Paul: Hello. Hello. Welcome to building brand advocacy. I am your host, Paul Archer, and I'm very excited to be joined by a special guest today, Marni Shapiro. Marni is a retail legend, I think is a good way of saying it. Yeah, she's one of the founding partners of the retail tracker. But she has been working over five years, actually in the industry, in apparel, and over a decade working at Merrill Lynch, just looking at retail stocks. And now consults and supports and analyzes some of the biggest retail brands in the world and has the era of many a CEO as well as a lot of really cool up and coming startups and where they're innovating. And so Marni's got just such a fantastic view of the market if what she doesn't know about retail isn't worth knowing. So we're going to get right stuck here. Marni, welcome.
Marni: Hey, great to be here. Thanks for having me.
Paul: I think you've got your finger on the pulse more than pretty much anyone I've ever met when it comes to what's going on. And we're recording this now at the very end of March, 2023. What are the top three things the need to know trends for retailers from someone like you? Spends your day speaking to the CEOs of the biggest brands in the US.
Marni: Yeah, it's a great place to start, because the last three years have been trash, I guess is the best way to describe it. It has been brutal, and obviously COVID had the first impact when the stores actually closed and we thought we would never be back to any sense of normalcy. And then it was a domino effect and it just continued. The hits kept coming. So it does feel like 2023 is the first year that things will be on some level of normalcy. That said, the trends that we saw heading into COVID never stopped. And so the three big things that continue to happen in retail is people do still go to stores, I would say is still a big trend. I believe during COVID people thought this would never happen. We watched retailers close stores left and right, rationalize their store fleets, which is all a fantastic thing. So today in 23, we sit here with a much healthier store fleet and traffic is up. People are back in the stores everywhere, even China, which was one of the latest places to open due to COVID. Traffic in stores is up. It doesn't mean that traffic in malls is up and back to where it was in 2000 or 2005. But people are still coming to stores and the brands are finding, and retailers are finding that consumers that come to the stores are still the stickiest customers, even if they find you online, which is typically where they're finding you. So that's become a very big focus, making sure the store bases really look good and clean and that the stores are engaging, and that when a customer finds you digitally, they eventually make it to a store. One of the other big trends, which is kind of a negative in the industry, but there's not a lot of good leadership out there right now. Just this morning, as a matter of fact, the CEO of Macy's, who's been there for 40 years, announced his retirement for February of 24. The person who's going to come take his place, Tony, has been with the company for also 30 something years. That's a rare find today. More often, when a leader leaves, it takes a long time to find a replacement. Gap right now is running without a CEO. Urban Outfitters. The Urban Outfitters division is looking for a CEO. There's a lot of places that are looking for leadership because we don't have the same pipeline for leadership and the training programs we used to. It's very interesting and the industry is looking outside of the normal industry for replacement. So if you think about a company like Bath and Body Works is a good example. They looked outside the industry, the retail industry, but to somebody who knows personal goods and personal care very well. And they brought in Gina Boswell. And so she's the new CEO, but she doesn't have a retail background. So there's a lot of interesting dynamics happening right now at the leadership in the C-suites. And we're finding that the Chief Marketing Officer is very important today, more so than they used to be.
Paul: I'm a brand guy. I'm not a retail guy, right? So I'm going to ask some dumb questions when it comes to this. What's the skill set that someone who's had their entire career in retail, what is it that they bring to the table that they can't get from someone who has been working as a CEO of a big multinational company, but not necessarily a retailer?
Marni: That's a great question and I'm going to start with the most trite response. But there's a saying, retail is in the detail and it's so boring and lame. But the fact is, it is. There's just so many more moving parts, distribution wise returns the way retail works. Some of these businesses are highly SKU intensive. So BBW Bath and Bodyworks, where Gina took over, is a very highly skew intensive business. It's one thing to deliver the products to the DC. For Bath and Body Works, you're a proctor and gamble and you're delivering it a big delivery to the DCs. It's another to then deliver it to all the stores and to constantly replenish it. If you walked into and I'll stick with the personal care and beauty space for a second, but if you walked into any Target store, their beauty business is very strong. I mean, the same thing at Ulta or Sephora. Any of your listeners would walk in and you're constantly going to see empty shelves when things are selling really fast. That's all the operations of a retailer. And being able to deliver all of that. Not to mention think of the number of people you're employing in the stores, the number of part time people, full time people, Regional Managers, District Managers. You don't have that. You don't have that network of people. When you're working for Procter and Gamble.
