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Speaker 3: We are watching shares a Figma. They're up nearly eight
Speaker 3: percent inter day high today. They were up even higher
Speaker 3: last night in the aftermarket. This is after the company
Speaker 3: came out with its latest quarterly update. So the stock
Speaker 3: rallying after the design and product development platform. It's a
Speaker 3: creative software maker. They do a lot of interesting stuff.
Speaker 3: They gave an annual revenue outlook that topped estimates, so
Speaker 3: kind of ease some of the Wall Street anxiety that's
Speaker 3: been out there that the business is threatened by the
Speaker 3: emergence of rival artificial intelligence products. And if you're not familiar,
Speaker 3: I mean they do some really interesting stuff.
Speaker 4: Yeah, they got a cloud based design prototyping tool. It's
Speaker 4: largely used for creating UI and user experience for websites
Speaker 4: and mobile apps. The stock so far this year, down
Speaker 4: about thirty four percent. Eight percent of the float is
Speaker 4: shorted Golden Morgan, Stanley, Carrol, RBC, stfel, JP, Morgan, Wells,
Speaker 4: Fargos just a few, though they've lowered their price targets
Speaker 4: on the stock. Today the stock down about eighty percent
Speaker 4: from its IPO that was last July.
Speaker 3: Investors don't care, though we see the stock definitely ralling
Speaker 3: in today's session. All right, let's get to it with
Speaker 3: more in the quarter of the outlook. The company joining
Speaker 3: us from San Francisco's Dylan Field. He's co founder, CEO
Speaker 3: and president of FIGMA. Hey, Dylan, so good to.
Speaker 5: Have you here.
Speaker 3: With Tim and myself, we do have to address though,
Speaker 3: I mean, investors have been nervous about you guys. The
Speaker 3: stocks down about eighty percent from the post IPO highs,
Speaker 3: and we've seen the software space in particular investors kind
Speaker 3: of trying to figure out the AI impact on lots
Speaker 3: of different sectors, including yours. So grappling with the defense
Speaker 3: ability of FIGS mode against AI native players and competitors,
Speaker 3: or the potential for general AI efficiencies to kind of
Speaker 3: weigh on seats. So walk us through should investors be
Speaker 3: worried what impact is AI disruption really having on your company?
Speaker 1: Yeah, well, first of all, thank you for having me
Speaker 1: and really appreciate the chance to be on the show
Speaker 1: with you. Yeah, I think it's I can offer always
Speaker 1: a point of view, but I can't tell investors what
Speaker 1: to think or not think. They're going to do that
Speaker 1: on their own. But for us, twenty twenty five we
Speaker 1: look back on as a massive year for Figma and
Speaker 1: our fourth quarter was our best quarter yet. We saw
Speaker 1: growth acceleration. We delivered three hundred and four million in
Speaker 1: revenue last quarter and this is that represented an accelerated
Speaker 1: year over year growth rate for the quarter of forty percent.
Speaker 1: And for us, we look at the business and go okay,
Speaker 1: as AI gets better, Figma gets better, And I think
Speaker 1: everyone should be thinking that way. As AI gets better,
Speaker 1: does your company and your products do they also get better?
Speaker 1: We're also shipping fast than ever. Last year in twenty
Speaker 1: twenty five, we went from four to eight products, and
Speaker 1: we also launched over two hundred features. And that growth
Speaker 1: and that momentum has not slowed down. The velocity continues,
Speaker 1: and actually this week we just launched a integration with
Speaker 1: cloud code where cloud Code can now go to Figma design,
Speaker 1: so you can take the code you're working on and
Speaker 1: then take that state of the application and then move
Speaker 1: it into Figma Design. We can talk more about the
Speaker 1: benefits and why we do that later, but we're really
Speaker 1: excited because right now we are seeing people start in
Speaker 1: so many different places, whether it be a terminal prompt
Speaker 1: or user interface design to like Figma. We want to
Speaker 1: make sure that Figma is the place where all can
Speaker 1: come together, and that's the platform that we're building. And
Speaker 1: if we can do that, I think that we are
Speaker 1: in a place where we can capture a massive opportunity.
Speaker 1: So we're very focused on building that platform to make
Speaker 1: that feature possible.
Speaker 4: Still, I wonder about the message to investors who may
Speaker 4: be concerned about LMS or just AI actually affecting your
Speaker 4: core business or your core features. As the stock of
Speaker 4: the company gets lumped in with sort of like all
Speaker 4: of the SaaS play and this idea of a SaaS
Speaker 4: pocalypt what would you say to investors out there who
Speaker 4: are a little gun shy when it comes to software stocks.
