Are you ready to wrap your mind around the future of retail? Join BrainTrust members, James Tenser and Ricardo Belmar, as they explore the compelling conversations emerging from Grocery Shop 2023.
Uncover the transformative power of artificial intelligence as it shapes this landscape. This isn't your typical event recap; we're delving into the nitty-gritty of practical use cases, inflation, pricing challenges, and the rise of private labels. Buckle up for insights that could redefine your understanding of the retail sector!
Ever wondered how robots can optimize white-collar jobs? Join us on this mind-boggling journey into the AI revolution at Grocery Shop 2023. We're not just talking about mundane task automation; we're discussing the exciting potential of AI-enhanced decision making, the elimination of "junk work", and the unprecedented career opportunities arising from this shift. Plus, find out why strong data governance is a non-negotiable for businesses eager to ride the AI wave.
Finally, we turn our gaze to the Instacart IPO and its profound implications. Ponder on how Instacart could redefine the retail media network with its unique access to customer data across multiple brands. Then, imagine the thrilling possibilities of streaming services and connected TV in the retail media landscape. As we wrap up, don't forget to visit RetailWire.com and join the conversation. The future is here, and it's more exciting than we ever imagined!
RetailWire is the retail industry's premier source for news, analysis, and discussion. With a focus on the latest trends, technology, and consumer behavior, RetailWire provides a platform for industry experts and thought leaders to share their insights and perspectives. Whether you're a retailer, supplier, or service provider, RetailWire is your go-to destination for staying informed and ahead of the curve.
Be sure to leave us a comment and let us know what you think. You might even hear your comment read on the next episode!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey, thanks for tuning in to the Retail Wire
podcast.
This episode was recorded livefrom grocery shop 2023 in Las
Vegas, featuring two of ourBrain Trust members, James
Tenser and Ricardo Belmar.
Listen to hear their insightsand key takeaways.
We hope you enjoy this episode.
Speaker 2 (00:23):
Welcome everyone to another Retail Wire Live.
I'm Ricardo Belmar, I leadpartner marketing for Retail at
Microsoft and I am here todaywith a good friend and a fellow
Brain Trust member, Jamie Tenser.
Speaker 3 (00:35):
Greetings.
Glad to be here.
As ever, working with you,Ricardo, on this is one of the
privileges of the job.
Speaker 2 (00:42):
We are here at grocery shop this week once
again and we're going to gothrough our notes on how things
are going at the show, what thehot topics are this time around.
Speaker 3 (00:52):
Very good.
Maybe we can start with a fewthoughts about the tone of this
event.
These Las Vegas events, groceryshop have always had a lot of
excitement, energy and can argue, at times hype about technology
innovation.
I think my overall observationis that that's a little toned
(01:14):
down the last day or the firsthalf of the show.
It feels like a more practicalconversation we're having in
many cases, as opposed toinfatuation with the next news.
Speaker 2 (01:26):
Yes, If we think back to past events, the one that we
are often, I guess, these days,somewhat chuckling about was
then infatuation with Metaverse,which, even at the time it
first started popping up at agrocery shop, tom Talk, which
everyone we talked about.
It was a lot of hype andeveryone was jumping in on that.
I think that one's completelygone off the radar.
Speaker 3 (01:47):
I haven't heard the word mentioned once.
That's not to dismiss itspotential in a larger picture,
but I think folks are reallyfocused on some more, let's say
pressing and currentopportunities and pressers.
I think.
Speaker 2 (02:02):
I think so.
Yeah, I think we both noticedthat in tone.
You were saying the technologycomponents we're hearing about
it's less about what's the artof the possible from that
technology and more about here'swhat we've done as a brand so
far with this technology.
Here's where we think we'regoing with it in more of a
practical use case.
Speaker 3 (02:22):
I think practicality is the term I would use too.
These are things we actuallyare doing or can be done.
It's great.
I'm a big fan of use cases andwe've heard several
presentations where folks reallytalked about things that are
accomplished or they're in theprocess of accomplishing.
We'll address a couple of thosetoday.
Gosh themes on our list.
(02:45):
One, clearly, that seems topervade every conversation.
Maybe it's a reason for themore I'll use the word silver
tone of the event, compared tosome in the past, is the
overarching concern aboutinflation and pricing challenges
in general.
I think it's coloring the wholeindustry.
It seems to come up in somerespect in just about every
(03:10):
presentation and many of theconversations I've certainly had
on the exhibit floor.
Inflation is slower, but notgone.
A lot of price increases havebeen taken in the past couple of
years.
Consumers are changing the waythey shop to a greater or lesser
degree because of it.
We've heard a number ofcomments about how that's
(03:33):
happening.
I really think that that's whythere's a little less focus on
the next new thing and a littlebit more about all right, let's
make sure we have our groundworklaid properly.
Speaker 2 (03:44):
I think that's one.
Every keynote that I went tothere was at least one comment
made about changing consumerbuying habits.
I think this time last yearwhat we were probably hearing a
lot of what were thepost-pandemic buying habits and
what we're going to stay, whichweren't going to stay this year,
I think it's more changingbuying habits because of
inflation pressure.
I think that's true.
(04:05):
I think that's taken over thatone.
I know I'm thinking back to theopening keynote with the head
of Kroger.
I think he mentionedspecifically things like
switching to private label as anexample of buying habits that
they're well aware of and howthey serve different price
points with different brands.
I've heard that mentioned a fewtimes.
Speaker 3 (04:26):
Because I think we're rounding up from what he
believed and I hope I quote thestat right.
But he was saying that they arepercent into private label.
Sales across the Kroger systemis increasing and and they and
it's actually a matter ofstrategy for the company.
I Hope the numbers right.
Was it 30 to 40 percent?
I think that's right?
Speaker 1 (04:46):
Yeah, I think I was 40 percent there.
Speaker 3 (04:47):
Maybe it's about 30 percent at Walmart.
These are numbers I heardsecondhand repeated today, so so
that that's Notable.
But it's also a way of helpingpreserve margin for those
companies and it perhapssuggests something about how
private labels are perceived byshoppers as well.
During covert they hadopportunity, or perhaps a Due to
(05:07):
lack of alternative, a reasonto try private label products
that they might not haveconsidered before and Learned
perhaps a greater comfort, atleast with some of those.
In fact, ron Bernacci, who'sone of the executives from
Rouse's markets in in Louisiana,actually made pretty much that
comment this morning at aconference and I sat in on.
So store brands are not a stigma.
(05:28):
Shoppers are happier with thequality of the products.
Door brand products almostacross the industry are quite
comparable, in a few instancesbetter than some of the branded
products and Retailers are.
I recognize that that's one ofthe responses that's happening
For shoppers, and not the onlyone, though they're also shifts
(05:49):
in the product choices or thecategory choices.
In some instances we heardabout shifts from Prepared food
products to ingredient products,shift in behavior between
restaurant meals or deliveredrestaurant meals and meals
prepared at home, and thatthat's one that's kind of flip
flopped a couple times in thelast year and a half, but my
(06:11):
delivery has had a good bit todo with that too, so the door
dashes.
I'm great the ability to get aprepared meal sent at home,
sometimes in the same Deliverytrip as some of the grocery
items that were shopped On thesame time.
So retailers are they'rethey're challenged to do this
right and and and also to priceright.
(06:32):
So brands have taken somePretty significant price
increases in the last couple ofyears.
It is not in their nature toroll them back right, although
we could say that the egg crisiswas a was an exception to the
rule.
But that had a reason and thereason resolved.
So the consumers some at leastare feeling the pressure, and
(06:53):
retailers feel the pressure torespond to that by trying to
provide a good value story and,at the same time, preserve the
margins that they so desperatelyneed to Keep their businesses
healthy In a couple trends I wasa hearing kind of relate to
that, the business aspect of itand then maybe the profitability
there were comments about andthis came up again right in the
Kroger and Kina.
