Shopify Earnings Go Wild, and American Retail is OVER.

0:00Phillip: Hello and welcome to Future Commerce, a podcast at the intersection of culture and commerce. I'm Phillip. And I'm Alicia. And today we are getting back into the swing of things and we are in the full swing of back to school. If you are, if you're listening in Georgia, you've probably been back for a couple of weeks now. Florida has been back for a week. And if you're listening literally anywhere else, you're like, what are you talking about? We've got a few weeks left to go. and we're going to be covering a little bit of forecast today on what the NRF thinks back to school data might look like, what Future Commerce has been talking about, about upcoming back to school trends.

0:36Phillip: Alicia, you've been covering this a little bit in the writing and the pages of futurecommerce.com for the last couple weeks. And also, I think we're going to cover a little bit of retail earnings news today, as well as a grab bag of some other stuff. So buckle up, We got a lot of data to get through here today. But before we do, we want to remind you that Early Bird is still available for Vision Summit. If you are a member of Future Commerce Plus, you can go get it right now. It is available to you. Go to futurecommerce.com and click on events. You can get a special deal if you are a member of Future Commerce Plus to the Vision Summit this year.

1:16Phillip: We're returning to MoMA for our fourth year, November 3rd, Vision Summit at the Museum of Modern Art in New York City. We'll see you there. Alicia, how are things? Good. Busy, like you kind of alluded to. My son's not going back to school until September 8th, but I feel like I'm already halfway through the school year and I need a nap already. So we'll see how the first week shakes out. That's not a good sign. I know. It's really not. But there's a lot happening. A lot of interesting trends. I think we've seen bubble up over the past year, and I feel like they're finally coming to a head, which is good for us.

1:53We have a lot to talk about.

1:54Phillip: There's a few things there. There's like the cultural trends. There's the retail trends. There's sort of the purchasing trends. I think one is certainly agentic. And we're seeing a bunch of that show up even in some of the retail earnings news ahead of the back to school actual data that's coming out. we're seeing how Agentec is starting to show up in retail earnings alongside Shopify's monster quarter which I mean we just we can't even talk today about anything without just mentioning that Shopify just posted probably I mean I think it's the biggest news probably of this past quarter of any earnings, but Shopify's revenue is up 34 % year over year.

2:42Phillip: And GMV was up 32 % to 115 billion, but they've effectively tripled their agentic traffic. And I think that's the kind of thing that as you start to look at that and you look at their retail roadmap, a lot of their AI bets are things that I think will start to pay off. And also their subscription revenue is starting to become eclipsed by all of the other revenue. They're basically a payments company. That's where all of their revenue is coming from. And you start to look at where their AI investments are leveraged and where their AI traffic starts to come from. It's a company that looks like it's starting to future-proof itself.

3:27Phillip: And they're starting to speak like that as well in their earnings calls. And that's where I start to think about back to school traffic and how much of back to school search is going to be had on answer engines in 2026. Yeah, I think you raise a good point, especially because a lot of the data around current behaviors, anticipated behaviors, a lot of it is rooted in one, finding the best deal possible, but also drilling into essential purchases and especially electronics. I know that's kind of a common narrative year over year, but especially this year, the NRF indicates that electronics demand is kind of reaching that fever pitch.

4:13And we've seen in our own research that the electronics category is a top indicator for AI and LLM usage. Like, you know, we scoped it around holiday specifically, but I think some of those behaviors do apply to you back to school because there is a very specific mode or mentality of how you're shopping. Like you want to find the best product at the best price for something like electronics. There are certain specs, you know, some consumers may not know to look at while comparing products. So it seems like the narrative is further fleshing out that LLMs are kind of that destination to distill narrow options, compare options, and of course lead with that efficiency and that savings that is top of mind for so many parents this year in particular.

5:05Phillip: Yeah, we could probably go down the rabbit hole talking a little bit about other trends that are happening among tween purchases or teen purchases that are influencing full adult and full household spend. And I think that that's a super interesting thing to take a look at, especially in the midst of back to school where you might be thinking about purchase necessities, right? And those things I think are happening earlier and earlier now versus the way that I think it used to be where I think people used to procrastinate a lot more. I think in the way that line culture has sort of conditioned us to wait longer for things, reservation culture has conditioned us to plan earlier for things.

5:53Phillip: And then the way that retail has crept to holidays further and further up the calendar, we're starting to see things like back to school. Those purchases are happening earlier and earlier in the calendar year as well, too. So maybe some of those, the types of purchases that are being made in advance of actual back to school are the nature of those purchases. The kind of purchases that you're making are also shaped by the time in which you're purchasing. Yeah, absolutely. And there's a really interesting pendulum swing, like 62 % of shoppers surveyed by the NRF and Prosper say they've already started shopping, like you noted.

