Morning Brew Daily - Shein Influencers Catch Backlash & Why Air Travel Is So Bad

Episode Date: June 29, 2023

Episode 92: Neal and Toby cover the multiple reasons why air travel this Summer is in shambles and continues to struggle. Plus, a trip to China goes horribly wrong as social media unleashes its fury towards the traveling Shein influencers. Also, Costco takes a page out of Netflix's playbook and starts cracking down on shoppers sharing membership cards, and is Airbnb on its way towards a collapse? The numbers may surprise you. Lastly, Ireland is looking to pay homebuyers to fix-up their homes. Sounds too good to be true? That's because there's some caveats. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.c.com slash U.S. slash brew AI. That's pwc.com slash us slash brewAI. Good morning brew daily show. I'm Neil Fryman. And I am Toby Howell. On today's pod, air passenger stress levels are through the roof ahead of the 4th of July travel weekend as cancellations have already caused airport havoc this week. And we'll discuss why you're going to hear a lot about cheap whiskey, dirt roads,

and faded blue jeans on the radio this summer. Then Sheehan tried to put together a little influencer trip to one of their factories in China. and it did not go well. Plus, sharing is no longer caring in the cavernous aisles of Costco after the retailer decided to crack down on people going splitsies on their membership cards. Neil, it's Thursday, June 29th.

Let's ride. All right, Neil, before we start the show, I want to tell you about a little experience I had last night. I had the Grimmis shake, which, for our less online listeners, McDonald's is rolling out this big promotion for Grimmis' birthday, Grimmis being one of their characters they launched in the mid-70s.

And to commemorate his birthday, they made this thing called the Grimmish shake. It's a monstrosity. It's kind of bluish, purplish. It's got like a berry vanilla flavor. And I can tell you what, I feel awful right now. Really? It was bad. It was so good that I drank the entire, like, extra large milkshake.

And here's the thing. This is why McDonald's gets you. In order to get one Grimmis shake, you have to get the entire Grimmis meal. So, last night at like 9. 30, I started pounding like chicken big nuggets and a large fry and drinking a whole grimace shake. And I was like, I was not happy with my life. This is an amazing marketing campaign by them, right? It's dominating right now.

Yeah. All over social media, you have these Gen Z people like yourself, drinking the grimace shake and then posting kind of horror movie scenes after they drink the grimace shake. Yeah. It's a crazy trend right now. And so, I mean, I guess I'm a victim of marketing because I wouldn't try it. Would you try it again? I'm never going to put that in my body again. But once they come out with like their next theme shake, I'll probably be right back in line.

They're killing it. Let's go to our first story of Toby. Not only did you drink the grimace shake, but you are one of millions of Americans who are planning to fly this holiday weekend. I know you are nervous about making your flight and you probably should be. Thousands of U.S. flights have already been canceled since Saturday and tens of thousands more delayed in one of the worst stretches for air travel this year. This week, we both heard stories of friends stranded in cities for multiple days and people camping out in airport terminals, just hoping they'll be able to get to their destination in time. United Airlines in particular has taken it on the chin. It canceled 20% of its flights yesterday and has scrubbed more than 2,300 since Saturday.

One source of the trouble is thunderstorms here on the East Coast that have disrupted flights at Newark, which is one of the major United hubs. but United CEO Scott Kirby isn't just blaming the weather. He's picked a fight with the FAA for a shortage of air traffic controllers that have fueled airline chaos. On Monday, he told staff that the FAA frankly failed us this weekend. They better not fail this upcoming weekend, which ahead of the fourth is expected to be the busiest for air travel this year and potentially even bigger than the same weekend pre-COVID in 2019. Honestly, I could not think of a worse time for this to happen. just from a personal perspective, and then also just from everyone, literally the busiest day in years.

