Hello, you’re listening to the Omnitalk Fast Five, brought to you in partnership with the a&m consumer and retail group, firework, Trigo, sezzle, and silk. Ranked in the top 10% of all podcasts globally, the Omnitalk Fast Five podcast is a podcast that we hope makes you feel a little smarter. But most importantly, a little happier each week too. Today is January 19 2023. I’m your host, Anne Mezzenga.
And I’m Chris Walton.
And we are here once again to discuss all of the top headlines making waves in the world of omni channel, retailing
No place I’d rather be in no place I’d rather be here with you after NRF talking about the headlines making waves in the world of omni channel retailing.
Making waves. But, Chris, it’s not just you and I today
I know it’s even better
I know we’ve spent so much time together in the last five days. So I think this is probably a welcomed entry into the Omnitalk world. But joining us today and back for their regular monthly appearance, our friends at the a&m consumer and retail group, Jonathan Sharp, and Michael Prendergast, welcome back, Jonathan, and Michael, we’re so glad to have you. I want to go right to it. Michael, Will you kick off and tell the audience who you are and what you do at a&m?
Sure Anne thank you. Great to be back. I’m Michael Prendergast, I’m a managing director in the consumer and retail practice at a&m. I been in the fashion and retail space for over 25 years. And that’s my background.
Excellent. Thanks for being here. Michael. Jonathan, your turn. Tell us about you and what you do at a&m.
Hello, nice to see you both again. Also Managing Director at a&m, maybe even more than 25 years in retail. Time in grocery. I tend to do a lot of work in the commercial space and I also lead on consumer insights at a&m.
Well, we are really excited to have both of you today.
I was loving Jonathan’s on the show too. Jonathan what what number show is this for you? It’s got to be like five six.
Might be it might be five? Do I get a card in the mail at 10 or something?
You might you might.
You get a curly whirly is what you get?
Yes, I remember that.
That we will import we will import from the UK and then send back. Yeah
Which is typical of how retailers are operating right now actually, too. So alright, well, let’s get into it. Today’s Fast Five headlines are brought to you with the help and support of our partner Shop Talk Shop Talk continues to expand their lineup of keynote speakers announcing footlocker CEO Mary Dillon this week, she’s joining an incredible list including Judith McKenna, Walmart’s international president and CEO the CEOs of chewy Pinterest Levi’s Ulta Beauty, tapestry, who are the owners of coach kate spade and Stuart Weitzman, and and you’re hearing it first for omnitalk fans, you’re hearing it first on omnitalk. There’s also a big senior executive for Google actually went on to check out who it is. It’s pretty big. You can see who it is at shoptalk.com/us/omnitalk that’s shoptalk.com/us/omnitalk and remember to make sure you’re registered by March 3.
See you there and come and say hello, we want to see you all right. In today’s Fast Five we’ve got news on Starbucks going national with DoorDash. Rent the Runway building its own storefront on Amazon Wakefern and trigger opening their first checkout free store in the United States. Portillo’s making its drive throughs cashless to improve employee safety. We’re gonna have fun talking about that one. But we begin today with news out of Walmart Anne
Let’s do it. All right, headline number one Chris. That is right. Walmart and Salesforce are teaming up. According to CNBC, Walmart announced a deal with Salesforce last week to help it ramp up the sales of go local delivery service which drops off purchases at customers doors and store Assist, which helps employees more quickly and accurately pick and pack orders for curbside pickup and delivery. Starting this spring. The services will be offered through Salesforce and listed in its app store for businesses. Jonathan, we’re gonna go to you first my friend, five timer. What do you think about this move from Walmart? Do you think it’s significant news or just more PR glass keeping up with the Amazon race kind of talk?
Well, I think I think both things might be true, right? I’m sure there’s a bit of PR. Well, I think there’s a bit of a PR gloss to it. I’m sure perhaps more on the part of Salesforce than on the part of Walmart. But I do think the Amazon race and the way in which Walmart is tackling that is quite a big story in retail. I think a little bit of a big sleeper story which we may get to the end of 23-24 and look back and say, oh actually did we see that coming? Did we see a legacy retailer who five years ago, people said were was kind of looking at its deathbed because of the emergence of Amazon, did we actually see how successfully it was fighting back?
And, you know, they’ve put so many pillars in place in the last two years to chisel away at the Amazon advantage to chisel away at The prime advantage amongst particularly amongst those who haven’t already subscribed to prime. And I think the thing that I found interesting here is, I mean, when I read it, this was a bit of kind of Amazon Web Services meets dunnhumby kind of thing going on. We shouldn’t at what a margin engine, Amazon Web Services has been for Amazon.