6:35digging into their shopping lists by early July. This is when the survey took place. However, I know, wild. I didn't even get the school list yet. So I guess people are just kind of deducing what is necessary.

6:50Phillip: I can see clothes shopping happening in early July for back school. Absolutely. But for the people who have not started shopping yet, that's 46 % said they're still waiting for the best deal. So to your point around the economics of what we're buying, when and why, it's like there are two sides of different shopper cohorts and they're both trying to get the best possible deal. And some people are doing that through early, like starting early and then others are waiting like this game of deal chicken, right? to see how much they could possibly save. But there could be category nuances depending on those behaviors and what they're saving for later.

7:36I wouldn't be surprised if some people are maybe saving things like apparel for a bit later too because retailers are maybe trying to clear out some of that inventory for holiday because once one thing begins, we got to get ready for the next thing, right? So I wouldn't be surprised if some people are just waiting to see what their kids actually need when they go back to school. And, you know, maybe they'll get a few purchases in before the holiday stuff starts.

8:03Phillip: I've gone deep down the rabbit hole over the last few months in building custom AI harnesses and skills around foundation models to make future commerce better every single day. And that started at building a vector database and then a custom harness for us to be able to search future commerce's archives and to build a skill so that whenever we do anything for any kind of text search, we're searching Future Commerce's archives. And all of that relies on a foundation model. But when most of us think of foundation models, we're thinking of text generation. But text generation is not what AI is by default.

8:40Phillip: Most people, when they are interacting with AI, are interacting with things that aren't primarily text. I saw a stat that one in six Google searches today are multimodal. Think about that for a second. One in six searches are a voice search or an image search or a camera search or some sort of search that's other than text entered into a box. So I think that the way that we're searching, the modes that we are expecting to be able to search with are already changing. And that means our interactions online, our expectations for the interactions online are changing too. And so the foundation models that we use for driving those AI interactions have to change as well.

9:27Phillip: And that's what makes me think about our new partner, 11 Labs, because 11 Labs is the frontier lab building the voice layer for the next generation of customer experience. Voice agents, they are the frontline. They support, they sell, they guide, they answer a customer's needs, and they can get you from intent. They can get you to action and they can do it in real time. And there are plenty of brands that are using 11 Labs infrastructure to support millions of customers. Companies like Klarna, who supports 35 million customers, and Revolut, who has deployed 11 Labs agents to resolve issues eight times faster in as much as 30 languages.

10:07Phillip: Brands from e-commerce and retail and customer operations are building on Eleven Labs voice agent infrastructure. And for commerce, I think this matters so much because the best kinds of customer experiences have always been the ones that take place in a conversation. And that kind of conversation doesn't just happen on the sales floor anymore. It can happen anywhere. And so if someone shows up in your support channel, you still want your support channel, even if it's driven by an agent, to be able to sell. And so now it finally can. Shopping, support, returns, product education, international markets, anywhere the customer has intent, but the interface is getting in the way.

10:48Phillip: That's what 11 Labs is building. It's one voice for your brand across multiple customer touch points and almost any language. And it's at real scale. So if you're thinking about what happens when customers are not typing, when they stop typing and they start talking, start thinking about 11 Labs. Build the agent. Give your brand a voice and meet your customer the way that they already want to be communicated with. So go to 11labs.io slash futurecommerce. That's 11labs.io slash futurecommerce. One voice for your brand across multiple customer touchpoints. That's 11labs.io slash futurecommerce. And tell them Phillip sent you.

11:27Phillip: Let's get back to the show. If you look at also the other type of growth that we saw in the quarter, just sort of like fanning. I know we're sort of like covering a lot right here all at the same time. I do want to talk a little bit about the other trends because I think there's some interesting things happening around that we've written about sort of the cultural trends that have happened. Jack Stratton filed a piece with us recently. We hung out with him, actually, you and me. We did. In London. Actually, I'd like to talk about that. We could actually talk about that because he had an insight that blew me away and I keep telling people about it.

12:09Phillip: Um, so, uh, but just to close my thought there, um, there's, uh, Coresight, uh, just put in their, like their prediction as they are want to do, uh, about store closures for the year. And, uh, they predict that us retailers would close about 7 ,900 stores in 2026 down four and a half percent from last year, which is the lowest in three years by their prediction. But value retailers, Dollar General, Aldi, Tractor Supply, et cetera, are leading openings right now, which bucks the trend that I think we had posted or forecasted at the end of last year when we put in our predictions around those retailers having a little bit of a tough challenge coming out of tariffs in 2025.

