Walmart Opens A New HQ And Does Fendi, Chanel And Robots All In The Same Week! | Fast Five
In this week’s Omni Talk Retail Fast Five news roundup, sponsored by the A&M Consumer and Retail Group, Simbe, Mirakl, Ocampo Capital, and Scratch Event DJs, A&M’s Kelly Carey and John Clear joined Chris and Anne to discuss:
- Walmart’s new Symbotic relationship, aka its new robot deal (Source)
- The veracity of Target’s claims that it has cut its production lead times down from 7 months to 8 weeks (Source)
- Whether the American consumer really needs smaller Burlington stores (Source)
- Sephora’s plans to redesign its entire North American store fleet (Source)
- And closed with an examination of Walmart’s marketplace expansion via Rebag to sell the likes of Fendi, Chanel, and more (Source)
There’s all that, plus pit diapers, roundabout rules of the road and the HQ amenities we all just can’t live without.
Music by hooksounds.com
#walmart #target #sephora #retailtrends #retailnews
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Transcript
The OmniTalk Fast5 is brought to you with support from the A and M Consumer and Retail Group.
Ann Mazinga: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 toward their maximum potential.
Ann Mazinga: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.
Ann Mazinga:Miracle is the global leader in platform business innovation for E commerce.
Ann Mazinga:Companies like Macy's, Nordstrom and Kroger use Miracle to build disruptive growth and profitability through marketplace, dropship and retail media.
Ann Mazinga:For more, visit mirakl.com that's M I R A K L.com and Symbi Symbi powers the most retail banners in the world with today's only multimodal platform for in store intelligence.
Ann Mazinga:See how Albertsons, BJ's Spartan Nash and Wakefern win with AI and automation at simbirobotics.com and Ocampo Capital.
Ann Mazinga:Ocampo Capital is a venture capital firm founded by retail executive executives with the aim of helping early stage consumer businesses succeed through investment and operational support.
Ann Mazinga:Learn more@ocampo capital.com and finally, Scratch Event DJs Scratch Event DJs tap into their unrivaled network of top local DJs to provide brands with high quality curated in store experiences anytime, anywhere.
Ann Mazinga:Find out more@events.scratch.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.
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Ann Mazinga: ,: Ann Mazinga:I'm one of your hosts, Ann Mazinga.
Chris Walton:And I'm one of your other hosts, Chris Walton.
Ann Mazinga:And we are here once again to discuss all the top headlines from the past week making waves in the world of omnichannel retailing.
Ann Mazinga: for their first appearance of: Ann Mazinga:Kelly John, this is your this is your second duo like appearance on the Omnitok Retail Fast 5.
Ann Mazinga:We're excited to have you, Kelly.
Ann Mazinga:I'd love for you to start with a little bit of your background and your current role at am.
Kelly Carey:Great, thanks, Anne.
Kelly Carey:Hi everyone.
Kelly Carey:I'm Kelly Carey.
Kelly Carey:I am a director with the Alvarez and Marcel consumer and Retail Group.
Kelly Carey:I've been with the group for going on six years now, which is crazy to say, really focusing on our beauty and apparel clients within the team.
Kelly Carey:So I've spent time both in consulting and in industry working with multibillion dollar beauty companies and I'm excited to talk about some fun headlines in that space today.
Ann Mazinga:Oh yes, we've got some for you, Kelly.
Ann Mazinga:We have some for you.
Ann Mazinga:I cannot wait to hear your thoughts.
Ann Mazinga:John, let's have you give the audience a little bit of your background and your current role at A and M.
Ann Mazinga:Sure.
John Clear:Thanks for inviting me back.
John Clear:I wasn't sure it was definitely going to happen after as the Irish change out.
Chris Walton:It was touch and go.
John Clear:I can imagine.
John Clear:I can imagine.
John Clear:So yeah, My name is John Clear.
John Clear:I've been with the A M consumer and retail group for three years.
John Clear:Actually next month I'm a senior director here in the team and so I work a little bit on the other side of the retail equation than Kelly.
John Clear:So my, my focus is really on grocery or food retail, so grocery, mass, drug, convenience.
John Clear:Prior to joining A and m, I spen 10 years working in the grocery industry as a, primarily as a merchant with a company called Lidl.
John Clear:So I really kind of bring the, the industry background to what CRG do and hopefully a little bit of that industry operator expertise to give a bit more nuance when we're engaging with the teams as we go through our processes.
Chris Walton:And I love how he said that just a company called Lidl, which I think we learned at nrf, is like the fourth largest retailer in the world or the fourth largest conglomerate in the world.
Chris Walton:The retail conglomerate in the world.
Chris Walton:So yes, John, it's great to have you.
Chris Walton:Every time.
Chris Walton:John, you're my go to for grocery insight.
Chris Walton:Whenever I don't know anything, I'm always like okay, what does John think about this?
Chris Walton:So it's great to have you back.
John Clear:That is a risky strategy, Chris, but.
Ann Mazinga:You'Re telling me it's worked so far?
Ann Mazinga:It's worked so far.
Ann Mazinga:So we'll keep rolling with it until it does us wrong, John, we'll keep going.
Ann Mazinga:All right, well let's, let's jump to the headlines.
Ann Mazinga:Let's get to it.
Chris Walton:All right.
Chris Walton:And well, I'm excited because the wait is almost over.
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Chris Walton:That's/save with Omnitok.
Chris Walton:All right, in this week's Fast5, we've got news on Target cutting its go to market timeframe from seven months to eight weeks.
Chris Walton:Burlington's new small store growth plans.
Chris Walton:Sephora's massive store redesign of its entire fleet.
Chris Walton:Walmart's partnership with Rebag to sell the likes of Fendi, Chanel and many, many more high end luxury brands.
Chris Walton:But we begin today with other exciting news in the world of robotics.
Chris Walton:Ann?
Ann Mazinga:Yes, big news.
Ann Mazinga:Chris and team Symbotic has struck a deal to expand its partnership with Walmart.
Ann Mazinga:According to the Wall Street Journal, Symbotic will take on a $520 million program to develop an automated delivery platform for Walmart stores while also agreeing to buy the retail giant's advanced systems and robotics business.
Ann Mazinga:Walmart will fund a development program that aims to leverage Symbotics artificial intelligence enabled robotics platform and will seek to enhance Walmart's current online pickup and delivery fulfillment systems and design new systems.
Ann Mazinga:Symbotics said that if performance criteria are met, Walmart is committed to buying and deploying systems for 400 accelerated pickup and delivery centers at stores over a multi year period.
Ann Mazinga:John, you're Mr.
Ann Mazinga:Grocery here.
Ann Mazinga:We're going to you first.
Ann Mazinga:Why would Walmart ink this deal with Symbiotic and what do you think it says about Walmart's approach to delivery?
John Clear:Yeah, so this is actually it's great because it's like the only grocery topic we have almost a grocery Jason and it's still not quite there today.
John Clear:So I'll do.
Chris Walton:Right, right, right.
John Clear:And I do have to just before I start, give a shout out to my brother David who works for a company called Auto Store who are also in the robotics space.
John Clear:So I was able to get a good insight from him last night on and the kind of information on this deal.
John Clear:So that's super helpful for me.
Chris Walton:Competitive intelligence, I love it.
John Clear:Yeah I'll try and be careful what I share.
John Clear:Right.
John Clear:He was yeah on the gossip side of things but I'll try and keep it factual here.
John Clear:Right but, but I do think generally speaking if you look at it first of all from like the industry lens one of their key kind of accelerants, enablers over the last number of years has been this focus on technology.
