"Help, an AI fired me!" Phillip and Brian dig into the exchange of privacy as a currency for convenience. PLUS: full-body AI model generation, Walmart's store innovation concept, and more. Listen now!

Phillip: [00:01:18] Hello and welcome to Future Commerce. The podcast about cutting edge and next generation commerce. I'm Phillip.


Brian: [00:01:23] And I'm Brian.


Phillip: [00:01:24] And this is Episode 1 0 7! One hundred and seven times we've done this, and one hundred and seven times you've experienced us doing it to you, which is interesting. We are... By the way I want to say hello to all of the new audience that we have.


Phillip: [00:01:41] Somehow, some way we've acquired a bunch of new listeners, and we are thankful that you're tuning in. It's going to help us tremendously if you go right now and do two things: One, subscribe anywhere we're podcasting found. You're probably already doing that, but when you do make sure to leave a review because that's the best way for us to get into the top rankings and to be seen by more people. And we have a message for the future of retailers everywhere. We want to help get that out. You can help us do it. Brian, today's a little... I wouldn't. Would you call it a minisode? Is today a minisode?


Brian: [00:02:15] Are any of our episodes minisodes?


Phillip: [00:02:20] No. No it's an action packed, bite sized episode talking about some absolutely ginormous things. And so we're going to talk about some ginormous businesses like Wal-Mart. A little retailer you might have heard of.


Brian: [00:02:38] Yeah. Wal-Mart, doing some crazy stuff right now... using technology to do it. And one of those things is they're now doing some interesting A.I. based monitoring of stores. This is, it's not terribly breaking news, but it is very interesting to me. You know, they're saying that they're anonymizing the data.


Phillip: [00:03:04] Yeah that's what everybody says, right?


Brian: [00:03:08] They're using it for for data about how to properly stock their stores and properly build their stores and merchandise their stores. It's all about the store.


Phillip: [00:03:20] And if you look at the pictures... So this was a store... I think we might have mentioned this a couple episodes ago just briefly. And this is a store that's a concept store that has cameras literally freaking everywhere.


Brian: [00:03:33] Everywhere.


Phillip: [00:03:36] And that's like it's not even a joke. If you look at the picture...it would be... It verges on the "joke store" that I would have made. This is, "let's design the a store of the future and let's put as many cameras as you can fit per square inch."


Brian: [00:03:55] I actually think that's a pretty good look at the future. Cameras everywhere. I mean honestly. Like, if China is any indication.


Phillip: [00:04:03] I mean we're already seeing it elsewhere. I mean forget retail there was a whole Twitter thread that blew up at JetBlue recently for using facial recognition for passenger boarding, which we had talked about almost a year ago, by the way.


Brian: [00:04:16] That was crazy.


Phillip: [00:04:17] But for your international flight boarding, JetBlue is capitalizing on using facial data for boarding procedures. This is where we're heading. And I think that customers will be freaked out by it, or consumers are going to be freaked out by it so long as it doesn't provide a real benefit to your life. For instance I'm all too happy for facial recognition and biometric data when I use Clear because it pops me to the very front of of the TSA pre check. That is a marked improvement in my life.


Brian: [00:04:56] Well, and it's clearly something you've opted into. That's the other thing.


Phillip: [00:05:03] Clear - ly... something you've opted into. You use Clear, right?


Brian: [00:05:03] I used to.


Phillip: [00:05:05] You don't see the benefit of it? Or is it just pervasive enough for you?


Brian: [00:05:07] Actually it's a really really good point. No it's that, with Clear, if you want to have the pre check experience you still have to get pre check. If you use Clear without pre check, you still have to go through normal security processes.


Phillip: [00:05:26] Right.


Brian: [00:05:27] Like once you get to the end of the line. Well, I mean, I... I get...


Phillip: [00:05:34] You're stammering. I can't see why you, of all people, who are on the road like 50 weeks a year, that you do not have pre check. That blows my mind.


Brian: [00:05:44] No no no. I have priority boarding, so I can take the priority boarding line which is...


Phillip: [00:05:49] I don't know what that means, but it sounds like a cop out. What's the deal... It's so funny because this all ties into a bunch of stuff that's sort of interrelated. You didn't really renew Clear. That sounds like this new, this new push for people to not renew Amazon Prime.


Brian: [00:06:07] And you know it's actually it's very similar to that's a really good comparison. I love that.


Phillip: [00:06:12] It's not enough convenience in your life, you've realized that a few extra minutes isn't going to kill you and you don't need to spend the money. That is what I'm hearing you say, and that's kind of what people are saying about Amazon prime right now.


