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The Omni talk Fast Five is brought to you in association with the A&M consumer and Retail Group the A&M consumer and Retail Group is a management consulting firm that tackles the most complex challenges and advances its clients people and communities toward their maximum potential CRG brings the experience tools and operator like pragmatism to help retailers and consumer products companies be on the right side of disruption and Avalara. Avalara makes tax compliance faster, easier, more accurate, and more reliable for 30,000+ business and government customers in over 90 countries. Avalara leverages 1,200+ signed partner integrations to power tax calculations, document management, tax return filing, and tax content access. Visit avalara.com to improve your compliance journey and Mirakl , Mirakl is the global leader in platform business innovation for eCommerce. Companies like Macy’s, Nordstrom, and Kroger use Mirakl to build disruptive growth and profitability through marketplace, drop shift, and retail media. For more, visit mirakl.com, and Ownit AI, Ownit AI helps the world’s leading retailers advance their eCommerce shopping experience with AI. To learn more visit Ownit.com and Finally Sezzle. Sezzle is an Innovative buy now pay later solution that allows Shoppers to split purchases into four interest-free payments over six weeks to learn more visit sezzle.com.
00:00:55
Companies like Macy’s, Nordstrom, and Kroger use Mirakl to build disruptive growth and profitability through marketplace, drop shift, and retail media. For more, visit mirakl.com, and Ownit AI, Ownit AI helps the world’s leading retailers advance their eCommerce shopping experience with AI. To learn more visit Ownit.com and Finally Sezzle. Sezzle is an Innovative buy now pay later solution that allows Shoppers to split purchases into four interest-free payments over six weeks to learn more visit sezzle.com. Hello. You are listening to Omnitalk’s Retail Fast five ranked in the top 10% of all podcasts globally and currently ranked the number one podcast in all of retail by Feedspot. The retail Fast five is the podcast that we hope makes you feel a little smarter, but most importantly, a little happier each week too.
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And the Fast five is just one of the many great podcasts you can find from Omnitalk Retail alongside our retail daily minute, which brings you a curated selection of the most important retail headlines every morning, and our retail technologies Spotlight podcast series which goes deep each week on the latest retail technology trends. Today is June 26, 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 have a very special show today because joining us for their regular monthly appearance are A&M CRGs, Kelly Carey and Jeffrey Dwyer. Thanks so much for joining us today, you guys. Jeff, it’s been over, just over a year since you were last on the show. We were reminiscing. We were in a hotel room in Monterey.
00:02:33
I love for you to just start by giving the audience, if they missed that podcast episode just over a year ago, a little bit of a quick background on you.
00:02:43
Absolutely. Yeah. That was a. For anybody who’s listening, that was a banger.
00:02:47
Yes.
00:02:49
Please, please refer back to the Monterey episode. I’m Jeffrey Dwyer. I’m a partner out of our Chicago office at least through July. And then I moved back to California, uh, where, where you guys are out on the west coast, uh, beginning of August. Excited to be back on with you.
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And, and, uh, and, and there’s some pretty good content today. So excited to get, get with it.
00:03:11
Oh, we are, too. We are, too. Um, Kelly, let’s, let’s go to you to, um, give the audience a little quick background on you.
00:03:19
Great, thanks, Anne. Kelly Carey, I’m a director with the consumer and retail group at A&M in our DC office. Been in the role for about five years. A lot of background in beauty and excited to talk to you guys today.
00:03:35
We are very, very excited to have you, Kelly. Fresh, fresh back from, from France, from the French Open and ready to drop some serious retail knowledge today, right, Chris?
00:03:47
Yes, that’s right. Like a drop shot. And that’s good, good reference. Good reference. And Jeff’s right, man.
00:03:52
These are, we’ve got some good headlines this week. I mean, I think, Ann, when you and I were doing our headline review, we had like eight or nine that we could go with and we siphoned it down to five. And so I’m, I’m excited to talk about them.
00:04:03
All right, well, let’s dive in.
00:04:06
All right, well, today we’ve got news on the Netflix house. We’re going to talk about what the heck that is. Unilever’s new quantum computing partnership with Microsoft. Amazon, mulling a new subscription fee for an AI powered Alexa targets, plans to bolster its marketplace via Shopify. And Ovative’s Chuck Anderson Weir stops by to give us five insightful minutes on Ovative’s latest EMR power rankings.
00:04:30
You know, I love power rankings. And, but we begin today with big news out of Target.
00:04:35
And all right, headline number one. Target announced plans late last week to roll out a new gen AI tool to team members at all of its nearly 2000 stores by August, becoming the first major retailer. It claims to share that it is bringing this technology to store team members across the US. According to a Target press release, the tool is called Store companion. There’s a GenAI powered chatbot designed by Target that can answer on the job process questions, coach new team members, support store operations management, and more.
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Target’s in house technology team used real frequently asked questions and process documents from its store teams across the US. The team then worked quickly, taking the project from its initial testing phase to plan rollout in just six months. Target is currently piloting the tool at about 400 stores, using the team’s feedback to improve the experience ahead of the chain wide rollout later this summer. Kelly, we’re going to go to you first here. The question is, is Target right to rush this technology out to stores?
00:05:39
Thoughts?
00:05:41
I, I would say yes. I think this one’s kind of a no brainer, and I really like it for a few reasons. So, first off, you know, the one hesitation I had was, okay, you know, there’s going to be a lot of learning time for the robot to understand how things work in Target. So, you know, you run a bit of a risk of getting the wrong advice provided through that tool or people not understanding. But it sounds like, you know, six months, 400 stores, they’ve, they’ve been doing those checks on the upfront.
00:06:11
So assuming that’s gone well and proven out to be adding value, which it sounds like it has, I think it’s great. And it’s such a good opportunity to free up time for their teams to go focus on higher order problems, spending time with customers. And I think it’s going to be an incredible engine for them to learn about what the problems are on the ground in the stores. Where do people actually need help? Where do they need to be thinking about new training programs?
00:06:42
So I think it’s great.
