Fast Five | Peloton To Sell On Amazon, Apple Wants Ads, & Walmart Gets Giggy With It
Anne Mezzenga: Hello, you are listening to the Omni Talk Fast Five, brought to you in partnership with Microsoft, the A& M Consumer and Retail Group, Takeoff and Sezzle. The Omni Talk Fast Five podcast is the podcast that we hope makes you feel a little smarter, but most importantly, a little happier each week too. Today is August 25th, 2022. I am your host Anne Mezzenga.
Chris Walton: I'm Chris Walton.
Anne Mezzenga: We are here once again to discuss all the top headlines that made waves in the world of omnichannel retailing. Chris?
Chris Walton: Anne?
Anne Mezzenga: Are you ready for this?
Chris Walton: Oh yeah, I'm getting super pumped. Super pumped. Philly.
Anne Mezzenga: Yeah, we've got a big week next week. We are headed to Philly. I want to sing a Philly song here, like-
Chris Walton: Motown Philly Back Again.
Anne Mezzenga: Motown Philly Back Again.
Chris Walton: Yeah. That's the one coming into my head right now, for sure.
Anne Mezzenga: Yeah. I love... Fresh Prince. We've got" West Philadelphia born and raised." All these things we are going to check out-
Chris Walton: Oh, there you go. That's a good drive.
Anne Mezzenga: Next week... tell the audience a little bit about what they're going to be expecting from us, next week, from Home Delivery World.
Chris Walton: Yeah, and like I said, I'm super pumped. We're both on stage. I'm doing a session on big and bulky delivery, which I just love saying. I think that-
Anne Mezzenga: That sounds perfect for you.
Chris Walton: I think it's my favorite title of all time, big and bulky delivery. News just broke that Instacart's getting into big and bulky delivery this morning. But what's your session on, too?
Anne Mezzenga: I am doing grocery, the final frontier, of home grocery delivery. We have a great panel-
Chris Walton: Oh, wow. So Star Trekian.
Anne Mezzenga: Yeah, we just met yesterday. I'm really excited. We have one of the founders and CEOs of Freshly. We've got Ali Ahmed from Robomart, and a company-
Chris Walton: Oh, cool.
Anne Mezzenga: Yeah, that's doing tracking cash up from... I'm forgetting the name of the company, but he does all the logistics and tracking around organizing, routing for delivery. We've got some fun conversations to have with them.
Chris Walton: Yeah, and it should be great. I mean... I think they're thinking there's going to be 5, 000 people there, 300 speakers, 300 exhibitors give or take. Honestly, it's one of the best conferences in last mile logistics around, both here in the U. S. and abroad. The best part about it is it's, actually, free to attend. You can see all the exhibitors in the expo hall for absolutely nothing. It's super easy to register, just go to terrapinn.com/homedelivery. There'll be a link in the show notes as well. Then, as well, you get a discount code if you're an Omni Talk follower-
Anne Mezzenga: Yes. You get VIP registration, Chris.
Chris Walton: That's right.
Anne Mezzenga: We've got our own VIP list and yeah, you can check out LinkedIn too. Chris and my posts have included those links as well.
Chris Walton: I'll put that in the notes too. Yeah, you ready to get this show started, Anne? Should we read this week's review?
Anne Mezzenga: We got to get to the review. We didn't have one last week. I want to hear Erica Retail Junkie's review.
Chris Walton: I know, which is a great name, by the way. I love that name, Erica Retail Junkie, kind of wish I'd come up with that myself. Here's what she had to say. Five stars, again. We're just on a five star string.
Anne Mezzenga: Let's keep it that way.
Chris Walton: I know, right? Let's hope." Best retail news for retailers", she said." I've been a marketing executive in retail for over 20 years. I'm, as you would expect, cynical, skeptical and grizzled as a result. I read everything about retail. This does not make me popular at cocktail parties, but pretty smart about retail. Yet, literally, every week I learn something new from you two. I don't always agree, but I always love the perspective. I just sent out your podcast to all the exes at my company." I think she means execs or at least Anne, I hope she does.
Anne Mezzenga: I hope, yeah. Oh man. Erica, it would be tough to work with all of your exes at one company. Especially if you're as cynical, skeptical and grizzled, as many of our listeners are.
Chris Walton: That's right. She marked it required reading. Yes, Erica Retail Junkie, thank you for that. That's exactly the type of review we love. That makes number 79 in terms of our reviews on Apple Podcast on a road to 100. Please, if you're listening, leave us a review. Every difference makes a difference.
Anne Mezzenga: Yes. Even if you're not a review person. That means you, Tammy, who we talked to this week. You said," I love listening. Not a reviewer." Just take a second.
Chris Walton: Take a second.
Anne Mezzenga: Tell us, and you can email us-
Chris Walton: Give a little love.
Anne Mezzenga: Directly too, but take a second and leave a review. If you're listening on Apple Podcast, heart the podcast. If you're on Spotify, Google, Amazon Music, follow and subscribe so that we can keep making the best content for all of you listening. We just might read your review aloud. We will. We'll read your review aloud-
Chris Walton: We will read your review aloud. There's no might, Anne.
Anne Mezzenga: ...for all the listeners to hear, without a question. Yeah.
Chris Walton: There's no might. No, it's going to happen. It's going to happen.
Anne Mezzenga: Yes. Okay.
