In this video, we are going to talk about a term that I hate but that is very important: the taste economy. I'm going to say, what does this even mean? What are the factors that led to it existing? And what does it mean for commerce, both how we buy and how you market and sell and brand your own products? We're going to talk about the educated consumer, how consumers now have way more knowledge of everything in the world than ever, and then how you actually consume based on that. And we're going to talk about the archetypes of the premium buyer. Who overpays for luxury today? Why do they do it, and how do you understand them?
If you are in marketing and branding, make sure to stay to the end because I have some specifics and some tactics there from my experience selling premium items. But the goal of this video is to have you think about why we consume what we consume, the factors that are at play on social media and media in general and in brand building that make us buy, how luxury actually works, why our brains think the way they do, and how this changes the world around us. Let's lock in.
I'm going to start with an analogy from food, a flavor analogy. Welcome to Flavor Town. You may have noticed in recent life, everything has started to taste amazing. Raising Cane's, Sweet Green, Goop Kitchen. There's a new generation of food that's engineered so that our taste buds just love it. It's like when you first had a Dorito as a kid. You never had a chip that tasted that intense before. Now all of a sudden, this feeling came over you. You're like, why have I never had anything that tasted this good? We had those hyper-strong flavors, at least in my childhood: Mountain Dew, Doritos, the high-sugar candy before this whole natural food movement, where you would just be shocked by the efficacy of flavor of this.
But now we have all this really refined flavor all around us. Way more global flavors, all these hot sauces, everything in the world. Why do I bring this analogy up? Because in that world, where now if you want to have a piece of white bread or a single vegetable, it feels like life with the volume off because everything around it has become so amazing. This is why so many people will get an Uber Eats now or do the easy thing because it's also that much better.
And this ties into the non-literal taste economy. Let's start with what does the taste economy even mean? We used to buy what we need. I might need a new jacket once every couple of years. You buy whatever hand soap is at the grocery store. If you really wanted the candle, you get something normal. If you want a car, you got your Corolla.
But a paradigm shift happened, and it happened for a couple of reasons. The first being the democratization of supply chain. So Alibaba in China, the whole concept behind Alibaba was all these factories used to have to go to China to find. An app now gave you access. Any person in the world could look online and see what someone made and get it. And the same exact thing happened, whether it was from Import Yeti, global trade shows, ThomasNet, whatever it is. All of a sudden, anything you want to make anywhere in the world, from Turkey to the Middle East to Italy to Portugal to the US, more people can make than ever.
So more and more brands popped up. And at first they started to compete on price. You'd see all these Chinese brands pop up on Amazon with risky, cheaper versions of what was successful. So it became a whole economy around cheap. But for people that still wanted something good, all of a sudden the competition stepped up. The nice thing all of a sudden became cheaper as well. Things that used to be a luxury that people could upcharge for, they had to go hunt, or it was only made in Italy, all of a sudden were being duped all around the world at extremely similar quality. So the nice thing became not that much more. And that's factor one.
Factor two: you used to have to dig to care. If you wanted to know what an amazing fragrance was, you had to go research. You had to go hunt it down. Now, with the internet, with Instagram, with TikTok, you are presented so much more information about your options. Far more people in the age of 14 to 16 know what a gourmand is than ever before. People understand materials. They know of brands that they wouldn't have heard of any other way. It is given to us, shown to us in how we consume. On social media, we are presented with brands, luxury experiences, and high-end items in our feed right next to everything else. We would never have seen on a TV ad in the early 2000s.
So caring has become easy. And those two factors, the nice thing not being that much more expensive because of competition, and the fact that nice things we never would have known are being shown to us, have made it easy to care, have made it easy to have taste, to see apartments that look nicer than your average apartment and go, oh, I could do that, or I could buy that. And you know what? That's not that much more expensive than what I was going to do already to get the designed version, the little luxury, the espresso machine that might be $150 more than what you were going to get but actually produces real craft macchiatas.
And at that same time, people have developed affinity for brands and experiences and beautiful things and are able to express that through what they like online, what they consume, and what they buy. We've had a cottage industry of amazing brands pop up. You've heard me talk a lot about Flamingo Estate. It was a brand that was founded in the pandemic, but they have a beautiful estate the brand is based in. It feels like it's been around for a long time. They sold vegetable, organic local vegetable pickup to people in LA, and then they began to add on hand wash and hand soap and honey and treats. And now it's curated boxes from around the world, extremely high-end versions of strawberries or olive oils or whatever it is for people that have begun to go down the rabbit hole. Yes, I like organic vegetables. Yes, I love what this brand stands for and their care about it and how they go into these things around the world and create this amazing iconography. And now I can buy in. And guess what? Buying in is just a couple of dollars more than whatever I spent on my soap.
