Episode 286
January 20, 2023

Crossing the Rubicon

Even in the aftermath of difficulties within the retail and commerce world, there is a relentless positivity and excitement shared among those living and working in it. This was evident at The NRF Big Show this year. Have a listen as Phillip and Brian share more about their perspective on this and what this could mean for the very near future!

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this episode sponsored by

Aggressive Optimism

  • The NRF Big Show was great, and everyone was enthusiastic about being there, back at the Big Show like old times
  • Walmart Technologies and the strides they are making is impressive and really overtaking Amazon when it comes to eCommerce experience and customer expectations
  • Shopify, coming in with a booth at NRF, with their Commerce Components roll out made quite the splash
  • “Regardless of whether you think you already provide a lot of these products and services, the ecosystem needs you to just say it in their language.” - Phillip
  • “People look for creative ways to use tools they're familiar with.” - Brian
  • Despite fake news about a downturn in sales, inflation is slowing, and that techno-optimism can’t be turned down or slowed down right now
  • Brian and Phillip share some of their favorite parts of the NRF Big Show and why they were impactful
  • The world in which we live is one where it takes a whole lot for people to go deep
  • There were a lot of robotics at The Big Show this year, and interestingly also a lot of Chads
  • As we walk through a season where cost management is high, companies may want to forego cloud prices and find other solutions

Associated Links:

  • Check out Retail Remix by Alicia Esposito here.
  • Have you checked out our YouTube channel yet?
  • Get your copy of Archetypes, our newly published 240-page journal! Check it out at ArchetypesJournal.com
  • Subscribe to Insiders and The Senses to read more of what we are witnessing in the commerce world! 
  • Listen to our other episodes of Future Commerce

Have any questions or comments about the show? Let us know on Futurecommerce.fm, or reach out to us on Twitter, Facebook, Instagram, or LinkedIn. We love hearing from our listeners!

Brian: [00:00:57] Well hello, and welcome to Feature Commerce, the podcast about the next generation commerce and so much more. I'm Brian.

Phillip: [00:01:03] I'm Phillip. {laughter} Oh, man. The only things that we run back and repeat at Future Commerce are that we typically have the back to back predictions episodes/NRF recap, but we're going to try really hard to not recap the NRF show. Other than I thought it was really good.

Brian: [00:01:24] I mean you did that over on the Retail Remix podcast. Yeah.

Phillip: [00:01:31] With Alicia Esposito, who is the literal best.

Brian: [00:01:34] She is the best. We love Alicia.

Phillip: [00:01:35] She's the absolute best. If you're subscribed to any other show, it should probably be that one. And I think Adam Blair was on the show as well, the Editor in Chief over at Retail Touchpoints, and we had a great conversation. If you're going to take a listen, might I suggest a pairing? I dropped a mention of, Brian, I don't know if you've ever read this book. There is a book that we were prescribed to read in premarital counseling, which looking back, is very cringey. This 20 years ago now. It's called, "Men Are Like Waffles, Women Are Like Spaghetti."

Brian: [00:02:20] Nope. Didn't read it.

Phillip: [00:02:22] It's a real book. If you have to take a guess as to how men are like waffles and how women are like spaghetti, which, by the way, it's cringey just talking about this, but could you even begin to guess?

Brian: [00:02:35] I have no venture on this whatsoever. Men are like waffles because they are delicious?

Phillip: [00:02:43] Yes, exactly. Men are delicious. You're correct.

Brian: [00:02:46] Spaghetti is also delicious. I see commonality here.

Phillip: [00:02:50] They're both delicious. We've got a lot in common. If you want to figure out what the heck I'm talking about the Retail Remix podcast, which is a pretty deep overview of what happened at NRF and adjacent events, go check it out. But we're going to do a little bit of that here because I don't know that we can have this conversation without talking about the NRF Big Show Expo, which is kind of the beginning of a long trade show season. Brian, you spent more time on the show floor than me, so I want some of your perspective. But I thought maybe we could start out with maybe the general upbeat nature of everyone who was there.

Brian: [00:03:25] Yeah. Yeah. I think that was clear. Everyone was really, I think, really happy to just see NRF in its full force back. I mean, I can't believe we're sort of talking about this because I feel like we've already talked about this with a number of other events, but it was only one year ago that NRF was crippled really by COVID and last year's NRF event, I should say January 2022, was kind of a halfway event. This was full force. I mean, it was hopping. Everyone was walking around and talking and the booths were gigantic. I think the Microsoft booth was probably the biggest booth I've ever seen.

Phillip: [00:04:09] The biggest. It was like half a city block.

Brian: [00:04:12] It was. It was two stories. Half a city block. It was crazy.

Phillip: [00:04:16] Unreal. I know it's been said before and we've mentioned it on the show before, but you kind of get to a point of having done this a lot, and now this is, I think, my 11th year, or 10th or 11th year attending the NRF Big Show in some regard, you know, COVID permitting, there's so much waste because a lot of these installations are built to order. It's not like they tear them down and store them in a warehouse somewhere. It's a little bit hard to watch. I'm sitting here obsessing over how we can repurpose these vinyl banners that we created for our Archetypes event and like, "How can we reuse those?"

