Well Made

Elizabeth Segran: Predicting the Next Decade – Well Made E106

January 16, 2020 · RSS · Apple Podcasts

Fast Company Senior Staff writer Elizabeth Segran is an expert in the cross section where fashion, technology, and ecommerce overlap. For every company that recycles innovative materials for fabric, opens an immersive retail space, or launches a new sustainability initiative, she's there to cover it. That's why we invited her on the show to reflect on the past decade of consumer trends and — more importantly — make some insightful predictions about what's to come. 

On this episode, Elizabeth and Stephan weave in and out of micro and meta. Listen to hear how gradual consumer shifts have lead to substantial changes in what people expect of brands and which brands they're choosing to buy into.

“My suspicion is that it's going to be very much about understanding your consumer's lifestyle and seamlessly integrating into it, versus standing out.”

On this episode, Elizabeth and Stephan start with predictions about the future of Amazon (2:23). Elizabeth anticipates that Amazon's role in the ecommerce landscape is shifting and that opens up new opportunities for DTC brands. With more tools offering digitization of the supply chain, she also shares how brands can increase transparency with consumers (11:04). Stephan and Elizabeth talk about how environment-focused, not-so-tech-obsessed Gen Zers will motivate brands to reprioritize their their missions (18:09). The brands that encourage consumers to buy less will be the ones leading the sustainability movement (34:47). Elizabeth predicts that the retail locations that survive will be the ones that are built to serve communities (42:41). Bonus prediction: Elizabeth's new book The Rocket Years will be out March 31, and you're going to want to read it. Full transcript below. 

Also mentioned on the show:

Stephan Ango: You're listening to Well Made, a podcast from Lumi about the people and ideas behind your favorite online brands. I'm your host Stephan Ango. Elizabeth Segran, welcome to the show.

Elizabeth Segran: Thank you so much.

Stephan: So you are a senior staff writer at Fast Company. I've been following your writing for several years now. You're one of my favorite writers. I think I follow you on Twitter, but somehow every story you write just like ends up being filtered into my timeline from like seven different people. 

Elizabeth: So, so much. I do love writing about retail and I'm also kind of a nerd when it comes to supply chains and manufacturing. And so that's probably why our two worlds intersect.

Stephan: And we'll talk about this a little bit at the end, but you are an author of The Rocket Years, which is coming out in a couple months. We'll talk a little bit about that at the end, but I thought that since we're kicking off the year and the decade, it would be fun to have you on to talk about some of the trends and predictions and things that we see coming over the next few years and how that will affect the whole world of commerce as a whole e-commerce DTC brands, which is a big topic that you've been covering quite a bit. I wrote a blog post about four-ish years ago about some of the big trends and it was called "Vertical Commerce and How the Next Generation of Retail Will be Built" (https://www.lumi.com/blog/vertical-commerce). And I'm writing this week a followup to that to try and kind of see how those worked out. But I think for the most part I turned out to be mostly on point, although maybe that means that my predictions were not bold enough or not crazy enough. I want to go back and forth.

Elizabeth: Or maybe you're just really good at foretelling the future.

Stephan: Well, I dunno. I think most of the things that we saw coming down the line were fairly predictable, but, hindsight is 20/20. So I think that we should try and go back and forth. We've got a big document here where we've been brainstorming together on a whole bunch of things. I don't think that we're going to get through all of them, but do you want to kick us off with an idea that you think is going to affect the next few years?

Elizabeth: Well, I think that the last decade, maybe even the last two decades belonged to Amazon. You know, we all saw the growth of this company. I remember being in college like a decade or 15 years ago and Amazon was just emerging. I would buy my textbooks on Amazon and now I'm literally turning to the platform multiple times a day. Whether that's Amazon Prime to buy products or whether I'm watching shows on Amazon. It's sort of in an almost unpredictable way. It has taken over our lives. But I do think that it's dominance is waning. And I think that actually the whole DTC movement was actually a counterpoint to Amazon, right? Because I think that what we saw with all the DTC brands was that they even the earliest ones, right? Like Warby Parker, Everlane, all of these brands they all talked about how they didn't want to build their brands using traditional retailers. And at the time, I think we were thinking that they didn't want to, you know, set up at Nordstrom's or at other brick and mortar retailers. But what they were also saying was that they didn't want to work on some other third party online platform either. And so what we're seeing is that the entire DTC movement was basically saying that these brands were saying that they wanted to take control of their brand. They wanted to control even things in the supply chain and Shopify and, and other website providers like that, ecommerce providers grew to accommodate them. And so now we're seeing this kind of bifurcation in the market, right? Where DTC brands are popping up all the time and choosing to exist away from Amazon. And so I think what's gonna be interesting going forward is seeing what happens here. And my prediction is that actually Amazon is going to exist but exists as a place board, commodity-based products, things that are unbranded and consumers are going to be far more excited about buying things from real brands that will exist away from the Amazon network thereby reducing Amazon's power. What do you think about that?

