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Hello, You are listening to the Omni talk Retail Fast 5 brought to you in partnership with the A&M consumer and retail group Avalara, Wiliot, TGW and Sezzle. Ranked in the top 10% of all podcasts globally and currently ranked the number one podcast in all retail by feed spot. The Retail Fast 5 is the podcast that we hope makes you feel a little smarter, but more importantly a little happier each week too. Today is April 10, 2024. I’m one of your hosts, Anne Mezzenga
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And I’m one of your other hosts, Chris Walton.
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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. Chris, we’re back from the break. At least we are back from the break.
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I feel like you’re back from your break. Yes.
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Yes. When I have some time to be away and reflect, I think of things that are outside of our day to day business. But I’m wondering, because you were, like, covering. You were on the ground, even on our vacation week, trying to stay on top of everything. You’re blowing up on LinkedIn.
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What was the most exciting thing that you learned last week while I. We were off.
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While we. While we were kind of off, while the omnitog office was closed down? In theory, yeah. Geez, that’s a good question. The biggest thing I learned, than, is that COVID.
00:01:29
COVID sucks. Like, I had COVID last week, and it. It’s. It’s just not fun. Like, it doesn’t get any better.
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The third time, I think I’ve had it right. Second time in, I don’t know, last count. Right. I tested negative this morning, though, so I’m raring to go. I’m in good form.
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But, man, it just gets weirder every time. It’s the weirdest disease ever, and I feel bad for anyone that has had it and have courses, had anything terrible happen with it, too. But, man, it’s just. It’s just awful. But, uh.
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But, yeah, but it’s fun holding down the floor, you know? I wrote a few articles on Amazon and. And Walmart and, uh, self checkout, and so, yeah, it was a great week for, uh, putting the old pen to paper, as. As one might say.
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And that’s what some people do. Some people watch, like, reruns of Grey’s anatomy. You write articles. So I’m. That’s something that you do.
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You know what I watch? I watched. I did. I watched a ton of movies, too. I was recuperating, especially on the weekend.
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I watched flight with Denzel Washington. I don’t know if you’ve seen that, but for those watching, wow, how did I miss that one? That is a really fantastic movie. Horribly traumatic and awful and depressing. But wow, what a really good movie.
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I really like that egg.
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I don’t recall. I do not recall that film. I’ll have to look it back up. I’ll add it to my growing list of movies that you have thankfully rewatched, and then I’ll rewatch.
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Not a good one to watch on our plane fight to Paris next week, though, and I’ll tell you that much. That’s probably not a good idea. Not a good idea.
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No, not good.
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Airplane view. No.
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I can imagine. But we are excited to be headed out to world retail congress next week in Paris. So if you’re going to be at the show, please let us know. It’s going to be an intimate show. So I’m excited.
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Our first time going. So we’ll have to, we’ll have to report back. We’ll be doing some interviews live from that show.
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Yeah. Thanks to the fusion group for supporting our work out there. Again, we have another, I would call it x. Keep using the word every time, man. But it’s another banger lineup of really great guests.
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You know, that is a very high level executive attended conference. And we’ve got some really, really great people lined up, including one that I’m super excited about and the head of retail store design at Lego. My kids are going to be so pumped up for that. I can’t wait to know.
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We have to not, we have to not fanboy and girl him too much. I know it’s going to be hard.
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It’s going to be tough. But hey, I’m sure he gets it all the time, though. He probably likes it, too. But we’ll see. We’ll see.
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All right. Should we get this show started? Do you have any exciting, I think we have some exciting updates because this is our first show of the month since we were off last week, right, Anne?
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We do. It’s not the first of the month a la Bone thugs in Harmony, but we’re still going to make it the first exciting announcement of the month. And that is that we have this month’s omnistar. If you’ll remember, our monthly omnistar award is the award we present in partnership with Quorso each month to recognize the top omnichannel operators across retail. Quorso ‘s AI copilot coaches retail leaders to optimize store performance at every level.
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It will help you transform retail operations from data overload into data powered. And we’re pleased with Quorso to announce. Drumroll, please. This month’s Omnistar award goes to Amber Turley, the VP of Omni convenience and commerce partnerships at Sephora. We had the pleasure of meeting Amber in person at a dinner we both attended at shop talking.
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And we both came away Chris, super impressed. And way to go, Amber. Congrats on being named our omnistar of the month for April. And, Chris, I just have to say, it’s the, um, it’s the Sephora beauty sales event right now. And Amber’s team is working their, their, like, compact soft right now because they are doing such a good job.
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I twice last week, my luggage did not make it, as I told you to. Our trip in California, I use the buy online pickup in store feature, which Amber’s team is in charge of. It works so flawlessly in California. I just used it last night again back home in Minneapolis. Very well deserving of the work that she has put in that she shared with us at that dinner.
