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This episode of the Fast five is sponsored by the Cappy. It’s summertime, our favorite season here at Omnitalk Retail. Beautiful weather, boating, beaches and barbecues. But that means it’s also high season for bees, flies and mosquitoes who can too often make their way into your favorite open beverage can. But that, my friends, is where the cappy comes in. I know this firsthand because I was pontooning with my family this past weekend and we had cappies on the tabs of all of our canned beverages, from sodas to seltzers. The cappy first helped us open the can itself, eliminating all those broken fingernails, and then rotated around with the can tab, creating a seal over the opening of the can. It kept our cans free from bugs, bees and even safe from baby cousins while keeping carbonation in so our drinks stayed fresher longer. Check the link in the show notes and order your cappy on Amazon today. 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. Hello. You are listening to Omnitalks Retail Fast five ranked in the top 10% of all podcasts globally and currently ranked in the top 100 of all business podcasts on Apple Podcasts.The retail Fast five is a podcast that we hope makes you feel a little smarter. But most importantly, especially this holiday week in the US, a little happier each week. And the Fast five is just one of the many great podcasts you can find from Omnitalk Retail’s podcast network alongside our retail daily minute, which brings you a curated selection of the most important retail headlines every morning, and our retail technology spotlight series which goes deep each week on the latest retail technology trends. Today is July 17, 2024. I’m one of your hosts, Anne Mezzenga.
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Is that what data is? Anne I’m Chris Walton.
00:03:13
It is, and we are here once again to discuss and debate the most important headlines from the past week. Chris thankfully, because you don’t know what day it is, we have two very special guests who will be joining us today for their regular monthly appearance. We have Alvarez and Marsal, consumer and retail groups managing director Mohit Mohan and senior director Chris Disa welcome you to Chris. You’re a first timer on the Fast five, so I want to welcome you especially. And I’d love to just have our audience get to know you a little bit. Why don’t you share a little bit of your background.
00:03:51
Thanks so much. It’s great to be here. Excited to chat with you guys today. So I am Chris Disa. I am a senior director with A and M’s consumer and retail group. I’ve been part of the organization for the past six years, but prior to that, I spent most of my career in industry, working in different functions such as merchandising, product development, and planning allocation. So deep background across all those three. And I spend most of my time working on large scale transformations and focusing mostly on front end opportunities for various retailers.
00:04:25
Excellent. Awesome. We’re super excited to have you. Thanks so much for joining us today. And Mohit, one of my favorite art aficionados and managing director at Alvarez. And Mirakl, tell the audience a little bit about you and your background for those who may not have met you on a fast five in the past.
00:04:45
And Chris is so good to be back here. Good morning. Mohit Mohan, managing director with Alvarez and Marcel, spent the last couple of decades focused really exclusively in the retail and consumer space. A lot of my work with our clients is focused around helping them navigate their most complex problems, be it around top line, be it around building capabilities for the future or thinking through, you know, how to navigate turbulent times like ones which we live in. And a lot of my time really is focused around specialty retail, different formats like value, convenience, and apparel, and glad to be back here and see what we have to talk today.
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Moy, what number of appearance is this for you?
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I think third or fourth, I was.
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Going to say probably this is going.
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To be the most memorable one, is.
00:05:37
How I. I love that attitude. I love that attitude. Yes. And Ann mentioned it before, but part of the reason, I don’t know what date is, I was at a funeral yesterday for my grandfather. So this podcast is dedicated to him, the great Richard Guidance. And so I always love when you guys are on because I can sit back, take a little backseat and soak in all the insight and intellect you guys bring to the podcast.
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So.
00:05:57
And should we do this?
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Let’s get to it.
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All right. Well, today we’ve got news on Walmart’s dominating lead in retail media, Macy’s ending takeover discussions with Arkhouse and Brigade Hy-Vee, rolling out fusion groups electronic shelf labels to 230 stores, and Starbucks piloting reusable cups in a citywide California pilot and in partnership with other QSRs. But we begin today with big, not GenAI. That’d be weird. GenAI news out of Amazon.
