Shopping, Solving Teacher Shortages, Wine Investing

is not about doorbuster deals. This year it is about shopping in a social distancing world. And Paul, I know you and Bonnie Quinn talked earlier with Danna tell Zy. She said the consumer is pretty healthy. Yeah, exactly right, and they're looking forward despite all the craziness in the world here, the consumer does have some liquidity as well. Yeah. Well, let's let's get to somebody who's got a front row seat on all of this. Jim Fallon is editorial director

of Women's Wear Daily. He joins us on the phone from Terrytown, New York. So, Jim, great to have you here with Paul and myself. The Westchester mall not too far from you, guys, but as we are hearing colleagues are sending in there talking about the malls and Riverhead and so on and so forth, the outlets, everything is very quiet. It's a very different Black Friday this year, extremely different. And I think it's going to be a

very different holiday season overall. I mean it's if any time is going to be an online holiday, this is the year. And the question is will it ever go back to what it used to be? So Jim, I think, you know, I think it was. As we've heard from retailers really over the last several years, we've heard about this concept of omni channel kind of you know, being online bricks and mortar, you know, talk to us what omni channel means to you and how we're seeing that

play out this holiday season. Well, they were omni channel basically is now utilizing your brick and mortar assets in a way that is going to pretty much drive traffic to your website. I mean, I think Deloitte or um Adobe predicted a hundred and six increase in UM buy

online pickup in store curbside pickups. So you're seeing Walmart, you're seeing Target, You're seeing all these retailers really using their store based to fulfill orders from online, especially with the surgeon online orders and worries over delivery and things like that. So whereas omni Channel used to be, oh, you know, we have our store and we also have our website and we're bringing the two together. Now, it's really how can we use our store base to fulfill

orders from online? And yes, customers might come in, but not in the numbers that they used to. Yeah, I listen. I gotta say to you, I've done a lot of shopping already and the packages, as I've warned our team today that I've got to listen for the door when packages are dropped because we have some porch pirates in the neighborhood, so I've got to be careful and get them. But what's interesting to know your neighborhood. It's a good neighborhood.

It's just they know. The packages that are delivered are really good too. Um. But what's interesting is when I order, I think about what's the exchange policy, how easy it how much is it going to cost for shipping back and forth? Because I love shopping online, but I'm often ordering multiple sizes and doing things like that. But I look at the store policies and that really determines where I shop a lot. Now, No, that's that's a very

good point. And I think consumers are going to become more and more wary and informed about those types of things. And also the key crunch point is the delivery times, and you know, I think predictions are now that pretty much December eleventh is going to be the cut off. I keep hearing different opinions. On the one hand, a lot of people say, oh, consumers are much more forgiving, they recognize the crunch on retailers. Uh, and so if

packages don't arrive on time, they're much more forgiving. And I keep thinking to myself, they're forgiving until DECEMBERY when they're waiting for that one gift for their left one that's not arrived. And then, um, so I think it's going to be a lot of pressure on retailers this year, particularly the logistics systems. And again the benefit is how quickly they can leverage their store bases to fulfill those orders and drive the consumer to the store to pick

up the product, because again that gives the retailer bigger margin. Um. You know, the key the key question of this holiday is going to be yes, growth of online, but what are the margin's going to look like? Yeah, I was wondered, Jim. You know we're seeing boxes pilot outside of to pretty much everybody's door up and down the street here. Talk to us about luxury. I mean, if I'm going to spend a lot of money on a luxury watch, does that also work in an etail e commerce type of environment?

Or I want to or do you find consumers want to go to the store, look at it, hold it, feel it, all that kind of stuff. Surprisingly, the luxury players are saying that more and more consumers are shopping online for those very high priced items. It's also forced those luxury players to offer those items online because luxury very much to your point, was kind of snobbish about a lot of things, but very much snobbish about the online experience. They thought the consumer wanted that personal touch,

personal service had to be in the store, etcetera. Now, because consumers haven't been you know, stores were closed, they didn't have access to those consumers. So they were setting up a lot of online shopping, a lot of video conferencing type shopping. Um and you know, the retailers I've spoken to have said They've sold jewelry worth hundreds of thousands of dollars via video conference and just then drove it up to the woman's house and dropped it off. So this is what I think. I think this is

something that's really dramatically different. We caught up at the CEO of Watches of Switzerland and they talked about how, you know, the whole idea of online shopping shifted to we were you know, thank you Zoom and all these other platforms that we were setting up, you know, sales personnel with customers online and doing you know, like we would be at a counter right like the shifting you know that we moved to that, you know, changing kind of how we shot and that that is something that

