Pivot - Amazon suspends facial recognition technology, Starbuck’s closes 400 stores and a prediction on Apple and search

Episode Date: June 12, 2020

Kara and Scott talk about Amazon and IBM moving away from their facial recognition technology because of algorithm's known racial biases. They also discuss Biden's petition to Facebook and Mark Zuckerberg to change his hands-off approach with political speech on the platform. They talk about HBOMax taking down "Gone with the Wind" and whether platforms should give more context to historic racism in film. And, as Starbucks shuts down 400 stores in North America, they talk about what the future is for brick and mortar giants. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi,

hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond and see for yourself how traveling for business can always be a pleasure. Hi, everyone. This is Pivot from the Vox Media Podcast Network. Get started at HubSpot.com slash marketers. There's so many other areas you can be vulgar in. I'm in my kid's room and I slip on some Legos and I hurt myself, Kara, and I have to go to one medical. I have to go get some treatment. And he says, okay, so my son has all these figures of horses. And it ends up I'd slipped on them and a bunch of them had gone up my ass. And he said, that's the bad news.

But the good news is you're stable. Get it? Stable. That's like a dad joke. That's a dad joke's the bad news. But the good news is you're stable. Get it? Stable. That's like a dad joke. That's a dad joke of the worst kind. Let me just explain to me. Did you see the people making Legos out of us while listening to us? That was pretty funny, wasn't it?

That was lovely. People making Legos and stuff like that. That was good. Speaking of people vetting us, the Wall Street Journal licked you up and down and back up again. Yes. Oh, my God. With the big picture. Was there anything wrong with Scott Galloway?

You talked about your foaming of coffee. That was like the biggest, wettest kiss. I was embarrassed. And my alcohol abuse. Yeah. But I want to get to the idea. Congratulations, by the way. You sounded great and you look great.

Thanks for that. That's nice of you. I think that's the nicest thing you've ever said to me. Thank you. I'm going to give out little dollops of love to you today. I appreciate it. I need the dollops. I know.

I have just had dental surgery, and so I'm in a lot of pain. No, not high. Pain. I don't do any pain medication. But one of the things you said, you want to be the greatest business analyst in the history of the world. Can you explain this to me? Like in the world? Like over Buffett or like others?

No, I didn't say that. I said I wanted to be the most influential thought leader in the history of business, not just the world, in history. Okay. I thought it was like a lot of great— If you're going to be a narcissist, put it on all caps, Kara. I felt grandiose was part of that, but tell me, explain to me what that means to you. What does that mean? I want people to understand your vast and unquenchable ambition.

I want to provide, through thought leadership and teaching, more economic security for people and their families than any individual in history. Okay. All right. By the way, there's still time. I'd also like to be a Broadway dancer and a Navy SEAL. Serious. I would like to do both those things. A Navy SEAL.

I think it's important to have big, bold, audacious goals, right? Really? The Broadway dancer could happen. I can see you. Have you seen me dance? Have you seen me dance? I have the body of a dancer. I just don't have the rhythm. Oh, yes, you do. I could see you could be good at dancing, but I could see that you're not. You know who thinks I'm a great dancer? Who? Vodka.

All right, so a drunk dancing thought leader. We are so excited to hear from you. I think I am the world's—I love dancing drunk. I'm excited. I don't know what we have—you know, there is Adam Grant out in front of you there, so you better, like, run fast. Oh, I'm coming for that little bald-haired bitch from Wharton. I am coming for you, Adam Grant. You know, ultimately... Other than intellect and credibility, he has nothing on me. Nothing. Ultimately, Susie Orman's going to kick both

your asses, and she's coming on our show soon. She's good. She's great. She's an island, you know. She's an island. I like her. I think she's an inspiring woman. She is a tough broad, let me just tell you, in all the good ways. Anyway, we're excited. We're going to be talking to her soon about the recovery and how people can handle it.

But listen, a couple things. The Biden campaign is circulating a petition and a letter to Mark Zuckerberg to change Facebook's hands-off approach to political speech on the platform. Nothing's going to happen. What do you think about that? Well, we predicted this, right? Social media has now been fully politicized. And Facebook is going red. And the opportunity is for Twitter to go blue. But Biden is going after Facebook as he realizes that Donald Trump has enlisted his favorite oligarch, Mark Zuckerberg, and said, I'll hands off as long as you hand me the election and then like have a bunch of people feign concern. you hand me the election and then like have a bunch of people feign concern uh so basically facebook's going red and facebook's going kind of android and twitter is going ios and twitter's

opportunity again we've been talking about this is for them to go smaller but better right yeah go after the 10 or 20 percent of urban educated people are willing to pay for a social media platform. And then, I mean, it's just shaping up. The whole world is shaping up into iOS versus Android. That's a great way of looking at it. One where you have essentially a phone that's free for people who aren't wealthy. And in exchange, they get to molest your privacy. I mean, that's basically what Android is.

