Latest / The Interline Podcast / ASOS Hacked, Amazon's About You, Climate Sourcing Risk, AI Consolidation, And Microfibres
Transcript
- speaker-0: So welcome to the edit from the Interline, the show where we run a quick fire analysis on our pick of the most important fashion and beauty technology stories from the last seven days. I'm Grace the social editor and I'm joined by Ben, the editor in chief. And together we have around twenty-five minutes to give you our analysis on the stories that we think really matter. speaker-1: Hey Grace, good to see you again as always. starting to feel like autumn. I don't know if it's the same down in London, up in Manchester, it's cold, it's wet, leaves are falling off. speaker-0: Yeah, it feels like we've had the first really cold days, so it feels like the seasons have actually changed now. speaker-1: Good. Well the news headlines haven't, in a way. There's still some common themes that we're gonna hear from today. Actually some unique ones. I think we've got a pretty diverse set of stories ahead of us, so let's get rolling. speaker-0: Yeah, so the first story that we have to talk about is the ASOS cyber attack that happened. So earlier this week, anyone who had the ASOS app on their phone will have received a message directly from the hackers. So essentially they said that they'd compromised the Snowflake instance, which, as the BBC outlined and wrote, Snowflake is a popular data storage and analysis company. And the cyber crimin criminals essentially used a special AI platform to access Snowflake and then manipulate it. So at first when ASOS spoke on this, they weren't sure if like personal data of users had been released. But in fact, now later communications from ASOS has said that they have. So the hackers access things like emails and addresses and phone numbers. So it is very concerning and it was definitely a tough week for ASOS. We obviously know that cyber attacks are a lot more common now with AI. So I wanted to get your take on this story and what should brands be thinking about with all of this. speaker-1: Yeah. So this one is interesting in that so there's an AI system involved in it. So the the there's a platform called Simon AI, which does t I I've done some reading around and some research here. It does kind of personalization, segmentation, the the the kinds of things that you would architect on top of big kind of data warehouse data lake stuff like Snowflake. That's not the source that might be the source of the hack, but it's not the source of a hack because it's an AI tool and neither is this seemed to be an AI enabled hack. This sounds from all of the reporting that's been done like an old-fashioned piece of social engineering where somebody persuades somebody to park login details to a third-party platform. You know, this is not infrastructure that's owned by ASOS. This is several steps removed from them. And then with that access, they are able to move laterally in some cases and start to get access to other systems and to do Something pretty unprecedented, I think, which is sending a message to every customer that has the has the app installed. Now, the message is obviously very dramatic. And I think it implies a level of access that the hackers didn't necessarily have here. I think if you if you're on the receiving end of that, you would probably rightly assume that this meant that absolutely everything on ASOS's end had been compromised. The reality seems to be that it is this. kind of segmentation personalization layer built on top of data architecture stored in Snowflake. And then it's paired with an integrated to a system called Braze, I think is the name for it, B-R-A-Z-E, which allows for messaging and follow-ups on particular segments. So all of this is kind of built on the personal data that ASOS has collected about customers. And then the way in, the door here is the AI system that they then use to run analysis, segmentation, drive insights and stuff on top of those segments, and then the messaging system that they use to send details out from there. Now, you anyone who's listened to the show for a while has heard me be a bit fatalistic about cybersecurity attacks in my personal life. I've talked about the whole the Manchester Airport group one is a massive one here in the UK that happened just a few weeks ago in September. and I fly out Manchester Airport all the time, park my car there all the time. and just unbidden one day you get a message that says, your Wi-Fi login and browsing patterns, your car registration plate, your name, your email address, your date of birth, everything else is contained in a a a breach and a data set that's then been extracted from there. And I I don't blame some people for being like, whatever. Like again. but The interesting part for this is names, email addresses, phone numbers, stuff like that are basic like table stakes for this kind of thing. I think that's where people get a bit fatalistic is this idea that fine, my email address is out there, my phone number's out there. It probably already was anyway. What's the worst that could happen? The interesting part of this is so the data that was stored in Snowflake and that was then used through Simon AI to do the segmentation and personalization includes search history. so it includes the way that people have interacted with the ASOS website, presumably the ASOS app and things as well. Now, it doesn't, it's not a hundred percent clear at this stage if that search history is necessarily assigned to individual profiles. It's not a hundred percent clear that your name, if you shop at ASOS, your email dash, your phone number is sat in the same row, for want of a better word, as your search preferences. But search preferences can reveal a lot. About people. The BBC r done some good reporting here that you referenced, but the examples they use are things like searching for petite, which can tell you how how tall