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Wow. That is high praise. Wow. Way to go, Amber and the Sephora team helping and out on her vacation. Yes.
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Well done. Well done. Congrats, Amber. Awesome, awesome news.
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All right, Chris, let’s get to the show.
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All right. And, well, today we’ve got news on target placing new camera technology above its self checkout machines, Kroger closing its three e commerce facilities. I guess they spoke too soon. Hey, Anne. Costco offering Ozempic to some of its members, and Home Depot’s acquisition of SRS.
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But we begin today with big news from Amazon concerning its just walk out technology.
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And yeah, even though I was trying to go under a rock last week, it was impossible to avoid this news. Chris. Early last week, Amazon announced that it was pulling its just walk out technology out of its Amazon fresh stores in the US. And this week, they plan to do the same at Whole Foods. According to payments Dive.
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Whole Foods Market plans to remove Amazon’s just walk out checkout system from the only two stores that offer the technology, one in Sherman Oaks, California, and the other in Washington, DC. The specialty grocer will instead install more self checkout stations and traditional registers at these locations. The grocery also confirmed payments dive that Amazon smart carts, known as dash carts, will continue to be available at select stores and that Amazon’s palm payment system, Amazon one, will still be available at all stores. Chris, you, like I said at the beginning. You covered this all week.
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You were talking to people. You were commenting on things. Give the audience a little sense of what to make of this for in your eyes.
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Yeah. And I see we really, and both of us really haven’t stopped covering this either. I expect to cover this more here in the coming weeks. But I mean, net net, I think, and this, this, this is why we do what we do. This is why we got started in omni talk.
00:07:20
Uh, there’s so much disinformation out there about this story. And quite honestly, I think I would call it, being spouted off on social media about these announcements. The fact of the matter is, when you get right down to it, Amazon fresh is likely struggling and probably whole foods too, for that matter. And if you don’t get the grocery shopping experience right, it doesn’t matter how good or time saving your tech is like, it just doesn’t matter. You have to get the grocery shopping experience right first.
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So the right to strip it out and get it back down to basics. And the same goes for Whole Foods. I mean, I would put Whole Foods in that same bucket. Whole Foods has lost its, what I would call Whole Foods ness, for lack of a better way to put it, and since the acquisition, and, and they need to get it back as well. So the last point I would make, and I think this is really important, is Amazon is really scientific.
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We interviewed Amazon’s VP of just walk out technology, Jon Jenkins at NRF, and quite honestly, he foreshadowed this move when he gave us the four areas where they are seeing success with just walkout technology. In fact, I came out of that interview and I think I said to you, why are they doing this in grocery then? And to remind people of what those four areas of success are. They’re seeing great success when you need high throughput, you know, at a stadium scenario, uh, when you have trouble staffing. So a lot of the overnight situation at hospitals when shrink is a major issue, and then fourth, when you’re experiencing extreme fluctuations in traffic, none of which apply probably to Whole foods or Amazon fresh.
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They don’t, neither of those concepts check the boxes on any of those four ideas. So, so that’s essentially what Amazon is doing here. They’re pulling back and they’re going to deploy the technology where it fits best. And most importantly, they’ve got to get the grocery experience right first if they’re going to make hay in that arena. That’s my take, Ann, but what do you think?
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Yeah, no, I think you made all really wonderful points. I think the thing that I would add on here that I’m still questioning is how big a push are we going to see with the smart carts in these spaces then, too?
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Me too. That’s getting a little overplayed to me a little bit. You’re right.
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I do. I do too. Like, I guess I, if I’m playing, if I’m playing the other side here and I’m trying to think about like the opportunity here of moving to the dash carts versus continuing to roll out, just walk out technology. I mean, there is that elimination, I guess, of the check in and check out barriers that, you know, you have to scan somebody in and you have to have people the front if they can just take the cart and go shopping. Like, you know, we’re seeing other retailers do with the caper carts and other scenarios too with Instacart.
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You know, there, there is that removal of the barrier perhaps. And then I think the bigger point is the addition of the retail media and the other revenue producing things that could happen on those smart carts that, that can’t happen as fluidly throughout the store when you have a just walk out scenario. So I’m wondering if that’s kind of a play here where Amazon’s like, look, this is expensive. However we’re operating these, we can do this same. We can still provide this seamless checkout experience for the customers with the smart carts instead of like outfitting the whole store and dealing with all of the complexities of a just walk out format.
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So that’s, that’s like one part of this where I’m like, you know, are they going to, or will we see, like you said at the beginning, Amazon is good at pulling something if it’s not working or making those quick decisions as we’ve seen, you know, them do several times in the past. So I guess that’s, that’s one sticking point here where I’m like, where, where do smart carts fall in all of this and are they truly going to continue to invest there both at Whole Foods and at their own grocery properties?