Speaker 2 (07:13):
You know what.
What happens when Kroger andAlbertsons merge, what, what to?
Should everyone else who's herethink about that?
How should, what, should theyexpect?
I think we heard a lot ofthings that I would expect to
hear if you're asked thatquestion.
You know, for example, right,well, we, we think that you know
the little immediate effectwould be lower prices Right on
things, and I think I thinkthat's the answer they have to
(07:34):
give, in my opinion, and whetherthat happens or not, that's the
answer they need to be givingthat's what you tell the
regulators.
right, exactly, so I think thatremains to be seen, but it might
.
Speaker 3 (07:43):
I mean, buying power of the combined company.
That was the real story there.
Yeah, is a factor whether thatyou know that may.
Well, I think I'm a little bitacidic about that sort of thing
in general, but you know, I'dlike to see it true.
I mean, let's say we couldargue that the buying cloud at
Walmart is one of the reasonsthat for their price, for their
prices to be.
Where they are, you know maybeother players want to want to
(08:04):
try and compete as close totheir level as possible.
I hope that's true.
Yeah, I would say that Krogeris at least saying some of the
things I would hope to hear froma enlightened company about the
impact of their, of theirmerger, and Mr McMullin, this
morning I'll be yesterdaymorning had some things to say
about that.
I clearly he's.
I think he's still the soundsokay, they still selling it a
(08:26):
little bit, a little bit.
Yeah, yeah, right, right,exactly, yeah exactly.
Speaker 2 (08:31):
So then I think other other things.
So we're on this, this theme.
Right, you had those comments.
Then there I hear more commentsfrom Different speakers on
finding the right ways to makeOnline grocery, digital grocery
channels, profitable.
Try is still an issue.
I think I've seen less on thecontents, on the session
perspective, on delivery, thanlast year.
(08:53):
Right, that's probably right,but, and then at the same time,
I think, on the show floor, Isaw, you know, I think related
to this, what we were talkingbefore about robotics and where.
Where is the robotics theme?
I don't see it in the sessions,but I've talked to a few of the
vendors on the expo floor.
There's still, you know, in thecontext of automation and
automating the picking andpacking through a warehouse and
(09:16):
using robotics.
Speaker 3 (09:17):
That's still there, I think there's, I think that's
become a competitor.
Yeah, so we tend to see morerobots that look like
rectangular objects that aresliding around, moving up and
down, then robots with arms andright, and there are a few
examples on the on the exhibitfloor today.
I could I could rattle off acouple cupping names, but a
company called fulfilled, theVinci, phonomic, all of which
(09:37):
are providing Really bins, ifyou will, bins with wheels but,
but but there's smart bins withwheels that work together.
That efficiency and fulfillmentis Is really important because
the film and cost retailers somuch money, right so so they are
trying to find ways to shavethat expense.
Speaker 2 (09:56):
Yeah, and then there's one I would add.
I would add to that I talked tovc robotics who's doing a Still
in the in store robot butthey're trying to tackle issue
of shelf replenishment Afterhours.
So they are introduced robotsimilar in the typical tower.
So we've seen of other in storerobots but with a robotic arm
that has enough precision thatit can take, you know, a
(10:18):
multiple boxes of, say, cangoods, for example, and place
them with precision exactly theway you want them by planet gram
on the shelf.
I'm desert with more precision,more accuracy than a person
would.
But interestingly, you know whenyou hear the story it's not
geared to be a labor replacement, it's meant to be a labor
augmentation.
So they said in retailersthey're working with they don't
see them having fewer people,that because they're focused on
(10:41):
this replenishment happeningafter store hours when there are
no customers around, their viewas well.
If you're a store you're tryingto do replenishment overnight,
how many employees are you goingto have that want that shift
overnight?
Me, you know you might not beable to get five employees to do
it, to restart maybe you canonly have two.
So if you have two, when youhave three of the robots, then
you get the job done overnightand all your cells are
replenished.
Speaker 3 (11:01):
So those people are kind of minding or directing the
robots and you can't reallyexpect those I mean robot that
detects a void Would have to goand retrieve the item that is
going to use to replenish.
I think you need some people inthe mix to make sure that they
have access to the product andthen you send it on their way to
do its task.
So I haven't seen how thatworks in practice, but it's an
(11:23):
interesting idea and I thinkthere and also that badger is
here as well the notion thatthere'll be certain special
purpose robots, roaming aislesand retail stores, while it I
think no, it's not being givenup on.
I think I think there's goingto be applications, maybe the
first and even second generationof these things.
We're about working out thekinks.
I think there are still someopportunities to.
Speaker 2 (11:45):
I mean, it comes down to run the stores efficiently
as you can write and it kind oflike to point your brother
before about the practicalitybeing the under tone, the show
you're.
One of the comments I've heardfrom the robotics folks is look,
the early use cases were allabout robots running, moving
down the aisle, scanning right.
Be a line on computer vision,scanning and generating data.
Then you.
Then you use that data todecide to replenish, doing or do
(12:08):
whatever I need to do.
The RI on that ended up notbeing as strong as it needed to
be, given the cost of thoserobots.
Even though you had the timeefficiency, it was still too
much cost to overcome.
So now the message I'm hearingfrom them is you need to tie
other things to it.
So I think the one example andI think they've been on stage at
every single grocery shop isnot markets Right.
(12:29):
So they've done I think the one, the one sort of the textbook
deployment right.
That makes sense of I don't.
But I don't just have therobots.
They've deployed I OT sensorsand things so that they're not
just scanning one thing when therobot goes down at I, let's get
in multiple things all at onceso that they're maximizing that
time efficiency, they'remaximizing what they do with the
data it feeds information backto their mobile app.
(12:51):
I think they're doing it nownear real time, so that you're a
shopper and the robots happento do a pass, the data in the
app gets updated.
So there's all those things.
I think you combine them.
Now you start to see an RI thatmakes sense.
Speaker 3 (13:05):
It's a lot of it's a lot of pieces of tech working
together right now.
Shucks has a long history beinginnovative about these things
and, and for my own interactionswith them years ago, I know
that there's a High levelconcern there about
implementation in the storebeing optimized to extend
possible, and so I it has never.
It hasn't surprised me thatthey've been on the leading edge
(13:25):
when it comes to testing thesethings.
I don't know if these are theMethodologies that that that
persist long term, but, you know, give them some credit for for
for being inventive, being atthe well intrepid right.
Yeah, try these things out.
And it is kind of great.
Yeah, so, so, so, anyway.
So robots don't have humanfaces on too much anymore,
despite the early hype someyears ago.
(13:46):
But robots have a degree ofartificial intelligence embedded
in many cases and theconversation absolutely is
continuing here at this event,again with it colored a little
differently in some respects.
So, but AI is everywhere.
I think people are a little bit.
People seem to be talking aboutin, in, in, well, what's really
(14:09):
good for how we really going toimplement it, but nobody is
saying we're not going with a,we're not using it right, it is
right, it's clearly.
It seems to be a technologiestimes come, it's a question
working out.
So you know, I both had the samereaction to the comment by from
heritage grocers in the sessionthis morning when she talked
(14:29):
about the evolution ofartificial intelligence in his
perspective.
You said but at the verybeginning the promise was about
finding ways to reduce bluecollar jobs.
We are replacing withartificial intelligence.
It's evolving quickly.
He suggests to the notion ofenhancing or optimizing white
collar jobs.
Artificial intelligence not forsubstituting for tasks, but
(14:52):
rather for making decisionmaking better, making and and
and I was, I would add to thatand, since my own
editorialization eliminating thejunk work, the, the, the judge,
decision making, a bogs downthe knowledge workers and
companies, because they cantrust the tool to do a large
portion of that for them.
Free their minds, speak to dealwith the issues that humans must
(15:15):
deal with in the mix.
