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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is Bloomberg Business Week with Carol Messer and Tim

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Speaker 2: Steneveek on Bloomberg Radio. So, Carol, I've been doing this

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Speaker 2: thought experiment. Hey, I've been asking parents. It's very informal,

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Speaker 2: it's anecdotal, asking parents of teens about a proposed TikTok ban.

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Speaker 2: I've heard from all of them the same thing, literally

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Speaker 2: all of them. I hope they ban it. No standard deviation,

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Speaker 2: there's no no And this is again not scientific. It's

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Speaker 2: just like, Okay, you have a kid, you have a teenager,

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Speaker 2: they have a phone, they're on TikTok all the time.

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Speaker 3: Well, we know that option could be on the table

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Speaker 3: after the US House of Representatives today passed to build

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Speaker 3: a banned TikTok in the US unless it's Chinese owner

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Speaker 3: sells the video sharing app. But Tim, we know it's

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Speaker 3: not just TikTok that has its critics.

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Speaker 2: Yeah, people have really had this fraught relationship with all

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Speaker 2: different kinds of tech, hardware, software, you name it, their

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Speaker 2: digital talk, detox retreats. I tried to delete certain apps

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Speaker 2: on weekends so I don't pick up my phone and

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Speaker 2: scroll when I'm with my family. The question is how

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Speaker 2: did we get here to a place where I really

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Speaker 2: ship with technology has become like this. Our next guest

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Speaker 2: has been thinking a lot about that and says he

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Speaker 2: has a solution. Frank mcot junior as chairman of McCourt Global.

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Speaker 2: It's a company with interest in real estate, sports, tech,

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Speaker 2: media and more. Frank also the founder and executive chairman

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Speaker 2: of Project Liberty, which is, in its own words, advancing

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Speaker 2: the responsible development of the Internet of tomorrow, designed and

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Speaker 2: governed for the comment good. He's also the author of

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Speaker 2: the brand new book Our Biggest Fight Reclaiming Liberty, Humanity,

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Speaker 2: and dignity in the Digital Age. Frank, Welcome to Bloomberg

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Speaker 2: Business Week. How are you.

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Speaker 1: I'm doing good. How are you both doing?

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Speaker 2: We're doing well. I'm interested because you're known for a

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Speaker 2: lot of things. You're the former owner and chair of

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Speaker 2: the La Dodgers, you own a French football club. You've

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Speaker 2: worked in construction and real estate for years. What happened

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Speaker 2: that prompted you to spend so much money and so

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Speaker 2: much time fighting the Internet as we know it?

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Speaker 4: Yeah?

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Speaker 1: So I wrote Our Biggest Fight to really shine light

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Speaker 1: on Project Liberty, which is a five hundred million dollar

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Speaker 1: initiative to reimagine how the Internet works and you know,

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Speaker 1: and really take back control of our data, which I

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Speaker 1: would say is really our personhood in this digital era

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Speaker 1: from the kind of the machines of big tech.

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Speaker 2: Right, we're the machines, the machines.

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Speaker 1: Look, we are connected to the Internet by an IP address.

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Speaker 1: So let's start right there. Okay, the Internet is not

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Speaker 1: you and I connected, it's our device connected. It was

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Speaker 1: built to connect devices, machines, and that's how the Internet

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Speaker 1: came into being. And then thirty five years ago yesterday,

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Speaker 1: Tim berners Lee created the World Wide Web that was

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Speaker 1: to connect data. We have never been connected as people

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Speaker 1: on the Internet. So what I put forward in the

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Speaker 1: book is is now, knowing how powerful the Internet is

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Speaker 1: and how dependent we are on it, and how everything

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Speaker 1: we do virtually is digitized, we need to reclaim ownership

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Speaker 1: of our digital our social graph, our digital information, our

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Speaker 1: relationships and so forth, because it's who we are. It's

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Speaker 1: not our data, it's who we are in the digital age.

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Speaker 1: And so I call that personhood, right, and it's our

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Speaker 1: digital DNA is as important as our biological DNA. It's

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Speaker 1: our lived archive. Why on Earth would we give that

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Speaker 1: up just for the right of using the internet. We

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Speaker 1: need an internet where we're in charge, we're owning and controlling,

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Speaker 1: so to speak, our data, and we reclaim that that personhood.

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Speaker 3: Well safe to say we didn't know we were giving

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Speaker 3: it up, right, We just thought, Wow, this is a

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Speaker 3: really cool thing, and look at all the things we

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Speaker 3: can do. And many would argue right at the same

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Speaker 3: time that the Internet and that connectivity has allowed us

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Speaker 3: to do so much more and learn so much more

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Speaker 3: about the other. But then there's the dark side and

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Speaker 3: bad side to it. Is there though? Can we I mean,

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Speaker 3: the horse has left the barn in a long you know,

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Speaker 3: a long time ago, Frank, Can we kind of regain

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Speaker 3: in our digital identity? Can we go back? Yeah?

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Speaker 1: We must, We can, and we must. And I do

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Speaker 1: want to focus on something first before I get to

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Speaker 1: that solution and so forth. And I do think we

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Speaker 1: are learning more and more about the harms, right, we

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Speaker 1: hear them every day and.

