Episode 142
January 31, 2020

The Skill Set of the Modern CMO

This week, Phillip talks with Ian Leslie, CMO at Industry West on topics that every CMO needs to know.

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This week, Phillip talks with Ian Leslie, CMO at Industry West on topics that every CMO needs to know.

Show Notes:

Main Takeaways:

  • Ian Leslie, the Chief Marketing Officer at Industry West, joins in on today's episode.
  • The modern CMO goes beyond just driving awareness for your brand and relies on your knowledge of the tech stack and how to leverage that tech stack to reach customers that you need.
  • Ian gives some insider perspectives on what is working and not working when it comes to marketing for a successful ecommerce brand.
  • How can you best arm yourself to be a successful marketer in a world that is oversaturated with content and noise?

What's the Story?: Some Background on Industry West:

  • Industry West is an eCommerce furniture company that has been around for about ten years and was founded by Jordan England and Anne England.
  • Jordan and Anne were looking for chairs for their house and went straight to the manufacturer, where they had the idea to sell those products to consumers.
  • Ten years later, Industry West has furnished many spaces owned by name brands, and you have probably sat on Industry West furniture without knowing it.
  • Ian has been with Industry West for about five years now.

The Nuts and Bolts: What's Inside Industry West's, Tech Stack?:

  • Industry West is running Magento 2.3, which is tied into Netsuite that pulls order in real-time into Magento.
  • Salesforce is being added to the sales team very soon.
  • On the eCommerce side, Industry West uses Nosto for personalization, onsite search functionality with Klaviyo, dotdigital for journey building and consumer-side email, ShipperHQ, and TaxJar.
  • Now that they are breaking into brick and mortar, Industry West is using ebizmarts for its POS (which is just a skin for a Magento store).

The Modern CMO: How Times Have Changed:

  • Ten years ago, CMOS did not have an in-depth knowledge of their tech stacks that is required to be successful in our current climate.
  • For someone who was raised as a digital native, technology has become engrained in the language of an omnichannel marketer.
  • Being on the ground with technology and genuinely understanding the functionality behind it is critical in knowing how to implement that technology best.
  • How can you get to know your tech stack better?

The Trade Market: Acquiring Brands as Customers:

  • The trade market uses a lot of the same digital platforms that are on the B2C side of the business.
  • Primarily, trade customers shop as if they are a regular consumer and have a lot of the same questions regarding the products.
  • Once the trade customer is acquired, the focus shifts to the retention of that client and getting the buyer to purchase for additional clients or locations.
  • The trade market is still an old-school industry when it comes to the tech stack, and there are emerging companies that are serving this vertical.

New Ventures: InFavorOf.com:

  • Industry West just launched a new venture called Favor.
  • Two holiday seasons ago, Industry West noticed a massive uptick in the interest of homewares, so they created Favor to serve this interest.
  • Favor is a different aesthetic than Industry West and focuses on an altruistic effort of working with real people who work with textiles.
  • When you are very broad in category, you begin to lose the nice that initially made you stand out, so branching off into a sister company could alleviate that dilution.

What Works and What Doesn't: An Insider's Perspective:

  • Industry West has seen significant wins with personalization regarding what is being recommended to customers to changing the homepage depending on the buyer.
  • One to one chat has also proved exceptionally fruitful, and people that chat with a rep online are much more likely to place an order.
  • There have been some large one-off buys with larger publications that have not proven to be an effective use of funds.
  • What are some efforts that have proved lucrative to your brand, and why do you think they worked?

The Industry West Outlook on 2020: Projected Wins and Potential Battles:

  • Industry West is growing quickly but is still entrepreneurial and has a consistent forward push across all employees of the company regardless of position.
  • The ability of the founder to source products and getting designers to want to work with Industry West is another great strength of the company.
  • A weakness (but more so an opportunity) is that Industry West is entirely bootstrapped, so everything goes back into the company, which is a fantastic opportunity to not answer to any investors granting a nimble and agile ability to adapt to change.
  • Industry West is profitable, and a lot of the unicorns that have received tons of venture capital will prove not to be profitable.

A Potential Economic Slowdown: Are You Prepared?:

  • Is Industry West prepared for a potential economic slowdown within the next 18 months?
  • Industry West as begun accounting for tariffs by swallowing the costs on some of the pricing.
  • There is always a swing in the economy during an election year, and Industry West keeps tabs on loan rates and interest rates.
  • They are so fluid in how they operate at Industry West, but that doesn't mean that they aren't worried about the potential repercussions on an economic shift.

The Next Five Years: What Does the Future Hold for Industry West?:

  • Strategic growth for both brick and mortar and online business are consistently on the horizon and part of the strategy for Industry West.
  • For the first time, they are beginning to understand the levers and seeing particular outcomes for actions taken.
  • Brick and mortar expansion is a goal, and they are looking at presence in Los Angeles within the next few years.
  • Everything that comes in for business is primarily inbound, and Industry West is going to start exploring trade shows as a potential method of acquisition.

The Future Commerce Wrap Up: From Chipotle Child Slaves to Exciting Newsletters:

  • Chipotle was fined $1.4 million in a recent child labor case for having dozens of 16 and 17-year-old employees work for longer than 9 hours a day and more than 48 hours per week.
  • Brian and Phillip think that there will be much more third party validation so that consumers can see what is going on at chains like this in regards to their labor force.
  • Phillip is consistently impressed by a weekly newsletter from Sari Azout called Check Your Pulse, a tech and startups newsletter designed to make you feel human.
  • If you're not subscribed yet to the Future Commerce Insiders Newsletter, then you should do that right now!

Brands Mentioned in this Episode:

As always: We want to hear what our listeners think! As a marketer, how can you arm yourself with knowledge of your tech stack to take your business to the next level?

Let us know in the content section on Futurecommerce.fm, or reach out to us on Twitter, Facebook, Instagram, or Linkedin.

Have any questions or comments about the show? You can reach out to us at info@futurecommerce.fm or any of our social channels; we love hearing from our listeners!

Retail Tech is moving fast, but Future Commerce is moving faster.

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

Brian: [00:00:06] And I'm Brian. Today we have an exciting show.

Phillip: [00:00:09] Yeah, you do this all the time. It's always exciting. No, today's a terrible show.

Brian: [00:00:14] It is.

Phillip: [00:00:14] Today's an awful show.

Brian: [00:00:15] No.

Phillip: [00:00:15] You should tune out right now.

Brian: [00:00:17] No, you know what today is? Today is our friend... Our friend...

Phillip: [00:00:20] Yeah

Brian: [00:00:20] ...and just somebody who is an absolute delight to talk with.

Phillip: [00:00:27] Yes, absolutely. Sir... Can I call him Sir Ian?

Brian: [00:00:32] Sir Ian McKellen.

Phillip: [00:00:36] No. If he was our friend, that would be something. Why are we doing this show? I guess is the question I would ask. No, of course, Sir Ian Leslie. Or just as he's known in the rest of the world, Ian Leslie, who's the Chief Marketing Officer at Industry West, which is a really interesting direct to consumer furniture and home furnishings business.

Brian: [00:01:02] So cool.

Phillip: [00:01:03] Family of brands now, which we'll here.

Brian: [00:01:05] So many cool things. Yes.

Phillip: [00:01:08] And the thing that really stuck out to me as part of the conversation that I feel like was really eye opening, I think, is the modern CMO, like the role of the modern CMO, and not just having your pulse on what's driving engagement in your organization, what's driving, you know, customers to your brand, but how much awareness of the tech stack you have to have and what levers you have to pull and where to make the right investments in that tech stack to give you the marketing functions that you need to meet customer expectations. And also, you know, I was ashamed to find out during the interview that a lot of the places that I frequent in restaurants and airports etc, I've been sitting on Industry West furniture, and I didn't even know it. It's everywhere.