And the thing that I thought was, this is kind of the new version of general merchandise, general merchandise used to be the margin enhancer that allows you to be price competitive in grocery. This is the new technology version of general merchandise. It’s a marketing tool that allows them to then be competitive in the sort of the grocery and the product side of things. So the whole kind of growing your margin potential out of services and technology, I think is very smart. One other thing I’d say is it’s also in a sweet spot, particularly in that sort of digital store up smart picking of labour. It’s an area where retailers, particularly regional grocers, regional retailers, who want to get into digital and delivery, really, really struggle. And it’s also a space that Amazon doesn’t really have a product offering. So it’s quite neat.
Right, right. Yeah. That mix component is very interesting. The merchandising mix. The new angle, the mix is really interesting. Jonathan, I love that.
Michael, what are your thoughts here? Anything you’d add?
Yeah, I mean, I couldn’t agree more with what Jonathan outlined. And I think it’s a terrific move for Walmart. And building on the thought that everyone has counted Walmart out with the advent of Amazon, I think that they’d been quietly behind the scenes, building a growth and progressive story, that in the long run, what will definitely benefit them as a corporation, you know, they’re massive, and they they move sometimes not as a massive entity, this, this is a very productive, forward looking, move by them. And I think the other interesting thing is that this is a little bit diabolical, but they are now going to be providing services to retailers, definitely in the US, maybe globally.
So it’s sort of a Trojan horse, where they get inside the building, where there are retailers that may not be doing such a great job. They now have Walmart technology as their some of their pillars. What does that future look like? Does that make a transaction or an acquisition easier for Walmart to do because of the partnerships that they’re creating? So I think it’s terrific across the board. And I definitely think Walmart is an entity to pay close attention to and not count out.
Right? Yeah. Same thing that Amazon has been gathering from us so many retailers for years. So it makes sense. But, Chris, I know you’ve got some thoughts on this, too.
Yeah. I’m curious if we’re all going to resolutely agree on this one. I mean, I actually love this a lot with the chats interview, John Ferner. And our f this week, we were this first interview he and Matthew Shay did from the conference. And it was, it was awesome, because there are a couple of points I took away from it. One was he said, I’m paraphrasing him here, he said it differently. And you might remember I said it. But he said, You’re only as faithful as your options, which means they’re hungry, they know they’re going to fight like hell to keep what they’ve got. And the loyalty of their customers is really front and centre for them. Which I extrapolated to also being the big my big takeaway from the show, what I extrapolated from was, this is the Show Me the Money year, I’m gonna keep saying that it’s a show me the money year on tech investment.
And so I like this move for another reason, too. Because when you take your own tech, and you try to put it in the marketplace, you’re eating what you cook in terms of your ability to get scale and to get value out of your own tech. And so I think that is a really smart move. The question I have is, why aren’t we seeing more retailers do this? Like if you’re a top 10 retailer, I don’t know why you’re not taking this approach. We’ve talked to target we’ve asked them they said it’s not even on their roadmap when I’ve had those discussions with them. And that baffles my mind. I think Jonathan mentioned Kroger, like they’ve done a great job of this through a number of years, there’s, if you’re that big, you should be doing this because it’s going to make your own tech that much better.
Right. I agree. I mean, I think this was this was something that was part of the consistent messaging that I felt like was coming out of NRF whether it’s, you know, big technology companies like SAP, Oracle, all these companies are selling Salesforce included are selling this idea of like, how can we bring more things online so that it’s simpler for the retailers that are using our platform to just plug and play these things? And so I think that that that’s a key theme we’re going to see is you know, how many of these tech companies can bring some of this technology from startup sighs like we heard a sap with their their small team that’s working with startups to bring them into the SAP ecosystem system. All the problems that retailers have, how can how much of that can they bring in house and have one unified system that’s helping support all of these retailers with one platform? All right, Chris, let’s go to headline number two. Yeah.
All right, let’s do it. headline number two Starbucks plans to offer delivery via DoorDash. Nationwide by March of 2023. According to change storage on Wednesday, January 17, which was yesterday, yes, the coffee giant began offering online delivery via DoorDash. In actually Wednesday was the 18th. So that that article was incorrect, and oh, yeah, so I apologise for that omni talk fans, a coffee giant regardless began offering online delivery this week via DoorDash in Northern California, Texas, Georgia, Florida and other select markets, and plans to expand the service to additional markets over the coming months. In the US customers will be able to have access to Starbucks delivery via DoorDash on iOS and Android devices. In addition to the DoorDash website.