And then iOS is all right. The globally affluent get to have privacy, but they have to pay the equivalent of one month's household income in Turkey for a phone, for chipsets and sensors that cost $380 to assemble and they can sell it for 1400 bucks. The whole world is going to iOS versus Android.

And basically it's happening in social media. It's what you would expect from a thought leader in the history of business. The most influential in history, Kira. In history. All right. I think that's interesting. I think you're right. I think you're right 100%. Also, HBO Max pulled Gone with

the Wind from its library until the company can provide some more historical context to go with the film. What do you think of that? I think you think of that? I think it's fine. Like, come on. Like, you should have a little bit. Well, what's fine?

Is Gone with the Wind fine or is pulling it fine? No, Gone with the Wind is full of racist tropes. It's ridiculous when you watch it now. I mean, like— But what doesn't have racist tropes? A lot of stuff. You know what? It's fine if they want to put it—

Sure, well, what about the green book that came out two years ago in 20 years? Do we delete that? Do we cancel that? All of these things are different shades of racist. Well, there's all those movies. There is all those movies. There's The Help. That goes on and on and on.

I think it's not. I think, look, at this moment in time, it's not the worst thing. Everyone goes crazy. I can't get my Gone with the Wind. By the way, nobody's watching Gone with the Wind but really old people, if at all, when it's on. Did your mom take you to see Gone with the Wind when you were a kid? No, I saw it. My mom did.

It was awful. You know, nobody's watching it. That's the thing. It's like an argument of old people. Like, no young people are going to watch it anyway, and eventually we'll be. I think the issue is a lot of this stuff, like the Confederate statues, they put them in museums. Like, we subject ourselves to context all the time so it's fine it's fine if

they want to do that it's perfectly fine and everyone losing their like mind over it isn't is uh so megan kelly did it come on i mean i know you don't yes maybe we will put things on everything maybe things should have things but you know who did it well warner brothers a couple years ago had whoopi goldberg say look parts of looney Looney Tunes are really gross. And, you know, watch it in the spirit. At the same time, it's part of Americana. And it was a different time and place. And maybe you'll learn something or maybe you'll think it's funny, but just be aware. And I think everyone, like people act like they're so inconvenienced that they just have to listen for a second. And they do it everywhere else. They do it in museums. They do it. So, so what?

So what? I saw your It's a big so what. I saw your tweet on that. I thought that was interesting. But there's a difference between adding context to things, especially cartoons that kids watch. They didn't censor it. It's still available. And pulling stuff down. I mean.

Well, that's because they, at this moment in time, Scott, I know you're all being inconvenienced by this. Hold on. But it's easy to always talk at this moment in time, Scott, I know you're all being inconvenienced by this. Hold on. But it's easy to always talk about this moment in time. I mean, remember when they started blowing up statues in the Middle East, the mullahs, whoever in power, thought they were blasphemous. Yes. every statue uncomfortable. And I think communities and people should have the right to pull down things when they vote on it. But this mentality that, I think there's something to be learned from offensive media. I think there's something that says- I think they were put up as a giant fuck you to black people and Jim Crow type. I agree. I agree. And that's actually- There's nobody voted to put them up. So no, I'm going to, no.

Well, I agree. I think Confederate flags should put them up. So no, I'm going to, no. I agree. I think Confederate flags should be pulled down. But this notion that we're going to start content that is offensive, I think there's a danger here. And that is, I think there's more to be learned from, look how just kind of fucked up in the head we were back then. I think there's opportunities for a learning moment. Absolutely, but without having context, you can't have that. I'll tell you, I'm going to make you watch a film called The Celluloid Closet. I'm going to get away from... I've seen The Celluloid Closet.

You understand why people hate gay people when watching that. I made my mother, I sat her down and made her watch it. It's an interesting time. I just think people getting all exercised over this because nobody ever wants to watch Gaw the Wind unless it's on late at night. And you don't ever watch the whole thing. And by the way, young people, my son was like, what's Gone with the Wind? Like, it doesn't even matter, you know. But it is an interesting time. And I think, again, this was, we'll get to our big story in a second because this is something that just happened recently.

But Audrey Gellman is stepping down as CEO of the wing. There are a lot of issues of people stepping down all over the place. It looks like CEOs are falling like flies. The staff staged a virtual walkout claiming the company is not practicing intersectional feminism, as promised. Can you answer? I'm sure I'm going to get shit for this. What is intersectional feminism? As usual, you're offensive.

