Reputation Rehab

26:38Anybody can spend money and grow. But if you don't find the fit between your content and your customer, you're going to fail eventually because it's not sustainable to buy every single customer at a loss, obviously. Yeah, I feel like the reductive way to put what happened during that period was that a lot of these venture firms thought that consumer was hot, thought these brands seemed really cool and they were growing fast. And they put a bunch of money into them and they were like, don't worry about making a profit, just grow, grow, grow as if you were a tech platform or something. Yes. And in the end, like, that's not how consumer brands are built.

27:27And most of them failed. And just talking to founders who like had so much pressure to just grow the top line. Do you think that there is any nuance to that? Or do you think that's just like, kind of plain and simple what happened? I mean, listen, to the extent like people prioritized growth over like having real businesses, 100%. Like, I mean, there's just no question about it. And I think to the extent you were running a business that had good fundamentals and you could pull it back and make the math problem work and the business still was a real business, you survived. and when you couldn't, when, you know, the Ferris wheel stopped.

28:08Like, how was that? And so I think, but we had a 10, I mean, you know this, we had a 10-year period where when interest rates were near zero, money was free. And to your point, like, I don't necessarily think consumer isn't venture, right? But, like, and in venture, like, and I think this is, like, the important point. Everybody's like, oh, man, DTC didn't work. I'm like, it sure did. I mean, you know, but in venture, 99 % of the stuff doesn't work. So you'd have a hard time explaining to me that Skims isn't a venture business. Sure. Yeah. I mean, I think the other thing is these brands, a lot of them still exist.

28:43So even like Outdoor Voices, which I mean, how long that lasts at this point, I don't know. But like it still exists. Yeah. So I guess like why do you think so many of them have stuck around? Do you think it's that because most of them like their original investors aren't even in it anymore? Do you think it's because the brands that were built early on were just so solid from a from a architecture perspective or? Yeah. And I mean, they all have different stories. Right. And many of them have succeeded. But a lot of those businesses existed before the paid epic. Right. And so. So like say whatever you want about what Ty has built, but Ty is an incredible merchandiser and a great storyteller.

29:37She, I think, led an entire era in that category, whether or not she won it. And what she did was incredible. So I'm not surprised that business is still around. Right. You know, I'm not either. Yes. Yeah, I agree. In the same way that a lot of those businesses, like they were there for a reason and they had built like really real relationships. with their customers. And so whether or not the business was ever going to be, because you can make an argument that in the world that we live in and the way discovery happens, that it's going to be extraordinarily hard to create another Abercrombie, right?

30:11And I read your piece, you know, I don't know when this is going to air, but you wrote about it, I think, yesterday. Sarah Shapiro, yeah. Yeah. And like, I was thinking about, I was putting like the analyst hat on because I read a lot of retail analysis. And it's like, if you start your year at zero every year and you just $3 billion of revenue, you're a successful business. And I think it's going to be really hard to build that kind of business in the epic that we have now. But I'm not surprised that a bunch of these businesses have succeeded to some extent. They had real connections with people.

30:43So another thing, let's talk about the storytelling element of it for a second, because I was working at Business of Fashion when most of these companies came up. And when you all, I started there in 2013. So it was like, as you were growing, Daris, I was looking at these businesses. And so I worked on a lot of stories with you and your team. And the thing that happened during that period was this like very close coverage of these firms, a lot of sharing of revenue when they were going out to raise another funding round, like a lot of transparency, as Michael Praseman would say. in terms of like what was actually happening at the business because they were proud of it.

31:30And there were there were strategic reasons. But what it has done, and I see this in my coverage of the luxury industry, too, and I'm sure this is across industries, is that there is this like micro coverage of businesses. and also like now you see it on TikTok and you see it with when I'm covering LVMH, like there are consumers who shop Dior who are doing TikTok videos about like, is Dior going to save LVMH? Like it's so step-by-step now, but how did that benefit the brands that you were covering? and also like how did it challenge them? Because Outdoor Voices is a great example. I'm probably the most, the biggest student of Outdoor Voices and the person who's followed it as closely through all the different iterations.

32:25But there were other people too, like there were New York Times. Think about the fact that there was a New York Times story about this little company that like at most made 90 million a year in sales, probably not that much. What do you think like the benefits of it were or what were the challenges with people covering stuff so closely? I can tell you why I thought it would work at the beginning because it's definitely changed, right? But I grew up, I'm an 80s kid. I grew up in a mall pretty much every week. And it feels like the heyday of brand advertising. The Gillette ads were incredible. The Be Like Mike ads, all that stuff.