Brian: [00:04:58] I'm sure there is some reuse.

Phillip: [00:04:58] We have some friends that do that.

Brian: [00:05:01] Yeah.

Phillip: [00:05:01] There's a company in New England called C Bags who we're pretty familiar with and have done podcasts with over the years. Right, Brian? And they repurpose sails from sailing vessels and of course, those are nice canvas sails and other polymers and textiles. But it's like I'm obsessing over whether can we possibly reuse stuff.

Brian: [00:05:27] I know some of it's reused.

Phillip: [00:05:28] This is not taking shots at Microsoft by any means.

Brian: [00:05:31] No and Microsoft's booth, I really hope they reuse that. That thing is a... They have to reuse some of that thing. It's too good.

Phillip: [00:05:41] And there's like... There had to have been iron workers in there. The structural engineers were definitely on site for the construction of that thing. Also, two big surprises on the show floor for me this year... Walmart Technologies.

Brian: [00:05:55] In a big way.

Phillip: [00:05:57] Showing up in a big, big, big way.

Brian: [00:05:59] Well, Google showing up in a big, big way, as well.

Phillip: [00:06:01] Google's been at the show for a few years. But Walmart Tech really sort of having the coming out party. They had an adjacent PR announcement about a deal they closed with Salesforce to help power the bridge from offline to online or online to offline, I should say because that's the direction we're going these days. So Walmart has technology now for retailers to enable BOPIS. And I think as we said in the predictions episode, Walmart is doing this. Walmart has the stack. I got off my plane returning to West Palm from NRF last night. I got off the plane and was getting my bags and I realized I left my AirPods case on the plane.

Brian: [00:06:49] No!

Phillip: [00:06:50] I was so mad about it. And I went back and they're like, "We have to give you a gate pass to get back in. And they're already boarding the next flight." And I was like, "It's a lost cause." So what do I do? I pop on. I was going to go on Amazon. I popped on Amazon.com to reorder a charging case for my Airpod Pros. The first 16 results are all sponsored and the next 16 results are all knock-off Wish.com Style.

Brian: [00:07:21] Yes.

Phillip: [00:07:22] Cheapie imposter brands that all have compatibility, but it is not the...

Brian: [00:07:27] Did Amazon just acquire Wish? Is that what happened? {laughter}

Phillip: [00:07:30] It feels like it at this point. I could not find the genuine article anywhere so you know where I go. Walmart. The Walmart app. Walmart is going to get it to me within two days, but I bounce and I'm like, "Do I want to do this? Maybe I'll just buy a new pair of Airpod Pros too." So I'm like kind of waffling on it. Woke up this morning. "Hey, you left something in your cart." I'm like, "Wow, Walmart's actually running the actual eCommerce playbook." They know how to run eCommerce. I feel like I just don't get that experience from Amazon.

Brian: [00:08:00] Yeah, it's true. Well, I think they say two days. I got stuff delivered same day.

Phillip: [00:08:07] Same day.

Brian: [00:08:08] Same day on Cyber Monday. Walmart's pushing hard.

Phillip: [00:08:13] Walmart Technologies is absolutely partnered. I think, full transparency, we do have to say Walmart tangentially is a supporter of the show and the content that we're creating at the moment in that Adobe's Commerce Services is partnered with Walmart Technologies as a suite of services that Adobe, Walmart, PayPal, Bolt, and others are bringing to bear in the marketplace. So I just feel like we have to give a disclaimer, although we are not being paid to say any of this or to highlight it. I just find it infinitely interesting that the world's largest retailer is making massive strides to compete with Amazon and doing it better. And Walmart Technologies is not necessarily Walmart.com or Walmart Plus or Walmart in-store. It is a different organization with different goals.

Brian: [00:08:59] They offer a number of different things that you can use.

Phillip: [00:09:01] Software. They're selling software.

Brian: [00:09:01] Yeah, exactly.

Phillip: [00:09:04] But the other thing, Brian. Having name-dropped Adobe, Shopify is here for the Enterprise. I think that is a massive takeaway from NRF this year, too.

Brian: [00:09:15] It was a big story. Yep, no doubt. They had to be in the basement though. Their booth had to be in the basement. Isn't that NRF's policy?

Phillip: [00:09:23] Everybody starts in the basement.

Brian: [00:09:25] You have to start at the bottom. But yeah, no, it was the Mattel announcement that everything about...

Phillip: [00:09:34] For those who aren't aware, could you give us a primer on the Mattel announcement?