Stephan: I think it's fascinating. I agree that what I've noticed is I've been actually shopping less and less on Amazon personally. And part of it is just that the experience of using Amazon feels like it's continually getting worse from a web standpoint. I do think where maybe I have increased my use of Amazon is when they acquired Whole Foods, now. I automatically became an Amazon customer for groceries through Whole Foods, I guess. But I think that in a weird way, Amazon is really more of an infrastructure company than a retailer. And something that definitely happened over the past 10 years is we really started to understand what they were doing with their marketplace. Much more of the volume that happens through Amazon is actually happening through these third party sellers and a lot of the work that they've been putting in, whether it's Amazon web services or now over the past year, they've basically been transitioning all of their shipments over to their own. Away from FedEx and UPS and doing their own delivery network. And so I think that kind of stuff is gonna keep growing. That's been working really for Amazon. And so I don't see them like backing down from being an infrastructure company. I think that is going to continue to strengthen. And that turns out, it seems like to be the most powerful part of their business. Whereas the shopping aspect of it, I'm not sure where that's going to go. And I sort of agree that there's a big opportunity for Shopify and frankly, even traditional retailers like Walmart and Target to encroach more on that slice of the e-commerce pie for sure.

Elizabeth: But I also think that it's interesting how other players in the market are beginning to beef up their own logistical networks in order to compete with that. And I think the most exciting one was just hearing about Shopify building out its own fulfillment network and beginning to work with, you know, warehouses around the country. I like the way that Shopify talks about it, which is that they talk about how they have a million merchants in their platform that are all independent businesses that are branded differently that have their own websites. But by consolidating them and consolidating the back end, they're beginning to approximate some of Amazon's power in the market. And particularly if it's something like a Fulfillment network like this where, you know, by consolidating multiple brands, they're going to be able to into one particular distribution center. They're going to be able to compete with the shipment times, like the two day shipping. And also, you know, in terms of costs. And so that's really exciting I think because every aspect of the Amazon experience is beginning to feel kind of like icky. That's not exactly what you said, but that's what I'm going to say. You know, I agree, the online shopping experience needs a lot to be desired. It's all about practicality and search results, right? There's nothing elegant or immersive or enjoyable about that experience. But whenever we hear about the awful conditions and the Amazon warehouses, that also makes you worry, right? About what you're doing when you're making an Amazon Prime purchase. So hopefully Shopify and other logistical providers and emerge they'll do it in a way that's more humane and you know, and that will just make it even more attractive for us to turn to them.

Stephan: Yeah, I mean I think that Shopify getting into Fulfillment is-- I'm skeptical about it because I think their approach so far from what they've described is something that's been tried before. I am excited. I'm hopeful. I'm excited. It's a very hard problem to solve as someone who's been very close to that problem for the past like five or six years, I think from what I can see, they're not building their own Fulfillment centers. So they're essentially providing a software layer on top of existing fulfillment provider, which is something that Shipwire did that strategy like eight years ago and got acquired by Ingram Micro. And so I'm not sure what the unique element is going to be there in the sense that if they have a million stores, how many of those are actually moving an important amount of product is not necessarily like a known quantity right now. Definitely not a million. It's probably in the tens of thousands that are actually moving meaningful volume. I would suspect there's a big power law distribution there. So I'm curious. I'm very curious. I'm very hopeful. I think it's a big problem. In fact in the predictions that I had made back in 2016 my third one was around logistics and I actually think that was maybe the one that I was the most off on because maybe I was too early on it I guess is what I think. Because there's a huge opportunity there, but it feels like we haven't solved it. And what Amazon is really good at is that because they have so much volume happening through their own warehouses, they can continue to double down on that investment. Whereas Shopify, if they continue with their strategy of being this meta layer that doesn't own the warehouses, they have a lot less control over how they can improve that experience. And it's a very low margin business that's why people are unhappy working in a Fulfillment center. It's a very low margin business. It's one that maybe this will be another topic we talk about around automation, but it's one that's very ripe for disruption. And if Shopify wants to get their hands dirty and build their own fulfillment centers, they're going to be dealing with the same type of challenges, which is how do we make this labor intensive job as something that people can have and make a living wage from.

Elizabeth: Yeah, totally. I guess if we're talking sort of longer time-frames, my hope would be that ambitious competitors like Shopify and others will begin to find ways to compete- But they'll be doing so with new technologies at their fingertips, right? And we know that Shopify is already acquiring companies that specialize in automating warehouses. Let's move on to the next prediction. And I think it's part of a broader thing that I'm seeing in the world of retail logistics. Which is that in the past decade we've seen a lot of different technologies emerge. As you were saying automation was one of them that sort of came to the fore. With all these different technologies and I'm talking about other things too, like computer vision, machine learning, moving things to the cloud. All of these technologies sprung up and we got excited about them individually. And I think that we're on the cusp of getting to the point where we're beginning to sort of consolidate all of these different technologies into sort of one system. And I was recently reporting a story in France at a company called Lectra that makes manufacturing technology and they have this concept, which I think it's pretty well known in Europe. I'm not sure how well known it is here, but it's called Industry 4.0. Is that a term that you're familiar with?

Stephan: I haven't seen it very much yet, but tell us more.