Paul: For example, it's about people at scale management more than anything else in the operational side of things, because P&G Unilever, almost sitting in ivory towers, never to leave. And you can just have a marketing team and a manufacturing team and they never have to deal with real that many humans, really. And that is the current that is driving. Is that right?
Marni: Exactly. And think about just keeping your stores up to date. Think about buildouts of those stores and refreshing and remodeling them and thinking about giving your Managers and your best store employees a path to success within your organization. But the flipside of all this that makes retail very interesting and I find a lot of companies don't take advantage of this is you have thousands and thousands of people at your disposal. Sort of an army of sales people boots on the ground who are so close to the consumer, who can really help inform product development and assortments and what's going on in the stores. So it's a very interesting dynamic. Retailers have a lot of information at their fingertips that the brands and suppliers don't necessarily and so if you take.
Paul: Like, a retail brand, so the brand is the full stack, like, if you've got 10,000 boots in the ground, which brands are doing that really well? Because we imagine 10,000 people, what's changed? Now, each one of those people, they must have their own social media accounts, they are obviously working in the store, who is leveraging them really well. That actually brings that brand to life in a way that's more than just, what size are you? And I'll go around the back and get it for you.
Marni: Yeah, no, that's a great so there's a few companies who excel at doing this and they sort of combine social with retail and that, to me, is what's very, very exciting. And if you think about as your sales people, is the most important. So I'll point to three companies off the top of my head who do this really well. Chico's, Urban Outfitters and Williams Sonoma. And very different examples at Urban Outfitters across the board, all of their companies, Anthropology, Free People, Urban Outfitters, even newly, they empower the people that work in their stores, so they merchandise their own stores, they put their own displays to use. They really have the power to work on this. And their sales associates are usually young and can pull stuff up online and they're very engaged that way. And so it really helps with Free People. They used to pre COVID they were running trips and all sorts of events which felt very free people. Chico goes even further. They have something that they call Style Connect, where each one of their associates has an account and they could reach out through social commerce and speak to all of their clients and all their customers who come into the store. They've done an exceptional job, but I would say Williams Sonoma is probably the OG. They were the earliest on this. They started early. Their catalogs, if you think back to the days of getting catalogs, their catalogs were some of the most impressive catalogs. And they just sort of translated that online. And they're using all sorts of tools to help their sales associates really connect. Maybe not with their own websites and stuff, but with their own digital instagrams and things. But they're connecting with the brands, with the consumers very well. And I would say low key. Macy's is actually doing it really well. They have personal stylists there. You wouldn't think Macy's would be so good at this, but they're really good at this. Their stylists are good, and they will stay in touch with you and reach out and follow up and send you information. So it's happening a little under the covers, more than you would think.
Paul: Is there any risk involved with allowing store associates to use their own channels and sort of incentivize them off the back of that? Or is it something which, because they are out there in the world talking about the brand, you'd expect them to be on brand, and if they were to be using their own channels, then they could be on brand. I don't know if you've heard any horror stories or actually success.
Marni: I don't really feel like there's any downside as long as you know your sales fleet really well and your sales force really well. If you think about another company that's done this exceptionally well, and I say is one of the original influencer companies is Lululemon. When they hired people to work into their stores, they hired local instructors who had their own social media following and who were beloved, and they started dressing them and started having them come work in their stores. So that is somebody who has bought into the quote unquote Kool-Aid of the brand, and they are going to be your best representatives. So I don't think there's any downside. I don't think it's for lack of wanting to do this, but a lot of companies are behind the eight ball because things retail, it seems that there's always a fire to put out. When you think back to the time period of let's call it 2016 to 2019, the last couple of years, there were very difficult. Not everybody was doing well in retail. You were at the end of a fashion cycle, which is always a very hard time to be doing business. You had a lot of discounting going on. Margins were under pressure. The focus was really on making sure you got through each quarter. The focus was not on making sure that your social media looked good. Now that we've come through all of that and we have a more rational retail environment or should in 23, we're seeing more retailers kind of pick up here and you're seeing some very interesting things where you had a couple of brands and retailers out there who were very focused on this revolved, who went out and found influencers. And a lot of that was driven by DTC, but then you had companies like Abercrombie and Fitch who very early went after the D'amelio sisters when they broke out on TikTok. Or you have just recently, Forever 21 just did a collaboration with Alix Earle, revolve was with Remi Bader. So you can see that they are moving a little bit more quickly. Children's Place is one of the biggest I mean, if you look at them online, they have the Kardashians and the Jenners over the holiday season with pajamas, but now they have oh, no, I just forgot Eli Manning. I know he's an important football player here, but I really couldn't care less about football except for college. So I always forget the names. But there's a whole host of football players that are now on their platform, which is unbelievable. This is a children's clothing brand and they're selling pajamas. It's fascinating.
