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The Omnitalk 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, Ocampo Capital Ocampo Capital is a venture capital firm founded by retail executives with the aim of helping early stage consumer businesses succeed through investment and operational support. Learn more@ocampocapital.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 trend. Today is September 18, 2024. I’m one of your hosts, Anne Mezzenga.
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And I’m Chris Walton and we are.
00:02:17
Here once again to discuss all the top headlines from the past week making waves in the world of omnichannel retailing. Chris we we’re trying out a new format today so it might be a new viewing experience for some of our YouTube watchers.
00:02:31
Yeah, normally we to tell people how the sausage is made. Normally we we do this on through Zoom, but today we’re trying out what’s it called Riverside, Ann.
00:02:39
Yes. Not River Cast. That is a, that is a religious organization that I’ve learned also does some streaming of videos. But. But yes, we’re trying out Riverside, so we’ll see how this works. Thank you everyone, for bearing with us. Chris, you. You had quite the weekend. You told me you are nearing the end of your 100 greatest books of all time journey.
00:03:05
I am, man. Thanks for bringing that up. Yes, Yes, I am.
00:03:08
Yes.
00:03:08
I can’t believe this. As long as I’ve known you, you’ve been doing this.
00:03:11
I’ve been doing it for 11 years. Yeah. So for those that don’t know, I started Entertainment Weekly, published the Hundred Greatest Novels of all time in 2013, and I have now read, I think I can’t remember exactly 93 or 94 of them. And I’m on, I’m on the 94th or 95th one. And it’s Tom Jones, which is a ribbled tale from 1700s in England. Anne, which is quite scandalous actually. And it’s a very fascinating read. Very long, very dense, but I’m loving it. And yeah, thanks for recognizing that. I’m so close to the finish line. And War and Peace is last. It’s a 20, like 600 page novel with really small print, too. I’m going to lose my mind as.
00:03:52
A former merchant and forecaster. Like, how much would, how many, how much time do you think is left in this reading process? Like, are we talking years? Are we talking, like, few months you’re going to try to get this done? Like, what, what is the end goal, realistically?
00:04:08
That’s a good question. I’d love to get done by the end of this year, but I think with War and Peace and Moby Dick still looming, I think, I think we might be, I think we honestly might be into in the next year. Like, we might even be into the summer of next year. It takes that. It just takes a long time.
00:04:22
Okay, one more question. Yeah. Has anyone stopped you, like, when you’ve been reading, like in a coffee shop or something, and they’re like War and Peace, eh? You’re gonna pick that one up like any of these books, because they’re like old books that you’re reading. They’re not like, you know, the beach reads that I read.
00:04:39
Yeah. That’s funny. So there’s a trainer at Orange Theory, which I’ve started recently in May, so to give people more insight into my background. But there’s a trainer there who likes to read and she’s always like, oh, what book are you reading. And I’m like, I’m reading Tom Jones. And she’s like, what the hell is that? Yeah, why, why are you reading that? Why are you wasting that time where I was like, I read the Brothers Karamazov. That was the last one I read. She’s like, what’s that? You know, she, meanwhile, she’s reading like fourth wing or whatever the heck that new like Harry Potter thing is. So.
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Yeah, so, yes, sci fi, it happens.
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To me all the time where people give me the raised eyebrow like, who are you? Like, what, what is your deal?
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But, well, it prompts them to ask you some questions and there’s never, you know, you meet a lot of people that way. So it’s, it’s probably not the worst thing.
00:05:21
It does. The best conversation was Harry Potter bringing Harry Potter to the bar. My God, everyone started talking to me. Everyone has an opinion on that series. It’s great. It’s great.
00:05:29
Except for me.
00:05:30
Yes, except for you. Because you are still late to the Harry Potter party. The Harry Potter party. Good alliteration.
00:05:36
All right.
00:05:36
And should we get to the headlines?
00:05:38
Let’s, let’s do it.
00:05:39
All right. Today’s fast five headlines are brought to you by Manifest. Manifest, which is happening in Vegas February 10th to 12th of 2025, is the largest global end to end supply chain and logistics tech event in the world. Bringing together global supply chain executives, logistics service providers, cutting edge startups, venture investors and technology leaders. And Omnitalk is pleased to offer an extra 200 off the current registration price. A total savings of a thousand dollars off the on site race rates. Yes, thousand dollars. Folks, you can learn more and register@ manifestvegas.com save with Omnitalk. That’s manifestvegas.com save with omnitalk. And I’m going to get through this headline read and then take a big swig of water because I have. My throat is parched already. Today we’ve got news on Costco testing, mobile inventory search, the Biden administration targeting the de minimis exception. Ooh, what is the de minimis exception?
