Hello, you are listening to the Omni talk Fast 5 brought to you. In partnership with the A & M consumer and retail group Firework, SPS Commerce and Sezzle ranked in the top 10 of all podcasts globally. The Omni Talk Fast 5 is the podcast that we hope. Makes you feel a little smarter, but most importantly a little happier each week too. Today is September 28th, 2023. I’m your host, Anne Mezzenga.
And I’m Chris Walton, and we are here once again to discuss the most important headlines from the past week that highlight how the physical, digital and human elements of retail are coming together to shape the future. And joining us today, yes, back from their regular monthly appearance are two new and two favorite consultants from the A and M consumer and retail group, Kelly Carey and John Clear. Kelly and John, we’re so excited to have you today. Kelly, why don’t you start, this is your first time. Tell the audience a little bit about you and your background and your role at Eddie and CRG.
Great. Thanks so much and hi everyone. My name is Kelly Carey. I am with the A and M consumer and retail group for about 5 years now. It’s such a great time being with the team and I’ve worked really across both consumer and retail industry during my time, primarily focusing in merchandising, working with apparel and beauty brands.
Awesome. My favorite topics. We’re excited to have you, Kelly. It’s going to be great, John. Tell the audience a little bit about you.You’ve joined us for a 5 insightful minutes, but this is the first time you are gracing the Fast Five stage. Tell us about your Yeah.
That’s right. I think I’m going to go with the off quoted longtime listener first time caller approach here. So very happy to be here and thanks for having me. So yeah, I’m also with the consumer retail group as a director. I’ve been with A and M for about two years and.
Prior to working with A&M, spent ten years in the grocery retail industry. So have you focused there on merchandising, buying, sourcing that element of of the world there? And then since I’ve been with CARG, I’ve done a lot of kind of different work, but really focused on that I would say retail with food space. So and both across operations, merchandising, pricing and really excited about the work that we’re achieving so far. And then happy to talk about all these new topics with you guys today.
Yes, and John is the big brain on bread when it comes to grocery. But John, I got a bone to pick with you before we get started here because I heard a little bird told me that that you were not too happy with my Irish accent. I think you, I think you that might be paraphrasing here quoting you that it was the worst Irish accent that you’ve ever heard. And so so I have to ask you point blank like who has the worst Irish accent, me or Tom Cruise in far and away. Which one is worse?
Which one is actually worse? That is a really difficult question to answer.
I’d say I don’t like to choose.
They’re both so bad that I wake up at nice kind of in cold chills thinking about it, Chris, which is not ideal. But if I had to choose, I would choose you over Tom Cruise. If that makes you feel bad. Oh, my God. Oh, my God.
Oh, my God. Oh, my God. Well, I I resemble that remark, John. I resemble that remark. Oh, well done.
Well done, my friend. All right, well, and man, we’re off a grocery shop. We’re in full season form the the headlines this week.
We had like 9 headlines that we would have been happy to pick on a normal week, you know, I know it’s.
Just the way it works.
Well, we’re back from grocery shop. You are still alive, thankfully. Thank you for all of our listeners who were calling to check in and make sure Chris is OK. He’s, he’s all right. He’s here in in real form today and we’re going to tear up the Fast 5.
Should we do this? You guys ready? John Kelly? You guys ready?
Let’s set it.
Right. Well, like like I said with grocery shop now in our rear view, it is time to also set our sights and tell you all about another exciting conference we have planned in our agenda and I’m talking this time about manifest, the future of supply chain and logistics hands down.
And I got to say it’s it’s definitely our favorite supply chain conference of the year with ended out and manifest and we got to see who the guest is the guest like performer is for the.
Oh, right. Yeah. They always have a great performer, too.
Yeah, as well Ludacris like who brings Ludacris to it’s not just supply chain people. This is very important. But Chris, continue. I’m sorry.
Yeah, you’re right. Luda, as I call him Manifest has also just announced A slew of thought leaders that are set to take the stage in early February. The show is actually the week before the Super Bowl. So you can go to Vegas, stay the weekend, catch the Super Bowl in Vegas, and those include the Chief Supply Chain Officer of Ulta Beauty. Amy Bear Thomas, as well as the Chief Operating Officer of Footlocker, our former target Target Colleague Elliot Rodgers.
Shout out to Elliott, you can learn and more and save $200.00 on the current registration rate, which equates to an incredible $800, believe it or not, $800 off the onsite rate by visiting manifest.manifestvegas.com/omni talk. That’s Manifest Vegas. Dot com slash Omni talk and and I will be there with bells on and we hope you will be there too. All right without further ado let’s get to today’s headlines and today’s Fast 5. We’ve got news on Kroger breaking ground on what it is calling its first marketplace store.
Nike selling refurbished sneakers online. A new initiative out of Best Buy called Best Buy Drops. Albertsons launching its new flash delivery service, but we begin today with big news from the government. No surprise to anyone probably listening already concerning Amazon.
