Anne 0:09
Hello, happy summer. You are listening to the OMNI talk Fast Five brought to you in partnership with Microsoft the a&m consumer and retail group takeoff and sezzle. The OMNI talk Fast Five podcast is the podcast that we hope makes you feel a little smarter. But most importantly a little happier each week to today is June 2, I am your host Anne Mezzenga and
Chris 0:34
And I’m Chris Walton.
Anne 0:35
And we are here once again to discuss all the top headlines making waves in the world of omni channel retailing. Chris, how you doing today? Are you getting ready for our our Euro tour that’s about to begin tomorrow?
Chris 0:48
Top of the morning to you Anne. Yes. I can’t wait to go across the Atlantic, so I don’t think you knew this. I do not think you know this. I’m gonna break the news to you. Do you know that we’re heading to London tomorrow and it is literally what is it the Diamond Jubilee for the Queen’s like 70th year on the throne
Anne 1:05
No
Chris 1:05
It’s gonna be insane.
Anne 1:07
I had no idea, absolutely no idea until you told me today but it explains where the flights were outrageous and everything that’s going to be starting this trip off is going to be the same.
Chris 1:19
Yeah every European retailers gonna be like hung over for Shop Talk. That’s why That’s why no one’s getting there till Wednesday but yeah, man we got we got we got a killer lineup coming though Anne, like IT shop talk so so for those of you that don’t know we’re gonna be live streaming from the show courtesy of our friends at SCS and Magnatech. No net for a while great group of great group of people. We’re going to be live streaming right from their booth. We’ve got some cool guests we’ve got we’ve got guys execs from Morrison’s Marks and Spencers
Anne 1:47
Mango
Chris 1:48
mango, such as mango Anne I really wanted to say that my whole life
Anne 1:51
such as mango?
Chris 1:52
yeah, from that line remember, Chris Catan
Anne 1:54
Oh, yeah.
Chris 1:56
But yeah, they’re all gonna they’re all gonna stop by and we’re gonna live students share that share what they’ve got to say about the future of retail and everything tech and retail for you guys on LinkedIn. So you know, keep your eyes on on that.
Anne 2:09
Yeah. And hopefully we’ll be able to give you a good sense of what’s happening there. What we’re seeing, and who knows, Chris, what else we’ll get into or get up to while we’re there so well, yeah, we’ll be posting it on LinkedIn.
Chris 2:21
Yeah. And for those of you listening too we will not have a fast fight podcast because immediate next week, because immediately following that we are jetting off to Germany and
Anne 2:30
yeah,
Chris 2:31
and the Netherlands to do a some video demonstrations of triggers checkout for your retail in all of those countries. So wohoo stick around for that one?
Anne 2:40
Yeah, yeah, it’s gonna be fun. Let’s hope we’re separate again today. Because last week, I had COVID. And I’m still as you can hear, very nasally so everybody keep your fingers crossed than 14 days, I’m able to get back into the country and we can record and pay back for our June 16 podcast.
Chris 3:00
That’s right. The reverse Godfather is in effect again, no matter how right you try to get together. It just keeps us away.
Anne 3:06
Right.
Chris 3:06
But Anne, Anne before we get to the headlines I do want to share because I think our fans will be very excited to hear this because they’re a part of this success. We moved up to number six on the Apple podcast rankings for retail last week.
Anne 3:20
Oh my god,
Chris 3:21
That is our highest ranking ever. Can you believe it?
Anne 3:23
Yes. That’s amazing. Thank you so much, everybody. I’m so excited. And I’ve been loving reading the reviews. So keep them coming.
Chris 3:30
I am pleased as punch and like I said, We’re coming for you McKinsey. McKinsey was in the top spot. All this week. We are coming for you. Guns blaring All right, Anne well let’s read this week’s review. This week’s review comes to us from Jenna. And here is what Jenna had to say. Keeping up with the big wigs exclamation point I am new to my career working in Category Management for a large CPG listening to the Fast Five weekly helps me to stay in touch with what’s happening in the world of our customers. It’s given me the confidence to speak up in meetings. You go Jenna and sound intelligent while I do it probably more intelligent than we sound too Anne. Thanks Chris and Anne for helping me find perspective in the future of retailing. Well, Jenna I gotta say we are quite quite welcome. This is exactly why we do what we do and honestly Anne I think this review means a tonne I know it does to me I’m sure it does. YouTube shows you a wider reaches we’re hitting a CVG audience as well with this podcast. It’s not just retail. The CPG crowd is finding our insights useful and our humour fun each and every week. And so I take great pleasure in that Anne
Anne 4:33
Absolutely and keep speaking up Jenna, love to hear this review. And if you are listening and you would also like to leave a review you want us to read on the Fast Five, or you just want to let us know what you think. Please go ahead and do that on Apple podcasts or heart the podcast if you’re on Spotify, Google Amazon music, you know the drill, but please follow and subscribe so that we can keep making the best content possible for all of you and one day, read it aloud for all the listeners to hear. Okay, Chris, let’s get it on.