00:10:58
That’s a really, it’s a really interesting point, though. You know, does the smart cart win out in the long run because of the fact that you get the in store retail media play that much more front and center from its deployment versus if you just go, just walk out, which is probably honestly, you know, in a lot of ways, the better consumer experience, at least it is from our perspective, I think. But, you know, which one wins out and which one did the customer acclimate more to your point, but. Oh, go ahead.
00:11:22
I was just going to say, especially as you think about licensing this technology to other retailers, I mean, that’s, that’s a, the just walk out technology is a significant capital investment, and so are the smart carts, but at least the smart carts provide that, like, instant revenue stream for them that they, that might make it even easier sell. But continue.
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Sorry. It’s more palatable. Yeah, it’s easier to, it’s easier to test, too. Like, you can get five carts in your store, much easier than you can overhaul your whole store and put in the just walk out system, too. But I think the other point that I thought that was interesting.
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Interesting. What you said real quick was just, you know, it was kind of funny that it was kind of like, oh, we’re pulling out this technology. But don’t forget, we still have this other technology, which still feels kind of like a tech company’s thing that they’re going to tell you. And so I was kind of like, okay, let’s just, which may be what got it screwed up, too, which is just like, let’s just, we just want to get our grocery experience right. That’s what we’re focused on first and foremost, you know?
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Yeah. And they’re, and they probably are leaving the carts in there. So they’re, they’re, you know, being truthful about that. And so who knows how the thing gets spun?
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But, but it might only be 15, like, right. The whole foods cards, there’s 15 or something. Right. That they’re testing.
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So I don’t, I don’t remember how many are in each store. You know, it’s hard, it’s, it’s always hard to predict that and under, or to understand that and count those. But, uh. But, yeah, but it’s fun story to watch and it’s going to be, I can, based on the chatter on social media, I don’t think this story is going away anytime soon. All right, headline number two tar another story that just keeps getting more interesting.
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Target is adding cameras at self checkout stations to deter theft. According to documents obtained by Bloomberg News, the retailer is adding a new technology at its self checkout registers that uses cameras to detect items on scanners, alerting shoppers who leave anything unscanned. The technology, called TruScan, is being rolled out to all stores this year, and it could help track Target shoppers who, quote, repeatedly fail to scan their items even after being prompted, end quote. A quote which appears to be taken directly from the review documents. Shoppers will get the audio and visual cues when they don’t scan items, and the technology has been piloted in some stores in recent months, said people familiar with the matter, asking not to be identified discussing private information.
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Whoa. And you get the honors this week. This is the put you on the spot question from our friends A&M consumer and retail group. And here it is. Both targets self checkout changes and the previous just walkout story point to the on again, off again excitement of checkout technology innovations over the last two years.
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A year from now, what will be the best form of non traditional checkout and what will it look like?
00:13:59
Oh, I hate making predictions like this in one year because I don’t know what’s the saying? You always say like we, predictions are.
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The basis form of journalism.
00:14:09
Yeah, well, I was thinking of the other one of like we, we underestimate the, the amount of technology or the amount of development that will happen in the long term and overestimate in the short term or something.
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Yes. Like, that’s right. That’s right. Yep. Yep.
00:14:22
Yeah. I, I don’t, I don’t think we’re going to see a lot change in the next year. Um, I still think that it’s going to require a lot of adoption on the consumer’s part, um, to change, to really change what self checkout behavior looks like in the physical store environment. But if I were to put my bets on something, I, I still think if you look at the adoption that sam’s club is seeing with scan and go, that’s still something that I would say is going to be the most successful form of a non traditional checkout. Coupled with, I think, um, you know, you, we talked about this with A&M and our podcast a couple of weeks ago and you wrote your article about it this week.
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But I think we’ll also start to see some benefits increase with the subscription programs that are here. Like, you know, Walmart. Walmart plus members getting access to scan and go and getting special access to the self checkout lanes or like things like that, that are perks to get people through. So I don’t think we’re going to see a lot of change in like the physical checkout properties, but I think that the mechanisms behind them, the adoption for more consumers of a scan and go type experience of, you know, limited access to self checkout is something that we probably will start seeing more retailers kind of test and play with over the course of the next year.
00:15:36
Interesting year.
00:15:38
What are you, what are your thoughts? How would you answer that question?
00:15:40
Yeah, I don’t know. Yeah, no, it’s funny. Predictions are the basis for my journalism, but that’s why they’re great for us at Omni talk. We’re not journalists. We’re true editorialists.
00:15:48
You know, when it gets right down to it. Um, no, I think I would actually put your hands together, you know, Joey Tribbiani, put your hands together. You know, like, I think. I think you take what Sam’s club is doing in the self checkout, and then you take what target is now doing, Kroger’s now doing others are now doing with the monitoring of the self checkout stations. And you put those ideas together.