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Speaker 3: This we talk about it all the time, and it's.

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Speaker 1: Just going to get worse as a generative AI enters

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Speaker 1: the picture, because a broken technology made more powerful will

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Speaker 1: just make the problems worse. But I want to just

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Speaker 1: highlight one thing you said, you know, there are a

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Speaker 1: lot of good things and then some bad things. I

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Speaker 1: hear that a lot that we kind of somehow think

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Speaker 1: of this technology differently than we would think of For instance,

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Speaker 1: let's say we were sitting here and some municipality had

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Speaker 1: a water system that was putting water into a million homes,

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Speaker 1: and you were reporting today that four hundred thousand of

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Speaker 1: those homes were getting toxic water. That we're making the

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Speaker 1: households sick and killing some kids. Okay, would we sit

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Speaker 1: here and say, well, yeah, but it's it's putting clean

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Speaker 1: water in six hundred thousand homes. So kind of on bound?

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Speaker 1: Why are we so tolerant of the harms of technology?

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Speaker 1: Look at the Internet is ours, it's our data. We

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Speaker 1: should be in charge. Why would we want machines to

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Speaker 1: drag us into a future we don't want. Let's just

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Speaker 1: take them inute, fix it, and then make it more powerful,

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Speaker 1: and we fix it by putting individuals in control. I'm

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Speaker 1: happy to talk about.

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Speaker 2: So in this case, in this analogy, what are what's

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Speaker 2: what's the toxic water? What's what are the harms being done?

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Speaker 1: So? Yeah, so so where to begin?

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Speaker 4: Right?

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Speaker 1: So let's think about this.

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Speaker 3: Like the Russian inference, interference in the elections.

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Speaker 1: Good starting point number two, missing disinformation.

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Speaker 3: Children.

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Speaker 2: But the problem is, I don't understand how that has

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Speaker 2: to do with the structure of the Internet versus Yeah.

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Speaker 2: So let's maligne actors. Okay, so on the Internet, right,

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Speaker 2: and in this case, you know, we could talk talk

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Speaker 2: about maligne actors potentially being foreign governments that want to interfere,

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Speaker 2: but also companies that want to create engaging content. And

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Speaker 2: I use the term engaging meaning anything that gets people

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Speaker 2: to click or scroll, which in some cases is bad

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Speaker 2: for people.

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Speaker 1: Yeah, so let's let's think about it this way. Okay,

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Speaker 1: I'm the head of the postal service, and I come

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Speaker 1: to you and say I have an idea I'm gonna

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Speaker 1: give you. I'm gonna deliver your mail no stamps for free,

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Speaker 1: so no more stamps. So you say, okay, I'm gonna listen.

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Speaker 1: Maybe I'd be a little bit suspicious, but i'd listen.

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Speaker 1: Then I'd say, Okay, here's the deal. I'm gonna put

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Speaker 1: cameras in every one of your homes, every one of

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Speaker 1: the rooms in your house, in your car, in your workplace,

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Speaker 1: and so forth, and I'm just going to surveil you

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Speaker 1: at twenty four to seven. You kind of be creeped

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Speaker 1: out by that, right, and then say well, yeah, but

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Speaker 1: it's free. And then it's one more thing. I'm going

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Speaker 1: to open your mail. I'm going to read it and

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Speaker 1: everything I learn is now mine, Okay, your relationships, your ideas,

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Speaker 1: everything else. And then you say, well that's I would

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Speaker 1: never Why would I do that?

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Speaker 3: Okay? And yeah, Then I said, well, but we do it.

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Speaker 1: One Well, one other thing. I'm going to read your

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Speaker 1: thirteen year old daughter's diary and I'm gonna and I'm

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Speaker 1: gonna learn she's a little concerned about her weight. She's thirteen,

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Speaker 1: she's insecure, a little vulnerable. I've got some stuff I

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Speaker 1: want to sell her, and I'm going to profit from

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Speaker 1: her insecurities.

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Speaker 3: It's sick.

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Speaker 1: It's not something we should be putting up with. And

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Speaker 1: so my point is that we have a decentralized intranet.

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Speaker 1: Something that Tim tim wrote. Tim Bernersley wrote a letter.

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Speaker 3: He publicly he issued it yesterday.

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Speaker 1: He said, I created something that was decentralized, that was

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Speaker 1: intended to empower human beings. You know, the proverbial tie

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Speaker 1: that lifts all boats, and it became something very centralized

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Speaker 1: in these big app These big apps are scraping data

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Speaker 1: and they're and they're applying algorithms and they're doing things

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Speaker 1: with it that are not good for society.

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Speaker 3: No individual, You make a good point. I think about

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Speaker 3: tim and I have talked about this, Like I've done

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Speaker 3: panels with top you know tech execs over the last

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Speaker 3: decade where they're like, yeah, my kid doesn't like have

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Speaker 3: a have a phone, doesn't have a lot like you know,

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Speaker 3: they limited their use their access because they understood. Having

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Speaker 3: said that, So, is there too much money though, wrapped

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Speaker 3: up in the space right now? People who do make

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Speaker 3: the money on the clicks, whether it's good or bad

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Speaker 3: information that how do we how do we get away

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Speaker 3: from that? How do we change that without that lobbying

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Speaker 3: or money behind it to keep it going. Well, so

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Speaker 3: we have about a minute and then we'll come back

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Speaker 3: and talk more.

