Albertsons Hits Reset, Digital Grocery Hits 20% & ChatGPT Lets You Try It On | Fast Five

Hello Omni Talk Fans!

This week, I welcomed Cory Painter and Anshu Prasad from the A&M Consumer and Retail Group to the Fast Five, and boy, did we have some interesting stories to unpack. From Albertsons questioning practically everything about its business to hackers turning French supermarket fridges up to 122 degrees, retail was apparently equal parts therapy session and crime thriller this week. And, of course, I couldn’t resist making a Hot Pocket joke. Sacré bleu!

And that was before we got to ChatGPT letting shoppers virtually try on clothes and TikTok Shop making it easier to return them. Cory and Anshu brought some great perspectives from their backgrounds in retail strategy, operations, and supply chain, and I particularly enjoyed pushing them on a question that kept coming up throughout the episode: Are retailers better off building their own capabilities, or are they becoming too dependent on outside technology partners?

We also welcomed SmartScout’s Scott Needham for Five Insightful Minutes on Amazon, TikTok Shop, and the changing ecommerce playbook.

Here’s what Cory, Anshu, and I covered, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Quorso, Veloq, and SmartScout:

Albertsons Hits Reset. But Is A Breakup Really The Answer?

Albertsons beat Wall Street’s second-quarter profit expectations, but pulled its full-year guidance and announced a sweeping business review. Net income fell 69% year over year, identical sales declined 0.8%, and practically everything is now on the table, from its cost structure to its portfolio of banners. (Source)

So I put Anshu on the spot right away: Does Albertsons right the ship, get broken up, or is there another outcome? He went with option three, arguing that the most likely scenario is a combination of operational improvements and targeted changes rather than a full breakup.

But I couldn’t get past one number: 22 banners. Is that really the best way to compete against Walmart, Costco, and Amazon?

I argued that some consolidation seems inevitable, particularly from a merchandising and digital standpoint. Anshu pushed back, reminding me that regional brands still carry meaningful customer loyalty, while Cory emphasized that Albertsons needs to improve operations AND rethink parts of its portfolio. We even got into whether the company should bring everything under one digital umbrella. The three of us generally agreed that change is necessary, but exactly what that change should look like? That’s where things got interesting.

Digital Grocery Hits 20%. Are Grocers Giving Away Too Much?

Online grocery officially crossed a pretty BIG milestone, with nearly 64% of U.S. households shopping online in September and digital sales accounting for 20.9% of total grocery spending. Delivery grew more than 30%, while pickup increased only in the mid-single digits. (Source)

I couldn’t help but bring up that 20% threshold because we’ve seen other retail categories face serious disruption around that level of online penetration. Cory argued that there’s no one-size-fits-all fulfillment strategy, while Anshu raised an even bigger question: If customers increasingly want groceries delivered, shouldn’t retailers be rethinking the purpose of their physical stores?

And here’s where I really wanted to push them. Are Instacart and DoorDash actually becoming a problem for grocers? Sure, they’ve helped drive online grocery adoption, but retailers are also potentially giving away customer data, retail media opportunities, and control of the shopping experience. Anshu agreed that dependency is a risk, although he reminded me that these third parties helped make eight straight quarters of 20%-plus growth possible. Cory brought us back to the fundamentals, arguing that before grocers invest heavily in their own delivery networks, they need to get inventory accuracy, picking productivity, and routing optimization right. Not necessarily the flashiest answer, but probably one of the most important.

French Supermarket Fridges Get Hacked. Is Retail Ready?

Well, this was certainly one of the stranger headlines we’ve covered. Hackers reportedly forced refrigeration systems at hundreds of French supermarkets up to 122°F, causing food losses and even fires. (Source)

I asked Anshu how prepared retailers really are for something like this, and his answer was pretty straightforward: Not great. He explained that decisions involving connected store equipment and outside service providers often happen at the local level, leaving retailers with vulnerabilities they may not even know exist.

Cory pointed out that retailers have traditionally focused cybersecurity efforts on customer information, payment systems, and corporate networks, rather than refrigerators, distribution centers, and other connected equipment. But what really caught my attention was the AI angle. I wondered whether these threats would push retailers to build more technology internally rather than relying on outside vendors. Anshu made a great counterpoint: AI might make cyberattacks easier, but it also makes monitoring, testing, and prevention more accessible. And all that equipment data could actually help retailers improve predictive maintenance and store operations.

Who knew a story about hacked freezers would turn into a conversation about physical AI?

Five Insightful Minutes: Who’s Really Winning On Amazon And TikTok Shop?

We also welcomed Scott Needham, Founder and CEO of SmartScout, for Five Insightful Minutes, and he had some fascinating data on how the ecommerce marketplace landscape is changing. Scott explained that big, established brands are increasingly winning on Amazon, thanks to their advertising budgets, expertise, and customer loyalty. But what really caught my attention was his TikTok Shop data. Approximately 80% of the top TikTok Shop brands SmartScout tracks also have an Amazon presence, and those brands are actually growing faster on Amazon than their peers.

That’s pretty remarkable when you think about it. A customer might discover something on TikTok, then turn around and buy it on Amazon or in a physical store. Scott also explained how shopping behavior differs between the two platforms, with Amazon driven more by intentional searches and TikTok by discovery and impulse purchases. And as AI shopping assistants become more prominent, brands need to think beyond traditional search keywords and provide the kind of product information AI can actually understand and recommend.

His biggest reminder?

Just because your sales are growing doesn’t mean you’re winning if the rest of your category is growing faster.

ChatGPT Lets You Try It On. Should Retailers Stop Building Their Own?

OpenAI has launched virtual try-on capabilities in ChatGPT, allowing shoppers to upload a photo and see themselves wearing clothing and accessories before purchasing. (Source)

Pretty cool, right? But my first thought wasn’t necessarily about the shopping experience. It was about all the retailers that have already spent time and money building their OWN virtual try-on technology. So I asked Cory and Anshu whether retailers should keep investing in these features or rethink their technology roadmaps altogether.

And I was willing to take the question even further. Should retailers just hit pause on developing front-end shopping technology like this? Cory wasn’t ready to go that far, arguing that retailers should focus on capabilities that actually differentiate their businesses, like accurate sizing recommendations and proprietary customer data. Anshu made an interesting point about the difference between owning a feature and owning the information that makes that feature valuable. And I think that’s exactly the conversation retailers need to be having.

If ChatGPT can offer the same basic experience, what makes YOUR version worth the investment?

Happy Returns Comes To TikTok Shop. How BIG Is This Deal?

UPS’ Happy Returns is now integrated directly into TikTok Shop, allowing shoppers to make box-free, label-free returns at 10,000 drop-off locations nationwide. (Source)

So I asked Cory and Anshu to rate how important this partnership is to TikTok Shop’s future on a scale of one to ten. Anshu gave it at least a seven, Cory went with an eight, and I was right there with them, maybe even closer to a nine. Because when you’re buying something from a creator or a brand you’ve never heard of, knowing you can easily return it makes a HUGE difference.

And this one was particularly fun for me because I actually met Happy Returns founder David Sobey years ago when I was running Store of the Future at Target. Back then, Happy Returns was operating from a card table in a California mall. Now look at them! Cory made the point that easy returns can make shoppers more likely to purchase AND come back, while Anshu compared the opportunity to how Amazon built consumer confidence through its own return experience. It’s a great reminder that sometimes the most important innovation isn’t about helping people buy more things. It’s about making them feel comfortable enough to buy in the first place.

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Be careful out there,

Chris and the Omni Talk team

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