Chris 5:05
Yes Anne, Let’s get to the fast five. Yes. And thank you to all the reviews we get. We’re not We’re not on. We’re not doing a show next week, but we’ll get to that my my favourite one thus far from my ex fellow employee and colleague at the gap next week. But I can’t wait to read it. We’ll get to that in two weeks, you’re up next. But alright. Anne, we’ve gotten news on something called curbsiders service, curbsiders service,
Anne 5:27
Fancy, Fancy.
Chris 5:29
Yes, from Sephora and Brookfield UPS acquiring delivery solutions. Robot stores roaming the way at the Mall of America. Old Navy scaling back its inclusive sizing strategy. But first, Anne we take off as we always do. With news out of Dollar General this week Anne
Anne 5:47
Yes, let’s do it. Alright, headline number one according to one of OMNI talk’s favourites Sam Silverstein at payments dive dollar general plans to self checkout to go to self checkout only in 200 of its nearly 18,000 stores this year. The pilot comes on the heels of dollar generals plan to roll self checkout machines to 11,000 stores in total by the end of this year. Dollar General Chief Operating Officer and 2022 Omni star by the way, Jeff Owen had this to say on a recent earnings call, “Associates in stores participating in the pilot will still be able to assist shoppers during checkout. But the company believes that they will be better serving customers by handling other tasks”, Chris, what have you got to say about this one?
Chris 6:37
Yeah, Anne, ah man, this one’s tough for me. I’m you know, quite honestly, I’m I think, like I’m conflicted conflict is the word.
Anne 6:45
Yeah?
Chris 6:46
I don’t actually know how to think about this yet. And I think that’s important, actually, in how they’re doing it. I’ll get to that in a second. But, you know, I think, you know, on one hand, given the economic headwinds, I think it makes sense to test this, and 200 out of the 18,000 stores is a hell of a good sample size.
Anne 7:02
Yeah
Chris 7:02
Without impacting your total chain all that much. So. So I think I think it makes sense for them to do that. But I wonder if they’re gonna find the efficiency gains, that they think that they are, you know, for example, that we talked about on the show a lot, for a truly self checkout only store to work, you still have to have at least one person surveying the lanes. Hopefully, you’ve got some computer vision assistant to like what we talked about earlier this year.
Anne 7:25
Absolutely
Chris 7:25
But you also have to have a controlled entry and exit point to keep theft at a minimum and that and that’s really key. And so. So the idea I have it here is like how they design this is going to be key. But my guess is that they’re still going to go back to wanting the hybrid solution. Because I just wonder if that’s the better solution in the long run when you when your universe is self checkout only, or cashiers like, you know, if I’m choosing to just walk out stuff out of this, right, because there’s a whole nother row we’ve recorded on the store, I think the hybrid solution is probably better in the long run, I don’t think you’re gonna get as much operational efficiency gains as you think you are from going to self checkout, because of the dynamics of how the customers engage with it. And you know, the other thing I bring up too, is like, Walmart tried this, you know, in Arkansas, we haven’t seen them roll it out to a large degree either. But a lot more people are going with the hybrid approach and finding success there. So that’s why I’m conflicted. I don’t think this is going to lead to like this big self checkout pot of gold at the end of the day, but I think it’s worth trying. Who knows? You could be surprised. So net net. Yeah. I love it. I do love it. I just don’t know what to make of it. But it’s great as an experiment.