00:06:45
Yeah, I agree. And big news out of Target. I mean, this was like one of those headlines where it was like, all right, yes, target, they’re doing a really cool tech deployment. They’re using new technology in a really smart and intuitive way and especially for the team members, like so, so great. I think.
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Jeff, I want to go to you next. What would you add into what Kelly said?
00:07:04
Yeah, I mean, look, I think there’s, we’ve got target on here a couple times today. Yeah, they are, they are throwing a lot at the wall. And I think this one is certainly meant to help them on the cost side and get the process efficiencies within the store streamlined and more impactful, obviously masked by GenAI and hopefully making everybody’s job a little bit easier under the roof and in the four walls. I think it’s smart. I think it’s the right move.
00:07:37
They’ll obviously learn a bunch out of these 1st, 400 stores and we’ll see, you know, how they, how they do this. I think they’re, they’re obviously one of the first retailers to, to announce this publicly, and, uh, you’ll probably see a lot of retailers behind them start to move this direction.
00:07:52
Yeah, I mean, that was a question for me. I mean, Walmart has been using.
00:07:55
Yeah, me too.
00:07:56
And for a long time, I was like, yeah, are they really the first ones to try this? But maybe they, like. I don’t know. I tried to dig up some info last night and see if Walmart, like, wasn’t using this across the chain, but according to what, I mean, sam’s club.
00:08:08
And they’re like, you know, target saying we’re the first general merchant, you know, whatever.
00:08:12
Yeah, I’m with you there. There might be some semantics in those terms, but, Chris, I’m really excited to get your opinion because you were in stores, you were rolling out things, like, similar to this. What are your thoughts? And especially the question around, like, the rollout decision, knowing, like, how teams are working with this and deploying new technology in stores.
00:08:33
Yeah, I. That’s a good question. I mean, so, first of all, I queried my, my old store manager buddies, uh, out in the field, and asked them, and they seem pretty excited about it, you know, but I think to the point that, you know, Jeff was making and you were alluding to, too, it does seem like there’s a rash of announcements coming from Target and a rash of announcements claiming we’re the first to do something, which, as you know, on this show, is always something I’m very skeptical of. Of why, why are we hearing so much all of a sudden? So, you know, when I put it that way, I am a little worried that the rollout could be a little too quick.
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Okay.
00:09:04
You know, they said it started six months ago. They tested in 400 stores. You know, how long did you test it then? Because it was, it can’t be that long of a trial. And the reason I bring that up, too, is because I actually just wrote an article with, in partnership with Microsoft, where we looked at, what are some of the issues when you try to deploy a generative AI at the store level, and particularly, security becomes a factor.
00:09:25
And so when you think about that, I’ll put that in context. So, like, previously, training for all your store team members was done on, like, desktop computers in the break room or even paper training manuals.
00:09:35
Honestly, finders. Yeah.
00:09:37
Right. And so now, essentially, what Target’s saying here is they’re putting all that information into a database so it can be easily accessed through language model queries through mobile devices, I’m guessing. And that’s what we’ll be seen in the Photoshop. Of this, the press shots of this and so, but all that means there’s more nodes for a breach. Like if you have devices now with access to all this information, there’s more nodes for people to try to want to get that information or to try to fish for information from unsuspecting employees who may or may not be trained well in terms of the security protocols related to those devices.
00:10:09
So, you know, overall I think the application makes sense. But I don’t know, like, I do worry they’re maybe going a little bit too fast and target, if anyone does not have a good history on the security side of things. So I think that’s something that has to be considered here.
00:10:22
Do they have to do that? I mean, is there that concern now that it exists in the PDA’s themselves? Like, I mean, I would imagine that if they’re using these already, there’s already security concerns in place, Chris, or is that not, is it, is it really the gen AI or the bad actors that can come in and like infiltrate the messaging that’s going through?
00:10:40
The concerns are higher because they’re now using the devices in different ways. They’re like talking to them now through the language queries, whereas before it was probably just task lists on their PDA’s. And so that opens up opportunities for potentially, you know, good scammers to come in and find new ways to get people to do things or to get access to information. Or the other security risk is internal too. Like does suddenly some type of information on the HR side get into the database and somebody now has access to it as an employee?
00:11:10
That shouldn’t as well. That’s another issue that could be, could be confounding here as well.
00:11:17
The last question that I have, Chris, for you was just, and not Mike. I was with Kelly. I was like, listen, the more information you can plug into these things, the more people that you can get. Like asking questions. Like, yes, you can pull from your frequently asked questions that people submit, but this is going out to almost 2000 stores and all the employees in there, and you’re collecting information in real time and being able to kind of drain this tool to its full capacity versus just doing it in a select subset of stores and potentially early adopters from those who, you know on the store’s behalf from a tech product rollout standpoint.
00:11:53
But I’m wondering, Chris, what your thoughts are about adoption from the employees? Like, to me, that’s the biggest question here is like, if this thing doesn’t work, like, are you going to get people to use this tool, and is it something that they’re really seeing benefit from? And so I guess that would be my last question for you, is, like, do you see the benefit, though, for the employees themselves, from a tool like this? And is it something that, you know, they’re actually going to pick up and start using day to day?
00:12:19
Yeah, 100%. And that was the. That was the general tone of the conversations I had with people out in the field, that they’re excited about it, they want to use it, that the usage of it is still very limited at this point in time to understand the full extent and the power of it, but they are excited about the opportunity to engage with the technology. Yes, 100%.
00:12:37
Excellent.
00:12:38
All right, headline number two. I’m excited to talk about this one, especially with our friends here. From A&M, Netflix revealed details about its upcoming permanent retail destination, Netflix House. That was first announced eight months ago, including where the first two venues will open in 2025, According to the Verge. Not to be confused with the verve, where the symphonies are always bittersweet.
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And the initial Netflix house locations will be open in, quote, two of the most popular shopping centers in America, according to Netflix, the Galleria Dallas and the King of Prussia Mall, and will take over the sites of former department stores, providing each venue with over 100,000 space. Details on what exactly will fill all that space and draw fans to the streaming giants. First, two permanent venues remain thin, but they will include, “regularly updated immersive experiences and,” unique food and drink offerings, according to Marian Lee, Netflix chief marketing officer. Jeff, I’m curious now, would you be advising Netflix to make this move? And if not, why not?