Chris Walton: You just have to wait your turn.
Anne Mezzenga: Yes, Chris, but let's give them what they want. Let's get to the Fast Five head list.
Chris Walton: All right, Anne. Today's Fast Five is brought to you with the help and support of our good friends at Groceryshop. Are you a retailer or a brand thinking about attending Groceryshop this year? Well, don't even think about it without using our promo code, specifically for Omni Talk. Listen, we're all about the promo codes for these shows. Just go to groceryshop. com and enter promo code... my favorite promo code of all time, RBOT1950.-
Anne Mezzenga: RBOT.
Chris Walton: That's R- B- O- T- 1- 9- 5- 0. If you're a loyal listener to the show, I'm sure you have that emblazoned in your brain and you'll get your special discounted rate. In today's Fast Five we've got news on Apple wanting to advertise more to you on your iPhone. Walmart buying up a gig labor delivery management platform. Gap creating its own third party supply chain platform to sell to other retailers. Tesco expanding its checkout free relationship with TRIGO to more stores. But first, we're going to take off with a crazy announcement from Peloton and Amazon this week. Anne?
Anne Mezzenga: Yes. Okay. I saw this and I immediately sent it to you and was like," This is in the show without a doubt." Headline number one, according to a Peloton press release yesterday, Peloton will begin selling its products outside of its own direct channel beginning with, none other, than Amazon. A new Peloton store now exists on Amazon's website. The products that are available at launch will include the Peloton bike and guide, apparel, also things like the accessories, like weights, shoes, and bike mats. As part of the Amazon experience, the Peloton bike will be available with a convenient in- home delivery, and customers will have the option to assemble the bikes themselves or select an add- on expert assembly option available in the majority of the U. S. The in- home delivery and expert assembly are offered at no additional cost to customers. Said Peloton Chief Commercial Officer, Kevin Cornils," We want to meet customers where they are, and they are shopping on Amazon. Providing additional opportunities to expose people to Peloton is a clear next step as we continue to generate excitement for our unparalleled connected fitness experience." Chris?
Chris Walton: Yes?
Anne Mezzenga: This is also where A&M is going to throw their weight in and put you on the spot.
Chris Walton: Oh, we're going to hit me right in the beginning today? All right. Fantastic.
Anne Mezzenga: I mean, this is one of the best headlines we've had in a long time.
Chris Walton: Yeah. Okay. All right.
Anne Mezzenga: It's gone up and down. I'll give you that. It's gone up and down within the last 24 hours. The height-
Chris Walton: Yeah. It was super high in the beginning, which I want to definitely talk about, but yes.
Anne Mezzenga: Yes. Okay, so their question for you, Chris, A& M wants to know, last month, A&M CRG managing director, Mike Simoncic offered his perspective to retail brew saying that Peloton's," Focus needs to be more on the user experience, content generation and retention, and growth of subscribers", which is effectively downplaying equipment manufacturing and D2C sales in favor of its core strengths. Chris, do you think this move smartly plays into that philosophy or is Peloton making a mistake here by selling through Amazon?
Chris Walton: This is... oh man. That's a really tough question. Holy crap. It's a great question too.
Anne Mezzenga: Yeah.
Chris Walton: To give some readers some insight and how the sausage is made too. When we first read this story, the headline said it was coming to Amazon's stores, which I hate, Anne. I don't know about you, but I hate when people use the Amazon ecommerce site and call it a store. I think the right way to say is it's going to be sold on Amazon. You and I lost our stuff on this, and I was like," That's the dumbest idea I've ever heard in my entire life, if they're putting this in Amazon Fresh Storage." But thank God, that's not what this is about. It sounds like it's purely an ecommerce play. To get to the question... in a lot of ways, I think it, kind of, makes sense... selling through Amazon. Sure. Why not? The brand is strong, which I think is important when you're thinking about selling on Amazon, the brand is strong. It can stand on its own. Amazon, as we've talked about on this show, is the online mall at this point. It makes sense to be there in a lot of ways.
Anne Mezzenga: Sure.
Chris Walton: But the question I come back to, which is kind of inherent to what A&M is asking, is how does it help? If you're in the market for a Peloton, is this really going to add volume to your business? Because everyone who wanted a Peloton during the pandemic probably got one. Then I was seeing that and I looked at some stats last night, Anne, and as of June 30th... I thought of last year, which was the height of the pandemic Peloton craze. Right? I think you could say that's effectively the absolute apex.
Anne Mezzenga: Okay.
Chris Walton: They had, roughly, six million paying subscribers.
Anne Mezzenga: To the platform, to the capital platform?
Chris Walton: Yep.
Anne Mezzenga: Okay.
Chris Walton: Yep. Which, when you think about it, the size of the U. S. population, 330 million... and that's probably worldwide that number. I don't know that for sure, but I'm pretty sure it is. It's like total subscribers. Yeah. That's pretty low, in comparison. It got me thinking. Okay, this is what I think the strategy is now at this point. Go on Amazon, allow the bikes... they've even said they're going to allow the bikes to be assembled themselves. Then, what I think is going to happen next, is you're going to price cut this thing, to get it into more people, to get it into more mass market adoption, to make it more affordable. It still does price a lot of the market out when you think about it.
Anne Mezzenga: Yes.