Brian: [00:06:22] Right. Yeah totally. I think you're on to something 100 percent. I can get the same experience by using the Sky Priority line with pre check. And in fact it's a better experience.


Phillip: [00:06:37] It's close enough. It's close enough.


Brian: [00:06:39] Yep yep. Right. And anyone that's flying as frequently as I am... They're going to be able to get a similar experience. And those are the people are going to buy Clear anyway. And so, I don't know. It's also interesting because pre check lines are so long right now, as well.


Phillip: [00:06:56] Yeah that's getting worse and worse. But I think pre check... OK. But I think the correlation that I'm trying to suss out here is that when you have cameras, you know literally freaking everywhere, (show title, by the way)... When you have cameras literally freaking everywhere it has to provide a real benefit to you in your life. And you have to see the tangible benefit.


Phillip: [00:07:19] It's not just about store you know stores being able to restock shelves efficiently, and anonymized data or not, our behaviors, our attention, where our gaze is fixed, and our face are all fundamental rights deprived...they're all fundamental parts of us, and we should be able to control who gets that data, and or we should give it up willingly in exchange for something else. I know we just talked about The Privacy Project with Danny Sepulveda. And that episode might go down as one of the best episodes we've ever done.


Phillip: [00:07:53] You conducted a fantastic interview, although he doesn't need a lot of help.


Brian: [00:07:58] No, Danny doesn't need a lot of help. He's got a lot of good stuff to say.


Phillip: [00:08:01] What's really interesting is that... In an era where The Privacy Project, probably one of the more chilling things that the New York Times uncovered was you know the amount of public data that's available and public APIs like Amazon's recognition service, and some others, that make it super easy and very trivial to harvest actual data for you to to train against. When you're looking at that world...


Phillip: [00:08:31] You look at the world that we live in, cameras that are available, like in this particular case it was public cameras at Bryant Park that were installed to see if the lawn is open for yoga.


Brian: [00:08:45] That is a crazy article. We need to put that in our show notes.


Phillip: [00:08:49] Insane use case, because it cost them something like $35 of Amazon services to find who people are and by nearby businesses that have employee alumni or what employee career boards that link to their LinkedIn, and it's insane what you can do these days. But all that aside, we live in an era where we're hearing stories about governments that infiltrating elections, that are using disinformation campaigns to affect the outcome of elections or not, I mean depending on which side of the aisle you might sit on.


Phillip: [00:09:38] You know, we're living in an era where where there's coercion on social media. We live in an era where our electrical grid is potentially under attack. This is the world we live in, and it's not trivial to think that even a retailer like Wal-Mart, as sophisticated as they may be, as great as security as they may be... When they have this kind of data they become targets that are worth trying to infiltrate. And when you have cameras everywhere, that might be a goldmine of the kind of data... Data is the new oil... Facial recognition is...


Brian: [00:10:15] The ultimate data.


Phillip: [00:10:16] Right. It is unobtainium. That is... I mean, Enemy of the State. You remember that movie with Will Smith?


Brian: [00:10:24] Yeah absolutely.


Phillip: [00:10:25] Yeah. I mean, it seemed absolutely farfetched and ridiculous. By the way Jack Black as the like master computer hacker... Best movie ever. That is so realistic. I mean, that might be the world that exists.


Brian: [00:10:39] This is the part that I think is interesting. That world is not driven by necessarily government...


Phillip: [00:10:48] Government.


Brian: [00:10:48] Yeah it's driven by private... And by opt-in actually. This is the part that I think is amazing. Think about how we accept cookies on sites right now because of GDPR.


Phillip: [00:10:58] Oh yeah. Yeah. For sure.


Brian: [00:10:59] We just hit accept.


Phillip: [00:11:01] We don't think about it any more.


Brian: [00:11:02] It's like, "I can't use this site unless I click accept." Yeah. We don't even think about it. This is going to mean the same thing for stores. Everyone's got their little club memberships. We all opt in to them.


Phillip: [00:11:15] We all have, by the way we all have this experience. I have a personal experience that I don't know that I've shared on the show. We're super deep into this one topic, and I know that we've got 30 others to talk about in 20 minutes. I know. I knew we were going to start out wanting to make this a short show. OK. So I took my kids to the grand opening of this like bounce, you know trampoline park, here.


Brian: [00:11:40] Oh yes. Yeah, yeah, yeah.