This is important, the monthly DoorDash dashpass membership programme say that 10 times fast also means Starbucks customers pay $0 in delivery fees when ordering through DoorDash. My Michael, my question for you is this is the dashpass smartly becoming DoorDash. His own very formidable version of Amazon Prime, what are we looking at here?
I think the dashpass is interesting. And yes, it can absolutely lead down that road. I like it a lot. The thing I don’t like, you know, a little bit salty about this based on personal experience is it’s about time like How come Starbucks has not been on DoorDash? And why are they not more complete on UberEATS? Full disclosure, though, it’s based on doing projects in places like the Midwest and not being able to get effective Starbucks delivery. When you have to work till 11pm at night. You know, this, this, to me feels like for Starbucks, them catching up to the future that’s already existed for a few years. However, I do like the advances that DoorDash is making with their with their paths.
And I actually think DoorDash and UberEATS need to have sort of a second and third round of innovations, both from a user interface standpoint and a delivery quality standpoint. I don’t think their delivery qualities are fantastic. And at this point in the game, they’ve they’ve captured such a large share of the markets. They should be fantastic across the board.
Yeah. Interesting. And let’s go to you next. What do you think here
So I love this you do? I think
I figured you would.
It’s so brilliant. I was joking with shipped’s Rena Hurst, like, shipped. When are you going to bring you’re doing curbside pickup Starbucks? Like, when are you going to start bringing that out? Target at Target?
And so I’m gonna bring up one other thing. So at NRF Chris targets head of food and beverage, Rick Gomez said in in one of his sessions, that the number two item that is ordered from the target and Starbucks pickup partnership that they just did, are cakepops
100% Doesn’t surprise me at all.
Doesn’t surprise me. But this is what it changed for me and what I think is important about because I think I think Starbucks is really the one here who I’m focused on not so much DoorDash and that is that Starbucks has found an opportunity through curbside pickup and now through curbside pickup with target and now through DoorDash to create a new type of shopping experience for a parent. Now you are giving me an experience or reason to choose target to choose DoorDash because it’s not just about me getting my coffee when I’m picking it up as a parent now it’s about we’re having my kid and I are having an experience together we get excited about going to target together to pick up that order because now it’s this, this surprise and delight moment that we get to have together which is one of the reasons that you choose to go to a shopping destination or choose to use a shopping app.
And I think that that’s another thing here that I had Starbucks continues to perfect delivery little things like making sure that you know you have the stickers covering the seal so that the coffee’s hot when it arrives that there’s you know, new types of like delivery carriers like we saw with Starbucks curbside pickup I think as Starbucks continues to expand and perfect delivery, this is going to continue to catapult Starbucks as one of those trip drivers even more so than it already is.
So you like so you basically nothing that you’d like to move from, from Starbucks, particularly in terms of how they’re increasing their distribution across a pickup capabilities with big retailers like Target Exactly. Partnership with DoorDash. You think it creates new moments as a parent with the cake pop, which I’m going to I’m going to definitely do that. I think try this out.
Jonathan, are you going to get to continue the streak of all of us agreeing with each other? Are we gonna get some debate in this show here soon?
I don’t know if I’m gonna agree or disagree. I’m just gonna make a different point. I’m going to ignore your question, Chris.
Okay, that’s fine. I would expect that from you.
I tell you what I thought when I read this was I thought 100 years from now retail archaeologists go digging through artefacts, right. And they’ll find this They’ll find this new story. And I think they will say that is the moment that work from home replace the third space.
Five years ago, remember, we weren’t gonna go into offices but we were going to be going into a third space. We were all going to be doing our work in Starbucks stores. Do you remember that?
Yeah, I do.
And then this little, this little thing called COVID happened. And then I think this is kind of the archetype of work from home is crystallised. Starbucks now has to come to you. It has to grow its network to come to you. I think it’s a marker.
Yeah. Wow, that’s really interesting. Got you got me think about like hotels, like everyone at hotels, you have a dashpass now because like you’re just in there gonna be just delivering coffee and mass from Starbucks every morning. And all these hotels, you know, for me, I, I liked it. And the reason I posed the question the way I did, yeah, was the value of the dashpass seems to be getting more compelling. Every week we do the show like last week, we had the returns thing. There’s a cost of delivery component that’s ongoing. But it’s also and that’s also why I wear this hat today in which we haven’t talked about yet. But I wanted my buy with prime hack.
I can see that
Because I think also what’s fine, what it got me think about last night, I’m curious how you guys think about this, too, is like, what’s the value of my prime membership anymore? When I get right down to it like two day delivery for me, it’s not that compelling anymore. So like, the move to buy with prime could be. And so I was kind of thinking like, as cool as we made buy with prime sound last week, it’s almost like a necessity now for Amazon to make that work, to keep driving the value here. Because for the first time in my life, I was actually questioning why do I have this? And I don’t know if you guys feel the same way. Anne, Michael, I saw you shaking your head, what are you? What are you thinking there to that comment?