Chris Walton: I think that's the strategy they're going for. If that's the strategy you believe in, and that's how you want to attain growth, then sure. I think it's the right way. Back to A&M, I don't think it's what I would do. I actually think I would've taken a very different approach. I think I would've gone more, all in on apparel, as a concept, versus... and, possibly, physical retail, as a concept, as a shop in and of itself, away from the bike. I would've tried to stand up that arm of the business. I've talked about getting the studios through all the countries, what they do in New York. Why can't you do that in every city? Why can't you have one of those? I think that's a much better way to secure higher margins from your current base. But if you're going for subscriber growth... I mean, I don't know that I can argue this. I just don't love it for the brand, long term.
Anne Mezzenga: I agree with you. I think your point about how they're selling it, like pricing... the first thing that comes to mind, in just in hearing what you're saying, I guess, is I don't understand why they're going on Amazon to sell this product.
Chris Walton: Yeah. Right.
Anne Mezzenga: I'm surprised, because they already offer... shipping and delivery is already part of this.
Chris Walton: Right.
Anne Mezzenga: That's not... you're not leveraging the prime value there. I think that... when you think about the amount that Amazon's going to take out of that sale. If you could pass that value onto your consumer, I think you start bringing in a much larger audience, and you start to build the mote with the subscription base, like the apparel, and all the other things around that bike. If you can knock, what is it going to be? I mean, Amazon can take up to 40% of a sale. If you think about taking that off with the$1, 500 for the bike, even if you took$ 200 off the bike, that's a significant savings for the end consumer. I, actually Chris, I like the store option. I know you don't like it. I pinged Sarah Yacoub yesterday, who's in charge of the Just Walk Out technology, because she posted about this.
Chris Walton: Yeah.
Anne Mezzenga: I was like," Sarah! Are we going to see any physical store execution?"
Chris Walton: Yeah.
Anne Mezzenga: Because, I think that's more valuable as a Peloton organization than the Amazon partnership online. I don't think you need to have a Peloton salesperson onsite. I think just getting the bikes... I've talked about this before in previous episodes, getting... I think Target, or Dick Sporting Goods, would've been a much better partner than Amazon, for an in- store execution. I think that it's about getting the bikes in front of people, showing them what the Peloton experience looks like. I don't think you're doing that, as well, on Amazon. Second thing here, I think Peloton is causing a threat for themselves by going on Amazon, when you start to look at the accessories. You purchase the bike once. You're not going to be purchasing that multiple times, but where you're going to get growth is in the accessories. What you can see... say the$ 150 Peloton bike shoes, for example. Right?
Chris Walton: Right.
Anne Mezzenga: As an Amazon customer, I have six other options for half priced shoes right in front of me. I'm, definitely, going to go for those, instead of spending$ 150 on Peloton shoes, versus having a full on Peloton experience within a store, where you've got the shoes right there, you've got the other accessories. Ultimately, the winner here is the Amazon customer, because they're going to get all the benefits of those Peloton goods, and much more affordable options, right side- by- side there. I do want to see some sort of physical store execution though, for Peloton.
Chris Walton: Yeah. Wow. We can save that one for another show, because... and we did talk about that. I hate that idea. I like going on Amazon much more than I like going into Dick's or anything else like that, because I think that just immediately cheapens the brand, and then you have to deal with the inventory placement and the potential markdown issues that ensue. I think this is the smart move.
Anne Mezzenga: Even a guide shop? Even a guide shop in a Dick's or Super Target.
Chris Walton: Yeah. Well, I don't think a guide shop really gets you anything differently too.
Anne Mezzenga: Oh, okay.
Chris Walton: It's a very confusing experience. There's a whole host of issues that arise with that. You, ultimately, get back to the same place, which the part I agree with you on is, is it seems like they effed up their apparel play, they're apparel and accessories play. It feels like that was something, like in the vein of Nike, that they could have gone after. Which... if I remember... I forgot, I actually had hypothesized that they had the ability to do that, two or three years ago, and my ending year- end piece for Forbes and they didn't do that. Now what I worry about Anne, to close it up here, and well then we'll move on is... I worry that that ship has sailed and now they're going after growth at all costs, because of the pressures financially that they're feeling internally and likely from the street. That's scary to me, because then you're going to lose the cache of the brand. Somebody will pop and start to encroach on the space, and it'll never be the same. I don't know. All right, let's keep rolling. Headline number two. In a headline that we, probably, should have done last week, but are doing it this week instead, Apple wants to serve up more ads in its iPhones. First reported by Bloomberg and later picked up by CNBC, Apple is reportedly planned to expand its advertising business, which already generates about four billion dollars annually, according to Bloomberg. Apple reportedly wants to now grow its ad business by double digits, with advertising pushes into things like Apple Maps, books and podcasts. Meanwhile, it is important to note, that last year apple released an update for iPhones with a popup asking users if they wanted to allow apps on their phones to be used for ad targeting. If you didn't know that you've probably been sleeping or hibernating for the past year. The privacy feature, according to CNBC, called App Tracking Transparency, a little ATT, has upended the behind- the- scenes mechanics of many mobile ads, especially those that confirm whether a purchase or download was made. There's lots of layers to this story.
Anne Mezzenga: Oh, yes.
Chris Walton: I'm curious what you think.
Anne Mezzenga: I'm not surprised by this at all. I mean-
Chris Walton: Really? Wow.
