00:00:00 Chris
Hello, I am Chris Walton and welcome to this Week’s Omni Talk Retail Fast Five, brought to you exclusively by the Omni Talk Retail Podcast network. After last week’s solo podcast, which my wife tells me I had way too much caffeine in my system, I’m excited to welcome my good friend Richard McKenzie into the guest hosting chair for the first time. What do you need to know about Richard? Well, Richard is the former chief commercial officer at Ocado. He was the president of ocado’s European and AS Asia Pacific efforts. He was also the former CEO of Valak and he was a former Senior advisor for McKinsey, no relation. And my featured guest on my favorite podcast I have ever recorded in which he and I spent a full hour breaking down all the components that go into making E Groceries possible. If you haven’t given that a listen just yet, I encourage you to look in our backlog and do so. Suffice it to say, you’re in for a real treat this week. And the accent definitely also adds a little something. Producer Ella let’s start the show.
00:01:02 Richard
There has to be a point to which consumers go, I just don’t want to be advertised all the time.
00:01:07 Chris
I’m going to defend McDonald’s here too.
00:01:09 Richard
Interesting timing for this question because boots has just been sold to the Western family of Sobeys fame in Canada.
00:01:15 Chris
Oh my God. Like today. Oh my God, that’s great. I’m scared as hell if I’m Amazon on this.
00:01:20 Richard
Delivery from store business has gone further than any of us ever expected. Suddenly we’re about to see a much more exciting beauty market in the uk.
00:01:29 Chris
I actually like this if I’m a parent shopping with kids. I knew this was going to be an awesome hot show. Richard McKenzie, how are you and where do we find you on this fine Wednesday morning?
00:01:42 Richard
I am very well, Chris, although it’s raining here, so I’m going to dispute. Fine. Wednesday morning I am in Richmond, West London, not the Virginia version, the home of Ted Lasso and as I discovered last night, the home of lots of Americans in Ted Lasso’s pub ordering fish and chips. And the pubs, actually I’m not going to say anything against the pub because they’re very nice.
00:02:06 Chris
That’s awesome. So, so basically it’s a typical day in London. That’s what I’m hearing from you. And the Americans are overrunning the the overrunning Richmond because of their love of Ted Lasso. Those are the two takeaways here to start.
00:02:17 Richard
Yeah. And no sign of Ted I’m afraid.
00:02:19 Chris
Yeah, no, I, I doubt that for sure. I, for sure. All right, so I read your bio at the beginning. Former Ocado Valak and also Senior advisor to McKinsey. What are you up to now though, Richard? How are you keeping busy these days?
00:02:33 Richard
Well, first I had, so I stopped my work of a lock in May and I gotta say, I had just the most wonderful summer. I was, I was more relaxed than I’ve ever been in 20 years and it was just glorious. Since then I’ve been picking up some independent consulting and actually doing some very interesting work as a senior advisor on the deployment and of some AI within retail.
00:03:00 Chris
Yeah. Did you find that the time off is just so fantastic? I did that too when I left Target. Like I took a few months off before starting anything new and it was, you know, it’s a time you never get back. And so I always tell people when they’re at that juncture to, to take that time and you know, I’d say like half of them take my advice, half of them don’t. Richard, would you say the same thing though? Because you never get that.
00:03:20 Richard
I, I, it was wonderful. I let my, my younger son left for university actually three days ago. So it was a perfect time before that happened. And just the summer here was just glorious.
00:03:34 Chris
It was a beautiful summer over there. Yeah. But I guess now it’s back to the typical weather patterns of, of the United Kingdom. All right, so this is your first time on the show and for those listening, Richard eagerly emailed me last week, wanting the headlines as quick as possible. So I’m curious, Richard, what was your preparation process as I sent them to you on Monday morning?
00:03:54 Richard
So, Chris, fairly obviously listening to your podcasts, if you’re going to keep up to date, then as you know a little bit about me, I’m a huge fan of AI and everything we can do with AI. So I actually created, I trained the AI to listen and talk in your voice. So I’ve had, I’ve had.
00:04:13 Chris
No way.
00:04:14 Richard
I’ve had Claude Chris challenging me all week.
00:04:18 Chris
Oh my God, that is so fantastic. You have to, you have to send me some of those, those clips or whatever those trading sessions were. Oh my God, that’s, that’s wild. No one’s ever told me that before, Richard. That’s definitely a first. All right, well, are you ready to get to today’s show? This is going to be a fun one. I could tell already.
00:04:33 Richard
Absolutely.
00:04:34 Chris
All right, well, in this week’s Fast Five, we are going to give a shout out to the support of the A&M Consumer and retail group, Mirakl, Quorso, Ocapo Capital, Veloq and now Smart Scout. Yes, welcome to Smart Scout and thank you to them for joining the Omnitalk family in this week’s Fast Five. We’ve got news on Ms. And Sephora teaming up to bring Sephora shopping shops to 100 stores across the UK DoorDash, adding Macy’s, Anthropologie and the North Face to its mall in your pocket and launching 799 Dasher Returns, Walmart rolling out light up digital shelf labels to every store by the holidays and Ikea closing three of its small format plan and order stores. But we begin today with McDonald’s wanting to sell a lot more than burgers at the drive Thru. Headline number one is of course brought to you with the help and support of 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.