And yes, all right, headline 1. The Federal Trade Commission and attorneys general from 17 states on Tuesday sued Amazon alleging anti competitive practices, according to Retail Dive. The FTC Chair Lina Khan said in a statement. Quote The complaint sets forth detailed allegations, noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the 10s of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them. And quote Amazon tactics the FTC describes as problematic include replacing relevant organic search results with paid advertisements and prioritizing its own products above items that it knows are superior.
Along with what the FTC calls anti discounting measures, including a practice of pushing sellers down research results if they offer lower prices elsewhere compared to what they advertise on Amazon, including on their own websites. John, we’re going to go to you first here. Is there merit to this lawsuit? I feel like we are always hearing about companies complaining about Amazon, consumers complaining about Amazon because of this topic. But if if this there is merit to this, what does it mean for the retail industry more broadly?
Yeah, I think there’s kind of lots of different angles and layers to this, which is super interesting and I will also I think it’s it’s also important for me to note I’m not an STC expert, right, but from my from my perspective. I think the hits keep coming for Amazon really is, is the first point here. They’re kind of getting it from all angles at the moment. And I don’t know if it’s as big a topic as it once was because there is now more competition against Amazon than there was even six or nine months ago, right. If we think about for example, TIMU, which is now basically cutting out Amazon in the middle and coming directly to consumers and that is now the most downloaded app in the App Store this year.
So it’s a huge push from that perspective to customers so. I think the more, the more interesting point for me about whether this has merit or not is that it’s a continuation of the FTC and how they’re getting more aggressive and what they’re terming monopolistic practices, right. So obviously this is a big decision with the state’s Attorney General supporting it too. And they have a huge decision coming down the track with Carver Albertsons as well. So I think the FTC are really doubling down on this idea that they’re protecting the consumer and that’s very interesting for the retail industry more broadly of how they approach things.
Because it is a bit of a shift in mindset towards making sure the consumer is at the center of decisions and that they’re getting the best deals. And I think you’re going to see more and more activity in this space from the FTC, not just to prevent monopolistic practices, but to put the consumer at the center of this and make sure that everyone’s getting a fair deal.
Yeah. Kelly, I see you donning along. Anything you’d add into what John just outlined? Yeah, absolutely. I think it’s going to be so interesting to see how this plays out.
And again, in my nonlegal opinion, I think there’s really two things they have to prove here. You know, are they unreasonably excluding other companies and impairing their ability to compete? I think there’s a lot of grounds and merit there and things to investigate. But the question of is Amazon creating a worse experience for the consumer? I’m really curious to see how they prove that out.
In particular, I think that they really created such a new space for the consumer here. So yeah, you know, are they actually making my experience worse when I’m getting an easy Amazon Basics product top of my feed, no hassle? I don’t know. I’m curious to see how it plays out, right, Chris, I want to hear what your perspective is because I I mean I’m curious like this is Amazon. What?
What happens if, like back in the day, you tried to do this at Target? Or, you know, if somebody tried to do this at Walmart? Like what would that look like?
Yeah, I’m not an FTC expert, but I, yeah, no, I am a retail expert and I am kind of a merchandising expert too.
Having spent 20 years in merchandising too, I feel like we need a disclaimer, like running across the bottom of this is not legal advice. This is not an FTC expert speaking. But hypothetically, Chris?
I think from the hip. Yeah, right, right. Yeah, yeah. Hey, Boo, Boo, Boo. But you know I think, I think, I think there is merit here and I think you can get into Gray areas between like what is monopoly power versus what is just not legal.
And to me the there’s merit because I’ve said this on this show before and so I was, I was pleased to really see it come out blatantly in the FTC statements and it comes down to the price fix, price fixing that’s potentially going on here and then that is by punishing vendors based on the prices they’re selling. Things at competitive retailers or like you said and even on their own websites because that is a 1 fresh out, fresh buyer off the boat and buyer training, the first thing they tell you not to do as a buyer your day one of of learning how to do merchandising. You can’t have those kinds of conversations. So to your question at Target, like if I was like compelling my towel vendors in my first buyer job to be like, hey, I don’t want you putting the price of these competitive towels that you’re selling to Walmart at you know $4.00, I would lose my. Tricking job.
Yeah. And so I went on the FTC website today to see how do they define price fixing so everyone can understand that because I think it’s really interesting. And here it is. It’s quote Illegal price fixing occurs whenever two or more competitors agree to take actions to raise. Lower, maintain or stabilize the price of any product or service.
Price fixing schemes are often worked out in secret and can be hard to uncover. But an agreement can be discovered from quote circumstantial evidence and quote fully so like that’s essentially when you read it, how they were working their website and demanding and placing products based on the what they were seeing as the competitive pricing position of these sellers on their site. In a lot of ways it feels like that is happening to me, and so that’s why I’m curious where this goes in the long run. But what do you think, Anne?
