Trend Makers vs. Taste Makers

Louis Vuitton's cycles through fashion directors, like its fashion seasons, Hermès didn't have a single new product since Jane Birking met Jean-Louis Dumas on that fateful flight. One behaves like a trend maker. One behaves like a taste maker, which one is better, and is one better. That depends what you believe, what creates value. Today, we explored the tension between trend makers and taste makers. Welcome to the season 2 of Hitmakers, the show that explores how culture moves margins, multiples and market cap. Hi Lee. Hey Anna, how are you doing? I'm well. I think you should binge on pluribus. Oh, I was watching that, so I'm like, I'm don't spoil anything, but I'm on episode, I just finished episode 2 last night. It is so not what I thought it was going to be. Oh really? Okay, but we'll talk when you finish episode, when you catch up. Wait, did you, did you know it was going to be like that? Like that type of narrative? It did, yeah. Oh, no. I love it. It's great. It's, it's totally in the style, obviously a breaking bad and better call Saul, like just the way the shots are framed and the pacing and everything like that. And of course, it takes place in New Mexico again, which I love that he keeps going back to New Mexico for everything. But it's like, I don't know, I just love it because it's so interesting in just terms of how he's sort of kind of created the context and stuff. And so I am, I am waiting for the story to open up more because the, the, the tension in the first two episodes is really just with the main character, heroin, reconciling this changed world with her understanding and her place in it. And so like that only has so many episodes that you can do before you have to open it up. And it's a larger, a larger level of conflict and stuff. And so I'm, don't spoil it, but I won't, I won't anticipate that. That apple had commission new season, so there are two seasons. So we're, you know, we're in for a ride. But I did, I did just finish the neck. I know. No, I'm like a decade behind on that. That's right. Right. All right. So it holds up. It's good. Or I'm sorry. Like, you know what? A lot of them do, which is very, like the golden age of television actually carries over. So all of her fault is the next one that you should watch after. Oh, I have it. I haven't even seen that. I didn't. What is that one? Look it up. I don't want to spoil it. Okay. That's fine. Well, speaking of not spoiling and looking it up, let's dive in. So let's dive into market moves, a segment where we track how companies are building cultural capital to move markets. So we do this podcast every two weeks. So that means the last few weeks are pretty busy. Next one is with gap. So gap posted stronger than expected, Q3 results being both sales and margin forecast. Net sales hit 3.9 billion, which was up 3% year over year with comparable sales up 5%. Marking the company's seventh straight quarter of comparative growth. Store sales rose 3% and online sales grew 2% now accounting for 40% of total revenue. Growth margin came in at 42.4% down 30 basis points while operating income hit 334 million with an 8.5 operating margin net income hit 236 million off the back of this gap raised its full year outlook to the high end of previous guidance bottom line. The retail turnaround continues and gap is showing rare momentum in an overall challenged category. This next one is about Nike, Nike just launched its most unexpected giveaway yet soup. In Guangzhou, runners who completed a 3K were rewarded not with merch but a bowl of Cantonese herbal broth from a Nike branded soup stall complete with a swish shaped spoon. The hyper local activation ran during China's national games and featured Olympic sprinter su bingshian. It comes as Nike faces 3 straight quarters of double digit sales decline in China and growing competition from Hoka, Solomon and on, putting pressure on its marking to reconnect with local customers. Without the recreation surging post-COVID, Nike is betting on cultural fluency over product drops and in Cantonese culture soup isn't just food, it's the local recovery ritual. In July, reports surfaced that LVMH was exploring a 1 billion dollar sale of Mark Jacobs holding talks with US brand aggregators like authentic brands and whp global. But as of last week, the deal fell apart. Two sticking points, LVMH wouldn't budge on price and buyers wanted access to operational data that LVMH refused to share. And this reveals a deep retention between luxury brand Steership and transactional licensing. The breakdown also resurfaced an old question that is bandied about. What is the role of Mark Jacobs inside LVMH? He's both an asset and author, reportedly retaining equity and full creative control. He wants to stay on the runway, not become a licensing engine, but in the era demanding scalability profitability and portfolio clarity, Mark Jacobs sits in strategic limbo. He's too symbolic to spin off and too unruly to scale. On November 20th, Warner Music Group reported a surprise bright spot in its Q4 earnings and it wasn't streaming. It was merch. While streaming brought in 931 million, it grew just 7.5%, that steady and expected but also really boring for Wall Street. The real jump came from WMG's artist services and expanded rights division, which hit 327 million in revenue, up 64% year-over-year. That amazing growth was driven almost entirely by the Oasis Live 25 tour. Oasis Reunion, the first and over a decade, sparked a surge in fan demand for physical goods like vinyl t-shirts, posters, and collector drops. W&D's service arm WNX held the merch and fan experience rights, turning well-managed nostalgia into revenue windfall. For context, a 64% spike in a mature business line like artist services is insane. The segment usually operates quietly in the background, but this quarter grew to one-third of WMG's entire streaming business. Also in that earnings call Warner Music Group issued a major policy statement and outlined its aggressive three-pronged strategy regarding generative AI in music. Legislate, litigate, license. This move directly addresses the cultural crisis of authenticity caused by AI-generated music. WMG is betting that in a sea of generic AI content, real artistry, identity, and vision will define stronger artistic brands. The cultural strategy is to secure the power of the authentic artist brand, which is seen as more valuable to customers than synthetic music. In November, Chinese sports conglomerate Anta, a major player in sportswear, launched its co-created collection, Anta Zero by Chris Van Ash, with the Belgian high-fashion designer. The global debut was held at the highly influential avant-garde cob store Dover Street Market Paris. This move is a pure cultural arbitrage using a high-fashion designer and prestigious European retail platform to immediately elevate Anta's brand status in Western markets. The debut at Dover Street Market, a key cultural gatekeeper for hype and avant-garde style, is a powerful signal that Anta is no longer just a mass market athletic brand. It's a calculated move to gain high-fashion credibility in cultural legitimacy among tastemakers. Pinterest