Elizabeth: Well, so basically my understanding of it is just that it's a term that's sort of developed in Germany and I think it first started in kind of the automotive industry, but it's basically this idea that as all of these technologies evolve, we're going to get to the point where we're able to sort of bring them all together in one seamless system. And so if you think about it in something like the fashion industry, which is my area of expertise this means that for instance your factories in Asia will be connected to your design room in San Francisco. And all of the technologies in both places will be connected and linked together. And there will be a layer of machine learning that goes on top of all of this so that when you design a garment you'll be able to prototype it immediately in China. And then all of the designs that you've done in the past will inform the sizing. For instance, all of these technologies will sort of work together. And so coming back to this discussion about the warehousing, I really think that we're just kind of at the start of seeing what all of this technology can do for us. You know, particularly these warehouse robots and things like that. I'm pretty excited about seeing how everything comes together. I'm excited about it for several reasons. I think the main one being that once we are able to be a lot more efficient because we're using all of these technologies in conjunction, I think we can start beginning to reduce a lot of the waste that we see. You know, in all of these systems, right? All the warehouses and manufacturing where there's so much waste, there's so much carbon emissions that are produced in all of these industrial systems. And by bringing these technologies together, I think we can just kind of start making things on demand, being able to sort of predict what things are going to be returned. Basically cutting out a lot of the waste that is creating a lot of the pollution that we're seeing right now.

Stephan: Yeah, I think there's really two key trends and threads that you're pulling at here. One around sustainability that I want to focus on in a second, but the other around the digitization of the entire supply chain, which is for me it's what I work on every single day. So I feel like I'm going to have like a very strong bias towards. I definitely believe that that is happening. We're creating tools that help companies get a better understanding of how manufacturers integrate in their supply chain. I think a question is: Yes, companies are doing this and they are doing it oftentimes for efficiency gains, for cost improvements. And so it makes sense for them to do that. I'm curious to see whether the trends around supply chain transparency will actually drive consumers to be expecting that. We've seen some companies be successful with talking about supply chain transparency and we're starting to see some consumer adoption of that language in that expectation. If we can get there over the next 10 years that consumers start to expect that they can have a better understanding of how the brands that they buy from are manufacturing things that may continue to increase the progression of that trend.

Elizabeth: Yeah, when I went to this company Lectra in France, it was interesting hearing it from their perspective because they create a lot of technology for the fashion industry, the automotive industry and the furniture industry. And so they're seeing all of this up close and according to them, a lot of brands are hearing from consumers that they would like to see more transparency. That they want to be shopping from brands that are ethical, that they're becoming more educated and being able to ask questions about the supply chain. But at this point, price is always going to supersede that. It's a very small minority of customers that are going to be willing to make a purchase from a brand entirely because of their manufacturing or their supply chain transparency. Which was a little bit disappointing to hear. But the good thing is that actually, a lot of the time cost is aligned with that. Right? At least in terms of sustainability. If you're able to make products more efficiently and cut down on waste, cut down on the number of hours that your factory is open, you know, all of that stuff. It's good for the environment. It's a line, right? The two goals are aligned. Yeah. I mean, I think the outstanding issue there in terms of ethical supply chains is just the human component. And that's something that's a little bit more of a bigger question, right? Because consumers are beginning to think sustainability, but they're still very cost focused. The question is, what happens to human labor? And you know what happens there. So yeah, I mean I think that's still an outstanding issue, but in general I'm pretty excited about what all of this new technology is going to do. You know, in terms of making things more ethical

Stephan: One trend that's not even a trend, it's more of a generational shift that will occur over the next 10 years that I have here on the list is, Gen Z is going to become of a professional age over the next 10 years and is going to be entering the workforce, starting to buy more and having more influence over what brands decide to do or what new brands emerge. There's a lot of studies already on this in terms of their expectations around environmental impact. Some studies that I've seen there are essentially two to three times, if not more likely to pay more for a company that is pushing those values forward. So I do think that we will see a shift in that direction as Gen Z becomes-- Each generation has higher expectations, but Gen Z has even higher expectation than Millennials on that topic. So that's definitely something I'm hopeful about.

Elizabeth: Well, I agree. And I think that among millennials, we were sort of stuck in this moment where we were raised with different values than the people that came before us and the generations that came before us. We were much more aware about the environmental destruction and being more sustainable. We wanted to work for purpose driven companies and buy from companies that are mission driven, all of that stuff. But the problem was that we were making these demands in a system that was really antiquated and built for the generations that came before us. And I think it was just really, really hard. It still is. We're seeing this now. It's just very hard to remake all of that infrastructure. But we're beginning to see it happen. And so I totally agree with you that it's really wonderful seeing what's happening with Gen Z. But I think that the really exciting thing is that by the time they're able to make buying decisions and when they're ready to join the workforce that hopefully by then some of the systems themselves will have changed. If they're really excited about buying from brands that have a low carbon footprint, that brands know how to do that, how to lower their carbon footprint, how to offset all of that stuff, right? In a way that right now brands are only beginning to try and figure that stuff out.

