Transcript of Fast Five Episode : Walmart Takes Vizio Private Label & Target Gives People A Big Reason To Go To Costco | Fast Five Video

00:00:11 Anne
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00:02:38 Chris Walton
And I’m Chris Walton and.

00:02:40 Anne
We are here once again to discuss all the top headlines from the past week making waves in the world of Omni channel retailing. Chris, before we get into the headlines, you and I are headed out to the Hamptons of the Midwest, Grand Rapids, MI next week. First, I want to know, have you ever been?

00:02:58 Chris Walton
No, I haven’t been. Yes, we’re heading out there for the Spartan Nash conference next weekend. I’ve never been. And I’m curious like have you been and #2 no, do you think you haven’t either? My here’s my question for you. And do you think the Rapids are really grand like, or are they more like, you know, ’cause like, grands are pretty? It’s a pretty bold statement, right? Like, so like, like grands, you think we’re going to? Yeah. What?

00:03:20 Anne
Like the Canyon? Like are we about to go see the the Grand Canyon of Rapids? That’s what my expectations are.

00:03:27 Chris Walton
Yeah, yeah, right. Because, like, there’s only so many levels above grand. I was thinking about this last night, Like maybe Majestic beats grand. I don’t know. But like, I’m curious, like what these Rapids look like. I’ve never seen pictures of the Grand Rapids, right. Are they going to be mediocre? Are they?

00:03:41 Anne
Going to have no idea is the city centred around them? Listeners in Grand Rapids, what should we do and see while we’re there at the Spartan Nash Conference next week where we’ll be recording live? We will report back. If you want to submit your ideas to us on LinkedIn, go ahead and do that and then maybe we can do some special reporting from the the Rapids of the Grand, the grandest of Rapids.

00:04:07 Chris Walton
I’m dying to find out what these Rapids look like. I really am. Like, I, I actually, I, I messaged one of our friends on LinkedIn who’s a follower of ours. She lives in Grand Rapids. I’m gonna be in town next week and like, let’s, let’s meet up. Like I want to, I want to know what I’m in for here, you know, because.

00:04:23 Anne
Really disappointed if there’s no Rapids, Chris, if that was just like old A.

00:04:28 Chris Walton
Pebble in a stream, you know like just like you know like I’m just not going to be into that so I.

00:04:33 Anne
Don’t know. Anyway, like old like you have you have visions of this grand thing and then I don’t know, this has gotten into like we’re in some serious Larry David territory right now with.

00:04:44 Chris Walton
That I want to be blown away. And I want like Snake River, whitewater rafting Rapids, American River, you know, outside Sacramento. I want those kind of Rapids. I want whitewater and all, right?

00:04:53 Anne
We shall.

00:04:54 Chris Walton
See, enough, enough rapid dialogue? Let’s get to the Fast 5 headlines as fast as we can. All right, in today’s Fast 5 we’ve got news on Tesla opening at Supercharger Diner, Mall of America’s new car counting tech, Tesco launching early delivery slots for families during the summer, Target ending its price matching policy. I have lots of thoughts on that one. Can’t wait to hear what you think too. And and A&M, Chris Crates and Brandon Peasy stop by for five insightful minutes on how Grocer should be thinking about space allocation for their future success and store development plans. But we begin today with a Vizio into the future and.

00:05:34 Anne
OK OK headline #1 Chris Walmart plans to sell Vizio TV’s exclusively as a private brand. According to Bloomberg, Walmart Inc plans to make Vizio a private label brand by the end of the year and will sell its smart TV’s exclusively at Walmart and Sam’s Club. The retailer is bringing Vizio’s operating system to its private label TV brand on that’s Onn, and has been working on making TVA shoppable experience in which consumers can buy items while watching shows. Walmart acquired Vizio last year for $2.3 billion. Chris, this is also the A&M put you on the spot question. At first glance, yes, Walmart’s move with Vizio may just look like not wanting to share sales of a top five TV brand in the US. But explain to us all why this move, starting with the 2024 Vizio acquisition to begin with, isn’t just about hardware, but about advancing an exclusive media ecosystem across content, consumer data, advertising and commerce that benefits Walmart and branded suppliers.