So it could not be happening at a worse time. But I feel for the FAA a little bit because it's just so understaffed. So 77% of critical facilities like air traffic control are staffed below the 85% threshold that the agency considers necessary in order to operate. And then you have the major ones in New York and Miami that are staffed at 54% and 66% And it's a huge risk to just flights going off and continuity in the airline industry. I know, but you feel bad for them, but maybe they should just change their hiring practices and get more people.

It reminds me a lot of the IRS where there's so much attrition and people are leaving the profession and they're not getting enough people. But if you look into the requirements for what it takes to be an air traffic controller or a flight dispatch or anything, you can't even apply in most cases once you're over 30 years old because of all the stringent training requirements. and the aviation industry places safety above all else. So you have this blame game going on where the airlines are blaming the FAA, the FAA and Pete Buttigieg, who's the Transportation Secretary,

is saying, airlines, you've got to get your stuff together. If you look at the actual data from the federal government, it seems like the airlines are by far the most responsible for delays and cancellations, whether they don't have enough flight attendance or people are in different cities. This is what happened with Southwest. Last December, when you had. crews, you know, the pilot for an airline that needed to be in Phoenix was in Seattle, and then, you know, the flight attendant crew was in Boston when they needed to be in Austin.

And that, like, it's this crazy domino effect that happens in airlines where it's held up by this House of Cards. And if one domino falls, I'm mixing my metaphors here, but everything kind of collapses. And then you get people waiting, you know, sleeping at airports at 3. Yeah, this is my big takeaway is I can't believe this House of Cards doesn't fall more often, because you think about one little ripple effect and the effect it can have on everything. But then also I can see why this is making people extra mad.

Not only is missing your flight just the worst thing in the world, but if you go back to the pandemic when airlines were really struggling, $54 billion of taxpayer money was kind of funneled to these airlines to prop them up. And yet they're still understaffed. They laid off or they didn't lay off. They like furloughed a ton of employees during the pandemic and they haven't really brought enough back to catch up to demand. So the airlines got the money to keep them afloat and then haven't prepared for a time when flight volume returns to normal.

So, yeah, tons of horror stories. Like, people are so, there's nothing that gets people as mad is, like, missing your flight. And I don't blame. Not even missing your flight. Having it canceled right before you get on. And there's even another wrinkle happening this weekend, which is that telecom companies are allowed to turn on their 5G C band networks, which sounds pretty technical. but the point is that it might interfere with some plane navigation thing. So basically you won't, some planes that aren't retrofitted with modern equipment may not be able to land in low visibility weather, which is I feel like all the kind of weather that we've had recently with and there's smoke coming in.

So there's possible more disruptions that could happen starting on July 1st. They say that Thursday and Friday, today and tomorrow are going to be the busiest days for air travel. I think you're flying out tomorrow. Come on, Newark. Come on, Legion. You got me. I am a big AV geek, so I want to just provide our listeners with some apps if they want to track flights.

Flight Radar 24 is the goat of all the industry. If you want to just look at where planes are going or see if your planes coming to your airport, definitely check Flight Radar 24. It's super fun just to play around with. And then if you want to see the broad view of cancellations and delays, go to flightaware.com. They have this fun map, not fun, but they have a map called the Misery Index. It's funny you. The Misery Index, and it shows an entire map of the U.S.

and where delays are happening. Seems like New York is kind of the epicenter with all the thunderstorms we've been having. All right, Neil, bookmarking those now. All right, let's move on to the world of fashion, where a lot of people are very mad at a group of influencers who many feel have been used as propaganda by the Chinese fast fashion company, Xi In. Now, Sheein is huge. it did 100 billion in sales in 2022, up from 10 billion in 2020, but it has a bit of an image problem.