Paul: And there's been a recent change in the law in terms of where sports athletes, amateur athletes, are able to now earn, which suddenly opens up just a channel regardless. I would never have thought children's pajamas and football would be a combination. But there are now so many different ways that athletes can become their own business, their own channel, their own audience, more than the team that they pay for. Is that right?
Marni: Yes. And that has more to do with the college. The national athletes, ones that were paid was no problem. The ones in college could never profit off of their likeness. And so it's name, image and likeness nil. Now they can. And so now if you're a college basketball star, let's just say for the University of Michigan, my alma mater, and you are a college basketball star, you could now sell your image, your name, you could sell jerseys with it and you could make money and you see people snapping up deals left and right. I think Fanatics is sort of running ahead and doing some really interesting things here and they're all direct to consumer. But yeah, it's a very interesting dynamic happening there because they are already their own influencers. If you think about it, they already have so many thousands and thousands and thousands of followers and they're not always macro influencers. So these are not the same level a Kardashian type of influence or even well, Alix Earle is not necessarily she's not as big as the Kardashians. But when you think about more of a global reach right, Selena Gomez, that kind of global reach. The most powerful people on these platforms, they have reach and they're very important. But as important, almost more important to these brands are the micro, nano and more localized influencers. So if you're an unbelievable basketball player for the University of Michigan and you're speaking to all your people, probably within the university, within the state, and probably within the Big Ten, you have some real reach, but you have reached that's. What I say is going to be click to buy reach. People are going to buy what you're selling. And that's very different than just, oh, what's Kim Kardashian talking about.
Paul: Yeah. And when you're talking of sort of hyper local, that comes full circle to what we're talking about with the store associates. How many of those if you're in a small town and you're working at a really cool brand on there and you've got a bit of a social following, the majority of the people there are going to be local. So each one of those store associates is the equivalent on a much smaller basis than getting the local college start onto it as well. So there's got to be a lot of different ways that this is evolving and how brands can start to tap into that.
Marni: Absolutely. I mean, I think we've seen that with some of the makeup brands in particular. They've done a phenomenal job with this. Going after local makeup artists, for example. That would be a perfect example. Or again, Lululemon going after local fitness instructors, where it gets a little dicey is in the real fashion world and nobody has been burned, I would say. But I'd say their risk is some of these companies want to enter into these long term contracts. They want to lock down some of these influencers as they get bigger, understandably. But I think sometimes they don't realize that the attention span for some of these influencers is not that long. You want to be constantly refreshing that program, and that's where it becomes more interesting. Except when they get so big. If you're talking about a Jennifer Lopez or Rihanna, any of the Kardashians, it's a different conversation, but it's a smaller level. They move faster.
Paul: Are they getting bored of the brand and they're moving to another brand, or people are getting bored of the person talking about the brand?
Marni: I think people's attention just moves very quickly. So if you think about how big Charlie Demiller was in 2020, and then you think about how quickly things move through and how different influencers there was an influencer tanks. That's what her handle is. She's actually from the UK. She blew up and became really important for a while. Then this woman, Victoria became really important for about a year. They're all still doing things, but it just constantly evolves. There's constantly a new person out there. So right now, it's Alex earl. I mean, for me it's fascinating. I've been watching her for quite a while before she really blew up. She's a college student at University of Miami. Very honest talks about things. Everybody wants a piece of the action with her, and she's gone from very authentic to now. You can tell she's selling things. And I wonder what's her time horizon? She's probably at her peak at this moment, but how much longer is this going to last? So it's much faster than it used to be.
Paul: That's quite depressing, really, as you imagine. She's coming up in a matter of months, and she's at her peak. And now she's getting in the decline of her career just a couple of months after that.
Marni: Yeah, I know, but she'll sign some deal, and then, honestly, we can't feel bad for her because she'll make more as a senior in college at the University of Miami than we'll make in 15 years. She'll probably retire at the age of 25.
Paul: Yeah. Ten years time, she turns up as your accountant, having qualified. Should have known you when I was young, when that TikTok thing was all popping.
