Shownotes
In this week's Omni Talk Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso, Chris and Anne discussed:
- A roundup of the latest retail earnings announcements
- Target enabling mobile app shopping within ChatGPT (Source)
- Kroger closing some of its automated fulfillment centers (Source)
- Gap's recent sales surge after viral 'Milkshake' denim ad with Katseye (Source)
- Bath & Body Works planning to launch on Amazon early next year (Source)
- And AWS's Daniele Stroppa dropped by to help us hand out November's Retail Tech Startup of the Month Award
There's all that, plus Thanksgiving shelf-stable food rankings, Black Friday shopping plans, and whether Chris is going turkey trotting or sofa surfing this holiday.
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#retailearnings #target #chatgpt #kroger #gap #bathandbodyworks #omnitalk #retailtech #retailinnovation #ecommerce #retailpodcast
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Transcripts
This episode of The OmniTalk Retail Fast 5 is brought to you by the A and M Consumer and Retail Group.
Speaker A:The A and M Consumer and Retail Group is a management consulting firm that tackles the most complex challenges and advances its clients, people and communities towards their maximum potential.
Speaker A:CRG brings the experience, tools and operator like pragmatism to help retailers and consumer products companies be on the right side of disruption and Miracle, the catalyst of Commerce.
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Speaker A:What's holding you back?
Speaker A:Visit Miracle.com to learn more.
Speaker A:That's M I R A K L.com and Corso.
Speaker A:Your stores are full of data, but are your teams acting on it?
Speaker A:Corso turns retail data into personalized daily to dos that drive sales, reduce waste and improve execution.
Speaker A:No fluff, just action.
Speaker A:Help your managers focus on what matters most.
Speaker A:Visit corso.com to see Intelligent management in motion and Infios.
Speaker A:At Infios, they unite warehousing, transportation and order management into a seamless, adaptable network.
Speaker A:Infios helps you stay ahead from promise to delivery and every step in between.
Speaker A:To learn more, visit infios.com and finally, Ocampo Capital.
Speaker A: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.
Speaker A:Learn more@ocampo capital.com hello, you are listening to Omnitalk's Retail Fast Five, ranked in the top 10% of all podcasts globally and currently the only retail podcast ranked in the top 100 of all business podcasts on Apple Podcasts.
Speaker A:The Retail Fast five is the podcast that we hope makes you feel a little smarter, but most importantly, a little happier each week too.
Speaker A:And the Fast 5 is just one of the many great podcasts you can find from the Omni Talk Retail Podcast Network alongside our Retail Daily minute which brings you a curated selection of of the most important retail headlines every morning and our Retail Technology Spotlight series which goes deep each week on the latest retail technology trends.
Speaker A: ,: Speaker A:I'm one of your hosts, Anne Mazinga.
Speaker B:And I'm Chris Walton and we are.
Speaker A:Here once again to discuss all the top headlines from the past week making waves in the world of omnichannel retailing.
Speaker A:Now, Chris, some listeners for the if they like the deep cuts of Omni Talk, they will know that this Thanksgiving is your number one holiday of all time in the ranking of holidays.
Speaker A:So for those who may have missed it in previous episodes, why is Thanksgiving your favorite holiday?
Speaker A:Chris?
Speaker B:Oh, and, and it's so simple.
Speaker B:It just comes down to one letter, F. The three Fs.
Speaker B:Food, family, and football.
Speaker B:I mean, what's, what, what's not to like about Thanksgiving?
Speaker B:But Thanksgiving doesn't, if I remember right, Thanksgiving doesn't really crack your top five.
Speaker B:Right?
Speaker B:You hate Thanksgiving.
Speaker A:Yeah, I'm not a fan.
Speaker A:I think the food just ruins it for me.
Speaker A:I think I'm, I listeners have heard me complain every year for the last eight years that we've been doing this podcast that, yeah, the food, not one of my favorites.
Speaker A:We might, I might have a couple of questions for you about it in the lightning round to just try to wrap my head around why people love this holiday so much.
Speaker A:But yeah, not a fan of, I mean, family, sure, but the food and the football?
Speaker A:No thanks.
Speaker B:Family, sure.
Speaker B:Why not?
Speaker B:Yeah.
Speaker B:Okay.
Speaker B:Yeah.
Speaker B:But, but yeah, if I was to throw another letter in there, there'd be, it'd be G for gravy.
Speaker B:Because I know how much you love gravy.
Speaker B:It just makes you nauseous to start this podcast.
Speaker A:And it's just all over.
Speaker A:Every shopping, everywhere you go shopping, every grocery store, it's just front and center staring at me, those jars of gravy.
Speaker A:And I just can't take it anymore.
Speaker A:So I'm really excited for the, for the holiday.
Speaker A:The Hanukkah Christmas flip over in the grocery stores after this weekend.
Speaker A:That's for sure.
Speaker B:Gravy's so good.
Speaker B:In fact, this podcast is going to be gravy.
Speaker B:And in my opinion.
Speaker B:All right, in this week's Fast5, we've got news on Target enabling mobile app shopping within ChatGPT, Kroger closing down some of its automated fulfillment centers, Gap's recent sales surge, Bath and Body works selling on Amazon.
Speaker B:And AWS's Danielle Stropa stops by once again to share this month's retail tech company of the month.
Speaker B:But we begin today with with an earnings roundup.
Speaker A:And yes, headline number one.
Speaker A:The last week saw a flurry of retail earnings announcements.
Speaker A:And here are some of the highlights.
Speaker A:Home Depot kicked everything off last week by cutting its earnings forecast.
Speaker A:Target then followed with a similar outlook, while Walmart, tjx, Ross stores and Best Buy all raised their financial outlooks across the back half of the year.
Speaker A:Chris, what stood out to you most from this week's picture Past earnings announcements.
Speaker B:Ooh, we're coming in hot.
Speaker B:That Ed, I don't know about you, but I'm going to zero right in on it and put a big bullseye on the bullseye itself.
Speaker B:Target, because Target was the real turkey of the past week, without a doubt.
Speaker B:Sales were, sales were quite honestly atrocious.