Brian: [00:09:35] Shopify just announced a new stack of components. They're calling it Commerce Components, very originally. And these components are basically open API, a sort of an unopinionated way to go to market with Shopify. And the intention is to do it for Enterprises. Mattel being the initial rollout partner for this new stack. And I think that it definitely lands. Mattel is a huge brand. I feel like their direct to consumer has a lot of opportunity with Shopify, and I am very interested to see how this all plays out. Obviously, it's a very, very new release, but it was all over their booth. Commerce Components were clearly the focus of this event, which makes sense because it is a retail event and I feel like retailers, the types of needs that they have, would sort of mandate something like Commerce Components. So it makes sense that this would be sort of the first, I mean, it's not that Shopify hasn't been involved in NRF, but I think it's the first time or in a long time or maybe the first time they have ever had a booth at NRF. And so having an offering that makes sense for retailers and then coming in the way that they did makes a ton of sense. There's also a ton of signage all over the show about this. I think that they were looking to make a splash and they did.

Phillip: [00:11:09] Make a splash. Absolutely. I also think they did something really brilliant. By positioning themselves as, "Hey, we're here for the enterprise," they accomplish the same kind of magic trick that they pulled off early last year around this time, which is Toby had been on record for years saying, "We're not saying we're headless and we're not saying that we're going to provide headless because we have been headless from day one." For ten years, Shopify has always had sort of microservices and unopinionated APIs that you could build on top of. And then they made this big announcement, late 2020 or early 2021, "Hey, we're here with Octane, and we could do headless now." It's kind of realizing that the ecosystem, [00:12:05] regardless of whether you think that you already provide a lot of these products and services, the ecosystem needs you to just say it in their language. [00:12:14] And this is Shopify continuing to relent and talk the talk, even though they have had... I had a meeting with Gil Greenburg, who is a friend of the show. We go back quite a long ways. Gil came on last year, I think, in the summer to talk about Shopify Additions, Shopify Additions being like the twice-annual big release of features that are sort of this like drop or drip model, "Hey, here's all the stuff you're going to do on Shopify." And Shopify Additions, word on the street will come out again in February and it's going to be a bunch of new stuff, but also stuff that already exists. That's what Commerce Components is. Shopify has been delivering for the Enterprise for years.

Brian: [00:12:58] Yes.

Phillip: [00:12:58] But what they didn't do is they did not participate in the ecosystem's way of buying software for the enterprise. And with Commerce Components, they're saying two things. They're saying, one, we're speaking the language of enterprise and we're going up against the others in the space, like Commerce Tools who position themselves as unintegrated, opinionated, take-what-you-want-leave-the-rest suites of microservices which already Shopify had to some degree. So this is a bit of a rebrand in a package. Second, they're implicitly saying if we're courting enterprise, we're going to do enterprise sales the way enterprise sales does enterprise sales, and that means RFPs, RFIs. And that is something historically Shopify, I believe, has been very vocal that they do not participate in.

Brian: [00:13:49] Yeah. I think it's a really good point. They're saying, "Hey, we're built for the enterprise. We want to work with you the way you want to work." It's very true.

Phillip: [00:13:59] But internal innovation teams have been, especially in CPG, have been adopting enterprise or have been adopting Shopify and Shopify Plus for years now. It's been the subject of endless conversation. So I find that really fascinating. You compile that with an experience that I had. So we had our Archetypes pop up with Industry West in Soho, where we saw hundreds and hundreds of people come through. We had almost 200 RSVPs just for our happy hour event, which was absolutely banging. And I'm just... I'm just... I have no words. A recap video is coming really soon. For now, you'll have a Twitter thread over on my Twitter handle, @Philwinkle, is probably what will suffice, but just such a great experience. They're just up the road from the Shopify New York headquarters, and I had to pop into the Shopify space to pick up a chip reader for a Shopify POS, which is what we use for these pop ups and for the roadshows. I walked in and there were like 60 people in there and they're having a local entrepreneur meet up and they're like holding court in the middle of this place. I could not believe it. It's just shocking. The engagement from local retailers who all were on "Oh, I'm on Toast." "Oh, I'm on Square." "I'm on..." And they all came just to get more education on how to use Shopify. And I happen to show up at exactly that right time. Absolutely wild. Good luck finding that kind of enthusiasm and grassroots community investment from many ecosystems. That's something I miss from the early days of the Magento ecosystem. When I ran the largest Magento meetup in the Western Hemisphere, we would have 60, 80, or 100 people show up for a meetup. It felt very, very familiar to me and it's no wonder why they have the success that they do.

Brian: [00:16:05] Yeah. And that's another thing...

Phillip: [00:16:07] That is not enterprise. Enterprise doesn't turn out for things like that in those numbers either, right?

Brian: [00:16:12] No, definitely not.

Phillip: [00:16:13] But those are the enterprise leaders of tomorrow. Absolutely.

Brian: [00:16:17] Well, and I think maybe that's part of what's happening right now. Shopify has been around for a while now.

Phillip: [00:16:22] Yeah, they've made investments in SMB and entrepreneurship for so long. Those people grow up and they take that software into their enterprise roles.

Brian: [00:16:33] Right, exactly. And what they start to do is figure out what they can eliminate or what they can get away with. You know what I mean? If we just use Shopify, we could, while we can't do that one thing, we can actually do it a different way and do it for a third of the cost or whatever it is [00:16:52]. People look for creative ways to use tools they're familiar with. [00:16:56]

Phillip: [00:16:58] Let's do a counterfactual exercise here because you love this. The counterfactual exercise that I'd love to role play is there was a sales kick off that the Magento team, when it was back under private equity, there was a sales kickoff that they had in a conference center. I think you might have been around for that.