Stephan: Let's talk about Gen Z and then a little bit more before we jump into sustainability. I think that I'm a Millennial too and we're definitely a very transitional generation because things like Google and Wikipedia that stuff came out when we were in middle to high school, early college, depending on how old you are. Things like the iPhone, smartphones came out when we were in college or professionals. The Gen Z, they're growing up in a world where this stuff has been basically in existence since either a teenager or earlier. And so they were actually raised with cell phones, raised with technology as an expectation, raised with virality and software tools as something that is like incredibly scalable. They can see that happening in front of their eyes. They were, some of them were part of the Minecraft generation. They really understand the concept of making things in a digital environment. I have tremendous optimism for that generation and I'll be really curious to see what their expectations, not only from the values of the companies they buy from, but how those companies are going to sell to them. And some of the things that I think people have been talking about, it'll be interesting to see how that pans out in terms of continuing that disruption of Amazon is: How will mobile commerce evolve? How is the stuff that's happening on Instagram right now going to translate over into ecommerce and direct to consumer in a new way as Gen Z comes around? Voice based interfaces are a whole area that I'm really curious about to see how that changes over the next 10 years. Can that open up avenues for brand new companies that are like a voice first ecommerce website? Voice first ecommerce app or whatever you want to call it. Are there opportunities in that area and will Gen Z be pushing those new channels forward? Things that we as millennials are not seeing yet.

Elizabeth: I mean, I think that to your point, another interesting thing about Gen Z is that because they grew up with so much technology and that was just kind of a world that they were born into and that they grew up with. For us, it was still relatively exciting that Amazon exists and that you can run out of toothpaste and have it there the next day. And like Facebook, I remember being in college when it first came out and it was this exciting idea and now we're beginning to sort of sour on these things, but it was a transition for us, right? Whereas I feel like for Gen Z technology is not in and of itself that exciting. And I think that that's a really, really good perspective because it means that they're a lot more judicious about what technology they're going to bring into their life. I think that they probably will have a much more balanced approach to technology the way. For us we were so excited about it and we were so quick to adopt a lot of different technologies and my hope is that with the next generation, they're going to be a lot more skeptical of it because it's not going to be that cool in and of itself. The question is always going to be what benefits does this bring to my life? Like, is this fun? Is this enjoyable? Is this useful? And so hopefully there'll be fewer discussions that really involve technology for technology's own sake, right?

Stephan: I think about that all the time when it comes to deep fakes. I don't know if that's a topic that you're fascinated by, but I'm so curious about that. Do you know what I'm talking about?

Elizabeth: Totally. Yeah.

Stephan: And I feel like there's one narrative which is like deep fakes are a huge problem because, for obvious reasons, like if it's easy to replicate someone's face and voice and put that out there, now it's very confusing what's real and what's not. But I think that is like a problem for generations like Millennials and above. And I think that Gen Z and below Gen Alpha and future generations are just going to live in a world where, oh yeah, we can do that. And so just adjust your expectations, adjust what you trust and what you don't trust. I think people saw that same thing happening when text, when journalism started, when photography manipulation started, when CGI started. So it's just like the next evolution of that. And so I'm agreeing with you, which is that GenZ is going to start within their professional careers with a different set of expectations that maybe are more actually more humanistic because the technology is less of a novelty to them.

Elizabeth: Yeah. And that's so exciting I think because we're in a moment now where it seems we've swung too far and there's all of this effort now to try and push back. We're talking about Cal Newport's book about digital minimalism and we're now working to try and balance things out. But I think for the next generation they're going to emerge with a sense of balance. I have a four year old daughter now.

Stephan: Well she's Gen Alpha. She's the next generation. She's not even a Gen Z.

Elizabeth: Yeah, yeah, yeah. And just watching her interact with technology is a little bit terrifying because she's in this world which is surrounded by-- You know, she knows how to use an iPhone. I mean it's just really terrifying. But at the same time, she's experiencing it differently than we have. You know, for her a playground, it still carries the same excitement for her as it did for us when we were growing up. And so now she now has the option to choose between these two things. It's not one or the other, right? She can choose to play with a tech toy or she can do all the things that we enjoyed doing growing up. It's not one or the other. And I think she sees both of them on par. And so hopefully, I dunno, maybe we're being optimistic, but I think that we can avoid this digital dystopia that we're all worried about.

Stephan: Well, yes. And I'll try to tie this to what we were talking about with logistics and supply chain. This is something I've been thinking about a bunch, which is have you ever seen videos of there's all kinds of different animals using touchscreens.

Elizabeth: No, I haven't seen that.