And we've democratized quality. I made a really viral video about rugs, right? Which rugs should you buy? You always buy crappy rugs. There are tons of crappy rug companies out there. All the big D to C rug companies don't make great product. Then you have companies like Nordic Knots or Benny that make really good rugs. Benny in particular makes an incredible, life-changing rug. Now, without the ability for a creator to be like, hey, here's this amazing thing, here's this amazing brand, look, they show their craft, look what the quality looks like, you may have spent a similar amount of money or decided to spend more on this new tasteful thing, and you enter the world of that brand. And the algorithms know that. You buy the Benny. They now know that you are often a luxury consumer, and they show you more content around that. If you just browse, they show you more content. So taste is brought to us.
This is an important transformation to understand for how we consume and how to sell. Fragrance is perhaps the best example. You will see boys, 14 to 18, are obsessed with fragrances. They have whole fragrance setups. And they are learning all this from TikTok. And they're learning more about the notes and the samples and making it part of their identity, who they are, how a scent gives them a bit of happiness. All this education, all this taste, for lack of a better term, gives us identity. And there's an economy around it where people are participating in buying things they didn't buy before, spending more on traditional things than what they spent prior. And the industry is so massive. There are so many dollars that have come into this in different ways, and then so many people that are paid to promote it or influence it or develop branding around it, that it is worthy of a title like the taste economy.
Now we're going to talk about what that means for the consumer, because the consumer is educated with all this content. What does this mean for you? How are things sold in this world? Then we're going to go to the archetypes of the luxury buyer who buys the really expensive stuff. And then we're going to go into the new economy to sell them.
Consumers are more educated than ever. You know this. You are on YouTube. You consume more educational content if you're watching a video like this than anyone in generations prior, simply because of its availability. If you want to go learn about how the best soap is made, or you want to learn about this drone versus that drone or camera equipment, whatever it is, you can simply go down a rabbit hole of amazing experts willing to educate you. So your average consumer now knows about incredible things. Look at the female skincare consumer. I'm going to butcher talk about what that means for the consumer, because the consumer is educated with all this content.
What does this mean for you? How are things sold in this world? Then we're going to go to the archetypes of the luxury buyer who buys the really expensive stuff. And then we're going to go into the new economy to sell them. So consumers are more educated than ever. This, you are on YouTube. You consume more educational content if you're watching a video like this than anyone in generations prior, simply because of its availability. If you want to go learn about how the best soap is made, or you want to learn about this drone versus that drone or camera equipment, whatever it is,
you can simply go down a rabbit hole of amazing experts willing to educate you. So your average consumer now knows about incredible things. Look at the female skincare consumer. I'm going to butcher this pronunciation, but niacinamide is something that people are buying now versus sunscreen. They buy the ingredient. They know about the actives. Brands like The Ordinary just listed niacinamide 6%, zinc 1% on the package. People Googled it. People went down the rabbit hole of what am I putting on my body? Same thing. You see the conversation around polyester versus natural fibers versus
cotton. What does that mean for my skin? What's in polyester? Why should I not buy bamboo? Oh, bamboo's treated a certain way. You start to get into it, more content comes to you around it. Prebiotics, probiotics, yogurt, soda. We know way more about the ingredients than ever before. That is from education. So how do you sell to a consumer who has content brought to them, who now expects a slightly better thing, who can follow the journey, who's educated? And there's three key tactics here. So the first is the best thing. You will see an endless storm of videos online of, I quit my job in private equity to fulfill my life's dream of creating the perfect prebiotic yogurt.
All seeing videos like that. People going on a quest to solve a problem is a content type that works really well on social media and in brand stores. And a lot of the reason this works is about consumer habits. So when you go into Google, I used to do SEO as one of the core things I did when I worked in marketing. And one thing I would always look at is, you search it, search the term. So for instance, I used to do this in surf. You would search for best foil surfboard, worst foil surfboard, reviews for foil surfboard, the different brand names. Those are all search targets that people
would be putting into Google because that's what people actually type. I want the best thing. I want the cheapest thing. Which one should I avoid? What do people recommend? That is a habit of how people search. That habit hasn't changed. They will type the same thing now into TikTok or into Instagram. And the algorithms now know if you type it into Google, they send signals to each other. So if you're looking for the best thing, it gives it to you. So brands now build around that story. Comfort is an amazing example. So Comfort Hoodies have built a huge brand. They have thousands and
thousands of creators making content. And it's all around the softest hoodie because they recognize when people are buying hoodies, they might be, oh, I want the heaviest. I want the cheapest. I want the coolest. I want the softest. Guess what? The softest is a huge market. Whether you were searching for it or not, do you in your mind want the softest hoodie ever? I'm intrigued. So this concept for the educated consumer of the best, and then we can show them why are we the best? How do we make that process? We can have hundreds, thousands of creators and ads telling the story that this is the best,
