Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 2: Steneveek on Bloomberg Radio. So, Carol, I've been doing this
Speaker 2: thought experiment. Hey, I've been asking parents. It's very informal,
Speaker 2: it's anecdotal, asking parents of teens about a proposed TikTok ban.
Speaker 2: I've heard from all of them the same thing, literally
Speaker 2: all of them. I hope they ban it. No standard deviation,
Speaker 2: there's no no And this is again not scientific. It's
Speaker 2: just like, Okay, you have a kid, you have a teenager,
Speaker 2: they have a phone, they're on TikTok all the time.
Speaker 3: Well, we know that option could be on the table
Speaker 3: after the US House of Representatives today passed to build
Speaker 3: a banned TikTok in the US unless it's Chinese owner
Speaker 3: sells the video sharing app. But Tim, we know it's
Speaker 3: not just TikTok that has its critics.
Speaker 2: Yeah, people have really had this fraught relationship with all
Speaker 2: different kinds of tech, hardware, software, you name it, their
Speaker 2: digital talk, detox retreats. I tried to delete certain apps
Speaker 2: on weekends so I don't pick up my phone and
Speaker 2: scroll when I'm with my family. The question is how
Speaker 2: did we get here to a place where I really
Speaker 2: ship with technology has become like this. Our next guest
Speaker 2: has been thinking a lot about that and says he
Speaker 2: has a solution. Frank mcot junior as chairman of McCourt Global.
Speaker 2: It's a company with interest in real estate, sports, tech,
Speaker 2: media and more. Frank also the founder and executive chairman
Speaker 2: of Project Liberty, which is, in its own words, advancing
Speaker 2: the responsible development of the Internet of tomorrow, designed and
Speaker 2: governed for the comment good. He's also the author of
Speaker 2: the brand new book Our Biggest Fight Reclaiming Liberty, Humanity,
Speaker 2: and dignity in the Digital Age. Frank, Welcome to Bloomberg
Speaker 2: Business Week. How are you.
Speaker 1: I'm doing good. How are you both doing?
Speaker 2: We're doing well. I'm interested because you're known for a
Speaker 2: lot of things. You're the former owner and chair of
Speaker 2: the La Dodgers, you own a French football club. You've
Speaker 2: worked in construction and real estate for years. What happened
Speaker 2: that prompted you to spend so much money and so
Speaker 2: much time fighting the Internet as we know it?
Speaker 4: Yeah?
Speaker 1: So I wrote Our Biggest Fight to really shine light
Speaker 1: on Project Liberty, which is a five hundred million dollar
Speaker 1: initiative to reimagine how the Internet works and you know,
Speaker 1: and really take back control of our data, which I
Speaker 1: would say is really our personhood in this digital era
Speaker 1: from the kind of the machines of big tech.
Speaker 2: Right, we're the machines, the machines.
Speaker 1: Look, we are connected to the Internet by an IP address.
Speaker 1: So let's start right there. Okay, the Internet is not
Speaker 1: you and I connected, it's our device connected. It was
Speaker 1: built to connect devices, machines, and that's how the Internet
Speaker 1: came into being. And then thirty five years ago yesterday,
Speaker 1: Tim berners Lee created the World Wide Web that was
Speaker 1: to connect data. We have never been connected as people
Speaker 1: on the Internet. So what I put forward in the
Speaker 1: book is is now, knowing how powerful the Internet is
Speaker 1: and how dependent we are on it, and how everything
Speaker 1: we do virtually is digitized, we need to reclaim ownership
Speaker 1: of our digital our social graph, our digital information, our
Speaker 1: relationships and so forth, because it's who we are. It's
Speaker 1: not our data, it's who we are in the digital age.
Speaker 1: And so I call that personhood, right, and it's our
Speaker 1: digital DNA is as important as our biological DNA. It's
Speaker 1: our lived archive. Why on Earth would we give that
Speaker 1: up just for the right of using the internet. We
Speaker 1: need an internet where we're in charge, we're owning and controlling,
Speaker 1: so to speak, our data, and we reclaim that that personhood.
