by Ted Richards Listen to Ted Richards in conversation with Scott Galloway, Professor of Marketing at NYU Stern, serial entrepreneur and author of the book Post Corona: From Crisis to Opportunity.
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This episode I spoke with Scott Galloway, Professor of Marketing at NYU Stern, serial entrepreneur and author of the book Post Corona: From Crisis to Opportunity.
Our conversation begins on the topic of e-commerce, which broadly started in 2000. Since then it has been gaining about 1% of market share annually. The COVID-19 pandemic has acted as an accelerant (rather than a change agent) and consolidated the importance of e-commerce.
At the beginning of 2020, about 16% of retail in the US was transacted via digital channels. Eight weeks after the pandemic reached the US (March-mid-April), that number had leapt to 27%. The US registered a decade of ecommerce growth in just eight weeks.
Amazon
There are winners and losers out of this change in behaviour. One of the clear global winners is Amazon, which has been firing on so many cylinders that Scott says it was practically built for this pandemic.
AWS is exploding as people need more cloud and data storage. Amazon Video is growing as people spend more time at home and, as mentioned previously, people are now buying products online and they’re turning to Amazon.
To give this some context it took 25 years for Amazon to get to 500,000 employees, but only 12 months to go from 500,000 to 1 million. Amazon is hiring around 1400 new employees every day. They’re now dominating many industries and Scott is of the view their next move will be into healthcare.
Education
Scott is a professor at NYU Stern and also set up Section 4 in 2019, an online business education business. He is therefore well qualified to discuss the future of education and goes into detail around its lack of affordability for most people. He highlights the benefits that international students can bring for local economies. In Australia, education is our third largest export behind iron ore and coal.
Investing
2020 has brought a recession for the global economy but there’s some behaviour many were not expecting during this time, such as the historical high savings rate. Scott’s view is that this shows that a lot of the stimulus money has gone to people that didn’t need it. Robinhood is an investing trading platform in the US that a lot of younger investors have turned to invest their savings and Scott mentions that concerns that these investors are 88x greater to be using options (including leverage) when investing.
In our discussion I mention a great piece by Jason Zweig’s in the Wall Street Journal on how he found it hard to stop trading when he tried this platform. You can check it out here.
Income inequality
In a previous episode I spoke with Morgan Housel about income inequality and what happened in the US in the 70-80s when income inequality started to rise. Scott supported Morgan’s view that it has been incrementally growing for a while and this pandemic has resulted in a K shaped recovery where the wealthy in society are better off and the minimum wage earners unfortunately are worse off.
Solutions
We do speak a lot in the episode about a lot of the problems COVID has created but we also touch on some of the initiatives we should take to fight the pandemic and create a better future.
Scott thinks a year of national service or a gap year should be implemented in the US to find a connective tissue and a common bond. Due to COVID we’re living in small bubbles and not wanting to help each other. Something like this would ensure we mix as a community and develop empathy for each other.
If you enjoyed this episode check out the previous episode when Scott and I caught up 12 months ago.
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Topics discussed are general in nature and for informational purposes only. This information and the information discussed in the podcast does not qualify as personal financial advice.