the softest. That becomes a really compelling way to sell. The second one is then focusing on the ingredients. Ingredients will become popular. You need to get your greens. You have a company like Grunz. People are really into creatine. So that's all of a sudden being everywhere. Prebiotics. People care about gut health. They understand the gut way more than ever. You talk to anyone 15 years ago, only 2% of people into their health were talking about the gut, macrobiome, prebiotics, probiotics. Now it's a huge swath that's lightly educated on that. So the ability to say, I do this thing with this
ingredient becomes compelling. And then the third thing is the transformation. When everything is just a little more tasteful or different than the other, what is the thing that is going to change my life? It's going to really tie the room together. It's going to help me achieve X or Y goal. How can I tell the story of how this product helps participate in a life-changing experience, the transformation? So those three tactics, the best thing, the super powered ingredient or ingredients, and the transformation of your life become ultra effective ways to sell in something like
a taste economy where everything looks cool, everything looks good. And you'll notice the through line for all three of those things is enthusiasm, right? People give a shit. Yeah, I want the best thing. If I'm going to put my dollars out there, I want to go buy something else in two years. I want the best one. Yeah, I care what I put in my body. I'm going to care about what I consume, this ingredient or that material. They're enthusiastic. They care about it. And the transformation, I want to actually get a result. I want to know if I commit to my 30-day program or I get this thing or I decide to get
this Peloton, I'm going to have a transformation. Enthusiasm is the byproduct of education. The more people learn, the more into it they get, the more excited they are to participate in it. And this is a huge thing to understand around the taste economies. People love participating in it. In my house, in my home, we've gotten into fragrance. My son, my wife, and I get interesting candles. We talk about it. We'll go visit a fragrance store when we're traveling abroad and try new stuff out. I was in a store in, I believe it was Barcelona. It may have been Florence. I forget which one. But my son was really interested in finding, he'd been
searching, and he's nine, for the wildest fragrances. And there was a store there that had something called the Blood Note that smelled like blood. There was another, and there were ones that were literally, it was like almost offensive smells. They were out there in the world. We visited this shop of rare curiosities because he's enthusiastic about the learning behind it. It's new. It's exciting. It's a sensory experience. But then if you really want to get scientific, you want to think about where you live in the consumer process or where you can market to in the consumer process,
we need to talk about the archetypes of who buys luxury. This week, Swap launched something worth paying attention to. Their Egentic Storefronts are live. The Egentic Storefront is its own dedicated shopping experience. It's not a widget or an add-on to your existing site. It runs a fully branded experience separate from your .com where a shopper can go from product discovery to virtual try-on to checkout inside a single uninterrupted flow. Simkai, Retrofret, Obmuse, Studio Nicholson, and Manor's Golf are already on board alongside 20 plus more global brands. And here's the problem
it's solving. LLMs are building their own commerce layers right now, and their incentives are not your incentives as a brand owner or marketer. They want the shopper to stay inside the LLM. You want them to convert, come back, and belong to you. Every purchase that runs through a third-party AI layer is a customer relationship that you don't own. So Swap flips that. The storefront lives on your .AI domain with your brand voice, your data, and your customer history. AI is trained on your catalog, sounds like you, and every customer interaction, purchase, and preference stays with the merchant
versus a third-party platform. The numbers from launch have customers seeing up to 2x conversion rates, 3x longer time on site, and returns down up to 20%. So pretty impressive data. And this is the window to be ahead and be working on these things before Egentic Commerce becomes table stakes. You can check out what Swap is building at the link in the description. And thank you so much to them for sponsoring this video. So in the taste economy, we talk a lot about things that cost a similar price to what you would normally buy to a median product, but they're a little nicer, more interesting, have more
interesting branding. That is a separate economy, in my opinion, than the luxury economy, where things are radically overpriced in the name of some obscure quality metric or selling you the story of luxury and the luxury brand. This is when we talk about the Ropeana, we talk about Louis Vuitton, we talk about Hermes, talk about Romova. These are luxury brands that really, if you are not in the 1% of consumers, window to be ahead and be working on these things before Egentic Commerce becomes table stakes. You can check out what Swap is building at the link in the description. And thank you so much to them for sponsoring this video.
So in the taste economy, we talk a lot about things that cost a similar price to what you would normally buy to a median product, but they're a little nicer, more interesting, and have more interesting branding. That is a separate economy, in my opinion, than the luxury economy, where things are radically overpriced in the name of some obscure quality metric or selling you the story of luxury and the luxury brand. This is when we talk about Ropeana, Louis Vuitton, Hermes, and Romova. These are luxury brands that, if you are not in the 1% of consumers, you have no right buying, but more people consume than ever. So let's talk about why and the archetypes behind it.
So I've sold a lot in the category right below this. And now, over the last few years, I've spoken a lot at luxury companies, including at the source in Italy, about how the new world interacts with this. So I've firmly been implanted in how these work and how they translate into purchase decisions. And I'm sure the luxury brands wouldn't love this, but I call it the four archetypes of people that waste money on luxury because you are truly overpaying for something. Why?
