Episode 042 : 12/23/2021
Chris Walton, OmniTalk
Chris Walton is co-CEO of Omnitalk, the leading retail podcast and blog. Previously, Chris was the Vice President of Target’s Store of the Future project and also the Vice President of Merchandising for Home Furnishings on Target.com. Chris wraps up 2021 for Spark Plug with an overview of how the pandemic affected retail this past year, predictions for growth and future technology adoption and a wealth of insights into how the National Retail Federation is shaping up for the annual NRF Conference in New York in January 2022.
Host: Ned Hayes and Ashley Coates
Guest: Chris Walton
Listen to every episode
Topics discussed in this episode
- Walton’s long experience as a leader in Target’s store of the future program
- Reflections on 2021 retail performance and indicators for the future
- Supply chain management as one big wave for the future
- Omnitalk, from a blog to a newsletter to a leading podcast
- Preview of NRF 2021, speakers, and tech highlights
- Why computer vision can be the game-changer for retail in the future
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Ned Hayes [00:00:01] Welcome to SparkPlug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe your smarter loyalty leader. At the end of the year, SparkPlug is happy to welcome Chris Walton to the podcast. Chris is a leading expert and influencer in omnichannel retailing with over 20 years of experience across nearly every discipline in retail is the CEO and founder of Omnitalk one of the fastest growing blogs in retail, and he’s a frequent contributor at Forbes. He is a keynote speaker and he was formerly vice president of Target Store of the Future program. So welcome, Chris!
Chris Walton [00:00:44] Thanks for having me. It’s great way to close out. 2021 with you guys. I’m excited.
Ashley Coates [00:00:48] Yeah, we’re so happy to have you here. Well, let’s start off, Chris, by having you tell our listeners a little bit more about your career history. And if you don’t mind, we’d love to start with Target. Can you talk about that experience and the value that that experience provided for your future endeavors?
Chris Walton [00:01:05] Yeah, for sure. A 100%, yeah. So like, like we said in the intro, I was, you know, I’m a 20. I was in retail for almost 20 years, give or take and start my career at the Gap in San Francisco and spent four years. Then I went to business school and after business schools. Yeah, that’s when I linked up with Target. So this was back in, believe it or not, 2005. So this will be age me a little bit at Target was a great, great experience ground for me. I I did almost every job under the sun at Target. So at Gap I’d had a lot of supply chain experience. I was in inventory planning allocation and after business school I decided I wanted to get into merchandizing because at the time I was kind of the retail heart, the epicenter of where retail was happening. It’s not so much anymore in a lot of ways, but you know, at the time it was so I I decided to try my hand at that. And believe it or not, my first job in retail was as the buyer of seasonal bath and rugs at Target. So I was almost catching things like Santa Claus hand towels. Pumpkin shaped doormats always joke it was my grandmother’s favorite job that I ever had. And from there, you know, I did a lot of the resistance and merchandizing. I ran frozen food for a while. I ran the bush Department for Frozen Food Area and the grocery department for a while. But the next most important thing that I did from my career standpoint is actually at 34, 35 years old, I went out and learned how to run stores in the field for Target. So I spent two years out in Colorado. I ran my own super Target for a period of time, just south of Boulder, Colorado, and then I ran a district that stores spread across Wyoming, Nebraska, South Dakota and northern Colorado. And so I was in my car about 30,000 miles a year, and there I was at 34-35 old Harvard MBA bag and grocery store and fed up a truck. My family would come in they think I’d I was crazy. They’d be like, What the hell are you doing? And I’d be like bagging groceries for some other customer, and I got it. But I got to tell you as I look back as private, single best decision I ever made because it gave me a different perspective on how retail works than just from the standard headquarters perspective that so many people have. And then from there, I was lucky enough to come back to Minneapolis and I was named the vice president home furnishings for Target.com, so I got my first e-commerce experience as well. And that may be pretty unique in the marketplace, and I think it’s still does to having a blend of e-commerce, traditional store operations, supply chain, as well as traditional bricks and mortar merchandizing and from their Target. And you know, based on that unique set of experiences, why don’t you come be the head of our store of the future work? And so that’s where I met my now partner Anne Mezzenga, who founded Omnitalk with me, and we spent two years just trying to develop Target’s future operations for scale. And so we got a really good sense of what technologies work and what technologies don’t. When you start talking about future consumer experience, design and also what the consumer is willing to adapt to or adopt as well.