Brian: [00:17:50] Yup. I was.

Phillip: [00:17:51] It was at a conference center, and they were talking about their go-to-market positioning for, I think 2018. I can't remember what the year was, but there was a pyramid graphic. I want to see if I can find this, and if I do, we'll put it on the YouTube feed. So YouTube.com/FutureCommercePodcast. We have to maybe change the name of that. And I'll see if I can find the picture. Robert, you'll have to put it up on the screen. I have a picture of when Magento made the decision to abandon SOHO, which is Single Owner Home Office. Magento made the decision that we are going to abdicate the open source product as being the dominant small business powered commerce engine. And we are going to relinquish that and let Shopify and the others own it. We're not going to try to compete in that space anymore. That might be the pivotal moment that...

Brian: [00:18:45] Also when they eliminated their SaaS offering, it was Magento Go or whatever they actually literally said, "Hey, if you're on this go on BigCommerce.

Phillip: [00:18:56] Yeah. Go to something else.

Brian: [00:18:58] It was like actually BigCommerce. They actually put it in the email.

Phillip: [00:19:02] I think six months later, the Adobe acquisition announcement came and there were 1.68 billion reasons why that was a good decision.

Brian: [00:19:13] But that wasn't the Adobe announcement, that was the...

Phillip: [00:19:18] 2018?

Brian: [00:19:19] I'm pretty sure that was the private equity announcement.

Phillip: [00:19:23] Well, we'll get the facts straight. I think the PE announcement I think was 2016 or '17, and the Adobe acquisition might have been '19 actually. Now that I'm thinking about it, you might have been right. At whatever rate, it's amazing to watch a brand new commerce ecosystem with as much excitement and local activity and fervor happen. And now they're coming for enterprise very directly. I think that's going to be a key theme of the show. I didn't mean to spend 10 minutes on that, but when you're remembering back to NRF there are a few things that pop out.

Brian: [00:19:55] Yeah, no, definitely.

Phillip: [00:19:56] And then aggressive optimism. That's the other thing is how many people are unbelievably optimistic despite the news that broke at the end of...

Brian: [00:20:10] What news? {laughter}

Phillip: [00:20:12] Despite the headlines.

Brian: [00:20:15] Retail sales numbers, 1.1% down.

Phillip: [00:20:20] Yeah. So headlines yesterday, which was January 18th. Wednesday, January 18th. Headlines all over read, "Markets Reacted. December Retail Sales Slows Again." Down 1.1%. But the actual data that comes out of the Department of Commerce was that retail sales rose year over year 6%, which, by the way, is not adjusted. That 1.1% down was not adjusted for inflation, which inflation has become under control and inflation is slowing, which could account for some of the de-growth from November to December.

Brian: [00:21:04] Right "de-growth." But it wasn't even de-growth.

Phillip: [00:21:07] Well, it could have been that consumer prices are falling because inflation is slowing, and so it doesn't mean that demand kicked back. It means that the spending kicked back. And then the other thing to realize is that November's numbers grew in both regards from month over month, from October to November, and year over year from October to October '21. And a lot of analysts at the time were saying we pulled forward sales from December because of supply chain worries. People were worried they weren't going to get things in time. And we were incentivizing from the retail side to buy early.

Brian: [00:21:43] That was the whole point. We knew that they would be down.

Phillip: [00:21:47] Despite the fake news that everybody knows is fake, but we all still have to talk about it... Despite the fake news that somehow retail is slowing. And I think there will be retailers that come out and we'll see it in earnings, that there will be pain that was experienced in Q4 for storied retailers.

Brian: [00:22:09] We've already seen it.

Phillip: [00:22:11] Oh, Party City has now declared bankruptcy. This just broke yesterday. Party City's now entering bankruptcy. Bed, Bath, & Beyond is on the verge of probably an existential crisis. Kohl's likely to have...

Brian: [00:22:26] Macy's is having trouble.

Phillip: [00:22:26] Very, very difficult times ahead. Macy's, Yes, but all in all, you can't stop the optimism. Techno-optimism at Retail's Big show.

Brian: [00:22:39] That was retail optimism, let alone techno-optimism.

Phillip: [00:22:43] Let's talk about techno-optimism because there was a lot of technology on display, including robots and artificial intelligence. And almost every conversation I had...

Brian: [00:22:50] Even legacy providers were pulling out their technology this time around. I feel like it used to be, we talked about how [00:23:00] The Big Show moved from "Oh, this is all a bunch of cash registers," to like, "Oh, wow, Microsoft's here," and then Microsoft and Oracle and others started taking front and center. And then this year I feel like it was the legacy strikes back. {laughter} They came with their innovative solutions, maybe trying to catch up with some of the players that are stepping in and eating their lunch. [00:23:29] Digital signage was all kinds of innovative solutions out there this time around. One of the things that got me most excited was the "hologram" that was...