So first is this new era customer, the cultural omnivore. We now have this class of educated people in the taste economy who understand and like everything. They are just as likely to know a bit about wine and enjoy and be able to participate in a fine wine while still appreciating a Miller High Life because it's the champagne of beers. They are fine and capable of going and sitting and experiencing the best caviar possible. And then they might still be hungry and go get a taco from a taco truck after and enjoy them the same amount. They consume across classes. They like everything around the world. This whole idea of the millennial craft movement and millennial food was largely a precursor to this. This customer comes a lot from that, where you begin to say, yeah, that little cup pepperoni is a lot better than the standard pepperoni. I want only pizzas to have that. This is a whole generation that came from this. And that cultural omnivore is a really important consumer. They love everything in the world. Why wouldn't I want to try it, be interested in it? A generation of people raised on Bourdain, and they're interesting because they're smart. They would never spend money on entry-level luxury. That consumer isn't getting a Gucci wallet. They are a luxury spender, but their taste has been built through exposure, through actually experiencing a bunch of these. So they become a great person to sell to if you sell something worth buying. If you charge a premium because of the quality, because the experience is that much better, this is an amazing target. But if you charge just for the sake of charging, this person can go back and forth between them. And this is a huge millennial taste demographic.
But then we have a second archetype, the petite bourgeoisie. This is someone who's trying to be an omnivore. They're reading a bunch of the Substacks. They're watching the videos. They consume what creators and influencers are telling them to consume. This is the person who reads a Man Repeller Substack, who will participate in something like The Strategist. They are trying hard, and they're spending above the money they have. They've begun to have a little of it, and they want to spend it on a luxury purchase. This is who buys a La Ropeana hat. This is who buys Aesop hand soap, who buys Kate denim. They are overspending in the name of being educated on it. They're signaling that they've arrived into money. This is typically really bad decision-making on their part. They should be saving that money. These are all the wrong purchases, but they're learning on their way to a different journey. But this is a really important demographic to consider because this is the demographic for the entry-level luxury products. And if you're this person, I would highly encourage you in your decisions not to spend that money on these things. Try to get the education, the experience, without buying the overly expensive hat. Save that money for the more informed purchase. But if you're selling to this demographic, it's really about entering them into something better from there, about saying, okay, you're going to be able to purchase into our brand. What does that mean? What do you get? How do they feel? Do they get the recognition or things that they desire? And how does that start them along our brand journey? Look at the dichotomy we deal with as marketers, something I think about all the time. How do I consume versus how I sell to people? You begin to struggle a lot with the natures of business and commerce and having to deal with that duality, which we won't wrestle with too much in this video.
And then we have the true elite, people that function purely in wealth. To them, buying a $3,000 luxury item is just buying a coat. It is normal. It's participated in. These are really hard people to market to. People are always complaining about, oh, Gucci is using AI on Instagram. Guess what? The true elite luxury consumer does not follow Gucci on Instagram. Aspiring consumers, we'll get to in a second, follow Gucci on Instagram. The true elite has not seen a Gucci AI ad campaign. And if they did, they have a different feeling about that. But most of the time, they don't. You can't reach that consumer in the same way. It's not a consumer you can easily market to. They are participating in these luxury economies because they've been around for a long enough time. It's simply built into what they consume and where they consume. And this is why, when people talk about, I want to start a luxury brand or a premium brand, it's like, okay, if you want to start one, your kids are going to finish it off. It is a generational play to be able to get to luxury. And you have to be able to work your way through craft, through creating an amazing experience, maybe not at that price point, for a long time. You'll get that recognition that comes from generations having consumed it. And that's how you end up in the true elite consumer. And very few things actually crack through that wall quickly.
And the last archetype is the aspiring, the person who doesn't know anything. They're not educated. The difference between them and the petite bourgeoisie is they've started to get money. They're starting to be educated. They're purchasing their way to understanding, to becoming an omnivore. But the aspiring don't know anything about this. They just see the Gucci logo. They say, I want that. I want a signal. I want a big logo tee, whatever it is, whether they have the money for it or not. These are people that will buy the cheapest item that's available to them purely to work as a signaler. And this is a really hard thing for premium businesses to work through. Because if you do too much of this, you lose your luxury. If you don't do any of it, you miss this, a generation of people who will maybe, over their consumption time, become more luxury consumers. I think it's really important to understand those four, about expensive purchases and where do you fit on that scale. And then where do your customers fit on that scale? And then what items do you have to sell them? And how do you fix your value proposition? And I would zone in, if you sell a premium good, on one or two of those at a time and think about what your product and marketing roadmap looks like for them.
And to give you an example of this, when I worked in the surf industry, we sold really high-end surf stuff. And our ability to get to the true elite was a lot through demo days and showcases in things like luxury country clubs and boat shows and places where they already bought in person. We weren't able to reach them through the meta ads or the influencers, etc. It was through long-form documentary. We did a really long-form documentary with Laird Hamilton about foiling and Nazare that was shared through the type of people that spend their time and hobbies and money doing intense things around the world like that. It reached the consumer through storytelling. That's a very different way than reaching the people we were able to reach online with content.