recently announced it had reached 600 million active among the users and is heavily promoting new AI-powered shopping features. Pinterest is capitalizing on its cultural position as the visual discovery platform, where users actively seek inspiration for their next aesthetic project, whether that be in home, fashion, or lifestyle. It's moving beyond mood boards to become more of a dedicated shopping destination that influences purchase decisions based on visual culture and vibe. The massive user growth, 600 million monthly active users, and the focus on commerce make Pinterest highly attractive for retailers and advertisers is an AI-powered product recommendations and shoppable pens are converting at higher than average rates. It also came out that last month, October, was one of the worst months for Hollywood in decades. The domestic box office totaled just 425 million, which is the lowest October in nearly 30 years excluding the pandemic shut down in 2020. Analysts are calling it a historic collapse, signaling a growing disconnect between what studios are releasing and what audiences actually want. For instance, Dwayne Johnson's prestige-private, the smashing machine opened to less than 20 million, making it the lowest debut of his career. He's long to lay drawn aries was the month's top performer, but even only managed 63 million dollars domestically, well below expectations for a tentpole release. Then came Christie. A biopic star in Sydney, Sweeney, as Boxer Christie, Martin, which opened in early November to just 1.3 million across 2,000 theaters. At its second weekend, it dropped a 91.7 percent, the worst second-week collapse in US box office history for a wide release. And then finally, the United States Post Office is celebrating its 250th anniversary this year. The United States Post Office is actually older than the country and it's celebrating its 250th birthday. Originally, the post office was called the Post Office Department and it was established on July 26, 1775 by the second continental congress and Benjamin Franklin was appointed the first postmaster general. When the US Constitution was being drafted in 1787, a provision was included that empowered Congress to open post offices and postal roads. Five years later, the US Post Office Department was established. So why are we talking about this? Because Ralph Lauren just created a capsule collection that pays homage to that entire history through male carrier uniforms. They're looking good, like nothing like Ralph three to men. I want that bag. I actually think it looks pretty good. It's one of those things where it's like it looks fantastic in like an ad or a photo shoot or whatever, but like I don't know where I would wear it. Oh, but look at that, like that look at that silhouette, you would look great because you're so swell. It's made for you. I appreciate the good silhouette, but can you make like, yeah, anyway, so like going postal because of different meaning in this context. He says it's it. So we're in the other way with cultural meaning, but no, it's like it's really nice. It really looks high-end, you know, you know, Ralph Lauren does one of those really things. We're going to talk more about them, but they do such a good job at finding those small historical codes and cues and building them into the product really well. I think the male carrier uniform is just a really good example of that. How you can take something that is just kind of like a blue collar uniform and just really elevate it. So it really sits both in that space of authenticity, but also brings in that level of craft that elevates it to a to a higher status product. Hey, I love it. I mean, give it to Ralph and I love that he became almost like an official dress. I mean, dress is a long word, but like, you know, indeed, they're Olympics. He's like, creating like not just the cues for the opening, but also the swim suits, the uniforms, the tracks, the suits and so on. So I think that's like, it's a very well-deserved position. And with that state, in both the culture, global culture, not just the American fashion culture, it was aesthetically, it's something that's been established as he took something that was not very defined or has been defined in, you know, like, like how UK has read brick colleges, you ask his Ivy League and he took like that aesthetic and like elevated it and created the prep and then New England, but then also wild the best. But then, ever since the prep has been so wildly interpreted around the world that it's almost, you know, how like you create a DNA and it kind of keeps evolving. So I think that like Ralph has managed to do that all the while, staying incredibly consistent and its brand world is incredibly coherent. It's WWDC or Summit last week, CEO Patrice Lovett said it plainly, "We are not in the fashion business. We are not in the apparel business, we are in the dreams business." It is centered in Lovett's words on clarity, consistency and staying true to who we are as a company. With a 20 billion market cap, Ralph Lauren is one of the most highly valued fashion companies today. While others pivot in rebrand, Ralph has stayed remarkably consistent, expanding its world through resale, hospitality and cultural product lines, all without losing a center of gravity. Ralph Lauren doesn't want to try to be something else. They don't drop on a trend. They don't try to be hot thing of the moment. They don't want to be a cold thing of the moment. They constantly deliver the same thing every season and that's what builds trust with customers that consistancy in the value that customers are going to know they're going to be delivered with. And it's been going on for really long time, Lee. And what is the center of gravity for Ralph Lauren is its merchandising. People think it is aesthetic and image, but it's impeccable defined merchandising. You can walk in in Madison Avenue flagship and you enter Ralph Lauren's house and you have cultural products there, which is aesthetic, which is the brand codes, which is the furniture, the creation, those images on the walls, but it's how it's merchandised. On the way you go in, you have purple label, you have polo, you have double R, L, you have all these different labels beautifully arranged. And that creates many doors in the brand because that's the genius of Ralph. It doesn't have one door in it has, that's what the survival strategy is. It serves many different audiences, all without knowing each other. And the biggest secret in the world is Ralph Mies, it's money in outlets, it doesn't matter, 10% of its revenue goes on advertising. That's all those brand campaigns, the point is to create that halo, to create this taste-making brand that can withstand both trends. How much comes from outlets? I didn't know that figure. It's a good question, but they don't release that on earnings calls. And if you listened to Patrice Lovese earning call, he's not going to say that. He talks about world-building, image-making and taste-making and international expression and revenue, he doesn't talk about outlets until like last 10 minutes of the call, so they don't give the breakdowns. Yeah, there's an old article from 