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Speaker 4: Yeah.

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Speaker 1: Well, let's first of all, I would hope your listeners

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Speaker 1: would take a couple of hours of their precious time

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Speaker 1: and read the book or go to you know, our

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Speaker 1: Biggest fight dot com and learn about how they can

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Speaker 1: get involved and learn in a little bit more detail

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Speaker 1: how this works, but I'm happy to get into more

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Speaker 1: detail after the break.

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Speaker 3: But I'm saying, but, like, is there too much money

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Speaker 3: behind it? The existing structure these tech companies that are

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Speaker 3: so dominant in our world, and definitely, you know, have

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Speaker 3: the ear of policy.

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Speaker 1: Maybe we definitely need to create an ecosystem, a commercial

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Speaker 1: ecosystem that will be bigger and better than.

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Speaker 3: What we have.

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Speaker 1: We know that data is valuable, right, these the biggest

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Speaker 1: five of these companies are worth eleven trillion dollars, So

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Speaker 1: nobody can say that data isn't valuable anymore. So now

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Speaker 1: let's rethink what that economy looks like going forward, and

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Speaker 1: let's unlock the innovation and ingenuity of Americans, right and

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Speaker 1: actually build something that's healthy.

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Speaker 3: Now, we've talked about these digital doh CAAs that are

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Speaker 3: being built on all of us, and it is incredibly

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Speaker 3: value and then so what's our that's our data? Do

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Speaker 3: we get some piece of that or some control over that?

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Speaker 3: Good idea right in the future. Absolutely, like sign me up.

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Speaker 3: We're not gonna let them go anywhere. We're gonna come

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Speaker 3: back with Frank Mcourt, Junior chairman of M Court Global,

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Speaker 3: Founder and executive chairman of Project liberty, and we want

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Speaker 3: to get to some points for those who are listening

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Speaker 3: about what they can do maybe change this if they

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Speaker 3: are interested. And his new Biggest or his new book,

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Speaker 3: Our Biggest Fight Reclaiming Liberty, Humanity and Dignity in the

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Speaker 3: Digital a. We're going to get back to that conversation

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Speaker 3: in just a moment.

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Speaker 2: We're still here with Frank McCourt, junior chairman of McCourt Global.

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Speaker 2: He's also the executive chairman and founder of Project Liberty

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Speaker 2: new book Our Biggest Fight Reclaiming Liberty, Humanity and Dignity

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Speaker 2: in the Digital Age. Frank, you're obviously so passionate about this,

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Speaker 2: and I've got to ask do you have any sort

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Speaker 2: of dog in the fight here?

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Speaker 3: Like there?

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Speaker 2: Do you have any sort of financial interest in creating

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Speaker 2: a more open Internet.

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Speaker 1: I hope that our tech people will eventually build things

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Speaker 1: in this new world with millions of other people. But

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Speaker 1: our focus right now has been to put forward a

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Speaker 1: piece of infrastructure, public digital infrastructure at we'll call it

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Speaker 1: a protocol level piece called DSNP, which we've gifted to

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Speaker 1: the world. It's basically like Tim Bernersley gifted HGT. No

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Speaker 1: one should own the Internet or own our relationships. That's

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Speaker 1: the point we're trying to make here, and then we

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Speaker 1: can all build on it. I would also add that

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Speaker 1: we need to be creating a commercial ecosystem here that

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Speaker 1: people will.

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Speaker 3: Build on or all.

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Speaker 1: This just is a nice idea that will never happen

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Speaker 1: because these are huge, huge platforms. So I think, you know,

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Speaker 1: we're sitting back and I'm seeing and feeling the same

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Speaker 1: things that you all are about. Something's wrong. We're seeing

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Speaker 1: the harms to kids. We're seeing our information ecosystem is

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Speaker 1: completely contaminated. We're seeing democracy struggle. So we need to

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Speaker 1: fix this. And so normally you go to these big

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Speaker 1: tech CEOs and say, the problems are obvious, we've had

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Speaker 1: hearings after hearing fix it. They haven't and they're not

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Speaker 1: incentivized to fix it in the pre digital world. Then

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Speaker 1: you go to your elected officials, you know, you go

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Speaker 1: to Congress and say, look at the harms. You need

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Speaker 1: to regulate this or have some new policies. We've seen

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Speaker 1: now for several years it's theater.

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Speaker 4: Right.

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Speaker 1: People show up, there's these big hearings, and Zuckerberg and

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Speaker 1: the rest show up, and then nothing happens. Why our

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Speaker 1: politics is impacted by this very same technology that just

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Speaker 1: polarizes everybody and causes that paralysis.

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Speaker 2: Well, that's it feels like that. I mean, it feels

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Speaker 2: like every opportunity for a lawmaker to do something outrageous

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Speaker 2: is an opportunity of them to create a click and

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Speaker 2: raise money.