00:13:40
And if yes, what do you think they need to get right for the effort to be successful?
00:13:46
Yeah, so. So a few things on this one. I think the headline is, you know, Netflix is filling voids left by dead department stores. They picked. I’ve been to both of these locations.
00:13:58
I’m sure you guys have as well. They picked phenomenal entry points into this. This business model. Model. These are not the left for dead bed, Bath and beyond type, the B&C malls.
00:14:11
Yeah, right. That’s a good point, though.
00:14:14
This is a very, very, you know, tier one type center that they’ve opened up. These locations are going to be opening those locations across the two centers. I think it’s a really interesting move for Netflix into a more customer focused, direct to consumer type model. I’m a buyer of this move.
00:14:38
You are?
00:14:38
It’s only two. It’s only two locations. I don’t think it’s a big bet for them, but I think the upside potential for what they could expand this into is more attractive. I think what I would say is they probably should forecast a little different on these two locations of how the rest of the rollout may look because these locations are so prime. I think the locations that they’ll have to put on behind this should be obviously very well thought through as they did these first two locations.
00:15:07
But, yeah, I think it’s where everybody’s moving to try to get more customer experiences and foot traffic to actually engage with your brand and your product category a little bit more, interestingly, than just come by my t shirt and jeans. It’s actually getting the consumer to experience the brand in a different way. And they haven’t issued very much other than a few pictures around what the concept will ultimately look like. So it’s a little bit of, let’s see how this looks, and very curious. No different than, you know, what Wayfair did up in Chicago here.
00:15:46
We kind of got to see it firsthand, and I think it’s a tremendous step for them.
00:15:50
Yeah. All right, Kelly, so do you agree with Jeff, or are you a little. I’m curious what your take is. And are there any watch outs that you would have for Netflix in order to make sure this thing is successful?
00:16:00
Yeah, definitely. I do ultimately agree with Jeff. I think this is an interesting move, very much an experiment for them. I think they’re dipping their toes in this new area and like, hey, let’s see what we can get out of it. My mind actually went, when I was reading about it, to, you know, a universal or a Disney, which obviously that’s.
00:16:21
That’s theme park. It’s a much bigger scale. But you think about it, they have so much content, and that’s kind of one of their differentiators nowadays. Like, fewer of the streaming services are doing quite as much unique to service content creation as them. So I think they have a lot of great assets.
00:16:43
They definitely could be moving merchandise through there, but I’m really curious to see what type of experiences they do. And not only do I think this could be a test into doing more locations in a department store type format, but could this even be a kind of trial to see if they could go as big as theme park in the future? So I think it would be really interesting. And I’m actually near the Dallas Galleria right now, so I’m looking out my window, seeing if I can see this building, but I would definitely go check.
00:17:15
It out a lot of interesting points there, man. I’ve flipped in my head on this one about 100 times since we. Anne and I talked about it yesterday. But, Anne, what do you think? Do you agree with what Jeff and Kelly have said here, or, you know, would you add anything?
00:17:29
Nope. I think I. From the second that I read this story, I think this is a great move to test for Netflix. I think Jeff brings out great points. You have to really look carefully at these, like, prime a malls testing this, versus, you know, somewhere in Fargo, North Dakota, a mall that’s struggling and, you know, was the shooting location for stranger things.
00:17:53
Like, that mall probably needs to think long and hard about whether or not this is the right destination for Netflix. But look, Netflix has 82 million subscribers in the US and Canada as of April this year. And I love that those individuals now could potentially have a localized mall where they get to have the Disney type of experience that Kelly’s talking about. Like, they. They.
00:18:15
You know, you look at all of the attractions that are doing well in malls right now. Dave and Buster’s, like Nickelodeon Universe. Like, those are attractions that malls want right now. And they give people a reason to maybe go there on a once, twice, three times a year basis. Now, the only question that I do have here is the.
00:18:35
Is the level of production. We’ll say, I think, how. What’s the frequency with which this needs to change? Um, can they minimize, like, structural changes and enhance, like, cast visits or Q&A’s with, like, things that don’t require, like, a full on build out of 100,000 sqft every single time they do it? Like, the Stranger Things mall, I think, is a good example.
00:18:57
Um, but. But even the ability, like, I was. And last thing, I was just at the Peloton studios in New York a couple weeks ago, and just seeing the demand for an in person class there, like, takes me to this exact type of situation. Like, if I could meet the cast of Bridgerton, would I go show up at this mall? Like, yeah, probably.
00:19:15
Like, I’d be go. I’d go there for a Q&A with them about the show. Why not? So I think there’s a lot of potential. Like, why not try it?
00:19:22
Risk is line for a week for Renee Jean Page.
00:19:27
I’m. Now, I’m. This is probably. I shouldn’t confess this on the podcast, but now I’m into this Luke guy. I mean, I probably.
00:19:33
Chris has probably seen it in our YouTube history. I was like, I finished the Bridgerton thing on the way home from our Salt Lake city trip.
00:19:39
Oh God, I didn’t see that.
00:19:41
I gotta go. I gotta learn more about the whole Luke and I forget her name.
00:19:48
Luke and Laura.
00:19:48
Nicola.
00:19:49
That’s the eighties.
00:19:50
Yeah, Nicola and Luke. There’s like, are they or aren’t they a real thing?
00:19:54
Yeah.
00:19:54
You know.
00:19:55
Yeah.
00:19:56
Another fun rabbit hole. Luke used to be in a boy band, it turns out. So if you need more content, that’s. There’s, there’s one for you.
00:20:03
Kelly’s got me down a rabbit hole for the weekend. Thank you, Kelly.
00:20:06
Yeah, we do. We do. That’s what’s great about this show. All right, so I’m gonna, since you guys are basically in agreement here that you like this, I’m gonna play a little glass half full on this. Okay.
00:20:16
There’s a couple of things that I don’t love about this and you know.
00:20:19
One is glass half empty. Glass half empty.