Ned Hayes [00:03:52] Well, coming back to your early experience, a Target, you know, to use a military metaphor, they say the best generals are always the ones who have actually been in the front lines. So was that a really formative experience for you to to be there working with customers, actually seeing what what complaints customers have day to day?
Chris Walton [00:04:11] Oh yeah, 100%. I mean, I mean, you got that job. That job was incredible in a number of fronts. I think number one, you got to see what what it’s like to really work on the front lines with customers, as you as you’re describing. But also, I think even more importantly, it got you. It gave me the ability to understand what the employees need when when they’re working with those customers day in and day out because they’re actually the lifeblood. The store level employees are still the lifeblood of what makes a retail operation run. Its retail stores should given the category 80-90% of sales, and they’re an invaluable part of that experience. And so everything you have to do has to come back to you. How does it impact the customer, but also what you’re asking your store employees to do each and every day? And I think that’s what oftentimes gets lost in this conversation around innovation, which especially many times can be very coastal in the band that it takes on. In terms of, you know, here’s what’s working in New York City. Here’s what’s working in San Francisco. And oftentimes it’s also a very e-commerce centric point of view, which isn’t to say that e-commerce isn’t growing, and you have to keep tabs on where it’s going at the end of the day. And that’s why we choose the word omni in our name of our business, omni talk. And we try to talk about the fusion of omni channel retailing of how it all comes together is thinking about what decisions you’re making or what technologies you’re going to adopt in your retail operation. Again, it comes back to you. Still, how will it impact the employees and the customers on those front lines?
Ashley Coates [00:05:41] That’s great, Chris. So let’s actually go further back before Target. Many of us get a job bagging groceries as you and I worked in retail in high school. I’m curious what other early life experiences in your youth and formative years helped you decide on Harvard, MBA and then a career path to business?
Chris Walton [00:06:00] Oh, my God. I’ve never been asked that before. Well, let’s see. I mean that probably the answer to both of us is the same. You know, for me, I was at I was at the I was at the gap in the late 90s during the dot com boom, which is probably why a little bit why I decided to go in the entrepreneurship route later on in life because I got a taste of it then and realized I maybe had missed out on something. And but, you know, from the business side of things, you know, for me, I have been at the gap for years, had been doing fairly well, like I was promoted fairly regularly. I think I was being close to being named a director when I left. But at the time I was like a director of what? Like, I was a director of supply chain and inventory allocation like that was all I knew how to do. Coming out of college was I knew how to get product at the gap from point A to point B, but I really didn’t know anything beyond that. I didn’t know anything about accounting. I didn’t know anything about finance. I didn’t know anything about marketing. And so for me, it was like trying to get wise to this, this pretty quickly, or I’m going to be looking back at my career and being like, Well, I don’t really know how to do a damn thing. And so. So, yeah, so I made the decision and fortunately enough, I was lucky to get into Harvard. And you know, when I got that, I didn’t think I’d go there honestly and I’d get in. And fortunately, I did. And and when I got that chance, I jumped at it.
Ned Hayes [00:07:20] So now that we’ve looked at the past, maybe we should look at the present. How was 2021, from your perspective in the world of retail?
Chris Walton [00:07:28] Yeah, that’s a good. That’s a really good. You guys are just really good questions, right? To get to the get go here. For the most part, what was hard for me as a pundit this year was that 2021 was a little bit of OK. We went through 2020, which was all about the pandemic and just trying to reset the table. And then for the most part, I thought retailers were just trying to still calibrate to that new normal and say, OK, this is the way it’s going to work. You know, you had things like curbside pick up and all the different options for contactless forms of retail that started to predominate last year. And so they, you know, they kind of just took those and ran with it. So from a retail pundit perspective of someone who likes to talk about the future of retail this year was honestly, this year was a little bit of a snooze for me because there just wasn’t that much coming out that was that new or different than, say, the year before. But in terms of what was different, I would say there were some different elements of that that I think twisted where retailers could actually focus. And primarily, I always sum that up by to me, retail this year was all about two things. It was all about making sure you had enough products. So the supply chain shortages hit people. And also the staffing shortages were a really, really big part of every retailer’s operations. So you were having to figure out how to do more with less on both the inventory side of things and the workforce side of things. And that was really those were really the two pervasive things themes that I saw that were different this year than last year, and they’re probably going to run into next year, quite honestly, to some degree.