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Speaker 3: Well, the whole thing that's going on with TikTok. I

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Speaker 3: keep asking the question is it politics or policy that

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Speaker 3: people are concerned about, And it just feels like people

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Speaker 3: aren't concerned about politically what they can say and how

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Speaker 3: it looks. TikTok ban. Should we ban it?

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Speaker 1: Well, TikTok for sure is a problem for two reasons.

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Speaker 1: One is again this surveillance aspect of it, where it's

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Speaker 1: collecting all of our information and in TikTok's case, exporting it. Right,

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Speaker 1: this is now the Chinese Communist Party has all this

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Speaker 1: information on all these all of US American citizens. Of

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Speaker 1: course that shouldn't happen. But the other point I want

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Speaker 1: to make is the model of this extractive, exploitive, predatory

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Speaker 1: technology where we're being essentially surveiled and our information is

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Speaker 1: being scraped, is the same model that American apps are using,

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Speaker 1: such as such as Facebook and Instagram and Twitter and

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Speaker 1: Google and Amazon and so forth. It's all about our

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Speaker 1: social graph, which is essentially all of our personal data.

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Speaker 1: And that doesn't it doesn't just mean where we shop

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Speaker 1: or buy shoes. It's everything.

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Speaker 2: Mark Zuckerberg has talked about this for years. He's used

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Speaker 2: that term publicly, the social graph. I mean, he tried

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Speaker 2: to get it sort of an iteration of it to

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Speaker 2: take off in the Facebook news feed gosh back in

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Speaker 2: like twenty twelve.

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Speaker 3: But how do you get away from it even in

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Speaker 3: the platform that you are offering up, Because in a

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Speaker 3: digital world, doesn't something live somewhere always?

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Speaker 1: So yeah, that's a great, a great question. First of all,

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Speaker 1: I'm not offering up a platform. I'm offering up a roadmap.

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Speaker 3: Okay.

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Speaker 1: And the title of the book is not my biggest fight,

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Speaker 1: it's our biggest fight. This is not going to happen

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Speaker 1: unless we bring really millions of people into this conversation.

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Speaker 1: And so what we're suggesting is we have a problem

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Speaker 1: with the infrastrucure. Look, I'm a fifth generation builder. We

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Speaker 1: build infrastructure. We have an infrastructure or engineering problem that

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Speaker 1: we can fix and then build great stuff on it.

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Speaker 1: But if we don't fix the tech we're going to

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Speaker 1: continually be spending all of our time and precious you know,

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Speaker 1: precious time, precious, precious tax money and resources and so

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Speaker 1: forth on putting out.

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Speaker 3: These fires and mitigating damage.

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Speaker 1: Why not just fix the problem and then go start

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Speaker 1: solving the other problems that the Americans want to see solved.

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Speaker 1: So we need now not just to have a tech project,

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Speaker 1: and Project Liberty is also a project that brings in

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Speaker 1: civil society and brings in social scientists so that the

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Speaker 1: next generation of the Internet is not just designed by technologists.

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Speaker 2: Do you think this problem can be solved with the

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Speaker 2: free market alone or the government needs to get involved?

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Speaker 1: Another great question. I think we can definitely solve the

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Speaker 1: tech problem with the free market alone, and we can

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Speaker 1: build out the new and improved Internet, let's call it

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Speaker 1: the improved Internet.

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Speaker 2: And that's a David and Goliath story, because you're talking

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Speaker 2: about a startup essentially going against the biggest companies in

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Speaker 2: the world.

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Speaker 1: Like, I like our chances if it's millions of people

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Speaker 1: getting involved here. I don't like our chances if it's

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Speaker 1: a little I like if it's an a David against

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Speaker 1: the Goliath story, I don't like our chances if it's

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Speaker 1: a million Davids against the glias, we will change this,

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Speaker 1: and so I think this all can be changed eventually.

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Speaker 1: We will want some that once people see that there's

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Speaker 1: an alternative to this, it doesn't have to be this way.

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Speaker 1: Then I think the government will step in because they'll

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Speaker 1: have to to make sure they facilitate that.

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Speaker 3: Frank do you feel like the Europeans are leading kind

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Speaker 3: of already on this way? Like I do feel like

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Speaker 3: when it comes to social media, even AI, there were

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Speaker 3: some stuff that came out, I mean, the kind of

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Speaker 3: going in the right direction or not necessarily.

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Speaker 1: I think that they're they're they're they're leading from the

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Speaker 1: vantage point of being able to take public policy objectives

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Speaker 1: and reduce them to law or regulation. So they have

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Speaker 1: they have passed regulations like GDPR, d m A, d

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Speaker 1: s A, and they just passed the law about artificial intelligence. However,

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Speaker 1: those regulations and laws are not really changing much because

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Speaker 1: they're dependent on these platforms that we're referring to, mostly

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Speaker 1: American existing platforms, so they're kind of stuck. That we

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Speaker 1: need rather than try to have policies that impact the tech,

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Speaker 1: we need to have the tech designed to actually optimize

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Speaker 1: for what we want the society to optimize for. Shouldn't

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Speaker 1: we be optimizing for strong democracy. Shouldn't we be optimizing

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Speaker 1: for protecting young kids? Why would we have crazy, you know,

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Speaker 1: technology that's running rampant over these things and then have

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Speaker 1: to go I'm going to go.