Anne Mezzenga: I don't think anybody should be surprised by this. I mean, I think that the canary in the coal mine was the whole move away from tracking that Apple launched with the update last year. I think that this should have been on the radar screens of every single company, in and around this arena. I think that-
Chris Walton: Right.
Anne Mezzenga: I'd be willing to bet... I mean, Apple has a solid mission here. There's no competition there... iPhone users, aren't going to stop using their iPhone, because they don't want to be tracked. They're not going to... nobody's going to give up their iPhones to prevent this from happening. I think the only thing I could see doing is, there could be some regulatory pressure against Apple, or just in general, Apple trying to be a good steward of saying," Okay. Well, we're still going to give you the option for the out, to not be tracked, or for us to not follow you." But then charging... or doing a freemium sort of version of their apps, like we're seeing Spotify do, or something. Where it's like," Okay, fine. You have to pay... if you want maps and you want apps, and you want podcasts without the ads, or without us tracking you, you need to pay for that now. It's going to be another$ 2. 99 a month, which is a nominal fee for the average apple iPhone user. Then, for Apple, it rakes in a bunch more money. I think that's what we're going to see. I don't know. It was inevitable. What do you think?
Chris Walton: That angle's interesting, although I feel like that's still talking out of both sides of your mouth. I mean, I'm really conflicted on this one, 100%. I guess the way I think about it, Anne, is if they allow the same privacy controls within their apps, that they are putting on everyone else, then I think this is a non- story. If you can say," Hey, I don't want ads served up to me in Apple maps or when I'm listening to the podcasts." Then fine. Then I think the playing field is level, for the most part.
Anne Mezzenga: There's no way that's going to happen though.
Chris Walton: Yeah, that's the thing, right? You're skeptical,
Anne Mezzenga: Yeah. Yeah.
Chris Walton: Then I feel like we're in... if they don't do that, which I think is the right, altruistic thing to do. Then I feel like we're in... we have the makings of the Microsoft Internet Explorer curfuffle with antitrust written all over it.
Anne Mezzenga: Right.
Chris Walton: Again, I looked at stats again yesterday, Anne. Did you know that Statista estimates that 47% of all U. S smartphones, in the U. S., are an apple iPhone?
Anne Mezzenga: Yeah.
Chris Walton: That's crazy, so that means they control the hardware for half the market. Now am... I mean, Apple's essentially saying," We control 50% of the market. We're not going to give it access to everyone else for ads, but we'll advertise until the cows come home on our own properties." That smells horrible to me.
Anne Mezzenga: Yeah. What are you going to do?
Chris Walton: Well, the other part too, that I hate about this too, that's not getting talked about, is the short term, long term impact is yeah, this is going to be horribly disruptive on all the small direct- to- consumer brands that, for years, have made their life blood on selling things on Facebook advertising and other sources of revenue. So we're going to see a lot of layoffs from that, most likely, here in the coming weeks or coming months, and then look back 10 years from now, and Apple's just going to be in a situation where they're raking it in at the detriment of many other people losing their jobs. The rich get richer. That's what pisses me off the most, potentially, about this story. But I'm reserving judgment until I see how they actually do this.
Anne Mezzenga: Yeah, but we can make a safe bet that they're going to do exactly what we were talking about.
Chris Walton: You're that sure about it? I don't know that I'm there yet, actually. I don't know.
Anne Mezzenga: Oh, I am.
Chris Walton: Apple's smart.
Anne Mezzenga: I mean, until... Why not? Why not make as much money if your Apple, until you can... they don't care about you.
Chris Walton: Until the government tells you can't, but you still win?
Anne Mezzenga: Exactly. Exactly. I mean, that's what we've seen. That's been the trend with what we've seen-
Chris Walton: Yay capitalism. Woo hoo!
Anne Mezzenga: I know. I know. Okay. Well, before we get down a very scary Reddit thread about capitalism, let's go to number three.
Chris Walton: Isn't that from Austin Powers? Yay. Capitalism. I think it is. Yeah.
Anne Mezzenga: Yes.
Chris Walton: Makes sense.
Anne Mezzenga: Yeah. Okay. Headline number three. Walmart has purchased gig labor management platform, Delivery Drivers, Inc, or DDI for short. According to Grocery Dive, DDI has supplied human resources, recruiting, insurance, accounting, and payment services to Walmart's Spark program, since 2018. Walmart Spark, of course, is the platform that Walmart uses to coordinate gig workers, to fulfill orders from both the retailer and their go local program, their white label delivery service." The Spark Driver platform reaches 84% of U. S Households, and the retailer brands to continue growing the program", Nav Chadha, the Vice President of the Spark Driver platform said, in a company post on Wednesday. Chris?
Chris Walton: Yes?
Anne Mezzenga: Where do you land on this? What do you think of this new acquisition?
Chris Walton: It's a good question. I mean, I don't have a lot of revolutionary things to say about this. I think it's pretty basic for the most part. I think it looks pretty clear to me that Walmart is trying to stand up its own third party delivery network.
Anne Mezzenga: Yep.
Chris Walton: I mean, for all intents and purposes, I think this is clear, which makes a lot of sense. Why spend the money on acquiring an Instacart or something in that vein, if the technology is now there for you to build it out yourself confidently? Minimally, you aren't paying the middleman fees by having to work through a third party anymore. You now can control that yourself, so if you got a good valuation on the deal, that makes sense. In a way it kind of feels like a different potentially smarter version of Shipt 2.0 that Target did when acquiring Shipt, but probably at a lower cost too.