But here's the deal. On USA Today, they had a very good example of it in a story they did last year. If feminism is advocating for women's rights and equality between the sexes, intersectional feminism is the understanding of how women's overlapping identities, including race, class, ethnicity, religion, and sexual orientation, impact the way they experience oppression and discrimination. Essentially, it's paying attention to someone beyond yourself. Essentially, they have, when you have stated values and you don't keep up with them, whatever they happen to be. Isn't that just hypocrisy? Isn't that, or as I call it, Sandberging, prostituting a social cause for your own enrichment? Something like that. Wasn't she Sandberging?

No. Yes, I guess if you want to use, I'm not, I don't love your verb, but yes, I guess that's what, but you know, and also, by the way, the business is to use, I don't love your verb, but yes, I guess that's what. But, you know, and also, by the way, the business is screwed, too, FYI. It was already, you know, had a hard time. Yeah, I know. Like, it's interesting. It's just an interesting time for some of these businesses. I think probably they're like, let's do a rethink here on how we want to do things.

And I think that's really what's going on. But it's really remarkable how much, this is a really, it's a very interesting time for people to really reconsider how they behave. You saw Anna Wintour did it, which I think everybody like piled on her. What did Anna Wintour do? Oh, she was like, I've noticed I haven't helped black creators. And I really feel bad about that. And of course, everyone's like, what? Like, you have to look at it. You go watch it.

I'm not going to go into it. Go watch it. Everybody should be aware to go into it. Go watch it. Everybody should be aware of all these different things that are happening, but people are trying to sort of apologize in advance, I think, is what's happening. It didn't work for Anna Wintour. I think she's kind of, it was

a cloddish attempt to negate her entire history. Yeah, but look at this. Coworking, print magazines. It's sort of like, who's next? Whoever's making buggy whips is going to come out as not having help. And a more important thing. I'm going to interrupt you. Big stories.

Amazon and IBM are ending their facial recognition technology products. In a letter written to Congress this week, the company's CEO, Arvind Krishna, wrote that they would no longer be offering images and technology to law enforcement and support efforts in police reform and more responsible use of the technology. There have been several studies showing that facial recognition technologies are biased against people with black and brown skin and can cause harm when used by law enforcement. Later in the week, Amazon released a statement saying they would be implementing a one-year moratorium on police use of their facial recognition technology. They also called on Congress to make stronger regulations. Law enforcement agencies around the country contract with Clearview AI, a startup that scrapes images posted around the internet to identify people from sources like security

viewers. You know, I did this long, you were there, interview with Andy Jassy of AWS. And I was pressing him on this very issue. And he seemed to be like, nothing to see here. Now, what do you imagine is happening, Scott? You know, I think Amazon, I think a lot of big tech has seen many of these issues recently, and the attention being placed on these issues is an opportunity for redemption. And I think that they look at the economic upside versus. And I think that they look at the economic upside versus the opportunity. I think they look at it through a shareholder lens, as a lot of people would argue. And they say, what is the upside here of facial recognition technology as it relates to our shareholder growth versus our ability to basically start

our hat white? I think when Tim Cook says that privacy is a basic human right, he may believe that, but he's also depositioning his competitors, Facebook and Google, who are totally focused on molesting your data as core to their business model, back to the notion of... Can you move away from molest, but go ahead, keep going. But also, you know, and the question, I am asking this to learn, because I understand, I know you're very concerned about this, but if law enforcement can use your DNA or forensics, why shouldn't they be allowed to use facial recognition technology? It's not that they shouldn't be allowed to use it. I think DNA was really bad for a long time, and you saw those people that were convicted and then later taken. I mean, I think it's in a stage where it just doesn't work right.

Because it's error-filled. It's error-prone. And I think it may not be error-prone going out the door, but then law enforcement agencies using it, use it badly. And because it's a question of life or death, it has to be perfect or almost nearly perfect. Well, witnesses aren't perfect. What part of the prosecutorial process is perfect? This isn't witnesses. This is like you're giving people technology that people can act on and make bad decisions.

This is like their car is blowing up, like they're at oops, like that kind of stuff. I think their gun's not firing correctly or whatever. I have no idea what that means. Your car blowing up or your gun's not firing. Well, I'm just saying a lot of their equipment is supposed to work and their technology is supposed to work. They should use almost no guns anymore. I think a lot of people are sort of sick of their use of guns, but they, they, when they buy any equipment, um, they need to, um, they,

that needs to work. And this is equipment and technology and this stuff, you know, there's been so many, there's the ACLU thing with, with recognition. And I think Amazon sort of shoving the ball to Congress. Now, there should be definitely in this area, there should be national legislation. Of course, now it's being piecemeal. San Francisco will have them ban it. Another area doesn't. And so I think they have to think that this is a national discussion in my view. And a lot of the people, I interviewed the guy who does most of the body

camps on people's police, and he doesn't want facial recognition in there. He doesn't think it's ready for prime time. And so, you know, these are people that are in the business and understand how quickly it can be abused or not abused as much as badly used. And so I don't, it's interesting that they did this one year moratorium and then why now? Why did they, after being, you know, harangued by me and many others way before me, they decide to do now? And you're right. It's this waiting for the protests to die down or just it looks good on a press release. I don't know what, I'd like to know why they made the decision now.