Phillip: [00:23:44] Let's talk about that. Actually, we did a little interview right before the show started with ARHT Media, who have a hologram technology. I'm learning more about it. I saw the same exact fixture installed in multiple places at the NRF Big Show. So I don't know really if maybe the physical screens and the hologram device itself is a licensed technology and as a media company they provide the programming and the media service that actually makes it all work. But the device is incredibly impressive. Brian, give us a little bit of that perspective.

Brian: [00:24:29] Yeah. So when you walk up to it, it's like a box with a glass window that you're looking into.

Phillip: [00:24:36] Oh, it's like a shadow box where you might display an award or a trophy, but it's life-size. It's like as big as a human.

Brian: [00:24:42] Right. And so you walk up and you can actually use it as a touch screen and kind of play around with it. But what you're looking at is, I don't want to say photorealistic, but a very realistic. There are shadows and depth to the image that you're looking at. And so you can display people or videos. You can display them in different contexts. It's not a true hologram, right Phillip? That's what they were saying. It's effectively like a layered screen. And the outcome was that it felt, when you were talking to a person there which you could do live or prerecorded, it felt like you were right there. When you were looking at an image, it felt like that item was actually there. Stuff we've seen around before, but this just felt like the next actual step toward getting to realistic. And it was good. It felt good. It felt better than some of the other prior years where some of the stuff felt a little like still kind of getting there. Like it wasn't quite as realistic. This one was. This was actually good.

Phillip: [00:25:49] Yeah, I was really impressed. We did a live video feed with someone who was in Los Angeles. Obviously, we're in New York for The Big Show. And yeah, we had a conversation live with someone who looked like they were standing right in front of us. The thing that really took me by surprise was the very high resolution on this screen. And it does. It casts shadow. It looks like the person is standing on a white cyclorama backdrop right in front of you, and you can see them in their entirety. I noticed the person's shoes. So we're talking to this person. I'm like, I could see the hem of their jeans. I could see the shoes they were wearing. I identified exactly the brand, wearing Docs. It was very impressive.

Brian: [00:26:38] The shadows were really good. The depth.

Phillip: [00:26:41] The shadow is really... Yeah. It's very impressive all the way around. And, you know, this is the kind of thing that it looks like from an industrial design perspective, it could fit into Sephora and Ulta very quickly. It could fit into high-end retail. It could be a fixture at Saks. These could take the next form of the kind of digital kiosks we've seen in vertical televisions for ages. But what an interesting experience. I don't know. Experiential retail and retailtainment are things that I think are... They go through fads and fashion. I don't know that this is revolutionary technology, but it is an evolution of something that we already have that makes it better and could be really powerful.

Brian: [00:27:35] Yeah, yeah, I agree. This is one step closer to that Minority Report/Blade Runner future that we are all looking forward to. {laughter}

Phillip: [00:27:47] I'm looking forward to it.

Brian: [00:27:50] I think it's really interesting when you start to mix it with like some of the stuff we... Personalization technologies. And also being able to distribute highly specific creator content, influencer content out and be able to do live stuff. And we were talking about how webinars "dead." You know, this could offer opportunities for real time engagement in a digital sense that we all actually might want to engage in, whereas webinars we just don't want to do.

Phillip: [00:28:24] If we're being really honest, nobody actually does. So this quandary of building a company that serves a professional audience, like we're a B2B company effectively, right? That's what we do. And in media, in B2B, everyone likes to believe that, you know, they have the highest engagement. Nobody's paying attention to other people's stuff. They're only paying attention to your stuff. But this is just not the case. And if you look at... I'll tell on myself. There are people who read only headlines. There are people who skim only. There are people who skim YouTube videos. There are people who skim. And you know who those people are? They're me.

Brian: [00:29:10] When you say, "They're me," and you and everyone.

Phillip: [00:29:15] It's everybody, right? Everyone is surface. And [00:29:18] it takes a whole lot to get people to go deep. So my shorthand for that is nobody reads your crap. They don't open your PDF. It'll sit in their inbox for six months and then they'll archive it. It'll sit on their desktop for a year before they delete it. They think they look at it, they think they understand it. They don't actually. No one's really going deep. That's the world that we live in. And that was part of the rationale for us creating Archetypes as a physical book. Creating it as a book means you're going to have more opportunities to open it up and flip through it and to skim it than you will the PDF that sits on your desktop because it'll be in places where fundamentally you're not necessarily as distracted and holding something in your hand. [00:30:03]

Brian: [00:30:03] It's also more sharable. It's a communal activity. Some chatter about that recently.

Phillip: [00:30:08] Something about analog. And so my question at the dinner table a few nights ago was are webinars dead? And cynically, the person we were having dinner with is like, "Who cares?" If nobody shows up to the webinar, I don't care, because I'm going to have 200 names at the end of it no matter what.

Brian: [00:31:30] I would almost go so far as to ask the question were webinars ever alive? I know that they were briefly for the pandemic because that's what we had. But I think everyone that's ever been on a webinar has second-screened that webinar.