Brian: [00:01:58] Yeah. It's everywhere.

Phillip: [00:02:00] Really interesting conversation. And stay tuned for after the interview with Ian, Brian and I are going to do a little after dark piece and talk about some of the stuff that's on our mind. And yeah, it'll be fun. It's awesome.

Brian: [00:02:13] Before light?

Phillip: [00:02:14] Before light. After dark. That's how we roll here is barely, barely morning time. Okay, great. This is it. Sit back, relax, grab something warm, and/or cold to drink depending on what side of the equator you live on. Just listen to the interview. It's going to be good as we're joined by Ian Leslie, CMO at Industry West.

Phillip: [00:02:36] Hello and welcome to Future Commerce, the podcast about cutting edge next generation commerce. I'm Phillip. And today I'm joined by the CMO of Industry West, direct to consumer and B2B focused online furniture retailer who actually, you now have a boutique, right? You have a showroom in Soho. And very excited to have Ian Leslie join me on the show today. Welcome, Ian.

Ian: [00:02:59] Thanks, Phil.. Always happy to talk to you.

Phillip: [00:03:01] How long have you had that Soho showroom?

Ian: [00:03:04] Yeah, we opened in March. Was it March? Yeah. Feels like it was 10 years now. Yeah, it's been it's been great. It's been amazing. A few celebrity sightings in Soho. It's been a great opportunity. Yes. It's been about nine months now.

Phillip: [00:03:22] You're on Lafayette?

Ian: [00:03:23] Crosby. 14 Crosby Street.

Phillip: [00:03:25] Okay. There's a lot of... It's almost like DTC alley. That whole area.

Ian: [00:03:29] Yeah. I mean it's funny because we talked about when we looked in SOHO...  You swing a stick. I mean, you hit, you know, Casper and you hit your Smile Direct and you hit Allbirds. And all these brands ever so familiar with on eCom side but are starting to have a brick and mortar presence.

Phillip: [00:03:47] Yeah. Tell me a little bit about Industry West for those who are listening that don't know what the brand is.

Ian: [00:03:53] Yeah. So we're a furniture company, eCommerce. We used to say we're pure play eCom until we opened in SOHO, and we've been around about 10 years, founded by two great friends of mine, Jordan and Anne England, high school sweethearts. Basically, they founded the company and were looking for chairs for their house and found some and went straight to the manufacturer. Loved the chairs...

Phillip: [00:04:20] As one does.

Ian: [00:04:21] As one does.

Phillip: [00:04:21] As normal people do.

Ian: [00:04:22] Yeah. You know, that's what everyone does. Right. And decided to... It was that at a time where no commercial real estate market was tanking, and Jordan was in commercial real estate or real estate in general. And Jordan said, "I think let's bring a few of these in and see if I could sell 'em on eBay." And so he did. And he said, Let's bring in a few more." days. And so he was kind of operating out of a small town, South Carolina, where we met. And, you know, that was 10 years ago. And started packaging, repackaging, things at a local UPS store or even getting in the U-Haul himself and schlepping a hundred stools up to a burger joint in Pittsburgh.

Phillip: [00:05:00] Wow.

Ian: [00:05:01] And now we're 10 years later, and we're doing great things. We're in probably... Most people have most likely sat on one of our pieces and they don't know it. Whether it was in an airport, or a restaurant, or if you're in Silicon Valley, and you're at Facebook, or Uber, or anywhere like that... We've done food courts at Yankee Stadium. We've done a restaurant at Lambeau Field. And we're also trying to go on the DTC side, and earn a ton of homes around the country. And yeah, it's been amazing. And now in SOHO. And 2020, spoiler alert, we're probably looking to be out west somewhere.

Phillip: [00:05:44] Yeah. How long you been at the company, Ian?

Ian: [00:05:48] So I knew Jordan pre Industry West. So a buddy of mine actually built his first site on Drupal 10 years ago. And then we kind of went our different ways. But I came back and was with the company. It's been about five years now. Yeah.

Phillip: [00:06:05] We have a series coming up in February. It's a series, like an ongoing, repeated series with Future Commerce, called Step by Step, where we talk to founders or leadership in direct to consumer businesses. And we talk about how you build out the tech stack.

Ian: [00:06:21] Yeah.

Phillip: [00:06:21] I'm interested to know, like, what does your tech stack look like right now for servicing both your online and in-store customers?

Ian: [00:06:28] Yeah, sure. I think it's something I've talked about a lot in terms of, you know, I look at the tech stack every day and even with that... And I feel like by looking at every day, I feel like I'm kind of keeping this site together with crazy glue and duct tape at times. But, you know, people from the outside look at us and see a brand, 10 year old brand, and a pretty new vertical in terms of direct consumer furniture. I mean, our tech stack is pretty mature. And anyone can go to like builtwith.com, and. See what's on our site.

Phillip: [00:07:04] Sure.

Ian: [00:07:04] But I mean, generally, you know, we're running Magento 2.3. It's tied in to our ERP side, which is NetSuite. So we're pulling inventory updates and everything real time from NetSuite, and we're pushing all our orders directly back into NetSuite, into the warehouse, into the DCs. We're adding Salesforce for the sales team just in like a week or so. And then we like to joke around, we have all SaaS. We're working with Nosto on personalization on the site. We improved our on site search with Claveaux. We are with Dotdigital now, Dotmailer, on a lot of our journey building on our consumer side email. Journey building on the customer side with our trade customers and then just marketing emails. ShipperHQ. TaxJar. So that's all eCom side. But then a lot of that goes into what we're doing brick and mortar with the POS. So we're use Ebizmart for our POS. And really, if anyone's not familiar with Ebizmarts, I mean really it's kind of a skin for another Magento store.

Phillip: [00:08:19] Store. Right.

Ian: [00:08:19] Right? So it's just like kind of skinning it, presenting it on a tablet nicely for our brick and mortar reps. But it's still pulling you in like TaxJar. You know, it's pulling...

Phillip: [00:08:30] Yeah, you're leveraging the rest of the platform...

Ian: [00:08:31] Yeah you're leveraging the rest of the SaaS. So, yes and that was pretty late lift actually to get that done, which was nice.

Phillip: [00:08:41] What's interesting about that, and the reason I ask that upfront was, 10 years ago... If I think back to what the world was like 10 years ago, Joss & Main, Article, Wayfair weren't household names, and CMOs didn't know what their tech stock was.

Ian: [00:09:00] Right. {laughter}

Phillip: [00:09:00] {laughter} So the world changed.

Ian: [00:09:01] Right.

Phillip: [00:09:01] And when you have a CMO of a company that's growing pretty rapidly and, you know, has penetrated a lot of commercial and now in home, do you think that the tech stack and ownership of the tech stack at the CMO role is the differentiator in like the modern entrepreneurial stack? Or is that just like its table stakes now because you can't live as a CMO without knowing and executing in this area? Or are you just different?

Ian: [00:09:30] No... It's... That's interesting because I think for a modern... I don't want to, you know, talk about necessarily ageism here, right?

Phillip: [00:09:44] Right.

Ian: [00:09:44] But I mean, I think for someone who came up as a digital native... It's funny you talk about 10 years because I was just recently thinking about this. Ten years ago, forget about none of these companies, but none of these softwares were there. Right?

Phillip: [00:09:57] Right. Yeah.

Ian: [00:09:57] We didn't buy like we buy now.

Phillip: [00:09:59] There weren't categories for these types of solutions.

Ian: [00:10:01] There weren't categories... Right. Right. There weren't the verticals in terms of like eCom for furniture per se, and then like the solutions for like, "Oh, I have to tax in all these different states, and then how am I going to calculate shipping? And how am I a tie in UPS and FedEx?" We had to build... The software had to be built, and then now we had to have CMOS who knew like, "Oh, I have to incorporate it." And it's like I mean, I came up sort of self taught, I guess. It was like, well, social media is a thing now. I'm a jack of all marketer. I better learn social media, and I better learn how to like what front end is, even though if I don't know how to do it, I better know what it is.