That he said it better, buthe's not the only one.
The only comment I heard thelast couple days where people
were talking about that thenotion of Enhanced decision
making right, a number ofdifferent realms and retail,
whether it's merchandising,whether it's promotion planning,
whether it's got you, I thinkeven comes down to staffing
(15:36):
decisions, things like that,that, and certainly content For
the ads, the I can be, a is atool and I and and it means the
nature of the jobs and retailare going to change.
Maybe it's not just some peoplecan do the tasks.
Sometimes it's gonna be thepeople who can direct the I to
the task right, and that's a newskill set and likely a great
career opportunity.
Speaker 2 (15:57):
And I definitely agree.
There's been many, manyspeakers mentioning how this
isn't about replacing something,that's it's augmenting, it's
increasing speed Efficiency.
To your point about thedecision making it's making
better decisions more rapidlywith the having surfaced the
right insights from the datathat you have.
I also heard mentioned a fewtimes to the idea that it's one
(16:19):
thing to say you're going toinvest in AI, but then it's
another thing to say, well, isyour data ready for that?
So I did hear a couple ofspeakers talk about you know how
they introduce new datagovernance teams and and and uh
teams are are focused on makingsure that they have clean data
and the notion that you know, ifyou supply your a?
(16:41):
I with data that's not cleanand not good, then the outcome
can't be trusted.
Speaker 3 (16:45):
I'm not you train and I'm not official intelligence
train them with that information, you train to make bad
decisions, exact work asastrosphere is worth so in.
And there were a couplecomments Over the last couple
days to that effect that youcannot put these tools to work
and and it takes time to trainand set up the systems right,
(17:07):
without working in your datagovernance first, without
getting that, that, that thatfoundational work.
It's part of, it's part of thedigital transformation process
and many companies have beenengaged in.
But now, with the, theurgencies even accelerated
because you know that's basicbad data just gonna compound it
with a I you're not, it's notjust gonna be right to be a lack
of improvement and make it work.
(17:28):
Make it work so, so they peopleget that, they realize that it's
.
It's a significant task.
I've seen master datamanagement.
Those kinds of disciplines havebeen a conversation for a long
time, but maybe there's a newurgency.
Speaker 2 (17:40):
Right?
Yes, I think so.
How how, how they have to get onthe stick with it and I think
related to that again.
This is another comment that'sa provosh what do you mention
about how you know?
He made a point of highlightingthat you can just do this on
your own right, so that whatthey found is you know, really
working your technology partnernetwork of suppliers and
providers to Make sure you havea strong grasp of what are they
(18:03):
doing today, where they going tobe doing, what's coming next.
You work that into your plan.
You mentioned that multipletimes how that's impacting.
In fact, when he was asked youknow, what do you?
What do you think this lookslike five years out?
You know.
First, you said why you know.
Given the rate of an estimatewe've seen the last few months,
it's hard to predict anythingfive years out, but I can you
send me the key was what's gonnadetermine how rapidly that
(18:25):
changes?
It's those technology providersthat are doing this and
delivering that technology.
So you need to be on top ofwhat they're doing so that you
can understand what are thecapabilities you can leverage
two months from now, threemonths from now, six months from
now and it's a mistake to thinkthat that you have it all
mastered right.
Speaker 3 (18:40):
In fact, that's probably the minute you think
that you're probably in trouble.
That that's true a lot ofrealms for a long time.
Right, it's certainly true here.
Right, a lot of intricacies.
I need to rely on the On theknow how of the folks, that
folks on your own teams, butalso that you work with.
So that that's, that's a story,but we're gonna be talking
about this again and probablyagain and again future.
(19:02):
I have to say the core argumentabout what we call generative
idea, the idea that we're gonnatake a lot of data, we're gonna
feed an agent, intelligent agentand use it to help make better
decisions, to perhaps Increasework capacity, which I think
it's something.
It's not said that often, but Ithink that it's fundamentally a
(19:24):
very sound idea, and artificialintelligence feels like it's.
It's like burst on the scene inthe last two years, but
actually it's been I thinkthat's been in development for
quite a long time.
So I guess I'm a fan when itcomes down to it and I'm not
really like to worried about,you know, robots from the future
coming in the tax right yeah, Idon't think that's really what
(19:46):
it's about.
I think it's really aboutenhancing, and you know, when we
talk about decision, support isanother element to that.
That haven't been said much,but I think it'd be quite
important.
When human decision makers aretime limited in the activities
are involved in whether it'spromotion, planning or
merchandising or storeoperations they basically have
(20:08):
to rank, order their list andcut off the bottom so they can
handle only so many matters in agiven amount of time and you
have to quit.
Hey, I can extend that reach.
And so in a company, in abusiness, what's looking for
another penny profit and but isnot able to undertake the
activities that are gonna giveit no opportunity to find that
(20:28):
next, next bit of advantage, theextra capacity that a
trustworthy artificialintelligence can provide can
possibly be a way to staycompetitive in a very tough
market.
So it's not, it's not justabout no nice to do better way
to do things, it's also a bottomline imperative.
Yeah, and the best retailers aregonna find ways to use it that
(20:52):
way.
So, among those decisions thatare challenging folks, let's
segue to the thing that wedecided to finish with it
because it may be the most on ontrend topic of the day at the
retail media.
Absolutely, and there's an areawhere there's gonna be a lot of
decisions.
Speaker 2 (21:07):
support needed as well, but you're mentioning
something happened this weekthat was very much Well, yes,
definitely popped up and verytimely was the instacart IPO and
I think what you're going bythe media reports.
Right, I'll use the wordrevelation.
I'm not sure that, followingthis, it should come as a
revelation, but the the notionthat their business has a very
significant portion tied toadvertising as a retail media
(21:30):
platform and you know thatclearly, the direction that
seems their Business plan willstrengthen that and go deeper
into retail media capabilitiesand then at being an advertising
solution and that's what'sgonna make give them a sound
business plan true and when,when I'm If you see no appeared
here a year or a year and a halfago to talk about her plans for
(21:53):
instacart something that's asresume with me.
Speaker 3 (21:56):
That she said at the time was that their delivery
business was not profitable onits own but that she expected
the retail media contribution tobe Virtually all the
profitability for the company.
And because of the scale theirdelivery business they had an
audience that was big enough toactually have some clout in the
market.
That was a prediction a yearback.
(22:17):
It seems like perhaps They'vecome through on that prediction
and we'll see how the markettreats the IPO.
I think I've actually been alittle bit won over by Instacart
.
I never liked the way theyIntermediated the shopper
relationship very much forretailers because I'm kind of a
I guess I have a bias about the,about the grocery business and
(22:40):
the consumer relationships.
But here's a case of a companythat's that's making a shift, I
think, to become a technologyand and data supplier to the
industry as well.
I got, I got a hand it to them.
They seem to, they seem to bemaking a transition.
Speaker 2 (22:55):
That's, I would think , not easy to do and We'll see
if the IPO, if the investmentcommunity agrees because, yeah,
I'm very We've seen, we can say,I mean they have a good data
position because, right,thinking about it, they're,
they're providing customer dataacross multiple brands and that
positions them as probably oneof the only, if not the few, who
(23:15):
can do that within a singleretail media network and paint a
picture of a consumer acrossthose multiple brands.
That's gonna be appealing to,to CPG brands and other
advertisers for that and and Ithink currently that's really
just based on product search,right, you know, if you see them
now layering on they've shownbefore.
Right, you know what, goingback toward point on generative
(23:37):
AI, you know, today most people,probably in the app, are
looking for a specific productthat either put it in by name or
they're looking within acategory.
But now, if you imagine, well,what if I'm just gonna search by
?
Here's my end result.
I want, I want to put togetherthis kind of a meal.
I'm like I want to shop forspecific ingredients.