Phillip: [00:31:49] Second-screened. They show up late, they only engage 5 seconds of it, maybe ten. You're right. Maybe. Maybe I'm being a little too Pollyannaish about the golden age of the webinar, but it's definitely behind us regardless. And people sign up for webinars and never look at it. And my thing was, what if we were to take the content in webinar and produce it as a TikTok? That should be... Because honestly, this is Parkinson's law to a tee. Work expands to fill the time available. A webinar can't be 15 minutes. No one's going to go to... That's crazy talk. No one's going to do a 15 minute webinar, although you could probably get everything you need in 15 minutes.

Brian: [00:32:39] Yes.

Phillip: [00:32:40] The first 5 minutes are, "Oh, we're just waiting for a few more people to show up." "Okay, we're going to just get going."

Brian: [00:32:44] Yeah.

Phillip: [00:32:45] And then there are three slides of intros. If you just cut to the chase, it could be ten, 10 minutes at most.

Brian: [00:32:53] I think that's one of the reasons why is because TikToks, if you want them to be good, and anyone that does it TikTok wants it to be good, it takes a lot of work to condense down to 15 minutes and do a good job with it.

Phillip: [00:33:06] Or 15 seconds. Yeah. Oh, an insane amount of work.

Brian: [00:33:08] Condensing a work, condensing anything into. its most key components that are most engaging is actually a skill that's really, really hard. And so it's much easier to say, "Oh, we're going to do a webinar and then all of a sudden it becomes something that you don't have to condense and it doesn't have to be as good because it's live and it's not going to be reposted in any place that anyone necessarily is going to go back and view it. It gets put up on some random YouTube channel and no one ever watches it ever again.

Phillip: [00:33:43] And everything sucks and let's just pack it up. It's true. And to be honest with you, that's actually how a lot of conversations at The Big Show sort of feel. One of the things we talked about on the Retail Remix podcast was it felt like this year there were a lot more extracurricular activities.

Brian: [00:34:05] Yeah.

Phillip: [00:34:06] The show outside of the show is almost as big as the show.

Brian: [00:34:10] I love that.

Phillip: [00:34:11] Of which we were part.

Brian: [00:34:12] Yeah.

[00:34:13] I'm wearing... If you're not watching on the YouTube stream right now, I'm wearing an Archetypes t-shirt, which you can get at ArchetypesJournal.com. We have like 25 of them left. And so yeah, you could engage in, you could go to the show and never go to the Javits and you'll get some of it.

Brian: [00:34:31] I know people that did that actually. And like basically there's enough stuff outside of the show, there are all kinds of... There was coffee outside of the show that was for the show. There were rooms for people to go and connect that were outside of the show. That was part of the show. There were pop ups. There were events. Someday when I write a sitcom about events like this, there's going to be like... Oh, man, I cannot wait for that sitcom, actually. But yeah, the show outside of the show is definitely going to be part of the show, of my show.

Phillip: [00:35:05] Definitely part of the show. It's exciting because it's a different strategy. And I said this also on Retail Remix, but I'll rehash it briefly here. I think that a lot of the formality of being at the show and by the nature of needing to have a lot of bodies that man booths, you get a lot of lack of depth of the people that you're talking to. They're not necessarily all the way up to date on all of what the product does. They don't have deep product education. They're mostly a concierge or a person to get to know and have some pleasant talk with. It's very surface. It's a lot of the sort of niceties. And then, "What do you guys do?" And they'll introduce you to an SME who has a queue waiting for them, and you'll get a few minutes with that person. And that is the bulk of every single booth at the trade shows. That is not what it's like at the show outside the show. You go to the show outside the show and you're talking to real people with low levels of formality and they're going to tell you exactly what they think.

Brian: [00:36:24] Yeah, that's true.

Phillip: [00:36:25] There's no pretense whatsoever.

Brian: [00:36:27] Yes. There's not the people that are at every booth that are just going to pitch you. They're going to pitch you and they're just going to ask what you're looking for.

Phillip: [00:36:35] "So what do you guys do?"

Brian: [00:36:36] Yeah.

Phillip: [00:36:36] "Oh, we're an experienced company, and we do a lot of stuff, and it's workforce management and hold on, let me go get Chad. You can talk to Chad."

Brian: [00:36:47] Chad GPT

Phillip: [00:36:48] If I talk to one more, Chad, I swear to God.

Brian: [00:36:52] Oh, poor Chad.

Phillip: [00:36:52] Chad GPT.

Brian: [00:36:54] I mean, anyone actually named Chad?

Phillip: [00:36:57] {laughter} Let's make Chad GPT a thing. We need a Chad. Give me Chad GPT Instagram.

Brian: [00:37:03] By the way, that was a Jesse Tyler. Jesse Tyler, our Creative Director, just posted that on Twitter yesterday.

Phillip: [00:37:09] Oh, Chad GPT? He has a...

Brian: [00:37:13] That was his thing.

Phillip: [00:37:14] Give me every answer in the form of like a Chad, a total Chad, which by the way, lots of Chad's at a show like NRF.