Phillip: [00:10:39] Right.

Ian: [00:10:39] And I think like now it's like I know... Yeah. I mean, I think it's almost required. And I do a lot of speaking, and I go to these events, and you see maybe some CMOs who were pushed into you eCom and pushed into like "I'm a B2B brand. I know I have to look at web now," and they talk at a level that shows they're reading websites, but not necessarily comprehending what they're reading. And so I think like being on the ground with an understanding is critical. But I don't know. I don't know how many CMOs necessarily know and really understand the text stack as much as I do.

Phillip: [00:11:27] Kind of taking a step back on the customer journey side, you work a lot in retail or in trade, right?

Ian: [00:11:35] Yeah.

Phillip: [00:11:35] So you're working with designers or...

Ian: [00:11:37] Yeah. Yeah.

Phillip: [00:11:38] How are you admiring those kinds of customers?

Ian: [00:11:40] Yeah. So we talk about trade. I always like to... For us, I talk about B2B trade. I always like to say that, you know, B2B is we're not selling wholesale.

Phillip: [00:11:49] Right.

Ian: [00:11:49] So I'll consider trade as everyone from the mom and pop coffee shop or pokeball or burger joint in wherever buying 10, 20, 30 stools for the restaurant all the way up to internal procurement for Google, because, you know, Google is doing their own internal procurement for a new cafeteria or a new whatever, all the way to the Gensler's of the world, who are doing the Marriotts, are doing a new skyscraper or whatever it may be. So there're a lot of levels. And then on the other end, back down to someone who is an independent interior designer who's sourcing for a house in the Hamptons.

Phillip: [00:12:32] Yeah.

Ian: [00:12:32] So we considered all that to the trade, if you will. So now we're acquiring them. I mean, I think it's a lot of the same digital platforms that are the DTC side. So what we've learned over the years is like we used to kind of debate back and forth, are we B2B site? Are we DTC site? How do we advertise? What is the homepage look like? And what we've learned is that on the trade side, people are going to see a chair they like, and they're going to ask how many we have. And if there's trade pricing, it's almost like the trade is...

Phillip: [00:13:06] They're shopping as if they're consumers.

Ian: [00:13:08] And they're programed to ask the right question.

Phillip: [00:13:10] Right.

Ian: [00:13:10] Right? So they're shopping for their consumers like, "Oh, my gosh, well, that chair. My client's gonna love it. I'm going to email him to chat now." And then it becomes more of like, what's the channel that they're going to communicate with us i? Like, are they going to go online and chat? Yes. Are they gonna email us? Yes. They're going to call us? Yes. Are they going to walk inot SOHO? Yes. Any number of the channels. Soon they're going to say, "OK. Is that commercial grade? Can I use the hotel lounge?" Yes. "OK. Do you have 20 of them?" Yes. "Can we do you know fabric, custom fabric, custom leather?" Yes. "Okay. I need an estimate. I'll go back to my client." Done. So it's eye candy initially, right?

Phillip: [00:13:50] Right.

Ian: [00:13:51] "I love that chair. I love how it's shot. The angles are beautiful." We spend a ton on photography. It's very important to us. So it's like, you know, it's Pinterest, it's Facebook, it's Instagram. It's some Google shopping.

Phillip: [00:14:03] Visual mediums.

Ian: [00:14:04] Visual.It's all visual.

Ian: [00:14:05] And then content. We're getting more into blogs. We are getting more into video this year. We're going to even explore direct mail, I know, to the trade and just really establishing those relationships with the trade.

Phillip: [00:14:22] So part of your acquisition strategy and new trade customer is it's being where they are already like on social and in display. But it's also working directly with, you know, the Genslers of the world or someone that has a big...

Ian: [00:14:38] Sure.

Phillip: [00:14:39] A big design agency or a firm.

Ian: [00:14:41] What's interesting is how...

Phillip: [00:14:43] And that gives you validation in the space. Right?

Ian: [00:14:45] Oh of course it does. Yeah, of course. But even within those firms, you'll find that the left hand doesn't know what the right hand is doing. I mean, I'm not going to use Gensler as an example, but take some of the largest design firms in the country. They may have 35 different trade e-mails on our website.

Phillip: [00:15:02] Right.

Ian: [00:15:02] And they don't know that each other's sourcing for us.

Phillip: [00:15:05] Right.

Ian: [00:15:06] And so they have their... I think what's interesting is there's a lot going on in interior design in this vertical in terms of online procurement. And there's a lot of new softwares out there that are exploring that, exploring how to take the products from the retailer, how to put them all into an easier format for the designer to kind of pick, choose whatever, then kind of churn out direct e-mail to the retailer to say, "OK, I need a quote. I need an estimate." There's a lot of online procurement SaaS that's trying to get kickstarted. And I'm sort of waiting to see who wins before we really kind of talk to any of them about giving them our catalog. But yeah, but I think what's also interesting is that it's I mean, it's an old school vertical still, in terms of the percentage of people who... We see people who on the trade side, who will go all the way to the checkout page, take a screenshot of the checkout page that includes the trade discount and the email that into us saying they want to check out.

Phillip: [00:16:17] You mentioned this once before, I think on Merchant to Merchant. We were discussing. That's an interesting type of a customer experience or customer use case that's hard to solve for.

Ian: [00:16:28] It is, and I think it's... I don't know if it's something that's just going to have to age out because I think there's still just in this vertical, there's just still a lot of... And some of it isn't even that. Some of it is. "I need to get everything buttoned up, and then I need to bring this to my client, who ultimately is the one who writes the check, so I don't even have their credit card or the wire info to give you. Like I need this estimate, and then they're the one who's going to send in the check." And as you get more into the trade, I mean, it begets a lot of different financial questions and just a lot of new problems to solve for in that you start dealing with larger clients who are paying via wire, paying via check, or aren't paying via credit card, you know. So how are you processing those orders? And it determines who you're using on your payment processing and all that. You're maybe getting them as good rates as you were previously because your orders aren't coming through credit card processing. They're coming in via a different method. So it's all new issues and new... But I don't know how much of that will age out or how much of it's just the industry.

Phillip: [00:17:37] You recently launched a new brand.

Ian: [00:17:39] Yeah.

Phillip: [00:17:40] So I Favor.

Ian: [00:17:42] Favor infavorof.com.

Phillip: [00:17:44] And that's the... It's like homewares?

Ian: [00:17:47] Yeah. So, not this past Christmas season, but the season prior, we noticed a huge uptick in the interest in our accessories and homewares. So a lot of that was we signed on with a great PR firm that did an amazing job getting us in gift guides. Now you obviously don't put a lot of sofas in gift guides, and it's gonna be like, you know, candles, plates, bowls and smaller items.

Phillip: [00:18:15] Sure.

Ian: [00:18:15] And when we saw those in the gift guides, they took off. And so Jordan and Anne, as I mentioned, are our founders, and Jordan curate's mostly on the furniture side, and Anne was curating mostly on the homeware accessories side. And so we saw that uptake. And we also saw how for a period, how Google's algorithms and some different algorithms there were pushing more of what was selling in higher quantities. So our AOV was dipping a little. And we said, "Well, maybe there's something great. That's awesome. It's amazing. We love it. Let's get it off the site."

Phillip: [00:18:48] Right.

Ian: [00:18:48] Because it's messing with algorithms a little bit also in terms of what different Nosto or whoever Google are showing. So let's sort of spin up a sister brand. And we did. So we took a couple months, and we launched Favor again infavorof.com. And it's really, it's a softer side. It's a different aesthetic, obviously much different products. It's a of linens. It's plates. We did an amazing collaboration with Chef Masa on some bowls and plates. Candles, rugs, some toys for kids. Very focused on the makers, you know, very focused on, you know, an altruistic kind of effort and trying to work with people who work in real textiles and real goods. But yeah, I mean, it's gone well. We launched that right around the same time we launched Soho. So I think March/April, and it's been doing well. I mean, it's slowly but surely. But yeah.