13:05Phillip: And it looks like they have found ways to turn that around. In fact, we're going to have Austin Leonard on the show who leads DGMN, the Dollar General Media Network, talking about ways that they're expanding how they're serving customers in all kinds of different ways. I can't wait to actually hear how they're serving customers in-store and out of store. But, uh, when you think about where people are going to shop, uh, back to school certainly has to be part of that, uh, you know, that consideration now it's no longer just try to get everything done at one store. I think people are, uh, especially right now, you'll get this sort of like K shaped recovery, which I think has been more full effect than it's ever been right now.

13:53Phillip: Um, you, I mean, especially if you look at like the way that the layoffs have, um, have shaped up. University of Michigan had this consumer sentiment report where the consumer sentiment rose for a second straight month to 55.2 in July, but it's 11 % below where it was this time last year. And then we have more tariffs that are coming into effect here today so you sort of have like this you have again you have things that are are swinging in both directions as it's continued to do post-pandemic and i think people are being way more considered in every purchase um both online and off people are are shopping more at walmart but they're probably doing it through walmart plus at home delivery um and then people are are spinning Amazon has never had bigger earnings, but it's coming primarily through their AWS and their Anthropic earnings and not necessarily through Marketplace, right?

14:55Phillip: So just a really interesting way to analyze all of this in light of just the way that people are choosing where to spend their dollars now. Yeah. Well, and I think it's a carry through of the conversation that we've been having over the past year. I think I recall us talking about holiday specifically and this idea of value and what does that really mean to consumers? And in some cases, that means price alone, or how much can I save in that trip or in my cart? Other times, it's breadth of inventory, like how much can I get in that shopping trip? How many things can I check off my list? And then other times it's how easily can I get it or how quickly can I get it?

15:43And I think those behaviors, like people hopping to different stores, and that's why these shopping centers or open-air concepts where you can go to Trader Joe's, then you can go to the dollar store, then you can go to Costco, those are becoming so hot right now because people can get that maximum value but still hit those unique brand differentiators. So I call it grocery shopping bingo in my house. So my husband goes to specific stores for certain things and he'll hit those stores on different days of the week. So he'll go to Costco for X and then he'll go to Trader Joe's for Y. And he'll never go to ShopRite on this day because it's too crowded that day.

16:35So maybe I'll go there on the weekend. And so it's like we're building our own little strategy around our time, our efforts, and our energy. Absolutely. Sometimes it's savings, right? And I'll reallocate my dollars for back-to-school shopping for notebooks and stuff to the dollar store or Walmart because I know my kid's going to lose all that stuff by November anyway. So why am I going to invest so much money in him? He's in third grade. What does he know? um and he doesn't care either he'd rather us spend money on robux but that's a whole other

17:10Phillip: conversation and i i'm gonna get on a soapbox real quick if i get one more class i've got two in high school now but for years i keep getting these like class uh supply lists and oh boy it was all through middle school and now i'm starting to see it even like syllabus sheets are coming back from high school now and i'm like when have they ever ever used colored pencils not once i've never seen anyone use a colored pencil like i don't know where they go they wind up in some vortex they're at the same place that the socks wind up from the dryer and i don't know what all these colored pencils what are these colored pencils being used where are they are where are they i don't know i don't see any work with colored pencils come home and that's the wild thing to me i feel like there's a colored pencil lobby like crayola is in cahoots it's the crafting lobby it really is it's like we are propping we're single-handed like school districts everywhere propping up the colored pencil industry because there's like there's no rational need for that many colored pencils and same a little bit with expo markers i'm like why does i was gonna bring up the expo markers child need a 24 pack of expo markers yeah unbelievable but for for real though If you have 30 kids in a given class and you have a 24-pack apiece, that's 720 markers.

18:35Phillip: What are you doing with 720 markers? I don't know. That's a lot of markers. That should be plenty for the year. I'm just saying. We need to do some research marker economics. That's the next bombshell piece from Future Commerce. I want to talk about Jack in our little jaunt around London. Yeah, let's do it. But we have a forthcoming set of field notes that are coming from our time in London, you and me. I'd love to actually chat about some of those real quick because there were a few brands that kind of blew my mind. And there was a big takeaway that we got from him. Could you give us a little bit of an overview of the infantilization of retail piece that he turned in about a week ago over on Future Commerce Insiders?

19:26Yeah, absolutely. And for those of you who don't know, Jack Stratton, he is the head of Insider Trends. So a lot of his work entails going to retail stores, monitoring the trends for merchandising, store design, aesthetics, but also merchandising mix, too. Then he also does these really great pieces that kind of bring his unique perspective as someone who sees this in the wild day in and day out. But this is a topic that he and I have kind of been jamming on inside conversations. myself largely because we're kind of seeing this resurgence of, you know, nostalgia and novelty for millennials. And, you know, we're seeing that trickle down to even younger consumers.