A lot of people think that Sheehan exemplifies the worst of the world of fast fashion. It's cheap clothing, bad environmental impact, and an exploited labor force. But Sheein is eyeing an IPO, so in an effort to clean up that image a little bit, they invited a bunch of fashion influencers out to visit one of their 6,000 factories in China. Here's a quote from one of the influencers. Honestly, everyone was just working like normal, sitting down. They weren't even sweating. And everyone in her comments just absolutely ate her up saying,

you're only seeing what they want you to see and that your integrity is worth more than this trip is. And the backlash came in swift and fast, so much so that some of the creators were actually deleting some of these paid posts in partnership with Sheehan. And Sheehan comes out looking worse from a consumer perspective. then they went in. We've seen these influencer trips go awry,

but this one seemed to really strike a nerve, Neil. Right, because what it was wasn't usually influencer trips, and I have to say, I didn't know a lot about influencer trips before reading about this, it's you go and you try on the actual products. You're like, look at this shirt.

You know, this is a cool shirt or this is a cool pants or this is a cool product that I'm trying out. This was influencers, like, talking about the labor practices and the social culture of a company. And people were like, this is a very ambitious move by Sheen to clean up its image. And it completely backfired.

I mean, I saw one TikTok that satirized this trip. It was an influencer saying that they went to the triangle shirt waste factory in New York, which infamously burned down and killed, you know, over 140 people. And this influencer was parroting this Sheen trip was like, oh, my God, the labor practices are so good here. Everything's so clean. You can leave. And that was kind of. of the vibe that the backlash took.

Yeah. And another layer, too, is, like, this was a very carefully curated group of six content creators who they represented, like, an array of different body types and backgrounds. And so a lot of people were, like, Sheehan is clearly just exploiting, like, diverse influencers in order to advance, like, this narrative. And so that's another reason, like, another layer to it, why people were just really seeing through, like, this ploy from Sheehan. Maybe we should talk about what the criticisms of Sheehan are.

There's sustainability criticisms that, you know, most of their clothing just ends up in landfills, which is a criticism that's been lobbed at the broader fast fashion industry. And then the big one here that actually U.S. Congress is looking into is that they're using cotton from the Xinjiang province in China, which uses forced labor by the U.S. Muslim minority, and the U.S. has banned imports from that region. And because of there's this particular loophole that if you ship a product to the U.S. That's below $800, it doesn't get checked by customs and border protection. And most Sheehan halls are very cheap, like $3. So they're not subject to that.

And therefore, they can kind of use sketchy materials and things from places that the U.S. has banned to get in. And then when Bloomberg kind of tested the products, they took it into the lab. They were like, yep, this cotton is from. Xinjiang province and you know sheen is completely skirting the rules so lawmakers from both sides of the aisle are trying to crack down on on this yeah we'll definitely see how kind of this controversy uh plays out in context of their impending IPO there there's no like set date for it or anything but they want to ipos is it a u.s ipio they they were uh looking at because congress wants to

SEC to look into it so i do think it would right in uh in the u.s but it's it was valued at one point at $100 billion. So, like, this is a big, big, big thing we're talking about. So it's crazy. Again, the ripple effect of one influencer trip could factor into a $100 billion IPO. All right, Neil, let's move on. Everyone's favorite big box retail store, Costco, has been struggling a little bit this year with weak sales.

So it's taking a page out of your local college bars playbook and IDing more customers. Yes, I said IDing. Costco has been suffering an epidemic. of non-members using members' cards to shop at its stores. And Costco memberships are one of one. You're not allowed to borrow your moms and cop some sweet deals on 54 tubes of toothpaste. I've tried. But that's exactly what shoppers have been doing,

often sneaking away to the self-checkout aisle so they can get away with their dastardly impersonations. So now Costco has warned customers it will be more consistently asking for a photo ID as a cross-reference with the membership card. Neil, can you imagine stress shopping for a 12-gallon bin of peanut M&Ms? And the checkout clerk goes, yeah, I'm going to need to see some ID here. Yeah, I mean, there have been all over Reddit, there have been people posting about seeing this crackdown in action. I mean, there's signage across stores now being like, only paid members are allowed to shop. Personally, I feel like, you know, shopping at Costco is a little intimidating anyway.