Speaker 3: Well safe to say we didn't know we were giving
Speaker 3: it up, right, We just thought, Wow, this is a
Speaker 3: really cool thing, and look at all the things we
Speaker 3: can do. And many would argue right at the same
Speaker 3: time that the Internet and that connectivity has allowed us
Speaker 3: to do so much more and learn so much more
Speaker 3: about the other. But then there's the dark side and
Speaker 3: bad side to it. Is there though? Can we I mean,
Speaker 3: the horse has left the barn in a long you know,
Speaker 3: a long time ago, Frank, Can we kind of regain
Speaker 3: in our digital identity? Can we go back? Yeah?
Speaker 1: We must, We can, and we must. And I do
Speaker 1: want to focus on something first before I get to
Speaker 1: that solution and so forth. And I do think we
Speaker 1: are learning more and more about the harms, right, we
Speaker 1: hear them every day and.
Speaker 3: This we talk about it all the time, and it's.
Speaker 1: Just going to get worse as a generative AI enters
Speaker 1: the picture, because a broken technology made more powerful will
Speaker 1: just make the problems worse. But I want to just
Speaker 1: highlight one thing you said, you know, there are a
Speaker 1: lot of good things and then some bad things. I
Speaker 1: hear that a lot that we kind of somehow think
Speaker 1: of this technology differently than we would think of For instance,
Speaker 1: let's say we were sitting here and some municipality had
Speaker 1: a water system that was putting water into a million homes,
Speaker 1: and you were reporting today that four hundred thousand of
Speaker 1: those homes were getting toxic water. That we're making the
Speaker 1: households sick and killing some kids. Okay, would we sit
Speaker 1: here and say, well, yeah, but it's it's putting clean
Speaker 1: water in six hundred thousand homes. So kind of on bound?
Speaker 1: Why are we so tolerant of the harms of technology?
Speaker 1: Look at the Internet is ours, it's our data. We
Speaker 1: should be in charge. Why would we want machines to
Speaker 1: drag us into a future we don't want. Let's just
Speaker 1: take them inute, fix it, and then make it more powerful,
Speaker 1: and we fix it by putting individuals in control. I'm
Speaker 1: happy to talk about.
Speaker 2: So in this case, in this analogy, what are what's
Speaker 2: what's the toxic water? What's what are the harms being done?
Speaker 1: So? Yeah, so so where to begin?
Speaker 4: Right?
Speaker 1: So let's think about this.
Speaker 3: Like the Russian inference, interference in the elections.
Speaker 1: Good starting point number two, missing disinformation.
Speaker 3: Children.
Speaker 2: But the problem is, I don't understand how that has
Speaker 2: to do with the structure of the Internet versus Yeah.
Speaker 2: So let's maligne actors. Okay, so on the Internet, right,
Speaker 2: and in this case, you know, we could talk talk
Speaker 2: about maligne actors potentially being foreign governments that want to interfere,
Speaker 2: but also companies that want to create engaging content. And
Speaker 2: I use the term engaging meaning anything that gets people
Speaker 2: to click or scroll, which in some cases is bad
Speaker 2: for people.
Speaker 1: Yeah, so let's let's think about it this way. Okay,
Speaker 1: I'm the head of the postal service, and I come
Speaker 1: to you and say I have an idea I'm gonna
Speaker 1: give you. I'm gonna deliver your mail no stamps for free,
Speaker 1: so no more stamps. So you say, okay, I'm gonna listen.
Speaker 1: Maybe I'd be a little bit suspicious, but i'd listen.
Speaker 1: Then I'd say, Okay, here's the deal. I'm gonna put
Speaker 1: cameras in every one of your homes, every one of
Speaker 1: the rooms in your house, in your car, in your workplace,
Speaker 1: and so forth, and I'm just going to surveil you
Speaker 1: at twenty four to seven. You kind of be creeped
Speaker 1: out by that, right, and then say well, yeah, but
Speaker 1: it's free. And then it's one more thing. I'm going
Speaker 1: to open your mail. I'm going to read it and
Speaker 1: everything I learn is now mine, Okay, your relationships, your ideas,
Speaker 1: everything else. And then you say, well that's I would
Speaker 1: never Why would I do that?
Speaker 3: Okay? And yeah, Then I said, well, but we do it.