Phillip: [00:11:41] In South Florida. And did I tell the story already? I don't know if I did. And there was someone walking around in a team member Jersey, and they looked like referees, and they were walking around, and they were very obviously filming. And I peek over her shoulder, and she's using Instagram Stories. And I'm not "that guy." I'm not that sketchy about my kids on social media, but she was like all up in my kid's face taking pictures. And it just weirded me out, and I just at that moment I felt like, "OK this is a hill I'll die on. I'm fine with this." And I confronted her, and I'm like, "Why are you taking pictures of my kids?" And her response was, "Did you read the waiver when you signed it?" and I'm like, "No you know what, screw me, right? Shame on me, I guess I should have read the damage and liability waiver for a camera release.


Phillip: [00:12:40] And so come to find out... Which by the way if you're if you're trying to win repeat business, probably not the best response. And... Yeah. Come to find out, in the liability waiver, where we're in I think I'm signing away  the fact that I'll sue you if my kid breaks their leg on your trampoline, there is a social media release hidden, or buried, in the middle of it. Which I think is totally unreasonable. But that's the world we live in now. Is that to use this place, I have to sign away my right for my kids to be on social media, and that is the new normal, and I'm conditioned... I think I'm more aware than most, but I'm condition now that's the new normal, and if I want to go to this place that's what I have to accept. That shouldn't be acceptable.


Brian: [00:15:20] This is the thing... And Danny called this out in the episode. Last week's episode. The genie is out of the bottle.


Phillip: [00:15:27] It is. You can't put it back.


Brian: [00:15:28] There's no going back. You cannot put it back. Once your face has been tagged once on the Internet, in a public way, you're out there, and it's over. Unless you decide you want to not have your photos taken. It's all about trying to manage and control that. And I think that's why we nailed when when we said that managing your data is a life skill that everyone needs to learn in this new world. And this is not a small thing. This is  an everyone problem, and everyone needs to learn how to manage their data and know where their data is at and where it's going and yeah it's crazy.


Phillip: [00:16:11] Well even then let's say that it's not your data. Let's say that it's it is actual... So moving on to another story on futurism, out on the Futurism blog, which by the way is one of my favorites... Amazon is testing an A.I. to automatically fire low productivity workers, which is the kind of thing that you might have assumed they were already doing, but...


Brian: [00:16:33] They kind of already are.


Phillip: [00:16:34] Ok.


Brian: [00:16:34] They kind of already are. This is why there's all the stories about the people skipping bathroom breaks. They don't want to have their metrics take a dip.


Phillip: [00:16:44] Right. So yeah. But this is.. Right. So but there's actual documentation now, and this is citing an article from The Verge, about how fulfillment center employees are failing to meet productivity quotas and effectively they can forecast if you will become... if you are on your way to being unproductive. They can, they sort of profile you. And basically you can receive a termination letter that's signed by an Amazon attorney that basically talks about how the entire process is fully automated.


Brian: [00:17:21] Trends.


Phillip: [00:17:21] Right. Exactly. They can forecast trends. And basically some of this may not even apply to Amazon directly. They might even... They seem to have some data to other, to third party, as well. Third party fulfillment, and using that sort of... They call it a coaching system. That sounds like a Black Mirror phrase like, "You have now been coached." It's not... Productivity data of an employee is still personal data. People...


Brian: [00:18:00] Maybe, maybe this is actually what we're going to be remembered for. You know, in future generations. We talk about the Industrial Revolution. And what we think about it, when you say Industrial Revolution what do you think? You think two things, right? You think a huge, explosive new ways of doing things, right? And manufacturing and so on. And then you think of worker conditions.


Phillip: [00:18:22] For sure. Right.


Brian: [00:18:23] Maybe the Digital Revolution is ushering in a new age of worker conditions. But in this particular case, maybe there's an opportunity to use this data to actually improve lives. You know as opposed to...


Phillip: [00:18:44] Let me take a different angle of attack because I have to wonder if these... You look at these these historical retrospectives of how would the New York City skyline was built. And how many workers died to build the Empire State Building, and how dangerous working conditions are in mines, and how people died building the railroad, and you have to wonder... One of those things doesn't necessarily bring prosperity to society. The Empire State Building is a monument, it's an obelisk, it's this edifice that we worship as an idol in our society of our greatness.


Phillip: [00:19:40] No I'm serious.


Brian: [00:19:41] Yeah, I agree.


Phillip: [00:19:43] It's an idol our greatness, and people sacrifice their lives to it. I mean that's effectively where we're heading with building the new empire, which is AI and data. There will be people that have to sacrifice their lives for it. And it's at the end of the day is it... Is it meaningful? Does it actually lead to a better life for people? Does the Empire State Building actually contribute positively to people's lives and livelihood? Or is it a symbol of something that stands for something greater? Is that worth giving your life for? And I have to ask myself, "Is this worth giving up my freedom of privacy for a future generation to have a "better life?" I don't know.