Well, I thought you’re taking it to a different place, I think this will be the first time we can debate today. I actually think the value of the Prime membership is exceptionally undervalued, the convenience that it has placed on my life in the premium that I am willing to pay for that is extraordinarily more than what I’m paying for my prime membership.
I’ve gotten to a place and I’m in the retail business. I’m technically a retailer. So I understand the numbers. And it’s like, it’s not a good. It’s terrific for the consumer, let’s put it that way. And I don’t have to go to a mall, I can get whatever I want. In certain cases, I can order a stack of legal pads, and it shows up at my house the same day. I mean, that is fantastic. not profitable for Amazon. So what that looks like down the road is sort of a different story. But I think the Prime membership is actually wildly undervalued for the premium that it provides me my wife it she
Well, I was gonna say until DoorDash, does Thursday night football.
Right, but that’s a good question. Like, where did this? Does it go into those realms? At some point? I don’t know. You know, I
I mean, I do think we underestimate the content value of Amazon Prime. And I don’t think you’ll, you won’t have gone. Right. And it’s not just in the US. I mean, I said Premier League for a reason. Right, which is they now have a whole tranche of the English Premier League, they have a bunch of rugby, which is my sport. So you know, I’m not as exciting as, as Michael ordering legal pads on. But I do like my football and my rugby.
I think you’re right, the media part is a key.
You bring up a great point, though. I mean, the content access the rims on prime is absolutely ridiculous. So what is that worth? I mean, think about what you used to pay, and I’m gonna date myself. But when you used to go and rent a VHS from blockbuster, right? I mean, think about the amount of times that you’re procuring content through Amazon Prime and what you’re paying for it. And it’s it’s pretty remarkable.
But the interesting thing is we’re not saying delivery is what is captivating us necessarily potentially and you know, so I think that’s interesting, but in the interest of time, let’s keep rolling it.
Yeah, we’re gonna keep talking about Amazon here because headline number three is that Rent the Runway has opened an online storefront on Amazon. So according to retail dive Amazon customers can purchase items from Rent the Runway is designer exclusive, as well as secondhand garments retired from its rental service. The move comes after Rent the Runway laid off about a quarter of its workforce in September and announced a new focus on profitability, which is I’m sorry, I have to stop pause here for a second, don’t you? We were reading this story yesterday in the airport. Chris. We were prepping for the show. And I was like, I’m sorry. Wait, now the new focus if you’ve been a company around for how many years like 2023 Let’s be profitable. I don’t know. I don’t know. Okay, Michael. I’m going to go into a major diatribe if I don’t go to you next. So Michael, what are your thoughts?
Your wheelhouse to Michael
I might go into the same diatribe so cut me if I go too deep. This answer is so complex. It’s incredible. I mean, look, real real Rent the Runway. Even Stitch Fix They came onto the scene and they were basically the brightest stars that the retail business has seen in years, saying that with quotations around that, that was the perception in the marketplace. However, their performance has been an absolute disaster, when you look at the stock price of real real, I mean, that’s the perfect one. And then we’re talking about Rent the Runway and Amazon. But you know, it’s, it was an interesting concept, renting product, or reselling product, interesting from an ESG benefit standpoint, however, it’s it’s really not been successful. And no one can really figure out from an operating standpoint, how to run it.
And if you look behind the curtain, and you start understanding the technology complexities, the SKU complexity, and the operational complexities that exist, it becomes sort of this question mark of can anybody ever really be successful with it? Now, what’s been happening, I think Amazon, dipping its toe, or actually jumping into this market is fascinating. When they did the partnership with what goes around comes around. I thought that was a monumental marker, as Jonathan was mentioning before. I also think this is interesting, because Amazon basically now sees it as an opportunity to capture front end business that they cannot do on their own, especially with what goes around comes around. However, they are an absolute gorilla in the marketplace operationally behind the scenes.
So all of a sudden now have to these partnerships, with the front end being Rent the Runway, and what goes around comes around, and I’m sure they’re going to do more plugged into the Amazon machine, start to turn it into a profitable entity, it might, but at the same time, it might not as we were talking about before with Amazon, clearly they’re not super focused on profit. So it’s going to be very interesting to see how this all plays out. But in a very long winded way. I love the move by Amazon. I think Rent the Runway and what goes around comes around should actually be worried about the partnership in the future of their own longevity. He’s
Chris, what are your thoughts here?