Yeah, I mean I think there’s, there’s a lot of questions that I have here. And I think it also comes down to the consumer, which is the, the consumer, you and I, but then also the SMB’s that are on the platform too. And I’m kind of resetting expectations for the customer as well. Like you know, they’re Amazon’s defense here is like well they’re preventing us from getting fast delivery to our consumers because you know like this FTC ban would or would force them to change the way that they’re doing operations that for it, it’s higher prices for the consumers. Like I I think that this is not quite their defense is not quite strong here when it comes to those key items like you know, reduced options.
Like there’s no that you’re not reducing options. There’s more marketplaces right now that sellers have than ever like there’s other opportunities and even you know D2C brands on their own websites have better opportunities if this is not in place. So I think that there’s a lot here that still needs to be ironed out. But ultimately, I think it gets back to what John said at the beginning here is that we need to establish a precedent for the other retailers that are coming into the space. TikTok, She and like all these other big marketplaces that are coming in here, whatever is happening here, as Amazon typically does, we’ll set the stage for how those are managed going forward.
It’s a great point to close on. Yes, the rules of the road in regards to marketplaces, both from this angle from, you know, preventing theft and organized crime have to be reevaluated pretty quickly. All right, let’s keep moving. The headline 2 Kroger has begun construction on its own version of. Walmart Supercenter This is crazy.
According to Supermarket News, the store will open in late 2024. It will be Kroger’s largest store format at 124,000 square feet, which is almost 55,000 square feet larger than an existing Kroger store. It will have a wider assortment, from produce to kitchen appliances to clothing and jewelry. John, we’re going to go back to you on this one because this is again in your wheelhouse being the grocery expert amongst the four of us, no doubt. It’s a pretty bold move for Kroger.
So should Target and Walmart be worried? Point blank, What do you think? Yeah, first of all, I think it’s. I think it’s an awesome move by Kroger. Yeah, I think it’s.
I think it’s a really, really great play by them generally. And to come to more directly to your question, should Walmart and Target be worried, I I would say that everyone should be worried about Kroger right now. They’re. But I don’t know if anyone is is both as ambitious as forward thinking and as aggressive by pursuing market share right now as Kroger like they are, they are doubling down in all aspects of their business, right. So they’re they’re acquiring, they’re expanding into new formats.
Their if their private label selection is really strong as we head into you know potential recession and people trading down like Kroger are well placed in kind of every set from that perspective. And and then you think about their leadership and how forward thinking they are and ambitious in terms of integrating technology into their their organization. Like I think they’re a really fascinating company for how they’re moving forward. So the easy answer is yes, I think both Walmart and Target should be worried, but I do think there is a nuance to that. Because it depends on which direction that Kroger go, because if they’re if they really heavily pursue general merch for example, I think Target should be very worried because that’s like Targets bread and butter, it’s how they, you know how they fund everything else that happens within their store, right.
But equally if they go much more on the Super sender. Offer everything you can possibly get under one roof, then Walmart should be worried. So I think there is two different directions that this can go. But overall, everybody in this space should be watching what Kroger are doing because they’re coming for everyone at the moment. So they kind of are indiscriminately trying to take.
Money from everyone on the table, and I think it’s a really interesting shot of you they’re pursuing right now. Interesting. This can be a fun discussion. So you think this is something to watch to keep an eye on. All right.
And what do you think? What do you agree with John? Disagree. What’s your take?
Absolutely, I agree. Really. Yes, because with some caveats. OK. Rodney McMullen on CEO of Kroger on stage at grocery shop last week talking about with the Albertsons merger, should it go through, they’re going hard on lowest price possible stream grocery.
And I think when you look at the competitors, Target not even close to a competitor and grocery products and produce and Fresh, you look at Walmart still more share than Target but still not great. So if you can take the produce the trip driver that’s going to get people in there day in and day out, you can start to bring in now. This is the key component though. You have to figure out and have having led to the partnerships first Target store of the future, like you have to figure out how that general merchandise assortment is going to hit because if it doesn’t then this fall fall flat. And while Kroger does get a lot of accolades for getting out there and trying new stuff, it doesn’t always work.
So I think that’s going to be the key dependency. Like can they do it? Can these additional footprints all over the country, should this merger go through? Can that help them? Can they be the low price leader for grocery like, yes, yes, yes.
But they have to be doing this better than Target, better than Walmart. And that to me is the key, like Linchpin here.
I 100% agree with you. Yes, low prices and grocery are different than low prices in a super center format that you’re doing for the first time. But so, Kelly, what do you think? Do you agree with these two or do you think there’s maybe a more doubting Thomas angle you would take it?
You could see which way I’m bleeding on this one already I think. So I think I’m leaning similarly to you, Chris. I’m a little more skeptical of this and mostly for that last point that Ann just brought up. You know, when I think about Target expanding into grocery, Walmart expanding into grocery, it was just that they really already had the general merchandising down and then moved into the the food side. So I think it’s a lot easier as a customer to jump onto, oh, now I can just get my groceries where I get my general merchandising versus, oh, Kroger sells my food, now I’m supposed to buy a dresser from there.