Let the app, let Instacart,tell me the ingredients that
Could potentially provide me.
(23:57):
I can just see this as theevolution, right, that could
provide from yet another.
Advertising unit that they couldoffer to brands within that,
which is not quite the same asthe search, but still sort of
all right.
Speaker 3 (24:08):
Well, let's come back to that.
That also because another thingwe were talking about about
retail media is the, is the, thedivide between the very largest
retail media networks and otherretailers, and Instacart's in
an interesting place for that.
So there's pressure obviouslyon all but the top 10 or 12
Retail media networks andgrocery right now to find their
(24:28):
place in this market and to beable to compete for the
attention and ad dollars of thelarge, of the largest brands.
And the largest brands, fortheir part, have been with
Limitations where they onlyperhaps have enough time to to
to interact with those largestplatforms the Walmart's, the
Kroger, the Albertsons, targetsand a handful of others.
(24:50):
So this is, this is a challengehow do, how do, how do others
play?
How did the, the, the reallystrong, the, the outstanding
regional grocery chains compete?
How do the Networks, the IGAscompete if they can only deliver
a fraction of the nationalaudience?
But the brands do understandeven if they run out of
(25:12):
bandwidth Maybe they need an AIto help them that that they
they're not catching the entireaudience if they only deal with
us top few retailers.
So they, only they.
They can, they can Createcampaigns, maybe tell me they're
using them and then kind offigure out another way perhaps
to reach the, the folks who aredevoted patrons of Myers or or
(25:33):
Publix or or Wegmans or HB inthese other.
You know their markets and Ithink that's not been worked out
that well.
Those retails are challenged toput up comparable offerings.
So it's it's an area of a lot ofevolution.
So why is Instacart interestinghere?
Because they cross over all ofthose retailers and perhaps
provide another point of accessfor those shoppers.
(25:54):
I don't know if that's you thethought process behind them,
behind their present move ortheir strategy, but in the end
brands still care about reachingtheir entire, at least to call
it the ACV, their all commodityvolume.
They want to reach the shopperseverywhere that they sell their
product.
And it's probably counter tostrategy to say, well, we're
(26:17):
only going to direct ouradvertising campaigns to the
stores that are easy to buymedia.
Speaker 2 (26:22):
Right, right.
But I do think and that's onethat I'm not I'm not sure just
how much I expected to hear morein the context of retail media
about.
You know, in store in my mind,is sort of the next growth area
there.
I'm going to be curious to seehow Instacart plays to that one,
because they're going to haveto leverage the I think the
retailer relationships they have.
I mean, I know they've got thein store platform offering the
(26:43):
cards and the cards it's goingto be, a matter of adoption of
that.
Yeah, yeah, but that's where Ithink you know you mentioned the
shelf label, electronic shelflabels, right, that's comes into
play as a evolution piece andthe I've heard this not so much
here but in other places youknow the neck.
I think a future battleground,if you will, for retail media is
the connections to streamingservices and connected TV.
(27:04):
As I'm yet another growth areafor that, that's a.
I think it'll be reallyappealing to brands.
Speaker 3 (27:09):
If the shoppers are using those services, it's an
opportunity.
If the issue is which shopperson which occasions, that's
always the issue.
It's always the issue.
You know which channel?
Speaker 2 (27:19):
which shoppers.
Speaker 3 (27:20):
So another related, related I think we'll wrinkle in
all of this.
That's been mentioned a numberof times in the sessions I was
in the last couple of days.
It's the need forstandardization of the ad units
and the measurements themselves.
Yeah, when you have one offplatforms by the largest
retailers and a number ofdifferent intermediaries, it is,
(27:40):
it seems, unclear.
How do we, how do we compare amedia, a media purchase, one to
one?
How do we understand theirperformance?
I think that is vexing rightnow to the folks who are
spending the money, right, yeah,and and and even to the
agencies who are trying to helpthem do it.
So it sounds like there's a lotof work there.
I understand there are effortsunderway.
Speaker 2 (28:02):
Yeah, yeah.
I have heard in there thatthere's some new standardization
I guess approaches thatreleased by IAB that's expected
to kind of help with this.
I mean again, I guess you knowthis presumes that you have
retail media networks will adoptthose standardization writing.
Speaker 3 (28:16):
Well, and and the and the, the advertising I forget
which Federation now, but the adindustry, the traditional ad
they have their own opinions onthis Right.
This is starting to feel likethere's a lot.
There's more work to do on thisthan perhaps people originally
assumed.
Let's put it that way.
Yeah, yeah, it's, it's it's,it's feels easy, let's get that
money, yeah, and for incrementalrevenue.
(28:36):
But now, now the brands have tojustify the spend, and so
that's.
That's an interesting, in myopinion, area where there's I
feel like we're one tenth of theway down the road.
Yeah, yeah, so so early, soearly on that one.
Speaker 2 (28:47):
I think that's a generally generally so so.
Speaker 3 (28:48):
So another issue related to that how you know
where do.
Where do they spend the money?
As I as as which dollars aregoing into retail media buys,
and there are a couple ofreferences I heard now that
surprised me.
I think there is perhaps asomething of an acceptance among
some retailers that some ofthose dollars are going to come
out of trade money that theyused to think were sacrosanct,
(29:11):
and it used to be that retailerswould say, yeah, I want those
grand dollars or those consumerpromotion dollars, but don't you
touch the allowances, right,you dare.
I think the retail mediaconversations now are in some
cases, becoming part of acomprehensive negotiation and
and and I confess I I think I'vestarted to be one over to the
(29:34):
notion that you know, if a, if atrade marketing investment
produces less return for the,why not move it?
Why not move it to somethingmore return?
Absolutely Now, from theperspective of the retail that's
putting up the network, they'veincurred a large expense and
effort to create this newchannel and the last thing they
(29:54):
want is for for the money justto be transferred from one
pocket to the other while theirexpenses go through.
Speaker 2 (29:58):
I think there's some and I think the I think some of
the risk to that maybe getsdiminished as the measurement
standardization gets worked out,because one of the ways you
solve that right is to have aconsistent, reliable way to get
a true measurement of.
Is this more valuable in thisbucket or this other bucket over
here for as the brand for me tospend the dollars and depending
on that result, that mightconvince me to say, well, I need
(30:19):
to put more dollars to it to.
Speaker 3 (30:20):
In total, no, perhaps so and and and it's, as I said,
the first part of thisconversation.
I'm going back a year or a yearand a half about retail media,
where it really started to toreally bubble up to the top of
mind.
It seemed like this is easy.
It was, it was going to be easy.
We're going to get the newfunds.
It's going to help offset ourcost of fulfillment in our, in
(30:41):
our digital grocery sales.
This is this is going to create, it's going to save us.
Everybody's going to be happyand the more they looked into
how it actually has to happen,the harder it seems to get Right
, so complexity is going up,yeah Well exactly.
So that's probably a normallearning curve, but I think
that's why it is.
It's on the lips of just abouteverybody that we've certainly
(31:03):
the retailers prefer, butthere's been reference to, I
think in every session I'veattended at some to some degree.
Yeah, I think that's true.
So that's true.
So there we are, so anyhow.
So we'll be back talking aboutretail media again.
Speaker 2 (31:16):
I'm sure, again and again, I think, yeah, I think so
, absolutely it's going to keepcoming back.
Well, I think that's a good onefor us to to close on for this,
for this grocery shop.
So I think we'll close it outby telling everyone you know, if
you haven't been toretailwirecom, to please give a
visit, where you'll heardiscussions like the ones we
just had kind of play themselvesout, and three different
(31:37):
discussions a day, every daythere's some smart retail wire.
Speaker 3 (31:39):
We're lucky to be with them, you know, I think so.
Speaker 2 (31:42):
Absolutely.
Speaker 3 (31:43):
Absolutely.