Speaker 1: Right now, I think that the best thing to do
Speaker 1: is to actually understand companies from first principles and again,
Speaker 1: to me, the first and most obvious test is okay,
Speaker 1: if AI and models are getting better, which I think
Speaker 1: is our everyone's base case right now, that we're going
Speaker 1: to continue to see really significant increase in capabilities, then
Speaker 1: does the company get better too? And for Figma, we
Speaker 1: passed that test. We are a year ago, we didn't
Speaker 1: have any notion of A credits in the platform. Now
Speaker 1: we see more than seventy five percent of our paid
Speaker 1: customers who are over ten k in ARR they're consuming
Speaker 1: A credits every week in Q four as of Q
Speaker 1: four and that I think speaks to some of the
Speaker 1: traction that we're seen with our AI offerings. And also
Speaker 1: over half of our large customers they're building with our
Speaker 1: product Figma Make, which is a way to go from
Speaker 1: prompting and Figma design to working application. Over half those
Speaker 1: large customers are building in Figma Make on a weekly basis,
Speaker 1: and so that's and that's up by the way, from
Speaker 1: thirty percent in Q three, so significant increase to fifty percent.
Speaker 1: And I think overall the platform is just very ole positioned.
Speaker 1: If you think about the product development life cycle. Not
Speaker 1: everyone is thinking in code. A lot of people want
Speaker 1: to think visually and if you can go create that
Speaker 1: map of what the software can be, and if you're
Speaker 1: not just urgently driving towards a solution, but rather you
Speaker 1: share our point of view, which is in a world
Speaker 1: of ever increasing competition software, you don't just need to
Speaker 1: make a product. You need to make the best product.
Speaker 1: You need to lean in and actually have design as
Speaker 1: a differentiator. Craft is a differentiator. You need a point
Speaker 1: of view. Then you need to select from this infinite
Speaker 1: option space out there possibilities and curate the ones that
Speaker 1: are actually the best options for you to go build.
Speaker 1: And that's not work that is done in code. Code
Speaker 1: is linear, it's a linear process. You need to go
Speaker 1: and actually consider the full option space to go build
Speaker 1: the best thing. And that's what we're trying to enable
Speaker 1: for our customers.
Speaker 5: So how do you think the world?
Speaker 3: I mean, Dylan, this is great because I think we're
Speaker 3: trying to understand, especially when we see these sectors impacted
Speaker 3: by this AI scare of just trying to understand how
Speaker 3: this is unfolding. And yet kind of would you agree
Speaker 3: that the AI disruption that we're seeing unfold and maybe
Speaker 3: impact certain sectors is kind of happening a little bit
Speaker 3: faster than we expected. At the same time, everybody seems
Speaker 3: to come on and say, we're really early in.
Speaker 5: You know, when it comes to this process.
Speaker 3: So even if you are kind of somewhat upbeat, would
Speaker 3: you can see that we're not quite sure exactly how
Speaker 3: this might shape your company or you know, how this
Speaker 3: all impacts how we work going forward.
Speaker 5: I mean, there's still a lot to be figured out. Right.
Speaker 1: Well, I think again there's framework so you can use
Speaker 1: that are good tools here, So for example, I think
Speaker 1: that you can we we can broadly bucket verifiable versus
Speaker 1: non verifiable, and a perhaps it's a spectrum not a binary,
Speaker 1: but math, for example, as verifiable as it gets. You
Speaker 1: can understand if something that is a math theorem that
Speaker 1: AI generates, you know, is provably correct based on you know,
Speaker 1: formal verification systems. And because of that, we're going to
Speaker 1: see incredible progress in mathematics. I mean, it is just
Speaker 1: amazing what we're going to see in math. Code is
Speaker 1: closer to math in terms of its verifiability. Design totally
Speaker 1: not verifiable. You could have five designers in a room
Speaker 1: debating what is the best design, and you can get
Speaker 1: like ten or twenty or thirty opinions from those five designers.
Speaker 1: It is something that is, you know, very subjective, and
Speaker 1: yet if you get it right and you can lean
Speaker 1: into craft and you can lean to design as a differentiator,
Speaker 1: that is how you're going to win in software. And
Speaker 1: also it's not just that SaaS companies are software businesses
Speaker 1: and that's it. Every company's a software business today, and
Speaker 1: so I think that every company really needs to figure
Speaker 1: this out. And if they can lean into design and
Speaker 1: really treat it with the reverence and deserves, then I
Speaker 1: think they will have a path to winning. But I
Speaker 1: think the ones that don't are going to have a
Speaker 1: hard time.