John Clear:So throughout their organization they're super focused on technology.
John Clear:They've.
John Clear:They already have an existing deal with Symbotic on like large scale DCs and automation of their DCs which has been successful and the way I would kind of position that is Symbotic have been pushed very hard by Walmart to improving up their game which has then driven Symbotics growth over the course of that time.
John Clear:If you take this as a separate piece then this is a little bit more focused on their what I think used to be called MFCs but people have slightly away from the turn MFCS I think because there's been some difficulties in getting that off the ground.
John Clear:And so maybe not to get into too much detail but Walmart acquired Alert a number of years ago to bring them in to do this work and now they're effectively spinning that work back out to Symbotic.
John Clear:And so the way I would read that is they brought it in house maybe found that it was more complicated than they expected to make this work with their own internal capabilities because it's complicated process and what they're really doing is I think doubling down on automation as a key pillar for their growth by going to an industry leader in the space and saying to them we want you to recreate the success you've had on large scale distribution centers to MFCs.
John Clear:And because it's obviously a key pillar for what they want to do particularly using their stores as fulfillment notes.
John Clear:Right.
John Clear:They haven't quite got that off the ground in the way that everybody was expecting.
John Clear:I think that it the structure of the deal is also very interesting.
John Clear:So it's being quoted as symbolic of bought it for $200 million.
John Clear:But when you go below the surface Walmart are going to pay them 500 million.
John Clear:There's 230 million guaranteed at closing there's 100 stores that they're guaranteed.
John Clear:So it's a very low risk deal for Symbotic that I think will hopefully clean up some potential issues that Walmart have had internally.
John Clear:And for me it's kind of another example of Walmart betting on innovation to continue to grow their performance because I Mean, Chris, I know you're a big fan of Doug McMillan, but it has been a huge success over the last number of years of how much they've grown.
John Clear:And I think this is just another signal of them continuing to double down on, on what they've seen work so far.
Ann Mazinga:Yeah, I mean Chris, how much do you think too with John saying like how much of this plays into probably the acceleration that Walmart has seen with delivery with grocery in the last couple of years, like that's causing a lot of strain on their systems, I'd imagine.
Ann Mazinga:So what are your thoughts here on this investment and what John had to say?
Chris Walton:Yeah, I mean I gave John a shout out at the beginning and John followed suit very well and got the great competitive intelligence here.
Chris Walton:I mean, I think, I think again your question's dead on.
Chris Walton:I mean I think you know, Walmart plays the long game, you know, as well as anyone right now.
Chris Walton:And I think that's really what you know, Doug McMillan the team are doing here and David Gugina, the head of supply chain too.
Chris Walton:The, the, the, the wrap.
Chris Walton:I would put on this in terms of what John said is like, and I keep thinking about, and we were talking about this even before we got on the show today, I keep thinking about the, the fabric save a lot experience that we saw in Brooklyn, New York and, and just how easy it was to plug into a community that you don't previously serve.
Chris Walton:Right.
Chris Walton:And, and we saw Uber drivers coming in there left and right and all this thing was, was stood up on an Uber eats marketplace for save a lot and they were doing business out of it.
Chris Walton:So, so if I'm Walmart, I think I'm in the two angles I would add here to what John said is I'm, I'm, I, I like this move, number one, but I'm thinking, I'm thinking about these two things.
Chris Walton:I think number one, I'm thinking about how do I extend Walmart plus because I've been, I've been successful extending my demographic.
Chris Walton:I can reach higher incomes.
Chris Walton:It, it brings the robotics play into the cities like we saw with fabric and save a lot.
Chris Walton:So I think that's a piece of this.
Chris Walton:But the other part of this that I think is really interesting that talks about their strategy relative to others is Walmart can't really take the sortation center approach that like Target is taking because of where their stores are located.
Chris Walton:Their stores are very rural based.
Chris Walton:So to get that same day delivery efficiency they have to go to robotics and they have to go to robotics in the store itself via micro fulfillment.
Chris Walton:So that's the key thing here.
Chris Walton:And I think that's what separates Walmart in terms of how they're thinking about the landscape relative to Target and even like Amazon too in terms of their approach.
Chris Walton:So, so honestly I, I can't stop thinking about the potential here that if Walmart cracks the code on this, this is why it's a great investment.
Chris Walton:If they crack the code on this over 10 years, like Walmart could have a very profound presence in the biggest cities in America in a way that they just don't have right now.
Kelly Carey:Yeah.
Chris Walton:And with an income demographic that they just don't have in those cities.
Chris Walton:So that's the play here.
Ann Mazinga:Yeah, I agree, Chris.
Ann Mazinga:I mean, I think the thing is that this will also in the long run help Walmart keep prices low, which is exactly the driver that you're talking about.
Ann Mazinga:Like you think about, you know, the Save A Lot example.
Ann Mazinga:If I'm going on a marketplace and I'm just buying eggs, like Save A Lot popped up as the cheapest place to buy eggs.
Ann Mazinga:And you know what, I don't really care where I'm getting which retailer I'm getting my eggs, but if I get served up three options and that's the cheapest, I don't care if they have a physical presence or not, that's where I'm going to go.
Ann Mazinga:And I think that's what this keys in on here, that Walmart will be able to do things more efficiently.
Ann Mazinga:They're eliminating the bottlenecks of manual picking from their, their process like you said to you know, ship from store.
Ann Mazinga:And this is something that, you know, will just continue to develop.
Ann Mazinga:They'll keep learning from and be able to serve more people.
Ann Mazinga:But jump back in, Chris?
Chris Walton:Well, no, I just wanted, I wanted, I just wanted to point out, because I think you're dead right, like just because you were there with me.
Chris Walton:How many people did Save A Lot have working that, that facility too?
Ann Mazinga:Like they need two people to facilitate two people, two pickers.
Chris Walton:We saw more Uber drivers coming in than there were in the time, in the three hours we were there.
John Clear:Yeah, yeah.
Ann Mazinga:And picking all things.
Ann Mazinga:Like again, I think that's the key thing.
Ann Mazinga:Like fresh frozen ambient.
Ann Mazinga:There was no manual labor associated with the picking process.
Ann Mazinga:It was all coming to those two individual baggers and that was it.
Ann Mazinga:That was all they needed.
Ann Mazinga:But Kelly, any last minute thoughts here to close us up?
Kelly Carey:Definitely excited to see where it goes.
Kelly Carey:I think that the, the Save A Lot example is a great one.
Kelly Carey:If they can start to get that kind of scale.
Kelly Carey:It'll be really interesting.
Kelly Carey:The city play that you mentioned is, is one I'm excited to see play out as well.
John Clear:Right?
Ann Mazinga:Yeah.
Ann Mazinga:To save a lot's doing.
Ann Mazinga:Serving 2 million customers with a 7,000 square foot warehouse.
Ann Mazinga:I mean I think you're dead on, Kelly.
Ann Mazinga:We gotta, we gotta see where this, this allows Walmart to go.
John Clear:I would add maybe just one final thing on like around the topic of the like the reduction of manual labor is that the, the basket economics of like home delivery for grocery just doesn't stack up right.
John Clear:So if we've done some recent work where you compare the grocery basket with an apparel basket for home delivery and like the differences is so stark because everyone's losing money in grocery and so that's why there's such a shift to kind of brick and mortar.
John Clear:And actually interesting because I know we touched on before we talked that Robert Yosef from the Schwartz Group mentioned that 94% of sales in Germany are still brick and mortar.
John Clear:It's somewhere in the high 80s in the US of how much sales and grocery are still brick and mortar.