00:20:21
Glass half empty. Yes, you’re right. Thank you. Yes, yes. Thank you.
00:20:24
And for correcting me. Yes. Appreciate that. I don’t usually take such a magnanimous approach to my intros with this. I’m usually coming in hot.
00:20:33
But I think a couple things I worry about. One, we don’t know what this looks like. If it ends up looking like a large scale Disney store, this thing ain’t gonna work. Nobody wants that. They might go to it once, but they’re not gonna go to it again.
00:20:46
The other thing that really concerns me about it and actually I thought about this more when you said it is I worry that it’s trying to be opportunistic with the fact that malls need this versus like let’s be really creative and innovative and do something new akin to like, Disney and the vision that Disney had back in the day. I mean why couldn’t you use the mall that they shot for stranger things? And like, I mean none of us knew what Orlando was back in the day before Disney went there. Why couldn’t you create the same thing, make it bigger, better and just be so inspirational and drive people to it versus like trying to go this mall route. And then I ask, then I get to the question of like how many, how many malls are there like this that can do where you can do the same thing?
00:21:28
Is the growth strategy ultimately capped at the end of the day and dependent on you getting all the operational dynamics right and being bound by, you know, everything the landlord wants you to do and the parking lot size and all that versus like starting green field and creating a vision of what you want this tourist attraction to be. That’s what I think, I don’t know if you guys have any thoughts on that, but.
00:21:48
Has anybody been to a wonder verse?
00:21:50
There’s no, I haven’t.
00:21:51
There’s a few select locations. One’s opened in Oakbrook. It is a mix of, I would say, in person entertainment bar, you know, casual dining, but also has a theater type view of, for content. It is my expectation that it. And it’s packed and it’s every single day you can walk in there on a Tuesday.
00:22:16
And it’s a destination for the consumer to come in amongst a mall that has all of our favorite brands. But consumers like going for an hour to have an experience inside of that mall. And I believe, I think it’s, for me, I think they’re going to see a lot of, again, it’s dependent upon what type of model they actually employ inside the four walls. But I think it’s a super creative way to have a very unique experience within even some of the lost malls that are dead or dying.
00:22:50
And Anne can make your Bridgerton dreams come true. I think that’s what I’m hearing at the end of the day.
00:22:55
Well, let’s move from Bridgerton dreams to quantum computing natural. Headline change here. Headline number three. Yeah, headline number three. Unilever is partnering with Microsoft to deepen its use of quantum computing.
00:23:10
According to consumer goods technology, Unilever is now using azure quantum elements within its data lab virtual R&D center. I feel like I need to, like, push up my spectacles for this one. It expects that these new capabilities will have a tremendous impact, according to a series of statements and videos from the two companies. With these new capabilities, Unilever will be able to use natural language to query scientific information, and it anticipates slashing the time required to perform computational simulations, including running thousands of lab experiments in the time it typically takes to run a few dozen. As one example, Unilever can use a simulation that predicts an outcome based on a molecule’s chemistry, enabling the company to perform a test without needing to manufacture them.
00:23:56
Kelly, are you like, this is like science hour now we’ve shifted dramatically. Yes. What is your position on quantum computing’s impact on the CPG industry? Please begin your doctoral thesis.
00:24:12
Perfect. Gotta also slide up my glasses for this one.
00:24:17
So as a.
00:24:18
As not a computer scientist, I actually pulled some of my recent clients on this one, work with a lot of people in the R&D space, actually in CPG, so I went direct to the source to get their thoughts on this one. And overall feedback is that this has legs. And, you know, I think the article said that quantum computing specifically is a bit off in the future. Like three to five years, they were saying, until they’ll really be able to deploy it at Unilever. But we’re already seeing today everywhere in the business, but specifically with an R&D, opportunities to leverage early stages like AI to either make processes more efficient and then also make predictability of formulas more stable, get more accurate.
00:25:07
Some of those things are already being tested today in earlier forms. Predictive formula development, automating lab processes, the list goes on. But overall, this seems like a great opportunity, and it’ll just be about how can we even further optimize it once the technology advances.
00:25:28
Yeah, I like this for some of the same reasons that I like the target GzenAI roll out earlier in the episode, because I feel like when you’re, when you’re giving more data, more scientists are more quickly able to share data and results of tests with a tool like this. Like, I have to imagine that that’s going to help improve processes like the ones you’re talking about. Kelly.
00:25:50
Absolutely. And I think especially, you know, in CPG. And, you know, like I mentioned at the beginning, I work a lot on beauty. The, the need to be a fast developer is so critical, especially when that’s what the consumer wants. It’s a high degree of innovation.
00:26:05
So the more that you can speed up what typically can be quite a long formulation process, not only is it going to make your labs more efficient, but it’s going to help you on the front end as well.
00:26:16
Yeah, especially, like, I love that you brought up, like, like, you just think of a TikTok’s impact on product development, too. Like, if there’s a product that’s really, like, using an ingredient that’s really wonderful, or excluding an ingredient that maybe comes out as harmful, like the ability to more rapidly create products, seems like it would be a great thing. Jeff, love to get your thoughts in here. Anything you’d throw in?
00:26:38
No, I mean, I think everything that was mentioned is right. I think it’s going to be, it will be disruptive and impactful for all the CPG players. I actually find it more interesting on who these CPG players are actually partnering with. So you have bets that are being made here across the universe. With Microsoft.
00:27:01
It’ll be with Google, it’ll be with Oracle. You’ll have these CPG companies that are trying to get an edge up on mastering big data. And I think it’s super interesting for them to pick Microsoft. Frankly, I think they’re head and shoulders above the rest of the competition in terms of their gen ag capabilities today. But we’re early.
00:27:26
We’re early. And I think to see where the ultimate sophistication comes down the road, it’s anybody’s best guess.
00:27:33
Yeah, I love the unlikely bedfellows, like, who’s going to match up with who, who brings, like, you know, are they partnering with Amazon’s tools? Like, are they, like, when you think about when they’re going direct to market. But, Chris, you’re the only one wearing glasses on this podcast today, so I’m going to go to you for the final wrap up. And you have some recent experience with this for a panel, right, that you.