Speaker 4: Well, part of that path includes spending big when it
Speaker 4: comes to AI and working to improve those features and
Speaker 4: bring those features to your customers. How much are you
Speaker 4: spending on AI tokens? How much are you spending on
Speaker 4: the models?
Speaker 1: Yeah, you know, we're not trying to be a frontier
Speaker 1: lab first of all, just to cp super clear about that.
Speaker 1: You know, there's that's a game that we're not playing,
Speaker 1: you know, in kidos. To those that do, they are
Speaker 1: our partners and we're very lucky to partner with them.
Speaker 1: And also there are customers and it is I think
Speaker 1: very exciting to see how they're using Figma to help
Speaker 1: shape these surfaces. But yeah, you can see the spend
Speaker 1: around inference show up in our gross margin, and I
Speaker 1: think that we did well to hold that flat, and
Speaker 1: definitely we're always looking at ways to be more optimization focused.
Speaker 1: But also you can see it as as a proxy
Speaker 1: through how Make weekly active users, which we disclosed as well,
Speaker 1: grew seventy percent quarter over quarter, and I think that
Speaker 1: the way that the overall activities growing the platform as
Speaker 1: it relates to not just that, but also the way
Speaker 1: that people are using some of our AI image generation
Speaker 1: capabilities and other AI features in Figma. It's really just
Speaker 1: the start. Like we believe that Make in Figma Design
Speaker 1: and Figma Design is our our five ship design tool,
Speaker 1: whereas Make is about going from prompt to working app.
Speaker 1: With Figma, we can try to bring those surfaces close together.
Speaker 1: Because so many of our users that are using Make
Speaker 1: on active basis are also using Figma Design. It is
Speaker 1: the majority case by far, and so if we can
Speaker 1: bring those close together and have them live as one
Speaker 1: experience and help people really think, divergently, explore options spaces,
Speaker 1: but also use their hands get into it. You don't
Speaker 1: want to prompt and say, you know, change it to
Speaker 1: twelve pixels spacing like and then takes two minutes to
Speaker 1: go see if you're right or not. Like, you want
Speaker 1: to go have that directnpulation flow state and actually see
Speaker 1: what it is that you want. And I think there's
Speaker 1: things that are going to do and prompt and things
Speaker 1: that are going to do with direct manipulation with design
Speaker 1: tools like we've done for a while.
Speaker 3: A really interesting conversation, especially Dylan, against what we've been
Speaker 3: seeing playing out in the market as we've tried to
Speaker 3: figure out what AI is going to do to different industries.
Speaker 3: Love it, Thank you so much, Really appreciate it, Dylan Field.
Speaker 3: He is co founder, CEO, and president of Figma. Figma shares.
Speaker 3: By the way, folks, they are still up more than
Speaker 3: eight percent in today's session.
Speaker 4: Hey, let's get to one of our most read stories
Speaker 4: on the Bloomberg. It's another gut check perhaps in the
Speaker 4: world of private credit again, this one involving yes Blue
Speaker 4: Owl Capital. She's stumbling after the decision to restrict withdrawals
Speaker 4: from one of its private credit funds raised fresh concerns
Speaker 4: over the risks bubbling under the surface of the one
Speaker 4: point eight trillion dollar market. We've got Bloomberg News Leverage
Speaker 4: finance reporter Olivia Fischlow joining us from New York City.
Speaker 4: Restricting withdraws from a private credit fund never a good
Speaker 4: sign investors reacting, Hi.
Speaker 6: Guys, Yeah, So basically what we've seen here is that
Speaker 6: this is one of Bluell's funds, a non traded BDC
Speaker 6: that they decided yesterday to ultimately restrict redemptions from. But
Speaker 6: what they did instead was they've sold loans from the
Speaker 6: portfolio in order to start paying investors back and winding
Speaker 6: down this vehicle.
Speaker 3: So help us understand And I think, you know, we've
Speaker 3: only got about a minute or so here, but it's
Speaker 3: just what do investors need to understand this? Because we've
Speaker 3: been following Blue Oul for a while, go back to
Speaker 3: Jamie Diamond's comments when it comes to private credit and
Speaker 3: you know, never just one cockroach. And then Blue Oul
Speaker 3: Capital's CEO co CEO Mark Libscheltz came back and defended it,
Speaker 3: and I'm just.
Speaker 5: Is everything okay? Or do we need to be is
Speaker 5: this is this kind of.
Speaker 3: Cost for concern here? And are what should we be
Speaker 3: watching to see? Because Aria's Management's down five percent, Apollo
Speaker 3: Management's down six and a half percent, Blackstone is down
Speaker 3: six percent. Just got about forty seconds here.