Speaker B:Like I did the math did.
Speaker B:You know, the four year, not the two year, not the three year, but the four year quarter three stack is now negative.
Speaker B:The Q3 stack over four years is negative.
Speaker B:That means Target hasn't grown a stitch in the last four years.
Speaker B:But in when you put that story in context, it's even more telling because like you said, like Walmart and all the discounters did fine.
Speaker B:Best Buy, which sells a hell of a lot of discretionary products.
Speaker B:They also did pretty well and even Abercrombie, Kohl's and Gap did better than expectations.
Speaker B:So, so like what the heck, Target, I mean you're just standing out like a sore thumb in the landscape of earnings in my opinion.
Speaker A:Yeah, I mean I guess I would challenge you in saying like what was your expectation?
Speaker A:And all the retail analysts out there, I think it's easy to kick Target while they're down, but they're in the middle of a CEO change.
Speaker A: They just laid off: Speaker A:Like what were we expecting this quarter's results to be?
Speaker A:If we're being honest with ourselves?
Speaker A:I think they've, yes, they've got a turnaround that they've got on their hands.
Speaker A:They've got a new CEO coming in place.
Speaker A:Hopefully that will be working on that.
Speaker A:And I think some things even that they've started to push on, which we'll talk about in the next headlines that are, that are showing that they are making some moves.
Speaker A:And I, I think you're right there.
Speaker A:It's clear, you know that because of Target's poor earnings this quarter, Walmart's getting their business.
Speaker A:For our essentials, you have tjx, Abercrombie and Gap who are getting their apparel business would be my guess, and then home goods again, part of the TGX umbrella.
Speaker A:Who's getting the home interest from those Target shoppers who have either left or are looking at other options right now.
Speaker A:But I mean it, it really wasn't surprising to me.
Speaker A:I'm not expecting that we're going to see a banner year coming of quarter, sorry, coming of Target anytime soon because they're in this turnaround and I would expect that of any retailer I think in their similar position.
Speaker B:So, so, I mean, but basically.
Speaker B:So you're like you're okay with it?
Speaker B:Like, see, to me it is a surprise because like it's the same regime.
Speaker B:It's the same regime that you've handed it over to.
Speaker B:So I would expect some improvement if you're believing in that regime.
Speaker B:And then the other point of it too is like Kohl's is in the same situation.
Speaker B:They have an interim CEO that's potentially doing better and just got named the full time CEO.
Speaker B:So like they're in the same exact situation.
Speaker B:And yet Target sticks out to me.
Speaker B:So I don't know.
Speaker B:Anything else you want to add there?
Speaker A:No, I think, I think it's just, you know, I again, not expecting to see anything, any massive changes until new people get in the role, both at Kohl's with their new CEO and at Target.
Speaker A:I think you got to give them time to right the ship.
Speaker A:And I think that we'll start to see either whether those changes are happening with new leadership in place or if, if it's a bigger problem and if this consistency continues for the next four quarters, then, yeah, then I, then I think I'm coming over to your side and I can understand.
Speaker A:But for right now, it was not surprising to me at all.
Speaker A:It just kind of was as expected.
Speaker B:Wow.
Speaker B:Okay.
Speaker B:Okay.
Speaker B:All right, well this next headline, we're going to get into it a little bit more and I have curious to see where your head is on this one too because speaking of Target, and believe me folks, I'm not done ranting on this yet either.
Speaker B:Target yesterday enabled mobile shopping in ChatGPT according to chain Storage and launched just yesterday.
Speaker B:The Target app is now connected to ChatGPT and lets users ask for help, search and purchase products using conversational language.
Speaker B:Target will offer a complete shopping experience through its app in ChatGPT with the ability to purchase items in a single transaction, multiple items, I should say, in a single transaction, shop fresh food products and select drive up, pickup or shopping fulfillment options.
Speaker B:And are you buying or selling Target's feet first foray into ChatGPT mobile shopping this holiday season?
Speaker A:I'm buying and I think I would be no matter which retailer would be making this move.
Speaker A:I know I'm going to be called probably a Target apologist for this podcast, but I do think that that every one of every retailer everywhere needs to be thinking about how they're going to go first into LLM enabled commerce.
Speaker A:I think it's important to note that this is still in beta.
Speaker A:They just launched it, so we've been playing around with it a little bit.
Speaker A:Sure.
Speaker A:There's still some things that need to be worked out.
Speaker A:But what I think is the biggest news is that Target's actually talking about this.
Speaker A:They're talking about it in the industry in ways that we haven't seen Target start or talk about some of the things that they've been deploying in stores or on E commerce in years past.
Speaker A:So I think this is not going to hit customers very strongly.
Speaker A:It's still very much in the trade media.
Speaker A:So I think as they continue to develop this beta version of their large language search, I think that customers will start to see, we'll start to see more adoption from customers.
Speaker A:But, but number one, right now I think Target is starting to get out in front of and start to talk about how they're making moves to try to course correct based on the earnings that we just talked about in the last story.
Speaker A:So I'm, I'm in for it.
Speaker A:I think there's a lot of, of, of developments still and I'm just glad that Target's actually getting in and doing something to start to compete with the likes of Amazon and Walmart.
Speaker A:But what do you think?
Speaker B:Wow.
Speaker B:Wow.
Speaker B:Okay.
Speaker B:So did you try it out?
Speaker A:Yep.
Speaker B:Yeah.
Speaker B:Did you think it makes your life better?
Speaker A:Um, I think it, I think that it's.
Speaker A:Yes, it will make my life better.
Speaker A:Um, absolutely.
Speaker A:I think I'm still trying to figure out all of the modes and methods that you can shop using these LLM search models.
Speaker A:I didn't even realize.
Speaker A:So for those listening, you know, when you go into ChatGPT, you have the ability on the left hand side to select a GPT.
Speaker A:So this is saying, you know, the way that Target's approaching this is that you go into it, you select the Target GPT and that's what you're using to help you find and pull together orders.
Speaker A:So it's a different method, but I still think that there's a lot of testing that needs to be done to figure out how we're going to go about doing this in the right way that serves the right customers who are using this, this methodology.