Phillip: [00:20:25] I feel like we have we have it pretty good. Working conditions are pretty good. As a whole, as a human society, at least in the West, things are pretty okay now. They've been worse in the past. But I think they could probably be better.


Brian: [00:20:42] Well you said "West," that's the key word there. What about 9 9 6, man?


Phillip: [00:20:46] Right. I know I understand that, and that's... The world has to suffer en masse. They suffer, so that we can have the modern conveniences, and that's in and of itself another episode. But that's... But we're also being productized and the same way that factory farming moves chickens through, inhumanely through, the slaughter mill. We're moving society inhumanely through cameras and movements and tracking and forecasting. That is it. This is it. It's 1984. Here we are.


Brian: [00:21:27] Well, no, thi is  the crazy thing. As Danny put it, "Are we being fairly compensated for our data?" That's the question.


Phillip: [00:21:36] Yes. That is the question.


Brian: [00:21:38] That's the question. And that's the part... Who's determining that? Are the users? Are the people determining that? Or are governments determining that? Or is the Internet determining that? Or is that fair, you know, free market that's determining that? And I think that... And what kind of data and what type of data is more valuable? Is your body data more valuable than your financial data? There's so many different pieces of data that we haven't even touched yet, as well, as the Internet of Things continues to grow. I was just talking with a good friend of mine, actually my brother in law, and he is in the in the fisheries management world. The stuff that he is able to do with very limited budget, in terms of collecting data on the environment and water... And it's actually mindblowing. And no one's doing it yet. That's the part that's kind of crazy. He's doing stuff that people are hardly doing right now. And so I guess cameras and sensors and everything we're talking about.. It is just get started. This is just getting started.


Brian: [00:23:00] We didn't talk about Walgreens and their facial monitoring, as well. We talked about that on a previous episode, but Wal-Mart and Walgreens and Amazon and everyone is just starting to bring these things in. I think I also wanted to comment something you said earlier, which is that people are only going to do it, to opt in if they if they find value. The value add is actually being able to use the brand altogether. It's all in or all out. This is the part that I was trying to make, the poin about Web sites. You just click accept because there's no other way to use the Web site unless you just click accept. And so you don't have any other options. I think the same thing's going to happen once physical stores. Either you agree to their terms of coming into the store or you don't use that store.


Phillip: [00:24:05] Oh yeah exactly. One hundred percent. Well OK. Let me jump ahead to maybe thinking that maybe this is, maybe it's all overblown. Do you mind if I shift gears just a hair?


Brian: [00:24:18] Yeah in the next five minutes. Here we go. Let's do it.


Phillip: [00:24:20] So maybe we're wrong. Maybe we'll look back, and we say this is a transition period because it could be that this is an era where we're training AI to learn things about us to be able to mimic the human behavior. Like for it to replace fundamental parts that require human beings. I'll give you a good example. There is a press release from a Japanese company called DataGrid, which has developed a deep fakes for a whole body model generation. So you know we had, we had Super Personal on the show, and they can superimpose faces with deep learning and they can superimpose faces onto existing models bodies. This can actually generate whole models which look fundamentally indistinguishable from real people. It's shocking. We'll link it up in the show notes. So this is, you know, deep fakes for whole bodies.


Phillip: [00:25:22] And I think that the pace of... It's using body data and AI to train what's called a GAN, which is a generative adversarial network. It's a certain type of deep learning to learn how to generate whole body images, including clothing, and the pace of innovation here is in less than a year we went from faces to bodies. And it could be that we make the leap from, "Do we need Instagram influencers? Do we need models? Do we need..." This might just be the next phase of our evolution that we may not even need facial recognition as we know it. The understanding of who a person is and their presence may no longer require cameras in the future. It might be something else.


Phillip: [00:26:08] So it could be that we're in this intense period of scrutiny of transition and personal data for us to make the leap into a future that we can't even fathom right now. And that might be the case.


Brian: [00:26:21] You've said you just took the opposite angle. I feel like you took the next step.


Phillip: [00:26:26] I'm saying there's a lot of scrutiny right now, and we might actually... If you were to extend it out logically maybe we're all paying that price, so that we don't need this in the future. Maybe we'll get smart enough and maybe machines get smart enough and AI get smart enough that we no longer need to train the networks anymore, right? We no longer need to surveil the populace. Right? That might be where we're heading.