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I don’t know, but I love saying it so much.
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I know, it is kind of a fun word. Zara plans to offer its close second hand within the United States. Zara’s plans, excuse me, to offer its clothes secondhand within the United States. Amazon telling its employees to return to the office five days a week. And miracles. Alex Hazy stops by to give us five insightful minutes on the strategic differences between marketplaces and drop shipping. But we begin today with big Generative AI news from of all people and Amazon.
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Yes. Chris, let me tag in here and go to headline number one while you get that swig of water. Amazon has started testing ads within its Rufus chatbot. According to TechCrunch, ads will be shown based on Amazon’s search and conversational context, and Rufus may generate text to accompany existing ad copy in certain cases. Chris, this is also the A and M put you on the spot question they would like to know. We, while we all likely saw this coming for Rufus, although maybe not this quickly, do you think mixing ads in with gen AI search will be evolutionary, revolutionary, or not materially move the needle?
00:07:54
Oh, man, that is. Wow, that’s. That’s a really good question. Yeah, I got to think about this one for a while. It’s kind of got me scratching my head. Honestly. The best way I could sum it up is I think it’s. It’s probably somewhere between revolutionary. Revolutionary and not material is kind of how I think.
00:08:13
Wow.
00:08:14
Yeah, I think it’s gonna be either or feast or famine and.
00:08:17
Ooh, interesting. Okay.
00:08:18
I think at the end of the day, the move signals a lot. I mean, when I first heard about this, I started thinking, you know, wait, I’m using conversational, you know, context to search and find the products I want. So I want a really authentic response in my, you know, to my queries.
00:08:34
Right.
00:08:35
And so, like, how does an ad fit into that? But then, but then you said something to me last week that got me thinking about how, you know, subjective product searches really are. At the end of the day, it’s not an objective thing when we search because the answers can be different for everybody. And what could be the right product in one context could be a different product in another context. And so, and particularly when you think about price being involved. So, like, yes, you know, I might want that coffee maker this week at this price, but if there’s another one available next week at another price, I might want that one. So. So to me, I think it makes me think that serving up ads inside of a conversational commerce search makes sense, that we’re going to see more of it. There’s probably pretty high conversion off of it too. At the end of the day, I think the CPG brands are going to like it a lot and they’re going to love it. The other part of this too is Google. Like, it makes me think that Google is particularly strong on this front too, because where they’re having those searches, they can pipe in any brand that wants to advertise as well. So can Amazon to a degree. But so for that reason I think I’m still heading towards the fact that this is a very revolutionary type concept that we’re going to start to see more of. If you put a gun in my head, that’s where I am today.
00:09:45
Yeah, that’s kind of. I was actually more along the evolutionary, the evolution.
00:09:51
You’re kind of taking the middle road.
00:09:53
I am because I think that, you know, pragmatist, I like we have a really great conversation with own it that’s coming out, so make sure to check that out with payment and Evan, and during that, that event in that recording, you know, they really emphasize that this is changing the way that we search for products as consumers. And so I think this is like that evolution of how we, how we conduct searches online for products. And I think like you said, Chris, like, if I can get the, that product for a better deal in that moment, it’s a win all around. So if you can get me on price, you’re scouring, you know, all of the Internet to figure out which the, what product is best for me based on, you know, the inputs of the product companies, the brands themselves. Like we talked about with like brands knowing, you know, what’s been returned, what has worked, what have customers liked, what if customers voluntarily left reviews on like, if you’re scouring all that information and you’re truly serving me up like the best content, I think it’s only natural that now they start to bring, you know, ads into this to further kind of get us over the hurdle of really hitting by in that scenario. And I think that, you know, where the revolution comes in for me is really thinking about how brands will start to use customer data, past purchase history, you know, they can use AI on that side too to really get to know me better and maybe other things that I might have purchased so that they can start adding that into the data that they serve up, the types of promotions that they serve up for me. So I think that’s where the revolutionary part of it comes in. But the last question for me is what you, what you hit on, you know, is really that authenticity. Like, I think you still have that issue of who’s providing this insight, who’s recommending this, because I think like you look at even sponsored products right now on Amazon, like, is that the first thing that you go to all the time? Not always for me.
00:11:47
Not always, no.
00:11:48
So I think like, you know, that’s the question is how are retailers and brands using that data about me As a consumer and really putting that most authentic. Right. Product in front of me.