Speaker A:But you use it too, right?
Speaker B:Yeah, yeah.
Speaker B:I mean the way I, the way I would summarize it is basically it basically simulates the Target app experience in ChatGPT, which I just kind of ask myself, like, why do I need that?
Speaker B:But especially when the traffic is going to be small to it.
Speaker B:But yeah, I mean, I'm in 100% disagree with you on this one.
Speaker B:100%.
Speaker B:I mean, I, I think this experience actually shows just how Desperate Target is to sound like they're doing something innovative.
Speaker B:First off, first off, why launch this two days before Thanksgiving if you're going to do it?
Speaker B:It should have been in the works and working long before two days before Thanksgiving and Black Friday.
Speaker B:Second, because of that fact alone, and then also because you announced it on earnings day when results are bad.
Speaker B:It also sounds a little desperate to me.
Speaker B:And third, which I was hitting at, too, the experience kind of is lame.
Speaker B:Like, I had a former Target employee me text me yesterday.
Speaker B:He's like, this is a big nothing burger.
Speaker B:Like, why would I want an app inside of another app?
Speaker B:It's like, you know, so it's something that's just basically approximating the experience we already have.
Speaker B:So I'm like, okay, so it's going to have no impact on sales.
Speaker B:Target's likely going to try to spin it, that it's going to have a positive impact when they report on the next quarter, even though materially it won't impact earnings.
Speaker B:So they're going to feel fine doing it.
Speaker B:Which goes back to my point that I bring up at the beginning.
Speaker B:It's not a good experiment.
Speaker B:The order of operations here matters, I think.
Speaker B:First, like we've said on the show multiple times, you got to figure out natural language search on your own site first.
Speaker B:Then, as we heard from David Dorff at AWS say, the second thing is you have to decide if you want to integrate with ChatGPT at all.
Speaker B:Is there a strategic value to doing that?
Speaker B:And you're not going to really understand that until you understand that your own site is ready and active to be searched in this way.
Speaker B:And I don't think Target's effectively done that, at least when you look at its peer set.
Speaker B:And then you dip your toe slow once you get those two things figured out, I think then you dip your toe slowly into the right categories, not your whole experience.
Speaker B:You look at how Walmart's doing it.
Speaker B:Walmart's.
Speaker B:Walmart.
Speaker B:Walmart says they're going to do it.
Speaker B:They haven't even launched anything yet.
Speaker B:And they're being very deliberate with what categories are going to put into the experience.
Speaker B:They're saying they're not going to do grocery, for example.
Speaker B:So the roadmap to me is already out there and Target is leaping ahead in a way to try to sound like they're doing something, when in reality.
Speaker B:I agree.
Speaker B:It is a big nothing burger.
Speaker A:I. Yeah, I think.
Speaker A:I think there's a few things that are.
Speaker A:That we don't know.
Speaker A:One, we're not in the four walls of Walmart, of Target, of any of these, these retailers.
Speaker A:And I don't know that you and I have done enough shopping in the, in this, this, these multiple pathways that get you to what the best LLM search model is going to be.
Speaker A:I think you're making an assumption that Target is not, the products are not ready for LLM search when they, they have to be testing this and they have to be putting this out so that they have to have something there.
Speaker A:So I don't think it's fair to say that there's nothing that's been in place.
Speaker A:They have to have their products be searchable using this format.
Speaker A:So whether it's searchable on the target.com site, you can, it's searchable on the Target or via chat.
Speaker A:They're still working on it.
Speaker A:And I think the other part of this is it's beta, Chris.
Speaker A:It's beta during the highest traffic time of the season.
Speaker A:So I don't have a problem with them launching it this week.
Speaker A:I think if anything, they're going to get, if they get any traffic to it, which again, this has not been, it's not on cnbc.
Speaker A:This is not on like any, it's all in trade publications right now.
Speaker A:So my guess is if you ask the average target consumer, do they even know this exists right now?
Speaker A:They don't.
Speaker A:And all that Target's doing is getting testing information this week so that they can help continue to evolve the model to figure out what the right user experience journey is for the target consumer to get to this spot.
Speaker A:So I think there's still a lot of unknowns to be making this a definitive no, this is a terrible idea.
Speaker B:All right, well, my only, my only retort to that is I, I could agree with those points.
Speaker B:Why do it over Black Friday?
Speaker B:Why put your engineering team slow through the hell of trying to make this thing work over Black Friday?
Speaker B:Why not just wait?
Speaker B:Why not wait?
Speaker B:What's the big deal of doing that experimentation in November versus waiting to do that experimentation in January?
Speaker A:I think you did bring up a good point of the earnings report.
Speaker A:And this does show that they're doing something to course correct.
Speaker A:So I, I, again, I don't have a problem.
Speaker A:I don't think it seems desperate.
Speaker A:I think it shows action being taken instead of just saying, again, you know, we're relying on Target to get us through the holiday.
Speaker A:They're, they're showing that they're investing in other methods that are the future of shopping so that they can contend with the Walmarts and the Amazons.
Speaker B:All right, well, we agree to disagree on this one then.
Speaker A:All right, headline number three.
Speaker A:Kroger is closing some of its automated fulfillment facilities to bolster its E Commerce profitability.
Speaker A: million in: Speaker A:It will incur impairment and related charges of $2.6 billion in fiscal Q3 of this year as a result of those changes.
Speaker A:This announcement comes months after the company initiated a quote, full site by site analysis, end quote, of its automated order fulfillment network in an effort to improve digital profitability.
Speaker A:Chris, do you agree with the approach Kroger is taking here in shutting down its automation facilities?
Speaker B:On the whole, I'd say yes.
Speaker B:Yes, I agree with the approach.
Speaker B:You know, a site by site evaluation seems like it makes sense.
Speaker B:It seems like it's always the right thing to do.
Speaker B:And what people have always said is that the sites really need to be able to accommodate the demand.
Speaker B:And you look at the sites that were that are shutting down, at least from the reporting, they're sites in Wisconsin, which surprised me.
Speaker B:Maryland, Florida, where Kroger doesn't even have a presence.