Stephan: Oh yeah. I mean, from like more intelligent ones. Like chimps are very adept at using, they can use Instagram, they'll swipe, they'll do the whole Instagram experience. Like a Chimp can do that. But then there's like, I saw a video of a frog using a phone. The frog was literally like playing Frogger. It was like playing a game where it was like trying to get flies on a screen. Maybe it was literally trying to get the flies. But it was dynamically responding to this thing. And this has been a pattern in computing since the beginning of computers, which is layers of abstraction. We started computers literally feeding punch cards into computers that had ones and zeros and we were controlling a computer that way. Then we had the command line so you could type words and say, tell a computer what to do. Then we invented the graphical user interface, which was you move a mouse and then a pointer moves around on the screen and you can click on icons and move things around. And that turned what a computer can do into something more abstract. And with cell phones we literally removed the mouse and made it a touchscreen so you can manipulate computing information in a tactile way. In that same kind of abstraction is now coming to the rest of the world. And so you can start to build a company through the same kind of abstraction where I can plug in these different pieces of my supply chain. I can go over here and find a manufacturer and plug it into my fulfillment center and plug it into my Shopify. And all of these things are sort of abstracted. You can remove entire departments that you would of had to build as a company and by the time Gen Z gets into entrepreneurship, a lot of that infrastructure is going to be there for them to build on top of. And that opens up some really creative possibilities that is somewhat hard to predict right now where that's going to go.

Elizabeth: I think that what we do know about it is that to just use the Shopify example, right? Like as soon as Shopify entered the scene companies didn't have to hire as many developers. You know, I was talking to Allbirds about it because they are on the top of my platform and they talked about how they were able to do an entire international expansion and grow their entire company with maybe five developers where before they would need fewer. And so I think what's really cool about that is it's again, this thing about this humanism we're talking about, right? Where when we're able to take away, sort of like outsource all of that stuff, we can kind of focus on the things that we're really good at, which is as people, right? Which is just thinking about real profound needs and trying to address them and being creative and creating beautiful things. Right? I think all of that stuff becomes more possible when you have to spend less of your time and less of your brain on things that can be automated.

Stephan: Let's talk about sustainability finally. I think there's a lot of different angles on this. We've sort of touched on it from the supply chain transparency. You know, what things are being made angle. We're looking at it from the generational shift that's happening. I think it's really one angle that I like to think about is, what are certain communities that are developing, doing and how is that representative of a trend that will sweep the nation or the Western world? And some of the ones that I see that are happening, we've talked about it on the podcast before there was like the Marie Kondo effect thing was really fascinating because I think one of the themes that you've written about that I'm really curious about, which is how do we change our patterns of consumption? It's obviously good that we continue to make things more efficient, make things out of better materials, make things, improve our recycling infrastructure, do all of that kind of stuff, which is kind of improving on what we have today. But then the other problem is how do we change our patterns of consumption? How do we buy less crap? How do we avoid throwing stuff away in the first place? Another thing that I'm seeing which kind of has self branded itself over the past couple of years is that the zero waste movement. There are people who are choosing to only buy things that have very little packaging that are refillable that they can buy once and use for a lifetime. So there are these patterns emerging that hopefully will address the consumption side of sustainability. And that is a hope for me in terms of like the next 10 years. Can we get that sentiment to really become something that the majority of the population at least understands?

Elizabeth: Yeah, I mean, I think that we're moving towards that. And again I'm most familiar with the fashion space. But I think that what's interesting is over the last couple of years we've seen sort of standout companies like Allbirds, Everlane, Reformation, sort of tackling one aspect of the sustainability issue. With Everlane that was taking on plastic in the entire supply chain, which was a very laudable and important thing first of all, to sort of draw our attention to. But then secondly, it was a very hard thing for them to do to remove virgin or new plastic from the entire supply chain, including the poly bags that the clothes get shipped in. You know, you think about Allbirds and how it's focusing so much of its energy on quantifying its own carbon footprint, not only in its own facilities like its factories or its warehouses or things like that, but all the way down to the very source of the raw materials. So that means the forests where the eucalyptus trees grow and the sheeps where the farms are. All of that stuff. So they're all tackling like one part of it in the face of an industry that is largely not really addressing these issues. So I think all of that was really, really good. And I think that all of that movement is going to continue and hopefully there will be best practices in place that will be shared and all companies will adopt them in the next 10 years. That said, we're still in a state of over-consumption, right? I mean, based on the most recent analyses, we're still producing a hundred billion, billion items of clothing every year all around the world. And that figure continues to grow up and that's a product of the fact that we've got so good at making clothes so inexpensively, right? Like we nailed the supply chain. We created a world where quotes could basically become disposable. And so what I'm seeing is that as much as we see these incremental changes happening with brands, really the most important thing that we need to do is to just cut down in our consumption. And as much the Marie Kondo effects spikes up right every time she has a Netflix series or a book of hers comes out. I'm concerned that we're not moving towards a reduction in our overall consumption as quickly as we need to be for us to avoid the worst impacts of climate change.

Stephan: Yeah, I mean in general our economy is really set up around growth continuing to increase and that's going to be really scary if suddenly, magically everyone decided, I'm going to be more conscientious and buy better stuff. That would have a very challenging and problematic effect on stock markets and all kinds of things. And so there's a whole kind of machine incentivizing the opposite behavior and advertising trying to get you to buy stuff. And so I don't know that we're going to solve that in the next 10 years, but it's something that we need to reckon with in the sense that how can we align our economy around more sustainable behaviors is really challenging.

