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Fast Five: Doug and Marc go to the Taj Majal

It has been a busy but rewarding week here at Omni Talk. Anne and I continue to make progress on our retail startup concept, I spoke at GMDC’s Retail Immersion series at Microsoft on Thursday, my most courageous article yet on Matthew Shay of NRF and his lack of leadership went national on the Robin Report, and Omni Talk, thanks to your continued support, continues to gain subscribers and is quickly becoming one of the fastest growing blogs in retail.

As is typical in retail right now, the news stories continue to come at a furious pace. This week was no different. Let’s start it off with Walmart.

Headline #1: Walmart has confirmed it is buying a majority stake in India’s Flipkart for $16B (Recode)

Walmart announced this week that it plans to buy Flipkart for $16B. We might as well call this one Doug and Marc Go to the Taj Mahal after the hilarious Harold and Kumar movies because this move promises to be just as uproariously funny over the next few years.

As stated in the article, Walmart has now paid a combined $19B for unprofitable businesses in the form of Jet.com and Flipkart. On the surface, sure, the Flipkart acquisition makes sense — India is the second largest market in the world.

It is a big opportunity for anyone.

But, what right or track record does Walmart have to succeed in e-commerce in India?  Their e-commerce presence in the U.S. is lackluster at best, and Marc Lore, for all his PR peacocking as the e-commerce messiah, only has Jet.com and Quidsi to fall back on, which last I checked, the former’s success is still a huge question mark and the latter Lore had to sell to Amazon, and then Amazon quickly closed the doors on the entire operation.

You know who is happy right now — Amazon. A $16B bet is sure to be a huge distraction for Walmart, both at home and abroad.

Headline #2: For the first time in nearly 30 years, Best Buy’s logo is getting a refresh (USA Today)

Here is Best Buy’s new logo:

636614624048994511-best-buy-new-logo

I like this move. It is a subtle change, but I like what it signals. Coming off a strong holiday season and riding the wave of a “turnaround,” it is a smart move by Best Buy management to give the company a new compass or North Star around which to rally.

The omnichannel retail reformation requires new ways of thinking and approaching problems. Rebranding is a smart way for CEO Hubert Joly to keep motivating the ranks.

Headline 3: Indochino ramps up store expansion (Chain Store Age)

This story was quietly under the radar this week, but we should take notice of it. Indochino, the brand that sells made-to-measure men’s clothing, announced that it plans to open eight additional locations within the next four months.

I highlight this today because Indochino always makes my list of upstart retailers who are thinking about their business flywheels from an omnichannel perspective — i.e. with data at the core of their operations. I heard Indochino’s CEO Drew Green speak at Shoptalk in March, and the first thing I said after he concluded his speech was “this guy gets it.”

By having men come into his shop, and then recording their interactions, their preferences, and their measurements, Indochino understands it has the ability to use data to tailor its experiences and products in ways its competitors cannot.

Chalk it up to another case of what was once old is new again (tailoring) thanks to technology reducing the friction points that had previously made the old ways of doing things undesirable.

Headline #4: Sears extends partnership with Amazon as ‘transformation continues’ (Retail Dive)

Similar to Chico’s last week, Sears has agreed to sell DieHard branded tires (not Bruce Willis) on Amazon, and customers can also use a ship-to-store function to set up an appointment for installation at a Sears Auto Center.

Aside: I don’t know what is going on these last few weeks, but I love this move too! So many positives again this week — except for Walmart, of course. You can’t teach an old dog new tricks that easily!

This move by Sears is great. My partner Anne Mezzenga highlighted it best when she said that this move actually enables Sears to create something different out of their physical assets. Their auto centers could actually become their new store base, highlighting all the “manly” things people still come to Sears to purchase, while leveraging Amazon for ease, convenience, and, most importantly, traffic.

It is a shrewd way to think about asset redeployment, Sears. Your auto centers can stand on their own and continue to capture some of the growing-ever-paltrier-by-the-minute volume you still generate, while you figure out what to do with the albatross around your neck that is your mall-based business.

Headline #5: Nestle pays $7.15B for rights to sell Starbucks products globally (Food Dive)

Starbucks agreed this week to a deal with Nestle. In exchange for $7.15B, Nestle receives the right to sell and distribute Starbucks coffee beans and drinks to grocery stores and other outlets throughout the globe.

Somebody check my temperature! I love this one too!

Why?

Because it is omnichannel in the fullest sense of the word. The business in question here only generates roughly $2.0B in annual revenue for Starbucks. Compare that to Starbucks’ annual worldwide revenue of $22.39B, and one starts to get a sense that Starbucks is sharpening its focus.

Starbucks has the best omnichannel experience in retail right now. Bar none. The have made it so the entire experience is 100% in the control of the consumer. They understand that their long-term prospects depend on the experiences in their stores, not on the products that they put on other outlets’ shelves. Product acquisition happens now, almost anywhere, anytime, at the press of a button, but it is the stores that will lead people to search out Starbucks’ products in the first place.

Kudos to Starbucks for selling product distribution off to a specialist and for what I hope is a signal of a continued focus on staying head-and-shoulders above the rest of the omnichannel class.

Be careful out there,

Chris

P.S. If you enjoyed this content, please be sure to subscribe to Omni Talk so you receive our weekly updates, videos, and podcasts that we distribute every Friday to our faithful email subscribers.

P.P.S. It is happening folks — Bill & Ted 3 is a reality!

P.P.P.S. Thank god the following quote from Elon Musk during Tesla’s earnings call ended differently from what it made me think about at the start:

So, we had fluffer bot, which was really an incredibly difficult machine to make work. Machines are not good at picking up pieces of fluff. Human hands are way better at doing that. And so, we had a super complicated machine using a vision system to try to put a piece of fluff on the battery pack. (Elon Musk)

Chris Walton View All

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."

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