And I'll end this section before we go into this new economy and how it works to sell to people with discussing sociology and psychology for a second. So if you've been watching my short-form content and you've followed me for any amount of time, if you're new to this, I'll explain a bit of my strategy here. You'll notice it shifted. I talk a lot now about insights. I will notice something happening in culture, and I will create a position around it. I will take a stance. I will say, I see this insight. People are doing a certain thing. They are buying a certain type of home. Men and women are interacting with each other
was shared through the type of people that spend their time, hobbies, and money doing intense things around the world like that. It reached the consumer through storytelling. That's a very different way than reaching the people we were able to reach online with content. And I'll end this section before we go into this new economy and how it works to sell to people with this, discussing sociology and psychology for a second. So if you've been watching my short-form content and you've followed me for any amount of time, if you're new to this, I'll explain a bit of my strategy here.
You'll notice it shifted. I talk a lot now about insights. I will notice something happening in culture and I will create a position around it. I will take a stance. I will say, I see this insight. People are doing a certain thing. They are buying a certain type of home. Men and women are interacting with each other differently than they did 10 years ago. Brands are leaning into the fact that people are increasingly lonely, whatever it is. I will take a stance. I will say, I believe a certain thing. Here's my thesis. And you'll see in the comments, people either agree with it or don't agree with it.
And this is because I'm sharpening my blade for how marketing now works. Because there's two types of sociology, psychology, insights here. And it's really important to understand. One is there's insights people know about themselves. They say, yes, I bought this thing because I want to make friends. I'm lonely. But you have to realize there's a conflict inside everybody, inside their self, where they'll be like, oh, I don't want to believe that about myself. So of course, I'm going to say it's wrong. Of course, I like my house at the size that it actually is, even if it's too big or too small for me. I've convinced myself. We do a lot of convincing of ourselves as human beings. It's completely natural.
But your job as someone in marketing or in sales or in social media or developing a product or working on any brand is you need to begin to decipher this. You need to go, is this a real insight or is this what someone says about themselves? And develop conviction in your stances and take opinions that you can then back up with content or advertising.
And I've noticed that more and more, I used to be a very operational marketer. I can set up a certain number of ads. We can do a certain amount of content. We will test different messages and landing pages. And we will hammer our way to making money online or supporting our retail partners through those decisions and messages we test.
Now I've noticed more and more of this has become commoditized, right? Making the landing pages, doing the media buying, creating the content. There are more and more people that can do that. It would never be worth my time-to-dollar ratio to do any of that work. The only thing that's left that's important is the insight, is the idea that can outperform all these different things that people can do. It can make a creator make great content. It can get a person to convert from a landing page. It gets someone to actually pay attention to an ad.
And so I'm hyper-focused now on what all those ideas are and building a compendium of them. And that is an important way, if you are in this world at all, or you care how people think, to catalog the things that are happening to you in your life. And so I will end this last point. This is very focused on marketing and brand people. What is this new economy like to sell to this premium buyer, this taste economy? Because it's completely different than the previous world.
So marketing used to work like you would have your own social media accounts. You have your Meta account, your TikTok account, and you would have paid ads. You'd run ads on Meta. You could run ads on banner ads. You could put billboards up, buy things in magazines or newspapers. And then maybe you would have some celebrity endorsement or a few influencers, right? But that would be the marketing stack.
The last time I had an SVP of marketing job was at the peak of this, when this new world was being formed. And we were participating in this new world I'm about to describe, where it's like you have your owned account. You are doing paid media to promote those owned accounts. But then you have what we call enabled accounts, people that you seed product with for free. People that are creating. You may have 20, 30 creators, hundreds of creators, that are making content about your message. You have influencers that you're paying for campaigns. You're doing experiences or events, but you're doing it to help enable people to create content.
When you put the billboard up in Times Square, it's not just about having people see it, but having people take a photo of it and share it. It's the enabled economy. And this goes side by side with the taste economy. We talked about, in the beginning, where taste becomes this multiplying factor. It can't just come from your brand. It has to come from the world of people talking about things. And then the multiplier of that is you can take any of those things. You can put money behind it. You can boost it. You can whitelist the ads. You can push that message out further using your dollars.
So your organic plus your enabled plus dollars gives you this much bigger piece of the pie for marketing. And on top of that, it leads to a more organic conversation. You execute all of those well, there's even more conversation around your brand going out in the world.
And a great example from this is when I was at Coachella the other week, there was a Gap booth there. I'm wearing a Gap sweater today. Unrelated, no affiliation with Gap, but maybe there's a psychological connection here. But they had a booth there selling Coachella Gap merch. They had a really popular Coachella hoodie that they were putting out. There's a line, just a massive line. My wife was interested in getting one. The lines were too big the entire time, VIP line, regular line.
Now you would say, okay, say Gap spent a million dollars to do that Coachella activation. Are they going to make that back in hoodies? Maybe. Bieber did 5 million in merch or whatever there. Are they going to get impressions for the Gap brand because of people attending that and seeing that? Maybe. What they're really buying is the fact that there are tens of thousands of people, not just anybody, people that post on social media, over-index on being influential, even micro-influencers to major influencers, are the people at Coachella. They are making videos about being in line. They're making videos once they get the hoodie. If they buy the hoodie, they're wearing it in Coachella content, which is significantly more popular than regular content. It's a huge content consumption moment. So they buy this enabling ripple effect that is way bigger than just buying that same event presence somewhere else. And that is a bit of how you think in this new economy.