Speaker B:So it's no surprise there when you step back and you say, yeah, the demand's probably not there to support a large scale automated fulfillment center.
Speaker B:Now, there are two things about the headline that I don't like.
Speaker B:Number one of which is $2.6 billion write off to close three facilities.
Speaker B:That seems like a hell of a lot of money.
Speaker B:And so you have to ask the question of like, holy cow, why is that?
Speaker B:Like how big of an error was this in strategy from the get go?
Speaker B:And then second of all, you know, you have to question like the, the way the headline is spinning, it is they're going to really rely on in store fulfillment, you know, to, to become profitable via E Commerce.
Speaker B:But I still wonder if there's a middle ground there.
Speaker B:And I think companies like Voke, which is spun out from the Roller group, and they're having success with this type of operation in smaller ways in Europe.
Speaker B:And it's a smaller automated facility approach.
Speaker B:So I think, I think the industry is going to get there.
Speaker B:I hope Kroger's still looking at that option.
Speaker B:My guess is that they are.
Speaker B:I think the industry just needs to find the right cocktail mix to use the analog.
Speaker B:That's the analogy I would use here.
Speaker B:Anne.
Speaker A:Yeah, I agree I think, you know, is this the end of CFCs as we know it?
Speaker A:I don't think so.
Speaker A:I think like you said, Kroger is just running another parallel experiment here with the third party delivery and with the in store automation that they have, as Kim Beaudry, who we had on from Dematic a long time ago predicted.
Speaker A:You know, this is, this is a way to try to figure out how to do this much more efficiently and to really test what the throughput is going to be.
Speaker A:So I think, I think while it's a lot of money to lose, it's a big write off.
Speaker A:I do think that it makes sense to start to pause this sooner rather than later because obviously there's more and more and more that's continuing to be invested in operating these CFCs the way that they are.
Speaker A:I also wonder and I'm curious to get your thoughts on this too.
Speaker A:CFCs are great for and even automation in the back of house of grocery stores.
Speaker A:It's great when you have center store items, things that are ambient temperatures.
Speaker A:But I'm curious, you know, what is the cost for this stuff look like and the layout because you and I have been in several of these.
Speaker A:As we start to hear more and more grocers around the US talking about how the customer is looking for more fresh product, more, you know, more refrigerated product, more perishables, how does that cost impact what they're able to do from, you know, picking from a CFC or from an automated warehouse in the store behind the scenes or you know, somebody just going through and picking up those items in a store via instacart or doordash like Kroger is doing.
Speaker A:I'm, I'm curious as the, the product set starts to evolve in what customers are demanding of their grocery stores, how the cost for this might fluctuate because more things are requiring refrigeration.
Speaker A:I don't know if that's coming into play here at all, but.
Speaker A:Curious to get your thoughts on that, Chris?
Speaker B:Well, I think it's always in play.
Speaker B:I mean that's the tough part is the refrigerated and frozen items, you know, being able to pick and pack them or the loose items is always the right challenge in this.
Speaker B:And you know, I, you know, I alluded to Loke earlier.
Speaker B:We're going to have their CEO Richard McKenzie on five insightful minutes with us hopefully here upcoming.
Speaker B:And you know, I think that's a question we should ask him is like, you know, how do you think about this now?
Speaker B:But also in the context of how the grocery product choices are evolving both internationally and particularly here in the United States with GLP1, because I think that's what you're alluding to here in terms of the mix of what people are wanting or is changing and will that impact the eventual migration and cost benefit analysis of standing up automation across grocery.
Speaker B:So yeah, I think it's an interesting question.
Speaker B:We should keep that on the roadmap for, for them and Domatic and whomever else we have gone.
Speaker B:All right, well let's bring on Danielle to award this month's Retail Tech Startup of the Month.
Speaker B:Lets give a big omnitalk welcome back to AWS's Daniela Stropa to hand out this month's Retail Tech Startup of the Month award.
Speaker B:Daniele is the worldwide technical lead for AWS Partners in Retail at Amazon Web Services where he drives a technical strategy for AWS Partners in Digital Commerce, Customer engagement and Generative AI.
Speaker B:Danelli, it's always great to have you back.
Speaker B:I think this is what your sixth time handing out this award with us.
Speaker C:It is, it is, yeah.
Speaker A:Wow.
Speaker B:Time, time flies and.
Speaker B:All right, well without further ado, who is November's Retail Tech Startup of the Month?
Speaker C:Right.
Speaker C:So Chris, this month I'm really excited to talk about Symfony AI and that is S Y M P H O.
Speaker A:N y a I.com Danelli, thank you so much.
Speaker A:We're so excited to hear more about Symphony AI.
Speaker A:So tell our audience and Chris and myself, what is it that they do and what really sets them apart from some other players in the AI space?
Speaker C:Basically, they enable retailers through a computer vision solution that can be deployed in their physical stores, in their retail stores.
Speaker C:And they leverage existing cameras, existing networks there and really provide the retailers there with actionable items to address the out of stock issue, the out of stock problem.
Speaker C:So instead of just providing a set of dashboards and insights that you can look at, you actually know what to do and exactly what needs to be fixed first in order to maximize sales impact.
Speaker C:So that's really for me the difference between knowing that there is a problem and knowing what to do to address it and how to solve it.
Speaker C:Right.
Speaker C:So when you see retailers that can achieve 25% increase in productivity, labor productivity, and at the same time improve on shelf availability by 5 to 7%, you know that this is a technology that actually works in a real world scenario.
Speaker A:Yeah.
Speaker A:And Danielle, I mean I imagine once they have clear impact inventory visibility, they're getting this real time data then from the cameras that already exist in their stores.
Speaker A:They're able to prioritize tasks, like you said, to make the most impact in the stores.
Speaker A:But what do you think some of the longer term implications of this technology will be across retail as this continues to get smarter?
Speaker C:I think we are at a point now where we're seeing a transformation in retail operations moving from the reactive store management approach to a predictive AI driven operation.
Speaker C:And really Symfony AI is right there at the forefront of this transformation.