2011 that said about 34% of the company's value at the time was derived from factory stores. But I would imagine that that's gone down since I feel like they started taking that seriously and saying they wanted to move away from the outlet stores because it was tarnishing the brand. It's not tarnishing the brand, that's the genius, because they spend as much as 10% of the revenue on their marketing. So there is a cafe, there is Ralph Restaurant and Restaurant, impossible to get into, there is that flagship, all stores look unbelievably visually merchandise, they're like, where do you think who is paying for those campaigns, that 10%, so that's there. And then, there are like who is buying those paulas, not a lot of people, purple label, not a lot of people, they have loyalists. But then, the people who are sitting in those cafes in Aventura Mall, who are sitting in front of Madison Avenue, it's 72nd Street and Madison. It's not a beautiful corner, it's like very busy street, it's always packed. So these are those aspirational customers who are going to go to outlet and they want that little polo player on death, they're going to pay 3, 4, 10, 3, 4, 20, I don't know whatever it is, they're going to buy the outlaw and swords for 34, 40% off, that's where the money comes from. That aspiration, he's feeble, the aspiration. He's been training in P&D for like 30 years, he's like looking at his bottom line, he's like, yeah, I'm happily going to spend all that money on the advertised, because I know where my margins are coming from, I know where my sales are coming from and I'm fine yet. Clearly Ralph Lauren is a tastemaker, there is no trend that he follows, so break down what why Ralph Lauren is a really good tastemaker in a way that kind of reveals some of the mechanics of what it means to operate as a tastemaker. So two things, yes, I will in a second, second he is a tastemaker, but he's also a trend maker and that is because the prep trend, where do you think that ALD came from, where does the modern prep come from? Oh, totally, no, it came from, it came from it, it came from them, but the center of gravity is one. Yeah, it's called, you know, and so, you know, like that was keeps Ralph in the business, all those trendy new labels that are riffing off, rowing blazers, you know, like all the drinks, Nicarbocker, walk down Canal Street between West Broadway, whatever, Mercer, those brands are keeping a lot of business, but go back to your question, which is like, he is a tastemaker in a sense that the guy set out and he is like, it's my taste, he's gonna create this bread, it's my taste that he's gonna create his company and he starts it with ties and it didn't go so well. So what the taste is is kind of saying, I don't belong to this wasp world, I don't belong to this id league schools, but I know that world and I can invent that world and I know who lives in that world and I know what they do. And ultimately he belong more than anyone else, if you will, and the way he defined that how he created the taste filter, which means, oh, you're talking about home there, you're talking about kids there, you're talking about, oh, you go on a boat, you're gonna yacht, you go country club, of course, what do you wear there? Like there is a very specific, not just style, but also like, where does this style live? What do they do? What is the room? What is the house? What is the neighborhood where they live? But then the only bread, the only American bread that managed to straddle both coasts, so you have East Coast and then you have the Wild West, Ralph Lauren Ranch, completely different aesthetic under one brand and no one is saying or Ralph is this and it's not that, no Ralph is both without any contradiction to different audience as someone who buys double Ralph and in those cowboy boots and denim is also gonna buy a purple label in a completely different occasion is completely different or not or this can be two different audiences, that's what taste makers do and what they do, they're like, consistently confidence in that taste and saying, as he said, I don't want to be too hot, like which means, I don't care what is currently trending, I'm gonna give this culture, I'm gonna contribute to this culture with this particular image, particular set of merchandising, particular set of product, particular set of aesthetics and this culture can refer to it, can add to it, but I'm not gonna change, mine windows are gonna look the same, they looked 30 years ago, sometimes they're gonna look incredibly dated, but long term, broken clock, yeah, I get that, I think, you know, for me, why Ralph Lauren is always the go to in terms of a taste maker in terms of somebody who's able to successfully deliver the same thing year over year and still grow, you know, they've had down years and stuff, but, you know, they've been successful over time is he mythologized something that was collectively understood or collectively experienced, so the idea of Americana, and that's why you can do the New England prep, but you can also do like the Montana ranch and so on, it's because that was sort of a shared but underdeveloped narrative in culture, and he leaned into that and said, actually, this is all part of the American experience, and I want Ralph Lauren to be the American brand, and so how do you unite all of those things with each other? And so the, that basic premise is what allows all of those things to come together. One of the things I had read about him is like when he would do ad campaigns, and you know, we just shoot the models wearing the clothes in a field and stuff, I think a lot of fashion brands would just go and shoot whatever looks interesting or whatever shows off the product. He would meticulously write the backstory for the models. He didn't like why they were standing there with that other person, why they were in that location, what they were talking about, what they were doing, you know, as actors and actresses after the shoot. So there was, I mean, he was really like building a movie that was shot in a single image. And I think when one is building a world, when one is trying to put a point of view of taste out into the world, you're, you have to tell a story and that story has to come through and all the little decisions. Now, people who see this aren't going to pick up and be able to pull out all those mechanics, but they're going to be able to feel that story and feel the depth and the texture in that narrative. And I think that was something that he was absolutely profoundly good at. But it was always about getting people to fall in love with a way of life and aesthetic. And to me, that's always a big difference between a taste maker and a trend maker. A taste maker is getting you to fall in love with a point of view into the world. And then the merchandise is a way to access that point of view, whether you're Prada or Ralph Lauren, it doesn't matter. The trend maker is always going to be someone who is trying to chase cultural capital, trying to trace cache, trying to chase what is going to, what's the hot thing that people are happening? What's happening right now? And how do we hook our brand onto that to always kind of