00:06:42 Chris Walton
All right, all those things. All right, I’ll do my best. You know, I mean, first of all, with the announcement, I’m not surprised by this and I’m not surprised by the announcement at all. I mean, I think, I think I predicted it on this show and we discussed the merger last year, which is why I like the deal because there’s two sides of this deal, which gets the question that A&M is inherently asking. The first part is you inherently lock the competition out from selling what has traditionally been an entry level TV and you’re forcing them to find another source, you know, right here before the holidays too. Now hopefully you were smart enough to get prepared for that, but the second piece of it is in really this is what the core of the deal is really about for the most part is Walmart gets the controlled substrate at top, which it can experiment with the full power of connected TV, retail media advertising. It’s all about connected TV and programmatic advertising at this point. And in fact, like a recent IAB report, my favourite, I think IAB may be my favourite acronym because it reminds me of Star Wars for some reason. But the IAB, the the International Advertising Bureau, I think it’s International Advertising Bureau, I’m not exactly sure you probably know that better than I do, but they said that ad buyers expect 47% of CTV inventory to be biddable this year. That’s up from 34% in 2024. So there’s still a lot of room to grow there. And when buying CTV programmatically, 41% of buyers also believe it will drive a better return on investment and AD spend and 35% expected to be easier to achieve scale. So that’s where things are going. And if memory also serves, and 1/3 of Walmart’s current profit is coming from retail media. So this whole move just supercharges that position. That’s what it’s all about. It gives Walmart profit upside and therefore a competitive advantage against Costco, Target, and other grocers primarily. Not so much against Amazon, but against the other core of who Walmart competes with as it continues to reinvest what will become then over time, a disproportionate share of retail media dollars back into its business to drive growth. So at net net, you know, people always use the expression like, you know, chess versus checkers Walmart and isn’t just playing Omni channel chess to everyone elses checkers. To me, it’s more like they’re playing a game of pickup basketball as adults against third graders, just squatting away everything that’s in their way or, you know, or said another way, they’re playing the long game and they’re playing to their strengths. So that’s that’s the core of what this whole Visio acquisition is all about.

00:09:06 Anne
Yeah, I agree. I mean, I think there’s just, we did, we have no idea, just the upside that they still haven’t even explored yet or the possibility that Walmart has here. And I think when you do compare it against Amazon and, and some of the retail media revenue that they’ve that Amazon has right now, like Walmart’s still in the very early stages of starting to compete with that. And so I, I do think that this is a really good Moat for Walmart in the race against Amazon just because of this ecosystem that they’re building. And I think the other thing that you really have to take a look at here too, Chris, is think about the value of all of the data from Walmart customers. You have them across all demographics that are going to be engaging with this ATV is a great way to get them engaged. You know, you, you think about like being able to put this TV up in one of in, you know, anybody’s houses from, or, you know, people who are buying their first apartment all the way to, you know, somebody that’s buying three of these Vizio TV’s during Walmart Plus days because they’re the cheapest 1 and they’re going to put them in three rooms of their house house. I think that’s the thing that we’re not talking about enough here. It’s just the full 360 view that Walmart will be able to offer brands because they know about those people, what they’re watching on TV and what they’re engaging with, how they’re interacting with their programmes and Walmart plus and other other behaviours online. And they have store behaviours too, that they’re going to be able to connect all this stuff together in ways that no one, not Target, not Amazon, not no one else can compete with. And so I think this is really just the dawn of what we’re going to see happen with Walmart and, and retail media and, and their potential here.

00:10:50 Chris Walton
Yeah, you’re dead right. I mean, the retail advertisers are going to spend money with Walmart because their data is going to be better and they’re going to actually be able to see the closed attribution of the sale too, easier than they can through other, you know, connected TV vehicles, you know, go.

00:11:02 Anne
Ahead, yeah. And the last thing too, I think is we haven’t, we haven’t really dug into the hardware value of this too. I mean, I think when you look at like we, so I just use the example of Prime week last week, Amazon, what are they giving deals on? They’re giving deals on Fire sticks, on Kindles, on all the things that Walmart is now going to be able to offer their cut consumers too. And in addition to just being like, we have one of the cheapest, best quality TV’s, we’re also going to give you, you know, $50.00 back on your Walmart, your Walmart Plus account if you buy it. Like they just, they, this flywheel is just going to continue and continue and continue. And, and that we, you know, right now people are focused on the retail media angle. But I also think there’s a hardware benefit too, of what Walmart’s going to be able to do and how they’re going to be able to drive traffic to their their properties with something that’s as big of a draw as ATV, too.

00:11:55 Chris Walton
Oh, 100%, that’s how I was going to close this. This headline was, you know, it’s not coincidental that they’re planning this just in time like 3 months out from Black Friday as well, right? It’s going to be a key piece of their merchandising strategy. And I wouldn’t be surprised if Walmart offers incredible deals. They might tie it in with Walmart Plus as well. And it’s going to get, and they’re going to try to put this into as many households as possible as soon as possible, starting with this Black Friday season. So yeah, I think it’s a great move and that I can tell you really like it too. And you’re starting off very, very, very energetic and excited. So all right, let’s keep rolling. This next story is this next story is kind of, it’s hilarious in some ways and not so funny in other ways, I think. But headline #2 Tesla’s Supercharger Diner has officially open according to teslaroddy.com. And did you know there was a site Tesla roddy.com?

00:12:45 Anne
I did not know this existed, but yeah, there’s a lot of Tesla content out there should one be interested in diving in.