33:05You walked into a mall on the weekends and it was sort of the original social network. You walked around the mall with your friends. Like the windows were what was important, all the merchandising you walked in, like, you know, you, you maybe saw stuff merchandised on a table. You maybe pick something up like the third or fourth or fifth thing was touching the product, but it was all imagery and, and merchandising. Right. And so I do think the thing that we had all gotten a little allergic to was being sold at, right. Cause it felt like we were being sold at in like the most materialistic country during the most materialistic time in its history.

33:39And I think the organic nature of these businesses when they started, and to an extent now, where people would just be honest with you, right? I remember like long conversations, like I think the day after we launched Harry's, the company, not the day after, it was a few days later, we had a problem with the product. And I remember talking to Jeff Rader, who, incredible founder, right? Vorby and Harry's. And he was like, what should we do? Right? Because people were saying the product was not working the way they wanted. And literally the conversation we had, well, what would the incumbents do?

34:16And we talked that out. And then we did the opposite. And I really do think a lot of it was that. It was filling a white space where people felt like the brands they were interacting with were kind of not phony, but felt like brands. They didn't feel like people. And so that was the beginning of it. it then starts to scale and everybody's talking like this, right? And we go through this period of time where everything looks exactly the same, which always happens. Everybody speaks exactly the same. Everything is derivative. And then it starts to feel less special, right? It starts to feel like everything's been carbon copied.

34:51And that period of time is sort of when you figure out whether or not you actually have a connection with your customer and with the ecosystem.

35:01So I That was the original intent of it, if that makes sense. Yeah, that makes sense. But when it got a little dicey later on, how did you manage it? And all your brands, it was different. I would say for most of Reformation's trajectory, there was, A, business-wise, it always did well. And B, there was like one blip during the pandemic where you had like a thing that a lot of people were dealing with at that time, like reckoning type thing. But it was actually when you look back on it, it was like two days. But then there were other businesses that you worked with that would like have weird like Everlane never had like would have like weird controversies.

35:50but they were sort of also surface, but it would come up, you know, once every six months or once every year. Like, how did you, as those, it was like, and you had all the big brands. So all the ones that people cared about were the ones that had challenges. Like, why do you think it got a little dicey for some of them? I mean, obviously Warby, never anything controversial, but like, do you think, I just think it's part of the natural cycle. Yeah. Like every single brand goes through peaks and troughs. Like I probably bring this up and I hope I don't get in trouble. But like, you know, there are brands.

36:35I won't say the name because I don't want to get in trouble. But the enormous consumer brands, consumer lifestyle brands that got in trouble for child labor in the 90s. Right. Like literally have kids make their products and lots of them. And those brands are all still around and all bigger than they have or have been before. Like brands go through challenges, right? And so, I mean, Reformation is an amazing example. Like Yale founded that business and has an incredible eye and an incredible voice. But like that business isn't what it is now without Hallie, who is an insanely talented operator.

37:09and what she's done to the business as it's grown. I mean, it's just incredible to watch, but they have since the beginning, no matter what they've gone through, like stay really true to their product and to serving their customer and to like making stuff that people love. And they also exist for like a great purpose and a reason, right? To make the world a little bit better. And so I don't know. I see, like, I think it's normal. Every single one of these brands went through, they were hyper scrutinized because they were covered a lot. And like, you know this, But like the media echo chamber is a thing like people love to write about the things they've written about.

37:42And so if you've written about the rise of a company, you have to write about its downfall and then eventually you have to write about its resurrection. Right. So it's like to me, that's just the cycle of like of the way like the public personifies stuff. Well, I think that's why you all are a bit different than for the PRs or for the fashion people who are listening to this. That's why you're different from a strategy and an approach perspective. Because in fashion, a lot of these companies, when they're having problems, are just used to journalists ignoring them because they need the advertising too much.

38:23So they'll skip over if a company is having a lot of financial issues. The one exception to that is like if it's on the public market, then it's fair game. So I feel like a lot of these trade reporters in particular get very gleeful when a big company has like a very bad quarter because they're like, yes, we can finally write the truth about what's happening with it because it's public information instead of doing their jobs and writing about it behind the scenes. But that's my own little soapbox. But to your point, and which I think is fascinating, is like a lot of this has gotten democratized, right?

39:05So you're not seeing, you don't have to wait for an established media presence to write about something to have, you know, some analysts, you know, whether you consider them armchair or not, kind of like doing think pieces on it, right? Right. Like the idea, like even what you're doing, I mean, just like the idea of what you're doing existing 10 years ago. Like it's so obvious now that it should exist, but it wasn't necessarily obvious when you were at BOF. Right. So like, I just think, and again, as we've totally democratized distribution, right, it's totally free to distribute now. Like I have the same distribution costs as Puck does.