Anne 8:30
Yeah, I think you call it a lot of important points. And I think it’s also important to clarify that, you know, these are two, this is 200, stores of 18,000 stores that they have, like, I think this is an important move just because of the size of retailer that Dollar General is in the amount of stores that they have in in the country. And I think that, you know, no matter what they’re gonna give this a solid try at those 200 stores. I think it’s important to call out that, you know, this does, while it does allow staff to help, you know, the customers and so on that helped to the customers might be helping them do self checkout on their own. I think that it’s it still gives some stores the flexibility and freedom to start to fulfil orders that they’re going to be fulfilling. For instance, delivery providers, like they’re supposed to be expanding produce, they’re supposed to be expanding healthcare into some of their stores too. And I think as we start to see an increase in delivery coming from those stores, that this could be the key that kind of gets them to that that end game of having the the people on the floor not be tethered to a cash register. There are clearly going to be like challenges with theft. There’s going to be challenges with other things but I think those can all be solved or solved for as the most part as much as possible with like ever seen in Kroger what we’re talking about there where there’s the screens that are up with the by the self checkout. But at the end of the day, I think that this is really going to be successful for Dollar General and seeing how their customer responds to a completely converted store to, you know, using something like self checkout, and might open the lanes for them to start to test things like just walk out technology that you’re talking about further down the road. Because ultimately, in order to keep operating costs low, they’re going to have to figure something out. They cannot, you know, they cannot staff stores to serve the stores the way that they need to, with the current the way the current model is running. And I think that they’re going to have to, you know, tell the Dollar General customer look, you either, you know, have to do self checkout, when you come to the store the same way that like, you have to bring your own bags to IKEA, it’s part of the cup, like, that’s part of how you get a less expensive product, you’re gonna have to self checkout here, and the customers will have to decide from there like, look, or am I going to go to the place that, you know, there’s a checkout person? Or am I going to keep going to the dollar store where I can get things at a lower price point, but I have to do the checkout on my own. So just, I mean, a lot to think about there. But I do think that this is an important thing for people to be paying attention to.
Chris 10:58
Yeah, and I think, you know, I think might what’s opened my eyes to is I think, you know, self checkouts gotten a lot better, especially over the last couple of years. And even today, like the announcement from Circle K with maszyn, which we’ll we’ll cover next week, but we’ll cover probably at a future episode, because it’s pretty big, where there’s new types of self checkout machines coming into play to that make this even quicker and more efficient. And people are just more used to it now. And so, yeah, but I think ultimately will depend on the design, by which they decide to put this and implement it in the store. But it’s gonna be, it’s gonna be fun to watch because I could see a day where everyone is comfortable with it, too. And therefore you could get efficiency gains. And the other point too Anne that you brought up, which I think is great is like, it’s not just about helping customers. It’s also just helping with all the other tasks you have to do in store now like arranging curbside pickup orders and things like that. Which brings me to the next headline, which is
Anne 11:44
Yes
Chris 11:44
Headline number two, for Brookfield malls in Houston, have partnered up with Sephora to offer what is being hailed as quote unquote, curbsiders service. Here and is how curbsiders service works and it is it is important they said in the headline that you have to say it like that, according to change storage costs her customers who makes a for purchases online can choose curbsiders curbsiders as their pickup option.
Anne 12:14
Oh my god.
Chris 12:14
Again, when the order is ready purchasers get an email or app notification that includes navigational instructions to the pickup destination. Upon arrival, they can press in I’m here button on the app or in the email and they can scan their parking spots QR code, Brookfield then promises that a curbsiders team member will make deliveries to their cars within minutes. The service is being offered in partnership with n group, a supply chain company that AIDS retailers with workers processes and technology is one of the most catch all descriptions that I’ve ever heard. And I’m guessing you are loving this like to the degree
Anne 12:51
Oh yeah, I put this post out the day I like saw it on LinkedIn because I was so impressed by it. And I think, again, this may not seem like much when you look at it at face value. I mean, a lot of retailers were coordinating consolidated pickup spots that were at malls where, you know, you can come to this one parking lot or something. But this was all being done manually. And so I think that this has, this has come from a lot of specific efforts on behalf of both Sephora and Brookfield to make this happen. This is not that manual process. This is you know, Sephora opening up what would traditionally be very walled gardens, you know, they’re not willing to share their information with many people. But they had to, we believe open that up to Brookfield so that they can, you know, the customer can have access to seeing whether or not this product is available at my Sephora store at my Brookfield Mall. So I think we have to give kudos to both Brookfield for taking that role on as you know, I’m not just mall operator anymore. I am an omni channel retailer, operator, and Sephora for really going in and saying look, we trust you, we’re gonna go and see how we can make this a better shopping experience for both of our customers. And I think really playing into what we talked about early on in the pandemic, which was like how and where you get a product is going to ultimately determine who you shop with. Like if I can pick something up that day and I don’t have to go into the mall, but that’s the closest location to me. I’m going to choose that location and it’s done upfront in the process, not waiting until you get to the checkout process at the end. So I love this Chris and I know I know you are feeling somewhat similarly about this.