Elizabeth: But what's really cool, I think, is that there are all of these companies that are doing really well right now that have created really innovative business models around not adding to that over consumption, right? So we're thinking about like all of the resale marketplaces, which actually by extending the life of a product and having somebody, a consumer buy a used item over a new one. We're eliminating a supply chain there, right? And so I think that's pretty cool. And then the whole rental approach is another way-- I think if that becomes more widely adopted, that's another important incremental shift because the total number of clothes produced could effectively go down, right? And the same number of people would get the same same access to the same number of clothes that they have now. I have concerns about the environmental impact of the rental model. I think that still needs to be explored and researched to see exactly what impact that has. You know, shipping clothes back and forth and dry cleaning them, all of that. But what I do think that it shows is that it's possible to just really think outside the box about how to make money and create a thriving business that's not about sort of adding more stuff to the fashion industry.

Stephan: One of the things that is something that is, is a question that is hasn't been comprehensively studied and it has to do with this last mile, first mile problem that you're describing, which is what is the difference in terms of the overall carbon footprint of a supply chain that's set up around the old school full retail model versus some of these new business models which require last mile delivery, first mile pickup type of thing directly from individuals and trying to comprehensively look at the life cycle analysis of all of that? And what does it actually cost from a carbon footprint standpoint that we have all these people driving around in relatively empty cars going to a place and picking up stuff versus what is the impact of a UPS truck or a FedEx truck coming to your house? And so that is still something that we don't have very good data on. And I definitely think that over the next 10 years we will answer some of those questions. And with the electrification of vehicles, I think that there will be some big gains in that area from an overall carbon footprint of the transportation side of things. Because a Tesla's semi-truck is coming this year, is the first deliveries of that semi-truck. That's a huge area of emissions currently.

Elizabeth: Let's just hope that the windows are fully in place and they don't explode.

Stephan: Not get another cyber truck incident. We'll see. And then you know that you have a lot of companies experimenting with these like last mile delivery of vehicles. I'm not totally sure how that is going to work out, but obviously a lot of them are electric powered vehicles. So I think that would be really interesting to figure out. And one of the secret kind of trends that it's maybe one of my odd ball predictions. This is maybe something that we'll see at the end of the decade because it really requires a lot of infrastructure changes. Is Just like cities are really going to change quite a bit as we go towards more automated vehicles. More multimodal transportation, more people getting deliveries to their homes. I think that the idea of lockers and what is the future mailbox look like? Is an interesting question that I think not very many people are asking, only in very new developments in different buildings. Are people asking the question, what should this mail room actually be like for the 21st century?

Elizabeth: I think that combined with broader changes in the retail landscape is going to be very, very interesting. So, I recently wrote a piece about how as we all know, the retail apocalypse happened and yet brands still wanted to have stores. I think the stores of the future-- I used a neighborhood close to me, the Seaport district here in Boston as an example where it's kind of in the past, you know, part of the reason for the retail apocalypse is because the whole concept of a mall was a very strange one, right? Where we would have these stores that far away from neighborhoods and would be a one stop place to like buy all of these products. And that just stopped being what we want to do anymore. And now the really cool new developments that we're seeing, like the one in the Seaport district blend together. Lots of different things. So there's offices, there's homes, there's stores, there's parks, there's museums, it's all sort of integrated. And actually, if that doesn't sound that radical, it's because it's like basically the model we had before the mall came into being, right? It was the concept of kind of like main street. And so I think that it also speaks to the fact that with all of the trends that we're talking about, online shopping, the rise of social media, all of this stuff, right? Like people just really feel disconnected from one another. And so I think going forward, retail is going to move much more into these kinds of more kinds of neighborhoods. And it's going to have a little bit more of a feeling of community. And so what that means is that, kind of going back to your last mile problem issue. If your part of a thriving community where you're walking past stores to get to work, you're going out for lunch and lunch is right next to a Warby Parker store or all of that, then suddenly you start being able to sort of integrate maybe some of these like the runway boxes, drop off boxes into places that you're already walking. Right? We get rid of a lot of these transportation, last-mile logistical issues because we're doing everything in little communities.

Stephan: Yeah. And I'm fascinated by, I want to bring one other thread into that, which is one of the predictions that I didn't make that I think we could have made more is, that say four years ago, is how high customer acquisition costs we're going to get through these social media platforms. Which in part has forced many brands to try new things, try new old things like having retail stores. Other brands decided to do that because it was important to the customer experience. They wanted people to be able to touch and feel their products. But we now have a really challenging situation when you think about Shopify having a million vendors on their platform, merchants on their platform, the signal to noise ratio is getting worse all the time it feels like. Matchmaking between consumers and brands feels like it's at an all time high. It's like very difficult to actually know who to buy from. And so as we go forward the next 10 years, it's interesting to me to tie those two things together. How will the companies who are able to create a physical footprint or find new ways to find their customer emerge and defeat that kind of the new barrier that removing the barriers creates a new barrier, which is now there's so much noise. How do you stand out?