Speaker 6: Olivia definitely, Yeah, it's a fair question, and I think
Speaker 6: what investors need to be thinking about is these are
Speaker 6: retail vehicles, but they house illiquid private credit loans, right,
Speaker 6: And in this situation, bluell was able to sell some
Speaker 6: pieces of these loans in order to make up liquidity
Speaker 6: and start to pay investors back. But as of now
Speaker 6: they've sold around thirty four percent of the portfolio, so
Speaker 6: they still have a ways to go of loans to
Speaker 6: sell to make investors whole. So I think the concern
Speaker 6: that investors are starting to see is, well, when I
Speaker 6: invest in these vehicles that promise the ability to receive
Speaker 6: cash back, will I actually be able to get that
Speaker 6: money back?
Speaker 3: Right? We talk about this especially as there has been
Speaker 3: a push to open this up to more individual investors.
Speaker 3: For one case, it's not as liquid as a lot
Speaker 3: of other investments. Olivia fishloughl News Leverage Finance reporter, really
Speaker 3: appreciate it.
Speaker 2: This is the Bloomberg Business Week Daily podcast. Listen live
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Speaker 2: flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 5: Well share as a Wayfair.
Speaker 3: We're keeping a watch on that one, dropping a lot
Speaker 3: down about sixteen percent at their lows on earnings, a
Speaker 3: four month low intra day as active customers during the
Speaker 3: fourth quarter came in slightly below street expectations. Now the
Speaker 3: Street weighing in on the results, William Blair saying that
Speaker 3: the six point nine percent growth and net revenue likely
Speaker 3: fell short of buyside expectations. But you had some peers
Speaker 3: rh our House and also Williams Sonoma under some pressure
Speaker 3: in the trade, so investors looking at the group overall.
Speaker 3: Let's get a little bit more on the outlet. We
Speaker 3: want to head to Boston.
Speaker 4: We got Kate Deliver back with us CFO of Wayfair. Kate,
Speaker 4: good to have you on the program. Tell us a
Speaker 4: little bit about quarter because interestingly enough, jeffries Uh says,
Speaker 4: this is attributable to colder weather to start the year.
Speaker 4: Anything about the guidance regarding is is it about colder weather?
Speaker 5: Yeah?
Speaker 7: Well, maybe let's step back and sort of speak to
Speaker 7: the quarter we just reported, and then I'm happy to
Speaker 7: shift to guidance. You know, we feel really great about
Speaker 7: the quarter we just reported. I think it highlighted and
Speaker 7: capped off a year of incredible momentum for us. We
Speaker 7: opened up the year flat, we you know, exit of
Speaker 7: the year at seven percent, revenue growth eight percent, you know,
Speaker 7: managing for the exit of Germany, and we flowed through
Speaker 7: to improved EBITA. EBITDA grew year over year about sixty percent, right,
Speaker 7: so we're seeing both ongoing market share gains and improved
Speaker 7: profitability and that story continues with our guide into Q one.
Speaker 7: We feel really good about the guide, the you know,
Speaker 7: mid single digits revenue growth and improved adjusted EBATA throughout
Speaker 7: the quarter. So you know, when we look at it,
Speaker 7: we feel that we produced pretty strong results.
Speaker 3: Yeah, I mean, you look at the quarter, I mean
Speaker 3: it just cps better than what the street was expecting.
Speaker 3: Just to even, as you said, coming in stronger, net
Speaker 3: revenue up about seven percent year over year, gross margin,
Speaker 3: coming in better than the street estimate, there were a
Speaker 3: lot to do. So maybe we talk a little bit
Speaker 3: about you know, I am curious you know, you guys
Speaker 3: have dealt with the call and so on and so forth.
Speaker 3: What are you hearing from the investment community that they're
Speaker 3: not just so comfortable with Kate?
Speaker 7: Yeah, you know, actually, you know, as we talked to investors,
Speaker 7: I think again they're they're pleased with the momentum that
Speaker 7: we see here. You know, obviously we're in a category
Speaker 7: that has been under pressure, right, So the category itself,
Speaker 7: we think was down low single digits in the fourth quarter,
Speaker 7: you know, to your earlier questions sort of around whether
Speaker 7: in the first quarter, we do think the category has
Speaker 7: been impacted in the first quarter of this year, you know,
Speaker 7: likely you know, downlow single digits again, maybe slightly worse
Speaker 7: even than Q four. So there's certainly some complexity in
Speaker 7: the overall category here. You know, what can we focus on?
Speaker 7: We can focus on what we can control, and our
Speaker 7: share game continues to be a real source of strength.
Speaker 7: You see us outstripping a category by several points, right,
Speaker 7: and that's continued, you know, Q three, Q four and
Speaker 7: then again into the guide in Q one.
