Hello, you’re listening to the Omnitalk Fast Five brought to you in partnership with Microsoft, the a&m consumer and retail group, takeoff, sezzle and silk. The Omnitalk Fast Five podcast is the podcast that we hope makes you feel a little smarter. But most importantly, a little happier each week too. Today is November 17. I’m your host Anne Mezzenga.
And I’m Chris Walton.
And we are here once again to discuss all the headlines making waves in the world of omni channel retailing and joining us today back for their regularly monthly appearance. Regular monthly appearance rather are the a&m consumer and retail group’s Jonathan Sharp, and Billy Christensen. Welcome both of you. Jonathan, welcome back. How are you doing today? Are you ready for a wonderful Fast Five.
I’m very happy to be back with you. Thank you Anne, thank you Chris. Yeah, looking forward to it kind of winter’s come here. So you need something to warm me up. But I’m pretty sure that
I think the topics today might do that.
They’re pretty high. It’s snowing outside Jonathan. Jonathan how many appearances is this for you now? What is this? Three, four?
I think this might be three. It might feel like 30 to you guys, but I think it’s three
You are one of our favourites man, for sure.
Well, Jonathan give those who might not know you or might not have listened to previous podcasts that you’ve been a part of, give them a little background on you and your role at a&m, please, if you would,
of course. Thank you. So I am a partner Managing Director at Alvarez of Marcel’s consumer and retail group. I’ve worked in retail probably for too long than I care to remember. Amongst other things, I’ve done a lot of work in grocery and for a&m, I lead our work on consumer sentiment and our six monthly Consumer Sentiment Survey.
Excellent. It’s always a great survey, we usually get to sit down with Jonathan to talk about those. So check those out if you haven’t already. And Billy, you’re a first timer here. Why don’t you tell us a little bit about you and your role at a&m?
Well, thanks for having me. I hope this is my maiden voyage and not my only voyage.
But I so I am. I’ve been with the anmc rg team now for a couple of months. On my background, I was an industry operator for 20 years before making the switch over to consulting a few years ago, and then have not looked back since my my change to consulting. So you have worked with retailers, large and small consumer, as well as on the branded side of the world. But really excited to be here today. Thank you all so much for having me.
It’s great to have you man.
It is I know we’re excited. Do you have a headline you’re most excited about this week, Billy?
You do? Are you gonna? Are you gonna give us a tease what it might be?
No, let’s let the people wait. Let’s build the suspense.
They’ll just be able to tell from your exuberance about the topic. All right. I love it. I love it. That’s, that’s what we like about this show. All right.
Perfect. Chris, you’re at home today.
Yes I am at home today.
We got in late from Dallas last night. Are you ready to rock these amazing headlines that we have today?
I am for sure. 100% I’m pretty excited about it. It’s been a big week though. And we went the SPS yet first article published in The Wall Street Journal too.
It’s down and video if you’re listening for that. That was that was a rare that was that was a pretty cool feather in the cap this week as well. But yeah, let’s get to the headlines. So today’s Fast Five headlines are brought to you with the help and support of manifest. Manifest is the who’s who conference in supply chain. And it’s January 31 to February 2 in Las Vegas. Army talk fans. Don’t forget you can still save $200 on your registration by heading to manife.st/omnitalk. That’s manife.st/omnitalk. Alright, Anne in today’s Fast Five, we’ve got news on gap launching a store on Amazon. Tik Tok piloting in app commerce in the United States. Nikes launch of duck .Swoosh which I just like saying and .Swoosh
Of course, of course
Swoosh. Victoria’s Secrets new fit tech partner. But first, we take off with big and fun intended news out of target this week, Anne
I’d love when you can get a pun in there Chris
It just won’t be the first
I am aware
It won’t be the last I mean, Annne. it’s just the first of many more.
Everybody’s well aware of this. So let’s get to it. So headline number one target last week in advance of dismal q3 earnings announced a new, larger 150,000 square foot format. So according to retail dive, the format will be its primary development focus in the coming years, while it will still continue to open stores of other sizes as well. The extra square footage includes five times more space for the back room fulfilment than a traditional Target store has and the format also has space For more merchandise assortment, including room for expanded food and beverage selection, according to target. Lastly, the company also pointed out two years, quote, years. Yes, we we have no idea what they’re talking about of research behind the new design and this larger storage strategy.
Jonathan, we’re gonna go to you are a seasoned veteran here. What are we supposed to be making of this headline? Is this like the real deal here? Is this just PR trying to pump everybody up before the earnings report came out this week? What are your thoughts?
