This week was a blur. So many things going on — it snowed again this week in Minneapolis, Amazon announced they have over 100 million Prime members, and I somehow ate the best pork belly brisket sandwich in my life while out at Home Delivery World in Atlanta.
To say the week was busy would be like Idina Menzel telling John Travolta, “I think you may have mispronounced my name.”
This week was so busy that It was difficult to cull the list down to only five stories.
And, then, there was Starbucks too. Intentionally not included in this week’s official Fast Five list, the incident at Starbucks deserves mention here, in this preamble, separate from the headlines below, because it is that important. Regardless of what side one comes down on, we now live in a society that is more transparent than ever before. We can either use that transparency as a lightning rod for positive change or for reinforcement of old habits.
The choice is ours.
Speaking of positive change. That is what Omni Talk is all about – creating and inspiring exciting and innovative ways to do retail. So, on that note of optimism, let’s get out of our comfort zones, embrace new ideas, and jump head first into this week’s headlines. The first one is sure to stir up some debate.
Headline #1 — Brandless plots LA pop-up (Retail Dive)
Brandless announced this week that it plans to open its first pop-up shop in Los Angeles, and, wait for it, it won’t sell products. No, instead it will sell tickets to expert workshops in “wellness, food, entrepreneurship and social impact.”
Brandless confounds me. I don’t know what to make of it yet. It is a fascinating experiment. While it could become an awesome business, and I like how the company is thinking as a lifestyle brand, I still need a few things cleared up before I jump on the Brandless bandwagon.
First, Brandless, you are a brand (had to get that out of the way).
Second, the so-called Brand tax? I am not buying it. Brandless claims that CPG brands have been unnecessarily taxing consumers for years via unnecessary and costly activities.
But, there is also likely a reason many of these activities existed in the first place (and note the Brandless website isn’t super clear about what these activities are either). As my Technology and Operations Manager professor told us at business school, “You can take a node out of the network, but all the tasks done within that node still have to be accomplished.”
At what point then does the cost of not paying this “tax” catch up to Brandless? I am guessing this premise isn’t closely watched now, since no one usually cares about e-commerce profitability within the first few years of operation, but one has to wonder if the brand tax is nothing more than a marketing hook.
Third, is it possible Brandless is just a modern day reimagination of an informercial? Is Brandless the new Ron Popeil?
Think about it. The parallels are there. Their pop-up shop concept, as described, is essentially a physical informercial. Brandless pays people to educate people on their products in the hopes that they go home and buy them online. It sounds a lot like my mom watching QVC late at night, only in a physical store.
But is this efficient? Have we gotten to a point of ROI where pop-up shops will trump actual infomercials or live-streamed events on social media?
I’d rather see them take a page from the HQ app and try something more innovative.
Long-term this leaves me at a crossroads, where the only positive outcomes I see for Brandless are either acquisition by a larger CPG company or becoming just another brand on a store’s shelf. I can’t buy into the next great retail story narrative quite yet.
Headline #2 — Home Depot is launching its biggest tech hiring spree ever to protect its lead over Amazon (Recode)
More great stuff this week, as usual, out of Jason Del Rey of Recode. Home Depot plans to add more than 1,000 technology hires this year.
Home Depot continues to crush it. According to the article, their stock is up over 135% over the last five years. Last summer I was driving down the street, looked over, and saw a huge Home Depot flatbed truck hauling lumber, cement blocks, etc.
I said to myself, “Yeah, try and disrupt that Amazon.”
This week’s headline gives us hope that there are defensible ways to coexist with Amazon. For Home Depot, their strategy to be the fastest, most efficient delivery network for consumers’ home improvement needs is right on point.
Kudos to them for now going after it even bigger and bolder. Well done Home Depot!
Headline #3 — Introducing the New Walmart.com (Walmart Corporate Blog Post)
Walmart sent out a press release on its new website design. We will get to it in a second but first a quick side note: I am going to create a new barometer for Walmart. I am now going to start classifying press releases as “From the Desk of Marc Lore” or “From Anyone Else at Walmart.”
This week’s headline again came from Marc Lore, and, big shocker, I am highly skeptical of it.
While I have lauded the “From Anyone Else at Walmart” moves recently, this statement is weird. A couple of things stand out.
One, in the entire press release, there is no mention of mobile. That is odd.
Two, the main tactics discussed — personalization, a different aesthetic, and home specialization — are garden variety tactics.
The aesthetic is especially concerning from personal experience too. When I first came to e-commerce, I mistakenly thought the “beauty” of my pages mattered, but I was wet behind the ears and had not learned how to ride the reverse-engineered bicycle of e-commerce yet.
Newsflash – beauty matters to an extent, but not nearly as much as so many other factors, like great item data and findability. The “beauty” Lore espouses in the release could be as much about placating internal stakeholders as it is about driving sales.
If so, uh oh.
Finally, rolling out a new website at scale is always dangerous. A company can only test so much in advance. Customers may or may not respond as expected. If they don’t, it could be another “tough explain” for Lore in the back half of the year.
Oh, and while we are on the subject, did anyone else notice Jet’s traffic was down 60% in March?
And, did a canary just fly by you too?
Headline #4 — The RealReal hunts for more funding amid IPO buzz (Retail Dive)
Word on the street is that The RealReal is looking to secure another $100 million in financing.
I love The RealReal. Like Home Depot, their luxury consignment business model is rooted in activities and concepts that are incredibly hard to replicate. They deploy armies of trained experts to go into people’s homes to evaluate luxury goods, and their business is 100% “sku unique,” meaning no one sku is like another. It takes real human understanding to be able to pull this off.
Now they are moving into stores, with their installation in New York and their pop-up in Las Vegas. They smartly are thinking about their business model differentiation across human, physical, and digital interaction points. While we do not talk about it often, Amazon and all of e-commerce still have much to learn about how to do the first two.
Headline #5 — Wayfair: new shopping holiday ‘Way Day’ coming April 25 (USA Today)
A Way Day? Seriously? Oh boy.
Here’s the thing – it will probably work. Web traffic will no doubt be higher in May year-over-year from the catchy name. But come on, Wayfair, can’t you come up with something more original? It’s an Amazon copycat move.
It’s been widely reported that customer acquisition costs and retention are thorns in Wayfair’s side right now. Playing on price with events like Way Day does not help the issue. The only thing that helps is building a brand that people admire and feel empathy towards. There are much better tactics Wayfair has yet to explore.
I have got an idea. How about doing something different? How about doing something with a soul? How about branding yourself, Wayfair, in a way where your logo does not look like the leftover stains on the conjugal bed sheets of Barney the Dinosaur and the Easter Bunny after a tawdry sex romp?
Ever think about stores? I hear they are all the rage in retail right now.
Be careful out there,
P.S. A big shout out to our loyal Omni Talk followers Sarah K, for always reading and listening to the end of our posts and podcast, and Barry from Coke, for stopping Anne and me cold on the street this week in Atlanta and telling us how much he enjoys our work. Both mean the world to us.
P.P.S. Sadly this week also saw the passing of Harry Anderson of Night Court fame. Night Court is one of the more underappreciated television sitcoms of the 1980s. Much of the birds and the bees, I learned from that show. You will be missed, Harry.
P.P.P.S. Thanks again for supporting Omni Talk on its journey. Tomorrow we have plans to go live again with our new video segments and podcast. Be sure to subscribe so you don’t miss out!
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."