00:12:53 Chris Walton
No doubt I’m I’m actually a little scared to talk about this story to be honest with you. But Tesla has officially opened its Supercharger Diner in Los Angeles to the public for the first time. It is an 80 Supercharger lot with two movie screens and a full service 24/7 diner that serves a wide variety of locally sourced food for patrons while they charge or even just stop by and not quit sending. Leanne, I’m curious to get your take on this too. The diner opened at 4:20 PM. Because of course, why not? Because of the significance of 4/20, which did not dawn on me until about 20 minutes after reading that headline. And are you buying or selling the idea of Tesla Supercharger diners populating the national landscape?

00:13:36 Anne
I’m going to go ahead and sell this one are.

00:13:38 Chris Walton
You.

00:13:39 Anne
I’m not hedging. No, no. Like no.

00:13:42 Chris Walton
Hedging.

00:13:43 Anne
No, just going to full on sell now. Should convenience store retailers and fueling station retailers be thinking about the future of the fueling station? 100% that is something that we’ve been talking about. I remember two years ago at Chop Talk Europe, I was talking to the head of BP Europe about this exact thing. What, what do you do when people start spending more time if they’re going to be charging? I, I think it’s this concept, though, is purely a marketing play. I think it’s just trying to get people to engaged with Tesla during a time that the brand is not doing so well and you have some questionable behaviour by its founder. I think that is something that is, is the real focus here and I think a way to maybe try to maintain some brand advocacy for the Tesla founders who are still very positively Tesla. I, I just don’t see this as a concept that’s going to go throughout the country, especially like this location right in Santa Monica Blvd. And I don’t know if you saw the pictures, but I encourage people to go to Tesla Roddy. They put up giant screens in front of people’s patios. So there’s apartment buildings that are now like there’s not even more than a metre between the, the screen now, the back of the screen and these people’s condos build condo building. So I, I would not be surprised if we see this thing drastically reduced or shut down in the next couple of months. And it was, it’s looked at as, hey, we just wanted to distract people with this big marketing ploy. The timing seems really interesting given what’s going on with the brand right now. So, so I’m, I’m selling it. Keep thinking about how you’re going to engage consumers in the fueling station, but not with this concept. But what about you?

00:15:35 Chris Walton
Yeah, well, I, I’m actually, I’m not as hard on it as you are. I’m I I am. I am selling it in its current iteration and it’s kind.

00:15:44 Anne
Of fo iteration the. It’s kind of fo iteration, yeah, whatever the.

00:15:47 Chris Walton
Hell, you want to call it? Yeah, You know, as an LA tourist attraction? Sure, fine. And, you know, I’m not surprised. It feels a little overblown, overstated. But that’s typical of first experiments because you can always scale them back too. But the one misgiving I have about it that I think particularly is not going to work when you think about it from a user design perspective, is the movie theatre. Like the whole thing seems to be way souped up more than it needs to be. And the movie theatre means the trip has to be planned. And so the trip is going to take a tonne of time. So why do I want to introduce that friction to my life with EV charging? That seems really tough. So as I look and then the other point about this too, as we look to the evolution of EV charging too, it’s going to get faster, it’s going to get quicker. So like, I’m not going to.

00:16:29 Anne
Watch, it may go away all together. I mean you look at like hydrogen charging or whatever this is too like.

00:16:36 Chris Walton
I’m getting my keys on that one. I’m not going there. But like they’re going to make it faster where you’re not going to want to watch a whole movie while you’re getting your car charged. And nobody wants to sit and watch in their car and watch a movie anyway because that’s gone away too, you know, And that technology has been a lot better over the years. So, so, you know, but the dining component of it, sure, Yeah, I think that could work. And maybe so that’s why when I think about national scale, like I think if they went more still like the roadside Flying J Market rather than the tourist attraction, and they try to populate those throughout the country because yes, if you’re going to take your car on the road, you need reliable charging stations. Like that’s why I think this potentially still could go. But yeah, as a current incarnation, like I’m just like, whatever, dude, total tourist attraction, get your 420 stuff, you know, take another hit on that 4/20 bog and whatever and and, and scale this sucker back is what I’m thinking.

00:17:27 Anne
Yeah, could not agree more. Moving on, Moving on, let’s go to headline #3. Mall of America is expanding an ongoing deployment of Axis Communications car counting video analytics across more than a dozen locations on its 5.6 million square foot campus in Bloomington, MN. According to Chain Storage, the mall has been deploying intelligent cameras from Axis to improve surveillance and security since 2023. Now, Mall of America is also utilising AI enabled video analytics to support parking operations and provide security to shoppers. The mall initially piloted an Axis camera deployed on a light pole isolated from the building. Despite difficult access to power and data, the trial system proved more than 99% accurate with performance improvements after minor adjustments. The success of that initial test LED Mall of America to expand the implementation, and the car counting data now drives macro level decisions about mall hours and event planning, as well as micro level scheduling for vendors and staff. Looking ahead, Mall of America is exploring the addition of capabilities like people counting and licence plate recognition, as well as leveraging line analytics to better understand customer trends, such as distinguishing hotel guests from shopping centre customers. Chris, what do you think of Mall of America’s new parking lot technology?