John Clear:So people still want to go to stores and this is a key way to enable that to still have pickup and then maybe there's some component of last mile delivery.
John Clear:But they have to make the economics of the basket make sense.
John Clear:And Walmart are ahead of the curve on that versus Yep.
Chris Walton:Yep.
Chris Walton:The other point I'd say too, it's cool to see MFC is getting talked about again and like, you know, and team like it seems like they kind of died off for a year and we're all kind of like going why did this happen?
Chris Walton:Like this seems like a good idea that we need to still figure out to John's point because the economics don't work.
Chris Walton:But so it's great to see.
Chris Walton:All right, headline number two, this is a potentially fun one.
Chris Walton:Target has said that it has cut its go to market timeframe from seven months to eight weeks according to Retail Dive.
Chris Walton:Rick Gomez, the chief commercial officer at Target, told an audience last Monday at the National Retail Federation's Big show conference that Target has shortened its go to market cycle to eight weeks down from 27 weeks for specific trending items so they can reach shoppers faster.
Chris Walton:Quote, not everything is in eight weeks, Gomez explained.
Chris Walton:But the things that are trending and that we're seeing that are going viral, that we want to be in market ahead of the competition, we've created an operating model that enables us to do that, end quote.
Chris Walton:John we're going to go to you again on this one.
Chris Walton:Are you buying or selling?
Chris Walton:Target's announcement of cutting its product lead times from seven months to eight weeks.
Chris Walton:And what, if any, impact will it have on Target's overall business performance?
John Clear:Yeah, I mean, to answer the first question, I think I'm a hold right now because I'm not quite, to be honest.
John Clear:It's, it's, I don't know, it's kind of, it's, it feels like a very exciting announcement, right?
John Clear:We're going to do stuff in eight weeks and we cut it down from seven months.
John Clear:And like all those numbers sound great, but I'd have a couple of like, first of all concerns about impacts this could have on Target operationally.
Kelly Carey:Right?
John Clear:So the first thing is that historically means historically, over the last number of years, Target have mentioned inventory issues a lot in earnings calls, right.
John Clear:That they've had too much inventory of the wrong items.
John Clear:They've gotten hit by markdowns.
John Clear:It's driving some of their underlying underperformance.
John Clear:I only see this exacerbating that issue, right?
John Clear:If you're, if you're changing and saying, hey, this is a big deal and we're going to go after it in eight weeks, but you choose the wrong thing, suddenly you've got a ton of like quote unquote trendy inventory that actually nobody wants, which is not probably going to solve Target's underlying issue.
John Clear:And if they currently have forecasting issues at a seven month lead time, I don't see how that's suddenly going to get better in an eight week lead time.
John Clear:So that's my first kind of operational concern I would have from a, from like kind of a merchandising ops perspective.
John Clear:The other thing I would say is like, I don't think that this gets at Target's underlying problem of underperformance, right?
John Clear:So we know that they're constrained on basically price.
John Clear:I mean, is the big issue that the stick that's being used to beat Target all the time having a trendy, I think, bow, that is one of the examples that they use.
John Clear:Having a trendy bow in time for holiday seasons is not going to change that.
John Clear:There's a little bit of maybe additional incremental sales you can gain, but I don't know if it's going to change it.
John Clear:The other thing is eight weeks I was trying to think through in the year, right, where eight weeks could actually be helpful for you on a trend.
John Clear:And so if you see a holiday trend, it's probably going to come in maybe mid October to early November, you're already past the holidays at eight weeks.
John Clear:If you see a back to school trend, which I thought was maybe the closest I could get, you might see it in June and you hit stores in September.
John Clear:But we all know in real life, in retail, back to school is done by September.
John Clear:Right.
John Clear:You're into Halloween.
John Clear:So I don't see how this actually helps them from that perspective.
John Clear:And the final point I'd have is like eight weeks is still way behind the market leaders of like real quick turn.
John Clear:So Zara is two to.
John Clear:Two to four weeks.
John Clear:Right.
John Clear:And so that's kind of our benchmark.
John Clear:It's not the exact same model, but I still think it doesn't think it brings it quite there.
John Clear:So it's actually funny.
John Clear:Having started from a hold and then work my way through those three points, I'm probably on a not buying situation.
John Clear:I just don't see how it trends to their actual.
John Clear:Solves the problems.
John Clear:And I think that the thing that Target's always been known for is kind of storytelling, building a brand that tells a story that you can rely on, that's consistent that you know what you're going to get.
John Clear:Yes, there's some kind of trend on trend moments that they've had, but it's not their usp.
John Clear:So I, I think it sounds great, but I don't know what it's driving at to solve for for them.
Chris Walton:Kudos to you, John, because I was gonna, I was gonna hammer you over the head with.
Chris Walton:So you're a hold on this, huh?
Chris Walton:But no, you, you switched me, I.
John Clear:Think, with me on my feet, Chris.
Chris Walton:Yeah, right.
Chris Walton:You switch mid diatribe.
Chris Walton:All right, so.
Chris Walton:And the other part too, that you know, that we, you didn't mention was if depending on the, the degree to which you try to do this, it's going to have a sizable impact on your product margins as well.
Chris Walton:Like incredibly sizable.
Chris Walton:Yeah, Kelly, so I was going to bring you in on this now.
Chris Walton:So, so what's your take?
Chris Walton:Are you, are you equally skeptical?
Chris Walton:Not as skeptical.
Chris Walton:More skeptical.
Chris Walton:What do you think here?
Kelly Carey:I'd say I'm, I came in maybe less skeptical.
Kelly Carey:And John has, has fully talked me into the, the selling as well margin was exactly where my mind went when I read this headline.
Kelly Carey:One to eight weeks.
Kelly Carey:Like John said, not as fast as your competitors in the apparel space are doing.
Kelly Carey:If that's really who you're looking to play against.
Kelly Carey:They, they talked about cherries and, you know, I'm, I'm seeing cherry pajamas.
Kelly Carey:For Valentine's Day.
Kelly Carey:So I get it.
Kelly Carey:I.
Kelly Carey:I've seen the trends, but if you're really looking to do it that fast, I question how much of that development they're actually doing internally with their merchandising team versus going, you know, to the market, buying from a vendor, and you're going to lose margin on that.
Kelly Carey:So if they're to figure that mix out effectively, they could run the risk of buying a lot of more expensive product that they're trying to push for trend.
Kelly Carey:And then to John's point, you know, if it's the wrong trend or you missed the sale, not only are you inventory bloated, but you also have less profitable inventory on hand.
Chris Walton:Right.
Chris Walton:And the other point that you bring up to Kelly is you're probably not doing this through your own brands, which has always been a pillar of Target strategy as well, if you're trying to chase this type of business.
Chris Walton:But.
Chris Walton:And at the end of the day, too, isn't.
Chris Walton:Is it what he's describing just good, good merchandising?
Chris Walton:Like, you're always trying to capture the trends and get products in as quickly as you can, right?
Ann Mazinga:Yeah.
Ann Mazinga:I mean, I'm not a merchant, but I've spent the last 10 years with you, and we've interviewed plenty of merchants at this level.
Ann Mazinga:And that was the first thing that I saw when I heard this.
Ann Mazinga:I was like, isn't this just what you're supposed to do as a merchant, like, capture the trends and figure out what makes sense for Target to invest in?
Ann Mazinga:But, Chris, I think.
Ann Mazinga:I think they're hitting.
Ann Mazinga:There's a bigger issue here.
Ann Mazinga:Like, I don't think this is an issue for Target.
Kelly Carey:Target.
