Pivot · Jun 12, 2020

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

Automatic transcript of the end of the episode, from 29:02. Speakers are labeled by software and may contain errors. Highlighted passages are Scott’s predictions.

Kara Swisher · 29:02 He's he's the decision maker, obviously. What happens to all these? So, like, when do companies decide? They... Do they have to have a retail presence or not at all? Scott Galloway · 29:13 The future is multichannel, and and it's gonna 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 health care, and that's US grocery, where we're gonna go from 1.8% of retail sales... Of grocery sales to online to somewhere between probably fifteen and twenty. And when you're talking about a three quarters of $1,000,000,000,000 market, you're talking about a 100 to $150,000,000,000 in transactions all of a sudden switching to one... From one channel to the other, which creates massive opportunity and disruption. If you 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 Yeah. Technologies. Think about apps. It's just Kara Swisher · 30:11 The milkman, Scott. Scott Galloway · 30:13 There you go. Kara Swisher · 30:13 I am just signing up for a milkman. He's all full. The milkman here in... I I always like the idea of a milkman. There's a couple of, you know, businesses who do this who are just, like, going crazy in terms of that. And that you're right. There's this 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, 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 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 I I don't go to a lot of stores, but I'm absolutely not going to stores now. Like, can see everything online. The merchandising has gotten a lot better. You know, the milkman, like it's a milkman moment, like milkman. Scott Galloway · 31:16 Yeah, there'll be niche providers. We have down here in Florida, we have this individual who's 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 gonna replace Whole Foods' fish? I mean, it's just there's there's gonna be niche offerings, and then there's gonna be the platform that kind of offers it all and brings it to you. And it's probably gonna be Amazon or Walmart. Think they're gonna consolidate Kara Swisher · 31:45 They really are. Scott Galloway · 31:45 The marketplace. Kara Swisher · 31:46 Yeah. It's interesting. And also, some of the stuff though, what goes away and what stays? Do 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 heart. It's 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. Scott Galloway · 32:11 Totally inappropriate for me to make a lesbian joke right Kara Swisher · 32:13 now. Yes. Go right ahead. I have control Scott Galloway · 32:14 of I'm just... I don't think that way. Kara Swisher · 32:16 I thought you wanted to be vulgar. Be vulgar. Go and be vulgar. Scott Galloway · 32:19 I don't think that way. Kara Swisher · 32:20 Okay. You Scott Galloway · 32:20 can You and Home Depot. I'm sorry. Kara Swisher · 32:22 Go ahead. No. I don't like Home Depot. It's too big. I like my hard Scott Galloway · 32:25 better than Home Depot? I think Home Depot is wonderful. Kara Swisher · 32:27 Yeah. I wander, wander, wander. Think I'm gonna die in there, and then they'll never find me back in the lumberyard. Scott Galloway · 32:32 Such a well run company. Kara Swisher · 32:33 Like it. I know. Scott Galloway · 32:34 So what what what little niche hardware store do you like? Kara Swisher · 32:38 It's a Logan... It's in Logan Circle. It's called... 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, you know, and if I don't find it there, I then find it on Amazon. And it's... 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, see if I like something better. But, but on a lot of things, I can just get there, like nails or nails essentially. But last question before we go and, go to predictions. What what would what would work retail? Is it restaurants? Because I do miss sitting restaurants. I like a restaurant. I like a... I don't like a bar. I don't drink. But those I don't 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. Scott Galloway · 33:30 Restaurants are gonna get crushed, Kara. Kara Swisher · 33:32 I know they are, but I... Scott Galloway · 33:33 I'm trying Kara Swisher · 33:33 to think. I'm try... What... 