00:12:01
Yeah, it’s interesting, you know, for me, like to. The other part of like the revolutionary side of it is will consumers start to shop this way, you know, will they start to use these features more often, you know, both on Google and on Amazon or anywhere else too. Right. And I mean that’s, that’s a sixty four thousand dollar question that will ultimately determine if this is a revolution or not. I think so, yeah. All right. Headline number two. Costco reportedly is exploring mobile inventory search according to chain store age. Costco is beta testing a new tool on its mobile app that lets customers click a quote warehouse button located between the account and cart buttons at the bottom of the app to bring up a search bar. The search bar then enables customers to enter the names and or descriptions of items they plan to buy to see if they’re in stock at a selected store. Ann, would you recommend that Costco roll out mobile search functionality to all its users chain wide?
00:13:01
I’m really conflicted on this, Chris, because I did try it last night. Yeah, it works in our region. Um, and it’s really sweet because I shared it with my husband, who’s my personal Costco shopper and his biggest complaint and mine is when, you know, I give him the list, I put it together and we have a lot of repeat purchases. And when he comes home and he’s like, they were out of it or they don’t have it anymore this week, like they just stopped carrying it all of a sudden. And so like for example, our liquid IV hydration packets, like there’s a specific kind, we get it every week and the last two weeks.
00:13:35
He’s very familiar. You put those in your water every plane trip we take.
00:13:40
I do, I like to stay hydrated. But you know, if he, he can check now and he’s going today and we were able to see like this morning. Yes, they have those, you can pick them up. And that’s driving him to go to Costco now because he knows that that product is there and I’m sure he’s going to pick up a million other things that we didn’t need while he was there. So I think that experience makes this great and will be really good for the consumer. However, I mean, I think this is still an issue that we’re seeing at a lot of retailers where, you know, consumers are coming in and they can sometimes have a better picture of inventory or they, in one app, you know, they’re able to see. Yes, I Have something. And if you can’t pay that off, if you haven’t invested in the, like, infrastructure for your store associates to have the same view as your customer has or for, you know, that data to be accurate, I think this could be a big challenge and could end up disappointing a lot of consumers if, if they can’t, like, get it all talking to each other. So I’m kind of in the middle of this, but where, where do you fall?
00:14:45
Like, so you can’t be in the middle. You can’t be on the middle of this one.
00:14:48
I’m going to push you which way.
00:14:50
You can’t, you can’t decide. You’re just, you’re like Switzerland on this. You so net. Net. Did you like the experience or not? Do you think it’s a traffic driver to Costco?
00:14:57
I think it can be if they have all their ducks in a row. And that’s what worries me about it, is that I think it’s very hard to have this data, like, incredibly accurate and up to the minute.
00:15:09
This is, this is interesting because I think, I don’t think I would recommend that Costco should do this.
00:15:15
Okay.
00:15:16
And I think there’s two reasons, and the first one is less important than the second one. But the first one is that I think this is really hard to do. Well, I got in a debate with Mike Hogan Miller on LinkedIn Last, this over the weekend about this because, you know, depending on how many, you know, Costco moves through a ton of units with a ton of people, especially on a weekend. So depending how many people are in Costco, you know, you’ve got to have great accuracy on your items because you might have, you might have all your items sitting in people’s carts as they’re all waiting in line to check out, and your inventory system thinks those items are in the store. You know, I’m at home, I’m going to plan my Costco trip three hours from now. I looked, you said it was there and it’s not. And I go to the store and it’s not there. So now there’s ways mathematically to, you know, mitigate that risk, so to speak. So I think you could potentially figure that out. But the second point that I think is even more concerning to me is something that you, you kind of alluded to this, which, in terms of how your husband shops Costco, your husband and most Costco shoppers love Costco, right? You and I, you and I don’t like shopping there, but the people that like Costco love going there. And they’re still going to go there. Right. And so I feel like the risk here is that if, if I’m a Costco shopper and I go online and I see that something I want is not there.
00:16:30
Yeah.
00:16:30
Then I’m not going to make the trip. You’re introducing a reason for me not to make the trip. And so I think at the end of the day, Costco is a different beast than other retailers. And so my big takeaway is that their omnichannel answers. The omnichannel answers for Costco may be different from others. So, like, this is a really. That lots of retailers have.
00:16:50
Yeah.
00:16:51
But I don’t know that Costco needs it or said another way in. If it ain’t broke, don’t fix it is kind of what I’m saying here.
00:16:58
I think that you made some really great points, and I don’t disagree with you because I do think, like, in the case of my hydration packets, like, then I have to go pick them up, then we’re completely aborting that mission. Like, we’re going to somewhere else because that’s something that I have to get. I. We will still go to Costco for some other things. Like, you know, there’s, there’s other components to that. I think you’re right. Like, people will still shop Costco, but you’re right. I don’t know that it’s going to. I, I think there’s still.
00:17:25
It might delay your trip to Costco, though, right?
00:17:27
It might.
00:17:27
So then over a course of, you might have less trips to Costco, right? I don’t know.