Well, big boxes back right? Did it ever go away. But we’re allowed to talk about it again. So look, here’s my view on this. Well, firstly, I guess to your first question around, was this just a kind of a cookie to throw to the street because it’s quite a risky one for that, right? Because it implies capital intensity. So as you would actually not be happy as an analyst with a company that’s having earnings trouble then saying capital intensity is going to go up so I can’t imagine it’s that first of all, my reaction was, as I said, which is well, big boxes back flares will be back and, you know, I’ll be fashionable again. But
Where’s our back, Jonathan? That’s like, I mean, that’s what you should be buying right?
I know I realised as I said it, which I just kind of
Let’s not talk crazy Jonathan, you being fashionable that’s that’s ludicrous. Okay.
I am so off the zeitgeist. It’s unbelievable. But look, so first of all, I thought, right, okay, so it’s big box, where are they putting the space? Are they actually going to crack grocery at last? Are they going to get rid of this kind of quite a problem I’ve always thought they had which is they’re quite compartmentalised. Which is, it’s quite difficult to shop, all of the stuff that they tried to be credible and authoritative in.
But the more I thought about this, I wonder actually, if this is not the return of big box stores, this is actually the expansion of kind of dark stores and fulfilment centres, you this is a fulfilment centre play 24 hour fulfilment compete with Amazon Prime delivery and do a bit of extra retail on the back, probably with an attempt to crack grocery because that drives traffic.
So that was kind of my sense. And the other thing that I was thinking about was, the other reason I can’t think it’s a kind of pure retail big box play is that a lot of the messages coming out of our Consumer Sentiment Survey, post COVID and continuing is that consumers are consolidating their shop, and therefore, you know, are target really going to pick up the sort of the marginal grocery shopper by with them fragmenting their shop. I’m not so sure. This feels to me like an Amazon Prime play.
I agree completely, I think, you know, it’s only 20,000 square feet in the grand scheme of things. So in most of that, I presume will be going to the back of house. That’s, that makes sense is they’re expanding distribution centres. They’re expanding sortation centres. But Billy, what are your what’s your take here?
I agree with Jonathan, I thought my thoughts immediately on this where this is all about a DC, you know, type setup. The one thing I will say that did excite me from the article was the picture and which I’m guessing is from that store in Houston, the the article mentioned, the covered bays as a as a pickup point,
That is a consumer got that gets me excited, because too many times I’ve done that in inclement weather. And that’s not a great experience for the store associate or for the customer. So if that’s part that’s baked into what they’re, you know, what their plans are, I think that’s super. And I actually think that that’s a positive, you know, for them and will will be a differentiator because I haven’t, at scale, at least seen anybody else attempt that. So I think that would be a really big differentiator for them. If that’s, if that’s, you know, baked into what they’re trying to do.
Yeah, that is it is a grand architectural gesture for sure. I mean, the likes of which I think, you know, we’ve started to see at HEB Chris and I went down to their Frisco store last week, they have the big covered awnings, but yeah, you’re right, like even Walmart’s are quite small when you compare it to that rendering that we saw the Houston store. But, Chris, you have some strong opinions here. We’ll go to you next. And I’d like you to share what you think about this this announcement.
I do. I think there’s some subtle points that you can pick up in this announcement too, which I think are really interesting. I agree with both what Jonathan and Billy said like it seems like it’s still mid play. It’s a micro warehousing play for the most part because you’re right, it’s an incremental 20,000 square feet, which 100-125,000 square foot box really isn’t all that much extra space, but You know, I think it’s funny the store to me because like, honestly, like how many of these can actually build, they have like 2000 stores already throughout the country, like the incremental value of these is gotta be relatively small on the sales side, it’s only got to be for a distribution play to the point.
The other counter to me is that in the headline is what it implies about the small store strategy. Because you know, they were big in the small store thing for a while now they’re saying they’re going the opposite direction, which I think is a proof point, which we’ve been saying all along, which is the small search strategy is really a road to nowhere, when you have that many stores already throughout the country, because it’s going to be smaller volume stores, you can only build so many of them, it’s not going to drive significant growth and cost in the long run.
So that’s what I take away from it here. Which begs another question in me, which is, how is target going to continue to move the needle on growth? There’s where’s the dry powder in the keg at Target? They don’t have a subscription programme like Walmart plus or Amazon Prime, they have no target Technology Services ala like walmart or amazon does. They’re not looking at that from a business to business standpoint at all from, from what our sources are telling us. So like, you know, so my question is, like, I think at this point, we’ve seen the height of what target can be during the pandemic, when everyone was forced to be a one stop shop.
And Brian Cornell, as lucky as he is, was the guy that happened to be at the dealer table at the blackjack table, right when the dealer busted. And so I think that’s my question here is where’s the growth coming from? It’s not going to be a large format store.