stay at the forefront of a changing conversation, regardless if it's going to be a short conversation or a long conversation? Which you don't really see Ralph Lauren doing. Yes. I like that. And I like where we landed because one is like speaking the language and the other is understanding the lexicon. And there are two different, like difference between lexicon with lexicon, you inherit the knowledge. You inherit the rituals, you inherit everything that came before when you speak the language. All the meanings, all the semantics, all the assumed view of the world. When you speak the language, you speak the words. So that's those are trends. When you just, that's the surface level, there's an image level. And then when you hear, you can have an image level, but then you hear the meaning level under it, that semiotic. So one is the image without the meaning, but three of, and then there is the image with interpretation. So that's the two, like, language, lexicon. So that's for me the best. And so Ralph is so powerful because it has lexicon. And that lexicon is, and that comes from someone who actually reverse engine, like did the same thing that Banana Republic was always like selection of models. When you look at Ralph Lauren campaigns, those models are the same under quotation marks over the course, of course, they're not the same people, they belong to the same family. The way that they're put together as a group, again, the same. You can look like what he shot at Spellman College. It's belongs to that lexicon, they speak the same language. Those clothes, the styling, is again the same, but it doesn't feel the same. It feels 2025 still. So that is sort of the, like, how the languages are not that languages, how they seed in with new references, with slang, with kind of a wall with the people who talk. That's how I see that. How the lexicon gets fed in as the world evolves, that's how that sort of evolved. And that's again, why did we start with the flagship on, on, on Madison Avenue is setting the stage. It's something incredibly cinematic. And that is, again, three, three dimension, you'd, even if you were on a printed page, you critic cinematic experience, you enter that. You inhabit that world. And even if you don't belong to that world, that's why you use the word belonging a lot. Because that's that lifestyle that for the moment you are there, that's why you have a coffee. Because even that cup of coffee makes you feel like you have that lifestyle. And that's still aspirational. That's mind-blowing, that when you say a Ralph's way and you just show a photo of him and his wife in the Hamptons, you know exactly what it means. Yes. The power of that semantics. Yeah, I mean, naturalist is year over year over year over year. Yeah. And like, I don't know if you, you'll agree with what I'm about to say. But I often say that, you know, brands even fall into one of two high category buckets. They're either vision letter values led. Whether you have a point of view on where the world is going or what the world is and you just, you just communicate and apologize, romanticize, educate on that over and over again. Or you are a values led company where you don't really have a point of view on where the world is going. And you just have a part, part point of view on like what's important? What values you care about and you want to amplify in the world wherever and however they pop up. So to me, a trendsetter or excuse me, a tastemaker would be someone who falls into the vision bucket. When you have a very clear point of view of how the world is should be where it should go and so on, that's you are building the taste of that world. Like so for instance, like to stay with the Ralph Lauren thing, the idea of American aristocracy, the idea of a romanticized west, we're not real things prior to Ralph Lauren. Like his media dollars, his storytelling, his cinematic sensibility with those things elevated them from just facts into philosophy. And so that is about talking about a vision of how we should live, a vision of how the world can be ordered. And of course, buying the product going to the locations is a way of ordering your life aligned with that vision. Whereas somebody who is running a business that's about trend setting, trend making is more values led where you're trying to associate yourself with values that you want associated with your brand, whether that's through collaborations, whether that's through a new product innovation, whether through that's a specific marketing campaign or so on. And so that gives you more variability to engage in lots of different ways or lots of different conversations with different groups of people, but you're not doing it as an investment in a core vision of the way the world should be. Would you agree with that? I like that a lot and I think it's very handy when you talk to clients and. But it's utter bullshit. What I do want to say is that those two things also, and I think we talked before this episode about that, is it halo, is it hype, can trend makers also be it taste makers and so on? And I think it does come through, and let's talk about this for a second, which is basically imagine you have a cultural narrative, imagine you have what is. you have to define what is my brand's rolling culture, how do I contribute to culture, what is the territory I want to play in, what are subcultures I'm connecting, you have to connect on both. You need to connect on a values level and you need to connect on a visual level. So it's your challenge to define both. You know what I mean, and yes, a lot of brands are going to have one or the other, but you will need, you're going to be asked to say, what are your values, what do you stand for? And then you're all asked, where do you see this going, where do you see this culture going, where do you see how you're going to enter dialogue with this subculture? Yeah, so no, I totally agree with that. I think, though, it's. I think Ralph Lauren specifically has to play to trends sometimes to maintain relevance, but to me, Ralph Lauren is first and foremost a taste maker. There's a very articulated vision that they whitenuckle their hands around and will not let go of rightfully so. Of course, that's a very clear set of values. So look, if you go back to your saying, it's a theater, it's a romance and it's a like siphon. It's a theater. It sets a state for you to enter that world, that lifestyle, to experience that state. That's all the entire Ralph is a stage that you're invited and that things play out. And it's even a stage, he's a composer, a stage. Okay. There is a romance, as you said. I mean, those people didn't wash for months, you know, of course, you kind of like romanticize cowboy life or romanticize his cost, his aristocracy, you all know how great gets be ended up. You know what I mean? That needs to be the romantic seduction, that you want to have that cup of coffee and that makes you think, oh, I belong there. And then there is the lexicon, the super codified direction creative, direction photography, model selection, so on, you know. So that these are the three pillars of that taste making, but at the same time, there needs to be