00:16:11
And by that, I mean Sam scope has the computer vision, identifying where the receipt checks need to happen and validating the cards that are leaving the store. In theory, that’s my understanding of how it works. I think you can do that in the corrals with the self checkout, too. You can have somebody manning the stations and between the cameras looking at what should be scanned and what’s not. Having someone then validate that the cart is leaving with the stuff that’s supposed to be leaving in it and then having someone stop to do a receipt check, I think that’s where we end up going.
00:16:42
So, it’s kind of the idea that you get from self checkout, but then you’re bringing all the principles together into the corral, where most of these self checkout operations are now in play at grocers and retailers throughout America. That’s kind of what I think. But I think the other point about. But we got to get back to this headline a little bit, too. And I want to talk about that for sure.
00:17:02
I want to get your thoughts, because, one, I think it’s interesting that all this is, like, secret. I think that’s kind of fascinating. Like, leaked documents makes it sound like all, you know, like cloak and dagger or Woodward and Bernstein here. But. But.
00:17:15
And the other point, too, is, like, true scan. Like, okay, target, you’re finally doing something with computer vision, which we’ve hit you over the head for. For a long time and which is good.
00:17:23
Like, we need that target’s doing this in the first place. Cause I think that’s a really big deal that they’ve moved forward with this. Like, that was the first thing that I thought when I read this headline.
00:17:32
And that’s my thing, too, is, like, who cares if this breaks? Like, you’ve had cameras over yourself checkout lanes forever. They just haven’t had computer vision identifying that.
00:17:39
What have the cameras been doing, like, are they, were they just strictly like a deterrent? Because I was wondering the same thing. Because I’m like this, these have been there for a while.
00:17:47
They’re watching the same things. They’re just, they’re having to be reviewed posts. Right. You’re not watching them in real time. There’s no analytics in real time or not as good of analytics in real time, but this isn’t for me, is Truscan.
00:17:58
I mean, you know, targets going with a provider that isn’t Everseen, like Everseen is the kind of quote unquote leader from our knowledge in this space. So I’m curious why target thinks Truscan’s technology is better. Maybe somebody will call us and tell us that, too. I hope they’re listening and, and give us that information. Or why they decided to go with them versus another.
00:18:16
Because I think that’s interesting. Like, you know, what makes you go, what makes you think you can do something better than what everyone else, like Kroger, like I said, is using, or, or whomever else, too. So, so that’s the interesting thing here. But I mean, it seems like, it seems like cameras over the self checkout for computer vision are the use case that retailers are going to start to deploy. That is one thing I would bet, which is why I think, you know, going back to the prediction, that’s why I feel pretty good about them.
00:18:42
That prediction coming to play to some degree. But what do you think to close it out?
00:18:47
Yeah, I mean, my, my last question just comes down to what are you doing with this information? Like, you have the cameras in place. I still think that there’s this issue here where 100% there is what is happening? What is the responsibility of your team members? Because safety is a priority.
00:19:04
Like, do you expect them then in real time to react to these things? Are you just going to look for bad actors and then approach them in store? Like, how do you, you have the data now? What do you do with it? And so I think, you know, as we’ve seen many retailers do, is changing practices.
00:19:19
It’s investing further in other technology. Like you mentioned, Sam’s club, scanning the, the cart before it leaves, too, so that you can have some sort of additional alert. I think that’s the component for me that is still missing in the, the overall strategy. But, but a good first step for target, for this investment. I’m, I’m really happy to hear it.
00:19:37
Well, the other thing now is at least, you know, the scope of the problem.
00:19:41
Yes.
00:19:41
Right. I mean, I mean, let’s start there. Like, let’s understand what’s at play here to then figure out all the answers to the questions that you have now put in front of target and every other retailer in America that’s grappling with this issue.
00:19:53
Yeah, that’s a great, great point to end on, Chris. Headline number three. Kroger plans to close three e commerce facilities. According to grocery drive, Kroger is closing three spoke facilities as part of its e commerce hub and spoke network with Ocado on May 25. A spokesman person for the Grocer confirmed on Wednesday the soon to be shuttered facilities are in Opa-locka, South Florida.
00:20:16
San Antonio.
00:20:17
What a great name. It’s got a hyphen. You gotta love the city with a hyphen.
00:20:21
I know. I know. Also, San Antonio. In Austin, Texas, Kroger spokesperson April Martin said in an emailed statement, “despite our best efforts, including the support from new customers, learnings from other locations, and the incredible work of our associates, the Miami, Florida, San Antonio, Texas, and Austin, Texas facilities did not meet the meet the benchmarks we set for success.”
00:20:44
Chris, what do you make of this?
00:20:46
I think this is really big news. I think it’s. It’s. It’s quite. You do, too.