Anne Mezzenga: Yeah.
Chris Walton: I think the move makes sense for Walmart. Will it blow the doors off? I don't know, but I like it, in principle.
Anne Mezzenga: Yeah, I agree. I mean, I think that it seems like, from what we're reading about DDI, that they have another piece of the puzzle that Walmart was missing. They have the expertise that Walmart needs to make this... that continues to make this a more successful arm of their business? I think you're smart of bringing up the Target example. I think, also, Target's acquisition of Deliv was very similar to this too. How do we take in and build... continue to build around? We have Shipt. How do we continue to make sure that routing is efficient, that we're optimizing delivery of products and movement of products? I think it's clear, Walmart is going to try to do whatever they can to build this up. We also saw this week that they're launching, they're doing the full launch of their Canoo Electric vehicles. They're trying to make this as viable an offer,, for Walmart customers, like the end consumers, but then, also, other retailers that they're working with, with the Go- Local program. I'm just trying to figure out, as this continues to evolve, what other retailers are going to jump on the platform? I mean, they're blowing out stats like crazy of how many... over a million deliveries with Go- local. Once they build up this network, how valuable is that to other... their retailer customers, to actually make this a profitable arm of their business? But...
Chris Walton: Which is a great segue actually too.
Anne Mezzenga: Yes.
Chris Walton: Because that was actually a point I thought of in this next story as well.
Anne Mezzenga: Yes.
Chris Walton: I think net-net, it's one of those stories that seems important, it probably is, and we'll look back on it, potentially, as being really important, but it's not going to get a lot of fanfare. That probably means it's a good story to pay attention to, in reality, when you look at all the things we cover on a week to week basis. Headline number four Gap is, similarly, taking its own page out of American Eagle's Frenemy Network, but launching its own supply chain platform for other retailers and brands to use, as you just discussed. According to chain storage, Gap is introducing a new offering called GPS platform services by Gap, Inc. It brings back the memories, Anne, inaudible The hosted service will provide supply chain solutions that Gap says meet the needs of direct- to- consumer and business- to- business companies across the supply chain. Specific advertised logistics and fulfillment capabilities include... are you ready, Anne? See how fast I can do this. Scalable high volume automated ecommerce fulfillment, Omnichannel capabilities for B2B wholesale and retail storage distribution, self- service portals with API integrations to Shopify, Amazon, and other major commerce platforms. Of course, a nationwide distribution network, just to name a few. Anne, what do you think on this? Add any light to your last comment? I think it probably does.
Anne Mezzenga: Yeah, for sure. I mean, I think this is interesting. We saw malls talking about doing this a long time ago, knowing... okay, we have all of these stores under our roof. How do we get them to start working together? But nobody pulled the trigger on it. So I think it's interesting that American Eagle, Gap, everybody's like," Well, we'll figure this out. We'll figure out how to do this." Because the most important point of this, for me, is it is not enough to just be a retailer anymore. Retailers have to figure out how they're going to gain alternate sources of revenue, and this is one way to do that. They're looking at," Okay, we're Gap. We have this huge logistics network. We have all these stores. We're in malls across the country. How do we leverage our assets, which are our stores, which are our fulfillment and logistics capabilities? I think we'll continue to see more retailers be like," Well, we had this going already. How do we make more money off of it?" I think we're also seeing companies take this approach, when they're looking at technology. We've talked to a lot of retailers over the course of the last year, especially looking more specifically at a build versus buy analysis. What are we going to build internally in house? How can we use that to make our processes more efficient, as a retailer? Then, can we sell that? Is it something that we can put out to other retailers or that we can create these frenemy networks? I think the last point, where I think we're also seeing this is with retail media networks. That's a quick way for retailers to earn another source of revenue, outside of the products that are on their shelves. What is the total product offering that you, as a retailer can offer? That's not always the t- shirt on the shelf at the Gap. It's definitely got to be some other capabilities in leveraging what you have. But Chris, you thought there was some light to that from the last story. I'd like to hear what your thoughts are.
Chris Walton: No, I think your points are right. I think the one wrinkle I would add is, I think as much as it is on the revenue side, I would, actually, argue it's even more so on the cost side of the equation too. There's only so many retailers that have the strength and the national scale to build up something like this. So that's what I think is cool about it, is retailers are creatures of habit. Shekar at American Eagle was one of the first ones to be talking about this. I guess Walmart was angling for this too, and now you've got Gap jumping into the fray. The question for me is, how many dueling frenemy networks are there going to be over time, and who wins that landscape? The reason I think they're important is, actually, not the revenue they provide for the frenemy networks, but what they're doing for the underlying cost structure of the businesses they're supporting.
Anne Mezzenga: Right.
Chris Walton: Because if ecommerce continues to grow like it has, and consumers want to shop that way, business models are going to have to change to adopt to that behavior, so you have to create frenemies. You have to get scale in your operation. You have to find a way to lower costs. There's no way you're going to go this alone, if ecommerce continues to grow. The costs of that business are just so expensive to do the shipping like you're needing to do. Yeah. I think that's another important point here, that I would add.