00:06:29
And it reminds me of Jenny from Janae. Janae from Forrest Gulf.
00:06:34
Smart man, GenAI.
00:06:38
All right, headline number one. That’s right, Amazon is rolling out its Rufus generative AI assistant to all us customers. According to chain storage, Rufus helps customers answer questions, gets customer product recommendations, and facilitate product discovery by leveraging Amazon’s products, catalog, customer reviews, and web information. Since its beta launch in February of 2024, customers have asked Rufus tens of millions of product specific questions, using it for inquiries like product ease of maintenance, tracking orders, and accessing past orders to inform future purchases. Amazon is enhancing its use of generative AI beyond Rufus, including a partnership with Nvidia to improve product listings, advanced AI tools for creating and editing listings, and AI features for fashion shoppers. Customers can also search by image and summarize product reviews using generative AI. Mohit, we’re going to go to you for this one. I want to know, what should retailers and brands be doing now that Amazon, along with Walmart and several other retailers, are training customers to get used to search and shopping using GenAI assistants?
00:07:48
Yeah, I mean, the way I think about this is the pandemic had really accelerated some structural changes in core consumer behavior. And that is what they buy, how they buy it, where they buy it, from, what channels, service expectations. So, you know, if you kind of think about service expectations, you know, when we were in the peak of COVID self service, be it checkout in a store or being more comfortable with a digital channel, went through the roof. Right now, you kind of marry that with some of the macro headwinds around, increasing labor costs, talent availability, this was always the direction other companies or industries were heading down. Banks are a perfect example of this. Typically, retail, as we all know, is an industry segment which is not at the forefront of technology innovation. But thats been happening in banks for almost a decade now. Right now, you couple that with rapid developments in AI and you have a unique opportunity to maximize every customer interaction, to deepen that customer relationship, to build loyalty and to be more consistent and be more responsive. So this is a trend which will continue, I think you said tens of millions of impressions. I think if we were probably having this discussion in a couple of years, it would be tens of billions of impressions all around the globe. Right. And I think it kind of depends on what kind of retailers and brands we’re talking about. I firmly believe anything which is mass to mid market, this is the new normal. The only caveat for this would be industries or specific segments where consumers have a higher service expectation, where human touch will still continue to be prioritized over these kind of technologies.
00:09:53
Yeah. So you’d recommend that retailers, a variety of types of retailers. This isn’t just a specific use case. This is like all retailers should be looking at how they’re going to do.
00:10:04
This because, and I’ll tell you, based on the work which we’re doing with multiple retailers, many of them, especially the large retailers, have actively been looking at it for multiple use cases. Customer service is one assortment, planning is another one. How do you think about maximizing, you know, your inventory productivity? How do you think about using it in pricing and promotion, dynamic promotions to kind of really think about, you know, how do you maximize margins? So the use cases are immense and the impact this would have on retail as an industry would be humongous in coming years.
00:10:40
Right? Yeah. Chris Disa, what would you add in there? You in agreement with Mohit’s recommendation for retailers, Chris?
00:10:46
Yes, absolutely. In addition, there’s also other use cases. One that’s really interesting is around labor planning and how retailers can look at buying patterns and then be more effective with planning their labor based on some of these AI generated tools.
00:11:02
Yeah, that’s true. I mean, I used Rufus yesterday for my prime day purchases and it was amazing because it just, it pops up right away now. So it’s like, whether you want to use it or not, you start getting down the rabbit hole of like, which scent diffuser is the best one and who, you know, how big of a room. Do I need it? So it’s like all of this data that you’re collecting, like you said, Chris, I think will help inform where do we need an associate to step in versus like what can generate of AI tackle with this?
00:11:29
Yeah, I actually asked Rufus today what shirt I’m going to an podcaster and said wear a blue shirt.
00:11:35
Oh, well done, Rufus. Well done, Rufus.
00:11:40
The applications are limitless. Chris Walton, close us up here. What are your thoughts on Rufus?