39:45Right. Whether or not anybody's reading it is a different matter. But like as we've totally democratized distribution, as we made it easier and easier to discover new stuff, whether it's new people, new brands or anything, like you've just totally flattened the earth as it relates to like how many people can opine about how many different things. That's what you're seeing. So like to me to overreact to any one thing when a brand is going through ups and going through downs, you know, brand is built on years and then decades of repetition. Like and you're either good or you're not good. And I think the only time when brands truly suffer, when their businesses actually suffer, is when the stuff that is not good becomes like a working pattern.

40:24But aside from that, like going through like a single negative event, I don't think is particularly impactful on a real brand. Do you feel like these brands are in the brands that you're working with that have been around for 15 years? What kind of phase of the cycle of the consumer cycle do you see them in? And how do you all how are you all working with them differently now than you were even five years ago? I mean, the world fundamentally changed. Right. And so. I would say three things in particular to me, one audience is everywhere and all around us. Right. It's you're a large company, a small company.

41:08Your internal audience matters. Right. Your customers matter. Influencers and creators matter. The press matters. That's one. Two, the kind of distribution of power has changed. And so power exists in lots of different places that are formal or informal. You can talk about the government, both federal and state governments, but you can also talk about power existing in small pockets of the press and in influencers and getting caught in a political debate that you never intended. And then three, everything's moving really quickly. And so, you know, the best brands are collapsing the delta between like the advice their CEO and their CMO and their CCO gets, the strategy that they have put in place, and then their ability to react, whether you're doing something proactive or reactive.

42:01So I say all that to say everything needs to be more integrated now. Right. And we have this fundamental belief here that the future of the world is earned, that every single channel that's meaningful now is meaningful because it earns your attention. Right. It earns your time. It earns your scrolling. Like it earns your ability to show up in person. By the way, reflection of what you guys have built and others in that space have built that is successful. And, you know, for us, like you have to have the ability in a company like ours, I believe, to be able to speak to the C-suite, one. Two, to be able to build like data-informed strategy that actually like speaks to your customer and allows your customer to speak back.

42:45And then three, has the ability to work like totally multi-channel, like regardless of channel, in whatever way works for your client. So that might be press. It might be influencer. It might be affiliate, but it might as much be organic social or public affairs or crisis or internal communications. And the more diffused those various things are, the harder your life is going to be as a leader.

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44:34How do you think the way that consumers consume now being so, I don't even know how to describe it. It's like so micro in terms of the direct relationship with the brands, but also you just have so much access to so many different brands and how you discover things has changed. Like it's not about like going to a store anymore. As much as we would love it to be, it's not about going to a store and you find a new brand and great and what a lovely experience. Like people just don't, it's not how their brains are wired anymore. How is that changing how these companies are growing and being built?

45:23well i think the way discovery works especially in fashion today or in retail more broadly the way discovery works and the desire of people to discover makes it harder to build something scaled right full stop i think we all know that and it's driving people into like smaller and smaller corners and i think two things can be true so one like people still love that act of discovery but I also think like paradoxically we're going through a bit of an age where people want to buy less stuff and have it be higher quality in some respects it's still young people are still going to buy fast fashion I know that and I think when you look at those two things I still do think people shop in similar ways that they have in the past where if they find something they like they invest in it right and so yeah at the same time like and I think the way discovery is happening in a world like consumer is different than the way it's happening in other places.

46:22Like we talked about this briefly, but when people are searching on ChatGPT or Claude, like it's a totally different thing. So if you're searching for like the best tent for a desert, for instance, you used to put that in Google. You'd have to, you know, shuffle through the 10 sponsored links and then start to do your own research. You do the same search in ChatGPT now, and it's going to tell you the tent to buy. Yeah. And it totally changes the intent and it totally changes the conversion. And if you click the sourcing on that chat GPT work, it's going to bring up probably 10 things that are either based in customer comments or press effectively, which I think is fascinating.

47:06It's almost like going back to the beginning where something as simple as just doing straight up paid is going to change in value relative to things that help establish and build brand. So I do think we might be at the beginning of a new epic. Well, this might be a dumb question, but like how much are brands able to pay these ChachiBT or Claude? Or is that not part of the equation right now? I assume it is with Google AI. I mean, people are building AEO products. We have a really good one, right? And there's kind of three pieces to it. One, the models are picking up like certain types of earned content.