00:20:50
Yeah, I think. Honestly, I think it’s actually the biggest headline of the day, even though it’s probably not gotten nearly the chatter on social media that the other headlines have gotten that we’ve read so far. But I think there’s a lot of angles here. First, I think it asks, you know, what’s going on with the cadaver investment, you know, which, if memory serves. And for me, this isn’t the first headline in the last year where that issue’s come up.
00:21:13
I feel like we’ve asked that question a lot recently. And then second, and more importantly, when news of this broke, I was really excited. I personally was really excited to see how this worked. When they announced that they were going to do it, like, I was really excited by them trying to do this, you know, trying to go into a market without stores, serve the market digitally. But I got to give kudos to my buddy Jason Lepes.
00:21:36
Hopefully I’m saying his name right. The funny thing about Zooman, I never meet anyone’s last name. You know, no one’s ever like, hey, I’m Jason. You know, I’m just Jason when I meet them on Zoom. So I apologize.
00:21:45
I’ve got your last name wrong. Cause he’s probably listening, but he’s formerly a fresh direct and now works at Heb. Uh, and he, he pointedly questioned my excitement on social media when we. This was like, two years ago. We talked about this on the show, and, you know, lo and behold, he was right.
00:21:59
And his point he was making is, you need a physical grocery footprint to be successful in mass market grocery. Amazon’s finding it out in the first headline, too. It’s really hard to do when you have so many players that are so established regionally. And so that’s the other angle. This story is Kroger’s finding that out as well.
00:22:17
But what do you think?
00:22:18
Especially, especially, I think when you’re in a market that’s not Manhattan, like, fresh, direct works in a, in a, right, like, tight urban environment works great. Tight, small urban environments where it’s close together and, like, yes, you don’t want the big grocery haul trip, but I think your point is so dead on, Chris. When you talk about, like, going into a Texas market and a Florida market where people are driving. People are driving to their grocery store, they’re doing the big stock up trick. Like, that’s a diff, totally different mentality for people to get switched over into.
00:22:50
And even though I agree, I was very excited about this when this news first came out. Like, it was bold. It’s a difficult thing to do. Absolutely. Especially, you know, I think the other, the other part of this, too, Chris, is, I don’t know about you, but I feel like the more retailers that we talk to, especially in the grocery space, this idea of this inflation weary customer, this customer that’s trading down for things, they’re trying to find the best deals on things.
00:23:17
You look at the, at the, I guess, psychological impact of thinking, like, if I go into a grocery store and I see three bottles of ketchup on the, on the shelf, like, I probably could, if I can look at that thing, if I can see the products, like, I might feel like I’m getting a better deal if I’m going into the store to pick my groceries, especially on top of the delivery fees that you’re paying for things like grocery delivery. So I think a lot of this could do also, or could be lending itself from the idea that consumers are just thinking that if they go pick up, pick their own groceries, they’re saving some money in time for themselves. Um, so I I think that probably came into play here, too, but I don’t know if you agree with that or.
00:24:00
Well, no, I think you’re right. I mean, I think the time elements are really interesting, too, because we’ve talked about this a long time ago on the show, which grocery shopping is just really hard to do online, which is why there isn’t a national player that really, you know, does grocery shopping, you know, and so, and the other point about this, too is, like, if Kroger can’t do this with the latest technology from a fulfillment perspective, that should be, you know, lowering the cost to serve, who can do it, you know? And so it makes me think, you know, that, you know, kind of the grocery landscape is the grocery landscape, barring the exception of the players that are really going to make hay on it, like the Aldis of the world who have a value price position and a tremendous opportunity expansion here. So I don’t know anything else.
00:24:43
I think it’s a little bit. I will. Yeah, I just was wondering, like, do you think it’s a little. They were just a little before their time, too. Like, do you think that, I mean, grocery.
00:24:51
Grocery is online. Grocery is continuing to steadily increase, but do you think that this could work in, like, a few years? It was just too early on. Or. Or is that like.
00:25:02
No, you don’t?
00:25:03
I don’t know. I mean, I got this wrong from the get go. I mean, I don’t want any credit for thinking about this because Jason was the one that got this right. But I. I don’t know.
00:25:10
I mean, if I. If I think hard about it, I think. I think, no, I think it’s just going to be hard to do, and it’s been hard to do for 25 years. I think it’s more like, okay, you know, from an omnichannel perspective, which is what this show is about. It’s more like, how do the grocers figure out the right way to serve the needs in those moments when.
00:25:27
When their customers do want to order from them digitally?
00:25:30
Yeah.
00:25:31
Which isn’t going to be all the time. Might be some customers do that more often than others, but the majority of their business is still going to be done in stores. But how do they have those omnichannel capabilities pick up in store curbside ship to home? Who are the right partners with that? Is it doordash?