a, what is that value? It's truly American, American but global company. You started with saying American. It's an Americanness of Ralph water that allows it to design USPS, United States Postal Service. Why didn't they invite someone else? Because no one captures American spirit, black wealth. Yeah. No, I totally agree with that. I mean, he is the quintessential American fashion brand intentionally so, and that has always been the ambition. So okay. So let's do this. Let's go into a trend maker with the social American brand, which is true. California. Yeah. So okay. So there was another. Yes. And so that is making brand cold. Trader Joe's. So I thought this would be a good one of contrast with Ralph Lauren. So this past week, Trader Joe's released a new micro canvas tote, a four and a half by three and a half inch, almost entirely non-functional mini version of its classic tote. In fact, I saw one on the subway on the way over here. You put a danger shot in it. I know. Yeah. Price at $2.99 and designed for pure cultural signaling. It triggered immediate sellouts and viral friends who are across TikTok and Instagram. It's a perfect snapshot of Trader Joe's trend making engine, rotating scarcity, collectible private label drops and an in store experience so culturally charged. It can turn a tiny, useless tote into a national phenomenon. In fact, and you were the one who told me this, Trader Joe bags are huge and London where Trader Joe's isn't even present. So it's actually an international phenomenon. So this is why Trader Joe's significantly outperforms all its competitors in the most important metric in its category, sales per square foot. The retailer generates $2,100 in sales per square foot. That's more than double hole foods and four times more than the industry average for larger conventional supermarkets like Kroger. So I thought this was a really great one to talk about because when done right and having sort of your operation set up to support this properly, trend setting can be amazing because it's this incredible way of creating anticipation of people always wanted to check out to see what they missed. It's that element of surprise and delight that becomes kind of core to the model. And the fact that Trader Joe's was able to do this in the grocery space is amazing because if you know anything about the grocery space, it is a market defined by commoditization. It is a market defined by being trapped in sort of regional footprints or local footprints because that's who shops with you, no one beyond your store footprint or your business footprint geographically is going to care because they don't visit the store. And there's nothing but downward pressures. They all compete on price. And so there's this constant pressure to just say we have more sales or we have lower prices than the grocery store down the street or whatever. And Trader Joe's deployed this trend maker strategy to generate value. And it's not that they are selling at a higher price. They're actually selling at a lower price than a lot of places and a lot of people go to Trader Joe's for that. But because Trader Joe's has focused so much on the store experience as its place, as its stage, as its theater of unveiling those new products, telling the stories around those new products, they don't sell stuff online. They've sort of totally bucked that trend when everyone else is racing to the internet to sell stuff D to C. They haven't. So overall, their cost structure because they're also doing private label because they have limited products in the space, all keep their cost structure really low, which then they can pass along those savings to the customer and be very competitive at a price point because that's sort of the category expectation. But they're able to be way more profitable because of this trend set or strategy that they put on top of that category model. And so I think it's an amazing, an amazing example of this whole tastemaker versus trendmaker dichotomy. I completely agree. I loved when you put that example in. I will tell you just to think about the following. May this be a case of trade those trying to buckle the category trends by elevating itself at the level not of everyone prices, but of everyone status. Because everyone was the first, California luxury grocer that introduced collaborations and merch as part of its offering. It's a sea. So what they do has as you said, physical occasions, the arrangement when you go and discovery and surprise and drops and now the surprising hit of their hands which they were very savvy to recognize those thoughts have been around for a really long time. But all of a sudden they recognize, oh, there is something going on. People in London are wearing that is becoming a status symbol. It's aspirational. It's become like a fashion item. How can we capital? Let's make a mean note. I'm sure they're going to reflux, there are going to be collaborations around that. And if fashion brands are smart, they would jump on that trend like now and see what other things they can create around that. It can be a burberry check and trade that goes bad and so on. So I just wonder if it's like are we all going towards premiumization at the same time, which would be amazing strategy, premiumization of your merch, all the while keeping your basic products at the competitive prices. Because it is, they don't do is known for the fresh produce, they started in California with one store or something and they were known for those, like some physical hippies who were going there to buy like healthy food. It was a health food store at the beginning before it extended nationally. So it did have that set of values that were super health food, were the nestles, supermarkets were more processed, was before hopefuls. So I do think there's like an overall trend in the economy towards premiumization. I mean, when the top 10% of an economy, it was responsible for almost 50% of all economic activity, you know, which is, which is a true reality. I know. Yeah. No, no. Not good. Yeah, well, a, not healthy long term, but it, you know, companies have to make decisions in the short term. There will be a drift towards premiumization of stuff. I don't necessarily see trader joes going towards the space of collaborations because I think their look that really pulls people in, just from a product perspective, is the sort of interesting flavors, the interesting combinations, the sort of product drops that you can get for a short time. I mean, they do a lot of limited edition, a lot of seasonal stuff that creates a lot of fanfare along stuff. Now, I do think your point, though, and I think this is where trend makers, the trend maker strategy comes in a lot more is, I do think that from like an economic terms, I think a lot of the traditional signifiers of material wealth are out of economic reach for a lot of people. Therefore, cultural assets become the new signifiers of status. And so what you have is people reaching for cultural objects that represent cultural knowledge or access to something that was really hard to get because it was a limited run, whether it was like, you know, the Dodgers apparel for the World Series win that we