Elizabeth: My suspicion is that it's going to be very much about understanding your consumers lifestyle and then just kind of seamlessly integrating into it versus standing out. I just love what I saw in the Seaport district where the developer and the retail stores there seemed to be so aware about what customers want today. There are free fitness classes in public spaces in the square and in some buildings in the winter time. There's free coworking spaces, there's all of this stuff which is thinking carefully about what the consumer wants. And then retail is just like sprinkled into all of that. And so it really comes down to brands that happened to be very, very aware of what their customers really need and then just like seamlessly integrating into that lifestyle. And so I think that personally, I think that that's like the way things are gonna go, at least for right now. And for the next few years. I think that that's going to be the way to stand out.

Stephan: Going back to that idea of abstraction, we've seen retail as a platform become a strategy and there are startups like Neighborhood Goods, they've been on the show. Restore as well as bigger companies like Nordstrom, really tackling that problem and enabling brands that started online to go offline. Where do you stand on that? So if I'm Neighborhood Goods or Restore or Nordstrom even, and I want to think of my physical footprint as an enabler in the way that Shopify thinks of its technology to enable other brands to come in and occupy that physical space for maybe a temporary period of time. Will we see that continue to thrive and grow? Or do you think that if you're a brand you're typically going to own your own stores and make that investment more intentionally?

Elizabeth: Oh, yeah. I totally love what we're seeing here, just in terms of the creativity that brands are applying to these. Like Neighborhood Goods refers to itself as like the department store of the future. And I think that in a way department store doesn't really capture what it really is, which it's a flexible space that you want to attract people to. And I definitely think we're going to see more of that. We're already seeing the companies that are doing this thriving. So Neighborhood Goods we're seeing the Nordstrom's local stores. They're doing very well right now. But I think that the flexibility and just kind of the variability of these spaces is kind of what's key. And, you know, and I think this comes back to what I was saying about the kind of retail neighborhoods, you know, the neighborhoods of the future. Like we're seeing the Seaport district, right? So you're sort of like meeting the needs of your customers and creating spaces that they want to come that fit into their lifestyle. But I also think it's about flexibility and impermanence, because I think that what part of what consumers want is to be able to see different things every time they stroll by a store. And I think that both the retailers and multi brand retailers like Neighborhood Goods and the brands really stand to benefit because of this new approach, this new model where things are just constantly in flux and you're learning about new things all the time. And so I think that that's actually very good. It's a win win situation for the consumer, the retailer and the brand.

Stephan: Yeah. And that definitely goes to try and solving that discovery problem that I was talking about. I'll be curious to see how a companies like Neighborhood Goods evolve because there's a tension between creating that freshness that allows consumers to want to come back and discover new things. But at the same time, Neighborhood Goods has a business to operate and the better they can service their existing customers, the more long lasting relationships they can form, the more healthy their business is going to be. And so that's constantly intention with how many new brands can we keep cycling through our spaces. And so I'll be really curious to see how that goes.

Elizabeth: Yeah, totally.

Stephan: I think a related theme. I just put it on there as a question, but there's the emergence of this concept called ghost kitchens. And I don't know if you've heard about this.

Elizabeth: I have not heard about this.

Stephan: Well, I first heard the term I think this year, but it's a trend that's been occurring I think for the past several years in the restaurant industry, especially with DoorDash and Postmates and Caviar all growing and becoming important in the lifestyle of a lot of like city dwellers. Is that now you have restaurants that are only on the platforms. They're not a place that you can go to. They are a ghost kitchen in the sense that-- Or sometimes it's an expansion opportunity for an existing restrict restaurant that does have a retail place that you can go to, but they want to expand to another neighborhood and be able to deliver in that area. So they'll set up this ghost kitchen so that they can cook the same foods and deliver to a wider area. This is like a fascinating question when it comes to that concept. Apparently Travis Kalanick, founder of Uber has received a huge investment for his company that is in this direction at the moment. Which probably makes sense given Uber eats. But, I'd be curious to see how that pattern expands and whether that idea comes to other segments of consumer behavior.

Elizabeth: Yeah, totally. I mean, we moved forward in terms of digital technology so much over the last decade. And I think that a lot of what we want to do is kind of go back to a place where our lives are based around kind of community and that our lifestyles are sort of allow us to get out and interact with people and brands and all of these different services needs to sort of be integrated into that. And so I think that going forward any way that brands can use their technology to facilitate this happy balance between the technology but then also allowing us to sort of like live our lives and out in the world. Whenever the technology itself is not like an end in itself and it's not a distraction and it just kind of facilitates us having like, experiences out in the world, I think that that's where brands are really going to shine. And yeah. Then basically like everything that we've talked about today, sort of speaks to that. I think

Stephan: I want to have you back on at some point. I think there's like three or four other things that were on my list that we didn't even have time to cover. But, before we go I do want to plug your book, which is coming out in a couple of months, which is "The Rocket years". Give people a quick snippet of what that's going to be about.