20:15So he's been tracking luxury and, you know, how they're really embracing these cafe concepts, these like almost like they're turning their stores into playgrounds and toy stores, right? They're embracing blind boxes. They're adding slides and tactile elements into their stores. And that's fun for us grownups too. It makes it fun and interesting to go into a store rather than scared to touch things. But it's also kind of creating this playing field for younger consumers too, especially Gen Alpha, who may not be in the prime spending years yet for that particular type of brand or type of product.

20:56but it still feels like an open environment for them to go browse, take pictures. And it's really kind of redefining what a retail space is meant to be. But then it's also like skincare and beauty brands are doing the same thing. Like if you look into, I mean, Glossier is an early example of how they really shaped their flagships to be almost like museums and like playhouses for certain cities. but there is another brand called flea and they used to have a store in new york i think they closed that down recently but they're mainly in asia and um we'll include a link to some examples in the show notes but um you know it's really it's a playground man like bright colors um a lot of testing and trying elements they're hosting parties there they're hosting gatherings there And it really gets down into the psychology of using novelty and play to encourage people to buy.

22:00And that was really the heart of his argument. It's like when you create these spaces that are conducive to young people, you're kind of creating this magnet moment that ultimately motivates them to shop. even if they're not intentionally shopping, like the fact that they're in that space and wandering around and playing, that's a form of consumption, right? And those moments, those sensory moments when you're touching and testing and taking pictures and you're saving them and posting them and going back to them, those are memories. And that is a memory that you hold onto. The more senses that are activated, the stronger the memory is.

22:40So really it's about building out that relationship with a consumer so when they are ready to buy or when they do build their wish list for the holiday season right they're more likely to pick that brand

22:55Phillip: it's uh it reminds me too of we we had a conversation um with uh juliet arnaud who is you know a longtime friend of the show and uh we were talking just about how uh hermese as a and and many luxury houses many many maisons have adopted the policy of being at once both a retail experience in a retail store but also a bit of a like museum like experience and being very experiential and wanting people to come in even if they intend to buy nothing and so this is where Jack really blew my mind Alicia and I it sort of made me put on totally new glasses um where he had this POV that uh London has so much retail and has a lot of experiential retail for sure and a lot of like flagships uh you have the Regent Street flagships um uh and they're very exciting to go to, but just retail in general is very plenteous in London.

24:04And that's because,

24:07Phillip: and you contrast that with say like the United States and my experience of retail in the U.S., which is I think much more utilitarian. And I think that's because a lot, and having spoken with Jack, it seems like a lot more of the U.S. share of wallet goes to experiential spending, right services and experience as opposed to other parts of the world which are actually spent on goods and so when you when you look at how retail occupies and like not just commerce in general but retail occupies a really special place in the overall budget the place of retail becomes a very important place to be. Whereas in the United States, you start to see now our hospitality sector is starting to become a much more important facet of our retail experience because experiential hospitality has to fuse with retail for it to be a part of our spending, right?

25:13Phillip: So that's why you see cafe culture coming and that's why you see uh a lot of the sort of uh hotel um and uh spa and wellness uh i was gonna bring up wellness right um gym shark i think was one that we went to with uh with jack right and the the gym activation has been superseded within london by just pure retail and it's become more utilitarian and not in less experiential. And I think that that's just a real eye opener for me is that we're much here. I mean, I can only speak from my experiences that I believe that the U S is just much more geared towards service and experience from our share of wallet than we are towards going into retail or going online and shopping for retail and shopping for goods, I should say, than we used to be.

26:09Phillip: And so that's where you start to look at. If you look at it through that lens, retailers have to future proof themselves in looking at the next generation and how we get the next generation to become, you know, lifelong adherence to a brand. And that's why you start to see what Jack has written about here is that you have to, I don't know, his words, get them while they're young. Right. And I think that's very true. I think it's just, we used to do it with licensing and I think we still do. We still do. A hundred percent. We still do. Right. But, but there's other ways to do it too. Right. And some of that, you know, might be, uh, there's the Chrome that you put on it as well.

26:54Phillip: Yeah. Well, and there was another really interesting example we've saw. I think this was before you met up with us, a retailer called Pure Soul. And they are essentially meant to be an incubator of sorts for these emerging K-brand companies. And their goal, and this is verbiage that he used, which I found very interesting, their goal is to get these brands into the pipeline before Sephora can get them. And that's their differentiator. It's you're coming to the store to see a brand that you won't see anywhere else through mass retail. But what I found very interesting is like their space was very cutesy.

27:35So color palette was like a very like powdery blue. He called out like they sold a lot of miniature products, like mini goods. And of course, that's good for travel and testing. But, you know, there is a novelty to these mini products, which we saw, of course, through many brands. but it's being carried through into actual goods now. So he noted how these little touches, they may seem like not a big thing, like kind of like a throwaway decision of like, oh, like, yeah, let's sell smaller products so people can try things. But there's an intention behind it that is below the surface. And that's a way to have lower priced goods.