00:18:48 Chris Walton
I, I like it a lot. That’s why I’ll just come right out and say it. The Mall of America, and particularly Jill Renzo and her team there and I got the chance to interview her on stage last year and you and I both known her for years. Actually too, they do a better job than anyone of understanding that the measure of success really at the end of the day when you’re talking about physical retailing is that people have a good time. And particularly when you’re in malls, like the casino analogy is 100% apropos. So you know, finding a parking space quickly impacts whether people are happy, feeling safe impacts whether people are happy. Getting through lines quickly impacts how people are feeling. So knowing how much staff like you’ve mentioned in the in the article, that impacts that too. So yes, yes, net, net. I love the investment and can’t, I can’t wait to see what they do next with it too. And because I think there’s angles from talking to her on stage last year, there’s angles on the safety and the theft prevention side of this that I think get really interesting in the long run.

00:19:46 Anne
Yeah, I think you hit on safety and convenience, like #1 and two things that they have to make sure are are set up so that people have that great experience when they’re at the mall. What I really love about this though, Chris, is using AI to analyse the licence plates and where that can go, the future of this investment. Because what I think you know you have right now is the mall knows about traffic. They can count. People coming in and out, they could do intercepts to gather data from visitors that are coming through the mall at key points of time. But with this, they could actually start to get the same visibility for their tenants that they have. And an online website, they know this, the zip code that people are travelling to, they know the time of that they’re spending at the mall. They know what times of year they’re coming. So are there peaks really, you know, should they start focusing on, you know, different times of year outside right of, you know, the, the holiday summer break peak that they get the back to school shopping peak, the holiday peaks that they get? This is really going to allow Mall of America to personalise the experience for their, their consumers or their their visitors more than they ever have before. And I think that’s what’s really key here to that casino experience that you’re talking about and giving people a feeling like this mall shopping experience has been 100% designed to suit me. And then needs of my family, especially for those travellers, they have tonnes of people that come from like 2 hours, 2 plus hours away to do shopping trips here. And I think that’s the the real unlock here and the value to future retail tenants that they’re not going to get it a lot of other malls yet. So that to me, that’s really where the future of this goes. And this technology from Access is really kind of checking all those boxes for the mall.

00:21:37 Chris Walton
Yeah, that’s a good point. It should make the marketing more effective over time. You know, if you know what percentage of your cars in your parking lot are from Iowa versus North Dakota, South Dakota, Illinois, which they get a hell of a lot of people from many different places, it tells them where they should put their marketing at what time of year. So, yeah, that’s a great point. And all right, let’s bring A&M’s Chris Crates and Brandon Peasley on to today’s show. Joining us now for five insightful minutes is the A&M Consumer and retail groups, Chris Crates and Brandon Peasley. Brandon and Chris are here to discuss A&M’s latest research on the power of advanced space planning. And let me tell you folks, this could not be more timely. Chris, let’s start with this. Why is it so important that grocers evaluate their space strategy now? What’s changed?

00:22:22 Chris Creyts
I think from a macro standpoint, highly inflationary environment, you also have e-commerce hitting the the centre of the store and really changing what categories people look to grocery stores versus other channels for, you know, on the fresh produce side, you have health and Wellness taking centre stage. You have the GLP one drugs really changing what people are shopping for in the store. And I think the the kind of summary of it all is it’s producing really different category outcomes in in the grocery store. You know, our research shows over the last five years there’s been about $37 billion of growth in the fresh food, fresh and food areas of the store. On the other hand, you’ve got $27 billion of revenue lost in general merchandising areas of the store. And and so it’s a really important time for grocers to step back and think about what they’re using shelf space for in the stores, what their customer emissions actually are and how they can be more productive and differentiated for their customers with that space.

00:23:27 Anne
This is a pretty big overhaul for retail organisations. What are retailers missing in this process? Like what are some of the challenges that they’re coming across as they start to embark on this endeavour?

00:23:37 Brandon
So the first is they tend to underestimate the complexity associated with with making. So I’ve seen that most retailers have a pretty well defined assortment process and they tend to think I’m making space changes. This is just an extension of of my assortment process, but it’s much, much bigger than that. You’re, you’re impacting a lot more categories At the same time, often the categories don’t sit directly adjacent to each other where you’re growing space and where you’re reducing space. So there’s kind of a cascading implications across the categories in between and you’re also enhancing the customer experience when you’re making these space changes. And so it’s a lot more than just product changes. The the second thing I would highlight from what retailers often miss is kind of a, a level of executive support and and sponsorship, right? This isn’t just a merchandising driven initiative, right, But you need support from the CEO on down. You need a no, it it’s not just cross functional teams that are going to stand up and then drive this, but you need to be thoughtful about standing up a kind of a centre of excellence with a cross functional team that is empowered to to make decisions and and drive the process from end to end.