somebody is, searching for an occasion or a particular like an occasion outfit at a particular time of year could tell you when someone's birthday is if you didn't have the data, or someone's wedding, or something along those lines. there's a lot in there that I think people didn't necessarily realize was being captured, almost certainly didn't realize was being retained. and didn't necessarily realize was being used to segment messaging and and the the personalized experience that they get on the website and in the app as well. Not that that should be like a shock when you think about it, but getting that kind of qualitative data as part of one of these breaches feels very different to people and I think can start to enrich some of the quantitative data that gets leaked too. F I haven't shopped at ASUS in years and years and years. I have done in the past. like, do I care that somebody has my email address? No, not not anymore. I've that's where that fatalism comes in. Do I care that that profile can start to get enriched with some of this qualitative insight that people capture for personalization? Yes. And this is what To me, it represents the biggest risk surface for brands is the more of that kind of qualitative data they collect, the more detailed a personal profile they build up on each individual consumer, the bigger the risk of these kinds of breaches becomes because it's not just stuff that people are used to seeing out in the personal domain, it's stuff that they think is more personal. So the message coming from the ASOS app, obviously unprecedented, and was the reason that it got the headlines. The reason I think it deserves the headlines long term is because it's a bit of a bellwether for just how much personal data brands collect about us, how long they hold it, what they do with it, and the systems that it lives in and the governance that applies to it. speaker-0: The next story actually reveals how we are living in this increasingly surveilled world, but it does have a slight comical twist to it. So this week an Amazon user went completely viral online because she found a hidden part of Amazon's website where you can essentially look at all the assumptions Amazon makes about about you based off your purchase history. So she found some pretty standard things like assumptions that she shops from the women's department or probably owns a shark robot robot vacuum. But she also found a pretty funny assumption that she probably has a flat bum as well based off what she's bought. So this went so viral and it prompted a lot of Amazon users to go and find this hidden page and see what Amazon has assumed about them. Now I went to go and look for myself on my own account, and actually there was nothing in terms of assumptions because I honestly don't use Amazon that much. And if I do, I use my sister's Prime account. So I was slightly disappointed not to see anything, but it kind of makes me want to use Amazon a bit more. But I wanted to get your take on this story, and I also wanted to know if you've checked your assumptions and what Amazon is saying about you. speaker-1: Yeah, so I there's a couple of things. I have. So I've I've I've been a heavy Amazon shopper for the last twenty two years. I went back and checked when my first order from Amazon was and it was in two thousand four. Back then, mm revealing a bit about my kind of nerdy history and stuff, I I bought a lot of graphic novels and things. So I went into this thinking, okay, I have shopped on Amazon for two decades plus. No joke, I think I buy stuff from Amazon f four or five times a week, like across across this household. Nothing. Disappointingly, very little profile on me. like a a awareness of an author that I happen to have listened to an audible audio book of. I don't know if it's because I use a bunch of script blockers for browsing and always have. but yeah, I was I was disappointed not to find that out about me. This one's an interesting story because Amazon actually did disclose that this about you, as they call it, page existed back in May. There's an official press release for it that's dated in May of this year. I think it's one of those things that just kind of disappeared in the news cycle, people didn't really think about it, didn't really care about it. And everybody is also familiar with the Amazon, like very blunt personalization that they do, where you buy A set of screwdrivers, and all of a sudden you just get recommendations for screwdrivers all the time. and you're like, no, actually, I had I had a specific job to do with these screwdrivers, and hopefully they're gonna last me for the rest of my life. So I'm not building up a museum of screwdrivers over here. I just needed something for a specific purpose. So I think people dismissed a bit of that. I think where this story's come to the headlines now is yes, it is funny, you know, if you have a flat S and You've been searching for. In this case, I think the the ver the ver virality of it comes from that and from the that that user's admission as well. She's like, Look, I searched for some like shaping leggings or something along those lines. So there's a reasonable inference in there. it is it you know, that bit of it is kind of funny. But when you start to think about some of the stuff that we just talked about with the with the ASUS hack in particular, you can build up quite a detailed profile of somebody based on what they search for and what they buy. so yes, you can get the broad brush stuff like do you buy from women's department, do you buy from the men's department? Do you buy kids wear, i.e., do you have children? Don't forget, Amazon owns Prime TV, they they have access to your watch habits, Audible, they have access to your listening habits, Amazon Music, if you happen to use it. You you can build up a very detailed, almost like psychometric profile of people based on their online behavior, particularly if you're one