Oh, wow. Going to me next? Um, well, I mean, Michael kind of summed it up pretty well there. I mean, for me, I don’t really get to move on run through one last part. Honestly, I wonder if they’re gonna piss off the brands they’re working with, you’re gonna start selling them on Amazon’s like, hunts, you can destroy search, you know, online experience to like No, no brand that they work with the Tyent is going to want to be on that experience.
So I questioned the value of it. So ultimately, to me, going back to your point about the new focus on profitability, it honestly seems super desperate. I think we might have had Jonathan on the show to I can’t remember if we are somebody from Maine, and we were talking about gap going on? I think this is totally different. And I That’s why I don’t like it.
Yeah. Jonathan, what are your thoughts here? You’re You’re nodding along?
Well, I thought, I think this is a bit of a sort of mini trend, isn’t it, which is retail innovation, which sort of bursts bright, but then struggles for distribution or struggles or acquisition goes and clings to the Amazon life raft. And in a way, it’s extremely smart of Amazon, right? Because you they basically bolster out the Amazon offering picking on segment after segment after segment. And to our earlier discussion about the value of prime value of prime is what, apart from Thursday night football, the value of prime is as many of your needs fulfilled in one place. And this is just another example of it. But there’s a huge asymmetry of power here. Right. You’ve got a struggling innovation.
Got and you’ve got an acquisition and distribution monster.
Right. Yeah. I mean, I think I think what we’re hearing here and this is this kind of echoes my sentiments about this too, is that, you know, it makes sense to try to leverage the operational backbone of Amazon to make this business more profitable. You’re certainly opening the aperture here of people who can find Rent the Runway product who can leverage their prime benefits in order to get that product sooner. But my question here and another part that we haven’t discussed in this conversation so far is that Amazon keeps talking about how they’re really trying to get this to get luxury to take off on Amazon and I still think I don’t know that this is where Amazon like this isn’t help Amazon get more people shopping luxury on the platform. I just don’t see it. You’re just not going to see people, you know, going to Amazon and typing Diane Von Furstenberg like that’s just not going to happen.
The only way and this is a long shot Chris and I talked about this in depth yesterday, but the only way I can start to see like a luxury consumer really going to Amazon in this capacity might be if they start to bring that secondhand or pre pre warned an apparel designer and luxury apparel, from Rent the Runway into Amazon’s fashion stores and, and really having that be a destination instead of the typical consignment shops that, you know, we have no idea what’s in there. It’s always a treasure hunt when you get in there, but if you could, you know, know with certainty, there are six different gowns in my size at my local Amazon fashion.
And I can go there and execute and try something on and then walk away with something instead of, you know, ordering two things from Rent the Runway, there’s a possibility there, but the amount of of struggle and work to actually make that happen here is, I think, a long haul for Amazon. So I don’t know that we’ll actually see that happening.
Right. I mean, I think there could be there there. But it gets back to the point of Michael Michael said to like, Can Can you make the current model work? And then if you do that is does that become even more difficult as as well?
Well, and you just made me think of this. If you look at the what goes around comes around partnership there in you think it made me think of the house of Gucci the movie?
When Al Pacino’s character, there was a dirty little secret that most of the Gucci business in the US was was counterfeit, but they knew it and they were happy with it. So the question I ask is, Is this a way for the luxury brands to basically start to grow their businesses with a dirty little secret kind of under the covers of doing the business now there’s a third party in between, but it’s still more revenue. So it’d be very interesting to to see if they eventually get over the Amazon hump and plug into it. Could be, may not be but
That’s a good little twist. I like that Michael. Chris, let’s go on to headline number four.
All right Anne, I’d love to but before we get to headline number four fresh off NRF in New York City, I want to tell you about another trade show we are both planning to attend you will on me talk fast and that is home delivery world home delivery what is the largest free supply chain and retail logistics Conference and Expo and it is this June 14 and 15th. In Philadelphia, it’s free to attend it will have over 350 exhibitors all showcasing cutting edge retail logistics solutions to well over 7000 Attendees, that shows growing.
Just head to terrapins.com/homedeliveryworld to register now that’s terrapins, terrapins.com/homedeliveryworld to register. Alright, headline number four according to when site grocery business Wakefern food Corp held a ribbon cutting ceremony on Monday for its latest shop called the pantry. A frictionless convenience store for the workers at its Edison New Jersey campus featuring Tricos AI based technology open to only workers from Wakefern office buildings the pantry uses computer vision with a series of cameras and shelf centres to identify products such as snacks, salads, pantry, staples, groceries and prepared foods.
I always love the pantry staple. wavefront is the first US company that tests tree goes technology which is already deployed in several locations around Europe and the UK. Jonathan given that you are very close to some of tree goes first installations in Europe being that you are in London. What is the significance of this announcement in your mind?