00:17:31
Yeah. Yeah. I think in the end, you just, you really have to make sure that you can pay that off. And your point about how many people have stuff in their cart, especially during, like, high traffic times? I’m thinking like before the holidays or something like where there’s like people, you know, a hundred people waiting in line and, you know, you want to get that same. Everybody’s going to get, you know, the wrapping paper, the, you know, that big gift for the holidays or something. I think that could, that could pose some challenges. So we’ll see. We’ll see what? It’s just a beta.
00:17:58
Two by fours at Home Depot don’t move to the same degree that the hot buy at a Costco. Correct. On a weekend, basically, what I’m saying, you know.
00:18:04
Correct.
00:18:04
And so it’s harder to understand, but.
00:18:07
All right, let’s go on to headline number three, Chris. Shipments worth less than $800 from China are no longer eligible for a special U.S. customs exemption according to chain storage. Again, the Biden Harris administration is addressing what it calls the quote, significant increased abuse, end quote, of an important exception for lower value goods by China founded e commerce platforms. In a new executive action, President Biden is making any import shipment subject to US China tariffs ineligible for the de minimis exception. The special exception had eliminated duties and taxes on imported shipments with an aggregate value of less than $800 and also allowed them to enter the US while revealing less information about the contents than other imported shipments. Chris, you need to put on your best US Representative hat right now and tell me what you think the long term ramifications will be from the ending of the de minimis exception.
00:19:05
De minimis. Nice Latin pronunciation there too. And I believe that’s a Latin word if I’m not mistaken. But you know, I don’t know, I.
00:19:11
Would, I would imagine. Who knows, who knows.
00:19:13
I don’t know. Trying to figure out words. Origins is all Greek to me but all right, I have no idea, honestly anti answer your question, I have no idea where this goes in the long run but God, I love thinking about the possibilities. That’s how I’d sum this up. I think short term, you know, I have to think it’s, it can’t be good news for companies like Temu and Shein like or even Amazon and Walmart who have taken steps to set up their marketplaces to ship factory to door in a similar fashion to both those companies. So but then I get to thinking, you know, how does this law morph over time? You know, will US based importers still get the special exemption if they agree to be held accountable to the liability and safety standards that they have traditionally stood by? Which means that, you know, could Walmart still direct ship from factories as an importer of record with the longer shipping lead time in exchange for a lower price? The end consumer. I think there have a lot, there are a lot of us consumers who would be willing to make that trade off. They’d be willing to wait for product if they could get it cheaper. So, so my prediction is that in the short term it hurts the Chinese based marketplace manufacturers, but in the long run we could see the laws adapt to help spur US based retailers to be more successful and deflects their supply chain power even more. That’s my current take.
00:20:24
Yeah, I mean I, I dug into a lot of commentary on this and the thing that really resonated most with me, I was listening to Scott Galloway talking about this actually and I think I agree with like what his opinion of this was and that was really that, you know, well, yes, this might help some of the US Based companies that are doing this. It might kind of temporarily level the playing field for them. I think that the core of this still, and while, you know, US retailers can’t rest on their laurels here is that Shimu, Shimo Shimu and she and.
00:21:03
I can’t believe that that’s what they’ve ever done. That she move. Yes, she move.
00:21:07
Shein and Temu like their whole business models are still way more efficient than a lot of the companies getting. Like we’re just getting into the marketplaces, the factory to consumer like shipping and all these things here in the US And I think that you still have to look at, you know, this, this change isn’t going to like make this so that Shimu Shimu. I keep saying Shimu, Shein and Temu are like, you know, it’s not going to totally disrupt their operations. They’re still running more efficiently. There’s, they’ve still like heavily invested in technology to make sure that, you know, they’re only producing the right amount of quantities that you know, their shipping is getting so precise so that they can save money in all of those areas too. So I think it’s a wake up call for the US retailers to be looking at like how do we continue to invest in beating them, you know, as competitors all around. How do we invest in technology, how do we invest in processes and supply chain to make sure that, you know, we can, we can ultimately get into a competitive space with them. I think this, this de minimis exception going away is not going to, not going to be something that makes a long term impact in the competitive landscape between these US retailers and these retailers from China. So I think it’s something that you brought up manifest at the beginning, Chris. I think this is something that I’m excited to hear about at that conference to hear how that industry because that’s the first time that I recall hearing about the whole concept of factory to consumer shipping. So I’m interested to hear what the perspectives are of those experts here too and hear what they think the impact is going to be on the industry.