Ashley Coates [00:08:59] Zeroing in on Cyber Week alone, we saw that online sales were reportedly down about 1.4%. I’m curious, does this accurately reflect how much consumers purchased and can you explain how programs like buy now, pay later effect have affected members? This year still reflects accurately what consumers are purchasing.
Chris Walton [00:09:23] Yeah, for sure. Yeah, I mean, I think I’m probably better equipped to talk to the first the first part of that question, if I can try to answer the second part too. You know, for the first part, I mean, online sales being down, I mean, I don’t. First of all, don’t read too much into the numbers from the Black Friday, Cyber Weekend and Cyber Week, even particularly this year, because they’re still just so much noise in the numbers relative to the comps in history. 2020 being the year that it was 2021, still being the year that it is with Omicron starting up and people still not knowing to what made to what to make of that. And then the fact that you had all that online activity being pulled forward as well into the months of October and early November, where those numbers actually are up over the year before, if I’m not mistaken. So. And then you got the supply chain shortages. Who knows how those are hampering the numbers to at the base so. So I think it’s hard. It’s hard to read the numbers in that way. For me, I think it’s this. Still, I kind of look to the next year or even the year after we really get a full sense of what’s going on. As far as your question would be, the buy now, pay later space. You know, I’m not I’m not accounting major. Like, I reference, I knew little about it going into business school, know even less about it, probably going out of it. But but, you know, for my understanding of sales, a sale is a sale and so buy now, pay later space would just change the accounting in terms of when that revenue is claimed. So I wouldn’t I wouldn’t expect much impact to that for that reason, based when you’re looking at the numbers, what it could be doing though, which could get at your point is it could be giving people a little more, so to speak, ammo or dry powder keg with which to go out and make some purchases that they wouldn’t otherwise make, which could be in the numbers up to some degree. But I think it’s probably too early to tell to what degree that’s happening, and it’s still relatively a small portion of the business overall for retail because for the most part, it really hasn’t hit the store side of retail yet, which is, like I said before, 80-90%. So I would, I would imagine, net net. The impact on the buy now, pay later in the numbers is still pretty small.
Ned Hayes [00:11:21] Right. And we were kind of all on the road to recovery, so to speak. And then Omicron emerged. And by the time this broadcast, who knows, there might be another new variant thoughts about impacts on in-store shopping and retail face to face? I mean, it’s kind of a super broad question, but we all know it’s going to have some sort of impact.
Chris Walton [00:11:41] Yeah, I mean, I know we’re coming off, I mean, just a couple of days ago, right from recording this like Saturday Night Live had to run replays again, makes me wonder, you know what’s going to happen NRF here in a few weeks to the big show that we’re all geared up for and excited about. Yeah, I don’t know. I think you can foresee I’d say at this point, you know, it’s not our first rodeo as as a nation, as consumers across the world at this point. We’ve all been through it. It’s just going to be a question of what do we all need to do to mediate the issues that we face municipality by municipality. And so I think the roadmaps are there. You know, my prediction would just be we’ll see people gravitate towards the things they did before, which was, you know, and continue to do opt for curbside pickup up for at home delivery by way of the third party marketplaces like Instacart and DoorDash as the world, especially for groceries, if we’re all stuck at home trying to shop for groceries again. But yeah, I don’t. I think again, Ned, I don’t I don’t expect major changes in behavior. I think it’ll just be like, OK, let’s buckle up. Get through this for a couple of hard months and figure out how we still try to claw our way back to normal.
Ashley Coates [00:12:48] Yeah, absolutely. Also, besides the virus, we have other issues that affect retail this year. You mentioned supply chain, which has been huge. What’s it large brands have done this year to manage their inventory better? And what what can brands do in the future to to manage inventory?
Chris Walton [00:13:11] Yeah, I mean, it’s a good question. I mean, for the most part, you know, I think the big brands have done well in terms of using their supplier power or their power within the supply chain to get what they need to get in. So the Amazons, the Wal-Marts, the Targets of the world. I think as you look to the future, though, one of the technologies, for example, that we’ve been espousing quite strongly on omni talk and I believe others have as well of late. It’s funny how it’s coming into the conversation. A lot more is really RFID. RFID when you start thinking about it as a technology for the future of omnichannel retail, retailing plays a lot of roles. So number one, of course, you get the inventory accuracy, which should in time make your forecasting better should make your allocation better so that when supply chain issues creep up like this, you’re better prepared to handle them. The second thing is it actually makes your consumer experiences better as well, particularly from an online standpoint, because you know, when you’re browsing online and you want to elect curbside pickup or ship to home out of the store, that inventory can be shown to the consumer with confidence that it’s actually there, and it can be found quickly and easily for again for the of the store employees. To do that work, which had a lot of retailers, is not the case, and that continues to hold them back. And then the third thing I’d say, actually from a from another trend that’s been popping up of late around the retail side of things. RFID can play a big role in helping to thwart some of that activity as in terms of making the products that are, say, stolen much more easily and readily identifiable. Should those people that are perpetrating those crimes be found or those products be found, and then therefore people can be held accountable to what’s happening. So I think for those three reasons, you’ll see RFID, be particularly more invested in as a whole across retail over the next two year to three years.