00:25:45
Is it Instacart? Is it buncho? With scheduled deliveries, all those kinds of things? I think that’s what’s going to happen here. I think a new entrant trying to come in this way is just really, really challenging.
00:25:55
Yeah, makes sense.
00:25:56
All right, now’s the time in the show where we tell you about another great conference we’re going to attend. So let’s take a quick break to remind you all that Ann and I are going to the commerce next growth show on June 11 to 13th in New York City, New York City, where we will be live streaming interviews from your favorite brands from the show. This year’s speaker include execs from Estee Lauder, Lowe’s, Sheehan, Patagonia, Sephora and more. Connect with us at the show while learning from over 150 industry leading speakers across more than 75 sessions. Or as I like to call, the commerce next show and the C conference because it felt like everyone there was in the C suite.
00:26:40
Scaled retailers and brands can register for a free ticket today or use code fast five all one word to get 10% off your general admission ticket, just go to commercenext.com conference to secure your spot today. We hope to see you there. You can also check out the link in our podcast description to learn more. That’s commercenext.com conference. And again, use code fast five all one word, okay?
00:27:05
And headline number four Costco has begun offering ozempic prescriptions to some members for $179. According to CNN, the warehouse retailer is now offering its us members access to prescriptions for GLP-1weight loss drugs through its low cost healthcare partner, Sesame. Costco first partnered with Sesame, a direct to consumer healthcare marketplace that connects medical providers nationwide with consumers, last fall when it began offering its members online health checkups for as low as $29. But soon after, Costco and Sesame noticed that about one in five customer inquiries was about weight loss. And so they launched a renewable three month program officially last Tuesday that includes a video consultation with a weight loss doctor or specialist, a GLP-1or weight loss prescription if appropriate, and ongoing support through unlimited messaging and guidance with a healthcare provider.
00:28:02
The cost of medication is not included in the $179 three month plan, and Sesame warned on its website that without insurance, GLP-1’s can cost between 950 and month.
00:28:15
Crazy.
00:28:15
So, Ann, my question for you is this. Your husband is a huge fan of Costco, while you, on the other hand, not so much. Does this announcement make you think more people will find value in the membership and how do you think about it? Personally?
00:28:31
Absolutely. I think from a business perspective, this makes complete sense. Costco does so well catering to this middle to upper class, you know, audience of customer who is demanding this product. This is something that they want access to. They want easy access to the same way that, you know, Costco shows up and they have bulk almond milk or vegan protein bars like all these, these like things that are in the zeitgeist for this specific audience they are on, they are getting those products in their door, and that’s why people love them so much.
00:29:06
And I think that, you know, what I imagine this will do is not only increase access to this very popular drug right now, but I, I’m hopeful that Costco seeing this kind of as an entry point for some of the other health services that they offer, I mean, $29 checkups, you can do $79 like physicals all through online, $72 mental health appointments, like all these things that they’re also offering on the platform. I think this might just be a way to be like come for the, for those that see what all else we have to offer you and all these things that we’re giving you with your Costco membership. So that part of it to me, feels like a brilliant strategic move for Costco. But the other thing, Chris, that I’m curious to hear your perspective on, too, is that, oh, boy, I’m, I’m wondering if this doesn’t start to bring in younger people who are interested in getting this drug that have disposable income but may have, like I’m thinking of the post 26 year olds, right, who are just off their parents health insurance because all of these offerings from Costco, you don’t have to have health insurance. So are you bringing people into Costco who were not Costco shoppers or didn’t see a reason to be a Costco shopper member before who are now like, oh, I can get Ozempic or Wigo be here, like, I’m going to check this out.
00:30:24
I’m going to go in here and then they’re, they’re kind of in, in the, the Costco worlds now because of this one entry point. It’s a, it’s kind of a stretch. It feels like, but I’m, it could be. No, maybe.
00:30:36
I don’t think it feels like a stretch at all. I think it’s a really great point. I mean, I think, you know, I mean, net, net, when I sit back, I didn’t have a lot to say on this, so I was just kind of like just going to see where you go with it and then I’ll just kind of add on. But I think Costco’s doing a great job merchandising to the trends, you know, and Joey Trebiani air quotes here, and this is one of the biggest trends out there. And they’ve got a higher income demographic already.
00:30:58
It’s probably an older customer, too. And you’re right, it probably plays squarely into the younger customer. I mean, we were talking about it yesterday too. It’s not any different than like the hims crap that you see online or during Super bowl ads where they’re just trying to get men to sign up for, you know, ed medication and hair loss medication quickly online. They’re just giving them access to do that so they don’t have to take the time to go to the doctor, make, make the appointment, which is a pee in the butt through your, all your healthcare systems.