Speaker 3: And we should point out that investors have been really
Speaker 3: keen on your stock, I mean, nearly doubling over the
Speaker 3: past year.
Speaker 5: Kate, let me just go to what you said. I mean,
Speaker 5: maybe it.
Speaker 3: Is those concerns about some softer active customer trends kind
Speaker 3: of early on in the first quarter. Do you give
Speaker 3: us an idea of what you're seeing in any idea
Speaker 3: or can you tell us if it continues.
Speaker 7: It's a great question. So active customers is one of
Speaker 7: our reported KPIs. It's actually a lagging indicator. Okay, that
Speaker 7: metric is LTM active customers, So anyone who's sort of
Speaker 7: placed an order within the last twelve months and as
Speaker 7: orders grow, and you do see that order volume grew
Speaker 7: in Q three and in the quarter we just reported
Speaker 7: Q four, that sort of precedes active customer growth. The
Speaker 7: other thing I do just want to point out there
Speaker 7: is we did exit in January of last year or
Speaker 7: German Business, So that took a large chunk of customers
Speaker 7: or not a large chunk, but a chunk of customers
Speaker 7: out of that number. And so as you're looking at
Speaker 7: that active customer number, you know obviously that came out,
Speaker 7: so we'll clear that comp you know, we exited that
Speaker 7: in January of this past year.
Speaker 4: You did say the sector has been under pressure, and
Speaker 4: Carol mentioned some of the peers, But what about the
Speaker 4: Wayfair consumer. When they're buying something on the platform right now,
Speaker 4: are they buying it because they need to replace something
Speaker 4: in their home. Are they buying it because they have
Speaker 4: extra money to upgrade something. What's the profile of the
Speaker 4: consumer and in other words, how is the consumer doing.
Speaker 7: It's a great question. We're seeing a few trends. So
Speaker 7: you mentioned some of the sort of luxury peers. Obviously,
Speaker 7: we have high end brands that do compete with those players,
Speaker 7: like a Paragold or specialty retail brand. The Wayfair brand itself,
Speaker 7: you know, plays all the way from opening price point
Speaker 7: to you know, upper end mass, so really spans the
Speaker 7: full range. And we have seen, you know, a divergence
Speaker 7: some of that ke shaped economy I'm sure we've all
Speaker 7: been talking about now for a bit. Certainly are Paragold
Speaker 7: brand or specialty retail brands are growing, you know, really
Speaker 7: north of twenty percent we said in twenty twenty five,
Speaker 7: so you can see that accelerating beyond you know, the
Speaker 7: overall core business. And I think that speaks to the
Speaker 7: strength and that you know, higher net worth consumer. We
Speaker 7: also do see a bit of a divergence in the
Speaker 7: types of things that people are buying. When I talk
Speaker 7: about the category being down low single digits, that's a
Speaker 7: category overall. We actually think furniture or bigger ticket items
Speaker 7: are down more. That tends to actually be where we
Speaker 7: you know, are more focused and have a bigger part
Speaker 7: of the business. But you know, we also of course
Speaker 7: sell decorative accent, seasonal decor. That part of the business
Speaker 7: seems to have done a bit better from a category
Speaker 7: perspective overall, So those would be lower ticket items you know,
Speaker 7: that may feel more comfortable for folks to purchase right now.
Speaker 3: Well, and the other thing I want to ask you
Speaker 3: and listen, Kate, we're obsessed with this the buy now,
Speaker 3: pay later and you can do that on Wayfair too.
Speaker 3: Are you seeing an uptick in that.
Speaker 7: Yeah, we have a number of options you know, for
Speaker 7: various financings and buy now, pay later as we work
Speaker 7: with a wide range of partners. I do think it's
Speaker 7: an important offering for the consumer, so you know, to
Speaker 7: you know, sort of sort of ensure good underwriting for
Speaker 7: folks and provide them with a lot of optionality. I
Speaker 7: would say our penetration there has been lower than other
Speaker 7: more traditional brick and brick and mortar furniture retailers. So
Speaker 7: you know, as we grow, we're really trying to get to,
Speaker 7: you know, sort of a more natural place there for
Speaker 7: the furniture industry overall.
Speaker 4: We're speaking with Kate Goliver, CFO of Wayfair, joining us
Speaker 4: from Boston.
Speaker 3: You know, Kate, one of the other things that we've
Speaker 3: talked with you about is the physical stores, and you
Speaker 3: have noticed some encouraging early performance from the physical stores
Speaker 3: when it comes to.
Speaker 5: Brand engagement and cross channel lift.