Yeah, Chris, I I’m with you. I mean, for me, the biggest disappointment in this announcement was where’s the tech? Where’s the investment in you know, checkout free checkout free small format store like taking some of this 20,000 square feet and making it you know, more convenient for customers to shop? Like, yes, you have curbside but like, what other investments are you making Target? There was nothing that was discussed in this and most of those investments, even though they’re, you know, their tech investments require some consideration from the infrastructure or build out of the store.
Like even you know what I was surprised to see, Billy was mentioning the overhang. Like, where’s the Starbucks updates? Like, are they going to put a Starbucks next to curbside pickup now, if they’re going to be doing like Starbucks to like, none of that part is included in this. And I love love design as much as the next person. We spent a lot of time on it when we were at Target, Chris, but I bet if you asked a target customer, would they rather have quote plants and regionally sourced reclaimed wood and quote, or a shorter checkout line at Target? They would choose the ladder and but it was not even addressed here. And I cannot believe it. So yes, better just keep. I mean, come on target. Come on.
Jonathan. Last word before we got to headline number two?
Well, Chris, I’ll add to your point. The thing that struck me in the last few weeks was if you looked at the quarterly report reporting cycle, right, you could arguably make a case that Walmart is beginning to meet the battle with Amazon, right? You’d also have to make the case that targets just missed the invite to the war. Right? I mean,
That’s my point.
There is clearly a battle going to be joined between Walmart and Amazon. Target just aren’t there?
Technology, to your point around kind of where’s the growth? It was a it wasn’t just their results, it was that it was the comparison relative to others.
Right, then there’s a difference between being being lucky and being good. And I think we’re gonna find out what what that means for target here in the long run, you know, over time, but alright, headline number two, last Thursday GAP officially launched its own store on Amazon. According to CNN, the new partnership with Amazon fashion marks for the first time, that gap itself is selling its products on the online marketplace, none of the gap items are exclusive to Amazon. However, they will also be available for purchasing gap stores. And on gap.com. Amazon said items from gap store will be included for Prime delivery, Billy.
Over to you. What do you think of this move by the gap? Is it about time? Or is this something they should never, ever have considered doing? How would you advise people that think about this question?
I don’t think my first opinion on this is going to be a hot opinion at that. And that’s a this is this is going to benefit Amazon more than it’s gonna benefit GAP.
This right, from from a marketplace perspective, right? Amazon makes money on it if something sold through their you know, through that because this is really a marketplace concept. So that, you know, one is it benefits them to this unfortunately for me just also rings hollow when it comes to gap and in an overarching strategy of where they’re going and gap is an iconic American brand.
I mean, I think back to my teenage years and GAP was it and through the years right, just it hasn’t evolved, you know, and that’s a well documented, you know, well documented occurrences but I look at this and think where’s the strategy because all of the things that the gap has done over the years especially in recent years, right, you look at the tie up with Kanye West you look at you know, the gap home Walmart, right things are just, it’s so scattershot that this just being another thing to me. What I’m what’s missing for me is where’s the strategy? How does this tie into a strategy to for the gap brand?
This just to me looks like, again, it’s Oh, here’s another thing. Let’s go for it. Oh, you know. And so I’m, I’m, I’m hopeful that this does good things for gap just because I still have a great affinity for the brand. And for the in for the company. I’m just not sold that this is going to be beneficial to them at all.
Interesting. I’m curious. Anne what do you think? Do you think this is a harbinger of more things to come? Or do you think it’s more of like a scattershot move from the GAP as Billy’s describing it?
Well, I think so. My, I actually have a question for Billy, before I get into my, my analysis, because I’m curious, I understand your perspective, Billy. But when does this make sense for a retailer like both for you and Jonathan, when you’re working? You mean, you you our operations background? What? And I’m sure a lot of people are thinking about this. We’ve seen several brands go to Amazon, when does it make sense for them to consider this as part of that strategy, instead of being you know, just a scattered? We’ll try this try that be in Walmart,
I’ve always taken the opinion that if if distribution is an issue for you, or expanding distribution is an issue for you than Amazon, whether it’s a short term or long term play is, is something that absolutely should be looked into Gap doesn’t have a distribution issue. Gap is so spread out and has so many has so many distribution centres across the country, it has that network that they’ve got already, in fact, I mean, there’s news right about them trying to leverage that as a as an income stream. So it doesn’t fit right. It doesn’t in the way I think about retailers or big brand name retailers partnering with Amazon, it doesn’t really fit the thesis that I typically look for, which is all all around distribution.
Jonathan, what do you think?