00:31:25
They’re just making that easy to give people what they want and telling them, hey, you can get this really easily from us at Costco. And so I think, I mean, it’s, it’s brilliant. We’ll see what happens next. We’ll see what the counter trend is to ozempic and what, what, you know, everyone starts to do later on that side. But yeah, I mean, there’s nothing not to like here from a true merchant and business sense, I think.
00:31:47
All right, let’s move on to headline number five. Chris? Home Depot has bulked up its pro business with an $18.25 billion deal for buildings product supplier SRS. According to Reuters, Home Depot will buy the building materials supplier and the price tag marks the chain’s largest acquisition to date. As Home Depot looks to broaden its professional customer base to better tackle tepid demand, SRS, a portfolio company of private equity firms Leonard Green and Partners and Berkshire partners, primarily serves pro customers, including roofers, landscapers and pool contractors.
00:32:23
The firm will also operate as an independent unit within Home Depot. Through the deal, expected to close by the end of fiscal 2024, Home Depot will add SRS’s network of more than 2500 professional sales force in 760 plus locations to its footprint of over 2000 us stores and distribution centers. It would also allow Home Depot to take advantage of SRS more than 4000 truck fleet and job site delivery capabilities. Chris, what do you think of this major? Major, like biggest acquisition that people’s ever done?
00:33:00
Yeah.
00:33:00
Yeah, it’s massive. $18 billion. It’s crazy. Um, Daily is not my sweet spot. And I mean, I think for those that might remember I tried to repair a faucet in my sink and ended up causing myself thousands of dollars in water damage.
00:33:11
So not my sweet spot. Not my sweet spot at all. Um, but I do have a couple of thoughts. I mean, I think first, you know, prior to this acquisition, it sounds like Home Depot’s revenue was 50% coming from the DIY market. So I think this is a little bit of a diversification play given the state of the housing market.
00:33:28
Yep.
00:33:29
Um, second, I think it also sounds like it shores up an area where Home Depot has been historically weak from a service level standpoint in terms of getting the materials that the builders need. But then, third, and most importantly, this is the angle that I like most about it from an omni talk standpoint is I love the omnichannel extension here of what a brand can do when they think about things differently. We saw Walmart in the past couple of weeks while we were off to doing something similar with HVAC installations. You can now get your HVAC installed through Walmart’s website. Marketplaces are growing by leaps and bounds, so there’s, there’s no reasons why retailers shouldn’t start thinking more about how they extend beyond b2c into b2b.
00:34:08
So, uh, b2b. Excuse me, not b&b, but b2b. But so, you know, like, for example, we were joking around yesterday, like, why couldn’t target go into the office supply business? Or. Yeah, uh, through its marketplace or sell furniture directly to home decorators?
00:34:22
Or why can your local grocer have a website set up for bulk orders for local businesses as well? There’s a lot of extensions like that. There’s probably more than I can think of, quite honestly. But I think this is a great example of Home Depot continuing to press the bounds of, of what they can do from an omnichannel standpoint. And that’s why Home Depot is, I think, in our opinion, a top five omnichannel retailer, when you get right down to it, and always has that.
00:34:45
Yeah, absolutely. I mean, I wasn’t familiar with SRS. I’m guessing most of our list.
00:34:51
Yeah. You’re the daughter of a contractor and the system contractor.
00:34:54
I know I did. I reached out to my, my contractor brother and dad to ask them if they’re familiar with this company, and they weren’t. So, you know, they’re obviously, they’re, they’re general contractors. They’re not roofers or landscapers or pool installers specifically. So I think that’s another point here that you have the, the possibility to reach the contractor market, too.
00:35:16
So it’s not just, you know, these three people. Those products that SRS carries are now available to your larger pro audience. So I actually think this could be more of a loyalty play to like get your, your customers who maybe are coming to you, to Home Depot for one or two things. Then they go to a Lowe’s for other products or a more regional and acer, another regional hardware player for other items. They kind of have their trips the same way.
00:35:43
Like you might have a grocery shopping trip that you do at Trader Joe’s and you do at Target or Walmart and then you do at your regional groceries.
00:35:50
Interesting.
00:35:50
I think that’s kind of changing, or where I think this is going, that it could change the mindset of your consumers to be like, well, maybe I can get that now at Home Depot because they have this association with, with srs or some of the products that SRS carries and just gives more awareness to those products. But then also, I think the thing that I’ve learned from my family and then just from, you know, other contractors in the space, too, is that some of the rebates that these, these hardware companies offer come into play when you’re, especially when prices of building materials have skyrocketed anywhere that you can make up more savings or as a loyalty member, you can get 11% back or 5% cashback or something if you’re using, you know, the properties that Home Depot has in place, the credit cards, the rebates, like those kinds of things like that. That’s not nothing when you’re ordering thousands of dollars worth of materials and lumber and all these things. So I think, you know, this could be really good for Home Depot to expand its portfolio, expand its audience and increase loyalty. So from my perspective, again, like, really, really smart move here by Home Depot.