So I'll leave more of this for the future. I know there's probably a lot of questions you have, whether it's around tactics, whether it's around brands. Drop any of those questions. I'm happy to get into it. I think our next community call, which I'll link below, the one that comes up in June, is going to be about luxury. It's like the taste economy. And so if you have questions about that or things to tackle, sign up for that call below, or we'll do the big workshop. We had 300 people on the last one that we did. More was almost 400 at peak. And that's simultaneously. There were just tons of people in there chatting and talking. So it's a great time to actually talk about these.
And I'm going to keep diving into the psychology of why we buy, how to sell in those places. And as always, thank you all so much for watching. ingredients, and the transformation of your life become ultra effective ways to sell in something like a taste economy where everything looks cool, everything looks good. And you'll notice the through line for all three of those things is enthusiasm, right? People give a shit. Yeah, I want the best thing. If I'm going to put my dollars out there, I want to go buy something else in two years. I want the best one. Yeah, I care what I put in my body. I'm going to care about what I consume, this ingredient
or that material. They're enthusiastic. They care about it. And the transformation, I want to actually get a result. I want to know if I commit to my 30-day program or I get this thing or I decide to get this Peloton. I'm going to have a transformation. Enthusiasm is the byproduct of education. The more people learn, the more into it they get, the more excited they are to participate in it. And this is a huge thing to understand around the taste economies. People love participating in it. In my house, in my home, we've gotten into fragrance. My son, my wife, and I, we get interesting candles. We talk about it. We'll go visit
a fragrance store when we're traveling abroad and try new stuff out. I was in a store in, I believe it was Barcelona. May have been Florence. I forget which one. But my son was really interested in finding, he'd been searching, and he's nine, for like the wildest fragrances. And there was a store there that had something called like the Blood Note that smelled like blood. There was another, and there was ones that were literally, it was like almost offensive smells. They were kind of out there in the world. We visited this shop of like rare curiosities because he's enthusiastic about the learning behind it. It's new.
It's exciting. It's a sensory experience. But then if you really want to get scientific, you want to think about where you live in the consumer process or where you can market to in the consumer process, we need to talk about the archetypes of who buys luxury. This week, Swap launched something worth paying attention to. Their Egentic Storefronts are live. The Egentic Storefront is its own dedicated shopping experience. It's not a widget or an add-on to your existing site. It runs a fully branded experience separate from your .com where a shopper can go from product discovery to virtual try-on
to check out inside a single uninterrupted flow. Simkai, Retrofret, Obmuse, Studio Nicholson, and Manor's Golf are already on board alongside 20 plus more global brands. And here's the problem it's solving. LLMs are building their own commerce layers right now, and their incentives are not your incentives as a brand owner or marketer. They want the shopper to stay inside the LLM. You want them to convert, come back, and belong to you. Every purchase that runs through a third-party AI layer is a customer relationship that you don't own. So Swap flips that. The storefront lives on your .AI
domain with your brand voice, your data, and your customer history. AI is trained on your catalog, sounds like you, and every customer interaction, purchase, and preference stays with the merchant versus a third-party platform. The numbers from launch have customers seeing up to 2x conversion rates, 3x longer time on site, and returns down up to 20%. So pretty impressive data. And this is the window to be ahead and be working on these things before Egentic Commerce becomes table stakes. You can check out what Swap is building at the link in the description. And thank you so much to them for sponsoring this video.
So in the taste economy, we talk a lot about things that cost a similar price to what you would normally buy to a median product, but they're a little nicer, more interesting, have more interesting branding. That is a separate economy, in my opinion, than the luxury economy, where things are radically overpriced in the name of some obscure quality metric or selling you the story of luxury and the luxury brand. This is when we talk about the Ropeana, we talk about Louis Vuitton, we talk about Hermes, talk about Romova. These are luxury brands that really, if you are not in the 1% of consumers,
you have no right buying, but more people consume than ever. So let's talk about why and the archetypes behind it. So I've sold a lot in the category right below this. And now over the last few years, I've spoken a lot at luxury companies, including like at the source in Italy, about how the new world interacts with this. So I am, I've firmly been implanted in how these work and how they translate into purchase decisions. And I'm sure the luxury brands wouldn't love this, but I call it the four archetypes of people that waste money on luxury because it is truly you're overpaying for
something. Why? So first is this new era customer, the cultural omnivore. We now have this class of educated people in the taste economy who understand and like everything. They are just as likely to know a bit about wine and enjoy and be able to participate in a fine wine while still appreciating a Miller High Life because it's the champagne of beers. They are fine and capable of going and sitting and experiencing the best caviar possible. And then they might still be hungry and go get a taco from a taco truck after and enjoy them in the same amount. They consume across classes. They like everything
around the world. This is a huge, this whole idea of the millennial craft movement and millennial food was largely a precursor to this, right? This customer comes a lot from that where you begin to say, yeah, that little cup pepperoni is a lot better than the standard pepperoni. I want only pizzas to have that. This is a whole generation that came from this. And that cultural omnivore is a really important consumer. They love everything in the world. Why wouldn't I want to try it, be interested in it? A generation of people raised on Bourdain and they're interesting because they're smart. They would
never spend money on entry-level luxury, right? That consumer isn't getting a Gucci wallet. They are a luxury spender, but their taste has been built through exposure, through actually experiencing a bunch of these. So they become a great person to sell to. If you sell something worth buying, if you charge a premium because of the quality, because the experience is that much better, this is an amazing target. But if you charge just for the sake of charging, this person can go back and forth between them. And this is a huge millennial taste demographic. But then we have a second