00:11:44
Yeah, I think what’s interesting to me in this conversation, I think Mohan had brought up an issue about speed. Like it’s going to make the speed of the user interface of digital commerce that much faster and more efficient, which is something I never thought about. But, you know, the main point that I’d reemphasize is that every boardroom and retail executive should be asking what are we doing to make our site function like this? Because if we don’t, we’re going to get left behind. You’ve got to be prepared for this change. And as evidenced by the fact that you guys were using it for Prime Day, you’re using it to pick your shirt, mo it like it’s coming and you don’t want to be too late on this one, unfortunately. Headline number two, the results of a sensor tower report show that Walmart has built a wide lead among us retail media networks. According to retail Dive, Walmart’s retail media network is far ahead of the pack compared to its us peers when it comes to delivering advertising impressions. The big box store saw 11 billion impressions in Q1, while No. 2, the number two player target, generated fewer than 7 billion impressions. Chewy, the Home Depot and Kroger rounded out the rest of the top five. List should be noted too that Amazon was not included in this analysis. Breaking out performance Walmart landed on top for on site media impressions, meaning it has better monetized its own properties. These findings come as retail media networks are pushing harder into off site media to tap into additional revenue streams. Chris, I’m curious, what impact will Walmart significant retail media gains and increase ad revenue enable for the retailer? And can other retailers actually compete in the long run?
00:13:20
Yeah, great question. So I think Walmart should continue to see growth across two dimensions. Number one, while the Walmart Connect division is five years old, it’s really been over the past two years that the company has significantly increased its investment in this space. And now we’re seeing that investment payoff as the company reported over 11 billion impressions, as you mentioned, in the first quarter. So we should see continued ad revenue generation as the retail media arm grows, especially as the organization has the ability to serve endemic and non endemic brands. Number two, most importantly, retail media is very attractive to both retailers and brands as there is a significant amount of data on the consumer and their buying habits or trends. When you have the ability to better target your customer and be more effective with your media spend and then tie back a media campaign to sales due to closed loop measurement, it becomes very powerful in terms of driving revenue. As Walmart realizes better traffic and conversion and the sales through more effective targeting and media spend, it will have a big impact on assortment shelf space, both from a channel and localized perspective, as well as inventory investments, etcetera. It’ll be interesting to see how the brands Walmart carries grow as a result of this as well. Id say from a competitive standpoint, due to Walmart size, physical store footprint, which is a competitive advantage to Amazon and their wide assortment of categories and products, I would think it’d be very difficult for other retailers to compete at the scale in which Walmart.
00:14:50
Okay, so let me ask you this. So let me. So now let’s bring Mohit in. So Mohit, do you think the lead will grow or do you think the other players will start to catch up to Walmart?
00:14:59
I always think about this as we’ve talked about it. I think in the past, the consumer is the new channel, right? So the question is, who owns the consumer? So in the case of Walmart, with a very significant store footprint and, you know, a rapidly growing Walmart+ network, you have that captive audience which you can play on. And frankly, every retailer is kind of, you know, doing the same, be it, you know, the big grocers beats the specialty retailers and, you know, it doesn’t really matter what is the relative scale of the number of impressions or users you have. I think if you have a captive audience and you’re a small retailer, you can have a captive audience of 500 million impressions and still be doing great. So I think the numbers kind of can sometimes be misleading. In the case of Walmart, I also believe, especially with changes in consumer discretionary spending, a lot of other new segments and demographics have started shopping at Walmart in the last three or five years, which has probably juiced up these numbers.
00:16:11
Right. Okay, so your main point is like, yeah, Walmart might have the lead, but there’s still an opportunity for every retailer to absolutely capitalize and benefit from this idea of retail media. So, and let me bring you in here, but still, I want to get back to it. Do you think, do you think this lead that Walmart is already exhibiting is only going to grow? What’s your take? Or do you think target’s going to catch up to them and Kroger and Chewy and all those folks?