will probably stay with us. And I think about that how important that could be for especially luxury goods, very much so. And as they said, I don't think it may slip back a little bit when hopefully the vaccines take effect and people are protected against the virus and so forth. But this behavior is a fundamental shift in the way everybody is going to shop. And I think it's the combination of convenience, if you can get that

personal service, even via Zoom or whatever. Then you might not travel to a store, and you know, in a sense, traveling to a store versus getting the one on one zoom experience, you might get better attention actually via zoom. I want, so, j what are some of the items that are hot this year and what are some of the items that maybe are not? UM. I think you know you're going to see the normal electronics seems to be taking off a lot of TV discounts today. UM. Apparel,

the sweaters that you know, the things like that. Jewelry may do well because again it's one of the few things that you women particularly will be able to show off when they're on their conference calls on the computer at home. UM. I think guys like to show off like that new watch as well. I'm just going to put that out there. Yes, that's true. UM, that's true very much. UM. And so you know very much tops because none of us wear bottoms when we're on the computers.

All right, full disclosure. I have a potum on right now, the UM. But ironically, you are seeing some growth in shoes and things like that. What the consumers at all price points are beginning to under beginning to do, is they want to treat themselves. They're not eating out in restaurants, they're not going on vacation. So there's been this spending boom because it's like, I have this liquidity, as you mentioned earlier in the program, I want to do something

with it. I need a treat, and so they're spending money on things they might not wear right away, but they're kind of buying for when this this horrible experience is over. Well, Jim, have a good holiday season. I'm sure we'll be checking in with you throughout. Jim Fallon, editorial director of Women's Where Daily, joining us on the

phone from Terrytown. Guess it's really fascinating story here. She has positioned her company as the peloton of education by connecting teachers from around the country to school struggling to find teachers by taking over classroom with live stream instruction. Let's get the latest. We welcome Shelley Barren Wall, CEO of Elevate K through twelve. Shelley, thanks so much for joining us here. Talk to us about your company, about the issue you're trying to address. Sure, thank you so

much for having me on. So when we talk about the problem that you're trying to solve keep COVID aside. It's a plaguing problem in the USK to old schools and district which is of the teacher shortage. Now, in the past, there was already a teacher shortage problem that existed that we was solving. According to the Learning Policy Institute, there were over five hundred thousand in teacher vacancies or uncertified substitute teachers teaching in the classrooms. With COVID. Now

that problem has actually grown several times. So according to the American Federation of Teachers, one in three K TALK teachers is expected to retire early due to COVID. So if you just talk about the problem right now, the teacher shortage problem across the USK to our school districts already existed and with COVID it's just accelerating at a much higher rate. And that is a problem that we're solving.

When there isn't that great format teacher or the grade six science teacher or the high school cybersecurity teacher not existing in the local zip code, how can you bring that same power of amazing teaching into the classroom by live streaming it so that zip code is not a barrier to the access to high quality teachings. Say, one thing I want to ask you is you said they were already over five teaching substitutes in our system. Why is it so that sounds like a really high number?

Is it help me out here? Right? So, the way you have to think about a problem about this problem is it's not really that the supply of teachers overall. Right, So if you look at the overall demand for teachers as of today, there are three point one million k twelves teachers in the school system. The supply may be slightly higher than that. But where it breaks is the

geographic arbitrage. We do a lot of work. Let's stay in South Georgia, dirty County, right, Sometimes it's impossible for them to find a Spanish teacher there, or a calculus teacher. But there's a high supply of teachers of calculus teachers, maybe in San Francisco. So the problem really is of a geographic arbitrage. I am surprised that there is not more conversation about this problem as we talk about reskilling America and reskilling real America, uh in specifics. So the

problem exists eight because of that. The second reason the problem exists is what the children need to learn is changing. We have a lot of conversations about STEM, computer science, cybersecurity. If a school district can't find a Grade Ford math teacher, Carol, go figure, how are they ever going to find a computer science teacher. So the problem really existed, people were talking about it, but I think COVID has just brought this problem center and completely up front. And this is

a problem plaguing mostly the low income neighborhoods in the country. Well, and I think about Paul, like you probably thought about it with your kids. I know my parents did. They thought about when they bought a house where we were