Marni: Exactly. The whole thing is very interesting. What I would just say is to bring this back to your first question, and sort of the way that these social platforms are happening is I think if the good brands today, if they are smart and doing a good job, brands and retailers, they are thinking about themselves more than just an apparel brand or a retailer. They're thinking themselves as a platform. And when you start to think that way, there's many different ways to attack your business. So if you think I'll use Lululemon as a good example, not to pick on them, but in a positive way. They reported earnings yesterday with they had a great holiday season. And when you think about what they're building out with lulu studio, which is a fitness platform on the Lulu brand, they talked about the fact that they signed up 9 million people right away. And at the end of the day, what that's telling you is that the Lulu brand is its own platform. And within that platform, they have influencers who work in the stores and are online. They sell apparel out of their stores, and that platform has allowed them to expand into, say, sneakers, for example. They're able to open stores globally, but they're also now able to extend that platform into fitness because the people who know the brand trust them enough to follow them into fitness. And good brands are able to do that and really extend their brand reach beyond the lane that they started in. And social media and social commerce has given them the ability to do that. And that's a very big difference from where we were a decade ago. Very, very big difference.
Paul: Who else is doing that? Well, so outside of fitness is one that it's always quite easy to look at because it's so intertwined with impassion and the outfit. But when you look slightly wider outside of the fitness industry, who else seems to be smashing it.
Marni: So here's one that you wouldn't think, but I'll give you a couple of examples. But you have williams Sonoma owns a company called West Elm. They've done incredibly well. It has a more modern look. It's very affordable. They've continued to go down the path of being eco responsible with all of their products, and they had a lot of designers that would come to them to help design their clients office spaces, which makes perfect sense. The product is already there. They don't have to do a build out. It looks much cooler than what you would find from your regular office supply brand, which doesn't look very cool. And these people wanted nice, cool offices. So Williams Sonoma launched a B2B business on the heels of what they were seeing already happening with their clients and with social media. Because as these designers who were working with them, buying at a certain discount, designers get a cost and then using it to decorate and finish offices, they were posting it on all their social media. So they launched a B. Two B. It's the fastest growing division they have, and they are disrupting the B, two B business. So something like that is very interesting. You look at Restoration Hardware also in the home space, but they furnish people's homes, they furnish their kitchens, they furnish all of this. They opened a restaurant. They opened many restaurants and stores. RH has great restaurants, and they open stores that you could feel like you live there and go up and have something to eat. So these are very interesting ways of doing things that I don't think would have been able to happen years ago if you didn't have social media and social commerce and the ability to touch people in different ways.
Paul: So you could try and say that actually the physical store experience is like a brand building endeavor. It's not necessarily the channel where it used to be, and the channel now is completely omnichannel through social, through online, through physical. Everything just it blends all into one completely.
Marni: Bricks and clicks, bricks and clicks, bricks and clicks. I don't want to see companies who are going out there and opening stores that are losing money, because that was a thing many, many years ago. That's not a thing anymore. You want to be making money in these stores. They almost always do. I'm not always the biggest proponent of flagship stores, which a lot of people do in cities like New York or London and Paris. But beyond that, I don't like to see that. But, yeah, the stores need to be experiential and it needs to work with social media. It'll be very interesting to see we have a new CEO. Again, back to the conversation of we don't have a lot of people in this industry. Mary Dylan, who was running Ulta, who did a fantastic job in bringing kind of experience and loyalty and social to Ulta and brought a salon into those stores, has taken over a Foot Locker. This will be very interesting. They have a great new format that's very, very engaging. So she's going to continue to grow that. But I'm very interested to see what she's going to do when she relaunches the app and when she relaunches the website and all of that to integrate everything a lot better because that integration becomes more and more important. It's very nice when even let's talk about a retailer like Express, very basic mall retailer, your average mall retailer. It's nice when you can walk in there and take your phone and scan the barcode of a product, especially during the holidays where the line is long, pop it in. H and M has disabilities are a little less so. But that whole full circle experience where it doesn't matter, even if you're finding the product in store, you could be standing in the store buying it online. To me, that's the full experience of omnichannel. And there's a lot of people, most returns that happen go back to the store. That's great for retailers because then you're bringing the person into the store. I will just say on a personal note, having done this forever and I walk malls every single solitary week, it is immensely faster to walk into a store, scan a store, find something you like, touch it and feel it, and know right away, purchase it and go than it is to click click through pages and pages and pages of product. Looking at each product, clicking out. It is so much faster and more efficient to go to a store. I think people forget that. And so I think that's why you're seeing people come back. But people shop very differently today. I always say this, and I don't mean to gender shopping, but I'm going to gender shopping for just half a second. With hundreds, centuries of experience behind this, men find, historically find something that they like and buy it in multiple colors. And then we'll return to that brand for the next season and next year. Very simple shopping. They show up at a mall, they go to their retailer. It's what I call directed shopping. What the internet and social media has done has turned most shoppers into men. When they shop, women now show up at the mall. They park their car. They already know what they're buying, how much it costs, in which store. They're just going there to touch it, feel it and try it on to see which size they need because they're not 100% sure. And so that kind of directed shopping is very different than what we used to see. And if you think about the mindset of that shopper entering a mall or a store, it's very different. All of the noise around them, the marketing around them is noise. So they could pass six stores with big signs in the window for clearance and they may or may not stop in, depending on their schedule because they're on a mission. They already know what they're buying. It's very different. So social media and all these guys, their social media and their online experience is immensely, immensely important today. This is where people are doing their discovery. They're not doing discovery in the stores.