00:24:45 Chris Walton
Someone that led to this effort to redesign Target Store and it’s layout 5 to 10 years into the future. I can attest to that. So what best practises do you recommend, Brandon? What do resource have to get right if they’re going to try to do something like this?

00:24:57 Anne
Because.

00:24:58 Brandon
Space changes are so complicated. You know, this is a space that that’s worth starting small and then expanding, right? You want to take a couple of pilot stores. You want to test your concepts, you want to hone those concepts. You want to get customer feedback, feedback from store associates and, and, and refine the ideas. You want to measure the results. And then at the same time, you want to build your playbooks. You know, how are you going to scale this? You know, what are, what’s the training programme going to look like? How do you go and, and teach the the rest of the fleet how to do this appropriately? The second best practise that we recommend is, is thinking about future proofing. So going back to to Chris’s example, all right, let’s say your brochure and your fresh business has grown, you know, 10 to 15% over the past couple of years. But if you expect that business growth to continue, right, you may actually want to lean in more and make, you know, broader, more sweeping space change. Maybe you want to change your space and fresh, you know, 20 to 25%. And so you need to be really thoughtful around, you know, what are these trends, you know which ones are going to take a best on and, and and how are you going to enhance that customer value proposition of the day.

00:26:03 Anne
What are you and the team at A&M advising that retailers start doing today to really get started moving on this and thinking about the future and what what space planning should look like for their organisation?

00:26:15 Chris Creyts
One of one of the primary things is really, I mean, Brandon hit on it is it’s talking about what, what’s the organisation going to be that’s going to drive these efforts and, and putting that in place so that you’re able to take a non biassed, a non biassed perspective and and kind of navigate the silos of the a typical merchandising organisation and really evaluate the trade-offs in space. So I think that’s the first step is putting that right organisation in place and empowering them. I think, you know, from a more foundational element, if you were sitting in a place where you say, Hey, we have a very basic space planning capability, you know, the, the first thing I’d start to do is build a chart that shows what, how much of our shelf space across our fleet do we give to different categories versus how much margin they drive in our business. And I think while it’s not a completely linear chart where anything below the line is bad, anything above the line is good, etcetera. I think it’ll start to help you think about where the outliers in our business. And you really have to look at it through the lens of, you know, what is our, what, what category, what are our category roles, what, what missions are we targeting with our customers? And, and that needs to guide some of those conversations. But really for me, that’s the most foundational starting point to say, what are the things that really jump out in our business that that likely don’t make sense, that need to be iterated in the next concept?

00:27:40 Chris Walton
Both in the current state and then projecting out five to 10 years too, right, Chris?

00:27:44 Chris Creyts
Yeah, I think it’s a great point, Chris. You know, it’s, it’s an opportunity to to take a merchandising stand and and develop a point of view of where you want to go with over the next 5 to 10 years. And you know, Brandon talked about it. It’s it’s not an effort that you do every single year. You’re not constantly moving space. I think about it more of a two to four year cadence of where you’re, you’re making macro space adjustments, significant macro space adjustments in your store. So you know, Chris, it’s, it’s a great chance for your merchants to help drive your merchandising strategy on how you’re going to differentiate yourself and where you think the market’s going over the next couple years.

00:28:24 Chris Walton
Excellent. Great stuff you guys. Thank you both. And if you’re interested in reading ANMCRGS report on the power of space planning, you can find a link to the report in our show notes. Headline #4 Tesco has launched early delivery slots to help families over the summer. According to the Fam Retail Gazette out of the UK, Tesco has opened its delivery slots earlier to help families over the busy summer. The grocery giant has enabled UK shoppers to access 8 weeks worth of home delivery and click and collect slots over the summer for the first time, instead of the usual 4 weeks. It’s also removed at same day charge for home deliveries and click and collect slots from selected stores. The fee previously cost shoppers 2 lbs sterling. I always like to say that for home delivery and 1 LB for click and collect, said Tesco Online director Rob Graham quote. This is a great time to plan ahead and let Tesco take some of the stress away from those summer activities by booking delivery or collection slots up to 8 weeks in advance. And I’m curious, do you think Tesco’s early delivery scheduling will ever catch on here in the USI?

00:29:33 Anne
See a lot of potential for this. I mean, you’re already seeing some of the retailers like, you know, even the the marketplace is like an Instacart or shipped and then, you know, Walmart letting you pick out a week in advance. Like you’re already seeing some of this start to happen. And I love this idea. I mean, you, you think about like the opportunities that this gives for like back to school. Like I could plan my back to school shopping as soon as the week, you know, gets as soon as the the list gets released, which is usually like mid-july or something. I could, you know, I know I’m going to have a 4th of July party or I know I’m going on vacation. And this allows me to like as soon as I have those plans cemented, be like I’m going to schedule a delivery. So I don’t have to think about it check done. I can just focus on getting to where I need to be and having that, that moment or that party or that vacation or being prepared for back to school. And I have to imagine that this is going to provide some benefit for the retailers to, to like have those orders in and guaranteed, sure, there’s probably some last minute substitutions that’ll come up, but that happens with any delivery order. So I, I think this has real potential. I’m curious to see how it goes with Tesco knowing that that market’s, you know, slightly smaller than than it is sometimes in the US with those, some of those deliveries. But I, I’m really excited for this. And you picked this headline for the for the Fast 5. And I’m really glad you did because it really got me thinking. So I’m curious. Oh, did it? Yeah. I’m curious if you’re feeling the same way about it still after our preliminary chat yesterday.