00:27:55
Yeah, yeah. Well, and, you know, honestly, anything that helps me balance my chemical equations in organic chemistry faster, I’m awesome. You know, I think, you know, based on my college.
00:28:04
Yep.
00:28:05
That being the worst class I ever, ever took. Like my worst performing class ever. But no, I did. I had some. I had some experience, you know, talking.
00:28:13
We were talking more about gender than quantum computing. But, you know, I think I spoke with Peirre-Yves Calloch of Pernod Ricard. I hope I’m saying that right. I always have trouble saying that at shop Doc Europe about all the use cases that he, as a CPG chief digital officer, was seeing for generative AI. And, dude, he could have talked to me for hours about them all.
00:28:37
And I think I underestimated. We talk a lot about retail, but I think I underestimated the impact that this is going to have on the CPG industry. I think the CPG industry is going to benefit from this a lot more so even than the retailers, because all the use cases he was talking to you about, talking to me about on stage, I mean, they were all real use cases that he has is in deployment on. So it was. It was pretty insane to think about.
00:28:59
So, yeah, I mean, I think this is smart. I think Jeff’s point about who are the bad fellows, and the other thing I think about, too, is, you know, who wins in that whole battle. Nvidia. Nvidia is sitting on the sidelines being the tool that everybody’s got to use, and they’re just loving life right now, as evidenced by their stock price. But, uh.
00:29:14
Yeah, that’s my take, Aaron.
00:29:16
All right, let’s bring Chuck on today’s program. Joining us now for five insightful minutes is ovative senior director of measurement solutions, Chuck Anderson. Weird. Chuck will be sharing with us the results of their most recent EMR power rankings. And if you want to check up EMR power rankings, you can just head to the link in this podcast description.
00:29:37
All right, Chuck, let’s break it down. EMR power rankings, what are they and why are they valuable for retailers, EMR.
00:29:44
Power rankings are awesome. At their core, they’re helping retailers understand what’s working in marketing to drive that true lift to the retail industry. At ovative, we are really focused on marketing, and we’re focused on driving three key business outcomes. One is incremental revenue, two is incremental customers, and three is building out that long term brand equity that’s so important. We measure this through EMR or enterprise marketing return.
00:30:11
But the bottom line is that every retailer is trying to drive business outcomes. And the EMR power rankings help capture the trends of what’s going on, like the recent rise of TikTok and YouTube to make sure that retailers don’t miss out on what’s working and what’s not.
00:30:27
I got to tell you, like, I’m not going to lie. Anytime I see power rankings on anything, I’m clicking on it. So I’m dying to learn more. So what are the big takeaways from this year’s EMR power rankings?
00:30:37
Number one thing for me, definitely this year is digital video. So talking about like, Hulu, YouTube, etc. Okay, really rising the rankings we’re seeing, especially with the ability to drive in store impact. We’re seeing CTV taking the number one spot and YouTube taking the number three spot. Couple reasons that, you know, seeing these rise up so much.
00:30:58
First, one is the digital video capability, especially within that in store traffic driving, seeing some really awesome integrations of the store locator overlays directly into digital video assets. That’s having some really high returns for retailers. And then second is the ability to really be full funnel. With digital video, you’ll be able to segment that funnel and be really intentional about how to leverage the channel. Smart retailers are finding cost savings as they go upper funnel as they build brand and awareness.
00:31:32
And they’re becoming really targeted and segmented and even product focused as they be able to move down that funnel and being able to do some really cool things with personalized video content as well. Like men’s warehouse and tour this year are driving more in store traffic and they’re increasing their marketing ROI by as much as 20%.
00:31:50
This is a huge opportunity check for retailers, especially like men’s warehouse, torrid, what are they doing? Right, and what do retailers need to do correctly in order to take advantage of digital video to drive traffic in store and increase sales.
00:32:04
There’s two things I would recommend to every retailer. Make sure you have an always on like full funnel approach and strategy in digital video. You don’t need the big budgets anymore like a Walmart or target to be always on engaging with your customer in meaningful ways. You’re able to segment your video program. Think full funnel.
00:32:24
And as long as you have a trusted measurement set up, you can understand the ROI of your full funnel with video and be really smart about you, how you leverage your dollars within the space. And then a newer thing I’m really excited to talk about today is shoppable tv ads. We’re seeing. The technology is really catching up here to how consumers actually want to engage. A great example here is Amazon and what they’re doing with Prime Video.
00:32:51
They’re becoming more interactive, more shoppable. You’re able to actually use your remote control from your couch to directly interact with those ads. Really cool stuff. And I’m really excited for how brands are going to get creative and how they use that in the coming year.
00:33:04
And I love the concept of scaling your video across the funnel too. That’s a really smart thing to, to take away. All right, so we always like to end when we can Chuck, with a little prognostication, a little predictions for 2025. So if you were to guess in terms of what next year’s report, what next year’s 2025 EMR report is going to say, the power rankings report is going to say, what would your predictions be?
00:33:25
My hot take is that influencer and creators are going to flip the entire marketing planning cycle on its head. The reason I think that planning cycle is going to be flipped is for two reasons. One is that we’re seeing a big shift from traditional storytelling to more compelling short form stories from authenticators that audiences and customers trust. You can’t start anymore with just what story do I want to tell? You have to be even more customer centric and find those true value add moments to engage with your audience where they are.
00:34:02
And then second is that retailers are becoming a lot more data driven as they think about the long term value of acquiring new customers. In the EMR power rankings, we see that influencer and creator have the second highest rate of high value new customer acquisition. What that means is influencer and creators are able to drive a lot deeper connection with brands and their customers. A really cool insight we’re seeing in the data is that new customers that engage with influencers or creators are 30% more likely to make a second purchase from a brand or retailer, and that is huge as you think about a customer lifetime value for a brand and what that can do for their business model. Bottom line here, change is coming, see a lot of opportunity.
00:34:47
But my prediction is that some big retail names will get exposed and fall behind in 2025.