Phillip: [00:19:50] It's an interesting part of the story that I hadn't heard before. But having category differentiation or category expansion has been a thing that I like. I sat down with Rachel Cohen from Snowe, who you guys did a collaboration with.

Ian: [00:20:08] We did a great collab with Rachel. Yeah. They're amazing.

Phillip: [00:20:10] They are amazing. And she was telling me that, you know, one of the concerns is when you're very broad in Home or in Entertaining, like Kitchen or homeware or something like that, when you're very broad in the category, you start to like lose the niche that made you special or that people would seek you out for.

Ian: [00:20:34] Sure. Right.

Phillip: [00:20:34] And I had broached the topic about, you know, creating subbrands or creating sister brands. But I had never heard of this idea of like the algorithmic data point around why that might be advantageous.

Ian: [00:20:49] You know, I think we're all... I mean, Phil, you're one of the smartest out there at this. And I think we're all like pretty good it this. A lot of us are very good at this. Rachel's good at this. You know, I have some amazing... I mean, it's a big world out there, but it becomes a lot smaller when you start dealing in like these websites and eCommerce, and we all start to know each other. And I think there's some great people out there. But then there are times where you're just like, "I just sold six of these bowls in 30 minutes, and I have no idea why."

Phillip: [00:21:17] Right.

Ian: [00:21:18] And some of it's just gonna be like, OK, I'm bidding for conversions and it's converting. And they're just... And whether it's Facebook or whether it's Instagram or whether it's Google, they've just decided to carpet bomb my audience with that bowl or that plate or that candle. And I think that's some of what we saw for the holiday season 2018. And it got us a little I mean, I'll be honest, he got us a little nervous. And, you know, it's like, OK, this is a great... And I guess what we decided was it's this... What we knew was that Favor and the accessory side were an amazing gateway to the Industry West brand.

Phillip: [00:21:57] Right.

Ian: [00:21:57] Like, I think we are a bit of an aspirational brand. Not to the sense of a lot of other furniture retailers, but we are. And while not everyone initially may be able to afford the eighteen hundred dollar sofa. If they can get the cool bowl or the cool plate or the cool, you know, leather tool box or whatever it is that we're offering, like it's kind of that entry way. And that's what we saw. And so we thought, okay, that's great. And now we could leverage both audiences like we have. It's we're all under one umbrella, so we can split this off. We can market to Favor. And the more people who are coming in, you know, via Favor and learning about us, we can cross-promote, you know, what's going on with Industry West. Like you bought this bowl or plate on Favor, like here's this amazing dining room table when you're ready to use it on. That sort of stuff. So I think we're sort of doing a better job now with getting the best out of both worlds. We did a great... And then having the brick and mortar, I mean, we did a Favor "pop up" in Soho, which was amazing. I mean, people loved that. And we drove drove traffic to Soho that maybe hadn't heard of Industry West before, but was familiar with Favor. So, I think we're definitely creating a pretty cool ecosystem.

Phillip: [00:23:11] It's super interesting to watch. I'm only familiar with the brand in the last three years. So three years ago, I see Industry West, and there's an aesthetic that you're sort of very timely right now. And one that I think people are equating with other, you know, probably cheaper, more consumer... They might be able to go get something that looks similar at Target, but it's not the same thing.

Ian: [00:23:44] Right. Right.

Phillip: [00:23:45] Well, I'm not sure how you would respond to that, but the broader question would be 10 years ago, I assumed that the aesthetic was different and that there's like sort of a trend line that is followed with what's popular, especially in the design world and interior design. How do you take two brands and keep them modern and keep them moving forward? And is that just what makes Industry West special? And do people look to you to sort of forecast those trends for them, so that they can stay ahead of the design curve?

Ian: [00:24:19] Yes. Yeah. I think it's interesting. I think furniture in general is such an interesting vertical, and I think like it's taken me all of the five years to really kind of understand the intricacies of it, especially when it comes to like you have a chair, you have a stool, it's enough different that it's its own design, its own whatever, but it looks close enough to something else that someone's got to call you out and say, "Well, that's just a rip off." And there's so much of that. And it's like, really, who's to say? But I think maybe we were a little bit closer to teetering that line five years ago when I started than we are now, which is so much... We're going to start white labeling some of our own stuff, actually introducing Industry West designs. Well, so much of what we do now is we're finding designers, manufacturers internationally and bringing them over to the states and bringing what's trendsetting in Europe to the states first. So one example I would give of a win for us was Mexa. No, I'm sorry. Not Mexa. Mexa was the loss for us. One of the wins for us was Podium, which is cane.

Phillip: [00:25:43] Yeah.

Ian: [00:25:44] So cane is like I mean, like Zoolander. Cane is so hot right now. Cane is just beyond hot. We can't keep it in stock. Everyone loves it. It's in every publication. It was an El Decor. It was in Apartment Therapy. It was in House Beautiful. I mean, everyone is like... And then what's different between cane and rattan and whatever else... And we were, I would say, if not first to market we were very close to first to market in the states. Of our line and with our designer, we are the sole North American distributor of this. There are some others that are utilizing cane in different fashions. But in terms of like we were the first to really bring cane to market in the states in North America, and we've seen the results of that. And that's a lot of what we're trying to do is find designers for both brands. Find what's hot, we're going to shows around the world. We're finding what's trending. We're bringing it here. And we're first to market with trends. And I think, I hate the term "secret sauce," but I mean, that's really what it's been.

Phillip: [00:26:43] We say "moat" now.

Ian: [00:26:44] Moat? Is that what the cool...

Phillip: [00:26:44] Yeah "moat" is the new thing. You're building the moat.

Ian: [00:26:49] Well, I guess, you know, that's what I've always said is like Jordan and Anne are... Are they the moat?

Phillip: [00:26:54] They could be.

Ian: [00:26:55] Or is the moat built over them?

Phillip: [00:26:56] Yeah.

Ian: [00:26:56] But their ability to see that and to build those relationships has been amazing. And I'll tell you a quick story is that we would go to these shows five years ago, and they'd turn their noses down on us, or up at us, and say like, "Well, you're eCommerce, and we're not going to sell to you." And now, like, they're begging us to come to their booths, and they're begging us to come by and to buy from them or to partner with them. So that's been an interesting sea change. Now, another example of where we weren't first to market, it took us a little while, was a Mexa line, which is based out of Mexico, and they're not plastic, but it's these kind of bucket... They're popular. I can't explain them right now, but...

Phillip: [00:27:47] It's like a bucket seat or a plastic molded bucket.

Ian: [00:27:50] Exactly. But it's kind of strands, not plastic, but strands. Rubbery. And you see them in CB2 and a lot of magazines. A lot of people are still buying them. But we just weren't first to market and it just had already saturated and we couldn't kind of get our foot in the door in terms of even like the earned media side of it. Because a lot of it is like first a market. Okay. It's gonna be in El Decor. We're gonna be featured. House Beautiful is gonna feature us and that we have it. And it just kind of bombed, to be honest. So I mean I think that's a big part of it. A big part of it is traveling, seeing what's trending, seeing what we think is going to hit. But then also it's a balancing act of what's going to hit in the trade market at volume versus what is going to be... So we know what do we need thousands of for restaurants versus what do we need hundreds of for homeowners?

Phillip: [00:28:42] Right.If there were emerging marketing channels... We had talked prior to the show recording about all these tools that you have at your disposal now of ways that you can talk to a customer. You'd mentioned a number of them. There's a whole litany of the like pop ups to Criteo, like retargeting.