Brian: [00:26:51] Well I doubt it. Here's why. Because people change. People change. People change, and so we're going to want to understand how we're being affected by AI, and we're going to want to understand how we're changin, right?


Phillip: [00:27:08] Right.


Brian: [00:27:09] And so the surveillance has to continue because we have to update our models or they'll go out of date. Right? We're always going to want to know what humanity is doing.


Phillip: [00:27:23] I spent some time with Jason Calacanis... You know, famous Angel investor and in he... So yeah, I spent some time with him last week. He gave like a symposium on Angel Investing down here in Miami, and he opens up with, which is by the way, he doesn't say hi. He doesn't say, "Hi I'm Jason." He just opens up... He's like, "The world is under threat." Which is... He's like, "Capitalism is under threat, and the despots of the world, the dictators of the world are trying to co-opt capitalism to pick the winners and losers... and the society and the capitalism that we've known for over 100 years. You can go in one generation from being destitute and having nothing to the next generation having incredible wealth. And that's the world that we actually live in, and the greatest fight of our generation will be to preserve that institution and not let maniacal dictators of the world co-opt that for their own gain, so that they can pick winners and losers. And China, they pick winners and losers. In the United States..." and he lists 60 of the Fortune 100, which are all American companies,"The Ubers and Airbnbs of the world, those are American institutions that are founded by people who had the upward mobility in their society, who weren't picked by the government, who weren't handpicked. And if we give AI over to adversaries, if we allow them to outpace us in innovation, we'll never get that back. And that is the fundamental, existential crisis. It's not all these things that we're railing against. It's not Russian spies and hacking and beluga whales who might be Russian spies and  everything else that we're distracted with. It's the threat to capitalism. That's the greatest threat because capitalism is what drives innovation and capitalism is what drives retail and capitalism is what..." and I tend to agree with him, maybe.


Brian: [00:29:26] Interesting.


Phillip: [00:29:26] I don't, I don't know. I think maybe I agree. Makes me, makes me want to read his book again.


Brian: [00:29:32] Man, I've agreed with that my entire life. It's interesting in that maybe innovation right now actually is being... How is innovation being driven right now? I'm not 100 percent sure. And actually I know capitalism plays a huge part in it, but there's just, I think, you know ,fear is also playing a part in it for sure, I think, as well.


Phillip: [00:29:54] Well yeah, it's fear of being outpaced and losing market share and having to answer to shareholders, and that does drive innovation.


Brian: [00:30:01] Sure. Yeah.


Phillip: [00:30:02] It's fear. Fear of missing an opportunity in the marketplace. It's fear of of you know... I don't know. There's an entire segment... I'm sure we could get some really smart people on to talk about you know V.C. and Angel investing and how Fear Of Missing Out (FOMO).


Brian: [00:30:26] FOMO, baby.


Phillip: [00:30:27] FOMO drives those funds because it's not altruism, it's not because people like think to themselves, you know "Let's all let's put our money together in a syndicate because we want to help the next generation of entrepreneurs." It's like, "No there's a lot of money to be made, and I want to be the person to make that money. Someone else is going to make that money. It better be me. I'm going to make that money, and somebody is going to win in this... I don't know. Ok. Last story...


Brian: [00:30:59] I think we gotta quit. We got a wrap. That was our alloted time.


Phillip: [00:31:04] Holy cow. I don't even know what happened to that time. How do we close out from here out? Thanks for listening. We have no idea what this had to do with retail. Probably everything. And we want to hear you having your take on this. What do you think? Head on over to futurecommerce.fm and lend your voice to the conversation. You do that on the episode title link. And also, follow us on Instagram. We're having some really interesting content over there. We'll be doing some Instagram live for the next few weeks. Brian, you're going to be playing a big role in NRFtech, right?


Brian: [00:31:38] I am. Yes I'll be the emcee on Tuesday. Yeah. So really looking forward to that. And so if you're going to be in San Francisco for NRFtech, I would love to connect with you in person there. We're looking for it.


Phillip: [00:31:53] Hit us up, and I think we'll also be... We'll play some role at Future Stores Seattle. I think we're gonna be participating in E-tel East pretty soon. A lot of things coming up in and around the retail trade events. So I'd love to see you. We're also working our way... If someone out there has a hookup to get us into Sustainable Brands. We're trying. It's hard, but there's so many awesome things that are happening in our industry as we head into a busy conference season. We want to meet with you. Hit us up and you can do that info@futurecommerce.fm. Send us an e-mail. All right. Thanks for listening. And as we always say, retail tech moves fast...


Brian: [00:32:31] But Future Commerce has moved faster.