talked about yesterday or these like limited run, Trader Joe, toads that literally in where I live in Brooklyn, there was a line around the corner to get into Trader Joe's just for these toads. And I think they were gone in 45 minutes. That's how like many people bought them and stuff. I think these become a signal of cultural awareness, cultural access, even if they are at a lower price point, the desire for them, the symbolic and cultural meaning of them has been premiumized. And so from that sense, I agree with you. If that's kind of how you were talking about you premiumize the cultural and symbolic value of the product, even if the price point stays very low and accessible. But what I was, yes, and so there are two things, one, what I was saying, Trader Joe's didn't, it's not a new thing. They've been around for decades. And they had a very strong meaning and very strong set of values when they emerged, which was like health food, healthy store in San Francisco. And then they spread around and so on. But before being known as a cheaper version of whole foods, they weren't the only ones. So that's that without that sort of halo, there wouldn't be any height. That number one. You see, if Trader Joe, if like Vaigmans decided to do that, or I don't know, like any newer company, I don't think that it would succeed. That's number one. Without that halo of many decades. And can I just build on that because your history of them is right, just to be clear, they started tailored to a well-educated, well-traveled customer who wanted stuff that was more international rather than just the same stuff that you got all the time. That's why they have these like nautical port themes in the store, people wear the whole Y insurance. It's always this sense of like. I mean, they're low San Francisco, yes. Yeah, yeah. Like, you get the sense that like, you're exploring, you're finding all of these things that came in from Lans far away and they're at the Trader, literally the Trader's port, the Trader Joe's where you can collect and find all of the stuff. They're like a merchant hubrod in and so on, yes. So that to your point, more than like the health food aspect though, I'm sure the health food was like a component of it. That discovery of the new and the exotic and the unseen and the flavors from abroad and stuff like that, that's the stuff that makes so much sense from a historical authenticity point to do these types of limited edition trend-making strategies. Correct. They say that Trader Joe already had a brand, already had a set of values, only the head that before even if I'm mistaken that it was not healthy, it was the Trader, the discovery of new flavors. So that was that set of values and of course, if they now do drops, everyone knows about Trader Joe's great. Second thing is, I suspect, they fell into this merchandising zeitgeist and vortex of drops, so you see cool people varying Trader Joe's and you want Trader Joe's. So you see that's that interplay when you have hype that's happening and then I would recommend them to do collaborations because very soon something else is going to drop and people are going to stop that Trader Joe's. The same way what you're seeing is like when New Yorker told, was it was a flex or then you had the group stuff that was a flex, you know. So that was already Krenox was, you know, that's kind of what you don't want to fall into. Well, I think that's the interesting part though, because like the New Yorker told the group thing, for example, yes, those had a little cultural cachet, but then people started finding out about it and everyone started carrying it. And so that scarcity that was needed, so that scarcity was necessary to drive that cultural cachet. Once that scarcity was gone because everyone knew about it, people moved on to the next thing that showed you had sort of insider cultural knowledge and therefore had cultural status. So I have totally agree with you that that will happen to Trader Joe's, but here's my question for you to kind of like unpack for everyone. So do you think then that the trend maker strategy puts the company into a, what is called the red queen probably just have to keep running faster and faster to stay in the same place and is therefore unsustainable over a long period of time and is really more of like a sub strategy to a larger economic business strategy or can the trend set or thing be a dominant strategy to build a company off of. When you like strike while the iron is hot, so they hit gold, add fuel to the fire right now. In a vitamin that's going to taper off if they don't keep adding new drops, new things. But they need to decide as a company, are we in the merge business? Are we in the grocery business, are we in the merge business, are we in a tape making business, are we in the trading business, whatever business we are in. So that's number one decision. Right now they don't need to worry about it. Right now they need to make this tote in as many, this would be a mega tote that should be like a micro, you know what I mean, they need to add fuel to the fire right now. When they see it's tapering off, those totes have been around. They're going to people who are going to be wearing those totes and bringing like the crunchy Brooklyn parts, love parents are going to keep like showing up with those because they don't want to recite like you know, they don't want plastic or like they didn't, they never use plastic paper. But that's a longer term strategy question is, do we want to add merch as up to the line of our product? Because do they want to add the theater of a store to the line? Do we want to, you know, like, do we want to keep adding better margin as many as a bit as well? Like the money come from business question at the end of the day. Look, I think it goes back to that question of like, what's the most important metric? It's sales per square foot. And so the more that they can put in a shopper's basket as that person is checking out. So average check out value effectively. That increases the price or sales per square foot. So the these small little things, whether it's like they've literally sell like a can of corn scented candle around things, like little things that that like that where people like, oh, that's really cute. That's really fun. Plot put it in the basket and stuff. That's where you get these, these really small, frankly, very small square footage, but enormous sell through on that, like, it's crazy in New York. Like if you go in any hour of the day for the most part, there are so many people there. And like, there's like lines that like stretch around within the store and stuff because people are willing to stand in that line in a way that they wouldn't stand in that line at a publics, at a H E B, at a, at a Kroger or whatever, but they'll do it at Trader Joe's because this is the only place where you can get the majority of that stuff. So I think what is up happening is through this, again, let's just call it drop strategy of limited edition runs, you get increased basket size, people are adding more stuff that they didn't intend to, but did because they thought the products were great. And you have people who start