Ian: [00:29:08] Sure.

Phillip: [00:29:08] You have all these means of talking to a customer. If you wouldn't mind what's working in that space, and what's not working in that space? If you had to give me that, you know, cane versus Mexa...

Ian: [00:29:22] Right. Right.

Phillip: [00:29:22] What are the high points of what's working in your business right now from like a marketing channel, customer acquisition perspective? And what's not?

Ian: [00:29:31] Everyone's, you know, "Email's dead. Email's dead." I mean, email still moves the meter. It certainly does. But to your question, we have... And I don't want to give away everything we do, but I mean, again, you can go on our site and see what we do. But I mean, you have onsite search banners. You have personalization models. You have personalization in general. You have, you know, emails. You have paid social. You have organic social. You have video, all that sort of stuff. So what are you using? I mean, I think we've seen big wins with personalization. And I think we're just at the tip of the iceberg with personalization. So personalization being what's being recommended under PDPs or what's being recommended on PLPs, product listing pages versus product detail pages, to changing over the entire homepage for a return buyer. So we tend to see our return buyer as a tends to be a trade buyer. We see 75% increase in AOV for that second purchase. And we also see our trade buyers tend to need large inventory quickly, in quantities rather. So we will show them on that home page. The second time we'll hit him with a promo code, of course to incentivize, but also ok, "Here are the bars and stools that we have high quantity of. We just restocked. We know there in..." We call them quick ship options. So, I mean, that's a win for us. What else is working? Like I said, email.

Phillip: [00:31:02] Chat and one to one...

Ian: [00:31:03] Chat is amazing. And that goes back to my previous life was in marketing for higher ed. And that goes back to when I was in higher ed, we would see people who chatted with a rep online were three times more likely to fill out a request for information form in higher ed than they were if they hadn't chatted. And then like had they chatted and fill out the request for information form, they were, you know, X potentially more like they'd actually fill out a full application.

Phillip: [00:31:34] Right.

Ian: [00:31:34] So, I mean, I think that that chat, and them self-selecting to communicate with you in that way is huge. And we see huge wins in chat, certainly. And chat will be I mean, is both B2B and DTC. It's not, you know, just the DTC customer saying, "I'm interested in a chair," it's a B2B customer saying, "Do you have 40 of these?"

Phillip: [00:31:55] Right.

Ian: [00:31:56] So and they expect that we'll have that information available, which we do. Chat is huge. I mean, we're exploring SMS. I think what's not working. You know, there are some larger one off buyers that will do independently with some publications digitally that I just don't see the value in sometimes. I don't know if it's that I'm not willing to stick it out long enough with them or what. But I mean, I think what I've been afforded with our company, and what Jordan's always afforded me is that I'm always willing to pilot. I'm always willing to try. But you better show value quickly to me. And there definitely have been times, whether it's been different third party display platforms that we've tried and abandoned, whether it's like kind of a one off buy with a pub that we tried and abandoned. But yeah, you know, you swing some and you hit and you miss some. But luckily we've hit more than we've missed.

Phillip: [00:33:00] You talked about like emerging marketing channels, direct mail. You said to trade was one that you'll experiment with in 2020. What are some others that you might take a bit of a gamble on?

Ian: [00:33:15] I mean, I think we have to try to connect to TV.

Phillip: [00:33:22] Over the top.

Ian: [00:33:22] Over the top. Yes, the lingo, man.

Phillip: [00:33:25] It's over the top. {laughter}.

Ian: [00:33:27] It's always changing. Constantly changing. So I think that's one. I think we've not done much podcasts advertising. I think that's one have talked about and Jordan and I have talked about. Maybe a podcast. Maybe a coffee book. Like, I don't know, maybe we, you know, put out some... Maybe we become more of a content platform, you know, like an Away or something.

Phillip: [00:33:54] You launched something recently.

Ian: [00:33:56] We did. We launched our blog. And it's great. And we've so much... We've started to just gather. We never had the need for a blog because we never generated much content. But now, not just on the editorial side, but just in these partnerships we're doing, whether it be with Snowe, or we did a great House Beautiful partnership, their whole home concept down in Nashville. We do a lot with nonprofits. I'm trying to think what else? My friend Sam at Vision and the start of her app, she's got a great startup in terms of color theory and using, you know, taking a picture of a color and matching products to it. And we're kind of ground-floor with them. And yeah, I mean it's been a great generator of content for us and the blog's being great.

Phillip: [00:34:42] It's a place to aggregate where it's all happening.

Ian: [00:34:44] Yeah, no doubt. Definitely.

Phillip: [00:34:45] Rather than having it come through your Instagram.

Ian: [00:34:47] Yeah of course.

Phillip: [00:34:47] Which was the partnership that you had the 3D printed home?

Ian: [00:34:53] Yeah. So Icon. Icon is a builder down in Austin, and they have this amazing thing called LavaCrete.

Phillip: [00:35:02] Yeah.

Ian: [00:35:02] It's like ridiculous.

Phillip: [00:35:04] If you're listening, you have to see this thing in action. It's mind blowing.

Ian: [00:35:09] It's mind blowing, and it's also... What are those videos of like cutting sand where it's like just soothing.

Phillip: [00:35:13] Yeah. Yeah. Yeah. Like the kinetic sand thing. It's like watching that.

Ian: [00:35:15] Yeah. Watching the LavaCrete pour is like... I'm obsessed with it. Plus LavaCrete sounds like Battlestar Galactica.

Phillip: [00:35:22] It's cool. {laughter} But they 3D print these homes, effectively.

Ian: [00:35:25] They 3D print these homes, and this venture was to 3D print homes for the homeless communities. To rehouse the homeless. And you know, obviously through other programs, job finding programs and everything to aid them, but that these low cost homes and building community and not just homes that people wouldn't want to live in, but I mean, beautiful, aesthetically pleasing homes. And they partner with Claire Zinnecker, an amazing texas-based interior designer, to help with that. And Claire has relationship with us. And she came seeking us out and said, would we like to furnish the welcome center for the community? And we said, of course, and those are projects that we love to work on. And we probably don't... I mean, I don't know if it's not doing a good enough job putting... I don't know that we always need to be patting ourselves on the back, but there're some great projects like that. But it also does create good content for us to kind of get there.

Phillip: [00:36:26] Oh yeah. For sure. Well, it allows people to imagine you, your products, and your brand in a way that they probably hadn't been able to think about it before.

Ian: [00:36:36] Sure. Yeah.

Phillip: [00:36:36] Has anyone ever used Industry West goods in a way that surprised you? Has anyone ever done... This completely out of left field. I didn't prepare you for that. But sometimes we'll ask a founder or an exec what their customers do that surprised them. And usually you hear some sort of off the wall or odd ball response.

Ian: [00:36:59] No, I don't think so. Nothing that's really surprised me. I think what surprises me is... That's interesting. That's a good question, but I think, like I would say, I mentioned the Lambeau one, but I'm like there's a restaurant in Lambeau? I've never been. But I guess there's a restaurant in Lambeau. That's really cool. I think that, it's like those little things that sometimes surprise me. And then there's like the always just the novelty of just seeing your pieces in the wild.

Phillip: [00:37:33] Right. Right.

Ian: [00:37:34] And it's gotten to the point where my kids now, they'll either identify or we'll be somewhere, and I'll turn around, and the kids right on the floor scoping out the furniture, like underneath. Because they know how to identify stuff now and they're like, oh yeah, that's dads. That's Mr. Jordan's. Because, you know, polite southern kids I have.

Phillip: [00:37:58] That's a special thing when you come across your...

Ian: [00:38:01] It is. And I don't know, who am I? Like, who am I to be doing this?

Phillip: [00:38:04] Yeah. Right.

Ian: [00:38:05] To be CMO of this company.

Phillip: [00:38:06] I feel that every day.