Speaker 1: One Well, one other thing. I'm going to read your
Speaker 1: thirteen year old daughter's diary and I'm gonna and I'm
Speaker 1: gonna learn she's a little concerned about her weight. She's thirteen,
Speaker 1: she's insecure, a little vulnerable. I've got some stuff I
Speaker 1: want to sell her, and I'm going to profit from
Speaker 1: her insecurities.
Speaker 3: It's sick.
Speaker 1: It's not something we should be putting up with. And
Speaker 1: so my point is that we have a decentralized intranet.
Speaker 1: Something that Tim tim wrote. Tim Bernersley wrote a letter.
Speaker 3: He publicly he issued it yesterday.
Speaker 1: He said, I created something that was decentralized, that was
Speaker 1: intended to empower human beings. You know, the proverbial tie
Speaker 1: that lifts all boats, and it became something very centralized
Speaker 1: in these big app These big apps are scraping data
Speaker 1: and they're and they're applying algorithms and they're doing things
Speaker 1: with it that are not good for society.
Speaker 3: No individual, You make a good point. I think about
Speaker 3: tim and I have talked about this, Like I've done
Speaker 3: panels with top you know tech execs over the last
Speaker 3: decade where they're like, yeah, my kid doesn't like have
Speaker 3: a have a phone, doesn't have a lot like you know,
Speaker 3: they limited their use their access because they understood. Having
Speaker 3: said that, So, is there too much money though, wrapped
Speaker 3: up in the space right now? People who do make
Speaker 3: the money on the clicks, whether it's good or bad
Speaker 3: information that how do we how do we get away
Speaker 3: from that? How do we change that without that lobbying
Speaker 3: or money behind it to keep it going. Well, so
Speaker 3: we have about a minute and then we'll come back
Speaker 3: and talk more.
Speaker 4: Yeah.
Speaker 1: Well, let's first of all, I would hope your listeners
Speaker 1: would take a couple of hours of their precious time
Speaker 1: and read the book or go to you know, our
Speaker 1: Biggest fight dot com and learn about how they can
Speaker 1: get involved and learn in a little bit more detail
Speaker 1: how this works, but I'm happy to get into more
Speaker 1: detail after the break.
Speaker 3: But I'm saying, but, like, is there too much money
Speaker 3: behind it? The existing structure these tech companies that are
Speaker 3: so dominant in our world, and definitely, you know, have
Speaker 3: the ear of policy.
Speaker 1: Maybe we definitely need to create an ecosystem, a commercial
Speaker 1: ecosystem that will be bigger and better than.
Speaker 3: What we have.
Speaker 1: We know that data is valuable, right, these the biggest
Speaker 1: five of these companies are worth eleven trillion dollars, So
Speaker 1: nobody can say that data isn't valuable anymore. So now
Speaker 1: let's rethink what that economy looks like going forward, and
Speaker 1: let's unlock the innovation and ingenuity of Americans, right and
Speaker 1: actually build something that's healthy.
Speaker 3: Now, we've talked about these digital doh CAAs that are
Speaker 3: being built on all of us, and it is incredibly
Speaker 3: value and then so what's our that's our data? Do
Speaker 3: we get some piece of that or some control over that?
Speaker 3: Good idea right in the future. Absolutely, like sign me up.
Speaker 3: We're not gonna let them go anywhere. We're gonna come
Speaker 3: back with Frank Mcourt, Junior chairman of M Court Global,
Speaker 3: Founder and executive chairman of Project liberty, and we want
Speaker 3: to get to some points for those who are listening
Speaker 3: about what they can do maybe change this if they
Speaker 3: are interested. And his new Biggest or his new book,
Speaker 3: Our Biggest Fight Reclaiming Liberty, Humanity and Dignity in the
Speaker 3: Digital a. We're going to get back to that conversation
Speaker 3: in just a moment.
Speaker 2: We're still here with Frank McCourt, junior chairman of McCourt Global.
Speaker 2: He's also the executive chairman and founder of Project Liberty
Speaker 2: new book Our Biggest Fight Reclaiming Liberty, Humanity and Dignity
Speaker 2: in the Digital Age. Frank, you're obviously so passionate about this,
Speaker 2: and I've got to ask do you have any sort
Speaker 2: of dog in the fight here?