Chris 14:31
Yes, spoil my thunder Anne yes, yes, I am. Yeah, no, I totally not. 100% 100% agree. I’m just giving you grief there intentionally and well deserved but, ya know, I think it’s an awesome evolution of things we’ve talked about on the show a lot like, you know, it’s what we’ve been clamouring for a long time, which is a major retailer stepped up to the forefront with a big shopping centre operator,
Anne 14:52
right
Chris 14:52
conceive of the world differently in terms of how we all can shop and in a way that quite honestly I think a lot of people probably want to shop when all this gets done and put In motion in the right way. We first saw the idea with the debt mine and Centennial malls and the Mall of America last year. Yeah, but this takes it to a whole nother level. I think that’s the key thing for the audience to hear. Anne, and it’s something that you mentioned, the key is really the integration that’s happening with here, because you have this service being electable on Sephora as product detail page. That means integrated data streams. And that’s really, really important. So if so now Brookfield has this map at all its properties, we can say, Look, we’re doing this with a major retailer like Sephora. Why don’t you do this with us, too. And then they get to the point again, where they kind of reverse engineer engineer their way into a new front, potentially new front end experience, or they just end up coordinating this for everyone to the benefit of everyone. But it gives them so much optionality and value in thinking about it that way. And the last, the last one I would make to Anne is like, kudos to Sephora. Sephora is so far ahead on the omni channel game, like their graduate level. They’re like writing the graduate level thesis. So many retailers are like back at like econ 101. You know, it’s like, kudos to them. They’re just so far ahead of everyone.
Anne 16:07
Yeah. Well, hopefully this will encourage more retailers to take the dive and to go in and to open things up. I mean, if Sephora is willing to do it, like you said, then then there’s no reason that you know, boot barn Abercrombie and Fitch, like, you name it, they should all be going in and trying to figure out how they’re doing it and for other mall operators to it’s not just you know, it’s other mall operators that can take a look at what Brookfield is doing here. And I think, figure out how to use that as a template for what they go on and do in their malls and shopping centres
Chris 16:37
and the scale that comes with the pics and the activity around that all those activities too in those services. Yeah, when you all do them together. 100%
Anne 16:45
Yep. All right. Let’s go on to headline number three, so UPS has acquired last mile orchestration provider delivery solutions. According to freightwaves delivery solution, SAS platform enables smoother logistics experiences and same day delivery curbside pickup in store, pickup shipping and poach post purchase transactions, shippers and retailers using delivery Solutions Technology are connected to an ecosystem of same day delivery providers. Delivery solutions, leading technology helps merchants offer their customers more flexibility and an engaging online purchasing experience as they increasingly increasingly look for an experience driven omni channel strategy. That was a quote from UPS in a statement published on its customer first story page. Chris, what do we got to say to our shot in Manila delivery solutions?
Chris 17:37
Yeah, I know. Yeah. You dropped the CEO there yet? No, I and I’m so we are so geeked up for this story. And we had to highlight it for our audience too. Because as many of you know, who fought our show for a long time. And and I have been on delivery solutions sensitive beginning. I think we were an anti advisory board right after I met Mineola Shot in 2017. So it’s been like four or five years that we’ve known these guys, we’ve had them on the podcast numerous times. And this is proof to what we’ve been saying all along, you know, yeah, delivery orchestration software is foundational, foundational to retailers clawing back value and taking control of their own destinies. And it just goes to show you that any just like we just talked about in any service, really, whether it’s delivery, picking and packing, curbside pickup orchestration, all of those things, as I’ve said, 1000 times can be thought of as white label goods that you can bid out across all the different providers so that you as the retailer can take control of the value chain UPS sees that value. They got in they acquired delivery solutions, congratulations to our shot, and you know, super excited for them. Yeah, I
Anne 18:39
am, too. I mean, this is just been amazing. I think, you know, the biggest news for me, which if you dig into this article a little bit closer, Chris, I think it’s hilarious. Remember, a couple of weeks ago, we were talking about Walmart go local, and we’re like, hey, if anybody knows how they’re pulling this off? Well, the word is out. Surprise, surprise delivery solutions behind go local for Walmart. So I’m going to be curious to get more information about that. But I think again, like you’re saying, you know, we’re past pandemic, pandemonium. Retailers are now in the driver’s seat when it comes to you know, how they’re going to do third party delivery orchestration and delivery solutions, technology is going to allow them to do that for themselves not to have to rely on an Instacart or somebody else, specifically, or having that specific relationship with them in order to get their products to customers. Same day. So huge congrats to our shout in Manila and their team for recognising where this industry was headed before the industry itself knew it.
Chris 19:40
Yeah, right. For sure, for sure. And this kudos to them too. They bootstrap this whole thing. So
Anne 19:44
Oh, yeah.