So I think it will be really critical to see who they’re bringing in, you know, in that initial marketplace model. But they do have so much equity and a great real estate profile. Like, I’m not saying never, but I’m I’m skeptical to see how they can really sell people that they can make a play in the space. I want that job.
Yeah. Yeah. I thought, Kelly, I thought you said it really well. I mean, yeah, again as a merchant, the proof is in the merchandising, which is what and you’re totally. But for that reason, I’m not losing sleep on this.
I mean, Kroger, I actually think Kroger feels late to the party on this. I mean you already have hyvee doing it. HEB is doing it in Texas.
I think you can combine I, & HEB aren’t doing apparel though like not in there not, not to the extent that that.
In their newer, in their newer stores there, yes, but maybe not to the extent that this is, but it’s pretty darn close. And then you still have Walmart and Target. And so like, why is Core going to do that any better than any of the myriad of options already out there and? And you also brought this up too. And their track record on this is crappy.
I mean, I can remember a year ago we were talking about them putting Bed Bath and Beyond in their stores and look how well that’s turned out. So like, well, I just, I just don’t think there’s anything in their track record that tells me they can do this any better than the other options that are already out there.
I mean that’s the one, but like that’s one, one option, one small floor pad thing. I mean I think you have to reimagine this. This is like directly going after Target and Walmart. I don’t even think you can put HEB and Hy-vee in the same consideration set because they’re not doing it in the the same way.
Yeah, last word here.
The boxes aren’t the same size, like it’s a different operation. But for sure Target and Walmart are competitors. I think we just have to see if they can, like Kelly is saying, like get to the level of quality of that merchandise.
Yeah, I mean I think, I think everything you said is correct, Chris, right. I mean the execution of this depends on how the merchandise they put into the box, right. I mean that’s but that’s the case for every retailer in every scenario. What I would say is that I think Kroger are thinking big in all directions, which which is why I’m so impressed by, right, the the acquisition of Albertsons is so big, you know they’re going for new formats. They’re also, they’re leading on In store and marketing like they are ahead of the game in a lot of areas.
So I think that they their track record in the last couple of years support that they can execute this well and they have a leadership team or are willing to go after things, which is why I think it’s a great strategy overall. Great, great, great conversation, yes. And and don’t forget, before you get the headline, they also have the crogies, which was another start, another great start. I know I was like from.
This is what we should do. We should take our money that we save from registering for manifest the $800 and we should each place a bet and then we’ll come back to each other and see like what? What happened when it opens in 2020?
Today. Yes, right.
All right, let’s go to headline 3. So Nike is now selling refurbished sneakers online. According to nicekicks.com, Nike has launchedrefurbished.nike.com. The program is reportedly part of Nike’s circular consumer offering, which takes gently worn like new or slightly imperfect footwear, refurbished but refurbished them by hand, and then sells them to customers at select Nike stores and now online. So here is a breakdown of how the refurbished plan works.
So customers will return shoes to Nike as they do, Nike experts inspect and grade the footwear. Then each eligible pair is carefully cleaned and sanitized, and the refurbished shoes are then returned to stores or sold online at a reduced price. Kelly, we’re going to go to you first on this one. Is this something that you would have advised Nike to do? Absolutely.
I think this is a great idea on Nike’s part and really two main reasons. The 1st is the market and then the second is especially what we’re seeing in the consumer right now. So resale market like first thing I think of when I hear resale is sneakers then handbags because that’s what I’m shopping for. But the massive, it’s a massive market. Nike is a major player in terms of products in the market.
You just think about the amount of Jordans going on resale. So it’s honestly kind of crazy to me that they haven’t started making a direct play to retail in this space yet and it’s just massive cakers right now in the industry. I think you know, 16% is what I was reading today for sneaker resale as opposed to just the shoe market itself growing at about 5:00. So there’s a ton of opportunity and I think you know historically there’s been a lot of even premiumizing products through that resale channel. Right now I think we’re seeing it’s more of a you know savings play for the consumer but people are hungry for that right now off price consignment are growing considerably as people are looking for a more affordable option to the brands they love.
So I think it’s it’s really win win for Nike and they’ve been investing in their ability to serve this space already with Nike fit their app. So I’m really excited to see how this takes off for them. Yeah, for sure. I mean I think I think the this is the first step, right, like get the Nike product in the returns and then you know start to go into managing A reseller platform because that’s the that’s the thing about this that really surprised me. It was like we’re not seeing a resale component to this yet.
It’s just returns coming in, but it’s setting the stage I think for that Chris, you’re the biggest sneakers drop person that I know like what you’re is super excited about this I imagine. But yeah, tell me I.