47:50And so if you understand what they're picking up and that gets to the last part, which I'll talk to, you can reinforce what they're picking up and do more of it. That's one. Two, a lot of SEO work was about like the functional like setup of a site. and the way your owned content works and a bunch of other things. And so like we have a team that can actually work on that because there are things that the LLMs are picking up. And then three, you have the ability to continually measure this, right? To like literally run the same query millions and millions of times and see how it's changing from day to day and why it's changing.

48:29And that data can like drive the decisions that you're making on one and two, if that makes sense. And so, listen, ChatGPT, I mean, OpenAI and a bunch of these companies are starting to move towards paid. And that ad thing is going to happen. And I think that will change over time and adapt as they see what works. But already right now, like the version of like how you like impact these engines, like plenty of people are starting to do that. And if you're not, you have to be. Yeah. Well, I just wonder, the thing I use it a lot for is like what book should I read next or what movie should I watch next?

49:04And I do the first couple of times you use it. It's really valuable because you're like, oh, that's exactly what I want. And then you realize it's only going to it keeps coming up with the same things because I'm a limited person. So even no matter how I really put it in, I'm kind of saying the same thing every time. And so there's books that have been surfaced to me on Claude like 15 times. And I'm like, why does it? And so I wonder, I mean, I guess this is just what our world is just so small now. And that's what it reflects. It's so big, but so small. The LLMs are going to take in and reflect the conversations you have with it and get to know you, right?

49:47And that's one, which may or may not sound creepy, right? And then number two, I think the most interesting thing to think about technology is today is the worst it's going to be. Yeah. What do you mean by that? Like the experience you're having today is the very worst version of it you're going to have. The one you're going to have tomorrow is going to be slightly better and slightly better and slightly better because it's going to continue to improve. The experience. Yeah. And so as it learns more about you as the kind of as the product matures, it's going to get better and better at this. Right.

50:18And you're probably since you've realized that like it works on books and movies, you might ask it for some other stuff down the road. like and you're not going to do it for like the clothes you buy because you're encyclopedic about that but you're not encyclopedic about everything right well i have used it for like what should i what kind of outfit should i wear tonight yeah so like i'm not going to ask you for advice on what to buy in that like what brand to buy or anything like that but i have been like it's this weather outside and i'm going here at this in this place what kind of what's like an uh because sometimes you just don't know like you especially in la there's like people dress like freaks like no one it nothing ever makes sense i'm always like should i wear that i have i don't know think about what you're saying yeah you lauren sherman right the most like knowledgeable person about this in like i know you won't say you are you spend your entire life writing about about what people are wearing, about like how these brands grow.

51:22And you are asking for advice in that category. Do this thing. So I just, I think any of us trying to anticipate exactly how this is going to change the world, it's sort of futile, but I think you play it inning by inning. And right now it's at this place product-wise where you can definitely impact it by doing like smart things and doing it repetitively. That will move into the paid realm like everything else. Like once paid starts to pick up and it'll be fascinating to see the paths the different products take. And then there's going to be a million other like versions of that. But if it's not, like it has to be part of how you're thinking because I, like discovery is going to continue to change.

51:56And in the same way that like where you and I grew up, like as like AIM kids, right? Doing dial up internet. We could have never anticipated the impact, the 20 year impact Google's had, right? And Google search. And like, obviously this, both like the OpenAI version and the Claude version and the Google version, like, is going to have, it's an apocal, like, impact in how we're going to behave as consumers. Okay, final question for you. What do you think, and this, it's a hard question to answer, but, like, what do you think the value of brand is now and will be as this stuff develops? Because you can say, the thing I see with sort of generational surveys that I've been looking at for 20 years is half of the surveys say that consumers, young consumers don't care about brands and aren't brand loyal.

52:49Half of them say that they are. And it seems like every generation is the exact same thing. But I'm curious, like, do you think there is a value in spending a lot of time and money in building out a brand story and a brand's reason to exist when there are just people buying these hair curling irons on TikTok because TikTok said to do it. Yeah. Yes. And so like, um, I think brand is always going to have enormous intrinsic value and generational value. Like brands are things you can pass down to your kids. and I also think people shop with their wallets and their emotions, right? And so discovery is both going to be a thing that we're actively doing in finding new things, whether those things are finding us through all the social media advertising or we are scrolling with intent and trying to look for something, one.