All right Richard, here we go. And nothing I doubt can make a UK guest feel more right at home than an American headline. Read about McDonald’s so McDonald’s is piloting third party ads on the digital drive thru menu boards it has at 450 owned company owned US restaurants as part of a new McDonald’s media network that it hopes will grow into a $1 billion advertising business. According to USA Today. The pilot began in August at the 450 Company owned US restaurants and shows third party ads on digital drive thru menu boards after customers place their orders. McDonald’s showed an example of a GEICO ad taking over part of a drive thru menu screen at its recent investor day. The initial test is limited to drive thru screens, but the broader network could eventually put third party ads on nearly every digital screen in its restaurants including menu boards and self order kiosks. Richard we’re starting off hot. This week we are opening with the A&M CRG put you on the spot question of the week and here it is. Better you than me as advertising infiltration continues to expand to every surface and screen which is true of McDonald’s and pretty much everywhere in the world it seems like. Do you believe this is an intuitive smart move for McDonald’s to use restaurant screens as retail media ad billboards in this way or are you concerned about saturation and customer frustration. Or could both be true.
00:07:07 Richard
I’m going to hedge a little bit. Smart, smart trial, why not the lowcost easy to do smart trial. However, I’m pretty damn skeptical of the, of actually how far it’s going to get. And I can, I think there’s two reasons for that.
00:07:22 Chris
Yeah.
00:07:23 Richard
One is these are pretty unfocused eyeballs. If you think when retail media works well, is at its best and you’re on a site, you know what they’re doing, you know the intent of the customer and then you can, and then you can actually say, okay, you Procter and Gamble, you’re getting this, you’re getting this customer when they’re looking at your competitor’s toothpaste and that’s when it works. And then you can track it. Unless they’re being really, really smart. Linking it to loyalty, linking it to something. I just don’t see how you get that. The second reason I’m going to go is if you look in grocery. Anyway, retail media is funded by suppliers and actually the biggest, the biggest buckets in this are all come from suppliers and I just don’t, you know, McDonald’s just don’t have that base so they’re having to go out to insurance companies and whatnot to get that to happen. So yeah, do the maths. You know, $0.01 per eyeball you’re not going to get, you’ve got to get a lot of eyeballs to get to your billion dollars.
00:08:23 Chris
Right, right, right, 100%. I agree with you on that. Like, I’m curious. So back to the question, like are you, are you at all concerned about the operational dynamics or the, or the saturation issues that were brought up by the A and M consumer and retail group at all? Do those concern you?
00:08:37 Richard
I think, you know, there has to be a point to which consumers go, I just don’t want to be advertised at every, all the time. And ultimately you’re going through a drive through as a convenience experience. Now good trial. Yeah. But you cannot delay from an operational point of view, you can’t delay it, which means you’ve got to have a pretty simple advert. And from a consumer point of view you just don’t want to be bombarded by an advert every second.
00:09:07 Chris
Yeah, I think I agree with you. I mean I think fundamentally I think it’s a smart test. I don’t see any customer frustration in it at all. The way, especially the way it’s described. Like they say the ads show up after you order. So like, and you Know, and if I think about any brand that go, any American brand that goes with billboards, it’s McDonald’s. Like, I’m not super worried about the customer frustration. You agree, right? Like, you, you kind of have the same connotation with the brand, Right? Right, Richard. Yeah.
00:09:30 Richard
And I agree. And I don’t, I don’t think it’s a big risk. I just don’t see it. I just don’t see why. Why as a brand am I going to buy that space? Who do I really think I’m reaching? Where’s my focus? Where’s my target?
00:09:44 Chris
Right, right. And that’s actually, that’s actually the issue I have with this headline overall. And all the reporting, quite frankly, in. I’m going to defend McDonald’s here too. All the reporting that’s been hitting McDonald’s over the past couple weeks, it’s just not going deep in telling the whole story. Like the $1 billion advertising goal. I think, to your point, Richard, that can’t be from this. Right? Like, it just can’t be right. It’s got it. The billion dollar advertising is going to come from probably the mobile app engagement, particularly because of the number of mobile app users McDonald’s has. But even then, you’re still up. You mentioned it. Right. There’s still an uphill climb to get the media dollars because of who the advertisers are and what they’re advertising in that app. And that’s the part of the whole idea that we haven’t really understood or I can’t conceptualize yet in terms of what behavior you’re going to incent McDonald’s shoppers to, to go and do from seeing the, seeing the ads inside your app.
00:10:36 Richard
Yeah, I think it’s really unclear at what point where, what is the intent of a customer, what. What are you going to influence and what type of customer you’re getting? It just, to me, it just, there’s no kind of, there’s no focus to this. Or again, unless you can get, unless McDonald’s are getting really smart and linking to something, something they know about their customer through that, through their behavior with them. But it’s a, it’s a, it’s a stretch, right?