I'd like to see what the decision making process was. It would be nice for transparency. I think there's a deeper issue, and it goes to these bailouts, which I think are going to undermine one of the core problems here, and that is a loss of trust in our institutions and our government. Because you talked about DNA being wrong. DNA has also correctly corrected the record and freed a lot of inmates who were incorrectly prosecuted. corrected the record and freed a lot of inmates who were incorrectly prosecuted. So science, you know, science is a, I think is a wonderful thing, both in terms of crime prevention, prosecution, and also exonerating people who are wrongly accused and sometimes jailed for decades. So I get that there, we have to be careful around, because it's science saying that it's binary,

that it's, it's a hundred percent's 100% when it isn't. But I think it goes to this notion that people are losing faith in our institutions because the people running our institutions or our elected leaders are quite frankly undermining them. You know, when you have Bill Barr, the attorney general, the head of the DOJ say that there's evidence of all these far left groups, and then the data comes out and this hasn't gotten enough oxygen. The data is showing we now have some data, people who have been prosecuted, arrested and prosecuted for really sowing violence and destruction at these protests. Most of them don't have any affiliation and the only ones that they could find that were

affiliated with any group were affiliated with far right groups. Yeah, that's right. And when you have elected leaders undermining and overrunning your institutions, we begin to lose faith in our institutions and say, we just don't trust them to handle any sort of science. And it's a real, it's a shame because science is an incredible tool for both people who should be prosecuted and people who should not be prosecuted. It can also declare people's innocence. Anyway.

Yeah, yes, I agree. But it has to. I think facial recognition technology shouldn't be made so badly that it can't recognize correctly people of color. I just, like, they're putting stuff out the door that doesn't work on all citizens. And especially when people of color are at such risk of being misidentified, you know, it's just, they cannot get this wrong. They cannot. And the fact that they let a product out the door that does this or when used, you know, they need to anticipate their products.

And again, Scott, I don't think they need to anticipate every problem, but boy, should it work on everybody's faces and people of color. Same thing with AI. Boy, should it, you know, the data that's going in, um, work, you know, not be data that, that creates the same problems. And so I think I, my issue with Amazon and I know they're like, well, let, let Congress, you know, they're always like, let Congress do this. I'm like, why don't you put out technology that doesn't appear to be so flawed and, or, and they tended to point the finger at police at the time not using it out of

the if you don't use it this way um you know you could it won't work kind of stuff but why doesn't why does it always not work that way and put people who are already at risk in general with police with law enforcement in even more risk or more problems that would lead to it. And, you know, you don't need one of these is one too many. It's interesting that IBM moved in here because IBM is not a big player here. So it was sort of a, you know, I think you call it virtue signaling kind of thing because they're not a player. But Amazon certainly is the most important player in this area, although there's several different players here.

Yeah, I just love, I mean, just from a pure selfish, I love biometrics. I don't have shoes with shoelaces. I don't, I purposely try never to have passwords on anything, which I realize makes me a target. And I don't own, I don't have keys. And I love the idea of a biometric world where it recognizes your face, your fingerprint for access to everything. I just spend, I think people spend so much time, and it's such a hassle,

this notion of this false sense of security. I've never understood locks. If somebody wants to get into your house, they're going to get in. I've just never understood it. Yeah, I agree. Well, but biometrics can be abused, you know what I mean? And, of course, I have to say, you don't think this way. Right, because I have the privilege of being a man that doesn't feel unsafe.

Right. And I'm not, 100%, I get to walk around with a sense of security that the majority of the population doesn't have that luxury. Or even anticipating problems. There was one of my favorite movies. It's called Barbed Wire with Pamela Anderson. I like it already. You need to sidle up to your giant couch in your beautiful home and watch this movie. It is about the future where they look at your eyeballs.

It was way a long time ago. I remember it riveting me. And there was eyeball trading in it. I don't even remember what was going on. Yeah, that was a minority report. Yeah, that was. But this was before that. It was called Barbed Wire.