Ned Hayes [00:15:02] I know RFID has been used to prevent theft, and you pointed to it as a great way of tracking stolen goods.
Chris Walton [00:15:09] Yep.
Ned Hayes [00:15:10] One thing that has emerged is this kind of media hype about organized smash and grab and organized shoplifting. And as someone who used to work in journalism, I have my suspicions about this actually being a broad trend. But I’m curious if you could speak to that as to whether or not you think organized shoplifting has changed the game?
Chris Walton [00:15:31] Yeah, it’s a good. That’s a good question, too. I mean, yeah, it was really hot coming out of Black Friday, which was like, I think, you know, we stand back and think about when we’re recording this, like three weeks ago. So, you know, it’s hard to say where it’s been, but you know, I just point to the fact that something’s happening. Is it as large of a trend as the media’s portraying? Maybe, maybe not. But you know, in October, you had Walgreens literally shutting down. I think it was five stores in San Francisco because of theft. Then in mid-November, you had the big Nordstrom’s smash and grab job, and then over Black Friday, you had incidents here, even in Minnesota with Best Buy and some in Chicago as well. So there’s enough smoke to think that there could be a fire there. You know, my take on it is, yeah, yeah, let’s let’s let’s keep it. I mean, it’s only been three weeks since we saw the last big effort. But you know, let’s let’s keep our heads about us, keep our wits about us and think about like, OK, what? What do we need to do about it? You know, I talked about RFID. I think I talk about other things I propose would be some changes to the legislation in terms of what’s done or what happens to people that participate in these types of almost collective crimes and. Away, a lot of the legislation is is put in place to put specific penalties to individual incidences of theft, but when you’re participating in a group type endeavor like this, I think the penalties need to be stiffer and stronger. And then also, I’d say we also need to hold the third party marketplaces more accountable to what’s being put on their sites and resold. I think that’s something that needs to get talked about a lot more. It seems like it’s starting to. We had 20 retail CEOs just, I think last week or the week before signed a letter to Congress urging that type of oversight. So I think when you’ve got 20 retail CEOs standing up to try to take action on that, it makes me think that there’s something to this. There’s a there’s a there there as my buddy used to say.
Ned Hayes [00:17:29] Yeah, well, I think the key problem, of course, is inequity and how capitalism hasn’t been distributing wealth in a way that that makes people able to make a living. I mean, I just read an article about the lifestyle scene in The Simpsons is now unattainable. You can’t have a single earner in a household supporting a full household. So it’s kind of an odd question, Chris. But I’m curious you have experience around the globe with retail. Do you feel like other countries might be creating an environment where retail can thrive for all parties?
Chris Walton [00:18:04] Yeah, I mean, I think, yeah, and that’s that’s one where I almost almost say that even that question in and of itself to me seems a little like doomsday in some ways. Like, you know, to me, it’s to me, it’s retail is going to be here. Retail has to be here for us all to thrive. You know, I mean, we have to have a way of getting goods and services that we need to to thrive and survive. But I think with anything, you know, we can look to other places and other communities, other municipalities that have put in place different things to thwart things across every region of the world to figure out what the right answers could be to find that right balance. And you know, it’s kind of the natural progression of things that, you know, as technology advances, we’ve got to figure out how to deal with it. And I think, you know, the good thing is we are starting to see some calls to action on what are the what are the right regulations here to make sure that everything can stay on the rails as much as possible.
Ashley Coates [00:18:55] So let’s talk about Omnitalk, Chris.
Chris Walton [00:18:57] All right.
Ashley Coates [00:18:58] Yeah. And I want to start with the term omnichannel.
Chris Walton [00:19:01] OK.