Chris 19:45
Nicely done. Gentlemen. Nicely done. All right. headline number four Anne Axios revealed this week that tortoises you’ll remember toward us from some of our coverage on Albertsons, I think last year, yeah, Portis is first of its kind, remote country. Ford store on wheels is now shilling it down at the MO a in the Nickelodeon section of the mall, selling everything from popcorn to cotton candy and theme park tickets in. Yeah, here’s how it works. Customers use a credit card to unlock some locks a box, lock a box lockbox on the tortoise back tortoises back wow, this could not be harder. Take your chosen product. Each robot is steered and monitored remotely by humans and Mexico City Control Centre. Holy crap, this gets better. Tortoise says the average transaction time is 11 seconds and that 30% of people make a second purchase right away.
Heck yeah
“The first time they try it. It’s like they’re almost not even sure what’s going to happen.” Said Demetri Sheva Lengow. Tortoises co founder. And then people either buy a second item from the same container, or one from each container on the robot back. He then went on to add these transactions. These are transactions that would likely not have happened if we hadn’t been there and doing this. All right. Anne so I’m curious if you agree with Mr. Sheva Lengow stick here. Before I ask you about that I have today is put you on the spot question from a&m.
Anne 21:17
Okay
Chris 21:18
Are you ready?
Anne 21:18
I’m ready. I’m ready.
Chris 21:19
Yeah, you ready? Okay. That’s a good one too. As discussed a few weeks ago with Unilever and ice cream trucks, which if memory serves you love quite a bit.
Anne 21:27
Oh, yes.
Chris 21:28
Mobile robotic vending is a great idea for disruption and thus incremental selling opportunities. Our question though, is much like your favourite Walmart delivery drones operated by pilots in a central hub. Can this type of mobile robots get mass traction, as long as they’re controlled remotely by humans in a control centre and not fully autonomous. Your
Anne 21:51
I can’t, I can’t believe that the drone got brought up again. I was there like poking
Chris 21:55
We’re never going away from drones after last week’s rant
Anne 21:59
No. Um, okay. So first of all, I love this application of the tortoise, I was a little like hohem, on the grocery delivery that Albertsons was piloting just because it seemed like there’s a lot involved, I think you definitely need a human behind the wheel in those scenarios. So that make that is kind of like just just to set the table on how, what I feel about this in general, but I do think that eventually, this tortoise should be able to get to autonomous operation, I don’t think that you’ll need control, you know, a human controlling this. And even if you do still need a human control in this, it’s not the same as the Walmart drones. One, because you don’t need an actual pilot to be monitoring this. This is like someone you know, in a call centre, or you know, you know, navigation centre, that’s map monitoring this, and it’s still multiple products to multiple people, you’re still not doing one drone delivery. And you know, right now it’s selling tickets, cotton candy, and popcorn. But the potential for this is so significant, one because it doubles as an attraction and the service because yes, people are going to stop and take pictures of this robot and think it’s amazing. And then they’ll be buying stuff from it, just because they want to see how it works doesn’t matter if it’s $12 Cotton candy they’re going to be interested in so I think kudos to Mall of America, because this is a great thing to just have wandering around the park. I think that the potential to take this further is like taking convenience items and having it roam throughout the larger mall, not just in the Nickelodeon Universe Park. But I mean, convenience stores just kill at malls. I mean, if you especially if you’ve ever worked at a mall, you know, like having the holiday gas station or whatever to run to like they do a Mall of America.
Chris 23:50
Right
Anne 23:50
It’s packed all the time, there’s a lineup the door. So I love this idea of bringing convenience to the consumer. And you know, ultimately, you can come play around with this, you can add to it, and you have multiple things going to multiple people, and just refilling that as you go along. So I think it’s definitely worth worth having a driver if it needs to. And I think that it’s just a stepping stone to get to autonomous delivery.
Chris 24:15
Yeah, I think that’s the key. Right. Like I think, you know, I’d say two things. I think one, I think the most important part of what you said is the one to many, which you said on the show a lot which I’ll bring up another company that you mentioned in previous episodes to autonomy that was doing the delivery
Anne 24:28
Right
Chris 24:28
at the airport. This is different than that, right? Because this is actually this is essentially a mobile vending machine. That’s what you’ve got here that catch it captures you in the moment without you having to go to it or see it right. It’s just there. And that’s a use case which gets you a lot of purchases through its installation in one environment. And that’s the value in it. So economically, even if you even if it’s not autonomous, there could be enough value to extract from somebody down in Mexico City watching this. Right. And then the second point I would make is Yeah, I think you still get to a world where this is autonomous. And this probably gets to a world of autonomy faster than a drone does. Because a drone, you’re dealing with FAA regulations, you’re dealing with, I think you used the phrase, Jenny getting a package dropped on her head, or whatever, like, we’re going to be much more comfortable with autonomous vehicles. I would ascertain then, because they’re already in operation in like Phoenix in places like that.