Paul: And so the shift, I mean, it's not dissimilar to hybrid work. And during COVID everyone's like, well, this is it. We're never going to leave our kitchen table and we'll buy everything from it and then we're going to buy our clothes there. We work on Zoom all the time. And then actually, now the real world is opening up. People are going back in again. And certainly companies are trying to make people go back in. And that's a big trend. If you look at any of the big ones in the world, et cetera, who have a huge amount of data and various different very smart AIS to analyze that data, and they think it's better for people to be back in the office from a productivity perspective. I mean, is this what's happening with retail? We've got like everything's online. It's only going to be online, but now everyone had to go online because of COVID And then the stores are there and actually kind of people are like, well, I kind of want to go back to stores, but I want everything all at the same time and I want it now.
Marni: I want everything. So that's definitely it. There's a few things, though, when people had to go online, most people were already shopping online. Those who didn't went online. So for some people, it was their first experience. Certainly in the US. You never had a big grocery online, a big online grocery business. Now you do. So there are certain things that are sticky. I think for need items it remains sticky. So buying copy paper, replenishing your socks, things like that, it becomes very easy to stick online. But I'll give you an example. There is not a person I know that wants to pay 595 or 795 return shipping for something they're not going to keep. So returns come back to the store. So even if people are ordering a bunch of stuff online to come to their home, they are more apt to return it to the stores because no one wants to pay for the privilege to return something they're not going to keep. That's just not human nature, unless it's so immensely convenient or inconvenient to return it to the store, where the cost is going to be about the same. The other thing is when people are not sure about a brand, they tend to want to go in and check it out if it's going to cost them money. Again, shipping back and forth. So that comes down to a different dynamic. You have companies that don't need to make money or don't care. If they're making money. And then you have people, retailers who care if they're making money. So shipping becomes a big deal. You find people who will spend up to a certain hurdle just to get the free shipping and then return to the store because they don't want to pay to return it. So that dynamic has changed quite a bit. It was off the table during COVID because shipping became free. You had returns for free. Retailers were just desperate to get any business. But look, in Europe, Zara has significantly changed their return policy. All of the retailers here, or most of the retailers here, have really started to change their return policies. And I think that also is what drives part of the store experience. But every retailer would tell you the stickiest consumers are the ones that ultimately end up coming into a store. And your relationship with your brands changes. When you go into a store, you do become more loyal. There are deals that happen in stores that don't always happen online. So I think that dynamic is not the same as work from home because we can have it all a little more easily where work from home, which I think for some people you can. But there are reasons to go into the office. Certainly as an old person on this podcast, I think about how much I learned from mentors in the Office. That experience is harder to replicate completely on Zoom.
Paul: Yeah, completely agree. I think there's an entire generation who are missing out on that, that one to one that learning how to work, particularly when you get your first job out of college or university or whatever the case is. And that's when you're immersed in it, you make your mistakes. You go to the pub after work from other people and you socialize from a work perspective, and it's like, fine when you're in your mid 30s or you've got a family, you can work from home. You're not really missing out. You've been to the pub quite a few times, but it's our early ones. And if they're logging in from their bedset with three other ex students in other bedrooms around the place, occasionally crossing paths at the fridge when they try and make a cup of coffee in the middle of the day, it feels like there's something lacking there that they're going to miss out on. Really, the fun part of work, actually.