of one of the biggest companies out there. Now, in one sense, people know this, and this is a bargain that they buy into. I shop from Amazon for two reasons. One is convenience. Two is that I've I've maintained wished list there for a long time. I've used it often enough that the recommendations, which seem to somehow be separate from about you, are reasonably useful to me. But that Any personalization you get from a brand or a retailer as a consumer, any personalization you want to unlock as a brand or a retailer for your consumers requires this kind of information to be captured and held. You cannot do it any other way, except for agentic commerce, AI native commerce, which we've talked about a bunch of times, where your several turns into a query with ChatGPT or Claude and that then gets handed off to The retailer and they get visibility into that behavioral side of things there. Fine. But if you want to capture this sort of stuff as a brand or a retailer, you have to gather this data, you have to hold it. And this is this is how you deliver it. That, as we've just talked about, becomes a huge risk exposure surface. And I think what would be interesting to me to see now, just to thread the needle from stuff we've talked about in the past couple of weeks, is we talked about MetaMuse, which still not available outside the US. The always-on agent and people using it to go and cancel subscriptions they don't have anymore, for instance, or to negotiate a better mobile phone plan, or to you know, other kind of everyday admin tasks. There's a big question now about do people use those always on agents to start to do returns for them, things that feel like onerous that they might not have done for themselves. The other is do they start to press agents into service of deleting these kinds of profile information. Because you could be very easily right now, I could just go say to ChatGPT, I feel uncomfortable about the amount of information Amazon has about me, go and sort it out. And it will either go manually delete all of those rows, put in a takeout request, what whatever it might be. Retailers are walking a tightrope, I think, with personalization at the moment. And every time it comes bubbling up through these kinds of viral stories. is a reminder that as a consumer you pay a price for personalization. As a retailer, you pay a price for personalisation as well, but it's measured in data governance and risk exposure. speaker-0: So, next I want to talk about how nature could actually be becoming a strategic pillar for fashion brands. So, I saw a really great piece in Fashion United this week, and it was actually written by Dr. Michael Burgess, who is the co-founder and director of Biodiversify. So, in the piece, he describes that big fashion brands could actually lose up to 30% of their profit. Due to nature loss by 2030. And this is, of course, because the fashion industry is so reliant on materials that need nature in order to be created, like cotton, for instance. And he describes that the solution to this is for brands to start to start thinking about nature through more of a strategic lens and combining it with other expertise like supply chain. intelligence and stuff like this rather than it being a add-on sustainability consideration that isn't taken too seriously. So apparently, according to the article, caring is among the first business to set valid science-based targets for nature. And I wanted to get your take on this because it's a new way to look at nature through more of a strategic lens. But I wanted to know what you think brands should be thinking about this. speaker-1: So if you if you think I'm fatalistic about data breaches, you're gonna find me even more fatalistic about the business contingency planning, business continuity impact of climate change. It's great that brands are committing to environmental targets, ecosystem targets in order to protect their own inputs, which is what we're talking about here. Like we're talking about raw fiber harvesting and so on. We're talking about leather, the the whole supply chain there as it becomes an input to their products as opposed to the environment in like a holistic sense. A good measure of this is outside anyone's hands. Right. A good there there is a certain amount of climate change related, climate transformation, climate crisis, whatever you want to call it, related transformation to the material supply chain that is locked in and that it it's not something that brands can do anything about. Except for where they are big luxury conglomerates or so on that can throw around their purchasing power to secure their share of a potentially dwindling supply. Now, everyone's been kind of conversant with this idea for a couple of years in some extreme cases. Like the the the go-to example of the procurement risk that changing climate creates is something like Vicunia wool. So that that's it's It's able to be gathered from a particular type of I I think the Cunaria are a bit like alpacas or llamas, but they live at kind of relatively high altitudes, which makes that a very scarce material to begin with. It's only used in luxury products or so on. the climate change is impacting where their food sources grow and is driving those into even higher altitudes, which makes them even harder to collect the wool. makes it even more pricey. Just that like a pure simple impact on commodity pricing there. But you can extrapolate that to the whole cotton supply chain. Like it it take all it takes is a single s season for a particular cotton growing region to have insufficient rain or a deluge of flooding or what have you for the commodity price of that underlying fiber to to skyrocket. And overall, I think the prediction here is that progressive kind of soil health erosion, biodiversity loss, all of this kind of stuff leads to just a reduction in availability overall. Like net, the fashion industry, the textile industry, every