So just maybe a counterpoint, I don’t disagree with much of what Billy said in terms of, you know, you’ll search for a gap strategy and vein over the last few months and years, but but one potential benefit and one area where it might make sense is, it does allow them to now control pricing and get out of minimum advertised pricing problems with Amazon and their product through third parties. So I think that is helpful for them, you know, they can now manage being undercut by third parties. on Amazon. The other thing that I was thinking about too, in the spirit of this, you know, the way Billy posed the question of kind of, is this Amazon strength or gap weakness? The only slight thing it raised for me is what does this mean about Amazon fashion and Amazon Basics? What’s on there? There’s just raised a little question for me about that.
Yeah, Jonathan. That’s actually exactly what I think my was was kind of my thought about this story. When I first read it, I actually think that this might be a good play for gap because I think you have Amazon essentials, which is, you know, the baseline this is just standard stuff, we you know, it’s going to be fast fashion kind of cheaper product. I do think like Billy was saying like gaps and iconic brand like you you there’s a level of quality, I think that people have come to expect through the years that this kind of provides Amazon shoppers a good better, best option to go to and, you know, Amazon essentials, maybe being the baseline, but then gapping, a little bit more durable, higher quality product.
And then I think you do get the benefit now of as a gap purchaser like you they do have logistics but you did you have to wait five to seven days to get something from gap right now. And so being able to get that product, that gap product, not have to go into a mall in a couple of days, I do I think that there may be more value, or there may be more strategy than than meets the eye in this one.
Yeah, I think that’s a really good point. And then we’ll go to Billy, I’m gonna give you the last word. But I think I would add to what you just said and is if you actually look at how this shows up on Amazon, it’s very much designed for a basics like shopping experience. Like the things you know, you want to go get it the gap, because it’s a search experience. It’s not inspirational at all people go online, look at it’s not inspirational at all, it’s just the standard cut and dry Amazon experience. And it’s a gap branded shop, which was totally not what I expected.
So I think I think you’re right, my point on my point on it, though, is like, I just feel like Amazon’s America’s mall at this point. Like, why wouldn’t you just distribute there? You know what, it’s the same as paying a leasing fee to like one of the mall operators like why wouldn’t you just do this? Like, what’s the downside in it at this point, Billy, last word.
Yeah. And it’s funny that you said that because actually the last point that or the last thing that came to mind and this is when I think about this as as potentially not beneficial for you know, gapping in a financial sense is what is this going to do in terms of driving traffic to their stores. Right. This is to your I agree with you haha Amazon is America’s mall at this point in time.
But the price of being in that mall is you’re taking away from your owned your owned properties today. And what does that mean for their future in brick and mortar retail? And how is this going to maybe, you know, the gap did go online 100% Right in the UK in recent months or in the last 12 months, right. I’m wondering how much of that experience has influenced the you know, their decision here and is that is that foreboding of what’s to come for the gap brand in the United States?
Or other apparel retailers too? All right, well, fasci man these topics are so meaty, we could spend the whole show on each one of them but we got to keep rolling. So Anne let’s do number three,
All right, headline number three tik tok is piloting in app commerce. According to chain storage. Tik tok is officially testing an E commerce feature called tik tok shop in the US after previously launching something by the same name in the UK and Southeast Asia. Tik tok is currently limiting sales of products on tik tok shop to invited us retailers only but plans to enable retailers outside the US to participate in the American tic tock shop over time news outlets semaphore also reports that the pilot of tik tok shop in the US is part of a larger effort by tik tok’s parent company China base bytedance to establish a robust live stream shopping business in the US, which it internally refers to as Project Aquaman.
That’s so great.
Yes, Billy, let’s go to you here. We’ll tik tok find success in in app shopping in the US when seemingly Instagram and Facebook have stalled on it. Or to our last headline, does the US already have its own Super App And it is called Amazon?
Yeah, I think reading this story and doing a little bit of a little bit of, you know, research into this it where I’m at with this is I want to know more. I think there’s there the seeds of some things that could be really innovative. And I think futurists have been talking to to the, to the possibilities here for some time. But is Tiktok shop going to somehow some way be linked to the content on on there on this on the app.
So in other words, I’m looking at an influencer. And I’m able to say, Oh, I like that that shirt, I want to buy that shirt. Is that going? Is that where this is going? Or is this just another marketplace? If it’s just another marketplace, I think the the road to success is very steep for them and very rocky. But if somehow they’re able to bring in that experience of the content and the shopping, I think that is a massive unlock. I don’t know how they would do that, frankly. But if they’re able to to do that, I think that there’s something really big there. I think also as part of this, if I’m QVC and HSN on paying attention.
Because right, they’re the the pioneers of the live streaming, shopping, streaming shopping experience. And their customer is as much involved with tech in their tech as somebody who’s on tik tok. So I hope they’re paying attention to because I think that the applications here could be significant.