You have to flash your badge everywhere. And I'm just kind of like looking over my shoulder, being like, I'm just shopping here. But, you know, somebody, I feel like somebody's looking at me and you have to get your receipt signed. And it's a very, you know, intimidating process. Well, it's also everything is jumbo size, too. You feel like you're shopping in, like, the jumbo aisle. But it's kind of like in other countries of the world, you don't necessarily have to pay for a subway ticket. But you have inspectors come along and it's kind of like spot checks.

And that's kind of what they're doing at Costco too. So you're always looking over your filter. Yeah, it's going to be nerve-wracking. But the reason why Costco is so. concerned with this is because their membership revenue is a big part of what allows Costco to exist at all. So they made $4.4 billion in membership fees in the year ending last August. And that is what allows them to offer these big ticket items at really, really low prices

because it is subsidized. So you can get the wholesale prices, even though you're getting the full goods. So that's why it's really a page out of Netflix that's played by the way. Let's talk about Netflix because, of, few weeks ago, they started cracking down on password sharing. And it's been an incredible success. Yeah. I mean, the first couple days that they cracked down on password sharing were their best for U.S. acquisition, you know, ever. Or, yeah, in a, in a good long while, yeah. That was hyperbole. But, yes, it seemed to have worked at Netflix and I think a bunch of other

subscription services. So we gave a lot of people a free lunch for a long time. It's time to crack down. Yeah, literally in Costco's case, a $1.50. Well, you can get a free, have you gone on a Saturday? You can get a free lunch. I mean, if you just walk around, do like three laps, you're going to get chicken pariaki, you're going to get a taquito. Now we're going to get. Now we're thinking.

You're just going to, yeah, I used to fill up all the time on, on, let's have a little Costco on Saturday. Let's have a little Costco sample lunch date. But I need to get a membership first. I won't, I won't tell on you if you don't tell on me. All right, Neil, before we jump into the next story, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the home. Home Depot. Get low prices guaranteed on propane grills starting $179, like the next grill three-burner gas grill,

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Okay, Toby, first of all, just did a fact check. It is the best four days of Netflix U.S. acquisition ever. I should never doubt you. Do not doubt me. I wasn't 100% sure when I said that, but it is true. All right, let's get to Neal's Numbers, which is our Thursday segment where I read a ton of news over the, week, and I bring you the three most interesting facts that I read. Here we go. Are Airbnb's

revenues plummeting? One analysis suggests that they are. In a tweet that went really viral, the CEO of Reventure Consulting posted a chart that showed that revenue per available Airbnb listing had plunged in certain cities. In Phoenix, they're down 47 percent. In Austin, 46 percent. In Asheville, North Carolina, a pandemic boomtown. They're down 43 percent. This suggests that struggling Airbnb hosts might have to sell their homes, which could cause shockwaves, not in the good way, to the broader housing market. There are about 1 million Airbnb or VRBO rentals on the market compared to 570,000 homes for sale. But others were skeptical of this Airbnb data, which came from analytics company All the Room. In one vacation town in Tennessee, the hometown of Dali Parton, who will get to in a bit, all the room's data show that Airbnb revenue dropped 48%.

But the chief economist of another real estate data company called BS and said that Airbnb revenue in that city only dropped 9%. So he doesn't think there's a calamity going on. But still, if you take the midway point of these data sets, it is not good for Airbnb and a sign that the COVID boom of everyone working remotely from a cabin in Montana for a month is maybe coming to an end. It's really sad for a lot of people to have that dream of owning an Airbnb, like running it out, having that as their second stream of income. or, yeah, a dual stream of income. And it's such like a TikTok mentality of like, why isn't, why aren't you buying an Airbnb and like are a multifamily home and renting it out? Because times aren't always so good for Airbnb.