Brian: [00:37:27] Oh sheesh.

Phillip: [00:37:27] Another nod to our Visions report from last year and sort of how salient some of the points are. A lot of robotics at The Big Show this year in particular, sort of inventory tracking, machine vision, sort of management machines...

Brian: [00:37:47] Drone delivery.

Phillip: [00:37:49] A ton of automation, a lot of sort of warehouse management pick, pack, and ship, that sort of thing. So we saw a ton of that this year. And it's interesting because that was my 2022 prediction that I wrote a piece for I think it might have been for retail touchpoints, actually, come to think of it. A lot of overlap here in this episode. But my 2022 prediction last year, not '23 but '22, was that we would see an explosion of robotics because there were very few places for new capital to go into that would fuel a continued rise in retail. And so having areas where you can soak or you can pump capital into with a potential of an outcome were diminishing. And I thought that last-mile delivery, warehouse management, or automation around supply chain, or offsetting the rising labor costs and retail were definitely areas for improvement. And that seems to have held true. Also, I can't for the life of me find it. But let's have the conversation here on the show about it. We recorded a show last year and I don't think, for some reason, I just cannot find a transcript around it. I made a prediction in 2022 about the future of open source being a bellwether of people leaving the cloud to contain costs and moving back to on-premise. And we had a whole argument about this. Do you remember that?

Brian: [00:39:22] I do vaguely remember this. I don't think it was that long ago. I want to say, who did we talk to? Did we talk to Adii about it?

Phillip: [00:39:30] No. This was a you and me conversation. We had a back and forth on the show, and I'm like, having trouble finding the transcript.

Brian: [00:39:38] Are you sure it wasn't during our Step by Step?

Phillip: [00:39:41] The open source? No. That's why I can't find it because we did a whole Step by Step season last year about open source. It wasn't a predictions episode, but I basically said I sense that we're at fatigue with the cloud and that there will be organizations who will leave the cloud in the next year to contain costs and have more manage costs and to also control deployment environment. And it's so complex to build in the cloud and there's a lot of risk in the cloud today because you have to have so many subject matter experts and entire organizations that build just to that end that I think we would see the return of virtual private servers. We're going to go back the other direction. And there was a news story that broke this week that was borne out of a thread by David Heinemeier Hansson, one of the Co Founders at 37signals, which runs Basecamp, which one of the early early software as a service companies that took project management CRM to the cloud. Their AWS bill last year was over $3 Million and he's doing active cost calculation. They have an entire team that just runs cost management for cloud infrastructure and he's working it out right now. It could be cheaper to lease hardware over the next ten years and move back to private because the rate of growth has slowed. They've sort of hit saturation. There's no more need for scale. They're really good at predicting demand. And why do they need the infinite scalability of the cloud? There isn't an infinite number of customers to serve. So his perspective is the next decade we can contain costs and drive our costs for hosting an infrastructure down and that there's a lot of incentive to do so, not just from trying... Again, this narrative that we talked about at the end of last year about the shift away from growth to profitability, this fits squarely there. And also I want to say I freaking called it, but if I could just find the stinking audio clip that shows...

Brian: [00:41:47] I'm trying to find it. I can't find it either.

Phillip: [00:41:49] I can't find it either. I know for a fact I said it. I know I said it.

Brian: [00:41:53] I do think there's something interesting about it. The one thing that I love about coming back and bringing it back in-house is that it does give you so much more control, and I think that if you can make that cost-effective, that's huge. But I think the answer is been it's almost always not been cost-effective because talent is really hard to maintain in this area. And then what happens is you end up losing that talent at some point. And then there's often a lot of stuff, like knowledge, that you lose when you lose that talent. And then trying to pass it along is hard. So you have to have a really well-documented organization, and a lot of organizations just don't have the ability to execute on something at that level. But once you reach a certain scale, yeah, definitely. It makes a ton of sense. And I just don't know what that scale number is.

Phillip: [00:42:53] I don't know what the scale number is either. But I think again if you're looking at risk points in the organization, if you're a new CFO coming in or you're a new COO coming in, you're probably saying to yourself, "Where do we spend the most money? What are the risks in spending that money if those vendors go away or if they change pricing on us? How do we manage those risks?" And a lot of people are going to say, "Hey, our biggest bill every year is cloud. So what are we going to do about that?" Right. And not just from a vendor lock-in perspective. You know, full transparency, I'm an angel investor in a business that provides sort of cloud-agnostic microservice deployment. So [00:43:39] I have a vested interest in cloud growth. I just think that we're going through a season where driving costs down is the most important thing. And some people, not everyone, but some people in businesses may say the most cost-effective way to do that is to just take ownership of the stuff back in-house. And growth is going to slow. We don't need to plan for growth. So scalability is not our highest concern. Stability might be, but maybe we can architect to that end with a fixed number of resources and we don't need to pay cloud prices. [00:44:15]

Brian: [00:44:15] Yeah, again, that's a huge exercise. I think that.

Phillip: [00:44:18] Oh geez, yeah.

Brian: [00:44:19] Yeah.