00:34:52
Way to go bold there, Chuck. I love it. All right, well, thank you, man.
00:34:56
Thanks, Chuck. And if you want to catch the EMR power rankings, just head to the link in the podcast description.
00:35:06
All right, headline number four, Amazon is mulling a $5 to $10 monthly price tag for its Alexa service amid an AI revamp. According to Reuters, Amazon is planning a major revamp of its decade old. God, it’s been ten years. Decade old money losing Alexa service to include a conversational, generative AI with two tiers of service and has considered a monthly fee of around $5 to access the superior version, according to people with direct knowledge of the company’s plans, known internally as Banyan, a reference to the sprawling, feisty street. Wow.
00:35:42
The project would represent the first major overhaul of the voice assistant since it was introduced in 2014. Along with the echo line of speakers, Amazon has dubbed the new voice assistant it remarkable Alexa. The insiders also said, however, the company plans for Alexa, plans for Alexa, including pricing and release dates, could be altered or canceled, depending on the project progress. Geez, progress of Project Banyan. These same people also caution.
00:36:11
So there’s, there’s, it’s hard to know what to make of this story at the end of the day. It’s really fun to read, though. So, Jeff, I’m curious, do you think the world ultimately needs a $5 a month generative AI version of Alexa? Is that something that we still need in this world?
00:36:25
The answer is no.
00:36:26
Yeah, 100%. I agree. 100%. Thank you.
00:36:29
Clear? Yes.
00:36:30
Unfortunately, I think the question is, are you going to have to pay for it, though? And do you have to have it.
00:36:38
Work? You think that’s where they might go with this?
00:36:40
Well, look, it’s in 100 million households. They sold 140 million devices. There’s 100 million active users of Alexa. Probably asking the same things that I do, like what’s the weather, what’s the traffic, time to the airport? And I think the use case for what they thought it was ten years ago of Alexa.
00:37:00
I need paper towels or Alexa. Order me a new v neck shirt, I think is not materialized to the capacity that I think they would have hoped. My neighbors, actually, who will remain unnamed, works at the Alexa division, and it is a money loser.
00:37:17
Oh, yeah, it’s got to be, right?
00:37:20
It’s a big red number at the end of the year for them. And I think they’re looking at this as an opportunity to not only try to get that baseline somewhere close to flatline, but also hoping that this new revamp can be a little bit more customer attachment that they hoped for ten years ago. I think the other thing that’s behind it, which is interesting, is they are the first, what I would say is the in home device space that will be charging for their actual platform on a monthly subscription model. So I would expect to see something very similar from a Google or a Siri or something like that, that’s in home right behind him. That probably starts charging a fee for their services, which is super disheartening.
00:38:05
Yeah. Or on our phone, too, which is where we always are, too. And you’re one of the few people I know that has not purchased an Alexa in our space. You’ve held out. You’re proud of holding out.
00:38:17
What is, what is your take here? Do you, do you think this ends up, you know, getting rolled out? Do you think they shut it down? Do you think the world needs this? What’s your thoughts, Zachary?
00:38:26
No, I, I just am really curious what remarkable Alexa does for an additional $5 a month. Like, I have never gotten on this bandwagon. I still wonder movie. Adrian, what is going on? This is insane.
00:38:42
Like, beyond weather, setting timers and playing music. Like, this is like Jeff said, there’s no, what else is it going to do? What else could you possibly do that’s going to make me pay another five to $10 a month? You look at what I’m paying for five to $10 a month for, and it’s Doordash subscription. Like, bringing me every single thing that I could need from restaurants or groceries for $10 a month.
00:39:04
I’m certainly not doing an elect. Like, I don’t need better weather. So I guess it just, just I’m, and I realize, like, they, that Amazon’s now gone and they’re creating their own competitor to chat GPT and that’s going into this. So there, I get that there’s potential, but I’m the wrong person to ask because I’m anti Alexa.
00:39:23
No, I think you’re right. And like, I think that’s, I actually think Alexa’s DOA now, given this headline, because it’s got a substrate issue, it’s got a form factor issue, too, like, to get all the value of generative AI. Don’t you want to put information into it to how are you going to do that? How do you put information into Alexa device other than your voice? Like in chat, DBT?
00:39:40
I can cut and paste. I can set up all kinds of crazy things to help it make me more productive, you know, on a given day. And so, like, I just don’t see this going anywhere for those reasons. And the Apple point is huge to me because everyone’s going to be able to do this on their phone, on their smartwatch, whatever the heck they want on their, on their laptop, on their desktop computer, you know, depending on how Microsoft still plays into this. So I just don’t think Alexa is going to be, it’s not going to be here for very much longer.
00:40:07
But, Kelly, what do you think? Last word?
00:40:10
Yeah, nothing huge to add to what you guys would say. I fully agree. I’m very satisfied with the types of questions my Alexa can answer right now in home. So I can’t think of what additional things you would need, whether it’s higher complexity. Like, I’m already going to turn to an online platform where it’s going to be written out if I need so much more detail for my order of questions.
00:40:38
So I don’t think it’s a great idea. I fear that it will force a industry wide trend that would make me sad as a opposite of an high consumer within my home. But I, in general, don’t think it’s a great idea.
00:40:52
Well, that’s the other piece of this story, too, that I think is important to touch on is Amazon’s, again, adding an additional subscription fee. Right? Like, we’ve done a number of stories on that over the past months about that. Like, oh, we’re gonna, we’re gonna start just getting a little nickel and dime in you for every little thing you want from us, which is so against Amazon’s ethos.
00:41:09
Great point. Yeah.
00:41:10
Yeah.
00:41:12
All right, well, let’s move on to the final headline. Headline number five. Target has tapped Shopify to help to add sellers to its third party marketplace starting on Monday this week, Target said companies that work with Shopify can apply to join Target plus its third party marketplace. In an interview with with CNBC, Target’s chief guest experience officer Cara Sylvester, said that Shopify will help the retailer discover hot items and quickly make them available for Target’s online shoppers. She also said that Target plans to put some popular items discovered through the Shopify deal on store shelves.