Speaker C:And I think the way they are addressing some of the challenges, some of the tension that you see with retailers struggling today, things like labor cost and customer expectations, I think that's really the key here.
Speaker C:Their computer vision technology detects issues that shelves issues in real time and delivers a prioritized work list so that the team can really focus on those highest impact problems first and address that by priority.
Speaker C:And like a large retailer, one of their customers, a large retailer, achieved 20% lower infrastructure cost while personalizing planograms across over 300 stores.
Speaker C:This is not a small improvement, it's not just an incremental improvement, but it's really a transformational change that can reimagine, that can transform physical retail operations.
Speaker B:So Daniele, let's get you out of here on this.
Speaker B:Because the one thing that's going through my head and I take a lot of pride in, there's a lot of computer vision based systems out there.
Speaker B:You can use fixed cameras, you can use robotics.
Speaker B:And we take a lot of pride in saying there's no one right solution for any brand or retailer out there because every brand or retailer is different.
Speaker B:And I don't think based on what you're saying, it's a mutually exclusive approach either.
Speaker B:Do you agree with that?
Speaker B:And then what is the value you would tell retail executives to looking at something like a symphony AI for their fixed position camera systems?
Speaker C:I agree.
Speaker C:I don't think there is one, one solution that solves everything.
Speaker C:There's no silver bullets.
Speaker C:Right.
Speaker C:So I think the differentiation here for symfony that there are unique point here is really that actionable item that prioritize actionable work list.
Speaker C:Exactly.
Speaker C:It's not just okay, yeah, we have some out of stock in 1, 2, 3, whatever.
Speaker C:Right.
Speaker C:But it's really okay.
Speaker C:These are the items that we need to fix first in order to maximize the impact in order to maximize sales.
Speaker B:Which is a great point because for technology to be successful, it also has to work within the process flow of the organization that's adopting it too.
Speaker B:So.
Speaker B:All right, well, thanks Danielle, thank you.
Speaker B:All right.
Speaker B:And producer, I got a question for you.
Speaker B:Is your milkshake better than mine?
Speaker B:Because Gaps comparable sales surged after its milkshake Denimad with Cat's eye.
Speaker B:According to CNBC, Gap Inc. Said Thursday its comparable sales rose 5% during the fiscal third quarter, driven by strong revenue at its namesake brand after its viral Better in Denim campaign.
Speaker B: owth for Gap since its fiscal: Speaker B:During the quarter, Gap's comparable sales rose a staggering 7%.
Speaker B:Old Navy's rose 6%.
Speaker B:Banana.
Speaker B:Yes, banana was up 4%.
Speaker B:While athletics comps.
Speaker B:Yeah, they kind of were still not very good.
Speaker B:They were still down 11%.
Speaker B:And has Dixon, Richard Dixon, officially right of the ship at the Gap?
Speaker A:Well, it's not surprising to me that as a former CEO of an entertainment company, that he is making the Gap entertaining again.
Speaker A:He's got Gen Z talking about it.
Speaker A:Millennials are talking about it.
Speaker A:Xers are you.
Speaker A:Gen Xers are even nostalgic for the Gap of old.
Speaker A:Anecdotally, my friends and I have been talking about it and passing around the.
Speaker A:The new TV spot that they just put out with the choir.
Speaker A:I think it's great content, it's entertaining.
Speaker A:But now what will that mean for getting butts in Gap denim?
Speaker A:That's the question that I have, because I think it's piquing a lot of curiosity.
Speaker A:But.
Speaker A:And based on this quarter's success, I think it appears that it's peaking interest from people.
Speaker A:People.
Speaker A:And that's for sure a great start.
Speaker A:So I think that Richard Dixon should get credited for that.
Speaker A:But even Dixon himself said, you know, this is a story about consistency, a mix of better product marketing and partnerships to maintain this growth.
Speaker A:So I think even Dixon knows, like, there's still work to be done before we give him the award for saving the Gap and completely turning it around.
Speaker A:But I do think that this is a good start.
Speaker A:You know, first you have to tell people that you exist again, and he's doing a good job of that.
Speaker A:But as a former Gapper, how do you feel about this?
Speaker B:I. I think.
Speaker B:I think he's.
Speaker B:He's definitely doing it.
Speaker B:Seems like he's turning things in the right direction, but I think it's still too early to tell.
Speaker B:But I like the trend.
Speaker B:You know, I think I went into the numbers a little bit more on this story.
Speaker B:You know, I looked at their two year stacks for the last three quarters.
Speaker B:Q1, it's plus 5, Q2, plus 4, Q3, plus 6.
Speaker B:That's a, that's pretty good.
Speaker B:That's pretty good results.
Speaker B:And if I go back three years, the only quarter that isn't positive is Q2.
Speaker B:So overall I think that's pretty good performance.
Speaker B:The profit line from the quarter worries me a bit.
Speaker B:They said that's related to tariffs, but I'm curious if that's actually masking anything else.
Speaker B:You do have to ask that question, I think.
Speaker B:And the other thing I worry about, and you kind of alluded to this too, is the flashy marketing.
Speaker B:Marketing is one thing, but you have to get the product right too.
Speaker B:And both are, both are hard to do and get right year over year.
Speaker B:Marketing can spur you to buy once, but can it spur you to buy it that second time?
Speaker B:So when you get that butt into the denim the first time, do you like it enough to want to come back?
Speaker B:Because that flashy marketing is not going to get you back the second time.
Speaker B:So.
Speaker B:But to me, when I look at the financials, the proof will be in the pudding.
Speaker B: of: Speaker B:Like if you can get that again, you can show a positive comp in the first quarter, then yeah, I'm going to give him the official you've turned this company around award and you're doing a great job seal of approval.
Speaker A:All right.
Speaker A:Well, hopefully it's a happy holiday for Gap.
Speaker A:Otherwise, I don't know.
Speaker A:I don't know what's next.
Speaker A:I don't know what.
Speaker A:I don't know who can save you when it comes to these celebrity spots.
Speaker A:But yeah, gotta, gotta have the product down.
Speaker A:All right, let's get to headline number five.