Speaker 3: As you think about or as you kind of move
Speaker 3: from proof of concept to a potential expansion, what specific
Speaker 3: performance thresholds are you kind of focusing on and would
Speaker 3: justify accelerating the physical store growth.
Speaker 7: Yeah, it's a great question. So we look at the
Speaker 7: economics of the store itself, so purchases that are directly
Speaker 7: attributable to the store and the economics of you know,
Speaker 7: operating that store. So as you think about the overall
Speaker 7: store four wall P and L. But one of the
Speaker 7: unique things about you know, building stores who already have
Speaker 7: a well established e commerce brand is you do get
Speaker 7: to see a benefit in the area for the brand overall.
Speaker 7: But the other thing that we look at is you
Speaker 7: know what in sort of industry partlance you might call
Speaker 7: the halo effect, but really sales that are attributable to
Speaker 7: folks that maybe came into the store and then you know,
Speaker 7: left and went and bought something, or you know, had
Speaker 7: an idea about the store being in the area because
Speaker 7: they've heard more about it and therefore then shopped in
Speaker 7: our platform. And we've seen that continue to hold in
Speaker 7: really nicely. We gave a stat in our updated investor
Speaker 7: presentation today that the first store, which is in Chicago,
Speaker 7: if you look at the entire state of Illinois versus
Speaker 7: the rest of the country since the store opened, it's
Speaker 7: had a ten percent cag or higher than the rest
Speaker 7: of the country. And that gives you a sense of,
Speaker 7: you know, the momentum that you can get from the store.
Speaker 7: It's obviously very crew metric, yeah, but it's an easy
Speaker 7: way to sort of explain it. So we really look
Speaker 7: at the combination of the store, P and L and
Speaker 7: then the other benefits that come along with having the store.
Speaker 3: Well, that makes me want to follow like what metrics
Speaker 3: would cause you to maybe remain a little bit more cautious,
Speaker 3: So like if you open another store and the metrics aren't,
Speaker 3: so you're not seeing that kind of momentum that you're
Speaker 3: getting in the Chicago store. Would just say, Okay, maybe
Speaker 3: it just depends on the city of the environment, like
Speaker 3: there's a lot of specifics that can go into it.
Speaker 7: Yeah, you know, I think our focus right now is
Speaker 7: on learning more about what makes a great store. Right
Speaker 7: So we have one store open. We're playing to open
Speaker 7: three more in twenty six. We have one opening soon
Speaker 7: in the Atlanta area, another one this summer in Columbus,
Speaker 7: and then in the fall and Denver. These will be
Speaker 7: you know, the Columbus store, for example, seventy thousand square
Speaker 7: feet versus the you know other stores are roughly around
Speaker 7: one hundred and fifty thousand square feets. So we're testing
Speaker 7: out a slightly smaller format. We're testing out different types
Speaker 7: of shopping areas where we put the store, and so
Speaker 7: we intend to learn and then continue to refine the
Speaker 7: store model based on those learning. So let's do you know,
Speaker 7: we are quite excited about it as a.
Speaker 4: Channelay, let's go from sort of like the old school
Speaker 4: store retail model to than what you're doing with AI and.
Speaker 5: Layer stores old school.
Speaker 4: So they are I mean about what you need with channel.
Speaker 7: We like the overall omni channel experience, but but what.
Speaker 4: How do you layer in personalization with AI? And I'm
Speaker 4: curious how you do that in a way that actually
Speaker 4: makes you more competitive in this area.
Speaker 7: Yeah, we're we're really excited about what we can do
Speaker 7: with AI from the customer experience perspective, and we've already
Speaker 7: started some of that and piloted some of that on
Speaker 7: the site and there's certainly more to come there. You know,
Speaker 7: I think this category is a bit unique in that
Speaker 7: respect because it's a category that is a highly emotive
Speaker 7: category right, feels very personal to folks. It's not a
Speaker 7: commodity category where you're doing sort of standard replenishment. You
Speaker 7: want to get a better sense and see the actual
Speaker 7: options out there. The brand is important, you know, our
Speaker 7: brand is important because you want to sure the delivery
Speaker 7: experience is high quality. So we think that the category
Speaker 7: itself lends itself to bringing people to our site and
Speaker 7: engaging them in a unique way. One thing that we
Speaker 7: can do with AI is help get more personalized for
Speaker 7: your style preferences. You know, I'm sure if the three
Speaker 7: of us were to pick an end table, we'd all
Speaker 7: pick different end tables. What we'd love to do is
Speaker 7: make sure that when we land on the site, we're
Speaker 7: serving up to each of us exactly that end table
Speaker 7: that we want. Generative Ai allows us to do that
Speaker 7: in a faster, more nimble way. It also allows you
Speaker 7: to play around with discovery. So if you were to
Speaker 7: go on the app today into the discover tab, you'd
Speaker 7: see a whole catalog of images and you can create
Speaker 7: more yourself if you want that. Are Jenai created that
Speaker 7: then allow you to shop the catalog based on the
Speaker 7: type of room that you're designing or the aesthetic look
Speaker 7: that you're looking for. And I think that kind of
Speaker 7: engagement and interaction is really compelling in this category.