Ian: [00:38:07] Yeah. Exactly. It's been a blessing. And who am I? I know Jordan and Anne feel that way sometimes too. I'll fly through LaGuardia and see our stuff at a restaurant there. Just everywhere. Anywhere. Actually, I was just with my parents, and my mom's like, "Oh, they opened a BurgerFi near us. Have you ever been to BurgerFi?" And I'm like, "We furnish BurgerFi." She's like, "Oh, really?" Yes.

Phillip: [00:38:34] How funny is that? Yeah. That's interesting. That's a good example of the kind of like I wouldn't have known that. But yeah, we've been there. We've definitely sat on some stools of yours.

Ian: [00:38:45] And then like it's funny when they'll be like a SaaS trying to sell me or something, and they'll call, and they'll be like, "Yeah, we just move to new space, and I've got your boxes everywhere." Because we do tons... Like SeatGeek. We've done a lot with SeatGeek, and my friend Dani Arps is an amazing interior designer and entrepreneur, and we're all going to be working for her one day. And she came to us. At SeatGeek, they have pretty distinct colors, you know, too. And they loved working with us because we would powder coat all their stuff to their specific color. So we did like their entire cafeteria. But yeah, I mean, it's been just stuff like that is so cool. I mean, I'm trying to think of something really weird someone's done. You get some weird like warranty questions, but... {laughter} Different podcast.

Phillip: [00:39:34] I don't know if I need to know about those. If you had to highlight, so if you had to do like a SWOT and think through like strength, weakness, opportunity, threat, what's your outlook on 2020? And like, where do you think you're going to win and where do you think you're going to have to, like, claw for success?

Ian: [00:39:53] Yeah, no, that's a great question. I think our strength is we're growing, and we're going quickly, but we're still, you know, very entrepreneurial focused. We're grinders. And I think our team is grinders. And our team has such great day to day interaction with not just the C level suite, and it's not a suite. I mean, I work out of a co-working space. But we have just a great day to day interaction with Jordan that they know, like, hey, you know, our kids know, get the flu like everyone else's and our kid, like, we're just all grinding, like we're all grinding to make this life work. So, I mean, I think that's our strength. And then our product, our product is just... Jordan's and Anne's ability to source their relationships. The fact that these, you know, amazing designers want to work with us is a great strength of ours. I mean, I think a weakness and an opportunity is that for us a lot of people don't know our story, but, you know, we are fully bootstrapped. So everything we do goes back into the company, which is an amazing opportunity for us in that it allows us to not have to answer to anyone but Jordan and Anne. We always like to say that we answered our kids.  We want to take time off, we just answer our families and our kids. So it's a great, amazing opportunity because allows us to be nimble, allows us to pilot different things, allows us to just really kind of fly by the edge of our seat a little bit.

Phillip: [00:41:27] You're speaking to legacy, too, though, right?

Ian: [00:41:29] Right.

Phillip: [00:41:29] Like you're doing what's right for yourself in the future. You don't want to rob from yourself.

Ian: [00:41:33] Exactly.

Phillip: [00:41:33] This is no one else's...

Ian: [00:41:34] Right. Yeah, right.

Phillip: [00:41:36] The only person you can be sure changing is yourself.

Ian: [00:41:38] Sure. Sure. And then but you know, is it a challenge weakness? Well, we don't have...

Phillip: [00:41:45] That's an opportunity.

Ian: [00:41:46] It's an opportunity.

Phillip: [00:41:47] Yeah.

Ian: [00:41:48] I mean, it really is.

Phillip: [00:41:48] It's truly the hardest route right now.

Ian: [00:41:51] Oh it is.

Phillip: [00:41:51] I think there's a lot of liquidity, and it seems like there is a route to go in and get money.

Ian: [00:41:57] Right.

Phillip: [00:41:58] If you just wanted to go out and raise, that's a possibility right now.

Ian: [00:42:03] It is. But I mean, I think just in the last six to nine months, we're in a different time than we were. You look at all these unicorns who are suddenly not. And I like to always tell people, I mean, you look at all these recent IPOs and these crazy valuations, 99% of them aren't profitable. And we are. I mean, we're profitable. And most these companies can't say that. And I think that's amazing. And I think that's, you know, something we obviously are always going to continue to strive for. Yeah. And you know the other side of that coin is that we don't have all this venture backing to, you know, spend X-million dollars on the website over six months. We have to prioritize. We have to really understand what a priority stack is. You know, talk dev terms like we have to really understand, like, OK, these are our top-tier priorities. This is what we can accomplish in this quarter and all that. But then I think just I think keeping up with, you know, keeping up with just the trends, keeping up with customers' expectations. I think the Amazons of the world are creating customer expectations that the immediacy and the right now and all that. But I mean, I think there's always gonna be that level of customer support and that level of design sensibility that a lot of these big boxes will never be able to provide that we can.

Phillip: [00:43:36] You mentioned some time ago that you're surprised by the number of customers that will opt to use like an Amazon Pay on your site for your experience.

Ian: [00:43:48] Yeah.

Phillip: [00:43:48] So do you see that as sort of the halo effect of that's like almost a trust badge at this point? Or is there something deeper happening there that the Amazon customer has come to expect something of you now based on their use of the checkout or the payment method?

Ian: [00:44:10] That's a really good question. Yes, I think the answer is yes. Well, I think there's an ease of use, first of all. I think Amazon Pay on mobile is easy.

Phillip: [00:44:23] Convenient.

Ian: [00:44:24] Convenient. It's easier than just typing in your credit card. So, I mean, I think there's that. There's probably almost like a badge, like trust badge in terms of like Amazon has my credit card and now this other vendor doesn't. I don't know if people are thinking through it that much. I don't know. I don't think they're expecting like, okay, now we know it's somehow associated with Amazon or whatever. But yeah, I mean, I think we've had that live for about three or four months now, and I think adoption has well exceeded what I expected. We tried some other financing options as well. And the adoption of Amazon Pay has well exceeded financing.

Phillip: [00:45:01] What kind of finance options? These are consumer finance or installment payment type solutions?

Ian: [00:45:06] Yeah some of them will go to twenty thousand though. Some of these out there.

Phillip: [00:45:09] Oh wow. That's whole room furnishing?

Ian: [00:45:15] Yeah. So they'll do... I mean it's like rates. It's real time credit check, and they will we get basically everything less a fee, and then they end up having the contract with the financier. So I mean it's not much different than like a PayPal financing or other. There's just a lot of options out there. And it just didn't take. I don't know if we didn't use the right vendor or what? We're kind of reassessing. But I mean, the adoption just wasn't what I thought it would be. Again, maybe just a different time. Maybe we're all a little bit more credit savvy.

Phillip: [00:45:47] There's also a conversation around sort of price point and AOV. You may not consider yourself a luxury good, but amongst a certain type of a customer, they might see you as luxury or aspirational. Maybe that customer just doesn't need the finance option.

Ian: [00:46:06] Yeah that's true, as well.

Phillip: [00:46:09] I'm curious what your outlook of, because we're talking about financing and credit and things... Do you think that the economy is a threat in the next 12 to 18 months? And is there something that might shift? Are you preparing yourself for what an economic slowdown or economic downturn might look like?

Ian: [00:46:33] Yeah, I mean...

Phillip: [00:46:33] You're the first of many that I'm going to ask this question to for the next year or so.