their shopping at Trader Joe's as the baseline to go get everything. And then maybe they go to some other places for some other specialty type of stuff because there are only things that you can get at Trader Joe's. You can't replicate that stuff at a Kroger, for example. And so all of that drive the metric, so it drives exclusivity, it drives bigger basket size, it drives preference of where you go and get the bulk of your stuff. And all of that, I imagine is what's driving the very strong financial performance of Trader Joe's Relative, you know, of its size relative to like big players like a Kroger or whatever. Totally. And then frequency of visits. You want to have me so repeat customers, which means constant novelty drops, and so on, also great service, also freshness and so on. But like bottom line is make a giant tote, right? But I think this is the really interesting point about these two strategies is in why this is such a good one of contrast with Ralph Laurence. So like some of the points that we're making is that being a taste maker and a trend maker are not incompatible. In fact, they have to often happen at the same time. But they do, but which one drives your business? That question is really dependent upon what are the metrics you're trying to drive. So for instance, like the way that you just talked about Trader Joe's with increasing frequency, I talked about increasing basket size. I talked about increasing preference, you know, where people will stand in long lines because they can't get things anywhere else because it's the exclusivity thing. Those are things that grocery stores depend upon. I need people to choose me. I need people to come more often. I need people to put more stuff in their baskets every single time that they come because it is a low margin business. You're selling oftentimes to cans of corn and milk and things like that, right? So those are the metrics that drive that business. And so the trend maker strategy works really well with that. Whereas Ralph Lauren is trying to probably play more of a long game. He's telling higher-ticket items. He's trying to create a brand halo so that he can sell stuff more, I should stop saying he, because it's a coal company. So the company can sell more at factory stores at a higher margin. So higher volume at a higher margin. So it's more of a margin play than necessarily maybe like a volume play. Do you think there's anything? Do you think there's a truth in that as to help, in and I'm not saying like it's as simple as saying companies that a volume play should do a trend maker strategy and people who are doing a margin play should do a taste maker strategy. I don't think it's that simple. But I do think that understanding those metrics of your business and which ones will be charged by which strategy is it is a really critical reason to decide like which strategy you're going to employ as a company. Because I'm sure that's a lot of the questions that people are asking themselves is listening to this. Which strategy is rose relevant to our business? Let's answer it by going to the third example because I think it's really well positioned. So white lot of season forecast is about to be announced, which makes this a perfect moment to talk about sprawling world of white lot of licensing. Following season 3, the show spun off no fewer than 19 brand collaborations across fashion accessories, beauty, furniture, home cents, CPG, spirits, ivory and more. And that doesn't even include the global partnership with four season featuring teamed on-site activations at the resorts around the world. It's a master class in destructuring the business around IP, turning a single show into a platform for content, common experiences, exhibitions, even private clubs. And it reflects a deeper shift. Talent is no longer confined to categories. Jonathan Anderson makes costumes as much as fashion designs and is represented by CAA. Prada has been hiring film directors for her campaigns since forever. People savvy in detail are now welcoming hospitality and entertainment restaurants and so on. In the flat business world, everything is everyone's business. So if you're wondering how does it make sense, it's because, for me, the white lot of licensing model is neither Trader Joe's nor Ralph Lawrence. And margin business versus volume business. So going back for a minute and we'll go, we'll touch on white lot is going back for a minute to what you say, said about Trader Joe margins is, again, Trader Joe is like Ralph at decade long business, Trader Joe has the halo of Trader Joe's name and the brand. People have been going there for decades before that's taught as a status symbol dropped, as a trend dropped. So I wouldn't say it's just a margin business or just a volume business. Both of them is because back to Ralph, again, outlet, what do you think outlet is? A volume business, yes, but, but you do, but he's doing it at an outlet. I don't know what the margins are, but I would imagine he's, he's selling really low margins at the outlet. Oh God, yes. What do you think? I mean, the margins are amazing at the purple label, even it's polo. Those polo sweaters are like five, six hundred bucks and you know what I mean? It's kind of. I guess I'm talking about relative margin, so like if you're the difference between selling a little pink polo for $40 at the market versus $25 at the market, you can, you can sell it and it will still seem affordable at $40 because it has the pony on it and it's associated with Ralph Loran. So that's, he's getting more of a margin play at the factory. Okay. I could be wrong. That's what I'm referring to. Right, but the difference is if you go to Ralph Loran store and bike polo, it's 120 or stuff. Go to outlet and it's like 24 and you, the margin is like nothing there at the outlet, but you know, well, it's all relative. Like, yes, if I, if I go to the one on Madison Avenue and I buy a polo, yes, I'm paying $150 for it. If I go to the factory store, I'm paying less for it and it probably blocks it off by color, strategy and so on. Yeah, I was just saying the idea is that it would just lift margin anywhere. He sells it, even if he's selling stuff at volume at a factory, whereas, whereas Trader Joe's doesn't sell things at a higher margin relative to other grocery stores. It's very major. It's being perishable commodities and so on, exactly, exactly, all clear. It's like the cat to go to limitation. All right. So let's quickly go back to white Lotus, which has a completely different strategy, which is pure trend. So white Lotus does not benefit from decades of hail. It's something that captures our attention for a second, extended second, and then disappears. So their challenge is business challenge is how to against, like, while the irony is hot, how to as fuel to the fire for that one moment, because go to CB2 and those right Lotus arm, chair, throne, sale, speak about non-negative margin. Is that a viable business strategy in your opinion? Oh, so your question is, was that a good collaboration? No. Is that a savvy business move? In that sense, is like trend making a savvy business move, really, doesn't have a taste behind it? Because of so many 