53:47Two, we will still also pretty much always go back to the brands that like deeply connect with us and those brands exist all over our lives, right? You might feel that way about Nike, but like like we feel that way about colgate right like like if i brought up crest to my wife oh my god like no way um and so there's no way that is going away and if anything in the world to come where we're doing less of the legwork on discovery when we're counting on these answer engines to tell us what to buy i could make a pretty compelling case the brand's going to matter more because you're going to have to have heard of something to feel trust in buying it if it's going to be sent to you in a way in which, oh, this is the choice.

54:31Because if you see it and they're like, this is the one you should buy, if you've heard of it, you're almost certainly going to pull the trigger and buy it. And if you haven't, it's probably going to lead you to do a bunch more research and figure out what the proxy for trust is for the purchase. Yeah. I mean, of course, she brought up Nike because I think it is the brand that is the most like at an impasse right now where it seems like it's doing a little better. It was never doing that badly, but in the market, the perception was that it like lost whatever it had. And for our generation, it is the like go-to brand.

55:14I have actually never been a big Nike sneakers person. I've gone in and out. But like right now, if I buy workout clothes, I still buy them from Nike because it's just and I love the I love the logo. Like I love the way I love the old vintage Nike stuff. I don't know, like do younger consumers feel this way about Nike or Levi's or Kleenex or Crest because the marketing isn't as effective, even if the marketing is good. It's not as like emotional as it was when we were growing up because there's just so much more it's just it there's so much more exposed to so many different things that like I don't do you think there are going to be brands that come out of this generation that people feel a do you think that Nike is going to be as valuable or powerful as it is now 50 years from now and B do you think there are going to be brands that develop during this time that you helped develop that are going to be super powerful 50 years from now the answer I don't know and I hope.

56:16I mean, I was just looking up Nike's numbers. Nike did$46 billion of revenue. 10 % increase year over year at that size. I mean, that's incredible. That means it grew$4 billion last year. Like, I... Well, I think it had fallen quite a bit. Yeah. Well, listen, they clearly pursued a distribution path that wasn't super smart under previous leadership. they've also clearly gotten back to like product led delivery now and i i think the product looks i mean i love nike nike is but what nike nike is everybody when i ask nike what the mission is they say just do it it's not the mission right the the mission of nike is inspiration and innovation right to every athlete in the world and then it it it puts a little star next to the athlete thing and says, if you have a body, you're an athlete.

57:08And yes, I remember it. I'm obsessed with it. And like, if you look at the work they've done over the last like 50 years, I mean, since I, you know, I haven't been paying attention to this thing forever, um, whether it was Nike Air or it's the innovation they've done with materials with MIT or all these other things, like they're actually doing the work, um, on the innovation side. And then the inspiration side, the way they tell stories, like, I still think that stuff is going to matter deeply. And I still, yeah, if I had to bet on like five brands that are going to be around in 50 years, Nike would definitely be one of them.

57:41You know, I think it's an incredible brand. And, you know, and I just I do think this stuff is going to mean, again, paradoxically, even more in the future than it has over the last 10 years because of the way like shopping is changing. I hope you're right, because otherwise it's a little depressing. Think about the way your life works. You're going to have products in your mind that you commoditize. You've had that since you were a kid, right? Like in our family, we don't drink soda in our family. But when I was a kid, when my mom bought a two liter bottle of soda every single week at the grocery store, and it was whatever was 99 cents that week, right?

58:17She had no brand affinity. But there were other things where she swore by the brand. I still think that's the way we shop, right? There are things that to you are a commodity that doesn't matter or something that you're willing to try because why not? and the thing is surfacing something that's like, oh yeah, I love hair curlers. I'm just like, they know you, they've been following you around the internet. They know the likelihood is that you're gonna convert and it's just like cheap bottom of the funnel, like really truly direct consumer stuff. And then there's gonna be a bunch of other stuff that you buy where you either buy it as if it's a subscription, like every time you buy sneakers, you buy Nike, or you just become like you have deep affinity for the business and you continue to collect it in whatever it means.

58:57And the collection can be anything. It can be stuff that's consumable. It can be stuff that lasts forever. But I think you're going to have both. But I do think given the way discovery, I think, will shift, I think brand will mean more in the coming out. Jesse, thank you for being here. This was super fun. Yeah, it was a lot of fun. Thanks, Lauren. Fashion People is a presentation of Odyssey in partnership with Puck. The show is produced and edited by Molly Nugent. Special thanks to Puck co-founder John Kelly, executive editor Ben Landy, producer Maya Tribbett, and director of editorial operations Gobby Grossman.

59:34An additional thanks to the team at Odyssey, Kelly Turner and Bob Tabador.

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