Chris, what are your thoughts here? You got
Yeah, I mean, I I would, I would emphasise what Billy said and add to it. Like I don’t actually, as he’s talking, I’m sitting here thinking, I don’t think this has a chance in hell of working because the US retailers are going to be smart about how they put content in social media, it goes back to what Vincent Yang of firework has told us time and time again, like the retailer is going to take control of it through shop shoppable video, and they’re going to put that content on their sites, and then they’re going to farm it out to the social media networks, which directs the traffic back to them.
That’s how this is gonna play out. So to the point, it’s just going to become another marketplace. And if it’s just another marketplace, we all have that already. And it’s called Amazon. So, you know, I just don’t see it. And that’s, you know, government fears aside around Tik Tok to you, I just don’t see it happening right now. And it’s also the other point I make, too. It’s not good for Facebook, either. But that’s a whole nother side tangent that we don’t need to go down. But that’s my opinion. Like, I just I don’t I wouldn’t bet on this right now. I don’t think it’s gonna work.
Okay, I know, I might have some scenarios to run by you. But Jonathan, what are your What are your consumer sentiments that you’ve been doing over the last several months? What are they telling you about about live shopping? And what do you think about this story?
Yeah. Well, here’s, here’s another point, actually, to add to this kind of scepticism. Very hot off the press published yesterday, we looked at we always ask about consumers use of channels and social commerce of all channels, options that will give social commerce saw the biggest fall in a six month period. In fact, it halved in popularity amongst our respondents it moved from being in the top five ranking of channel choice to number 11 out of 12. So and I think there are some underlying economic reasons behind that, which is the consumer is continuing to grow trench into basic needs. And, you know, you can’t buy you gas and groceries over Insta. By their very nature, social commerce products tend to be very discretionary, somewhat indulgent. And so it’s failing. It’s really suffering in this economic environment.
A couple of other points on this specific, I think tik tok is probably one of the hardest channels to do this, which is that users on tik tok really value authenticity. And it’s, it’s a very difficult, it’s a very difficult media to interrupt, but I’m struggling with that kind of sort of technical kind of getting in the flow kind of aspect. The only other thing I’d say is, it does highlight one of Amazon’s weaknesses, which is Amazon is still not social, right? It’s very functional. You know, they try that. What was it that sort of shop along with me on the summer Prime Day on Twitter? Did I choose this or this and you get your, your your friends involved, but they’ve really only dip their toe in it.
And so it is interesting that people keep kind of coming at them from the social aspect. And I do think that is a vulnerability of Amazon. We call it America’s Mall. It is but it doesn’t have the coffee shops and the Dunkin and the places to hang out. It’s it’s kind of boring. It’s a boring mall, so
It has the movies. That’s that’s it’s ended around on the social media plays that is the streaming and the NFL package and stuff like that. But yeah, but Anne what do you think?
I think the things
Play devil’s advocate, I know you want to.
Yeah, I think the things that we’re missing here are one that I agree, Jonathan, like authenticity is important. But you also want the option. And right now tik tok is doing this. They partnered with Shopify A while back, and they are allowing especially those smaller to medium sized businesses to enable transactions, you know, in Shopify, or taking them directly to their Shopify stores, which I think makes sense here, we are forgetting about the very powerful nature of influencer marketing, especially for those local boutiques like the smaller businesses, that leverages platform as their number one source of marketing. This is how they’re getting their products out there.
They’re using localised micro influencers to help build this audience. And so I do think that this makes sense there. I agree with what Chris, you were saying that for larger retailers, I don’t think this is going to make a dent and therefore will it make a big enough dent and tik tok and in commerce and tik tok overall, because they’re still going to use tik tok as a traffic driver of these larger brands, but they’re going to be more focused on bringing consumers directly to their own sites. But the last point I would make is now the ecommerce fulfilment centres that Tik Tok is opening makes so much more sense to me. I’m curious to hear what you guys think.
But I think now that we’re seeing like Tik Tok’s, tik tok’s, you know, abroad influencers, content creators cannot ship product over here, they cannot take part in this yet, there’s going to be a lot of like careful regulation around what they can import into the the US. And so I think that what we’re gonna see here is exactly what Tony Shannon of Alibaba is doing with Timo where they’re creating consolidated distribution centres. They’re allowing these overseas manufacturers to hold products here so that when they flip the switch and start letting those international retailers be on the platform, they have, like quick distribution there. And that’s how tiktoks going to kind of, you know, make some cash here really get into the E commerce market. But Billy, you’ve been, you’ve been not in along for a while. So yeah, wrap up, wrap us up here.