Well, Chris it’s even better than that. I’m from London and I’m sitting in New Jersey so I mean I’ve got it all covered. Right we’re on the road
That’s right I forgot about that
Come on. I’m very disappointed. They didn’t invite me to the ribbon cutting given I’m a local but anyhow
And you have something tells me Jonathan you have your own giant scissors stored somewhere away up in your
I do exactly and my royal wave for every
BYOS, Yes, Jonathan will be there.
So what do I make of this? Well, first of all, I think the interesting the particularly interesting thing about this is it’s a kind of a demonstration of how you sell technology and a franchise model, right? Because this is about trigo, and kind of Wakefern centre, trying to create a poll amongst their franchisees for why they would want to invest and deploy the technology. It’s not quite as simple as, you know, picking a store running a trial and then expanding it across an estate if you don’t own their state. So, I mean, that was the primary thing that that struck me was it’s this sort of two step approach to deployment, which then does raise a question about how quick is it therefore going to be because, you know, franchisees, particularly sort of family structure franchisees, they have a different view of kind of lifetime value, they have a different view of kind of payoff periods.
There will be a sort of very, very appeal amongst that group. That said, the thing that I did chuckle out was I noticed that Wakefern is immediately on triggers landing page on their website. So you know, it’s Tesco River, Neto, and now Wakefern. So They’re either very confident about a bunch of franchisees already signed up all often about how compelling the demo store is going to be. But the thing i’ll be watching will be speed. It’s just very difficult in that franchise environment.
Right. That’s a great point. Yeah, that’s the new wrinkle here is that, you know, I mean, first of all, they actually got that type of setup to commit to this too, which is interesting in of itself. Anne what do you think?
I think this is a big the big story here, even though you know, this is just an employee owned store right now, or employee only store is that Treecko is now here on US soil. Like Jonathan said, The Wakefern logo is on the website. And I think that plays into for me, what Dave Ritter from a&m, on our end of the year show last year said that, you know, there may be another non Amazon provider that’s doing a full scale, just walk out grocery store in 2023. And from what we’ve seen so far, at what Tricos done in the Europe and some of the especially under like, very complex regulatory settings, like in Germany, for example. They have the capacity to pull this off to be that first full size grocery store in the US with Wakefern here.
Yeah, I mean, I know Yeah, I know, David thinks I think he said on the annual show, he thinks is gonna be a good Bango tree goes, you know, trying to line up the resources to do it, as well as it appears from this story. Michael, what do you think your you have any thoughts?
Yeah, I mean, I love it. I think it’s, I think it’s the future. So a frictionless environment and grocery store, turning into frictionless environment and retail, we’re headed there. Whoever can get there first and figure it out and then expand it and then have the others follow, I think is going to be wildly successful. But it I love the idea. I think it’s truly future of the retail business or apart major part of the retail business.
Yeah, absolutely. I don’t have much to add here. Beyond what what is the three of you have said, I mean, the only other point I’d bring up too is us retailers are creatures of habit. We talked about this on the show all the time. So I’m not surprised to see the first US like the one of the one of the first US grocers take the same approach that they basically deployed with trigo and Tesco, in Europe, they went to the company store first. Then shortly thereafter, they rolled it out to an actual like, operating grocery store in market or something like that. And I have no idea if that’s the case. But you know, to Jonathan’s point about them promoting on the website, you have to wonder if that’s in play here or if it won’t, and trigo’s track records pretty good to like, relatively speaking amongst these providers.
They’re one of the few that I can point to who has consistently continued to roll out with the people they’re doing business with. They’ve rolled out more with revvo They’ve rolled out more with Tesco. They’ve announced more plans to roll out with all the already like that’s something to watch. So I think the fact to your point that this is the first one in the US for the arguably the best provider in Europe right now is something to watch.
Alright, let’s go on to headline number five. So Portillo’s is making its drive throughs cashless Chris
You gotta bring your card when you’re getting your dog. Okay?
Okay. Yes, of course. Always do Anne, Always do.
According to restaurant, According to restaurant drive. The chain which has over seven new units across nine states stopped accepting cash payments at his drive throughs beginning Monday, January 16. The shift is intended to improve safety of the staff according to Portillo’s CEO Michael Austin Lu. Ausitn Lou?
I guess. Yeah
I hope I said your name right. Michael, which was quoted he was quoted in restaurant dive. He said, quote, workers across the restaurant industry had been robbed or threatened at gunpoint or knifepoint on the job end, quote, youwser
Setup does sound kind of dangerous when you do
Yes, cash will, however, still be accepted within the walls of the restaurant itself. Jonathan, let’s go to you first here, what’s your take on this story? Poor drive thru people getting robbed at knife and gunpoint, that sounds awful?