28:18So maybe younger consumers can try them and just create a fun space where they can, you know, browse and also like embrace the novelty of like those little mini products because they just find them cute and fun. So again, like everything has multiple purposes. And if you get deep into the psychology behind why that is, it's very fascinating.

28:39Phillip: Fascinating. It may be a little terrifying. We've covered for many years and I think you actually, you wrote about it to some degree in lore, the physical book that we sell at futurecommerce.com slash lore uh about the unbelievable market that is many brands like the the kuru right and kuru zuru kuru is a footwear um and i mean like there's still a thing right like you go to yeah and they expanded into more categories oh it's like so many things like you've got like resin kits now from from zuber which i think is like i think toxic to people's health you shouldn't be doing resin indoors with like no no ventilation it should come with like an n95 mask that's uh but i i digress um what's really wild about the mini brands thing is just the synthesis or like the um the approximation of the feeling of owning something when you don't actually own the thing it's play and we will at once complain about shrinkflation right it's like we don't get as much as we used to and then also buy the mini of something which is like a premiumization of a per unit cost right like we know we're getting less for what we're buying but we're going to sample it at that extreme you know at that extremely small size at a premium it's like Like we are irrational by nature and brands would do well to play at both ends of the spectrum.

30:19Phillip: And I think it's just fascinating to me that we, yeah, the duality of man. Okay. So Jack Stratton's piece, we'll link it up actually in the show notes. You should go check it out. And I think that actually pairs really nicely with other things that we've published this past a couple of weeks, actually, August has been already quite a busy month over on Future Commerce. Just yesterday, we published a piece on sensory marketing that I think if you're a Future Commerce Plus member, you have exclusive access to that for this member brief. So sensory marketing, the three trends driving the next era of brand engagement.

31:08Phillip: And this is where I learned that the scent market was not just something that Jack Stratton explained to me. Once upon a time when I was in the agency world, Alicia, one of our customers was a company called Scentair. And Scentair has a branded sense for when you walk into certain stores. Now there's, You know, I'm not talking about like when you walk into, you know, a Lelabo and it smells like their sandalwood, Santal 26 candle because it's been, you know, they, you know, don't just pump it into the place. The place literally smells that way. I'm talking about the branded scents that a company like Scent Air might give to a retailer.

32:00Phillip: uh many companies are doing things like this as experiential activations and uh in this piece you've outlined the ways that we're having to bring things like this into the real world presumably as a way to counter things like ai slop the ai slop of it all and so companies like mcdonald's are bringing their smell of french fries out into the real world through things like billboards. Um, and so out of home advertising has, uh, has always been a way for you to do, you know, cuckoo banana stuff. I mean, Netflix has somebody living in a billboard right now in LA. Um, but activating the senses in particular is a way of grounding things and bringing things into the real world.

32:47Phillip: What are some others here and what are, uh, and, and let's tease people so they can go check out the piece for themselves. Yeah. I think just to double click on a point that you made, I think it's a really interesting moment for us to take a step back and see what's really happening through the minds of consumers today. Because we're being pummeled by content so hard every day through our feeds. It's like we're yearning for a moment where we can just pause and experience something like truly. And that idea of, you know, interacting with a smell or, you know, being able to actually touch, feel, play with something.

33:31It's like, that's, you use the term grounding, right? Like I say, like, I just have touch grass. I don't always mean literally touch grass, but I need to just like take a moment and acknowledge all of the sensory things that are actually happening to make myself, bring myself back down to earth. And, you know, like McDonald's, I love the example of Billy, the personal care brand. They wanted to promote their new scent line for deodorant. They literally had scratch and sniff billboards around New York City. Very in-your-face visuals, very direct, right? And it was kind of part of this movement of like a few different brands.

34:11I think it was Rare Beauty. There was another personal care brand that did this as well. where, you know, the more, you know, in your face you can be and embrace kind of like the awkwardness of the category, it's more shareable. I think Billy actually won a Shorty Award for integration with traditional media. So this is an idea of like, how do we take something old and established? Like everybody knows billboards are kind of part of the marketing mix, right? But what new things can you add to it to make it feel more interactive and grounding? The other trend that felt inherently, quote unquote, old, but also new in many ways is what I called the fidget mailer.