Am totally 100%. I love it. I think you know. Turns are a major problem. This helps solve that.
It gets you some revenue off of what is a growing problem for all of retail. The only thing I would say about it is, you know, I went on it as first as soon as I heard about it, I jumped on it and the inventory is really light. And it’s a website too, you know. And and this is something where if it was an app like the sneakers app, like the Nike app, I’d be on it every week. But you know, so I hope they go in that direction and actually make it a standalone app or make it easily accessible within one of those apps as well.
That’s the one thing I would advise because right now, you know, it’s a little lacking from like desirability in terms of shop ability in terms of what’s there. But net, net, longterm, I love where they’re going with this. Absolutely. Love it.
Yeah. John, how about you?
Are you all in? Yeah, I mean, I’m all intimate too, I think. I think it’s, it’s kind of a classic no brainer, right. I mean, I even though I’m not one, I know that the term sneaker head is obviously very common. So there’s a lot of people who are like super focused in this area.
They really want the latest trends, but also may not always be able to access them. The other so it’s great from that perspective of bringing more consumers in. You may not always have been able to get access that stuff and then build your brand equity. The other point here that is an obvious one, but I think he should be touched on is the fact that this is great for sustainability. I mean Nike don’t have a great track record from a sustainability perspective.
Speakers have always been viewed as disposable, and this can change that conversation to make it that it’s actually circular now and that they’re making an effort to be more sustainable, which. Is becoming a topic, but will as we get as Gen. Z take more part of the of the share, sorry, more of market share and more buying power, that is going to become a huge topic. So they’re getting ahead of what I think will be important for them in the next 5 to 10 years, too.
Love it. Good job, Nike. All right, let’s go on to headline 4.
All right, Best Buy has launched a new promotional program called Best Buy Drops. I can’t wait to talk about this one. I think this is gonna be another fun conversation. According to Chain Store Age, the program launched on Wednesday and the campaign provides discounts on items such as product releases, limited runs, and launches, all in real time. Each drop is only available in limited quantities.
And exclusively through the Best Buy app, drops will include special products and deals from a variety of categories, including gaming consoles and accessories, wearable devices, E transportation products. That’s an important category, small appliances, smart home and toys. And multiple drops will occur every week during the holiday season. For example, tomorrow, Friday, September 29th, shoppers can save $250 on the Atari VCs 800 All in gaming bundle. The drop price is 149.
99 But if you are a plus and Best Buy total member, you can see it even more as you can get the Atari for just $99.00. Pretty smoking deal.
Can we pause there? Like Atari? That’s a thing now again.
Oh yeah, dude, come on.
And you know I’m asking. I know you are a video game expert. Not enough TC expert, but a video game expert. Like.
$99.00 nostalgia for $99.00, So that’s what it is.
This is like another Atari, that’s what you’re telling.
Me. I have no idea actually had. I’m just guessing.
It’s basically a nostalgic play for all the all the Gen. X. Well, I’m intrigued. I didn’t realize someway coming back, but yeah.
Need some way to relate to their kids? Yeah, that’s what I’m guessing this is but some. Kelly, It’s a great point. Kelly, my question for you is what do you think of this concept? Do you think it’s a shrewd merchandising move or do you think it is just a copycat gimmick similar to what we’ve seen from Nike in the previous headline?
Yeah, good question. So I’m feeling I’m leaning more copycat, but. Really almost less Nike and more Amazon. Just thinking more broadly about the holiday season rather than, you know, the drops kind of culture Okay. But I don’t think it’s a bad move.
I actually think it could be a pretty favorable move, Okay.
So it’s a good copycat.
A good copycat. Yeah. Okay. Especially for Best Buy with, you know, especially starting last year, Amazon has really redefined that holiday promotional calendar by introducing a second Prime day in October. And we see Best Buy as starting their deals tomorrow, in the month of September.
I think they even had one yesterday on Apple Watch, which I was sad to have missed. Yes. So and you know, I think especially for the tech space and gaming electronics, that’s when people are really looking for a deal, especially for the holiday season. So we used to have this game of who can offer the steepest discounts on Black Friday and now that really seems to be shifting to who can offer the earliest deals. So it’s just it’s pulling that forward, but I think this could work in the sense that if they can make it a little bit more of an exciting promotional drop that’s happening earlier rather than just going for the steepest discounts come back Friday, it might actually help out their margins a little bit during the season.
Yeah, that’s a great point because what you’re getting at too is, is also part of this too is who can have the most flexibility in their promotional schedule during the this season, which this helps out a lot. And you and I talked about this a little bit yesterday, actually for quite a while. I got picked up by it, as you could probably tell already. But what do you think?
Yeah, I mean, I I definitely see your points. I think you need to go through like all of the the underlying things that we’re probably not seeing in the headlines here. But I think for Best Buy, like what Kelly was saying, like it’s a great way to get people to download your app and then see some of the other benefits that you offer like scan and go in store or like locker pickup and all the other things that you can do inside the app that people probably wouldn’t know. Like you’re. I think most people are conditioned to kind of going to the the.com site for Best Buy, then they are, you know, downloading the the retailer app.