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? Scott Galloway · 33:45 The stuff that's experiential, maybe a Sephora or Restoration Hardware, the stuff where going is is, 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. And that is when you go into a Sephora, you go in for the people, you go in for the cast members. You go to Restoration Hardware, you go to feel, you know, that 7th 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. We have, I think, 18 square feet per person in a square foot of retail in The US. And like London has three. Mean, we're just so radically overstored that that this isn't doing anything different. It's just if someone had said, where would we be again in ten years? It's gonna look like where we're gonna be next year. So... But I don't I don't... It's a very interesting question. What... The guys that get really hard... Hit really hard are especially retail apparel. And then and then anything... You wanna talk about industries that are just getting killed. It's just so weird. Anything where you sit shoulder to shoulder, whether it's sports, restaurants, education, my industry is gonna... You can imagine Yes. The the tension and Harvard's conversations we're going Kara Swisher · 34:59 digital. Scott Galloway · 35:00 Well, I mean, but look at Harvard. Harvard has to lay off people with $40,000,000,000. Can you imagine what's happening everywhere else? Kara Swisher · 35:05 Scott, your predictive nature has come to the forefront, and we're gonna take a quick break, and you're gonna make some more predictions when we get back. [Ad break] — Predictions segment begins — Kara Swisher · 36:02 Okay, Scott. We're living in unpredictable times, but you've done a very good predicting things like the the school stuff. What do you think our lives will look like a year from now? I want you to be like a little Nostradamus y here. Scott Galloway · 36:14 Oh, don't. I mean, that's a... We're gonna need a bigger boat for that. Prediction for today is more around big tech. I think there's gonna be some very interesting... I think some border skirmishes break out. Specifically, I think big tech is gonna start making some fairly bold moves. I think you could see Apple go into search. Oh. There you see Kara Swisher · 36:38 that tweet at us saying we're Yeah. Scott Galloway · 36:40 Saying that they really doesn't appreciate us mocking DuckDuckGo, that they thought that was damaging, that we rag on big tech and we're Kara Swisher · 36:49 Do like playing how they, like, roll me into you? Cause I was like, no, it's really good to have By a association. I was like, I did not say that. It was Scott Galloway. I'm literally Scott Galloway · 36:57 You're wrong with a dog, you're a hound. Kara Swisher · 36:59 I... Apparently. But go ahead. So okay. Apple get into Scott Galloway · 37:02 the search. Okay. The other the other gangster move, I think, that would be really interesting if Twitter doesn't get a shit together and move to subscription is I think there's an enormous opportunity for LinkedIn to start a Twitter competitor. Kara Swisher · 37:16 LinkedIn. Scott Galloway · 37:17 Well, think think about this. Again, goes back to the notion 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. Yeah. 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 wanna pay for more access or have more InMail opportunities, and only a third comes from advertising. What do you know? LinkedIn isn't totally fucking up the world. You know, Kara Swisher · 37:42 it's Microsoft property. You know, I'm gonna bring in Jeff Wiener dog to talk about it. His name's Jeff Wiener. He's impressive. Scott Galloway · 37:48 He's very impressive. Kara Swisher · 37:49 He is. And he's... The only thing though is he... I always... I'm gonna tell him we're on the stage. I'm like, what's it like to be a division of Microsoft? He's like, we are LinkedIn. He never will say a division. And I always go, comma, a division of Microsoft. Right. Scott Galloway · 38:02 To by Microsoft. Kara Swisher · 38:03 To 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 Scott Galloway · 38:10 Very talented executive. Kara Swisher · 38:11 He is. So you think they would start a Twitter? Scott Galloway · 38:14 Well, think something on Twitter. So my prediction is the following. In the next sixty days, there is a frightening declaration of border skirmish that's gonna turn out to all all out war. Either Apple is gonna take advantage of their access to the consumer and the fact that they own the rails and introduce a more a more direct competitor to Google. Because right now, they make about 6 or $7,000,000,000 in free cash flow by having Google be their default search. Yeah. 