You learn a lot from that andit's been a privilege to be part
of it, in my case for years,and yours too.
Yeah, I agree, I agree, yeah,so it's great and it's.
You know, if I'm smart enoughto be on this webcast, it's
probably because I've beenparticipating in retail wire for
a long time and learning fromthe rest of the brain trust.
Speaker 2 (31:59):
So yeah, 100%, 100%.
So definitely check it out ifyou haven't been to
retailwirecom and we hope to seeyou soon again on a future
retail wire live.
Speaker 3 (32:08):
I can count on and, Ricardo, it's always a pleasure
working with you.
I'm Jamie Tensor via Send.
Speaker 2 (32:13):
Strategies and I'm Ricardo Balmar, the partner
marketing for Microsoft forretail in the Americas.
Thanks for joining us, thanksfor joining us.
Hey, thanks for tuning in to the Retail Wire
podcast.
This episode was recorded livefrom grocery shop 2023 in Las
Vegas, featuring two of ourBrain Trust members, James
Tenser and Ricardo Belmar.
Listen to hear their insightsand key takeaways.
We hope you enjoy this episode.
Speaker 2 (00:23):
Welcome everyone to another Retail Wire Live.
I'm Ricardo Belmar, I leadpartner marketing for Retail at
Microsoft and I am here todaywith a good friend and a fellow
Brain Trust member, Jamie Tenser.
Speaker 3 (00:35):
Greetings.
Glad to be here.
As ever, working with you,Ricardo, on this is one of the
privileges of the job.
Speaker 2 (00:42):
We are here at grocery shop this week once
again and we're going to gothrough our notes on how things
are going at the show, what thehot topics are this time around.
Speaker 3 (00:52):
Very good.
Maybe we can start with a fewthoughts about the tone of this
event.
These Las Vegas events, groceryshop have always had a lot of
excitement, energy and can argue, at times hype about technology
innovation.
I think my overall observationis that that's a little toned
(01:14):
down the last day or the firsthalf of the show.
It feels like a more practicalconversation we're having in
many cases, as opposed toinfatuation with the next news.
Speaker 2 (01:26):
Yes, If we think back to past events, the one that we
are often, I guess, these days,somewhat chuckling about was
then infatuation with Metaverse,which, even at the time it
first started popping up at agrocery shop, tom Talk, which
everyone we talked about.
It was a lot of hype andeveryone was jumping in on that.
I think that one's completelygone off the radar.
Speaker 3 (01:47):
I haven't heard the word mentioned once.
That's not to dismiss itspotential in a larger picture,
but I think folks are reallyfocused on some more, let's say
pressing and currentopportunities and pressers.
I think.
Speaker 2 (02:02):
I think so.
Yeah, I think we both noticedthat in tone.
You were saying the technologycomponents we're hearing about
it's less about what's the artof the possible from that
technology and more about here'swhat we've done as a brand so
far with this technology.
Here's where we think we'regoing with it in more of a
practical use case.
Speaker 3 (02:22):
I think practicality is the term I would use too.
These are things we actuallyare doing or can be done.
It's great.
I'm a big fan of use cases andwe've heard several
presentations where folks reallytalked about things that are
accomplished or they're in theprocess of accomplishing.
We'll address a couple of thosetoday.
Gosh themes on our list.
(02:45):
One, clearly, that seems topervade every conversation.
Maybe it's a reason for themore I'll use the word silver
tone of the event, compared tosome in the past, is the
overarching concern aboutinflation and pricing challenges
in general.
I think it's coloring the wholeindustry.
It seems to come up in somerespect in just about every
(03:10):
presentation and many of theconversations I've certainly had
on the exhibit floor.
Inflation is slower, but notgone.
A lot of price increases havebeen taken in the past couple of
years.
Consumers are changing the waythey shop to a greater or lesser
degree because of it.
We've heard a number ofcomments about how that's
(03:33):
happening.
I really think that that's whythere's a little less focus on
the next new thing and a littlebit more about all right, let's
make sure we have our groundworklaid properly.
Speaker 2 (03:44):
I think that's one.
Every keynote that I went tothere was at least one comment
made about changing consumerbuying habits.
I think this time last yearwhat we were probably hearing a
lot of what were thepost-pandemic buying habits and
what we're going to stay, whichweren't going to stay this year,
I think it's more changingbuying habits because of
inflation pressure.
I think that's true.
(04:05):
I think that's taken over thatone.
I know I'm thinking back to theopening keynote with the head
of Kroger.
I think he mentionedspecifically things like
switching to private label as anexample of buying habits that
they're well aware of and howthey serve different price
points with different brands.
I've heard that mentioned a fewtimes.
Speaker 3 (04:26):
Because I think we're rounding up from what he
believed and I hope I quote thestat right.
But he was saying that they arepercent into private label.
Sales across the Kroger systemis increasing and and they and
it's actually a matter ofstrategy for the company.
I Hope the numbers right.
Was it 30 to 40 percent?
I think that's right?
Speaker 1 (04:46):
Yeah, I think I was 40 percent there.
Speaker 3 (04:47):
Maybe it's about 30 percent at Walmart.
These are numbers I heardsecondhand repeated today, so so
that that's Notable.
But it's also a way of helpingpreserve margin for those
companies and it perhapssuggests something about how
private labels are perceived byshoppers as well.
During covert they hadopportunity, or perhaps a Due to
(05:07):
lack of alternative, a reasonto try private label products
that they might not haveconsidered before and Learned
perhaps a greater comfort, atleast with some of those.
In fact, ron Bernacci, who'sone of the executives from
Rouse's markets in in Louisiana,actually made pretty much that
comment this morning at aconference and I sat in on.
So store brands are not a stigma.
(05:28):
Shoppers are happier with thequality of the products.
Door brand products almostacross the industry are quite
comparable, in a few instancesbetter than some of the branded
products and Retailers are.
I recognize that that's one ofthe responses that's happening
For shoppers, and not the onlyone, though they're also shifts
(05:49):
in the product choices or thecategory choices.
In some instances we heardabout shifts from Prepared food
products to ingredient products,shift in behavior between
restaurant meals or deliveredrestaurant meals and meals
prepared at home, and thatthat's one that's kind of flip
flopped a couple times in thelast year and a half, but my
(06:11):
delivery has had a good bit todo with that too, so the door
dashes.
I'm great the ability to get aprepared meal sent at home,
sometimes in the same Deliverytrip as some of the grocery
items that were shopped On thesame time.
So retailers are they'rethey're challenged to do this
right and and and also to priceright.
(06:32):
So brands have taken somePretty significant price
increases in the last couple ofyears.
It is not in their nature toroll them back right, although
we could say that the egg crisiswas a was an exception to the
rule.
But that had a reason and thereason resolved.
So the consumers some at leastare feeling the pressure, and
(06:53):
retailers feel the pressure torespond to that by trying to
provide a good value story and,at the same time, preserve the
margins that they so desperatelyneed to Keep their businesses
healthy In a couple trends I wasa hearing kind of relate to
that, the business aspect of itand then maybe the profitability
there were comments about andthis came up again right in the
Kroger and Kina.
Speaker 2 (07:13):
You know what.
What happens when Kroger andAlbertsons merge, what, what to?
Should everyone else who's herethink about that?
How should, what, should theyexpect?
I think we heard a lot ofthings that I would expect to
hear if you're asked thatquestion.
You know, for example, right,well, we, we think that you know
the little immediate effectwould be lower prices Right on
things, and I think I thinkthat's the answer they have to
(07:34):
give, in my opinion, and whetherthat happens or not, that's the
answer they need to be givingthat's what you tell the
regulators.
right, exactly, so I think thatremains to be seen, but it might
.
Speaker 3 (07:43):
I mean, buying power of the combined company.
That was the real story there.
Yeah, is a factor whether thatyou know that may.