00:41:45
Jeff, we’re going to go to you first. Are you buying or selling this new Shopify partnership? Having a material impact on Target’s revenue outlook.
00:41:53
Well, I know Chris loves this one, so let’s, let’s start there. I think he thinks this is probably the best idea that they’ve come up with. I’m, of course, being sarcastic. I actually, look, I think they’re five years behind the curve. I’m with Chris on this one.
00:42:10
I think, you know, I don’t know what adding Shopify is going to do for them. I think they’re, they’re, they have been throwing a lot of, of new ideas to try to get their brand earlier to the conversation we had to set off this omnitalk. I think they’re struggling to customer attachment and they’re trying to throw a bunch of spaghetti at the wall to see what sticks. Look, for me, I think it’s a continuation of a muddled strategy from Target and trying to replicate others versus coming up with their own unique strategy for the marketplace that they employ today.
00:42:57
Jeff, where would you be directing them to focus? I’m just curious.
00:43:01
Jeff.
00:43:02
Yeah. So look, I think their home furnishings and apparel side of the store, which has historically been their huge growth driver, I think they’ve lost a lot of the newness. I think if you, even for me, having a number of experiences, they’re frankly my number one retailer of choice. The breadth and the reliability across the different stores from an offering perspective is a different experience. Every target I walk into, at least where I’m located, and it doesn’t feel the same like walking into a Costco, a Walmart, a similar marketplace that you can rely on getting high quality brands.
00:43:41
I think they have, they have had a glut of inventory, and they’ve been very public about what they’ve been trying to work through on the home furnishings and retail side of the house. And I think that’s cost them a lot of what people used to love walking into a Target store in the first place to get. The good news is I think they’ve realigned the inventory levels pretty meaningfully back to pre Covid levels, which is, I think, step one. But they’ve got to lean into that home side and apparel side of the brand to get their core customers reattached. And it has to be what I think of what wanted me to get into a Target store in the first place.
00:44:23
It cant be just a bunch of trash that youre trying to liquidate.
00:44:27
Kelly, youre nodding. What are your thoughts on this move? What do you think? If not this, what do you think will move the needle for Target here?
00:44:35
Yeah, definitely. I think for me, the disconnect on this one, and Jeff, you started to mention it here is when I think of Target and what I love about it is it’s a place I go for reliable brands, reliable quality. I’m not really going there to discover new brands like my current home. I’m by Trader Joe’s, I’m by Whole Foods. I’m like, if I want to Diet Coke, I go to Target.
00:45:01
I know it’s going to be there. So obviously, food is not their only channel, but I don’t see it as a space where people are thinking about going to discover small brands. So I just have a hard time seeing consumers doing that level of discovery with them. But we can see where it goes. I would agree with Jeff.
00:45:19
I think with them, it’s getting the product right in the current format, bringing back that reliability where it’s lacking today.
00:45:30
Chris, jump in here. I know you’ve got a lot of opinions.
00:45:33
Yeah, wow. A lot going on there. Well, with respect, I disagree with Kelly. I think Kelly is a sample size of one. I think there’s a lot of people that approach target in a lot of different ways.
00:45:43
And having run e commerce, when we grew the dropship side of the business business, specifically on the home category, you know, doubling the business in two years, taking over a billion dollars, there’s a lot of extra products. People expect to find a target and want to find a target. And so, you know, to me, the marketplace is just a further augmentation of that. And this concept, it fundamentally doesn’t do anything like, I mean, shopify vendors. Yeah, you can.
00:46:12
It probably makes the integrations easier. But target fundamentally, there’s a strategy issue here where they’re not buying into the marketplace opportunity. And that’s evidenced by the fact that their chief digital officers out saying, I’m really proud that we only have 1200 vendors on our marketplace. We’re the unmarket place. Like you’re seven up of retail marketplaces.
00:46:30
If you do the math on that, and I know this, the marketplace initiative at Target has been in place since like 2018, which is six years ago. So you do the math, that’s 200 vendors you’re onboarding to your marketplace a year for a week. Amazon and Walmart probably are onboarding that many vendors a day. I don’t know that for a fact, but they’re definitely onboarding 1200 vendors probably a week when you look at the numbers in the sheer scope, so like, and then suddenly you’re going to have all these shopify vendors augmenting that when most of them have probably already applied to targets marketplace, too. That’s something you have to keep in perspective here.
00:47:07
They’ve probably already applied and Target has not admitted them in, in, and marketplaces by principle shouldn’t be hard to sign up for. That’s another issue here. That’s why they exist. So it just brings me back to I don’t think the Target leadership understands digital’s place in its branding process. And the last point I’ll make that I think is really alarming is again, the first Target was very overt, saying this will be the first place or Target will be the first retailer to put shopify vendors into their physical stores, which I’m like, okay, big deal.
00:47:42
Like now a shopify vendor is going to be ready for mass distribution at Target. These are generally small scale players. They’re not going to be able to do wholesale at a drop of hat. Maybe some of them will be, some of them will be. But your good merchants could get those products anyway.
00:47:56
You don’t need this connection to make that happen. If you’re a good merchant, you’re bringing products into your store anyway. And generally speaking, small vendors, I’ve said this on the show before, small vendors are small for a reason. They’re not ready for primetime. So that’s my rant.
00:48:10
Thank you for sticking with me and close it out.
00:48:14
I’m going to close it out with a little what, what could this be doing for Target and Target’s customers? And I think it hits on the number one thing that Jeff said, which is Target is still my preferred retailer of choice. Now. I don’t know that this is going to move the needle for Target, Target corporate and their digital expansion and all the things that I think that they’re really out promoting with this announcement. But I do think that it helps Shopify sellers more easily integrate into target systems and it provides an opportunity for target customers to experience these Shopify sellers to have the ability to get their 5% off with their red card, the ability to return things in store that they wouldn’t have if they were just on the shop platform or they were just finding these retailers on their own.