archetype, the petite bourgeoisie. This is someone who's trying to be an omnivore. They're reading a bunch of the sub stacks. They're watching the videos. They consume what creators and influencers are telling them to consume. This is the person who reads like a man repeller sub stack, who will participate in something like the strategist. They are trying hard and they're spending above the money they have. They've begun to have a little of it and they want to spend it on a luxury purchase. This is who buys a La Ropeana hat. This is who buys Aesop hand soap. Who buys Kate denim. They are overspending in the name of being
educated on it. They're signaling that they've arrived into money. This is typically really bad decision making on their part. They should be saving that money. These are all the wrong purchases, but they're learning on their way to a different journey. But this is a really important demographic to consider because this is the demographic for the entry level luxury products. And if you're this person, I would highly encourage you in your decisions, don't spend that money on these things. Try to get the education, the experience without buying the overly expensive hat. Save that money for the more
informed purchase. But if you're selling to this demographic, it's really about entering them into something better from there about saying, okay, you're going to be able to purchase into our brand. What does that mean? What do you get? How do they feel? Do they get the recognition or things that they desire? And how does that start them along our brand journey? Look at the dichotomy we deal with as marketers. Something I think about all the time. How do I consume versus how I sell to people? You begin to struggle a lot with the natures of business and commerce and having to deal with
that duality, which we won't wrestle with too much in this video. And then we have the true elite, people that function purely in wealth. To them, buying a $3,000 luxury item is just buying a coat. It is normal. It's participated in. These are really hard people to market to. People are always complaining about, oh, Gucci is using AI on Instagram. Guess what? The true elite luxury consumer does not follow Gucci on Instagram. Aspiring consumers, we'll get to in a second, they follow Gucci on Instagram. Truly has not seen a Gucci AI ad campaign. And if they did, they have a different feeling about
that. But most of the time, they don't. You can't reach that consumer in the same way. It's not a consumer you can easily market to. They are participating in these luxury economies because they've been around for a long enough time. It's simply built into what they consume and where they consume. And this is why when people talk about, I want to start a luxury brand or a premium brand, it's like, okay, if you want to start one, your kids are going to finish it off. It is a generational play to be able to get to luxury. And you have to be able to work your way through craft, through creating an amazing experience, maybe not at that price point.
For a long time, you'll get that recognition that comes from generations having consumed it. And that's how you end up in the true elite consumer. And very few things actually crack through that wall quickly. And the last archetype is the aspiring. The person who doesn't know anything, they're not educated. The difference between them and the petite bourgeoisie is they've started to get money. They're starting to be educated. They're purchasing their way to understanding, to becoming an omnivore. But the aspiring don't know anything about this, but they just see the Gucci logo. They say, I want that. I want a signal. I want a big logo
tee, whatever it is, whether they have the money for it or not. These are people that will buy the cheapest item that's available to them purely to work as a signaler. And this is a really hard thing for premium businesses to work through. Because if you do too much of this, you lose your luxury. If you don't do any of it, you miss this, basically a generation of people who will maybe over their consumption time become more luxury consumers. I think it's really important to understand those four, about expensive purchases and where do you fit on that scale? And then where does your customers fit on that scale? And then what items do you have to settle them? And how do
you fix your value proposition? And I would zone in if you sell a premium good on one or two of those at a time and think about what is your product and marketing roadmap look like for them. And to give you an example of this, when I worked in the surf industry, we sold really high-end surf stuff. And our ability to get to the true elite was a lot through like demo days and showcases in things like luxury country clubs and boat shows and places where they already bought in person. We weren't able to reach them through like the meta ads or the influencers, etc. It was through long form
documentary. We did a really long form documentary with Laird Hamilton about foiling and Nazare that was shared through the type of people that spend their time and hobbies and money doing intense things around the world like that. It reached the consumer through storytelling. That's a very different way than reaching the people we were able to reach online with content. And I'll end this section before we go into this kind of new economy and how it works to sell to people with this discussing sociology and psychology for a second. So if you've been watching my short form content and
you've followed me for any amount of time, if you're new to this, I'll explain a bit of my strategy here. You'll notice it shifted. I talk a lot now about insights. I will notice something happening in culture and I will create a position around it. I will take a stance. I will say, I see this insight. People are doing a certain thing. They are buying a certain type of home. Men and women are interacting with each other differently than they did 10 years ago. Brands are leaning into the fact that people are increasingly lonely, whatever it is. I will take a stance. I will say, I believe a certain thing. Here's my thesis. And you'll see in the
comments, people either agree with it or don't agree with it. And this is because I'm sharpening my blade for basically how marketing now works. Because there's two types of sociology, psychology, insights here. And it's really important to understand. One is there's insights people know about themselves. They say, yes, I bought this thing because I want to make friends. I'm lonely. But you have to realize there's a conflict inside everybody, inside their self, where they'll be like, oh, I don't want to believe that about myself. So of course, I'm going to say it's wrong. Of course, I like my house at the size that it actually is, even if it's too big or too small for me.