Speaker 3: So I know, Kate, if we had asked Tim, like
Speaker 3: if we were going you, me and him shopping for pillows,
Speaker 3: you know he would say, no more pillows. I don't
Speaker 3: know about your household, but that's what happens in my
Speaker 3: house anyway.
Speaker 7: What originally, people have an insatiable demand for pillows, So
Speaker 7: we will keep selling him.
Speaker 3: Thank God, Thank God. Always appreciate getting time. It is
Speaker 3: a great read on the consumer and finding out what's
Speaker 3: going on. Kate, Well, thank you Kate Gulliver. She's the
Speaker 3: chief financial officer of Wayfair.
Speaker 8: You're listening to the Bloomberg Business Week Daily Podcast.
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Speaker 4: Back with Us, Kerry Pelts and Matthew O'Neil, the directors
Speaker 4: and producers of Can't Book Away, Welcome back, Thanks for
Speaker 4: coming back to joining us, Thanks for having us. You know,
Speaker 4: we actually you booked for last week in the trial
Speaker 4: got moved around a little bit because of a sick lawyer,
Speaker 4: so we do appreciate your flexibility. We're going to talk
Speaker 4: about the documentary and talk about that in the context
Speaker 4: of the trial. But first, Perry, for those who who
Speaker 4: have not yet seen the documentary, worries that you tell
Speaker 4: the lawyers that you follow, remind everybody.
Speaker 8: Yeah, we have the privilege of following several families, all
Speaker 8: of whom have lost children in the case, except for
Speaker 8: one family whose child is still alive but has been
Speaker 8: deeply harmed by an overdose. But we follow families who have,
Speaker 8: unfortunately whose children have died as a result of their
Speaker 8: exposure to social media, and we follow them as they
Speaker 8: try to seek justice for their for their.
Speaker 5: Love, you know, their beloved children.
Speaker 3: Yeah, and you know, it's interesting what you guys do
Speaker 3: in this film. And we've been thinking a lot about
Speaker 3: what the world is doing, whether it's Europe or it's Australia,
Speaker 3: that they are looking at social media and starting to
Speaker 3: put in restrictions in place.
Speaker 5: I am curious about.
Speaker 3: As you start to watch what's happening here in the US,
Speaker 3: Mark Zuckerberg. And you know how important that is because
Speaker 3: there's lots of litigation. You guys have the group of
Speaker 3: lawyers that you track, but there's states looking into it,
Speaker 3: there's school systems looking into this. So how important is
Speaker 3: what happens here in this this case that Mark Zuckerberg
Speaker 3: just gave some testimony for.
Speaker 9: So there's state's attorneys general is looking into it in
Speaker 9: this case. And KGM, the anonymous twenty year old who's
Speaker 9: at the center of it, is actually a client of
Speaker 9: the Social Media Victims Law Center, which who are the
Speaker 9: lawyers just heard in that clip and are really at
Speaker 9: the forefront of this. What's important to remember is that
Speaker 9: this is just one case. In this case, it's one
Speaker 9: of nine Bellweather cases that has twenty five hundred other
Speaker 9: cases stacked up behind it, and all of these different
Speaker 9: efforts to bring accountability are really really important. This isn't
Speaker 9: going to be the end of this. It's really only
Speaker 9: the beginning.
Speaker 4: So Perry, if there is accountability here, at least in
Speaker 4: the definition that you guys have, what could be the
Speaker 4: implications for the social media platforms and the way that
Speaker 4: kids have access to them.
Speaker 8: Well, if we look globally about what's happening, there's a
Speaker 8: saying that the US debates, Europe regulates, and Australia bands.
Speaker 8: So we are really behind and what we're really missing
Speaker 8: And unfortunately we've seen so many times that these tech
Speaker 8: CEOs are hauled into Congress right here, lots and lots
Speaker 8: of talk and chat and nothing really gets done.
Speaker 4: Well, it's like social media clips ironically, for the members
Speaker 4: of government to then.
Speaker 5: Posts exactly that's exactly right.
Speaker 8: We need reform here in this country, and hopefully, to
Speaker 8: Matt's point, this is the beginning of what may be
Speaker 8: some steps that take place in this country to hold
Speaker 8: these companies accountable.