Ann Mazinga:I mean, Kelly, I'm not going to go to you and John on this one because I don't think you're probably buying a lot of your clothes or fill in items at Target.
Ann Mazinga:But like.
Ann Mazinga:Kelly, do you feel like.
Ann Mazinga:I feel like Target's already hitting on the trends.
Ann Mazinga:Like, if you need something like that's been Target's cachet all along is that they have great products that.
Ann Mazinga:That's on trend at a lower price.
Ann Mazinga:Would you agree with that, Kelly?
Kelly Carey:I would agree.
Kelly Carey:Yeah.
Kelly Carey:You know, go to any store, back to school, you're gonna find something.
Kelly Carey:Oh, cute.
Kelly Carey:Do I need this?
Kelly Carey:No.
Kelly Carey:Does it kind of hit the mark?
Kelly Carey:For the moment, yeah.
John Clear:Ah, interesting.
Chris Walton:Yes.
Chris Walton:Right.
Ann Mazinga:So I think, like, to me, it's really.
Ann Mazinga:This really is like throwing tech at a problem or an investment at a problem that they don't need to solve right now.
Ann Mazinga:I'm giving a quick plug for our show.
Ann Mazinga:Fashion's missing middle.
Ann Mazinga:Like we were going, we, we have Target in the plan because they are serving people at a price point where you can get affordable on trend.
Ann Mazinga:Fashion like this is not an issue.
Ann Mazinga:And if they miss one bow trend or they miss one cherry trend, like they still have plenty of other assortment that people are already going there for.
Ann Mazinga:I think they need to find a new problem to solve.
Chris Walton:Yeah.
Chris Walton:Okay, so I, I mean I agree with all of you and I think I'm going to be the most skeptical one here.
Chris Walton:I mean I, I, I, I, I actually question how much investment is actually really even being put into solving this at the end of the day because I think it's, I think it's code for pure window dressing at a large industry conference when you have nothing else substantive to talk about.
Chris Walton:That's what I think.
Chris Walton:I mean, come on, you're, the things you're sell, you're selling on stage, are buying into cherries and bows at the hot, you know, around the holiday season.
Chris Walton:I mean, come on, like that's going to have no material impact on your business.
Chris Walton:It's just what Target always is trying to take credit in the media for something that you should already be doing.
Chris Walton:Anyway, to your point and your point and about, you know, why do you really go to Target and Kelly too, like it's the things you, you don't expect to find.
Chris Walton:It's not necessarily that you want to go find the thing that's going viral on TikTok.
Chris Walton:It's the things that just surprise and delight you every single day.
Chris Walton:So I don't know, it's.
Chris Walton:Once again we've talked about the old adage and you and I talk about this quote all the time.
Chris Walton:Honesty is not synonymous with truth.
Chris Walton:From the Departed, my one of my all time favorite movies.
Chris Walton:It's not synonymous with truth.
Chris Walton:And, and that's, that's what they're doing here again.
Chris Walton:So I don't know.
Chris Walton:I, I'm glad we all feel the same way about this relatively.
Ann Mazinga:All right, well, let's move on to headline number three.
Ann Mazinga:Burlington is taking aim at Ross stores and TJX with a smaller store format.
Ann Mazinga:According to the Wall Street Journal.
Ann Mazinga:Unlike Burlington, whose locations were historically the size of department stores, Ross and TJX brands have always operated smaller format stores.
Ann Mazinga: an, who joined the company in: Ann Mazinga:The company believes it will eventually grow to 2,000 total stores.
Ann Mazinga:O'Sullivan said.
Ann Mazinga:John, one more time right to you.
Ann Mazinga:Does the American consumer need more smaller format Burlington stores?
John Clear:Yeah, I'll, I'll give my kind of quick pitch and I think Kelly will probably have a bigger perspective here as well.
John Clear:But my, my feeling is yes, I think Burlington is, is like they're, they have consecutive quarters of double digit growth.
John Clear:So like they are really moving forward in this trend of like off, off price fashion.
John Clear:The other thing that I, that really drew me to this is, and it's a little bit linked to our conversation with Target previously is no, what do great retailers do consistently that bad retailers are like, don't do?
John Clear:And that is turn inventory.
John Clear:And Burlington turn inventory.
John Clear:And a smaller format for me will only accelerate how good they are at that already because they know what they need to do.
John Clear:They don't need to stuff stores with, with products that people don't need.
John Clear:They don't need to buy inventory.
John Clear:And I think it's going to accelerate their turns.
John Clear:That's my first kind of thought when I looked at this.
John Clear:The other thing is that we see consumers enjoy smaller stores now.
John Clear:They prefer a smaller convenience store they get in and out of and you can still have a aspect to that without then needing a department store site.
John Clear:So, so for me I see like literally zero downside to this for Burlington.
John Clear:I think it's a smart play.
John Clear:I think it's going to financially make sense.
John Clear:It also it's them listening to their customers.
John Clear:And so I would kind of be really interested to see the impact because I don't see a negative.
Ann Mazinga:Yeah, I agree with you, Kelly.
Ann Mazinga:Where do you land on this one?
Ann Mazinga:Are you thinking that the smaller store format is the way to go?
Kelly Carey:I, I do think the smaller store format is a good way to go for them.
Kelly Carey:And in particular looking at the types of real estate that they're moving into, it's, it's not just smaller format but I think they mentioned, you know, former Big Lots, former Bed Bath and Beyond.
Kelly Carey:So they're moving into these spaces where people are, you know, it's a likely the demographic they're looking for Bed Bath beyond, they have HomeGoods.
Kelly Carey:So people are looking for this broader assortment which has also been a big effort of theirs over the last few years to ditch the coats only merchandising, branding.
Kelly Carey:And I was really surprised to Find out coats are only about 5% of their sales nowadays.
Kelly Carey:Which, yeah, surprised me.
Kelly Carey:I didn't know.
Kelly Carey:But I, I do think smaller format, the locations they're choosing will be good for them.
Kelly Carey:And I just agree.
Kelly Carey:I think that discovery and kind of treasure hunt aspect that they're looking to bring and emulate like the other off pricers can be really overwhelming in a big space.
Kelly Carey:You know, there's stuff everywhere.
Kelly Carey:You don't know.
Kelly Carey:Are you taking the store quadrant by quadrant?
Kelly Carey:So that smaller format is just giving you a tighter space to actually find things to buy.
Kelly Carey:So I'm excited to see where this goes.
Chris Walton:Right.
Ann Mazinga:And to, to John's point too.
Ann Mazinga:I think it up allows you to update the inventory more frequently, giving people a reason to come back time and time again.
Ann Mazinga:Maybe more frequently than just going to buy the coats for, you know, winter time or back to school stuff or like those key moments where you might go in there.
Ann Mazinga:Now it's kind of getting more of that cachet that TJX and Ross have too.
Ann Mazinga:Chris, what about you?
Ann Mazinga:What do you think about this?
Ann Mazinga:Are you ro going small format?
Chris Walton:Well, I gotta tell you guys, with all respect, I.
Chris Walton:With all.
Chris Walton:To all three of you, I 100% agree with you.
Chris Walton:I 100 agree with all of you.
Ann Mazinga:You're trying to.
Chris Walton:I think I was trying to trick you.
Chris Walton:Yes, I think, I think it's a great move.
Chris Walton:And the reason I would call it similar to what everyone was saying, but the one point I would make here would be the macroeconomic tailwind is at their back in terms of, of how people are shopping.
Chris Walton:People are showing a propensity to.
Chris Walton:We just had placer on our.