And she ran a bar and she was sort of like, you know, the Casablanca character. And then she ends up being good. You know, she's like, I'll take your money and this and that. And then she ends up helping the rebels or whatever, the version of that. She's a deeply misunderstood artist, Pamela Anderson. I have to say I've watched Barb Wire so many times. I can't believe I've spent my life watching it. She's Canadian, Pam Anderson, I think. I think she's Canadian. I have no say I've watched Barb Wire so many times I can't believe I've spent my life watching it I think she's Canadian

no information about her but anyway this idea that it could be I do imagine a world where it could be woefully misused and I know there's all kinds of point of information but biometric takes it to a DNA I was an early user to Clear

I signed up when Steve Brill started it and I never thought at the time I remember going early user to Clear. I signed up when Steve Brill started it. And I never thought at the time, I remember going down there to take the picture, which is still in the system, which is super old. And I was really fascinated by it more than worried about it at the time. I love Clear. Don't you love Clear? I love it. I do. I do. I do. But I still, when it was starting to get bought and sold, I started, you know, they had some financial troubles and everything. And so, when that happened, I was like, oh, goodness, they have my, and then I thought, think that's the answer. I think the answer is to have a slow thinking public institutions really think through how do you regulate it. But I think

the notion that we're going to just kick the can down the road and stop investing in the technology or not understand it as well. I don't know if that works. I worry that bad actors don't seize their investment in it and use it for less benign purposes. But I would love Clear to run my life. I think they do a great job. No, I just— It's also—but the dark side of Clear is it's the further casting of our society where if you don't have money, if you can't afford business class, if you don't fly a lot, you end up waiting in line for three hours at an airport. And then if you're 1K, you get this line. And then finally, if you're clear and you have an American Express card, you get to get to your plane in two minutes versus two hours. It's more and more segmentation of our society based on wealth, which is one of the attributes of a capitalist society, but it's

just getting, it feels like it's getting out of control. Yeah, absolutely. I feel badly when I go through that line. Although I, oddly enough, I got it so early, I pay almost nothing for it because I was one of the early, very early users of it. I didn't know that was Stephen Brill. He's the media guy, right? Yeah, yeah. He just wrote me. He's a creative thinker. He just wrote me. I haven't looked at the email, but I just saw his name pop up. He's like, Kara, I'd like to talk to you about this new thing I'm doing. And of course, I'll listen to him because he's such an interesting person. All right, Scott, let's take a quick break and we'll be back to talk coffee. Fox Creative. This is advertiser content from Zelle.

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It's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. All right, Scott, we're back. We're talking about Starbucks. They have closed down 400 stores in North America. You know, there's been a Starbucks on every corner kind of stuff that's been going on. And, you know, they've been trying to do various things. And, you know, you can order. They've done a lot of mobile stuff.

They've been heavy into mobile already and mobile ordering. And they've done a pretty good job. They opened up a whole bunch of stores. But what do you think this means? It's the same thing, the contraction of retail, essentially. Yeah, well, back to this notion that COVID-19 isn't a change agent, but an accelerant. And something I've been working with companies on is look at every trend. Take the two or three biggest trends in your business and then extrapolate them out 10 years. And that's where the consumer is right now, what's happened in the last eight weeks.

And companies, there's a lag. Companies, in terms of their capital allocation and the moves they're used to making, in terms of their capital allocation and the moves they're used to making. And there isn't so far a recognition that what has gotten you here today is what's required to get you where you need to be. And if you look at Starbucks, which has always been, they're an incredibly impressive company. Starbucks has got great management, great DNA, very forward-looking. You know, the first company that said it's about moving from

pre-purchase running ads, you know, good to the last drop and about the purchase and creating this unbelievable experience, not only through real estate, but through workers that are happier, they spend more money on benefits than they spend on coffee beans. And that app you were talking about is borderline revolutionary. If you look at the amount of money that's preloaded onto the Starbucks app, I think they're the seventh largest bank in America. It's a terrific app. If you look at the amount of money that's preloaded onto the Starbucks app, I think they're the seventh largest bank in America. It's incredible. I got to tell you, it's a great app.

It's a great, I always am like, I never have problems with the Starbucks app except if it signs me out and I don't remember, you know, what I've called myself. It's run by a tech guy and he certainly has been, right now it is, took over from Howard Schultz and others. And it's really interesting.

Is it a digital company or is it an analog company? Because it's always been like you're on one corner and you looked across the street and there was another Starbucks because they did all this mathematical figuring about walking and things like that. So they've always been a tech-forward company. What does it mean for companies like Starbucks? Because you're in a CUC, specialties went away, a lot of store closings, people are moving out of malls.

Is there such a thing about going to a Starbucks anymore? Is it all going to be ordering in advance? It'll just be accelerated. It was already moving that way where, I think, I'm not sure, but I think it's 20% or 30% of their purchases now go through the app. And if you look at an organization like Restoration Hardware, 95% of their gross merchandise volume goes through their loyalty program. You could see, it's just going to accelerate. Wherever they thought they were going to be in 10 years in terms of their store footprint,

the skills they need, where they allocate capital, they should be now. And they're doing that. They looked at their store footprint and said, where would it be in 10 years? Because 10 years, we've had a decade in weeks. And they've decided to dramatically shrink their square footage. I would bet a lot of those stores were still profitable. And they've decided that they're going to, it also gives them more leverage negotiating their leases. It says that we came to play. Which they already had done. They already had done. Is that right? Yeah. Yeah. But you have, you have.