Speaker 5: Yeah, it's funny, you know, not funny.
Speaker 3: We have a story in the Bloomberg about parents now
Speaker 3: getting for their kids.
Speaker 5: Dumb, phonest in smart phones.
Speaker 3: To limit access, and even kids being like kind of
Speaker 3: pushing back. There is something going on in terms of
Speaker 3: our culture. Do you feel like, in terms of society
Speaker 3: at large, that there is here in the US? I mean,
Speaker 3: as we watch what feels like the rest of the
Speaker 3: world being way ahead of us on this, do you
Speaker 3: feel like there's something turning here.
Speaker 9: There's a change that's happening in this society, for sure,
Speaker 9: the way children are interacting with social media, the way
Speaker 9: parents are trying to involve themselves in their children's lives.
Speaker 9: But you can't outparent a trillion dollar algorithm. That's just
Speaker 9: the truth, and we are laggards. The UK has the
Speaker 9: Online Safety Act, the European Union has a Digital Services Act.
Speaker 9: Australia has the I think it's called the Online Safety
Speaker 9: Amendment that bans sixteen year olds anyone under the edge
Speaker 9: of sixteen from using social media and critically holds the
Speaker 9: social media companies financially accountable. Those are the legislative issues
Speaker 9: that hold the social media companies financially accountable. That's what
Speaker 9: these lawsuits will do in the end. That's what's going
Speaker 9: to matter to these companies, But is.
Speaker 4: There a way to do this that's a tough task,
Speaker 4: like holding these companies financially accountable, because what does that
Speaker 4: actually look like. I mean, we talked about this in
Speaker 4: the context of Australia and that means a social media
Speaker 4: ban or like technology bands. But it doesn't actually mean,
Speaker 4: you know, these companies coming out and providing some sort
Speaker 4: of payments.
Speaker 6: No.
Speaker 8: And it's really difficult because these social media companies are
Speaker 8: amongst the most wealthy companies in the world right This
Speaker 8: is not minor.
Speaker 4: Mark Zuckerberg wealthy.
Speaker 8: Absolutely, and they have a lot of tendrils into our
Speaker 8: Congress and into government officials. This is a really difficult
Speaker 8: thing to get done. And yet we look at the
Speaker 8: reporting that Olivia's done, you look at the work Jonathan
Speaker 8: Heights done. We must have changed. We were talking about
Speaker 8: a generation here that's lost.
Speaker 3: We just talked about there's this great Columbi Amandemull on
Speaker 3: a Bloomberg Garb Blomberg Business weekteme about kind of corporate
Speaker 3: complicity in this current environment with everything that's going on,
Speaker 3: and maybe CEO is not speaking up. So we watched
Speaker 3: Mark Zuckerberg or we've been following him. What are you
Speaker 3: guys watching in terms of this case and what's crucial
Speaker 3: in terms of the outcome? As you said, there's so
Speaker 3: many cases stacked up behind it.
Speaker 9: Well, for sure, this will set a tone, right. It's
Speaker 9: an important case because it is a first and it's
Speaker 9: getting a lot of attention in the media, which matters
Speaker 9: too because people are talking about it and talking about
Speaker 9: what happened to this now twenty year old but child
Speaker 9: when the allegations about what happened to her and her
Speaker 9: media addiction came out. And looking at the documents that
Speaker 9: are coming out in this case that show the internal
Speaker 9: communications that Facebook, even specifically when it comes to Mark
Speaker 9: Zuckerberg to not be robotic to say change so that
Speaker 9: he seems more sincere, it suggests that they don't actually
Speaker 9: believe what they're saying.
Speaker 4: Hey, Perry, before we go, how is history going to
Speaker 4: judge us as a society?
Speaker 5: Oh?
Speaker 8: I think on this count, I don't think history judges
Speaker 8: us well. I think the one thing though, if we
Speaker 8: look back at tobacco, we look at opioid's. Tobacco took
Speaker 8: almost forty years to get legislation. Opioid's almost thirty, so
Speaker 8: We're at least at a place it's not great, but
Speaker 8: at least we're starting to take this really seriously and
Speaker 8: hopefully as a country we will make some forward momentum.
Speaker 8: We can only hope, because our kids' lives hang in
Speaker 8: the balance.
Speaker 3: Than you guys for coming back, We really appreciate it.
Speaker 5: Thank you.
Speaker 3: Perry Paltz and Matthew Neil, directors and producers of Can't
Speaker 3: Look Away, The Case Against Social Media, the Bloomberg original investigation,
Speaker 3: now available on all of the Bloomberg platforms, so check
Speaker 3: it out.
Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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