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. Kara Swisher · 39:02 But it's not crazy then. You don't get Tom Cotton yelling at you like I had today from my call. Scott Galloway · 39:07 Senator Cotton was yelling at you? Kara Swisher · 39:08 Oh, yeah. Scott Galloway · 39:09 That's a badge of honor. Oh, jeez. Boasting now. No. You're just boasting. Kara Swisher · 39:13 I know. But I was just thinking you Scott Galloway · 39:14 Does he understand intersectional feminism? Does he get where feminism intersects with feminism? What the fuck does that mean? Kara Swisher · 39:23 Intersectional feminism? Scott Galloway · 39:24 What is your question? How Kara Swisher · 39:25 about intersection? You. They have excellent courses at NYU on this. I hear they're online. Scott Galloway · 39:30 Oh my god. I'm a living living lesson in intersectional masculinity. You take Cialis to Kappa and a little steely man in Asia. Boom. The dog's... The dog is ready to play. It's go time, Kara. It's go time. Kara Swisher · 39:42 You are intersectional. Listen to me. I I I don't know what will happen to her because, like, you got Tom Gotton being crazy here. You got president talking about the confederacy, and today, the SS, somehow we got Scott Galloway · 39:52 Oh, you know, was a gangster move, though? Kara Swisher · 39:54 You did not see that coming. Scott Galloway · 39:56 The chairman the chairman of the joint chiefs of staff. Oh, yeah. I think you mentioned him, general Kara Swisher · 40:00 Yeah. Milley. Scott Galloway · 40:01 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. Kara Swisher · 40:05 What was he doing there? He should have known it was a mistake when he Scott Galloway · 40:08 showed Come on. He's... He... How many other people how many other people in the Trump administration have stood up and said, this was a mistake? Well He'll he'll probably lose his job over it. Yeah. Men and women in uniform have something no one in this administration have, and it's they have code. Kara Swisher · 40:22 Yeah. Well, then we're gonna have, like, Stephen Miller, like, run-in the military at some point. Whatever. Scott Galloway · 40:27 Yeah. Kara Swisher · 40:28 That That on that note, he's writing a speech about racism. That's really... That's a that's a speech I don't wanna hear. But I'm saying... Let me get back before he finishes. Yep. If... What happens then to Twitter? Who buys that? Who wants to touch that while he's still in there making a mess? Like... Or, you know, yeah. Who wants [Ad break] Scott Galloway · 40:46 don't need to. Twitter has an enormous opportunity here. Kara Swisher · 40:48 I would say just Scott Galloway · 40:48 Zero to zero to a thousand followers free. A thousand to 25,000 followers, $10 a month. And then it goes up to if you're Kim Kardashian, you have pay $25,000 a month, which she would pay because she's getting $30,000 per sponsored I Kara Swisher · 41:01 wouldn't pay that much. Scott Galloway · 41:03 Oh, yes. You would. Kara Swisher · 41:04 No. I wouldn't. Scott Galloway · 41:04 Oh, sure you would, Karen. Kara Swisher · 41:05 I don't have Scott Galloway · 41:06 it You're addicted to Twitter, and it's a very powerful platform for you. You wouldn't pay $50 a month for Twitter? Kara Swisher · 41:12 I might. That might Scott Galloway · 41:13 be too much. And 25,000. They're not making $50 a month off you of advertising. And if they... 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. Kara Swisher · 41:26 Are you mounting them with friends of yours, rich friends in the Wall Street area? I think you're mounting. Scott Galloway · 41:32 Oh, I've disclosed this. I'm a Twitter shareholder. Kara Swisher · 41:34 And if Scott Galloway · 41:35 they don't move to a subscription, if they don't move... Twitter at a $100 a share is on less revenue than they are now moving to a subscription model that's growing faster than every other platform. Kara Swisher · 41:44 Now they've got that money. They've got... Silverlight came in and saved them. Scott Galloway · 41:47 Yeah. Eason Jurgen or Eidon Eidon? John Durbin. Eidon Durbin? Kara Swisher · 41:51 He's very intersectional. Scott Galloway · 41:53 He's a... He's an intersectional hedge I Kara Swisher · 41:56 am going to... I'm going to send you some... In fact on you. I'm gonna let you... I'm gonna send you some literature that you are going to read for our next gathering. Scott Galloway · 42:05 Literature I'm going to read? Why why thank you, fair lady, from Gone With The Wind. Kara Swisher · 42:09 Oh my god. On that note. Scott Galloway · 42:11 Frankly frankly, Kara, don't give a damn what intersectional feminist literature you send me. Kara Swisher · 42:16 Oh god. I just don't even know what — Predictions segment ends — Scott Galloway · 42:18 to say. We gotta sign out here. Kara Swisher · 42:20 Gotta go. Don't forget there's a story in the news you're curious about and wanna hear our opinion on. Email us at pivot@voxmedia.com to be featured on the show. Read us out, Scott. Scott Galloway · 42:28 Today's episode was produced by Rebecca Sonamis. 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. [Ad break] Scott Galloway · 44:01 See store [Ad break]