going to grow up and what kind of education. That was a big thing, and we know it's just not equal, right Paul, you know around the country absolutely, And Shelley, I'm just wondering what the you know, what this country has been dealing with really for the last eight months as it relates to education, much much more virtual education. What are your thoughts on the viability the quality of that virtual experience visa vi the in person experience, since

you've had so much experience with it. Thank you so much for asking that question. I think it's a very important question. To be asked. Um, you'll see a lot of articles now talking about virtual education is not working, online learning is not working. I don't think virtual education or online learning is not working. What is really not

working is the way it is being done. Over the last several years, we as the company have honed in on the specifics of what makes real life teaching impactful engagement. That a gaugey, the way you teach. How is the teacher being how is the teacher being like evaluated? What

are you doing in a life syncodness and waterman. If you think about virtual teaching now and what you see with your children, what they've basically done is taken a platform like Zoo More Google Needs that was built for business and bandaged it and said, hey, kids, schools in districts, let's use it. And that's the reason it's not working because it wasn't built for a child, it wasn't built

for engagement. The teachers didn't go through the right amount of training, The teachers are not going to the right amount of quality audits because everybody is just scrambling to fill let's get something out to the kids. The instruction loss that is going to happen, specifically in the low income neighborhoods because your children fall and Carroll's still you know, you have WiFi at home, you have laptops, you have electricity. When COVID hit, the transition was easy. We worked with

some school districts when COVID hit. The only thing that the superintendent would say the goddesses to make sure that the meals are delivered to the kids. Some of these kids don't have electricity at home, some of them don't have WiFi, so they were different issues them. My viewpoint is virtual learning and online learning works if it's done well, and the three pillars that make it highly effective is great technology built four K twelve right, absolutely amazing, rock

star teachers, and great content. You know, Carol, unfortunate to live in a town that has a very good school system. But this summer at school is just about to open. I saw for the first time signs in front of the schools recruiting substitute teachers. I guess the district was really anticipating with the COVID that there would be a

greater need for substitute teachers. So if it has happening in strong school districts, you gotta really wonder kind of where we are and some of the others, and fortunate to continue our discussion with elevate K through twelve CEO Shelley Baron Wall. Shelley again just highlighted to me, uh, this issue of teachers and give us a sense is this Are you finding that there is a growing shortage of teachers or maybe just that arbitrage that you were

talking about earlier, that's really a regional thing. So I would answer the question in two phases. Number one and the first problem is the geographic arbitract right if I look at the supply of teachers right now. But however, when we think about building a company, when we think about reforming a complete industry, you have to think about

what this is going to do long term. And I do believe that as the percentage of people in general taking teaching certifications or wanting to be teachers reduces, this problem is going to further increase and rather than just impacting the low income neighborhoods, very soon may actually impact

the high income neighborhoods. So what we need to do as as a society, what we need to do as a company, is not just think about the problems that we are solving right now, but also think about what are the strategies and measures that need to be taken now to continue to improve the supply of teachers, like to make teaching of un professor again where millennials and want to be teachers, and they're not wanted about that being a teacher, they may not get paid a lot,

or where do they want to live. I think one thing that COVID has done is, you know what, people can live anywhere they want, and with our live streaming instruction, teachers can teach straight into a classroom where the kids are in one physical location from anywhere they want. So I look at it in two phases and that's how I see the problem evolving. So don't you think all I also think there's something wrong with us as a society. Cately that I don't think there is a lot of

respect for teachers. We certainly don't pay them often enough, and we also ask teachers to often buy their own supplies, you know, contribute. You know, there's something wrong. I didn't grow up where my parents had to buy you know, we bought the things I basically needed, but the schools supplied a lot. And something's happened in our world. Despite the amount of money that we haven't spent on taxes and it goes into education, we've gotten I don't know,

we really kind of gotten messed up. So how do we pay teachers more so that people want to be a teacher and come into the occupation. How do we make sure schools are funded in the right way? M so Actually, so, we do surveys of of our teachers. Right we have a network of over thousand teachers in the US. They're located everywhere, they teach online, they teach live. And when we do our surveys, Carol and we asked them, why did you leave the school district to work with us?

