The Best One Yet - ⚔️ “Wakanda got Tariff’d” — Trade War’s nuclear fallout. White Lotus’ drip strategy. Coach’s dwell time.

Starting point is 00:00:00 This is Nick. This is Jack. It is Friday the real Friday, April 4th. And today's pod is the best one yet. This is a T-boy. The top three pop business news stories you need to know today. Jack, breaking news. The White House has just announced new tariffs on Wakanda.

Starting point is 00:00:20 That's right. The fictional country of Wakanda from the Marvel comic books has just been tariffed. Let me get to real headline, but I wouldn't be surprised. Update more breaking news. Jack, I'm getting one. that Black Panther, the leader of Wakanda, is putting retaliatory tariffs on America. That's how the news cycle has felt recently. We are living, we are living through history.

Starting point is 00:00:40 The S&P 500 sank by 5% yesterday, the worst day since 2020. It's all because of Trump's global trade war, which we'll get to in a sec. Jack, three stories for today's show. What do we get? For our first story, the White Lotus season finale is this weekend, but it's already answered the biggest debate in streaming. The HBO Weekly Drip versus the Netflix binging drop. For our second story, this week, President Trump dropped a nuclear tariff bomb in Trade War II. So let's zoom in on the $324 iPhone tariff.

Starting point is 00:01:14 And our third and final story. For some reason, Gen Z is spending all their time hanging out in coach handbag stores. Turns out the reason is a brand new concept, and it's called dwell time. Dwell time. Dwell time. I can use some dwell time. Yetis, before we hit that wonderful mix of stories, fantastic mix of stories to go into the weekend with Jack.

Starting point is 00:01:33 According to every tech company, glasses are the future of computing. You got Google Glass, Meta Raybans, Applevision pros, they're all glasses. But the most powerful glasses aren't from Silicon Valley. They're from Buffalo, New York. We're talking Buffalo Wild Wings glasses. Here's the problem. You're at Buffalo Wild Wings watching the Final Four this weekend, plus every baseball game and golf.

Starting point is 00:01:57 Plus a couple basketball games in hockey, Jack, what is the solution to watch all those games? Glasses that let you watch 10 screens at the same time. Get this, Buffalo Wild Wings is now selling a single pair of glasses to let you watch 10 screens at once. And the wildest part, you don't plug these in. They don't have a battery. They don't even use electricity. No, because these glasses are simply attached with 10 mirrors sticking out of the frames. It's like those mirrors you can attach to your bike helmet. I can picture that. But there's 10 mirrors.

Starting point is 00:02:28 So, besties, you put these on. You can watch Duke v. Alabama directly ahead of you. And then tilt the nine mirrors just right. So you can watch the entire Major League Baseball slate. Jack, this is not a bifogel. It's a 10-fogel. It's not four-eyes. It's 10-eyes.

Starting point is 00:02:41 This is the biggest innovation in glasses since the croaky. You kind of look like Edward Cisorhands, but on your head. In a good way. The way, Jack, and I see this, this isn't even the cleverest part of the innovation, is it, man? The cleverest part is that they're not giving them away for free. Buffalo Wild Wings is charging $10 per use, which is still 99% cheaper than those Applevision pros. And you only look marginally more ridiculous. So yeah, these one chicken wing chain just out-innovated big tech.

Starting point is 00:03:10 And these spectacles, they're a spectacle. Oh, yeah. Jack, let's hit on three stories. 15 years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm. Jack, Nick, that's it. even think they need to practice. 50% that's a fat tip.

Starting point is 00:03:30 Tea Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more, so just start the show. Start the show. First, a quick word from our sponsor. For our first story, the White Lotus season finale is this Sunday. Whose dead body is going to end up floating in that pool? Nobody knows.

Starting point is 00:04:02 But the bigger question, is HBO's drip strategy better than Netflix's drop? We have got the answer. But Yeti's White Lotus. Sex, money, and room service. Someone's going to get undressed, and someone's going to die. Popper, I'm going to need more, Loris of Pam. That's pretty good. Yeti's in February, we told you about the White Lotus effect.

Starting point is 00:04:25 Wherever the show films, tourism jumps by 20%. Is that the patio where Lori wings at Valentin? Well, sure, I'll pay $2,000 for that room. By the way, we just got new numbers. the White Lotus actors all got paid the same fixed rate, $40,000 per episode, and there was no negotiating. So regardless of fame, each and every actor got paid $320,000 for the whole season. Whether you were Saxon, Lachlan, or Piper, you got the same pay.