So I’ll give you one thing I like and one thing that I don’t like the one thing I do like is that in the spirit of meeting customers where they are this does do that, right? If somebody is on Tik Tok, and spending a lot of time on tik tok, there’s a demographic that you are meeting where they are, which, which I think is only a good thing, the thing I don’t like and I’m actually going to get a counterpoint to what you were just talking about in terms of the distribution centre, I actually don’t like that play. And I don’t like it because they’re not a distribution company. They’re a tech company, I would much rather than be a conduit to to it than otherwise. And you think about the idea of the micro influencers, things like that as well.
And using more localised sources. I think that routing it to them for fulfilment for them, there’s a value if I’m a small, small regional or just a one, one single store, have fulfilling that order and creating that customer connection that gets robbed from me if if I’m not the one handling that and so, I actually don’t like the fact that they’re investing in distribution centres. I really would much rather see them stick to their guns as a tech play.
Yeah. All right. That was that was kind of our thought it was my thoughts last week, Anne’s playing the contrarian, we were talking we’re joking. For those listening. We were joking beforehand on the show, like who’s gonna play the contrarian card here amongst the four of us and and I think Anne wins it on tik tok and is continuing to take the contrarian stance on tik tok against our prevailing thoughts here, but let’s keep rolling. headline number four Nike launched .Swoosh a marketplace to collect and trade virtual products according to retail dive registration to join .Swoosh can’t stop saying that begins in November and Nike will invite a larger group of individuals to join over the course of the year.
The platform is enabled by web three. Of course it is. The concept of a new version of the internet based on blockchain, and allows Nike members to collect and co-create virtual objects like jerseys and shoes. Jonathan, my question for you is simple. Did Nike just do it again?
I have an inkling that if anyone’s going to monetize the metaverse, this, these might be the guys you know. And there’s a whole bunch of reasons and I’ll be honest, I haven’t kind of completely kind of formed them into a perfect thread. But there are a few things going on that I think give them a significant advantage. Right. So the first thing is, is sneaker heads, right? I mean, if you can’t get the real deal then get the NFT version right and I am very confident not being one myself but I am very confident that people will trade serious dollars for the NF T version of a shoe they can’t get hold off.
The second thing is is this is this is a product ecosystem that already has a kind of customization you know Nike by you. There’s a value and an expectation of customization and you can have a lot of fun kind of customising in the metaverse, I have a bunch of I’m a runner. I have a bunch of Nike, Pegasus buy you different colorways I don’t choose which colorway I want to run in depending on the weather. It’s all very sad. But anyway. So now
I am gonna need a photo of that Jonathan.
Yeah, my running shoe wall, I’ll send you a photo. So I now know I’m going to spend hours basically doing the meta first version. And then And then who knows, I may choose to buy one or two of them because I liked them. And then the other thing that I’m pretty sure will be going on here is this is a way for them to crowdsource designs, right? And market test designs. And again, it just feels like the sort of market where it could work and it could take off.
The other thing that’s that that I’m interested in is how does this tie in to? Virtual reality? Right, so I see the design or the option on swoosh? And then can I see what it looks like on my feet? Can I see what it looks like on me? There’s got to be a tie up there. You’re already seeing people kind of trying to customise shoes and and sort of present how they look on a run, etc, etc. There’s got to be people way smarter than me are going to thread that needle. But this feels like it has potential.
Yeah, that’s a great point. They’re already doing that on goat right now. It’s it’s something that God would be amazing for them to bring into this.
Yeah, I mean, I I So you’re sure you’re on it, you think they’ve done a good move here, I think it’s great to like I the thing I love about it too, is it gets all incremental profit. Like to me, it’s just like a new version of the retail media network. Only. It’s a retail media network that only a few people can do to drive profit. And Nike has the chutzpah to pull this off to your point. So I think it’s brilliant because they’re cool. But Billy, what do you think?
I can’t agree anymore with everything that’s been said. I mean, the thing about Nike, right? As they are in such rarefied air as a brand, that there’s very little that they can do that isn’t going to turn out, you know, really well, I think they almost have to intentionally do something to not turn out well. Because Nikes religion, it is a religion. And this is just a another way to evangelise, that, that religion I the thing that excited me the most on it. And Jonathan, you said this earlier, is what this does for crowdsourcing design, because I think you look at the the market of people after the this was, you know, bigger, probably what 10 You know, 10 to 12, maybe 15 years ago, but people taking Air Force ones were dunks in doing aftermarket designed to them, and those shoes being sold for you know, for an awful lot. I mean, I think an entire industry was born out of that. This brings that home to Nike, right?
You’re not going to have I think it was Fuki Jama was one of the names of one of those designers out there. I just remember that from entourage. That was a you know one of the that that is not going to be out there anymore. It’s going to be at Nike I’ll be in Beaverton. So, I can’t help but think to your point Chris. Yes, they just did it again.
Right. Anne anything to add here or should we should we go on to the last story.