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Speaker 3: Off on a crazy thing, and then we'll come back

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Speaker 3: and talk some more. But I think about we live

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Speaker 3: in a country where we talk about gun legislation and

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Speaker 3: we have shooting after shooting after shooting, and we say

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Speaker 3: every time, Okay, this is going to change something, and

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Speaker 3: it doesn't. So it makes me a little concerned whether

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Speaker 3: or not we can get that public momentum.

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Speaker 1: I would just say quickly, we have technology that's designed

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Speaker 1: so that we don't solve those problems. Well, we won't

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Speaker 1: solve climate change, we won't solve the immigration issue, we

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Speaker 1: won't solve the gun violence issue, because the technology is

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Speaker 1: designed to keep us in a constant state of fifty

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Speaker 1: to fifty four and.

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Speaker 3: Against Yeah, and in a vacuum where we just kind

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Speaker 3: of continue to hear. We've only got about two minutes.

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Speaker 3: Tell us what you would like to leave our audience with.

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Speaker 1: First of all, I'd like them too as I said earlier,

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Speaker 1: take a couple hours read the book Our Biggest Fight,

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Speaker 1: and I've tried to write it in accessible language, and

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Speaker 1: it's not a long book. I actually used Thomas pain

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Speaker 1: as my inspiration, the guy that wrote Common Sense in

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Speaker 1: seventeen seventy five, right, and he said, you.

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Speaker 3: Have a choice.

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Speaker 1: You can either be a subject or a citizen. Well,

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Speaker 1: we have that choice again. We can need to be

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Speaker 1: subjects to these big platforms, or we can actually be

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Speaker 1: digital citizens where we own and control our data, which

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Speaker 1: means we own and control ourselves in the digital world.

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Speaker 1: There's no biological us and digital us. We're one and

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Speaker 1: the same. So that's so please read the book, Please

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Speaker 1: go to Our Biggest Fight dot com and learn more,

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Speaker 1: and so forth. But if there's one thing I could

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Speaker 1: ask people to do right now, it would be other

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Speaker 1: than that. It would be socialize this issue. Talk about

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Speaker 1: this issue. I know there are millions of people out

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Speaker 1: there seeing and feeling the same thing I am and

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Speaker 1: you are. And so let's get it to the kitchen table.

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Speaker 1: Let's get it to the sideline of the soccer game,

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Speaker 1: the kids soccer game. Let's get it to the into

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Speaker 1: your school, into the school board, into the the parents

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Speaker 1: in schools. Let's get it to talk about it after church.

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Speaker 1: Let's let's socialize this issue, because I think we're going

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Speaker 1: to find that millions and millions of people once they

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Speaker 1: realize how their data is being used and how it's

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Speaker 1: being turned to hurt them and harm them and harm

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Speaker 1: their kids, they're going to be outraged and they're going

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Speaker 1: to demand change if we.

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Speaker 3: Don't do this. Thirty seconds left, what happens.

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Speaker 1: Well, we're seeing what's happening right with artificial with generative AI.

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Speaker 1: This is the same technology which is taking our data,

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Speaker 1: these machines ingesting it right and applying quote artificial intelligence

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Speaker 1: algorithms to it to go ahead and create all this stuff.

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Speaker 1: And we see some of the stuff coming out as wacky,

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Speaker 1: right because garbage in, garbage out. I say, let's let's

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Speaker 1: not have the machines drag us into a future we

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Speaker 1: don't want. Let's get the tech right, put individuals back

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Speaker 1: in charge, and then build great tech that will be

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Speaker 1: better for the next generation than generations.

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Speaker 3: After open door come back anytime.

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Speaker 1: I would love to thanks for your time.

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Speaker 3: Frank McCourt, Junior chairman and McCort Global founder and executive

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Speaker 3: chair of Project Liberty are his new book, Our Biggest

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Speaker 3: Fight is out now.

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Speaker 2: Speaking of retail, we talked about what's happening at Dollar

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Speaker 2: Trade just now. We talked about icating higher income consumers.

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Speaker 2: It plans to include products that costs up to seven dollars.

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Speaker 2: The stock fel today because they're closing about one thousand stores. Also,

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Speaker 2: Carol retail sales for February. We're going to get those tomorrow.

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Speaker 2: They're likely to rebound after adverse weather and unfavorable seasonal

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Speaker 2: adjustment factors. Wait on January figures. That comes from analysts

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Speaker 2: over at Bloomberg Economics.

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Speaker 3: Listen, We've got a great guest to talk about the

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Speaker 3: retail environment and how the consumer is doing. Julie Van

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Speaker 3: Allen is chief revenue officer over at Racketin. It's the

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Speaker 3: technology conglomerate. You know them well. They offer cash back

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Speaker 3: to consumers for shopping eight hours of the company. By

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Speaker 3: the way, that train the US are up more than

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Speaker 3: twenty percent year to date. Julie, great to have you

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Speaker 3: here with Tim and myself. Let's start. We like size

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Speaker 3: and scope, we like going broad to begin here, and

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Speaker 3: let's do that. How are consumers doing and what specifically

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Speaker 3: are you seeing in terms of spending activities in your

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Speaker 3: purview and on your site.