What caused it? And the number one reason was because they were so done with a lot of bureaucracies and politics that happens within a school district where they went into teaching for the joy of teaching. So, frankly, it's not so much the money, it's actually the rest of the systems around it that plugged the teachers out of the school system. Definitely, paying them well, making teaching a

high paid job is definitely a plus. And I'm hoping that with some of the laws changing, with some of the policies coming in, we see more and more of that. Teachers want flexibilities. Like a lot of our teachers are from North to Code down there from Oklahoma where they live in small towns with the cost of living is low, but they're teaching in a big town in let's say in North Carolina and into a classroom. So I think

that part is causing them to leave the profession. And if you look at the root cause analysis of that and start targeting each one of those, you will see more and more teachers come back into the system. Like we've currently partners with companies like Sylvan Learning that your code sharing our teachers. We're partnering with University of Phoenix talking to these universities on how you can make your

teaching curriculum more impactful. That more millenniums and the younger generation want to get into this profession and teach the way they wanted, maybe from a beach, and how do you make it SEXI before them, Okay, I mean you told me, But what's interesting. I have a cousin. I mean she's retired now and we would have kept teaching

a few more years, but you mentioned bureaucracy. Um, you know, talk to me about situations where schools didn't back up teachers against parents, and it became where teachers were, you know, kind of having to reprimand kids or it just got really difficult. And I do wonder you know that dynamic how what what you're hearing about that as well? Yeah, I would say that probably not every school district goes

through that. We have the fortune of working with some amazing school districts where their leaders and superintendents care a lot about their staff. Because again, it's like any other organization, right, you care for your people, you give them the right rules, and the entire organization flourishes. So specifics, what I have heard about is Number one is the time commitment required. Right Like, as a teacher, you may think that that a am to three pm is where your life and no,

your life kind of continues beyond that. So the number of hours of work that they have to do beyond the to three is what pushes a lot of teachers from a regular brick and mortar system to working with us online. The second is the flexibility of time. More than sixt the tchual teaching population is women, more than of our teaching population is women, right, So you see the difference there, and they are between thirty two to forty.

They are a mother with a teaching certification, so they need that flexibility that I can work and I can also you know, be at home when needed. So that flexibility that the gig economy has offered to a lot of other industry. It's high time that it comes to Kate pout now and that's what we're trying to change. Shelly, just quickly, what is most school dridstricts, I would say around the country are really struggling with virtual learning? What

the mistakes do you think they're making? What advice would you give them to try to improve their virtual learning? I think the first the only advice that I would give them, actually not the first run is believe in

synchronous teaching. What the difference between synchronous and asynchronous arning and teaching a synkinner, So a lot of remote teaching that's happening not with elevation but without elevate wealth is a teacher would come online, teach for maybe ten fifteen minutes and then that's synchronous teaching, and then give a synchinners work to the kids to do on their own

watch videoself based learning. Again, it goes back to the have and have not right, like your children would be proactive, would want to do a syn conness learning maybe or maybe not. I'm not sure, but a lot of the students who we serve there isn't a culture of success. They don't have those examples. So what is really not working is the lack of synchronous life teaching into remote learning.

Online learning is not life learning, and I think the industry and the country needs to start understanding the difference between the two. That's a really good, important distinction, especially as we move forward and we expect that this online learning is going to kind of stay with us in some form or another. Shelly, thank you so much. She Alie bar and Wall. She is founder and CEO of Elevate K twelve. Check out more about what they're doing.

You can go online and find out about that. Paul, You know, we talk a lot about diversification when it comes to investing, right, and that often includes some hard tangible assets, including wine, which is what our next guest knows about. Anthony is saying he's a repeat entrepreneur. He has founded and sold a couple of companies. His current venture is as co founder and CEO of vino vest excuse me, a tech platform for investing in wine, and

he joins us on the phone in Los Angeles. Um, Anthony, it's nice to have you here with Paul and myself. First of all, how are you doing? And I'm curious about the pandemic impact. UM, how what it's had on your business, especially go back to April and then kind of where we are today. Absolutely, and first of all,

thanks to both for having me on UM. I think with the pandemic, with a lot of both being uh, you know, lockdown and certainly drinking a lot more wine, I think we've seen a lot of hill winds, especially in the high end wine investing market. As coupled with that, a lot of savvy investors are thinking of ways where they can diversify away from traditional stocks and find other assets where they can start to hedge some of their profits.

So UM, I think with our company as well with a lot of other alternative investing companies, we've started to see a lot more openness and interest from retail investors and institutional investors alike. So Anthony, tell us about your company, how does it facilitate investing in fine wine. Absolutely. Our company makes it simple and accessible for anybody to be able to to invest into fine wine as an asset class.