Starting point is 00:04:51 Yeah, it's a big show, so the studio has leverage in terms of what they're dishing out for paychecks. Patrick Schwarzenegger, by the way, he actually cried when he got selected for the cast. He posted a video about it. Yeah, in the video, I think he goes, tsunami! But seriously, where's my lorazepam? I think it's larazepam, but I love where you're at that. But yet, he's no spoilers here. Jack is two episodes ahead of me.

Starting point is 00:05:14 And we notice that the biggest drama in White Lotus isn't Chelsea's teeth or the brotherly love. It's the publishing strategy. That's the biggest drama. More specifically, the drip strategy versus the drop strategy. Because Netflix lets you binge it all, but HBO makes you wait seven days for the next episode. We're talking about the delay versus. the deluge. The binge blitz versus the trickle treat. The Netflix feast versus the HBOTs. This is the biggest divide in streaming. It really is. Do you let viewers watch at their leisure all at once if they want,

Starting point is 00:05:44 or do you make them wait for a weekly schedule? Well, we have noticed that so far this year, the shows that drop weekly are winning the cultural clout. White Lotus and Severance, both captured the zeitgeist as momentum grew each week with the new episode. We jumped in T-Boy style and we got the data now. Get this, White Lotus viewership has grown every single Sunday episode to episode. From episode six to seven, viewership jumped by 14%. Oh, and anecdotally, everyone you know has been freaking out about Severance for the last 10 weeks. Probably already chose a Halloween costume of Mr. Milchek. Because with both the White Lotus and Severance, over two months, the cast members got to make PR appearances on late night talk shows.

Starting point is 00:06:25 Honey, is that Mark S on Conan? Let's watch. And for eight weeks, the office water cooler had one conversation top. Hey, Frank, is Moog a murderer or what? I got a lot of theories. Plus, I've seen eight weeks of White Lotus memes. Each week, we had a highly memeable moment that spread like fire Monday morning on social media. Oh, but Jack, on the other hand, what was happening with Netflix's shows in Q1? Squid Game 2 dropped the day after Christmas? I didn't hear a peep about it.

Starting point is 00:06:53 Makin Markle's show got a lot of publicity that first weekend, but then they both kind of flamed out after a few days. AdWeek actually studied a dozen different shows from the last two years, and they found that fan engagement is three times higher when there's a weekly release schedule versus one big drop. So add it all up, and it looks like the Netflix feast is getting roasted by the HBOTs. We bet your buddies are talking more about Severance and White Lotus than they are Squid Game. What's Squid Game? So, Jack, what's the takeaway for our buddies over in media?

Starting point is 00:07:24 Sometimes disruption is actually just an interruption. Yeties, when Netflix streaming technology introduced The Binge, it disrupted how we all watch TV. And it was so popular, we assumed that the Netflix way would become the new norm. Every streamer would drop the whole season at once. But despite the existence of that binging technology, the trend has actually gone in reverse. HBO Max, Apple TV Plus, Amazon Prime, they all keep their premium shows on a weekly drip schedule. I mean, Jack, even Netflix is seeing the appeal. Love is Blind is now a weekly drip release.

Starting point is 00:08:00 Here's the deal. As Hollywood's financials remain squeezed, marketing teams want to spread out the marketing bang to make their bucks last longer. And now we've got enough evidence to confirm that the drip strategy is beating the drop strategy. It shows that disruption isn't always permanent. Now, what looks like disruption might actually just be a temporary interruption. For our second story, on Wednesday, Trump dropped a nuclear, bomb in his trade war. To understand the fallout, we're looking at the iPhone and the new $324 iPhone tax that someone's going to have to pay. Now, yet he's a bit of historical context. The United

Starting point is 00:08:42 States set up the global world order after World War II. It's made us the richest country in the world. But President Trump thinks we should go back to when America made stuff in America. So he blew up the world order on Wednesday in a way that only the president of the United States could do. Jack, could you recap the key numbers for us over there? please? Here's the key trade war escalation from Wednesday. A minimum 10% tariff on every country that we buy stuff from abroad, plus extra tariffs on countries that we have a trade deficit. The wildest part may be that the United States put a 10% tariff on the McDonald Islands off of Australia, which Jack, how many people live there exactly? No people, yeah, but penguins live there.