34:57And like, of course, this is like a PR box, right? This is an influencer, you know, mailer. This is something that so many brands do. But what I found interesting is how brands are incorporating true interactivity into the experience. So it's not just passively posting about something they received from a brand, whether it's the new product line or whether it's just an invitation. I feel like those are so overdone. But it's how do you actually get people to play with the thing and interface with the experience that the brand is trying to evoke through the product itself. So Numu is a really great example of what they did for their

35:37Phillip: uh, or delay fragrance. Of course, there was some pushback about like the waste of it all. Right. And I think that's a consideration for certain brands, but you can't deny like there was true. There was true immersion in that experience. It wasn't just slicing the box open, taking the thing out and looking at it. Right. Like people had to actually interface with the brand and with the products to get the full experience. We'll get you back to future commerce in just a moment, but let's clear something up. You don't need more information. You already have a machine that you're sitting in front of right now that can summarize the entire internet in three seconds and confidently tell you the exact wrong thing.

36:19Phillip: What you need is judgment because AI can tell you what happened or what's trending or what everyone else is already saying, but it can't tell you whether any of it matters or whether you'll regret acting on it in six months' time. That's why we built Future Commerce Plus. Future Commerce Plus is the paid premium membership for executives, founders, and creatives who are tired of being impressed by the outputs of answer engines and they're more interested in making the right call for their business. It's less about speed and more about vision. As a Plus member, you will get long-form essays and research that connect commerce to culture and psychology to technology and all of it back to history.

37:02Phillip: You get premium episodes and deep dives that we just don't publish publicly. And you'll get access to journals like lore, muses, and archetypes in our forthcoming journal. You're gonna get original research and limited releases and you'll get data products like our word of mouth index, which tracks how brands actually move through culture. Not vibes, not dashboards, but actual momentum. So you can see what's rising, what's peaking, and what's already on its way out. Plus members get priority access and preferred pricing for future commerce events, salons, and summits where ideas leave the group chat and enter the real world.

37:41Phillip: Future commerce plus is for people who don't need more answers. They just need better ones. So join us today at futurecommerce.com slash plus and get vision for your business. Futurecommerce.com slash plus Join us today at futurecommerce.com slash plus. Now, let's get back to the show.

38:07Phillip: The I think that go get the member brief. If you're not signed up for Future Commerce Plus, go sign for Future Commerce Plus. I think it's a brilliant way for you to stay on top of our data driven member briefs and And also all of the exclusive content, including ad-free versions of the very podcast you're listening to right now, futurecommerce.com slash plus. But one of the other experiential pieces that I learned when we were in London with Jack, we'll be putting this out on Field Notes, was when we went to the Scandinavian general goods store. Oh, yeah. That was an interesting one. Yeah. So it's called, and I've never been there before, and help me with this pronunciation.

38:59Phillip: It's called Sostrana Grana. Sostrana Grana. I believe Grana. I think so. That's how it's pronounced according to TikTok. I might have that wrong. Of course, the G is supposed to be a soft, raspy throat clearing sound. Grana. But I'm not going to do that because I'm not good with things like that. You're close enough. You're good. But this is one of the wildest store experiences that I've ever been to. And it falls under this experiential piece in that when you walk in the front door, they are literally piping in the smell of pine. because every single retail fixture, every shelf, everything is built out of sort of these very simple pine boxes.

40:00Phillip: And it's made up in this general store, Cracker Barrel-esque.

40:08Phillip: What did Jack call it? it's sort of like a mouse in a maze or so what he had a phrase oh yeah yeah because there's only one way in and only one way out correct you have to go through the whole experience yeah yeah very ikea like they push you in one way and you sort of just kind of wander through and you're kind of grabbing stuff as you go and uh but the thing that was very of this moment to me was there was there was two pieces and we'll put this out on field notes again if you are part of future commerce Plus you can get field notes, which is our retail store teardown and experiential teardown.

40:47Phillip: And it was, you know, our senses matrix is what qualifies these retail store experiences. And I think that's what really stood out to me. I'd love your take on this too, but it's so keyed in on this like proof of human work, right? And so the first part is the every single sign is handwritten. Every single sign is handwritten. Yeah. I have a ton of pictures of this. Maybe we'll throw some up on for social media. But like every sign is handwritten. They're all done in this like uniform style from store to store. So you sort of teach the store associates how to do the handwritten style, which just harkens back to the old grocery store days where the grocery store signs were illustrated and colored and done like in this very particular lettering style and they have this branded lettering style that um is more work than is necessary let's just say that yeah well and i think the interesting angle is that it's supposed to be like from the founders who are like two sisters right so it's like right all the entire experience is through the lens of like these personas and it's like you're coming into their territory sorry i didn't mean to cut you off there well that's the thing is that the the other part is that it's story led so you come in and you're supposed it's like a complete ruse this is some it's some corporation that owns you know i I don't know how many of these exist, dozens of these stores, but you're supposed to feel like it's one of one.