Speaker 3: Like there?
Speaker 2: Do you have any sort of financial interest in creating
Speaker 2: a more open Internet.
Speaker 1: I hope that our tech people will eventually build things
Speaker 1: in this new world with millions of other people. But
Speaker 1: our focus right now has been to put forward a
Speaker 1: piece of infrastructure, public digital infrastructure at we'll call it
Speaker 1: a protocol level piece called DSNP, which we've gifted to
Speaker 1: the world. It's basically like Tim Bernersley gifted HGT. No
Speaker 1: one should own the Internet or own our relationships. That's
Speaker 1: the point we're trying to make here, and then we
Speaker 1: can all build on it. I would also add that
Speaker 1: we need to be creating a commercial ecosystem here that
Speaker 1: people will.
Speaker 3: Build on or all.
Speaker 1: This just is a nice idea that will never happen
Speaker 1: because these are huge, huge platforms. So I think, you know,
Speaker 1: we're sitting back and I'm seeing and feeling the same
Speaker 1: things that you all are about. Something's wrong. We're seeing
Speaker 1: the harms to kids. We're seeing our information ecosystem is
Speaker 1: completely contaminated. We're seeing democracy struggle. So we need to
Speaker 1: fix this. And so normally you go to these big
Speaker 1: tech CEOs and say, the problems are obvious, we've had
Speaker 1: hearings after hearing fix it. They haven't and they're not
Speaker 1: incentivized to fix it in the pre digital world. Then
Speaker 1: you go to your elected officials, you know, you go
Speaker 1: to Congress and say, look at the harms. You need
Speaker 1: to regulate this or have some new policies. We've seen
Speaker 1: now for several years it's theater.
Speaker 4: Right.
Speaker 1: People show up, there's these big hearings, and Zuckerberg and
Speaker 1: the rest show up, and then nothing happens. Why our
Speaker 1: politics is impacted by this very same technology that just
Speaker 1: polarizes everybody and causes that paralysis.
Speaker 2: Well, that's it feels like that. I mean, it feels
Speaker 2: like every opportunity for a lawmaker to do something outrageous
Speaker 2: is an opportunity of them to create a click and
Speaker 2: raise money.
Speaker 3: Well, the whole thing that's going on with TikTok. I
Speaker 3: keep asking the question is it politics or policy that
Speaker 3: people are concerned about, And it just feels like people
Speaker 3: aren't concerned about politically what they can say and how
Speaker 3: it looks. TikTok ban. Should we ban it?
Speaker 1: Well, TikTok for sure is a problem for two reasons.
Speaker 1: One is again this surveillance aspect of it, where it's
Speaker 1: collecting all of our information and in TikTok's case, exporting it. Right,
Speaker 1: this is now the Chinese Communist Party has all this
Speaker 1: information on all these all of US American citizens. Of
Speaker 1: course that shouldn't happen. But the other point I want
Speaker 1: to make is the model of this extractive, exploitive, predatory
Speaker 1: technology where we're being essentially surveiled and our information is
Speaker 1: being scraped, is the same model that American apps are using,
Speaker 1: such as such as Facebook and Instagram and Twitter and
Speaker 1: Google and Amazon and so forth. It's all about our
Speaker 1: social graph, which is essentially all of our personal data.
Speaker 1: And that doesn't it doesn't just mean where we shop
Speaker 1: or buy shoes. It's everything.
Speaker 2: Mark Zuckerberg has talked about this for years. He's used
Speaker 2: that term publicly, the social graph. I mean, he tried
Speaker 2: to get it sort of an iteration of it to
Speaker 2: take off in the Facebook news feed gosh back in
Speaker 2: like twenty twelve.
Speaker 3: But how do you get away from it even in
Speaker 3: the platform that you are offering up, Because in a
Speaker 3: digital world, doesn't something live somewhere always?
Speaker 1: So yeah, that's a great, a great question. First of all,
Speaker 1: I'm not offering up a platform. I'm offering up a roadmap.
Speaker 3: Okay.