Well, I think I'm a little bitacidic about that sort of thing
in general, but you know, I'dlike to see it true.
I mean, let's say we couldargue that the buying cloud at
Walmart is one of the reasonsthat for their price, for their
prices to be.
Where they are, you know maybeother players want to want to
(08:04):
try and compete as close totheir level as possible.
I hope that's true.
Yeah, I would say that Krogeris at least saying some of the
things I would hope to hear froma enlightened company about the
impact of their, of theirmerger, and Mr McMullin, this
morning I'll be yesterdaymorning had some things to say
about that.
I clearly he's.
I think he's still the soundsokay, they still selling it a
(08:26):
little bit, a little bit.
Yeah, yeah, right, right,exactly, yeah exactly.
Speaker 2 (08:31):
So then I think other other things.
So we're on this, this theme.
Right, you had those comments.
Then there I hear more commentsfrom Different speakers on
finding the right ways to makeOnline grocery, digital grocery
channels, profitable.
Try is still an issue.
I think I've seen less on thecontents, on the session
perspective, on delivery, thanlast year.
(08:53):
Right, that's probably right,but, and then at the same time,
I think, on the show floor, Isaw, you know, I think related
to this, what we were talkingbefore about robotics and where.
Where is the robotics theme?
I don't see it in the sessions,but I've talked to a few of the
vendors on the expo floor.
There's still, you know, in thecontext of automation and
automating the picking andpacking through a warehouse and
(09:16):
using robotics.
Speaker 3 (09:17):
That's still there, I think there's, I think that's
become a competitor.
Yeah, so we tend to see morerobots that look like
rectangular objects that aresliding around, moving up and
down, then robots with arms andright, and there are a few
examples on the on the exhibitfloor today.
I could I could rattle off acouple cupping names, but a
company called fulfilled, theVinci, phonomic, all of which
(09:37):
are providing Really bins, ifyou will, bins with wheels but,
but but there's smart bins withwheels that work together.
That efficiency and fulfillmentis Is really important because
the film and cost retailers somuch money, right so so they are
trying to find ways to shavethat expense.
Speaker 2 (09:56):
Yeah, and then there's one I would add.
I would add to that I talked tovc robotics who's doing a Still
in the in store robot butthey're trying to tackle issue
of shelf replenishment Afterhours.
So they are introduced robotsimilar in the typical tower.
So we've seen of other in storerobots but with a robotic arm
that has enough precision thatit can take, you know, a
(10:18):
multiple boxes of, say, cangoods, for example, and place
them with precision exactly theway you want them by planet gram
on the shelf.
I'm desert with more precision,more accuracy than a person
would.
But interestingly, you know whenyou hear the story it's not
geared to be a labor replacement, it's meant to be a labor
augmentation.
So they said in retailersthey're working with they don't
see them having fewer people,that because they're focused on
(10:41):
this replenishment happeningafter store hours when there are
no customers around, their viewas well.
If you're a store you're tryingto do replenishment overnight,
how many employees are you goingto have that want that shift
overnight?
Me, you know you might not beable to get five employees to do
it, to restart maybe you canonly have two.
So if you have two, when youhave three of the robots, then
you get the job done overnightand all your cells are
replenished.
Speaker 3 (11:01):
So those people are kind of minding or directing the
robots and you can't reallyexpect those I mean robot that
detects a void Would have to goand retrieve the item that is
going to use to replenish.
I think you need some people inthe mix to make sure that they
have access to the product andthen you send it on their way to
do its task.
So I haven't seen how thatworks in practice, but it's an
(11:23):
interesting idea and I thinkthere and also that badger is
here as well the notion thatthere'll be certain special
purpose robots, roaming aislesand retail stores, while it I
think no, it's not being givenup on.
I think I think there's goingto be applications, maybe the
first and even second generationof these things.
We're about working out thekinks.
I think there are still someopportunities to.
Speaker 2 (11:45):
I mean, it comes down to run the stores efficiently
as you can write and it kind oflike to point your brother
before about the practicalitybeing the under tone, the show
you're.
One of the comments I've heardfrom the robotics folks is look,
the early use cases were allabout robots running, moving
down the aisle, scanning right.
Be a line on computer vision,scanning and generating data.
Then you.
Then you use that data todecide to replenish, doing or do
(12:08):
whatever I need to do.
The RI on that ended up notbeing as strong as it needed to
be, given the cost of thoserobots.
Even though you had the timeefficiency, it was still too
much cost to overcome.
So now the message I'm hearingfrom them is you need to tie
other things to it.
So I think the one example andI think they've been on stage at
every single grocery shop isnot markets Right.
(12:29):
So they've done I think the one, the one sort of the textbook
deployment right.
That makes sense of I don't.
But I don't just have therobots.
They've deployed I OT sensorsand things so that they're not
just scanning one thing when therobot goes down at I, let's get
in multiple things all at onceso that they're maximizing that
time efficiency, they'remaximizing what they do with the
data it feeds information backto their mobile app.
(12:51):
I think they're doing it nownear real time, so that you're a
shopper and the robots happento do a pass, the data in the
app gets updated.
So there's all those things.
I think you combine them.
Now you start to see an RI thatmakes sense.
Speaker 3 (13:05):
It's a lot of it's a lot of pieces of tech working
together right now.
Shucks has a long history beinginnovative about these things
and, and for my own interactionswith them years ago, I know
that there's a High levelconcern there about
implementation in the storebeing optimized to extend
possible, and so I it has never.
It hasn't surprised me thatthey've been on the leading edge
(13:25):
when it comes to testing thesethings.
I don't know if these are theMethodologies that that that
persist long term, but, you know, give them some credit for for
for being inventive, being atthe well intrepid right.
Yeah, try these things out.
And it is kind of great.
Yeah, so, so, so, anyway.
So robots don't have humanfaces on too much anymore,
despite the early hype someyears ago.
(13:46):
But robots have a degree ofartificial intelligence embedded
in many cases and theconversation absolutely is
continuing here at this event,again with it colored a little
differently in some respects.
So, but AI is everywhere.
I think people are a little bit.
People seem to be talking aboutin, in, in, well, what's really
(14:09):
good for how we really going toimplement it, but nobody is
saying we're not going with a,we're not using it right, it is
right, it's clearly.
It seems to be a technologiestimes come, it's a question
working out.
So you know, I both had the samereaction to the comment by from
heritage grocers in the sessionthis morning when she talked
(14:29):
about the evolution ofartificial intelligence in his
perspective.
You said but at the verybeginning the promise was about
finding ways to reduce bluecollar jobs.
We are replacing withartificial intelligence.
It's evolving quickly.
He suggests to the notion ofenhancing or optimizing white
collar jobs.
Artificial intelligence not forsubstituting for tasks, but
(14:52):
rather for making decisionmaking better, making and and
and I was, I would add to thatand, since my own
editorialization eliminating thejunk work, the, the, the judge,
decision making, a bogs downthe knowledge workers and
companies, because they cantrust the tool to do a large
portion of that for them.
Free their minds, speak to dealwith the issues that humans must
(15:15):
deal with in the mix.
That he said it better, buthe's not the only one.
The only comment I heard thelast couple days where people
were talking about that thenotion of Enhanced decision
making right, a number ofdifferent realms and retail,
whether it's merchandising,whether it's promotion planning,
whether it's got you, I thinkeven comes down to staffing
(15:36):
decisions, things like that,that, and certainly content For
the ads, the I can be, a is atool and I and and it means the
nature of the jobs and retailare going to change.
Maybe it's not just some peoplecan do the tasks.
Sometimes it's gonna be thepeople who can direct the I to
the task right, and that's a newskill set and likely a great
career opportunity.
Speaker 2 (15:57):
And I definitely agree.
There's been many, manyspeakers mentioning how this
isn't about replacing something,that's it's augmenting, it's
increasing speed Efficiency.