00:22:47
Yeah, no, you bring up a good point too. You know, I had the chance to speak with some people at TEMU about a month ago. I got on a call with them, you know, early one morning and talked to them. And you know, as much as you is to your point, as much as they talked about supply chain, they also talked about the front end of their experience and the gamification of their experience, what’s really differentiating. And so to your point, that’s the part that the US Retailers still need to learn from and figure out, you know, what matters here within the US So. All right, well, since we just got off the topic of marketplaces, let’s stay on that topic and bring Alex on to dive into them a little bit more. Joining us now for five insightful minutes is Alex Hazi. Alex is the general manager and chief revenue officer for the Americas at Miracle, and he is joining us today to discuss the differences between a dropship business and a digital marketplace. Alex, let’s level set with our listeners to start off today. What are the actual differences between a dropship platform and a marketplace platform?
00:23:50
In reality, they’re really two different constructs solving a similar challenge, which is the notion of unowned inventory. And so Drop Ship’s actually been around for quite a while. It’s focused on the core assortment. Typically the retailers, the one who’s responsible for all the merchandising, they set the price. They’re essentially doing all of the work associated with products, even that are part of a dropship, a dropship program. And it’s really geared towards solving supply chain constraints. So making sure you’re not out of stock of products, you know, and that the customer, when they order something they’re actually going to get, are able to get what they, what they set out to buy. Marketplace, on the other hand, much more agile, much more geared towards scale and expanding beyond your core assortment. So many marketplaces are both core assortment, but also expanding beyond that. And part of the reason for that is that you’re able to actually push a huge amount of that work out to the seller community. So that means that they’re doing the merchandising and uploading the photos and making sure that the, you know, the product descriptions are accurate. There are things like costs around shipping that they actually absorb, which you don’t then have to deal with, and then customer support. So whenever there’s an issue with an order, they’re the ones that typically will address it. And so when you get to a certain level of scale, you don’t want to balloon out a merchandising organization, but you’re able to leverage this third party seller community.
00:25:20
Alex, why is it so important that the seller sets the price? Why is there that distinction?
00:25:26
The primary reason that is of significance is competitive pricing in particular in today’s economic times is obviously a big driver of how consumers Buy. So by allowing the sellers to set the price, it creates to it creates this level of competitiveness among those sellers that might all, you know, both be selling or multiple that are selling on your site. By driving that price down, you not only improve an SEO, but it tends to drive a much higher conversion rate. And one of the things that’s really important to understand is that there’s a very high attachment rate of marketplace products to 1P products. You end up with these mixed baskets that are, you know, solving a whole bunch of needs. And at the end of the day, the consumer is much happier and customer lifetime values everything.
00:26:14
All right, Alex, like you mentioned, drop shift platforms are not new. They’ve been around for quite a while. In fact, I cut my teeth building one at target back in 2013. And we know many retailers are also developing their own marketplaces. We recently interviewed Macy’s Josh Janos about theirs, for example. So my question to you is this. Why should a retailer with a robust dropship platform even consider a marketplace option? Why should they look at doing both? What’s the rationale there?
00:26:40
If you think about the notion of dropship programs being focused on the core and a desire to try to expand beyond that. So again, see what consumers want to buy from you, and if you’re not delivering that, they’re going to go someplace else to do to buy, you know, frankly, not only what they came to look for, but all the other products and things that they’re looking for. So long story short is that when you go to try to expand your assortment, you get to a certain threshold of where it’s just not manageable with your own team. You don’t want to continue to balloon out a merchandising organization that’s trying to support all this expansion, so you start to be able to leverage a seller community that actually, as I said, does a lot of that work. But the way that we view things is they all coexist. And it’s a continuum of 1P products, dropship and marketplace. And we actually see a lot of retailers that actually as part of their strategy, they will push products from one P and dropship out to marketplace because it’s either more profitable or it’s just part of the assortment that they don’t want to manage themselves directly. So our view of the world, it’s all coming together where the expectation is going to be to manage sellers and vendors on one platform. But to leverage 1P dropship and marketplace.
00:27:58
Yeah, you can take the Pepsi Challenge between the two options and carry the Skew based on which option gives you the best profitability. That’s really interesting.
00:28:06
Well, Alex, on that thread, what would you say to retailers who are worried that expanding a third party assortment via via dropship or marketplace models or both could kill the performance of their first party inventory? How do you handle that question?
00:28:20
Yeah, it’s a very common misunderstanding. I mean we have that conversation probably ten times a week. It’s also there’s another similar misunderstanding around marketplaces is that it’s the wild wild west and it’s these uncontrolled sellers that are on your retail site. And that’s obviously what retailers don’t want as part of their brand and value proposition. The reality of it is our platform helps curate and manage ensure all the quality is there, just like you’d be selling your own 1P products. But as it relates to, you know, this notion of killing 1P, it’s actually the opposite with that high attachment rate. And again it’s very common for us that we’ve seen the attachment rate of Marketplace purchases to 1P products. It’s north of 70% very typically and upwards of 100% in many cases. So it actually complements and helps drive one piece sales much more so than the risk of potential cannibalization.