00:10:59 Chris
Yeah. I doubt the French fries supplier is going to be advertising to get them to purchase French fries for their own cooking at home, because that’s essentially the equivalent of what we’re talking about when you compare it to Amazon’s media network. Okay, so. All right, let’s keep rolling. Headline number two. Headline number two is brought to you by Miracle, the catalyst of Commerce. Over 450 retailers are opening new revenue streams with marketplaces, dropship and retail media. And succeeding with Miracle, you can unlock more products, more partners and more profits without the heavy lifting. So what’s holding you back? Visit miracle.com to learn more.
All right, Richard, I picked this one out especially for you. This week Marks and Spencer and Sephora have announced a strategic partnership to create Sephora at MS, a new beauty shopping shop coming to 100 Ms. Stores and M&S.com starting in spring of 2027. According to an M and S press release, customers can expect a curated mix of established favorites, emerging brands and exclusive products across skincare, makeup, fragrance, hair care and body care with Sephora Beauty advisors in stores and a broader range online with home delivery and click and collect. John Little, M and S managing director of fashion, home and Beauty, called the partnership quote the next step in this transformation quote of that beauty business. Richard, we’ve seen this move before in the US With Sephora at Kohl’s and even recently with Ulta Beauty at Target. Does Sephora at M S have a better shot than its American cousins? And who needs to steal more M S or Sephora? And what is your on the ground perspective to those questions?
00:12:37 Richard
Look great questions. Number one, I think he’s got a better chance, I think. And the reason I said M S is a good host, M S is not a distress for it’s not a distressed business. It growing its food business is growing. Well, interestingly, the leader of the Conservative Party here gave a speech earlier where they said we’re back in fashion like ms, not convinced Ms. Wants to be like the Conservative Party, but now people want to be like Ms. Again. So it’s a good host and I think for Ms. It’s a smart move because it gets them to develop a category that then they’ve made some embryonic steps in.
But it’s pretty basic for them. It gives their customers another reason to come into the store. And it’s developing a category that frankly is quite difficult to develop just because the service proposition is more difficult than selling clothes. So my answer is I think Sephora needs it more. Sephora needs it more because they’ve tried to roll out in the UK before. Getting critical mass in a new market is difficult. They’re spending a ton of money on marketing at the moment, but you’re doing that against a small base. If you can get to 100ms. Stores, you’re suddenly able to start investing again. And I think that’s to me, this is a, this is a smart move for Sephora, but honestly, I think this is a win win. My question back to you though is kind of is there a risk for Sephora? Is M and S going to learn how to do this and actually they’re going to kick them out in five years time and say, actually we’ve learned this business, we don’t. You know, your margin is my opportunity.
00:14:19 Chris
That’s a good. Wow, that’s a good question. I, I don’t think so. I think that’s harder to do than people realize for the reasons you said. You know, an M and S traditionally has been more the department store beauty setup as I, as I understand it. So this is like a different angle to that as well. So you’d have to rewire the whole thing to make that work. And my hunch is to your point, and I agree with you, I think this is clearly a case of one plus one equals three. I think Sephora probably does need, need Eminet, need MNS more than MNS, needs Sephora, but it’s only a little bit in that regard. But I think that probably is the way the pendulum swings or the lever, you know, balances out. But you know, the points I would bring up too is the dynamics of the UK market. I phoned another British friend of mine, the Ben Miller, who’s my, my go to on all things uk and you know, he brought up a good point that he reminded me of too, Richard, which I’m sure you’re aware of as well, which is, and correct me if I’m wrong and provide any color here or context to in case I do a bad job at it.
But he said that the, the beauty market is pretty much dominated by boots, which is like, kind of like the equivalent of like a beauty retailer mixed with Walgreens at the end of the day, you know, with the pharmacy equivalent. And I think he said it’s like got like 20% in the market and when you look at Boots, there’s a couple of things going on there. One, it’s kind of a dowdy kind of older generational experience, right? And then two, it’s also owned by private equity. And just in the last week, coincidentally, the private equity company wants to spin that off. So Sephora is going in here at a time when there’s probably a lot of distractions at Boots. And so if you can find the right partner with mns, which also the other part about M and S, their locations are all the pinnacle of traffic on all the UK High streets. Right Richard? So like they’re getting the, they’re getting the traffic in there. So that should be a great spot for Sephora to make hay and take share from Boots, which is probably going to have a difficult time keeping hold of what they currently have in the market.
00:16:22 Richard
Interesting timing for this question because Boots has just been sold to the western family of Sobeys fame in Canada.
00:16:28 Chris
Oh my God. Like today. Oh my God, that’s great. Oh wow.
00:16:32 Richard
So I think you’re absolutely right and I think actually it gives you another reason why, why for Sephora the timing critical because I think Boots will now get. You’re absolutely right. Boots has been under invested in, in my view for the last probably decade and it doesn’t look great. The, the beauty proposition does get mixed in with vitamins and just doesn’t frankly is not inspiring. But I think they will now get the investment they need. So I think suddenly we’re about to see a much more exciting beauty market in the uk.