00:16:34
A lot would have to happen. I mean, Chris, we’ve talked about this. Like, Walmart just seems to be on a trajectory that is unstoppable, I think, especially when you look at what Amazon’s ad revenue has allowed Amazon to do, and now you look at where Walmart is going. They are a, Walmart is a strong contender. They can only go up with here. From here you have retail media in stores, online, the marketplaces. And then I think nobody is talking, too, about the emerging categories like CTV with the Vizio partnership. Like they’re just going to keep collecting more and more data to make this media network stronger.
00:17:08
I 100%, 100% agree with you. And like, I mean, it’s, it’s, it’s like it’s going to rocket ship. Like we’re going to keep watching these numbers and the, the lead is just going to grow. And I think two reasons. One, you brought up marketplace, right? No one else can do a marketplace of the size and scale that Walmart can. And the one that can is target, and they’re too scared to do it, apparently. And then the other point, too, which goes to what the folks at A and M CRG said is got the store play here, too, and electronic shelf levels, which we’re going to talk about in a few minutes, like that’s another physical substrate to sell and put retail media on, which hasn’t even been talked about in this discussion yet. So those are more impressions ultimately, where the bulk, the majority, like 80% to 90% of retail volume still happens. So, and the last time I checked, Amazon can’t do that. So put that in your pipe and smoke at Amazon is my last thing.
00:17:56
I would say, and I can’t think of a better way to end on that headline. Chris? Um, headline number three, Macy’s has ended, ended its talks with Arkhouse and brigade foiling a $6.9 billion takeover, according to retail dive in March, Arkhouse and Brigade had offered 6.6 billion, or $24 per share to take over the company, the department store said on Monday. The firms in June raised their bid to $24.80 per share, but failed to deliver a, “Definitive, fully financed and actionable proposal”. Macy’s has requested the best price firms were willing to pay, plus their, “fully negotiated commitment papers for all the debt and equity needed to finance the revised proposal”. Arkhouse and brigade had initiated their takeover proposal in December with an offer of $21 per share, or $5.8 billion, which Macy’s rejected back in January. Mohit, make some sense of all of this. What does this mean for what should the industry make for Macy’s future with this announcement?
00:18:59
I mean, listen, right. We all knew this was coming. If you really think about it. When they started in December, you know, Macy’s was very proactive in terms of their management also talking about their new strategy in terms of what they’re going to do. And that was three big pillars. One was strengthening the Macy’s name plate and really closing around 150 unproductive or lower, lower productive stores, accelerating the growth they’ve been seeing in blue Mercury and, uh, Bloomes format, and then, you know, simplifying and modernizing their, their supply chain with, you know, really geared towards where the future is. And that’s going to be omni in, in a department store format. Um, the second lens to take here is, I mean, we all have seen what happened with Sears and no management and board want to go down that direction. And you kind of step back and think about what is the real estate valued at? And different estimates out there, but anywhere from six to $12 billion. So the bid was at any point in time never convincing enough. It was on the lower end of the spectrum, I think as it relates to what the industry should be watching is probably three really important things. One, can you be, or how relevant can you be as a department store with a smaller footprint of stores? That’s number one. Number two is how do consumers really respond on scale to a smaller department size? So if you kind of look at Macy’s over the years, they’ve been talking about a much curated smaller store assortment, higher service levels. You’re not like walking down in 60,000 sqft department store, which sounds sometimes like a ghost town, you know, because you don’t have enough labor there.
00:20:54
Right?
00:20:55
So that is two. But you know, the third and the most important thing is if you kind of look at where Macy’s was ten years ago, the peak of, you know, where they were from a shareholder value perspective and how they have kind of come down in the last decade, it’s very important to see with these changes, can Macy’s really get back to driving growth in a profitable way and something which the analysts and street would be excited by?
00:21:27
Yeah. Chris Disa, what do you make of that? I mean, you have a rich background in this industry and category. Where do you think Macy’s is headed?