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Speaker 4: Well, first, thanks for having me, Carolyn Tam. Always love

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Speaker 4: being with you guys. I mean, the trend continues where

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Speaker 4: we've got to wake up every day and see what's

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Speaker 4: going on. It is still our moment is still that

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Speaker 4: of pivoting and understanding what is the consumer doing today?

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Speaker 4: And what I can say is that inflation continues to increase,

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Speaker 4: as we all know, particularly in areas that impact the

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Speaker 4: consumer gas, energy, rent prices, and that really highlights a

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Speaker 4: potentially negative impact on retailers as these consumers effectively look

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Speaker 4: to save money. Now, saving money can come in all

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Speaker 4: sorts of different forms.

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Speaker 5: As we know, Rackutan offers a.

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Speaker 4: Really valuable offering to our retailers and brands by way

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Speaker 4: of giving value to consumers as cash back. Right, so

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Speaker 4: we're very well positioned for a moment like this that

436
00:21:52,800 --> 00:21:57,000
Speaker 4: we're calling, you know, cautiously out shopping last year is

437
00:21:57,040 --> 00:22:00,520
Speaker 4: what we're seeing on our platform, largely driven the fact

438
00:22:00,560 --> 00:22:04,119
Speaker 4: that consumers do still seem to be interested in spending,

439
00:22:04,240 --> 00:22:07,320
Speaker 4: and from what we see actually out spending last year,

440
00:22:07,720 --> 00:22:12,080
Speaker 4: but very much associated with categories and brands who are

441
00:22:12,119 --> 00:22:13,960
Speaker 4: offering them the value that they're looking for.

442
00:22:14,160 --> 00:22:15,879
Speaker 2: What are some of those categories? What are some of

443
00:22:15,880 --> 00:22:18,440
Speaker 2: those brands If you can dig a little deeper into

444
00:22:18,480 --> 00:22:19,080
Speaker 2: the data.

445
00:22:18,840 --> 00:22:24,200
Speaker 4: Here, Yeah, if I'm to look for some correlations here,

446
00:22:24,400 --> 00:22:28,160
Speaker 4: it's a lot to do with what brands are offering

447
00:22:28,200 --> 00:22:32,240
Speaker 4: the consumer. So Racketin's own data shows a really positive

448
00:22:32,400 --> 00:22:37,560
Speaker 4: and exciting correlation between categories who have adopted an increased

449
00:22:37,680 --> 00:22:40,879
Speaker 4: level of cash back versus last year, and then the

450
00:22:40,920 --> 00:22:47,080
Speaker 4: subsequent increased average order value or the amount of trips

451
00:22:47,080 --> 00:22:49,600
Speaker 4: that a shopper is taking to their store the frequency

452
00:22:49,960 --> 00:22:53,120
Speaker 4: that those shoppers are taking in their store. So, if

453
00:22:53,119 --> 00:22:55,480
Speaker 4: we dig a little bit deeper, the categories who have

454
00:22:55,600 --> 00:23:00,080
Speaker 4: really leaned in heavily understanding that the consumer of toad

455
00:23:00,240 --> 00:23:03,720
Speaker 4: is looking for value and who have increased cash back

456
00:23:03,800 --> 00:23:07,320
Speaker 4: rates over last year. We see the pets category doing

457
00:23:07,359 --> 00:23:11,640
Speaker 4: extremely well, having grown over one hundred percent in trips

458
00:23:12,000 --> 00:23:16,640
Speaker 4: year over year. We also see appliances in hardware. They're

459
00:23:16,680 --> 00:23:20,320
Speaker 4: seeing an increase of ten percent in trips here over year,

460
00:23:20,320 --> 00:23:24,080
Speaker 4: but an increase of twelve percent in average order value,

461
00:23:24,800 --> 00:23:28,440
Speaker 4: which is an incredible outcome. Right to see an increase

462
00:23:28,520 --> 00:23:31,679
Speaker 4: of order value in the amount that consumers are spending

463
00:23:31,720 --> 00:23:34,600
Speaker 4: with you, even more than they're visiting, just by way

464
00:23:34,640 --> 00:23:38,320
Speaker 4: of spending a little bit extra to give them a reward.

465
00:23:38,880 --> 00:23:43,400
Speaker 4: Marketplace is also doing extremely well Home and garden and

466
00:23:43,720 --> 00:23:47,439
Speaker 4: travel is a real standout because typically Q one is

467
00:23:47,440 --> 00:23:50,520
Speaker 4: a very promotional period for travel, and they spend quite

468
00:23:50,560 --> 00:23:54,360
Speaker 4: a lot to lower consumers their way in Q one anyway,

469
00:23:54,600 --> 00:23:58,159
Speaker 4: and this Q one has kind of not been too different,

470
00:23:58,240 --> 00:24:01,800
Speaker 4: except there's even more leaning into those higher cash back

471
00:24:01,880 --> 00:24:07,240
Speaker 4: rates to achieve the high price point purchases that they're

472
00:24:07,240 --> 00:24:10,119
Speaker 4: looking for. And the travel has increased twenty two percent

473
00:24:10,200 --> 00:24:12,159
Speaker 4: year over year for US in terms of trips.