00:29:17
Thanks Ox. Wonderful Insight. Headline number four Zara plans to offer its second hand closed service in the US by October of this year. According to Reuters, Zara’s pre owned platform is already running in 6 year 16 and 16, not 6, 16 European countries after launching in Britain in November of 2022. In Britain with this customer to customer service Zara customers can resell their Zara garments or buy second hand items so they last longer and therefore lengthen their useful lives. And the service will be available through Zara stores, its website and its app. And yes, are you buying or selling Zara pre owned? And more importantly, what is your rubric for how fashion apparel retailers should attack the second hand market? If at all. I sound like A and M there you do.
00:30:13
You do sound like am I buying peer to peer resale like this? Without a doubt. For me if, if your brand is at all successful on the secondhand market to me there is no reason that you shouldn’t be getting a piece of that so you should be involved. I think Zara is a brand that is commonly seen both in like physical store consignment, secondhand consignment stores and online. So I think it this only makes sense the part of it about the like donation and repair part. I’m a Little confused unless there’s some kind of discount or incentive for the buyers in this case or the customers. That part I guess I wouldn’t focus as much on, I’d just go full in on peer to peer. But you know, I think it’s, it’s again, it’s another way to bring people into your brand. It gets them like there’s many cases, a lot of retailers like what we’re seeing with some of the brands that recurate worked with, they’re giving you incentives. So if you sell your product instead of just taking the cash, you can get 20% off a new product. You know that that cash has a higher value on the brand’s website. You’re keeping them in your brand, website and ecosystem. So I love that part of it. I also think, Chris, that the other thing to keep in mind here is as we talk about how we’re searching for products and we bring in things like Google Lens or other ways to shop using visual search. I think this could also be a search play for some of these retailers because if that, you know, blazer that I see somebody wearing on the street, odds are that’s that may be at a year old or something. And if that still exists in Zara’s, you know, secondhand resale site, they, they show up on that and they capture that, that image in that site because they probably have the highest quality image of that product versus something that, you know, somebody posts on Poshmark or something. So I think you get people there too. And at the end of the day, it costs Zara so little to make these products that I have to imagine that this investment, which it is an upfront capital investment, will pay off in the long run and will see an increase to traffic and to spend at Zara compared to other retailers. But what are your, what are your thoughts here?
00:32:28
I mean, I, I think similar to, similar to yours. I mean, I think the questions I want to ask you a little bit more just to get your thoughts on is because you, you definitely know this subject more than I do. So, so you’re saying that any fashion apparel retailer that, whose brands are being resold on all these traditional sites, they should be thinking about this to the same degree that Zara is. And so without a doubt. So my question though is as we double click into that, so you know there’s different ways to do that, right? Do you, do you recommend that people own the inventory? Never do. They know. So you just, you’re, you’re brokering the transaction like you’re Brokering the peer to peer transaction. Like recently a lot of people do it. Okay, yep. And then do you do this through your own site or do you do it through like a standalone site, a third party site? Like, you know, how do you think about that?
00:33:13
I think if you can do this within your own site, that’s the best way to do it. I mean, by all means, people poke holes in that argument, but I, I just think that the, the more you can keep this all happening in one place versus I forget what we were talking about a couple weeks ago with Ben Miller on the show, but like to get, oh, it was Ikea resale, like you have to go to a different site like that. That is not the experience that people want. In that case, like you’re, you’re better off. Like now you have to figure out how to drive people to that site versus your own site. But I think, yeah, if you can keep this on your own brand site, that is where you win.
00:33:47
And then my last question for you, Ann, is like, how much, how much does the authentication of the garments come into play and how should the retailers think about that? And then, and then what is the customer service point here? Because that’s the other thing that concerns me is that now you’re getting into customer service interactions for peer to peer interactions that go wrong. Which is a different muscle memory to use than say your traditional like, hey, I’ve got a problem with my Zara garment that I just purchased at the store I just purchased online. So how do you think about that?
00:34:12
I mean, yes, I think that’s something that you have to factor in. Part of the capital. Yeah, it’s part of the capital investment. But all in all, I think like for, you know, the peer to peer sites run on reviews. They run like peer reviews and things like that. Like there’s been doing that for a while.
00:34:27
Yeah, yeah.