00:21:37
It’s interesting. I mean, I think there’s a lot of headwinds right now, and it is about creating value for shareholders. Fundamentally, one of the big challenges that Macy’s faces, along with other department stores, is that the assortments in product offerings tend to be the same, because from a brand perspective, there’s not the diversity that there used to be 10, 15, 20 years ago in terms of product options. If you remember back in the day, Macy’s would buy a certain, certain products from a certain brand versus may company, et cetera. And now with the brands getting smarter and having one product offering, it’s really hard to diversify. So then that begs the question, is this just a distribution point or is there a reason for them to be and for consumers to go to the Macy’s brand? I think Blue Mercury, Bloomingdale’s, others, a little bit different. But for a core Macy’s perspective, I think that’s going to continue to be a challenge of how do they drive traffic. And I, you know, given their current product offering.
00:22:47
Yeah. And it seems like there is a lot of time and energy, at least that’s what Macy’s is saying, spent on these dealings. And hopefully some of that time can now be reallocated to those concepts that are working, like the Blue Mercury, like the bloomies, and even the small, like, go forward locations for the, for Macy’s. Um. Chris Walton, take us home.
00:23:06
Yeah, I thought Chris’s point. I thought Chris’s points really good. I mean, we’ve said it before, but, you know, I thought he said it really well, which is the way I think about what he said is the value proposition of why a department store was originally built no longer matters. You don’t need a place to see all these brands on display. Right? There’s so many avenues you can do that. And the other point I would make, too, is you have to wonder, like, you know, did they just, like, phone this last thing in, you know, $300 million? And, like, you and I were talking like, that doesn’t seem like a lot to increase the bid. It’s like when you go buy a house, right? And they’re like, okay, time to increase the bids. And, you know, the seller’s got a lot of offers. You don’t lowball that offer. You got to come in strong, and they didn’t do that. So it makes me think this was just phoned in and it was done. But this won’t be the last we see of this conversation. Maybe it is with these folks, but, you know, Macy’s is going to continue to be in a tough spot and they’re going to continue to have acquisition talks, I would think. All right, headline number four, Hy-Vee is rolling out Fusion Group’s electronic shelf tags in over 230 stores. According to progressive grocer fusion groups, technology will allow Hy-Vee to do real time price updates in store fulfillment with flashing leds for order preparation. And for the first time I’ve ever seen in a press release, intraday promotions to reduce waste on perishable items, contributing to a more sustainable retailing model. By automating the labeling process, Hy-Vee employees can focus on tasks such as replenishment and customer service, creating a richer experience for both employees and shoppers. Moet with Hy-Vee now deploying ESLs almost chain wide, it seems we’ve come to a place where, to quote your colleague John clear, it’s not if, but when we see ESL scale to all grocers. Are any grocers still holding out? And if so, why are they, you.
00:24:53
Know, broadly, I think the US market here is just catching up to their european counterparts in this regard. And part of it was always driven by, you know, a very traditional way of looking at, you know, what, what does it cost, right. Printing a labor and printing a label and the labor required to kind of change. Right. Changed that dynamic quite a bit. The second thing, which I would say is Walmart just recently announced a big investment to roll out electronic shelf tabs to all of their stores by 2026. So this thing is coming. So I don’t think it’s a question of if, it’s a question on when. The use cases here are pretty significant beyond just really thinking about the cost of the labor. It’s about how do you kind of digitize the entire experience? 97% of consumers in the US in urban markets have a smartphone, right? So how do you kind of use that mobile device and create a connection beyond just providing information on price? Where was the product source? Is it gluten free? Is it keto friendly? Right. So the, the things which this can offer are immense. I would say though, here, you know, there are few things which, which grocers need to be cognizant of. And think about that as the uber surge pricing or predatory pricing, right?
00:26:27
Oh, right, right. For sure.
00:26:28
As long as it is focused around. Listen here, you know, I have some stuff. It’s going to expire today.
00:26:36
Yeah.
00:26:36
Let’s offer a deal and make it a win win. I think that’s great. That’s great for consumers, that’s great for society. But you don’t want to be in a situation where it kind of becomes a little bit predatory in nature. So that would be my only. Watch out.