I mean, it is just so, it's just crazy when you talk to these companies. Their general attitude is that what's happened here is cyclical and that we're going to get out of it. It's not. It's structural. 10 years,

where were all these trends going to be in 10 years impacting your business? Well, we are there. And how would that, how would you, how would you expect to be or look different in 10 years? Who else is like this? Starbucks, he had already been experimenting around coffee machines that

are easier to use. He was, I had a long talk with him about coffee machines, which is all about the technology of getting these, these drinks made more quickly, you know what I mean, in terms of, and better, better tasting. What other businesses, like, look, the CEO of Patagonia stepped down. I'm not really clear. I guess she was accelerating what was, this is what they were saying, the company saying this. I know her pretty well. She's really quite a fascinating character.

And of course, it's owned by one guy. The whole thing is owned by one guy who is sort of probably running, she's a very strong CEO, but he's the decision maker, obviously. What happens to all these? Like, when do companies decide do they have to have a retail presence or not at all? The future is multi-channel and it's going to meet in the middle.

It's just the ratio of spend around tertiary versus digital. The ratio is just getting flipped. And you're going to see whatever your percentage of offline versus online sales is just going to dramatically move. The most significant transition is taking place in what is arguably the largest consumer category in the world, other than maybe healthcare, and that's U.S. grocery, where we're going to go from 1.8% of retail sales, of grocery sales done online to somewhere between probably 15 and 20. And when you're talking about a three-quarters of a trillion-dollar market, you're talking about $100 to $150 billion in transactions all of a

sudden switching from one channel to the other, which creates massive opportunity and disruption. Think about cold storage. Like, where do they leave your cabbage and your milk when they get to your house? Think about pick and pack technologies. Think about apps. It's just... The milkman, Scott. There you go.

I am just signing up for a milkman. He's all full. The milkman here. And I always like the idea of a milkman. And there's a couple of businesses who do this who are just going crazy in terms of. And that you're right. There's a little box that you put stuff in. I mean, it's so funny because that was like the milkman was put out of business by grocery stores, essentially. But they have other things, you know, cheese, bread, fresh eggs, all the fresh stuff. And obviously Amazon sort of, you know, comes up the rear with all the hard goods

or the, or I, I have to say the other day, I was like, I have not gone to a store in a long time. And I am not, I buy every, I like, I think of something in the house and I go on Amazon or wherever, or I went to container store. I went to somewhere else. I was looking for an umbrella for the porch. I'm not going to stores, I don't think, very much. And I don't go to a lot of stores, but I'm absolutely not going to stores now. Like, I can see everything online. The merchandising has gotten a lot better. You know, the milkman, like, it's a milkman moment.

Like, milkman. Yeah, there'll be niche providers. We have, down here in Florida, we have this individual who each day he goes out, and he goes out to the second or the third reef off the coast and he catches fish fresh and he puts out an email saying, this is what we have. And then he drops off this ridiculously fresh fish. And I wondered, is that going to replace Whole Foods fish? I mean, it's just, there's going to be niche offerings and then there's going to be the platform that kind of offers it all and brings it to you. And it's probably going to be Amazon or Walmart. I think they're going to consolidate the marketplace. Yeah, it's interesting. And also, some of the stuff, though, what goes

away and what stays? You have to be like this wonderful retailer or what is it that, like, I do go to my hardware store because I like wandering through my hardware. It's an experiential thing. I'm not sure what it is. And if I don't find it there, I then order from Amazon because I often am like, I'd rather give them money for one. And two, I like it. I actually enjoy myself in the hardware store. Same thing with restaurants. It's totally inappropriate for me to make a lesbian joke right now, right?

Yes, go right ahead. I have a tool belt. I don't think that way. I thought you wanted to be vulgar. Be vulgar. Go and be vulgar. I don't think that way. Oh, yeah.

Anyways, you and Home Depot. I'm sorry. Go ahead. No, I don't like Home Depot. It's too big. I like my hardware store. What do you like better than Home Depot? I think Home Depot that way. Oh, yeah. Anyways, you and Home Depot. I'm sorry. Go ahead. No, I don't like Home Depot. It's too big. I like my hardware store. What do you like better than Home Depot? I think Home Depot is wonderful.

It's too big. Wander, wander, wander. I think I'm going to die in there, and then they'll never find me back in the lumber area. Great job. Such a well-run company. Oh, I don't like Home Depot. I never do. So what little niche hardware store do you like?

