After a two week hiatus, like Fast Eddie Felson in the underrated Scorsese classic The Color of Money, the Omni Talk Fast Five is back and ready to bring you the hardest-hitting, sledgehammer breakdown of the week’s top new stories from the retail industry!
Unfortunately, this week was a bit of snooze, but don’t despair because weeks like this are when Omni Talk is at its best. They force us to get creative both here and especially in our weekly podcast too.
We don’t plan to disappoint and, to start us off, there was one really important headline this week — Walmart actually made some sense!
After weeks upon weeks of Walmart diatribes, I have to give Walmart credit where credit is due.
So, let’s get right to it . . .
Headline #1 — Walmart actually makes some sense, as seen in a rash of announcements about the likes of PillPack (CNBC), Humana (Retail Dive), High-Tech Stores in China (Reuters), and Global Money Transfer Services (Chain Store Age)
After recent vegan cookie dough announcements, this week’s Walmart announcements were full fat gluttony. From rumors of acquiring Humana and PillPack to opening a high-tech supermarket in China to announcing its global wire service Walmart2World, Walmart crushed it this week with announcements of real strategic value.
Check this against Walmart’s general every three weeks PR announcement fluff, like expanding inventory scanning robots to 50 stores (yes, this was a real announcement last week), and the scale finally tipped in the favor of progress.
Let’s keep this going Walmart! Kudos to you for taking on some tough issues — like rising healthcare costs. America and its workers (as you will see below) need you to lead with substance over style.
This headline caught my attention because the resale trend is really starting to pop. I read the above headline, then happened upon Richard Kestenbaum’s nice piece on this trend as well, and both reminded me of a seminal moment in my life.
When I was in my early twenties, I dated an Irish woman. Our relationship was just like the Ed Sheeran song Galway Girl, only far less instrumental and much worse for my liver. But I learned some lessons from the experience that I will never forget.
Most importantly, I learned that Europeans are far ahead of Americans on spotting trends.
In 2003, my girlfriend couldn’t stop talking about texting despite numerous dismissals of the technology by our friends in San Francisco and Boston. But she was on it. Just like she was on the furniture and clothing resale trend too. I didn’t think of it much at the time, but she never could understand why Americans do not rent furnished apartments like they do over in Europe. Instead, Americans have to move and buy furniture every time they move into a new place. It is a practice that she believed was wasteful and downright expensive. She was ahead of her time again.
Flash forward to today, and Americans are starting to appreciate the mushy peas on the side of their fish and chips. Companies like ThredUp, the RealReal, and others are starting to understand the value in the resale services they provide, while experimenting in physical retail with a wealth of data and on top of business models with different working capital dynamics.
As usual, apparel appears to be the first domino to fall, but expect furniture to follow soon after based on the same psychology.
Companies like ThredUp are worth our time and study.
Headline #3 — Mall Vacancies Reach Six-Year High as Retail Slump Batters Local Economies (Wall Street Journal)
Real estate data firm, Reis Inc, reported that the vacancy rate in big U.S. malls reached 8.4%, the highest rate in six years, and that new construction within spaces currently under lease was also uncharacteristically slow.
These statistics should not be “new news” to any of us, especially Omni Talk’s faithful readers, but they are important statistics on which to keep our eyes.
My prediction — they will only get worse.
When the only thing that separates digital from physical shopping experiences in the future is the physical delight and memory of being somewhere, the legacy debt of shopping mall infrastructures is likely too much to overcome.
“Tourist attraction” malls, like the Mall of America, might still remain, but “Joe America” malls, malls that are the same in Florida as they are in Arizona, will face a difficult proposition in giving consumers value for their time.
Malls began in the 1950s, when retailers needed efficient outlets to distribute their products, and consumers needed efficient means to acquire said retailers’ products. But it isn’t about product distribution nor product acquisition anymore (for example, I just bought my coffee and picked it up in the time it took me to type these last two sentences).
The future of physical retail is about the efficiency of time and the delight of being somewhere.
Still not bought in? Give me call and let’s meet at the Brookstone to discuss further. I hear the chair massages are outstanding.
This headline stat blew my mind. Then I clicked in the article and learned that retail directly supports 29 million and indirectly supports another 13 million American jobs.
So, 42 million American jobs rely on retail.
Amazon, automation, AI, oh my! We aren’t in the general store anymore Toto.
Translation — one of the most important entry level/blue collar/whatever you want to call it jobs in America is about to change. Not only will there be less jobs in the retail industry to go around, but the jobs that will exist will require a higher level of technical acumen than ever before.
NRF — I ask you, how are we getting in front of this?
Maybe there is light at the end of the tunnel though. Finally something Amazon has touched has not turned to gold.
Quietly Amazon released their social platform competitor Spark. As my good buddy Carter Jensen pointed out last week at the CUE4 conference in Minneapolis, the race is on for social companies to get to commerce and for Amazon to get from commerce to social networking. Or, as I like to call it, the race for explicit and implicit search-based commerce is on — and Amazon appears to be encountering some speed bumps along the track.
Spark is designed to be Instagram for Prime Members, but Spark does not appear to be gaining influencers’, brands’, and agencies’ attentions.
This fact is one reason why I am still long on Faceboook, despite everything in the media. Social networks/communities are hard to create. Amazon knows what we consciously and explicitly want (via search), but Facebook owns our implicit desires (via our stored memories and how we navigate our feeds).
Expect startups to get into this space soon too — like this one in the video below, SHOP — the winner of the startup pitch contest at Shoptalk.
If there is one axiom in business that holds constant, it is that business never holds constant.
Be careful out there,
P.S. If you liked today’s post, please be sure to like, comment, and/or share this post with your friends or colleagues. Every like and share, especially on LinkedIn, tends to make a huge difference in our readership each week. You can also subscribe to Omni Talk here.
P.P.S. Tomorrow Anne, Carter, and I will be back at it as well with our weekly Fast Five and After the Five podcasts, where we will dissect the week’s news even further. Be sure to check us out on iTunes or SoundCloud, if you haven’t already. It is a great listen in your car, at the gym, or if you happen to be lucky enough to be like Chris Weaver and at a beach right now in California vs. the frigid tundra that is still Minneapolis in April.
Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.
Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.
Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.
He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."