Starting point is 00:09:21 There are penguins. We should point out those penguins, they're going to have to pay. Now, Nike stock plummeted on Thursday by 10%. Because we get 97% of our. footwear from abroad. Lulu Lemon fell by 10%. Because 50% of our clothing comes from China or Vietnam. And restoration hardware dropped by 30%. Because that lovely sconce in your mother's kitchen was made in Asia. But it's not just investors who are suffering. Consumers will too. And to best illustrate the pain, we're looking at the brand new iPhone tariff. More specifically, the $324 iPhone tax. Because Yeties, Apple assembles 90% of its iPhones in China. Well, China just got it. got a brand new 34% tariff on everything they produce. But that's on top of the 20% tariffs that Trump

Starting point is 00:10:07 already placed on China last month. Good point, Jack. So add it all up, that means we've got 54% tariffs on anything made in China coming to America. That's basically a 54% sales tax on the most popular product of all time, the iPhone. We should sprinkle on a little more context here. The 54% tariff isn't paid on the $1,000 price tag of your next iPhone. All right. Apple buys iPhonescon factory for about $600 each. And that's the price that the tariff applies to, the $600 bucks. Apple then marks up the price of the iPhone to the $1,000 that you and us pay in the stores. So what is 54% tariffs on a $600 iPhone?

Starting point is 00:10:47 Well, Jack, that would be $324. That is the new tariff on iPhones that come to the United States. It's an enormous new tax on the iPhone. $324. Now, besties, Apple whips up your iPhone in China because the labor costs are less, but this new tariff cancels all that out. Still, we don't think there's any way Apple moves their iPhone factories to America. They would only do that if they were certain that these tariffs were permanent, which they're

Starting point is 00:11:16 almost certainly not. Timmy Cook donated a million bucks to Trump's inauguration, hoping for an exemption, and it looks like he didn't get it. But we expect them to continue lobbying for that exemption, or just hope that China cuts a deal of the U.S. to cancel all these tariffs. In the meantime, Walmart, Nike, General Motors, your mom's sconces from restoration hardware. Virtually every big company is facing the same issue to varying degrees. A new tax on their imported products. So, Jack, what's the takeaway for our buddies is over at Apple? Who is going to pay the $324 iPhone tax? You know what yet? Honestly, the short

Starting point is 00:11:51 answer? We don't know yet. But we can tell you that nobody is going to be unscathed. Maybe the factory, Foxcon is going to pay for some of the tariff by lowering the price that they sell the iPhone to Apple. The Chinese factory could become less profitable or they could cut the wage of their workers. Either way, someone's going to pay. More likely, we think Apple is going to pay for this tax by accepting a lower profit margin.

Starting point is 00:12:11 Or potentially, Jack, we U.S. consumers could pay because Apple's got a lot of leverage and could just pass the tariff on to us. I'm not going to buy an Android phone. And Apple knows that. So if they raise the price by $324, I might delay my new iPhone, but eventually I'm going to get a new iPhone. Oh, there you go, Jack. We just lost a sponsor. So, Bestie's, only time will tell how much of the new $324 iPhone tax trickles down into the price we all pay at the Apple Store register.

Starting point is 00:12:37 It's probably going to be split in some way between Foxcon, Apple, and us consumers. But in response, Apple's stock fell 9% this week, which is double the drop of the whole stock market. Besties, this is the most uncertain moment for the U.S. economy since the pandemic. Well, one of the millions of questions our economy faces, who's going to pay this third? $324 iPhone packs. Now a quick word from our sponsor. For our third and final story before the weekend. A strange new phenomenon is taking over coaches handbag stores.

Starting point is 00:13:15 Gen Z is just hanging out. We need to talk about a new way to measure retail success. Dwell time. Dwell time. Now, yeties, if you work at a Wall Street bank, odds are at least one person in the room is about to drop a coach bag on that conference table. Coach, the accessible status symbol bag. Still, 200 bucks to 2,000 bucks. This is a subtle urban flex, baby. It's not a Hermes Birken bag, but you definitely don't want to

Starting point is 00:13:43 leave your bagel inside it. Tom Wamsgan, well, spanky if you do that. Coach is owned by Tapestry, a $13 billion American fashion conglomerate, and their stock's done pretty well this year. It's up 40%. But Jack, what's the weird thing that's happening at these coach handbag stores? The online publication, modern retail, notice that Gen Z is just hanging out at coach stores, like a half hour, an hour. Young people are just like meeting up at Coach for hours like it's a public park. Why all the retail ordering? Honey, where were you today? Uh, I hung out at Coach, Mom. Stop asking questions.