To your point about thedecision making it's making
better decisions more rapidlywith the having surfaced the
right insights from the datathat you have.
I also heard mentioned a fewtimes to the idea that it's one
(16:19):
thing to say you're going toinvest in AI, but then it's
another thing to say, well, isyour data ready for that?
So I did hear a couple ofspeakers talk about you know how
they introduce new datagovernance teams and and and uh
teams are are focused on makingsure that they have clean data
and the notion that you know, ifyou supply your a?
(16:41):
I with data that's not cleanand not good, then the outcome
can't be trusted.
Speaker 3 (16:45):
I'm not you train and I'm not official intelligence
train them with that information, you train to make bad
decisions, exact work asastrosphere is worth so in.
And there were a couplecomments Over the last couple
days to that effect that youcannot put these tools to work
and and it takes time to trainand set up the systems right,
(17:07):
without working in your datagovernance first, without
getting that, that, that thatfoundational work.
It's part of, it's part of thedigital transformation process
and many companies have beenengaged in.
But now, with the, theurgencies even accelerated
because you know that's basicbad data just gonna compound it
with a I you're not, it's notjust gonna be right to be a lack
of improvement and make it work.
(17:28):
Make it work so, so they peopleget that, they realize that it's
.
It's a significant task.
I've seen master datamanagement.
Those kinds of disciplines havebeen a conversation for a long
time, but maybe there's a newurgency.
Speaker 2 (17:40):
Right?
Yes, I think so.
How how, how they have to get onthe stick with it and I think
related to that again.
This is another comment that'sa provosh what do you mention
about how you know?
He made a point of highlightingthat you can just do this on
your own right, so that whatthey found is you know, really
working your technology partnernetwork of suppliers and
providers to Make sure you havea strong grasp of what are they
(18:03):
doing today, where they going tobe doing, what's coming next.
You work that into your plan.
You mentioned that multipletimes how that's impacting.
In fact, when he was asked youknow, what do you?
What do you think this lookslike five years out?
You know.
First, you said why you know.
Given the rate of an estimatewe've seen the last few months,
it's hard to predict anythingfive years out, but I can you
send me the key was what's gonnadetermine how rapidly that
(18:25):
changes?
It's those technology providersthat are doing this and
delivering that technology.
So you need to be on top ofwhat they're doing so that you
can understand what are thecapabilities you can leverage
two months from now, threemonths from now, six months from
now and it's a mistake to thinkthat that you have it all
mastered right.
Speaker 3 (18:40):
In fact, that's probably the minute you think
that you're probably in trouble.
That that's true a lot ofrealms for a long time.
Right, it's certainly true here.
Right, a lot of intricacies.
I need to rely on the On theknow how of the folks, that
folks on your own teams, butalso that you work with.
So that that's, that's a story,but we're gonna be talking
about this again and probablyagain and again future.
(19:02):
I have to say the core argumentabout what we call generative
idea, the idea that we're gonnatake a lot of data, we're gonna
feed an agent, intelligent agentand use it to help make better
decisions, to perhaps Increasework capacity, which I think
it's something.
It's not said that often, but Ithink that it's fundamentally a
(19:24):
very sound idea, and artificialintelligence feels like it's.
It's like burst on the scene inthe last two years, but
actually it's been I thinkthat's been in development for
quite a long time.
So I guess I'm a fan when itcomes down to it and I'm not
really like to worried about,you know, robots from the future
coming in the tax right yeah, Idon't think that's really what
(19:46):
it's about.
I think it's really aboutenhancing, and you know, when we
talk about decision, support isanother element to that.
That haven't been said much,but I think it'd be quite
important.
When human decision makers aretime limited in the activities
are involved in whether it'spromotion, planning or
merchandising or storeoperations they basically have
(20:08):
to rank, order their list andcut off the bottom so they can
handle only so many matters in agiven amount of time and you
have to quit.
Hey, I can extend that reach.
And so in a company, in abusiness, what's looking for
another penny profit and but isnot able to undertake the
activities that are gonna giveit no opportunity to find that
(20:28):
next, next bit of advantage, theextra capacity that a
trustworthy artificialintelligence can provide can
possibly be a way to staycompetitive in a very tough
market.
So it's not, it's not justabout no nice to do better way
to do things, it's also a bottomline imperative.
Yeah, and the best retailers aregonna find ways to use it that
(20:52):
way.
So, among those decisions thatare challenging folks, let's
segue to the thing that wedecided to finish with it
because it may be the most on ontrend topic of the day at the
retail media.
Absolutely, and there's an areawhere there's gonna be a lot of
decisions.
Speaker 2 (21:07):
support needed as well, but you're mentioning
something happened this weekthat was very much Well, yes,
definitely popped up and verytimely was the instacart IPO and
I think what you're going bythe media reports.
Right, I'll use the wordrevelation.
I'm not sure that, followingthis, it should come as a
revelation, but the the notionthat their business has a very
significant portion tied toadvertising as a retail media
(21:30):
platform and you know thatclearly, the direction that
seems their Business plan willstrengthen that and go deeper
into retail media capabilitiesand then at being an advertising
solution and that's what'sgonna make give them a sound
business plan true and when,when I'm If you see no appeared
here a year or a year and a halfago to talk about her plans for
(21:53):
instacart something that's asresume with me.
Speaker 3 (21:56):
That she said at the time was that their delivery
business was not profitable onits own but that she expected
the retail media contribution tobe Virtually all the
profitability for the company.
And because of the scale theirdelivery business they had an
audience that was big enough toactually have some clout in the
market.
That was a prediction a yearback.
(22:17):
It seems like perhaps They'vecome through on that prediction
and we'll see how the markettreats the IPO.
I think I've actually been alittle bit won over by Instacart
.
I never liked the way theyIntermediated the shopper
relationship very much forretailers because I'm kind of a
I guess I have a bias about the,about the grocery business and
(22:40):
the consumer relationships.
But here's a case of a companythat's that's making a shift, I
think, to become a technologyand and data supplier to the
industry as well.
I got, I got a hand it to them.
They seem to, they seem to bemaking a transition.
Speaker 2 (22:55):
That's, I would think , not easy to do and We'll see
if the IPO, if the investmentcommunity agrees because, yeah,
I'm very We've seen, we can say,I mean they have a good data
position because, right,thinking about it, they're,
they're providing customer dataacross multiple brands and that
positions them as probably oneof the only, if not the few, who
(23:15):
can do that within a singleretail media network and paint a
picture of a consumer acrossthose multiple brands.
That's gonna be appealing to,to CPG brands and other
advertisers for that and and Ithink currently that's really
just based on product search,right, you know, if you see them
now layering on they've shownbefore.
Right, you know what, goingback toward point on generative
(23:37):
AI, you know, today most people,probably in the app, are
looking for a specific productthat either put it in by name or
they're looking within acategory.
But now, if you imagine, well,what if I'm just gonna search by
?
Here's my end result.
I want, I want to put togetherthis kind of a meal.
I'm like I want to shop forspecific ingredients.
Let the app, let Instacart,tell me the ingredients that
Could potentially provide me.
(23:57):
I can just see this as theevolution, right, that could
provide from yet another.
Advertising unit that they couldoffer to brands within that,
which is not quite the same asthe search, but still sort of
all right.
Speaker 3 (24:08):
Well, let's come back to that.
That also because another thingwe were talking about about
retail media is the, is the, thedivide between the very largest
retail media networks and otherretailers, and Instacart's in
an interesting place for that.
So there's pressure obviouslyon all but the top 10 or 12
Retail media networks andgrocery right now to find their
(24:28):
place in this market and to beable to compete for the
attention and ad dollars of thelarge, of the largest brands.
And the largest brands, fortheir part, have been with
Limitations where they onlyperhaps have enough time to to
to interact with those largestplatforms the Walmart's, the
Kroger, the Albertsons, targetsand a handful of others.