00:17:04 Chris
Yeah, right. Yeah, right. Yeah. There’s gonna be lipstick everywhere. All right. Headline number three is brought to you by Corso. Your stores are full of data, but are your teams acting on it? Corso turns retail data into personalized daily to dos that drive sales, reduce waste and improve execution. No fluff, just action. Help your managers focus on what matters most. Visit corso.com to see Intelligent Management in Motion. Headline number three. This one I also picked for your wheelhouse. RICHARD Doordash is expanding its retail marketplace with Macy’s, Anthropologie, the North Face vans and Timberland. And launching Dasher returns a flat 799 service where a dasher picks up a return from your door and takes it back to the store.
According to a DoorDash press release, Macy’s apparel, beauty and home assortment is now available from more than 350 stores nationwide. Anthropology for more than 220 stores and VF corporations, the North Face vans and Timberland for more than 350 stores. Chief Revenue Officer Shanna Prevey, a past Army Talk guest and a fellow Stanford alum, I might add, described the strategy as, quote, the mall in your pocket. The new partners joined Costco, Barnes and Noble, Gap, Kohl’s and Skims. And Doordash says more than half of the NRF’s top 100 retailers now partner with it. DoorDash says its incrementality study show that as many as 90% of a retailer’s first time shoppers on DoorDash are actually incremental. RICHARD Doordash is Calling its marketplace the mall in your pocket. Are you buying that phraseology?
00:18:41 Richard
I buy it being the emergency mall in your pocket. I don’t buy it being the mall in your pocket. Okay, yeah. Fundamentally, why do you use doordash? Because you need it. You need it quick. And for buying a North Face ski jacket, sometimes you need it quick if you realize you’re grown out of it just before you go skiing. But generally it’s a planned purchase. So I, I kind of buy this. And I think it’s great for doordash because I just get. The more they can get on it, the more they densify their network, the more they get the delivery, the delivery density, the better the economics for them. I just think it’s relatively small. You know, you’re not going to be getting a lot of emergency purchases in ski jackets. And I’d say the other thing, you know, that goes. It’s just clothing’s quite difficult. You know, if you want to, you don’t.
If you want to buy a ski jacket you want, you’re the right size and you’ll know stock availability and making sure you, you know, what stock is in a is available and whether it’s actually on the shelf. I just think you’re going to get some disappointed customers there as well. This is not a. This is not an easy one to make operationally work. I do like the returns, and I think I actually, I kind of like the returns, particularly for the retailer, you know, you know how what a pain it is when it takes the. When it comes back a month later, it’s suddenly out of season and you’re left with one. One large side jacket and nothing else to sell. So I think the returns bit I get, and I think that could be. That’s quite valuable. But I think the, actually the, the mall in your pocket, certainly this bit of it, I’m a bit skeptical how big it is.
00:20:18 Chris
Okay, all right. I’m gonna, I’m gonna press you on this one a little bit. So. Okay, so. So that’s the Today, right? That’s your answer today. I’m curious, as you look at how Doordash is trying to build out this marketplace platform, do you think that changes at all in the longer term view?
00:20:36 Richard
Yeah, I do. And I think, and I’m. You’ll know I spent some time in China in the past, and I’m just amazed what, you know, people like Mei Twanga man, jinxing is liver now. You know, I think the delivery from store business has gone further than any of us ever expected. So getting these people under your belt, being able to say we offer you anything, I think is, is useful. It’s kind of the same the story you were talking about last week of Walmart going into delivering pizzas. It’s not their house. I take a different view from the last week, but it’s not the wheelhouse. But actually you just want to get every, you want to be the super apparent and in the long term I think you are just, you’re making that journey to be the super app and also getting the delivery density. So you’ve got. Your drivers are full.
00:21:25 Chris
Yep, 100%. The other thing I think about long term, just because you mentioned it too is the inventory accuracy. Like most of the apparel companies are going towards RFID in their operations. So actually the inventory accuracy problem is becoming less and less of an issue too as you look to pick from store which will only get more and more improved as we go forward. But yeah, that’s the interesting thing to me, Richard as well because longer term I’m actually buying this. I’ve been talking, I’ve been stumping Doordash now for the past three or four years. Like I think Doordash is kind of the sleeping giant on the scene. And it’s funny you mentioned what you did with Claude in preparation for this show. I queried my good friend Claude as well, Richard. And you know what I asked Claude, I asked Claude how many of the top 100 US retailers either wholesale through Amazon or are the merchant of a merchant of record for an Amazon transaction. And I’m going to ask you, guess how many of the top 100 retailers fall into those buckets on Amazon?
00:22:22 Richard
I’m going to look stupid here on a. No, no, I’m going to go for 70%.
00:22:27 Chris
It’s, it’s in the range of 10 to 14.
00:22:30 Richard
Wow.
00:22:31 Chris
Yeah. Because. Because the retailers that Doordash has been acquiring don’t want to sell on Amazon.
00:22:38 Richard
Yeah.