474
00:24:12,320 --> 00:24:15,080
Speaker 3: So, Julie, help me understand here. So when you say

475
00:24:15,080 --> 00:24:18,280
Speaker 3: they're leaning in more to get that spend, I guess

476
00:24:18,280 --> 00:24:21,000
Speaker 3: in their basket to get the cash back. So does

477
00:24:21,040 --> 00:24:25,960
Speaker 3: that mean the retailer is in or or who's ever

478
00:24:26,000 --> 00:24:28,159
Speaker 3: offering up the deal is in the driver's seat, or

479
00:24:28,200 --> 00:24:30,680
Speaker 3: is the consumer in the driver's seat because they're pushing

480
00:24:30,760 --> 00:24:33,840
Speaker 3: for a better and better deal because they kind of

481
00:24:33,880 --> 00:24:34,239
Speaker 3: need to.

482
00:24:36,240 --> 00:24:38,359
Speaker 4: Well, it's a great question, and it's two sides of

483
00:24:38,400 --> 00:24:41,120
Speaker 4: the same coin. You know, I think the consumers are

484
00:24:41,240 --> 00:24:43,959
Speaker 4: if you look at this data. They're very clearly saying,

485
00:24:44,480 --> 00:24:47,800
Speaker 4: I have the money, and I will buy from retailers

486
00:24:47,840 --> 00:24:50,880
Speaker 4: and brands who are willing to deliver me value. And

487
00:24:51,080 --> 00:24:54,240
Speaker 4: I think the categories and brands who are doing well

488
00:24:54,280 --> 00:24:56,400
Speaker 4: like the data we just reviewed, are the ones who

489
00:24:56,400 --> 00:25:00,160
Speaker 4: are listening to that message and are reacting by offering

490
00:25:00,440 --> 00:25:04,719
Speaker 4: higher cash back rates because it really is within their power,

491
00:25:05,040 --> 00:25:08,200
Speaker 4: the brand and the retailer's power to use racketon to

492
00:25:08,320 --> 00:25:10,520
Speaker 4: offer more cash back to their shoppers.

493
00:25:11,320 --> 00:25:14,280
Speaker 2: What typically happens if you go back? I mean, I

494
00:25:14,280 --> 00:25:16,960
Speaker 2: know the data. The data changes year to year because

495
00:25:17,000 --> 00:25:21,280
Speaker 2: more people presumably use the product. But what typically precedes

496
00:25:22,160 --> 00:25:24,800
Speaker 2: a slowdown in consumer spending? Like, what are the signals

497
00:25:24,840 --> 00:25:26,919
Speaker 2: that you could be looking for right now in the

498
00:25:27,000 --> 00:25:29,159
Speaker 2: data that you have that would say, okay, well, the

499
00:25:29,200 --> 00:25:30,800
Speaker 2: economy is indeed slowing down.

500
00:25:33,200 --> 00:25:36,040
Speaker 4: I think that in a time like this, right, the

501
00:25:36,080 --> 00:25:38,439
Speaker 4: power of something like cash back is that it is

502
00:25:38,480 --> 00:25:43,440
Speaker 4: a lever for good times and challenging times economically. Right, So,

503
00:25:43,800 --> 00:25:47,240
Speaker 4: even in good economic times, cash back is a great

504
00:25:47,359 --> 00:25:51,800
Speaker 4: lever to ensure that brands can continue to keep their.

505
00:25:51,640 --> 00:25:54,639
Speaker 5: Loyal shoppers loyal. That's what we do as a brand.

506
00:25:54,760 --> 00:25:58,640
Speaker 4: So there are use cases in any moment from an

507
00:25:58,640 --> 00:26:02,240
Speaker 4: economic standpoint. But I would say, which is something that

508
00:26:02,240 --> 00:26:04,680
Speaker 4: we're not seeing today, is that if you are in

509
00:26:04,760 --> 00:26:08,399
Speaker 4: a challenged economic moment where inflation continues, and you have

510
00:26:08,440 --> 00:26:12,000
Speaker 4: a brand like Racketon who has an offering that allows

511
00:26:12,160 --> 00:26:15,400
Speaker 4: retailers to provide the value to the shoppers that they're

512
00:26:15,400 --> 00:26:18,480
Speaker 4: looking for and that isn't working, that would probably be

513
00:26:18,560 --> 00:26:21,000
Speaker 4: a sign that consumers really are pulling back.

514
00:26:21,080 --> 00:26:24,000
Speaker 5: But we see the exact opposite that versus last year.

515
00:26:24,440 --> 00:26:27,640
Speaker 4: Brands are investing and shoppers are responding and outspending.

516
00:26:27,840 --> 00:26:30,280
Speaker 3: So that's interesting. So if I asked you, then Okay,

517
00:26:30,320 --> 00:26:32,360
Speaker 3: you're looking at the data points that you guys see

518
00:26:32,520 --> 00:26:35,359
Speaker 3: every day, right, you can easily kind of tap into that.