Ashley Coates [00:19:02] Yeah. So we’ve had some guests on the podcast this year who said, you’re not really sure the omni channel is the right term anymore. And of course, as you know, it can mean many different things, many different people. Yeah. So I’m curious, do you agree, disagree with the thought that that may not be the right term anymore?
Chris Walton [00:19:20] Yeah, no. I I wholeheartedly disagree with the term with that statement. Actually, I think I think it’s honestly, I think if you’re still debating the word omnichannel, it’s just such a waste of time. Like, it’s definitely made a resurgence as of 2020. Like suddenly it became in vogue and everyone is using it, which I took a lot of pride in because I had people that used to argue with me at the dinner table at trade shows like how how ridiculous the word was, and I was like, OK, then just pick a different word. I don’t care what it is. I care that you actually know what it means and that you know how to do it. Because like to, to your point Ned that you said before, like like, I’ve actually done it and I know like what what it takes to make it work right? And can you actually talk about that to me, that’s what I care about. So if you want to call it omni channel, want to call it a harmonized retail? You want to call it new retail. I don’t care, but I care that it’s called something because it’s a different way of doing retail. I happen to like omni channel because I think omni represents what it’s supposed to be about, like it’s an ever present, always on perpetual state of being able to give your customer what they want at all times. Like, give me a better word than that. Like, what are we arguing here? It’s just all semantics to me, and most of the time I find that people are arguing it, just arguing it, to argue it and try to make a point because some people care about talking about that.
[00:20:37] Well, how has your show Omnitalk evolved over the years? Do you have any particular memorable moments that you want to share with us about your show?
Chris Walton [00:20:46] Oh man. Yeah, it is. I mean, our show, I mean, our show, first of all, it’s like background on Omnitalk, Omnitalk started with me writing an article in a coffee shop, putting a blog up on WordPress called Omnitalk, which was inspired by coffee talk from the old Saturday Night Live skit with Mike Myers that you can, that’s like, I believe in Omnichannel. So let’s do it and they’ll be up. And my first article is about comparing Amazon to the Vietnam War. It was like comparing Retail’s general response to the United States and the rest of the world and looking at the North Vietnamese. And so it was a very kind of different type of article that you would not normally find in a retail setting. And next thing, I knew people are reading it, and I started writing articles every week after that. And yeah, and then we got into podcasting and our first podcast was in the basement of my house and the first video we shot was in the basement of my house to like 11 o’clock at night and the audio quality and the video quality was about as bad as you could possibly imagine, but people are listening to it and watching it. And so we just kept going after it. And so, yeah, I mean, those are the memories I think back to is this, you know, it takes a lot of hard work to get it stood up and to make it happen. But to me, what it showed was that contents really key. If you if you’ve got a good point of view, if you’ve got if you’ve got something that’s important to say, people tune into it and that’s what matters most. And so, you know, I’m excited. Like this year, we actually and fingers crossed NRF goes off as it’s planned. But we were just asked by Nvidia and Lenovo this year Anne and I to be their host. They’re the sponsors for the Innovation Lab at NRF this year we’re asked to be their MC’s, so we’re going to be live streaming all the activity from the Innovation Lab for the three days of the show. And we’re pretty excited about it because we feel like it’s really good validation for all the hard work we put into everything.
Ned Hayes [00:22:43] Fantastic. Well, can you give us a little preview of NRF? What’s going to happen at the at the show this year? What are you looking forward to?
Chris Walton [00:22:52] Yeah, I mean, I’m what I’m just looking for. I’m just looking forward to the fact that it’s going to happen, you know, fingers crossed we’re all back in in space together. You know, that’s number one. I think everyone is just excited about that. You know, as far as the other things, you know, I’m pretty keyed up on being part of the Innovation Lab, too, because that’s really the heart hard blood or the really the pulse of everything that’s happening in retail. Getting to talk about, you know, specifically like, I’m excited, I’ll be on a panel talking about A.I. implementations with Kroger up on stage. So I’m excited about that, either with representatives from Lenovo and Nvidia as well. And so things like things like that, just get me really geeked up to be a part of, in addition to all the other trends and different tech companies you can you can talk to throughout that week.
Ashley Coates [00:23:47] So how has interest changed over the years and what do you think will be different there?