00:22:38 Chris
So this, that statistic should be a, it should almost be a mic drop what, what Doordash reported this week because I mean that just happened out of nowhere. This snuck up on everybody that Doordash has acquired this many retailers onto its marketplace. So, so that’s why I said like if you take the long term view of like creating the super app again of where do I go to find the products I want and get people in the habitual, you know, pattern of looking and shopping across all these mall based retailers. There’s a there there and in a lot of ways you could actually argue that the doordash marketplace, aside from the random long tail item that I didn’t even know I needed, could actually be a more comprehensive marketplace than Amazon actually is as of right now. And I think it’s actually hard to argue the other side of that, Richard. But I don’t know. You get the last word here. What are you thinking?
00:23:32 Richard
No, long term, I buy it and I think it just takes me back to the first story. If you can track those customers, then you’ve got really valuable retail media. Right. And I think, and I think, I think that’s when you actually, you know, you know, most e commerce businesses run on retail media, not the.
00:23:49 Chris
Right.
00:23:50 Richard
And I think that’s when you can really get valuable.
00:23:53 Chris
Right. Yeah, you’re right. That’s a great point of this too. I didn’t even think about this. The flywheel, when you have the top 100, you have that many of the top 100 US retailers in your flywheel. That’s going to fuel your retail media business to a very, very large extent as well. Wow. Potentially. Potentially. Of course, the proof’s in the pudding.
00:24:10 Richard
To take it forward. Also, when we’ve got a gentle commerce. Actually, if you’ve got that all aggregated in one delivery service, I think you’re then becoming more future proof.
00:24:21 Chris
Yeah, if I’m exactly. I’m scared as hell if I’m Amazon on this because like, yeah, if I’m going into Clyde and I’m like, find me the outfit, it’s going to return Doordash. Because those vendors are on Doordash. They’re not on Amazon. Yes, a hundred percent. Wow. All right. I knew this was going to be an awesome hot show. All right, headline number four. Headline number four is brought to you by 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. You can learn more@ocampocapital.com all right, Richard, another one just made for you. Walmart is rolling out three new light up digital shelf label features. Shop To Light, Pick to Light and Stock to Light to stores company wide by the holiday season. According to cnbc, Shop to Light lets customers find a product in the Walmart app, navigate to the correct aisle and then flash that product’s digital shelf label to locate it. Pick to Light and Stock to Light use the same capability to help associates pick digital orders and to stock shelves. Richard, for all the executives listening, I’m curious. Based on your experience, rank order from most important to least important, the value Walmart will attain from its three various light up digital shelf capabilities.
00:25:38 Richard
First Chris, I am a just, I’m a huge fan of this technology and I think he’s going to do more and more and more. I think you’ll be able to, I just think it’s going to, I think actually this is the beginning what they’re doing now to answer your question, I think stock because if you don’t get, if you don’t get the stock right, everything else fails. So having the stock in the right place, you know, you’re just gonna, you’re gonna have happier customers in the store and the pickers are going to find the product. So actually to my mind getting that that stock to light is probably an under underappreciated part and of course you’re going to get better compliance with planograms. And you know, I actually don’t know Walmart so well, but planogram compliance in my general experience is pretty crap if I’m allowed to say crap.
00:26:24 Chris
No, you can say whatever you want on this show, Richard.
00:26:28 Richard
Now you’ve thrown me. And then I’m going to go the second after that I’m going to go to, I’m going to go to pick, I think, you know, pick to light it. You know an average pick is probably costing, you know, we talked about it last time, $10. Say if you can save 10%, you can just get that 10% down. It’s a dollar an order that’s, you can get a material amount out of that. And again the bit we’re forgetting is accuracy. You know, I think we’ve all had grocery E Com orders where you’ve just, they suck. The pick has just picked the wrong thing. So, and that actually is kind of worse than the cost because you just put off the customer. So for me, pick is number two. I think the shop to light is kind of coming and interesting. You’ve got to drive people onto the app. If it gives people a reason to go onto the app that gets quite exciting again because you can then get the retail media flywheel going and everything we were talking about last time round. But I kind of think that’s just going to take a little bit longer. I just don’t think naturally people are going to be walking around a Walmart on their app. I think that’s going to take a while to change the behavior. So for me that’s number three.
00:27:37 Chris
Yeah. Wow. Yeah, wow. You know it’s funny when I was thinking about this, I was actually going to go that. I was going to say that pick was the number one value creator here, but I think you’re right. And you have far more experience at this than I do too. You know, it probably is the stock because yes, from an operational perspective, everything starts with having the product in the right place. So if you’re going to be more probabilistically correct in the placement of that. Good. That probably is the. The single biggest driver here. But yeah, I’m with you. Like the Shop to Light. The thing about Shop to Light is I think I could be. I think I could be sitting here like five years from now, Richard, and being like, wow, we had no idea Shop to Light would be as big as we as. As it is. Like, you know, because, you know, it’s always the use case that you hear about, you know, for these shelf labels on the consumer side. The super.