00:31:02 Chris Walton
Yeah, I think so. I mean, we always, we try to bring in insights from from Europe as much as possible and particularly the UK and particularly in the UK in the grocery market too. And I think, you know, the way I see this evolve in the US is, you know, first you go to you, you go to, you know, weekend deliveries or scheduled deliveries in a shorter time frame and then you go further out to the 8 weeks. And we’re already seeing companies like Buncha, who we’ve spotlighted numerous times over the past two or three years, having a lot of success white labelling this type of service where for them, it’s like scheduled weekly deliveries with their W2 drivers. White labelling it is an option for shipping on the product detail pages of most of the, you know, experiences of the companies they’re working with. So I at the end of the day, when you just step back from it to this is the pure definition of what Omni channel retailing is, because it’s getting the products to customers when and where they want it and how they want it, right? What, what, what better definition is there of that of a company trying to do that? And to your point, it does help the retailer because they know their demand in advance. They can plan around that. They can plan their, the, the space allocation in their trucks, their delivery routes, They can make sure the inventory is there. So there’s probably less cancelled orders. If they know like 3 months ahead of time, usually they can get goods in three months, especially food, like, you know, that shouldn’t be a problem for the most part. So, so that’s why I think I like it and I’d like to see, I’d actually like to see the US grocer, the US grocers in particular move faster towards this because I think the demand is there and you could probably potentially save a lot of money in terms of your e-commerce fulfilment cost in the.

00:32:37 Anne
Line, I would think so, I would think so. And and operations, I mean, I, I think yeah, I I think there’s a lot of potential. I’m kind of curious what’s been keeping them from going this route already why we haven’t heard anybody really exploring this further, but they’re busy. They’re busy.

00:32:53 Chris Walton
But we are hearing some, we are hearing some good. We can’t say who, but we are hearing some good, some good, some very smart companies that are starting to bite into this apple and they’re they’re moving in this direction. So that’s good.

00:33:04 Anne
Right, OK, let’s go to headline #5 Targets will no longer match pricing for identical items at places such as Walmart and Amazon. According to Retail Dive, Target will no longer price match products starting on July 28th. The company said that it’s found that shoppers quote overwhelmingly price match Target and not other retailers. End Quote. According to a statement from a spokesperson that was shared with Retail Dive, under the previous policy, Target would match prices for identical qualifying items at Amazon and Walmart. Shoppers could require such price matching at the time of purchase or within 14 days afterward. Chris, do you think Target will regret the day that it made the decision to stop price matching or do you think stopping price matching is a good move for them?

00:33:52 Chris Walton
Man, I have not talked to you about this one at all. So I have no idea which way you’re going to go with the go, go with it, go with it on it. So I’m a little worried that I might be dagging on a limb here, but we’ll see. But you know, for the whole and I can’t get behind this. I just can’t. I’ve tried really hard for a lot of reasons. First, the number of people that actually price match is pretty damn negligible. So it’s not going to move the needle financially. Like it’s just not so. And then my second point that I’m kind of annoyed about in terms of how this was conveyed in the media is if the customers are overwhelmingly price matching Target, you have to ask yourself, why is that Target? Your prices should your prices should never be lower than Walmart and Amazon. So, so I’m not buying that. That’s the real rationale either. Something else has to be going on. And the only thing I can think of is it they’re scared going into the holidays because of the impact of what they’re seeing in the macroeconomic climate. And, and they’re scared of it in a way that they’ve never had to be before because as the mentor said to me, they try to do a good job of comp shopping Walmart and Amazon wherever possible. And so but you Target can’t win a price war, but they can lose 1. And so I think they’re saying we want the flexibility to not have to match Walmart and Amazon in the upcoming season. And is that threat real? Yeah, possibly. But on the flip side of it, you already have people shifting to Walmart and Costco, and now you’re giving them another reason to shift allegiances when price perception has always been a problem for you, Target. That’s why you came out in the spring, in the summer and talked about your price decreases that you’re planning to take. So, So net, net, even if that’s the rationale, which I could understand potentially strategically, one, Target’s not saying that, so they’re kind of being obfuscating in the media. And two, I don’t like that rationale either. So you know, I had a place to run data for me and too, so I’m going to add some data in this conversation. Did you know that the percent of shoppers that are also shopping Costco, Target shoppers that are also shopping Costco regularly has gone from 28% to 30% in just the last two years. You know, that’s almost a 10% change. So that’s pretty significant. And so you’re just giving people more reason to question, am I getting a good price at Target when you’re taking the price match out and that’s why the price match exists. So overall, I think it’s a short term reactionary move. It’s like honestly, the best thing I can acquit it to is it’s like getting rid of Reddit red and Khaki versus making a long term decision that is the best decision for the brand. The brand at Target is the weakest it’s ever been. It is the weakest it’s ever been. The brand of Target itself. So get a ring price match. Getting rid of price matching sure as heck doesn’t help.