19 collaborations, like, is it like lack of CMO's imagination? Or what is it play? And then you say, oh, that it was one collaboration, you can say, oh, they made a mistake, but 19, every brand jumped on wanted to work with white Lotus. I don't know that I would throw the baby out with the bath water about trend makers, because in this specific example, A, it seems like way too many collaborations, so, like, oversaturation of what people are interested in, also sounded like a time delay for the CB2 collaboration where it was like, oh, all of them very least afterwards. None of them was released during, true to be told, so none of them thought that scene. Yeah. You know, like with the milk creamer, there was a candle, a way luggage was there, which was the only one that actually made sense. There was, and then H&M actually made sense, because you had costume designer from white lot to actually designing a collection, but there were like 16 others. This is really interesting one to talk about, because it's your exact point. White Lotus appeared in had a cultural moment for a period of time while people were watching it, and it's this really narrow window to capitalize on that. But once the show's over, you know, people are ready to move on to the next piece of content, so I don't know that people want to buy furniture for their home based off of a 10 episode TV show. That, that the second, you know, the 10th one is aired, it's already outdated. I mean, like Netflix has this problem of like, you know, like with Stranger Things, for example, how do you, you have this huge fandom, but how do you keep people engaged far after they've watched the show and stuff? And so, you know, I would imagine it's really hard to do something that isn't a femoral around a content brand, like Stranger Things or white Lotus. I do think you can do it if you partner with the show early in development. For example, white Lotus, now the cast is going to be announced, they're not working with four seasons anymore. So now the show is in development, you can say, oh, as a brand, let's partner now. Let's start releasing tidbits or smaller things that give some cues as to plot, as to location, as to character arcs or something, like, you know, teenagers, then during your release, your main thing, during the show, and then after you have some sort to follow up. So then you, you have that in parallel, I don't understand this fast release. And then again, aesthetically it makes sense, oh, you're really into white Lotus aesthetic, but the problem is, the white Lotus did not have such a recognizable aesthetic, yes, you may be into Thailand and so on, and not to harp on CB2. I mean, someone probably bought that or like, you know, white Lotus is an ongoing series and maybe someone really liked that, but it was nothing, why then don't call it white like, well, he has nothing recognizably white Lotus about that collaboration for me. It's like the latest stage of capitalism, it's a money printing machine. Yeah. So I 100% agree with all that. I mean, doing stuff in the lead up to a new season release that is tied in with the new season, doing stuff while the season is being rolled out makes tons of sense, maybe doing like a very quick hit, a femoral follow after that makes sense. But if you're doing something six months or longer after after the show, it doesn't make any sense because like that wave has come and gone. So, you know, it kind of reminds me of like the madman era when it came out like everybody was all about mid century modernism. And that happened to tie in with a fashion cycle where it was bigger than the show. The show may have allowed it to crest or had given it some momentum and broader visibility, but that aesthetic extended far beyond the show. I remember there were fashion brands. I remember like five, seven years, even after that, we're still in mid century modernism in terms of their aesthetic. And I think your point about the white Lotus is a really good example of this. There was no aesthetic to the show. And it's interesting to think about it that way in that if you want to design a show either in its second or third season, because you would wait to see if it was like a narrated hit. If you want to design a show that has stain power beyond the show, I would agree that it probably has to have a really strong aesthetic point of view because that is the thing that can stay on. So, it ends up becoming like a CB2 release in the aesthetic not necessarily tied to white Lotus because by the time the furniture comes out, the white Lotus show has already, you know, many. Yeah, it's gone. People wash it. It's not that, but the aesthetic is what lives on. So it's interesting to think about how do you design a show that while it will have a limited run of attention, it can have elements to it that extend far beyond it and aesthetic being one of them. That's, that's a, to me, a really interesting thought about extending the white Lotus collection regardless of the season, which is, I think this is a great way to kind of like wrap all of this episode up in a true line, which is, can you turn a trend maker into a taste maker? And I believe yes. Well, here's my question, can a trend maker just be a trend maker? Absolutely, but that's insanely costly. Like number one, and you end up repeating the same things. Like look at Mischief, love them to death, but they're like, they're like slicing up to piece to start work is repeated one too many times. Got it. So you're saying is like the trend maker, and I'm just sort of trying to land this as a, as a bottom line for everyone on the podcast, you're saying that a trend maker is more of a tactical strat, a necessary tactical strat, either as an on ramp into becoming a taste maker or a way of refreshing taste making so that it stays relevant. But at the end of the day, you have to become a taste maker. You have to longevity is in taste making unless you are such a genius, if I may see to figure it out how to constantly, how to have a taste making strategy. And even Mischief is not death anymore. Yeah. I mean, I think that's a really good kind of through line with all of this. It's the goal at the end of the day is being a taste maker. And whether you use trend making on the front end of that or on the back end of that, you have to do both or as a sort of like rule line of that as you like, you can always jump on any trend. But if you don't do it to filter of your taste, you are in a danger of not having a center of gravity losing the center of gravity. And you end up in the black hole. Yep. That makes sense. Oh. Right. But the next episode we thought would be really good would be something that trend makers and taste makers do a lot of, which is world building. Now, this is one of those ideas that everyone talks about, but almost nobody can explain. Brands create fan worlds, aesthetic worlds, merchandising worlds, product worlds, but what's the difference? How do you actually build one? So in the next episode, we're going to demystify all of that. We'll map the different types of worlds, the mechanics behind them, and how companies can build them with intention. Stay tuned. Thank you, Lee. Thanks, Anna.