You already mentioned the Walmart app shoppers. The super engaged app shoppers are 100% going to try it out and they’re probably going to like it. The other thing I thought about from a merchandising perspective is I actually like this if I’m a parent shopping with kids because it keeps my kids distracted while they shop. Right. It’s like, hey, Timmy, find the light. Find the light, Timmy. You know, like, go find the product for me. So like, I. So like, that’s the thing here. Like, I just don’t know how big this could be or how much of a hook it is. I mean, I remember I was on stage with Fusion’s Roy Horgan and he shared a video of a Walmart. I think it was a Walmart shopper using pick to light to find an item. And the video had like, you know, hundreds of thousands of views. So there’s a there there for a certain segment of people. And, you know, I’m just gonna be curious to see what happens.
00:29:19 Richard
But yeah, I think it’s very cool if you can get yourself to a place where you’re then saying, oh, Gary, you can then sell Procter and Gamble that moment on the app. In terms of retail media now. Yeah, there’s definitely the saturation danger we talked about earlier and you had to do it smartly. But if you really know customer intent at that point, you really know what they’re going to do. So just that ability to do that and you just understand that the shopping behavior at a level you only concurrently understand online. Yep.
00:29:54 Chris
Yeah, that’s really interesting too. And there’s also, there’s this. There’s this other confounding factor here in my brain which is like there’s, there’s, there’s this confluence of trends that are emerging around the same time too. You’ve got the GLP1 impacts where people are having to be more specific in their dietary guidelines. You’ve got AI in the background which is helping people find those products. So that should make the shopping experience easier. And lay into this, you’ve got SNAP restrictions in the US playing into things as well in terms of what people can and can’t buy. So like there’s all these factors that could actually help to push this, you know, over the chasm of adoption, so to speak, you know, from the average Walmart shopper’s perspective. But I’m curious Richard, before we get off this headline, you said this was like you said at the outset, that this is one of the technologies that you’re most bullish on. Is there anything else you’re bullish on that we haven’t talked about?
00:30:43 Richard
Yeah, I think it enables you to do in store a lot of the things we’ve been doing online in the past. So there’s a use case I really like, which I think Albert Hein does in the Netherlands which is they will start to, they’ll start to discount products to clear them if they know they’re hitting their shelf their sell by date. And that’s something we’ve been doing online for decades. But you can’t do it in an automated way in a store or rather you’ve got to have the associate go around, pick it out and take it to the clearance bin and that type of thing. I think you can just start to do everything that we’ve thought was clever and unique to online in a store. And I just, that will just, I think it’s got potential to really transform the store experience. Both make it convenient and actually just make it more efficient.
00:31:26 Chris
Yeah, yeah, that’s a great point too. The other point, from a consumer perspective, electronic shelf labels actually help grocers give better, sharper prices to customers more often than they do currently. That’s the thing. There’s all this misinformation out there on this topic too. But yes, at the end of the day your promotions get sharper, your clearance price gets sharper and who wins on that? The customer does at the end of the day. All right, wow. Headline number five, great show. Is brought to you by Veloc. Volok is a proven E grocery technology built by grocers for grocers. They unite proprietary software with right size automation to make same day delivery profitable. To learn more, visit Valoc.com that’s veloq.com headline number five IKEA is closing three of its small format, plan and order stores in Washington, D.C. maryland and Virginia, including one that opened less than a year ago as it reevaluates its footprint, according to Retail Dive.
Ikea said the closures are part of its strategy to build a more affordable, accessible and sustainable future. That is a quote. And that it continues to invest in home delivery, pickup services and digital channels. The Georgetown store opened less than a year ago after replacing the now shuttered plan and order location in nearby Arlington, Virginia. Oh boy, there’s the move appears to walk back IKEA’s 2023 plan to invest $2.2 billion over three years in the US which included nine plan and order locations. Richard IKEA spent the last few years telling us small format was the future. And as someone who knows as much about shipping logistics as anyone I have ever met, how difficult of A concept is IKEA’s plan and order store idea to pull off?
00:33:08 Richard
I’m going to answer that very simply. I’m very glad I’m not running it.
00:33:13 Chris
Me too.
00:33:14 Richard
You and me too. So it’s another way of saying I think it’s really hard.
00:33:18 Chris
I agree.
00:33:20 Richard
So to my mind, you’re doing two you’ve got to ask in a small space, you’re trying to do two really difficult things. One is you’re trying to get a design experience. You’re trying to get you in to say you need a new kitchen and you’re trying to without the backup of a showroom. You’re trying to get people in tough, tough to come into a design studio in the first place, get them to spend time and get them to and to go through that entire process. Second point, the kitchen. I probably about the most complicated delivery you’re ever going to do in your life. You know, I, you know, you’re talking hundreds of items and you can’t have a screw missing. So being trying to get that operationally to work and then you’ve got no backup in these stores of you’re not selling anything else. So I think it’s honestly I, you know, rather them than me. But I think it is, I think this is a tough one. Do I think this small, I think, do I think small stores for them are absolutely out of the question? No, but I think they’ve, they’ve got to have some stock in them, they’ve got to have something else. And you know, you see it in Ireland for example, they’re running stores, more stores away from Dublin. They’re working well, or so I kind of think there’s, there’s life in this. I think this is part of the experimentation, which is good. But this, this particular way of doing it, I think is really difficult.