00:26:51
Yeah, you don’t want to pull a wendy’s here, right? I mean, yeah, I joked about the intraday being the first time I’ve seen that. But yeah, as long as you’re doing it macro level for everyone and everyone’s getting a deal because you’re doing it and you’re getting more deals more often, I think the consumers are going to love it. So, so, and I mean, and do you think we’re going to see is 2025 the year of the electronic shelf label? What do you think here?
00:27:10
Yeah, absolutely. I mean, I do, I think this is a huge announcement and really I want to, we’ve talked at length on this show about the benefits from an operational perspective and what this does for, you know, improving efficiency at the store, on the store side. But I think what’s really important to call out here, especially for Hy-Vee, which has a beloved following, is just how much better the customer experience is going to be because of the things like the intraday promotions that Mohawk was just talking, talking about. I mean, we have an event coming up here with Ethan Chernofsky of Placer AI, and one of the things that he was talking to us about is that grocers are really trying to push for an increased basket size. So not increased visits as much as just making sure that you can put more in your basket when you’re on those trips and putting, being able to, like at the blink of an eye, change pricing on some of those key items that your customers are going into to purchase or that they didn’t know that they want to purchase, but the price is right. Like, this is a way that those grocers will be able to do that. And it improves customer loyalty. It helps have, you know, more people on the floor that are able to help customers. And so overall, I think it’s just improving things all around and the ROI is absolutely getting there. So I think that’s, that’s the, those are the key kind of things for me, Chris, about why I think it’s going to be so impactful in the next year.
00:28:25
Yeah, that’s a great call, too. We got Ethan coming on your way next Wednesday on LinkedIn. We’re going to be talking to him live. He’s handing out his retail report card for the mid year, which is always a fun one to, to watch, but, yeah, I mean, the use cases for electronic shelf labels, I think, I haven’t jotted it down recently, but I got to think it’s like over ten. It’s got to be in the ten to 15 range. And so I can’t understand why this is going so slow. So you think it’s. It’s definitely going to hit, hit the apex of, of the trend curve here next year. At least I hope it does. And finally, I would, might add. But, but, Chris, what do you think here? What, what’s your, what’s your final word on electronic shelf labels and why the industry has been slow? Is it going to get faster, the whole nine yards?
00:29:06
I think it is a case of not if, but when. You think about ten years ago, only 35% of the american population had a smartphone, compared to almost 97% today. I think the cautionary tale here, though, is for certain retailers, you still need to know your customer. So an area, as Mohit mentioned, in urban areas, the use case or the adaptability of smartphones is quite high, but in rural areas, it’s less than 85%. And so you still have a decent customer base that does not have a smartphone, and therefore, that could impact sales as well. When you look at demographics, those 65 plus and over, only 76% of the population owns a smartphone. So I think it is about your customer and then using and engaging in this technology to be successful. And I think that’s why you’ve seen a slow progression up until this point.
00:30:00
Interesting. So, Chris, let me press you on that. You think smartphone adoption is a potential thing that retailers need to think through, because I think there’s probably still a lot of use cases for esos that don’t require the interaction with the consumer smartphone. Right.
00:30:13
That’s fair. But, I mean, I think from a friction standpoint, that’s probably the easiest using your smartphone to understand pricing. And so I think that is a high consideration in going to ESLs over the last couple of years.
00:30:27
Got it. Versus just. Okay, got it.
00:30:29
Just making the switch. Yes.
00:30:31
Making the switch.
00:30:33
All right, let’s go on to headline number five. Starbucks is partnering with over 30 other QSR chains for a first of its kind reusable cup pilot in Petaluma, California, from August 5 to October 28. Chris Walton, you’re going to be out there. I want you to go to Petaluma, and I want you to try the reusable cup program and report back. Can you do that for us?
00:30:56
I could, except I’m going to southern California.
00:30:58
And I think you’re going to be in the state, Chris.
00:31:01
It’s a big state and it’s a big state.