Speaker A:Bath and Body Works is planning to launch on Amazon early next year.
Speaker A:We've had Bath and Body Works in the show more this year.
Speaker A:I know.
Speaker A:I think we have ever.
Speaker A:According to retail dive, Bath and Body Works will start with a small assortment of its evergreen products on Amazon in order to quote, test and learn and quote and build ratings and reviews.
Speaker A:According to CEO Daniel Heath.
Speaker A:He also said that Bath and Body believes somewhere between 60 to 80 million dollars of gray market sales are already happening via Amazon and that such sales are both brand dilutive and product dilutive.
Speaker A:Chris, this is also the A and M put you on the spot question.
Speaker A:Yeah, A and M would like to know more and more brands are opening up curated assortments on marketplaces like Amazon on one hand it's a chance to meet consumers where they are already.
Speaker A:Sorry, where they already shop.
Speaker A:But on the other it raises questions about brand control, margins and what happens to the in store magic.
Speaker A:How should companies be thinking about this trade off?
Speaker B:I think this topic's really interesting.
Speaker B:It is, you're right.
Speaker B:It's interesting to see Bath and Body Works in, in the headlines again.
Speaker B:I think the AI discussion that we had earlier changes the calculus on this a little bit.
Speaker B:And so for that reason, actually, and I've actually was going a different direction when I first started thinking about this headline.
Speaker B:And then I was like, okay.
Speaker B:From a consistency standpoint though, I think I changed my mind.
Speaker B:And actually I don't like this move, I don't like this move to integrate with Amazon because.
Speaker B:And I would say the same thing potentially about Bath and Body Works integrating with Walmart because they're both retailers and they're formidable ones at that.
Speaker B:I would be, given that AI is on the scene here, I would be biding my time, investing in my stores, as we've talked about a lot.
Speaker B:And I would follow the steps that I outlined above, like, you know, ready your site for LLM search first, because you're gonna have to be able to do that and make sure it works.
Speaker B:And then you partner with the right LLM search engine, you know, and you could take your time to decide what that is, but you find distribution that way, I think first and foremost, because if the industry as a whole, if the industry executives listening as a whole take that approach, the really interesting thing about that and to me is that Amazon is going to lose its dominance.
Speaker B:So if you start selling on Amazon, why start selling on Amazon now?
Speaker B:Wait a few years, Clean the decks, scrub the decks, get everything right and then decide what you want to do and how you want to play in this new AI landscape.
Speaker B:Because if you think about it the right way, you can still go to Amazon later, but you could also hurt them in the long run.
Speaker B:And so I think that's important thing to think about here.
Speaker B:So, you know, are you thinking short term or you think in long term?
Speaker B:And I think in this case Bath and Body Works seems like it's thinking short term to me.
Speaker A:I, I think I am thinking about this another way for the same reason, and that is I think it gets a product that requires a beauty product, a fragrance product that's very hard to buy.
Speaker A:It gets it into the hands of consumers without the concern of if I buy this and I'm paying for it on the Bath and Body Works site because they have an order minimum of $35, I'm not gonna go through with that transaction because I don't have any security blanket.
Speaker A:And I actually think because of LLM Search, I think you have to be on as many platforms as you can.
Speaker A:And I compare it almost to like when you're going to watch a movie on your streaming tv, right?
Speaker A:Like, you go there, you type in the name of the movie.
Speaker A:You don't, you just don't want to pay for the movie.
Speaker A:So what's the easiest way that I can see that movie, that I can get that movie?
Speaker A:And if I have a Walmart, you know, plus membership, or I have a Prime membership and I can get that Bath and Body Works product delivered to me for free and I can return it for free.
Speaker A:Like, that makes me pull the trigger on a product that if I had to pay or pay a restocking fee when I sent it back or go to a mall to return it to a Bath and Body Works store, like that to me is limiting on whether or not I'm going to go through with that search.
Speaker A:When I'm typing in, you know, what's a great fragrance for Holiday for me, you know, and tell me what all the products are, what's the highest rated, that kind of thing.
Speaker A:You know, if Bath and Body Works comes up and I get that listing next to it of, here are all the places you can buy.
Speaker A:Here are the, the deals that you uniquely qualify for based on your loyalty programs in each one of these segments.
Speaker A:Like that, to me, is what's going to drive purchase.
Speaker A:Whereas I think if you're just focusing on your own site and your own traffic, I think you might lose some of those customers.
Speaker A:So that, that's my perspective on it.
Speaker A:But I think it's also a test, right?
Speaker A:Like they're just trying this with a few products.
Speaker A:What does it hurt you to just test and learn on this?
Speaker A:Like, not, not a lot of, of of lift, I think, from Bath and Body Works.
Speaker B:Yeah.
Speaker B:And the great goods number is pretty telling too.
Speaker B:And I'm sure that's happening.
Speaker B:No doubt.
Speaker B:Yeah.
Speaker B:I think the big difference here is I just think the, the adopt, you know, the big question is how quick is the adoption curve?
Speaker B:Really?
Speaker B:Like, it's fun to talk about, but how quick is the adoption curve and how much, how many product sales are actually going to go through?
Speaker B:The lambs is the big crux of this argument here, I think.
Speaker B:You know, I think that's where you and I are probably differing here is Like, I just think you've got time to think this out and be a little more thoughtful and strategic before you start making some of these moves.
Speaker A:Yeah, I mean, I think, I think you can do both.
Speaker A:I think you have to parallel path this.
Speaker A:I think you have to be thinking about it on your own, like one serves the other.
Speaker A:So if you're thinking about how your products are showing up on your own site, you, you can simultaneously be thinking about, you know, it's just like when, again when E Commerce came online, like we had to think about all of the customer journeys to get to that product to get to your store, whether it was online, offline, curbside pickup delivery, all of these things.
Speaker A:Like we're in an entirely new phase of that.
Speaker A:And so I think that that is, to your point, dependent on each retailer and what their customer strategy is going to be.
Speaker A:But I do think that it's possible to be doing this at the same time and actually very necessary if you're a retailer that wants to stay relevant in the next era of, of shopping in this LLM based search way.