00:34:28
So I think that makes sense. And then the authentication perspective here too. I mean again, this is where recurring was so smart and especially looking at like I have the record that you purchased this item at my store on this date. We can even use the same images that you like. I think that that’s like truly a way to make sure that you’re successful in this peer to peer transaction. It’s just it to me it makes so much sense and there’s money to be had here and there’s no reason that, you know, Poshmark or you know, any of the other like sites, consignment sites should be making the money off of your, your Brands.
00:35:07
Right. Which is a great point because if you think about this the right way, there’s, there’s a closed loop aspect of this from an authentication perspective. If you’re doing it through your own website too, that’s cool.
00:35:16
Yeah. All right, let’s go to headline number five, Chris. Amazon has told employees to return to the office five days a week. According to cnbc, Amazon CEO Andy Jassy is instructing corporate staffers to return to the office. Previously, Amazon required employees to be in the office at least three days a week. Employees have until January 2nd to start adhering to the policy. In addition, Amazon said that it also plans to simplify its corporate structure by having fewer managers in order to, quote, remove layers and flatten organizations. End quote. Jassy said each area within the company will be expected to increase the ratio of individual comp contributors to managers by at least 15% by the end of the first quarter, quarter of 2025. Chris, do you think Amazon’s return to office policy will set off a chain reaction of other retailers following Amazon’s lead?
00:36:10
Oh, man, that’s, that’s a really tough question. I possibly, I mean, there, there’s so many layers to this announcement that the only thing that I’m very clear about, Ann, is, you know, who doesn’t win? Company morale. Company morale does not win with this announcement in any way, shape or form. The, the middle managers at Amazon, they must be quaking in their boots right now. But you know, I think at the end of the day too, like I do, I do step back and say, you know, kudos to Andrew Jassy for making the tough call here. I don’t, I don’t think there’s one right answer to this question, but it will force Amazon to do what it needs to do, which is learn how to operate leaner and more efficiently, which historically it’s been good at doing. It’s always a good skill to practice in the long run when you’re running business. It’s not always an easy call to make. So that’s why I give him credit. But you gotta. But for that to work, you have to provide the long term financial reward for those who get on board with coming back to five days a week versus the short term pain of doing it. Now, Amazon’s traditionally been able to provide that reward, but I don’t know because like, you know, the other part that I come back to in this announcement is he talks a lot about being the biggest startup in the world. Right? Yeah. But I think this announcement is proof Positive that your startup days are over. Like, you’ve officially reached day two with this announcement, which is which, I mean, honestly, it’s kind of hubrisic to think that you are Amazon and that’s never going to happen to you too. I mean, it’s just natural that’s going to happen. And I think this announcement shows that that’s the case. You’re at that point Amazon, so, you know, it’s a little bit concerning whether the retail follows suit. I don’t, I don’t think so. I think every CEO is going to make the decision based on what, what they think is right.
00:37:48
Yeah, yeah. I mean, I agree with you, Chris. I think like the whole return to office part was kind of the secondary part of this for me. The real Head Time headline was like, how they’re minimizing bureaucracy.
00:38:00
It was interesting.
00:38:01
Yeah, yeah. So much so that like, Jassy has created a bureaucracy mailbox. And like, I don’t even know what to think about that because it’s like, I mean, I’ve never worked for Amazon, so I mean, maybe Amazon does this better than others, but, like, what can you, like, what are the realities of like responding to those bureaucracy emails and how much is like, I mean, you, you managed a ton of people. Like, what is it just going to be complaints? Like, how much of those are going to be dealt with? Like, no, you’re right.
00:38:32
I mean, you’re talking out of both sides your mouth. You can’t have a bureaucracy mailbox and then call yourself the biggest startup in the world. Like, it just doesn’t work.
00:38:39
Right. It just, it seems altruistic. But I think the key thing here though is, and what Jassy’s putting forward, like one, he’s making a plan and he’s saying, like, we need to operate our business as efficiently as possible. We need to be better than, faster than and more innovative than our competitors. It gets back to what I was saying with the de minimis exception. And, you know, us retailers having to be like, how do we really compete? And he thinks that part of that plan includes bringing people back to office. So I mean, we’re seeing this with Walmart just did this too. We’re, you know, now Amazon and I think, you know, retailers and retail organizations across the country needs to need to be making plans for how they are more efficient, how they’re more innovative and how they’re better than their competitors. And I think, you know, the. If I’m a retailer, if I’m working for a retailer and I’m Working remote. I think it’s time to start seriously thinking about, you know, what are my plans here? What are my, what is my future like? Because I think that we’re going to see more of this happen. So.
00:39:39
Yeah, especially if you’re a middle manager who, you know, you know, if you’re in that middle manager rung and you know, like to that point, it’s a good, it’s a good mechanism to cut your workforce in a lot of ways.