Chris Walton [00:23:52] Oh, man, that’s a good question, too. Well, it’s funny, actually. One, this is a guy we all more backstory. So one of the first articles I ever wrote, probably within the first six months of writing articles, guy, let me think back. This would have been him going to NRF 2018. I wrote a pretty scathing review of NRF in 2018 and really for one particular one particular reason, which was I felt like if I walked in NRF that year, it was like a Brooks Brothers convention. It was very male heavy. You tell this anecdote all the time where I went into a tech companies booth and the one of the guys at the booth gave me his card and gave my partner and a flier for the after party. And I thought that was incredibly telling. And so I had to go on record as saying that happened and that that knows had to do a much better job of putting women front and center in the retail conversation. And and I would say that I would say they have. I think they’ve done a good job of listening to you that need as much as possible, and that NRF has a much different look and feel than it has in the past. Still probably has things where it can improve, but they definitely took it to heart. They started to create their own. There’s usually a specific place at the show now that focuses on the achievements of women in retail. I think that type of thing is important. And in I after that actually went out, created our women’s retail collective series where all we do is focus on the great things and great women in retail as a result of that to do our part too. And I think it’s done. I think the other thing I’d say is they’ve done a better job of of of highlighting things around innovation to, you know, NRF to be the Big Tech show, which was dominated by the biggest of the big companies. But they’ve done things like create the innovation lab, create the start up center, things that are important to highlight in a different way and to allow people to stand out in a different way from, say, the Big Big Tech companies. They can just spend a lot of money on on whoever can have the biggest booth can win, so to speak. So I think they’ve done come a long way over the last four years or not as many as five years. I’ve been going there recently.
Ned Hayes [00:26:07] Well, along with making sure that we’re leveling the playing field so that people of allgenders can equally participate, what about diversifying tech? I mean, McKinsey came out with a study last year where they talked about the need to diversify tech and, like the Journal of Consumer Affairs, said that 60% of minorities have experienced discrimination in a retail store. So how do we change that? And again, this is such a broad question, but if we don’t talk about it, who will?
[00:26:39] Yeah, I mean, I mean, all I can say is, you know, I think it’s a part we all have to play. I mean, Anne and I particularly try to focus that on who we bring on as guests to our show. So for example, we’ve had to have had a number of diverse guests on our women’s retail collective series. We have one coming up next month actually with Victoria, who’s a director and AI at Kroger, for example. You know, that’s that’s how we play our part. And then we try to live out essentially what you’re saying each and every day as best we can. I think modeling the behavior is the best and the best thing and best advice I would have to everyone listening.
Ned Hayes [00:27:18] And that’s fascinating to see how the the audience or the consumers in retail have diversified. I mean, as of twenty eighteen, there’s so many more people who are not kind of European origin who are shopping. So, you know, why not make sure that your store appeals to everyone? Right?
Chris Walton [00:27:36] Yeah. And that’s the beauty of e-commerce. I mean, that’s the beauty of technology. Is it a lot of ways it’s harnessed correctly. It enables us to reach those groups of people in a much more individualized one to one basis than we ever could before. Because if you think about a physical store was the one thing that fit everything right is one size fits all. E-commerce doesn’t have to be that way. So if we can figure out how to harness technology in the right way, it actually opens up a lot of good in terms of the in terms of this topic, particularly.
Ashley Coates [00:28:08] So looking back at 2021 at omni talk and thinking about the most exciting people you’ve had this year, the most popular topics help sum up 2021.
Chris Walton [00:28:19] Oh man, that’s a good question. I’ve actually I was actually writing my My 2021 summation article for Forbes right before I got on this time. Well, yeah, unfortunately, I wasn’t too far into a year ago to figure out how to help you with your article. But for 2021, I thought, you know, 2021, I thought, like I said before it, from a pundits perspective, it wasn’t my favorite year. Like 2020 was much more interesting just because of everything that got thrown at us. But I think 2021 there was some there was some real seminal moments this year. The most important of which to me was probably the opening of the full scale Amazon Fresh grocery store that Amazon opened in June. That was, I think, the the kind of the shot heard round the world, so to speak. If you want to put it that way to me, for the rest of the grocery industry that Amazon’s coming for the grocery space, you’re going to do it in a really unique way. They’re going to reimagine the grocery experience in a way that hasn’t been in the grocery store and it hasn’t changed since nineteen sixty when Piggly Wiggly first introduced the first modern grocery store. And so 2021 one, there’s a good chance that it may be the new nineteen sixteen when you start to think about it, because Amazon has created a new consumer experience at a scale never seen before. And just, I think just today, actually, if I’m not mistaken, they just said they’re going to open up a forty thousand square foot version of it as well out in California. So. So it’s coming. And I think that’s important to you because when you put it in perspective, I have to check my math on this. I think it’s right. But the next large that that forty thousand square foot store is like 18 teams, 18 times larger than that than the next comparable Amazon Go style grocery store from any competitor in the world. Wow. Yeah. And there’s that most one of those by any retailer that you want to look at the roughly three thousand square feet. So. So that that says something to me, that one consumer’s experience is going to change and to Amazon in particular in grocery is going to be at the forefront of making that happen.