00:34:40 Chris
Richard, for the audience. You mentioned the stores outside Dublin. For comparison, how small are those stores? Because there’s a big difference between the IKEA warehouse and a very small plan and order store. Is, is, are the Dublin stores of the size of that or are they, you know, kind of somewhere in between?
00:34:57 Richard
There’s some, they’re a little bit bigger, but they’re, they’re small. I don’t know. At the top of my head, I don’t know the size, but they, there’s enough. You’ve got some stock in them. There’s another reason to visit. It is not purely a design studio.
00:35:09 Chris
Okay, got it, got it. Okay. Yeah. All I’m gonna say is you made me laugh. You made me chuckle with your answer to there or your answer there, because I wish I’d had you on the show two years ago. We were talking about this because I think I was pretty skeptical of this idea from the get go, mainly because of my home furnishings background. And, and as an aside, I think what you’re also saying does not bode well for the IKEA shop and shops that are sitting inside Best Buy stores, which I’ve also been skeptical of on the show many times.
And the reason I say is simple and I think about it from the customer standpoint. The, the value of Ikea, which I will say until the end of time, is that you can get the chore of home furnishings shopping all done in one go. You can get as much of it done in one go as possible. You can’t do that in a plan and order location. You just can’t. It’s going to necessitate another trip somewhere, either to the bigger IKEA or to another home furnishings retailer. It’s just going to. And so even like. So I was thinking about this like, I used to live in San Francisco. Even if I lived in San Francisco proper and I went to one of these stores, I’m probably better off from a time utilization perspective, just putting myself on the BART and going to the IKEA in Oakland or driving out there to wherever the nearest IKEA is and just still doing my shopping there. That’s what this comes down to. And that is why I think fundamentally these stores are going to be very hard. It’s going to be very Hard for these stores to work in the US particularly.
00:36:35 Richard
100% Agree. And I think the IKEA experience is the very big showroom. And, you know, and that works because you actually. You forget what you need. You go around and you pick up everything. And I think, you know, with. That’s worth a destination. There’s no. There’s very limited reason to go to small stores.
00:36:54 Chris
The other concurrent experiment that’s going on that proves out this thesis or hypothesis is how. How Wayfair is developing their stores. They started out small and found out, yep, it’s not going to work. We got to go bigger, we got to go showroom, we got to go big. And that’s why they’re taking the approach that they are. And I think they’ve got a formidable position against Ikea in the long run there, too, based on, you know, how that ends up, or we’ll see how that ends up playing out. But I think it’s. It’s. It’s a. It’s a good strategy for them to undertake. And the experiment is running. It shows that this idea probably is. Is dead on arrival. All right. Whoo. Richard, let’s go to the Lightning Round. Today’s Lightning Round is brought to you with the help and support of Smart Scout. Smart Scout is Amazon and TikTok shop Intelligence. Most tools show you your own account. Smart Scout shows you the market, brand, revenue, category, share, and who really owns it all. Visit smart scout.com omnitok to learn more. I. Richard, lightning round, question number one. I recently watched Chariots of Fire. Yes, I did. On my flight home from Paris. I’m curious. I want to know how celebrated is this film in the annals of UK film history?
00:38:01 Richard
Honestly, I don’t think anybody under 50s watched it, really.
00:38:06 Chris
Okay.
00:38:07 Richard
Having said that, everybody knows the music and everybody. If there’s. If you’ve ever got anybody running along the beach, the music comes along. Right. So I’m gonna. I’m actually gonna go. Not that celebrated. I can also say it’s a bit of a shame. You know, a guy who wouldn’t work on a Sunday. That’s kind of. There’s a kind of retail theme in that.
00:38:29 Chris
Right, right. There is. Yeah. That’s funny. Yeah. Is the story that it. That it. That. That it revolves around, is that celebrated? Is. Is that, like, in the lore, too? Or is that God now?
00:38:39 Richard
No, honestly, I don’t. I. I am pretty sure if I asked my kids, they kind of go, heard of it. That’s it.
00:38:46 Chris
Yeah. Right. Okay. Got it, got it. Yeah. All Right. Fine. Sounds good.
00:38:50 Richard
Chris, I talked about Ted Lasso earlier. I’m curious if you had to pick one character from Ted Lasso, who would make the best retail CEO out there?
00:39:01 Chris
Oh, my God. Wow. I got to think about that one for a sec. I don’t think it would be Ted Lasso. I don’t think I could work for Ted Lasso. I don’t. I don’t think I could work for him. One, One, he’s just too damn happy all the time. I need somebody that has. That has some variance in their. Their personality. But two, the biggest reason I couldn’t work for him is he has no expertise on the subject. Like, he. He’s not. He has no. No background in soccer. It’s the most baloney thing ever. So I think, you know, it’s funny. The. The. I think I’d probably go with Roy Ket, because Roy Ket is. Is the. Is the most typical retail, like, executive that I’ve worked with. You know, he’s harsh. He’s. To the point, he tells you what needs to be done. And. And that’s. That’s who I’d go with. Who would you pick?