(24:50):
So this is, this is a challengehow do, how do, how do others
play?
How did the, the, the reallystrong, the, the outstanding
regional grocery chains compete?
How do the Networks, the IGAscompete if they can only deliver
a fraction of the nationalaudience?
But the brands do understandeven if they run out of
(25:12):
bandwidth Maybe they need an AIto help them that that they
they're not catching the entireaudience if they only deal with
us top few retailers.
So they, only they.
They can, they can Createcampaigns, maybe tell me they're
using them and then kind offigure out another way perhaps
to reach the, the folks who aredevoted patrons of Myers or or
(25:33):
Publix or or Wegmans or HB inthese other.
You know their markets and Ithink that's not been worked out
that well.
Those retails are challenged toput up comparable offerings.
So it's it's an area of a lot ofevolution.
So why is Instacart interestinghere?
Because they cross over all ofthose retailers and perhaps
provide another point of accessfor those shoppers.
(25:54):
I don't know if that's you thethought process behind them,
behind their present move ortheir strategy, but in the end
brands still care about reachingtheir entire, at least to call
it the ACV, their all commodityvolume.
They want to reach the shopperseverywhere that they sell their
product.
And it's probably counter tostrategy to say, well, we're
(26:17):
only going to direct ouradvertising campaigns to the
stores that are easy to buymedia.
Speaker 2 (26:22):
Right, right.
But I do think and that's onethat I'm not I'm not sure just
how much I expected to hear morein the context of retail media
about.
You know, in store in my mind,is sort of the next growth area
there.
I'm going to be curious to seehow Instacart plays to that one,
because they're going to haveto leverage the I think the
retailer relationships they have.
I mean, I know they've got thein store platform offering the
(26:43):
cards and the cards it's goingto be, a matter of adoption of
that.
Yeah, yeah, but that's where Ithink you know you mentioned the
shelf label, electronic shelflabels, right, that's comes into
play as a evolution piece andthe I've heard this not so much
here but in other places youknow the neck.
I think a future battleground,if you will, for retail media is
the connections to streamingservices and connected TV.
(27:04):
As I'm yet another growth areafor that, that's a.
I think it'll be reallyappealing to brands.
Speaker 3 (27:09):
If the shoppers are using those services, it's an
opportunity.
If the issue is which shopperson which occasions, that's
always the issue.
It's always the issue.
You know which channel?
Speaker 2 (27:19):
which shoppers.
Speaker 3 (27:20):
So another related, related I think we'll wrinkle in
all of this.
That's been mentioned a numberof times in the sessions I was
in the last couple of days.
It's the need forstandardization of the ad units
and the measurements themselves.
Yeah, when you have one offplatforms by the largest
retailers and a number ofdifferent intermediaries, it is,
(27:40):
it seems, unclear.
How do we, how do we compare amedia, a media purchase, one to
one?
How do we understand theirperformance?
I think that is vexing rightnow to the folks who are
spending the money, right, yeah,and and and even to the
agencies who are trying to helpthem do it.
So it sounds like there's a lotof work there.
I understand there are effortsunderway.
Speaker 2 (28:02):
Yeah, yeah.
I have heard in there thatthere's some new standardization
I guess approaches thatreleased by IAB that's expected
to kind of help with this.
I mean again, I guess you knowthis presumes that you have
retail media networks will adoptthose standardization writing.
Speaker 3 (28:16):
Well, and and the and the, the advertising I forget
which Federation now, but the adindustry, the traditional ad
they have their own opinions onthis Right.
This is starting to feel likethere's a lot.
There's more work to do on thisthan perhaps people originally
assumed.
Let's put it that way.
Yeah, yeah, it's, it's it's,it's feels easy, let's get that
money, yeah, and for incrementalrevenue.
(28:36):
But now, now the brands have tojustify the spend, and so
that's.
That's an interesting, in myopinion, area where there's I
feel like we're one tenth of theway down the road.
Yeah, yeah, so so early, soearly on that one.
Speaker 2 (28:47):
I think that's a generally generally so so.
Speaker 3 (28:48):
So another issue related to that how you know
where do.
Where do they spend the money?
As I as as which dollars aregoing into retail media buys,
and there are a couple ofreferences I heard now that
surprised me.
I think there is perhaps asomething of an acceptance among
some retailers that some ofthose dollars are going to come
out of trade money that theyused to think were sacrosanct,
(29:11):
and it used to be that retailerswould say, yeah, I want those
grand dollars or those consumerpromotion dollars, but don't you
touch the allowances, right,you dare.
I think the retail mediaconversations now are in some
cases, becoming part of acomprehensive negotiation and
and and I confess I I think I'vestarted to be one over to the
(29:34):
notion that you know, if a, if atrade marketing investment
produces less return for the,why not move it?
Why not move it to somethingmore return?
Absolutely Now, from theperspective of the retail that's
putting up the network, they'veincurred a large expense and
effort to create this newchannel and the last thing they
(29:54):
want is for for the money justto be transferred from one
pocket to the other while theirexpenses go through.
Speaker 2 (29:58):
I think there's some and I think the I think some of
the risk to that maybe getsdiminished as the measurement
standardization gets worked out,because one of the ways you
solve that right is to have aconsistent, reliable way to get
a true measurement of.
Is this more valuable in thisbucket or this other bucket over
here for as the brand for me tospend the dollars and depending
on that result, that mightconvince me to say, well, I need
(30:19):
to put more dollars to it to.
Speaker 3 (30:20):
In total, no, perhaps so and and and it's, as I said,
the first part of thisconversation.
I'm going back a year or a yearand a half about retail media,
where it really started to toreally bubble up to the top of
mind.
It seemed like this is easy.
It was, it was going to be easy.
We're going to get the newfunds.
It's going to help offset ourcost of fulfillment in our, in
(30:41):
our digital grocery sales.
This is this is going to create, it's going to save us.
Everybody's going to be happyand the more they looked into
how it actually has to happen,the harder it seems to get Right
, so complexity is going up,yeah Well exactly.
So that's probably a normallearning curve, but I think
that's why it is.
It's on the lips of just abouteverybody that we've certainly
(31:03):
the retailers prefer, butthere's been reference to, I
think in every session I'veattended at some to some degree.
Yeah, I think that's true.
So that's true.
So there we are, so anyhow.
So we'll be back talking aboutretail media again.
Speaker 2 (31:16):
I'm sure, again and again, I think, yeah, I think so
, absolutely it's going to keepcoming back.
Well, I think that's a good onefor us to to close on for this,
for this grocery shop.
So I think we'll close it outby telling everyone you know, if
you haven't been toretailwirecom, to please give a
visit, where you'll heardiscussions like the ones we
just had kind of play themselvesout, and three different
(31:37):
discussions a day, every daythere's some smart retail wire.
Speaker 3 (31:39):
We're lucky to be with them, you know, I think so.
Speaker 2 (31:42):
Absolutely.
Speaker 3 (31:43):
Absolutely.
You learn a lot from that andit's been a privilege to be part
of it, in my case for years,and yours too.
Yeah, I agree, I agree, yeah,so it's great and it's.
You know, if I'm smart enoughto be on this webcast, it's
probably because I've beenparticipating in retail wire for
a long time and learning fromthe rest of the brain trust.
Speaker 2 (31:59):
So yeah, 100%, 100%.
So definitely check it out ifyou haven't been to
retailwirecom and we hope to seeyou soon again on a future
retail wire live.
Speaker 3 (32:08):
I can count on and, Ricardo, it's always a pleasure
working with you.
I'm Jamie Tensor via Send.
Speaker 2 (32:13):
Strategies and I'm Ricardo Balmar, the partner
marketing for Microsoft forretail in the Americas.
Thanks for joining us, thanksfor joining us.
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