00:31:04
You got time. You got time. According to chain store age, this includes participation from brands like Dunkin Pete’s Coffee, Burger King and Yum brands. With eight Starbucks stores involved. Customers will receive their to go beverages and reusable cups marked with Siphenheid, return, repeat and after use. The cups can be dropped at one of over 60 return bins across the city, where they will be collected and sanitized for reuse. The initiative, supported by the next gen consortium, aims to reduce single use cups. Advertising will raise awareness across Petaluma and some return bins will remain post initiative. This effort aligns with Starbucks goal to become a resource positive company by 2030, reducing its climate, water and waste footprint. Chris, we’re going to go over to you for this one. What must be true for a pilot like this to successfully scale beyond California?
00:31:57
Well, interesting. Petaluma is in northern California. I have a lot of friends in the Bay Area who are very excited about this initiative.
00:32:04
Really?
00:32:05
Yes. Sustainability is very top of mind for many consumers. So this is, again, an amazing initiative to watch. I would say, in terms of scalability, two things really must be true. Number one is adoption and engagement.
00:32:22
Right.
00:32:23
And I think, again, sustainability is so top of mind that I think initial engagement should be strong. But repeated engagement is critical for the success of this, not only in Petaluma, but also to scale. Number two, the cost, or I should say, the opportunity to service. So, you know, if I read this correctly, customers are going to be getting these recyclable, if you will, cups. And then the brands are going to be responsible for washing and maintaining. And so I think this is all underpinned with the cost to serve. Right. Because ultimately, it is the brand’s responsibility to make sure that they are providing these cups resources, et cetera. And in order to scale, you have to have organizations that can do this as well as, you know, what is the cost to do that to service? So, you know, again, I think it’s a great concept. Really excited to watch this. Again, a lot of friends are very excited that this is rolling out in their backyard, but I think in order for it to scale, you know, it really does come down to, again, those two things, engagement, servicing, and then again, underpinned with the cost of service.
00:33:41
Yeah, that’s going to be the really interesting one to watch for me. How much does this end up costing? Is it worth it? Yes, to meet sustainability goals. But can they make it pencil, Mohit, anything you’d add to what Chris’s recommendations for scale are?
00:34:01
The way I would just think about this is I think there are some learnings which we can allude to across the pond and I think about, but this is not the first time when Starbucks has done something to kind of push their global sustainability program. So if you remember as Starbucks kind of grew early on in the early two thousands in Europe, if customers came with their own cup, you got a discount in terms of the beverage you were buying. There were multiple programs after that in UK, Germany, a lot of other developed western countries. I think the biggest barrier here beyond really thinking about the cost to serve is consumer adoption. And that consumer adoption is, yes, customers want to be more sustainable, but a lot of times its also around, hey, Im in a rush. I did have a reusable cup. I forgot to take it or Im coming from a meeting and walking to another place in town. Im not going to be walking with that cup. There are practical realities around, you know, being able to walk around with a reusable cup, which I think is a bigger issue as you kind of think about adoption in general. And frankly, I would say the Europeans are a lot more progressive around sustainability and climate related issues and we haven’t seen this really scale there. So again, great pilot. I think there is a lot of benefit there, but probably we are a few years away from it being scaled the way us consumers are thinking right now.
00:35:54
Yeah. Mohit, I think two key points, you call out the incentive or the discount is not high enough yet from these retailers to get them to use their own reusable cup. It doesn’t seem, and then maybe there’s the consequence side of things where like, you know, reusable bags, if you don’t bring your reusable cup, it’s you get paid or charged an extra amount or something like that. But Chris Walton, where do you land on this?
00:36:19
I mean, the thing about that’s coming to my mind to that question is who cares? You know, the fact is that they’re doing it and you test and learn and you learn by doing. And I think that’s a really interesting thing. And, and cities and municipalities tend to watch these things very closely and they learn from each other. And them, I’ve always wanted to bring a wire reference into the show. Anna, do you remember the episode in the wire where the police chief like, sets up like the hovel for all the drug use and there’s all the benefits and then, I mean, I remember at that time, like Amsterdam or whatever. Yeah, new Amsterdam. Yeah, right? Yeah. And cities at the time were trying to do that and they were trying to learn from each other. So this is like that same type of thing where, yeah, Petaluma is going to be the first to start. You’re going to learn what works, what doesn’t. How do you incentivize the behavior that you guys have been talking about and then somebody else is going to try it. And then, then, and then, and then. And so. So kudos to Starbucks for champing this. They’re very good on this front. Kudos to the other QSRs for jumping on too. And kudos to Petaluma for being the one that says, okay, we’re going to try this and see what happens.