00:39:51
Right. Okay, Chris, let’s get to the lightning round. First question for you. New Starbucks CEO Brian Nichols announced that one of his plans for the future of Starbucks under his leadership is making the stores community gathering spaces once again. Were you, did you influence him?
00:40:10
No. I don’t know. Maybe. I mean it feels like he wrote, he feels like he dictated what, dictated my thoughts in that letter.
00:40:16
But yeah, I know, I know. Okay, so I want to know though, if, if you were advising him or if you did advise him and we don’t know it yet, what would you say is the first thing that Brian should do to make Starbucks great again?
00:40:29
Oh, that’s so easy. And I would prioritize in store order making. They get, they, if you come in, if you come in store to order your coffee, you get, you get to the front of the line, you get by, you bypass every mobile order that’s out there because you can just put that in your algorithm for mobile orders. Like, okay, you’re just, you know, it’s not ready.
00:40:45
Do they not do that now? I feel like it depends. I think it’s probably like variable by Starbucks because I think it sure as.
00:40:52
Hell doesn’t seem like it a lot of times because I’ve waited a hell of a long time for my, my Americano and I’m like the first one in line. So. Yeah, no. All right. A tick tocker recently discovered that a croissant shaped lamp purchased from TEMU was an actual pastry covered in resin. What is the more disturbing part of this story? That A, the tiktoker discovered this from a train of ants it found going towards the lamp or B that someone wanted a croissant shaped lamp to begin with.
00:41:24
Oh my God. Where’s the de minimis exception for this? Like where?
00:41:27
How are we proof positive of why?
00:41:29
Yeah, how are we shipping products in that are resin covered croissants? Oh God, it’s so disgusting. I’m going to say that the A, the most disturbing part is the train of ants. Like that makes. I’m actually like dry heaving as I’m talking right now. It’s so disgusting. Oh, okay, Chris, question number three. Target announced this week that they plan to hire. I’m still, like, gagging. It is really gross.
00:41:55
Like, to think that you bought a lamp and then you open it up and there’s an actual croissant pastry inside of it. But this is the kind of stuff that, I mean, it’s real. And you’ve got to put regulations on this. Like, this is why regulations exist, people.
00:42:08
Well, okay, so Target announced this week that they plan to hire 100,000 new team members for holidays. Because of your experience in running Target stores, I want to know what the most difficult part of onboarding 100,000 temporary employees is.
00:42:26
I don’t know. I mean, I don’t know. It’s a little bit. Rinse and repeat. These stories are always interesting when they come out because every year the companies announce the same thing. They’re going to hire more people. Yeah, of course you are. It’s the holidays, right? So. But I think there’s two things that come to mind. One, you got to ramp up hiring. Um, so you gotta get people into the chairs to be interviewed. That’s never easy. And then the second part is, once you get them, you have to train them and they’re, you know, they’re gonna potentially temporarily be there. But oftentimes you can find some good employees, too, that end up working for you into the next year. So it’s. It’s a good training ground as well. All right, last one. And Neiman Marcus. This one’s good. This one’s good. Neiman Marcus and Christian Louboutin. Hope I said that right. Have come together on a collection of on trend leopard print shoes and bags. What was the last occasion in which you recall wearing leopard print?
00:43:14
Like, last weekend print shoes. But, you know, like, Mob Wife was like the trend.
00:43:23
You say mob Wife? Is that what you said? Mob Wife?
00:43:25
Yeah. And apparently it’s coming back again, so.
00:43:28
Sounds like.
00:43:28
Yeah, I think this is just. Come on, like leopard print. It’s always going to be in fashion in some form or another, like head to toe leopard print. That’s too much. But a little. A little taste is always, I think, a little classy with, like, the right outfit.
00:43:44
So for men and women or just women?
00:43:49
I guess I was thinking of women’s fashion.
00:43:51
I’ve never worn leopard print. Honestly, I’ve never ever worn any of. I’m sure some guys have.
00:43:58
We need to change that. How do we get that? Maybe like a shoe or something or like a handbag we need to get you like a mur. That’s leopard print, I think.
00:44:07
No, you’re not changing my spots for that. And all right. Happy birthday today to Jacob Sudeikis, Aisha Taylor, and the man my wife would drive a car over me to be with, James Marston. And remember, if you can only read it, so would Anne. Remember if you could 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 10 US retailer. I just don’t get James Mars, dad. Can you explain him to me?
00:44:35
I mean, I don’t. I don’t know how. I don’t know that he can be explained, Chris. I just don’t know.
00:44:40
He just has that Jenna. Sais quoi. All right. 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, I take 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 by simply going to YouTube.com omnitalkretail so until next week, on behalf of all of us at OmniTalk Retail, on behalf of Anne and myself, as 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.