Speaker 1: And the title of the book is not my biggest fight,
Speaker 1: it's our biggest fight. This is not going to happen
Speaker 1: unless we bring really millions of people into this conversation.
Speaker 1: And so what we're suggesting is we have a problem
Speaker 1: with the infrastrucure. Look, I'm a fifth generation builder. We
Speaker 1: build infrastructure. We have an infrastructure or engineering problem that
Speaker 1: we can fix and then build great stuff on it.
Speaker 1: But if we don't fix the tech we're going to
Speaker 1: continually be spending all of our time and precious you know,
Speaker 1: precious time, precious, precious tax money and resources and so
Speaker 1: forth on putting out.
Speaker 3: These fires and mitigating damage.
Speaker 1: Why not just fix the problem and then go start
Speaker 1: solving the other problems that the Americans want to see solved.
Speaker 1: So we need now not just to have a tech project,
Speaker 1: and Project Liberty is also a project that brings in
Speaker 1: civil society and brings in social scientists so that the
Speaker 1: next generation of the Internet is not just designed by technologists.
Speaker 2: Do you think this problem can be solved with the
Speaker 2: free market alone or the government needs to get involved?
Speaker 1: Another great question. I think we can definitely solve the
Speaker 1: tech problem with the free market alone, and we can
Speaker 1: build out the new and improved Internet, let's call it
Speaker 1: the improved Internet.
Speaker 2: And that's a David and Goliath story, because you're talking
Speaker 2: about a startup essentially going against the biggest companies in
Speaker 2: the world.
Speaker 1: Like, I like our chances if it's millions of people
Speaker 1: getting involved here. I don't like our chances if it's
Speaker 1: a little I like if it's an a David against
Speaker 1: the Goliath story, I don't like our chances if it's
Speaker 1: a million Davids against the glias, we will change this,
Speaker 1: and so I think this all can be changed eventually.
Speaker 1: We will want some that once people see that there's
Speaker 1: an alternative to this, it doesn't have to be this way.
Speaker 1: Then I think the government will step in because they'll
Speaker 1: have to to make sure they facilitate that.
Speaker 3: Frank do you feel like the Europeans are leading kind
Speaker 3: of already on this way? Like I do feel like
Speaker 3: when it comes to social media, even AI, there were
Speaker 3: some stuff that came out, I mean, the kind of
Speaker 3: going in the right direction or not necessarily.
Speaker 1: I think that they're they're they're they're leading from the
Speaker 1: vantage point of being able to take public policy objectives
Speaker 1: and reduce them to law or regulation. So they have
Speaker 1: they have passed regulations like GDPR, d m A, d
Speaker 1: s A, and they just passed the law about artificial intelligence. However,
Speaker 1: those regulations and laws are not really changing much because
Speaker 1: they're dependent on these platforms that we're referring to, mostly
Speaker 1: American existing platforms, so they're kind of stuck. That we
Speaker 1: need rather than try to have policies that impact the tech,
Speaker 1: we need to have the tech designed to actually optimize
Speaker 1: for what we want the society to optimize for. Shouldn't
Speaker 1: we be optimizing for strong democracy. Shouldn't we be optimizing
Speaker 1: for protecting young kids? Why would we have crazy, you know,
Speaker 1: technology that's running rampant over these things and then have
Speaker 1: to go I'm going to go.
Speaker 3: Off on a crazy thing, and then we'll come back
Speaker 3: and talk some more. But I think about we live
Speaker 3: in a country where we talk about gun legislation and
Speaker 3: we have shooting after shooting after shooting, and we say
Speaker 3: every time, Okay, this is going to change something, and
Speaker 3: it doesn't. So it makes me a little concerned whether
Speaker 3: or not we can get that public momentum.
Speaker 1: I would just say quickly, we have technology that's designed
Speaker 1: so that we don't solve those problems. Well, we won't
Speaker 1: solve climate change, we won't solve the immigration issue, we
Speaker 1: won't solve the gun violence issue, because the technology is
Speaker 1: designed to keep us in a constant state of fifty
Speaker 1: to fifty four and.
Speaker 3: Against Yeah, and in a vacuum where we just kind
Speaker 3: of continue to hear. We've only got about two minutes.