00:48:59
So I do think that there is potential there to find new newness or to find new brands, which I agree with you, Chris, on the like I, having worked at Target, like, I know that they were out trying to find these unique brands whose values aligned with target and trying to bring them into the ecosystem. So I do think that this provides a lot of opportunity and ease and simplicity for the shopify sellers, I don’t know that you know this because it’s such a small amount of people. I don’t know that it’s going to really, like, catapult the marketplace like target needs.
00:49:31
Yeah. I mean, when you say it like that. And what comes, what comes, what hits me square in the face is that the target merchants either haven’t been doing their job or they haven’t been allowed to do their job by the leadership. That’s what this, this announcement means to me. And that, that’s an, that’s an important statement, I think, to think about.
00:49:48
Great. Let’s go to the lightning round. Jeff, you get question number one here. Tom Brady and Gopuff are launching a product collaboration based on the former NFL er. Jeff, does Tom Brady’s name on any product make you want it more?
00:50:07
Look, I think the answer is yes.
00:50:10
What I. Nicely done.
00:50:14
I don’t think there’s.
00:50:15
Explain yourself.
00:50:16
A doubt in my mind that Tom Brady is a brand in and of itself. He has replicated that with his new contract that he has as his announcer, basically becoming the number one highest paid sports announcer in history with his contract. And I love it. I think he’s turning himself a little bit into a Peyton Manning type brand where he’s going to be a mouthpiece for all. And the consumers love him despite, you know, his, the hated Super Bowls that I, as a 49 er fan, have, have had to witness and see.
00:50:55
It’s, it’s tough to be, to be a Tom Brady hater.
00:50:59
Yeah, I don’t find it that difficult.
00:51:01
Yeah, no, you don’t do. I got it. I’m with Jeff, though. If he came out and told me where he got his hair plugs, I’d be the first one to sign up for that service. All right, Kelly, Krispy Kreme is rolling out a new line of donuts in the UK and Ireland based on the tv show Friends.
00:51:16
If you could honor any other sitcom of the past via baked goods, what sitcom would it be? And bonus if you can decide the baked good.
00:51:28
You know, when I think of sitcoms that are just so, like, global sitcom, everyone knows that everyone loves it. I have to go to the office. I think people would buy that. And, you know, I’m not sure which vendor would, would handle this, but there’s a pretty famous tiramisu scene on the office where Michael’s eating the tiramisu and choking all the cocoa powder, and he’s like, I love tiramisu. So I think there’s a tiramisu potential there.
00:51:56
Oh, my God. That’s amazing. Kelly, you get the next question, too. Our friends over at Walmart are launching a spicy summer campaign on TikTok talks, book talk community where it’s rating romance and fantasy novels based on a spice scale from mild to burning. They are also selling a corresponding Melinda’s hot sauce set with that.
00:52:17
What’s the last book, Kelly, that you’ve read that would earn a spot on the spicy summer Scoville scale?
00:52:24
I’ll have to check out this TikTok feed when it goes live because I’m going on some trips this summer and I’m a big fantasy reader, so I recently read the fourth wing series. Sure. That’s going to be on their list. Okay, solid one for any fantasy book talk people podcast here.
00:52:46
All right.
00:52:47
Just thrilled that you asked Kelly this question. Yeah, right.
00:52:50
I know, Jeff. I would have nothing on that one.
00:52:52
You didn’t recently read a romantic novel, Jeff?
00:52:55
Yes, I missed that this weekend.
00:52:57
Romantic. Wow. I didn’t even know that was a thing. I also love for those watching the video that Anne, like Shimita, she has, like, the Scoville rating.
00:53:04
It was pretty funny.
00:53:05
The spicy summer Scoville scale.
00:53:08
So much alliteration we can’t get away.
00:53:10
Yeah, right. Lots of s’s. All right, last one, Jeff. Former jeopardy. Host Alex Trebek is soon to be honored with a USP’s forever stamp.
00:53:18
If you could buy a forever stamp with anyone of your choosing on it, who would it be and why?
00:53:24
Yeah, this is, this is, you could take this in a thousand different directions for me. I’m, I’m a huge golf fan, and I’d have to, I’d have to put my, you know, at least childhood hero, my, my, the man, Jack Nicklaus. I put on, on a stamp in a heartbeat. He deserves it. He’s, he’s the goat.
00:53:45
And, and him and Tiger woods are probably right up there at the top. But it’s, it’d be a golf theme for me. But you could take this and it’d be, it’d be fun to the directions. You could take this.
00:53:57
Nice. The golden bear. All right. Love it. Way to close out the show, Jeff.
00:54:01
All right, happy birthday today to Nick off Aubrey Plaza, both of whom are of parks and recreation theme, believe it or not, and the young lad who captured all our hearts in the 1990s but never entered our lives in the way we all thought he would, despite his promising young career. And that is, of course, the great Chris O’Donnell. 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, fast, fastest rundown of all the week’s top news in our daily newsletter.
00:54:33
The retail daily minute tells you all you need to know each day to stay on top of your game as a retail executive, and also regularly features special content that is exclusive to us and that Ann and I take a lot of pride in doing just for you. Thanks as always for listening in. Please remember to like and leave us a review wherever you happen to listen to your podcast or on YouTube. You can follow us today on YouTube by simply going to YouTube.com omnitalk retail. And watching and facial expressions in video are the best way to view this podcast.
00:55:01
All right, Kelly, Jeff, if people want to get in touch with you both, they want to get in touch with the A&M consumer and retail group. What’s the best way for them to do that?
00:55:10
Great. Thanks, Chris. Best way? Find us on LinkedIn, Alvarez and Marsal consumer and retail group, or visit us on our website, alvarezandmarsal-crg.com. you can find Jeff’s profile on that website.
00:55:25
Hit him a message. Hit me a message on LinkedIn. And. And we’re always looking forward to connecting with more people.
00:55:31
Kelly’s cell phone is four.
00:55:33
No, we’ve had people do that before, Jeff, believe it or not. Yeah. So you never know which way it’s gonna go. But hey, thank you both for being here. Thanks for your regular monthly appearance with us.
00:55:43
Thanks for all of your help and support over the years as well. So on behalf of Jeff, Kelly and myself and all of us here at omnitalk retail, as always, always be careful out there.
Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.