I've convinced myself. We do a lot of convincing of ourselves as human beings. It's completely natural. But your job as someone in marketing or in sales or in social media or developing a product or working on any brand is you need to begin to decipher this. You need to go, is this a real insight or is this what someone says about themselves? And develop conviction in your stances and take opinions that you can then back up with content or advertising. And I've noticed that more and more, I used to be a very operational marketer. I can set up a certain number of ads. We can do a certain amount of content. We will test different messages and landing pages.
And we will hammer our way to making money online or supporting our retail partners through those decisions and messages we test. Now I've noticed more and more of this has become commoditized, right? Making the landing pages, doing the media buying, creating the content. There are more and more and more people that can do that. It would never be worth my time to dollar ratio to do any of that work. The only thing that's left that's important is the insight, is the idea that can be outperform all these different things that people can do. It can make a creator make great content. It can get a person to convert from a landing page. It gets someone to actually pay attention
to an ad. And so I'm hyper-focused now on what all those ideas are and building basically a compendium of them. And that is an important way if you are in this world at all, or you care how people think, to catalog the things that are happening to you in your life. And so I will end this last point. This is very focused on marketing and brand people. What is this new economy like to sell to this premium buyer, this taste economy? Because it's completely different than the previous world. So marketing used to work like you would have your own social media accounts. You have your meta account,
your TikTok account, and you would have paid ads. You'd run ads on meta. You could run ads on banner ads. You could put billboards up, buy things in magazines or newspapers. And then maybe you would have like some celebrity endorsement or a few influencers, right? But that would be the marketing stack. The last time I had an SVP of marketing job was basically at the peak of this, when this new world was being formed. And we were participating in this new world I'm about to describe, where it's like you have your owned account. You are doing paid media to promote those owned accounts. But then you have,
what we call enabled accounts, people that you seed product with for free. People that are creating. You may have 20, 30 creators, hundreds of creators that are making content about your message. You have influencers that you're paying for campaigns. You're doing experiences or events, but you're doing it to help enable people to create content. When you put the billboard up in Times Square, it's not just about having people see it, but having people take a photo of it and share it. It's the enabled economy. And this goes side by side with the taste economy. We talked about the, in the beginning where taste becomes from this multiplying
factor. It can't just come from your brand. It has to come from the world of people talking about things. And then the multiplier of that is you can take any of those things. You can put money behind it. You can boost it. You can whitelist the ads. You can push that message out further using your dollars. So you're organic, plus you're enabled, plus dollars gives you this much bigger piece of the pie for marketing. And on top of that, it leads to a more organic conversation. You execute all of those well, there's even more conversation around your brand going out in the world. And a great example from
this is when I was at Coachella the other week, there was a Gap booth there. I'm wearing a Gap sweater today. Unrelated, no affiliation with Gap, but maybe there's a psychological connection here. But they had a booth there selling Coachella Gap merch. They had a really popular Coachella hoodie that they were putting out. There's a line, just massive line. My wife was interested in getting one. Lines were too big the entire time. VIP line, regular line. Now you would say, okay, say Gap spent a million dollars to do that Coachella activation. Are they going to make that back in hoodies? Maybe. Bieber did 5 million in merch or whatever
there. Are they going to get an impressions for the Gap brand because of people attending that and seeing that? Maybe. What they're really buying is the fact that there are tens of thousands of people, not just anybody, people that post on social media, over-index on being influential, even micro-influencers to major influencers, are the people at that at Coachella. They are making videos about being in line. They're making videos once they get the hoodie. If they buy the hoodie, they're wearing it in Coachella content, which is significantly more popular than regular content. It's a huge content consumption moment. So they
buy this enabling ripple effect that is way bigger than just buying that same event presence somewhere else. And that is a bit of how you think in this new economy. So I'll leave more of this for kind of the future. I know there's probably a lot of questions you have, whether it's around tactics, whether it's around brands. Drop any of those questions. I'm happy to get into it. I think our next community call, which I'll link below, the one that comes up in June, is going to be about luxury. It's like the taste economy. And so if you have questions about that or things to tackle,
if you're to sign up for that call below, or we'll do the big workshop. We had 300 people on the one that we did, the last one. More was almost 400 as peaking. And that's simultaneously. There was just tons of people in there chatting and talking. So it's a great time to actually talk about these. And I'm going to keep diving into the psychology of why we buy, how to sell in those places. And as always, thank you all so much for watching.