00:36:40 Anne
That brand.

00:36:40 Chris Walton
Perception in my mind.

00:36:41 Anne
So, Chris, I mean, I’ll start off by saying that I agree with you. I, I don’t, I don’t understand here. And I cannot make heads or tails of how this was messaged. Like was this leaked to the media? So they had to put something out? Because if I were target, I would be, I would be more strategic about this message. Like as a member of Target circle works, you get, you know, we’re going to make sure that you’re part of the the like best price that we can give you or that we’re researching these top items for the season to make sure that you’re getting the lowest price possible and you’re earning rewards or something like that. Like this. The way that this was pushed out, just we’re ending price matching feels like another reason to further prevent somebody from shopping at Target. And I think while the while the timing might be necessary due to, you know, the cost of goods changing this, this time of year, it just, it feels like the timing is just absolutely poor in terms of a guest perspective and whether or not I’m going to choose Target or if I’m going to go to Costco, like you just said. The last thing that I wonder about, Chris, is I again, I think if I were target, I would be investigating where I can make this up in terms of technology. Like are you investing in digital pricing or different pricing software to make sure that you don’t have to manually do this like that your guests aren’t the one bringing these price differences to your attention? Or if fraud is the issue where like you feel like people are take overwhelmingly taking advantage of Target, like what are you investing in there to make sure that you’re you’re set up success? The technology is out there target. And that’s what I, I really baffles me because it feels like there should be more to this instead of just, oh, we’re just going to stop doing price matching because the, the optics of that are terrible.

00:38:29 Chris Walton
That’s, that’s where I’m reading between the lines here. And I think I think that’s, it’s, it’s, there’s one point that you made in there. That’s that it’s, it’s especially salient to me, which is the fact that Walmart’s going to have electronic price levels on every shelf. So Target, you’re already going to be behind them anyway, right? And so now you’re taking price match out and that’s going to make the perception of your prices relative to Walmart because Walmart can be more flexible, even worse in the minds here from where it is now versus where it’s going to be a year or two, two from now. So the only rationale I can think of is that Target wants to be able to to control its prices and doesn’t want to have to comp shop, comp shop Walmart and Amazon anymore. It’s the only conceivable way. And I think the other point I make too is you’re kind of giving them credit for the fact that this got leaked. I’m actually curious if it didn’t leak because this is such a significant change that they have to get in front of this. They have to communicate this to people very clearly that you can no longer do this in our stores. True. You know, you don’t want to just you don’t, you don’t want to just throw that on to people like Willy nilly. And they came up with this bogus excuse of like, people price match Target more than they price match the other retailers, which you should have.

00:39:34 Anne
Also how do?

00:39:35 Chris Walton
They know that you should have because they know who they’re price matching. They they know who they’re giving the data for, like they know who’s coming in and what ad they’re they’re referencing or what price they’re referencing. But why should that be happening? Why should your own customers be price copping you? That’s insane when you think about it. So like the rationale is insane. The the reading the headline too. I’m like, I have I have a friend that reported doesn’t even know what the hell they’re saying. And because like that’s essentially I think what they’re saying. So like, you know, the reporters have been like, why is that happening? So I don’t this is so that now we both hate this. We hate this movie.

00:40:13 Anne
I just don’t get it. Somebody’s going to need to take me to coffee and explain it to me. I I will listen. I I just don’t get it. OK, Chris, let’s try. I’m trying and.

00:40:24 Chris Walton
I’m not, and I do not want to continue to critique Target, but they just keep giving us so much fodder of things that just aren’t making sense.

00:40:33 Anne
All right, Chris, let’s go to the lightning round. Question number one, you probably already know about this app, but Neon Coat is an app for influencers with 5000 or more followers that provides free perks to 1500 restaurants, services and experiences. Chris, if you were asked to be on this app or approved to be on Neon Coach, or perhaps you already are, what would you want free access to?

00:40:57 Chris Walton
Does this include LinkedIn followers? And because I’m curious. Like I mean I don’t know how this works.

00:41:02 Anne
I am not certain but I think we could qualify, yes.

00:41:06 Chris Walton
Let’s.

00:41:07 Anne
Apply. Yeah. All right.

00:41:09 Chris Walton
I mean, my number one is I love movies and you know, I love movies AMC. I want the free AMC movie pass like I want to be able to see whatever movie I want. You know, my my dream job is actually I haven’t told this my dream job is to stop what we’re doing and become a movie reviewer. That’s what I got to do. That would be amazing, but I’m.