Speaker B:Yeah.
Speaker B:And the way I think about it, for me, the way, sorry, and the way I think about that from executive perspective is like in the Monday morning meeting I'd be looking at like, where are my traffic sources now?
Speaker B:Like, am I seeing the tick up in ChatGPT traffic that I think I should be seeing or not?
Speaker B:And that's how I'd be using that to gut, to gauge, you know, at what pace am I trying to do this, you know, versus like, you know, is the majority of my sales still come like you had?
Speaker B:We had was it constructor on?
Speaker B:Right.
Speaker B:The, the conversion gains that they're seeing from just improving your own site traffic flow through LLMs is pretty staggering.
Speaker B:And, and from their standpoint, far more worth the investment than trying to plug in to ChatGPTs as an example.
Speaker B:So that's where I'm like, okay, I'd be watching those, you know, in my morning meeting and then saying, okay, like let's, let's decide here where we're pushing our bets because we can't do everything.
Speaker B:As retail executives, we have to make decisions on where to place our resources.
Speaker A:Right?
Speaker A:Yeah.
Speaker A:And I just don't know that that's mutually exclusive.
Speaker A:I think that yes, you have to be focused on the bringing in the right partners, like a constructor to help supplement what that experience is going to be on your own site.
Speaker A:But I also think that that work is going to feed the other work that you're doing.
Speaker A:To serve your content up correctly to the other LLMs, knowing what you know about consumers and how they' shopping on your site too.
Speaker A:All right, let's go to the lightning round, Chris.
Speaker A:Let's rank the following shelf stable Thanksgiving products, from best to worst.
Speaker A:Jarred gravy, tinned cranberries, or instant mashed potatoes.
Speaker B:Oh, this one.
Speaker B:This one's super easy.
Speaker B:I mean, I think it's a battle for first place on this one.
Speaker B:And it's cranberries and gravy are neck and neck in my mind.
Speaker B:And the canned gravy.
Speaker A:The canned stuff, the jarred gravy.
Speaker B:Oh, gravy.
Speaker B:Gravy's just good.
Speaker B:Gravy's just good.
Speaker B:And, and, but, but way down the bottom is instant mashed potatoes.
Speaker B:Instant mashed potatoes are disgusting.
Speaker B:They never deserve to be on the table at all.
Speaker B:Ella, shake it.
Speaker B:Ella, come on in here.
Speaker B:What do you think on this one?
Speaker B:I want to know.
Speaker B:You're shaking your head here.
Speaker B:I want to know what you think.
Speaker B:What.
Speaker B:What are your rankings here, Ella?
Speaker B:Producer.
Speaker B:Ella.
Speaker A:No, I'm with Ann.
Speaker A:Gravy is never on my list.
Speaker A:Cranberries also, Chris.
Speaker A:I don't.
Speaker A:I don't know.
Speaker A:Not on my list.
Speaker B:Loves cranberries.
Speaker B:Oh, my God.
Speaker B:All right, you two.
Speaker B:All right.
Speaker B:Well, them's fighting words.
Speaker B:All right.
Speaker B:Our friends at Planalytics say that winter storms could also be heading our way this week, disrupting Black Friday shopping.
Speaker B:What stores, if any, are you planning to hit up this week, Anne?
Speaker A:Well, I am really excited for the noise off Bazaar Pop up, which is a critically acclaimed New York Times fashion resale site that's based in Minnesota.
Speaker A:They're doing a pop up here in Minneapolis on Saturday for Shop local Saturday or shop small Saturday.
Speaker A:So I'm excited about that.
Speaker A:I'm going to hit my local luxury consignment retailers at our neighborhood little shopping district, going to the Egan outlet centers down here in Southern, the southern part of the Twin Cities and probably more.
Speaker A:I can't wait.
Speaker A:I love.
Speaker A:I love Black Friday shopping.
Speaker A:What about you?
Speaker A:Are you gonna go?
Speaker A:You're gonna do anything?
Speaker B:Yeah, I.
Speaker B:For sure.
Speaker A:Yeah.
Speaker B:I always hit a banana, actually.
Speaker B:That's why I made that a joke about banana before.
Speaker B:Like, banana's my place to go.
Speaker B:Like, I'm always a big fan of banana on Black Friday.
Speaker B:So I'm gonna try to head over to South Del Mar and they got a lot of deals and see what else is going on over there, too.
Speaker B:Like a lot of new shops over at South Del Mall.
Speaker B:The first Indoor shopping mall in the history of America right down the street from us.
Speaker B:So, yeah, I'm gonna go check it out on Friday.
Speaker A:What describes your Thanksgiving Day mood, Chris?
Speaker A:Turkey trot, morning 5k or sofa surfing?
Speaker A:Which one sounds more appealing to you?
Speaker B:Oh, ideally both.
Speaker B:I love to, I'd love to turkey trot and sofa serve.
Speaker B:Turkey trot in the morning, sofa surf in the afternoon.
Speaker B:But, but man, and I, I haven't told you guys this, but like, I think I've got sciatica now.
Speaker B:Like, I can't even run.
Speaker B:I can't walk.
Speaker B:I gotta go to physical therapy today just to get like out of bed now.
Speaker B:So like, so sofa surfing is going to be like medically mandated, I think, for me.
Speaker B:But.
Speaker B:All right, anyway, last one.
Speaker B:As our resident fashion expert, this one's kind of off the beaten path from Thanksgiving.
Speaker B:Although I give thanks that it's actually a story.
Speaker B:Bianca Sensori is reportedly launching a new fashion brand with Kanye's money.
Speaker B:On how high does this story rank on the irony scale for you and what are your expectations of this new line?
Speaker A:I don't find it ironic at all.
Speaker A:I think it's just that I'm not surprised.
Speaker A:Like, again, yes, he's funding someone who has a very high presence, is already has significant virality based on the outfits that she's worn publicly for the last several years.
Speaker A:So I'm actually intrigued.
Speaker A:I think other people will be too.
Speaker A:I think it's going to be boundary pushing.
Speaker A:It will be daring and it's art and I think that's the fun part of it.