Yeah, I mean, it’s kind of something no one should go to work theory. And, you know, if you run a team in retail or in hospitality, and you think that’s a risk, you do everything you can to, to mitigate it. So I get I absolutely get that motivation. And to Chris’s point, their model is not all of their team are sort of within the booth or behind the screen, right? They’ve gotten the menu board, able to direct you and of course, trade you up as well. So they are particularly vulnerable.
That said, I’m I also am pretty sure that the real lead here is is actually buried a little bit further in the story around what it does to speed of transactions, right? And kind of clearly what that does to the economics of drive thru. Right. Not to mention the savings you get from cash handling costs, all those sorts of things. And so to that extent, if we, if we sort of put to one side, the safety issue, which is very real and I’m sure was the trigger for this, if we put That’s one side. This is just another example of the move to cashless. Right.
I mean, it’s a bit consistent with the conversation we just had around walkouts digital walkout stores, right? It’s all of these points of friction are being removed by technology enablement. And what that’s doing to costs for these retailers is potentially very significant. I do think, by the way, there’s a major social question around employment in retail. Ignore how significant an employer, the retail and hospitality sector is in the US. I mean, that’s for another day. That’s another question. Businesses have to maximise their profit. I completely understand that. And this is, I think, one of the major sort of trends that we’re seeing, and here it is playing out again.
Yeah, Chris, what are you? What are you seeing here? Like, are you are your thoughts consistent with what Jonathan saying?
Yeah, I think they are. And I, it’s funny, I was thinking about that same angle Jonathan was talking about this morning, as I was thinking about this too, because there’s gonna be a negative sales impact from not taking cash to your drive thru. And so it’s got to be a big pill to swallow. Unless there’s other operational efficiencies that you’re thinking you’re gonna gain from this. My question is really, like, Where does this go next? I think we’re gonna see more of it. A lot of the quick serve restaurants have gone to this model, especially in the pandemic as curbside pickup and everything else has become just that much more prevalent, like Chick fil A has, like, I feel like 600 people outside it’s drive thru lanes, right, as an example.
But the question for me is like, do governments continue to allow it like, does it push into the store, the store itself only become cashless, and do the government’s locally allow this to happen? We know in New York that you were required to still take cash is going to be an important part of the rollout story, potentially, with, you know, the Wakefern, depending on where they start to deploy those stores and other things. So that’s my thing. I mean, I think we’ll see more of this. But there’s a lot of things that we as a society have to come to grips with, for us to do this in the right way.
Michael, any thoughts here from your side?
No, I mean, I agree with everything. Jonathan. And Chris just said, I think, just from a safety standpoint, we obviously talk to senior leaders in the retail business. They’re all hyper focused on employee safety, to a point where two CEOs recently separately had told me, we tell the employees to give them what they asked for and basically give them the keys to the register. So I think this is a great move to protect employees. But to Jonathan’s point, you have a lot of operational benefits. And then from a futures focus standpoint, it’s heading towards cashless. So it’s definitely a first mover.
I have a question, you guys. Okay, one I have a problem with they’re still being cash accepted inside if safety, like Jonathan saying, is really the concern, because Aren’t you still putting the associates then that are working inside the store in danger, because now they’re, that’s where all the cash is going. It’s not separated by drive thru window and like checkout lane,
It’s a little bit of a conflict too. Because if you’re accepting inside, you avoid you don’t avoid the operational efficiency of not having a cash drop
It feels like it’s a first step. It’s like, the defense’s, let’s do it outside, let’s see how that goes, does not have a negative impact on our business, let’s then do an inside. And that sounds like also they’re dancing around governmental issues that Chris is bringing up to like, kind of testing the waters.
Right. That’s a great point
And lastly, like, again, I’m going back to how many where do we best serve the human workforce in quick service restaurants? The cash thing for me too, is like, is it not possible to still take cash through some kind of cash, you know, like, machine like, can’t you just put cash in dispense the change? Like, I feel like there’s technology that should be able to support this so that you can still take cash, you can take cards, but you’re you’re removing the safety or you’re considering the safety of the people working in that restaurant so that they don’t have to handle the money or be the the in between there in those situations. It just it doesn’t make sense to me.
Yeah, that’s a good question. I don’t know there’s a lot of operational hang ups that come with any of that stuff, too, you know, like having to put cash into I mean, how many times have we put the cash in the dispenser and it comes back like Bill cannot be read, you know, like we’ve all been through that nightmare. Imagine that in the drive thru to that that scenario was unmanageable. Stop and think about it. So as easy as it sounds, I think. I think the point that we’ll come back to feels like to me like I agree with you guys like it’s, it’s first step. We’ll see where it goes next.