Phillip: [00:44:19] It's a multi-year journey, but 37signals is signaling to the industry. And you know what's interesting is I have been saying this over and over again. I called it last year, I called it the uncorkening because I didn't have a language for it. It's like there's a phenomenon where one person breaks the silence about something and then a flurry or a litany of people follow. It becomes a bit of an avalanche, like one small admission that somebody doesn't agree with the generally accepted religious beliefs of this little echo chamber that we all live in, in eCommerce and retail, it gives permission for the rest of an industry who aren't buying into the zealous beliefs to say, "Hey, maybe they're right," and now they can all talk about it. And that's where I believe that we might be with cloud infrastructure, and also never discount the fact that people just get bored and they want something different and they want to try something different and something new. So that's the way I've been saying it now is we've crossed the Rubicon.

Brian: [00:45:37] Crossed the Rubicon. That's good.

Phillip: [00:45:38] People are just over it. Yeah, there's the show title: Crossing the Rubicon.

Brian: [00:45:44] Crossed the Rubicon, I think is an appropriate title for this episode because we are headed into another year here that I think the data on retail is an indication that things are still kind of chomping around. I think we're in or had an end to a year where there might be a little more chop, but I think that chop is actually leading to good outcomes. And so there's still a threat of recession. There's still some wild things happening and some big changes. But I think we said this in our predictions episode, there's a lot to be excited about this year, and I certainly am.

Phillip: [00:46:27] I certainly am as well.

Brian: [00:46:29] And The Big Show was a good indication of that excitement, I think, across the board.

Phillip: [00:46:34] And relentless optimism. Somehow people are pumped. People are excited, and we just went through crazy times. I mean, there's been layoffs in tech and somehow people are still excited. Can I put one last thing out there and we'll close it up?

Brian: [00:46:52] Let's do it.

Phillip: [00:46:56] One of the... New small talk. New business small talk is how was your flight in? You always get that.

Brian: [00:47:06] Yeah.

Phillip: [00:47:06] How was your flight?

Brian: [00:47:07] That's normal.

Phillip: [00:47:07] When did you arrive?

Brian: [00:47:08] Normal.

Phillip: [00:47:09] Right? Yeah. And then add this one to the list. Have you used ChatGPT?

Brian: [00:47:16] Oh yeah. I mean that's the talk of the town. It's the talk of the town.

Phillip: [00:47:22] It's funny because I don't feel like NFTs or crypto was as unanimously, positively accepted. Most everybody... It's made such quick penetration to everybody. And in fact, we had a salon dinner that we hosted at Future Commerce. We hosted a salon dinner at The NRF Big Show, and we hosted some very, very, very forward-thinking CEOs who admitted some of the most prestigious fashion brands in the world with enduring legacies are using ChatGPT within weeks of onboarding their team onto it were already publishing things out into the world and using it from everything, not just product descriptions, but for designing product and for team communication and for building their briefs and for communicating with warehouses. And it's a wild thing to see how quickly enterprises have found a way and storied, prestigious brands and their leadership are so forward-thinking and so quick to adopt new technology. I don't think the world is ever going to be the same.

Brian: [00:48:43] I agree. Yeah.

Phillip: [00:48:45] It's a really interesting time.

Brian: [00:48:46] I think unlike NFTs, or I should say blockchain and crypto and NFTs, people were searching for...

Phillip: [00:48:53] Not an apparent use case.

Brian: [00:48:55] Right. Right. They were searching for a use case. It was like, how do we employ this? With ChatGPT it's just like, "Oh yeah, we can use this immediately. Here's where we're going to do it. And we see other ways we're going to use it in the future as well. But here are some immediate use cases that don't require us to go build a whole stack and figure something completely new out." ChatGPT is something that a consumer can use actively and have a meaningful impact on their output even without being in a business.

Phillip: [00:49:32] And if you're looking for a viable alternative, maybe we'll have a Chad GPT.

Brian: [00:49:36] Yeah. I feel like there's going to be a whole bunch of well, there's going to be, I mean there already are a whole bunch of different options out there for AI, but I feel like there's going to be a lot of fun that's had with ChatGPT that's in the vein of Chad GPT.

Phillip: [00:50:03] I love it.

Brian: [00:50:03] There's going to be a whole bunch of different little bots that pop up out of this, and I'm really excited about it. Anyway.

Phillip: [00:50:09] I am too. I hope everyone else is starting off their 2023 with as much relentless positivity as we've had. Very exciting stuff. Who knows? It could all come crashing down. We're pumped. This has been a great year. Our Archetypes continues to roll on. We've got some new announcements happening. If you have the wherewithal, we'd love for you to come support the work that we're doing. And the best way you can do that go buy an Archetypes book. There are only about, I think, 60 left. Go check it out it's at ArchetypesJournal.com and stay tuned. We have a bunch of our salon dinners coming up and local meetups. There might be a pop up in March that we will be announcing. The best way to find out about all of those things that we'll be doing in the community is to get on our newsletter. That's at FutureCommerce/Subscribe. Thank you for listening to Future Commerce.

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