And the company warned of a booking slowdown. But I think the reason it went so viral this data was because there seems like a bit of a backlash to Airbnb has been jacking up their prices. And, you know, you have to do all of this work to leave the house. Team hotels, baby. So hotels are kind of taken a little over. mindshare of Airbnb, and I think there's this pent up anger toward Airbnb. So people are looking at this with a little shot in Freud. Our Neil number, number two, that was a mouthful,

luxury watches. If there are any luxury watch collectors listening to this pod, there is a bed, bath, and beyond level sale going on right now. Prices for luxury Swiss watches on the secondary market have fallen to their lowest levels in almost two years and are down almost 20% over the last 12 months. Just like a bunch of other types of collectibles, prices of luxury watches soared to records in 2021 with limited supply and raging demand. But as interest rates shot up and recession talk heated up,

prices have cooled by a lot. But this is the interesting part. There's one other factor driving prices of watches, specifically lower. And that is the crypto wipeout. Newly minted crypto millionaires were major buyers of Rolexes during peak of COVID. But now that crypto is in its winter era, and investors aren't feeling as flush as they were,

they're going with casios instead. And this is a real phenomenon. The online watch trading platform, Chrono 24, said that the crypto downturn has directly impacted pricing of luxury watches from brands like Rolex and Potech Philippe. It's so, again, butterfly effects, but also I'm now thinking, what's the luxury item that you want to store your money in

that appreciates? Because if watches aren't going up, and it's got to be Birken bags, right? Birken bags are undefeated as stores of value. or some sort of grimace memorabilia. Neil, I don't want to talk about it. I'm already feeling bad. Okay, our third number,

for everyone headed on a road trip this weekend, which is definitely a smart move, given the state of air travel, expect country songs to be blasted into your ear holes. Morgan Wallin's last night, and Luke Holmes' cover of Fast Car, are number one and number two on the Billboard Hot 100 list. This is the first time country songs

have landed in the top two spots since 1981, when Dolly Parton was singing about the nine to five. The country pop singularity has arrived. I hear it all the time. I have a couple of friends who are big country music listeners, and I'm done pretending that I don't like it. These songs are good. They're a good vibe.

If you're truly hating on country music at this point, you're just being a hater. It's definitely country is just pop at this point with some country instrumentation, like a slide guitar or something. But if you listen to the melodies, it's very poppy. There's a lot of hip-hop elements. that have been exploded by Old Town Road in 2019,

which really put hip hop and country in the same boat together. So there's a lot of fusion going on. A lot of pop stars are touring right now, not putting out new music. Country is filling the void. I've liked country for a while, so I'm happy. Let's move on. I want to talk about a particular headline

that seems to pop up once every month and always spreads like wildfire. It goes something like, this European country will pay you to move to our breathtakingly beautiful town with a rustic old world charm Sounds pretty great, huh? Most recently, it was Ireland, which is offering up to $92,000 in renovation reimbursements if you move to its gorgeous remote islands, one of which was featured in the movie The Banishes of Inashirin. Other European countries have dangled similar incentives, particularly in some Sicilian towns,

which are selling abandoned homes for a dollar. Why are they doing this? Well, young people are moving out of these rural villages, and the idea is that luring foreigners to move there through generous subsidies could help revive these towns. The question is, Toby, is this too good to be true? Is this happening? Would you do this? I mean, it's too good to be true in some senses, but it's also doing pretty well in others.

So we talked about Ireland. There's been more than 500 applications for that particular program, and then over 300 homes have been sold in that program in Italy. So it is working to the sense that it is driving people. there, but a lot of people arrive or apply thinking that they'll handle everything, like, they'll help with immigration, they'll help get you resettled. But in reality, it's a renovation budget. So there's just like a little bit of loss in translation here. And it's totally exacerbated by these headlines that you see that go viral because, yes, the companies are

technically paying you. The countries. Yeah, the countries are technically paying you. But it's not, Like here's $200,000, like come, come live here. And it's as simple as that. So imagine, I mean, you know, working with contractors here is tough. I've heard a lot of headaches. Imagine going to a rural Sicilian village dealing with home renovation, which is already such a headache and so frustrating and a very high stress thing. And, you know, there's so much loss in translation.

