American Eagle’s Logistics Gamble | Fast Five Shorts
This Omni Talk Retail Fast Five segment, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, Quorso, and Veloq, breaks down American Eagle’s decision to shut down Quiet Logistics after acquiring the company for $360 million.
Chris Walton and guest host Jenn Hahn discuss why selling logistics tech proved harder than expected, when retailers should avoid becoming software companies, and what this means for future retail tech bets.
⏩ Tune in for the full episode here.
#AmericanEagle #RetailLogistics #RetailTech #Omnichannel #RetailStrategy #OmniTalk #RetailFastFive
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Transcript
Just $360 million.
Speaker A:No big deal, BFD.
Speaker A:According to supply Chain Dive, American Eagle confirmed in an email that Quiet Logistics will discontinue services in the coming months and end operations at fulfillment centers in Boston and Dallas.
Speaker A: d quiet logistics in December: Speaker A:As of last year, Quiet primarily served as a regionalized fulfillment center network for American Eagle with excess capacity servicing third party clients.
Speaker A:But the third party business failed to meet expectations.
Speaker A: In: Speaker A:Question, Jen, what does this say?
Speaker A:What does this headline say to you about retailers trying to build out and sell their own technological solutions?
Speaker A:And if someone were to come to you and ask your help in finding the talent to do that, what would you tell them?
Speaker B:Well, if they came to us to find the talent, my answer would be happy to help.
Speaker B:We can find that for you.
Speaker B:So again, as mentioned, they're not always coming to us until they have the plan.
Speaker B:And if they already had the plan and the spot open, listen, we'd find them that person.
Speaker B:But I think your question is saying if they did come and say, we're thinking about filling this role, Jen, or we could invest these dollars elsewhere.
Speaker B:I would suggest investing the dollars elsewhere.
Speaker B: million in: Speaker B:But I just inherently think they should focus on, on their clear mission a little bit more than selling technology.
Speaker B:Right.
Speaker B:Like American Eagle, I think of jeans.
Speaker B:I don't think of tech.
Speaker B:And not that there wasn't an opportunity there, but again, I don't know all the details.
Speaker B:I think this could be a case of just because you can do something doesn't mean think you want to stay close to your core mission and your core audience.
Speaker B:It's too far outside of their wheelhouse to make that big of an investment and to create a quote unquote anti Amazon platform.
Speaker B:I mean, that's a huge lift like you're talking about.
Speaker B:You might as well go start a different organization and partner with American Eagle.
Speaker B:It feels, it feels like a little much on my end.
Speaker B:I mean, here's the thing.
Speaker B:Go sell more jeans.
Speaker B:Right.
Speaker B:Like, I would if I was working there.
Speaker B:If I was leading the charge, I would focus on how can we sell more jeans.
Speaker B:I have a real time issue with jeans, Chris.
Speaker B:I don't know if you do, because I feel like this is a woman thing.
Speaker B:But, I mean, are we going like, wide leg, this barrel thing?
Speaker B:Are skinny jeans okay, or does that date me?
Speaker B:Like, I.
Speaker B:There's so much they could help me with that.
Speaker B:I. I'm not in on buying tech solutions.
Speaker B:I just want them to help me with my jeans.
Speaker A:You're not alone on your jeans.
Speaker A:I have the same issue.
Speaker A:In fact, I need to re outfit my entire wardrobe.
Speaker A:Yes.
Speaker A:I, I'm.
Speaker A:I'm down to, like, two pairs of jeans, Jen.
Speaker A:And I got to.
Speaker A:I got to, I got to get.
Speaker A:I got to get some new pairs.
Speaker A:I feel like we're on a jean trend cycle again, too.
Speaker A:So I got to figure it out.
Speaker B:I just don't know because I pick one and I'm like, yes, this is it.
Speaker B:But then it doesn't go with shoes anymore.
Speaker B:Like, it's winter here.
Speaker B:How do I put boots with wide legs?
Speaker B:I don't get it.
Speaker B:Yeah, I feel like Ella could help me, so I'll talk to her later.
Speaker A:But we'll bring producer Ella into this conversation, too, before we let, before we end.
Speaker A:But, but, yeah, but for me.
Speaker A:Yeah, I mean, for me.
Speaker A:Well, first on the jeans thing, like, yeah.
Speaker A:And then, plus, I'm like, almost 50.
Speaker A:Like, what genes can I actually get away with?
Speaker A:You know, that's the big question for me, John.
Speaker A:But no, I mean, I think I agree with you.
Speaker A:And we kind of talked about this in the first headline too.
Speaker A:And I got to eat crow on this, because when this news initially broke back in.
Speaker A: What was it,: Speaker A:And I was intrigued by it because of the personality, mainly of.
Speaker A:Of the leader of it at the time.
Speaker A:And like, you know, I. I know better than that.
Speaker A:And so what I've learned from, and this is why I like doing the show personally, is I learned from the things that I talk about and what works and what doesn't.
Speaker A:And so now I know how to scope these types of things better.
Speaker A:And so what I would say to people is like, yeah, if you're Walmart and you can create a differentiating place in the marketplace, you should be taking these approaches.
Speaker A:But if you don't have a real differentiation point in why your new tech platform or your new strategy is going to stand out.
Speaker A:You shouldn't do it.
Speaker A:And so, and like I'll never forget like as I kind of told people I was intrigued I met somebody at NRF from FedEx.
Speaker A:I won't name her but if she still listens to the show she'll remember this.
Speaker A:And she said but aren't they just doing a 3 PL?
Speaker A:And I was like yeah.
Speaker A:And that as soon as she said that then I started to become like oh yeah you're right like what's the difference in three PL providers?
Speaker A:Like there's nothing so like if why should I use American Eagle a competitor against, you know, somebody else like you know any of the other myriad of three PL providers.
Speaker A:So it's not even close when you look at it from that lens on how to think about this.
Speaker A:So yeah so that's, that's my big takeaway and my big epiphany here is I stand doing this show eight years now so.