But I think you could also start to see how they could apply this gamification and including some of their other initiatives like I’d like to see them do this in conjunction with like their virtual store team or something to kind of make this more dynamic down the road. But like, to Kelly’s point, like the Apple Watch was sold out by 1:00 PM yesterday, so it must be working. But I mean, what are your you? You need to like, preach now. I’m like you.
Want me to go next? I mean you. You’re like, you’re like writing fifteen articles about this yesterday already. I know I was.
Going to go, yeah, I’m probably going to write an article about this because I actually I don’t. I think, I think, I think Kelly actually the way you summed it up is really good. It is a copycat, but it’s it’s like a very good smart copycat. It’s like a pivot on what we’ve seen before. So you know, I think it takes the Nike drop concept but it or even the Amazon’s concepts like you said, but it adapts it to what Best Buy needs most which is creating.
Urgency and demand for the key items during the selling season. And moreover, it does it in a way, like you said, it gives Best Buy the ultimate flexibility to talk about the products they want to talk about around the noise of Black Friday, Prime Day, Cyber Monday, name your freaking holiday here over the next, you know, two months. And they can do these whenever it wants. It can price them whenever they want and then it can still determine what’s the best price to clear the stock out on those big days when you have everyone’s attention. So net, net I think.
It’s a great innovation for Best Buy. It makes them more flexible, it improves their sell throughs in theory, it gives them better margins on these products. And these are the items, the other part that Ann and I talked about yesterday, these are the items that make or break your holiday season. So if you can get them. In front of your consumers before other people at the is most optimal for you.
That is a huge win. Win. So yeah, it’s copycatting, but it’s adapting something to your business, which is what Best Buy consistently does better than anyone else and that’s why they stay in the game. But John, anything you’d add here? Yeah, I mean.
I agree with everyone’s points overall and I know that everyone’s real bought in on it. This one kind of left me a bit cold, I have to say. I mean, go ahead, go ahead. Yes, I love this. Go ahead.
I mean, I mean, like I’ll say, Chris, when you’re reading out, I don’t think it was just your delivery. I got a bit lost about what actually the point of this is, right. It was just wasn’t my accent. That’s good, okay good. Yeah.
But for me it’s just. It’s a promotional strategy, right, which is great. It’s great and I get it. And I think best buyer first of all like an awesome company for all the reasons that you guys have outlined. I think they’re innovative.
They do a lot of stuff in terms of Omni channel and retailing. But for me, this is just, hey, we’re offering discounts on electronics and guess who else is offering discounts on electronics, Target and Amazon and Walmart. Like everybody’s doing this in a certain way and I I get your point as well. And that okay, something sold out early yesterday, so it must be working, but we don’t know if they just put 10 on the website, right. And then they sold 10 Apple Watches.
So it is a good way to create some excitement and demand, but I really don’t see it as that. Quote UN quote innovative, right? I mean, Amazon has been doing drops on Black Friday for five years, right? You click on Black Friday, they do like this 30 minute deal. So I think they’re just pulling it forward by two weeks and then next year someone else is going to pull it forward by a week and then next year they’re going to do it again and then suddenly we’re just going to have discounts all through the year.
So it feels a little bit like a race to the bottom and I know that we say that it’s going to protect margins. What ultimately these discounts are going to get built into the prices when they plan out their year. So I think it’s cool in some ways, but it hasn’t got me so excited. Got it, got it. So you’re a little more tempered than I am, John.
That’s great. Yeah, I was really happy about everything else. It’s just this one.
Oh my God. Well, let’s try to make you happier on this last show.
This is a good show.
All right, headline 5. Albertsons has introduced a new service called Flash, designed to provide online order pickup and delivery in as little as 30 minutes. According to Chain Storage, Albertson’s customers can place Flash orders via its website and apps at the same cost as purchasing an item in store. Shoppers can select up to 35 items for flash pickup or delivery and when choosing Flash, their orders will be delivered within a 30 to 50 minute window or ready for pickup at their local store in 30 minutes or less. Members of the company’s Fresh Pass delivery subscription program will receive complimentary flash pickup service and a discounted flash delivery fee of $2.00 per order.
All other customers can utilize flash pickup for just 395 per order or flash delivery for 1195 per order. John, you are a resident grocery expert on this show today. If we break this down, is Albertsons just essentially charging for 30 minute pickup? Do you think we’re going to see other retailers go in this direction? Like what?
What should we what do we make of this headline?