Marni: The fun part, that's exactly I say this all the time. I mean, listen, I understand not wanting to leave your house. It adds commute time, it adds getting dressed, it adds all that. I completely understand. But I think you don't know what you are missing because you never experienced it. But the fun part of work, the going out part after the grabbing lunch with somebody, the walking into your office mates cube and complaining about something that's going on, some of it is just missing a little bit. But look, people are in the United States are pretty much back at work. There is hybrid work still, but I think all the studies are showing people are back and they're getting dressed for those occasions. So that's helping all of that is also driving a lot of new social media, which is also driving a lot of how do you get dressed for work these days? All of this ties back to some sort of commerce because either way, you're either dressing for work at home or you're dressing for work on the go. One way or the other, it somehow ends up relating back to retail, or at least I can always relate it back to retail. Let me rephrase that. I can always relate whatever's going on out there. I can give you a reason why people need to spend money.
Paul: Well, I mean, it does tie into it as well, and I think the reduction of returns is probably a good thing for the world as well. The carbon footprint of it and everything that's going on. From that perspective. Here's an outside challenge. TikTok, you reckon it's going to get canceled in the US?
Marni: And if so, I really hope not. I might be the oldest person. No, I'm kidding. There are a lot of us on there. I have been on it for so long, and I absolutely love it and I see the benefit of it. I think ultimately there are people who put their stuff out there and there are people who don't either. You engage with all these platforms, and if you do, you are under the assumption, or should be under the assumption, that nothing in your life is private and all of your information is out there and has been. I mean, if you have a cell phone and you have a computer, you have IP addresses, you're out there. If you've ever bought one thing on Amazon, you're out there. You have one social media, anything, you're out there. I think it's just comfort level with how people think about it. But to watch the impact that TikTok has had, more so than some of the other platforms, is stunning. And I'm watching it unfold in real time. And I think some of the most recent examples come out of the beauty space. But I could give you a couple very quickly. You see what's happening when the economy, inflation went through the roof and the economy got tight and gas prices in the US. Were skyrocketing. I mean, globally they were, but I could just speak to the costs here in the US. They went from below three dollars to five dollars a gallon on the East Coast. You watch the tone of the beauty conversations on TikTok change, and all of a sudden things started focusing on drugstore, beauty and Dupes and copies. And it was pretty stunning and pretty quick that consumers went to that and I would show up at Target or a Walgreens CVS and you would find L'Oreal product sold out, elf product sold out. Fascinating where it was well stocked before and all the high end brands were sold out. Now the funny part is you have D influencing that's trend against influencing. You have the D influencing and the funny part is even D influencing is influencing because they come there and like here are the five things you should spend your money on. The Charlotte Tilbury it's always the same five things. Here are the five things spend your money here the rest of it. Buy here cheap and don't worry about it and you get rid of the clutter. Stop buying more stuff. So De influencing is actually influencing. And then you have somebody like Alex Earl who has blown up and she goes out and she wears a pair of American Eagle jeans. It shows up on Instagram, it shows up and she's wearing them on TikTok. And within hours you have Sleuths on TikTok figuring out which pair of jeans they are, which top. It was from Amazon. The Nike Panda sneakers which you already couldn't buy. You could not buy that jean. The next day across the country it was sold out. You could buy it in a second color that they still had available. But the color Alex Earl was wearing you could not buy. That's the kind of power that it's unbelievable. And American Eagle is left chasing the product now in a good way and it was completely authentic. It wasn't paid for. So it's stunning. We haven't seen something like this before and it's really kind of fun to be honest. I love it.
Paul: I mean, beauty do really well in terms of the growth as an industry. Is that just down to social media? The amount of makeup that people need to create content that they're pushing out there is this just one self fulfilling cycle?
Marni: Beauty is an interesting one because it's at all different levels. But what I would say is the younger generations have really taken to a full face of makeup and a lot of that comes down to social media. Many, many years ago when Instagram first came out, I called it the Instageneration is my coined term for this because I said to all of my clients at that time we are going to watch the beauty industry explode. And it has gone from strength to strength since then. And it's not just makeup, it's skincare, it's eyelash extensions, it's everything you could possibly think of and I just don't see it slowing down, if anything. Watching a gain on the men's side with skincare routine for men, with hair color and everything for men, it's fascinating to watch. I don't see it slowing down. Also. Beauty is a very affordable luxury for many people. So even when things are tight, it's an affordable luxury. That's why they have the lipstick index. You can go out and buy that Chanel lip gloss without and own a piece of Chanel, even though you can't afford Chanel. People feel very passionate about their beauty, and it's a very personal thing as well. What TikTok did and what COVID did for beauty, though, is created routines for people. All of a sudden, you had time because you weren't commuting, and it was different. So people were able to start beauty and skincare routines. And that has really changed the beauty industry because people are sticking with those routines and that we hadn't really seen to this degree before.