Ashley Coates [00:30:24] Well, and we wanted to ask you about some of your recent Forbes articles, one of them being about the new Amazon Fresh store and how it might change retail in the future. So your I know you just mentioned the customer experience really changing. Any other thoughts on what this means for the future of Amazon and retail?
Chris Walton [00:30:47] Yeah, computer vision to me is probably the single most important, the true vision, which is for those of us in the technology that Amazon, Google or Amazon to just walk out technology is predicated upon is singlehandedly the most important technology out there that’s going to change retail and it’s going to change retail. You know, in a number of ways, but you know, first and foremost, you’re going to have it’s going to change the way people shop. So like we said, like now in this 4000 thousand square foot store that just opened in California, you walk in and you scan your phone to go in, take whatever you want out to show if you walk out. You never have to stand in line again. That’s that in itself is awesome, right? Then what will happen as well is you’ll get better inventory accuracy in the store because by way, those cameras, you’ll know where everything’s positioned on the shelves at all times. That’s going to make your workforce more efficient, probably over time. If you can harness in the right way, make them happier because they’re doing less onerous jobs just and they can be repositioned and doing the jobs that they want to do. Instead of having to go and scan inventory outs like I’ve had to do in a store a thousand times, you can only get to a fraction of the store every day. Now they’re doing it all the time, every time, right? The other other part you’ll start to see is you’ll start to see. I think over time you’ll start to see how we handle pricing in store, start to change, where pricing will be more real time in the moment. Because the price tags can be comparable, it can be correlated to cameras, which can be correlated to the on shelf inventory. So you think about that, that opens up a whole host of ways to interact with the customer from a pricing perspective that are probably advantageous to the consumer in the long run. And then as a result of all of that activity going on, people walking in the store, prices being take in inventory being understood. The great thing about it, too, is that it’ll improve it, prove the platform by which companies like an Amazon or any of these other companies are standing up retail media networks, which is one of the big technologies of the year, so to speak, it’ll change the way they can interact with us to as consumers because they’ll be able to process all that data. Use those media networks to serve up content to us. That’s more engaging to us, more inspiration to us, and that entices us to buy in different ways than ever before. So all of that is coming through this one platform or technology. You stop and think about it. I’ve actually never said all of that out loud to focus on doing that with you guys. It’s time to think about that. That’s pretty powerful that all of that is coming from one potential technology.
Ned Hayes [00:33:14] Yeah, it reminds me of that term smart smart retail technology. Is that still an accurate term to describe some of these things? Or is that too broad?
Chris Walton [00:33:25] No, I think it’s still I mean, I think it’s still as good a term as any, you know, I think that’s, you know, it’s a really good term in the sense of like, you know, smart to me is meant to be, you know, the interaction of multiple things at one time, right, that they’re coordinated together. And that is exactly what’s happening in what I just described.
Ned Hayes [00:33:45] It reminds me of that Japanese idea of just in time manufacturing that we’re now getting to the point where we can do just in time inventory in just in time supply chain.
Chris Walton [00:33:55] Yeah, in some ways, yeah. Although I’d say to you, you know, one of the other big trends I’ve seen coming out this year is actually a move away from the Just-In-Time philosophy to more of a contingent contingency based philosophy. And so what you get with both of that, I’d say now, too, is you get the just in time aspect, but you actually get a better understanding of what you need from the contingency based side of things as well to be able to flex and adapt to meet the needs of the quote unquote omni channel consumer.
Ashley Coates [00:34:21] So in another recent Forbes article, Chris, you went over the five trends that are coming or could be coming and that companies should really be aware of. Can you walk through those with us?