Chris Walton:We just interviewed Placers Ethan Chernofsky yesterday for an upcoming webinar and he told us about how people are willing to make extra trips to stores where they can find products they can't find anywhere else.
Chris Walton:And that's what the treasure hunt's all about.
Chris Walton:So, you know, I think similar to what we've seen in terms of success with Sprouts and Trader Joe's, getting that extra trip in the grocery space, O'Sullivan appears to have found a smaller footprint that he thinks works in that same vein to get that extra trip from people and is scaling the prototype.
Chris Walton:So like we talked about in the last headline, this is just good merchandising.
Chris Walton:And so, yeah, I mean, ultimately I think it's going to work.
Ann Mazinga:Yeah, I mean it's the.
Ann Mazinga:If you look at some of the images of some of these prototype stores, they look better.
Ann Mazinga:They look More inviting, they're more organized.
Ann Mazinga:Like, the whole shopping experience is so much better for this off price shopper, which I think is, you know, just to close with, again, Kelly's point of people are going back to these spaces where they expected to see Bed, Bath and Beyond.
Ann Mazinga:And it's almost like they're rediscovering Burlington in these same environments.
Ann Mazinga:Like, I didn't know Burlington had home goods.
Ann Mazinga:Like, and.
Ann Mazinga:But you're going in there with a similar visual shopping experience.
Ann Mazinga:And I imagine that the savings that they're getting from consolidating real estate will help them continue to expand that and roll that out to newer stores.
Chris Walton:Yeah, great point.
Chris Walton:And the other trend that's happening here is people are more.
Chris Walton:More and more people are shopping off price retailers.
Chris Walton:Right.
Chris Walton:That's another macroeconomic trend that's happening.
Chris Walton:And so there's probably room for a new entrant in this space too, if not a new entrant, but a more substantial determination to go after that business, I think, you know, to be that third or even that second or first player over the long run.
John Clear:One final point on this, I think to give Burlington some more props is kind of.
John Clear:It's a really good example of them witnessing things happening in a macro retail environment that they can take advantage of.
John Clear:Right.
John Clear:So we mentioned they're taking Bed Bath, big lot stores, so they see that there's real estate they wouldn't have normally gotten access to.
John Clear:And then they've thought, well, actually we already.
John Clear:We also think we can be a consumer centric, make a consumer centric decision that takes advantage of that opportunity.
John Clear:So it actually kind of satisfies two needs at the same time.
John Clear:It's really, really clever play, I think overall from them then.
Chris Walton:Yeah, 100.
Chris Walton:Yeah.
Chris Walton:And for all those retail executives out there, the one thing I've Learned in my 25 years of covering retail now is I'd rather work for a company that's pushing, going with water downhill than trying to push water uphill.
Chris Walton:Right.
Chris Walton:You know, and the company is pushing water uphill, like Macy's, et cetera.
Chris Walton:It's a tough game.
Chris Walton:All right, Headline number four.
Chris Walton:Sephora plans to redesign its entire North American store fleet according to retail Dive.
Chris Walton:Sephora is in the middle of the largest capital project in its history wherein it is redesigning every store in its North American fleet.
Chris Walton:Artemis Patrick, president and CEO of North America, told an audience at the National Retail Federation's big Show conference on Monday of this past week.
Chris Walton:Some stores will, quote, get major redesigns and some will get Minor Patrick said of the project, which launched last fall.
Chris Walton:The beauty retailer has over 700 stores in North America.
Chris Walton:Sephora has brought changes like modular fixturing and new checkout pathing to 111 of those stores over the past few months.
Chris Walton:And as a result, key performance indicators like transactions, productivity and sales are all up when compared to the control group.
Chris Walton:Kelly, what do you find most intriguing about Sephora's plan to renovate its stores as part of what retail Dive calls its quote, largest capital project in its history.
Kelly Carey:Yeah, lots of big headlines dropping at NRF big show last week.
Kelly Carey:You know, I think the thing that was most interesting to me about this, you mentioned it, Chris and Artemis Patrick talks a little bit more about it in, in the the article, but she cited one of the leading factors of the redesign in effectively making a more affordable fixture structure for their brand partners.
Kelly Carey:That was kind of one of the the leading things.
Kelly Carey:She said.
Kelly Carey:We're not a cheap date to sell in Sephora.
Kelly Carey:We don't want our partners building these expensive fixtures that, you know, the deal doesn't work out and, and they don't see the, the full benefit.
Kelly Carey:So this was super interesting to me for two different reasons.
Kelly Carey:The first is the tone and tenor of it is very different from what we see from Sephora typically.
Kelly Carey: So internationally they: Kelly Carey:And then additionally it to me kind of suggests a bit of a shifting power dynamic between Sephora and its brand partners.
Kelly Carey:Having spent a lot of time more on the manufacturing side of the beauty business, you know, you'll do what you gotta do to, to get placement in Sephora and typically there's, you know, they have the upper hand in those negotiations.
Kelly Carey:It's more expensive, but you need to be there and they have the market share.
Kelly Carey:So to hear them really being proactive about how to make the experience more affordable for their brand partners just kind of signals to me that they're thinking ahead about where the retail market might be going in the US And Ulta hasn't seen, you know, a great couple quarters in the last few quarters.
Kelly Carey:But, you know, are there other tides that they're concerned about whether it's E Comm.
Kelly Carey:Where they're trying to shift some more attention to their brand partners?
Kelly Carey:So I thought that was really interesting and there are a lot of other Great things that they're doing, which just seemed like smart retailing to me from store of the future, really making a metrics based approach to the redesign.
Kelly Carey:So I think there's more to it than just this kind of brand cosplay.
Kelly Carey:But that was what really stood out to me.
Chris Walton:Yeah, that's really interesting.
Chris Walton:I never thought about that.
Chris Walton:You know, is it, is this kind of an attempt to, you know, keep the cachet, make it easier for the brands to come into the stores and elevate the experience and play up on the brands that you really want expect to get from Sephora.
Chris Walton:And what do you think?
Ann Mazinga:I mean, I love Kelly's points.
Ann Mazinga:I hadn't thought about those.
Ann Mazinga:For me, this was a strictly operational Play.
Ann Mazinga:Like number one, there is 100% benefit to making your fixtures flexible.
Ann Mazinga:Especially in a space like Sephora where they're getting people to come in there, they want to make sure that people, they can do events in there.
Ann Mazinga:When there's a new beauty brand launch, they're bringing in a new brand.
Ann Mazinga:Like the flexibility of this fixturing that Artemis was talking about I think is going to be critical to them being able to convert that store to work as hard as possible as needed on weekends, you know, for big launch events.
Ann Mazinga:I think that's, that's where the real trouble is right now.
Ann Mazinga:But for me, the best thing about this whole thing, I love Sephora.
Ann Mazinga:I love the associate help there.
Ann Mazinga:I hate the line.
Ann Mazinga:Sometimes I've had to even leave because you have this younger demographic that's coming in.
Ann Mazinga:They're each paying their, you know, their s a crew of six people and they're each paying individually.
Ann Mazinga:Like it's taking too long.
Ann Mazinga:And so for me, I think the key item in this article is that only 25% of transactions are happening on mobile devices with the associates right now.
Ann Mazinga:And I think if you start to enable every associate, every transaction, if I just want to get out and get that thing that you helped me find, I think we're going to start to see significant increases in, in transactions and basket sizes once they enable that, you know, for all the associates and you can kind of skip that snake if you're just kind of snake line if you're just trying to come in and get something quickly.