Right. All right. Let’s go to the lightning round.
Let’s do it.
All right. Question one goes to you, Jonathan targeted Lego are kicking off a partnership to allow consumers to send in their use Lego so that another child may enjoy them. Jonathan, I want to know if you had to guess what do you think the most surprising thing that it will be that lead Go might find in some of these returned Lego packages?
Well, I don’t know if the first one is a surprise on the basis of my experience with my kids, there’s bound to be a whole bunch of kind of Skittles and candy. I mean, and the red ones in particular, you’re gonna think what do I build with this? You’re going to think? I guess the other thing that would be ironic would it be if you found someone stubbed toe in there? Because, you know, did that toe actually come off and stick to the leg?
Oh, God. Oh, god,
Oh my god, that’s so disgusting
But they show the red Skittles are the ones that are the most easily hidden within the Lego van. All right, Mike, let’s keep going. Pizzahut is bringing back the big New Yorker for a limited time only beginning February 1. My question for you is are you okay with this? Or do you think this move should be more permanent?
I love it. I think it’s a branded, iconic item that’s that’s part of pizzahut’s heritage and kind of immediately inspires you to go out and get one. I think the interesting thing is is that do they use this as a pulsing in to create excitement for their customer base? Or should they be turning it into a long term core item that they bring back into the stable? Not really sure. I think the results will will kind of point them in that certain direction.
Well, I’m gonna be ordering.
I’m excited about it. Yeah.
All right. Michael, we’re going back to you for question number three volume mental fit technology just announced their partnership with Under Armour where customers inside Under Armour stores will be able to step on a volume mental plate, scan their feet and be served up the specific products that will best fit their feet. What is one category you hate shopping for that you think a 3d scan could help with?
Yeah, this one’s kind of a layup. I mean, shoes.
So they’re on the right track.
Yeah, they’re on the right track and love this one, too. I mean, look, it’s so volatile, the Fit standards across brands. Sometimes you’re a 10. Sometimes you’re a 10 and a half, sometimes you’re nine and a half. And then also the actual structure. And fundamental, underlying construction of the of the soles is different, so different across brands. So whether you have a high arch or a low arch, it makes it very difficult to shop for shoes effectively. So I think obviously, footwear is a great place to start.
So Michael is all in on shoes. All right, Jonathan, we’re gonna get you out here on this. This is one of my favourite all time questions. After John they’re a cat, famous for nikecourt admitted he was paid in weed for his role in the 1974 horror classic The Texas Chainsaw Massacre. Jonathan, my question for you is what is the strangest thing you have ever accepted in exchange for any of your services?
Any of my services? Well, it’s not narcotics
Yeah, yes. Who knows who’s listening?
Maybe when you retire? Jonathan? Yeah.
So I guess I do have one which is a long time ago, my long time ago and my career to do someone a favour a kind of pro bono or low Bono kind of piece of work. My payment was tickets to a soccer World Cup match. France. It was England vs. Argentina. I think it was round of 16. For those of you old enough and into soccer enough to remember it. It was an amazing match. Michael Owens scored a one to go back and got sent off through some very devious Argentinian tactics, actually. And it’s a it’s a very famous World Cup match. So actually, I came out pretty well.
What year was that night? Was it 98? Or
98 nice. Nice. Very nice. That sounds awesome, man. What smart trade man after you got the better end of that deal too.
That one worked out. Well.
Alright. Well, thanks you both for joining us today. Michael, Jonathan. If people want to get in touch with you learn more about a&m, get there potentially enlist your help on solving some of the complex questions we discussed today. What’s the best way for them to do that Michael,
Email, you can email me at MPrendergast@Alvarezandmarcel.com. Or you can go to our website which is http://www.AlvarezMarcel-crg.com. And you can find either Jonathan or myself or any of the other senior leaders there, and lots of information about us too.
All right. All right. Well, that wraps us up Happy Birthday today to Dolly Parton. communites. Dolly Parton.
She’s 77, did you know that?
No, I didn’t know that. Actually. That’s pretty amazing. Katie Seagal
From married with children and to the woman who helped to put those sopranos next on my binge watch list and Draya de Matteo fun name is say, I 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 comes with a special contents that that is exclusive to us and we do it all just for you and we try really hard to make it all fit within the preview pane of your inbox. You can 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 podcasts or on YouTube. And on behalf of the nm consumer and retail group and all of us here at omnitalk as always Be careful out there.
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