is going to continue being a strong presence in eCommerce. There's no doubt about that. Right? I mean, Amazon Prime is the de facto way of making purchases online right now.

Phillip: [00:48:43] And of our survey, 91% of households have Amazon Prime.

Brian: [00:48:51] Right. So Amazon makes it easy for everyone to get Prime. They've got discounted options.

Phillip: [00:48:58] There're programs for everybody.

Brian: [00:49:00] Yes.

Phillip: [00:49:00] We will get you on Prime.

Brian: [00:49:02] Yes. Interestingly enough, 7% though, 7% of our respondents responded that they were unsure if they would renew Prime this coming year. And honestly, I would almost put myself in that category. And that's a big step. I do use Prime pretty regularly. But I can tell you one of the big reasons why I have not left Prime is because of Amazon original video. And that should be a scary thought to Amazon that the reason why someone's sticking around on their Prime platform is just for their content.

Phillip: [00:49:40] That's the number three cited reason for being part of Amazon Prime. Just to reiterate it. So number one is free shipping. Duh. Right?

Brian: [00:49:50] Duh.

Phillip: [00:49:51] %Number two is free returns. I'm sorry. No one is free shipping. Number two is speed of delivery. So like two day shipping.

Brian: [00:49:57] Right.

Phillip: [00:49:58] Number three is Prime video, which is a huge change to see Amazon as a content creator. In the same whisper, in the same breath, as Amazon being a retail powerhouse.

Brian: [00:50:13] %%Yes. If Amazon has to rest on its content creation laurels alone, this could be a problem for them going forward. I can't help but wonder if they will split their membership at some point, or offer a video only membership.

Phillip: [00:50:35] Yeah, I wonder that too. But I think that what's more likely to happen is we begin to see a slowdown and renewal of Prime. We begin to see a slowdown in an actual brand adoption and uptake of selling on Amazon Marketplace Direct. And the having good experiences outside of Amazon... In our research, we found 33% of people have had really good brand experiences off of Amazon. That means the other 66% haven't had a good experience in eCommerce yet outside of Amazon. And that means that you have a total addressable market of 66% of people that you could possibly reach. And those people are only being reached right now through one place, and that's like Instagram. So there is so much more to be had for people to realize that Amazon is a drug. It's a bit of a drug in that you spend way more money on Amazon than you think you do. You think that you're saving a ton of money on Amazon, but you're actually probably not. And the only thing that you really have come to depend on Amazon for is speed of delivery. And that's it.

Brian: [00:51:54] Which is no longer a moat that it once was.

Phillip: [00:51:59] No, it's not. And I think that's the crux of our position here, is that you will see the broadening of Prime benefits. But the fact is, is that after after free returns, which is 25% of our... I'm sorry. Let me look down the list a bit. So that the top five Prime benefits of our 91% of households that have Amazon Prime, are free shipping, speed of delivery, Prime video, then it's free returns, competitive or low price, and ability to select delivery day. From there, the long tail is just the remaining 10%, and the remaining 10% basically make up the bulk to say all this other stuff like Whole Foods, and paying in installments, and Prime Pantry, and Kindle books, and Prime wardrobe, and extended returns, and Amazon Prime credit card... I don't care about those things, right?

Brian: [00:53:01] Right.

Phillip: [00:53:02] So to compete, brands would need free shipping, fast shipping, and to be able to create original content. And that's the world that we actually are living in right now.

Brian: [00:53:11] That's correct.

Phillip: [00:53:12] And that's the crux of the prediction is that I think that we can compete with Amazon. It's just gonna be expensive.

Brian: [00:53:22] Well, it's getting less expensive all the time. And that's I think the other part of this is that finally, I think technology in a no-code world is getting to a point where you can go get ShopRunner, you can go get Shopify, or Klaviyo, or Gladly, or Vertex... Get these pieces of technology that allow you to be competitive. And it's actually less expensive to invest in those things than it is to go get like crazy expensive, downtown real estate in New York City. Digital should be treated as your best flagship.

Phillip: [00:54:05] Yeah.

Brian: [00:54:05] Digital should be treated as your best flagship because he could address everyone with it. And so as you go into 2020, think about the fact that you have the ability to offer an experience that consumers care about by investing in these technologies.

Phillip: [00:54:27] .That's a great final word. And so we want you to see the whole rest of the report. And you can do that by going to Gladly.com/FutureCommerce. It's a great place to digest all of this. It's more long form than usual. It's got all of the points. There's some data that backs up a lot of what we're talking about. We're also making available the raw research, so that you can see the trend lines as we found them. And our new web site is coming soon. And we'll have a lot more of this kind of content as we go into 2020. Also speaking of 2020, as we give you a clearer insight and vision, we want you to... You can hear from us every week in writing in 2020 on Wednesdays at 2:00 pm by signing up to our Future Commerce Insiders newsletter. And you can get that FutureCommerce.fm And we are also doing a lot of events in partnership with a lot of major retail events and conferences, especially in Q1. So we're gonna be at all the major events. You're probably listening to this on your way to NRF right now. You can meet us Live at NRF where we'll have a printed version of this report. We're also going to be doing new brand reports coming in Q1 and Q2. We have a Step by Step series launching in collaboration with another eCommerce platform tool kit called Brightpearl. And we have so much more content coming. We don't want to miss any of it. And we want you to stay in touch with everything that we're doing. You can subscribe everywhere podcasts or found, or you can get on our email list at FutureCommerce.fm. Any last words, Brian?

Brian: [00:56:08] Finally, there's one more super exciting thing that's happening this month that you absolutely have to be a part of. We are doing a webinar with Gladly on this report.

Phillip: [00:56:18] Yes.

Brian: [00:56:19] Actually, it's February 4th. So look for more details to come on that. Do not miss that webinar. It will be one of my favorite things that we've ever done. So look for that. More details that come on that webinar ahead.

Phillip: [00:56:35] Yeah, well, this has been awesome. Thank you so much for listening. Thank you for paying attention. And we wish all the best for you in 2020. We hope you have an awesome year. And we want to be part of that story. We want to help you shape that future. But thanks for listening.

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