Anne 25:22
And the hotels they’ve been like, remember, the future like the the, that was one to one delivery? Like, you know, it can have
Chris 25:29
In warehouses, like, you know, those robots aren’t gonna bump into people. They’ve been tested enough,
Anne 25:33
Right
Chris 25:33
I don’t think we’re at the place where we know where 1000s of drones flying through the sky, dude. And by the way, 4 million I was doing the math on how many frickin pilots you need for 4 million to deliver 4 million packages one to one, and that’s ridiculous. But yeah, I don’t think we’re at the point where we know the implications of having all of those 10 pound boxes flying over our heads every single day.
Anne 25:52
Right
Chris 25:52
Right, like, when chill when we all those
Anne 25:56
a&m, you
Chris 25:58
crazy words
Anne 25:58
You poked the bear, it’s coming back out.
Chris 26:00
But yeah, but so I think so. But I think both those points are important differences here. And ultimately, it may the autonomy part may not even matter here. If you’re getting enough throughput in these high traffic locations, like the Nickelodeon Plaza in the Mall of America, it just right just makes a tonne of sense.
Absolutely.
And it’s another James McCann company, Anne, we’re Vitesse, mechanical engineers when you know, it’s going to be awesome, so kudos to him.
Anne 26:23
All right, Chris. Let’s wrap it up. Before we border on any more rants about the Walmart drones. Chris headline number five Old Navy is scaling back its efforts to offer more inclusive women’s sizing in stores. So according to the Wall Street Journal gap, Inc, CEO, Sonia single told all said sorry that Old Navy stores will no longer carry all the sizes that it wants did. Old Navy will continue to offer on its website, the full size range, which runs from zero to 30, and extra small to 4x. But in stores, that will no longer be the case. Now, Chris, we’ve talked a lot about this one leading up to today’s podcast, and you have a lot of experience with this. So I love if you can kind of give us a background? Because when you were a gap, I mean, they were looking at extended sizes. What How did how, what’s the whole story behind this? And why is old maybe making this move?
Chris 27:17
Yeah, I mean, this story is actually story is actually a little disheartening in a lot of ways. It’s kind of kind of, it’s kind of sad, but in reality, you can kind of see how we got here. And I think that’s what we’ve talked about in the previous show. And you’re right, so at the background for everyone listening, like I used to work at the gap. And I was in charge of men’s denim sizing and women’s denim sizing at one point in time. And at the time, we did this investigation to say, Okay, we had 40 sizes, which included like things like 36, pant legs for really tall people,
Anne 27:45
Right
Chris 27:45
And we did the analysis of saying like, Should we take that from 40, down to 30. And when we did the math, like, you look at those ancillary sizes at that time, and you were doing somewhere between like five and 8% of your business, which may seem like a lot, but when you double click into it, when you look across every store where you’re having to send those jeans, it’s an it’s not a very profitable decision, because you’re selling less than one per store per week on average in those sizes, right, but you might sell them in your better stores. But you’re you’re ending up with a marked down or just a huge inventory carrying costs from from from trying to place all the sizes in the store. So when you get to a store like this, you know, navy, you’re talking about, like kind of that range of size, but then you’re probably also talking about even harder to sell sizes across the general population. And so there’s a reason this gets difficult and you can see why they’re pulling back. And so I think they I think ultimately they’ve arrived at the right answer and I’ll get your thoughts on this too. But the right answer to me is you warehouse them, you warehouse them in your ecommerce distribution centre because it’s one pool of inventory you can send it wherever you need to you make them available for ship to store you know you can pick them up in store tram on and store, you put all the full omni channel capabilities around it. But net net, it’s a really difficult game to get into. Unless you are 100% confident do you want to take the loss on this from a gross margin return on investment standpoint, to offer this to your customer? But I think history shows you that that’s hard to do. This is why things like big and tall stores exist, like they capitalise on this market specifically, and that’s what they tailor their business to. We’re trying to be everyone like everyone everything for everyone and mass, it just becomes really difficult to do.