Speaker A:So I'm, I'm all here for this next chapter in the Hollywood story of Bianca and Kanye.
Speaker A:And I think, think a lot of people will be looking forward to seeing what this collection actually looks like.
Speaker A:Now how many people are going to be wearing this?
Speaker A:That might be another question.
Speaker A:But, but I'm excited to see what she pulls together.
Speaker B:So you don't see any irony at all in a woman who made her claims by not wearing clothing, having a clothing line?
Speaker A:I think that's, I mean, she is still wearing clothing.
Speaker A:I mean, it's, yeah, it's, it's.
Speaker A:I mean the sheer trend is very popular in fashion right now.
Speaker A:It's not just her.
Speaker A:So I think that that's, that's, that it makes sense to me.
Speaker A:But yeah, she's, I mean, why not?
Speaker A:You already got your bill, you already have your built in followers who are going to pay attention to it.
Speaker A:So I don't know, it wouldn't be the craziest thing that Kanye's ever done, that's for sure.
Speaker B:Definitely.
Speaker B:Definitely not.
Speaker B:Definitely not on.
Speaker B:On that scale.
Speaker B:It's very low.
Speaker B:On the crazy scale, yes.
Speaker B:100.
Speaker B:Yeah, but kind of does.
Speaker B:I mean, Kanye has had an eye for fashion in the past.
Speaker B:All right, well, of course, today's podcast was produced with the help of Ella Siri.
Speaker B:Ella, come on in here again.
Speaker B:It was great to have you with your Thanksgiving rankings there, your.
Speaker B:Your shared hatred of gravy.
Speaker B:But I'm curious, who won this week's headlines for you?
Speaker A:Well, I loved the Gap milkshake campaign.
Speaker A:I mean, this is dead.
Speaker A:It's all over my algorithm still.
Speaker A:And this came out, what, back in August?
Speaker B:Yeah.
Speaker A:Yeah.
Speaker A:My question for you is, though, has that brought you to purchase or explore?
Speaker A:Like, you saw that commercial, then what.
Speaker A:What does the Gap mean to you now?
Speaker A:What are you interested in?
Speaker A:I mean, this ad was everywhere.
Speaker A:Specifically the dance.
Speaker A:Like, my friends were doing the dance.
Speaker A:I was doing the dance.
Speaker A:Unfortunately, my favorite pros and Dancing with the Stars were doing this dance.
Speaker A:So the virality definitely made me go check out the brand.
Speaker A:But would I say that it made me buy the jeans?
Speaker A:No.
Speaker A:What about the Apple and Gwyneth Paltrow, like, stuff did that?
Speaker A:Like, and now they have this new, like, the choir spot.
Speaker A:Like, are you getting more and more intrigued by the more content that they're pulling out?
Speaker A:Are you still, like, meh.
Speaker A:As a producer, I'm very intrigued by the content.
Speaker A:Like, I love video production.
Speaker A:I am obsessed with what they're doing with all this, like, talent spotting.
Speaker A:Sienna Spyro, she came up on my for you page on TikTok like, two weeks ago, and this ad came out two weeks ago.
Speaker A:So, like, they're ahead of everything, at least in my eyes.
Speaker A:So it's definitely making us talk about it as Gen Z.
Speaker A:But I think there has to be something there to get me in the store too, because shopping online, seeing the ads, it'll get me there.
Speaker A:But what's going to be that factor of getting me to buy these jeans?
Speaker A:I have one sweatshirt in my closet.
Speaker B:From Gap, and has it gotten your Gen X, you know, self into any new Gap clothing of late?
Speaker A:I'm not a Gen Xer.
Speaker A:I'm a millennial, but I am.
Speaker A:I'm not a Gen Xer, but I am getting.
Speaker A:But I.
Speaker A:But I would say, like I said in the last headline, I mean, my friends and I are talking about it.
Speaker A:We're passing it back and forth, you know, and we're sending these and like, oh, this is Amazing.
Speaker A:I think for us the biggest challenge is there's not the, the store locations have diminished so significantly that it's just not something that's convenient.
Speaker A:I have to make another trip to do it.
Speaker A:But I will say, like the Zac Posen influence on some of the designs do have me spending more time on the Gap website because I'm curious.
Speaker A:Like I, I like this elevated look for them.
Speaker A:I've always thought that they should be going for almost this more not quite banana in suiting, but a more elevated basics look so that they can compete again with the Uniqlos and others in the world that are doing that so well right now.
Speaker A:Gap owns that space.
Speaker A:They should be.
Speaker A:Or they did it one time, they should be doing it again.
Speaker A:So I'm hopeful.
Speaker A:I'm hopeful.
Speaker B:Yeah.
Speaker B:So, yeah, I think, yeah, so am I. I mean, cut my teeth there.
Speaker B:Yeah.
Speaker B:I thought you all, I thought you always voted with the, with the Gen Xers though, because you're right on the cusp.
Speaker B:I thought you were always a Gen X voter, relatively speaking.
Speaker A:I think it depends.
Speaker A:Zillennial.
Speaker A:Maybe that's what I should Zillennial.
Speaker A:But I would say, yeah, I wasn't like, I was not a die hard Gapper back.
Speaker A:I mean, as much as I think the Gen Xers were.
Speaker A:So I think I'm more of a middle of the road.
Speaker A:Discovered it when I was younger and yeah, it wasn't as formidable for me as I think it was for most Gen Xers.
Speaker B:You weren't swinging with the khakis, I guess.
Speaker B:All right.
Speaker B:All right.
Speaker B:On that note, happy birthday to Rita Ora Jessica Camacho.
Speaker B:And to one of my personal faves, Mike Dexter from Can't Hardly Wait, the great Peter Facinelli.
Speaker B:And remember, if you can only read or listen to one retail blog in the business, Make It Omnitalk, the only retail media outlet run by two former executives from a current top 10 US retailer.
Speaker B: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 the of of your game as a retail executive and also regularly feature special content that is exclusive to us and that Ann and I take a lot of pride in doing just for you.
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Speaker B:On behalf of all of us here at Omnitalk, as always, be careful out there.