42:27Phillip: These people, these, these sisters go all over the world and these, and they're, they're trying to find the absolute best of the best. And they're curating it here in this one store for you, which is absolute bollocks. Um, it's just cheap goods that are all very, as my 14 year old would say aesthetic. Um, but they, they all go together. Um, and a selection of teas and like arts and crafts materials and gift wrapping. And, uh, I don't know, just really interesting thing, even like blind, you know, a blind date with a book, sort of a situation, um, and bath stuff and all the little trinkets you might expect in a, uh, really considered, general store sort of a vibe.

43:15But wow, just it's hitting on pretty much all the things that you

43:22Phillip: would expect in this moment. And I don't want to say it's like specifically an anti-AI reaction. This company has been around for a decade plus, but it feels very prescient because it's arriving just on time for a moment when people I think want this specifically. Yeah. Right. And a hundred 100%. We need, we need and want more of this. And I, I would expect that we start to see a lot more of this sort of thing in an era where every other company is running toward dynamic pricing, uh, electronic price tags, you know, there it's weird. This is the direct opposite reaction to that. Um, anyway, what, what was your experience going through Sustranagrena?

44:12I'm going to go back to a point that you made earlier about it being Cracker Barrel-esque. Like that was really what I felt going through it because all of the categories just felt so disjointed isn't the right word because they all kind of worked well together in context of this space. But it was random. Like you would go through and be like, what am I going to find next? And it harkened back to that like treasure hunt type experience, but it also felt homey and like you were kind of walking through someone's space. And I think that's something that not just the smell, but like the finishing of the fixtures, like the fact that it was kind of like this light pine.

44:53It almost looked homemade, even unfinished in some aspects. Like, you know, like sometimes you see like the mixing and matching of, you know, furniture styles and different, you know, tones as you go through the space. It almost feels like it's more high touch because it's kind of imperfect. And I thought that was a really interesting strategy. And I also appreciated the little moments that appealed to younger shoppers. So they had like a little sit down area where like they could do crafts. And it was in, of course, the crafting area. They had a little space for kids' toys and they actually had a little window, like a door in the wall that said, like, open me.

45:39And you opened it. I had like a little setup with like all of the puppets like in the wall. It was a very cute way to kind of create these little Easter eggs to intrigue anyone. but especially I think those younger shoppers that like have to go with their parents or their caretakers from point A, which is the front of the store to point B, which is the front of the store again, but it's a giant circle, right? And it's like, like, where does it end? Like, get me out of here. But what I also found interesting is that they do their own version of blind boxes and blind bags. They have like different items in tote bags.

46:16And then of course, their branded tote bags and they had different pricing thresholds so i think they have like started at 20 and it went all the way up to like a hundred dollars so you could get like your own little curation of goods that they recommend based on these um these different parameters which you know i'm seeing even in my like local boba store like they're doing this thing too so it's just interesting again how the psychology of consumption is being applied to all these different contexts And I think it's resonating because I just did a quick search of how many stores they have. And they're at over 400 stores.

46:55And they're going to reach hopefully 500 by 2027. So to your point around the demand, and obviously the proof is in pudding, right? People are going there, they're shopping, and that's what's driving this expansion. But I've never seen it before. So it was nice to kind of walk through it with someone who knows the brand so well.

47:16Phillip: Really, really awesome. If you get a chance to visit one of these, I highly recommend it. Go check it out on Field Notes in just a couple weeks. If you want to know when that drops, futurecommerce.com slash subscribe. We'll let you know. And also, just something to... I'm just such a nerd of stuff like this. But I came back and I was like, I wonder what technologies they use in store, right? Because they have, it's not like they have an exorbitant amount of inventory, but that inventory has to turn over quite a bit all the time in a store like that. It's, you know, sort of a general goods store.

47:57Phillip: There's nothing terribly branded about it. It's like Bucky's. I mean, like there's a, there's a very private label nature to it where most everything in there is chosen and probably they've got a ton of buyers just grabbing things that make sense in the store that just, the only thing that I saw that really had brand that was like branded or was a known national or global brand was the tea. right so uh when you're when you're walking through it it's like you really have to wonder how they manage inventory or their point of sale you know they're not on shopify uh they're on ls retail of all things this is like the international international companies um have different they just they they just do things differently they're on microsoft dynamics whoo that's a that is a blast from the past.

48:54Phillip: So they're among the companies that are not choosing Shopify. So they did not contribute to Shopify's growth this year or this last quarter, which I'm just going to reference real quick here. What was their point of sale growth? ShopPay, GMV up 53%. B2B, GMV up 76%. We didn't even cover that. That's insane. That is insane. Holy moly. I feel like I can't go anywhere without seeing shop pay. So, which is problematic for me personally, but we won't get into that. There's a, I just keep buying things. Well, that's, I mean, that's, that's the problem, right? It's also like a marketplace unto itself now too.