Starting point is 00:14:16 What were you doing at Coach? Well, the answer, Jack, is a new concept called Dwell Time, and Coach made it happen. Coach redesigned 12 of their stores to strategically test a new idea. They wanted to get young people to come inside the store and just dwell. Dwell, hang out. It's actually a whole new KPI that Coach measures, they call dwell time. It's an experiment. They're setting aside 50% of the floor space at these 12 stores for an activity to compel you to just stick around for a while.

Starting point is 00:14:48 They're like they told the architect, let's have a mirror here, let's have the changing room here, and let's put the dwell zone right here. Here's an example of what's in one of the dwell zones. Yeah, like Jack, they would have a customized bag area so people could hang out and watch a custom bag get made right before their eyes. Another has an ice cream shop inside so that you can lick your... What do you lick, Jack? What are you going to look in that store? Here's where you're going with this dwell. You could lick your moose tracks while browsing a really expensive handbag.

Starting point is 00:15:17 Well, Jack, I got to ask. After all of these new dwell stores, is the dwell concept working for coach? Absolutely. At least it's causing you people to dwell more. These dwelling activities have increased the time spent in stores by 4 to 8x compared to a regular store. At one coach store in Malaysia that had live music and a DJ, you spent 12 times as much time in the store just dwelling. Now, at first, I thought this was a dumb idea. Jack questioned the whole story. He really did.

Starting point is 00:15:44 Why would a handbag store start side-housing as like a concert venue? Like, are you a bags shop or are you an ice cream shop? I'll tell you what, Jack, if they added a mechanical bull, I'd probably buy three bags before I even walked out. No, you wouldn't. But like, a mechanical bull would be so incongruent with the bag store. I guess you're asking, Jack, if people dwell more, but to what end are they dwelling? I could take my shirt off and people would dwell more. Well, maybe not. Maybe not. So, Jack, what's the takeaway for our buddies over at coach.

Starting point is 00:16:16 More dwelling, more selling. Ladies, everyone these days is focused on point of sale, eliminate friction, one-click shopping to make people buy, buy, buy. It turns out, giving people space and an experience to hang out and engage, that sells just as well. Yeah, according to Path Intelligence's latest white paper, there's a high correlation between dwell time and spending. The more time a customer spends chilling with an ice cream cone or a DJ or a custom tote bag embroidery station, well, the more likely they are to walk. out having swiped their credit card. Plus, the more time they're dwelling in your store is the less time they're spending at the competition store.

Starting point is 00:16:55 So Coach is adding on-brand non-disruptive activities to their stores to increase dwell. No to the mechanical bull. No to me taking my shirt off either. Yeah. But yes, to a live string quartet. So Yeti's coach handbags, they reveal a big new data point. More dwelling, more selling. Jack, could you whip up the takeaways for us for the real Friday?

Starting point is 00:17:20 White Lotus has captured the zeitgeist for eight weeks because their episodes drip, they don't drop. Netflix's binge felt like disruption, but it was just a temporary interruption. For our second story, Apple, everything Americans buy from abroad has a new tax. For the iPhone, it's $324. Well, who's going to pay that tax? Us consumers, Apple, and maybe Foxcon the Factory 2. And our third and final story is Coach. They're adding activities in their stores to increase dwell time. We've literally never said the word dwell as many times as we just said it. And they're doing it because more dwelling leads to more selling. But Yeties, this pod's not over yet. Here's what else you need to know today. Yeah, we were curious. First, the only stock market winner yesterday?

Starting point is 00:18:07 McDonald's. They ended up 2% at an all-time high. Why? Because investment banks hugely raised their expectations yesterday that the economy was going into a recession. The S&P 500 is now down 12% from its all-time high and the tech-heavy NASDAQ is down 18%. By the way, Nick and I, we don't sell our stocks during panics like today. No idea. This is an investment advice, but we've been through these before, and downturns have always rebounded. And second, Hershey's chose Tea Day, tariff day, to make a huge announcement, shockingly. The chocolate company is buying lesser evil, that popcorn brand you see at the co-op.