519
00:26:35,400 --> 00:26:38,040
Speaker 3: What's going on your outlook? Then, though, if we can

520
00:26:38,119 --> 00:26:43,320
Speaker 3: kind of pull it out on discretionary spending, especially as

521
00:26:43,359 --> 00:26:46,960
Speaker 3: we do see it feels like increasingly shoppers trading for value.

522
00:26:47,000 --> 00:26:49,880
Speaker 3: And I'm going to say, just walking around in my world,

523
00:26:50,359 --> 00:26:53,520
Speaker 3: I'm seeing like deals and promotions that I feel like

524
00:26:53,560 --> 00:26:56,119
Speaker 3: I wasn't seeing before. So what's your outlook on the

525
00:26:56,160 --> 00:26:57,959
Speaker 3: discretion discretionary spend?

526
00:26:59,640 --> 00:27:01,000
Speaker 5: I think it's clearly there.

527
00:27:01,280 --> 00:27:03,760
Speaker 4: You know, you see in a lot of these these

528
00:27:03,840 --> 00:27:09,320
Speaker 4: categories high spend arenas, whether it's appliances, travel, so the

529
00:27:09,359 --> 00:27:11,320
Speaker 4: AOV is high, the spend.

530
00:27:11,040 --> 00:27:13,760
Speaker 5: Is there if the right value is being delivered.

531
00:27:13,840 --> 00:27:16,880
Speaker 4: But you know, I think you you ask an interesting

532
00:27:16,960 --> 00:27:21,520
Speaker 4: question that makes me think about a category that isn't

533
00:27:21,600 --> 00:27:26,200
Speaker 4: performing terribly well right now across the retail landscape, which

534
00:27:26,240 --> 00:27:27,000
Speaker 4: is luxury.

535
00:27:27,800 --> 00:27:30,720
Speaker 5: We saw last week Matches Fashion shutting.

536
00:27:30,359 --> 00:27:34,320
Speaker 4: Down and it's a real nod to the rising acquisition

537
00:27:34,480 --> 00:27:38,440
Speaker 4: costs and finding new consumers to shop that has been

538
00:27:38,480 --> 00:27:41,879
Speaker 4: going on for years now, Facebook, Google, Those acquisition costs

539
00:27:41,880 --> 00:27:45,640
Speaker 4: have been getting so expensive. And then you see these

540
00:27:45,680 --> 00:27:49,800
Speaker 4: brands that we're you know, partnering with Matches and the

541
00:27:50,000 --> 00:27:52,760
Speaker 4: like cutting wholesales that they can invest more in their

542
00:27:52,800 --> 00:27:54,040
Speaker 4: direct to consumers site.

543
00:27:54,200 --> 00:27:56,360
Speaker 2: So we only have we only have thirty seconds left.

544
00:27:56,359 --> 00:27:59,120
Speaker 2: How are retailers thinking of customer acquisition costs? And then

545
00:27:59,200 --> 00:28:01,680
Speaker 2: and also does how does your company fit into that strategy?

546
00:28:01,760 --> 00:28:02,520
Speaker 2: Just thirty seconds?

547
00:28:03,920 --> 00:28:06,600
Speaker 4: Yeah, I mean everybody needs to be thinking about who's

548
00:28:06,640 --> 00:28:10,439
Speaker 4: next on their pathway and younger shoppers are looking for

549
00:28:10,520 --> 00:28:14,280
Speaker 4: the same value, and it doesn't devalue a brand to

550
00:28:14,400 --> 00:28:17,480
Speaker 4: offer something like cash back which is looked at as

551
00:28:17,560 --> 00:28:20,440
Speaker 4: a savvy shoppers weapon to be able to buy what

552
00:28:20,480 --> 00:28:20,920
Speaker 4: they're looking for.

553
00:28:21,000 --> 00:28:23,920
Speaker 3: So, retailers, the folks that you deal with and who

554
00:28:23,960 --> 00:28:26,840
Speaker 3: want to partner with you, is that widening out?

555
00:28:27,960 --> 00:28:30,360
Speaker 4: I would say absolutely, and you'll see that on our

556
00:28:30,400 --> 00:28:33,640
Speaker 4: site in the coming months. And I'm sure others as

557
00:28:34,040 --> 00:28:37,080
Speaker 4: arenas like Luxury are really looking for the next generation

558
00:28:37,160 --> 00:28:37,920
Speaker 4: of loyalists.

559
00:28:38,200 --> 00:28:40,000
Speaker 3: All right, We're going to leave it in that note. Hey, Julie,

560
00:28:40,000 --> 00:28:41,600
Speaker 3: thank you so much. Great to check in with you

561
00:28:41,680 --> 00:28:44,680
Speaker 3: once again. Julie Vannel and she's the chief revenue officer

562
00:28:44,720 --> 00:28:48,600
Speaker 3: over at Rakaton. Joining us of course on Zoom from

563
00:28:48,680 --> 00:28:49,520
Speaker 3: New York City