00:41:25 Anne
Just stopping. You just get it going on the side, Chris, just see.

00:41:30 Chris Walton
Time. Yeah, time. But I saw Superman, I loved it and I went to the movie theatre, I saw it was great and I missed going to the movies. I just miss it and you know, partly ’cause it’s so expensive too. It’s not affordable.

00:41:40 Anne
You’re one of the myth. You’re one of the myth blockbusters that Ethan Chernovsky was talking about last week about returning to the movie.

00:41:47 Chris Walton
100% I am. Yeah. You can’t beat it, all right? My kids hated it, but I loved it, All right. Southwest Airlines passengers will fly in assigned seats for the first time on January 27th, the carrier told CNBC this week. And I’m curious, I don’t know which way you going to go on this one, too. Does the the announcement of assigned seating at Southwest Airlines make you more or less likely want to fly SWA?

00:42:11 Anne
I you know what, if I’m not flying Delta, I don’t, I have 0 expectations for that flight. I’m just happy I get to the place that I’m going to go so it doesn’t matter to me one bit. I, I mean, I was never a big fan of the Southwest onboarding thing anyway, but it actually caused more confusion so I that’s fine with me. I don’t mind. Doesn’t make one bit of difference. It’s crazy.

00:42:35 Chris Walton
To me though, what it’s I don’t know if I don’t know if I care as a passage, but I care as a business. Like there are whole operational cases at like I can remember many, many operational Business School cases about Southwest Airlines and why they operate the way they do. And now they just seem like they’re becoming another also ran airline in all of their policies. And so I just can’t figure out for the life of me why they’re going in that direction.

00:42:59 Anne
All right, well, let’s go to #3 Chris In and Out President Lindsay Snyder told reporters that she is moving her family out of California because living and working there has become too difficult. As someone who now considers himself a Minnesotan, what would you do to try to sell Lindsay as the number one reason to move her family and In and Out headquarters to Minnesota or somewhere in the Midwest?

00:43:25 Chris Walton
Wow, that’s a tough sell. Number one, I think, well, it wouldn’t be the Juicy Lucy’s and I don’t think I could sell the Juicy Lucy’s, which for those unfamiliar with the Juicy Lucy’s is a hamburger with cheddar cheese packed inside it. So when you bite into it, it melts and burns the hell out of your mouth. Because honestly, in and out can beat a Juicy Lucy in the other week. So I I wouldn’t say that. But I, you know, can I, let me ask you a question. And can I say the warm, inviting and passive aggressive nature of Minnesotans? You see what I did there?

00:43:53 Anne
I did. I did. You could say that. I don’t think that gets us closer to an in and out in Minneapolis, but I think that would be, that might be one way of trying to get to get her and her family to pick Minneapolis over Nashville, I think is where they’re going.

00:44:09 Chris Walton
Yeah, good choice. Good choice. By the way, Lindsay, I like it. All right, last one is kind of sad news. And Malcolm Jamal Warner sadly passed away this past week. What is your fondest memory of Theo Huxtable?

00:44:22 Anne
That was so awful. He drowned in Costa Rica, right? That was terrible, Yeah.

00:44:27 Chris Walton
Another guy. Another guy’s in critical condition, Yeah.

00:44:29 Anne
Oh my God, I would say I had to go back to the archives because I couldn’t remember his character. Like I I remember watching him and having a fondness for him. I couldn’t remember in a specific memory. So one of the videos that I watched was when his sister Robin brings or sorry, his sister Denise brings Robin Gibbons. I forget her character on the show, but he brings her and he like is trying to like put the moves on his shirt progressively just keeps unbuttoning more and more. And then her boyfriend comes like, oh, it was so good. Just like classic Leo trying to impress Robin Givens, who’s just like badass Bee, you know, It was great.

00:45:10 Chris Walton
Yeah, yeah, yeah, No, there’s so many great memories with him for sure. Even the pilot episode, you know, where he, his dad’s like, showed him the budget with Monopoly money and his dad’s like, so you can have a girlfriend and he just, like, rips the money out of his hand. I just love. I just love that. All right, well, that closes us up. Thanks for a great show, everybody. Happy birthday today to Joel Edgerton, Frances Mcdorman and the man known to us as Coughlin who gave us unforgettable laws in the movie Cocktail. Unforgettable laws like never tell tales about a woman, no matter how far away she is, she’ll always hear you, the great Brian Brown. And remember, if you can only read or listen to 1 retail blog in the business, make it Omni time, the only retail media outlet run by two former executives from a current top ten US retailer. Our Fast 5 podcast is the quickest, fastest rundown of all the week’s top news. And our 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 feature special content that is exclusive to us and that Ann and I take a heck of a lot of pride in doing just for you. Thanks as always for listening in. Please remember to like and leave us a review wherever you happen to listen to your podcasts or on YouTube. You can follow us today at by Sippy going to youtube.com/omni Talk Retail. So until next week, on behalf of all of us at Omni Talk Retail, as always, be careful out there.