other industry that's competing for these inputs just has less to go after over time. and and and some of that is locked in. Now, there's an alternative, of course, which is like innovative fibers, alternatives like recycled, renewed and things. and those have their scaling issues, which which we've talked about on the big interview and show and stuff before, but you know, could end up being a replacement if the industry takes like preferred material status seriously enough to scale those up. The other alternative is more synthetics. and the industry already uses a ton of synthetics, like the majority of of textile production overall is is still fossil fuel derived synthetics, which have a burden that I know you and I are going to talk about at the at the end of the show here. I agree with this, essentially. we've we've said for a while, and I've said for a while, that climate change, sustainability are business continuity risks, not as much as more than they are reputational risks to me. If you rely on a steady inflow of a naturally occurring fiber, and that is the primary input into your product, and that's the primary force that governs the pricing of your product, then w you're likely to have something much, much bigger than traditional supply chalks in the in the very near future. So yeah, the the the the environment absolutely is a strategic priority for fashion and is a business continuity priority for fashion as well. speaker-0: So the next story is a very big story for fashion tech startups because this week we saw that OpenAI has released a new feature into Chat GPT. And essentially now, if someone is shopping for different fashion products, once they get the results, they'll now have the option to virtually try on the fashion piece. So you can do that by either taking a quick picture of yourself or you can upload an existing picture of yourself. And this is a big story for fashion tech startups because it slightly makes a lot of fashion virtual try-on apps a bit obsolete. So I'm thinking just of Vibe, for instance, which is actually an AI-powered virtual try-on extension for different fashion brands. This now seems like it's going to be cannibalized by ChatGPT. Additionally, we also saw that OpenAI is really trying to expand its business capabilities of AI as well. So we've seen that they've worked with Ironclad, which is a company that makes software for managing legal contracts and other legal work like this. So they've been working with internal people from Ironclad train a to train AI to now complete tasks such as setting up contracts or Creating approval processes and it essentially will now follow the company's rules. So it seems like a massive leap forward in terms of AI capabilities. And I know that OpenAI has also put out a call to work with other businesses in this way. So I wanted to get your take on both of these stories and what you think fashion brands and fashion tech startups should be thinking about. speaker-1: Sure. So I think I think this is a risk to the kind of AI virtual triangle companies that exist out there already. I don't think it's necessarily a lock that they will be disrupted or routed and that everything is going to move to ChatGPT for two reasons. One is this is the kind of bet that requires people to live in ChatGPT. This this this so this hinges on the idea that instead of Mac, Mac OS, Windows and desktop applications or whatever web browser you use. This hinges on the idea that people will increasingly start to work in AI applications as their primary operating environment. Now, I've said before on this show and others that that actually does describe me a bit more these days. I actually do work in codecs, ChatGPT work, whatever you call it, for a lot of the day. like the they it is o constantly open there. But Do I use it for shopping? No, we've talked about this before. and and I know you do a little bit, but not not to any kind of great extent. so the fundamental difference between this and kind of existing AI virtual try-on things is that this is in ChatGPT's world, in OpenAI's world, whereas a lot of them are more about embedding it into e-commerce storefronts that the brands already have. So I don't think i it's it's it's competitive, but I don't think it's necessarily like a straight shot replacement. However, A lot of virtual try-on companies, a lot of AI generative, they all rely on the same underlying models. and I think this is a this strong reminder that if your basic capability is provided by an external party, is it provided by like a Frontier AI lab, it's much easier for that frontier AI lab to recreate your customer experience based on that than it would be for you to go and train a model to do the the underlying piece of it. you and I talked about. Virtual try-on last week going more into physical stores, which I think again is like a hedge against this to to some extent. Now, I have not had a chance to try this out. it should do. Maybe I'll task you with doing the same next week as well. Give it a go and see see how well it works. I imagine it probably works as well as a lot of the other solutions that exist out there. Now, the ironclad one is a bit more interesting because i in On the surface, that seems like nothing to do with fashion, right? Like legal contracts, it seems like it's it's way outside of of our sphere. What it is, is a demonstration of the power of computer use, as they call it. So specifically for this one, it's GPT6 Astra. and it the test is turning that model loose and saying, okay, go use the systems that Ironclad provides and see how much of this work you can do end to end. Now, interestingly, Ironclad have their own agents already. They have their own agency capabilities built into that system. So this is a weird one where they're selling AI capabilities themselves, but they're also saying, okay, we think the future might look different. The future might be AI agents actually