I am just gonna be depositing all of my kids allowance directly into his Well, his .Swoosh Nike account, it’s gone. That hit that generation is already gonna go bonkers over this. I think it’s, it’s, I don’t know. Nikes done it again. That’s all there is to say about it here. Alright, let’s go into headline number five so Victoria’s Secret wants to make finding the perfect bra easier. According to a press release, Victoria’s Secret announced it is introducing a new technology to help customers easily find the right size when shopping on the Victoria’s Secret app for their favourite Victoria’s Secret and Victoria’s Secret pink bras. Now in partnership with net Virta, the world’s leading fit technology provider and creator of Verifyt spelled Verifyt. Registered Trademark customers will be able to leverage the 3d scan technology to receive personalised bra size recommendations with no measuring tape needed, said Chris Rup, Victoria’s Secrets Chief Customer Officer, quote, We are thrilled to offer this new technology to our customers to give them even more confidence when buying their favourite Victoria’s Secret and pink bras end quote, Jonathan, what I this might be a hard question for you personally to answer.
But when you’re thinking about this kind of fit technology, what are your thoughts on the technology in general as it applies to multiple categories? And then here for the Victoria’s Secret customer? And how are you thinking about that when when clients are asking you about this?
Yes, I mean, in a way, this is somewhat related to the topic we just talked about, right, which is using a kind of a virtual and augmented reality technology in some way to either enhance the design process at the start, or I actually think in this case, to reduce the returns process at the end, right. So it’s taking, it’s just taking a kind of difficulty point away for the consumer. And I think the other thing I that makes it, I think, particularly relevant in this category, and as you correctly point out, and I speak from the point of view of a consumer research, rather than a user, but I’ve done quite a lot of research in the sector with consumers. And the one thing we do know that for a retailer of this type, if they get intimates right, then they drive an awful lot of loyalty across the rest of the range.
I can kind of see the quite strong kind of loyalty building, it will drive and like I said, improving the economics of E commerce through reduced returns. The other thing I think for Victoria’s Secret that it does is it it sort of emphasises for them their functional benefits of the brand, as well as the sort of fashion indulgent elements of the brand. And that can’t be a bad thing for them, you know, giving them sort of more legs to the stool, in terms of in terms of that attribute, so I can kind of see it, and I can see it, particularly in this sector. I guess the only thing I’m fearful of is when Tommy John’s start doing it for Oscar.
Hey, savage by Fenty is already doing it for the men, Amazon’s doing it for T shirts. I think you’re 100%, right, like with your two points of you know, reducing returns and just having confidence in fit, regardless of the type of product because the fit for functional lingerie and the fit for other like just stack style and fashionable laundry is completely different in a lot of cases. But, Billy, I don’t know if you want to comment on that specifically. But I know you had some comments earlier on. So why don’t you share with us what you’re thinking?
My my knee jerk reaction to this was
Fit virtual fit technology has been around for a while now. Is this the moment where it’s finally going to hit? In pop in a popularity sense? Right. That was that was my first my first thought. I think the application, you know, to Victoria’s Secret is especially along the lines of function and everything else that Jonathan was just saying. I agree with that. I do have though, as a husband and as a father of a daughter a grave concern with this, which is how is it going to work? Because the photos needed for this, I would think require a level of intimacy pun into pun intended or not that security of the images that are provided to me is of paramount concern. How are you going to do this and recommend a bra without a certain level of exposure in those images?
Right, that’s of concern to me. But then also as from a business perspective, as a consumer. How are we going what what’s the level of effectiveness of this working the first time if it doesn’t work the first time there’s not going to be a second chance for I would think the overwhelming number of consumers here. So if this doesn’t, if this doesn’t hit a home run right away for consumers, it’s going to be unfortunately just more of the same with what a lot of these technologies have been. My personal experience with with virtual fit Technologies was under one only, you know, on its best day.
So I that’s those are those are the the additional, I guess points I would bring to the table?
Yeah, I think you’re right. I mean, fit technology has been around for a while I do. I really believe me. And I’ve said this several times, we had a conversation with Microsoft that we’re gonna be doing a live event later today. But I think fit technology is going to be one of the most like, prominent technologies that we start to see over the course of the next year. I think you look at the experiences that savage by Fenty has been able to provide in exactly what you’re saying, Billy, like, they I did that test, I took it out like it is giving me a very, like very high degree of accuracy when it’s giving me a fit recommendation. And I think, to address your point, I mean, I did the Victoria’s Secret one yesterday, just to try it out and see, we’ll see what I ordered the recommendation, we’ll see what happens here.