Paul: And outside of beauty, beauty is the beneficiary of the Instagram generation. What's? The TikTok generation. What industry has been or is being revolutionized by TikTok?
Marni: Oh, God, there's so many beauty. First of all, definitely, because even though you had the YouTubers putting on makeup and doing all this, the way they do it today on beauty is just quicker. It's more accessible. I'm a little bored with it at this point because I've been on Beauty Talk for a very long time. But cooking, I mean, the way that TikTok has changed the cooking, the way people cook, the way they prepare foods, you had it before on Instagram, and you had it with things like tasty and things like that. But this is at a whole different level. People posting their recipes, cooking, making shortcuts for meals. That has been fascinating with me. Pet Talk, I mean, everyone adopted pets during COVID and they are making huge stars of their pets on TikTok. That's fascinating to me. But I think it's disrupted fashion. I mean, education. I know there are several TikTokers that I've fallen into that I like. I'm a bit of a history buff, and I started following with this woman who teaches AP American and AP World History early, early on. And I feel like I took the entire AP World History class, which is an exam that you take here. I don't know if you have Advanced Placements in Europe, but it's a test you take here. You get college credit for it, but you take it in college. I think I took the entire AP World History class during COVID from listening to her as she was tutoring students in AP World History because they needed access to information. And some of their professors, some of their teachers weren't as good. Online healthcare has been changed dramatically by TikTok in good ways and in bad ways, because you think people went to WebMD to find out what that itch was for before. Now there's 25 doctors, or people who think they're doctors online, telling you what that itch is and why you should really look out for it. But you've had TikTokers go week after week after week and people followers saying, I don't like that mark on your chest. I don't like that mark on your neck. You should go to a doctor. You should go to a doctor. And sure enough, a couple of the people that I followed have gone to the doctor and have had illnesses that their followers have focused on. There's so many the way people decorate their homes, I think it's just quicker. You've had the home decorations of Pinterest has been a big one for a long time. I think the difference is this is just the video, it's the conversational tone, it just seems to be a quicker hit for some reason. More addicting.
Paul: Talking to Pinterest, that's something which has gone from strength to strength as well. And I think it's probably one of the most commercial platforms there is. It's well linked to brand. It has the lookalike. It's just a brilliant shopping experience which is completely tailored to you and your loves and your passion. And in a way that, if you think about Google, is just this incredible thing where it's the best sales machine in the world. It will advertise to you exactly what you want at the moment when you are searching for it, which is just magic, right? There is no better business model in the world. Well, until Chat GTP is the I.
Marni: Was going to say, wait, don't we have a new one?
Paul: But actually we look at Pinterest. It's just oh, I like the look of that. Let me look at that. Oh, here's some things that look just like it. Do you want to go and buy them? And that's just brilliant. So I can see that just becoming even more of a commercial platform than TikTok, which is an entertainment platform more than anything else.
Marni: Completely. I agree. If you're separating, there's two different things. I think TikTok is definitely more discovery. So entertainment and discovery, where Pinterest is definitely more click to purchase. I also find Instagram to be more click to purchase nowadays. I think it is a very good tool to find things and then purchase through. I don't feel like TikTok has gotten to that commercial sort of that level, it's just not there. But Pinterest has done it very well. It is stunning to me, though, having now played with ChatGPT. The first week it went live, I was like, I'm on, I wanted that account. And I'm feeling now when I Google things, there's a lot of clutter. So a good simple example is I googled chocolate chip recipe, chocolate cookie recipe. Just kind of curious playing around with it. And Chat GPT comes back with an answer. While there are thousands, thousands of recipes, here's a great classic chocolate chip cookie recipe that gets thousands of good reviews. And it's right there. I Googled chocolate chip cookie recipe, same exact thing into Google and search hundreds. It was like in that moment, I was like, oh my God, this is so much clutter instantaneous.
Paul: Oh, and here's my story of my life. I did this and I learned this from my great grandmother and I like to cook it for my kids. And I did this. And you just got to scroll and scroll and scroll before you get less, and you've got to click through to another thing you're like, I just want to make some cookies.