00:39:42 Richard
I was going to go for Roy, too. He’s. He’s the gruff operator who makes the. Makes sure things happen. You may not love him, but he’ll. He’ll make sure things happen.
00:39:51 Chris
Yeah. Yeah. And you always know where you stand, too, which goes a long way with me. Like, I like people that just tell me, you know, how am I doing? And where do I stand? All right. Given ikea’s news this week, is there one piece of IKEA furniture that came close to breaking you during its assembly?
00:40:08 Richard
Yeah. I’m not sure how honest to be here. So I used to. I do hate that kind of. I hate for doing the. The IKEA assembly.
00:40:18 Chris
Oh, yeah.
00:40:19 Richard
To the extent. My wife called in a handyman when we last moved house to do this, and she was just so grateful and she was being so nice to him. Then guess what happened? He propositioned her at the end. So IKEA didn’t. I didn’t break the IKEA furniture, but it. But IKEA nearly broke my marriage. No way.
00:40:37 Chris
Oh, my God. That’s wild.
00:40:40 Richard
So, yeah, now I do the IKEA furniture.
00:40:42 Chris
Were you in the house at the time or.
00:40:44 Richard
I was. It was that bad?
00:40:46 Chris
Are you serious?
00:40:49 Richard
Wow.
00:40:50 Chris
Oh, my God. This show is. Went up to 11.
00:40:54 Richard
I definitely. I definitely now have to do the furniture.
00:40:58 Chris
Oh, my God. Yep. You’re doing the Allen wrenching, my friend. You’re Doing the Allen wrenching.
00:41:02 Richard
So, Chris, you just come back from Paris, from your tiny hotel room. What French store would you like to see near you?
00:41:13 Chris
And these are true lightning round questions, too, because I’ve not seen these ones in advance today, man. French store that I like to see near me. It’s gonna be lame, but because it’s 7:30am In Vegas, the only one coming to my mind right now is Carrefour. I. I think Carrefour is a. A good shopping experience, but it’s kind of. It’s kind of basic, so. So, Richard, help me help my mind. Like, what would your answer be?
00:41:40 Richard
I think I’d have gone Monopri.
00:41:42 Chris
You’d go Mono Pre. I was gonna say. I almost said definitely not Monopri. I’m not a big Monopri guy.
00:41:47 Richard
Really?
00:41:48 Chris
Yeah. Why do you like Monopri?
00:41:51 Richard
I just think it’s gonna. It’s. The quality is good. You get everything. Anything is in it. They were my client when I was at Ocado, so I quite liked them.
00:42:02 Chris
Okay, okay. All right, all right, all right, all right. Yeah, I mean. I mean. Yeah, all right. That’s funny. I was gonna say the exact opposite of that. So that’s wild to me that. Yeah, we’re so divergent there. But, hey, that’s why we do this show.
00:42:14 Richard
Yeah. I don’t see car 4 as anything particularly different, though, if I’m gonna use that one.
00:42:19 Chris
Yeah, I think. I think. You know. You know, it’s funny, I had this conversation with somebody recently. I don’t remember who it was, but, like, I think I had it like, three months ago while I was over there. And, you know, I think the Monoprise I’ve been in have just been in, like, dingy parts of town. And so, like, it’s just kind of like. Okay, yeah, that’s just. Just kind of the experience that I’ve got there.
00:42:40 Richard
No, I. I’ve got to say, I rate them more highly than you. I think the. The quality of the food is really good.
00:42:46 Chris
Is it okay? Yeah, yeah, it is. Yeah. And, you know, and. And my. My experience with French. French retailing is, you know, is limited to what I can get, you know, very quickly in and out and around the hotels where I’m staying at, which are sometimes not in always the best and nicest parts of the town either.
00:43:01 Richard
You live the life, Chris.
00:43:03 Chris
I do. I do, I do. I’m on the road all the time. Today’s podcast was produced with the help and support of Ella Seward. Happy birthday today to Toni Braxton, John Mellencamp, and everyone’s favorite, yo yo, the famed cellist Yo Yo Ma. And remember, if you can only read or listen to one retail blog in the business, make it Omnitalk. 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 feature special content that is exclusive to us and that we take a ton of pride in doing just for you. Thanks as always for listening in. Please remember to like and leave us a review wherever you happen to listen to your podcast or on YouTube. You can follow us today by simply going to YouTube.com omnitalk retail Richard, I’m guessing people listening to this are like, man, that guy knows his stuff. If they want to get in touch with you, what’s the best way for them to do that?
00:43:56 Richard
If they really think that, I’m surprised, but thank you. Richardrategymax.co.uk is my email awesome?
00:44:04 Chris
Awesome. Well Richard, thank you so much for doing this. We’re have to have you back because this was a thoroughly enjoyable episode and I think we really took it up. We really dialed it up to 11 particularly particularly with your Ikea anecdote that you shared as well. So on behalf of all of us at Omni Talk, thank you to Richard. Thank you to you for tuning in and 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.