Anne Mezzenga: Yeah. I love that. I love that alternate side of it where it's more about the cost. It's not about what I was saying earlier about the revenue that you're bringing in. It's about, how do I reduce costs and how many people can I bring together? I mean, I think that's going to be really interesting to watch too, over the next few years, is how who's partnering together?
Chris Walton: Right. For sure.
Anne Mezzenga: What makes sense? How do you not have duplication in those efforts, and figuring out how the money disperses, or the savings disperse among all of those partners will be?
Chris Walton: Yeah, it's a cool idea, because both parties win. Right? Like both-
Anne Mezzenga: Yeah. Right.
Chris Walton: That's the idea of something that is a good idea really, ultimately, at the end of the day. That's why I think we'll see more of this, for sure.
Anne Mezzenga: Oh, all right. Let's move on to headline number five. Tesco is launching its second checkout free GetGo store on the TRIGO platform, But this time it comes with a twist. According to the grocer, the new store on Chiswell street, near the Barbican, in London... Barbican? Am I saying that right?
Chris Walton: Sounds good to me. I'm sure we'll get corrected, if we didn't, with all London fans out there.
Anne Mezzenga: The Barbican? Some of our British fans-
Chris Walton: Barbican? I don't know.
Anne Mezzenga: Correct me. Barbican? It probably sounds better with an English accent. Anyway. Okay. They're opening a new store near the Barbican, in London. It will also include self checkouts, which lie in stark contrast to Tesco's first GetGo on High Holborn, that was completely checkout free. This also means that the Chiswell street store will be accessed by any shopper, so unlike Tesco High Holborn, which could only be accessed through the mobile app scan, when you come in, this store will now allow for any customer to enter the store. Chris, you really fought for this one to be included this week. Why do you think this story is so significant?
Chris Walton: Yeah, I did. I did. I get some of the pushback too, because we've talked about TRIGO, we've talked about Tesco a lot. We did the TRIGO store tour over in Europe, but ultimately, I think it's important for a couple reasons. First, on the tech side.
Anne Mezzenga: Yeah.
Chris Walton: Tesco is, again, going with TRIGO which, if you follow us closely, is super important in the checkout free provider landscape. Reva, Tesco have all expanded their relationship, after their first trial. There aren't many providers of this type of solution that can hang a statement... hang their hat on a statement like that.
Anne Mezzenga: Yeah.
Chris Walton: It's few and far between. I think that's really, really important, and for the most part, they're doing this in a retrofit environment too. They've shown that they have that capability. But, the most important thing I think about this story is the twist.
Anne Mezzenga: Yeah.
Chris Walton: Like you said, at the beginning. I thought that was a great way to put it so kudos to you for that. The hybrid option is becoming more important in my mind. I never liked it at the beginning, but I think I'm liking it more now, because we visited the Amazon Go Hudson News store in the Chicago airport, and it was fascinating to watch people have to deal with understanding how to enter that store. Some people were just leaving, some people were doing it and one guy commented on the way out. He's like," What's next, the microchip in my butt?" I know he is going to go back and tell his friends and use it, so it's really difficult for people to understand that. The other part about it to me is, if you do a hybrid solution, let's not forget you still get the full benefits of a computer vision experience, which includes everything from better inventory accuracy, better customer marketing, more flexible price changes as well, that respond in the moment which... and all those things are probably of better benefit to the retailer, in the long run, than the actual consumer being able to walk out, check out free. So those that want to use it can use it. Those that can't, don't have to. I'm thinking we're starting to see this, probably, be the approach that most people are going to take to the adoption of this technology, is my hunch, but I don't know. ALDI Nord will be interesting as a college town. Does the demographics play into this too? I have no idea, but I'm starting to lean that way, but what do you think?
Anne Mezzenga: Yeah. I mean, I think we have to give credit to Tesco here, because one, they went in on-
Chris Walton: Yep. Great point.
Anne Mezzenga: What I still believe is the right way to do this. I think if you're going to be a retailer investing in this technology, I still feel like as... if I was a retailer, I would be going in on full on autonomous stores, to be honest.
Chris Walton: Right. That's the way to start. You're right. That's great.
Anne Mezzenga: I think so. I think that's great.
Chris Walton: 100%.
Anne Mezzenga: Even in the airport example, yes, you have that first time, that hurdle to get over, which is going to keep some people out. I mean, we did see people turn away from that, but I think, ultimately, now that they have that first experience under their belt, once that starts going out to airports around the world, it will become more common for people. I think for the long term, with the amount of investment that you're going to put into an autonomous store, I would go fully autonomous. I do think, though, that Tesco is correctly doing an AB test here.
Chris Walton: Right.
Anne Mezzenga: I think it's important for them to see what happens when we build it to be fully autonomous? You retrofit it to be fully autonomous, but we also have self checkout in here for the interim. Is that the smart move so that people can still feel like," Okay, I can have it. If I'm not ready yet, today, I can still go through and still spend at the store."? How does the future roll out for Tesco look? Are they going to invest in both self checkout and this hybrid approach? I also think we saw an interesting case, a couple of weeks ago at HEB, where they're doing smart carts. They have this concept where they're rolling smart carts through a computer vision scanner, and then they're sending the receipt after. I think some of these tactical things, or outs for the customer, if they're not ready for fully autonomous shopping, are a smart thing for retailers to be testing, before they go fully in. I still think though, what TRIGO entrusts Tesco did with the fully autonomous store. That's where I would be focusing most of my efforts here. Still getting all the benefits, like you said Chris, of the full computer vision suite of offerings, better inventory, visibility, all of those things makes sense, but I'm still putting my bets on fully autonomous.