Ann Mazinga:So I, I think smart operational decisions here for Sephora that are going to continue to pay dividends in the long run.
Chris Walton:Yeah, that was what the article highlighted for me that was most interesting too was how they're thinking about checkout and it was very light on the details in There.
Chris Walton:But I think you're hitting on points that, you know, especially when you talk modular fixturing, you could, you could apply modular, modular setup designs to your checkout process too.
Chris Walton:So you can scale it up, scale it down across the seasons.
Chris Walton:You know, lots of different ways you could do this.
Chris Walton:Mobile enabled.
Chris Walton:John, what do you think though?
Chris Walton:Any final words here?
John Clear:Yeah, I mean, my first thought is I think this is a great example of the kind of benefits of CRG because Kelly had a totally different perspective than I have.
John Clear:She's got obviously way more detail and understanding and the points that she made around the dynamic between Sephora and the brands is something I never thought about.
John Clear:But actually I think now looking through the information with that lens, it kind of makes a bit more, more sense to me because honestly, when I was looking at it, I, I think what I wrote down when I was writing my notes is that I felt like it was kind of a nothing burger.
John Clear:I was like, yeah, okay, we're, we're updating our store fleet and it's our biggest ever capital investment.
John Clear:But I can tell you if I did my capital investment now versus 10 years ago, it's always going to be my biggest ever capital investment.
Chris Walton:Right.
John Clear:It's way more expensive.
John Clear:So I felt a little bit like it was an announcement for NRF that they put some buzzy language around.
John Clear:And, and the other point was I know that Kelly mentioned they're using a metrics based approach, which is great, but I don't know if anybody here has ever redesigned a store where the sales didn't go up because you've got all this extra attention, you've got all the extra staffing.
John Clear:Once you pull that out, your sales normally revert to the mean.
John Clear:Right.
John Clear:So it's.
John Clear:So for me it felt a little bit like we're doing all this work and we're going to change trajectory, but once you went below the details, I didn't quite get it.
John Clear:However, I think the checkout points also stood out to me because I think if you can make that easier to get out of the store.
John Clear:Obviously I'm not like a high Sephora shopper, but my wife is.
John Clear:And so like she has talked before about how difficult it is to get in and out of the store and I think that would be a big thing.
John Clear:But, but more operationally, I'm actually more excited by what Kelly says about the connection with the brands because having done some work in the drug space, getting the fixtures changed over by your brand partners is a massive lift for everybody.
John Clear:And if you can make that smoother.
John Clear:That also then feeds into the, the idea of being more on trend and more relevant if you can make that happen quicker.
John Clear:So I can actually see a much bigger benefit from that now than, than I kind of originally thought.
Kelly Carey:Absolutely.
Chris Walton:Yeah.
Chris Walton:Those are great points, John.
Chris Walton:You know, it's, it's funny to me too when I think about the psychological dynamics of doing this show too is like when I first read the headline, I was like, yeah, I feel like John does.
Chris Walton:But then you go and you think about who's the leadership team, you know, what pedigree do they have behind them, what performance has the company exhibited in the past?
Chris Walton:And it gives us a little more license to accept what Sephora is telling us and be a little more optimistic about it as well.
Chris Walton:So it's interesting as, as we review these headlines each and every week.
Ann Mazinga:Well, let's stay on fashion, beauty and luxury and talk about headline number five, which is Walmart selling Chanel, Fendi and Prada.
Ann Mazinga:And yes, you heard that right.
Ann Mazinga:According to Yahoo Finance, Walmart is making a big push into the luxury market and has tapped resale platform Rebag to attract wealthier shoppers.
Ann Mazinga:Starting January 16, the retail giant will offer over 27,000 pre owned high end items on its online marketplace, including coveted pieces from brands like Chanel, Fendi, Prada and Louis Vuitton.
Ann Mazinga:The move follows the viral success of the work in a dupe made working ad Hermes Birkin bag and marks a significant step in Walmart's resale business.
Ann Mazinga:Rebag's catalog will include luxury handbags, watches, jewelry and accessories ranging from smaller items to iconic pieces like the Birkin bag which can cost tens of thousands of dollars.
Ann Mazinga:Additionally, there will be a hundred items sold exclusively to Walmart customers, the company confirmed to Quartz in an email.
Ann Mazinga:Kelly, on a scale of 1 to 10, how much do you like Walmart's partnership with Rebag?
Ann Mazinga:And do you think customers will actually come to Walmart's website to purchase items from the likes of Chanel?
Kelly Carey:I'm really excited to hear what you guys score this as well.
Kelly Carey:I spent a long time on this.
Kelly Carey:I started in the middle and then I started to shift up.
Kelly Carey:So I'm gonna give this an eight.
John Clear:Okay, nice.
Kelly Carey:I'm gonna give it an eight.
Kelly Carey:I like it for a couple reasons.
Kelly Carey:I like it the most for Rebag, but I'll, I'll talk about why I like it for each partner.
Kelly Carey:So you know, Walmart over the last couple years has been really trying to grow their marketplace and increase their SKU count.
Kelly Carey:So from that regard, I think this is a really smart move because they're immediately getting access to a ton more SKUs.
Kelly Carey:Whether or not someone's actually going to go think to buy a Chanel bag at Walmart.
Kelly Carey:If I'm Google searching for a Chanel bag now, Walmart is getting visibility clicks from shoppers who would probably never go there for Chanel and maybe never go there ever.
Kelly Carey:So I think it is is an interesting way for them to get access one to more SKUs and to potentially new consumers where they've already been starting to attract more of this, you know, higher household income type of consumer.
Kelly Carey:Love this for Rebag because the luxury secondhand market has been growing a lot and I, I've actually been familiar with the company for a couple years through social media advertising which is a really expensive way to acquire customers and they're still not the biggest name in this market.
Kelly Carey:So they've been starting to dabble in partnerships.
Kelly Carey:They're also partnered with Bloomingdale's which I think is honestly not as good of a partnership as the Walmart one because you have people who would be going to Bloomingdale's to buy these bags full price and right, you know, they have an option to buy secondhand.
Kelly Carey:But I think this is a quirky but really interesting pair for them to also just get a lot of visibility to their brand and also reach a younger luxury consumer who will only buy secondhand.
Kelly Carey:A lot of the growth of this market has been driven by millennials, Gen Z who you know, through social media have a lot of visibility to these brands that they've never been able to participate in and now they're looking for ways to do that affordably.
Kelly Carey:So I think I also just love Walmart like using the virality of the work in to now launch this totally new luxury platform I think is genius.
Kelly Carey:So great point.
Chris Walton:I wonder how intentional that was.
Chris Walton:So it was seated?
Chris Walton:Yeah, yeah, it could have been.
Chris Walton:Yeah, it could have been, could have been because I.
Kelly Carey:You can now no longer find a work in bag.
Kelly Carey:Oh no site that.
Kelly Carey:That came right down.
Kelly Carey:Hermes has pretty good track record at, at lawsuits with anti copyright infringement.
Kelly Carey:So yeah, I'm excited to see where this goes.
Kelly Carey:Would, would love to hear your thoughts too.
Ann Mazinga:Yeah, I mean Kelly, I think you bring up such a good point and we've said this the last couple weeks, like this is a search game now and I think from people finding things on social media.
Ann Mazinga:I'm bringing in Google Lens again because that's what I do all the time when I See a bag that I like and now, you know, Walmart's going to be the first one that shows up when I find that bag, whether it's through search, through typing in Fendi handbag.
Ann Mazinga:Like this is now a consideration that many people would not have made before.
