Why Retail Stores are the New Black

For those of you who have not had a chance to check out Barry Ritholtz's Masters in Business series over at Bloomberg, I can assure you that you will not be disappointed.  Barry has been at this for over a year now interviewing some of the top people in business (not only in finance), academia, and a few in the entertainment business as well.

One interview that Barry did back in June was with  NYU marketing professor Scott Galloway.  Most people have probably never heard of Galloway but you may have heard of the phrase he coined, "the four horsemen of technology."I found this interview to be fascinating on many different levels but specifically since my wife is in the marketing industry I was finally able to get her to listen to this interview and she got hooked. So who are the "four horsemen of technology" and what does Galloway have to say about them?

• Amazon; would not be surprised if they tried to buy the U.S. Post Office,  see this article here
• Apple; luxury brand not a tech company, multiple billion-dollar companies within one
• Facebook; could be the first Trillion dollar market cap, pulled off the "greatest bait and switch" in company history by convincing companies to build online communities that are not owned by the brands but instead owned by Facebook
• Google; one-trick pony (search) that generates revenue (but they are the best at it)

Below are a few of the other interesting takeaways that I had from the interview;

Retail stores are the new black

• The great retail companies in addition to being leaders in merchandising are also becoming point-of-sale warehouses, why?
• Because the great retail companies have figured out how to be great E-commerce sites as well which has opened up an additional selling channel

It's never been easier to be a billionaire, buts it's never been harder to be a millionaire

• Watch for the rise of the urban supercenters, more spoils are going to fewer people in smaller pockets of the U.S.
• The "Four Horseman of technology" have the population of Lexington, KY and the GDP of Spain or Australia
• If you do a heat map of the Apple iPhone, it shows you where the wealth is in the U.S.

How does higher education hack/disrupt itself? 

• The top universities start to provide free tuition
• If this happens what will the second-tier school's strategy be?

Attributes of a potential 5th horseman of technology

• Differentiated product
• Control end-use product
• Vanity (people want to associate with)
• Treat employees really well

Potential 5th horseman candidates

• Nike; people are spending more money on athletic wear vs. denim
• Alibaba; Amazon of China in which there are more people to cater to
• Starbucks; a technology company that serves hot beverages treat employees pretty well with health care and education assistance
• Uber; flexible labor, competitive cost structure (limited amount of capital required since they do not own the cars), can get into multiple businesses, last-mile solution for places such as Amazon

Galloway has a fascinating weekly YouTube channel that I started watching after getting through Barry's MIB interview which can be seen here.

Be sure to take a look at the entire lineup of guests that Barry has had at either iTunes or Bloomberg here.