Elizabeth: Yeah, I mean it's a book that I'm really passionate about and it comes out of my own experiences as a millennial in my thirties. Basically it's called The Rocket Years, how your twenties launch the rest of your life. And basically I look at the big decisions that we make in our twenties and how they play out in the years to come. And so I blend storytelling, a lot of experiences from my own twenties with a lot of really interesting social science data. And I look at some of the big decisions that we're all thinking about in our twenties, including career, this quest to find the dream job. Of course I look at relationships and this issue of whether soulmates really exist and what it takes to find that. And I think about things like family, which are all already on people's minds in their twenties. But I think the really interesting part of the book is that I look at a lot of things that we were not necessarily thinking about in our twenties, but that actually have a huge impact on our lives in the years to come. So I look at things for instance, like hobbies, right? The research that I was looking at basically came down on the fact that basically all of the passions that you pursue in your 20s those are the passions that you're going to be pursuing for the rest of your life. Because once you enter your thirties, it just becomes a lot harder to learn new skills. And then also you have a lot less time to pick up new hobbies, right? Which could be anything from hiking the Himalayas to whatever it is that you have been putting off that you said you were going to pick up at some future time. There's a good chance that you're not going to find time to do that. And so your twenties actually a really, really important for making space for those activities. I also look at things like activism because there's a lot of evidence that suggest that how politically engaged you are in your twenties, has a huge impact on how politically engaged she'll be for the rest of your life. I look at things like friendships, how basically your circle of friends peaks when you're 25 and keeps shrinking and shrinking until you're in your seventies and you have one friend. But I also show them how you can sort of avoid the most common outcomes. And so basically, I think my point is just that in our twenties and early thirties, we have this amazing ability to shape our futures. We have all of this potential. And so the question really then becomes, what do you really care about and what are you most passionate about? And that is really what I encourage my readers to do. To sort of think about the really important things, the things that are really important to them. And then try and use data and research to help them chart a course that will allow them to live out that life. That's my book and it comes out on March 31st, I hope people preorder it if they're interested in the themes.

Stephan: This is really exciting. I can't wait to read it. I think it's a topic that I wish we had more time to discuss cause I have a lot of opinions on. I'm a big proponent of cross pollination. I think it's really good to have a wide variety of interests and go kind of live in different places, work with different types of people, expose yourself to the world as best specially in your twenties and try to understand a little bit how the world works so that you can really see where to focus your energy, your passions and where that's going to have the biggest impact. I actually just released a blog post on my own blog, stephanango.com, just last week about, there's this thing that I do every year, which is I ask myself these same 40 questions and I publish that and that's gotten some good pickup in it. It's a survey that I do for myself and it's very much about that specific year. What went well, what were some of my favorite things that happened? What were some of the not so great things that happened. And I've found that to be a really nice practice. But since we're kicking off a new decade, I created another set of 40 questions. It's a more philosophical and personal about what's going to happen for you over the next 10 years. And I think it works regardless of how old you are, but I think if you're in your twenties right now, these are some really powerful questions about kind of the long term things that you would want to do or maybe some of the things that you'll be able to look back 10 years from now and say like, oh, you know, it's fascinating how some things change and some things don't change about your personality.

Elizabeth: I love that and I think that it just comes down to this tension that most of us have in our twenties which is that on the one hand, we feel all of this pressure to make good decisions and to think ahead about what we want to do. And on the other hand we have this impulse, which is a very good one to just go out there and explore the world and travel and quit a job and date lots of different people and just basically taste the world and see what's out there for us. And I think that a lot of this kind of go back and forth in this kind of unpleasant way where we're on the one hand we're like so focused on trying to make our careers work out. And then on the other hand we have this impulse to just like quit our job and move to Hawaii. These two things are sort of playing at us in an unpleasant way. And I think that in my book, what I'm trying to say is that there is actually this really nice way that you can sort of bring them together. I call it purposeful exploration, which is that we should feel free to go out and explore the world and we're never going to be as independent and as free as we are in those years. But I think that the way to make all of that exploration really useful for our future is to just to think a little bit about what we're learning through all of those experiences and sort of like file it away so that when you're confronted with an equitable decision later on about what career to go into or like who to marry. You have all of those insights and all of that exploration isn't just a flash in the pan, right? It actually has a way of shaping, of teaching you things and shaping your future.


Well, this is super exciting. I hope people follow you on Twitter and keep up to date as you go on on your book tour and tell people about it and hopefully they'll preorder it. So people can follow you on @lizsegran on Twitter and I would definitely encourage everyone who's listening to go to Fast Company and take a look at some of your recent there. We'll link to some of them in the show notes, but you've been really active writing about the direct to consumer landscape, traditional brands as well and sustainability and how all of those things overlap. I love your writing, so I hope that people have a chance to check that out.

Elizabeth: Thank you so much. This has been such a great conversation.

Stephan: Thank you. Oh, one last thing before we go, I'm talking to you at home. What's your favorite brand these days? Is there something that you think is really well made or maybe someone that you love for me to talk to? Send us a tweet. We are @lumi on Twitter. We're making this show for you. So tell us what you want to hear and we'll make it happen. Thanks. See you next time.

You can find this and all future episodes on iTunes, Google Play, and here on the Lumi blog. This episode was edited by Evan Goodchild.

Innovative brands use Lumi to manage scalable and sustainable packaging.

Learn more →