Speaker 3: Tell us what you would like to leave our audience with.
Speaker 1: First of all, I'd like them too as I said earlier,
Speaker 1: take a couple hours read the book Our Biggest Fight,
Speaker 1: and I've tried to write it in accessible language, and
Speaker 1: it's not a long book. I actually used Thomas pain
Speaker 1: as my inspiration, the guy that wrote Common Sense in
Speaker 1: seventeen seventy five, right, and he said, you.
Speaker 3: Have a choice.
Speaker 1: You can either be a subject or a citizen. Well,
Speaker 1: we have that choice again. We can need to be
Speaker 1: subjects to these big platforms, or we can actually be
Speaker 1: digital citizens where we own and control our data, which
Speaker 1: means we own and control ourselves in the digital world.
Speaker 1: There's no biological us and digital us. We're one and
Speaker 1: the same. So that's so please read the book, Please
Speaker 1: go to Our Biggest Fight dot com and learn more,
Speaker 1: and so forth. But if there's one thing I could
Speaker 1: ask people to do right now, it would be other
Speaker 1: than that. It would be socialize this issue. Talk about
Speaker 1: this issue. I know there are millions of people out
Speaker 1: there seeing and feeling the same thing I am and
Speaker 1: you are. And so let's get it to the kitchen table.
Speaker 1: Let's get it to the sideline of the soccer game,
Speaker 1: the kids soccer game. Let's get it to the into
Speaker 1: your school, into the school board, into the the parents
Speaker 1: in schools. Let's get it to talk about it after church.
Speaker 1: Let's let's socialize this issue, because I think we're going
Speaker 1: to find that millions and millions of people once they
Speaker 1: realize how their data is being used and how it's
Speaker 1: being turned to hurt them and harm them and harm
Speaker 1: their kids, they're going to be outraged and they're going
Speaker 1: to demand change if we.
Speaker 3: Don't do this. Thirty seconds left, what happens.
Speaker 1: Well, we're seeing what's happening right with artificial with generative AI.
Speaker 1: This is the same technology which is taking our data,
Speaker 1: these machines ingesting it right and applying quote artificial intelligence
Speaker 1: algorithms to it to go ahead and create all this stuff.
Speaker 1: And we see some of the stuff coming out as wacky,
Speaker 1: right because garbage in, garbage out. I say, let's let's
Speaker 1: not have the machines drag us into a future we
Speaker 1: don't want. Let's get the tech right, put individuals back
Speaker 1: in charge, and then build great tech that will be
Speaker 1: better for the next generation than generations.
Speaker 3: After open door come back anytime.
Speaker 1: I would love to thanks for your time.
Speaker 3: Frank McCourt, Junior chairman and McCort Global founder and executive
Speaker 3: chair of Project Liberty are his new book, Our Biggest
Speaker 3: Fight is out now.
Speaker 2: Speaking of retail, we talked about what's happening at Dollar
Speaker 2: Trade just now. We talked about icating higher income consumers.
Speaker 2: It plans to include products that costs up to seven dollars.
Speaker 2: The stock fel today because they're closing about one thousand stores. Also,
Speaker 2: Carol retail sales for February. We're going to get those tomorrow.
Speaker 2: They're likely to rebound after adverse weather and unfavorable seasonal
Speaker 2: adjustment factors. Wait on January figures. That comes from analysts
Speaker 2: over at Bloomberg Economics.
Speaker 3: Listen, We've got a great guest to talk about the
Speaker 3: retail environment and how the consumer is doing. Julie Van
Speaker 3: Allen is chief revenue officer over at Racketin. It's the
Speaker 3: technology conglomerate. You know them well. They offer cash back
Speaker 3: to consumers for shopping eight hours of the company. By
Speaker 3: the way, that train the US are up more than
Speaker 3: twenty percent year to date. Julie, great to have you
Speaker 3: here with Tim and myself. Let's start. We like size
Speaker 3: and scope, we like going broad to begin here, and
Speaker 3: let's do that. How are consumers doing and what specifically
Speaker 3: are you seeing in terms of spending activities in your
Speaker 3: purview and on your site.