Marni: Exactly. But then I did the same thing. I put chocolate chip cookie recipe into TikTok. And what was interesting there was it came up with some of the people I follow and a couple of others chocolate chip cookies. All the videos are like two, three minutes, whatever, link them bio to get the recipe. So it made it easy. But I was able to quickly visualize all of the ingredients and to see if they were using like a stand mixer or they were doing it by hand very quickly to know, oh, I don't want this is too involved, or, oh yeah, this looks like more up my. So it's very interesting because I see that there's a use for TikTok in that regard that's also a little less cluttered because you could just go through that, you could see it visually much more quickly. So I wonder what it will look like eventually with Google. I'm assuming with their AI, it will change quite a bit.
Paul: Well, if they can get it to work.
Marni: Okay, fair. I'm very interested to see also how it will affect retailers. I mean, you've had certain things with social media already, have affected retailers quite a bit. I'll be curious to see they use AI quite a bit already. So it's not new to the space and it's not new to brands. Using AI is not new to brands. But you think about the way social media has changed what people's expectations are about products and about even the way they look. So I'm curious to see how now AI will further change the way retailers are.
Paul: I think Google is the one that's got the most to lose because of that discovery phase that you do with SEO and SEM. Basically, ads are trying to serve you a product when you search for it, because if you are using Chat GCP to try and figure things out, you're not searching in the way that you would have done. And you're more likely to be searching Pinterest or to be searching TikTok for recommendations for coats and jackets, et cetera, et cetera. So then that user generated content. You're looking for people's genuine opinions. You're looking for maybe someone you know, maybe someone you don't know. But that search engine capability which crowdsources visual content that you get with social media, you just can't get with a Google. And so that sort of split there may become really apparent.
Marni: Oh, I could not agree more. I actually think social commerce and social media because that includes even Facebook, but I think that becomes more important, not less important, because I think Chat, GPT and AI should be able to make your search experience. I say it more transactional, but here's an input. Give me the return. It doesn't become a place for discovery. It's already not. But I think it becomes less a place for discovery. And because people are using their phones and their computers for discovery, the most entertaining and fun way they do that is through social. So I think it becomes more and more that way. I will just say though, getting back to the point of stores and why stores have opened and things like that, and do we need stores? There's a lot of reasons why we need stores and some of it has to do with figuring out does the product fit me? Do I like it, do I like the aesthetic of this brand? Is this brand me? I can't really tell from online. I want to go and experience it. I need help in whatever it is. I want a real sales associate helping me, which might be that might change with online over time, but I think there's real reasons. But people forget there are a lot of consumers out there that enjoy the shopping experience. And I use this example quite a lot lately, but in the United States, when the stores reopened after COVID, it was May of 2020, and I was back in the stores immediately walking the malls. And it took a little while for the stores to open everywhere. But I remember walking over to a TJ. Maxx, I think it was a TJ. Max and home goods to combine store or side by side. And they had a limitation of 90 people in the store. And these are massive stores. Everybody was online. They were masked up as masks was still mandatory. I mean, half the women still had gloves on their hands because that was still a thing. This was early on in the pandemic, but there was a massive line to get in. I wait online. I get into the store like half an hour. Half an hour to wait to get into a store. I get into the store and it was like COVID begun. Women were shoulder to shoulder, each of them with a hand on the same item because they're grabbing for whatever they can. The experience, the fun, the treasure hunt of just being there. Everybody you can tell they're smiling because their eyes are smiling. Everybody love the line. Everybody was talking on the line. I was in an alternate universe because you walked out of there and into any other retailer. It wasn't the same experience. People were still so skittish. The malls were empty, empty. You walked into these stores, people enjoyed it. You walked into Target, packed to the gills. You walked into stores where people hang out. You walked into Foot Locker is another random but very good example because guys hang out in Foot Locker and the stores were packed, lululemon packed. So I think people forget there is a real social aspect. The more time we spend on our phones and on our computers, it's human nature to want to be social and to interact with people. And so it's restaurants, it's travel, but it's also shopping. A lot of people really enjoy shopping. Yeah, there are people who hate it, but there's a lot of people that just enjoy shop thing mania.
Paul: I think that's just a brilliant way to leave this until this is it, shopping is back and there's going to be a lot more of it. We've touched. Really fascinating things. I've certainly loved it. Thanks a lot for coming on board.
Marni: Absolutely. I'm so excited to do this. And everybody should go out and go shopping. The retailers need your help.
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