But I think that the the other point of this is like, it’s not getting down to a level that’s uncomfortable, like it’s, it’s a sports bra, it’s you know, tight fitting T shirts and stuff, it will be a matter of how how precise the technology can get with, you know, a level that lots of people can be comfortable with. But right now, the alternative is a complete stranger coming in and measuring you with no shirt on like, this is it like that’s not that’s an awful experience. It’s not good right now you’re not getting good recommendations. So I think that the Fit technology experience can only go up from here. And I think with Chris Rupp at the helm over there, like she loves to test things. We saw her doing all kinds of experiments at Albertsons, so I’m excited to see what else she starts to do.
And kudos to her. She’s the first one to bring, you know, fit technology to mass retail, like this is going to be something really exciting. I think, as kind of an introduction. Chris, are you in agreement with me? I mean, are you what are your thoughts? You and Chris tested a lot of things. So
I’m a little more cautious on this than you are I think okay, I’ll probably be the last point to cap it off here. I think. I think I think the point Billy makes is, there’s still a lot of grunt work that has to be done on the side of the consumer to get the benefit of this where so I think maybe this is like going to help push it over the edge to get it, you know, possibly figure out how to alleviate all those pressures on the consumer side. I hope so. Because I think you’re right, there’s a lot of value to it, if you can figure it out. But I still think it’s going to take more time than then. Then then then you’re describing but that’s just my opinion. So I think we should close the show out. We’re running long and let’s get to the lightning round.
All right, Billy. First question goes to you. Coors Light launched a nail polish made in partnership with Lynch hat nails that mimics the can technology that turns from slate grey to Coors Light Blue at a certain temperature. Billy, what is your favourite colour changing product? Would it be a Coors Light can perhaps a mood ring or a hypercolor t shirt?
Oh hypercolor t shirt.
Did you have one?
That’s childhood right there. No, I didn’t have one. And that’s probably why I was so quick to say it because I’ve never had one of these. I always wanted one
I had paper coloured t shirt. It was not hypercolor those were too expensive. So we just
You’re still paper colour Anne. All right, Amazon, Jonathan is said to be piloting facial recognition as a tool to validate potential third party sellers on its website. Jonathan, what is the most memorable mask you have ever worn to hide your face from other people?
Okay, revealing my imposter syndrome. Maybe it’s the mask of professional competence over 20 years of my career. But apart from that, there is a one photo circulating of me dressed fully top to toe as a dragon chugging beers, an international rugby game, and I’m trying to chase down all of the copies and destroy them
Two photos we need for the show notes Jonathan. Your shoe wall and the dragon chugging beer at a rugby match. Okay, Jonathan, I have another question for you. Microsoft just launched a new app in teams that allows colleagues to challenge each other to a game of Minesweeper, word of meant, icebreaker and even Solitaire. Which of these games would you reign champion in across your colleagues at a&m?
I have a writing campaign for another game, which is huge confidence that we’re at Crossy Road. I would wait
what is Crossy Road?
The new version of Frogger
You gotta play Crossy Road. Played it with my daughter for years. She’s better than me, but I’m pretty good.
That’s pretty good, man. It’s pretty good. All right, Billy. Let’s close it out here stovetop brand is celebrating its 50th anniversary by reviving its stuffing pants campaign for Thanksgiving. The pants are available on Amazon and feature an extra wide stuffing print waistband that offers 360 degrees stuffing stretch technology. Billy What is your favourite thing to scarf down at the Thanksgiving dinner table?
I gotta go with what my my I think my first reaction was which was mashed potatoes, just give me the mashed potatoes and load them up. Load them up or not load them up. Just give me the mashed potatoes.
That little gravy little gravy. Anne is cringing as you say that right now. Oh my god. That’s like her least favourite thing in the world. All right, well that wraps us up Happy Birthday today to Rachel McAdams, Danny DeVito. And to one of the most underappreciated Bond girls of all time, Sophie Marceau. And remember, if you can only read or listen to one retail blog in the business, make it omnitalk. 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 it’s just for you. And we try really hard to make it all fit within the preview pane of your inbox and sign up today at http://www.omnitalk.blog that might have been one too many W’s but I’m not sure we’ll have to go back and read the tape. Thanks as always for listening in. But before I give the close, Jonathan, if people want to get in touch with you at a&m consumer and retail group, what’s the best way for them to do that?
Of course so you can email me at Jonathan.shop@Alvarezandmarsal.com. You can also go to our website which is AlvarezandMarsal-crg.com. And Billy, you should give your contact details.
My My email address is BChristensen, BChristensen@Alvarezandmarsal.com and you can also find us on Linkedin.
All right, awesome. For all those listening. Please remember to leave a like and leave us a review wherever you happen to listen to our podcasts or on YouTube and be on behalf of all of us at Omni talk. As always, be careful out there.
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