Speaker 4: Well, first, thanks for having me, Carolyn Tam. Always love
Speaker 4: being with you guys. I mean, the trend continues where
Speaker 4: we've got to wake up every day and see what's
Speaker 4: going on. It is still our moment is still that
Speaker 4: of pivoting and understanding what is the consumer doing today?
Speaker 4: And what I can say is that inflation continues to increase,
Speaker 4: as we all know, particularly in areas that impact the
Speaker 4: consumer gas, energy, rent prices, and that really highlights a
Speaker 4: potentially negative impact on retailers as these consumers effectively look
Speaker 4: to save money. Now, saving money can come in all
Speaker 4: sorts of different forms.
Speaker 5: As we know, Rackutan offers a.
Speaker 4: Really valuable offering to our retailers and brands by way
Speaker 4: of giving value to consumers as cash back. Right, so
Speaker 4: we're very well positioned for a moment like this that
Speaker 4: we're calling, you know, cautiously out shopping last year is
Speaker 4: what we're seeing on our platform, largely driven the fact
Speaker 4: that consumers do still seem to be interested in spending,
Speaker 4: and from what we see actually out spending last year,
Speaker 4: but very much associated with categories and brands who are
Speaker 4: offering them the value that they're looking for.
Speaker 2: What are some of those categories? What are some of
Speaker 2: those brands If you can dig a little deeper into
Speaker 2: the data.
Speaker 4: Here, Yeah, if I'm to look for some correlations here,
Speaker 4: it's a lot to do with what brands are offering
Speaker 4: the consumer. So Racketin's own data shows a really positive
Speaker 4: and exciting correlation between categories who have adopted an increased
Speaker 4: level of cash back versus last year, and then the
Speaker 4: subsequent increased average order value or the amount of trips
Speaker 4: that a shopper is taking to their store the frequency
Speaker 4: that those shoppers are taking in their store. So, if
Speaker 4: we dig a little bit deeper, the categories who have
Speaker 4: really leaned in heavily understanding that the consumer of toad
Speaker 4: is looking for value and who have increased cash back
Speaker 4: rates over last year. We see the pets category doing
Speaker 4: extremely well, having grown over one hundred percent in trips
Speaker 4: year over year. We also see appliances in hardware. They're
Speaker 4: seeing an increase of ten percent in trips here over year,
Speaker 4: but an increase of twelve percent in average order value,
Speaker 4: which is an incredible outcome. Right to see an increase
Speaker 4: of order value in the amount that consumers are spending
Speaker 4: with you, even more than they're visiting, just by way
Speaker 4: of spending a little bit extra to give them a reward.
Speaker 4: Marketplace is also doing extremely well Home and garden and
Speaker 4: travel is a real standout because typically Q one is
Speaker 4: a very promotional period for travel, and they spend quite
Speaker 4: a lot to lower consumers their way in Q one anyway,
Speaker 4: and this Q one has kind of not been too different,
Speaker 4: except there's even more leaning into those higher cash back
Speaker 4: rates to achieve the high price point purchases that they're
Speaker 4: looking for. And the travel has increased twenty two percent
Speaker 4: year over year for US in terms of trips.
Speaker 3: So, Julie, help me understand here. So when you say
Speaker 3: they're leaning in more to get that spend, I guess
Speaker 3: in their basket to get the cash back. So does
Speaker 3: that mean the retailer is in or or who's ever
Speaker 3: offering up the deal is in the driver's seat, or
Speaker 3: is the consumer in the driver's seat because they're pushing
Speaker 3: for a better and better deal because they kind of
Speaker 3: need to.
Speaker 4: Well, it's a great question, and it's two sides of
Speaker 4: the same coin. You know, I think the consumers are
Speaker 4: if you look at this data. They're very clearly saying,
Speaker 4: I have the money, and I will buy from retailers
Speaker 4: and brands who are willing to deliver me value. And
Speaker 4: I think the categories and brands who are doing well
Speaker 4: like the data we just reviewed, are the ones who
Speaker 4: are listening to that message and are reacting by offering
Speaker 4: higher cash back rates because it really is within their power,
Speaker 4: the brand and the retailer's power to use racketon to
Speaker 4: offer more cash back to their shoppers.