00:37:18
All right, you guys, let’s go and close this up with the lightning round. Chris Diesel, you get question number one. A Wells Fargo analyst ordered the same burrito bowls 75 times from 23 different New York City outlets to prove that bowl weights were not consistent as Chipotle had previously stated, but rather that they varied from 13oz all the way up to 21oz of Barbacoa delight. Have you ever gone to one Chipotle or QSR brand location over the others because they gave you a superior product or in this case, more meat?
00:37:57
I have not. But I will tell you that when I want a Diet Coke, I tend to always go to McDonald’s because it’s the best. Because it is the best. So that would be the closest thing I could say to choosing one fast or. Yeah, fast food provider. Wow.
00:38:17
I didn’t know that about McDonald’s. I’m gonna have to put that to the test. Wow. All right, moy, a man’s. A man’s thumb was recently sliced off to gain access to his mobile payments app. Does this make you more pro or con regarding facial recognition?
00:38:33
I mean, listen, I’ll tell you, maybe I’m a naysayer. I’m really big on technology, but I don’t have facial recognition enabled on my phone. I still always use password. So call me old school for that.
00:38:46
For this reason or for a different reason?
00:38:49
No, not because I’m worried about someone who’s going to slash my thumb. But I do feel, you know, there could be security issues where maybe I’m napping in a public transit and someone can access my phone and get access to my phone.
00:39:06
Interesting.
00:39:07
Not Nick Cage or John Travolta. You’re not worried about them slicing your face off? Not yet. All right, question to you again, Mohit. 92 Walmart stores will get brand new food offerings in the form of Mister Gotti’s pizza shops, specifically clustered around their southern Walmart locations. If you were consulting with Walmart, which food outlet or cuisine would you have recommended that they roll out?
00:39:31
You know, it’s an interesting question. I think localization as it relates to food menu is a big trend in the last decade. So the answer depends on what geography you’re kind of talking about what kind of a brand you want to put there. Is it an organic brand? Is it a, you know, a small business? Is it something really ethnic to a particular region? So I think the answer kind of really depends. You know, I spent a lot of time growing up in Chicago, so for me, you know, one of the deep dish pizzas, as an example, if you were talking about the Chicago market, would be what I go with.
00:40:10
Nice. Love it. Love it. All right, last one. People are reportedly using chat GPT to improve their dating lives. Chris, what is one aspect of your college dating game you wish could be improved through artificial intelligence? If you could go back in time?
00:40:25
Well, I’m old enough to say that there wasn’t dating apps when I was in college, but if, um, if they did exist, I’d have them write the whole thing.
00:40:35
They’d write your whole thing, your whole bios, doctor, the photos. Yep, absolutely. I think. I think many people are taking that approach. I would not be surprised. All right. Happy birthday to data. Rhett Goldstein, PJ Souls. And to the man who takes more pride in his ability to spin a horse around in circles for hours, Yellowstone’s creator, Tyler Sheridan. Have you ever noticed that? And on that show, like, he just spins that horse around for hours.
00:40:59
He’s good at it.
00:41:01
Yeah, he’s real good at it. He loves showing it off, too. 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 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 Anne and I take great 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 at by simply going to YouTube.com Omnitalkretail Mohit, before we let you and Chris go today, if people want to get in touch with you, pick your brains. What is the best way for them to do that?
00:41:51
Reach out to us, obviously, on our website, it’s Alvarez and Marcel-CRG.com or on our LinkedIn page.
00:42:01
Awesome. Awesome. Yes, you guys are very accessible on LinkedIn. So again, Chris Disa and Mohit Mohan, thanks for being with us today. And on behalf of all of us at Omnitalk from Anne and myself, 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.