Ian: [00:46:40] Not to get too, I guess, into the weeds on that. But I mean, I think, yeah, last year we had to account for tariffs. We worked with manufacturers on some of the pricing. We swallowed some of the pricing. We didn't really pass the pricing on. I mean, I think that was a big deal for us. And that's not necessarily the economy but more just kind of the state of the country and politics and affairs. But like so I mean, I think there's that. And I think you see a swing anytime, obviously an election year, you always see a swing. So, I mean, I think there's something to be concerned for for that. And I think as we track, you know, what loan rates look like and what interest rates look like and how people are engaging with that on the commercial side and new business and job reports. Yeah, I think it's all something that we certainly are going to look at. I think how much we're prepping for it... We're so fluid in terms of not not necessarily cash wise, but I mean, fluid in terms of just how we operate is that our month-to-month buy and what we're seeing or the trends we're seeing. I mean, I think it's something we definitely have to account for. But yeah, I mean, there's definitely I would say it's definitely potential nervewracking... I would say specifically on the B2B side. Are all these new housing developments going to go up? Is this new hoteling going to go up that's buying from us? Or is that can to be put on hold? We do have a lot of BPAs with... Take cutover for one. Like X number of new restaurants. Are they going to hold for whatever reason because of the economy? Yeah. Yeah, that's definitely potentially concerning.

Phillip: [00:48:28] Well, for whatever it's worth, I'm on the record, and I'm sure I'll be take into account on it eventually. But I'm on the record saying I think we have at least 10 months of guaranteed economic growth until the election because I think it's the only way that this administration stays in office.

Ian: [00:48:45] I didn't know we could go there, yeah.

Phillip: [00:48:47] Yeah. {laughter} So I think maybe we see it chug along. Of course, it's been surprising still. You've said yourself, the last 10 years have been pretty successful for Industry West. What do you think the next five years looks like economics notwithstanding.

Ian: [00:49:14] Strategic growth. So that's both brick and mortar and online. And we are for the first time understanding the levers. And some of that even as like levers and spend. So like I know I can spend this and do 3x I can do that and spend 4X or I could... And if I could continue that spend, why wouldn't I? If I could continue to do 4X to a point, what's the point of negative returns? I mean I think we're finally understanding that. I think it's mature growth, it's controlled growth. It's brick and mortar. I mean a little bit more brick and mortar. I mean we're not going to be in strip malls, but I mean, I think we are looking in L.A. for 2020. We'll be looking at other major or our other top markets after that where it makes sense for us to be. And then growing the team around that and getting a little bit better about just one on one meeting with our trade partners and kind of just kind of being out there. We're not an outbound company. We're no different than any other DTC company. We are in bound. Everything that comes in is via essentially some sort of lead, whether it's them creating a new account on the site or it's a chat or it's an inbound email or I mean, those are all leads. This will be our first... We'll be in Vegas in May for HD Expo, Hospitality Design Expo. And that's going to be our first trade show. Like we've never explored that as a channel before.

Phillip: [00:50:53] Wow.

Ian: [00:50:53] Yeah. So that'll be our...

Phillip: [00:50:55] So sky's the limit.

Ian: [00:50:57] Exactly. And it's almost like when we went to Soho we didn't know what to expect. Like what would be the exponential growth of having a space in Soho. So we'll be in Vegas for HD Expo. I don't know what that could lead to in terms of potential contracts. So then if that works, I mean, trade shows in general. Are going around the country once a month, being at a show every month? So I'm going to think there's... But again, all within the frame of mind of steady growth, but growth with profitability.

Phillip: [00:51:38] Yeah. I mean, yeah, it's funny that was one of the topics of our Vision 2020 report that will have been released by the time this comes out. And I think the title of the section was "Profits." You know, like what a novel concept. Running a profitable and sustainable business is not just about having sustainability and having 90% post-consumer recycled cardboard.

Ian: [00:52:09] Right. Exactly. Yeah.

Phillip: [00:52:09] It's about having a business that will be here tomorrow.

Ian: [00:52:13] Sure. Sure. Yeah. I mean, I love so many of these brands. You're the avid runner. I'm the avid Pelotoner. I love Peloton. I bought stock in Peloton.

Phillip: [00:52:30] You have a Peloton sticker on your laptop.

Ian: [00:52:31] I have a Peloton sticker on my laptop. I don't know that my Peloton stock is going to make... But I bought in Peloton because I like the company. I believe in it as a brand. But at some point they're gonna have to learn to turn a profit.

Phillip: [00:52:43] Yeah.

Ian: [00:52:43] And I think they know that. But I mean, you look at all these companies out there, and at some point... I think that Wall Street has definitely sent that message clearly in the last half of 2019.

Phillip: [00:52:56] Yeah. Well if nothing else it's been a wonderful time of repurposing public pensions for consumer research and development.

Ian: [00:53:06] Yeah.

Phillip: [00:53:06] But I'm very bullish on the idea of things like Peloton as a programing and audience building type service in that space. I think that's really interesting, and it makes me wonder about what the next phase of consumer brands like yours could learn from that. We talked off the show, but I thought it might be interesting just if for nothing else than the SEO value of me having said "Hype House" and "Tik Tok. But this idea of, you know, brands like yours could get penetration into new markets and earned media with air quotes like through social media collaboration with things like Esports and Hype House and, you know, Tik Tok like Vine creators that like all hole up in a mansion on Palm Beach, and you furnish it. These are like new avenues to explore, to try to get your brand in front of a new generation of customer.

Ian: [00:54:01] Yeah.

Phillip: [00:54:01] And I think that those are the kinds of things that can't exist without a world that's backed by venture. {laughter}

Ian: [00:54:11] Well no.

Phillip: [00:54:11] But those are new channels that are emerging.

Ian: [00:54:14] Well, it's funny you bring that up because I've done a lot of thinking about international. And I'm sure there's some term for this. But like how are we marketing to internationals domestically? I think there's a lot of potential international customers who are coming here and still utilizing international platforms not native to the states, but are coming here with a lot of money and willingness to buy. And how am I talking to them? Whether it's by do or it's way by or using or some other some other platform. And if they are coming here and adopting Tik Tok or Vine or whatever it is, then that's what we need to be. Ive given that, you know, a fair amount of thought in terms of that demographic also in those channels. So, I mean, I think you're right. We did a partnership with the CollegeFashionista, which is college focused. And this was a couple of years ago. But I mean, it's college student focused, but. These same college students are walking around with fifteen hundred dollar handbags.

Phillip: [00:55:22] Yeah.

Ian: [00:55:23] So they'll have to buying...

Phillip: [00:55:23] And twenty five hundred dollars sneakers, too.

Ian: [00:55:25] Right. They're not going to have an issue buying it $250 lounge chair for their dorm. Yeah. We just have to all be creative and really kind of think about all these different demos and channels.

Phillip: [00:55:38] This has been super interesting. I really appreciate all your time.

Ian: [00:55:41] Yeah.

Phillip: [00:55:42] Where can people find Industry West?

Ian: [00:55:44] Well, industrywest.com. Of course 14 Crosby Street in Soho. And we will let you know ASAP when we're out in L.A.

Phillip: [00:55:54] And maybe I can come help you open the store.

Ian: [00:55:55] Yeah. Yeah.

Phillip: [00:55:57] I've always wanted to hold big scissors. Let me hold the ribbon while you guys cut.

Ian: [00:56:02] {laughter} Maybe we'll do the big scissors for SOHO.

Phillip: [00:56:02] You've got to do the big scissors. That's awesome. Thank you so much.

Ian: [00:56:06] Yeah, man. I always going to talk to you.

Phillip: [00:56:08] Thanks so much to Ian Leslie, CMO at Industry West for joining us. And thank you for listening. We want you to lend your voice to this conversation. You can do that best over at FutureCommerce.FM and/or drop us 5-Star on anywhere  podcasts or found. We like Spotify these days, but you can find us at Google Play. And over on Apple podcast. But we really appreciate it. You know, the best way to predict the future is to shape your future. And Future Commerce wants to help you provide the insights, so you can shape that future. Thanks for listening. And we'll see you next time.

Brian: [00:56:40] What are we gonna talk about? Chipotle slaves? {laughter}

Phillip: [00:56:46] {laughter} We're already in it. That was it. That's the beginning. You feel like we go through cycles in business of finding out that, you know, these really well-known brands really can only exist on the back of unfair and unethical labor practices.