It's in Logan Circle. It's an Ace Hardware. It's just great. I like the people. They're quirky and interesting. They're always helpful. The customer service is fantastic. And if I don't find it there, I then find it on Amazon.

And I usually find it there. It's interesting. But not everything. Not everything. And the selection isn't enough, for sure. Now I have massive selection. But I always do an Amazon search before I go now, which is interesting to see if I like

something better. But on a lot of things, I can just get there, like nails are nails, essentially. But last question before we go and go to predictions. What would work retail? Is it restaurants? Because I do miss sitting in restaurants. I like a restaurant. I don't like a bar. I don't drink. But those I don't see me doing less of at all with delivery. I'm so tired. I don't think I want anything delivered again for the next three years. Oh, restaurants are going to get crushed, Cara. I know they are.

But I'm trying to think. Tell me one thing. I want a positive thing for your predictions. What in the retail space doesn't get killed or have to go almost completely digital the stuff that's experiential maybe a sephora or restoration hardware the stuff where it going is is uh you know calls on your dopa stuff that makes you feel a that is not crowded and b is your go for the people not for the products right and that is when you go into a sephora you go in for the people you're going for the cast members when you go to restoration hardware you go for the people, not for the products. And that is when you go into a Sephora, you go in for the people, you go in for the cast members. When you go to Restoration Hardware,

you go to feel, you know, that seventh floor restaurant where they have wine and it's just beautiful and sunny and you kind of envision what your home might look like. I think places like that, the experience stuff, but we have, I think, 18 square feet per person in a square foot of retail in the US and like London has three. I mean, we're just so radically overstored that this isn't doing anything different. It's just if someone had

said, where would we be again in 10 years? It's going to look like where we're going to be next year. But it's a very interesting question. The guys that get hit really hard are especially retail apparel. And then anything, you want to talk about industries, they're just getting killed. It's just so weird. Anything where you sit shoulder to shoulder, whether it's sports, restaurants, education, my industry, you can't imagine the tension and conversations we're having. Harvard's going digital. Well, I mean, but look at Harvard.

Harvard has to lay off people with $40 billion. Can you imagine what's happening everywhere else? Scott, your predictive nature has come to the forefront. And we're going to take a quick break. And you're going to make some more predictions when we get back. Support for this podcast comes from Anthropic. You already know that AI is transforming the world around us. But lost in all

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Go to ConstantContact.ca for your free trial. ConstantContact.ca. Okay, Scott, we're living in unpredictable times, but you've done a very good predicting things like the school stuff. What do you think our lives are going to look like a year from now? I want you to be like a little Nostradamus-y here. Oh, I don't. I mean, we're going to need a bigger boat for that. My prediction for today is more around big tech.

I think there's going to be some very interesting, I think some border skirmishes break out. Specifically, I think big tech is going to start making some fairly bold moves. I think you could see Apple go into search. Did you see that tweet at us saying we're into DuckDuckGo? Yeah, saying that they really didn't appreciate us mocking DuckDuckGo, that they thought that was damaging, that we rag on big tech and we're playing. I love how they like roll me into you because I was like, no, it's really good to have a competitor. I was like, I did not say that. It was Scott Galloway. You're wrong with the dog, you're a hound. Apparently, but go ahead. So, okay. Well, the other gangster move, I think,

that would be really interesting if Twitter doesn't get its shit together and move to subscription is I think there's an enormous opportunity for LinkedIn to start a Twitter competitor. LinkedIn. Well, think about this. And again, it goes back to the notion that advertising really is the tobacco that causes the cancer in media. And that is LinkedIn isn't being weaponized.

It isn't tearing us apart. It's a powerful social media platform. Why? Because a third of the revenue comes from subscriptions. A third of it comes from individuals who want to pay for more access or have more in-mail opportunities. And only a third comes from advertising. What do you know? LinkedIn isn't totally fucking up the world. You know it's a Microsoft property. You know, I'm going to bring in Jeff Wiener dog to talk about it. His name's Jeff Wiener. He's impressive. He's very impressive. He is. And he's, the only thing though is he, I always, I'm going to tell him we him on the stage, I'm like, what's it like to be a division of Microsoft?

He's like, we're LinkedIn. He never will say a division. And I always go, comma, a division of Microsoft. Brought to you by Microsoft. Brought to you by. And he's like, and I'm CEO of LinkedIn. He's a really clever man. He used to work for Warner Brothers.