Yeah, it’s a I’d say when we get to grocery, this is one of my favorite topics because somewhere along the way somebody decided that customers need products in 30 minutes. I don’t know who decided that, right? But I I don’t know where the demand is coming from or what it is, but it’s a big topic that everyone wants things in 15 or 30 minutes. What we’ve it’s repeatedly being shown that it’s not possible because every order loses money and you’re in an industry that’s already wait for thin on margins. So why have we decided that we’re going to create this kind of process that’s just going to lose a lot of money for these retailers.
So I think what Albertsons has said is great. If you want something in 30 minutes that’s that’s awesome and I’m happy for you, but you got to pay for it because it costs us money, right. I think it’s a it’s a very clear, like decision by Albertsons to say. We can offer you saying they pick up or two hour pick up or whatever for no cost because that doesn’t cost us a lot of money, but if you want it faster you got to pay for it. So I think a lot of people are going to move in this direction and and it it’s just totally logical for me that you charge for something that costs you so much more money.
Albertsons are just ahead of the curve. I don’t know. Like I said, I got a bit kind of worked up on this topic because it became this like buzzword for a couple of years that everyone wants to deliver things fast and then they just we there was some reports that people are losing like 200 bucks in order right, to get this stuff working. It just it was a fallacy from the beginning and this proves it. And so I think it’s just an easy decision by Albertsons and if they if they’re the last people to do it, I’d be really surprised.
How about you? Yeah, I mean I would agree with John and then actually maybe even raise the stakes a little bit. I think the interesting thing about this announcement is we’ve seen a rash of announcements that are similar to this. And by that I mean retailers charging for things that used to be free. So like just this past week, you have Amazon now charging to keep ad free Prime.
Which is really there, 299 to keep ad free Prime Czar and HM now charging for returns. You know, those are just some of the recent examples, so I kind of think this is only the beginning and. These announcements are heralding this age where I think the e-convenience free lunch may soon be over is how I would phrase that up. And so I like I wouldn’t be surprised if you actually start seeing some retailers, maybe not all but some even charging for curbside pickup because there is an added expense to that then just coming in your store to shopping. So I’ve made the comparison before and I think it’s very appropriate here that it’s kind of like the airlines in the past, you know you’ve got especially in the grocery you’ve got you’ve got a business model that is under pressure.
And therefore the economics of it, you need to find new ways to do it and so you’re going to have to adapt to survive. And the one way you can adapt to survive like the airlines is you start to charge more for the value added services that people want. It’s the same thing that’s happened in that industry for the past 20 to 30 years. I think this may be the start of seeing it happen in the grocery industry in particular.
Yeah, I think the airline comparison is so good Chris, because you it’s also like something that they can lever up or down and or implement things like they’re talking about here where if you have the subscription to Albertson’s program like then you get free delivery the same way you would if you’re a premium customer in an airline or something. So I think that that makes sense that they’re they’re just trying this to see what happens. Does it decline, do people even want it like John saying Kelly, what would you throw in here? Yeah, I would totally agree with Chris here. I think that grocers and it’s not just grocery even we’re seeing it on the retail side.
Apparel, you know people haven’t figured out the best way to optimize this ecommerce model. Margins have been shrinking, especially as people try to increase the services that they’re offering. So I think this is just one example of many ways people are trying to figure it out. So I I definitely think that will continue, but I think that’s I think that makes complete sense. I the last thing I’d throw in here too and John then I’ll get back to you for the last word.
But the other thing I think could be really interesting here that is not about the consumer necessarily here and the speed of pickup, but also like, I think it’d be really interesting to see what they learn and how much is involved from prioritizing these 30 minute orders. And then when you start to think about like a place like Costco where like could you fulfill a 30 minute, could you put in your 30 minute order, but you still want the discovery experience. So like you walk in and you shop for 30 minutes and then you’re picking up your order on your way out. Like, I think that there’s other things operationally that these retailers can learn from trying to fulfill in this shorter time domain and still provide like an Instore experience perhaps. Or it’s, you know, if you pick it up in store, you don’t have to pay the fee, but you it’s still ready in 30 minutes.
Like, I think there’s a lot of of experimentation that could happen in this. But John, I’ll give you the last word here.
I also think that it’s a, it’s a trend that we’re seeing in in grocery, but all in like food in general, trying to bring the consumer back to physical retail. Yeah, because when you’re shopping online, this is like it’s a little anecdotal, but if you’re shopping online, you can make very clear decisions of, well, I don’t want to pay 4 bucks for that one. I can pay 3 bucks for this. So you’re losing the impulse and we are seeing fairly consistently that the margin, the gross margin in those online baskets is lower than the gross margin in the Instore baskets. And so this is another way to try and say to people you’re going to pay extra for it, but then you should come to the store instead and we can try and get more margin out of you that way.
So I think that’s also part of this play to bring people back in for impulse purchases too. All right. The other thing I’d say Ant too is like just to close it out like. This this headline was really interesting for those listening to like it’s it’s about a week old but Ann and I were looking through the headlines and it both caught our attention for the reason that we said and it was great to have a discussion about it too.