Ann Mazinga:And I think Walmart's biggest issue right now, which again, Kelly, I think you bring in the validity and authenticity that Rebag brings to this partnership because I think that's the biggest challenge that Walmart will have here is that, yes, I see a fendi bag on Walmart.com 1.
Ann Mazinga:This is weird because I didn't expect that it would be there, but now I have Rebag's name attached to it so that I know that actually this is going to be an authenticated bag.
Ann Mazinga:This is the same thing.
Ann Mazinga:It's just at a place where maybe I'd never considered, you know, shopping for this type of thing before.
Ann Mazinga:So, John, I'm going to bring you in here too.
Ann Mazinga:What are your thoughts on this?
Ann Mazinga:Are you gonna buy your wife a chanel bag on Walmart.com?
John Clear:Well, hold on.
Chris Walton:And what, what's your grade first?
Chris Walton:I want to know.
Chris Walton:One to ten.
Chris Walton:Where are you?
Chris Walton:Are you eight?
Chris Walton:Kelly was eight.
Chris Walton:What are you.
Ann Mazinga:Oh, I'm, I'm a ten on this.
Ann Mazinga:I think it's brilliant.
Ann Mazinga:Yeah, yeah, I think it's total, total brilliant Move, John, where, what are you grading?
Ann Mazinga:And are you going to buy your wife a bag?
Ann Mazinga:So I want to know this.
John Clear:And she might, if she's lucky, she'll get a handbag at some point.
John Clear:I guess I don't have a great track record.
John Clear:This does, this does make it easier for me to up my game there.
John Clear:Yeah, I mean, I would agree and say, yeah, I think it's a 10 for me as well.
John Clear:I mean, I, honestly, from, I, I think Kelly's perspective, kind of looking at, from everybody's view is a really good way, I think.
John Clear:And I don't see a downside for anybody.
John Clear:I was a little bit more focused on my first view on the kind of Walmart piece of this.
John Clear:And I, I literally don't see a downside to this for Walmart.
John Clear:I mean, I mean, people can say it's quirky, but they have, I think like 150,000 sellers on their marketplace.
John Clear:They sell a ton.
John Clear:They compete directly with Amazon on this.
John Clear:So why not get into this space?
John Clear:So that's my first piece.
John Clear:The other thing is, and Kelly touched on it, I mean, this, the resale market is massively driven by Gen Z, even Particularly more so than millennials.
John Clear:Gen Z, I think I looked it up.
John Clear:43% have said they bought a secondhand item in the last 12 months and 83% say they are interested in buying a secondhand item.
John Clear:So like the, the penetration of interest in this space is huge.
John Clear:And the final piece I'd have is it again goes on to this topic of Walmart doubling down on growth strategies.
John Clear:And for me it's a growth strategy in two directions.
John Clear:So one is trying to capture even more of that 100k plus household that we already know is shopping more with Walmart and has been over the last 12 to 18 months.
John Clear:So that's the first point.
John Clear:The second point is now entering and attracting more attention from those, the aforementioned, like Gen Z's, right?
John Clear:Which is not a space where Walmart traditionally attracts a lot of customers.
John Clear:And you really kind of people age into Walmart I guess is the way to put it.
John Clear:So if they can attract those earlier, obviously you get more sales over the life cycle of that person.
John Clear:And I think it's, it's just very like it, it's low risk, it's high rewards and also it generates some clicks at this moment, right?
John Clear:It's like, oh, Walmart are selling Fendi.
John Clear:What?
John Clear:Like it's very easy marketing play at this moment for kind of not a lot of downside.
John Clear:And it's just, for me, it's just so interesting to see all the different ways that Walmart are innovating.
John Clear:Like they're doing it in like super like basic ways in grocery with private label.
John Clear:They're doing it in automation, they're doing it in high end luxury.
John Clear:I don't think anybody is touching as many pieces as they are at this moment, which is interesting.
Ann Mazinga:I love that point, John.
Ann Mazinga:And I think you hit on too the importance here of they're not just doing this partnership with Rebag, it's not just a design partnership and poof, it's gone.
Ann Mazinga:It's all of the things that they're doing around it, working it to be present at New York Fashion Week.
Ann Mazinga:Like they're really working to establish this audience and build this audience, you know, 365 days a year.
Ann Mazinga:But Chris, I'll let you close it out, give us your grade and then explain why.
Chris Walton:Yeah, or the Walmart rebrand overall that they just announced a couple of weeks ago too.
Chris Walton:Right.
Chris Walton:And you know, I think the other point I make too, John, like, like before I get my grade is like I think it potentially democratizes resale too because it potentially actually makes it available to all those older generations in a way that they were not able to, you know, view it or take part in it before too.
Chris Walton:But I'm, I'm, I'm Spinal Tap on this one.
Chris Walton:I'm dialed up to 11 on this.
Chris Walton:I mean, I think, and the reason I say that is because I did something yesterday that I never in my life thought I would be able to do.
Chris Walton:I'm, I'm, I'm serious when I say that.
Chris Walton:Like, I typed Fendi into the search bar and I got 25 pages of results.
Chris Walton:That's insane.
Chris Walton:I never would have expected to do that.
Chris Walton:And the, the only, and the, here's the cool thing about this.
Chris Walton:To me putting my merchandising hat on, the only Walmart customers that will have this experience are those that are searching for it, those that want it.
Chris Walton:It's the perfect example of extending your reach digitally without alienating your customer base or your business model because you don't have to dedicate your space in the store to slow turning high priced items that could be too unaffordable for those people that can't afford them.
Chris Walton:But this gives you that customer base.
Chris Walton:So I think it's just a masterclass on digital retailing.
Chris Walton:And try, I mean, here's the other thing.
Chris Walton:And because I took a page from you on this one, try searching for Fendi at Target and let me know what you find.
Chris Walton:My hunch is it's going to rhyme with a big fat donut.
Chris Walton:That's what's there.
Chris Walton:There's nothing there.
Chris Walton:And so Walmart's killing it on every angle.
Chris Walton:And to John, to your point, the scale at which they're doing this too is just so impressive.
Ann Mazinga:Yeah, it's coming from every department out of that retailer right now.
Ann Mazinga:All right, you guys, let's, let's close it up and go to the lightning round.
Ann Mazinga:Kelly, you get question number one.
Ann Mazinga:Walmart not only is dominating all of our retail headlines today, but they're also requiring employees to return to the office in Bentonville this month.
Ann Mazinga:And to welcome them back, they just opened a brand new designed campus which features a fitness center, a store layout center, an amphitheater, a daycare for up to 500 children, among many other things.
Ann Mazinga:I want to know, Kelly, what would you want included if A and M was designing a new headquarters for you?
Kelly Carey:Great question.
Kelly Carey:I would certainly take all those things that, that Walmart's setting up for their employees.
Kelly Carey:The two that you didn't mention.
Kelly Carey:Which out.
Kelly Carey:Adam.
Kelly Carey:Sucker for a luxury fancy coffee.
Kelly Carey:So if there's free lattes.
Kelly Carey:You know, you'll keep me in the building for, you know, an extra hour on both ends of the day and then I'm gonna go doggy daycare.
Ann Mazinga:Yes.
Kelly Carey:Those of us who are not in the, the child population, doggy daycare would go a long way.
Ann Mazinga:They might even have those things.
Ann Mazinga:I think they ran out of space in the article.
Ann Mazinga:Who knows?
Ann Mazinga:Who knows?
Chris Walton:Yeah.
Chris Walton:They probably do, knowing them.
Chris Walton:Yeah.
Chris Walton:All right.