He's had a long, interesting history. Very talented executive. He is. So you think they would start a Twitter? Well, I think something, so my prediction is the following. In the next 60 days, there is a frightening declaration of border skirmish that's going to turn out to all-out war. Either Apple is going to take advantage of their access to the consumer and the fact that they own the rails and introduce a more direct competitor to Google. Because right now they make about $6 or $7 billion

in free cash flow by having Google be their default search. They could buy DuckDuckGo and start offering their own search. Or you could see if Twitter doesn't bust a move quickly and take advantage of their opportunity to go after basically wealthier blue state cohorts and offer a subscription service, I think the opportunity

is for LinkedIn to start a microblogging platform that is more clean, more pure, more starts professional, but moves to media. But it's not crazy then. You don't get Tom Cotton yelling at you like I had today from my column. Senator Cotton was yelling at you? Oh, yeah. That's a badge of honor. Oh, yes. You're just boasting now. No. You're just boasting. I know. But I was just thinking.

Does he understand intersectional feminism? I don't think so. Does he get where feminism intersects with feminism? What the fuck does that mean, intersectional feminism? Why don't you take a course at NYU? They have excellent courses at NYU on this. I hear they're online. Oh, my God.

I am a living lesson in intersectional masculinity. You take Cialis, the Coppa, and a little Steely Dan Asia. Boom! The dog is ready to play. It's go time, Carol. It's go time.

You are intersectional in all the best ways. Listen to me. I don't know what will happen to you because you've got Tom gotten being crazy here. You've got the president

talking about the Confederacy and today the SS. Somehow we got... Oh, you know what was a gangster move, though? You did not see that coming. The chairman, the chairman of the Joint Chiefs of Staff. I think you mentioned him, General Milley. Yeah, but you know something? These guys have code. He went on and said it was a mistake for him to be in that photo. What was he doing there? He should have known it was a mistake.

Yeah, but you know what? Come on. How many other people, how many other people in the Trump administration have stood up and said this was a mistake? He'll probably lose his job over it. Men and women in uniform have something no one in this administration has, and it's they have code. Yeah. Well, then we're going to have like Stephen Miller running the military at some point, whatever. On that note. that on that note he's writing a speech about racism that's really that's a that's a speech i don't want to hear but i'm saying let me get back before he finishes yeah if what happens then to twitter to who buys that who wants to touch that well and he's still in there making a mess like or you know yeah who wants they don't need to twitter has an enormous opportunity here zero to zero to a thousand followers free a thousand to twenty five thousand

followers ten bucks a month. And then it goes up to if you're Kim Kardashian and you have to pay $25,000 a month, which she would pay because she's getting $30,000 per sponsor tweet. I wouldn't pay that much. Oh, yes, you would. No, I wouldn't. Oh, sure you would, Carol. I don't have it today. You're addicted to Twitter, and it's a very powerful platform for you.

No, I would not pay $50. You wouldn't pay $50 a month for Twitter? I might. Yeah, you might. And guess what? They're not making $50 a month powerful platform for you. No, I would not pay $50. You wouldn't pay $50 a month for Twitter? I might. Yeah, you might. And guess what? They're not making $50 a month off you of advertising. And even if they have a reduction in revenues, which they will in the short term, if they could hold on to 50% to 60% of their revenues, they would have a much higher market valuation. Are you mounting with friends of yours, rich friends in the Wall Street area?

I think you're mounting. No, I've disclosed this. I'm a Twitter shareholder. And if they don't move to a subscription, if they don't move, Twitter at $100 a share is on less revenue than they are now moving to a subscription model that's growing faster than every other platform. Now they've got that money. They've got, Silverlight

came in and saved them. Yeah, Ezon Juergen or Edon? Edon Durbin. Edon Durbin. He's very intersectional. He's very intersectional. He's an intersectional head fundist. I am going to, I'm going to send you some, in fact,

I'm going to let you, I'm going to send you some literature that you are going to read for our next gathering. Literature I'm going to read? Why, why thank you,

fair lady, from Gone with the Wind. Oh my God, on that note. Frankly, frankly, Kara, I don't give a damn what intersectional feminist literature you send me. Oh, my God. On that note. Frankly, frankly, Cara, I don't give a damn what

intersectional feminist literature you send me. Oh, God. I just don't even know what to think. All right. We got to sign out here. We got to go. Don't forget, there's a story in the news you're curious about and want to hear our opinion on. Email us at pivot at voxmedia.com to be featured on the show. Read us out, Scott. Today's episode was produced by Rebecca Sinanis. Our executive producer is Eric Anderson. Our sound engineer is Fernando Finete. If you like what you heard, please subscribe, download, comment, send us an email. Also, thanks to Drew Burrows.

We'll see you next week for a breakdown of all things tech and business. Have a good weekend, Kara. Deliver that feeling to your customers every time. Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond. Make every moment count with Klaviyo. Learn more at klaviyo.com slash BFCM. for this podcast comes from Stripe. Stripe is a payments and billing platform supporting millions of businesses around the world, including companies like Uber, BMW, and DoorDash. Stripe has helped countless startups and established companies alike reach their growth targets, make progress on their missions, and reach more customers globally.

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