Chris Walton [00:34:34] Let’s see if we can go back to the memory banks, I think, yeah, the first one. There are five trends. I said the returns may come in, so it’s too late. One of them was first for sure. Check out freebie talks. I think I wrote this in like April or May or something like that. And Amazon had it hadn’t hadn’t released their full scale grocery store, but I think I’d predicted it was coming at that time or I did it even last year. I think I said it was coming. So that was one, and I’ve been just pretty frank about how slow retail has been to adapt because the US hasn’t in the U.S. retail base hasn’t done anything of the size and scale of Amazon Go, and even three thousand square feet are less like they haven’t attempted it yet. The best experimentation right now is coming out of Europe, with Tesco and Rubber Group in an Aldi, so the US has done nothing. The second thing I talked about was warehouses and stores, which I think you’re starting to see that come into play a little bit more of the idea that you know this. This store has always been the place we’d go to get products. But why can’t the warehouse be the place we go to get products? You’re starting to see some experimentation with that around companies like Gopuff. I think you could even say that Target’s doing some experimentation with that, with what they’re calling their new sortation centers, where ship drivers just go to the store and enter a drive thru lane and pick up their delivery to then take to the customer’s houses. So that’s happening. Gosh, another one was, let’s keep me honest here. Another one was the rise of the instant delivery marketplace, which I think that one that one is probably one to really keep an eye on. And by that, I mean instant delivery. So I want it quick. I want it fast. 10, 15 minutes, 30 minutes, even same day. Instacart, DoorDash have been kind of leading the charge on the same day, but now you’ve got all these players trying to make that even quicker. 10 15 minutes from bite, gorillas, get here, Gopuff, we’re going to get Gopuff on our show in a few weeks, but that’s that’s something is happening there, and the speed in the mind of the consumer is a good disintermediation point. Amazon’s always been the one that can win convenience and friction free delivery. But whoever can grab that, that lion’s share there for that specific that there’s a place for a number two. So that’s important to think about in terms of how future retail evolves in relation to Amazon. The other two, you know, real quickly, I talked about Real-Time pricing in store. I think that’s another one. You’ll see that by way of Amazon Go or Amazon Fresh and Amazon Go stores first. And then the last one, if I’m not mistaken, was the rise of what I called influencer asset light retail, which is the idea that the merchants are really no longer the gatekeepers of the assortments for retail stores anymore. The influencers of sort of disintermediated the merchants and a lot of ways. And so with all these technologies being stood up from Amazon Go to scan and go technology to RFID, it enables it enables the influencer to do physical retailing as well as e-commerce in ways that are different than ever before. And it allows them to stand up those operations with much less working capital and was required previously and so that it now enables them to start to do retail more on their own direct to consumer in ways that haven’t been done before. And I think that’s a really interesting topic to think about to.
Ned Hayes [00:37:50] Any sense of which of these predictions will will happen first? Or do you think they’re all going to happen and simultaneously?
Chris Walton [00:37:57] They’ll definitely happen at different speeds. I mean, check out free seems like the one that I’ve just mentioned that’s already out there. I’d say that’s number one. Number two, if I had to put them in order, number two would be the warehouses of stores. Then three would be three would probably be the instant delivery network. I think you’ll start to see that pretty quickly take hold you in the next few years. Real time, real time pricing in store will happen. There’s just some things that probably have to be ironed out and then the influencers influencers as a new form of retailer will start to see it happen. But it’ll take it’ll take time to get everyone on board with that.
Ashley Coates [00:38:34] Well, thank you so much for being here today, Chris. We do have one last question for you.
Chris Walton [00:38:38] OK.
Ashley Coates [00:38:39] Yeah, which is what do you hope for your legacy and what do you want to be remembered for?
Chris Walton [00:38:46] Oh man, I’ve never been asked that before. That’s a really good question. And especially end the 2021, which has been kind of a crazy year for. I don’t know if you guys know this, but I had a stroke in June and yeah, it was kind of a crazy experience. You know, if I was going to make it there for a while but turned out I did and my partner and held down the fort for us in Omnitalk, I think to answer that question, I would just say, Well, I think you know, our motto at Omnitalk when we started was follow your interests and you’ll always be interested. And that’s what we’ve done every day in terms of the topics we cover, the guests we interview, they have to meet our bar on that. And and I really believe that saying and it’s kept us interested in our every day that we come to work and why Anne and I enjoy working with each other so much. And so I think my legacy will be just to be remembered as someone that kind of took that model to heart and in everything you try to do each day.
Ashley Coates [00:39:43] Thank you so much.
Ned Hayes [00:39:45] Yeah, thank you so much for spending this time just before the holiday break chatting with us. Appreciate it.
Chris Walton [00:39:51] Absolutely. Thanks for having me, guys.
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