Chris Walton:All right, John, this next one I picked out just for you, a Waymo Taxi recently got stuck in a never ending roundabout near the Phoenix airport, a la European vacation, as our resident European on this show.
Chris Walton:And for those interested, my first roundabout experience was in Ireland.
Chris Walton:What recommendations do you have for us Yankees here in terms of navigating a roundabout effectively?
John Clear:First of all, before I ask the question, did you watch the video of the guy in the Waymo Taxi?
John Clear:It's crazy.
John Clear:And he's like on the call with the customer service being like, how do I stop this car?
John Clear:It's like running a circle.
John Clear:So it's like you should look it up.
John Clear:He also works in AI, which is kind of funny.
John Clear:So just as.
Chris Walton:Oh, that's hilarious.
Chris Walton:Really?
Chris Walton:Oh, my God.
John Clear:Yeah.
Kelly Carey:Yeah.
John Clear:So he was like, I've never taken one of these again.
John Clear:So my recommendation for, for roundabouts, which I mentioned to you guys already, is a little bit of a passion of mine.
John Clear:I treat it like a four way stop sign.
John Clear:Right.
John Clear:So when you come to the roundabout, you stop, you see where other people are coming from.
John Clear:And then if there's nobody coming, you go.
John Clear:If you're turning right, you indicate right.
John Clear:If you're going to the other side of the roundabout, you're indicating left.
John Clear:It's a four way stop sign with a circle in the middle.
John Clear:That's all you need to think about.
John Clear:Don't over complicate it.
Ann Mazinga:Yeah.
Chris Walton:Yet Americans can't figure it out.
Ann Mazinga:Yeah, I know.
Ann Mazinga:We're still, we're still working on it.
Ann Mazinga:John, you get question number three as well.
Ann Mazinga: tes to start a business in in: Ann Mazinga:If you were to start a business in Florida this year, what kind of business would it be?
John Clear:Yeah, I was kind of torn on this one, to be honest.
John Clear:I had two different ideas.
John Clear:So I'm going to put them both out there.
Ann Mazinga:Okay, we'll take them.
John Clear:One is like an alligator based, like boutique.
John Clear:So they sell like alligator skin handbags and all that kind of stuff.
John Clear:Right.
John Clear:Which is kind of like sustainable local but the other one, the more I thought about is, like, what's synonymous with Florida, and it's like, old people, I mean, to be kind of blunt.
John Clear:So what you really want is kind of a, like a theme park for older people.
John Clear:So kind of like Disneyland, but for older people.
John Clear:So, like, gentle roller coasters, you know, like a track where they can go around on their.
John Clear:On their golf simulator.
John Clear:Yeah, exactly.
John Clear:Or a golf simulator.
John Clear:But it's like, I think that's what they're missing in Florida.
John Clear:And I think you'd make a lot.
Ann Mazinga:Of.
Chris Walton:Like, amusement park rides that are like a massage chair.
Kelly Carey:Yeah.
John Clear:Gentle rollers for people's hearts, you know, that's what you're looking.
Ann Mazinga:Yes.
Chris Walton:Oh, my God.
Chris Walton:Oh, my God.
Chris Walton:And the alligator store.
Chris Walton:I could definitely sink my teeth into that.
Chris Walton:All right, Kelly.
Chris Walton:Last one.
Chris Walton:Liquid Death's pit Diaper, priced at 75, is reportedly flying off shelves following a viral bathroom incident at a recent San Francisco concert.
Chris Walton:At $75.
Chris Walton:And as an esteemed retail consultant, do you think the pit diaper is underpriced?
Chris Walton:Overpriced, or properly priced?
Kelly Carey:You know, I was sad to Google pit diaper.
Kelly Carey:That was a wild visual to start my day.
Chris Walton:But it is worth do, though.
Chris Walton:It is worth the dude.
Chris Walton:Yeah.
Kelly Carey:Doing it.
Kelly Carey:Proceed with caution.
Kelly Carey:I would say appropriately price.
Kelly Carey:If it's flying off the shelf, you know, keep going with it, guys.
Kelly Carey:You know, a diaper, I had to look this up to see, you know, what is just a regular diaper cost nowadays.
Kelly Carey:It's.
Kelly Carey:It's probably double the cost of a adult diaper.
Kelly Carey:30 pack.
Kelly Carey:So it's definitely expensive, but, you know, it's got the chains, it's got the pleather, and people will spend a lot of money for that kind of rave gear.
Kelly Carey:That's not my.
Kelly Carey:My personal shopping space.
Kelly Carey:But I think as long as they can ride this high, keep doing it.
Kelly Carey:75.
Chris Walton:I think it's right price.
Chris Walton:No reason to raise the price.
Chris Walton:Get any more margin.
Chris Walton:And I could see you wearing one of these because you're a frequent concert goer.
Chris Walton:What do you think?
Chris Walton:Could you could, like, can we see you wearing one of these at a future.
Ann Mazinga:No.
Ann Mazinga:I am too old.
Ann Mazinga:I.
Ann Mazinga:This.
Ann Mazinga:I am too old for this.
Ann Mazinga:I'm not in the pit anymore.
Ann Mazinga:I am.
Ann Mazinga:I am.
Ann Mazinga:I am paying the extra money for the VIP tickets with their own bathroom.
Ann Mazinga:Chris.
John Clear:I am.
Ann Mazinga:I'm so beyond pit diapers.
Ann Mazinga:Maybe back in my 20s, but.
Kelly Carey:And the pit diaper appears to be, like, worn as pants as well.
Kelly Carey:You know, it's kind of under your clothes.
Kelly Carey:It is.
Ann Mazinga:No.
Kelly Carey:So it's for the bold of heart, for sure.
Ann Mazinga:I'm going to be.
Ann Mazinga:I'm going to be going away from the people wearing pit diapers.
Ann Mazinga:Let me just tell you that it's not going to smell great.
Ann Mazinga:I have a feeling you're too old for the pit.
Chris Walton:All right, on that note, happy birthday today to Linda Blair, Gabriel Mock, and to a woman with timeless beauty, the always captivating Diane Lane.
Chris Walton:And remember, if you can only read or listen to one retail blog in the business, Make It Omnitok, the only retail media outlet run by two two former executives from a top 10 US retailer.
Chris Walton:Our weekly Fast Five podcast is the quickest, fastest rundown of all the week's top news in our daily newsletter.
Chris Walton:The Retail Daily Minute tells you all you need to know each day to stay on top of your game as a retail executive and also regularly features content that is special and exclusive to us that Ann and I take a lot of pride in doing just for you.
Chris Walton:Thanks as always for listening in.
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Ann Mazinga:Yes.
Chris Walton:Thank you everyone.
Chris Walton:Thank you to everyone for that.
Chris Walton:And if you still haven't joined the party to watch our weekly fast five through the best medium out there, go to YouTube.com omnitalk retail.
Chris Walton:Kelly, if people want to get in touch with you or anyone at the A and M Consumer and Retail Group, what's the best way for them to do that?
Kelly Carey:If you guys want to get a hold of us, please find us at our website at Alvarez and marcel-crg.com you can also find us on LinkedIn, Alvarez and Marcel Consumer and Retail Group, or feel free to reach out to John and myself directly on LinkedIn.
Chris Walton:Thank you both for being on our show this week.
Chris Walton:It was a great show, very informative, very insightful.
Chris Walton:Always a pleasure having you both on.
Chris Walton:And so until next week, on behalf of John, Kelly, Ann and myself and everyone at the A and M Consumer and Retail Group and all of us here at Omni Talk Retail, as always, be careful out there.
