Hello Omni Talk Fans! The long Labor Day weekend here in the U.S. is over, and I’m already back to doing what I do every week: finding five new things in retail to argue about.
For this week’s Omni Talk Retail Fast Five, Shelley Huff is back for another round, and as always, having her on makes for a great conversation.
We covered Amazon’s latest grocery push, Ulta’s surveillance-tech backlash, Costco quietly killing Costco Next, Sephora’s TikTok Shop experiment, and Sprouts getting a new CEO just as comps turn negative.
And, as tends to happen when Shelley joins me, we didn’t agree on everything.
That made this week’s weekly retail news rundown particularly fun, because the real story was not just what happened. It was what these moves say about where retail is headed.
Here’s what Shelley Huff and I covered sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Quorso, Veloq, and R&S Logistics:
Amazon’s Grocery Gimmick
Amazon used Labor Day to launch another limited-time grocery storefront, offering cookout essentials starting at $2, produce under $4, and grilling proteins under $10. Shelley saw the move less as an offensive grocery play and more as a defensive one, arguing Amazon is likely trying to protect share during key holiday periods when Walmart, Target, and Kroger have a natural advantage. (Source)
I still think there is an offensive element to it. Amazon may be using these little events as “death by 1,000 cuts,” creating more reasons for customers to think about buying groceries on Amazon. Shelley agreed that if Amazon can deliver on the freshness and quality promise, it could eventually chip away at competitors’ share. “I think consumers tend to expect that from them at this point,” she said.
Ulta’s Flock Problem
Ulta is facing social media backlash over its use of Flock Safety’s automated license-plate reader technology at fewer than 1% of its stores. Shelley’s take was pretty direct: “A retailer should not deploy technology like this unless they can actually explain it.” She believes the bigger problem may be communication, not surveillance itself. (Source)
Her point was that retailers have to be transparent about what data is being captured, how long it is kept, and why the technology is being used. “If you don’t create your own narrative, somebody else is going to create it for you,” she said. For Ulta, the technology may have a legitimate defensive purpose, but the retailer needed a plan to explain it before the internet explained it for them.
Costco Kills Costco Next
Costco quietly shut down Costco Next, its member-only online marketplace, after nearly a decade of letting members shop products from third-party suppliers at exclusive pricing. Shelley thinks the move makes sense because Costco already has one of the strongest trust relationships in retail, and a marketplace adds another layer of supplier vetting, quality control, and customer service. (Source)
When I asked Shelley whether any club should have a marketplace, her answer was even clearer: “It doesn’t necessarily make sense for them.” I agreed. If a product is important enough, it can make its way into the club, while broader ecommerce assortment can act as a testing ground. For membership clubs, keeping the customer relationship intact matters too much to hand that experience off.
Sephora Bets On TikTok
Sephora is piloting a new Drop Shop storefront on TikTok Shop, featuring exclusive monthly product drops, creator content, and livestream shopping. Shelley was particularly excited about this one because she sees something much bigger happening than another social commerce experiment. (Source)
“Amazon captures demand, whereas TikTok can actually create it,” she said. Her bigger prediction? “The next generation of great brands won’t just have customers, they’ll have communities.” TikTok gives consumers a place to discover, learn, interact, and buy all at once, which is particularly powerful in beauty. I agreed, especially because Amazon is where people go looking for something, while TikTok is where they can discover something they never knew they wanted.
Sprouts Stays The Course
Sprouts is getting a new CEO, with Nick Konat taking over from Jack Sinclair in January as the grocer works through two consecutive quarters of negative comps. Shelley, who shops at Sprouts at least once a week, thinks the transition is less about changing the strategy and more about continuing to execute the one already in place. (Source)
“Don’t confuse a leadership transition with a strategy transition,” she said. That may be the most important takeaway here. Sprouts still has plenty of room to grow, and Shelley sees this as a rare CEO transition where the incoming leader gets to build on a strong brand rather than walk into a turnaround. My advice to Nick is much the same: stay pragmatic, stay focused, and don’t get distracted.
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Be careful out there,
Chris and the Omni Talk team
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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.