Chris Walton: Yeah. I think you're right. In the long run, that's still where it will go. I love how you said the right place to experiment with what went. Right?
Anne Mezzenga: Yeah.
Chris Walton: Because if you don't do the fully autonomous, you don't know the difference.
Anne Mezzenga: Yes.
Chris Walton: You don't know when you go that next step, you can always go back.
Anne Mezzenga: Right.
Chris Walton: Which is why we've always advocated that, and also the HEB thing is cool. I know we have a lot of HEB fans out there too, and we're assuming it's computer vision based.
Anne Mezzenga: Yes. Correct.
Chris Walton: We don't know that for sure, but if you want to let us know, please do. I think of this... I just keep coming back to Starbucks mobile app and order pickup. Right?
Anne Mezzenga: Right. Totally!
Chris Walton: Some people gravitated towards it. It was a small percentage of the people, but then once you do it, you never go back.
Anne Mezzenga: Right.
Chris Walton: And you're right. Once you do it in the airport, you're never going back,
Anne Mezzenga: No.
Chris Walton: Ever, in your life. I mean, I'm never gone back, in general.
Anne Mezzenga: Right.
Chris Walton: It's so easy. Especially if you can wave your hand to get in?
Anne Mezzenga: Totally, and all the concerns that people have. I mean, viable concerns that we heard from people, outside of that store. How do I know I don't get charged? How do I know... I don't have a receipt? How do I know? All these things. Once you do that once and you see that it can work, that will get you to do it. Then you understand the value. It's just going to be getting over that first.
Chris Walton: But they're all the same concerns when you order a fricking cup of coffee.
Anne Mezzenga: Exactly.
Chris Walton: Let's be honest. Right?
Anne Mezzenga: Exactly. Or ordering grocery delivery for the first time. All of these things, it's just doing it once, and then you'll never look back.
Chris Walton: My favorite Mitch Hedberg line of all time... my favorite Mitch Hedberg joke... I hope my buddy Elvin's listening, is when he is like," I'm at the donut shop and they asked me if I want a receipt. He's like for what? I'm not going to bring it back. It's a donut."
Anne Mezzenga: Yeah. Right?
Chris Walton: What are we talking about here? But anyway. All right, let's go to the lighting round. Let's finish out this show.
Anne Mezzenga: All right, Chris. Ryan Cohen took full advantage of Bed Bath& Beyond's meme stock surge, and sold all of the shares in the company. If you were Ryan Cohen, what are you doing with all of those giant wads of cash right now?
Chris Walton: This is going to be funny. You have to listen. You'd have had to listen to the show before, but I'm going to get myself some good high quality wild sage, Anne. That's what I'm doing.
Anne Mezzenga: I hope it's not the wild Sage from Bed Bath& Beyond. That's all I'm going to say.
Chris Walton: Probably not. Probably not. I don't even know if you could find that anymore. All right, Anne. I noticed a trend on social media recently, that the youngin's are spelling the word fav, F- A- V_E versus F- A- V. Is this something I've always gotten wrong? Some big change I missed, or do the youngin's need a talking to? Set me straight on this? What's your take?
Anne Mezzenga: No, F- A- V is like fav, okay. Fave is like a new word. It's like... this... look it up in urban dictionary or something. It's like... I don't know that it's going to be in your Webster's, as this is a correct word, but I think it's a new part of the vernacular.
Chris Walton: I need to get on this bandwagon, is what you're saying.
Anne Mezzenga: You need to get on the fave bandwagon.
Chris Walton: All right. The fave bandwagon. All right, I'm on it.
Anne Mezzenga: All right, Chris, it's back to school shopping time, especially for those of us procrastinator parents who are crossing our fingers and hoping that the delivery times are accurate, and we'll get all the school supplies that we ordered yesterday, in time for school. I want to know what your most memorable back to school purchase was growing up?
Chris Walton: Oh dude, that's so easy. The trapper keeper. 1984.
Anne Mezzenga: Oh yes!
Chris Walton: I felt like such a boss, bringing that to school.
Anne Mezzenga: What Trapper Keeper did you have?
Chris Walton: What's yours though?
Anne Mezzenga: What Trapper Keeper did you have?
Chris Walton: I don't remember that. That's going way back.
Anne Mezzenga: You don't? You don't even remember the theme.
Chris Walton: No.
Anne Mezzenga: Wasn't it like GI Joe or something.
Chris Walton: I don't think it was a theme-
Anne Mezzenga: Ninja turtles?
Chris Walton: I was... dude, I was... I'm a little bit older than you, so I think it was just baseline, garden variety Trapper Keeper back then.
Anne Mezzenga: Just like, the blue one.
Chris Walton: Before they licensed it. Yeah. Yeah, yeah. They weren't licensing it yet.
Anne Mezzenga: Lisa Frank. Lisa Frank, the Trapper Keeper. It was like... I still remember the day I convinced my mom. It was like$ 25. They were not inexpensive.
Chris Walton: Who the hell is Lisa Frank? I have no idea.