Starting point is 00:18:41 I know you're a popcorn guy, Jack. Hershey's is going to pay up to $750 million for the popcorn brand if they hit some fantastic milestones. And finally, the final four is this weekend. Four number one seeds are remaining on the men's side. Three number one seeds and one number two seed remain on the women's side. March has had no madness. Zero madness. If you picked only the favorites to win, you're probably winning your bracket. And that's, that's kind of lame. Eastern Purdue Central State University just didn't do it for me this year, Jack. The less risks you took on your bracket, the better you've done. Yeah, I only had upsets. Now time for the best fact yet. This one's sent in by Breaking.

Starting point is 00:19:21 News, Jack. The White House has just announced new tariffs on Westeros. The Fifth Kingdom and Game of Thrones will now have a 25% tariff on barley, grain, and dragons eggs exports. Oh, boy. Is the Bank of Bravo is going to cut interest rates to account for this? Breaking news, update, Jack. I'm getting word that Queen Cersie of Westeros is putting retaliatory tariffs on all U.S. weapon exports. True story. I got a feeling little fingers behind this whole policy. I got a feeling little fingers behind all of this tariff stuff. Wow, that was the best fact yet? That was it, Jack. That was the news report, man. That was the news report. Okay. All right. Good way to end of the week. Yiddies, you look fantastic over there. And Jack and I whipped up a little something special

Starting point is 00:20:06 for this podcast for you tomorrow morning. We got a tease about one of the subjects of today's episode. The iPhone. We've got a tease of our weekly show, the best idea yet, where we tell you the untold origin story of Apple's iPhone. You can tap the link in the episode of description today. or just wait till it drops on the feed tomorrow. It's a fantastic story. Wild team behind it. You're going to love this. But in the meantime, Jack,

Starting point is 00:20:27 so many wins to celebrate this week. Incredible time with you at the Ambees. What an amazing trip to Chicago. Sorry we didn't wear tuxes, but you looked amazing in that navy suit. That red carpet was the Jack carpet. Best you celebrate the wins, and Jack and I will see you Monday.

Starting point is 00:20:46 And before we go, a happy birthday to Yeti Lauren Bergeron, who's celebrating not just a bidet, but a wedding. She's turning 40. her fiance, Caleb's turned 45, and they're going into it with a whole lot of love in Pinehurst, North Kakalaki. Nice. And happy 35th birthday to Sam Wilkins in Eugene, Oregon. And Enzo Benfanti, the T-boy, a husband in Buffalo, New York, has got the best birthday yet. Happy birthday to Chrissy DeLore from Brooklyn, who's not a recession brunette.

Starting point is 00:21:14 And Princess Adelena in St. Joseph, Michigan, has known this theme song since she was in the womb, and that means she's going to have a best birthday. Happy 30th birthday to Breonna Winberg in Winbury, Massachusetts, who's doing a Euro trip with her buddies. And Carly Canick has celebrating the birthday in Chicago with her puppy Francisco, her husband, Mark, and a whole lot of logistics. And a big shout out and happy birthday to Karen Huang in Kingston, Ontario, who has shared this pod with more of her business school students than anyone north of the border. Karen, we stand on guard for thee. And everyone in northern Michigan, who's been stuck at home in ice storms, we're here for you to win. up the takeaways and keep it entertaining.

Starting point is 00:21:53 And congratulations to Ashley and Arnold, who are celebrating their dinkhood with a wedding in Las Vegas. And Lizzie and Jared are getting married over in Kauai, Hawaii. They met at Duke's Business School, and these Blue Devils are the top seed in the marriage ceremony. Oh, and a big shout out to little brother Chuck, who is a T-boy. This is Jack. I own stock of Amazon, Restoration Hardware, and Netflix. Nick owned stock of Nike and Lulu Lemon, and we both own stock of Apple, as well as ETFs of the S&P 500. How's your dwell time, Greg?

Starting point is 00:22:27 I'd say strong to quite strong.

The Best One Yet - ⚔️ “Wakanda got Tariff’d” — Trade War’s nuclear fallout. White Lotus’ drip strategy. Coach’s dwell time.

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