Brian: [00:57:08] It's so funny because Chipotle has had such a long reputation. You know, their whole goal was to do things...

Phillip: [00:57:16] Was to spread ecoli around the world. They are owned by McDonald's, or they have been in their lifetime.

Brian: [00:57:22] They were. They were.

Phillip: [00:57:22] In their past owned by McDonald's.

Brian: [00:57:23] Yes. So maybe that's where it all started. No.

Phillip: [00:57:26] I don't know. We are so unqualified to be talking about this.

Brian: [00:57:31] Yes.

Phillip: [00:57:31] Can draw attention to a newsletter that's really been...

Brian: [00:57:35] Well, hold on. Let me just give one quick comment on Chiptole.

Phillip: [00:57:40] Ok.

Brian: [00:57:40] And their, honestly, like predatory labor practices that they employed in Massachusetts. They just got slapped with a 1.4 million dollar fine for having kids work too long and so on. The I think the interesting thing here, and I think that this is really we're going to talk about this a lot in the coming episode, with Good On You, because it's very hard to know when a company is doing things right.

Phillip: [00:58:24] Right. They can broadcast all the right messages and still be...

Brian: [00:58:26] Yes.

Phillip: [00:58:27] And still be, you know, up to shenanigans, I guess. We can greenwash it all day long.

Brian: [00:58:33] Greenwash all day long, and I know that would have been possible to figure out that they had unfair practices for children, labor practices for children, but...

Phillip: [00:58:44] Just as an aside.Sorry. It's not like they're employing 8 year olds.

Brian: [00:58:48] No.

Phillip: [00:58:48] OK. Like these are high school age, 16, 17 year old, you know, and there are state laws that vary state by state in the United States, if you're not from here, that set up guidelines for how long someone that is in school or someone of that age can work in a given day and within a given pay period.

Brian: [00:59:14] Right.

Phillip: [00:59:15] Right.

Brian: [00:59:15] So my point in saying all this is it's very exciting what's ahead. We believe that there's going to be more third party validation. Make it a lot more transparent for you, the consumer, us, the consumers, to be able to understand what's going on. We think this is needed.

Phillip: [00:59:33] Yeah.

Brian: [00:59:33] So I'm doing a little teaser for an interview that's just a short while out.

Phillip: [00:59:39] Yeah a couple of weeks from now.

Brian: [00:59:41] Yes.

Phillip: [00:59:41] Sandra Capone, who's the CEO and co-founder at Good On You, which is a consumer brand rating organization. And they are starting in the world of fashion. And we are very excited for her to come on the show.

Brian: [00:59:56] So on to your exciting newsletter.

Phillip: [00:59:58] I just want to point out when other people are doing things right, and I'm consistently impressed, not that these people exist to impress me, but Sari Azout, who is a Florida native and a VC, I believe. I believe she works in venture capital. And she has a weekly newsletter called Check Your Pulse, which is on Substack. And I'm very impressed with it. She just has a way of expressing certain things that I think are really hard to...that are otherwise hard to grok. And the newsletter that she published a month or two ago that really caught my eye and piqued my interest and made me a fan was a newsletter where she talked about the emerging consumer brands, especially those backed by venture and where they fit into Maslow's hierarchy of needs. And Maslow's hierarchy, the basis needs are like food, water, shelter. And she created a hierarchy and like a ranking of brands that, you know, spanned from Peloton to Soylent, of where they fit into that hierarchy and how you could make some strategic bets, especially in the world of venture, around the kind of consumer that has needs lower down on the hierarchy being covered. So they focus on the top of the pyramid, and the top of the pyramid tends to be more affluent services, especially when you're looking at like self-actualization, you're thinking about like com and headspace and meditation apps and superhuman things that manage like your productivity. And I think that that's a really interesting way to think about brand investment and a really interesting way to hierarchically organize brands. So super interesting. Check Your Pulse. It's a newsletter that Sari publishes, and I believe she's a Florida person. So I love to give some love to Florida people, and you can find it on...

Brian: [01:02:14] They need it.

Phillip: [01:02:17] {laughter} Lord knows between the gators and the iguanas falling out of the trees. You know, we need something to celebrate otherwise. But yeah. And you can find it on Substack. It's a great newsletter.

Brian: [01:02:29] That's interesting. Very, very interesting. And what I thought was really interesting was your recent tweet actually about Carly, the psychographic that we introduced recently and that you wrote a really lengthy article on in our FC Insiders newsletter, which everyone should be subscribed to.

Phillip: [01:02:49] Everyone. Right now, go do it.

Brian: [01:02:53] And you basically had this idea of like how Carly will actually forego things that we consider lower on Maslow's hierarchy of needs pyramid to get something that's like a higher, you know, part of the pyramid.

Phillip: [01:03:11] Yes. And in particular, it was a qualitative feedback that we had from somebody who read our article who said, oh, this is totally me. This, you know, she's a Gen Zer, and she's a founder. And she's building a brand that I think, you know, is looking at other Carlys as... Carly, by the way, for those unaffiliated, is "can't afford real life yet." It's an acronym for a consumer who is younger and maybe Gen Z, but not necessarily belonging to a particular generational group, but more around a psychographic of somebody who's probably more dependent on their parents or someone else for, you know, food, water, shelter, et cetera, but will spend money on premium brands when it's money that they have to spend on their own. And they'll, like Brian said, will forego more basic needs to go without... Anyway. This founder had basically told me she's like, oh, that's totally me. I would skip lunch for a week to afford eyelash extensions. That's totally a thing I would do. And I have a sense that she's not alone, that there's a whole generation of consumers who, by the way, are plentyat least here in the United States. Ninety three million Gen Zers right now that are coming into purchasing power age. And they're the largest retail purchasing population to have ever existed. More so the millennials. And if you think millennial hype and it's expensive to acquire millennial consumer now, wait until Gen Z really comes of age. So I think it'll be really interesting to watch this evolve. We're going to continue to write about it. You'll hear more about that kind of stuff over on Future Commerce Insiders.

Brian: [01:04:54] It's interesting. That's the second anecdote we've heard about this. I think actually on the episode we did it with Ingrid at NRF, I mentioned that I'd talked to somebody who's like, yeah, it used to be that, you know, his nieces would buy H&M, and that they would be in the fast fashion. And now that they're kind of moving out on their own and they're kind of reaching an age where they're changing how they think about the world, he said that they would rather skip a meal and save money for that used Louis Vuitton than actually go and, you know, buy some fast fashion that they could have their lunch and eat it, too.

Phillip: [01:05:47] And with intermittent fasting, it's all the rage now. Hey, we just hit all the SEO points here. I think we should stop while we're ahead. I love it. We want to hear more about what you're thinking about and whether this resonates with you and give your feedback into this conversation. You can do that at FutureCommerce.fm, which hopefully in the next couple weeks is a brand new site, and we'll talk more about that when it finally launches. Really excited for it.

Brian: [01:06:15] Man...

Phillip: [01:06:15] We're almost there.

Brian: [01:06:16] We keep trumpeting it. It's so close.

Phillip: [01:06:17] It's really good though. You know what's really awesome is having so much of our... I know this is like we're going to look back and say how naive we were that in January we went...

Brian: [01:06:29] That we talked about it live on the show.

Phillip: [01:06:31] Yeah. I think that it's almost like... It's an accountability. Boundaries. Boundaries. Brian. Boundaries.

Brian: [01:06:36] We're setting accountability. Public accountability for ourselves.

Phillip: [01:06:39] Exactly. All right. Thanks for listening. And the best way to predict the future is to shape your own future and...

Brian: [01:06:50] To speak it into the internet.

Phillip: [01:06:51] Exactly. Put it out into the universe. And yeah, so let's all build a future that we can be proud of. Thanks for listening.

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