00:36:57
Yeah. Wow. All right. Yeah, great points. Great show, too.
00:37:00
And I’ve really, this has been a great show, like, learning a lot, you know, getting challenged a lot by, on, on previous thoughts around stories like the Kroger story. Like, it was. Right. It’s been a great show. Really good show.
00:37:11
All right, let’s do the lightning round.
00:37:12
All right, Chris, question number one for the lightning round, the eclipse happened this week. I want to know, would you prefer to celebrate the eclipse with Bonnie Tyler’s total eclipse of the heart or Soundgarden’s black hole son?
00:37:25
Oh, not even close. This is like the total eclipse of the heart all the way. I mean, that was my jam when DJ, big, big fun DJ at Stanford would come and play there. We had a DJ that would do all the, all the big dorm parties, was called big fun. It had a shirt that just said big fun, which I, of course, had, like seven of them.
00:37:41
And, yeah, total clips of the heart was always the jam whenever it would come on. It was great. It was awesome. You’re probably black hole sun, though, aren’t you?
00:37:47
Oh, yeah.
00:37:48
Oh, God, yeah. All right.
00:37:50
Such a good song.
00:37:51
National Burrito Day was Thursday, April 4. You know, this is a topic that’s near and dear to my heart. And, yes, as of right now, what do you think is the number one way that you can screw up a burrito?
00:38:02
I ate a lot of burritos last week in California, and I determined that excess starch, you should not have too many potatoes or too many. Too much rice.
00:38:12
Yep.
00:38:13
It just makes your mouth dry, and it eliminates all of the other flavors that are marrying together. So get rid of all the potatoes, get rid of all the rice, and we’re good to go.
00:38:23
Yep. 100%. I discovered a new one, too, but I’ll tell you what, that one is after the show.
00:38:28
Oh, God. Okay. I’m nervous about that. Um, okay, Chris. JCPenney opened their first new store in eight years.
00:38:35
Recently. If you had to shop at JCPenney right now for something, what would you buy?
00:38:40
Uh, probably still home furnishings. I thought I was. I always thought JC Penney said decent home furnishings, especially, like, on the linen side of things. Um, towels and linen. So I’d probably go there for that.
00:38:51
All right, last one.
00:38:52
What is that? Wasn’t it Lionel Richie’s line? You. You’re going to get Lionel Richie’s, like, home decor, bedding and stuff.
00:38:59
Was he at JCP? I don’t remember. Was he? Yeah. So.
00:39:02
But maybe I’m wrong.
00:39:03
The most. One of the best. Best conversations I’ve ever heard at a retail conference was Lionel Richie. You know, saying, that’s right. Like, life begins at the edge of your comfort zone.
00:39:12
That was so profound. I. That’s. It’s really true. I’ve thought about that a lot ever since he said it.
00:39:17
All right, last one. An instacart driver reportedly shot and killed Angie Harmon’s dog recently. Yeah. This true story. Uh, and it made me think exactly of you, because what has.
00:39:28
What has been your most. What has been your worst gig driver experience of late? I know you’ve had one.
00:39:35
Yeah. Well, I alluded to it earlier, but I had a Lyft driver taking us to the airport who was just stalled out. And then I called because we started running late for our flight, and he was in the bathroom of a gas station, just telling me that he needed five more minutes, which has never happened to me before, and then proceeded to pick us up 25 minutes late and left my suitcase in the middle of the street, did not put the suitcase in the car. So I had got to the airport, running late, no time to go back and get the suitcase. Worst gig driver experience of my life.
00:40:10
Although then when we got to California, we had the same doordash driver delivery driver, two nights in a row. Delivered our stuff to the wrong house both times and I actually like, physically talked to him. I walked out and was like, we’re actually this house here came the second night, delivered it to the wrong house again. So I’ve been on a roll of bad, bad experiences lately, and that is.
00:40:31
Truly, truly a crappy experience. All right, happy birthday today to Mandy Moore, Hailey, Joel Osment, and to the man who once played Stingo in Sophie’s choice, the great Peter McNichol. And remember, if you can only read or listen to one retail blog in the business, make it Omnitalk, the only retail media outlet run by two former executives from a current top ten us retailer. Our fast five podcast is the quickest, fastest rundown of all the week’s top news and our daily newsletter. The Retail Daily minute tells you all you need to do know each day to stay on top of your game as a retail executive, and also feature special content that is exclusive to us and that Ann and I take pride in doing just for you.
00:41:09
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, you can follow us today by simply going to YouTube.com omnitalkretail. So until next week, and on behalf of all of us at Omnitalk Retail, as always, be careful out there.
00:41:26
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