So not only do we actually help with the selection, we also help our investors store their wine, ensure their wine, as well as provide a platform for liquidity into selling their wine whenever they want. So, if I deposit some money with your and can give you some money, will you go out and buy a basket of wines for me to invest in? Or how how does that work? How do you decide what I should be buying? I

guess yeah, that's a great question. So we do take a basket approach in that based on your maybe your risk tolerance, your investment timeline, as well as how much how many you have to actually invest. We're able to then have our team, as well as algorithms that we've built, be able to construct a portfolio of wines that could be right for you. So, just like in the traditional stock market, you've got your equivalent of blue ship stocks or maybe your emerging market stocks. Uh, there's the same

thing in the wine world. There's some wine regions and producers that are a bit more established than others that have um really predictable gains as the wines mature and age, and there's also newer and hotter, up and coming regions that maybe a little bit more speculative, but can also

to deliver returns that are above above market. Hey, Anthony, I'm curious about your demographics, because if if we wanted to get started, I mean, you can start, you know, for as little as a thousand dollars, right, I think that's your standard UM kind of platform. Premium is fifty. You have to have a minimum balance, and then there's the grand crew, which is about a quarter of a million dollars minimum balance. Who do you have the most of on your platform? I'd say we definitely still have

the most of our standard plans. So most folks, I think are really unfamiliar with investing in wine. Maybe they've heard of a friend or two as a couple of expensive bottles, and they're familiar with the general concept of wine going up over time as it ages and gets more expensive. But um, most people don't really know where

to start. And that's really where we want to be as be that accessible entry point for someone to be able to maybe start with a few thousand dollars to diversify away from the stock market then build on from there as to become more knowledgeable and comfortable. Anthony, how is this? How is wine done as an asset class from investment perspective and kind of what benchmark do you do you look at or should we look at? Yeah,

that's a great question. So in terms of the performance of the fine wine market over the past thirty to forty years, it's outperformed the SMP five hundreds. It's had annualized returns of a little bit under twelve percent. And I think on top of just the strong annual performance, what really stands out to most investors is the lack

of volatility. It's really really slow and steady. Over the last thirty years, it's only had six down years, which, um I think as something to diversify into that has lower volatility and really strong gains makes it a really attractive asset class, regardless of the fact that it's lying. Yeah, well it's interesting. You know, the economists had a story I think it might have been last year, just talking specifically about Burgundy wine investors beating the stock market. UM

no pun intended. How liquid is it? So you you invest, you buy bottles or you have a portfolio created for you, you can ultimately sell those bottles right and I'm curious how easy how quickly that can be done. You can

also ultimately right drink those bottles. Absolutely so, since we are allowing each client to actually buy the whole bottle or by the whole case of wine, and we're not securitizing it into some sort of a fund or some sort of fractional ownership, the client enjoys the benefit of actually having that direct ownership or the physical asset, which means regardless of what happens to the price of the wine, that can still choose to drink it, enjoy it, gifts

it whatever they like. Um, and your question about liquidity, we really only put a you know, put a premium on the wines that already have existing demand on the secondary market. So a lot of these top Burgundy wines or Bordeaux wines are ones from NAPA. UM, they're always in high demand. So we can be able to say, Um, if you wanted to sell off your portfolio positions tomorrow, we could get you out of those positions in a

matter of a couple of weeks. Because there are so many investors or collectors on the consumption side that want that wine. All right, So Anthony, I'm a value stock investor, how do I bring that over to the wine Because what's the up and coming hot region or hot grower that I should be looking at right now? It's called the screw Top Paul And from New Jersey. That's definitely

the value there. But I'd say for investment wines, what you want to do is not look at the Kreme Dola Creme, right those ones everybody knows and those prices have have been skyrocketing for the past few years. What you want to do is take an established region and maybe find some up and coming producers from that established region.

So looking at Burgundy, there's there's producers that are selling balls of wines for ten thousand dollars twenty thousand dollars a bottle, but they're all are also ones that are maybe five hundred bucks a thousand bucks a bottle, and you know that they're they're going to be climbing into those uh stratospheric price rangers in the next few years.

Another approach is to take a completely uh up and coming wine region as a whole, so you're looking at the impact of something like climate change previously, places like Oregon in the past decade have really really started to blossom in popularity, and even a lot of these top burgundy producers are actually buying up land there because they see that as the future producing the best wine in the world as well. Thanks for listening to Boomberg Markets podcast.

You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn. Paul Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can all is catch us worldwide at Bloomberg Radio m