You don't know the language. So this seems like a little tough. But the problem is very acute. I mean, in this one Sicilian town. that's doing this program, they have 40,000 homes, but only 10,000 residents. Right. I don't think that this foreign exchange thing that they're doing is a sustainable solution. It might, you know, get a, you know, provide a little uptick on the margin, but they need to do something just to keep their young people from leaving, like create more jobs.

Yeah. All right, Neil, last question on this one. Would you move to Sicily or would you move to Ireland? Oh, Sicily. You're a Sicily guy? Oh, my God. I thought you loved the banish. You know, all I want to do when I retire is just like sit on.

a Mediterranean beach and eat tin fish and drink wine and play cards all day. Okay, okay. That is all I want to do. All right, Neil, our final story is one that it's very near and dear to me because it involves cramping on a soccer field. This week, a couple of videos of NWSL players getting stretched out by a trainer went viral. As they're getting stretched, the trainer hands them this little shot that looks like a five-hour energy bottle.

But when they take it, they immediately start gagging and rolling around and making a face that looks like they just ate the last wings on hot ones. And they kind of did because the liquid they are drinking is called a hot shot, and it's supposed to instantly get rid of cramps. All right, ready for a little science, Neil? Hot shot uses three primary active ingredients, cinnamon, ginger, and capsicum, which is that compound that makes hot peppers hot. And when you take the shot, the nerves in your mouth and throat get triggered,

which makes your brain send calming signals to that area of your body. In doing so, it inhibits the nerves in your cramping muscles from overfiring, which can provide that instant relief from a cramp. I've never seen this before, Neil, but gosh, dang it, I wish I had it during my playing days because that would very clutch. Is it supposed to actually work? It's supposed to instantly relieve it. I mean, again, like, this is a claim that's made by Hot Shot the company, but the science in my head makes sense. So, like, of course, if it's just neurons overfiring in a muscle, that's what a cramping. muscle is. It's just sending pain to a different part of your body, right? Right, but it's getting rid of

that of the over, the hyperactive neurons in your hamstringer. I know, but looking at these players talked about it afterwards and they were like, I'm never doing that again because it just tastes so disgusting. Here's the rule I want to institute. It's a big thing in soccer at the end of the game, time wasting, you go down with a cramp in parentheses. And if it is clear that someone is time wasting, they should have to take a hot shot. And if you go down, it's got to go to. the hot shot has to go down as well. I like that. The whole point of this is like when you stub your toe and it hurts

and then your brother comes up to me is like, let me punch you in the arms so that you forget about your stubbed toe. That's basically what hot shot is. But we will keep track of that. That is our show. We have one more before the break. Who's counting, though? I'm not.

Thanks for listening and watching. If you want to get in contact with us, our email is Morningbrewdaily at MorningBrew.com. Huge shout out to our crew, puts the show together. Sam Wolf joining the crew, editor and producer. Samantha Velas and Raymond Liu are the associate producers. Yuchinawa Ogu is our technical director. Billy Minino is on audio. Hair and makeup said they thought working at Morning Brew would be filled with people slaving away, but they were pleasantly surprised by the labor practices and that every product is handled with

care. I can confirm they were not given talking points. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back to tomorrow. It all. Pay off your home, travel for life, drive a Ferrari. In celebration of the world premiere of the Monopoly, Big Board Buckslot machine by Aristocrat Gaming, Yamava Resort and Casino at San Manuel is giving one person a $1.6 million dream package. The biggest prize in Yamava's history. Club Serrano members can earn daily instant prizes and secure a spot in the finale May 29th. Don't pass go and own it all. Only at Yamava, celebrating its 40th anniversary. You win? Details at yamava.com must be 21-20. Please gamble responsibly. Monopoly is a trademark of

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