Anne Mezzenga: Lisa Frank, she's like a designer. It was like mystical. She did the stickers, the sticker machines. Actually, do you remember the sticker machines too? Where you would put quarters in it... like at a game or a roller rink and you'd stick and get stickers?
Chris Walton: Yeah, like at the grocery store. Yeah.
Anne Mezzenga: Lisa Frank designed a lot of those stickers. They were like fanciful, cool, neon drawings.
Chris Walton: For all of Omni Talk fans out there, if you actually know what Anna's talking about, I want to hear about it on social media.
Anne Mezzenga: Please! You have to validate!
Chris Walton: Please tell, because if I don't get any chatter on this, on social media, then I'm going to assume Anna's crazy, and she was like,
Anne Mezzenga: That's obvious.
Chris Walton: Into something really weird at that age that no one else was into.
Anne Mezzenga: We know that. We know that.
Chris Walton: All right. This last question, Anna, is probably one of my favorite all- time lightning round questions. The Wall Street Journal, yes Anne, the Wall Street Journal reported last week that there is a growing generational divide over the use of the flat top sheet on one's bed. Team top sheet argues that it's more hygienic, more proper, just more correct to use one, while team none responds that it's more efficient to skip it, and if you change your duvet cover regularly, it's just as clean. Where do you come down on this argument and why?
Anne Mezzenga: Wow, Wall Street Journal, August is upon us. Is it not?
Chris Walton: Right?
Anne Mezzenga: Slow news month.
Chris Walton: How is that in the Wall Street Journal?
Anne Mezzenga: I don't know. Okay. I have to say, we spent a lot of time in Europe this summer-
Chris Walton: We did.
Anne Mezzenga: And I might have converted, because they only do duvets there-
Chris Walton: Whoa!
Anne Mezzenga: And I kind of love it. The only thing that I will say, you have to change your duvet, not just your cover.
Chris Walton: Oh, really?
Anne Mezzenga: I think if you're going to just go full duvet only, and no top sheet, I think you got to replace your duvet a lot more often than you probably are every seven years, for some people. You need to get a new duvet every couple of years. I think if you're just going to do the top.
Chris Walton: Fascinating. You think that the thin layer of a top sheet is enough to protect you from having to do that same thing with the regular duvet?
Anne Mezzenga: Yeah. For sure.
Chris Walton: That's fascinating. You went in a totally different direction on me on this. I thought... because I know your nighttime routine, and when we travel-
Anne Mezzenga: Oh, my sleep suit.
Chris Walton: You're in a full on sweatsuit to protect yourself. So I'm surprised you went this direction.
Anne Mezzenga: I think that was before I turned 40 also.
Chris Walton: Oh.
Anne Mezzenga: I think now, especially when you're thinking about... if you are like a night sweat sleeper, you've got the top sheet layer over you, then the duvet doesn't get harmed. I mean, this could be its own podcast, evaluating this. Maybe the Wall Street Journal was onto something, when they were like," Okay, yes. This is a topic of discussion that's worth a full thing."
Chris Walton: Hey, we're talking about it, we're talking about it, so there's probably 10, 000 other people are too. All right. Well that wraps us up. Happy birthday today to Blake lively.
Anne Mezzenga: Aww. Serena.
Chris Walton: Right? Rachel Bilson, and the always smoldering Alexander Skarsgard. Remember if you can only read, or listen, to one retail blog in the business, make it Omni Time. Our Fast Five podcast is the quickest, fastest rundown of all the weeks top news. Our twice weekly newsletter tells you the top five things you need to know each day, and also features special content exclusive to us and just for you. We try really hard to make it all fit within the purview of your inbox. You can sign up today at www. omnitalk. com. 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. Please remember, also, to use your promo code RBOT1950 to register for Groceryshop. That's R- B- O- T 1950, and on behalf of Omni Talk Retail, as always, be careful out there.
Anne Mezzenga: The Omni Talk Fast Five is a Microsoft sponsored podcast. Microsoft cloud for retail connects your customers, your people, and your data across the shopper journey, delivering personalized experiences and operational excellence. Is also brought to you in association with the A& M consumer and retail group. The A& M consumer and retail group is a management consulting firm that tackles the most complex challenges and advances its clients, people, and communities toward their maximum potential. CRG brings the experience tools and operator like pragmatism to help retailers and consumer products companies be on the right side of disruption. And Take off. Take off is transforming grocery by empowering grocers to thrive online. The key is micro fulfillment, small robotic fulfillment centers that can be leveraged at a hyper- local scale. Takeoff also offers a robust software suite so that grocers can seamlessly integrate the robotic solution into their existing businesses. To learn more, visit takeoff. com. And Sezzle. Sezzle is an innovative, buy now, pay leader solution, that allows shoppers to split purchases into four interest- free payments over six weeks to learn more, visit sizzle. com.
- Did some massive Peloton pontification around their recent Amazon news
- Looked long and hard at whether Apple is talking out of both sides of its mouth when it comes to advertising and privacy
- Praised Gap for its own “frenemy” supplier platform approach
- Discussed Walmart’s latest acquisition of gig delivery management platform, Delivery Drivers Inc.
- And closed with some deep introspection around checkout-free retailing based on Tesco expanding its autonomous GetGo store concept.
There’s all that, plus “fav” or “fave,” Lisa Frank Trapper Keepers, and where Anne stands on flat top sheets.
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