I think and like in terms of hearing everyone’s points here because it it’s, it does sound like it’s, it’s more important than it probably was given credit for in the media at the time, absolutely.
Everyone’s shaking their head in agreement on that.
All right, let’s close it out and go to the lightning round. Kelly, this is your first lightning round question of all time, not your last, though I want to know Central Park Coffee House is about to open in Boston, influenced by the coffee shop of the same name from friends. What fictional sitcom spot do you wish would be created into a real life place that you could visit, say at first you started to say fictional? My mind went. Hogwarts.
But if we’re going to fictional sitcom, that’s a tough one. I mean, I think I can give you Hogwarts, but if you have another one, you let me, you let us know. One comes to mind. I was always a big Parks and Rec person. Yeah.
So there’s that episode where Entertainment 7:20. They have the new, like experiential media business, which is like very vague and ominous, and they just have this huge party. I think I would want the Entertainment 720 lounge. Yes, I love that to be a real place. You can go to the real Hogwarts.
You know they have like a replica in New York. They they do, right? Yes. That was so that dream can come true. We got to worry about the experience 721.
I don’t think that one’s in in construction yet, but awesome.
All right, John, the next one, which sometimes the stars just align so perfectly. We have guests on the show, but SE Technical University in County Carnal, Ireland plans to offer a Bachelor of Arts in Content Creation in social media. John, which social media influencer would you most like to be a guest lecturer if you were to take this course? Yeah. So that’s a great question.
I actually did see this headline before it, before you brought it up, so I went. I probably will go even more Irish. So right now the Irish rugby team are playing in the in the World Cup. One of their players is called Peter Romani and you guys should look him up. He’s at his Instagram feed.
It’s all about like gardening and cleaning his house. It’s so he’s this big like 6 foot three like huge guy and then it shows he literally gets like scissors act to cut to trim the edge of his grass. It’s like, weirdly LCD. It’s weirdly LCD. But he’s got like 100,000 followers and everybody watches him, like, cutting his grass.
So I would go, he’s like, he’s like pruning his peonies or something like that. Yeah. Yeah, Yeah, yeah. Yeah. It’s like, like, I got some stuff from my sister and like, cleaning tips from Peter Armani.
It’s bizarre. So wonderful. Wonderful. Yeah.
All right. John, we’re going back to you. Amazon is expanding the program to help sellers redesign their packaging so that it can be shipped without requiring an additional box. What is 1 product or company you wish would partake in this program?
Yeah, I So the first thing that can’t comes to mind is like a toy packaging. You know that like they’re like vacuum sealed toy packaging that you have to get like the industrial scissors to cut open and like your kids are screaming at you because they want to play with the toy and then you like cut your finger on it.
So if we could somehow change that, I don’t know how to make it better, but that would be that would be my push 100%. I don’t know what they do, but yes, that needs to be repaired immediately.
Whoever created that should never create packaging ever again. Yeah, it’s like Fort Knox. All right, Kelly, Last one. Amazon sellers are reportedly rating dollar stores for products like glow sticks and Twinkies to resell online. Kelly, What is 1 product you Cannot live Without and would gladly pay a huge markup for online if Amazon were the only place you could get it?
It was a fun one. Pick. The first one that comes to mind for me is white out. It’s something that I never I am a huge physical note taker, but I also hate it when you have to go back scratch it out. So I’m a big white out user accepting sponsorships.
If I could get that easy from Amazon, I would pay a huge markup. Oh my gosh. I already do get it there. But Kelly, you are a giant nerd. I just You’ve exposed your nerd.
You’re welcome. You are welcome on this podcast with your fellow nerds anytime. But that might be the most nerdy answer we’ve ever had in the history of.
I’ve noticed answer in the history show and I imagine your colleagues at the A and M Consumer and Retail Group are going to give you quite the grief for that over the course of the next week. And and well, they should too, I will add. All right, well that closes us up. Happy birthday today to Hilary Duff. Naomi Watson to the woman.
Who could probably teach me a thing or two about social media? Miss Olivia Jade herself. And remember, if you can only read or listen to one Retail Blog in the business, make it on Me Talk, the only retail media outlet run by two former executives from a current top ten US retailer. Our Fast 5 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 contents that that is exclusive to us. And we do it all just for you, and we try really hard to make it 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 Kelly, if people enjoyed our conversation today, we want to get in touch with you or John, or maybe get in touch with the A and M consumer and retail group. What’s the best way for them to do that?
Yeah, absolutely. You know, check us out on LinkedIn, Alvarez and Marcel consumer and retail group or visit us at our website alvarezandmarcelcrg.com and you can meet our team and we would be so excited to connect with you.
Awesome. Well, it’s great having both of you. John Kelly, thanks for being with us your first time. You did great. It was a great conversation all throughout.
Really quick Pace Show. Loved it. And so on behalf of John, Kelly, Anne and myself and all of us at Omnitalk Retail, as always, be careful out there.
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