Speaker 2: What typically happens if you go back? I mean, I
Speaker 2: know the data. The data changes year to year because
Speaker 2: more people presumably use the product. But what typically precedes
Speaker 2: a slowdown in consumer spending? Like, what are the signals
Speaker 2: that you could be looking for right now in the
Speaker 2: data that you have that would say, okay, well, the
Speaker 2: economy is indeed slowing down.
Speaker 4: I think that in a time like this, right, the
Speaker 4: power of something like cash back is that it is
Speaker 4: a lever for good times and challenging times economically. Right, So,
Speaker 4: even in good economic times, cash back is a great
Speaker 4: lever to ensure that brands can continue to keep their.
Speaker 5: Loyal shoppers loyal. That's what we do as a brand.
Speaker 4: So there are use cases in any moment from an
Speaker 4: economic standpoint. But I would say, which is something that
Speaker 4: we're not seeing today, is that if you are in
Speaker 4: a challenged economic moment where inflation continues, and you have
Speaker 4: a brand like Racketon who has an offering that allows
Speaker 4: retailers to provide the value to the shoppers that they're
Speaker 4: looking for and that isn't working, that would probably be
Speaker 4: a sign that consumers really are pulling back.
Speaker 5: But we see the exact opposite that versus last year.
Speaker 4: Brands are investing and shoppers are responding and outspending.
Speaker 3: So that's interesting. So if I asked you, then Okay,
Speaker 3: you're looking at the data points that you guys see
Speaker 3: every day, right, you can easily kind of tap into that.
Speaker 3: What's going on your outlook? Then, though, if we can
Speaker 3: kind of pull it out on discretionary spending, especially as
Speaker 3: we do see it feels like increasingly shoppers trading for value.
Speaker 3: And I'm going to say, just walking around in my world,
Speaker 3: I'm seeing like deals and promotions that I feel like
Speaker 3: I wasn't seeing before. So what's your outlook on the
Speaker 3: discretion discretionary spend?
Speaker 5: I think it's clearly there.
Speaker 4: You know, you see in a lot of these these
Speaker 4: categories high spend arenas, whether it's appliances, travel, so the
Speaker 4: AOV is high, the spend.
Speaker 5: Is there if the right value is being delivered.
Speaker 4: But you know, I think you you ask an interesting
Speaker 4: question that makes me think about a category that isn't
Speaker 4: performing terribly well right now across the retail landscape, which
Speaker 4: is luxury.
Speaker 5: We saw last week Matches Fashion shutting.
Speaker 4: Down and it's a real nod to the rising acquisition
Speaker 4: costs and finding new consumers to shop that has been
Speaker 4: going on for years now, Facebook, Google, Those acquisition costs
Speaker 4: have been getting so expensive. And then you see these
Speaker 4: brands that we're you know, partnering with Matches and the
Speaker 4: like cutting wholesales that they can invest more in their
Speaker 4: direct to consumers site.
Speaker 2: So we only have we only have thirty seconds left.
Speaker 2: How are retailers thinking of customer acquisition costs? And then
Speaker 2: and also does how does your company fit into that strategy?
Speaker 2: Just thirty seconds?
Speaker 4: Yeah, I mean everybody needs to be thinking about who's
Speaker 4: next on their pathway and younger shoppers are looking for
Speaker 4: the same value, and it doesn't devalue a brand to
Speaker 4: offer something like cash back which is looked at as
Speaker 4: a savvy shoppers weapon to be able to buy what
Speaker 4: they're looking for.
Speaker 3: So, retailers, the folks that you deal with and who
Speaker 3: want to partner with you, is that widening out?
Speaker 4: I would say absolutely, and you'll see that on our
Speaker 4: site in the coming months. And I'm sure others as
Speaker 4: arenas like Luxury are really looking for the next generation
Speaker 4: of loyalists.
Speaker 3: All right, We're going to leave it in that note. Hey, Julie,
Speaker 3: thank you so much. Great to check in with you
Speaker 3: once again. Julie Vannel and she's the chief revenue officer
Speaker 3: over at Rakaton. Joining us of course on Zoom from
Speaker 3: New York City