49:37Phillip: Like I'm getting push notifications. I'm like, I think I have to remove this from my, um, uh, from my phone. Everything's been good in green, which is good for them. Uh, we, we're kind of right at the end. And Alicia, what else is there for us to cover here as we kind of come to the end and we start to wrap up? I would just flag we've got a lot in the pipeline. It's going to be a busy, busy couple of months. Like you mentioned, we have our back to school analysis coming down the pike. We're going to do some comparison with data we've seen around trust and where trust is being formed for consumers.

50:17Is it through influencers? Is it through media? Is it through AI? And there's been some back-to-school data that kind of hints at it. So I hope to dig a little bit deeper and see what we find there. We also have a piece on retail media or commerce media and the rise of the vertical drama trend. I've been speaking with some fantastic experts, including Andrew Lipson, who's now officially a member or part of the podcast. so we had a great conversation about what's driving that trend and you know what he hopes to see as someone who's been covering retail media for so long and he actually raised a really interesting point it was a it was a quotable moment I even put it in my notes so I didn't forget and I think it kind of ladders to a lot of what we talked about today around physical experiences.

51:10But he mentioned how the rise of vertical dramas allude to hopefully a shift in how the media and advertising industry are thinking about brand versus performance marketing. And he said, I'm simplifying here, that for so long, we have focused on efficiency and the performance aspects of marketing and advertising and that he hopes the rise of vertical dramas means that we're going to be leaning into the effectiveness of something, meaning how culturally relevant something is, how meaningful something is in the eyes of the consumer, and how much thought and intention you put into what you're amplifying or releasing into the world, whether that's a physical store concept or whether that's a vertical drama, right?

52:03So I thought that was a nice little uh circle moment of you know proof of work proof of care and um and how that's showing

52:13Phillip: up in all these different ways there's a uh they call it duanju in uh china these like uh vertical drama um that are i think they're just it's just they're these serialized uh micro dramas um been around for ages and you know everyone pours some out for quibi um which just take a moment to admit that they were just too far ahead of their time way too far ahead way too far ahead they were there before the pandemic um such a sad thing katzenberg man that guy saw the future um but uh And here we are now and it's a real thing. And I think more brands understanding that there's more cultural value to be had in in these not just the creation of original content.

53:12Phillip: And I think that that's something that we should maybe Andrew has a take on. But there are more people discovering old content through edits and vertical drama formats, but also basically rewatching old content through clips formats. And I think that to me, it's like I've I've never seen billions, but I might as well have seen billions because. they're basically there now. Yeah. Basically they're like, they, the algorithm just sorts it for me and puts it in the right order. And like, I, there's, you'll, you'll go down a rabbit hole and next thing you know, it's like, I've, I've now seen, um, hundreds and hundreds and hundreds of clips.

53:54Phillip: I've got the idea. I've got the gist. I know the storylines. It's crazy. Right. Um, and that's where, uh, we, we find ourselves right now. Um, so I don't even think that we need to talk about like, okay, well, how do brands get in on that? I think that's one question. uh cultural expression of it in like original content is another but i think like we have you know a century of content that is easily repurposable for that format that we haven't even considered yet um uh last word i found it uh shopify reports it is offline revenue growth Um, the full year 2025 was 27%, uh, offline revenue growth.

54:38Phillip: Wow. Um, and that means that GMV point of sale, um, offline GMV rose 32 % year over year in this last earnings, uh, which is cuckoo bananas. So, um, if, if, if B2B GMV was up 76 % and point of sale GMV was up 32%. uh shopify is doing extremely well across the board but it's um uh i think it's just adoption like a lot of folks are moving to the platform from other platforms right there's there's i mean we saw barnes and noble this last yeah within the last uh quarter um canada goose is one of their enterprise wins holt renfrew was another um david's bridal was a recent one bananas uh so yeah um as long as shopify is propping up our economy i think everything's probably okay um no it's it's this is great uh alicia thank you for joining us on this episode looking forward to this uh quarter i can't wait to come back in and see what happens in the actual school period.

55:54Phillip: And good luck on the next couple of weeks as you gear up for your own back to school. Oh gosh. Thank you. I'm excited. I'm glad to be here. Thanks for having me. Yeah. Thanks for listening to this episode of Future Commerce. If this conversation sparks something for you, leave a like, subscribe, something for us over wherever you find your podcast. We are on all podcast platforms. It helps others to discover the show. If you want, You can find more of Future Commerce by bringing some of it into your real world with beautiful journals, crafted books, real atoms over electrons, something like this.

56:27Phillip: This is called Lore. It's a nearly 300-page tome of what brands are all about. Do you write the story of the brand or is the story of the brand already written? 300 pages. We'll ship it right to you. You can get it at futurecommerce.com slash lore, or you can find all of our books at futurecommerce.com and just click on the store link. Remember, commerce shapes the future because commerce is culture. We'll see you next time.