directly steering the software here. Now, we've talked in previous weeks, I think, about computer use when it came to 3D modeling and things like that. And when it comes to 2D artwork. I have tried a bunch of it for both of those things and it's pretty good. Like if if if that's something that you need to do, if you need to put together 2D artwork, if you need to do some 3D modeling, GPT six Astra in particular is very capable of driving your computer to do that. Now, think about web-based applications and things for the rest of fashion. So think about PLM, ERP, supply chain management, like all of those things that you sit down and you open in a web in a web browser tab and you put in data. Or you go through and you are doing an end-to-end workflow and you're like, okay, this is what we need to do next in material development, or so on. One way of looking at AI is that the AI will be embedded into the system over time and is your PLM solution will have more AI and you will chat to it and you will go go do this for me. This is more evidence of the longer term bet I think that AI labs are placing on, well, let's just sidestep all of that and let's just have it actually use the software for itself. Because it seems to be increasingly capable of doing that. So to me, this is a there's a famous like Apple term, like kind of Apple analysts and consumers. There used to be an app called Sherlock. and Apple once just created a first-party version of it and it ended up obviating the need for the third-party plugin or application. And that's why it gets referred to as like Sherlocking, is where you you are a big company, somebody, a small developer builds something unique on top of what you do. And then as the big company you go, No, I'm just gonna build that for myself. I think there's more of that to come. speaker-0: So, for the final story, we're going back to the topic of synthetic materials, which you just mentioned. So this week it's been announced that brands like Nike and Patagonia and Under Armour and Lululemon, among other big brands as well, have founded this new initiative that's essentially meant to reduce microfiber pollution in the apparel industry. So, as you'll know, synthetic fibers Are responsible for releasing a lot of microscopic microplastics into the environment. And these are very harmful to the environment and they're also very harmful to our health because ultimately they end up in the oceans and then we consume fish from the ocean. So there are kind of so many negative implications of microfibers. And now all of these big sportswear brands have come together. And they've started this new initiative called the Microfiber Action Alliance. And essentially it encourages apparel companies to collaborate on creating real solutions to microfiber shedding. And all of the businesses are going to contribute slightly different things. So Nike is contributing research, I believe, and Underarmour is contributing data. But ultimately, they want to find a long-term solution. and a supply chain solution to microfibers. I personally think that this seems like a super positive initiative, especially because these brands are competitors in essence, but I wanted to get your take on it based off one on what you said before and what the industry should make of this. speaker-1: So I can be really quick about this one. the reason that there are so many synthetic fibers in clothing is that they allow you to do things with the performance, durability, or washability and care characteristics of a garment that you historically weren't able to do with natural materials, right? So the the whole athlet the everybody knows the athletes are boom of the last like five, six years or whatever it was that's now kind of dwindling. if you're old enough like me, you grew up in the era of Spandex and aerobic wear and all of that stuff, all of which was unlocked by the fact that you could make cheap, easy care, stretchy, durable garments from materials like nylon and spandex, all of which are derived from the same like long polymer chain extrusion stuff that gives you like plastic, fossil fuel derived fibers that have those characteristics. The microplastics. Shedding happens at every stage of the supply chain for synthetic fibers. So you get microplastics shared throughout mill use, through factory use and cutting. You get it shared through a lot of consumer end stuff. So washing, care, wearing, and so on. there are ways to mitigate some of that. And there's a lot of effort that goes into capture. So capturing it, filtering it out through wastewater treatment, capturing it at the factory, capturing it in And dying and places like that through actually kind of filtering effluent and that kind of stuff. All of that is designed to minimize shedding. Right? That's and that and that's the the wording of this is it's designed to minimize the microplastic output of synthetic fibers. You can scale that to a point. And I think I agree with you that this is a positive alliance from that point of view. The only real way to curb microplastic output. into the marine environment, into the lip environment, into human surroundings and things is not to use synthetic fibers. There's there's there's a point at which you need to just look at alternative inputs. Now microfibers, you can shed microfibers from natural materials. Cotton sheds microfibers. It just doesn't shed microfibers made of plastic that don't biodegrade and that have those potential health impacts and so on. So yeah. Pu positive step, but to me a supply chain solution means finding alternative inputs besides fossil fuel derived synthetics. speaker-0: Amazing, that's all the stories this week. speaker-1: Brilliant. Thanks, Grace. We went a little bit long today, but we did have quite a few heavy topics to get into there. So hopefully people will indulge us for a couple of extra minutes. Fun talking to you as always. I will see you next week.