Anne 29:26
Well, I appreciate that perspective. And I wonder then what brands should do? I mean, there is a demand increasing for extended sizes that we’ve started to see there are more brands that are going specifically after an extended size market. How I mean do you think brands like immediately I go to like do brands continue to offer this? I mean, we saw like Athleta go and really stand out for this talking about doing extended sizes in stores. But I mean, are they responsible then for pulling that budget, if that’s going to be where they’re gonna stand the budget for the loss of items that they don’t sell in the store? Is marketing going to cover that? Like, how do they figure out how to cover those gaps? Because somebody it’s got, it’s going to be paid for somewhere. I think the other part of this that I question too, is like, what’s happening to all of those unsold goods to, you know, as from a customer perspective, yes, it’s not an ideal situation that you can’t go to an Old Navy now and find all of your sizes on the rack. But, you know, if if they’re not available, you know, are those sizes that don’t get sold? Or that are getting returned to stores? Are they just ending up in landfills? And is, you know, is keeping them in an E commerce warehouse, a better way to hang on to that and make sure that those those get distributed? I don’t know what your thoughts are?
Chris 30:44
No, that’s a great point. I mean, it’s great point, there’s probably a sustainability angle too in terms of how you try to approach these consumers with these types of products. Right?
Anne 30:53
Yeah.
Chris 30:53
You know, in today’s day and age, I don’t necessarily think having something in a store is a requirement to a good retail experience, right, you can still call these sizes online, you could elect to have them shipped to the store if you want and they could try them on in the store. And that way, it avoids the downside of trying to say, you know, hey, we have these for everyone in every store, because you can’t, you can’t, you can’t just put them in your best stores, right? That’s a marketing nightmare. Like, oh, you can, you know, you’re this size, you can shop in this store, but to two miles down the street, you can’t like, right, that doesn’t work. But I think you can create a good experience to your point and probably a more sustainable one in the long run as well without having to worry about, you know, marking the stole stuff all out or salvage it or get rid of it or send it to a job or whatever.
Anne 31:39
And what about what Amazon style is doing? I mean, I know that’s possible for Amazon, because they have the money to do it. But I’m curious, your thought, like, you know, could Old Navy start to do something where you don’t pay for the product, you just order it all to An Old Navy, you try it on there, and then return where you don’t want right in the store? And then walk out with what you do? I mean, is that something like? How does that work into the like, the mechanics of everything? And what products you have on hand? And how many of those products you have on hand?
Chris 32:09
Yeah, I think that I mean, that’s a much better solving, if we’re talking about skews with highly variable sales distributions,
Anne 32:15
sure,
Chris 32:16
relative to sizes that are always selling and you know, like the medium, you know, how much you can sell the medium in every location, the extra extra extra small to elaborate on the point, it’s very hard to tell the pattern, especially in clothing, where things change significantly one style to the next.
Anne 32:33
Sure
Chris 32:33
Yeah, that’s a much more sustainable and economically viable business model. Because you’re not It’s not forcing you to upfront, allocate your product to 1000 stores do your best guess that you have at that time. So yeah, that absolutely makes sense. It’s one of the brilliant ideas around, you know, Amazon’s model. But you know, getting back to the question, I think, ultimately, it depends what brands you are, how much volume you can command in these sizes, there’s probably so retailers that can command a significant amount of volume in these sizes, without having the same impact to their bottom line financials. But most specialty retailers are not going to be able to do that. And so if they’re going to do it, if they’re going to take that risk, they’re going to have to hold hands and say, look, it’s a marketing investment, here’s how much I’m working investment is going to cost us and we think it’s going to be worthwhile and therefore we have to cut our budget in marketing somewhere else if we’re going to make this work.
Anne 33:26
Right. Well and makes the case for future you know, fit tech sizing and other things that are helping the other technology that’s used that can be used to try to help plan this out better to in the future, hopefully, but
Chris 33:39
Right.
Anne 33:39
We’ll see. All right, Chris. That’s it. Should we get to lightning round.
Chris 33:43
Yes. Heck yeah. Let’s
Anne 33:44
Okay
Chris 33:44
Let’s Lightning Rounds this B up before we go to Europe Anne.
Anne 33:48
All right. All right. Chris. tablez with a Z is Metaversizing. I think I’ve made that word up the restaurant reservation industry, which allows you to virtually view and select your table in your restaurant before booking my question for you, Chris is does Larry David still get sad that other people are in the restaurant? No, I’m kidding. My question for you is, are you a booth guy or a table guy when making a reservation?
Chris 34:16
Okay, so wait, you don’t want me to answer the Larry David question.
Anne 34:19
I mean, yes, do whatever you want.
Chris 34:22
I think those are both great questions. I think first of all, he gets to sit wherever he wants, because he’s Larry David in the metaverse, he can be whoever he wants.
Anne 34:28
That’s right.
Chris 34:29
You can adopt whatever persona he wants. But no, I mean, a booth or a table person. Anne you know this about me, I’m a table guy and particularly a circle table guy.
Anne 34:38
Okay,
Chris 34:39
I’ve told you the story at Stanford, like all the tables had to be circular because a circle circular table engenders camaraderie, because you’re always looking at everyone. You don’t have that situation where you’re only talking to person on your right or your left. It’s very, it’s very interesting when you start to think about
Anne 34:54
I’m a I’m a nice cosy booth gal,
Chris 34:56
you’re a booth gal. You like those big Wash red leather booths Alright Anne somehow reported someone I mean someone somehow someone somehow Anne reportedly threw a piece of cake at Mona Lisa. What was the last time you remember throwing food at someone?
Anne 35:16
I had to be
Chris 35:16
*inaudible* excluded.
Anne 35:17
I had to think really hard about the last time that I did this, but I do remember the last thing I could think of was when we were in Seattle, when we were at Target on a trip and I was eating some sort of fish stew like the choke cioppino or whatever. You know tracking something. What is it called
Chris 35:35
cioppino. Yes.
Anne 35:37
Cioppino?
Chris 35:38
Yeah,
Anne 35:39
I was cracking one of the things that was in that and I cracked and it hit Todd Waterbury, at target our boss at the time.
Chris 35:47
Oh, my God
Anne 35:48
In the face. I was sitting right next to him. And just yeah, pretty bad.
Chris 35:51
Yeah which For those that don’t know, Todd, wherever he has, like an all white house in New York like Right, like, like getting getting hit with cioppino
Anne 35:58
Yeah, he was I don’t think he was,
Chris 36:00
Probably not his favourite thing to do, by the way you’re Italian, You’re asking me how to say that.
Anne 36:05
I know? Well, you know what, it’s I think it’s the it’s what it’s like as vanilla ice would say what it’s like having the Rona except that wasn’t the actual, but I think that I’m gonna blame the Coronavirus for this this today All right, Chris. Four Johns Hopkins students invented an edible tape that keeps burritos from falling apart. We all know who’ve been listeners to the show but you have a very strict list of key ingredients for a burrito Where does edible burrito tape fall on that list?
Chris 36:37
Oh my god yeah. And if you have to look up this picture too because it makes it makes it look even worse than it is but But to answer your question Anne I would place it third on my list right after meat that is too dry and too much lettuce in my burrito. But But before before and ahead of otusa fold you can’t have a otusa fold in your burrito
Anne 36:59
No no no no no
Chris 37:00
And burrito that is too wet a burrito that is too wet but it’s better than those but worst it’s it but being too dry and having too much lettuce is a far more greater offence and I’d rather have edible tape.
Anne 37:12
I feel like the tape would prevent the loose fold and the wet burrito hopefully right?
Chris 37:16
I think you can still get a wet burrito from tape because it’s all just depends on like how much usually sour sour cream is generally the culprit in the wet burrito. Got off the rails. Alright Anne Taco Bell Stop selling Its recently reintroduced Mexican pizza on a scale of one to 10 How much do you think this had to do with a&ms David Ritter’s insatiable need to run to the border.
Anne 37:42
Oh man, David Ritter clearly is not alone with this menu item and that it maybe needs to be reintroduced Taco Bell, so figure out your supply chain, it’s no crunchwrap supreme but apparently people love it. So I think that I would give this probably an eight It’s David Ritter’s fault.
Chris 38:01
Yeah, you know, the hustle needs to do the hustle of the great dealer. They need to do an x plus A on like, why the Mexican pizza ever went away? Like I don’t get it. Like it was such a great thing. And now people love it, even though we’re running out of it. Like why did it ever leave the menu like
Anne 38:13
I don’t know
Chris 38:15
But anyway, Happy Birthday today to Wayne Brady, Justin log and the greatest official US president that is still living David Palmer himself Mr. Dennis Haysbert. Remember our LinkedIn live streams from shocked up Europe will replace our regularly scheduled Fast Five next week. We’d be back on June 16. And remember, if you can only read or listen to one retail blog in the business make it OMNI talk. Our Fast Five podcast is the quickest fastest rundown of all the week’s top news. And our twice weekly newsletter tells you the top five things you need to know each day and also features special content exclusive to us and just for you and we try really hard to make it fit all within the preview pane of your inbox and sign up today at http://www.Omnitalk.blog. Thanks as always for listening in. Please remember to like and leave us a review wherever you happen to listen to your podcast or on YouTube. And of course, as always, be careful out there.
Anne 39:08
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